SRC-JBJ H.B. 539 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 539
77R11587 CLG-FBy: Thompson (West, Royce)
Jurisprudence
5/10/2001
Engrossed


DIGEST AND PURPOSE 

Under current Texas law, a parent or guardian is required to seek court
approval when a minor is entering into certain contracts.  There are no
specific laws, however, relating to the establishment of a contract for the
services of a child performer or to issues of liability accompanying that
contract.  H.B. 539 establishes provisions to specifically address arts,
entertainment, advertisement, and sports contracts entered into by minors.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter XIII5, Texas Probate Code, by adding Subpart H,
as follows: 

SUBPART H.  CONTRACTS IN ARTS, ENTERTAINMENT,
ADVERTISEMENT, AND SPORTS

Sec. 901.  DEFINITIONS.  Defines "advertise," "advertisement contract,"
"artist," "arts and entertainment contract," "consumer goods," and "sports
contract." 

Sec. 902.  CONSTRUCTION.  Prohibits this subpart from being construed to
authorize the making of a contract that binds a minor beyond the seventh
anniversary of the date of the contract. 

Sec. 903.  APPROVAL OF CERTAIN CONTRACTS OF MINORS; NOT VOIDABLE. (a)
Authorizes a court, on petition of the guardian of the estate of the minor,
to enter an order approving for purposes of this subpart an arts and
entertainment contract, advertisement contract, or sports contract that is
entered into by a minor.  Authorizes the court to approve the contract only
after the guardian of the minor's estate provides to the other party to the
contract notice of the petition and an opportunity to request a hearing in
the manner provided by the court. 
 
(b)  Provides that the approval of a contract under this section extends to
the contract as a whole and any of the terms and provisions of the
contract, including any optional or conditional provision in the contract
relating to the extension or termination of its term.  

(c)  Authorizes a court to withhold approval of a contract under which part
of the minor's net earnings under the contract will be set aside as
provided by Section 904 of this code until the guardian of the minor's
estate executes and files with the court written consent to the making of
the order.  

(d)  Prohibits an otherwise valid contract approved under this section from
being  voidable solely on the ground that it was entered into by a person
during the age of minority.  
  
(e)  Provides that each parent of the minor is a necessary party to a
proceeding brought under this section. 

Sec. 904.  NET EARNINGS OF MINOR; SET ASIDE AND PRESERVATION.  (a) Defines
"net earnings." 

(b)  Authorizes the court, notwithstanding any other law, to require in an
order approving a contract under Section 903 of this code that a portion of
the net earnings of the minor under the contract be set aside and preserved
for the benefit of the minor in a trust created under Section 867 of this
code or a similar trust created under the laws of another state.  Requires
the amount to be set aside under this subsection to be a reasonable amount
as determined by the court.  

Sec. 905.  GUARDIAN AD LITEM.  Authorizes the court to appoint a guardian
ad litem for a minor who has entered into an arts and entertainment
contract, advertisement contract, or sports contract if the court finds
that appointment of the ad litem would be in the best interest of the
minor.  

SECTION 2.  Effective date: September 1, 2001.