AN
ACT Relating to assignment of rights of lottery winnings; amending RCW
67.70.100; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
67.70.100 and 1996 c 228 s 2 are each amended to read as follows:
(1)
Except under subsection (2) of this section, no right of any person to a prize
drawn is assignable, except that payment of any prize drawn may be paid to the
estate of a deceased prize winner, and except that any person pursuant to an
appropriate judicial order may be paid the prize to which the winner is
entitled.
(2)(a)
The payment of all or part of the remainder of an annuity may be
assigned to another person, pursuant to a voluntary assignment of the right to
receive future annual prize payments, if the assignment is made pursuant to an
appropriate judicial order of the Thurston county superior court or the
superior court of the county in which the prize winner resides, if the winner
is a resident of Washington state. If the prize winner is not a resident of
Washington state, the winner must seek an appropriate order from the Thurston
county superior court.
(b)
If there is a voluntary assignment under (a) of this subsection, a copy of the
petition for an order under (a) of this subsection and all notices of any
hearing in the matter shall be served on the attorney general no later than ten
days before any hearing or entry of any order.
(c)
The court receiving the petition may issue an order approving the assignment
and directing the director to pay to the assignee the remainder or portion
of an annuity so assigned upon finding that all of the following conditions
have been met:
(i)
The assignment has been memorialized in writing and executed by the assignor
and is subject to Washington law;
(ii)
The assignor provides a sworn declaration to the court attesting to the facts
that the assignor has had the opportunity to be represented by independent
legal counsel in connection with the assignment, has received independent financial
and tax advice concerning the effects of the assignment, and is of sound mind
and not acting under duress, and the court makes findings determining so; ((and))
(iii)
The assignee has provided a one-page written disclosure statement that sets
forth in bold-face type, fourteen point or larger, the payments being assigned
by amount and payment dates, the purchase price, or loan amount being paid; the
interest rate or rate of discount to present value, assuming monthly
compounding and funding on the contract date; and the amount, if any, of any
origination or closing fees that will be charged to the lottery winner. The
disclosure statement must also advise the winner that the winner should consult
with and rely upon the advice of his or her own independent legal or financial
advisors regarding the potential federal and state tax consequences of the
transaction; and
(iv)
The proposed assignment does not and will not include or cover payments or
portions of payments subject to offsets pursuant to RCW 67.70.255 unless
appropriate provision is made in the order to satisfy the obligations giving
rise to the offset.
(d)
The commission may intervene as of right in any proceeding under this section
but shall not be deemed an indispensable or necessary party.
(3)
The director will not pay the assignee an amount in excess of the annual
payment entitled to the assignor.
(4)
The commission may adopt rules pertaining to the assignment of prizes under
this section, including recovery of actual costs incurred by the commission.
The recovery of actual costs shall be deducted from the initial annuity payment
made to the assignee.
(5)
No voluntary assignment under this section is effective unless and until the
national office of the federal internal revenue service provides a ruling that
declares that the voluntary assignment of prizes will not affect the federal
income tax treatment of prize winners who do not assign their prizes. If at
any time the federal internal revenue service or a court of competent
jurisdiction provides a determination letter, revenue ruling, other public
ruling of the internal revenue service or published decision to any state
lottery or state lottery prize winner declaring that the voluntary assignment
of prizes will effect the federal income tax treatment of prize winners who do
not assign their prizes, the director shall immediately file a copy of that
letter, ruling, or published decision with the secretary of state. No further
voluntary assignments may be allowed after the date the ruling, letter, or
published decision is filed.
(6)
The occurrence of any event described in subsection (5) of this section does
not render invalid or ineffective assignments validly made and approved
pursuant to an appropriate judicial order before the occurrence of any such
event.
(7)
The requirement for a disclosure statement in subsection (2)(c)(iii) of this
section does not apply to any assignment agreement executed before the
effective date of this section.
(8)
The commission and the director shall be discharged of all further liability
upon payment of a prize pursuant to this section.
NEW
SECTION. Sec. 2. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and takes effect immediately.
