State of Illinois
91st General Assembly
Legislation

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91_HB0858

 
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 1        AN ACT to amend the  Illinois  Lottery  Law  by  changing
 2    Section 13 and adding Sections 7.12 and 13.1.

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

 5        Section 5.   The  Illinois  Lottery  Law  is  amended  by
 6    changing  Section  13  and  adding  Sections 7.12 and 13.1 as
 7    follows:

 8        (20 ILCS 1605/7.12 new)
 9        Sec. 7.12.  Report concerning prohibition against sale to
10    minors.  The Department shall report to the  Speaker  of  the
11    House,  the President of the Senate, and the minority leaders
12    of  both  houses  by  January  1,  2000   regarding   current
13    enforcement  of  prohibitions  against  the  sale  of lottery
14    tickets to minors.  The report shall include the Department's
15    recommendations concerning strengthening the  enforcement  of
16    the  prohibition,  particularly  as it applies to the sale of
17    lottery tickets from machines.

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

15        (20 ILCS 1605/13.1 new)
16        Sec. 13.1.  Assignment of prizes.
17        (a)  The  right of a person to receive payments due under
18    a prize that  is  paid  in  installments  over  time  by  the
19    Department  may be voluntarily assigned, in whole or in part,
20    if the assignment is made to a person  or  entity  designated
21    pursuant  to  an  order  of  the circuit court located in the
22    county in which the assigning winner resides or in which  the
23    Department's headquarters are located.
24        A  court  shall  issue  an  order  approving  a voluntary
25    assignment and  directing  the  Department  to  direct  prize
26    payments in whole or in part to the assignee if, and only if,
27    all of the following conditions have been met:
28             (1)  the  assignment  is in writing, executed by the
29        assignor, and by its terms, subject to the laws  of  this
30        State;
31             (2)  the   assignor   provides   a  sworn  affidavit
32        attesting that:
33                  (A)  the assigning winner is of sound mind,  in
 
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 1             full command of his or her faculties, and not acting
 2             under duress;
 3                  (B)  the  assigning  winner  has  been  advised
 4             regarding   the   assignment   by  his  or  her  own
 5             independent  legal   counsel   and   has   had   the
 6             opportunity to receive independent financial and tax
 7             advice concerning the effects of the assignment;
 8                  (C)  the  assigning  winner understands that he
 9             or she will  not  receive  the  prize  payments  (or
10             portions thereof) for the years assigned;
11                  (D)  the   assigning   winner  understands  and
12             agrees that, with regard to the  assigned  payments,
13             the  State,  the Department, and their officials and
14             employees  will  have  no   further   liability   or
15             responsibility  to make the assigned payments to the
16             assignor;
17                  (E)  the assigning  winner  has  been  provided
18             with a one page written disclosure statement setting
19             forth  (in  bold  type,  14  point  or  larger)  the
20             payments  being  assigned  (by  amounts  and payment
21             dates), the purchase price being paid, the  rate  of
22             discount    to   present   value,   assuming   daily
23             compounding and funding on the  contract  date,  and
24             the  amount,  if  any, of any origination or closing
25             fees that will be charged to the  assigning  winner;
26             and
27                  (F)  the   assigning   winner  was  advised  in
28             writing, at the time he or she signed the assignment
29             contract, that he or she had the right to cancel the
30             contract without any  further  obligation  within  3
31             business  days  following  the  date  on  which  the
32             contract was signed.
33        (b)  A  voluntary  assignment  shall not include or cover
34    payments or portions of payments that are subject  to  offset
 
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 1    on  account  of  a  defaulted  or  delinquent  child  support
 2    obligation, unless appropriate provision is made in the order
 3    to satisfy the obligations giving rise to the offset.
 4        (c)  The  State,  the  Department,  and  their respective
 5    officials and employees shall be discharged  of  all  further
 6    liability  upon  payment  of  a  prize  pursuant  to an order
 7    entered under this Section.
 8        (d)  The Department may establish  a  reasonable  fee  to
 9    defray  administrative  expenses  associated with assignments
10    made pursuant to this Section,  including  the  cost  to  the
11    State  or  the  Department  of any processing fee that may be
12    imposed by a private annuity provider.  The fee amount  shall
13    reflect   the  direct  and  indirect  costs  associated  with
14    processing the assignments.
15        (e)  Notwithstanding any other provision of this Section,
16    no prizewinner shall have the right to assign prize  payments
17    upon:
18             (1)  The  issuance  by  the  United  States Internal
19        Revenue Service (IRS) of a technical rule letter, revenue
20        ruling, or other public ruling of the IRS  in  which  the
21        IRS  determines  that, based upon the right of assignment
22        provided in this Act, a lottery prizewinner who does  not
23        assign  prize  payments  would be subject to an immediate
24        income tax liability for the value of  the  entire  prize
25        rather   than   annual  income  tax  liability  for  each
26        installment when paid.
27             (2)  The  issuance   by   a   court   of   competent
28        jurisdiction  of a published decision holding that, based
29        upon the right of assignment provided in this Section,  a
30        lottery  prizewinner  who  does not assign prize payments
31        pursuant to this Section would be subject to an immediate
32        income tax liability for the value of  the  entire  prize
33        rather   than   annual  income  tax  liability  for  each
34        installment when paid.
 
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 1        Upon receipt of a letter or ruling  from  the  IRS  or  a
 2    published  decision  of a court of competent jurisdiction, as
 3    specified in item (1) or (2)  of  this  subsection  (e),  the
 4    Director  shall  immediately  file  a  copy  of  that letter,
 5    ruling, or published decision with the  Secretary  of  State.
 6    Immediately  upon  the  filing  by  the Director of a letter,
 7    ruling, or published decision with the Secretary of State,  a
 8    prizewinner shall be ineligible to assign a prize pursuant to
 9    this Section.
10        The changes made by this amendatory Act of 1999 shall not
11    apply  unless  the  national  office  of the Internal Revenue
12    Service has ruled that  those  changes  will  not  constitute
13    constructive  receipt  by any prize winner prior to an actual
14    assignment being made under this Section.

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