Section 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.