Download Zipped Amended WordPerfect SB0109.ZIP
[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]

S.B. 109

This document includes Senate Committee Amendments incorporated into the bill on Fri, Jan 19, 2007 at 10:49 AM by rday. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Thu, Feb 1, 2007 at 9:23 AM by rday. --> This document includes Senate 3rd Reading Floor Amendments (CORRECTED) incorporated into the bill on Thu, Feb 1, 2007 at 4:58 PM by rday. --> This document includes House Floor Amendments incorporated into the bill on Thu, Feb 22, 2007 at 2:52 PM by ddonat. -->              1     

TRANSFERS OF STRUCTURED SETTLEMENTS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Ed Mayne

             5     
House Sponsor: Stephen D. Clark

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions related to transfers of structured settlements, including
             10      rights to periodic payments under workers' compensation.
             11      Highlighted Provisions:
             12          This bill:
             13          .    prohibits transfers of payment rights under workers' compensation;
             14          .    removes payment rights under workers' compensation from the application of the
             15      Structured Settlement Protection Act; and
             16          .    makes technical and conforming changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          34A-2-422, as last amended by Chapter 72, Laws of Utah 2004
             24          78-59-102, as enacted by Chapter 99, Laws of Utah 2002
             25          78-59-107, as enacted by Chapter 99, Laws of Utah 2002
             26     

             27      Be it enacted by the Legislature of the state of Utah:



Text Box

CORRECTED Senate 3rd Reading Amendments 2-1-2007 rd/po

Senate 3rd Reading Amendments 2-1-2007 rd/po

- 2 -
Senate Committee Amendments 1-19-2007 rd/po
             28
         Section 1. Section 34A-2-422 is amended to read:
             29           34A-2-422. Compensation exempt from execution.
             30          (1) For purposes of this section:
             31          (a) "Payment rights under workers' compensation" means S. [ an employee's ] the .S right to
             32      receive compensation under this chapter or Chapter 3, Utah Occupational Disease Act,
             33      including the payment of a workers' compensation claim, award, benefit, or settlement.
             34          (b) (i) Subject to Subsection (1)(b)(ii), "transfer" means:
             35          (A) a sale;
             36          (B) an assignment;
             37          (C) a pledge;
             38          (D) an hypothecation; or
             39          (E) other form of encumbrance or alienation for consideration.
             40          (ii) "Transfer" does not include the creation or perfection of a security interest in a right
             41      to receive a payment under a blanket security agreement entered into with an insured
             42      depository institution, in the absence of any action to:
             43          (A) redirect the payments to:
             44          (I) the insured depository institution; or
             45          (II) an agent or successor in interest to the insured depository institution; or
             46          (B) otherwise enforce a blanket security interest against the payment rights.
             47          (2) Compensation before payment [shall be]:
             48          (a) is exempt from:
             49          (i) all claims of creditors[,]; and [from]
             50          (ii) attachment or execution[,]; and
             51          (b) shall be paid only to employees or their dependents, except as provided in Sections
             52      26-19-5 and 34A-2-417 .
             53          (3) (a) S. [ Beginning ] Subject to Subsection (3)(b), beginning .S April 30, 2007,
             53a      S. [ an employee ] a person .S may not S. :
             53b      (i) .S transfer payment
             53c      rights under
             54      workers' compensation S. [ .
             55          (b) Beginning April 30, 2007, a person may not
] ; or

             55a      (ii) .S accept or take any action to provide for
             56      a transfer of payment rights under workers' compensation.


            
Text Box

CORRECTED Senate 3rd Reading Amendments 2-1-2007 rd/po

- 2a -

56a
     S. (b) A person may take an action prohibited under Subsection (3)(a) if the commission
             56b      approves the transfer of payment rights under workers' compensation:
             56c          (i) before the transfer of payment rights under workers' compensation takes effect; and
             56d          (ii) upon a determination by the commission that:
             56e          (A) the person transferring the payment rights under workers' compensation received
             56f      before executing an agreement to transfer those payment rights:
             56g          (I) adequate notice that the transaction involving the transfer of payment rights under
             56h      workers' compensation involves the transfer of those payment rights; and
             56i          (II) an explanation of the financial consequences of and alternatives to the transfer of
             56j      payment rights under workers' compensation in sufficient detail that the person transferring
             56k      the payment rights under workers' compensation made an informed decision to transfer those
             56l      payment rights; and
             56m          (B) the transfer of payment rights under workers' compensation is in the best interest of
             56n      the person transferring the payment rights under workers' compensation taking into account
             56o      the welfare and support of that person's dependents.
             56p          (c) The approval by the commission of the transfer of a person's payment rights under
             56q      workers' compensation is a full and final resolution of the person's payment rights under
             56r      workers' compensation that are transferred:
             56s          (i) if the commission approves the transfer of the payment rights under workers'
             56t      compensation in accordance with Subsection (3)(b); and
             56u          (ii) once the person no longer has a right to appeal the decision in accordance with this
             56v      title. .S
             57          Section 2. Section 78-59-102 is amended to read:
             58           78-59-102. Definitions.



Text Box

- 3 -
             59
         For purposes of this chapter:
             60          (1) "Annuity issuer" means an insurer that has issued a contract to fund periodic
             61      payments under a structured settlement.
             62          (2) "Dependents" include:
             63          (a) a payee's spouse [and];
             64          (b) a payee's minor children; and
             65          (c) all other persons for whom the payee is legally obligated to provide support,
             66      including alimony.
             67          (3) "Discounted present value" means the present value of future payments determined
             68      by discounting the payments to the present using the most recently published Applicable
             69      Federal Rate for determining the present value of an annuity, as issued by the United States
             70      Internal Revenue Service.
             71          (4) "Gross advance amount" means the sum payable to the payee or for the payee's
             72      account as consideration for a transfer of structured settlement payment rights before any
             73      reductions for transfer expenses or other deductions to be made from the consideration.
             74          (5) "Independent professional advice" means advice of an attorney, certified public
             75      accountant, actuary, or other licensed professional adviser.
             76          (6) "Interested parties" means, with respect to any structured settlement[,]:
             77          (a) the payee[,];
             78          (b) any beneficiary irrevocably designated under the annuity contract to receive
             79      payments following the payee's death[,];
             80          (c) the annuity issuer[,];
             81          (d) the structured settlement obligor[,]; and
             82          (e) any other party that has continuing rights or obligations under the structured
             83      settlement.
             84          (7) "Net advance amount" means the gross advance amount less the aggregate amount
             85      of the actual and estimated transfer expenses required to be disclosed under Subsection
             86      78-59-103 (5).
             87          (8) "Payee" means an individual who:
             88          (a) is receiving tax free payments under a structured settlement; and
             89          (b) proposes to make a transfer of payment rights under the settlement.



Text Box

- 4 -
             90
         (9) "Periodic payments" includes both recurring payments and scheduled future lump
             91      sum payments.
             92          (10) "Qualified assignment agreement" means an agreement providing for a qualified
             93      assignment within the meaning of Section 130 of the United States Internal Revenue Code.
             94          (11) "Responsible administrative authority" means, with respect to a structured
             95      settlement, any government authority vested by law with exclusive jurisdiction over the settled
             96      claim resolved by the structured settlement.
             97          (12) "Settled claim" means the original tort claim [or workers' compensation claim]
             98      resolved by a structured settlement.
             99          (13) "Structured settlement" means an arrangement for periodic payment of damages
             100      for personal injuries or sickness established by settlement or judgment in resolution of a tort
             101      claim [or for periodic payments in settlement of a workers' compensation claim].
             102          (14) "Structured settlement agreement" means the agreement, judgment, stipulation, or
             103      release embodying the terms of a structured settlement.
             104          (15) "Structured settlement obligor" means, with respect to any structured settlement,
             105      the party that has the continuing obligation to make periodic payments to the payee under a
             106      structured settlement agreement or a qualified assignment agreement.
             107          (16) "Structured settlement payment rights" means rights to receive periodic payments
             108      under a structured settlement, whether from the structured settlement obligor or the annuity
             109      issuer[, where] if:
             110          (a) (i) the payee is domiciled in[,] this state; or
             111          (ii) the domicile or principal place of business of the structured settlement obligor or
             112      the annuity issuer is located in this state;
             113          (b) the structured settlement agreement [was] is approved by a court in this state; or
             114          (c) the structured settlement agreement is expressly governed by the laws of this state.
             115          (17) "Terms of the structured settlement" include, with respect to any structured
             116      settlement, the terms of:
             117          (a) the structured settlement agreement[,];
             118          (b) the annuity contract[,];
             119          (c) any qualified assignment agreement; and
             120          (d) any order or other approval of any court or other government authority that



Text Box

- 5 -
             121
     authorized or approved the structured settlement.
             122          (18) (a) ["Transfer"] Subject to Subsection (18)(b), "transfer" means any sale,
             123      assignment, pledge, hypothecation, or other alienation or encumbrance of structured settlement
             124      payment rights made by a payee for consideration[; provided that the term "transfer"].
             125          (b) "Transfer" does not include the creation or perfection of a security interest in
             126      structured settlement payment rights under a blanket security agreement entered into with an
             127      insured depository institution, in the absence of any action to:
             128          (i) redirect the structured settlement payments to:
             129          (A) the insured depository institution[,]; or
             130          (B) an agent or successor in interest [thereof,] to the insured depository institution; or
             131          (ii) otherwise [to] enforce a blanket security interest against the structured settlement
             132      payment rights.
             133          (19) "Transfer agreement" means the agreement providing for a transfer of structured
             134      settlement payment rights.
             135          (20) (a) ["Transfer] Subject to Subsection (20)(b), "transfer expenses" means all
             136      expenses of a transfer that are required under the transfer agreement to be paid by the payee or
             137      deducted from the gross advance amount, including[, without limitation,]:
             138          (i) court filing fees[, attorneys'];
             139          (ii) attorney fees[,];
             140          (iii) escrow fees[,];
             141          (iv) lien recordation fees[,];
             142          (v) judgment and lien search fees[,];
             143          (vi) finders' fees[,];
             144          (vii) commissions[,]; and
             145          (viii) other payments to a broker or other intermediary.
             146          (b) "Transfer expenses" do not include preexisting obligations of the payee payable for
             147      the payee's account from the proceeds of a transfer.
             148          (21) "Transferee" means a party acquiring or proposing to acquire structured settlement
             149      payment rights through a transfer.
             150          Section 3. Section 78-59-107 is amended to read:
             151           78-59-107. General provisions -- Construction.



Text Box

- 6 -
House Floor Amendments 2-22-2007 dd/po
             152
         (1) The provisions of this chapter may not be waived by any payee.
             153          (2) (a) Any transfer agreement entered into on or after May 6, 2002 by a payee who
             154      resides in this state shall provide that disputes under the transfer agreement, including any
             155      claim that the payee has breached the agreement, shall be determined in and under the laws of
             156      this state.
             157          (b) A transfer agreement may not authorize the transferee or any other party to confess
             158      judgment or consent to entry of judgment against the payee.
             159          (3) The transfer of structured settlement payment rights may not extend to any
             160      payments that are life-contingent unless, [prior to] before the date on which the payee signs the
             161      transfer agreement, the transferee [has established] establishes and [has agreed] agrees to
             162      maintain procedures reasonably satisfactory to the annuity issuer and the structured settlement
             163      obligor for:
             164          (a) periodically confirming the payee's survival; and
             165          (b) giving the annuity issuer and the structured settlement obligor prompt written
             166      notice in the event of the payee's death.
             167          (4) A payee who proposes to make a transfer of structured settlement payment rights
             168      may not incur any of the following on the basis of a failure of the transfer to satisfy the
             169      requirements of this chapter:
             170          (a) a penalty[, forfeit];
             171          (b) a forfeiture of any application fee or other payment[,]; or [otherwise incur]
             172          (c) any liability to the proposed transferee or any assignee based on any failure of the
             173      transfer to satisfy the requirements of this chapter.
             174          (5) (a) [Nothing contained in this] This chapter [shall] may not be construed to
             175      authorize any transfer of structured settlement payment rights in contravention of any law or to
             176      imply that any transfer under a transfer agreement entered into [prior to] before May 6, 2002 is
             177      valid or invalid.
             178          (b) This chapter does not apply to a transfer of payment rights under workers'
             179      compensation, as defined in Section 34A-2-422 , that takes effect on or after April 30, H. [ 2006 ]
             179a      2007 .H .
             180          (6) Compliance with [the requirements set forth in] Section 78-59-103 and fulfillment
             181      of the conditions set forth in Section 78-59-104 shall be solely the responsibility of the
             182      transferee in any transfer of structured settlement payment rights, and neither the structured



Text Box

- 7 -
             183
     settlement obligor nor the annuity issuer shall bear any responsibility for, or any liability arising
             184      from, noncompliance with the requirements or failure to fulfill the conditions.





Legislative Review Note
    as of 12-21-06 9:51 AM


Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]