Amend HB 1799 by striking below the enacting clause and
substituting the following:
SECTION 1. Subsection (d), Section 466.402, Government Code,
is amended to read as follows:
(d) The state is discharged of all further liability on the
payment of a prize under Section 466.403, 466.404, 466.406, <or>
466.407, or 466.410 or this section or under any additional
procedures established by rule.
SECTION 2. Section 466.406, Government Code, is amended to
read as follows:
Sec. 466.406. RIGHT TO PRIZE not generally assignable.
(a) Except as <otherwise> provided by this section and section
466.410, the right of any person to a prize is not assignable.
(b) Payment of prize payments not previously assigned as
provided by this section or section 466.410 shall <may> be made to
the estate of a deceased prizewinner if the prizewinner was an
individual.
(c) A prize to which a winner is otherwise entitled may be
paid to any person under an appropriate judicial order.
SECTION 3. Subchapter I, Chapter 466, Government Code, is
amended by adding Section 466.410 to read as follows:
Sec. 466.410. ASSIGNMENT OF PRIZES. (a) A person may
assign, in whole or in part, the right to receive prize payments
that are paid by the commission in installments over time if the
assignment is made to a person designated by an order of a district
court of the county of Travis County, except that installment prize
payments due within the final two years of the prize payment
schedule may not be assigned.
(b) A district court shall issue an order approving a
voluntary assignment and directing the commission to direct prize
payments in whole or in part to the assignee if:
(1) A copy of the petition for the order and copies of
all notices of any hearing in the matter have been served on the
Executive Director not later than 20 days prior to any hearing or
entry of any order. The Commission may intervene in a proceeding
to protect the interests of the Commission but shall not be
considered an indispensable or necessary party. A petition filed
under this section shall include in the caption the prizewinner's
name as it appears on the lottery claim form.
(2) the assignment is in writing, executed by the
assignor and assignee (or designated agent), and by its terms
subject to the laws of this state; and
(3) the assignor provides a sworn and notarized
affidavit stating that the assignor:
(A) is of sound mind, over eighteen years of
age, is in full command of the person's faculties, and is not
acting under duress;
(B) has been advised regarding the assignment by
independent legal counsel and has had the opportunity to receive
independent financial and tax advice concerning the effects of the
assignment;
(C) understands that the assignor will not
receive the prize payments, or portions of the prize payments, for
the assigned years;
(D) understands and agrees that with regard to
the assigned payments, the state, the commission, and its officials
and employees will have no further liability or responsibility to
make the assigned payments to the assignor;
(E) has been provided a one-page written
disclosure statement stating, in boldface type, 14 points or
larger:
(i) the payments being assigned, by
amounts and payment dates;
(ii) the purchase price being paid, if
any;
(iii) if a purchase price is paid, the
rate of discount to the present value of the prize, assuming daily
compounding and funding on the contract date; and
(iv) the amount, if any, of any
origination or closing fees that will be charged to the assignor;
and
(F) was advised in writing, at the time the
assignment was signed, that the assignor had the right to cancel
without any further obligation not later than the third business
day after the date the assignment was signed.
(c) It shall be the responsibility of the assignor to bring
to the attention of the court, either by sworn testimony or by
written declaration submitted under penalty of perjury, the
existence or nonexistence of a current spouse. If married, the
assignor shall identify his or her spouse and submit to the court a
sworn and notarized statement wherein the spouse consents to the
assignment. If the assignor is married and the sworn and notarized
statement is not presented to the court, the court shall determine,
to the extent necessary and as appropriate under applicable law,
the ability of the assignor to make the proposed assignment without
the spouse's consent.
(d) With respect to any given prize, the order shall also
recite and identify all prior assignments by amount of or fraction
of payment assigned, the identity of the assignee, and the date(s)
of payment(s) assigned. A court order obtained pursuant to this
section, together with all such prior orders, shall not require the
Commission to divide any single prize payment among more than three
different persons.
(e) The court order shall include specific findings as to
compliance with the requirements of sections (b), (c) and (d) above
and shall specify the prize payment or payments assigned, or any
portion thereof, including the dates and amounts of the payments to
be assigned, the years in which each payment is to begin and end,
the gross amount of the annual payments assigned before taxes, the
prizewinner's name as it appears on the lottery claim form, the
assignor's social security or tax identification number, and, if
applicable, the citizenship or resident alien number of the
assignee if an individual.
(f) A certified copy of a court order granted under this
section shall be delivered to the commission and such order must be
provided to the commission no later than 20 days prior to the date
upon which the first assigned payment is to be paid to the
assignee. Within 20 days of receipt of the court order, the
commission shall acknowledge in writing to both the assignor and
the assignee its receipt of said court order. Unless the
commission provides written notice to the assignor and assignee
that the commission cannot comply with the court order, the
commission shall thereafter make the prize payments in accordance
with the court order.
(g) The commission shall establish and collect a reasonable
fee to defray any administrative expenses associated with an
assignment made under this section, including the cost to the
commission of any processing fee imposed by a private annuity
provider. The commission shall establish the amount of the fee to
reflect the direct and indirect costs associated with processing
the assignment.
(h) An assignment pursuant to court order may not include or
cover payments or portions of payments that are subject to any
offset provided by this chapter.
(i) Notwithstanding any other provision of this section,
there will be no right to assign prize payments following:
(i) the issuance, by the Internal Revenue
Service, of a technical rule letter, revenue ruling, or other
public ruling of the Internal Revenue Service that determines that,
based on the right of assignment as provided by this section, a
lottery prizewinner who does not assign prize payments would be
subject to an immediate income tax liability for the value of the
entire prize rather than annual income tax liability for each
installment when paid; or
(ii) the issuance by a court of a published
decision holding that, based on the right of assignment as provided
by this section, a lottery prizewinner who does not assign prize
payments would be subject to an immediate income tax liability for
the value of the entire prize rather than annual income tax
liability for each installment when paid.
(j) After receiving a letter or ruling from the Internal
Revenue Service or a published decision of a court as provided by
Subsection (i)(i or ii), the Executive Director shall immediately
file a copy of the letter, ruling, or published decision with the
Secretary of State. When the Executive Director files a copy of
the letter, ruling, or published decision with the Secretary of
State, an assignor is ineligible to assign a prize under this
section, and the commission shall not make any payment to an
assignee pursuant to a court order entered after the date of such
letter or ruling.
SECTION 4. This Act takes effect September 1, 1999.
SECTION 5. The importance of this legislation and the
crowded condition of the calendars in both houses create an
emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended.