PRINTER'S NO. 223
No. 201 Session of 1997
INTRODUCED BY HERMAN, BARLEY, BROWNE, NAILOR, HUTCHINSON,
RUBLEY, SAYLOR, GORDNER, YOUNGBLOOD, STAIRS, VANCE, WALKO,
MELIO, TRELLO, M. N. WRIGHT, KENNEY, HERSHEY, GODSHALL,
PLATTS, WAUGH, BATTISTO, STURLA, CLYMER, MAITLAND, RAYMOND,
GEIST, GANNON, COY, NICKOL, TRUE, STETLER, SCHULER, PESCI,
COLAFELLA, JADLOWIEC, HORSEY, CLARK, KAISER, SEMMEL, FICHTER,
MICOZZIE, TIGUE, SANTONI, SHANER, MILLER, MUNDY, HENNESSEY,
WOGAN, ARGALL, STABACK, SAINATO, COLAIZZO, FAIRCHILD,
TRAVAGLIO, SCHRODER, BAKER, HALUSKA, SATHER, HESS, OLASZ,
LEDERER, READSHAW, CORPORA, BOSCOLA, STERN, CASORIO, BARD,
ROONEY, FARGO, SEYFERT, L. I. COHEN, LYNCH, ROEBUCK,
E. Z. TAYLOR, EGOLF, TULLI AND KELLER, FEBRUARY 4, 1997
REFERRED TO COMMITTEE ON FINANCE, FEBRUARY 4, 1997
AN ACT
1 Amending the act of August 26, 1971 (P.L.351, No.91), entitled
2 "An act providing for a State Lottery and administration
3 thereof; authorizing the creation of a State Lottery
4 Commission; prescribing its powers and duties; disposition of
5 funds; violations and penalties therefor; exemption of prizes
6 from State and local taxation and making an appropriation,"
7 providing for a lottery winnings intercept in relation to
8 defaulted student loans obtained originally through the
9 Pennsylvania Higher Education Assistance Agency.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 302 of the act of August 26, 1971
13 (P.L.351, No.91), known as the State Lottery Law, is amended by
14 adding definitions to read:
15 Section 302. Definitions.
16 The following words and phrases when used in this chapter
1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Debt." An amount owed by a person and may include interest,
4 penalties, charges, costs, fees or any other amount for a
5 student loan guaranteed by or obtained through the Pennsylvania
6 Higher Education Assistance Agency.
7 * * *
8 "PHEAA." The Pennsylvania Higher Education Assistance
9 Agency.
10 * * *
11 Section 2. The act is amended by adding a section to read:
12 Section 315. Lottery Winnings Intercept.
13 (a) Offset required.--Notwithstanding section 306, payments
14 of more than two thousand five hundred dollars ($2,500) from the
15 State Lottery Fund shall be subject to offset to satisfy debts
16 for defaulted student loans which the winner owes to PHEAA after
17 any outstanding obligations to pay court-ordered child support
18 have been offset in accordance with 23 Pa.C.S. § 4308 (relating
19 to lottery winnings intercept).
20 (b) Check for certain outstanding obligations.--Prior to
21 releasing a prize exceeding two thousand five hundred dollars
22 ($2,500) from the State Lottery Fund, the Secretary of Revenue
23 shall ascertain that the prize winner does not have obligations
24 to pay court-ordered child support, in accordance with 23
25 Pa.C.S. § 4308 or to repay defaulted student loans, in
26 accordance with this section.
27 (c) Information to PHEAA.--The Department of Revenue shall
28 provide PHEAA with the full name and Social Security number of
29 prize winners in excess of two thousand five hundred dollars
30 ($2,500) upon receipt of prize claims.
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1 (d) Duty of PHEAA.--PHEAA shall cause a search of its
2 records to determine if the prize winner is in default on
3 student loans guaranteed or obtained through PHEAA. PHEAA shall
4 notify the Department of Revenue within five working days of
5 receipt of the information from the Department of Revenue if the
6 winner is in default.
7 (e) Default collection procedures.--If it is determined by
8 PHEAA that a prize winner is in default, PHEAA shall request the
9 Department of Revenue to withhold the amount of any arrearage
10 discovered by PHEAA and to pay, within thirty days of
11 notification by PHEAA, whether in lump sum or by installment, to
12 PHEAA that part of the prize which satisfies this arrearage.
13 (f) Insufficient prize.--If prize winnings are insufficient
14 to satisfy the arrearages owed, PHEAA shall proceed as follows:
15 (1) PHEAA may collect as provided by law.
16 (2) PHEAA may reinitiate the procedures set forth in this
17 section if the obligor wins a subsequent lottery prize.
18 (g) Fees.--PHEAA and the Department of Revenue shall
19 determine and set a fee which reflects the actual costs incurred
20 to administer this section. The Department of Revenue shall
21 deduct the calculated amount from the amount to be paid to the
22 prize winner after any obligation to pay child support under 23
23 Pa.C.S. § 4308 has been fully satisfied and then after defaulted
24 student loans have been fully repaid under this section, and
25 request that the deducted amount be divided between both
26 departments based on the administrative expenses incurred by
27 each.
28 (h) Duty of Department of Revenue.--PHEAA shall request the
29 Department of Revenue to do the following within thirty days of
30 the date the prize was won:
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1 (1) Award the prize winner the lottery prize winnings in
2 whole or in part.
3 (2) If applicable, PHEAA shall provide to the Department of
4 Revenue notification and the Department of Revenue shall provide
5 such notification to the prize winner that the prize, or a
6 portion thereof, was used to satisfy arrearages owed for
7 defaulted student loans.
8 (i) PHEAA notice to obligors.--PHEAA shall send a one-time
9 notice to all obligors of existing orders informing them that
10 arrearages may be intercepted as provided by this section.
11 (j) Appeals.--A lottery prize winner whose prize is used to
12 satisfy an obligation under this section may appeal to PHEAA in
13 accordance with PHEAA procedures. The appeal shall be filed
14 within thirty days after the prize winner is notified by the
15 Department of Revenue that the prize has been reduced or totally
16 withheld to satisfy the prize winner's outstanding arrearages
17 for defaulted student loan amounts and other related
18 obligations.
19 (k) Regulations.--PHEAA and the Department of Revenue shall
20 promulgate any regulations which may be necessary to carry out
21 the provisions of this act.
22 Section 3. This act shall take effect in 60 days.
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