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Am. Sub. H. B. No. 122 As Passed by the Senate
As Passed by the Senate
126th General Assembly | Regular Session | 2005-2006 |
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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, and 5747.062 and to enact sections 3123.89 and 3770.074 of the Revised Code to prohibit the claiming and payment of a lottery prize award with a value in excess of $599 until the beneficial owner's name, address, and Social Security number are disclosed to the State Lottery Commission, to make changes in the procedure for the deduction of support from lottery prize awards, to change the income tax withholding percentage for certain lottery prize award payments, to modify the basis upon which the withholding computation is made, to require that final, nonappealable unpaid judgments be deducted from certain unpaid lottery prize award payments pursuant to a specified procedure, and to specify the method of payment of lottery prize award installments.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3770.07, 3770.071, 3770.072, and 5747.062 be amended and sections 3123.89 and 3770.074 of the Revised Code be enacted to read as follows:
Sec. 3123.89. (A) Subject to section 3770.071 of the Revised Code, a child support enforcement agency that determines that an obligor who is the recipient of a lottery prize award is subject to a final and enforceable determination of default made under sections 3123.01 to 3123.07 of the Revised Code shall issue an intercept directive to the director of the state lottery commission. A copy of this intercept directive shall be sent to the obligor. (B) The intercept directive shall require the director or the director's designee to transmit an amount or amounts from the proceeds of the specified lottery prize award to the office of child support in the department of job and family services. The intercept directive also shall contain all of the following information: (1) The name, address, and social security number or taxpayer identification number of the obligor; (2) A statement that the obligor has been determined to be in default under a support order; (3) The amount of the arrearage owed by the obligor as determined by the agency. (C) After receipt of an intercept directive and in accordance with section 3770.071 of the Revised Code, the director or the director's designee shall deduct the amount or amounts specified from the proceeds of the lottery prize award referred to in the directive and transmit the amounts to the office of child support.
Sec. 3770.07. (A)(1) Except as provided in division (A)(2) of this section, lottery prize awards shall be claimed
by the holder of the winning lottery ticket, or by the executor
or
administrator, or the trustee of a trust, of the
estate of a
deceased holder of a winning lottery
ticket, in a manner to be determined
by the state lottery
commission, within one hundred eighty days
after the date on
which the prize award was announced if the
lottery game is an
on-line online game, and within one hundred eighty
days after the close
of the game if the lottery game is an instant
game. No lottery prize award with a value that exceeds five hundred ninety-nine dollars shall be claimed by or paid to any person, as defined in section 1.59 of the Revised Code or as defined by rule or order of the state lottery commission, until the name, address, and social security number of each beneficial owner of the prize award are disclosed to the commission. Except when a beneficial owner otherwise consents in writing, the name, address, and social security number of that beneficial owner in the commission's records as a result of that disclosure are confidential and shall not be subject to inspection or copying under section 149.43 of the Revised Code as a public record. Except as otherwise provided in division (A)(1) of this section or as otherwise provided by law, the name and address of any individual claiming a lottery prize award are subject to inspection or copying under section 149.43 of the Revised Code as a public record. (2) An eligible person serving on active military duty in any branch of the United States armed forces during a war or national emergency declared in accordance with federal law may submit a delayed claim for a lottery prize award. The eligible person shall do so by notifying the state lottery commission about the claim not later than the five hundred fortieth day after the date on which the prize award was announced if the lottery game is an on-line online game or after the date on which the lottery game closed if the lottery game is an instant game. (3) If no valid
claim to a lottery prize award is made within the
prescribed period,
the prize money, the cost of goods and
services awarded as
prizes, or, if goods or services awarded as prizes are
resold by the state lottery
commission, the proceeds from their sale shall be
returned to the
state lottery fund and distributed in accordance
with section
3770.06 of the Revised Code.
(4) The state lottery commission may share with other governmental agencies the name, address, and social security number of a beneficial owner disclosed to the commission under division (A)(1) of this section, as authorized under sections 3770.071 and 3770.073 of the Revised Code. The shared information as disclosed pursuant to those sections remains confidential and shall not be subject to inspection or copying under section 149.43 of the Revised Code as a public record unless the beneficial owner otherwise provides written, notarized consent. (5) As used in this division: (a) "Eligible person" means a person who is entitled to a lottery prize award and who falls into either of the following categories: (i) While on active military duty in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is transferred out of this state before the one hundred eightieth day after the date on which the winner of the lottery prize award is selected. (ii) While serving in the reserve forces in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is placed on active military duty and is transferred out of this state before the expiration of the one hundred eightieth day after the date on which the prize drawing occurs for an on-line online game or before the expiration of the one hundred eightieth day following the close of an instant game as determined by the commission. (b) "Active military duty" means that a person is covered by the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 U.S.C. 501 et seq., as amended, or the "Uniformed Services Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, 38 U.S.C. 4301 et seq., as amended. (c) "Each beneficial owner" means the ultimate recipient or, if there is more than one, each ultimate recipient of a lottery prize award. (B) If a
prize winner, as
defined in section 3770.10 of the
Revised Code, is under eighteen
years of age, or is under some
other legal disability, and the
prize money or the cost of goods
or services awarded as a prize
exceeds one thousand dollars, the
director of the state lottery commission shall order that
payment be made to the order of the
legal guardian of
that prize winner. If the amount of the prize
money
or the
cost of
goods or services awarded as a prize is one
thousand
dollars or
less, the director may order that payment be
made to
the order of
the adult member, if any, of
that prize
winner's family
legally responsible for
the care of
that prize
winner. (C) No right of any
prize winner, as defined in
section
3770.10 of the Revised Code, to a prize award shall be the
subject
of a security interest or used as collateral. (D)(1) No right of any
prize winner, as defined in
section
3770.10 of the Revised Code, to a prize award shall be
assignable,
or subject to garnishment, attachment, execution,
withholding, or
deduction, except as follows: as provided in
sections 3119.80,
3119.81, 3121.02, 3121.03, and
3123.06 of the
Revised Code; when
the
payment is to be made to the executor or
administrator, or the
trustee of a trust, of the estate of a winning
ticket holder; when
the award of a prize is disputed, any person
may be awarded a
prize award to which another has claimed title,
pursuant to the
order of a court of competent jurisdiction; when a person is awarded a prize award to which another has claimed title, pursuant to the order of a federal bankruptcy court under Title 11 of the United States Code;
when the director
is
to make a payment pursuant to section
3770.071 or, 3770.073, or 3770.074 of the Revised
Code; or as provided in sections 3770.10
to 3770.14 of
the Revised
Code. (2) The state lottery commission shall adopt rules pursuant to section
3770.03
of the
Revised Code concerning the payment of prize awards
upon
the death of a prize winner, as defined in section 3770.10 of the Revised Code. Upon the death of a prize winner,
the
remainder
of the prize winner's prize award, to the
extent it
is
not subject to a transfer agreement under sections
3770.10 to
3770.14 of the Revised Code, may be paid to the
executor,
administrator,
or trustee in the form of a discounted
lump sum
cash settlement. (E) No lottery prize award shall be awarded to or for any
officer or employee of the state lottery commission, any officer
or
employee of the auditor of state actively coordinating and certifying
commission drawings, or any blood
relative or spouse of
such an officer or employee of the commission or auditor
of state
living as a member
of the officer's or employee's household, nor
shall any such officer,
employee, blood relative, or spouse attempt to
claim a lottery prize
award. (F) The director may prohibit vendors to the state lottery commission and
their employees from being awarded a lottery prize award. (G) Upon the payment of
prize awards pursuant to this
section, the director and the state lottery
commission are discharged from all
further liability for their payment. Installment payments of lottery prize awards shall be paid by official check or warrant, and they shall be sent by mail delivery to the prize winner's address within the United States or by electronic funds transfer to an established bank account located within the United States, or the prize winner may pick them up at an office of the commission. Sec. 3770.071. (A)(1) If the amount of the prize money or
the
cost of goods or services awarded as a lottery prize award is
six
hundred dollars or more, the director of the state lottery
commission, or the director's designee, shall require the person
entitled to
the prize award to affirm in writing, under oath,
whether or not
the person is in default under a support order.
The director or the
director's designee also may take any
additional appropriate steps to
determine if the person entitled
to the prize award is in default
under a support order. If the
person entitled to the prize award
affirms that the person is in
default under a support order, or if the
director or the
director's designee determines that the
person is in default
under
a support order, the director or the director's designee shall
temporarily withhold payment of the prize award and inform notify the
court child support enforcement agency
that
issued administers the support order that the person is entitled to
a prize
award, of the amount of the prize award, and, if the prize
award
is to be paid in annual installments, of the number of
installments. After (2) Upon receipt of the notice from the director or the
director's
designee, the court
shall give the person notice of the
director's notice, schedule a
hearing to determine if the person
is in default and the amount
of the default, and give the person
notice of the date, time, and
location of the hearing child support enforcement agency shall conduct an investigation to determine whether the person entitled to the lottery prize award is subject to a final and enforceable determination of default made under sections 3123.01 to 3123.07 of the Revised Code. If the
court at the hearing agency determines
that the person is in default so subject, it
shall issue an order intercept directive as described in section 3123.89 of the Revised Code to the director at
lottery commission
headquarters requiring
the director or the director's designee to
deduct from
any unpaid prize award or any annual
installment
payment of the an unpaid prize award, a specified amount for
child support
or spousal support in satisfaction of the support
order under
which the person is in default. To the extent
possible, the
amount specified to be deducted under the order
issued under this
section intercept directive shall satisfy the amount ordered for
support or spousal
support in the support order under which the
person is in default.
Within
A child support enforcement agency shall issue an intercept directive within thirty days from the date the director or the director's designee notifies the agency under division (A)(1) of this section. Within thirty days after the date on which
the court agency issues the
order under this section to the director intercept directive,
the director or the director's designee shall pay
the amount specified in that order the intercept directive to the
office of child support
in the department of job and
family services.
If But, if the prize award
is to
be paid in annual installments, the director or the
director's
designee, on the date the next
installment payment is due,
shall pay deduct the amount specified in the
court order issued under
this section intercept directive from that installment and, if
necessary, any
subsequent annual
installments, at the time such those installments
become due and owing to
the prize winner, and pay the amount to the office of child
support. (B) As used in this section: (1) "Support order" has the same meaning as in section
3119.01 of the Revised Code. (2) "Default" has the same meaning as in
section 3121.01
of the
Revised Code. (C) No person shall knowingly make a false affirmation or
oath
required by division (A) of this section.
Sec. 3770.072. (A) As used in this section, "prize winner,"
"transferee," and "transferor" have the same meanings as in
section 3770.10 of the Revised Code. (B) The state lottery commission shall deduct amounts from
lottery
prize awards and file returns in accordance with section
5747.062 of the
Revised Code and any rules adopted by the tax
commissioner pursuant to that
section.
This division also applies
to lottery prize award payments the commission remits to
transferees. (C)(1)(a) Each transferee shall deduct and withhold from each
gross amount payable to each prize winner three and one-half six per
cent of the gross amount payable prior to making any other
reduction required by this chapter. (b) Subject to division (C)(1)(c) of this section, each transferee, including any transferee that is a related member, as defined in section 5733.042 of the Revised Code, to the transferor, shall deduct and withhold from each amount payable to a transferor that is not a prize winner six per cent of the portion of the payment representing gain or income the transferor will recognize in connection with the payment. (c) For purposes of division (C)(1)(b) of this section, the portion of any payment representing gain or income recognized by the transferor shall be computed in accordance with the Internal Revenue Code. The transferor shall prepare a written statement setting forth that amount and sign the statement under penalty of perjury. Within five days before the date on which the payment is to be made, the transferor shall deliver the written statement to the transferee and deliver a copy of the written statement to the tax commissioner. If the transferee does not receive the written statement by the time the payment is made, the transferee shall withhold six per cent of the entire amount of the payment. If the tax commissioner notifies the transferee that the transferor has erroneously computed the amount of gain or income recognized, the transferee shall withhold six per cent of the entire amount of each payment to be made after the transferee receives the notice. (d) The tax commissioner may impose a penalty of up to one thousand dollars for any person failing to timely deliver to the tax commissioner the copy of the written statement as required by division (C)(1)(c) of this section. Proceeds from the imposition of the penalty shall be considered as revenue arising from the tax imposed under section 5733.06 or 5747.02 of the Revised Code, as applicable. (2) With respect to amounts deducted and withheld pursuant to
division (C)(1) of this section, each transferee shall comply with
divisions (A)(2) to (4) of section 5747.062 of the Revised Code. (3) An employee of a corporation, limited liability company,
or business trust having control or supervision of or charged with
the responsibility of filing the report and making the payment
required by division (C) of this section and section 5747.062 of
the Revised Code, or an officer, member, manager, or trustee of a
corporation, limited liability company, or business trust who is
responsible for the execution of the corporation's, limited
liability company's, or business trust's fiscal responsibilities,
shall be personally liable for failure to file the report or pay
the amount due as required by division (C) of this section and
section 5747.062 of the Revised Code. The dissolution,
termination, or bankruptcy of a corporation, limited liability
company, or business trust does not discharge a responsible
officer's, member's, manager's, employee's, or trustee's liability
for a failure of the corporation, limited liability company, or
business trust to file returns or pay the amount due. (4)(a) The tax commissioner may make an assessment against
any person listed in division (C)(1) or (3) of this section for
any deficiency for any period. Section 5747.13 of the Revised Code
shall apply with respect to issuing assessments, filing petitions
for reassessments, conducting hearings, issuing final
determinations, making the assessment final, and filing the entry
that makes the assessment final. Section 5717.02 of the Revised
Code shall apply to appeals of the commissioner's final decision
in connection with assessments issued pursuant to division (C)(4)
of this section. (b) An assessment issued against any person listed in
division (C)(1) or (3) of this section shall not be considered
an
election of remedies or a bar to an assessment against any
other
person for the failure to comply with division (C)(1) of
this
section. No assessment shall be issued against any person who
is
so listed if the amount required to be withheld has been paid
by
another. (c) The assessment shall include interest at the rate per
annum prescribed by section 5703.47 of the Revised Code on
liability from the time the payment is due until the date of
assessment. Interest shall continue to accrue from the date of
assessment until the date the assessment is paid in full. Any
interest accruing subsequent to the date of the issuance of the
assessment shall be considered to be an additional deficiency for
which the tax commissioner may issue subsequent assessments. The
initial assessment and any subsequent assessments may include a
penalty in an amount not to exceed twice the applicable interest
charged under this division. Sec. 3770.074. (A) Except as otherwise provided in this section, if the state lottery commission has not yet paid in full a lottery prize award whose remaining unpaid amount is one hundred thousand dollars or more, if the winner of the lottery prize award is a judgment debtor, if a certified copy of the entry of a final, nonappealable judgment of a court of record of this state, another state, or the United States pertaining to that judgment debtor is transmitted to the commission by the clerk of that court upon the request of the judgment creditor, and if that judgment has not yet been paid in full, the director of the commission or the director's designee, subject to the procedures specified in division (B) of this section and to the priorities specified in division (G) of this section, shall deduct and pay to the judgment creditor from the remaining amount of the unpaid prize award, or from any annual installment or installments of the remaining amount of unpaid prize award, either of the following:
(1) An amount sufficient to pay in full the amount of the unpaid judgment, if the remaining amount of the unpaid prize award equals or exceeds the amount of the judgment;
(2) The remaining amount of the unpaid prize award, if that remaining amount is less than the amount of the unpaid judgment.
(B) (1) The commission shall receive certified copies of entries of final, nonappealable judgments for payments from a lottery prize award as described in division (A) of this section for a period of three weeks after the commission receives a claim for that lottery prize award. If the commission receives a certified copy of an entry of such a judgment during that period, the commission shall continue to receive certified copies of entries of final, nonappealable judgments for an additional week. At the end of this four-week period, if more than one certified copy of an entry of a final, nonappealable judgment is received and the amount of the lottery prize award equals or exceeds the total amount of the judgments, the director or the director's designee shall pay the amount of the judgments in full and pay the remaining amount of the lottery prize award to the judgment debtor. But, at that time, if the amount of the lottery prize award is less than the total amount of the judgments for which certified copies of entries were received, the commission shall file a civil action in the court of common pleas of the county in which the prize winner resides or, if the prize winner is not a resident of this state, in the court of common pleas of Cuyahoga county, for a declaratory judgment on the distribution of the amount of the lottery prize award to each of the applicable judgment creditors.
(2) If a lottery prize award winner elects to receive the payment of the prize award in annual installments, the commission shall receive certified copies of entries of final, nonappealable judgments for payments from an annual installment of a lottery prize award as described in division (A) of this section for a period of three weeks before the date of payment of that annual installment. If the commission receives a certified copy of an entry of a final, nonappealable judgment during that period, the commission shall pay the judgment from that annual installment in the manner described in division (B)(1) of this section.
(3) The commission shall pay judgments under divisions (B)(1) and (2) of this section in the following order of priority:
(a) Judgments entered before the date that the claim for a lottery prize award is received if certified copies of the entries are received within the four-week period after the date that the claim for the prize award is received;
(b) Judgments entered before the date that the claim for a lottery prize award is received if certified copies of the entries are received after the end of the four-week period after the date the claim for the prize award is received;
(c) Judgments entered after the date that the claim for a lottery prize award is received.
(C) The state lottery commission may establish and charge a judgment creditor described in division (A) of this section a fee to reimburse the commission for the costs it incurs for deducting amounts and paying them to the judgment creditor.
(D)(1) If a judgment debtor described in division (A) of this section is a member of a trust, the commission shall notify each of the members of the trust of the deductions from the lottery prize award made under that division. The judgment creditor shall be responsible for providing the commission with information as to the existence of such a trust and as to its members other than the judgment debtor.
(2) This section does not apply to or affect the payment of a lottery prize award to a blind trust, as defined by rule of the commission.
(E) Division (A) and (B) of this section do not require the commission, before paying a lottery prize award, to inquire of lottery prize award winners regarding any unpaid judgments that have been or may be entered against them or to conduct an independent inquiry as to the existence or nonexistence of such judgments, nor do they prevent the commission from making annual installment payments of a lottery prize award.
(F) The commission may adopt and amend rules pursuant to Chapter 119. of the Revised Code as necessary to implement this section and to comply with any applicable requirements of federal law.
(G) The deductions and payments from lottery prize awards the commission is required to make under sections 3770.071, 3770.072, and 3770.073 of the Revised Code take priority over deductions and payments it is required to make under this section.
(H) Upon making payments from a lottery prize award as required by divisions (A) and (B) of this section, the director and the commission are discharged from all further liability for those payments, whether to the judgment creditor or to the lottery prize award winner.
Sec. 5747.062. As used in this section, "transferee" has the
same meaning as in section 3770.10 of the Revised Code, and
"recipient" includes a transferee. (A)(1) The state lottery commission shall
deduct and
withhold from each lottery prize award
payment that exceeds five
thousand dollars an amount equal to
three and one-half six per cent of
the payment, prior to making any
other reduction required by
Chapter 3770. of the Revised Code. (2) On or before the tenth banking day of each month,
the
state lottery commission, and each transferee required to deduct
and withhold amounts pursuant to section 3770.072 of the Revised
Code, shall file
a return and remit to the tax commissioner all
amounts deducted
and withheld pursuant to this section during the
preceding month. (3) On or before the thirty-first day of January of each
year,
the state lottery commission, and each transferee required
to deduct and withhold amounts pursuant to section 3770.072 of the
Revised Code, shall file with the commissioner an annual return,
in the form
prescribed by the tax commissioner, indicating the
total amount
deducted and withheld pursuant to this section or section 3770.072 of the Revised Code during
the
preceding calendar year. At the time of filing that return,
the
state lottery commission
or transferee shall remit any amount
deducted and
withheld during the preceding calendar year that was
not
previously remitted. (4)
The state lottery commission, and each transferee
required to deduct and withhold amounts pursuant to section
3770.072 of the Revised Code, shall issue to each
person with
respect
to whom tax has
been deducted and withheld
by the
commission
or transferee pursuant to
this section or section 3770.072 of the Revised Code during the
preceding
calendar year, an information
return in the form
prescribed by
the commissioner. (B)(1) Division (B)(1) of this section does not
apply to
persons classified for federal income tax purposes as
associations
taxable as corporations. Amounts withheld pursuant to this section or section 3770.072 of the Revised Code shall be
treated as
a credit against
the tax imposed
pursuant to section 5747.02
of
the Revised
Code
upon the lottery prize award recipient, upon a
beneficiary of
such a recipient, or upon any investor in such a
recipient if the
recipient is a pass-through entity or disregarded
entity, and
shall be
treated as paid by the recipient,
beneficiary, or
investor on the date on which those
amounts are
deducted and
withheld. The credit
is a refundable
credit
and
shall
be claimed in the order required under section 5747.98 of
the
Revised Code. The credit is available to the recipient,
beneficiary, or investor even if the commission or transferee does
not remit to the tax commissioner the amount withheld. (2) Division (B)(2) of this section applies only to persons
classified for federal income tax purposes as associations taxable
as corporations. Amount
Amounts withheld pursuant to this section or section 3770.072 of the Revised Code shall be treated as
a credit against the tax imposed pursuant to section 5733.06 of
the Revised Code for the tax year immediately following the date
on which those amounts are deducted and withheld, upon the lottery
prize award recipient, upon a beneficiary of such a recipient, or
upon an investor in such a recipient if the recipient is a
pass-through entity or disregarded entity, and shall be treated as
paid by the recipient, beneficiary, or investor on the date on
which those amounts are deducted and withheld. The credit is a
refundable credit and shall be claimed in the order required under
section 5733.98 of the Revised Code. The credit is available to
the recipient, beneficiary, or investor even if the commission or
transferee does not remit to the tax commissioner the amount
withheld.
(3) Nothing in division (B)(1) or (2) of this section shall
be construed to allow more than one person to claim the credit for
any portion of each amount deducted and withheld. (C) Failure of the commission
or any transferee to deduct
and withhold the
required amounts from lottery prize awards or to
remit amounts
withheld as required by this section
and section
3770.072 of the Revised Code shall not relieve a
taxpayer
described in division (B) of this
section from liability for the
tax
imposed by section
5733.06 or
5747.02 of the Revised Code.
Section 2. That existing sections 3770.07, 3770.071, 3770.072, and 5747.062 of the Revised Code are hereby repealed.
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