Texas 2011 - 82nd Regular

Texas Senate Bill SB626 Compare Versions

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1	1	By: Carona S.B. No. 626
2	2	(Thompson)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to lottery winnings, including assignment of winnings,
8	8	periodic payments of winnings, and the deduction of child support
9	9	delinquency amounts from winnings paid to a prize winner.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter I, Chapter 466, Government Code, is
12	12	amended by adding Section 466.4001 to read as follows:
13	13	Sec. 466.4001. DEFINITION. In this subchapter, "prize
14	14	winner" means a person who presents a valid winning ticket, claims a
15	15	lottery prize, and is recognized by the commission as the person
16	16	entitled to receive lottery prize payments. The term does not
17	17	include an assignee of a lottery prize.
18	18	SECTION 2. Subsection (b), Section 466.406, Government
19	19	Code, is amended to read as follows:
20	20	(b) Payment of prize payments not previously assigned as
21	21	provided by this section or Section 466.410 shall be made to the
22	22	estate of a deceased prize winner [prizewinner] if the prize winner
23	23	[prizewinner] was an individual.
24	24	SECTION 3. Section 466.407, Government Code, is amended by
25	25	amending Subsections (a) and (b) and adding Subsection (a-1) to
26	26	read as follows:
27	27	(a) The executive director shall deduct the amount of a
28	28	delinquent tax or other money from the winnings of a prize winner
29	29	[person] who has been finally determined to be:
30	30	(1) delinquent in the payment of a tax or other money
31	31	to a state agency and that delinquency is reported to [collected by]
32	32	the comptroller under Section 403.055[, the Texas Workforce
33	33	Commission, or the Texas Alcoholic Beverage Commission];
34	34	(2) [delinquent in making child support payments
35	35	administered or collected by the attorney general;
36	36	[(3) delinquent in reimbursing the Texas Department of
37	37	Human Services for a benefit granted in error under the food stamp
38	38	program or the program of financial assistance under Chapter 31,
39	39	Human Resources Code;
40	40	[(4)] in default on a loan made under Chapter 52,
41	41	Education Code; or
42	42	(3) [(5)] in default on a loan guaranteed under
43	43	Chapter 57, Education Code.
44	44	(a-1) The executive director shall deduct delinquent child
45	45	support payments from the winnings of a prize winner in the amount
46	46	of the delinquency as determined by a court or a Title IV-D agency
47	47	under Chapter 231, Family Code.
48	48	(b) If the [a person's] winnings of a prize winner exceed
49	49	the amount of a delinquency under Subsection (a) or (a-1), the
50	50	director shall pay the balance to the prize winner [person]. The
51	51	director shall transfer the amount deducted to the appropriate
52	52	agency or to the state disbursement unit under Chapter 234, Family
53	53	Code, as applicable.
54	54	SECTION 4. Section 466.4075, Government Code, as added by
55	55	Chapter 1104 (H.B. 2424), Acts of the 75th Legislature, Regular
56	56	Session, 1997, is amended to read as follows:
57	57	Sec. 466.4075. DEDUCTIONS OF CHILD SUPPORT FROM CERTAIN
58	58	LOTTERY WINNINGS. (a) This section applies only to a prize that is
59	59	[required to be paid in periodic installments and is] awarded by the
60	60	director under Section 466.402(b), including a prize paid in
61	61	periodic installments.
62	62	(b) In the event of a single payment, the executive director
63	63	shall deduct from winnings of the prize winner an amount for
64	64	delinquent child support owed by the prize winner if the executive
65	65	director has been provided with a certified copy of a court order or
66	66	a writ of withholding issued under Chapter 158, Family Code, or
67	67	notice of a child support lien created under Subchapter G, Chapter
68	68	157, Family Code.
69	69	(c) If the prize is paid in periodic installments, the [The]
70	70	executive director shall deduct [an amount a court has ordered a
71	71	person to pay as child support] from [a person's] periodic
72	72	installment winnings paid to a prize winner amounts owed by the
73	73	prize winner for child support if the executive director has been
74	74	provided with a certified copy of a court order or a writ of
75	75	withholding issued under Chapter 158, Family Code, or notice of a
76	76	child support lien created under Subchapter G, Chapter 157, Family
77	77	Code. This subsection does not apply to the payment of amounts to a
78	78	person to whom the prize winner assigns the right to receive prize
79	79	payments under Section 466.410.
80	80	(d) [(c)] The court order, writ of withholding, or notice of
81	81	a child support lien provided under Subsection (c) must direct
82	82	child support to be paid in the manner in which the periodic
83	83	installment prize is paid. The executive director is not required
84	84	to receive the court order, the writ of withholding, or notice of
85	85	child support lien until the executive director determines there is
86	86	a periodic installment prize to which the prize winner is entitled.
87	87	(e) [(d)] If the [a person's] winnings of a prize winner
88	88	exceed the amount deducted under Subsection (b) or (c) and Section
89	89	466.407 or any other section of this chapter allowing a deduction
90	90	from the winnings of a prize winner, the executive director shall
91	91	pay the balance to the prize winner [person]. The executive
92	92	director shall transfer the money deducted under Subsection (b) or
93	93	(c) to the appropriate person as determined by court order, the
94	94	clerk of the court that issued the order for placement in the
95	95	registry of the court, or the state disbursement unit under Chapter
96	96	234, Family Code, as appropriate.
97	97	(f) [(e)] The commission may [shall] adopt rules necessary
98	98	to administer [under] this section [that:
99	99	[(1) allow a person with a court order under Chapter
100	100	157 or 158, Family Code, to file copies of the order with the
101	101	commission; and
102	102	[(2) describe the procedures used by the commission to
103	103	compare the list of persons winning periodic installment prizes
104	104	under Section 466.402(b) with a list of obligors compiled from
105	105	orders filed under Subdivision (1) and to make the deductions
106	106	required under this section].
107	107	(g) Section 9.406, Business & Commerce Code, does not apply
108	108	to periodic payments of lottery prize winnings under this section.
109	109	SECTION 5. Section 466.410, Government Code, is amended by
110	110	amending Subsections (a), (b), (e), and (i) and adding Subsection
111	111	(k) to read as follows:
112	112	(a) A person may assign, in whole or in part, the right to
113	113	receive prize payments that are paid by the commission in
114	114	installments over time if the assignment is made to a person
115	115	designated by an order of a district court of Travis County, except
116	116	that a person may not assign the right to receive prize payments if
117	117	the person is subject to a child support order and is delinquent in
118	118	making support payments under that order [installment prize
119	119	payments due within the final two years of the prize payment
120	120	schedule may not be assigned].
121	121	(b) A district court shall issue an order approving a
122	122	voluntary assignment and directing the commission to direct prize
123	123	payments in whole or in part to the assignee if:
124	124	(1) a copy of the petition for the order and copies of
125	125	all notices of any hearing in the matter have been served on the
126	126	executive director not later than 20 days prior to any hearing or
127	127	entry of any order. The commission may intervene in a proceeding to
128	128	protect the interests of the commission but shall not be considered
129	129	an indispensable or necessary party. A petition filed under this
130	130	section shall include in the caption the prize winner's
131	131	[prizewinner's] name as it appears on the lottery claim form;
132	132	(2) the assignment is in writing, executed by the
133	133	assignor and assignee (or designated agent), and by its terms
134	134	subject to the laws of this state; and
135	135	(3) the assignor provides a sworn and notarized
136	136	affidavit stating that the assignor:
137	137	(A) is of sound mind, over 18 years of age, is in
138	138	full command of the person's faculties, and is not acting under
139	139	duress;
140	140	(B) is not delinquent in payment of child support
141	141	under a court or administrative order issued in this state or
142	142	another state;
143	143	(C) has been advised regarding the assignment by
144	144	independent legal counsel and has had the opportunity to receive
145	145	independent financial and tax advice concerning the effects of the
146	146	assignment;
147	147	(D) [(C)] understands that the assignor will not
148	148	receive the prize payments, or portions of the prize payments, for
149	149	the assigned years;
150	150	(E) [(D)] understands and agrees that with
151	151	regard to the assigned payments, the state, the commission, and its
152	152	officials and employees will have no further liability or
153	153	responsibility to make the assigned payments to the assignor;
154	154	(F) [(E)] has been provided a one-page written
155	155	disclosure statement stating, in boldfaced type, 14 points or
156	156	larger:
157	157	(i) the payments being assigned, by amounts
158	158	and payment dates;
159	159	(ii) the purchase price being paid, if any;
160	160	(iii) if a purchase price is paid, the rate
161	161	of discount to the present value of the prize, assuming daily
162	162	compounding and funding on the contract date; and
163	163	(iv) the amount, if any, of any origination
164	164	or closing fees that will be charged to the assignor; and
165	165	(G) [(F)] was advised in writing, at the time the
166	166	assignment was signed, that the assignor had the right to cancel
167	167	without any further obligation not later than the third business
168	168	day after the date the assignment was signed.
169	169	(e) The court order shall include specific findings as to
170	170	compliance with the requirements of Subsections (b), (c), and (d)
171	171	and shall specify the prize payment or payments assigned, or any
172	172	portion thereof, including the dates and amounts of the payments to
173	173	be assigned, the years in which each payment is to begin and end,
174	174	the gross amount of the annual payments assigned before taxes, and
175	175	the [prizewinner's] name of the prize winner as it appears on the
176	176	lottery claim form[, the assignor's social security or tax
177	177	identification number, and, if applicable, the citizenship or
178	178	resident alien number of the assignee if an individual].
179	179	(i) Notwithstanding any other provision of this section,
180	180	there will be no right to assign prize payments following:
181	181	(1) the issuance, by the Internal Revenue Service, of
182	182	a technical rule letter, revenue ruling, or other public ruling of
183	183	the Internal Revenue Service that determines that, based on the
184	184	right of assignment as provided by this section, a lottery prize
185	185	winner [prizewinner] who does not assign prize payments would be
186	186	subject to an immediate income tax liability for the value of the
187	187	entire prize rather than annual income tax liability for each
188	188	installment when paid; or
189	189	(2) the issuance by a court of a published decision
190	190	holding that, based on the right of assignment as provided by this
191	191	section, a lottery prize winner [prizewinner] who does not assign
192	192	prize payments would be subject to an immediate income tax
193	193	liability for the value of the entire prize rather than annual
194	194	income tax liability for each installment when paid.
195	195	(k) Section 9.406, Business & Commerce Code, does not apply
196	196	to periodic payments of lottery prize winnings under this section.
197	197	SECTION 6. (a) Subsection (c), Section 466.407,
198	198	Government Code, is repealed.
199	199	(b) Section 466.4075, Government Code, as added by Chapter
200	200	135 (H.B. 566), Acts of the 75th Legislature, Regular Session,
201	201	1997, is repealed.
202	202	SECTION 7. This Act takes effect immediately if it receives
203	203	a vote of two-thirds of all the members elected to each house, as
204	204	provided by Section 39, Article III, Texas Constitution. If this
205	205	Act does not receive the vote necessary for immediate effect, this
206	206	Act takes effect September 1, 2011.