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SB-1765 Motion picture, television, and radio contracts: 3rd-party rights.(2007-2008)

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Amended  IN  Senate  April 23, 2008

CALIFORNIA LEGISLATURE— 2007–2008 REGULAR SESSION

Senate Bill
No. 1765

Introduced  by  Senator Kuehl
Migden (Coauthor(s): Senator Alquist, Migden, Romero, Steinberg)
Ma (Coauthor(s): Assembly Member Davis, Ma, Swanson)

February 22, 2008

An act to add Section 17048.7 to the Business and Professions Code, relating to business.


LEGISLATIVE COUNSEL'S DIGEST


SB 1765, as amended, Kuehl. Motion picture, television, and radio contracts: third-party 3rd-party rights.
Existing provisions of the Unfair Practices Act prohibit any person engaged in business within this state from selling any article or product at less than the cost thereof, for the purpose of injuring competitors or destroying competition. Under existing law, any contract made in violation of the act is an illegal contract, and a person violating the act is guilty of a misdemeanor and subject to specified criminal penalties and civil liability.
This bill would additionally prohibit the holder of rights in a motion picture, television program or series, or radio program from selling or licensing those rights to an affiliated entity for less than their fair market value, as defined, where a third 3rd party is entitled to receive payment based on the proceeds from the sale or licensure. The bill would provide that, where an action is brought to enforce this prohibition by the Attorney General or a district attorney, the court shall assess against a guilty party a civil penalty of $100 per violation. The bill would provide that a violation of its provisions would not be a crime. The bill would not apply to a governmental entity.

Because a violation of the bill’s provisions would be a crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: YESNO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17048.7 is added to the Business and Professions Code, to read:

17048.7.
 (a) It is unlawful for the holder of rights in a motion picture, television program or series, or radio program to sell or license those rights to an affiliated entity for less than their fair market value where a third party, including, but not limited to, an actor, writer, director, producer, musician, composer, or health and welfare or pension trust fund, is entitled to receive payment based, in whole or in part, on the proceeds from the sale or license.
(b) For purposes of this section, “fair the following terms have the following meanings:
(1) “Affiliated entity” means any business entity, including, but not limited to, a sole proprietorship, partnership, corporation, subsidiary, department, or division, that is related to the holder of rights through common ownership or control. Affiliated entity shall not include a governmental entity.
(2) “Fair market value” means the most likely price that the assets being sold would bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller acting prudently, knowledgeably, and in their own best interest, and a reasonable time being allowed for exposure in the open market.
(c) Notwithstanding any other provision of law, the provisions of Article 6 (commencing with Section 17100) shall not apply for violations of this section, and a violation of this section shall not be a crime.
(d) Where an action is brought to enforce this section by the Attorney General or a district attorney, and the defendant is found to have violated the provisions of subdivision (a), the court shall assess a civil penalty of one hundred dollars ($100) per violation.
(e) Nothing in this section is intended to limit any other rights or remedies available under law.
(f) This section shall not apply to a governmental entity.

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.