Putting Massachusetts on the Road to Opportunity

An innovative approach
to cultivating economic
growth in the
Commonwealth
 WHO WE ARE

Senate Republican Caucus Peter Durant

Ryan C. Fattman
Kimberly N. Ferguson
Bruce E. Tarr
Paul K. Frost
Robert L. Hedlund
Susan W. Gifford
Richard J. Ross
Sheila C. Harrington
Michael R. Knapik
Steven S. Howitt
Donald F. Humason, Jr.
House Republican Caucus
Randy Hunt
Kevin J. Kuros
Bradley H. Jones, Jr.
Steven L. Levy
George N. Peterson, Jr.
Marc T. Lombardo
Bradford R. Hill
James J. Lyons, Jr.
Elizabeth A. Poirier
Shaunna L. O’Connell
Vinny deMacedo
Keiko M. Orrall
Paul Adams
George T. Ross
F. Jay Barrows
Todd M. Smola
Richard Bastien
David T. Vieira
Matthew A. Beaton
Daniel K. Webster
Nicholas A. Boldyga
Daniel B. Winslow
Angelo L. D’Emilia
Donald H. Wong
Geoff Diehl

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 INTRODUCTION
Citizens throughout our state continue to face harsh economic circumstances and the
uncertainties of local, state and national economies that are struggling to recover from
one of the most difficult recessions in our nation's history. By taking decisive action
now, our state government can capture substantial economic opportunities and put our
Commonwealth on a path to sustainable economic growth and prosperity.

We realize that rebuilding a prosperous economy is a task that reaches well beyond
Beacon Hill. Last year Legislative Republicans engaged citizens, employers and
organizations on a statewide 2011 G.O.P. Jobs Tour. Since then we've been working to
turn ideas into a plan for action that will deliver real results. Now, we have taken our
fellow citizens’ ideas, concerns and insights and constructed a road map that can knock
down barriers to employment, incentivize investment in our economy, and put us on
track to getting the 240,000 unemployed residents in our state back to work.

We, as a legislative body, have a great opportunity to reform the way we create and
maintain employment opportunities, while at the same time making government run
more efficiently. The Republican Caucus has identified five targeted areas – business
regulations, education, energy, healthcare, and taxes - that are key to facilitating
economic growth in Massachusetts.

While we maintain that government cannot create jobs, we believe government can
provide the right environment for the private sector to grow and thrive. Our goal is to
alleviate the burdensome regulations and policies that drive entrepreneurs and business
away from our Commonwealth. Getting individuals back to work is our top priority.

The legislation outlined in this package may seem daunting to many, but it presents a
real opportunity for cultivating job creation and economic growth to improve the lives of
our fellow citizens. We must not be afraid to make the tough choices this legislative
session. We need to roll up our sleeves and do the people’s work – after all, it’s why
they elect us. We must be vigilant in our efforts to look for innovative ways to employ
and protect workers without stifling entrepreneurial opportunities for those who choose
to do business in our state.

By taking action on these specific steps, we can capture opportunities for growth, and
put Massachusetts on the road to sustainable economic recovery and prosperity.

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 FACT SHEET
High Business Costs
 The Chief Executive Group ranks Massachusetts the 6th worst state to do
business.
The Group’s study polled over 500 CEOs regarding criteria that included
taxation, regulation, workforce quality, and living environment.

 The Tax Foundation ranks Massachusetts as having the least favorable

Unemployment Insurance Schedule in the country.
According to the study, Massachusetts has the country’s highest
maximum UI tax rate, thus, the worst maximum UI tax rate, of 15.4%. As a
comparison, the lowest maximum tax rate is 5.4%.

 Moody’s Analytics ranks Massachusetts #1 on its Cost of Doing Business

Index.
According to Moody’s, business costs are a clear indicator of economic
prospects and have a direct correlation with the pace of economic growth.
This proves true in Massachusetts: the Commonwealth has a very low
average annual growth rate of nearly .5%, much lower than that of most
other states.

 Forbes Magazine ranks Massachusetts as the #1 most expensive state for

conducting business.
Forbes incorporates Moody’s Analytics Cost of Doing Business Index
which includes labor, energy and taxes in its rankings, as well as the new
state tax index from the Tax Foundation that looks at the tax burden on
businesses in each state across different industries.

 Associated Industries of Massachusetts Business Confidence Index is

currently at 52.8, weaker than a year ago, when the index registered a 55.2
reading.
A reading above 50 is considered “positive” - which this reading is barely
above.
According to Raymond Torto, Global Chief Economist at CB Richard Ellis
Group and chair of AIM's Board of Economic Advisors, "Massachusetts
employers are telling us that this continues to be a slow and halting
recovery."

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 Unemployment Rates

 Unemployment numbers do not offer an accurate picture of the true

employment issues facing citizens of the Commonwealth.
According to the Center of Labor Market Studies at Northeastern
University, the number of people who took part-time jobs because of an
inability to find a full-time job has grown fourfold since 2000.
In the first eight months of 2011, the number of “underemployed” workers
in Massachusetts increased by 18% to 200,500.

 The state-wide unemployment figures do not accurately represent the state

as a whole.
According to Steve Poftak of Pioneer Institute, the metro Boston area has
strong employment, while some other cities in the state, like Fall River,
New Bedford, and Lawrence have unemployment rates just under 10%.
Despite arguments that the Commonwealth has recovered from the Great
Recession, the current unemployment rate is 6.8% - nowhere close to pre-
Recession level of 4.4%.

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 OUR PRIORITIES
Business Regulations

 Reform Regulatory Processes for Efficiency

 Redefine Independent Contractor

 Create Certainty by Reinforcing the Massachusetts Endangered Species Act

 Streamline and Consolidate Local Permitting Process

 Reform Unemployment Insurance System

 Reform Treble Damages for Wage Violations

Education

 Incentivize Students to Complete Their College Degree by Creating a Finish-

Line Grant Program

 Empower Vocational Schools and Strengthen Collaboration with Community

Colleges to Meet Demand for Targeted Skills

 Establish a Student-Operated Early Investment Fund to Provide Funding for

Potential Start-Up Companies to Grow and Create Jobs

 Qualify Veterans for Licenses and/or Academic Credit at Public Institutions of

Higher Learning

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 Energy

 Require Competitive Bidding for Long-Term Renewable Energy Contracts

 Incorporate Small Renewable Hydroelectric Generation into the Renewable

Portfolio Standards (RPS)

 Incorporate Large Renewable Hydroelectric Generation into the Renewable

Portfolio Standards (RPS)

 Establish Energy Policy and Electricity Cost Reduction Commission and

Review Renewable Energy Portfolio Standards

 Require Economic Evaluation of All Proposed Legislative Changes to Energy

and Electricity Policies

Healthcare

 Reform Fair Share Contribution Requirements

 Increase the Full Time Equivalent (FTE) Threshold

 Reduce Healthcare Mandates

 Suspend the Prescription Drug Requirement from Minimum Creditable

Coverage Guidelines

 Reform Massachusetts’ Medical Malpractice Laws

Taxes

 Reduce Commercial Vehicle Registration Fee

 Establish a Job Creation Tax Credit

 Simplify and Eliminate Corporate Fees and Taxes

 Incentivize First-Time Homebuyer Savings Accounts

 Establish Angel Investment Tax Credit

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BUSINESS REGULATIONS
An Act Providing Regulatory Reform to Promote Job Growth

 Reform Regulatory Processes for Efficiency

Creates a new regulatory analysis report for a new regulation, if
requested by the Governor, Legislature, or 300 interested persons.
The report will provide a cost benefit analysis detailing why an agency
chose to adopt the new regulation rather than the alternative.
Increases the frequency of the mandatory review period for all agency
regulations, and empowers the Legislature to review regulations and
offer amendments.
Increases the transparency of the review and business impact
processes through public hearings and appropriate documentation.
Our goal with this provision is to provide greater inclusivity with the
business community and transparency in the process by reforming the
existing regulatory process.

 Redefine Independent Contractor

Modifies the definition of an independent contract to language
previously adopted by the Legislature in 1990.
Classifies an individual as an independent contractor if they can either
meet the first two requirements OR satisfy the third requirement.
1. The individual is free from control and direction in connection
with the performance of a service; AND
2. The service is performed outside of the usual course of
business for the employer; OR
3. The individual is customarily engaged in an independently
established trade, occupation, profession or business of the
same nature as that involved in the service performed.
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 Our goal with this provision is to help end employer confusion and
uncertainty by restoring the historic definition of independent
contractors, and bring Massachusetts back in line with other states.

 Create Certainty by Reinforcing the Massachusetts Endangered Species

Act
Prohibits the Massachusetts Division of Fisheries and Wildlife (DFW)
from promulgating regulations beyond the scope of the National
Heritage and Endangered Species Program’s enabling legislation: the
Massachusetts Endangered Species Act.
Our goal with this provision is to increase permitting and maintain
predictability for businesses and homeowners.

 Streamline and Consolidate Local Permitting Process

Expands the previously instituted expedited permitting program from
strictly economic development sites to include sites used for the
development or redevelopment of housing.
Requires deadlines for permitting decisions on priority sites and
encourages owners of private property to participate in the program.
Our goal with this provision is to allow municipalities to provide
incentives that encourage housing development within a streamlined,
one-stop framework.

 Reform Unemployment Insurance System

Aligns Massachusetts with a majority of states in terms of eligibility for
and duration of benefits while standardizing the rate structures for
businesses, lowering the rates for companies whose employees rarely
use the Unemployment Insurance Trust Fund and increases the rates
for those companies whose employees use it more.

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 Our goal with this provision is to make substantive changes to the
unemployment insurance system while maintaining reasonable
benefits for citizens of the Commonwealth, thus removing
unemployment insurance as a major barrier to adding and retaining
jobs.

 Reform Treble Damages for Wage Violations

Repeals the 2008 Treble Damages Act, which requires that all
violations of wage and hour laws be subjected to mandatory punitive
treble damages.
Removes the burden of treble damages for employers who have acted
in good faith and take reasonable steps to comply with wage payment
laws, but maintains punitive damages for employers who have
engaged in willful misconduct of wage and hour laws.
Our goal with this provision is to lower the number of wage violation
lawsuits by lifting the undue burden on our employers who do not
willfully violate wage laws, thereby lowering the overall cost of doing
business in Massachusetts.

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 EDUCATION
An Act Relative to Improving Employment Opportunities
Through Access to Education

 Incentivize Students to Complete Their College Degree by Creating a

Finish-Line Grant Program
Awards financially challenged students at Massachusetts institutes of
higher education with a scholarship for the total cost of tuition and fees
in the final year of their associate’s or bachelor’s degree.
Our goal with this provision is to turn students into graduates, thus
enabling qualified individuals with the skills and requirements
necessary to gain employment.

 Empower Vocational Schools and Strengthen Collaboration with

Community Colleges to Meet Demand for Targeted Skills
Provides vocational schools increased flexibility to create new courses
of study by expanding the definition of “service programs” to include
programs such as fire safety, law enforcement, data mining, and
barbering.
Strengthens regional collaboration between vocational schools and
community colleges by requiring vocational school district trustees and
community college boards of trustees to each designate a member to
serve as a non-voting member liaison to the reciprocal board.
Establishes a corporate sponsorship program for vocational schools to
expand not-for-credit vocationally-oriented instruction and targeted
skills training provided through contracts with Massachusetts
employers.

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 Our goal with this provision is to empower vocational schools and
encourage collaboration of those schools with community colleges and
workforce investment boards to maximize their common goals of
producing a highly-trained and well-rounded workforce to meet the
needs of Massachusetts employers.

 Establish a Student-Operated Investment Fund to Provide Funding for

Potential Start-Up Companies to Grow and Create Jobs In State
Provides financial support to student-led Massachusetts start-up
companies.
Designates a qualified student from the University of Massachusetts,
State University, and Community College to serve on the board which
oversees all investments, providing them with invaluable investment
experience.
Our goal with this provision is to entice Massachusetts’ best and
brightest students to remain in state when establishing start-up
companies by providing them with the necessary financial support.

 Qualify Veterans for Licenses and/or Academic Credit at Public

Institutions of Higher Education
Allows public institutions of higher education to award academic credit
to a student who is a veteran for the student’s experience in a relevant
military occupation and/or relevant training and education completed
as a component of a student’s military service.
Authorizes relevant education, training, or service completed by an
individual as a member of the United States Armed Forces or Military
Reserves, to count toward the qualifications required to receive a
license or certification under the authority of the Division of
Professional Licensure and/or the Departments of Public Safety and
Health.

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 Our goal with this provision is to allow service members to use their
documented training, education, and experience towards either a
college degree or qualifications required for professional licensure in
order to gain post-service employment.

ENERGY
An Act Relative to Cost-Effective Energy Policies and
Electricity Cost Reduction

 Require Competitive Bidding for Long-Term Renewable Energy

Contracts
Requires public utilities to competitively solicit their long-term
renewable energy contracts.
Our goal with this provision is to prevent Massachusetts’ ratepayers
from shouldering the costs associated with privately negotiated long-
term contracts by preventing the Cape Wind-National Grid contract
from becoming the Department of Public Utilities’ standard for cost-
effective contract.

 Incorporate Small Renewable Hydroelectric Generation into the

Renewable Portfolio Standards (RPS)
Qualifies renewable hydropower as a Class I renewable source when
calculating a supplier’s percentage of sales from renewable sources.
Increases the definition for a small hydroelectric facility from 25
megawatts to 30 megawatts.
Our goal with this provision is to lower electricity costs for
Massachusetts’ businesses and residential consumers by encouraging
the incorporation of low-cost small hydropower in the Commonwealth’s
renewable energy portfolio.

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 Incorporate Large Renewable Hydroelectric Generation into the
Renewable Portfolio Standards (RPS)
Requires the Massachusetts Department of Energy to establish a
carve-out within the RPS’ requirements that will allow hydroelectric
generation, from facilities with a capacity larger than 30 megawatts, to
qualify toward meeting a supplier’s annual renewable generation
requirements.
Our goal with this provision is to lower electricity costs for
Massachusetts’ businesses and residential consumers by encouraging
the incorporation of low-cost large hydropower in the Commonwealth’s
renewable energy portfolio.

 Establish Energy Policy and Electricity Cost Reduction Commission and

Review Renewable Energy Portfolio Standards
Creates a 10-year Commission to annually and independently evaluate
environmental benefits and economic costs associated with current
energy and electricity policies.
Mandates the Division of Energy Resources to review the Renewable
Energy Portfolio Standards every five years and report on their impact
on economic growth and job creation.
Our goal with this provision is to ensure the Commonwealth’s energy
and electricity policies are cost-effective and economically sustainable.

 Require Economic Evaluation of All Proposed Legislative Changes to

Energy and Electricity Policies
Requires all Joint Committees of the Legislature and the House
Committee on Ways and Means to consult with the Energy Policy and
Electricity Cost Reduction Commission regarding economic costs of
proposed changes to energy or electricity policies prior to reporting
favorably on bills that institute such changes.

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 Our goal with this provision is to increase transparency, ensuring that
the Legislature and the citizens of the Commonwealth are aware of
how proposed energy programs and policies will impact businesses
and residents prior to implementing such policies.

HEALTHCARE
An Act Relative to Reducing the Healthcare Burden on Businesses

 Reform Fair Share Contribution Requirements

Removes the requirement that Massachusetts employers insure out of
state residents.
Ensures that an employee or the spouse of an employee, who elects a
lower cost healthcare coverage option, will not be counted towards the
Full Time Equivalent (FTE) requirements under the fair share
contribution guidelines.
Our goal with this provision is to provide economic relief to small
businesses, especially those located in border cities and towns that are
unable to afford health insurance for their employees.

 Increase the Full Time Equivalent (FTE) Threshold

Raises the Full Time Equivalent threshold from 10 to 50 employees,
which will mirror the federal law.
Our goal with this provision is to relieve Massachusetts’ small
businesses with 50 or fewer FTE employees by giving them greater
flexibility in providing healthcare coverage

 Reduce Healthcare Mandates

Imposes a moratorium, from effective date of the bill until January
2014, on all new healthcare mandates.

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 Allows mandate-free and mandate-lite products to be offered in the
healthcare market.
Requires the Legislature to send all legislation dealing with healthcare
mandates to a study pending a review by the actuaries at the Division
of Health Care Finance Policy (DHCFP) and directs the DHCFP to
study the fiscal impact of the proposed mandated healthcare bill on
municipalities and small businesses.
Our goal with this provision is to prevent any new financial burdens on
small businesses while ensuring close review of any proposed future
healthcare mandates.

 Suspend the Prescription Drug Requirement from the Minimum

Creditable Coverage (MCC) Guidelines
Suspends the prescription drug requirement from the Minimum
Creditable Coverage (MCC) guidelines.
Our goal with this provision is to provide relief to employers and
employees struggling to provide and obtain coverage with unaffordable
premiums.

 Reform the State’s Medical Malpractice Laws

Requires that expert witnesses testifying in an action against a
physician be board certified in the same specialty as the defendant
physician.
Establishes that a defendant in a medical malpractice case only be
liable for the amount of damages allocated to that defendant in direct
proportion to his/her percentage of fault.
Makes an apology by a healthcare provider inadmissible as evidence
in a claim for medical malpractice.
Our goal with this provision is to reduce healthcare costs for
consumers and employers in the Commonwealth which will in turn
drive down the cost of doing business in Massachusetts.

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 TAXES
An Act Incentivizing Job Creation and
Reducing the Burdens on Small Businesses

 Reduce and Cap Commercial Vehicle Registration Fees

Caps the annual increase of fees on commercial vehicles registered in
Massachusetts to no more than 2.5% of each fee, and discounts the
commercial vehicle registration fee by 10% for businesses registering
five or more commercial units.
Requires the Registry of Motor Vehicles to furnish a report on their
recommendations to make Massachusetts a more competitive state to
own and operate a commercial vehicle.
Our goal with this provision is to both incentivize business owners to
register their commercial vehicles in Massachusetts as opposed to
neighboring states, while making the commercial vehicle registration
process more accommodating.

 Establishes a Job Creation Tax Credit

Applies a tax credit to companies who increase their net employment
figures in Massachusetts.
Rewards companies that have shown increased employment numbers
by allowing them to claim a tax credit equal to 50% of the
Massachusetts income tax withholding on salaries and wages
attributable to eligible jobs created by the company.
Our goal with this provision is to stimulate hiring with market-driven job
creation that puts Massachusetts residents back to work.

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 Simplify and Eliminate Corporate Fees and Taxes
Eliminates the $456 a year minimum corporate income tax payment
and $500 incorporation fee.
Removes the collection of unequal installments of estimated corporate
taxes and replaces it with equal tax payments of 25% every quarter.
Our goal with this provision is to encourage in-state business creation
and to provide predictably throughout the year for small businesses.

 Incentivize First-Time Homebuyer Savings Accounts (HBSA)

Allows individuals to create a tax-free account to save up to $4,000 per
year for first-time home-buying expenses.
Enables the conversion of existing savings accounts (savings, CDs,
IRAs) into HBSA, provides a tax credit for up to $5,000 on previously
taxed savings, and allows for tax-free withdrawals from a HBSA for
qualified home-buying expenses.
Imposes a penalty of up to 10% for non-qualified expenses, which will
be used to help fund a Closing Cost Assistance Program. This
program will provide grants of up to $2,500 to cover closing costs for
individuals who maintain a HBSA and have an income equal to 90% or
less of the median area income.
Our goal with this provision is to provide tax-free savings assistance to
first-time homebuyers and ensure that Massachusetts workers have
access to affordable housing opportunities.

 Establish Angel Investment Tax Credit

Provides Angel Investors with a tax credit of 15% of the amount of
cash invested in a small business start-up.
Increases investment tax credit to 25% if the start-up is located in an
Economic Target Area; a low-income part of the state which has
experienced major layoffs or has a commercial vacancy rate of at least
20%.

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 Caps the total amount of credits at $10 million for the first 3 years, $5
million for the following 5 years, and expires at the end of 2019.
Our goal with this provision is to incentivize entrepreneurs to start and
build companies in the Commonwealth while improving the workforce
and quickly improving economic activity.

Media inquiries should be directed to:

Peter Lorenz Troy Wall

Communications Director Communications Director
Office of the House Minority Leader Office of the Senate Minority Leader
(617) 722-2100 (617) 722-1600

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