House Bill 1549er

CODING: Words stricken are deletions; words underlined are additions.





    ENROLLED

    1999 Legislature                                    CS/HB 1549



  1

  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 s. 24.115, F.S., relating to

15         payment of prizes, to conform; requiring the

16         department to seek a declaration concerning the

17         tax consequences of the right of assignment for

18         those who do not assign their prizes; providing

19         effective dates.

20

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

22

23         Section 1.  Section 24.1153, Florida Statutes, is

24  created to read:

25         24.1153  Assignment of prizes payable in installments

26  over time.--

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

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

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

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

31  pursuant to an order of a court of competent jurisdiction


                                  1

CODING: Words stricken are deletions; words underlined are additions.




    ENROLLED

    1999 Legislature                                    CS/HB 1549



  1  located in the judicial district where the assigning prize

  2  winner resides or where the headquarters of the department is

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

  4  assignment and directing the department to make prize payments

  5  in whole or in part to the designated assignee, if the court

  6  finds that all of the following conditions have been met:

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

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

  9  state.

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

11  being assigned represents a present value of the payments

12  being assigned, discounted at an annual rate that does not

13  exceed the state's usury limit for loans.

14         (c)  The assignor provides a sworn affidavit attesting

15  that he or she:

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

17  faculties, and is not acting under duress;

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

19  her own independent legal counsel, who is unrelated to and is

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

21  affiliates, and has received independent financial or tax

22  advice concerning the effects of the assignment from a lawyer

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

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

25  affiliates;

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

27  prize payments or portions thereof for the years assigned;

28         4.  Understands and agrees that with regard to the

29  assigned payments the department and its officials and

30  employees will have no further liability or responsibility to

31  make the assigned payments to him or her;


                                  2

CODING: Words stricken are deletions; words underlined are additions.




    ENROLLED

    1999 Legislature                                    CS/HB 1549



  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)  A certified copy of a court order approving a

22  voluntary assignment must be provided to the department no

23  later than 14 days before the date on which the payment is to

24  be made.

25         (3)  In accordance with the provisions of s. 24.115(4),

26  a voluntary assignment may not include or cover payments or

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

28  a defaulted or delinquent child-support obligation or on

29  account of a debt owed to a state agency. Each court order

30  issued under subsection (1) shall provide that any delinquent

31  child-support obligations of the assigning prize winner and


                                  3

CODING: Words stricken are deletions; words underlined are additions.




    ENROLLED

    1999 Legislature                                    CS/HB 1549



  1  any debts owed to a state agency by the assigning prize

  2  winner, as of the date of the court order, shall be offset by

  3  the department first against remaining payments or portions

  4  thereof due the prize winner and then against payments due the

  5  assignee.

  6         (4)  The department, and its respective officials and

  7  employees, shall be discharged of all liability upon payment

  8  of an assigned prize under this section.

  9         (5)  The department may establish a reasonable fee to

10  defray any administrative expenses associated with assignments

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

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

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

14  costs associated with processing such assignments.

15         (6)  If at any time the Internal Revenue Service or a

16  court of competent jurisdiction issues a determination letter,

17  revenue ruling, other public ruling of the Internal Revenue

18  Service, or published decision to any state lottery or prize

19  winner of any state lottery declaring that the voluntary

20  assignment of prizes will affect the federal income tax

21  treatment of prize winners who do not assign their prizes, the

22  secretary of the department shall immediately file a copy of

23  that letter, ruling, or published decision with the Secretary

24  of State and the Office of the State Courts Administrator. A

25  court may not issue an order authorizing a voluntary

26  assignment under this section after the date any such ruling,

27  letter, or published decision is filed.

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

29  24.115, Florida Statutes, is amended to read:

30         24.115  Payment of prizes.--

31


                                  4

CODING: Words stricken are deletions; words underlined are additions.




    ENROLLED

    1999 Legislature                                    CS/HB 1549



  1         (1)  The department shall promulgate rules to establish

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

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

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

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

  6  be assignable. However, any a prize, to the extent that it has

  7  not been assigned or encumbered pursuant to s. 24.1153, may be

  8  paid to the estate of a deceased prize winner or to a person

  9  designated pursuant to an appropriate court judicial order. A

10  prize that is payable in installments over time is assignable,

11  but only pursuant to an appropriate court order as provided in

12  s. 24.1153.

13         Section 3.  The Department of the Lottery shall seek

14  from the United States Internal Revenue Service a

15  determination letter or revenue ruling declaring that the

16  voluntary assignment of prizes under this act will not affect

17  the federal income tax treatment of prize winners who do not

18  assign their prizes.

19         Section 4.  This act shall take effect upon becoming a

20  law, except that sections 1 and 2 shall take effect September

21  1, 1999, or upon receipt by the Department of the Lottery of

22  the declaration sought under section 3, whichever occurs

23  earlier.

24

25

26

27

28

29

30

31


                                  5