093_SB0689enr

 
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 1        AN ACT in relation to gambling.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Illinois  Lottery  Law  is  amended by
 5    changing Section 13 and adding Section 13.1 as follows:

 6        (20 ILCS 1605/13) (from Ch. 120, par. 1163)
 7        Sec. 13.  Except as otherwise provided in  Section  13.1,
 8    no  prize,  nor  any portion of a prize, nor any right of any
 9    person to a prize awarded shall be assignable.  Any prize, or
10    portion thereof remaining unpaid at  the  death  of  a  prize
11    winner,  may  be  paid  to  the estate of such deceased prize
12    winner, or to the trustee  under  a  revocable  living  trust
13    established by the deceased prize winner as settlor, provided
14    that  a  copy  of  such  a  trust  has  been  filed  with the
15    Department along with a notarized letter  of  direction  from
16    the  settlor  and  no  written  notice of revocation has been
17    received by the Department  prior  to  the  settlor's  death.
18    Following  such a settlor's death and prior to any payment to
19    such a successor trustee, the Director shall obtain from  the
20    trustee  and  each  trust  beneficiary a written agreement to
21    indemnify and hold the Department harmless  with  respect  to
22    any  claims  that  may  be  asserted  against  the Department
23    arising   from   payment   to   or   through    the    trust.
24    Notwithstanding  any  other  provision  of  this Section, any
25    person pursuant to an appropriate judicial order may be  paid
26    the  prize  to which a winner is entitled, and all or part of
27    any prize otherwise  payable  by  State  warrant  under  this
28    Section  shall  be  withheld  upon certification to the State
29    Comptroller from the Illinois Department  of  Public  Aid  as
30    provided  in Section 10-17.5 of The Illinois Public Aid Code.
31    The Director shall be discharged  of  all  further  liability
 
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 1    upon payment of a prize pursuant to this Section.
 2    (Source: P.A. 85-1224.)

 3        (20 ILCS 1605/13.1 new)
 4        Sec. 13.1.  Assignment of prizes payable in installments.
 5        (a)  The  right of any person to receive payments under a
 6    prize  that  is  paid  in  installments  over  time  by   the
 7    Department  may be voluntarily assigned, in whole or in part,
 8    if the assignment is made to a person  or  entity  designated
 9    pursuant  to  an  order  of a court of competent jurisdiction
10    located in the judicial circuit  where  the  assigning  prize
11    winner resides or where the headquarters of the Department is
12    located.  A  court  may  issue an order approving a voluntary
13    assignment  and  directing  the  Department  to  make   prize
14    payments  in  whole or in part to the designated assignee, if
15    the court finds that all of  the  following  conditions  have
16    been met:
17             (1)  The  assignment  is  in writing, is executed by
18        the assignor, and is, by its terms, subject to  the  laws
19        of this State.
20             (2)  The  purchase price being paid for the payments
21        being assigned represents a present value of the payments
22        being assigned, discounted at an annual  rate  that  does
23        not  exceed  10  percentage  points  over the Wall Street
24        Journal prime rate published on the business day prior to
25        the date of execution of the contract.
26             (3)  The contract  of  assignment  expressly  states
27        that  the assignor has 3 business days after the contract
28        was signed to cancel the assignment.
29             (4)  The  assignor  provides   a   sworn   affidavit
30        attesting that he or she:
31                  (i)  is  of  sound  mind, is in full command of
32             his or  her  faculties,  and  is  not  acting  under
33             duress;
 
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 1                  (ii)  has been advised regarding the assignment
 2             by  his or her own independent legal counsel, who is
 3             unrelated to and is not  being  compensated  by  the
 4             assignee  or  any  of the assignee's affiliates, and
 5             has received independent  financial  or  tax  advice
 6             concerning  the  effects  of  the  assignment from a
 7             lawyer or other professional who is unrelated to and
 8             is not being compensated by the assignee or  any  of
 9             the assignee's affiliates;
10                  (iii)  understands  that  he  or  she  will not
11             receive the prize payments or portions  thereof  for
12             the years assigned;
13                  (iv)  understands  and agrees that, with regard
14             to the assigned payments,  the  Department  and  its
15             officials   and   employees  will  have  no  further
16             liability or responsibility  to  make  the  assigned
17             payments to him or her;
18                  (v)  has  been provided with a one-page written
19             disclosure statement setting forth, in bold type  of
20             not   less   than  14  points,  the  payments  being
21             assigned, by amounts and payment dates; the purchase
22             price being paid; the rate of  discount  to  present
23             value, assuming daily compounding and funding on the
24             contract  date;  and  the  amount,  if  any,  of any
25             origination or closing fees that will be charged  to
26             him or her; and
27                  (vi)  was advised in writing, at the time he or
28             she  signed  the assignment contract, that he or she
29             had the right to cancel the  contract,  without  any
30             further obligation, within 3 business days following
31             the date on which the contract was signed.
32             (5)  Written  notice  of the proposed assignment and
33        any court hearing concerning the proposed  assignment  is
34        provided  to  the  Department's  counsel at least 30 days
 
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 1        prior  to  any  court  hearing.  The  Department  is  not
 2        required to appear in or be named as a party to any  such
 3        action  seeking  judicial  confirmation  of an assignment
 4        under this Section, but may intervene as of right in  any
 5        such proceeding.
 6        (b)  A  certified  copy  of  a  court  order  approving a
 7    voluntary assignment must be provided to  the  Department  no
 8    later than 30 days before the date on which the payment is to
 9    be made.
10        (c)  A  court  order  obtained  pursuant to this Section,
11    together with all such prior orders, shall  not  require  the
12    Department to divide any single prize payment among more than
13    3  different  persons. Nothing in this Section shall prohibit
14    substituting assignees as long as there are no  more  than  3
15    assignees at any one time for any one prize payment.
16        (d)  If  a husband and wife are co-owners of a prize, any
17    assignment of the prize must be made jointly.
18        (e)  A voluntary assignment may not include  portions  of
19    payments that are subject to offset on account of a defaulted
20    or delinquent child support obligation, non-wage garnishment,
21    or  criminal  restitution  obligation or on account of a debt
22    owed to  a  State  agency.  Each  court  order  issued  under
23    subsection  (a)  shall  provide  that  any  delinquent  child
24    support  or criminal restitution obligations of the assigning
25    prize winner and any debts owed to  a  State  agency  by  the
26    assigning  prize  winner,  as of the date of the court order,
27    shall be set off by the Department  first  against  remaining
28    payments  or  portions  thereof due the prize winner and then
29    against payments due the assignee.
30        (f)  The Department  and  its  respective  officials  and
31    employees  shall  be discharged of all liability upon payment
32    of an assigned prize under this Section.   The  assignor  and
33    assignee  shall  hold  harmless and indemnify the Department,
34    the State of Illinois, and its employees and agents from  all
 
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 1    claims,  actions,  suits, complaints, and liabilities related
 2    to the assignment.
 3        (g)  The Department may establish  a  reasonable  fee  to
 4    defray    any   administrative   expenses   associated   with
 5    assignments made under this Section, including  the  cost  to
 6    the Department of any processing fee that may be imposed by a
 7    private  annuity  provider.  The fee amount shall reflect the
 8    direct  and  indirect  costs   associated   with   processing
 9    assignments.
10        (h)  If  at  any  time  the Internal Revenue Service or a
11    court  of  competent  jurisdiction  issues  a   determination
12    letter,  revenue  ruling, other public ruling of the Internal
13    Revenue Service, or published decision to the  Department  or
14    to  any  lottery  prize  winner  declaring that the voluntary
15    assignment of prizes  will  affect  the  federal  income  tax
16    treatment  of  prize  winners who do not assign their prizes,
17    the Department shall immediately file a copy of that  letter,
18    ruling,  or published decision with the Attorney General, the
19    Secretary of State, and  the  Administrative  Office  of  the
20    Illinois Courts. A court may not issue an order authorizing a
21    voluntary  assignment  under  this Section after the date any
22    such ruling, letter, or published decision is filed.
23        (i)  A contract of assignment in which the assignor is  a
24    lottery  winner  shall  include  a  sworn  affidavit from the
25    assignee. The form of the affidavit shall be  established  by
26    the Department and shall include:
27             (1)  a summary of assignee contacts with the winner;
28             (2)  a  summary  of  any lawsuits, claims, and other
29        legal actions from lottery winners regarding  conduct  of
30        the assignee or its agents;
31             (3)  a  statement  that  the  assignee  is  in  good
32        standing  in  its  state  of  domicile and with any other
33        licensing or regulatory agency as may be required in  the
34        conduct of its business;
 
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 1             (4)  a brief business history of the assignee;
 2             (5)  a   statement  describing  the  nature  of  the
 3        business of the assignee; and
 4             (6)  a  statement  of  the  assignee's  privacy  and
 5        non-harassment policies and express affirmation that  the
 6        assignee has followed those policies in Illinois.
 7        (j)  The  assignee  shall  notify  the  Department of its
 8    business location and mailing address  for  payment  purposes
 9    during the entire course of the assignment.