California Legislature—2013–14 Regular Session

Assembly Bill No. 533

Introduced by Assembly Member Ian Calderon

February 20, 2013

An act to amend Section 6753 of the Family Code, relating to minors.

LEGISLATIVE COUNSEL’S DIGEST

AB 533, as introduced, Ian Calderon. Artistic employment contracts: minors.

Existing law regulates certain contracts for artistic employment between an unemancipated minor and 3rd parties, including employment as an actor, dancer, musician, comedian, singer, stunt-person, voice-over artist, or sports player. Existing law provides for the establishment of a trust for the purpose of preserving for the minor a portion of the minor’s gross earnings, as defined. Existing law prohibits a withdrawal from this trust account by the beneficiary or any other individual or entity before the beneficiary attains 18 years of age or is emancipated without a court order, as specified.

This bill would prohibit the financial institution or company that holds the trust from withdrawing funds from the trust account for the purpose of collecting fees or service charges assessed for maintenance of the account prior to the date on which the beneficiary of the trust attains 18 years of age or is emancipated without a court order as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

SECTION 1.  

Section 6753 of the Family Code is amended to
read:

6753.  

(a) The trustee or trustees shall establish a trust account,
that shall be known as a Coogan Trust Account, pursuant to this
section at a bank, savings and loan institution, credit union,
brokerage firm, or company registered under the Investment
Company Act of 1940, that is located in the State of California,
unless a similar trust has been previously established, for the
purpose of preserving for the benefit of the minor the portion of
the minor’s gross earnings pursuant to paragraph (1) of subdivision
(b) of Section 6752 or pursuant to paragraph (1) of subdivision (c)
of Section 6752. The trustee or trustees shall establish the trust
pursuant to this section within seven business days after the minor’s
contract is signed by the minor, the third-party individual or
personal services corporation (loan-out company), and the
employer.

(b) Except as otherwise provided in this section, prior to the
date on which the beneficiary of the trust attains begin delete the age of end delete 18
years begin insert of age end insert or the issuance of a declaration of emancipation of
the minor under Section 7122, no withdrawal by the beneficiary
or any other individual, individuals, entity, or entities begin insert , including
the financial institution or company in which the trust is held, for
purposes of collecting fees or service charges assessed for
maintenance of the trust, end insert may be made of funds on deposit in trust
without written order of the superior court pursuant to paragraph
(7) of subdivision (b) or paragraph (5) of subdivision begin delete (c) end delete begin insert (d) end insert of
Section 6752. Upon reaching begin delete the age of end delete 18 years begin insert of age end insert , the
beneficiary may withdraw the funds on deposit in trust only after
providing a certified copy of the beneficiary’s birth certificate to
the financial institution where the trust is located.

(c) The trustee or trustees shall, within 10 business days after
the minor’s contract is signed by the minor, the third-party
individual or personal services corporation (loan-out company),
and the employer, prepare a written statement under penalty of
perjury that shall include the name, address, and telephone number
of the financial institution, the name of the account, the number
of the account, the name of the minor beneficiary, the name of the
trustee or trustees of the account, and any additional information
needed by the minor’s employer to deposit into the account the
portion of the minor’s gross earnings prescribed by paragraph (1)
of subdivision (b) or paragraph (1) of subdivision (c) of Section
6752. The trustee or trustees shall attach to the written statement
a true and accurate photocopy of any information received from
the financial institution confirming the creation of the account,
such as an account agreement, account terms, passbook, or other
similar writings.

(d) The trust shall be established in California either with a
financial institution that is and remains insured at all times by the
Federal Deposit Insurance Corporation (FDIC), the Securities
Investor Protection Corporation (SIPC), or the National Credit
Union Share Insurance Fund (NCUSIF) or their respective
successors, or with a company that is and remains registered under
the Investment Company Act of 1940. The trustee or trustees of
the trust shall be the only individual, individuals, entity, or entities
with the obligation or duty to ensure that the funds remain in trust,
in an account or other savings plan insured in accordance with this
section, or with a company that is and remains registered under
the Investment Company Act of 1940 as authorized by this section.

(e) Upon application by the trustee or trustees to the financial
institution or company in which the trust is held, the trust funds
shall be handled by the financial institution or company in one or
more of the following methods:

(1) The financial institution or company may transfer funds to
another account or other savings plan at the same financial
institution or company, provided that the funds transferred shall
continue to be held in trust, and subject to this chapter.

(2) The financial institution or company may transfer funds to
another financial institution or company, provided that the funds
transferred shall continue to be held in trust, and subject to this
chapter and that the transferring financial institution or company
has provided written notification to the financial institution or
company to which the funds will be transferred that the funds are
subject to this section and written notice of the requirements of
this chapter.

(3) The financial institution or company may use all or a part
of the funds to purchase, in the name of and for the benefit of the
minor, (A) investment funds offered by a company registered under
the Investment Company Act of 1940, provided that if the
underlying investments are equity securities, the investment fund
is a broad-based index fund or invests broadly across the domestic
or a foreign regional economy, is not a sector fund, and has assets
under management of at least two hundred fifty million dollars
($250,000,000); or (B) government securities and bonds,
certificates of deposit, money market instruments, money market
accounts, or mutual funds investing solely in those government
securities and bonds, certificates, instruments, and accounts, that
are available at the financial institution where the trust fund or
other savings plan is held, provided that the funds shall continue
to be held in trust and subject to this chapter, those purchases shall
have a maturity date on or before the date upon which the minor
will attain the age of 18 years, and any proceeds accruing from
those purchases shall be redeposited into that account or accounts
or used to further purchase any of those or similar securities, bonds,
certificates, instruments, funds, or accounts.