093_SB0689ham001

 










                                     LRB093 09350 LRD 15126 a

 1                    AMENDMENT TO SENATE BILL 689

 2        AMENDMENT NO.     .  Amend Senate Bill 689  by  replacing
 3    everything after the enacting clause with the following:

 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
 
                            -2-      LRB093 09350 LRD 15126 a
 1    arising   from   payment   to   or   through    the    trust.
 2    Notwithstanding  any  other  provision  of  this Section, any
 3    person pursuant to an appropriate judicial order may be  paid
 4    the  prize  to which a winner is entitled, and all or part of
 5    any prize otherwise  payable  by  State  warrant  under  this
 6    Section  shall  be  withheld  upon certification to the State
 7    Comptroller from the Illinois Department  of  Public  Aid  as
 8    provided  in Section 10-17.5 of The Illinois Public Aid Code.
 9    The Director shall be discharged  of  all  further  liability
10    upon payment of a prize pursuant to this Section.
11    (Source: P.A. 85-1224.)

12        (20 ILCS 1605/13.1 new)
13        Sec. 13.1.  Assignment of prizes payable in installments.
14        (a)  The  right of any person to receive payments under a
15    prize  that  is  paid  in  installments  over  time  by   the
16    Department  may be voluntarily assigned, in whole or in part,
17    if the assignment is made to a person  or  entity  designated
18    pursuant  to  an  order  of a court of competent jurisdiction
19    located in the judicial circuit  where  the  assigning  prize
20    winner resides or where the headquarters of the Department is
21    located.  A  court  may  issue an order approving a voluntary
22    assignment  and  directing  the  Department  to  make   prize
23    payments  in  whole or in part to the designated assignee, if
24    the court finds that all of  the  following  conditions  have
25    been met:
26             (1)  The  assignment  is  in writing, is executed by
27        the assignor, and is, by its terms, subject to  the  laws
28        of this State.
29             (2)  The  purchase price being paid for the payments
30        being assigned represents a present value of the payments
31        being assigned, discounted at an annual  rate  that  does
32        not  exceed  10  percentage  points  over the Wall Street
33        Journal prime rate published on the business day prior to
 
                            -3-      LRB093 09350 LRD 15126 a
 1        the date of execution of the contract.
 2             (3)  The contract  of  assignment  expressly  states
 3        that  the assignor has 3 business days after the contract
 4        was signed to cancel the assignment.
 5             (4)  The  assignor  provides   a   sworn   affidavit
 6        attesting that he or she:
 7                  (i)  is  of  sound  mind, is in full command of
 8             his or  her  faculties,  and  is  not  acting  under
 9             duress;
10                  (ii)  has been advised regarding the assignment
11             by  his or her own independent legal counsel, who is
12             unrelated to and is not  being  compensated  by  the
13             assignee  or  any  of the assignee's affiliates, and
14             has received independent  financial  or  tax  advice
15             concerning  the  effects  of  the  assignment from a
16             lawyer or other professional who is unrelated to and
17             is not being compensated by the assignee or  any  of
18             the assignee's affiliates;
19                  (iii)  understands  that  he  or  she  will not
20             receive the prize payments or portions  thereof  for
21             the years assigned;
22                  (iv)  understands  and agrees that, with regard
23             to the assigned payments,  the  Department  and  its
24             officials   and   employees  will  have  no  further
25             liability or responsibility  to  make  the  assigned
26             payments to him or her;
27                  (v)  has  been provided with a one-page written
28             disclosure statement setting forth, in bold type  of
29             not   less   than  14  points,  the  payments  being
30             assigned, by amounts and payment dates; the purchase
31             price being paid; the rate of  discount  to  present
32             value, assuming daily compounding and funding on the
33             contract  date;  and  the  amount,  if  any,  of any
34             origination or closing fees that will be charged  to
 
                            -4-      LRB093 09350 LRD 15126 a
 1             him or her; and
 2                  (vi)  was advised in writing, at the time he or
 3             she  signed  the assignment contract, that he or she
 4             had the right to cancel the  contract,  without  any
 5             further obligation, within 3 business days following
 6             the date on which the contract was signed.
 7             (5)  Written  notice  of the proposed assignment and
 8        any court hearing concerning the proposed  assignment  is
 9        provided  to  the  Department's  counsel at least 30 days
10        prior  to  any  court  hearing.  The  Department  is  not
11        required to appear in or be named as a party to any  such
12        action  seeking  judicial  confirmation  of an assignment
13        under this Section, but may intervene as of right in  any
14        such proceeding.
15        (b)  A  certified  copy  of  a  court  order  approving a
16    voluntary assignment must be provided to  the  Department  no
17    later than 30 days before the date on which the payment is to
18    be made.
19        (c)  A  court  order  obtained  pursuant to this Section,
20    together with all such prior orders, shall  not  require  the
21    Department to divide any single prize payment among more than
22    3  different  persons. Nothing in this Section shall prohibit
23    substituting assignees as long as there are no  more  than  3
24    assignees at any one time for any one prize payment.
25        (d)  If  a husband and wife are co-owners of a prize, any
26    assignment of the prize must be made jointly.
27        (e)  A voluntary assignment may not include  portions  of
28    payments that are subject to offset on account of a defaulted
29    or delinquent child support obligation, non-wage garnishment,
30    or  criminal  restitution  obligation or on account of a debt
31    owed to  a  State  agency.  Each  court  order  issued  under
32    subsection  (a)  shall  provide  that  any  delinquent  child
33    support  or criminal restitution obligations of the assigning
34    prize winner and any debts owed to  a  State  agency  by  the
 
                            -5-      LRB093 09350 LRD 15126 a
 1    assigning  prize  winner,  as of the date of the court order,
 2    shall be set off by the Department  first  against  remaining
 3    payments  or  portions  thereof due the prize winner and then
 4    against payments due the assignee.
 5        (f)  The Department  and  its  respective  officials  and
 6    employees  shall  be discharged of all liability upon payment
 7    of an assigned prize under this Section.   The  assignor  and
 8    assignee  shall  hold  harmless and indemnify the Department,
 9    the State of Illinois, and its employees and agents from  all
10    claims,  actions,  suits, complaints, and liabilities related
11    to the assignment.
12        (g)  The Department may establish  a  reasonable  fee  to
13    defray    any   administrative   expenses   associated   with
14    assignments made under this Section, including  the  cost  to
15    the Department of any processing fee that may be imposed by a
16    private  annuity  provider.  The fee amount shall reflect the
17    direct  and  indirect  costs   associated   with   processing
18    assignments.
19        (h)  If  at  any  time  the Internal Revenue Service or a
20    court  of  competent  jurisdiction  issues  a   determination
21    letter,  revenue  ruling, other public ruling of the Internal
22    Revenue Service, or published decision to the  Department  or
23    to  any  lottery  prize  winner  declaring that the voluntary
24    assignment of prizes  will  affect  the  federal  income  tax
25    treatment  of  prize  winners who do not assign their prizes,
26    the Department shall immediately file a copy of that  letter,
27    ruling,  or published decision with the Attorney General, the
28    Secretary of State, and  the  Administrative  Office  of  the
29    Illinois Courts. A court may not issue an order authorizing a
30    voluntary  assignment  under  this Section after the date any
31    such ruling, letter, or published decision is filed.
32        (i)  A contract of assignment in which the assignor is  a
33    lottery  winner  shall  include  a  sworn  affidavit from the
34    assignee. The form of the affidavit shall be  established  by
 
                            -6-      LRB093 09350 LRD 15126 a
 1    the Department and shall include:
 2             (1)  a summary of assignee contacts with the winner;
 3             (2)  a  summary  of  any lawsuits, claims, and other
 4        legal actions from lottery winners regarding  conduct  of
 5        the assignee or its agents;
 6             (3)  a  statement  that  the  assignee  is  in  good
 7        standing  in  its  state  of  domicile and with any other
 8        licensing or regulatory agency as may be required in  the
 9        conduct of its business;
10             (4)  a brief business history of the assignee;
11             (5)  a   statement  describing  the  nature  of  the
12        business of the assignee; and
13             (6)  a  statement  of  the  assignee's  privacy  and
14        non-harassment policies and express affirmation that  the
15        assignee has followed those policies in Illinois.
16        (j)  The  assignee  shall  notify  the  Department of its
17    business location and mailing address  for  payment  purposes
18    during the entire course of the assignment.".