Here’s a Summary of the Legislature’s 2019-2020 Session
Budget, Tax, & Finance
Health Care Costs
HR & Employment Law
| January 11, 2021
By: Brooke Thomson
The Massachusetts Legislature ended an extended 2019-2020 session on January 5 having passed significant laws dealing with everything from economic development to transportation to health care.
What will the new laws mean to employers? And how will they influence the ability of the commonwealth’s economy to recover in the wake of the COVID-19 pandemic?
The AIM Government Affairs team has developed the following summary:
H. 5250, An Act enabling partnerships for growth
- 11A Report
- House 143-4; Senate 40-0
- Totals $626.5 million, an increase from the $450 million originally considered in July.
- Pending Governor Baker’s signature
The final economic development package enacted by the House and Senate omits patent-troll language. Over the past several legislative sessions including the past two years, AIM has worked with experts in the business community to file legislation to address the concerns related to patent trolling and to ensure the legitimate use of patents. However, the language that was contained in the final comprise legislation raised concerns that the language would ultimately inhibit legitimate patent claims for companies and institutions.
Language instituting legalized sports betting was similarly excluded from the final bill.
Governor Charlie Baker’s housing choice initiative remained intact in final language allowing local zoning boards a simple majority vote to change zoning bylaw restrictions with the goal of creating 135,000 additional housing units by 2025 with an emphasis around the Greater Boston Area.
The bill caps third-party food delivery fees at 15 percent of the total restaurant order, although the cap only applies if the restaurant in question has fewer than 25 locations. Food-delivery companies have voiced concerns that AIM is tracking.
Additional business-related policy included in the Economic Development bill include:
- Paid Family Medical Leave: Legislation clarifies that taking family or medical leave does not affect an employee’s right to accrue vacation/sick time, bonuses, advancement or other employment benefits; requires retail employers to pay employees time and a half holiday pay for working on New Year’s Day, Indigenous People’s Day/Columbus Day and Veterans Day.
- Minority and Women Enterprise Study – a special commission to identify ways to grow minority and women businesses in public construction.
- Future of Work Commission – a special commission to conduct a comprehensive study on the effects of technological advancements (AI, automation, new forms of data etc.) on the overall economy, businesses and workforce.
The bill also contains multiple binding provisions:
- COVID-19 State Payroll Protection Program: $30 million for the Massachusetts Growth Corporation (MGCC) to provide small business loans to those impacted by the COVID-19 pandemic to pay employee payroll, mortgage interest, rent, utilities and interest on obligations, similar to the federal PPP.
- MGCC Microbusiness Grants: $25 million for the Massachusetts Growth Capital Corporation grant program for micro-businesses and low-to-moderate income entrepreneurs starting or expanding a new business.
- Massachusetts Technology Collaborative: $10 million in matching grants to support collaboration between Massachusetts manufacturers and non-profits, colleges/universities, and other public or quasi-public entities.
- Massachusetts Broadband Incentive Fund: $5 million for maintenance of broadband infrastructure owned by the Massachusetts Technology Park Corporation.
- Rural Community Development & Infrastructure Grants: $20 million competitive grant to support community development, infrastructure projects, and climate resilience initiatives in rural and/or small towns.
- Employment Social Enterprise Capital Grant Program: $27.7 million for the establishment of said grant program to be administered by EOHED.
- Vocational School Expansion Grants: $15 million for vocational technical schools capital grants to expand capacities and reduce wait lists.
- Higher Education Workforce Grants: $15 million program administered by the Department of Higher Education to support career-oriented initiatives at community colleges.
- Local Economic Development Projects: $102.3 million for local economic development projects.
- Site Readiness Program: $15 million administered by MassDevelopment to continue making sites ready for development through site assembly and assessment, permitting, etc.
- Restaurant COVID-19 Grants: $20 million for a program administered by EOHED to provide financial and capital assistance to restaurants impacted by the pandemic.
- House 146-0; Senate 39-1 (Fattman dissent)
- Totals $16.5 billion
- Pending Governor Baker’s signature
Final language does not include any changes to corporate minimum tax structure following extensive and successful advocacy done by AIM and others. Similarly, the bill does not include regional transportation ballot initiatives on which AIM and the business community voiced concern because it would set a dangerous precedent by setting up a patchwork of varying tax-rates on businesses and employers across the state (Globe Article).
Additional business-related policy included in the Transportation bill include:
- Introduces a new TNC fee structure increasing rates for Uber and Lyft services from 20 cents per ride of any type to 40 cents per shared ride, $1.20 per non-shared ride, and $2.20 per non-shared ride in a luxury vehicle. A portion of all revenues will be directed to the MBTA and regional transit authorities. The language was in neither the House nor Senate version of transportation bonding but was passed by the House early last year in a separate transportation tax package and by the Senate through the FY21 budget process.
- Establishes a Roadway and Congestion Pricing Commission to be appointed by the governor, to “study and make recommendations on the development and deployment of comprehensive and regionally-equitable roadway pricing and congestion pricing mechanisms” including on greater Boston metropolitan area roadways, major bridges and interstate highways near state borders.
- Requires the MBTA to implement a low-income fare program; those who fail to pay T fares will no longer be subject to arrest.
The bill also contains multiple binding provisions:
- Funding for capital costs associated with preconstruction, planning, and early work for the Allston Multimodal Project.
- $10 million for all-day commuter rail service.
- $50 million for the Framingham/Worcester line.
- $60 million for constructing high level platforms along the Franklin Line.
- $600,000 to implement a Bus Rapid Transit pilot (Acton to Cambridge).
- $5 million for a three-year transit grant matching program for communities partnering with regional transit authorities and engaging in public/private partnerships to support commuter services linking to the MBTA.
Senator Joseph Boncore, Senate chair of the Transportation Committee, hinted that the Legislature would revisit the question of raising taxes during the next legislative session.
“We know our roads are gripped by congestion; our transit system is burdened by a number of more than $10 billion in state of good repair. Local roads are in critical need of repair. Transportation is the largest source of greenhouse gas emissions. We’ve yet to make real investment since the Big Dig …,” he said.
“This does not mean the ills of our system do not persist. This isn’t a silver bullet but a further reminder that conversations will need to continue. Massachusetts needs a new deal on transportation. “
- House 145-9; Senate 38-2
- Pending Governor Baker’s signature
Includes AIM-supported priority eliminating solar net metering caps for companies that use solar energy to reduce their on-site load.
Sets new greenhouse-gas emissions limits to reach net-zero by 2050 with reduction goals every five years beginning in 2025. The 2030 goal must be at least 50 percent and the 2040 goal must be at least 75 percent lower than 1990. The Baker administration recently set the 2030 goal at 45 percent below 1990 because anything higher would be too costly and disruptive to the economy.
Mandatory sub-limits exist within each five-year limit for the following six priority sectors: electric power, transportation, commercial and industrial heating/cooling, residential heating/cooling, industrial processes, and natural-gas distribution/service.
The bill increases the Renewable Portfolio Standard (RPS) to 3 percent (from 2 percent) each year from 2025-2029, effectively requiring at least 40 percent of the electricity used in the state to come from renewable sources by 2030. It also increases off-shore wind procurement to 5,600 Megawatts (MW) from 3,200 MW.
The measure mandates promulgation of a local option “net zero stretch energy code,” including a definition of “net zero building.” It authorizes cities and towns to adopt such a code. To get the net-zero stretch energy code written, the bill shifts responsibility for energy code development to the Department of Energy Resources (DOER) and away from the Board of Building Regulations and Standards (BBRS).
- Chapter 260 of the Acts of 2020 signed into law Jan 1, 2021
- House 157-0; Senate unanimous
The bill permanently introduces telehealth to Massachusetts by requiring that insurance carriers, including MassHealth, cover telehealth services in any case in which the same service would be covered in-person and the use of telehealth is deemed appropriate. It removes restrictive prescription language originally included in House iteration of telehealth legislation as advocated for by AIM.
The measure mandates that behavioral telehealth services be permanently reimbursed at the same rate as in-person services. It requires primary care and chronic disease management services to be reimbursed at the same rate as their in-person counterparts for the next two years. All other health-care services delivered by telehealth are to be reimbursed at the same rate for 90 days after the end of the COVID-19 public health emergency.
The bill directs the Secretary of Health and Human Services (HHS) to work with the Health Policy Commission (HPC) the Center for Health Information and Analysis (CHIA) and the Division of Insurance (DOI) to recommend a process to establish a sustainable out-of-network rate by September 1, 2021. Providers and carriers are required to provide patients information on a provider’s network status before any scheduled, non-emergency procedure or treatment take place. Some insurers voiced support for a delayed response to network rates, while others preferred immediately clear rates and guidelines. AIM advocated for clarity between any future statute and the emergency rate orders from the governor that are currently in effect.
Finally, the legislation requires all carriers, including MassHealth, to cover COVID-19 related emergency, in-patient, and cognitive rehabilitation services, including diagnostic and lab testing, at both in-network and out-of-network facilities. It prohibits patient cost-sharing for COVID services. It requires coverage of all medically necessary COVID-19 testing, including for asymptomatic individuals whose coverage requirements will be further clarified under upcoming guidelines from the Secretary of HHS.
- Chapter 253 of the Acts of 2020 – signed by Gov on Dec. 31
- Re-enacted with governor’s amendments adopted (House vote 107-51)
The law establishes the Massachusetts Peace Officer Standards and Training (POST) Commission, the first of its kind in the state and the nation, composed mostly of civilians, to perform as an independent state entity with the power to establish policing standards, certify law enforcement officers, investigate allegations of misconduct, and suspend or revoke the certification of officers who violate its standards. The final bill ties qualified immunity protections to the licensing procedure and revokes immunity in any case where an officer is decertified.
Governor Baker’s amendments stipulated that the duties of the existing municipal police training committee remain under the administration/Executive Office of Public Safety and Security, and police will be allowed to perform facial recognition searches to assist with criminal cases after submitting a written request to the RMV, Massachusetts State Police, or the FBI. A separate amendment clarified due process concerns with respect to POST oversight.
The final law prohibits the use of chokeholds, requires the use of de-escalation tactics before physical force is used, and establishes limits on the use of rubber bullets, tear gas and dogs. It also requires an officer to intervene in most situations when another officer is using unnecessary physical force and to report said use of force.
It bans law enforcement agencies from engaging in racial profiling and restricts the use of no-knock warrants by requiring:
- That they be issued by a judge only if there is probable cause that the life of the officer or another person would be endangered without one; and
- The requesting officer must attest there is no reason to believe minor children or seniors over 65 are present in the home.
Fiscal Year 2021 Budget
The final budget did not include any broad-based taxes on resident businesses in the commonwealth. At the same time, it maintained critical workforce development funding, provided access to direct COVID-19 relief for municipalities, emphasized the need for greater diversity and inclusion in the state, and shielded vulnerable non-profit employers from astronomical unemployment compensation bills originally due in December.
Neither the House or Senate budget proposal for Fiscal Year 2021 (FY21) included “accelerated” or “real time” sales tax proposals and the legislature rejected various amendments inserting the concept into the budget. AIM had advocated for the existing prepayment language to allow estimates rather than actuals from the first 21 days of the month to calculate said prepayment, but this change was not adopted.
One of AIM’s consistent priorities ultimately accepted through the process was an extension of the original grace period on unemployment insurance (UI) payments offered to non-profit employers by another 180 days until June 30, 2021.
Final language retained the workforce development priorities of AIM’s membership: fully funding the commonwealth’s Workforce Training Fund ($25 million) and the Massachusetts Manufacturing Extension Partnership ($2 million) and programs like FORGE; and implementing a $4 million line item to aid in the development and operation of Career Technical Institutes in vocational technical schools.
Some $990,000 was allocated directly to the new Supplier Diversity Office to ensure businesses owned by women, minorities, veterans, persons with disabilities and members of the LGBTQ+ community are better able to compete for state contracts.
The budget includes significant funding for virus prevention and containment, including funds necessary to communicate information to persons with disabilities, $1 million for the planning, oversight and implementation of the commonwealth’s vaccine distribution program, and $1.975 million to help municipalities and local boards of health combat the pandemic in their immediate communities.
AIM tracked and monitored more than 200 COVID-related bills filed after the state of emergency was issued. The association successfully advised the Legislature on the following labor issues to ensure that business confidence and security in the state were prioritized.
Bills linked to the following AIM testimony in opposition were sent to study:
- Extended Sick Leave
- Extended Unemployment Benefits
- Workers’ Compensation Presumption
- Business Interruption Insurance
AIM supported legislation instituting liability protections for contractors/subcontractors and institutes of higher education, asking for such protections to be expanded to cover all essential businesses in operation throughout the pandemic. Neither matter was considered by the state legislature as business liability discussions gained traction at the federal level.
H.5206 filed by Governor Baker to freeze the unemployment tax schedule rates at Schedule E ($539/employee) rather than allow for a 60 percent automatic increase to Schedule G ($866/employee) and allowing the state to bond the UI trust fund deficit did not pass this session – the proposal died in the House Ways and Means Committee without being introduced on the floor for a vote.
AIM has reached out to the administration, which has confirmed plans to reintroduce language in the new legislative session.
AIM Advocacy on behalf of this legislation included:
- 17 Statement to entire legislature – includes a packet of all federal-level advocacy AIM has done requesting additional aid to state and local governments and direct relief to state unemployment trust funds.
- 18 AIM Member Blog
- 23 Testimony in Support to Labor and Workforce Development Committee