Nebraska Structured Settlements

Be it enacted by the people of the State of Nebraska,

Section 1. SECTIONS 1 TO 7 OF THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE

STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT.

Sec. 2. THE PURPOSE OF THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT IS

TO PROTECT STRUCTURED SETTLEMENT RECIPIENTS INVOLVED IN THE PROCESS OF

TRANSFERRING STRUCTURED SETTLEMENT PAYMENT RIGHTS. THE ACT DOES NOT APPLY TO

STRUCTURED SETTLEMENTS OF CLAIMS FOR WORKERS' COMPENSATION BENEFITS.

Sec. 3. FOR PURPOSES OF THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT:

(1) ANNUITY ISSUER MEANS AN INSURER THAT HAS ISSUED A CONTRACT TO BE USED TO

FUND PERIODIC PAYMENTS UNDER A STRUCTURED SETTLEMENT;

(2) APPLICABLE FEDERAL RATE MEANS THE MOST RECENTLY PUBLISHED APPLICABLE RATE

USED TO DETERMINE THE PRESENT VALUE OF AN ANNUITY, AS ISSUED BY THE INTERNAL

REVENUE SERVICE PURSUANT TO SECTION 7520 OF THE INTERNAL REVENUE CODE AS

DEFINED IN SECTION 49-801.01;

(3) DEPENDENT MEANS A PAYEE'S SPOUSE AND MINOR CHILDREN AND ANY OTHER FAMILY

MEMBER AND OTHER PERSON FOR WHOM THE PAYEE IS LEGALLY OBLIGATED TO PROVIDE

SUPPORT, INCLUDING SPOUSAL MAINTENANCE;

(4) DISCOUNT OR FINANCE CHARGE MEANS THE SUM OF ALL CHARGES PAYABLE DIRECTLY

OR INDIRECTLY FROM ASSIGNED STRUCTURED SETTLEMENT PAYMENTS AND IMPOSED DIRECTLY OR INDIRECTLY BY THE TRANSFEREE AS AN INCIDENT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. DISCOUNT OR FINANCE CHARGE INCLUDES INTEREST CHARGES, DISCOUNTS, AND OTHER COMPENSATION FOR THE TIME VALUE OF MONEY, ALL APPLICATION, ORIGINATION, PROCESSING, UNDERWRITING, CLOSING, FILING, AND NOTARY

FEES AND ALL SIMILAR CHARGES, AND ALL CHARGES FOR COMMISSIONS OR BROKERAGE

SERVICES. DISCOUNT OR FINANCE CHARGE DOES NOT INCLUDE ANY FEE OR OTHER

OBLIGATION INCURRED BY A PAYEE TO OBTAIN INDEPENDENT PROFESSIONAL ADVICE

CONCERNING A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS OR ANY CHARGES,

COMMISSIONS, COSTS, BROKERAGE FEES, OR OTHER FEES WHICH THE PAYEE HAS AGREED TO

PAY TO A NONAFFILIATED THIRD PARTY IN CONNECTION WITH THE TRANSFER;

(5) DISCOUNTED PRESENT VALUE MEANS, WITH RESPECT TO A PROPOSED TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS, THE FAIR PRESENT VALUE OF FUTURE

PAYMENTS, AS DETERMINED BY DISCOUNTING THE PAYMENTS TO THE PRESENT USING THE

MOST RECENTLY PUBLISHED APPLICABLE FEDERAL RATE USED TO DETERMINE THE PRESENT

VALUE OF AN ANNUITY AS THE DISCOUNT RATE;

(6) INTERESTED PARTIES MEANS, WITH RESPECT TO ANY STRUCTURED SETTLEMENT:

(A) THE PAYEE;

(B) ANY BENEFICIARY IRREVOCABLY DESIGNATED UNDER THE ANNUITY CONTRACT TO

RECEIVE PAYMENTS FOLLOWING THE PAYEE'S DEATH OR, IF SUCH DESIGNATED BENEFICIARY

IS A MINOR, THE DESIGNATED BENEFICIARY'S PARENT OR GUARDIAN;

(C) THE ANNUITY ISSUER;

(D) THE STRUCTURED SETTLEMENT OBLIGOR; AND

(E) ANY OTHER PARTY THAT HAS CONTINUING RIGHTS OR OBLIGATIONS UNDER THE

STRUCTURED SETTLEMENT;

(7) PAYEE MEANS A NEBRASKA RESIDENT WHO IS RECEIVING TAX-FREE PAYMENTS UNDER A

STRUCTURED SETTLEMENT AND PROPOSES TO MAKE A TRANSFER OF PAYMENT RIGHTS UNDER

THE STRUCTURED SETTLEMENT. PAYEE DOES NOT INCLUDE A NEBRASKA RESIDENT WHO IS

RECEIVING PAYMENTS UNDER A STRUCTURED SETTLEMENT OF A WORKERS' COMPENSATION

CLAIM;

(8) QUALIFIED ASSIGNMENT AGREEMENT MEANS AN AGREEMENT PROVIDING FOR A

QUALIFIED ASSIGNMENT WITHIN THE MEANING OF SECTION 130 OF THE INTERNAL REVENUE

CODE AS DEFINED IN SECTION 49-801.01;

(9) STRUCTURED SETTLEMENT MEANS AN ARRANGEMENT FOR PERIODIC PAYMENT OF DAMAGES FOR PERSONAL INJURIES OR SICKNESS ESTABLISHED BY A SETTLEMENT, AGREEMENT, OR JUDGMENT IN RESOLUTION OF A TORT CLAIM;

(10) STRUCTURED SETTLEMENT OBLIGOR MEANS THE PARTY THAT HAS THE OBLIGATION TO

MAKE CONTINUING PERIODIC PAYMENTS TO THE PAYEE UNDER A STRUCTURED SETTLEMENT

AGREEMENT OR A QUALIFIED ASSIGNMENT AGREEMENT;

(11) STRUCTURED SETTLEMENT PAYMENT RIGHTS MEANS RIGHTS TO RECEIVE PERIODIC

PAYMENTS, INCLUDING LUMP-SUM PAYMENTS UNDER A STRUCTURED SETTLEMENT, WHETHER

FROM THE SETTLEMENT OBLIGOR OR THE ANNUITY ISSUER IF THE PAYEE IS A RESIDENT IN

THE STATE;

(12) TRANSFER MEANS A SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER FORM

OF ALIENATION OR ENCUMBRANCE MADE BY A PAYEE FOR CONSIDERATION;

(13) TRANSFER AGREEMENT MEANS THE AGREEMENT PROVIDING FOR TRANSFER OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS FROM A PAYEE TO A TRANSFEREE; AND

(14) TRANSFEREE MEANS A PERSON WHO IS RECEIVING OR WILL RECEIVE STRUCTURED

SETTLEMENT PAYMENT RIGHTS RESULTING FROM A TRANSFER.

Sec. 4. (1) NO DIRECT OR INDIRECT TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS IS EFFECTIVE, AND NO STRUCTURED SETTLEMENT OBLIGOR OR ANNUITY ISSUER IS

REQUIRED TO MAKE A PAYMENT DIRECTLY OR INDIRECTLY TO A TRANSFEREE OF

STRUCTURED SETTLEMENT PAYMENT RIGHTS, UNLESS THE TRANSFER HAS BEEN AUTHORIZED

IN ADVANCE IN A FINAL ORDER OF A COURT OF COMPETENT JURISDICTION BASED ON THE

COURT'S WRITTEN EXPRESS FINDINGS THAT:

(A) THE TRANSFER COMPLIES WITH THE REQUIREMENTS OF THE STRUCTURED

SETTLEMENTS TRANSFERS PROTECTION ACT;

(B) THE TRANSFEREE HAS PROVIDED TO THE PAYEE A DISCLOSURE STATEMENT IN NO

SMALLER THAN FOURTEEN-POINT TYPE SPECIFYING:

(I) THE AMOUNTS AND DUE DATES OF THE STRUCTURED SETTLEMENT PAYMENTS TO BE

TRANSFERRED;

(II) THE AGGREGATE AMOUNT OF THE PAYMENTS;

(III) THE DISCOUNTED PRESENT VALUE OF THE PAYMENTS, TOGETHER WITH THE DISCOUNT

RATE USED IN DETERMINING THE DISCOUNTED PRESENT VALUE;

(IV) THE GROSS AMOUNT PAYABLE TO THE PAYEE IN EXCHANGE FOR THE PAYMENTS;

(V) AN ITEMIZED LISTING OF ALL BROKERS' COMMISSIONS, SERVICE CHARGES,

APPLICATION FEES, PROCESSING FEES, CLOSING COSTS, FILING FEES, REFERRAL FEES,

ADMINISTRATIVE FEES, LEGAL FEES, NOTARY FEES, AND OTHER COMMISSIONS, FEES,

COSTS, EXPENSES, AND CHARGES PAYABLE BY THE PAYEE OR DEDUCTIBLE FROM THE GROSS

AMOUNT OTHERWISE PAYABLE TO THE PAYEE;

(VI) THE NET AMOUNT PAYABLE TO THE PAYEE AFTER DEDUCTION OF ALL COMMISSIONS,

FEES, COSTS, EXPENSES, AND CHARGES DESCRIBED IN SUBDIVISION (1)(B)(V) OF THIS

SECTION; (VII) THE QUOTIENT, EXPRESSED AS A PERCENTAGE, OBTAINED BY

DIVIDING THE NET PAYMENT AMOUNT BY THE DISCOUNTED PRESENT VALUE OF THE

PAYMENTS. SUCH QUOTIENT SHALL BE DISCLOSED IN THE FOLLOWING STATEMENT "THE NET

AMOUNT THAT YOU WILL RECEIVE FROM US IN EXCHANGE FOR YOUR FUTURE STRUCTURED

SETTLEMENT PAYMENTS REPRESENTS ....% OF THE ESTIMATED CURRENT VALUE OF THE

PAYMENTS."; (VIII) THE EFFECTIVE ANNUAL INTEREST RATE. SUCH RATE SHALL BE

DISCLOSED IN THE FOLLOWING STATEMENT "BASED ON THE AMOUNT THAT YOU WILL RECEIVE

FROM US AND THE AMOUNTS AND TIMING OF THE STRUCTURED SETTLEMENT PAYMENTS THAT

YOU ARE TURNING OVER TO US, YOU WILL, IN EFFECT, BE PAYING INTEREST TO US AT A

RATE OF ....% PER YEAR."; AND

(IX) THE AMOUNT OF ANY PENALTY AND THE AGGREGATE AMOUNT OF ANY LIQUIDATED

DAMAGES, INCLUDING PENALTIES, PAYABLE BY THE PAYEE IN THE EVENT OF A BREACH OF

THE TRANSFER AGREEMENT BY THE PAYEE;

(C) THE TRANSFER IS IN THE BEST INTERESTS OF THE PAYEE, TAKING INTO ACCOUNT

THE WELFARE AND SUPPORT OF THE PAYEE'S DEPENDENTS, AND THE NET AMOUNT PAYABLE

TO THE PAYEE IS NOT UNFAIR, UNJUST, OR UNREASONABLE UNDER EXISTING

CIRCUMSTANCES;

(D) THE PAYEE HAS RECEIVED, OR WAIVED HIS OR HER RIGHT TO RECEIVE, INDEPENDENT

PROFESSIONAL ADVICE REGARDING THE LEGAL, TAX, AND FINANCIAL IMPLICATIONS OF THE

TRANSFER;

(E) THE TRANSFEREE HAS GIVEN WRITTEN NOTICE OF THE TRANSFEREE'S NAME, ADDRESS,

AND TAXPAYER IDENTIFICATION NUMBER TO THE ANNUITY ISSUER AND THE STRUCTURED

SETTLEMENT OBLIGOR AND HAS FILED A COPY OF THE NOTICE WITH THE COURT;

(F) THE TRANSFER AGREEMENT PROVIDES THAT ANY DISPUTES BETWEEN THE PARTIES WILL

BE GOVERNED BY THE LAWS OF NEBRASKA AND THAT NEBRASKA IS THE PROPER PLACE OF

VENUE TO BRING ANY CAUSE OF ACTION ARISING OUT OF A BREACH OF THE AGREEMENT;

AND

(G) THE TRANSFER DOES NOT CONTRAVENE ANY APPLICABLE STATUTE OR ORDER OF ANY

COURT OR OTHER GOVERNMENT AUTHORITY.

(2) THE COURT MAY NOT AUTHORIZE A TRANSFER IF THE COURT MAKES AN EXPRESS

WRITTEN FINDING THAT THE TRANSFER CONTRAVENES THE PUBLIC POLICY OF THIS STATE.

(3) THE TRANSFER AGREEMENT SHALL ALSO PROVIDE THAT THE PARTIES AGREE TO THE

JURISDICTION OF ANY NEBRASKA COURT OF COMPETENT JURISDICTION. IF THE TRANSFER

WOULD CONTRAVENE THE TERMS OF THE STRUCTURED SETTLEMENT OR THE STANDARDS SET

FORTH IN SUBSECTION (1) OR (2) OF THIS SECTION, THE COURT MAY GRANT, DENY, OR

IMPOSE CONDITIONS UPON THE PROPOSED TRANSFER AS THE COURT DEEMS JUST AND PROPER

UNDER THE FACTS AND CIRCUMSTANCES, UPON THE FILING OF A WRITTEN OBJECTION BY

ANY INTERESTED PARTY AND AFTER CONSIDERING THE OBJECTION AND ANY RESPONSE TO

IT. ANY ORDER APPROVING A TRANSFER MUST REQUIRE THAT THE TRANSFEREE INDEMNIFY

THE ANNUITY ISSUER AND THE STRUCTURED SETTLEMENT OBLIGOR FOR ANY LIABILITY

INCLUDING REASONABLE COSTS AND ATTORNEY'S FEES ARISING FROM COMPLIANCE BY THE

ISSUER OR OBLIGOR WITH THE ORDER OF THE COURT.

(4) A PROVISION IN A TRANSFER AGREEMENT GIVING A TRANSFEREE POWER TO CONFESS

JUDGMENT AGAINST A PAYEE IS UNENFORCEABLE TO THE EXTENT THE AMOUNT OF THE

JUDGMENT WOULD EXCEED THE AMOUNT PAID BY THE TRANSFEREE TO THE PAYEE, LESS ANY

PAYMENTS RECEIVED FROM THE STRUCTURED SETTLEMENT OBLIGOR OR THE PAYEE.

(5) WITH RESPECT TO A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS A

TRANSFEREE MAY NOT CONTRACT FOR OR RECEIVE A DISCOUNT OR FINANCE CHARGE THAT

WOULD RESULT IN AN EFFECTIVE ANNUAL RATE IN EXCESS OF THE MAXIMUM INTEREST RATE

PER YEAR APPLICABLE IN NEBRASKA TO A CONSUMER LOAN AS SET FORTH IN SECTION

45-101.03.

Sec. 5. (1) THE NEBRASKA COURT THAT APPROVED THE STRUCTURED SETTLEMENT

AGREEMENT HAS JURISDICTION OVER AN APPLICATION FOR AUTHORIZATION OF A

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS. IF A NEBRASKA COURT DID NOT

APPROVE THE STRUCTURED SETTLEMENT AGREEMENT, A PERSON SHALL FILE AN APPLICATION

UNDER SECTION 4 OF THIS ACT IN THE DISTRICT COURT FOR THE COUNTY IN WHICH THE

PAYEE RESIDES.

(2) NOT LESS THAN TWENTY DAYS BEFORE THE SCHEDULED HEARING ON AN APPLICATION

FOR AUTHORIZATION OF A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER

SECTION 4 OF THIS ACT, THE TRANSFEREE SHALL FILE WITH THE COURT AND ALL

INTERESTED PARTIES A NOTICE OF THE PROPOSED TRANSFER AND THE APPLICATION FOR

ITS AUTHORIZATION. THE NOTICE SHALL INCLUDE:

(A) A COPY OF THE TRANSFEREE'S APPLICATION TO THE COURT;

(B) A COPY OF THE TRANSFER AGREEMENT;

(C) A COPY OF THE DISCLOSURE STATEMENT REQUIRED UNDER SECTION 4 OF THIS ACT;

AND

(D) NOTICE THAT AN INTERESTED PARTY IS ENTITLED TO SUPPORT, OPPOSE, OR

OTHERWISE RESPOND TO THE TRANSFEREE'S APPLICATION, EITHER IN PERSON OR BY

COUNSEL, BY SUBMITTING WRITTEN COMMENTS TO THE COURT OR BY PARTICIPATING IN THE

HEARING, AND NOTIFICATION OF THE TIME AND PLACE OF THE HEARING AND NOTIFICATION

OF THE MANNER IN WHICH AND THE TIME BY WHICH WRITTEN RESPONSES TO THE

APPLICATION MUST BE FILED IN ORDER TO BE CONSIDERED BY THE COURT. WRITTEN

RESPONSES TO THE APPLICATION SHALL BE FILED WITHIN FIFTEEN DAYS AFTER SERVICE

OF THE TRANSFEREE'S NOTICE.

Sec. 6. THE PROVISIONS OF SECTIONS 3 TO 5 OF THIS ACT MAY NOT BE WAIVED. NO

PAYEE WHO PROPOSES TO MAKE A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

SHALL INCUR A PENALTY, FORFEIT AN APPLICATION FEE OR OTHER PAYMENT, OR

OTHERWISE INCUR ANY LIABILITY TO THE PROPOSED TRANSFEREE BASED ON THE FAILURE

OF THE TRANSFER TO SATISFY THE CONDITIONS OF SECTION 4 OF THIS ACT.

Sec. 7. THE STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT APPLIES TO ANY

TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS UNDER A TRANSFER AGREEMENT

ENTERED INTO ON OR AFTER JANUARY 1, 2002.

Sec. 8. Section 9-109, Uniform Commercial Code, is amended to read:

9-109. Scope.

(a) Except as otherwise provided in subsections (c) and (d), this article

applies to:

(1) a transaction, regardless of its form, that creates a security interest in

personal property or fixtures by contract;

(2) an agricultural lien;

(3) a sale of accounts, chattel paper, payment intangibles, or promissory notes;

(4) a consignment;

(5) a security interest arising under section 2-401, 2-505, 2-711(3), or

2A-508(5), as provided in section 9-110; and

(6) a security interest arising under section 4-210 or 5-118.

(b) The application of this article to a security interest in a secured

obligation is not affected by the fact that the obligation is itself secured by

a transaction or interest to which this article does not apply.

(c) This article does not apply to the extent that:

(1) a statute, regulation, or treaty of the United States preempts this article;

(2) another statute of this state expressly governs the creation, perfection,

priority, or enforcement of a security interest created by this state or a

governmental unit of this state;

(3) a statute of another state, a foreign country, or a governmental unit of

another state or a foreign country, other than a statute generally applicable

to security interests, expressly governs creation, perfection, priority, or

enforcement of a security interest created by the state, country, or

governmental unit; or

(4) the rights of a transferee beneficiary or nominated person under a letter

of credit are independent and superior under section 5-114.

(d) This article does not apply to:

(1) a landlord's lien, other than an agricultural lien;

(2) a lien, other than an agricultural lien, given by statute or other rule of

law for services or materials, but section 9-333 applies with respect to

priority of the lien;

(3) an assignment of a claim for wages, salary, or other compensation of an

employee;

(4) a sale of accounts, chattel paper, payment intangibles, or promissory

notes as part of a sale of the business out of which they arose;

(5) an assignment of accounts, chattel paper, payment intangibles, or

promissory notes which is for the purpose of collection only;

(6) an assignment of a right to payment under a contract to an assignee that is

also obliged to perform under the contract;

(7) an assignment of a single account, payment intangible, or promissory note

to an assignee in full or partial satisfaction of a preexisting indebtedness;

(8) a transfer of an interest in or an assignment of a claim under a policy of

insurance, other than an assignment by or to a health-care provider of a

health-care-insurance receivable and any subsequent assignment of the right to

payment, but sections 9-315 and 9-322 apply with respect to proceeds and

priorities in proceeds;

(9) an assignment of a right represented by a judgment, other than a judgment

taken on a right to payment that was collateral;

(10) a right of recoupment or set-off, but:

(A) section 9-340 applies with respect to the effectiveness of rights of

recoupment or set-off against deposit accounts; and

(B) section 9-404 applies with respect to defenses or claims of an account

debtor;

(11) the creation or transfer of an interest in or lien on real property,

including a lease or rents thereunder, except to the extent that provision is

made for:

(A) liens on real property in sections 9-203 and 9-308;

(B) fixtures in section 9-334;

(C) fixture filings in sections 9-501, 9-502, 9-512, 9-516, and 9-519; and

(D) security agreements covering personal and real property in section 9-604;

(12) an assignment of a claim arising in tort, other than a commercial tort

claim, but sections 9-315 and 9-322 apply with respect to proceeds and

priorities in proceeds; or

(13) an assignment of a deposit account in a consumer transaction, but sections

9-315 and 9-322 apply with respect to proceeds and priorities in proceeds ; OR

(14)(A) AN ASSIGNMENT OR TRANSFER OF A CLAIM OR RIGHT TO RECEIVE COMPENSATION

FOR PERSONAL INJURIES OR SICKNESS UNDER ANY WORKERS' COMPENSATION, INDUSTRIAL

ACCIDENT, OR SIMILAR LAW OR (B) A TRANSFER OF STRUCTURED SETTLEMENT PAYMENT

RIGHTS ENTERED INTO ON OR AFTER JANUARY 1, 2002, AND SUBJECT TO THE

STRUCTURED SETTLEMENTS TRANSFERS PROTECTION ACT UNLESS THE TRANSFER HAS BEEN

AUTHORIZED IN ADVANCE IN A FINAL ORDER OF A COURT OF COMPETENT JURISDICTION

PURSUANT TO THE ACT.

Sec. 9. This act becomes operative on July 1, 2001.

Sec. 10. Original section 9-109, Uniform Commercial Code, is repealed.

Sec. 11. Since an emergency exists, this act takes effect when passed and

approved according to law.