2019 -- H 5508

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LC001552

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

     RELATING TO STATE AFFAIRS AND GOVERNMENT - STATE LOTTERY

     Introduced By: Representatives Noret, Shekarchi, Serodio, Amore, and Hawkins

     Date Introduced: February 14, 2019

     Referred To: House Judiciary

     (Dept. of Revenue)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-61-7.1 of the General Laws in Chapter 42-61 entitled "State

Lottery" is hereby amended to read as follows:

     42-61-7.1. Payment of prizes in excess of six hundred dollars ($600) -- Setoff for

child support debts and benefit of overpayments.

     Notwithstanding the provisions of § 42-61-7 relating to assignment of prizes, the

following setoff provisions shall apply to the payment of any prizes or winning ticket in excess of

six hundred dollars ($600).

     (1) With respect to a person entitled to receive the prize or winning ticket who has an

unpaid child support order(s) arrearage(s) in excess of five hundred ($500), as provided by the

department pursuant to § 42-61-7.1(3), or owes any sum in excess of five hundred dollars ($500)

for benefit overpayments and interest to the department of labor and training determined to be

recoverable under the provisions of chapters 39 -- 44 of title 28, the lottery director:

     (i) Shall set off against the amount due to that person after state and federal tax

withholding an amount up to the balance of the child support arrearage(s), and benefit

overpayments and interest owed to the department of labor and training, and the director shall

make payment of this amount directly to the Rhode Island family court in the case of child

support arrearage(s) which shall deposit the amount set off into the registry of the family court for

a period of forty-five (45) days, or if an application for review has been filed pursuant to § 27-57-

1(d), until final disposition of the application until further order of the court and in the case of

benefit overpayments and interest owed the director shall transfer the amounts owed to the

department of labor and training; and

     (ii) Shall pay to this person the remaining balance of the prize or winning ticket amount,

if any, after reduction of the amount set off above for child support and benefit overpayments and

interest owed. If any instance, the lottery director has received notice from more than one

claimant agency, the claim for child support arrearage(s) by the department of human services

shall receive first priority and the claim for benefit overpayments and interest owed by the

department of labor and training the second priority.

     (2) The director shall be discharged of all further liability upon payment of a prize or

winning ticket pursuant to this section.

     (3) The department of human services shall periodically within each year furnish the

director with a list or compilation of names of individuals, together with any other identifying

information and in a form that the director shall require, who as of the date of the list or

compilation, have an unpaid child support order arrearage in excess of five hundred dollars

($500) as shown on the Rhode Island family court degrees department of human services child

support enforcement computer system ("CSE system"). For the purposes of this section, the terms

used in this section shall be given the meaning and definitions specified in § 15-16-2.

     (4) Any party aggrieved by any action taken under this section may within thirty (30)

days of the withholding of the payment by the lottery director seek judicial review in the family

court, in the case of withholding for child support or in the district court in the case of benefit

overpayments and interest owed, which may, in its discretion, issue a temporary order prohibiting

the disbursement of funds under this section, pending final adjudication.

     (5) The department of labor and training shall periodically within each year furnish the

director with a list or compilation of names of individuals, together with any identifying

information and in any form that the director requires, who as to the date of the list or

compilation, have unpaid benefit overpayments and interest in excess of five hundred dollars

($500) determined to be recoverable under the provisions of chapters 39 -- 44 of title 28.

     [See § 12-1-15 of the General Laws.]

     42-61-7.2. Payment of prizes in excess of six hundred dollars ($600) -- Setoff for

unpaid taxes.

     Notwithstanding the provisions of § 42-61-7 and § 42-61-7.1 relating to assignment of

prizes and setoff for child support debts and benefit overpayments, the following setoff provisions

shall apply to the payment of any prizes or winning ticket in excess of six hundred dollars ($600).

     (1) With respect to a person entitled to receive the prize or winning ticket who has unpaid

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taxes owed to the tax administrator in excess of six hundred dollars ($600), as evidenced by the

tax administrator pursuant to subdivision 42-61-7.2(3), the lottery director:

     (i) Shall setoff against the amount due to that person after state and federal tax

withholding an amount up to the balance of the unpaid taxes owed as evidenced by the tax

administrator pursuant to subdivision 42-61-7.2(3), and the director shall make payment of this

amount directly to the tax administrator; and

     (ii) Shall pay to that person the remaining balance of the prize or winning ticket amount,

if any, after reduction of the amount setoff above for taxes owed. If in any instance, the lottery

director has received notice from more than one claimant agency, the claim for child support

arrearage(s) owed to the department of human services shall receive first (1st) priority, the claim

for benefit overpayments and interest owed to the department of labor and training the second

(2nd) priority, and the claim for taxes owed to the tax administrator the third (3rd) priority.

     (2) The director shall be discharged of all further liability upon payment of a prize or

winning ticket pursuant to this section.

     (3) The tax administrator shall periodically within each year furnish the director with a

list or compilation of names of individuals, together with any other identifying information and in

a form that the director shall require, who as of the date of the list or compilation, have unpaid

taxes in excess of six hundred dollars ($600).

     (4) Any party aggrieved by any action taken under this section may, within thirty (30)

days of the withholding of the payment by the lottery director, seek a review with the tax

administrator, who may, in his or her discretion, issue a temporary order prohibiting the

disbursement of funds under this section, pending final decision.

     SECTION 2. Chapter 42-61 of the General Laws entitled "State Lottery" is hereby

amended by adding thereto the following section:

     42-61-7.3. Payment of prizes in excess of six hundred dollars ($600) - Setoff for

unpaid non-tax state debt.

     Notwithstanding the provisions of §§ 42-61-7, 42-61-7.1 and 42-61-7.2 relating to

assignment of prizes, setoff for child support debts and benefit overpayments, and setoff for

unpaid taxes, the following setoff provisions shall apply to the payment of any prizes or winning

ticket in excess of six hundred dollars ($600).

     (1) With respect to a person entitled to receive the prize or winning ticket who has

delinquent debts referred to the central collections unit pursuant to § 42-142-8 as provided by the

central collections unit pursuant to § 42-61-7.2(3), the lottery director:

     (i) Shall setoff against the amount due to that person after state and federal tax

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withholding an amount up to the balance of the delinquent debts referred to the central collections

unit as provided by the unit pursuant to § 42-61-7.2(3), and the director shall make payment of

this amount directly to the collection unit; and

     (ii) Shall pay to that person the remaining balance of the prize or winning ticket amount,

if any, after reduction of the amount setoff above for delinquent debts owed. If in any instance,

the lottery director has received notice from more than one claimant agency, the claim for child

support arrearage(s) owed to the department of human services shall receive first priority, the

claim for benefit overpayments and interest owed to the department of labor and training second

priority, the claim for taxes owed to the tax administrator third priority, and the claim for

delinquent debts referred to the central collections unit fourth priority.

     (2) The director shall be discharged of all further liability upon payment of a prize or

winning ticket pursuant to this section.

     (3) The central collections unit shall periodically within each year furnish the director

with a list or compilation of names of individuals, together with any other identifying information

and in a form that the director shall require, who as of the date of the list or compilation, have

delinquent debts owed to the state and referred to the central collections unit.

     (4) Any party aggrieved by any action taken under this section may, within thirty (30)

days of the withholding of the payment by the lottery director, seek a review in the district court,

which may, in its discretion, issue a temporary order prohibiting the disbursement of funds under

this section, pending final adjudication.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

     RELATING TO STATE AFFAIRS AND GOVERNMENT - STATE LOTTERY

***

     This act would require the lottery director to recognize and satisfy setoffs against lottery

prizes in excess of six hundred dollars ($600) from the winning ticket for any amounts owed for

child support arrearages (first priority), labor benefit overpayments (second priority), state taxes

owed (third priority) and non-tax debts owed to the state's collection unit (fourth priority), before

payment to the person presenting the winning ticket.

     This act would take effect upon passage.

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