HBA-EDN H.B. 539 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 539
By: Thompson
Judicial Affairs
2/8/2001
Introduced



BACKGROUND AND PURPOSE 

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

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 539 amends the Texas Probate Code to authorize a court, on
petition of a party to the contract, to enter an order approving an arts
and entertainment contract, advertisement contract, or sports contract
(contract) that is entered into by a minor.  The bill authorizes the court
to approve the contract only after the party requesting the petition
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.  The
bill authorizes a proceeding for approval of such a contract to be brought
in the county in which the minor resides, is employed, or a party has its
principal office in this state for the transaction of business if the minor
does not reside and is not employed in this state.  Each parent of the
minor or the court-appointed managing conservator or guardian of the minor
is a necessary party to such a proceeding.  The bill authorizes the court
to appoint a guardian ad litem for a minor who has entered into a contract
if the court finds that appointment of the ad litem would be in the best
interest of the minor.   H.B. 539 provides that the approval of a contract
that is entered into by a minor 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.  The bill  prohibits an otherwise valid contract
that was approved by the court from being voidable solely on the ground
that it was entered into by a person during the age of minority. 

H.B. 539 authorizes the court, notwithstanding any other law, to require in
an order approving a contract that a reasonable amount of the net earnings
of the minor under the contract, as determined by the court, be set aside
and preserved for the benefit of the minor in a management trust or a
similar trust created under the laws of another state.  The bill 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 in a trust until the
guardian of the minor executes and files with the court written consent to
the making of the order.   

H.B. 539 prohibits these provisions from being construed to authorize the
making of a contract that binds a minor beyond the minor's 18th birthday or
the date on which the minor's disabilities of minority are removed for
general purposes, whichever is earlier.        



 





EFFECTIVE DATE

September 1, 2001.