End of Year Rush

In Massachusetts, our Legislative year ends on July 31, on the second year of our term. That doesn't mean that we stop working. Far from it. There are still informal sessions every few days where noncontroversial matters or home rule petitions are heard and passed. There are projects and hearings and work on committee deliberations and initiatives. There is an opportunity to get back to the district more often and meet with constituents. There is time to tour businesses and meet with groups. I plan on holding an informational hearing on winter fuel prices and what, if any, our options and opportunities are to deal with this crisis. So the time is busy but the schedule is more flexible. That is good because after being in the Legislature for twenty-two years and being a chairman for the last seventeen, my time in Boston as opposed to the district grows each year. It is good to get back more and recharge my batteries, so to speak.

More on the district in a future post, but with two weeks left in the session, I have a full list of things that I need to get done. We are close but need to get the broadband bill, to bring service out to unserved areas in Western Massachusetts, finalized and passed. We need to complete the work on the the dairy stabilization bill that so many rural Legislators worked on. I have passed the Creative Economic Council bill in the House and would like to see action in the Senate. I have a few local bills such as an expansion of the Adams Fire District and completing the land transfer for the North Adams Armory to the City of North Adams. I am still hopeful for some movement on an Optometry bill that I have filed for years.

I have a bill to create a creative index for our schools to spread best practices at challenging our school kids to be more innovative and creative. We are hopeful of finalizing in committee and then passing the Green Jobs bill filed by the Speaker of the House. We have several capital bond issues that have important initiatives or projects for my district. For example, the science building at the Massachusetts College of Liberal Arts in North Adams is in the higher ed bond bill. There is money to refinish Rt.116 in the town of Savoy in the transportation bond. As co-chair of the regional transportation caucus, I would like to see forward funding passed for the RTA's. As a member of the IT advisory board, I am interested in the bond to modernize our state IT system. That is a pretty daunting list and I know that there is more
There are other bills that I think are important to finish before the end of the year such as the health care cost containment bill that the Senate President filed. This is a very good bill and contains initiatives on e-health management which is something I have written about for a number of years. And of course, there are a number of budget vetoes that I feel we should override. These are small local earmarks that are important for my district. I think of these as additional local aid that gives a boost to local initiatives that would not be funded if they weren't included as earmarks, yet are so important to our districts.

So we have two weeks in which to accomplish this. I will let you know at the end of the session on our success in getting this list done.

FY 2009 Budget Highlights for the District

The following is an amalgam of the press releases sent out concerning the fiscal year 2009 budget and its impact on the district. This was a pretty good year for Western Mass and I am happy with the various programs that we were able to bring back to our area. I took the lead on some of this, but on the ones where the lead sponsor is named, you can bet they did a lot of heavy lifting on these and deserve the credit. We are fortunate to have a great group of Legislators from Western Massachusetts that work very hard for their constituents and we work well as a group.

With the conclusion of the Conference Committee late Thursday evening, State Representative Daniel E. Bosley (D – North Adams) commented on the FY 2009 spending plan, saying; “This has been a very tough budget process due to a billion dollar deficit from the beginning. Fortunately, through diligence these past few months, we were able to secure funding for many programs in the 1^st Berkshire District and across the Commonwealth that are vital to the prosperity and economic development of the state.”

The City of North Adams received an earmark of $150,000 for the North Adams Armory. This funding will be used to replace the deteriorating heating, ventilation, and air conditioning (HVAC) system and offers the final touch to the other construction work that has been recently been performed on the building.

Another significant success for the entire Berkshire Delegation was $400,000 for the Northern Berkshire Community Coalition for teen pregnancy prevention programs, of which $250,000 is to be allocated equally to school systems in the cities of North Adams and Pittsfield. “With increasing rates of teen pregnancy across the Commonwealth, it is imperative that the Coalition continue receiving funds to implement and expand their teen pregnancy preventions programs in the Berkshires,” said Bosley.

The Councils on Aging received a $73,000 boost to its overall budget, which is now capped at $8,615,068. As the lead sponsor of this amendment during the initial House budget debate, Representative Bosley was instrumental in securing this funding increase and made a passionate speech on the house floor during the debate. This allotment allows the formula grant to increase from $6.50 per elder to $7 per elder, which is significant considering that it is a tight budget year and the COA has been advocating for this increase for the past two budgets.

In addition to that, Representative Bosley, the House Chair of the Regional Transit Authorities Caucus, alongside the entire western Massachusetts delegation, secured $57,888,391 for RTAs across the Commonwealth, a $2.6 million increase from FY ’08. This funding would ensure that proposed service reductions that threaten to affect consistent transportation and will allow RTAs to provide quality, reliable and cost-effective service for seniors, workers, the disabled and the general public.

In addition to that, $50,000 was earmarked for public safety on the Deerfield and Upper Connecticut River. The main intent of this earmark is to protect property owners along the river in the Town of Charlemont. With two major rafting companies and multiple places to launch a raft or tube, there have been issues of trespassing and property damage to those who reside on the river. These funds will be used in conjunction with the Charlemont Police Department.

Representative Bosley, working with members of the Aviation Caucus, was able to assure that the budget language repealing the aircraft sales tax exemption was not included in the final conference committee budget. Bosley was the original sponsor of the legislation establishing the exemption. The exemption has been a catalyst for economic development throughout the state and is especially important for Harriman And West Airport in North Adams and the related companies and jobs that support it.

Finally, through the efforts of the Berkshire Delegation, the Berkshire Economic Development Corporation received $250,000 to continue leading the Berkshire region in economic development initiatives as a vital tool for small businesses inquiring about expansion, relocation or start-up.

According to Bosley, “considering the projected economic recession looming for the next few years, this was a particularly tight budget year for the Commonwealth. In spite of this, Berkshire County faired well and I am pleased that many programs received level or increased funding.”

In addition to those achievements, Representative Bosley and the other members of the Berkshire delegation – Representative Smitty Pignatelli (D-Lenox), Representative Denis Guyer (D-Dalton) and Representative Chris Speranzo (D-Pittsfield) - were able to secure funding for the following local and statewide programs that directly affect the Berkshires:

· Rep. Bosley was able to secure $42,000 to help fund the Turner House Living Center For Veterans in Williamstown

· Rep. Bosley was able to secure $200,000 for the Western MA Enterprise Fund to provide workforce training in Western MA

· Rep. Bosley was able to secure $30,101,348 for Adult Basic Education, an increase of $1,000,000 from FY ’08

· Rep. Bosley was able to secure $200,000 for the Bay State Games which is crucial funding for the annual events held in Williamstown and North Berkshire County

· Rep. Bosley was able to secure $200,000 for the North Quabbin Community Coalition for the support and implementation of four model community coalitions and community capacity building activities, of which the Northern Berkshire Community Coalition is involved.

· Rep. Bosley was able to secure $200,000 for the Small Business Association of New England’s layoff aversion program

· Rep. Bosley was able to secure $1,260,697 for the Small Business Technical Assistance program, which offers community development organizations grants to provide technical assistance or training programs to businesses with 20 employees or fewer

· Rep. Bosley was able to secure $14,465,462 for the Massachusetts College of Liberal Arts, an increase of $564,462 from FY ’08. In that amount, a total of $350,000 is for the Berkshire Wireless Learning Initiative, and of that, $100,000 is allocated for the Berkshire Compact, which assesses and evaluates the higher education resources available to Berkshire County residents

· The Berkshire Delegation was able to secure $9,456,459 for Berkshire Community College, an increase of $295,520 from FY’08

· Rep. Bosley was able to secure $6.5 million for the Cultural Facilities Fund, which provides capital grants and feasibility and technical assistance grants to promote the acquisition, design, repair, rehabilitation, renovation, expansion, or construction of nonprofit cultural facilities in Massachusetts. Since its inception in 2006, many cultural organizations in the Berkshires have been fortunate to receive grants from the program.

· The Berkshire Delegation was able to secure $75,000 for the Berkshire County Housing Authority’s Housing Services and Mediation Program

· Working with the lead sponsor, Represenative Guyer, $61,300,000 was secured for regional school transportation, an increase of $3,000,000 from FY ’08

In addition to those achievements, Representative Bosley worked alongside the entire Franklin County Delegation to secure funding for other important local and statewide programs, including:

· The Franklin County Delegation was able to secure $200,000 for the Western MA Enterprise Fund to provide workforce training in Western MA

· Working with the lead sponsor, Representative Kulik, $200,000 was secured for Buy Local programs across the Commonwealth

· Working with the lead sponsor, Representative Kulik, $50,000 was secured for the Senior Farm Share Program

· The Franklin County Delegation was able to secure $5,500,000 for the Education Pothole account to fill in inadequacies in the budget

The final Conference Committee Report will be sent to the Governor.

Happy Birthday America

IN CONGRESS, JULY 4, 1776

The unanimous Declaration of the thirteen united States of America

hen in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefit of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.

Corporate Tax Reform

This week the Conference Committee on the Combined Corporate Tax Reform issued it's report and the Legislature has sent the bill to the Governor's desk. It is a pretty good bill that will raise revenues for the Commonwealth, create a tax system that will tax in a fairer manner, and give corporations some long term relief from rates in out years.

Much has been written about the so-called Bosley Amendment to the bill. Most of this was kept in the final version of the bill. Water edge election, Fas 109 changes, as well as taking discretion from the Department of Revenue that make tax policy more transparent and predictable are all in the bill. The only major piece of the amendment missing was the 80-20 provision. That was a disappointment, but as a whole, the conference committee did a good job at separating fact from fiction and did a very good job.

Since the Boston Globe wrote an editorial this week concerning the 80-20 provision that contained a great deal of information that was either not true or misconstrued, I wrote the following letter to members of the House. For further info concerning the corporate tax reform, there are previous posts here discussing the bill.


Dear Colleagues,

In response to today’s Boston Globe editorial regarding the corporate tax reform bill,
currently in conference committee, I would like to offer some further observations
regarding the bill.

Leaders in the Senate, House, and Administration agreed upon the water’s edge provision
in the bill – whereby the taxable income of a unitary group is computed based on their
business within the continental United States. Also agreed upon was an 80/20 provision
– something that numerous other states practice – that simply clarifies that a unitary
group that has 80% or more of its payroll, sales, and property outside of the United States
is not subject to state taxes.

The language in the House version of the bill was drafted to accomplish two goals. The
first is to try to avoid any negative interference that our state tax policy may have on
international trade agreements or tax treatises. If, for example, we did not institute a
water’s edge provision and began to identify taxable income of a unitary group that a
European government also identified as taxable income, it would be difficult for both
parties to avoid reactionary public policy that may negatively affect trade agreements or
diplomatic relations. This would inevitably lead to lengthy and costly lawsuits,
effectively negating any increase in revenues that the state may be able to collect by
including foreign profits as taxable income. This would also not be a positive
development in a time when the Commonwealth is trying to compete on a global scale
with significant investments in the life sciences and clean energy.

The second goal of the house language regarding the water’s edge provision is to ensure
that there is no discrimination solely based on where a company is incorporated by
adopting language that only includes water’s edge income without regard to where the
taxpayer is incorporated. The House language simply abides by the agreed upon water’s
edge principle by making sure that income earned overseas will not be taxed in
Massachusetts simply because the corporation is incorporated somewhere in the United
States. For example, a company incorporated in France with 80% of its payroll, property,
and sales there would be exempt, yet a company incorporated in any state with the same
80% of its payroll, property, and sales in France would be taxed in Massachusetts. The
House language levels the playing field by removing the incentive to incorporate abroad
by assessing taxation based on the agreed 80/20 provision and apportionment formula,
not the location of incorporation.

Today’s Globe article, using figures presented by the Department of Revenue, asserts that
by including the House water’s edge language, the state could be losing a significant
amount of potential tax revenue due to a perceived tendency by corporations to establish
foreign subsidiaries to represent 80% of their payroll, sales, and property so as to avoid
state taxes. DOR uses the state of Minnesota as an example and extrapolates their
revenue loss estimates due to the use of 80/20 in that state by simply multiplying the
recorded revenue effect in Minnesota by how much larger the Massachusetts economy is
in comparison (DOR estimates one third larger). They come up with a potential loss for
Massachusetts state revenues of $140-$170 million. Aside from the significantly
anecdotal nature of this analysis, the state of Minnesota also did not share the same
apportionment provision in their combined reporting, using only property and payroll to
calculate taxable income rather than property, payroll, and sales as is proposed in the
House language. DOR compared apples to oranges. Minnesota has since changed their
apportionment formula to include all three factors and have found that their revenue
projections for the next three fiscal years do not record a loss, but rather a significant gain
in state tax revenues from their new water’s edge provision using the three pronged
apportionment - $95.9 million in FY09, $75.7 million in FY10, and $78.3 million in
FY11.

In addition, the example of Illinois’ experience with Wal-Mart where the company made
an attempt to consolidate its taxable income on foreign soil and thus keep the state of
Illinois from collecting over $25 million in state taxes is misleading. Wal-Mart paid the
state of Illinois the $26.4 million in taxes/fees that it owed, subsequently appealed the
state’s decision, and lost. Essentially, they were caught with their hand in the cookie jar
and paid up. Their ability to regulate their state tax laws is the same that would exist for
the Massachusetts Department of Revenue. Were a similar situation to arise in the
Commonwealth, DOR already has the ability to pursue corporate tax evasion should it
arise. In fact, the House language strengthens this ability because it establishes
transparent and predictable tax law for companies, so that there is no misunderstanding as
to how companies are supposed to interact with and pay the state.

The Globe’s editorial says, “Closing the loopholes carved out by big corporations’ tax
attorneys can offset the revenue loss from a lower rate and generate additional funds to
cover the rising cost of healthcare, education, and infrastructure maintenance. Plus it is
the fair thing to do.” The truth is that eliminating the water’s edge provision, as it is
written in the House, and providing DOR with the overarching discretion that the
Administration has called for, is a way for the state to raise money by going after the
business community. The Administration’s version of this bill does not address the
question of fairness, but rather the question of how much money the state can squeeze out
of the business community. The Administration’s version of the bill gives DOR overly
broad discretion to reach back and interpret the regulations for combined reporting on a
case-by-case basis. This makes the state an unattractive place to do business, because a
lack of predictable tax regulation makes it very difficult to project long-term costs,
profits, employment, and sales. The House combined reporting language provides
taxpayers with long term clarity, removes DOR from policy decisions, and strengthens
their ability to regulate our state’s tax policy.

I look forward to working with you on this important matter. Please do not hesitate to
contact my office with any questions or concerns that you may have.

Sincerely yours,

Daniel E. Bosley
Chairman
Joint Committee on Economic Development and Emerging Technologies