Gov. Jay Nixon signed legislation Monday prohibiting welfare recipients from using those funds at liquor stores, casinos and strip clubs.
The newly signed law restricts the use of Temporary Assistance for Needy Families cash benefits at such businesses, as well as for items marketed solely for adults. Penalties for misusing public assistance funds also will increase.
Nixon, a Democrat, said the restrictions will help protect taxpayers.
"By strengthening existing protections for taxpayers and children, and cracking down on those who misuse public funds, this bill will help ensure these programs continue to provide temporary support for needy families and children in a proper and accountable way," Nixon said.
Missouri needed to enact welfare spending restrictions this year to comply with federal guidelines or risk losing 5 percent of the program's funding. The newly approved law takes effect Aug. 28.
Welfare cash benefits are distributed to recipients through electronic benefit transfer cards that operate similar to credit cards, and are also used to access federal food stamp benefits.
The legislation bars the use of the cards at the prohibited locations. The measure passed the Senate 33-0 and House 110-36.
Supporters in the Legislature said the measure would help to prevent fraud and abuse in the welfare system.
House Democrats, many of whom opposed the legislation, said it limits where people can shop and noted that some liquor stores also sell food. The restrictions apply to businesses that "exclusively or primarily" sell liquor.
In addition to restrictions on where benefits can be used, the measure also deals with penalties for misuse.
Recipients who repeatedly spend benefits improperly would face steeper criminal penalties. Existing law makes it a misdemeanor to spend benefits on prohibited items with a face value of less than $500, with a maximum punishment of up to one year in jail. Under the signed law, a second violation now will be a felony that carries a prison sentence of up to four years.
Business owners that sell prohibited items to welfare recipients will also face fines, ranging from up to $500 for the initial offense, between $500 and $1,000 for the second instance and at least $1,000 after that.
The legislation requires state officials to submit a report by Dec. 1 examining analytical modeling methods for detecting fraud. The report to lawmakers and Nixon is to detail possible benefits, limitations and the estimated costs for adopting analytical modeling-based methods.