[Congressional Record Volume 147, Number 48 (Wednesday, April 4, 2001)]
[Extensions of Remarks]
[Page E534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  STRUCTURED SETTLEMENT PROTECTION ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, April 4, 2001

  Mr. STARK. Mr. Speaker, I join today with Mr. Shaw and a broad 
bipartisan group of our colleagues from the House Ways and Means 
Committee in introducing the Structured Settlement Protection Act.
  I was the Chairman of the Ways and Means Subcommittee that considered 
the original bipartisan legislation in 1982 that enacted the structured 
settlement tax rules. The Ways and Means Committee, acting on a 
bipartisan basis, adopted the structured settlement tax rules that are 
in the Code today to provide long-term financial protection to 
seriously-injured victims and their families, so that these families 
would not have to turn to taxpayer-financed programs to meet their 
basic living and medical needs.
  As a long-time supporter of structured settlements, I have been 
gravely concerned about the impact of so-called ``factoring''--in which 
future damage payments are sold off for a discounted lump sum--on this 
long-term financial security that Congress intended to achieve for 
injured victims and their families. That is why I have worked actively 
with Mr. Shaw and our colleagues on the Ways and Means Committee over 
several years to put forward legislation to protect structured 
settlements and the injured victims and their families who depend upon 
them.
  The Structured Settlement Protection Act that we are introducing 
today with broad bipartisan support on the Ways and Means Committee 
will bring a final resolution to the factoring issue, protecting the 
hundreds of thousands of structured settlement recipients and the 
longstanding Congressional policy of almost two decades.
  The Act works in conjunction with complementary State structured 
settlement protection legislation that already has been enacted by 19 
States and is under active consideration in an additional 20 States. 
The Act and the complementary State legislation rely upon a State court 
review process to ensure that the structured settlement fulfills its 
intended purpose of providing long-term financial protection for 
injured people, while enabling the victim to get access to future 
payments if the court determines that such access is in the best 
interests of the injured person, taking into account the welfare and 
support of his or her dependents, and determines that the sale of 
future payments does not violate any State or Federal statutes or 
existing court orders.
  This Federal legislation is necessary to ensure compliance with State 
regulation given the nationwide operation of the factoring industry, to 
encourage the remaining States to adopt the necessary regulatory 
legislation, and to put to rest tax uncertainties that factoring 
transactions have created for the other parties to the structured 
settlement.
  I understand that the Act has the support of both the National 
Structured Settlements Trade Association on behalf of the structured 
settlement industry and the National Association of Settlement 
Purchasers on behalf of the factoring industry. Given this joint 
support, the legislation should be non-controversial.
  We have worked hard on a bipartisan basis to resolve this issue. I 
strongly urge that we move forward to enact this bipartisan legislation 
as soon as possible.

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