Idaho State Statutes - Idaho Attorney Directory

(a) Except as otherwise provided in subsections (c) and
(d), this chapter 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 28-2-401, 28-2-505,
28-2-711(3) or 28-12-508(5), as provided in section 28-9-110; and
(6) A security interest arising under section 28-4-210 or 28-5-120.
(b) The application of this chapter 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 chapter does not apply.
(c) This chapter does not apply to the extent that:
(1) A statute, regulation, or treaty of the United States preempts this
chapter;
(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 28-5-114.
(d) This chapter 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 28-9-333 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 obligated 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 28-9-315 and 28-9-322
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 28-9-340 applies with respect to the effectiveness of
rights of recoupment or set-off against deposit accounts; and
(B) section 28-9-404 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 28-9-203 and 28-9-308;
(B) fixtures in section 28-9-334;
(C) fixture filings in sections 28-9-501, 28-9-502, 28-9-512,
28-9-516 and 28-9-519; and
(D) security agreements covering personal and real property in
section 28-9-604;
(12) An assignment of a claim arising in tort, other than a commercial
tort claim, but sections 28-9-315 and 28-9-322 apply with respect to
proceeds and priorities in proceeds;
(13) (A) A claim or right to receive compensation for injuries or
sickness as described in (i) 26 U.S.C. section 104(a)(1) and (ii) on
and after the effective date of this chapter, in 26 U.S.C. section
104(a)(2), as those sections may be amended from time to time.
Notwithstanding the foregoing, this chapter (other than sections
28-9-406(d) and 28-9-408(a) and (c), Idaho Code, in the case of
transfers made on and after the effective date of this chapter) shall
apply to such compensation as described in 26 U.S.C. section
104(a)(2) if the sale, pledge, assignment or other transfer of rights
to receive such compensation under a structured settlement is
approved by the final order of a court pursuant to, and otherwise
complies with, the requirements of paragraph (B) of this subsection.
(B) (i) Definitions. For purposes of this subsection:
1. "annuity issuer" means an insurer that has issued a
contract to fund periodic payments under a structured
settlement;
2. "dependents" include a payee's spouse and minor
children and all other persons for whom the payee is
legally obligated to provide support, including alimony;
3. "discounted present value" means the present value of
future payments determined by discounting such payments to
the present using the most recently published applicable
federal rate for determining the present value of an
annuity, as issued by the United States internal revenue
service;
4. "gross advance amount" means the sum payable to the
payee or for the payee's account as consideration for a
transfer of structured settlement payment rights before any
reductions for transfer expenses or other deductions to be
made from such consideration;
5. "independent professional advice" means advice of an
attorney, certified public accountant, actuary or other
licensed professional adviser;
6. "interested parties" means, with respect to any
structured settlement, the payee, any beneficiary
irrevocably designated under the annuity contract to
receive payments following the payee's death, the annuity
issuer, the structured settlement obligor, and any other
party that has continuing rights or obligations under such
structured settlement;
7. "net advance amount" means the gross advance amount
less the aggregate amount of the actual and estimated
transfer expenses required to be disclosed under
paragraph (B)(ii)5. of this subsection;
8. "payee" means an individual who is receiving tax free
payments under a structured settlement and proposes to make
a transfer of payment rights thereunder;
9. "periodic payments" includes both recurring payments
and scheduled future lump sum payments;
10. "qualified assignment agreement" means an agreement
providing for a qualified assignment within the meaning of
26 U.S.C. section 130, as amended from time to time;
11. "settled claim" means the original tort claim resolved
by a structured settlement;
12. "structured settlement" means an arrangement for
periodic payment of damages for personal injuries or
sickness established by settlement or judgment in
resolution of a tort claim;
13. "structured settlement agreement" means the agreement,
judgment, stipulation, or release embodying the terms of a
structured settlement;
14. "structured settlement obligor" means, with respect to
any structured settlement, the party that has the
continuing obligation to make periodic payments to the
payee under a structured settlement agreement or a
qualified assignment agreement;
15. "structured settlement payment rights" means rights to
receive periodic payments under a structured settlement,
whether from the structured settlement obligor or the
annuity issuer, where:
A. the payee is domiciled in, or the domicile or
principal place of business of the structured
settlement obligor or the annuity issuer is located
in, this state; or
B. the structured settlement agreement was approved
by a court in this state; or
C. the structured settlement agreement is expressly
governed by the laws of this state;
16. "terms of the structured settlement" include, with
respect to any structured settlement, the terms of the
structured settlement agreement, the annuity contract, any
qualified assignment agreement and any order or other
approval of any court or other government authority that
authorized or approved such structured settlement;
17. "transfer" means any sale, assignment, pledge,
hypothecation or other alienation or encumbrance of
structured settlement payment rights made by a payee for
consideration; provided that the term "transfer" does not
include the creation or perfection of a security interest
in structured settlement payment rights under a blanket
security agreement entered into with an insured depository
institution, in the absence of any action to redirect the
structured settlement payments to such insured depository
institution, or an agent or successor in interest thereof,
or otherwise to enforce such blanket security interest
against the structured settlement payment rights;
18. "transfer agreement" means the agreement providing for
a transfer of structured settlement payment rights;
19. "transfer expenses" means all expenses of a transfer
that are required under the transfer agreement to be paid
by the payee or deducted from the gross advance amount,
including, without limitation, court filing fees,
attorney's fees, escrow fees, lien recordation fees,
judgment and lien search fees, finder's fees, commissions,
and other payments to a broker or other intermediary;
"transfer expenses" do not include preexisting obligations
of the payee payable for the payee's account from the
proceeds of a transfer;
20. "transferee" means a party acquiring or proposing to
acquire structured settlement payment rights through a
transfer.
(ii) Required disclosures to payee. Not less than three (3)
days prior to the date on which a payee signs a transfer
agreement, the transferee shall provide to the payee a separate
disclosure statement, in bold type no smaller than fourteen (14)
points, setting forth:
1. the amounts and due dates of the structured settlement
payments to be transferred;
2. the aggregate amount of such payments;
3. the discounted present value of the payments to be
transferred, which shall be identified as the "calculation
of current value of the transferred structured settlement
payments under federal standards for valuing annuities,"
and the amount of the applicable federal rate used in
calculating such discounted present value;
4. the gross advance amount;
5. an itemized listing of all applicable transfer
expenses, other than attorney's fees and related
disbursements payable in connection with the transferee's
application for approval of the transfer, and the
transferee's best estimate of the amount of any such fees
and disbursements;
6. the net advance amount;
7. the amount of any penalties or liquidated damages
payable by the payee in the event of any breach of the
transfer agreement by the payee; and
8. a statement that the payee has the right to cancel the
transfer agreement, without penalty or further obligation,
not later than the third business day after the date the
agreement is signed by the payee.
(iii) Approval of transfers of structured settlement payment
rights.
1. No direct or indirect transfer of structured settlement
payment rights shall be effective and no structured
settlement obligor or annuity issuer shall be required to
make any payment directly or indirectly to any transferee
of structured settlement payment rights unless the transfer
has been approved in advance in a final court order based
on express findings by such court that:
A. the transfer is in the best interest of the payee,
taking into account the welfare and support of the
payee's dependents;
B. the payee has been advised in writing by the
transferee to seek independent professional advice
regarding the transfer and has either received such
advice or knowingly waived such advice in writing; and
C. the transfer does not contravene any applicable
statute or the order of any court or other government
authority.
(iv) Effects of transfer of structured settlement payment
rights. Following a transfer of structured settlement payment
rights under this subsection:
1. The structured settlement obligor and the annuity
issuer shall, as to all parties except the transferee, be
discharged and released from any and all liability for the
transferred payments;
2. The transferee shall be liable to the structured
settlement obligor and the annuity issuer:
A. if the transfer contravenes the terms of the
structured settlement, for any taxes incurred by such
parties as a consequence of the transfer; and
B. for any other liabilities or costs, including
reasonable costs and attorney's fees, arising from
compliance by such parties with the order of the court
or arising as a consequence of the transferee's
failure to comply with this subsection;
3. Neither the annuity issuer nor the structured
settlement obligor may be required to divide any periodic
payment between the payee and any transferee or assignee or
between two (2) or more transferees or assignees; and
4. Any further transfer of structured settlement payment
rights by the payee may be made only after compliance with
all of the requirements of this subsection.
(v) Procedure for approval of transfers.
1. An application under this subsection for approval of a
transfer of structured settlement payment rights shall be
made by the transferee and may be brought in the county in
which the payee resides, in the county in which the
structured settlement obligor or the annuity issuer
maintains its principal place of business, or in any court
which approved the structured settlement agreement.
2. Not less than twenty (20) days prior to the scheduled
hearing on any application for approval of a transfer of
structured settlement payment rights under paragraph
(B)(iii) of this subsection, the transferee shall file with
the court and serve on all interested parties a notice of
the proposed transfer and the application for its
authorization, including with such notice:
A. a copy of the transferee's application;
B. a copy of the transfer agreement;
C. a copy of the disclosure statement required under
paragraph (B)(ii) of this subsection;
D. a listing of each of the payee's dependents,
together with each dependent's age;
E. notification that any 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
F. 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 (which shall be not less than fifteen (15) days
after service of the transferee's notice) in order to
be considered by the court.
(vi) General provisions -- construction.
1. The provisions of this subsection may not be waived by
any payee.
2. Any transfer agreement entered into on or after the
effective date of this subsection by a payee who resides in
this state shall provide that disputes under such transfer
agreement, including any claim that the payee has breached
the agreement, shall be determined in and under the laws of
this state. No such transfer agreement shall authorize the
transferee or any other party to confess judgment or
consent to entry of judgment against the payee.
3. No transfer of structured settlement payment rights
shall extend to any payments that are life-contingent
unless, prior to the date on which the payee signs the
transfer agreement, the transferee has established and has
agreed to maintain procedures reasonably satisfactory to
the annuity issuer and the structured settlement obligor
for (i) periodically confirming the payee's survival, and
(ii) giving the annuity issuer and the structured
settlement obligor prompt written notice in the event of
the payee's death.
4. No payee who proposes to make a transfer of structured
settlement payment rights shall incur any penalty, forfeit
any application fee or other payment, or otherwise incur
any liability to the proposed transferee or any assignee
based on any failure of such transfer to satisfy the
conditions of this subsection.
5. Nothing contained in this subsection shall be construed
to authorize any transfer of structured settlement payment
rights in contravention of any law or to imply that any
transfer under a transfer agreement entered into prior to
the effective date of this subsection is valid or invalid.
6. Compliance with the requirements set forth in paragraph
(B)(ii) of this subsection and fulfillment of the
conditions set forth in paragraph (B)(iii) of this
subsection shall be solely the responsibility of the
transferee in any transfer of structured settlement payment
rights, and neither the structured settlement obligor nor
the annuity issuer shall bear any responsibility for, or
any liability arising from, noncompliance with such
requirements or failure to fulfill such conditions.
(vii) Effective date. This subsection shall apply to any
transfer of structured settlement payment rights under a
transfer agreement entered into on or after the thirtieth day
after the date of enactment of this subsection; provided
however, that nothing contained herein shall imply that any
transfer under a transfer agreement reached prior to such date
is either effective or ineffective; or
(14) A claim or right to receive benefits under a special needs trust as
described in 42 U.S.C. section 1396p(d)(4), as amended from time to time.

Click here to visit the Official Idaho State Statutes