Bill Text: TX SB626 | 2011-2012 | 82nd Legislature | Enrolled
Bill Title: Relating to lottery winnings, including assignment of winnings, periodic payments of winnings, and the deduction of child support delinquency amounts from winnings paid to a prize winner.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-06-17 - Effective immediately [SB626 Detail]
Download: Texas-2011-SB626-Enrolled.html
S.B. No. 626 |
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relating to lottery winnings, including assignment of winnings, | ||
periodic payments of winnings, and the deduction of child support | ||
delinquency amounts from winnings paid to a prize winner. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter I, Chapter 466, Government Code, is | ||
amended by adding Section 466.4001 to read as follows: | ||
Sec. 466.4001. DEFINITION. In this subchapter, "prize | ||
winner" means a person who presents a valid winning ticket, claims a | ||
lottery prize, and is recognized by the commission as the person | ||
entitled to receive lottery prize payments. The term does not | ||
include an assignee of a lottery prize. | ||
SECTION 2. Subsection (b), Section 466.406, Government | ||
Code, is amended to read as follows: | ||
(b) Payment of prize payments not previously assigned as | ||
provided by this section or Section 466.410 shall be made to the | ||
estate of a deceased prize winner [ |
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SECTION 3. Section 466.407, Government Code, is amended by | ||
amending Subsections (a) and (b) and adding Subsection (a-1) to | ||
read as follows: | ||
(a) The executive director shall deduct the amount of a | ||
delinquent tax or other money from the winnings of a prize winner | ||
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(1) delinquent in the payment of a tax or other money | ||
to a state agency and that delinquency is reported to [ |
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the comptroller under Section 403.055[ |
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(2) [ |
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Education Code; or | ||
(3) [ |
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Chapter 57, Education Code. | ||
(a-1) The executive director shall deduct delinquent child | ||
support payments from the winnings of a prize winner in the amount | ||
of the delinquency as determined by a court or a Title IV-D agency | ||
under Chapter 231, Family Code. | ||
(b) If the [ |
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the amount of a delinquency under Subsection (a) or (a-1), the | ||
director shall pay the balance to the prize winner [ |
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director shall transfer the amount deducted to the appropriate | ||
agency or to the state disbursement unit under Chapter 234, Family | ||
Code, as applicable. | ||
SECTION 4. 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 | ||
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director under Section 466.402(b), including a prize paid in | ||
periodic installments. | ||
(b) In the event of a single payment, the executive director | ||
shall deduct from winnings of the prize winner an amount for | ||
delinquent child support owed by the prize winner 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 paid in periodic installments, the [ |
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executive director shall deduct [ |
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installment winnings paid to a prize winner amounts owed by the | ||
prize 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. This subsection does not apply to the payment of amounts to a | ||
person to whom the prize winner assigns the right to receive prize | ||
payments under Section 466.410. | ||
(d) [ |
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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 prize winner is entitled. | ||
(e) [ |
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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 prize winner, the executive director shall | ||
pay the balance to the prize winner [ |
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director shall transfer the money deducted under Subsection (b) or | ||
(c) to the appropriate person as determined by court order, 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) [ |
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to administer [ |
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(g) Section 9.406, Business & Commerce Code, does not apply | ||
to periodic payments of lottery prize winnings under this section. | ||
SECTION 5. Section 466.410, Government Code, is amended by | ||
amending Subsections (a), (b), (e), and (i) 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 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 [ |
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(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 prize winner's | ||
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(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) [ |
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receive the prize payments, or portions of the prize payments, for | ||
the assigned years; | ||
(E) [ |
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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; | ||
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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) [ |
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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 [ |
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lottery claim form[ |
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(i) Notwithstanding any other provision of this section, | ||
there will be no right to assign prize payments following: | ||
(1) the issuance, by the Internal Revenue Service, of | ||
a technical rule letter, revenue ruling, or other public ruling of | ||
the Internal Revenue Service that determines that, based on the | ||
right of assignment as provided by this section, a lottery prize | ||
winner [ |
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subject to an immediate income tax liability for the value of the | ||
entire prize rather than annual income tax liability for each | ||
installment when paid; or | ||
(2) the issuance by a court of a published decision | ||
holding that, based on the right of assignment as provided by this | ||
section, a lottery prize winner [ |
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prize payments would be subject to an immediate income tax | ||
liability for the value of the entire prize rather than annual | ||
income tax liability for each installment when paid. | ||
(k) Section 9.406, Business & Commerce Code, does not apply | ||
to periodic payments of lottery prize winnings under this section. | ||
SECTION 6. (a) Subsection (c), Section 466.407, | ||
Government Code, is repealed. | ||
(b) Section 466.4075, Government Code, as added by Chapter | ||
135 (H.B. 566), Acts of the 75th Legislature, Regular Session, | ||
1997, is repealed. | ||
SECTION 7. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2011. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 626 passed the Senate on | ||
April 5, 2011, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 626 passed the House on | ||
May 23, 2011, by the following vote: Yeas 142, Nays 0, one | ||
present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
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Governor |