Senate Research Center   H.B. 1799
By: King, Phil (Armbrister)


Currently, large Texas state lottery prizes may be paid in annual
installments over a period of 20 years.  Many state lotteries have
established procedures that allow prize winners to sell their right to
collect lottery prizes over time in exchange for a lump sum cash payment
from a third party, including individuals, banks, investment or loan
companies.  H.B. 1799 would regulate the assignment of lottery payment
streams and would clarify that voluntary assignment of lottery prize
payments, as authorized by court order, is allowable, but only subject to
specified consumer protection safeguards. 


As proposed, H.B. 1799 establishes conditions regarding the assignment or
deposit of certain lottery prizes. 


This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 


SECTION 1.  Amends Section 466.402(d), Government Code, to make conforming

SECTION 2.  Amends Section 466.406, Government Code, as follows:

Requires prize payments to be made to the estate of a deceased prizewinner,
if the prizewinner was an individual.  Makes conforming changes. 

SECTION 3.  Amends Section 466.408(b), Government Code, to require the
prize money to be deposited to the credit of the Texas Department of Health
State Owned Multi-categorical Teaching Hospital Account for the purpose of
providing funding for indigent health care, if a claim is not made on a
prize on or before the 180th day after the winner was selected.  Deletes
text regarding additional money for the state lottery account. 

SECTION 4.  Amends Chapter 466I, Government Code, by adding Section
466.410, as follows: 

Sec. 466.410.  ASSIGNMENT OF PRIZES.  (a)  Authorizes a person to assign
the right to receive prize payments that are paid by the Texas Lottery
Commission (commission) in installments over time if the assignment is made
to a person designated by an order of a district court of Travis County,
except that installment prize payments due within the final two years of
the prize payment schedule may not be assigned.   

(b)  Requires a district court to issue an order approving a voluntary
assignment and directing the commission to direct prize payments in whole
or in part to the assignee if certain conditions exist and are fulfilled.  

 (c)  Requires it to be the responsibility of the assignor to bring to the
attention of the court, the existence or nonexistence of a current spouse.
Provides conditions regarding the assignor  and an assignor's spouse, if
married, in reference to the proposed assignment.   

(d)  Requires the order to 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, with respect to any given prize.
Provides that 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)  Requires the court to include specific findings as to compliance with
the requirements and to specify the prize payment or payments assigned, as
well as certain information regarding the payment or payments.   

(f)  Requires a certified copy of the court order to be delivered to the
commission  not later than 20 days prior to the date upon which the first
assigned payment is to be paid to the assignee.  Requires the commission to
acknowledge in writing to both the assignor and the assignee its receipt
of said court order.  Requires the commission, unless the written notice
from the commission cannot comply with the court order, to thereafter make
the prize payments in accordance with the court order. 

(g)  Requires the commission to establish and collect a reasonable fee to
defray certain administrative expenses.  Requires the commission to
establish the amount of the fee to reflect the direct and indirect costs
associated with processing the assignment. 

(h)  Prohibits an assignment pursuant to court order from including or
covering payments or portions of payments that are subject to any offset
provided by this chapter. 

(i)  Establishes that there will be no right to assign prize payments
following certain issuances, notwithstanding any other provision of this
(j)  Requires the executive director to immediately file a copy of the
letter, ruling, or published decision with the secretary of state, after
receiving a letter or ruling from the Internal Revenue Service or the
court.  Prohibits the commission from making any payment to an assignee
pursuant to a court order entered after the date of such letter or ruling,
and the assignor is ineligible to assign a prize, after the filing by the
executive director. 
SECTION 5. Effective date: September 1, 1999.

SECTION 6.  Makes application of this Act prospective.

SECTION 7.  Emergency clause.