BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
AB 533 (Calderon)
As Amended June 3, 2013
Hearing Date: June 11, 2013
Fiscal: No
Urgency: No
TMW
SUBJECT
Artistic Employment Contracts: Minors
DESCRIPTION
This bill would exempt children who are background performers
from the requirement of establishing a Coogan Trust Account.
BACKGROUND
Under existing law, children entering into contracts to provide
professional entertainment services are required to obtain a
permit from the Labor Commissioner. Work permits issued by the
Labor Commissioner related to contracted services are only valid
for ten days, unless the permit is attached to a trustee's
statement evidencing the establishment of a Coogan Trust
Account. (Lab. Code Sec. 1308.9.)
Coogan Trust Accounts were established under the Coogan Law in
1938 in response to child star Jackie Coogan's plight. Even
though he earned millions as a child, Coogan was surprised to
find out when he reached adulthood that he was flat broke,
because his mother and stepfather spent all of his money -
legally. Community property laws in California made all
earnings of individual members of a family the property of the
family, and a child had no control over his or her earnings.
Thus, the Coogan Law was passed in order to preserve a portion
(15 percent) of the minor's earnings for the minor's use when he
or she reaches the age of majority. In 1999 and 2003, the
Coogan Law was amended to provide enhanced protections for a
minor's earnings. (SB 1162 (Burton, Ch. 940, Stats. 1999); SB
210 (Burton, Ch. 667, Stats. 2003).)
(more)
AB 533 (Calderon)
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This author-sponsored bill would exempt children who are
background performers and extras from the Coogan Trust Account
requirement.
CHANGES TO EXISTING LAW
Existing law provides protections for minors who contract to
render artistic or creative services. (Fam. Code Sec. 6750 et
seq.)
Existing law requires the employer of a minor, who provides
artistic, creative, or sports services, to set aside 15 percent
of the minor's gross earnings for placement into a Coogan Trust
Account that must be established by the minor's parent or legal
guardian, who acts as the trustee of the trust account. (Fam.
Code Sec. 6752.)
Existing law defines a Coogan Trust Account to mean a trust
account established for the purpose of preserving for the
benefit of a minor the portion of the minor's gross earnings.
(Fam. Code Sec. 6753.)
Existing law provides that if the parent or legal guardian fails
to establish a Coogan Trust Account, the employer must transmit
the required portion of gross earnings to The Actors Fund
America, which is required to take specified steps to provide
notice of the unclaimed funds to the parent or legal guardian.
(Fam. Code Sec. 6752(b)(9), (c).)
This bill would exempt from the Coogan Trust Account
requirements minors who contract to provide services as an
extra, background performer, or in another similar capacity.
This bill would also make various technical corrections.
COMMENT
1. Stated need for the bill
The author writes:
Existing law requires that all child actors must have 15
[percent] 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
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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. This
bill corrects this situation and removes the requirement that
the parents of background kids have to create Accounts.
2. Exempting child extras and background performers from Coogan
Trust Account requirements
Existing law requires a Coogan Trust Account to be established
for children employed in the entertainment industry, into which
15 percent of the child's earnings must be placed for
safekeeping and access only by the child upon reaching
adulthood. The Coogan Trust Accounts requirement was created to
protect the earnings of child actors from mismanagement by their
parents and management. Jackie Coogan was the primary example
of the need to protect child actors' earnings. Coogan had
starred in nearly 20 films before his 18th birthday, including
Charlie Chaplin's "The Kid," and sued his mother and stepfather
to recover earnings they had stolen from him as a child actor.
This bill would exempt children contracting to provide artistic
or creative services as an extra, background perform, or in
another similar capacity from the Coogan Trust Account
requirement.
According to the author, Central Casting (the largest extras
casting company) reports that background child actors typically
perform two or less times per year for wages amounting to $145
or less per performance. Further, The Actor's Fund of America
(AFA), which is statutorily designated as the trustee of
unclaimed child actor earnings, reports that the Unclaimed
Coogan Fund has over 38,000 individual deposits, over 32,000 of
which are for less than $99. The Unclaimed Coogan Fund is
comprised of earnings forwarded by employers when the child
actor has not provided proof of an established Coogan Trust
Account. The AFA has concluded that most of these deposits are
from background players who have abandoned their money rather
than establishing a Coogan Trust Account.
Proponents further argue that requiring background performers to
establish Coogan Trust Accounts does not further the purpose of
protecting the child's career earnings for use by the child
later in life. As such, it makes more sense to allow these
children to receive their background performance wages as earned
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rather than requiring them to wait until adulthood to have
access to miniscule amounts in the trust accounts.
The author notes a recent class action demonstrates another
issue with Coogan Trust Accounts required to be established for
child actors. ABC News reported on a lawsuit brought by the
trustee parents of child performers alleging improper fee
withdrawals by Bank of America. (Miller, Did Bank of America
Steal From Child Actors (Sept. 24, 2012) ABC News
[as of May 31, 2013].) The current status of
this class action case is unknown; however, it demonstrates that
Coogan Trust Accounts containing less than specified amounts
($300 at Bank of America) are charged fees, which use up a
child's earnings from a few days of extra work rather than
maintaining the earnings for the use by the child later in life.
The author argues that after agent fees and taxes, the amount
left to deposit in the Coogan Trust is insubstantial and
effectively exhausted by fees charged by banks for accounts
containing amounts less than $300.
The issue presented by this bill is whether it is appropriate to
exempt children who are providing extra or background services
from the Coogan Trust Account protections. Arguably, the Coogan
Law was aimed at protecting children earning large amounts from
their child acting career. On the other hand, a child earning
less than $300 per year (two union days of acting at $145/day),
minus the 20 percent agent fees, minus federal and state taxes,
may benefit more from immediate access to the 15 percent of
these earnings currently required to be placed in trust ($45)
rather than paying fees from this amount to the bank maintaining
the Coogan Trust Fund on the child's behalf. As such, it
appears appropriate to exempt children performing as extras and
background performers from the Coogan Trust Account requirement.
Notably, children performing in acting roles not designated as
extra or background work would still be required to establish a
Coogan Trust Account.
Support : BizParentz Foundation; Children in Film, Inc.; The
Actors Fund of America
Opposition : None Known
HISTORY
AB 533 (Calderon)
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Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 1401 (Committee on Arts, Entertainment, Sports, Tourism, and
Internet Media, Ch. 557, Stats. 2011) established an online
temporary work permit process administered by the Division of
Labor Standards Enforcement in order to assist parents
establishing a Coogan Trust Account for the benefit of the minor
performer.
SB 210 (Burton, Ch. 667, Stats. 2003) See Background.
SB 1162 (Burton, Ch. 940, Stats. 1999) See Background.
AB 436 (McCarthy, Ch. 436, Stats. 1975) See Background.
Prior Vote :
Assembly Committee on Arts, Entertainment, Sports, Tourism, and
Internet Media (Ayes 6, Noes 0)
Assembly Committee on Labor and Employment (Ayes 7, Noes 0)
Assembly Floor (Ayes 70, Noes 0)
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