BILL REQ. #:  S-3945.1 

Read first time 01/16/08.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to directing the state lottery commission to implement a raffle that awards scholarships as prizes; amending RCW 67.70.100 and 67.70.240; and adding a new section to chapter 67.70 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 67.70 RCW to read as follows:
     (1) The commission shall conduct a raffle game to be known as WINaBRAIN. The price for a WINaBRAIN ticket is two dollars per ticket. After one hundred thousand WINaBRAIN tickets are sold, the commission must conduct a drawing to determine the winners of the WINaBRAIN raffle. Winning tickets must be awarded prizes as follows: The first four tickets drawn must be awarded twenty-five thousand dollars to be used pursuant to subsection (2) of this section; and the next ten thousand five hundred tickets drawn must be awarded a WINaBRAIN ticket for the next raffle drawing.
     (2) The twenty-five thousand dollar prize will be awarded as units in the guaranteed education tuition program and the winner of the prize must designate an account holder and a student beneficiary for the guaranteed education tuition account.
     (3) The commission must adopt rules to implement this section.

Sec. 2   RCW 67.70.100 and 1997 c 111 s 1 are each amended to read as follows:
     (1) Except under subsections (2) and (3) 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;
     (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 winner of a WINaBRAIN raffle must designate the account holder and the student beneficiary for the guaranteed education tuition account established under section 1 of this act.
     (4) The director will not pay the assignee an amount in excess of the annual payment entitled to the assignor.
     (((4))) (5) 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))) (6) 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))) (7) The occurrence of any event described in subsection (((5))) (6) 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))) (8) The requirement for a disclosure statement in subsection (2)(c)(iii) of this section does not apply to any assignment agreement executed before April 21, 1997.
     (((8))) (9) The commission and the director shall be discharged of all further liability upon payment of a prize pursuant to this section.

Sec. 3   RCW 67.70.240 and 2001 c 3 s 4 (Initiative Measure No. 728, approved November 7, 2000) are each amended to read as follows:
     The moneys in the state lottery account shall be used only:
     (1) For the payment of prizes to the holders of winning lottery tickets or shares, including the purchase of units in the guaranteed education tuition program pursuant to section 1 of this act;
     (2) For purposes of making deposits into the reserve account created by RCW 67.70.250 and into the lottery administrative account created by RCW 67.70.260;
     (3) For purposes of making deposits into the education construction fund and student achievement fund created in RCW 43.135.045. For the transition period from July 1, 2001, until and including June 30, 2002, fifty percent of the moneys not otherwise obligated under this section shall be placed in the student achievement fund and fifty percent of these moneys shall be placed in the education construction fund. On and after July 1, 2002, until June 30, 2004, seventy-five percent of these moneys shall be placed in the student achievement fund and twenty-five percent shall be placed in the education construction fund. On and after July 1, 2004, all deposits not otherwise obligated under this section shall be placed in the education construction fund. Moneys in the state lottery account deposited in the education construction fund and the student achievement fund are included in "general state revenues" under RCW 39.42.070;
     (4) For distribution to a county for the purpose of paying the principal and interest payments on bonds issued by the county to construct a baseball stadium, as defined in RCW 82.14.0485, including reasonably necessary preconstruction costs. Three million dollars shall be distributed under this subsection during calendar year 1996. During subsequent years, such distributions shall equal the prior year's distributions increased by four percent. Distributions under this subsection shall cease when the bonds issued for the construction of the baseball stadium are retired, but not more than twenty years after the tax under RCW 82.14.0485 is first imposed;
     (5) For distribution to the stadium and exhibition center account, created in RCW 43.99N.060. Subject to the conditions of RCW 43.99N.070, six million dollars shall be distributed under this subsection during the calendar year 1998. During subsequent years, such distribution shall equal the prior year's distributions increased by four percent. No distribution may be made under this subsection after December 31, 1999, unless the conditions for issuance of the bonds under RCW 43.99N.020(2) are met. Distributions under this subsection shall cease when the bonds are retired, but not later than December 31, 2020;
     (6) For the purchase and promotion of lottery games and game-related services; and
     (7) For the payment of agent compensation.
     The office of financial management shall require the allotment of all expenses paid from the account and shall report to the ways and means committees of the senate and house of representatives any changes in the allotments.