BILL ANALYSIS Ó
AB 533
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Date of Hearing: April 23, 2013
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND
INTERNET MEDIA
Ian C. Calderon, Chair
AB 533 (Ian Calderon) - As Amended: April 18, 2013
SUBJECT : Artistic Employment Contracts: Minors
SUMMARY : Excludes Background performers from the requirement
of establishing a Coogan Trust, as defined. Specifically, this
bill :
1)Provides that the court shall not require the employer of a
minor for services as an extra, background performer, or in a
similar capacity, as specified, to set aside 15% of the
minor's gross earnings.
2)Exempts an employer of a minor for services as an extra,
background performer, or in a similar capacity, as specified,
from depositing or disbursing the 15% of the minor's gross
earnings pursuant to the contract within 15 business days
after receiving a true and accurate copy of the trustee's
statement, a certified copy of the minor's birth certificate,
and, in the case of a guardian, a certified copy of the court
document appointing the person as the minor's guardian.
3)Provides that notwithstanding any other statute, for any
minor's contract for services as an extra, background
performer, or similar capacity, as specified, that is not
being submitted for approval by the court pursuant to existing
law, or for which the court has issued a final order denying
approval, is exempt from having 15% of the minor's gross
earnings pursuant to the contract be set aside by the minor's
employer.
4)Stipulates that an employer of a minor for services as an
extra, background performer, or in a similar capacity, as
specified, is not required to deposit 15% of the minor's gross
earnings pursuant to the contract within 15 business days of
receiving the trustee's statement, or if the court denies
approval of the contract, within 15 business days of receiving
a final order denying approval of the contract.
AB 533
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EXISTING LAW
1)Requires the written consent of the Labor Commissioner (LC)
for the employment of a minor in the entertainment industry,
as specified. (Labor Code Section 1308.5.)
2)Provides that once written consent is given by the LC, as
specified, that consent shall be void after the expiration of
10 business days from the date the written consent was granted
unless it is attached to a true and correct copy as evidence
that a "Coogan Trust Account" has been established on behalf
of the minor. [Labor Code Section 1308.10(a).]
3)Requires that 15% of a minor's gross earnings be set aside by
the minor's employer in trust, in an account or other savings
plan, and preserved for the benefit of the minor in accordance
with Section 6753. [Family Code Section 6752 (b)(1).]
4)Further requires that the minor's employer shall deposit or
disburse the 15% of the minor's gross earnings within 15
business days as specified. [Family Code Section 6752(b)(4).]
5)Pending receipt of (among other things proof of the
establishment of a trust account), the minor's employer shall
hold, for the benefit of the minor, the 15% of the minor's
gross earnings pursuant to the contract. [Family Code Section
6752 (b)(1).]
6)If a parent, guardian, or trustee fails to provide the minor's
employer with a true and accurate photocopy of the trustee's
statement within 180 days after the commencement of
employment, the employer shall forward to The Actors' Fund of
America 15% of the minor's gross earnings. [Family Code
Section 6752 (b)(9)(A).]
7)Provides that if a minor renders services as an extra,
background performer, or in a similar capacity through an
agency or service that provides one or more of those
performers for a fee (casting agency), the agency or service
shall be considered the minor's employer for the purposes of
this chapter. [Family Code Section 6750 (b)(3).]
FISCAL EFFECT : Unknown
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COMMENTS :
1)Author's Statement and Support : According to the author,
"Existing law requires that all child actors must have 15% of
their earnings set aside in a Coogan Trust Account, which may
not be accessed by anyone - including the child actor - until
after they become adults. For child actors who earn large
sums as principal performers, the Coogan law provides needed
and beneficial protection. However, for kids who only work
once or twice a year as an extra or background performer, this
requirement is an unnecessary and inefficient waste, and
simply denies kids some summer fun money. AB 533 corrects
this situation and removes the requirement that the parents of
background kids have to create Coogan accounts.
Central Casting, the largest casting agency in the world, that
background kids work less than 2 times a year on average. The
author concludes, "The daily pay rate for the background
actors is $64/8 non-union and $145/8 for kids who are in
SAG/AFTRA. When you take out 20% for their agent; 7% for
taxes; 15% a Coogan Account, very little is left to deposit.
Given that some banks charge fees for the Coogan Account, and
draw it from the corpus of the trust, this pittance is
exhausted quickly. For those accounts which are in place -
waiting until a child reaches majority to release the funds is
really inefficient and does little further our goal with the
Coogan Act to protect kids."
According to The Actor's Fund of America (AFA), "the Unclaimed
Coogan Fund has over 36,000 individual deposits, and over
31,000 of them are for less than $99." Very few have
aggregated sums of substance, which leads AFA to conclude it's
probably all Background players who are abandoning their money
rather than establish a Coogan Trust Account.
In a recent article discussing the ongoing class action
lawsuit against Bank of America, (alleging that their practice
of collecting fees from Coogan Account Trust Funds violates
the Coogan Act), it was noted that BofA requires a minimum
deposit amount of $300, and will charge service fees on
accounts which slip below that limit. Backstage, Did Bank of
America Steal From Child Actors? Sean J. Miller, Sept. 24,
2012. Other banks also charge fees for the establishment and
maintenance of Coogan Accounts.
AB 533
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2)Employment of Minors - Entertainment Work Permit : According
to the California State Department of Industrial Relations Web
site, generally, all minors under18 years of age employed in
the state of California must have a permit to work. The Labor
Code further provides, in Section 1308.9(a), that if the LC
provides written consent pursuant to Labor Code Section
1308.5, for the employment of a minor in the entertainment
industry, that consent shall be void after the expiration of
10 business days from the date written consent was granted,
unless it is attached to a true and correct copy of the
trustee's statement evidencing the establishment on behalf of
the minor of a "Coogan Trust Account" pursuant to Chapter 3
(commencing with Section 6750) of Part 3 of Division 11 of the
Family Code. If the written consent is attached to a true and
correct copy of that trustee's statement, the written consent
shall be valid for a six-month period.
3)Background - The Coogan Act: Blocked Trust Accounts Must be
Established for Known and Unknown Child Actors :
The Coogan Act was passed in 1938 in response to Jackie
Coogan's plight. Even though he earned millions as a child
actor, Coogan was surprised to find out when he reached
adulthood that his entire earnings were depleted, because his
mother and stepfather spent all his money - legally. The
Coogan Act was enacted to preserve a portion of a minor's
earnings under an employment contract for creative or artistic
services, for the minor's use when he or she reaches the age
of majority. SB 1162 (Burton), Chapter 940, Statutes of 1999,
overhauled the Coogan Act. Applicable to both court-approved
and non-court-approved minors' contracts for creative or
artistic employment, SB 1162 required 15% of a minor's
earnings to be set aside and deposited into a "Coogan Trust
Account", invested in low-risk financial vehicles, and blocked
from use until the minor is emancipated or reaches age 18. To
enforce the set-aside, SB 1162 imposed a duty on the employer
to make the deposit directly into the minor's Coogan Trust
Account, which a parent or guardian is required to open at an
insured financial institution and to invest in a manner
consistent with that of a trustee. Annual accounting is
required, and court supervision of trust accounts for minors
with court-approved contracts continues until the minor turns
18.
To further strengthen enforcement of the Coogan Act, the
AB 533
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Legislature adopted, and the Governor signed, SB 210 (Burton),
Chapter 667, Statutes of 2004, which added the requirement
that the LC's written consent for performances of a minor
under Labor Code Section 1308.5 be limited to 10 days, unless
a Coogan Trust Account has been established.
SB 210 also created a mechanism for payment of the Coogan
set-aside to AFA for those child performers whose parents
failed to establish a Coogan Trust Account. The AFA holds the
money for the benefit of the child until such time as the
child claims his or her funds. Periodically AFA will
advertise the Unclaimed Coogan Account, and makes best efforts
to contact children whose 15% set aside is being held in trust
for them.
To date over 36,000 individual deposits have been made into
the Unclaimed Coogan Trust Account of AFA. Of those, 31,000,
clearly the vast majority, of deposits are under ninty-nine
dollars ($99).
4)Why Does the Same Language Appear Twice ?
The Family Code section which contains the Coogan Act was
originally designed to cover the legal problem presented by
studios hiring children to preform, but children are not
allowed to sign contracts. The solution was to have contracts
which were of an amount large enough to cause concern to be
submitted to the court for Affirmance. This way the court
could look out for the interests of the studios and child
performers. The current law covers contracts which are
subject to the courts Affirmance, and those which are not,
hence the necessity to say the same thing twice.
5)Prior and Related Legislation :
a) AB 1401 (AEST&IM Committee), Chapter 557, Statues of
2011, established an Internet Web site permit process to be
administered by DLSE for the issuance of temporary work
permits for minors working in the entertainment industry.
The temporary work permit issued under this bill enabled a
parent or guardian of a minor to establish a Coogan Trust
Account for the benefit of the minor. This bill required
the LC to place fees received for a temporary minor's
entertainment work permit into an EWP Fund, which funds
would pay for the costs of administration of the Internet
AB 533
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Web site created under this bill.
b) SB 210 (Burton), Chapter 667, Statutes of 2004, which
was discussed earlier, added the requirement that the LC's
written consent for performances of a minor be limited to
10 days, unless a Coogan Trust Account has been
established.
c) SB 1162 (Burton), Chapter 940, Statutes of 1999, which
was discussed in Comment
2) above, made significant changes to the Coogan law.
6)Double-referral : Should this bill pass out of this committee,
it will be re-referred to the Assembly Committee on Labor and
Employment.
REGISTERED SUPPORT / OPPOSITION :
Support
BizParentz
The Actors Fund of America
Opposition
None on file
Analysis Prepared by : Dana Mitchell / A.,E.,S.,T. & I.M. /
(916) 319-3450