Print Print
  • Acts
  • 2002
  • Chapter 364 AN ACT MAKING CERTAIN AMENDMENTS TO THE GENERAL APPROPRIATION ACT FOR FISCAL YEAR 2003 AND CERTAIN OTHER LAWS.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:


SECTION 1. Section 2EEE of chapter 29 of the General Laws, inserted by section 40 of chapter 184 of the acts of 2002, is hereby amended by adding the following sentence:- The comptroller shall certify payments, including payments during the accounts payable period, in anticipation of revenues, including receivables due and collectibles during the months of July and August, from the fund for the purpose of making the expenditures authorized under said sections 25 and 26 of said chapter 118G or any other special law.

SECTION 2. Section 1 of chapter 62 of the General Laws is hereby amended by striking out paragraph (c), as amended by section 1 of chapter 186 of the acts of 2002, and inserting in place thereof the following paragraph:-

(c) "Code", the Internal Revenue Code of the United States, as amended on January 1, 1998 and in effect for the taxable year; provided, however, that Code shall mean the Code as amended and in effect for the taxable year for sections 62(a)(1), 72, 274(m), 274(n), 401 through 420, inclusive, 457, 529, 530, 3401 and 3405 but excluding sections 402A and 408(q).

SECTION 3. Paragraph (2) of subsection (a) of section 2 of said chapter 62, as so appearing, is hereby amended by striking out subparagraph (L), added by section 4 of said chapter 186.

SECTION 4. Said section 2 of said chapter 62 is hereby further amended by striking out subsection (c), as amended by section 7 of said chapter 186, and inserting in place thereof the following subsection:-

(c) Part A adjusted gross income shall be the Part A gross income less the following deductions in the following order:

(1) Any excess of the deductions allowable under subsection (d) over the Part B gross income, but the amount deductible under this paragraph shall only reduce an item of Part A gross income which is effectively connected with the active conduct of a trade or business of the taxpayer.

(2)(a) Losses from the sale or exchange of capital assets held for 1 year or less, provided that the excess, if any, of the Part A net capital loss for the year over the Part A net capital gains for the year, but not more than the amount allowed under paragraph (4) of this subsection, shall be applied against Part A interest and dividends; provided, however, that any remaining excess of the Part A net capital loss for the year shall be applied against capital gains included in Part C gross income after applying the excess of each class's net capital loss against the other classes' net capital gains in accordance with subparagraph (1) of paragraph (M) of subsection (e). For purposes of this subsection, any Part A net capital loss shall first be applied to any Class B net capital gain, then to any Class C net capital gain, then to any Class D net capital gain, then to any Class E net capital gain, then to any Class F net capital gain and then to any Class G net capital gain. If Part A net capital loss for the year exceeds the Part C net capital gain for the year, then the excess, if any, of Part A net capital loss shall be a Part A capital loss under this paragraph in the succeeding taxable year.

(b) The excess, if any, of the Part C net capital loss for the year over the Part C net capital gains for the year shall be applied against capital gains included in Part A gross income after applying the excess of each class's net capital loss against the other classes' net capital gain in accordance with subparagraph (1) of paragraph (M) of subsection (e) and after applying the excess of the Part A net capital loss against Part A interest and dividends, but not more than the amount allowed under paragraph (4), and Part C capital gains in accordance with subparagraph (a) of this paragraph. For purposes of this subparagraph, any Part A net capital gain shall first be offset by any Class B net capital loss, then by any Class C net capital loss, then by any Class D net capital loss, then by any Class E net capital loss, then by any Class F net capital loss and then by any Class G net capital loss. If Part C net capital losses for the year exceed the Part A net capital gain for the year, then the excess, if any, of Part C net capital losses over Part A net capital gain, but not more than the amount allowed under paragraph (4), shall be applied against any interest and dividends included in Part A gross income. The excess, if any, of the Part C net capital loss over the Part A net capital gain shall be a Part C capital loss in the succeeding taxable year.

(3) A deduction equal to 50 per cent of the gain income from the sale or exchange of property defined under section 408(m)(2) of the Code, as amended and in effect for the taxable year, and held for more than 1 year, after reduction by any losses in paragraph (2).

(4) Notwithstanding any other provisions of this chapter, not more than an aggregate amount of $2,000 in Part A capital loss and Part C capital loss shall be applied against any interest and dividends included in Part A gross income.

SECTION 5. Subsection (c) of said section 2 of said chapter 62, as most recently amended by section 4 of this act, is hereby amended by striking out paragraph (2) and inserting in place thereof the following paragraph:-

(2)(a) Losses from the sale or exchange of capital assets held for 1 year or less, provided that the excess, if any, of the Part A net capital loss for the year over the Part A net capital gain for the year, but not more than the amount allowed under paragraph (4), shall be applied against Part A interest and dividends; provided, however, that any remaining excess of the Part A net capital loss for the year shall be applied against capital gains included in Part C gross income. If Part A net capital loss for the year exceeds the Part C net capital gain for the year, then the excess, if any, of Part A net capital loss, after accounting for any deduction against interest and dividend income, shall be a Part A capital loss under this paragraph in the succeeding taxable year.

(b) The excess, if any, of the Part C net capital losses for the year over the Part C net capital gains for the year shall be applied against capital gains included in Part A gross income. If Part C net capital losses for the year exceed the Part A net capital gain for the year, then the excess, if any, of Part C net capital losses over Part A net capital gain, but not more than the amount allowed under paragraph (4), shall be applied against any interest and dividends included in Part A gross income, provided that the aggregate amount of the deduction allowed in this subparagraph against any interest and dividends shall not be more than the amount allowed under paragraph (4). The excess, if any, of the Part C net capital loss over the Part A net capital gain, after accounting for any deduction against interest and dividend income, shall be a Part C capital loss in the succeeding taxable year.

SECTION 6. Said section 2 of said chapter 62 is hereby further amended by striking out subsection (e), as amended by section 8 of chapter 186 of the acts of 2002, and inserting in place thereof the following subsection:-

(e) Part C adjusted gross income shall be the Part C gross income comprised of the following classes as adjusted:

(A) Class B net gain which equals the excess of Class B gains over the losses from the sale or exchange of capital assets held for more than 1 year but less than or equal to 2 years.

(B) Class B net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 1 year but less than or equal to 2 years over the Class B gains.

(C) Class C net gain which equals the excess of Class C gains over the losses from the sale or exchange of capital assets held for more than 2 years but less than or equal to 3 years.

(D) Class C net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 2 years but less than or equal to 3 years over the Class C gains.

(E) Class D net gain which equals the excess of Class D gains over the losses from the sale or exchange of capital assets held for more than 3 years but less than or equal to 4 years.

(F) Class D net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 3 years but less than or equal to 4 years over the Class D gains.

(G) Class E net gain which equals the Class E gains over the losses from the sale or exchange of capital assets held for more than 4 years but less than or equal to 5 years.

(H) Class E net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 4 years but less than or equal to 5 years over the Class E gains.

(I) Class F net gain which equals the Class F gains over the losses from the sale or exchange of capital assets held for more than 5 years but less than or equal to 6 years.

(J) Class F net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 5 years but less than or equal to 6 years over the Class F gains.

(K) Class G net gain which equals the Class F gains over the losses from the sale or exchange of capital assets held for more than 6 years.

(L) Class G net loss which equals the excess of losses from the sale or exchange of capital assets held for more than 6 years over the Class G gains.

(M)(1) Each class of net capital loss for the year shall be applied against the other class's net capital gains included in Part C gross income in the following order: Class B net capital gain shall first be offset by any Class C net capital loss, then by any Class D net capital loss, then by any Class E net capital loss, then by any Class F net capital loss and then by any Class G net capital loss. Class C net capital gain shall first be offset by the remainder of any Class B net capital loss, then by the remainder of any Class D net capital loss, then by the remainder of any Class E net capital loss, then by the remainder of any Class F net capital loss and then by the remainder of any Class G net capital loss. Class D net capital gain shall first be offset by the remainder of any Class B net capital loss, then by the remainder of any Class C net capital loss, then by the remainder of any Class E net capital loss, then by the remainder of any Class F net capital loss and then by the remainder of any Class G net capital loss. Class E net capital gain shall first be offset by the remainder of any Class B net capital loss, then by the remainder of any Class C net capital loss, then by the remainder of any Class D net capital loss, then by the remainder of any Class F net capital loss and then by the remainder of any Class G net capital loss. Class F net capital gain shall first be offset by the remainder of any Class B net capital loss, then by the remainder of any Class C net capital loss, then by the remainder of any Class D net capital loss, then by the remainder of any Class E net capital loss and then by the remainder of any Class G net capital loss. Class G net capital gain shall first be offset by the remainder of any Class B net capital loss, then by the remainder of any Class C net capital loss, then by the remainder of any Class D net capital loss, then by the remainder of any Class E net capital loss and then by the remainder of any Class F net capital loss. The amount of any class of net capital loss that remains after the foregoing offsets, reduced by the amount of such loss that is deducted under subparagraph (b) of paragraph (2) of subsection (c), shall be Part C capital loss within the same class in the succeeding taxable year.

(2) Class B, C, D, E, F and G net gains shall be reduced by any remaining excess of the deductions allowable under subsection (d) over the Part B gross income, after applying the excess of each class's net capital loss against other class's net capital gains in accordance with subparagraph (1) and after applying such excess Part B deductions against Part A gross income in accordance with paragraph (1) of subsection (c). Any Part B deductions in excess of Part B income shall first be applied to Class B net gains, then to Class C net gains, then to Class D net gains and then to Class E net gains. The amount deductible under this paragraph shall not exceed the amount of Part C gross income which is effectively connected with the active conduct of a trade or business of the taxpayer. Excess Part B deductions shall not be applied to increase the amount of any net capital losses and may not reduce the amount of any net capital gain below zero. The resulting amount of net capital gain or net capital loss shall comprise Part C adjusted gross income.

(N) Where a taxpayer has any unused Class B net loss, Class C net loss, Class D net loss, Class E net loss, Class F net loss or Class G net loss on April 30, 2002, the aggregate amount of such net losses shall be taken into account after April 30, 2002 as a loss on the sale or exchange of a capital asset held for more than 1 year.

For purposes of this subsection, property acquired prior to January 1, 1996 shall be deemed to have been acquired on January 1, 1995 or on the date of actual acquisition, whichever is later.

Any excess net long-term capital loss from property sold or exchanged prior to January 1, 1996 as determined under paragraph (2) of subsection (c) of section 2 of this chapter in effect prior to January 1, 1996, shall be treated as Class B losses for purposes of paragraphs (A) and (B) of this subsection. Any excess net short-term capital loss from property sold or exchanged prior to January 1, 1996 as determined under paragraph (2) of subsection (c) of section 2 of this chapter in effect prior to January 1, 1996, shall be treated as losses from the sale or exchange of capital assets held for 1 year or less for purposes of paragraph (2) of subsection (c).

SECTION 7. Said section 2 of said chapter 62 of the General Laws is hereby further amended by striking out subsection (e), as most recently amended by section 6 of this act, and inserting in place thereof the following subsection:-

(e) Part C adjusted gross income shall be the Part C gross income less the following deductions:

(1) Losses from the sale or exchange of capital assets held for more than 1 year. The amount of any class of net capital loss reduced by the amount of such loss that is deducted under subparagraph (b) of paragraph (2) of subsection (c), shall be Part C capital loss in the succeeding taxable year.

(2) Part C net gains shall be reduced by any remaining excess of the deductions allowable under subsection (d) over the Part B gross income after applying such excess Part B deductions against Part A gross income in accordance with paragraph (1) of subsection (c). The amount deductible under this paragraph shall not exceed the amount of Part C gross income which is effectively connected with the active conduct of a trade or business of the taxpayer. Excess Part B deductions shall not be applied to increase the amount of any net capital losses and may not reduce the amount of any net capital gain below zero. The resulting amount of net capital gain shall comprise Part C adjusted gross income.

(3) Where a taxpayer has any unused Class B net loss, Class C net loss, Class D net loss, Class E net loss, Class F net loss or Class G net loss on April 30, 2002, the aggregate amount of such net losses shall be taken into account after April 30, 2002 as a loss on the sale or exchange of a capital asset held for more than 1 year.

SECTION 8. Section 5 of said chapter 62, as appearing in the 2000 Official Edition, is hereby amended by striking out subsection (c).

SECTION 9. Section 3 of chapter 62C of the General Laws, as so appearing, is hereby amended by adding the following paragraph:-

In any year in which the commissioner of public safety delivers to the commissioner of revenue by September 30, or such later date as may be agreed upon, sufficient copies of missing children inserts or pamphlets in a form, size and weight as prescribed by the commissioner not to exceed 4 pages, and in a form suitable for mailing, and in accordance with such other reasonable specifications as he may prescribe, the commissioner of revenue shall cause such inserts to be sent by mail to each taxpayer to whom the commissioner of revenue intends to mail a copy of the current year's personal income tax return form or booklet. All costs associated with the production and duplication of such inserts shall be borne by the commissioner of public safety and all costs associated with the insertion and mailing of such inserts shall be borne by the commissioner of revenue. The commissioner of revenue may promulgate such regulations or other guidelines as he deems necessary.

SECTION 10. Section 2A of chapter 65C of the General Laws, as amended by section 28 of chapter 186 of the acts of 2002, is hereby further amended by striking out subsections (e) and (f) and inserting in place thereof the following subsection:-

(e) For the estate of decedents dying on or after January 1, 2003, all references and provisions in this chapter to the Internal Revenue Code or Code, unless the context clearly indicates otherwise, shall be to the Code as in effect on December 31, 2000.

SECTION 11. Subsection (h) of section 5 of chapter 128A of the General Laws, is hereby amended by striking out the words "(A) To pay, subject to appropriation, the state racing commission's expenses in excess of its appropriation for the costs to conduct each racing performance held by a racing meeting licensee, including racing meeting licensees conducting racing in conjunction with an agricultural fair; but said expenditure shall not exceed $600,000 in a fiscal year.", as appearing in section 12 of chapter 300 of the acts of 2002, and inserting in place thereof the following sentence:- (2A) To pay, without further appropriation, the state racing commission's expenses in excess of its appropriation for the costs to conduct each racing performance held by a racing meeting licensee, including a racing meeting licensee conducting racing in conjunction with an agricultural fair; but said expenditures shall not exceed $1,080,976 per fiscal year.

SECTION 11A. Section 42 of chapter 139 of the acts of 2001 is hereby amended by striking out the fourth sentence and inserting in place thereof the following 2 sentences:- The chair of the state racing commission shall act as chair of the special commission, which shall file its report with the joint committee on government regulations on or before February 28, 2003. If the special commission fails to meet, the state racing commission shall prepare the report instead.

SECTION 12. Section 355 of chapter 159 of the acts of 2000, as amended by section 18 of chapter 300 of the acts of 2002, is hereby further amended by striking out the last sentence.

SECTION 13. Chapter 177 of the acts of 2001 is hereby amended by striking out section 80 and inserting in place thereof the following section:-

Section 80. Section 7A shall take effect on June 30, 2007.

SECTION 14. Chapter 96 of the acts of 2002 is hereby amended by striking out section 10 and inserting in place thereof the following section:-

Section 10. Section 3 shall take effect for returns filed on or after January 1, 2002 and shall cease to be effective for returns filed on or after January 1, 2005.

SECTION 15. Item 2000-0100 of section 2 of chapter 184 of the acts of 2002 is hereby amended by adding the following words:- ; provided further, that funds may be expended for space rental costs for departments within the executive office of environmental affairs, including the office of the secretary of environmental affairs, the department of environmental management, the department of fisheries, wildlife, and environmental law enforcement, and the department of food and agriculture.

SECTION 16. Item 7030-1000 of said section 2 of said chapter 184 is hereby amended by adding the following words:- ; and provided, further, that up to $80,000 may be expended from this item for the home-based parenting and family literacy program known as the parent-child home program to serve low-income families.

SECTION 17. Item 7066-0000 of said section 2 of said chapter 184 is hereby amended by adding the following words:- ; and provided, further, that the expenditure of capital funds by the institutions of higher education or by the division of capital asset management and maintenance for capital adaptation and renewal at the institutions of higher education may be applied to said 5 per cent requirement.

SECTION 18. Notwithstanding any general or special law to the contrary, the comptroller may revise the percentages established in the Transitional Aid to Needy Families Fund fund split contained within an item of appropriation in state fiscal year 2003 in order to maximize federal reimbursement and to meet federal maintenance of effort requirements consistent with the requirements of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and chapter 5 of the acts of 1995. Said percentages shall be based upon certification to the comptroller by the department of transitional assistance that they reflect the appropriate distribution of actual expenditures necessary to achieve the said purposes. Said percentages shall be subject to the prior approval of the secretary of administration and finance. The comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance any changes made to the fund splits in relation to this section within 10 days of said changes. Within 60 days of the end of the state fiscal year, the comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance on the final fund split for each item of appropriation with a Transitional Aid to Needy Families Fund fund split and the final spending corresponding to each such fund split.

SECTION 19. Notwithstanding any general or special law to the contrary, the comptroller may revise the percentages established in the Child Care Fund fund split contained within an item of appropriation in state fiscal year 2003 in order to maximize federal reimbursement and to meet federal maintenance of effort requirements. Said percentages shall be based upon certification to the comptroller by office of child care services that they reflect the appropriate distribution of actual expenditures necessary to achieve the said purposes. Said percentages shall be subject to the prior approval of the secretary of administration and finance. The comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance any changes made to the fund splits in relation to this section within 10 days of said changes. Within 60 days of the end of the state fiscal year, the comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance on the final fund split for each item of appropriation with a Child Care Fund fund split and the final spending corresponding to each such fund split.

SECTION 20. Notwithstanding any general or special law to the contrary, the comptroller may revise the percentages established in the Social Services Fund fund split contained within an item of appropriation in state fiscal year 2003 in order to maximize federal reimbursement and to meet federal maintenance of effort requirements. Said percentages shall be based upon certification to the comptroller by the department of social services that they reflect the appropriate distribution of actual expenditures necessary to achieve the said purposes. Said percentages shall be subject to the prior approval of the secretary of administration and finance. The comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance any changes made to the fund splits in relation to this section within 10 days of said changes. Within 60 days of the end of the state fiscal year, the comptroller shall report to the house and senate committees on ways and means and the secretary of administration and finance on the final fund split for each item of appropriation with a Social Services Fund fund split and the final spending corresponding to each such fund split.

SECTION 21. Sections 2, 3, 4, 6 and 8 shall be effective for tax years beginning on or after January 1, 2002.

SECTION 22. Sections 5 and 7 shall be effective for tax years beginning on or after May 1, 2002, and for the portion that begins on May 1, 2002 of any taxable year beginning on or after January 1, 2002 and before May 2, 2002.

SECTION 23. Section 10 shall be effective with respect to estates of decedents dying on or after January 1, 2003.

SECTION 24. Except as otherwise provided, this act shall take effect as of July 1, 2002. `t+4 `tuc ENDORSEMENTS FOLLOW ON PAGE 12 `t+99

Approved October 30, 2002.