PRINTER'S NO. 242
No. 260 Session of 1995
INTRODUCED BY HERMAN, STAIRS, SCHULER, COWELL, CARONE, NYCE,
RUDY, PLATTS, BATTISTO, COY, TIGUE, STEELMAN, E. Z. TAYLOR,
EGOLF, NAILOR, VANCE, FLEAGLE, CLARK, GEIST, HESS, PHILLIPS,
MARSICO, HUTCHINSON, WOZNIAK, STABACK, DEMPSEY, PESCI,
DeLUCA, BIRMELIN, STURLA, READSHAW, MAITLAND, CIVERA, TRELLO,
WOGAN, MANDERINO, BAKER, GANNON, SANTONI, M. N. WRIGHT,
CLYMER, ROBERTS, NICKOL, JADLOWIEC, SCHRODER, MILLER, SHANER,
CORNELL, TRICH, STERN, J. TAYLOR, BARLEY, DENT, FAIRCHILD,
B. SMITH, GORDNER, BROWNE, MELIO, KAISER, L. I. COHEN,
TRAVAGLIO, MUNDY, RAYMOND, HORSEY, PETRONE, LAUGHLIN, SATHER,
MARKOSEK, STRITTMATTER, FAJT, YOUNGBLOOD AND GODSHALL,
JANUARY 24, 1995
REFERRED TO COMMITTEE ON FINANCE, JANUARY 24, 1995
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 3 of the act of August 26, 1971 (P.L.351,
13 No.91), known as the State Lottery Law, is amended by adding
14 definitions to read:
15 Section 3. Definitions.--As used in this act:
16 * * *
1 (6) "PHEAA" shall mean the Pennsylvania Higher Education
2 Assistance Agency.
3 (7) "Debt" shall mean an amount owed by a person and may
4 include interest, penalties, charges, costs, fees or any other
5 amount for a student loan guaranteed by or obtained through the
6 Pennsylvania Higher Education Assistance Agency.
7 Section 2. The act is amended by adding a section to read:
8 Section 8.1. Lottery Winnings Intercept.--(a)
9 Notwithstanding section 8, payments of more than two thousand
10 five hundred dollars ($2,500) from the State Lottery Fund shall
11 be subject to offset to satisfy debts for defaulted student
12 loans which the winner owes to PHEAA after any outstanding
13 obligations to pay court-ordered child support have been offset
14 in accordance with 23 Pa.C.S. § 4308 (relating to lottery
15 winnings intercept).
16 (b) Prior to releasing a prize exceeding two thousand five
17 hundred dollars ($2,500) from the State Lottery Fund, the
18 Secretary of Revenue shall ascertain that the prize winner does
19 not have obligations to pay court-ordered child support, in
20 accordance with 23 Pa.C.S. § 4308 or to repay defaulted student
21 loans, in accordance with this section.
22 (c) The Department of Revenue shall provide PHEAA with the
23 full name and Social Security number of prize winners in excess
24 of two thousand five hundred dollars ($2,500) upon receipt of
25 prize claims.
26 (d) PHEAA shall cause a search of its records to determine
27 if the prize winner is in default on student loans guaranteed or
28 obtained through PHEAA. PHEAA shall notify the Department of
29 Revenue within five working days of receipt of the information
30 from the Department of Revenue if the winner is in default.
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1 (e) If it is determined by PHEAA that a prize winner is in
2 default, PHEAA shall request the Department of Revenue to
3 withhold the amount of any arrearage discovered by PHEAA and to
4 pay, within thirty days of notification by PHEAA, whether in
5 lump sum or by installment, to PHEAA that part of the prize
6 which satisfies this arrearage.
7 (f) If prize winnings are insufficient to satisfy the
8 arrearages owed, PHEAA shall proceed as follows:
9 (1) PHEAA may collect as provided by law.
10 (2) PHEAA may reinitiate the procedures set forth in this
11 section if the obligor wins a subsequent lottery prize.
12 (g) PHEAA and the Department of Revenue shall determine and
13 set a fee which reflects the actual costs incurred to administer
14 this section. The Department of Revenue shall deduct the
15 calculated amount from the amount to be paid to the prize winner
16 after any obligation to pay child support under 23 Pa.C.S. §
17 4308 has been fully satisfied and then after defaulted student
18 loans have been fully repaid under this section, and request
19 that the deducted amount be divided between both departments
20 based on the administrative expenses incurred by each.
21 (h) PHEAA shall request the Department of Revenue to do the
22 following within thirty days of the date the prize was won:
23 (1) Award the prize winner the lottery prize winnings in
24 whole or in part.
25 (2) If applicable, PHEAA shall provide to the Department of
26 Revenue notification and the Department of Revenue shall provide
27 such notification to the prize winner that the prize, or a
28 portion thereof, was used to satisfy arrearages owed for
29 defaulted student loans.
30 (i) PHEAA shall send a one-time notice to all obligors of
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1 existing orders informing them that arrearages may be
2 intercepted as provided by this section.
3 (j) A lottery prize winner whose prize is used to satisfy an
4 obligation under this section may appeal to PHEAA in accordance
5 with PHEAA procedures. The appeal shall be filed within thirty
6 days after the prize winner is notified by the Department of
7 Revenue that the prize has been reduced or totally withheld to
8 satisfy the prize winner's outstanding arrearages for defaulted
9 student loan amounts and other related obligations.
10 (k) PHEAA and the Department of Revenue shall promulgate any
11 regulations which may be necessary to carry out the provisions
12 of this act.
13 Section 3. This act shall take effect in 60 days.
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