§ 50-27-24.1 - Payment of prize to person other than winner; assignment of prize rights; hearing; findings justifying approval of voluntary assignment; other requirements
O.C.G.A. 50-27-24.1 (2010)
50-27-24.1. Payment of prize to person other than winner; assignment of prize rights; hearing; findings justifying approval of voluntary assignment; other requirements
(a) Under an appropriate judicial order, any prize or any portion of a prize or any right of any person to a prize awarded payable by the corporation in installment payments may be paid to any person other than the winner.
(b) The right of a person to a prize payable by the corporation in installment payments may be voluntarily assigned as a whole or in part if the assignment is made to a person designated in accordance with an order of the superior court in the county where the corporation is located. In the case of a voluntary assignment for consideration made under a judicial order, the assignee shall withhold from the purchase price to be paid to the assignor federal and state income taxes in a manner and amount consistent with the procedures of the corporation and pay such withheld taxes to the proper taxing authority in a timely manner and maintain and file all required records, forms, and reports.
(c) On the filing by the assignor or the assignee in the superior court of a petition seeking approval of a voluntary assignment, the filing party shall schedule a hearing on such petition and serve notice of the hearing on all interested parties. The court shall conduct an evidentiary hearing. If the court finds that:
(1) The assignment is in writing, is executed by the assignor, and is by its terms subject to the laws of the state;
(2) The assignor has provided a sworn affidavit attesting that he or she is of sound mind, is in full command of his or her faculties, and is not acting under duress;
(3) The assignor has been advised about the assignment by an independent attorney who is not related to and not compensated by the assignee or an affiliate of the assignee;
(4) The assignor understands that he or she will not receive the prize payments or parts of payments during the years assigned;
(5) The assignor understands and agrees that the corporation, directors, and officials and employees of the corporation are not liable or responsible for making any of the assigned payments;
(6) The assignee has provided the assignor with a one-page disclosure statement in boldface type not less than 14 points in size, setting forth:
(A) The payments being assigned by the amount and payment date;
(B) The purchase price;
(C) The rate of discount to present value assuming daily compounding and funding on the contract date;
(D) An itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees, and other commissions, fees, costs, expenses, and charges, and a good faith estimate of all legal fees and court costs payable by the assignor or deductible from the gross amount otherwise payable to the assignor;
(E) The net amount payable to the assignor after deduction of all commissions, fees, costs, expenses, and charges described in subparagraph (D) of this paragraph; and
(F) The amount of any penalty and the amount of any liquidated damages, inclusive of penalties, payable by the assignor in the event of any breach of the transfer agreement by the assignor;
(7) The interest rate or discount rate, as applicable, associated with the assignment does not indicate overreaching or exploitation, does not exceed current usury rates, and does not violate any laws of usury of this state; and
(8) The contract of assignment expressly states that the assignor has three business days after signing the contract to cancel the assignment,
the court shall issue an order approving a voluntary assignment and directing the corporation to make prize payments as a whole or in part to the assignee.
(d) Written notice of the petition and proposed assignment and any court hearing concerning the petition and proposed assignment shall be given to the corporation's counsel at least ten days before a court hearing. The corporation need not appear in or be named as party to an action that seeks judicial approval of an assignment but may intervene as of right in the action. A certified copy of a court order approving a voluntary assignment shall be given to the corporation not later than ten days before the date on which the payment is to be made. Written notice of the petition and proposed assignment and any court hearing concerning the petition and proposed assignment shall be served by certified mail to the last known address of any interested party. The interested party need not appear in or be named as party to an action that seeks judicial approval of an assignment but may intervene as of right in the action.
(e) The corporation, not later than ten days after receiving a certified copy of a court order approving a voluntary assignment, shall send the assignor and the assignee written confirmation of the court approved assignment and the intent of the corporation to rely on the assignment in making payments to the assignee named in the order free from any attachments, garnishments, or executions.
(f) A voluntary assignment may not include or cover payments or parts of payments to the assignor to the extent that such payments are subject to attachments, garnishments, or executions authorized and issued pursuant to law as provided in subsection (b) of Code Section 50-27-24. Each court order issued under this subsection shall provide that any obligations of the assignor created by subsection (b) of Code Section 50-27-24 shall be satisfied out of the proceeds to be received by the assignor.
(g) A voluntary assignment may not include portions of payments that are subject to offset on account of a defaulted or delinquent child support obligation, nonwage garnishment, or criminal restitution obligation or on account of a debt owed to a state agency. Each court order issued under subsection (c) of this Code section shall provide that any delinquent child support or criminal restitution obligations of the assignor and any debts owed to a state agency by the assignor, as of the date of the court order, shall be set off by the corporation first against remaining payments or portions thereof due the prize winner and then against payments due the assignee.
(h) The corporation, the directors, officials, and employees of the corporation are not liable under this Code section after payment of an assigned prize is made. The assignor and assignee shall hold harmless and indemnify the corporation, the directors, and the state, and its employees and agents, from all claims, suits, actions, complaints, or liabilities related to the assignment.
(i) The corporation may establish a reasonable fee to defray administrative expenses associated with assignments made under this Code section, including a processing fee imposed by a private annuity provider. The amount of the fee shall reflect the direct and indirect costs of processing assignments.
(j) The assignee shall notify the corporation of its business location and mailing address for payment purposes and of any change in location or address during the entire course of the assignment.
(k) A court order or a combination of court orders under this Code section may not require the corporation to divide a single prize payment among more than three different persons. This Code section does not prohibit the substitution of assignees as long as there are not more than three assignees at any one time for any one prize payment. Any subsequent assignee is bound as the original assignee by the provisions of this Code section and the terms and conditions of the contract of assignment.
(l) If the federal Internal Revenue Service or a court of competent jurisdiction issues a determination letter, revenue ruling, or other public document declaring that the voluntary assignment of prizes will affect the federal income tax treatment of lottery prize winners who do not assign their prizes, then within 15 days after the corporation receives the letter, ruling, or other document, the director of the corporation shall file a copy of it with the Attorney General and a court may not issue an order authorizing a voluntary assignment under this Code section.
(m) The provisions of this Code section shall prevail over any inconsistent provision in Code Section 11-9-109.
(n) Any agreement or option to sell, assign, pledge, hypothecate, transfer, or encumber a lottery prize, or any portion thereof, prior to May 12, 2008, shall be void in its entirety.