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Archived: Legislature, Governor Approve Flood of Business-Related Bills

Posted on August 6, 2012

Massachusetts lawmakers sent a flurry of mostly positive business-related legislation to Governor Deval Patrick last week to go with the initiative to control health insurance costs.

PatrickSignsEnergyBill.SmallThe House and Senate passed an energy bill, an economic development bill and a compromise “right to repair” bill in the final hours of formal legislative sessions Tuesday night. Legislators also advanced two measures opposed by AIM – one moving private child care providers into a union and an ambulance payment bill that would add $80 million in health care costs to businesses and consumers.

The governor signed the energy, economic development and child care measures last week. He is expected to approve the health care bill this morning.

Also significant were the bills that the Legislature elected not to approve, including a measure that would have mandated that employers provide seven sick days to workers. Lawmakers also declined to repeal or restrict non-compete agreements that protect the intellectual property of employers.

“The Legislature and Governor Patrick placed a premium on maintaining a business climate that encourages employers to create jobs,” said John Regan, Executive Vice President of Government Affairs for AIM.

“We do not agree on everything, but acknowledge that the governor and Legislature have balanced the budget without increasing taxes and wisely concentrated on issues that will help our unemployed fellow citizens get back to work.”

The flow of bills from the Legislature to the governor did not stop when formal sessions ended at midnight Tuesday. Lawmakers working during informal sessions on Thursday approved two expensive insurance mandates – one requiring insurance companies to cover hearing aids for all children and adults under age 21 and a second requiring coverage of treatment for cleft palates.

The bills of interest to employers include:

  • Energy – The legislation includes a provision supported by AIM that would resolve inequalities under which commercial and industrial ratepayers have paid an increased percentage of total electricity costs despite using a declining share of power. The bill would also require utilities to procure competitively by 2016 an additional 4 percent, or 7 percent total, of their peak-load power needs from renewable sources through long-term contracts of 10 to 20 years. The annual payment for utilities entering into those long-term contracts for renewable energy would drop from 4 percent to 2.75 percent.
  • Economic Development – The measure would improve the schedule for companies making estimated tax payments, authorize investments in research and development, provide tax-credits to start-up enterprises, and suspend the sales tax on the weekend of August 11-12. The measure also creates a $50 million fund to help local universities and nonprofit institutions compete for federal research and development money. Lawmakers removed a provision that would have expanded the bottle bill to non-carbonated beverage containers.
  • Right to Repair – The final legislation protects trade secrets and intellectual property (IP). AIM’s objection to the initial bill was driven by language that would have threatened existing legal protections for IP and trade secrets. Because the legislation passed after the July 3 deadline, Massachusetts residents will still see the Right to Repair questions on the ballot in the November elections. To educate the public about this compromise, all parties that signed the agreement letter have agreed to run ads indicating that the measure is unnecessary.
  • Child Care – The bill would move private-sector child care providers into a union collective bargaining unit.  AIM considers the bill a clear and unprecedented intrusion by government into the private sector.
  • Ambulance Payment – Overall added costs from this provision would be at least $80 million. The bill would codify this inequity with the practical effect of 300 percent of Medicare becoming the floor for all payments, while providing a disincentive for providers to contract with insurers at more reasonable rates. This is clearly contrary to the intent of cost-control efforts.

AIM opposed the cleft palate and hearing aid bills because they represent the latest in a steady stream of health insurance mandates that will exacerbate the health cost crisis for small employers. State-mandated benefits account for $1.3 billion or 12 cents of every dollar paid for health insurance.

“At a time when employers and the state are struggling with rising health care costs and the Legislature has passed payment reform legislation to contain the cost of health care, adopting new mandated benefits runs counter to those efforts,” Regan said.