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91_HB0858
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1 AN ACT to amend the Illinois Lottery Law by changing
2 Section 13 and adding Sections 7.12 and 13.1.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Lottery Law is amended by
6 changing Section 13 and adding Sections 7.12 and 13.1 as
7 follows:
8 (20 ILCS 1605/7.12 new)
9 Sec. 7.12. Report concerning prohibition against sale to
10 minors. The Department shall report to the Speaker of the
11 House, the President of the Senate, and the minority leaders
12 of both houses by January 1, 2000 regarding current
13 enforcement of prohibitions against the sale of lottery
14 tickets to minors. The report shall include the Department's
15 recommendations concerning strengthening the enforcement of
16 the prohibition, particularly as it applies to the sale of
17 lottery tickets from machines.
18 (20 ILCS 1605/13) (from Ch. 120, par. 1163)
19 Sec. 13. No prize, nor any portion of a prize, nor any
20 right of any person to a prize awarded shall be assignable,
21 except as provided in Section 13.1. Any prize, or portion
22 thereof remaining unpaid at the death of a prize winner, may
23 be paid to the estate of such deceased prize winner, or to
24 the trustee under a revocable living trust established by the
25 deceased prize winner as settlor, provided that a copy of
26 such a trust has been filed with the Department along with a
27 notarized letter of direction from the settlor and no written
28 notice of revocation has been received by the Department
29 prior to the settlor's death. Following such a settlor's
30 death and prior to any payment to such a successor trustee,
31 the Director shall obtain from the trustee and each trust
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1 beneficiary a written agreement to indemnify and hold the
2 Department harmless with respect to any claims that may be
3 asserted against the Department arising from payment to or
4 through the trust. Notwithstanding any other provision of
5 this Section, any person pursuant to an appropriate judicial
6 order may be paid the prize to which a winner is entitled,
7 and all or part of any prize otherwise payable by State
8 warrant under this Section shall be withheld upon
9 certification to the State Comptroller from the Illinois
10 Department of Public Aid as provided in Section 10-17.5 of
11 The Illinois Public Aid Code. The Director shall be
12 discharged of all further liability upon payment of a prize
13 pursuant to this Section.
14 (Source: P.A. 85-1224.)
15 (20 ILCS 1605/13.1 new)
16 Sec. 13.1. Assignment of prizes.
17 (a) The right of a person to receive payments due under
18 a prize that is paid in installments over time by the
19 Department may be voluntarily assigned, in whole or in part,
20 if the assignment is made to a person or entity designated
21 pursuant to an order of the circuit court located in the
22 county in which the assigning winner resides or in which the
23 Department's headquarters are located.
24 A court shall issue an order approving a voluntary
25 assignment and directing the Department to direct prize
26 payments in whole or in part to the assignee if, and only if,
27 all of the following conditions have been met:
28 (1) the assignment is in writing, executed by the
29 assignor, and by its terms, subject to the laws of this
30 State;
31 (2) the assignor provides a sworn affidavit
32 attesting that:
33 (A) the assigning winner is of sound mind, in
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1 full command of his or her faculties, and not acting
2 under duress;
3 (B) the assigning winner has been advised
4 regarding the assignment by his or her own
5 independent legal counsel and has had the
6 opportunity to receive independent financial and tax
7 advice concerning the effects of the assignment;
8 (C) the assigning winner understands that he
9 or she will not receive the prize payments (or
10 portions thereof) for the years assigned;
11 (D) the assigning winner understands and
12 agrees that, with regard to the assigned payments,
13 the State, the Department, and their officials and
14 employees will have no further liability or
15 responsibility to make the assigned payments to the
16 assignor;
17 (E) the assigning winner has been provided
18 with a one page written disclosure statement setting
19 forth (in bold type, 14 point or larger) the
20 payments being assigned (by amounts and payment
21 dates), the purchase price being paid, the rate of
22 discount to present value, assuming daily
23 compounding and funding on the contract date, and
24 the amount, if any, of any origination or closing
25 fees that will be charged to the assigning winner;
26 and
27 (F) the assigning winner was advised in
28 writing, at the time he or she signed the assignment
29 contract, that he or she had the right to cancel the
30 contract without any further obligation within 3
31 business days following the date on which the
32 contract was signed.
33 (b) A voluntary assignment shall not include or cover
34 payments or portions of payments that are subject to offset
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1 on account of a defaulted or delinquent child support
2 obligation, unless appropriate provision is made in the order
3 to satisfy the obligations giving rise to the offset.
4 (c) The State, the Department, and their respective
5 officials and employees shall be discharged of all further
6 liability upon payment of a prize pursuant to an order
7 entered under this Section.
8 (d) The Department may establish a reasonable fee to
9 defray administrative expenses associated with assignments
10 made pursuant to this Section, including the cost to the
11 State or the Department of any processing fee that may be
12 imposed by a private annuity provider. The fee amount shall
13 reflect the direct and indirect costs associated with
14 processing the assignments.
15 (e) Notwithstanding any other provision of this Section,
16 no prizewinner shall have the right to assign prize payments
17 upon:
18 (1) The issuance by the United States Internal
19 Revenue Service (IRS) of a technical rule letter, revenue
20 ruling, or other public ruling of the IRS in which the
21 IRS determines that, based upon the right of assignment
22 provided in this Act, a lottery prizewinner who does not
23 assign prize payments would be subject to an immediate
24 income tax liability for the value of the entire prize
25 rather than annual income tax liability for each
26 installment when paid.
27 (2) The issuance by a court of competent
28 jurisdiction of a published decision holding that, based
29 upon the right of assignment provided in this Section, a
30 lottery prizewinner who does not assign prize payments
31 pursuant to this Section would be subject to an immediate
32 income tax liability for the value of the entire prize
33 rather than annual income tax liability for each
34 installment when paid.
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1 Upon receipt of a letter or ruling from the IRS or a
2 published decision of a court of competent jurisdiction, as
3 specified in item (1) or (2) of this subsection (e), the
4 Director shall immediately file a copy of that letter,
5 ruling, or published decision with the Secretary of State.
6 Immediately upon the filing by the Director of a letter,
7 ruling, or published decision with the Secretary of State, a
8 prizewinner shall be ineligible to assign a prize pursuant to
9 this Section.
10 The changes made by this amendatory Act of 1999 shall not
11 apply unless the national office of the Internal Revenue
12 Service has ruled that those changes will not constitute
13 constructive receipt by any prize winner prior to an actual
14 assignment being made under this Section.