[Congressional Record Volume 147, Number 49 (Thursday, April 5, 2001)]
[Extensions of Remarks]
[Page E549]
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, April 4, 2001

  Mr. SHAW. Mr. Speaker, I rise today to introduce the Structured 
Settlement Protection Act. This legislation protects the Congressional 
policy underlying structured settlements and brings a final resolution 
to the issue known as ``factoring'' of structured settlement payments.
  In introducing this legislation, I am joined by my colleague Mr. 
Stark and by a broad bipartisan group of our colleagues from the Ways 
and Means Committee, including Mr. Houghton and Mr. Coyne, the Chairman 
and the Ranking Minority Member respectively of the Oversight 
Subcommittee which held a hearing on the structured settlement 
factoring issue in the last Congress. There are a total of 19 Ways and 
Means co-sponsors of this important legislation.
  I am a long-time supporter of the use of structured settlements to 
compensate victims of physical injuries. Structured settlements 
constitute a private sector funding alternative to taxpayer-financed 
programs to meet the ongoing, long-term medical and living needs of 
seriously-injured victims and their families. Structured settlements 
enable these injured people to live with dignity, free of reliance on 
government. For these reasons, Congress adopted special tax rules to 
encourage the use of structured settlements to provide long-term 
financial security to injured victims and their families.
  The Structured Settlement Protection Act that I am introducing today 
addresses concerns which have been raised over the ``factoring'' of 
structured settlement payments, in which factoring or settlement 
purchase companies buy up part or all of the structured settlement 
recipient's future payments for cash. My legislation is part of a 
single overall package of complementary Federal and State legislation 
that has been agreed upon by the structured settlement industry and the 
factoring industry to resolve these concerns.
  Under the Structured Settlement Protection Act, the States are given 
the consumer protection role. The Act relies upon a State court review 
process to govern a proposed factoring transaction to ensure that the 
structured settlement serves the purpose Congress intended--providing 
long-term financial security for the injured victim and the victim's 
family--while enabling the victim to get access to future payments 
should the court determine that such access is in the best interests of 
the victim, taking into account the welfare and support of the victim's 
dependents, and does not contravene other applicable statutes and 
existing court orders.
  The complementary State model legislation agreed to by the structured 
settlement and factoring industries specifies the process for State 
court review. Legislation similar to the State model has now been 
enacted in 19 States and is being actively considered in some 20 other 
States during the current State legislative cycle.
  The Structured Settlement Protection Act protects the Congressional 
policy underlying structured settlements by providing the threat of an 
excise tax sanction to ensure compliance with State regulation in light 
of the multi-State nature of the factoring business, as well as 
resolving Federal tax uncertainties which factoring has created for the 
other parties to the structured settlement.
  The Structured Settlement Protection Act is similar to legislation 
that I introduced in the last Congress along with Mr. Stark and a 
similarly broad bipartisan group of our colleagues from the Ways and 
Means Committee.
  This legislation has been agreed to by the National Structured 
Settlements Trade Association (NSSTA) on behalf of the structured 
settlement industry and the National Association of Settlement 
Purchasers (NASP) on behalf of the factoring industry. In light of the 
joint support of the structured settlement industry and the factoring 
industry, I believe that this legislation should be non-controversial. 
In addition, the identical version of the legislation last year was 
scored by the Joint Tax Committee as being essentially revenue neutral.
  The agreement of the two sides to the provisions of the Structured 
Settlement Protection Act provides us with a critical opportunity to 
put the structured settlement factoring issue to rest at long last. We 
should avail ourselves of that opportunity while it is at hand. 
Accordingly, I strongly urge the enactment of this important 
legislation as soon as possible.

                          ____________________