Budget Amendment ID: FY2013-S4-405.1
Further EPS 405.1
Preventing Waste of Taxpayer Dollars
Ms. Chang-Diaz moved that the amendment be amended by striking out the text of amendment 405 and inserting in place thereof the following text:-
SECTION ___. Section 38X of Chapter 63 of the General laws, as most recently amended by chapter 173 of the acts of 2008, is hereby amended by inserting subsection (a) the following paragraphs:—
Section 38X. (a) As used in this section the following words shall, unless the context clearly requires otherwise, have the following meanings: —
“Drinking establishment’, any tavern or club licensed to sell alcoholic beverages, wines, or malt beverages pursuant to chapter 138 that derives more than 50 per cent of the establishment’s profit from the sales of alcoholic beverages, wines, or malt beverages.
‘Liquor Store’, any establishment licensed to sell alcoholic beverages, wines, and malt beverages not to be drunk on the premises pursuant to section 15 of chapter 138, and excluding any food store as defined pursuant to section 184B of chapter 94.
‘Performance’, any play, dance, concert, exhibit, including movies, simulcasts, any such entertainment at an establishment which displays lives nudity for patrons, as defined pursuant to section 9A of chapter 40A, or any such entertainment performed before one or more persons, excluding performances offered by, at or through any preschool, school, college, university, public library, church or nonprofit organization.
‘Performance venue’, any place at which a performance is conducted, including, but not limited to a: sports arena, stadium, ball park, race track, movie theatre, or establishment which display live nudity for patrons, as defined pursuant to section 9A of chapter 40A.” and
‘Person’, a natural person, corporation, association, partnership or other legal entity.
SECTION 38. Chapter 63 of the Generals Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting after Section (g) the following section:-
“(h) No person accepting taxpayer dollars or tax expenditures pursuant to section 31A, section 31M, section 38M, section 38N, section 38U, section 38W, section 38X, and section 38CC of chapter 63 shall purchase, during the time period for which he is receiving said public subsidy, the following services or products: (1) alcoholic beverages as defined pursuant to section 1 of chapter 138; (2) lottery tickets; (3) tobacco products as defined pursuant to section 1 of chapter 64C; (4) any visual material intended to create or simulate sexual conduct or sexual excitement as defined pursuant to section 31 of chapter 272; (5) admission to any performances; (6) luxury bathing quarters or furnishings for the personal use of company executives; (7) professional services, excluding medical care, provided by any member of the bar or any person licensed pursuant to chapter 112; (8) services, excluding childcare services, or memberships provided by health clubs as defined pursuant to section 78 of chapter 93; (9) jewelry; (10) the rental of goods or real property that are not central to the production of that person’s commercial good or service; (11) for the payment to the commonwealth or any political subdivision thereof of any tax, fee or penalty, including restitution or bail or bail bonds ordered by a court; (12) gambling as defined pursuant to section 2 of chapter 23K; or (13) entertainment on, entry to, or goods or services aboard cruise ships.
(i) Any business that offers for sale the services or products defined by subsection (h), shall display in an area conspicuous patrons a sign containing the following statement: “Massachusetts law (M.G.L. c.63, §38) prohibits the use of taxpayer subsidies for the purchase of the following products and services: alcoholic beverages; tobacco products; lottery tickets; sexually explicit material; admission to performances; luxury bathing quarters or furnishings for the personal use of company executives professional services; health club memberships or services; jewelry; rental goods or property that are not central to the production of that person’s commercial good or service; payment of any tax, fee, or penalty including bail or bail bonds; gambling; and entertainment on, entry to, or goods or services aboard cruise ships.
Violators will be punished to the full extent of the law. If you witness tax fraud, please report it, toll-free, by calling local law enforcement authorities”.
The Department of Revenue shall maintain a downloadable template of the sign on the department’s website. Business associations may also maintain a downloadable template of the sign on their websites.
(j) No person accepting taxpayer dollars or tax expenditures pursuant to section 31A, section 31M, section 38M, section 38N, section 38U, section 38W, section 38X, and section 38CC of chapter 63 shall patronage the following types of businesses, except to the extent that such patronage is necessary for the filming of footage on-location, or for the acquisition of bona fide props or costumes, or for the specific scientific research for which the person is receiving taxpayer subsidy: (1) liquor stores; (2) gaming establishments licensed pursuant to chapter 23K; (3) performance venues; (4) adult bookstores or adult paraphernalia stores, as defined pursuant to section 9A of chapter 40A; (5) beauty shops, barber shops, manicure shops or aesthetic shops registered pursuant to chapter 112; (6) health clubs as defined pursuant to section 78 of chapter 93; (7) rent-to-own furniture, electronics, or appliance stores; (8) jewelry stores; and (9) drinking establishments; (10) cruise ships.
(k) Any business defined by subsection (j), shall display in an area conspicuous to patrons a sign containing the following statement: “Massachusetts law (M.G.L. c.63, §538) prohibits this store from accepting payments from the persons and entities listed on the Department of Revenue’s website, except in limited circumstances, and Massachusetts law (M.G.L. c.63, §38) prohibits these persons from purchasing products in this establishment. Violators will be punished to the full extent of the law. If you witness tax credit fraud, please report it, toll-free, by calling local law enforcement”.
The Department of Revenue shall establish a website and make available a downloadable template of the sign and list of tax subsidy recipients on said website. Business associations may also maintain a downloadable template of the sign on their websites.
(l) Any person accepting taxpayer dollars or tax expenditures pursuant to section 31A, section 31M, section 38M, section 38N, section 38U, section 38W, section 38X, and section 38CC of chapter 63 who knowingly makes a purchase in violation of this section shall reimburse the department for such purchase and shall be disqualified from the tax credit program for a period of 3 months for the first offense and permanently for the second offense.
(m) Any person who is found to have knowingly violated subsections (h) and (j), if such benefits are of an aggregate value of less than $100, shall, upon the first conviction thereof, be fined not more than $1,000 or be imprisoned in a jail or house of correction or the state prison for not more than 1 year, or both, and upon the second and any subsequent conviction thereof, shall be fined not more than $1,000 or imprisoned in a jail or house of correction or the state prison for not more than 2 1/2 years, or both.
Any person who is found to have knowingly violated subsections (h) and (j), if such benefit has an aggregate value of more than $100 but less than $5,000, shall, upon the first conviction thereof, be fined not more than $10,000 or be imprisoned in a jail or house of correction or in the state prison for not more than 3 years, or both, and, upon the second and any subsequent conviction thereof, shall be fined not more than $10,000 or be imprisoned in a jail or house of correction or in the state prison for not more than 5 years or both.
Any person who is found to have knowingly violated subsections (h) and (j), if such benefits are of an aggregate value of $5,000 or more shall be fined not more than $250,000 or be imprisoned in a jail or house of correction or the state prison for not more than 20 years, or both.
(n) Any person who is found to have knowingly violated subsections (h) and (j) shall forfeit to the commonwealth all property, real and personal, used in connection with the violation or any proceeds traceable to the violation.
The proceeds from any sale of forfeited property and any monies forfeited under this subsection shall be used by the commonwealth to reimburse the bureau of special investigations in the office of the state auditor, established under section 16 of chapter 11, or any other state or local agency for any cost incurred in the investigative effort resulting in the forfeiture.
No interest in property shall be forfeited under this subsection as the result of any act or omission established by the owner of the interest to have been committed or omitted without the knowledge or consent of the owner.
(o) The alcoholic beverages control commission may suspend or revoke the license of any person who is found to have knowingly violated subsection (i) of section 38.
(p) The state lottery commission may suspend or revoke the license of any person who is found to have knowingly violated subsection (i) of section 38.
(q) Notwithstanding any general or special law to the contrary, the Department of Revenue shall implement a vendor payment system for the non-cash payment or reimbursement for all legitimate expenses for all recipients of taxpayer subsidies or tax expenditures pursuant to section 31A, section 31M, section 38M, section 38N, section 38U, section 38W, section 38X, and section 38CC of chapter 63. The department shall have 50 per cent of all such recipients enrolled in the vendor payment system by July 31, 2012, and shall have the remaining 50 per cent of recipients enrolled in the vendor payment system by November 30, 2012. Beginning on July 31, 2012, all recipients pursuant to section 31M, section 38, section 38N, section 38U, section 38W, section 38X, and section 38CC of chapter 63 shall be enrolled in the vendor payment system upon admittance into the applicable tax credit program.”