Preproposal statement of inquiry was filed as WSR 98-03-074.

Title of Rule: WAC 315-06-123 Rules for voluntary assignments of prizes.

Purpose: Amends WAC 315-06-123 governing the process for voluntary assignment of prizes.

Statutory Authority for Adoption: RCW 67.70.040.

Statute Being Implemented: RCW 67.70.040.

Summary: See Purpose above.

Reasons Supporting Proposal: See Explanation of Rule below.

Name of Agency Personnel Responsible for Drafting: Mary Jane Ferguson, Rules Coordinator, Olympia, (360) 753-1947; Implementation and Enforcement: Merritt D. Long, Director, Olympia, (360) 753-3330.

Name of Proponent: Washington State Lottery Commission, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 315-06-123 requires petitioners for voluntary assignment of prizes to file petitions with the director of the lottery, as well as with the attorney general. In addition, the certified copy of the order must be served on the director at least twenty working days prior to the annual payment to allow sufficient time for change of assignee. The amended rule also specifies processing fees for amended orders.

Proposal Changes the Following Existing Rules: Requires service of petitions on the director of the lottery as well as the attorney general. Requires service of the certified copy of the order or amended order twenty working days before annual payment (increased from twelve working days). Specifies processing fees for amended orders.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The lottery has considered whether these rules are subject to the Regulatory Fairness Act, chapter 19.85 RCW, and has determined that they are not for the following reasons: (1) The rules have no economic impact on business' cost of equipment, supplies, labor or administrative costs. The rules are designed to establish rules and procedures for the playing of instant lottery games; and (2) the rules will have a negligible impact, if any, on business because they are interpretive. They have been promulgated for the purpose of stating policy, procedure and practice and do not include requirements for forms, fees appearances or other actions by business.

RCW 34.05.328 does not apply to this rule adoption. Said section does not apply to these proposed rules because they are not proposed by one of the listed agencies. As the rules are merely interpretive, the lottery does not voluntarily apply this section.

Hearing Location: Washington State Lottery, 5936 Corson Avenue South, Suite 106, Seattle, WA 98108, on July 17, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Mary Jane Ferguson by July 10, 1998, (360) 753-1947.

Submit Written Comments to: Mary Jane Ferguson, Lottery, FAX (360) 586-6586, by July 16, 1998.

Date of Intended Adoption: July 17, 1998.

April 22, 1998

Mary Jane Ferguson

Rules Coordinator

WAC 315-06-123  Voluntary assignment of prize pursuant to an appropriate judicial order. (1) In the case of a petition for an order or an amended order for the voluntary assignment of a prize, a copy of a petition shall be served on the Director of the Lottery or designee, in addition to service on the attorney general, no later than ten days before any hearing or entry of any order or amended order. After superior court entry of voluntary assignment of a right to a prize pursuant to an appropriate judicial order or amended order, the Director shall make payment to the person designated by a certified copy of the order or amended order uwhich has been served upon the Director personally or by certified mail provided that the order contains, in addition to the requirements set forth in RCW 67.70.100(2), the following provisions:

(a) The assignor's name. For an initial assignment, the winner's name as it appears on the prize claim form;

(b) The assignee's name;

(c) The citizenship or resident alien number of the assignee (if a natural person).

(2) The certified copy of the order must be served on the Director at least (twelve (12)) twenty (20) working days prior to the annual payment date to allow for a change in the payee. The Director shall not be liable for failure to pay an annual payment to an assignee if service of the order and presentation of the required information for tax withholding purposes described in subsection (3) of this section is not timely made.

(3) Payment shall be made payable to the name of the assignee designated in the judicial order and to no other name and federal income tax withholding shall be deducted from each payment and reported to the internal revenue service. The assignee shall provide its social security number, if a natural person, or tax identification number, if a legal entity, to the Director at the time the judicial order is served for the purpose of reporting tax withholding to the Internal Revenue Service and for the purpose of applying the debt collection process as described in subsection (5) of this section.

(4) RCW 67.70.100 authorizes the Director to charge actual costs for each assignment and deduct such costs from the initial annuity payment made to the assignee. In determining actual costs the Director has considered the staff time required to determine the sufficiency of the judicial order or amended order and to process the initial payment; telegraphic and long distance telephone communications, photocopying, postage, and private delivery service; and legal services directly related to determining the sufficiency of the judicial order and processing of the initial payment, including legal services and costs associated with any legal proceeding in which the agency is represented by the office of the attorney general. The director has determined the following costs shall be deducted from the initial annuity payment made to each assignee, unless paid pursuant to subsection (e):

(a) Assignment of whole annuity payments (one or more years) resulting in payment only to the assignee during each year of the assignment: $250; or

(b) Assignment of a portion/percentage of annuity payments resulting in annual payments to one or more assignees and/or the original prize winner: $300 for the first year of the assignment, plus $75 for each year thereafter();

(c) Assignment pursuant to an amended order of assignment, resulting in annual payments to the same number of assignees as in the original order: $250;

(d) Assignment pursuant to an amended order of assignment, resulting in annual payments to one or more assignees in addition to the assignees in the original order of assignment: $300 for the first year of the amended order of assignment, plus $75 for each year thereafter;

(e) If payment of the total fees due for costs for processing an order or amended order is received by the Lottery together with and at the same time as the required certified copy of the order or amended order, the fees will not be deducted from annual payments;

(f) The director shall review these costs at least biennially from December 1, 1997, and shall recommend adjustments, if necessary, for commission consideration and approval.

(5) The debt collection process mandated by RCW 67.70.255 and WAC 315-06-125 shall be applied to all payments made to any person pursuant to a voluntary assignment. The term person shall have the same meaning as the definition set forth in WAC 315-02-180.

[Statutory Authority: RCW 67.70.040. 97-20-052, § 315-06-123, filed 9/24/97, effective 10/25/97; 96-15-124, § 315-06-123, filed 7/24/96, effective 8/24/96.]

Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.