82R4306 JSC-F
By: Carona S.B. No. 626
A BILL TO BE ENTITLED
AN ACT
relating to lottery winnings, including assignment of winnings,
periodic payments of winnings, and the deduction of child support
delinquency amounts from winnings.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 466.407, Government Code, is amended to
read as follows:
Sec. 466.407. DEDUCTIONS FROM PRIZES. (a) The executive
director shall deduct the amount of a delinquent tax or other money
from the winnings of a person who has been finally determined to be:
(1) delinquent in the payment of a tax or other money
collected by the comptroller, the Texas Workforce Commission, or
the Texas Alcoholic Beverage Commission;
(2) [delinquent in making child support payments
administered or collected by the attorney general;
[(3)] delinquent in reimbursing the Health and [Texas
Department of] Human Services Commission for a benefit granted in
error under the food stamp program or the program of financial
assistance under Chapter 31, Human Resources Code;
(3) [(4)] in default on a loan made under Chapter 52,
Education Code; or
(4) [(5)] in default on a loan guaranteed under
Chapter 57, Education Code.
(a-1) The executive director shall deduct delinquent child
support payments from the winnings of a person in the amount of the
delinquency as determined by a court or a Title IV-D agency under
Chapter 231, Family Code.
(b) If a person's winnings exceed the amount of a
delinquency under Subsection (a) or (a-1), the director shall pay
the balance to the person. The director shall transfer the amount
deducted to the appropriate agency or to the state disbursement
unit under Chapter 234, Family Code, as applicable.
(c) The [attorney general,] comptroller, Texas Workforce
Commission, Texas Alcoholic Beverage Commission, Health and [Texas
Department of] Human Services Commission, Texas Higher Education
Coordinating Board, and Texas Guaranteed Student Loan Corporation
shall each provide the executive director with a report of persons
who have been finally determined to be delinquent in the payment of
a tax or other money collected by the agency. The Title IV-D agency
under Chapter 231, Family Code, shall provide the executive
director with a report of persons who have been determined to be
delinquent in the payment of child support obligations. The
commission shall adopt rules regarding the form and frequency of
reports under this subsection.
SECTION 2. Section 466.4075, Government Code, as added by
Chapter 1104 (H.B. 2424), Acts of the 75th Legislature, Regular
Session, 1997, is amended to read as follows:
Sec. 466.4075. DEDUCTIONS OF CHILD SUPPORT FROM CERTAIN
LOTTERY WINNINGS. (a) This section applies only to a prize that is
[required to be paid in periodic installments and is] awarded by the
director under Section 466.402(b), including a prize required to be
paid in periodic installments.
(b) In the event of a lump-sum payment, the executive
director shall deduct from winnings an amount for delinquent child
support owed by the prizewinner if the executive director has been
provided with a certified copy of a court order or a writ of
withholding issued under Chapter 158, Family Code, or notice of a
child support lien created under Subchapter G, Chapter 157, Family
Code.
(c) If the prize is required to be paid in periodic
installments, the [The] executive director shall deduct [an amount
a court has ordered a person to pay as child support] from [a
person's] periodic installment winnings paid to or on behalf of a
prizewinner amounts owed by the winner for child support if the
executive director has been provided with a certified copy of a
court order or a writ of withholding issued under Chapter 158,
Family Code, or notice of a child support lien created under
Subchapter G, Chapter 157, Family Code.
(d) [(c)] The court order, writ of withholding, or notice of
a child support lien provided under Subsection (c) must direct
child support to be paid in the manner in which the periodic
installment prize is paid. The executive director is not required
to receive the court order, the writ of withholding, or notice of
child support lien until the executive director determines there is
a periodic installment prize to which the winner is entitled.
(e) [(d)] If a person's winnings exceed the amount
deducted under Subsection (b) or (c) and Section 466.407 or any
other section of this chapter allowing a deduction from the
winnings of a lottery winner, the executive director shall pay the
balance to the person. The executive director shall transfer the
money deducted under Subsection (b) or (c) to the appropriate
person, the clerk of the court that issued the order for placement
in the registry of the court, or the state disbursement unit under
Chapter 234, Family Code, as appropriate.
(f) [(e)] The commission shall adopt rules necessary to
administer [under] this section, including rules that:
(1) allow a person or the Title IV-D agency under
Chapter 231, Family Code, with a child support court order or writ
of withholding or notice of lien issued under Chapter 157 or 158,
Family Code, to file copies of the order, writ, or notice with the
commission; and
(2) describe the procedures used by the commission to
compare the list of persons receiving [winning] periodic
installment prizes under Section 466.402(b) with a list of obligors
compiled from orders, writs, and notices filed under Subdivision
(1) and to make the deductions required under this section.
(g) Section 9.406, Business & Commerce Code, does not apply
to periodic payments of lottery winnings under this section.
SECTION 3. Section 466.410, Government Code, is amended by
amending Subsections (a), (b), and (e) and adding Subsection (k) to
read as follows:
(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 Travis County, except
that:
(1) installment prize payments due within the final
two years of the prize payment schedule may not be assigned; and
(2) a person may not assign the right to receive prize
payments if the person is subject to a child support order and is
delinquent in making support payments under that order.
(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 18 years of age, is in
full command of the person's faculties, and is not acting under
duress;
(B) is not delinquent in payment of child support
under a court or administrative order issued in this state or
another state;
(C) 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;
(D) [(C)] understands that the assignor will not
receive the prize payments, or portions of the prize payments, for
the assigned years;
(E) [(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;
(F) [(E)] has been provided a one-page written
disclosure statement stating, in boldfaced 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
(G) [(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.
(e) The court order shall include specific findings as to
compliance with the requirements of Subsections (b), (c), and (d)
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, and
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].
(k) Section 9.406, Business & Commerce Code, does not apply
to periodic payments of lottery winnings under this section.
SECTION 4. Section 466.4075, Government Code, as added by
Chapter 135 (H.B. 566), Acts of the 75th Legislature, Regular
Session, 1997, is repealed.
SECTION 5. This Act takes effect September 1, 2011.