[Congressional Record Volume 145, Number 24 (Wednesday, February 10, 1999)]
[Extensions of Remarks]
[Page E192]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  STRUCTURED SETTLEMENT PROTECTION ACT

                                 ______
                                 

                         HON. E. CLAY SHAW, JR.

                               of florida

                    in the house of representatives

                      Wednesday, February 10, 1999

  Mr. SHAW. Mr. Speaker, on opening day of the 106th Congress, I, along 
with my colleague Mr. Stark and a broad bipartisan group of our 
colleagues introduced the Structured Settlement Protection Act, H.R. 
263.
  This bill would address the serious public policy concerns that are 
raised by transactions in which so-called factoring companies purchase 
recoveries under structured settlements from injured victims.
  Recently there has been dramatic growth in these transactions in 
which injured victims are induced by factoring companies to sell off 
future structured settlement payments intended to cover ongoing living 
and medical needs in exchange for a sharply-discounted lump sum that 
then may be dissipated, placing the injured victim in the very 
predicament the structured settlement was intended to avoid.
  As long-time supporters of structured settlements and the 
congressional policy underlying such settlements, we have grave 
concerns that these factoring transactions directly undermine the 
policy of the structured settlement tax rules. The Treasury Department 
shares these concerns.
  Because the purchase of structured settlement payments by factoring 
companies directly thwarts the congressional policy underlying the 
structured settlement tax rules and raises such serious concerns for 
structured settlements and injured victims, it is appropriate to deal 
with these concerns in the tax context.
  Accordingly, H.R. 263 would impose a substantial excise tax on the 
factoring company that purchases the structured settlement payments 
from the injured victim. The excise tax would be subject to an 
exception for genuine court-approved hardship cases to protect the 
limited instances of true hardship.
  Mr. Speaker, too many Americans have been taken advantage of through 
the purchase of structured settlements by factoring companies. I urge 
my colleagues to join me to end this abusive practice.

                          ____________________