BILL NUMBER: S9441

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the state finance law and the cannabis law, in relation
to authorizing a qui tam proceeding for civil violations of the cannabis
law

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would permit a person, known as a qui tam plaintiff, to bring
a civil action under the New York False Claims Act for violations of
general prohibitions and restrictions of cannabis law.

 
SUMMARY OF PROVISIONS:

Section 1. Subdivision 1 of § 189 of the state finance law is amended to
include new paragraph (i) for violations of any civil provisions of §
125 of the cannabis law. Paragraph (h) of subdivision 1 is further
amended to provide, however, that the civil penalty for violations of
the cannabis law shall be as set forth in § 132 of the cannabis law.
              

Section 2. Subdivision 5 of § 138-a is amended to allow for an action or
proceeding authorized under § 189 of the state finance law.

Section 3. Effective date.

 
JUSTIFICATION:

The New York False Claims Act permits civil actions to be brought by the
government for certain fraudulent acts. These acts include, but are not
limited to, knowingly present false or fraudulent claims for payment or
approval, knowingly make a false record or statement material to an
obligation to pay or transmit money or property to the state or local
government and concealing and improperly avoiding or decreasing an obli-
gation to pay or transmit money or property to the state or a local
government.

If the government declines to participate in the civil action based on a
violation of § 189 of the state finance law or declines to authorize a
local government to participate in the civil action then a person, known
as a qui tam plaintiff, may bring a civil action for a violation of §
189 of the state finance law on behalf of the person and the people of
New York or a local government.

This bill will allow a qui tam plaintiff to bring a civil action for
violations of any civil provision that are included within the general
prohibitions and restrictions of § 125 of the cannabis law.  Empowering
everyday New Yorkers with tools against illegal cannabis operators,
whose conduct is both unlawful and inundates our communities with
untested, unregulated and potentially deadly cannabis, is vital as we
continue our enforcement efforts to combat illegal cannabis. Illegal
cannabis operators undermine the legal cannabis industry in New York,
whose cannabis processors, cultivators, distributors and retail dispen-
sary licensees followed the rules only see their hard work damaged by
those who violate the cannabis law. New York must lead when legitimate
business is compromised by the conduct of bad actors.

The bill expands the ability for the government to bring an action or
proceeding authorized under § 189 of the state finance law for action
for unlawful business practices relating to cannabis under § 138-a of
the cannabis law. Authorizing a qui tam plaintiff to bring a civil
action for violations of cannabis law under the New York False Claims
Act adds another layer of legal protection for everyday New Yorkers.

 
PRIOR LEGISLATIVE HISTORY:'

New bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately.