Bill Text: OR HB2536 | 2013 | Regular Session | Enrolled

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Bill Title: Relating to transfers of structured settlement rights.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Passed) 2013-08-14 - Chapter 736, (2013 Laws): Effective date January 1, 2014. [HB2536 Detail]

Download: Oregon-2013-HB2536-Enrolled.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

                            Enrolled

                         House Bill 2536

Sponsored by Representative HOLVEY (Presession filed.)

                     CHAPTER ................

                             AN ACT

Relating to transfers of structured settlement rights; creating
  new provisions; and amending ORS 33.850, 33.855, 33.860, 33.865
  and 33.875.

Be It Enacted by the People of the State of Oregon:

  SECTION 1. ORS 33.850 is amended to read:
  33.850. As used in ORS 33.850 to 33.875:
  (1) 'Annuity issuer' means an insurer that has entered into a
contract to fund periodic payments under a structured settlement
agreement.
   { +  (2) 'Independent professional advice' means advice of an
attorney, certified public accountant, actuary, financial advisor
or other professional advisor:
  (a) Who is engaged by a payee to render advice concerning the
legal, tax or financial implications of a transfer;
  (b) Who is not affiliated with or compensated by the
transferee; and
  (c) Whose compensation for providing the advice is not affected
by whether a transfer occurs or does not occur. + }
    { - (2) - }   { + (3) + } 'Obligor' means a party that has a
continuing obligation to make periodic payments to a payee under
a structured settlement agreement or an agreement that provides
for a qualified assignment as defined in section 130 of the
Internal Revenue Code, as of January 1, 2006.
    { - (3) - }   { + (4) + } 'Payee' means an individual who is
receiving tax-free payments under a structured settlement
agreement and proposes to make a transfer of payment rights.
    { - (4) - }   { + (5) + } 'Payment rights' means rights to
receive periodic payments under a structured settlement
agreement, whether from the obligor or the annuity issuer.
    { - (5) - }   { + (6) + } 'Periodic payments' includes both
recurring payments and scheduled future lump sum payments.
    { - (6) - }   { + (7) + } 'Responsible administrative
authority' means a government authority vested by law with
exclusive jurisdiction over the original tort claim or workers'
compensation claim that was resolved in a structured settlement
agreement.
    { - (7) - }   { + (8) + } 'Structured settlement agreement'
means an agreement, judgment, stipulation or release embodying
the terms of an arrangement for periodic payment of damages from
an obligor or an annuity issuer for:
  (a) Personal injuries or sickness established by settlement or
judgment in resolution of a tort claim; or

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 1

  (b) Periodic payments in settlement of a workers' compensation
claim.
    { - (8) - }   { + (9) + } 'Terms of the structured settlement
agreement ' includes the terms of:
  (a) A structured settlement agreement;
  (b) An annuity contract;
  (c) An agreement that provides for a qualified assignment as
defined in section 130 of the Internal Revenue Code, as of
January 1, 2006; and
  (d) Any order or other approval of any court, responsible
administrative authority or other government authority that
authorized or approved the structured settlement agreement.
    { - (9) - }   { + (10) + } 'Transfer' means any sale,
assignment, pledge or other alienation or encumbrance of payment
rights made by a payee for consideration. 'Transfer' does not
include the creation or perfection of an unspecified security
interest in all of the payee's payment rights entered into with
an insured depository institution, or an agent or successor in
interests of the insured depository institution, in the absence
of any action to redirect the payments under the structured
settlement agreement to the insured depository institution or
otherwise to enforce a security interest against the payment
rights.
    { - (10) - }   { + (11) + } 'Transfer agreement' means an
agreement providing for a transfer of payment rights.
    { - (11) - }   { + (12) + } 'Transferee' means a party
acquiring or proposing to acquire payment rights through a
transfer agreement.
  SECTION 2. ORS 33.855 is amended to read:
  33.855. (1) A payee may transfer payment rights under ORS
33.850 to 33.875 if:
  (a) The payee is domiciled in this state;
  (b) The domicile or principal place of business of the obligor
or the annuity issuer is located in this state;
  (c) The structured settlement agreement was approved by a court
or responsible administrative authority in this state; or
  (d) The structured settlement agreement is expressly governed
by the laws of this state.
  (2) Prior to transferring payment rights under ORS 33.850 to
33.875, the transferee shall file   { - an application - }
 { + a petition + } for approval of the transfer   { - in - } :
  (a)  { + In + } the county in which the payee resides; { +
or + }
    { - (b) The county in which the obligor or the annuity issuer
maintains its principal place of business; or - }
    { - (c) - }   { + (b) In + } any court or before any
responsible administrative authority  { + in this state + } that
approved the structured settlement agreement.
  (3) Not less than 20 days prior to the scheduled hearing on
  { - an application - }   { + a petition + } for approval of a
transfer of payment rights, the transferee shall send notice of
the proposed transfer to:
  (a) The payee;
  (b) Any beneficiary irrevocably designated under the annuity
contract to receive payments following the payee's death;
  (c) The annuity issuer;
  (d) The obligor; and
  (e) Any other party that has continuing rights or obligations
under the structured settlement agreement that is the subject of
the hearing.

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 2

  (4) The notice sent under subsection (3) of this section shall
include:
  (a) A copy of the transferee's   { - application - }  { +
petition + }.
  (b) A copy of the transfer agreement.
  (c) A copy of the disclosure statement provided to the payee as
required under ORS 33.860.
  (d) A listing of each person for whom the payee is legally
obligated to provide support, including the age of each of those
persons.
  (e) Notification that any person receiving notice under
subsection (3) of this section is entitled to support, oppose or
otherwise respond to the transferee's   { - application - }  { +
petition + }, either in person or by counsel, by submitting
written comments to the court or responsible administrative
authority or by participating in the hearing.
  (f) Notification of the time and place of the hearing
 { - and - }  { + .
  (g) + } Notification of the manner in which and the time by
which written responses to the   { - application - }
 { + petition + } must be filed, which shall not be less than 15
days after service of the transferee's notice, in order to be
considered by the court or responsible administrative authority.
  SECTION 3.  { + Sections 4 and 5 of this 2013 Act are added to
and made a part of ORS 33.850 to 33.875. + }
  SECTION 4.  { + (1) A petition for approval of a transfer of
payment rights filed under ORS 33.855 must:
  (a) Include the payee's name, age and county of residence.
  (b) Describe the financial terms of the proposed transfer,
including the payment rights to be transferred by the payee and
the amount to be received by the payee in return for the
transfer.
  (c) Be accompanied by a copy of the transfer agreement.
  (d) Be accompanied by a copy of the disclosure statement
required under ORS 33.860, and the signature of the payee
acknowledging the payee's receipt of the disclosure statement.
  (e) Generally describe the reasons why the payee seeks to
transfer the payment rights.
  (f) Be accompanied by a declaration under penalty of perjury by
the payee:
  (A) Stating whether the payee depends on structured settlement
payments or government benefits for the payee's necessary living
expenses or required medical care and treatment.
  (B) Stating whether the payee personally sustained physical
injuries or sickness in connection with the incident from which
the structured settlement arose and whether the injuries or
sickness currently prevents the payee from working or
substantially limits the work that the payee can perform.
  (C) Providing a summary of:
  (i) Any prior transfers of structured settlement payments by
the payee to the transferee within the five years preceding the
date of the pending transfer agreement.
  (ii) Any prior transfers of structured settlement payments by
the payee to a person other than the transferee within the five
years preceding the date of the pending transfer agreement.
  (iii) Any attempted prior transfers of structured settlement
payments by the payee to the transferee or to a person other than
the transferee within the year preceding the date of the pending
transfer agreement, including any prior attempted transfers that

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 3

were denied or that were dismissed or withdrawn prior to a
decision on the merits of the transfer.
  (D) If the payee has minor children, stating whether the payee
is currently obligated to pay child support under any child
support order, and whether the payee is current or in arrears
under any child support order.
  (2)(a) If the summaries required under subsection (1)(f) of
this section describe any prior transfers or attempted transfers
of structured settlement payments, the transferee shall, at or
before the hearing on the petition:
  (A) Provide to the court or responsible administrative
authority a copy of the court orders approving, denying or
otherwise relating to the transfers or attempted transfers
involving the transferee; and
  (B) Request from the payee or the annuity issuer or obligor
under the structured settlement agreement copies of any court
orders relating to any transfer or attempted transfer involving
the payee and any other party and, if any orders are provided to
the transferee, provide a copy of the orders to the court or
responsible administrative authority at or before the hearing on
the petition.
  (b) The inability of the transferee or payee to provide copies
of court orders under this subsection does not preclude the court
or responsible administrative authority from approving the
proposed transfer, if the court or authority determines that the
court orders are not available to the transferee or payee after
the transferee and payee have made reasonable requests to obtain
the court orders. + }
  SECTION 5.  { + At the hearing on a petition to transfer
payment rights filed under ORS 33.855, the court or responsible
administrative authority may ask the payee to provide testimony
on or other evidence related to the following matters and any
other relevant evidence that the court or authority deems
appropriate to make the findings required by ORS 33.865:
  (1) The payee's marital status and, if married or separated,
the name of the payee's spouse.
  (2) The names, ages and place or places of residence of any
minor children or other dependents of the payee.
  (3) The amounts and sources of the payee's monthly income and,
if the payee is married, the amounts and sources of the payee's
spouse's monthly income.
  (4) If the payee has minor children, whether the payee is
currently obligated to pay child support under any child support
order, whether the payee is current or in arrears under any child
support order and the names, addresses and telephone numbers of
any persons or agencies receiving child support from the payee
under the order.
  (5) Whether the payee depends on the structured settlement
payments that the payee proposes to transfer for the payee's
necessary living expenses or required medical care and
treatment. + }
  SECTION 6. ORS 33.860 is amended to read:
  33.860. Not less than   { - three - }   { + 14 + } days
 { - prior to the day on which a payee is scheduled to sign - }
 { + before a payee signs + } a transfer agreement, a transferee
shall provide the payee with a  { +  disclosure + } statement in
not less than 14-point type that sets forth:
  (1) The amounts and due dates of the structured settlement
payments to be transferred.
  (2) The aggregate amount of the payments to be transferred.

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 4

  (3) The discounted present value of the payments and the rate
used in calculating the discounted present value. The discounted
present value shall be calculated by using the most recently
published applicable federal rate for determining the present
value of an annuity, as issued by the Internal Revenue Service.
  (4) The amount payable to a payee as the result of a transfer.
The amount set forth in this subsection shall be calculated
before any reductions are made for transfer expenses required to
be listed under subsection (5) of this section or any related
disbursements.
  (5) An itemized listing of all applicable transfer expenses and
the transferee's best estimate of the amount of any attorney fees
and disbursements. For the purposes of this subsection, '
transfer expenses':
  (a) Includes all  { + fees, costs and + } expenses of a
transfer that are required under the transfer agreement to be
paid by the payee  { +  to the transferee + } or deducted from
the amount payable to a payee as the result of a transfer.
  (b) Does not include   { - attorney fees and related
disbursements payable in connection with the transferee's
application for approval of the transfer or - }  preexisting
obligations of the payee payable for the payee's account from the
proceeds of a transfer.
  (6) The amount calculated by subtracting the aggregate amount
of the actual and estimated transfer expenses required to be
listed under subsection (5) of this section from the amount
identified in subsection (4) of this section.
  (7) The amount of any penalties or liquidated damages payable
by the payee in the event of a breach of the transfer agreement
by the payee.
  (8) A statement that the payee has the right to cancel the
transfer agreement, without penalty or further obligation,
 { - not later than the third business day after the date the
agreement is signed by the payee. - }  { +  before the approval
of the transfer by the court or responsible administrative
authority.
  (9) A statement that the payee is entitled to, and should, seek
independent professional advice regarding the proposed transfer.
  (10) A statement that transferring payment rights may or may
not be financially appropriate for the payee and the payee should
not proceed without first weighing and considering other offers
and alternate means of obtaining funds through borrowing or the
sale of other assets.
  (11) A statement that the transferee's attorney does not
represent the payee in connection with the proposed transfer.
  (12) A statement that the court or responsible administrative
authority may require the payee to seek independent professional
advice and that the expenses for the independent professional
advice may be paid out of the amount paid by the transferee to
the payee. + }
  SECTION 7. ORS 33.865 is amended to read:
  33.865.  { + (1) + } A transfer of payment rights under ORS
33.850 to 33.875 is not effective and an obligor or annuity
issuer is not required to make any payments directly or
indirectly to a transferee unless the  { + transferee has filed a
petition under section 4 of this 2013 Act and the + } transfer
 { - has been - }   { + is + } approved
  { - in advance in a final court order or order of a - }
 { + by the court or + } responsible administrative authority
based on express findings by the court or authority that:

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 5

    { - (1) - }   { + (a) + } The transfer is in the best
interest of the payee, taking into account the welfare and
support of all persons for whom the payee is legally obligated to
provide support.
    { - (2) - }   { + (b) + } The payee has been advised in
writing by the transferee to seek  { + independent
professional + } advice   { - from an attorney, certified public
accountant, actuary or other licensed professional adviser
regarding the transfer, - }  and the payee has either received
 { - the advice - }   { + independent professional advice
regarding the transfer + } or knowingly waived  { + independent
professional + } advice in writing.
    { - (3) - }   { + (c) + } The transfer does not contravene
any applicable statute or order of any court or other government
authority.
   { +  (d) The payee understands the transfer agreement, the
disclosure statement required under ORS 33.860 and the financial
terms of the transfer.
  (e) The payee understands the payee's right to cancel the
transfer agreement as set forth in the disclosure statement
required by ORS 33.860 and knowingly elected not to cancel the
transfer agreement.
  (f) The payee confirmed to the court or responsible
administrative authority at the hearing that the payee wanted the
court or authority to approve the proposed transfer and
understood that the court or authority would not approve the
transfer if the payee did not want the court or authority to do
so.
  (2) When determining whether the proposed transfer should be
approved, including whether the transfer agreement is fair,
reasonable and in the payee's best interest, the court or
responsible administrative authority may consider all relevant
information, including information contained in the petition and
any other document that is filed with the court or authority and
provided at the hearing. Relevant information that may be
considered under this subsection includes, but is not limited to:
  (a) The reasonable preference and desire of the payee to
complete the proposed transfer, taking into account the payee's
age and apparent maturity level.
  (b) The purpose of the transfer and the intended use of the
proceeds by the payee.
  (c) The payee's financial situation.
  (d) Whether the payee depends on the structured settlement
payments that the payee proposes to transfer for the payee's
necessary living expenses or required medical care and treatment.
  (e) Whether the payee is employed or employable.
  (f) The terms of the transfer agreement, including whether the
payee is transferring monthly or lump sum payments or all or a
portion of the payee's future payments, the size of the
transaction and the financial alternatives available to the payee
to achieve the payee's stated objectives.
  (g) Whether the payee has experienced a change in personal,
family or financial circumstances.
  (h) Whether the payee has income or support other than the
future periodic payments sufficient to meet the payee's future
financial obligations for support of the payee's dependents,
including child support obligations.
  (i) Whether the terms of the proposed transfer agreement,
including the amount to be paid to the payee and the expenses and

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 6

costs of the transfer for the payee and the transferee are fair
and reasonable.
  (j) Whether the payee has completed or attempted previous
transfers of payment rights.
  (k) Whether the payee, or the payee's family or dependents, may
suffer personal, family or financial hardship if the transfer is
not approved.
  (L) Whether the payee received independent professional advice
regarding the transaction. + }
  SECTION 8. ORS 33.875 is amended to read:
  33.875. (1) The provisions of ORS 33.850 to 33.875 may not be
waived by any payee.
  (2) A transfer agreement entered into on or after January 1,
2006, by a payee who resides in this state shall provide that
disputes under the transfer agreement, including any claim that
the payee has breached the agreement, shall be determined under
the laws of this state. A transfer agreement may not authorize
the transferee or any other party to confess judgment or consent
to entry to judgment against the payee.
  (3) A transfer of payment rights may not extend to any payments
that are life contingent unless, prior to the date on which the
payee signs the transfer agreement, the transferee has
established and has agreed to maintain procedures reasonably
satisfactory to the annuity issuer and the obligor for:
  (a) Periodically confirming the payee's survival.
  (b) Giving the annuity issuer and the obligor prompt written
notice in the event of the payee's death.
  (4) A payee who proposes to make a transfer of payment rights
does not incur any penalty, forfeit any application fee or other
payment, or otherwise incur any liability to the proposed
transferee or a assignee based on any failure of the transfer to
satisfy the conditions of ORS 33.850 to 33.875.
  (5) Nothing in ORS 33.850 to 33.875 shall be construed to
authorize a transfer of payment rights in contravention of any
law or to imply that any transfer under a transfer agreement
entered into prior to January 1, 2006, is valid or invalid.
  (6) Compliance with the requirements   { - set forth in ORS
33.860 and fulfillment of the conditions set forth in ORS 33.855
shall be - }   { + of ORS 33.850 to 33.875 is + } solely the
responsibility of the transferee in any transfer of payment
rights, and neither the obligor nor the annuity issuer shall bear
any responsibility for, or any liability arising from,
noncompliance with the requirements or failure to fulfill the
conditions.
  SECTION 9.  { + Sections 4 and 5 of this 2013 Act and the
amendments to ORS 33.850, 33.855, 33.860, 33.865 and 33.875 by
sections 1, 2, 6, 7 and 8 of this 2013 Act apply only to transfer
agreements signed on or after the effective date of this 2013
Act. + }
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Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 7

Passed by House April 25, 2013

Repassed by House July 1, 2013

    .............................................................
                             Ramona J. Line, Chief Clerk of House

    .............................................................
                                     Tina Kotek, Speaker of House

Passed by Senate June 12, 2013

Repassed by Senate July 2, 2013

    .............................................................
                              Peter Courtney, President of Senate

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 8

Received by Governor:

......M.,............., 2013

Approved:

......M.,............., 2013

    .............................................................
                                         John Kitzhaber, Governor

Filed in Office of Secretary of State:

......M.,............., 2013

    .............................................................
                                   Kate Brown, Secretary of State

Enrolled House Bill 2536 (HB 2536-BCCA)                    Page 9