130th Ohio General Assembly
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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
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, 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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