BILL NUMBER: SB 1162	CHAPTERED
	BILL TEXT

	CHAPTER   940
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 10, 1999
	PASSED THE SENATE   AUGUST 26, 1999
	PASSED THE ASSEMBLY   AUGUST 23, 1999
	AMENDED IN ASSEMBLY   AUGUST 18, 1999
	AMENDED IN ASSEMBLY   JULY 8, 1999
	AMENDED IN ASSEMBLY   JUNE 29, 1999
	AMENDED IN ASSEMBLY   JUNE 9, 1999
	AMENDED IN SENATE   APRIL 21, 1999
	AMENDED IN SENATE   APRIL 12, 1999

INTRODUCED BY   Senator Burton
   (Coauthors:  Senators Costa, Solis, and Speier)
   (Coauthors:  Assembly Members Havice, Kuehl, Washington, and
Wildman)

                        FEBRUARY 26, 1999

   An act to amend Sections 771, 6750, 6751, and 7500 of, and to
repeal and add Sections 6752 and 6753 of, the Family Code, relating
to minors.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1162, Burton.  Minors:  contracts.
   Existing law governs the earnings and accumulations of minors, as
specified.
   This bill would regulate the disposition of earnings or
accumulations by an unemancipated minor by requiring a certain
portion to be held in trust, as specified.  The bill would require
the trustee of the trust to, among other things, prepare a specified
written statement under penalty of perjury, thereby expanding the
crime of perjury and creating 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.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 771 of the Family Code is amended to read:
   771.  (a) The earnings and accumulations of a spouse and the minor
children living with, or in the custody of, the spouse, while living
separate and apart from the other spouse, are the separate property
of the spouse.
   (b) Notwithstanding subdivision (a), the earnings and
accumulations of an unemancipated minor child related to a contract
of a type described in Section 6750 shall remain the sole legal
property of the minor child.
  SEC. 2.  Section 6750 of the Family Code is amended to read:
   6750.  This chapter applies to the following contracts entered
into between an unemancipated minor and any third party or parties on
or after January 1, 2000:
   (a) A contract pursuant to which a person is employed or agrees to
render artistic or creative services, either directly or through a
third party, including, but not limited to, a personal services
corporation (loan-out company).  "Artistic or creative services"
includes, but is not limited to, services as an actor, actress,
dancer, musician, comedian, singer, stunt-person, voice-over artist,
or other performer or entertainer, or as a songwriter, musical
producer or arranger, writer, director, producer, production
executive, choreographer, composer, conductor, or designer.
   (b) A contract pursuant to which a person agrees to purchase, or
otherwise secure, sell, lease, license, or otherwise dispose of
literary, musical, or dramatic properties, or use of a person's
likeness, voice recording, performance, or story of or incidents in
his or her life, either tangible or intangible, or any rights therein
for use in motion pictures, television, the production of sound
recordings in any format now known or hereafter devised, the
legitimate or living stage, or otherwise in the entertainment field.

   (c) A contract pursuant to which a person is employed or agrees to
render services as a participant or player in a sport.
   (d) Where a minor renders services as an extra, background
performer, or in a similar capacity, through an agency or service
that provides one or more performers for a fee (casting agency), the
agency or service shall be considered the minor's employer for the
purposes of this chapter.
  SEC. 3.  Section 6751 of the Family Code is amended to read:
   6751.  (a) A contract, otherwise valid, of a type described in
Section 6750, entered into during minority, cannot be disaffirmed on
that ground either during the minority of the person entering into
the contract, or at any time thereafter, if the contract has been
approved by the superior court in any county in which the minor
resides or is employed or in which any party to the contract has its
principal office in this state for the transaction of business.
   (b) Approval of the court may be given on petition of any party to
the contract, after such reasonable notice to all other parties to
the contract as is fixed by the court, with opportunity to such other
parties to appear and be heard.
   (c) Approval of the court given under this section extends to the
whole of the contract and all of its terms and provisions, including,
but not limited to, any optional or conditional provisions contained
in the contract for extension, prolongation, or termination of the
term of the contract.
   (d) For the purposes of any proceeding under this chapter, a
parent or legal guardian, as the case may be, entitled to the
physical custody, care, and control of the minor at the time of the
proceeding shall be considered the minor's guardian ad litem for the
proceeding, unless the court shall determine that appointment of a
different individual as guardian ad litem is required in the best
interests of the minor.
  SEC. 4.  Section 6752 of the Family Code is repealed.
  SEC. 5.  Section 6752 is added to the Family Code, to read:
   6752.  (a) A parent or guardian, as the case may be, entitled to
the physical custody, care, and control of a minor who enters into a
contract of a type described in Section 6750 shall provide a
certified copy of the minor's birth certificate indicating the minor'
s minority to the other party or parties to the contract and in
addition, in the case of a guardian, a certified copy of the court
document appointing the person as the minor's legal guardian.
   (b) (1) Notwithstanding any other statute, in an order approving a
minor's contract of a type described in Section 6750, the court
shall require that 15 percent of the minor's gross earnings pursuant
to the contract be set aside by the minor's employer in trust, in an
account or other savings plan, and preserved for the benefit of the
minor in accordance with Section 6753.  The court may also require
that more than 15 percent of the minor's gross earnings be set aside
in trust, in an account or other savings plan, and preserved for the
benefit of the minor in accordance with Section 6753, upon request of
the minor's parent or legal guardian, or the minor, through his or
her guardian ad litem.
   (2) The court shall require that at least one parent or legal
guardian, as the case may be, entitled to the physical custody, care,
and control of the minor at the time the order is issued be
appointed as trustee of the funds ordered to be set aside in trust
for the benefit of the minor, unless the court shall determine that
appointment of a different individual, individuals, entity, or
entities as trustee or trustees is required in the best interest of
the minor.
   (3) The trustee or trustees of the funds ordered to be set aside
in trust shall promptly provide the minor's employer with a true and
accurate photocopy of the trustee's statement pursuant to subdivision
(c) of Section 6753.
   (4) The minor's employer shall deposit or disburse the funds as
required by the order within 15 business days of receiving the order
and receiving the trustee's statement pursuant to Section 6753.
Notwithstanding any other statute, pending receipt of the trustee's
statement, the minor's employer shall hold for the benefit of the
minor the percentage ordered by the court of the minor's gross
earnings pursuant to the contract.
   (5) When making the initial deposit of funds pursuant to the
order, the minor's employer shall provide the financial institution
with a copy of the order.
   (6) Once the minor's employer deposits the set aside funds
pursuant to Section 6753, in trust, in an account or other savings
plan, the minor's employer shall have no further obligation or duty
to monitor or account for the funds.  The trustee or trustees of the
trust shall be the only individual, individuals, entity, or entities
with the obligation or duty to monitor and account for those funds
once they have been deposited by the minor's employer.  The trustee
or trustees shall do an annual accounting of the funds held in trust,
in an account or other savings plan, in accordance with Sections
16062 and 16063 of the Probate Code.
   (7) The court shall have continuing jurisdiction over the trust
established pursuant to the order and may at any time, upon petition
of the parent or legal guardian, the minor, through his or her
guardian ad litem, or the trustee or trustees, on good cause shown,
order that the trust be amended or terminated, notwithstanding the
provisions of the declaration of trust.  An order amending or
terminating a trust may be made only after reasonable notice to the
beneficiary, to the parent or guardian, if any, and to the trustee or
trustees of the funds if the beneficiary is then a minor, with
opportunity for all parties to appear and be heard.
   (8) The trustee or trustees of the funds ordered to be set aside
shall promptly notify the minor's employer in writing of any change
in facts that affect the employer's obligation or ability to set
aside the funds in accordance with the order, including, but not
limited to, a change of financial institution or account number, or
the existence of a new or amended order issued pursuant to paragraph
(7) amending or terminating the employer's obligations under the
original order.  The written notification shall include the
information set forth in paragraph (3) and shall be accompanied by a
true and accurate photocopy of the new or amended order.
   (c) (1) Notwithstanding any other statute, for any minor's
contract of a type described in Section 6750 that is not being
submitted for approval by the court pursuant to Section 6751, or for
which the court has issued a final order denying approval, 15 percent
of the minor's gross earnings pursuant to the contract shall be set
aside by the minor's employer in trust, in an account or other
savings plan, and preserved for the benefit of the minor in
accordance with Section 6753.  At least one parent or legal guardian,
as the case may be, entitled to the physical custody, care, and
control of the minor, shall be the trustee of the funds set aside for
the benefit of the minor, unless the court, upon petition by the
parent or legal guardian, the minor, through his or her guardian ad
litem, or the trustee or trustees of the trust, shall determine that
appointment of a different individual, individuals, entity, or
entities as trustee or trustees is required in the best interest of
the minor.
   (2) A parent or guardian, as the case may be, entitled to the
physical custody, care, and control of the minor shall promptly
provide the minor's employer with a true and accurate photocopy of
the trustee's statement pursuant to subdivision (c) of Section 6753
and in addition, in the case of a guardian, a certified copy of the
court document appointing the person as the minor's legal guardian.
   (3) The minor's employer shall deposit 15 percent of the minor's
gross earnings pursuant to the contract within 15 business days of
receiving the trustee's statement pursuant to subdivision (c) of
Section 6753, or if the court denies approval of the contract, within
15 business days of receiving a final order denying approval of the
contract.  Notwithstanding any other statute, pending receipt of the
trustee's statement or the final court order, the minor's employer
shall hold for the benefit of the minor the 15 percent of the minor's
gross earnings pursuant to the contract.
   (4) Once the minor's employer deposits the set aside funds in
trust, in an account or other savings plan pursuant to Section 6753,
the minor's employer shall have no further obligation or duty to
monitor or account for the funds.  The trustee or trustees of the
trust shall be the only individual, individuals, entity, or entities
with the obligation or duty to monitor and account for those funds
once they have been deposited by the minor's employer.  The trustee
or trustees shall do an annual accounting of the funds held in trust,
in an account or other savings plan, in accordance with Sections
16062 and 16063 of the Probate Code.
   (5) Upon petition of the parent or legal guardian, the minor,
through his or her guardian ad litem, or the trustee or trustees of
the trust, to the superior court in any county in which the minor
resides or in which the trust is established, the court may at any
time, on good cause shown, order that the trust be amended or
terminated, notwithstanding the provisions of the declaration of
trust.  An order amending or terminating a trust may be made only
after reasonable notice to the beneficiary, to the parent or
guardian, if any, and to the trustee or trustees of the funds if the
beneficiary is then a minor, with opportunity for all parties to
appear and be heard.
   (6) A parent or guardian, as the case may be, entitled to the
physical custody, care, and control of the minor shall promptly
notify the minor's employer in writing of any change in facts that
affect the employer's obligation or ability to set aside funds for
the benefit of the minor in accordance with this section, including,
but not limited to, a change of financial institution or account
number, or the existence of a new or amended order issued pursuant to
paragraph (5) amending or terminating the employer's obligations
under this section.  The written notification shall be accompanied by
a true and accurate photocopy of the trustee's statement and
attachments pursuant to subdivision (c) of Section 6753, or a true
and accurate photocopy of the new or amended order.
   (d) Where a parent or guardian, as the case may be, is entitled to
the physical custody, care, and control of a minor who enters into a
contract of a type described in Section 6750, the relationship
between the parent or guardian, as the case may be, and the minor is
a fiduciary relationship that is governed by the law of trusts,
whether or not a court has issued a formal order to that effect.  The
parent or guardian, as the case may be, acting in his or her
fiduciary relationship, shall, with the earnings and accumulations of
the minor under the contract, pay all liabilities incurred by the
minor under the contract, including, but not limited to, payments for
taxes on all earnings, including taxes on the amounts set aside
under subdivisions (b) and (c) of this section, and payments for
personal or professional services rendered to the minor or the
business related to the contract.  Nothing in this subdivision shall
be construed to alter any other existing responsibilities of a parent
or legal guardian to provide for the support of a minor child.
   (e) With respect to contracts pursuant to which a person is
employed to render services as a musician, singer, songwriter,
musical producer, or arranger only, "gross earnings" for purposes of
this chapter means the amount paid directly to the minor pursuant to
the contract, including the payment of any advances to the minor
pursuant to the contract, but excluding deductions to offset those
advances or other expenses incurred by the employer pursuant to the
contract.
  SEC. 6.  Section 6753 of the Family Code is repealed.
  SEC. 7.  Section 6753 is added to the Family Code, to read:
   6753.  (a) The trustee or trustees shall establish a trust
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, 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
and the employer.
   (b) Except as otherwise provided in this section, prior to the
date on which the beneficiary of the trust attains the age of 18
years 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 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
(c) of Section 6752.  Upon reaching the age of 18 years, 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 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) If the trust is established in the United States, it shall be
established 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.  If the trust is
established outside the United States, the financial institution
shall be a first-class international bank.  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, in a financial
institution 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 where the trust is held, the trust funds may
be handled by the trustee or trustees in any of the following
methods:
   (1) The trustee or trustees 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 section.
   (2) The trustee or trustees 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 trustee or trustees have 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 trustee or trustees 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
remain in trust at a financial institution insured by the FDIC,
SIPC, or NCUSIF if within the United States or maintained in a
first-class international bank if not within the United States;
provided that those purchases have a maturity date on or before the
date upon which the minor will attain the age of 18 years, and
provided further that any proceeds accruing from those purchases be
redeposited into that account or accounts or used to further purchase
any of those or similar securities, bonds, certificates,
instruments, funds, or accounts.
  SEC. 8.  Section 7500 of the Family Code is amended to read:
   7500.  (a) The mother of an unemancipated minor child, and the
father, if presumed to be the father under Section 7611, are equally
entitled to the services and earnings of the child.
   (b) If one parent is dead, is unable or refuses to take custody,
or has abandoned the child, the other parent is entitled to the
services and earnings of the child.
   (c) This section shall not apply to any services or earnings of an
unemancipated minor child related to a contract of a type described
in Section 6750.
  SEC. 9.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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 XIIIB of the California Constitution.