Rep. Senfronia Thompson, D-Houston, filed HB 539 on January 9, 2001. HB 539 would add Sections 901--905 of the Probate Code, giving probate courts the ability to approve a minor's contract for arts and entertainment, sports or advertising services.

In 1999, a substantially similar provision was added to HB 1851 (the guardianship bill of the Real Estate, Probate and Trust Law Section of the State Bar) at the last minute, and inclusion of this provision led Governor Bush to veto HB 1851. Rep. Thompson's 2001 bill differs from the 1999 version in three ways:

1. New Section 902 provides: "CONSTRUCTION. This subpart may not be 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." This makes the 2001 bill less controversial but much less useful than the 1999 bill. For example, a record company wanting to sign a 16-year-old to a four-record deal (where the last two records are likely to be issued after his or her 18th birthday) run the risk of the kid repudiating the contract when he or she turns 18. Will the record company in that case be willing to promote the artist as aggressively, knowing that it might lose the minor to another label when he or she turns 18?

2. New Section 903(f) provides that each parent and managing conservator is a necessary party to the proceeding to approve the contract. While it seems likely that this was intended in 1999, the theoretical possibility that a parent may not get notice of a proceeding to approve a contract may have led to Governor Bush's veto (although that is not clear).

3. The 1999 version would have permitted the court to order up to one-half of the net earnings of the minor in an 867 trust or similar trust, to be "set aside and preserved for the benefit of the minor." The new version removes the one-half limit, saying only that the court can order a "portion" of the net proceeds and that it must be "a reasonable amount as determined by the court." Section 3.103 of the Texas Family Code provides that the earnings of an unemancipated minor are subject to the management, control and disposition of the minor's parents. Section 151.003(5) of the Texas Family Code gives the parent of a minor child "the right to the services and earnings of the child." This bill, if enacted, would require the court to balance the rights of parents to manage, control and dispose of a minor's earnings with the rights of the minor to benefit from his or her own services while a minor. While the 2001 version provides that a "portion" may be safeguarded for the minor, it is likely that a probate court will want to preserve all, or virtually all, of the proceeds of a large contract in an 867 trust.

It is not clear why the bill is limited to contracts for advertising, arts and entertainment and sports. Granted, these are the areas where most of a minor's earnings are likely to be generated, but there doesn't seem to be any reason to limit its application to those areas.  [01/10/01].