NY Tax L § 1613 (2021)
2021 New York Laws TAX - Tax Article 34 - New York State Lottery for Education 1613 - Certification of Prize Winners; Payment of Prizes.

§ 1613. Certification of prize winners; payment of prizes. a. It shall be  the  duty  of  the  director  to  require  that all prizes over five thousand dollars in any game be awarded to holders  of  winning  tickets for  that  game  as provided in this section and section sixteen hundred fourteen of this article. Within one week after any drawing or selection of prize winning lottery tickets, the  division  shall  deliver  to  the comptroller  a certified list of the tickets to which prizes are awarded and the amount of each such prize. Upon receipt of such  certified  list and  voucher  of the division, moneys sufficient for the payment of such prizes shall be paid to the division from  the  lottery  prize  account, upon  audit  and  warrant  of the comptroller. Moneys for the payment of lottery prizes shall be deposited by the director as provided in section sixteen hundred eleven of this article and the withdrawal of such moneys for the payment of prize winners shall be subject to a check  signed  by the  director  or  such  officers  or  employees  of the division as the director may designate.  The  division  shall  each  month  provide  the comptroller  with  a  record of all such withdrawals from the director's accounts. Payment of prizes shall be made by the division to holders  of the  tickets  to  which  prizes  are awarded, except that payment of any prize drawn may be paid to the estate of a deceased prize winner, may be paid pursuant to a court order granted as a result of  a  proceeding  as provided  in  subdivision  d of this section, and except that any person pursuant to an appropriate judicial order may be paid the prize to which the winner is entitled. The division shall be discharged of all  further liability upon payment of a prize pursuant to this subdivision.   b.  If  the  person entitled to a prize on any winning ticket is under the age of eighteen years, and such prize is  less  than  five  thousand dollars, the division may make payment by delivery to an adult member of the  minor's  family  or  a  guardian  of  the minor of a check or draft payable to the order of such minor. If the person entitled to a prize on any winning ticket is under the age of eighteen years and if such  prize is  five thousand dollars or more, the division may make payment to such minor by depositing the amount of the prize in any financial institution to the credit of an adult member of the minor's family or a guardian  of the  minor as custodian for such minor. The person so named as custodian shall have the same duties and  powers  as  a  person  designated  as  a custodian  in  a  manner  prescribed by part six of article seven of the estates, powers and trusts law, and for purposes  of  this  section  the terms  "adult",  "member  of  a  minor's  family",  and  "guardian"  and "financial institution" shall have the same meaning as in said  part  of said law. The division shall be discharged of all further liability upon payment of a prize to a minor pursuant to this subdivision.   c.  1. Notwithstanding any inconsistent provision of law, the director may award and pay a "Lotto"  prize  to  a  claimant  without  a  winning ticket, if:  (i) the claimant has filed a perfected claim therefor;  (ii)  the  perfected  claim  is  for  a  first prize in excess of five million dollars;  (iii) at least one year has elapsed since the date of the drawing  for which the prize is claimed;  (iv) no other perfected claim has been filed therefor; and  (v) the perfected claim has been authenticated by the division.   2.  For purposes of this section, a "perfected claim" shall consist of a written request that the prize be awarded and paid  to  the  claimant, accompanied by:  (i)  a  "Players  Copy"  of a claim validation report showing that the original winning lottery ticket was  produced  by  the  on-line  lottery  computer  system  at  the  same  time  and  place as the validation of a previous first-prize claim in the "Daily Numbers" game;  (ii)  "Lotto"  play cards bearing the same number combinations as were played  at  such  time  and  place  immediately  before  or  immediately following the validation of such "Daily Numbers" first prize claim;  (iii)  a  written  statement  from  the  licensed  lottery sales agent stating that the agent believes the  missing  ticket  was  sold  to  the claimant;  (iv)  a  verified written statement explaining the circumstances under which the winning ticket was lost; and  (v) a filing fee of one hundred dollars.   3. Within thirty days  of  the  receipt  of  a  perfected  claim,  the division shall attempt to authenticate it by comparing it to the records of  the  division,  including  electronic  information  provided  by its on-line  service   provider.   A   perfected   claim   may   be   deemed "authenticated" if:  (i)  the  "Players  Copy"  and  "Lotto"  play cards included therewith correspond to the records of the division; and  (ii) none of the  information  included  in  the  perfected  claim  is contradicted by the records of the division.   4.  The director may promulgate rules and regulations to implement the provisions of this subdivision.   d. 1. The right of any person to receive payments under a  prize  that is  paid  in  installments  over time by the division may be voluntarily assigned, in whole or in part, if the assignment is made to a person  or entity  designated  pursuant  to  an  order  of the supreme court of the county  where  the  assigning  prize  winner  resides   or   where   the headquarters  of  the  division  is  located. A court may issue an order approving a voluntary assignment and  directing  the  division  to  make prize  payments  in  whole or in part to the designated assignee, if the court finds that all of the following conditions have been met:  (i) The assignment is in writing, is executed by the assignor, and is, by its terms, subject to the laws of this state.  (ii) The purchase price being paid for  the  payments  being  assigned represents a present value of the payments being assigned, discounted at an  annual rate that does not exceed ten percentage points over the Wall Street Journal prime rate published on the business  day  prior  to  the date of execution of the contract.  (iii)  The  contract  of assignment expressly states that the assignor has three business days after the contract  was  signed  to  cancel  the assignment.  (iv) The assignor provides a sworn affidavit attesting that he or she:  (A)  Is of sound mind, is in full command of his or her faculties, and is not acting under duress;  (B) Has been advised regarding  the  assignment  by  his  or  her  own independent  legal  counsel,  who  is  unrelated  to  and  is  not being compensated by the assignee or any of the assignee's affiliates, and has received independent financial or tax advice concerning the  effects  of the  assignment  from a lawyer or other professional who is unrelated to and is not being compensated by the assignee or any  of  the  assignee's affiliates;  (C)  Understands that he or she will not receive the prize payments or portions thereof for the years assigned;  (D) Understands and agrees that, with regard to the assigned payments, the division and its  officials  and  employees  will  have  no  further liability or responsibility to make the assigned payments to him or her;  (E)  Has  been  provided  with a one-page written disclosure statement setting forth, in bold type  of  not  less  than  fourteen  points,  the  payments  being  assigned,  by  amounts  and payment dates; the purchase price being paid; the rate of discount to present value, assuming  daily compounding and funding on the contract date; and the amount, if any, of any origination or closing fees that will be charged to him or her; and  (F)  Was  advised  in  writing,  at  the  time  he  or  she signed the assignment contract, that  he  or  she  had  the  right  to  cancel  the contract,  without  any  further  obligation, within three business days following the date on which the contract was signed.  (v) Written notice of the proposed assignment and  any  court  hearing concerning the proposed assignment is provided to the division's counsel at  least  thirty  days  prior to any court hearing. The division is not required to appear in or be named as a party to any such action  seeking judicial  confirmation  of an assignment under this subdivision, but may intervene as of right in any such proceeding.   2. A certified copy of a court order approving a voluntary  assignment must  be  provided  to the division no later than thirty days before the date on which the payment is to be made.   3. A court order obtained pursuant to this section, together with  all such  prior  orders, shall not require the division to divide any single prize payment among more than three different persons. Nothing  in  this section  shall  prohibit  substituting assignees as long as there are no more than three assignees at any one time for any one-prize payment.   4. If a husband and wife are co-owners of a prize, any  assignment  of the prize must be made jointly.   5.  A  voluntary  assignment may not include portions of payments that are subject to offset on account of  a  defaulted  or  delinquent  child support   obligation,  non-wage  garnishment,  or  criminal  restitution obligation or on account of a debt owed to a state  agency.  Each  court order  issued under paragraph one of this subdivision shall provide that any delinquent child support or criminal restitution obligations of  the assigning  prize  winner  and  any  debts  owed to a state agency by the assigning prize winner, as of the date of the court order, shall be  set off by the division first against remaining payments or portions thereof due the prize winner and then against payments due the assignee.   6.  The  division  and its respective officials and employees shall be discharged of all liability upon payment of an assigned prize under this subdivision. The assignor and assignee shall hold harmless and indemnify the division, the state of New York, and its employees and  agents  from all  claims,  actions, suits, complaints, and liabilities related to the assignment.   7.  The  division  may  establish  a  reasonable  fee  to  defray  any administrative  expenses  associated  with  assignments  made under this subdivision, including the cost to the division of  any  processing  fee that  may be imposed by a private annuity provider. The fee amount shall reflect  the  direct  and  indirect  costs  associated  with  processing assignments.   8. If at any time the Internal Revenue Service or a court of competent jurisdiction issues a determination letter, revenue ruling, other public ruling  of  the  Internal  Revenue Service, or published decision to the division or to any lottery prize winners declaring  that  the  voluntary assignment  of  prizes  will  affect the federal income tax treatment of prize winners who  do  not  assign  their  prizes,  the  division  shall immediately  file  a  copy of that letter, ruling, or published decision with  the  attorney  general,  the   secretary   of   state,   and   the administrative  office of court administration. A court may not issue an order authorizing a voluntary assignment under  this  subdivision  after the date any such ruling, letter, or published decision is filed.    9.  A contract of assignment in which the assignor is a lottery winner shall include a sworn affidavit from  the  assignee.  The  form  of  the affidavit shall include:  (i) A summary of assignee contacts with the winner;  (ii)  A summary of any law suits, claims, and other legal actions from lottery winners regarding conduct of the assignee or its agents;  (iii) A statement that the assignee is in good standing in  its  state of  domicile and with any other licensing or regulatory agency as may be required in the conduct of its business;  (iv) A brief business history of the assignee;  (v) A statement describing the nature of the business of the assignee; and  (vi) A statement of the assignee's privacy and non-harassment policies and express affirmation that the assignee has followed those policies in New York.   10. The assignee shall notify the division of  its  business  location and mailing address for payment purposes during the entire course of the assignment.  The  division  shall be discharged of all further liability upon payment of a prize pursuant to this subdivision.