House Bill 1549

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    Florida House of Representatives - 1999                HB 1549

        By Representatives Bense, Feeney, Fasano, Peaden, Effman,
    Jacobs, Bradley, Bitner, Brummer, Wiles, Flanagan and Warner





  1                      A bill to be entitled

  2         An act relating to the state lotteries;

  3         creating s. 24.1153, F.S.; authorizing the

  4         assignment of certain prizes pursuant to a

  5         court order and providing requirements

  6         therefor; providing for the securing of funds

  7         offset for child support payments or debts owed

  8         to a state agency; exempting the Department of

  9         the Lottery from liability upon payment of an

10         assigned prize; authorizing a fee to defray the

11         administrative expenses associated with such

12         assignments; providing circumstances under

13         which such court orders may no longer be

14         issued; amending ss. 24.115 and 24.118, F.S.,

15         relating to payment of prizes and unlawful

16         assignment or transfer of a right to claim a

17         prize, to conform; providing an effective date.

18

19  Be It Enacted by the Legislature of the State of Florida:

20

21         Section 1.  Section 24.1153, Florida Statutes, is

22  created to read:

23         24.1153  Assignment of prizes payable in installments

24  over time.--

25         (1)  The right of any person to receive payments under

26  a prize that is paid in installments over time by the

27  department may be voluntarily assigned, in whole or in part,

28  if the assignment is made to a person or entity designated

29  pursuant to an order of a court of competent jurisdiction

30  located in the judicial district where the assigning prize

31  winner resides or where the headquarters of the department is

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    Florida House of Representatives - 1999                HB 1549

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  1  located. A court may issue an order approving a voluntary

  2  assignment and directing the department to make prize payments

  3  in whole or in part to the designated assignee, if and only if

  4  the court finds that all of the following conditions have been

  5  met:

  6         (a)  The assignment is in writing, is executed by the

  7  assignor, and is by its terms subject to the laws of this

  8  state.

  9         (b)  The purchase price being paid for the payments

10  being assigned represents a present value of the payments

11  being assigned discounted at an annual rate that does not

12  exceed the state's usury limit for loans.

13         (c)  The assignor provides a sworn affidavit attesting

14  that he or she:

15         1.  Is of sound mind, is in full command of his or her

16  faculties, and is not acting under duress;

17         2.  Has been advised regarding the assignment by his or

18  her own independent legal counsel who is unrelated to and is

19  not being compensated by the assignee or any of the assignee's

20  affiliates, and has received independent financial or tax

21  advice concerning the effects of the assignment from a lawyer

22  or other professional who is unrelated to and is not being

23  compensated by the assignee or any of the assignee's

24  affiliates;

25         3.  Understands that he or she will not receive the

26  prize payments or portions thereof for the years assigned;

27         4.  Understands and agrees that with regard to the

28  assigned payments the department, and its respective officials

29  and employees, will have no further liability or

30  responsibility to make the assigned payments to him or her;

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    Florida House of Representatives - 1999                HB 1549

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  1         5.  Has been provided with a one-page written

  2  disclosure statement setting forth, in bold type of not less

  3  than 14 points, the payments being assigned, by amounts and

  4  payment dates; the purchase price being paid; the rate of

  5  discount to present value, assuming daily compounding and

  6  funding on the contract date; and the amount, if any, of any

  7  origination or closing fees that will be charged to him or

  8  her; and

  9         6.  Was advised in writing, at the time he or she

10  signed the assignment contract, that he or she had the right

11  to cancel the contract, without any further obligation, within

12  3 business days following the date on which the contract was

13  signed.

14         (d)  Written notice of the proposed assignment and any

15  court hearing concerning the proposed assignment is provided

16  to the department's counsel at least 10 days prior to any

17  court hearing. The department is not required to appear in or

18  be named as a party to any such action seeking judicial

19  confirmation of an assignment under this section, but may

20  intervene as of right in any such proceeding.

21         (2)  In accordance with the provisions of s. 24.115(4),

22  a voluntary assignment may not include or cover payments or

23  portions of payments that are subject to offset on account of

24  a defaulted or delinquent child support obligation or on

25  account of a debt owed to a state agency, unless appropriate

26  provision is made in the court order to satisfy the

27  obligations giving rise to the offset.

28         (3)  The department, and its respective officials and

29  employees, shall be discharged of all liability upon payment

30  of an assigned prize under this section.

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    Florida House of Representatives - 1999                HB 1549

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  1         (4)  The department may establish a reasonable fee to

  2  defray any administrative expenses associated with assignments

  3  made under this section, including the cost to the department

  4  of any processing fee that may be imposed by a private annuity

  5  provider. The fee amount shall reflect the direct and indirect

  6  costs associated with processing such assignments.

  7         (5)  If at any time the federal Internal Revenue

  8  Service or a court of competent jurisdiction issues a

  9  determination letter, revenue ruling, other public ruling of

10  the Internal Revenue Service, or published decision to any

11  state lottery or prize winner of any state lottery declaring

12  that the voluntary assignment of prizes will affect the

13  federal income tax treatment of prize winners who do not

14  assign their prizes, the secretary of the department shall

15  immediately file a copy of that letter, ruling, or published

16  decision with the Secretary of State and the Office of the

17  State Courts Administrator. A court may not issue an order

18  authorizing a voluntary assignment under this section after

19  the date any such ruling, letter, or published decision is

20  filed.

21         Section 2.  Paragraph (a) of subsection (1) of section

22  24.115, Florida Statutes, is amended to read:

23         24.115  Payment of prizes.--

24         (1)  The department shall promulgate rules to establish

25  a system of verifying the validity of tickets claimed to win

26  prizes and to effect payment of such prizes; however:

27         (a)  The right of any person to a prize, other than a

28  prize that is payable in installments over time, is shall not

29  be assignable. However, any a prize, to the extent it has not

30  already been assigned or encumbered, may be paid to the estate

31  of a deceased prize winner or to a person designated pursuant

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    Florida House of Representatives - 1999                HB 1549

    725-102-99






  1  to an appropriate court judicial order. A prize that is

  2  payable in installments over time is assignable, but only

  3  pursuant to an appropriate court order as provided in s.

  4  24.1153.

  5         Section 3.  Subsection (2) of section 24.118, Florida

  6  Statutes, is amended to read:

  7         24.118  Other prohibited acts; penalties.--

  8         (2)  UNLAWFUL ASSIGNMENT OR TRANSFER OF RIGHT TO CLAIM

  9  PRIZE.--Except as authorized by s. 24.1153, any person who

10  induces another to assign or transfer his or her right to

11  claim a prize, who offers for sale his or her right to claim a

12  prize, or who offers for compensation to claim the prize of

13  another is guilty of a misdemeanor of the first degree,

14  punishable as provided in s. 775.082 or s. 775.083.

15         Section 4.  This act shall take effect July 1, 1999.

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17            *****************************************

18                          HOUSE SUMMARY

19
      Authorizes the assignment of lottery prizes payable in
20    installments over time pursuant to a court order and
      provides requirements therefor. Provides for the securing
21    of funds offset for child support payments or debts owed
      to a state agency. Authorizes a fee to defray the
22    administrative expenses associated with such assignments.
      Provides that such court orders may no longer be issued
23    if the Internal Revenue Service or a court determines
      that such assignment affects the income tax treatment of
24    prize winners who do not assign their prizes.

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