S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3079

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 2, 2015
                               ___________

Introduced  by Sens. KRUEGER, MONTGOMERY, PARKER, STAVISKY -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on Finance

AN ACT to amend the executive law, in relation to enacting the automated
  sales suppression act

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Short  title. This act shall be known and may be cited as
the "automated sales suppression act".
  S 2. The executive law is amended by adding a  new  section  170-c  to
read as follows:
  S 170-C. AUTOMATED SALES SUPPRESSION STUDY AND REPORT. 1. DEFINITIONS.
(A)  "AUTOMATED SALES SUPPRESSION DEVICE" OR "ZAPPER" SHALL MEAN A SOFT-
WARE PROGRAM,  CARRIED  ON  A  MEMORY  STICK,  REMOVABLE  COMPACT  DISC,
ACCESSED  THROUGH  AN INTERNET LINK OR ACCESSED THROUGH ANY OTHER MEANS,
THAT FALSIFIES THE ELECTRONIC RECORDS OF POINT-OF-SALE SYSTEMS  FOR  THE
PURPOSE OF TAX EVASION.
  (B)  "DEPARTMENT"  SHALL  MEAN  THE  STATE  DEPARTMENT OF TAXATION AND
FINANCE.
  (C) "ELECTRONIC CASH REGISTER" SHALL MEAN A DEVICE THAT KEEPS A REGIS-
TER OR SUPPORTING DOCUMENTS THROUGH THE MEANS OF AN ELECTRONIC DEVICE OR
COMPUTER SYSTEM DESIGNED TO RECORD TRANSACTION DATA FOR THE  PURPOSE  OF
COMPUTING,  COMPILING  OR  PROCESSING  RETAIL  SALES TRANSACTION DATA IN
WHATEVER MANNER.
  (D) "PHANTOM-WARE" SHALL MEAN A HIDDEN, PRE-INSTALLED OR INSTALLED  AT
A  LATER  TIME PROGRAMMING OPTION EMBEDDED IN THE OPERATING SYSTEM OF AN
ELECTRONIC CASH REGISTER OR HARDWIRED INTO THE ELECTRONIC CASH  REGISTER
THAT  CAN  BE  USED  TO CREATE A VIRTUAL SECOND TILL OR MAY ELIMINATE OR
MANIPULATE RECORDS THAT MAY OR MAY NOT BE PRESERVED IN  DIGITAL  FORMATS
TO REPRESENT THE TRUE OR MANIPULATED RECORD OF TRANSACTIONS IN THE ELEC-
TRONIC CASH REGISTER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05488-01-5
              

S. 3079                             2

  (E)  "SUPPORTING  DOCUMENTS" SHALL MEAN ANY RECEIPT, INVOICE OR REPORT
THAT PROVIDES A RECORD OF TRANSACTION DATA OR TRANSACTION REPORTS.
  (F)  "TRANSACTION  DATA"  SHALL INCLUDE ITEMS PURCHASED BY A CUSTOMER,
THE PRICE FOR EACH ITEM, A TAXABILITY DETERMINATION  FOR  EACH  ITEM,  A
SEGREGATED TAX AMOUNT FOR EACH OF THE TAXED ITEMS, THE AMOUNT OF CASH OR
CREDIT  TENDERED, THE NET AMOUNT RETURNED TO THE CUSTOMER IN CHANGE, THE
DATE AND TIME OF THE PURCHASE,  THE  NAME,  ADDRESS  AND  IDENTIFICATION
NUMBER  OF  THE  VENDOR, AND THE RECEIPT OR INVOICE NUMBER OF THE TRANS-
ACTION.
  (G) "TRANSACTION REPORTS" SHALL MEAN A  REPORT  DOCUMENTING,  BUT  NOT
LIMITED  TO, THE SALES, TAXES COLLECTED, MEDIA TOTALS AND DISCOUNT VOIDS
AT AN ELECTRONIC CASH REGISTER THAT IS PRINTED ON CASH REGISTER TAPE  AT
THE  END  OF  A DAY OR SHIFT, OR A REPORT DOCUMENTING EVERY ACTION AT AN
ELECTRONIC CASH REGISTER THAT IS STORED ELECTRONICALLY.
  (H) "TECHNOLOGICAL COUNTERMEASURES" SHALL MEAN ANY ELECTRONIC  DEVICE,
COMPUTER  SYSTEM  OR  SOFTWARE  PROGRAM  DESIGNED  TO ASSIST AUDITORS IN
DETECTING THE PRESENCE AND/OR USE OF ZAPPERS OR  PHANTOM-WARE  IN  ELEC-
TRONIC CASH REGISTERS, BY VERIFYING THE AUTHENTICITY OF TRANSACTION DATA
RECORDED IN SUPPORTING DOCUMENTS AND/OR TRANSACTION REPORTS.
  2.  THE  DEPARTMENT  IS  HEREBY  AUTHORIZED  AND DIRECTED TO PREPARE A
COMPREHENSIVE  STUDY  DOCUMENTING  THE   PREVALENCE   OF   ZAPPERS   AND
PHANTOM-WARE WITHIN THE STATE'S RETAIL INDUSTRY, FOCUSING ON CASH TRANS-
ACTIONS,  BUT  NOT  LIMITED  TO,  THE USE OF ZAPPERS AND PHANTOM-WARE AT
RESTAURANTS, MOVIE  THEATERS,  HAIRDRESSERS,  AMUSEMENT  PARKS,  GROCERY
STORES, CONVENIENCE STORES OR ANY OTHER RETAIL ESTABLISHMENT WHERE THERE
IS A HIGH VOLUME OF CASH TRANSACTIONS.
  (A)  SUCH  STUDY  SHALL  ALSO  PROVIDE AN ESTIMATE ON THE TOTAL FISCAL
IMPACT THAT ZAPPERS AND PHANTOM-WARE HAVE ON THE STATE, FOCUSING ON, BUT
NOT LIMITED TO, THE ESTIMATED TOTAL REDUCTION IN GROSS RETAIL SALES,  AS
WELL  AS  THE  ESTIMATED TOTAL AMOUNT OF TAX REVENUES THE STATE DOES NOT
COLLECT BECAUSE OF THE FALSIFIED TRANSACTION DATA  PRODUCED  BY  ZAPPERS
AND PHANTOM-WARE.
  (B)  SUCH STUDY SHALL CONSIDER TECHNOLOGICAL COUNTERMEASURES THE STATE
COULD EMPLOY OR REQUIRE BUSINESSES TO USE TO ENHANCE  THE  DETECTION  OF
ZAPPERS  OR  PHANTOM-WARE USED IN OR INSTALLED IN ELECTRONIC CASH REGIS-
TERS. THE DEPARTMENT IS AUTHORIZED AND DIRECTED TO INCLUDE IN THIS STUDY
ITS RECOMMENDATION OF WHICH TECHNOLOGICAL COUNTERMEASURE  WOULD  BE  THE
MOST EFFECTIVE AND COST-EFFICIENT.
  3.  THE DEPARTMENT SHALL SUBMIT THE FINDINGS OF SUCH STUDY IN A REPORT
TO THE DIRECTOR OF THE DIVISION OF THE BUDGET, THE  TEMPORARY  PRESIDENT
OF  THE  SENATE, THE SENATE MINORITY LEADER, THE SPEAKER OF THE ASSEMBLY
AND THE ASSEMBLY MINORITY LEADER NO MORE THAN FIVE  HUNDRED  FORTY  DAYS
AFTER THE ENACTMENT OF THIS SECTION.
  4.  NOTHING  IN THIS SECTION SHALL PERMIT OR REQUIRE THE DEPARTMENT TO
INCLUDE IN THE REPORT DESCRIBED IN SUBDIVISION TWO OF THIS  SECTION  ANY
LISTING  OF  ANY INDIVIDUAL BUSINESSES' TAX LIABILITY, PROFITS, SALES OR
LOSSES OR ANY INFORMATION PERTAINING TO ANY ON-GOING  ADMINISTRATIVE  OR
CRIMINAL  INVESTIGATION BY THE DEPARTMENT, U.S. INTERNAL REVENUE SERVICE
OR ANY LAW ENFORCEMENT ENTITY INTO THE USE, INSTALLATION, MANUFACTURING,
OR LEASING OF ZAPPERS OR PHANTOM-WARE.
  S 3. This act shall take effect on the ninetieth day  after  it  shall
have become a law.