093_SB0689enr SB689 Enrolled LRB093 09350 LRD 09584 b 1 AN ACT in relation to gambling. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Lottery Law is amended by 5 changing Section 13 and adding Section 13.1 as follows: 6 (20 ILCS 1605/13) (from Ch. 120, par. 1163) 7 Sec. 13. Except as otherwise provided in Section 13.1, 8 no prize, nor any portion of a prize, nor any right of any 9 person to a prize awarded shall be assignable. Any prize, or 10 portion thereof remaining unpaid at the death of a prize 11 winner, may be paid to the estate of such deceased prize 12 winner, or to the trustee under a revocable living trust 13 established by the deceased prize winner as settlor, provided 14 that a copy of such a trust has been filed with the 15 Department along with a notarized letter of direction from 16 the settlor and no written notice of revocation has been 17 received by the Department prior to the settlor's death. 18 Following such a settlor's death and prior to any payment to 19 such a successor trustee, the Director shall obtain from the 20 trustee and each trust beneficiary a written agreement to 21 indemnify and hold the Department harmless with respect to 22 any claims that may be asserted against the Department 23 arising from payment to or through the trust. 24 Notwithstanding any other provision of this Section, any 25 person pursuant to an appropriate judicial order may be paid 26 the prize to which a winner is entitled, and all or part of 27 any prize otherwise payable by State warrant under this 28 Section shall be withheld upon certification to the State 29 Comptroller from the Illinois Department of Public Aid as 30 provided in Section 10-17.5 of The Illinois Public Aid Code. 31 The Director shall be discharged of all further liability SB689 Enrolled -2- LRB093 09350 LRD 09584 b 1 upon payment of a prize pursuant to this Section. 2 (Source: P.A. 85-1224.) 3 (20 ILCS 1605/13.1 new) 4 Sec. 13.1. Assignment of prizes payable in installments. 5 (a) The right of any person to receive payments under a 6 prize that is paid in installments over time by the 7 Department may be voluntarily assigned, in whole or in part, 8 if the assignment is made to a person or entity designated 9 pursuant to an order of a court of competent jurisdiction 10 located in the judicial circuit where the assigning prize 11 winner resides or where the headquarters of the Department is 12 located. A court may issue an order approving a voluntary 13 assignment and directing the Department to make prize 14 payments in whole or in part to the designated assignee, if 15 the court finds that all of the following conditions have 16 been met: 17 (1) The assignment is in writing, is executed by 18 the assignor, and is, by its terms, subject to the laws 19 of this State. 20 (2) The purchase price being paid for the payments 21 being assigned represents a present value of the payments 22 being assigned, discounted at an annual rate that does 23 not exceed 10 percentage points over the Wall Street 24 Journal prime rate published on the business day prior to 25 the date of execution of the contract. 26 (3) The contract of assignment expressly states 27 that the assignor has 3 business days after the contract 28 was signed to cancel the assignment. 29 (4) The assignor provides a sworn affidavit 30 attesting that he or she: 31 (i) is of sound mind, is in full command of 32 his or her faculties, and is not acting under 33 duress; SB689 Enrolled -3- LRB093 09350 LRD 09584 b 1 (ii) has been advised regarding the assignment 2 by his or her own independent legal counsel, who is 3 unrelated to and is not being compensated by the 4 assignee or any of the assignee's affiliates, and 5 has received independent financial or tax advice 6 concerning the effects of the assignment from a 7 lawyer or other professional who is unrelated to and 8 is not being compensated by the assignee or any of 9 the assignee's affiliates; 10 (iii) understands that he or she will not 11 receive the prize payments or portions thereof for 12 the years assigned; 13 (iv) understands and agrees that, with regard 14 to the assigned payments, the Department and its 15 officials and employees will have no further 16 liability or responsibility to make the assigned 17 payments to him or her; 18 (v) has been provided with a one-page written 19 disclosure statement setting forth, in bold type of 20 not less than 14 points, the payments being 21 assigned, by amounts and payment dates; the purchase 22 price being paid; the rate of discount to present 23 value, assuming daily compounding and funding on the 24 contract date; and the amount, if any, of any 25 origination or closing fees that will be charged to 26 him or her; and 27 (vi) was advised in writing, at the time he or 28 she signed the assignment contract, that he or she 29 had the right to cancel the contract, without any 30 further obligation, within 3 business days following 31 the date on which the contract was signed. 32 (5) Written notice of the proposed assignment and 33 any court hearing concerning the proposed assignment is 34 provided to the Department's counsel at least 30 days SB689 Enrolled -4- LRB093 09350 LRD 09584 b 1 prior to any court hearing. The Department is not 2 required to appear in or be named as a party to any such 3 action seeking judicial confirmation of an assignment 4 under this Section, but may intervene as of right in any 5 such proceeding. 6 (b) A certified copy of a court order approving a 7 voluntary assignment must be provided to the Department no 8 later than 30 days before the date on which the payment is to 9 be made. 10 (c) A court order obtained pursuant to this Section, 11 together with all such prior orders, shall not require the 12 Department to divide any single prize payment among more than 13 3 different persons. Nothing in this Section shall prohibit 14 substituting assignees as long as there are no more than 3 15 assignees at any one time for any one prize payment. 16 (d) If a husband and wife are co-owners of a prize, any 17 assignment of the prize must be made jointly. 18 (e) A voluntary assignment may not include portions of 19 payments that are subject to offset on account of a defaulted 20 or delinquent child support obligation, non-wage garnishment, 21 or criminal restitution obligation or on account of a debt 22 owed to a State agency. Each court order issued under 23 subsection (a) shall provide that any delinquent child 24 support or criminal restitution obligations of the assigning 25 prize winner and any debts owed to a State agency by the 26 assigning prize winner, as of the date of the court order, 27 shall be set off by the Department first against remaining 28 payments or portions thereof due the prize winner and then 29 against payments due the assignee. 30 (f) The Department and its respective officials and 31 employees shall be discharged of all liability upon payment 32 of an assigned prize under this Section. The assignor and 33 assignee shall hold harmless and indemnify the Department, 34 the State of Illinois, and its employees and agents from all SB689 Enrolled -5- LRB093 09350 LRD 09584 b 1 claims, actions, suits, complaints, and liabilities related 2 to the assignment. 3 (g) The Department may establish a reasonable fee to 4 defray any administrative expenses associated with 5 assignments made under this Section, including the cost to 6 the Department of any processing fee that may be imposed by a 7 private annuity provider. The fee amount shall reflect the 8 direct and indirect costs associated with processing 9 assignments. 10 (h) If at any time the Internal Revenue Service or a 11 court of competent jurisdiction issues a determination 12 letter, revenue ruling, other public ruling of the Internal 13 Revenue Service, or published decision to the Department or 14 to any lottery prize winner declaring that the voluntary 15 assignment of prizes will affect the federal income tax 16 treatment of prize winners who do not assign their prizes, 17 the Department shall immediately file a copy of that letter, 18 ruling, or published decision with the Attorney General, the 19 Secretary of State, and the Administrative Office of the 20 Illinois Courts. A court may not issue an order authorizing a 21 voluntary assignment under this Section after the date any 22 such ruling, letter, or published decision is filed. 23 (i) A contract of assignment in which the assignor is a 24 lottery winner shall include a sworn affidavit from the 25 assignee. The form of the affidavit shall be established by 26 the Department and shall include: 27 (1) a summary of assignee contacts with the winner; 28 (2) a summary of any lawsuits, claims, and other 29 legal actions from lottery winners regarding conduct of 30 the assignee or its agents; 31 (3) a statement that the assignee is in good 32 standing in its state of domicile and with any other 33 licensing or regulatory agency as may be required in the 34 conduct of its business; SB689 Enrolled -6- LRB093 09350 LRD 09584 b 1 (4) a brief business history of the assignee; 2 (5) a statement describing the nature of the 3 business of the assignee; and 4 (6) a statement of the assignee's privacy and 5 non-harassment policies and express affirmation that the 6 assignee has followed those policies in Illinois. 7 (j) The assignee shall notify the Department of its 8 business location and mailing address for payment purposes 9 during the entire course of the assignment.