BILL ANALYSIS Ó AB 1401 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1401 (Arts, Entertainment, Sports, Tourism, & Internet Media Committee) As Amended August 15, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |52-24|(May 26, 2011) |SENATE: |25-19|(August 22, | | | | | | |2011) | ----------------------------------------------------------------- Original Committee Reference: A.,E.,S.,T., & I.M. SUMMARY : Establishes a program to be administered by the Labor Commissioner (LC) that would enable a minor's parent or guardian to obtain a temporary permit for the employment of a minor, under specified conditions. This bill would also authorize the LC to collect and deposit money into the Entertainment Work Permit (EWP) Fund, which the bill creates, and upon appropriation by the Legislature, to expend the proceeds from this fund to pay the costs of administrating the temporary minor's EWP program. This bill would also authorize the Labor Commissioner, on a one-time basis, to borrow and repay up to $250,000 from the Labor Enforcement and Compliance Fund to the Entertainment Work Permit Fund to pay for startup costs incurred in the creation of the program. The Senate amendments authorize the Labor Commissioner, on a one-time basis, to borrow and repay up to $250,000 from the Labor Enforcement and Compliance Fund to the EWP Fund to pay for startup costs incurred in the creation of the program and require the loan to be repaid as soon as sufficient funds are available in the EWP Fund, provided repayment does not compromise the operations of the temporary work permit program. AS PASSED BY THE ASSEMBLY, this bill : 1)Provided that prior to the employment of a minor under the age of 16 years, as specified, the LC may issue a temporary permit authorizing employment of the minor. 2)Declared the purposes of the temporary permit is to: a) Enable a parent or guardian of the minor to meet the requirement for a permit; AB 1401 Page 2 b) Establish a trust account for the minor; and, c) Produce the documentation required by the LC for the issuance of a permit. 3)Established the following conditions for the temporary work permit: a) A temporary permit shall be valid for a period not to exceed 10 days from the date of issuance; and, b) A temporary permit shall not be issued for the employment of a minor if the minor's parent or guardian has previously applied for or been issued a permit by the LC pursuant to Labor Code Section 1308.5, or a temporary permit pursuant to this section for employment of the minor. 4)Required the Division of Labor Standards Enforcement (DLSE) to prepare and make available on its Internet Web site the application form for a temporary permit. 5)Required an applicant for a temporary permit to submit a completed application and application fee online to DLSE. 6)Required upon receipt of the completed application and fee, DLSE to immediately issue a temporary permit. 7)Created the EWP Fund in the State Treasury. 8)Directed the LC to deposit all fees for temporary permits received into the fund. 9)Provided that the funds deposited in the EWP Fund shall be available to the LC, upon appropriation by the Legislature, to pay for the costs of administration of the online temporary minor's EWP program. 10)Allowed the LC to set forth the fee in an amount sufficient to pay for these costs, not to exceed $50. FISCAL EFFECT : According to the Assembly Appropriations Committee, "The DLSE would incur one-time start-up costs of $50,000 to $100,000 for a contract to establish the online AB 1401 Page 3 application and payment system for temporary permits and to implement new procedures to integrate the temporary permit process with the existing EWP system. These start-up costs would likely be covered by a loan from the Labor Enforcement and Compliance Fund, which would be repaid by revenues from the temporary permit fee. The bill requires that the temporary permit fee revenues be sufficient to cover program costs. These revenues, which would depend on the number of applicants and the fee level established by the LC, are unknown. At the maximum fee of $50 per applicant, around 3,000 annual applications could support the costs for two administrative staff. "The current EWP program includes processing about 60,000 permits at an annual cost of about $800,000 for 11 positions. As part of the 2011-12 Budget Act, General Fund support for the DLSE was removed and replaced with funding from the newly-created Labor Enforcement and Compliance Fund, which is financed by a surcharge on employers." COMMENTS : The Senate amendments are technical and clarifying of the existing statutory authority for the LC to borrow from the Labor Enforcement and Compliance Fund for the startup costs incurred in the creation of the temporary minor's EWP program. According to the author, they were taken at the recommendation of the Department of Finance, and address the concerns raised in their analysis of the bill. Analysis Prepared by : Dana Mitchell / A.,E.,S.,T. & I.M. / (916) 319-3450 FN: 0002065