Public Act 93-0465

SB689 Enrolled                       LRB093 09350 LRD 09584 b

    AN ACT in relation to gambling.

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

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

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

    (20 ILCS 1605/13.1 new)
    Sec. 13.1.  Assignment of prizes payable in installments.
    (a)  The  right of any person to receive payments under a
prize  that  is  paid  in  installments  over  time  by   the
Department  may be voluntarily assigned, in whole or in part,
if the assignment is made to a person  or  entity  designated
pursuant  to  an  order  of a court of competent jurisdiction
located in the judicial circuit  where  the  assigning  prize
winner resides or where the headquarters of the Department is
located.  A  court  may  issue an order approving a voluntary
assignment  and  directing  the  Department  to  make   prize
payments  in  whole or in part to the designated assignee, if
the court finds that all of  the  following  conditions  have
been met:
         (1)  The  assignment  is  in writing, is executed by
    the assignor, and is, by its terms, subject to  the  laws
    of this State.
         (2)  The  purchase price being paid for the payments
    being assigned represents a present value of the payments
    being assigned, discounted at an annual  rate  that  does
    not  exceed  10  percentage  points  over the Wall Street
    Journal prime rate published on the business day prior to
    the date of execution of the contract.
         (3)  The contract  of  assignment  expressly  states
    that  the assignor has 3 business days after the contract
    was signed to cancel the assignment.
         (4)  The  assignor  provides   a   sworn   affidavit
    attesting that he or she:
              (i)  is  of  sound  mind, is in full command of
         his or  her  faculties,  and  is  not  acting  under
         duress;
              (ii)  has been advised regarding the assignment
         by  his or her own independent legal counsel, who is
         unrelated to and is not  being  compensated  by  the
         assignee  or  any  of the assignee's affiliates, and
         has received independent  financial  or  tax  advice
         concerning  the  effects  of  the  assignment from a
         lawyer or other professional who is unrelated to and
         is not being compensated by the assignee or  any  of
         the assignee's affiliates;
              (iii)  understands  that  he  or  she  will not
         receive the prize payments or portions  thereof  for
         the years assigned;
              (iv)  understands  and agrees that, with regard
         to the assigned payments,  the  Department  and  its
         officials   and   employees  will  have  no  further
         liability or responsibility  to  make  the  assigned
         payments to him or her;
              (v)  has  been provided with a one-page written
         disclosure statement setting forth, in bold type  of
         not   less   than  14  points,  the  payments  being
         assigned, by amounts and payment dates; the purchase
         price being paid; the rate of  discount  to  present
         value, assuming daily compounding and funding on the
         contract  date;  and  the  amount,  if  any,  of any
         origination or closing fees that will be charged  to
         him or her; and
              (vi)  was advised in writing, at the time he or
         she  signed  the assignment contract, that he or she
         had the right to cancel the  contract,  without  any
         further obligation, within 3 business days following
         the date on which the contract was signed.
         (5)  Written  notice  of the proposed assignment and
    any court hearing concerning the proposed  assignment  is
    provided  to  the  Department's  counsel at least 30 days
    prior  to  any  court  hearing.  The  Department  is  not
    required to appear in or be named as a party to any  such
    action  seeking  judicial  confirmation  of an assignment
    under this Section, but may intervene as of right in  any
    such proceeding.
    (b)  A  certified  copy  of  a  court  order  approving a
voluntary assignment must be provided to  the  Department  no
later than 30 days before the date on which the payment is to
be made.
    (c)  A  court  order  obtained  pursuant to this Section,
together with all such prior orders, shall  not  require  the
Department to divide any single prize payment among more than
3  different  persons. Nothing in this Section shall prohibit
substituting assignees as long as there are no  more  than  3
assignees at any one time for any one prize payment.
    (d)  If  a husband and wife are co-owners of a prize, any
assignment of the prize must be made jointly.
    (e)  A voluntary assignment may not include  portions  of
payments that are subject to offset on account of a defaulted
or delinquent child support obligation, non-wage garnishment,
or  criminal  restitution  obligation or on account of a debt
owed to  a  State  agency.  Each  court  order  issued  under
subsection  (a)  shall  provide  that  any  delinquent  child
support  or criminal restitution obligations of the assigning
prize winner and any debts owed to  a  State  agency  by  the
assigning  prize  winner,  as of the date of the court order,
shall be set off by the Department  first  against  remaining
payments  or  portions  thereof due the prize winner and then
against payments due the assignee.
    (f)  The Department  and  its  respective  officials  and
employees  shall  be discharged of all liability upon payment
of an assigned prize under this Section.   The  assignor  and
assignee  shall  hold  harmless and indemnify the Department,
the State of Illinois, and its employees and agents from  all
claims,  actions,  suits, complaints, and liabilities related
to the assignment.
    (g)  The Department may establish  a  reasonable  fee  to
defray    any   administrative   expenses   associated   with
assignments made under this Section, including  the  cost  to
the Department of any processing fee that may be imposed by a
private  annuity  provider.  The fee amount shall reflect the
direct  and  indirect  costs   associated   with   processing
assignments.
    (h)  If  at  any  time  the Internal Revenue Service or a
court  of  competent  jurisdiction  issues  a   determination
letter,  revenue  ruling, other public ruling of the Internal
Revenue Service, or published decision to the  Department  or
to  any  lottery  prize  winner  declaring that the voluntary
assignment of prizes  will  affect  the  federal  income  tax
treatment  of  prize  winners who do not assign their prizes,
the Department shall immediately file a copy of that  letter,
ruling,  or published decision with the Attorney General, the
Secretary of State, and  the  Administrative  Office  of  the
Illinois Courts. A court may not issue an order authorizing a
voluntary  assignment  under  this Section after the date any
such ruling, letter, or published decision is filed.
    (i)  A contract of assignment in which the assignor is  a
lottery  winner  shall  include  a  sworn  affidavit from the
assignee. The form of the affidavit shall be  established  by
the Department and shall include:
         (1)  a summary of assignee contacts with the winner;
         (2)  a  summary  of  any lawsuits, claims, and other
    legal actions from lottery winners regarding  conduct  of
    the assignee or its agents;
         (3)  a  statement  that  the  assignee  is  in  good
    standing  in  its  state  of  domicile and with any other
    licensing or regulatory agency as may be required in  the
    conduct of its business;
         (4)  a brief business history of the assignee;
         (5)  a   statement  describing  the  nature  of  the
    business of the assignee; and
         (6)  a  statement  of  the  assignee's  privacy  and
    non-harassment policies and express affirmation that  the
    assignee has followed those policies in Illinois.
    (j)  The  assignee  shall  notify  the  Department of its
business location and mailing address  for  payment  purposes
during the entire course of the assignment.