As Reported by the Committee of Conference

126th General Assembly
Regular Session
2005-2006
Am. Sub. H. B. No. 122


Representatives Wagoner, McGregor, Martin, Wagner, T. Patton, Hoops, Uecker, Seitz, Combs, Gibbs, Flowers, Collier, D. Evans, Calvert, Reidelbach, Setzer, Strahorn, Garrison, Latta, C. Evans, Kearns, Blasdel, Law, Gilb, Webster, Ujvagi, Harwood, Daniels, Carmichael, Walcher, Hartnett, D. Stewart, Book, Allen, Barrett, Brinkman, Brown, Cassell, Chandler, Coley, DeBose, Distel, Dolan, Domenick, Faber, Hughes, Key, Miller, Sayre, Schaffer, Schneider, J. Stewart, Yuko 

Senators Mumper, Niehaus, Zurz, Mallory, Clancy 

A BILL
To amend sections 3770.07, 3770.071, 3770.072, 1
3770.073, 3770.10, and 5747.062 and to enact 2
section 3123.89 of the Revised Code to prohibit 3
the claiming and payment of a lottery prize award 4
with a value in excess of $599 until the 5
beneficial owner's name, address, and Social 6
Security number are disclosed to the State Lottery 7
Commission, to make changes in the procedure for 8
the deduction of support from lottery prize 9
awards, to change the income tax withholding 10
percentage for certain lottery prize award 11
payments, to modify the basis upon which the 12
withholding computation is made, to require that 13
amounts be deducted from certain unpaid lottery 14
prize award payments pursuant to a court order, to 15
require unpaid lottery sales receipts to be 16
deducted from lottery prize awards, and to specify 17
the method of payment of lottery prize award 18
installments.19


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 3770.07, 3770.071, 3770.072, 20
3770.073, 3770.10, and 5747.062 be amended and section 3123.89 of 21
the Revised Code be enacted to read as follows:22

       Sec. 3123.89. (A) Subject to section 3770.071 of the Revised 23
Code, a child support enforcement agency that determines that an 24
obligor who is the recipient of a lottery prize award is subject 25
to a final and enforceable determination of default made under 26
sections 3123.01 to 3123.07 of the Revised Code shall issue an 27
intercept directive to the director of the state lottery 28
commission. A copy of this intercept directive shall be sent to 29
the obligor.30

       (B) The intercept directive shall require the director or the 31
director's designee to transmit an amount or amounts from the 32
proceeds of the specified lottery prize award to the office of 33
child support in the department of job and family services. The 34
intercept directive also shall contain all of the following 35
information:36

       (1) The name, address, and social security number or taxpayer 37
identification number of the obligor;38

       (2) A statement that the obligor has been determined to be in 39
default under a support order;40

       (3) The amount of the arrearage owed by the obligor as 41
determined by the agency.42

       (C) After receipt of an intercept directive and in accordance 43
with section 3770.071 of the Revised Code, the director or the 44
director's designee shall deduct the amount or amounts specified 45
from the proceeds of the lottery prize award referred to in the 46
directive and transmit the amounts to the office of child support.47

       Sec. 3770.07.  (A)(1) Except as provided in division (A)(2) 48
of this section, lottery prize awards shall be claimed by the 49
holder of the winning lottery ticket, or by the executor or50
administrator, or the trustee of a trust, of the estate of a51
deceased holder of a winning lottery ticket, in a manner to be 52
determined by the state lottery commission, within one hundred 53
eighty days after the date on which the prize award was announced 54
if the lottery game is an on-lineonline game, and within one 55
hundred eighty days after the close of the game if the lottery 56
game is an instant game.57

       No lottery prize award with a value that exceeds five hundred 58
ninety-nine dollars shall be claimed by or paid to any person, as 59
defined in section 1.59 of the Revised Code or as defined by rule 60
or order of the state lottery commission, until the name, address, 61
and social security number of each beneficial owner of the prize 62
award are disclosed to the commission. Except when a beneficial 63
owner otherwise consents in writing, in the case of a claim for a 64
lottery prize award made by one or more beneficial owners using a 65
trust, the name, address, and social security number of each such 66
beneficial owner in the commission's records as a result of such a 67
disclosure are confidential and shall not be subject to inspection 68
or copying under section 149.43 of the Revised Code as a public 69
record.70

        Except as otherwise provided in division (A)(1) of this 71
section or as otherwise provided by law, the name and address of 72
any individual claiming a lottery prize award are subject to 73
inspection or copying under section 149.43 of the Revised Code as 74
a public record.75

       (2) An eligible person serving on active military duty in any 76
branch of the United States armed forces during a war or national 77
emergency declared in accordance with federal law may submit a 78
delayed claim for a lottery prize award. The eligible person shall 79
do so by notifying the state lottery commission about the claim 80
not later than the five hundred fortieth day after the date on 81
which the prize award was announced if the lottery game is an 82
on-lineonline game or after the date on which the lottery game 83
closed if the lottery game is an instant game.84

       (3) If no valid claim to a lottery prize award is made within 85
the prescribed period, the prize money, the cost of goods and86
services awarded as prizes, or, if goods or services awarded as 87
prizes are resold by the state lottery commission, the proceeds 88
from their sale shall be returned to the state lottery fund and 89
distributed in accordance with section 3770.06 of the Revised 90
Code.91

       (4) The state lottery commission may share with other 92
governmental agencies the name, address, and social security 93
number of a beneficial owner disclosed to the commission under 94
division (A)(1) of this section, as authorized under sections 95
3770.071 and 3770.073 of the Revised Code. Any shared information 96
as disclosed pursuant to those sections that is made confidential 97
by division (A)(1) of this section remains confidential and shall 98
not be subject to inspection or copying under section 149.43 of 99
the Revised Code as a public record unless the applicable 100
beneficial owner otherwise provides written consent.101

       (5) As used in this division:102

       (a) "Eligible person" means a person who is entitled to a 103
lottery prize award and who falls into either of the following 104
categories:105

       (i) While on active military duty in this state, the person, 106
as the result of a war or national emergency declared in 107
accordance with federal law, is transferred out of this state 108
before the one hundred eightieth day after the date on which the 109
winner of the lottery prize award is selected.110

       (ii) While serving in the reserve forces in this state, the 111
person, as the result of a war or national emergency declared in 112
accordance with federal law, is placed on active military duty and 113
is transferred out of this state before the expiration of the one 114
hundred eightieth day after the date on which the prize drawing 115
occurs for an on-lineonline game or before the expiration of the 116
one hundred eightieth day following the close of an instant game 117
as determined by the commission.118

       (b) "Active military duty" means that a person is covered by 119
the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 120
U.S.C. 501 et seq., as amended, or the "Uniformed Services 121
Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, 122
38 U.S.C. 4301 et seq., as amended.123

       (c) "Each beneficial owner" means the ultimate recipient or, 124
if there is more than one, each ultimate recipient of a lottery 125
prize award.126

       (B) If a prize winner, as defined in section 3770.10 of the127
Revised Code, is under eighteen years of age, or is under some128
other legal disability, and the prize money or the cost of goods129
or services awarded as a prize exceeds one thousand dollars, the130
director of the state lottery commission shall order that payment 131
be made to the order of the legal guardian of that prize winner. 132
If the amount of the prize money or the cost of goods or services 133
awarded as a prize is one thousand dollars or less, the director 134
may order that payment be made to the order of the adult member, 135
if any, of that prize winner's family legally responsible for the 136
care of that prize winner.137

       (C) No right of any prize winner, as defined in section138
3770.10 of the Revised Code, to a prize award shall be the subject139
of a security interest or used as collateral.140

       (D)(1) No right of any prize winner, as defined in section 141
3770.10 of the Revised Code, to a prize award shall be assignable 142
except as follows: when the payment is to be made to the executor 143
or administrator, or the trustee of a trust, of the estate of a 144
winning ticket holder; when the award of a prize is disputed, any 145
person may be awarded a prize award to which another has claimed 146
title, pursuant to the order of a court of competent jurisdiction; 147
when a person is awarded a prize award to which another has 148
claimed title, pursuant to the order of a federal bankruptcy court 149
under Title 11 of the United States Code; or as provided in 150
sections 3770.10 to 3770.14 of the Revised Code.151

       (2)(a) No right of any prize winner, as defined in section152
3770.10 of the Revised Code, to a prize award with a remaining 153
unpaid balance of less than one hundred thousand dollars shall be154
assignable,or subject to garnishment, attachment, execution,155
withholding, or deduction, except as follows: as provided in156
sections 3119.80, 3119.81, 3121.02, 3121.03, and 3123.06 of the157
Revised Code; when the payment is to be made to the executor or158
administrator, or the trustee of a trust, of the estate of a 159
winning ticket holder; when the award of a prize is disputed, any 160
person may be awarded a prize award to which another has claimed 161
title, pursuant to the order of a court of competent jurisdiction; 162
when a person is awarded a prize award to which another has 163
claimed title, pursuant to the order of a federal bankruptcy court 164
under Title 11 of the United States Code;or when the director is165
to make a payment pursuant to section 3770.071 or 3770.073 of the 166
Revised Code; or as provided in sections 3770.10 to 3770.14 of the 167
Revised Code.168

       (2)(b) No right of any prize winner, as defined in section 169
3770.10 of the Revised Code, to a prize award with an unpaid 170
balance of one hundred thousand dollars or more shall be subject 171
to garnishment, attachment, execution, withholding, or deduction 172
except as follows: as provided in sections 3119.80, 3119.81, 173
3121.02, 3121.03, and 3123.06 of the Revised Code; when the 174
director is to make a payment pursuant to section 3770.071 or 175
3770.073 of the Revised Code; or pursuant to the order of a court 176
of competent jurisdiction located in this state in a proceeding in 177
which the state lottery commission is a named party, in which case 178
the garnishment, attachment, execution, withholding, or deduction 179
pursuant to the order shall be subordinate to any payments to be 180
made pursuant to section 3119.80, 3119.81, 3121.02, 3121.03, 181
3123.06, 3770.071, or 3770.073 of the Revised Code.182

       (3) The state lottery commission may adopt and amend rules 183
pursuant to Chapter 119. of the Revised Code as necessary to 184
implement division (D) of this section, to provide for payments 185
from prize awards subject to garnishment, attachment, execution, 186
withholding, or deduction, and to comply with any applicable 187
requirements of federal law.188

        (4) Upon making payments from a prize award as required by 189
division (D) of this section, the director and the state lottery 190
commission are discharged from all further liability for those 191
payments, whether they are made to an executor, administrator, 192
trustee, judgment creditor, or another person, or to the prize 193
winner, as defined in section 3770.10 of the Revised Code.194

       (5) The state lottery commission shall adopt rules pursuant 195
to section 3770.03 of the Revised Code concerning the payment of 196
prize awards upon the death of a prize winner, as defined in 197
section 3770.10 of the Revised Code. Upon the death of a prize 198
winner, the remainder of the prize winner's prize award, to the199
extent it is not subject to a transfer agreement under sections200
3770.10 to 3770.14 of the Revised Code, may be paid to the201
executor, administrator, or trustee in the form of a discounted202
lump sum cash settlement.203

       (E) No lottery prize award shall be awarded to or for any204
officer or employee of the state lottery commission, any officer205
or employee of the auditor of state actively coordinating and 206
certifying commission drawings, or any blood relative or spouse of207
such an officer or employee of the commission or auditor of state208
living as a member of the officer's or employee's household, nor209
shall any such officer, employee, blood relative, or spouse 210
attempt to claim a lottery prize award.211

       (F) The director may prohibit vendors to the state lottery212
commission and their employees from being awarded a lottery prize 213
award.214

       (G) Upon the payment of prize awards pursuant to a provision 215
of this section other than a provision of division (D) of this 216
section, the director and the state lottery commission are 217
discharged from all further liability for their payment. 218
Installment payments of lottery prize awards shall be paid by 219
official check or warrant, and they shall be sent by mail delivery 220
to the prize winner's address within the United States or by 221
electronic funds transfer to an established bank account located 222
within the United States, or the prize winner may pick them up at 223
an office of the commission.224

       Sec. 3770.071.  (A)(1) If the amount of the prize money or225
the cost of goods or services awarded as a lottery prize award is226
six hundred dollars or more, the director of the state lottery227
commission, or the director's designee, shall require the person228
entitled to the prize award to affirm in writing, under oath,229
whether or not the person is in default under a support order. The 230
director or the director's designee also may take any additional 231
appropriate steps to determine if the person entitled to the prize 232
award is in default under a support order. If the person entitled 233
to the prize award affirms that the person is in default under a 234
support order, or if the director or the director's designee 235
determines that the person is in default under a support order, 236
the director or the director's designee shall temporarily withhold 237
payment of the prize award and informnotify the courtchild 238
support enforcement agency that issuedadministers the support 239
order that the person is entitled to a prize award, of the amount 240
of the prize award, and, if the prize award is to be paid in 241
annual installments, of the number of installments.242

       After(2) Upon receipt of the notice from the director or the243
director's designee, the court shall give the person notice of the244
director's notice, schedule a hearing to determine if the person245
is in default and the amount of the default, and give the person246
notice of the date, time, and location of the hearingchild 247
support enforcement agency shall conduct an investigation to 248
determine whether the person entitled to the lottery prize award 249
is subject to a final and enforceable determination of default 250
made under sections 3123.01 to 3123.07 of the Revised Code. If the251
court at the hearingagency determines that the person is in 252
defaultso subject, it shall issue an orderintercept directive as 253
described in section 3123.89 of the Revised Code to the director 254
at lottery commission headquarters requiring the director or the 255
director's designee to deduct from any unpaid prize award or any 256
annual installment payment of thean unpaid prize award, a 257
specified amount for child support or spousal support in 258
satisfaction of the support order under which the person is in 259
default. To the extent possible, the amount specified to be 260
deducted under the order issued under this sectionintercept 261
directive shall satisfy the amount ordered for support or spousal262
support in the support order under which the person is in default.263
Within264

       A child support enforcement agency shall issue an intercept 265
directive within thirty days from the date the director or the 266
director's designee notifies the agency under division (A)(1) of 267
this section. Within thirty days after the date on which the court268
agency issues the order under this section to the director269
intercept directive, the director or the director's designee shall 270
pay the amount specified in that orderthe intercept directive to 271
the office of child support in the department of job and family 272
services. IfBut, if the prize award is to be paid in annual 273
installments, the director or the director's designee, on the date 274
the next installment payment is due, shall paydeduct the amount 275
specified in the court order issued under this sectionintercept 276
directive from that installment and, if necessary, any subsequent 277
annual installments, at the time suchthose installments become 278
due and owing to the prize winner, and pay the amount to the 279
office of child support.280

       (B) As used in this section:281

       (1) "Support order" has the same meaning as in section282
3119.01 of the Revised Code.283

       (2) "Default" has the same meaning as in section 3121.01 of 284
the Revised Code.285

       (C) No person shall knowingly make a false affirmation or286
oath required by division (A) of this section.287

       Sec. 3770.072. (A) As used in this section, "prize winner,"288
"transferee," and "transferor" have the same meanings as in289
section 3770.10 of the Revised Code.290

       (B) The state lottery commission shall deduct amounts from291
lottery prize awards and file returns in accordance with section292
5747.062 of the Revised Code and any rules adopted by the tax293
commissioner pursuant to that section. This division also applies294
to lottery prize award payments the commission remits to295
transferees.296

       (C)(1)(a) Each transferee shall deduct and withhold from each297
gross amount payable to each prize winner three and one-halfsix298
per cent of the gross amount payable prior to making any other299
reduction required by this chapter.300

       (b) Subject to division (C)(1)(c) of this section, each 301
transferee, including any transferee that is a related member, as 302
defined in section 5733.042 of the Revised Code, to the 303
transferor, shall deduct and withhold from each amount payable to 304
a transferor that is not a prize winner six per cent of the 305
portion of the payment representing gain or income the transferor 306
will recognize in connection with the payment.307

        (c) For purposes of division (C)(1)(b) of this section, the 308
portion of any payment representing gain or income recognized by 309
the transferor shall be computed in accordance with the Internal 310
Revenue Code. The transferor shall prepare a written statement 311
setting forth that amount and sign the statement under penalty of 312
perjury. Within five days before the date on which the payment is 313
to be made, the transferor shall deliver the written statement to 314
the transferee and deliver a copy of the written statement to the 315
tax commissioner. If the transferee does not receive the written 316
statement by the time the payment is made, the transferee shall 317
withhold six per cent of the entire amount of the payment. If the 318
tax commissioner notifies the transferee that the transferor has 319
erroneously computed the amount of gain or income recognized, the 320
transferee shall withhold six per cent of the entire amount of 321
each payment to be made after the transferee receives the notice.322

        (d) The tax commissioner may impose a penalty of up to one 323
thousand dollars for any person failing to timely deliver to the 324
tax commissioner the copy of the written statement as required by 325
division (C)(1)(c) of this section. Proceeds from the imposition 326
of the penalty shall be considered as revenue arising from the tax 327
imposed under section 5733.06 or 5747.02 of the Revised Code, as 328
applicable.329

       (2) With respect to amounts deducted and withheld pursuant to330
division (C)(1) of this section, each transferee shall comply with331
divisions (A)(2) to (4) of section 5747.062 of the Revised Code.332

       (3) An employee of a corporation, limited liability company,333
or business trust having control or supervision of or charged with334
the responsibility of filing the report and making the payment335
required by division (C) of this section and section 5747.062 of336
the Revised Code, or an officer, member, manager, or trustee of a337
corporation, limited liability company, or business trust who is338
responsible for the execution of the corporation's, limited339
liability company's, or business trust's fiscal responsibilities,340
shall be personally liable for failure to file the report or pay341
the amount due as required by division (C) of this section and342
section 5747.062 of the Revised Code. The dissolution,343
termination, or bankruptcy of a corporation, limited liability344
company, or business trust does not discharge a responsible345
officer's, member's, manager's, employee's, or trustee's liability346
for a failure of the corporation, limited liability company, or347
business trust to file returns or pay the amount due.348

       (4)(a) The tax commissioner may make an assessment against349
any person listed in division (C)(1) or (3) of this section for350
any deficiency for any period. Section 5747.13 of the Revised Code351
shall apply with respect to issuing assessments, filing petitions352
for reassessments, conducting hearings, issuing final353
determinations, making the assessment final, and filing the entry354
that makes the assessment final. Section 5717.02 of the Revised355
Code shall apply to appeals of the commissioner's final decision356
in connection with assessments issued pursuant to division (C)(4)357
of this section.358

       (b) An assessment issued against any person listed in359
division (C)(1) or (3) of this section shall not be considered an360
election of remedies or a bar to an assessment against any other361
person for the failure to comply with division (C)(1) of this362
section. No assessment shall be issued against any person who is363
so listed if the amount required to be withheld has been paid by364
another.365

       (c) The assessment shall include interest at the rate per366
annum prescribed by section 5703.47 of the Revised Code on367
liability from the time the payment is due until the date of368
assessment. Interest shall continue to accrue from the date of369
assessment until the date the assessment is paid in full. Any370
interest accruing subsequent to the date of the issuance of the371
assessment shall be considered to be an additional deficiency for372
which the tax commissioner may issue subsequent assessments. The373
initial assessment and any subsequent assessments may include a374
penalty in an amount not to exceed twice the applicable interest375
charged under this division.376

       Sec. 3770.073.  (A) If a person is entitled to a lottery 377
prize award and is indebted to the state for the payment of any 378
tax, workers' compensation premium, unemployment contribution, 379
payment in lieu of unemployment contribution, certified claim 380
under section 131.02 or 131.021 of the Revised Code, lottery sales 381
receipts held in trust on behalf of the state lottery commission 382
as described in division (G)(2) of section 3770.05 of the Revised 383
Code, or charge, penalty, or interest arising from these debts and 384
the amount of the prize money or the cost of goods or services 385
awarded as a lottery prize award is five thousand dollars or more, 386
the director of the state lottery commission, or the director's 387
designee, shall do either of the following:388

       (1) If the prize award will be paid in a lump sum, deduct 389
from the prize award and pay to the attorney general an amount in 390
satisfaction of the debt and pay any remainder to that person. If 391
the amount of the prize award is less than the amount of the debt, 392
the entire amount of the prize award shall be deducted and paid in 393
partial satisfaction of the debt.394

       (2) If the prize award will be paid in annual installments, 395
on the date the initial installment payment is due, deduct from 396
that installment and pay to the attorney general an amount in 397
satisfaction of the debt and, if necessary to collect the full 398
amount of the debt, do the same for any subsequent annual 399
installments, at the time the installments become due and owing to 400
the person, until the debt is fully satisfied.401

       (B) If a person entitled to a lottery prize award owes more 402
than one debt, any debt subject to section 5739.33 or division (G) 403
of section 5747.07 of the Revised Code shall be satisfied first.404

       (C) Except as provided in section 131.021 of the Revised 405
Code, this section applies only to debts that have become final.406

       Sec. 3770.10. As used in sections 3770.07 and 3770.10 to407
3770.14 of the Revised Code:408

       (A) "Court of competent jurisdiction" means either the 409
general division or the probate division of the court of common 410
pleas of the county in which the prize winner or transferor 411
resides, or, if the prize winner or transferor is not a resident 412
of this state, either the general division or the probate division 413
of the court of common pleas of Franklin county or a federal court414
having jurisdiction over the lottery prize award.415

       (B) "Discounted present value" means the present value of the 416
future payments of a lottery prize award that is determined by417
discounting those payments to the present, using the most recently418
published applicable federal rate for determining the present419
value of an annuity as issued by the United States internal420
revenue service and assuming daily compounding.421

       (C) "Independent professional advice" means the advice of an422
attorney, a certified public accountant, an actuary, or any other423
licensed professional adviser if all of the following apply:424

       (1) The prize winner has engaged the services of the licensed425
professional adviser to render advice concerning the legal and 426
other implications of a transfer of the lottery prize award.427

       (2) The licensed professional adviser is not affiliated in428
any manner with or compensated in any manner by the transferee of429
the lottery prize award.430

       (3) The compensation of the licensed professional adviser is431
not affected by whether or not a transfer of a lottery prize award432
occurs.433

       (D) "Prize winner" means any person that holds the right to434
receive all or any part of a lottery prize award as a result of435
being any of the following:436

       (1) A person who is a claimant under division (A) of section 437
3770.07 of the Revised Code;438

       (2) A person who is entitled to a prize award and who is439
under a legal disability as described in division (B) of section 440
3770.07 of the Revised Code;441

       (3) A person who was awarded a prize award to which another442
has claimed title by a federal bankruptcy court order or other 443
court order referred to in division (D)(1) of section 3770.07 of 444
the Revised Code;445

       (4) A person who is receiving payments upon the death of a446
prize winner as provided in division (D)(2) of section 3770.07 of 447
the Revised Code.448

       (E) "Transfer" means any form of sale, assignment, or449
redirection of payment of all or any part of a lottery prize award450
for consideration.451

       (F) "Transfer agreement" means an agreement that is complete452
and valid, and that provides for the transfer of all or any part453
of a lottery prize award from a transferor to a transferee. A454
transfer agreement is incomplete and invalid unless the agreement455
contains both of the following:456

       (1) A statement, signed by the transferor under penalties of457
perjury, that the transferor irrevocably agrees that the458
transferor is subject to the tax imposed by Chapter 5733. or 5747.459
of the Revised Code with respect to gain or income which the460
transferor will recognize in connection with the transfer. If the461
transferor is a pass-through entity, as defined in section 5733.04462
of the Revised Code, each investor in the pass-through entity463
shall also sign under penalties of perjury a statement that the464
investor irrevocably agrees that the investor is subject to the465
tax imposed by Chapter 5733. or 5747. of the Revised Code with466
respect to gain or income which the transferor and the investor467
will recognize in connection with the transfer.468

       (2) A statement, signed by the transferee, that the469
transferee irrevocably agrees that the transferee is subject to470
the withholding requirements imposed by division (C) of section471
3770.072 of the Revised Code and that the transferee is subject to 472
the tax imposed by Chapter 5733. or 5747. of the Revised Code with 473
respect to gain or income which the transferee will recognize in 474
connection with lottery prize awards to be received as a result of 475
the transfer. If the transferee is a pass-through entity, as 476
defined in section 5733.04 of the Revised Code, each investor in 477
the pass-through entity shall also sign under penalties of perjury 478
a statement setting forth that the investor irrevocably agrees 479
that the investor is subject to the withholding requirements 480
imposed by division (C) of section 3770.072 of the Revised Code 481
and is subject to the tax imposed by Chapter 5733. or 5747. of the482
Revised Code with respect to gain or income which the transferee483
and the investor will recognize in connection with lottery prize484
awards to be received as a result of the transfer.485

       (G) "Transferee" means a party acquiring or proposing to486
acquire all or any part of a lottery prize award through a487
transfer.488

       (H) "Transferor" means either a prize winner or a transferee489
in an earlier transfer whose interest is acquired by or is sought490
to be acquired by a transferee or a new transferee through a491
transfer.492

       Sec. 5747.062. As used in this section, "transferee" has the493
same meaning as in section 3770.10 of the Revised Code, and494
"recipient" includes a transferee.495

       (A)(1) The state lottery commission shall deduct and withhold 496
from each lottery prize award payment that exceeds five thousand 497
dollars an amount equal to three and one-halfsix per cent of the 498
payment, prior to making any other reduction required by Chapter 499
3770. of the Revised Code.500

       (2) On or before the tenth banking day of each month, the501
state lottery commission, and each transferee required to deduct502
and withhold amounts pursuant to section 3770.072 of the Revised503
Code, shall file a return and remit to the tax commissioner all504
amounts deducted and withheld pursuant to this section during the505
preceding month.506

       (3) On or before the thirty-first day of January of each507
year, the state lottery commission, and each transferee required508
to deduct and withhold amounts pursuant to section 3770.072 of the509
Revised Code, shall file with the commissioner an annual return,510
in the form prescribed by the tax commissioner, indicating the511
total amount deducted and withheld pursuant to this section or 512
section 3770.072 of the Revised Code during the preceding calendar 513
year. At the time of filing that return, the state lottery 514
commission or transferee shall remit any amount deducted and515
withheld during the preceding calendar year that was not516
previously remitted.517

       (4) The state lottery commission, and each transferee518
required to deduct and withhold amounts pursuant to section519
3770.072 of the Revised Code, shall issue to each person with520
respect to whom tax has been deducted and withheld by the521
commission or transferee pursuant to this section or section 522
3770.072 of the Revised Code during the preceding calendar year, 523
an information return in the form prescribed by the commissioner.524

       (B)(1) Division (B)(1) of this section does not apply to525
persons classified for federal income tax purposes as associations526
taxable as corporations.527

       Amounts withheld pursuant to this section or section 3770.072 528
of the Revised Code shall be treated as a credit against the tax 529
imposed pursuant to section 5747.02 of the Revised Code upon the 530
lottery prize award recipient, upon a beneficiary of such a 531
recipient, or upon any investor in such a recipient if the532
recipient is a pass-through entity or disregarded entity, and533
shall be treated as paid by the recipient, beneficiary, or534
investor on the date on which those amounts are deducted and535
withheld. The credit is a refundable credit and shall be claimed 536
in the order required under section 5747.98 of the Revised Code. 537
The credit is available to the recipient, beneficiary, or investor 538
even if the commission or transferee does not remit to the tax 539
commissioner the amount withheld.540

       (2) Division (B)(2) of this section applies only to persons541
classified for federal income tax purposes as associations taxable542
as corporations.543

       AmountAmounts withheld pursuant to this section or section 544
3770.072 of the Revised Code shall be treated as a credit against 545
the tax imposed pursuant to section 5733.06 of the Revised Code 546
for the tax year immediately following the date on which those 547
amounts are deducted and withheld, upon the lottery prize award 548
recipient, upon a beneficiary of such a recipient, or upon an 549
investor in such a recipient if the recipient is a pass-through 550
entity or disregarded entity, and shall be treated as paid by the 551
recipient, beneficiary, or investor on the date on which those 552
amounts are deducted and withheld. The credit is a refundable 553
credit and shall be claimed in the order required under section 554
5733.98 of the Revised Code. The credit is available to the 555
recipient, beneficiary, or investor even if the commission or556
transferee does not remit to the tax commissioner the amount557
withheld.558

       (3) Nothing in division (B)(1) or (2) of this section shall559
be construed to allow more than one person to claim the credit for560
any portion of each amount deducted and withheld.561

       (C) Failure of the commission or any transferee to deduct and 562
withhold the required amounts from lottery prize awards or to563
remit amounts withheld as required by this section and section564
3770.072 of the Revised Code shall not relieve a taxpayer565
described in division (B) of this section from liability for the566
tax imposed by section 5733.06 or 5747.02 of the Revised Code.567

       Section 2. That existing sections 3770.07, 3770.071, 568
3770.072, 3770.073, 3770.10, and 5747.062 of the Revised Code are 569
hereby repealed.570