COMMONWEALTH OF MASSACHUSETTS

SUPREME JUDICIAL COURT

Suiiolk, No. SUCV2011-3756

SAC-11661

NESTO MONELL, JONATHAN GIBBON, RACriAEL BUTCHER,

BENJAMIN SMITH, LINDSEY" BURNS, and ANN McGOVERN, on

behalf of themselves and others sirr.ilarly situated,

Plaintiffs - Appellants,

V.

BOSTON PADS, LLC, JACOB REALTY, LAC, NEXTGEN REALTY,

INC . , RENTi~IYUNIT . CONI, INC . , D~NI~TRIOS SALPOGLOU, and

YUAN HUANG,

Defendants - Appellees.

B~ZIEF OF THE MASSACHUSETTS EMPLOYMENT LAWYERSASSOCIATION & THE MASSF,CHUSETTS Bt7II,DING TRADES

COUNCIL, AFL-CIO, AMICI CURIAE

Ian O. Russell (BBO #673387.)PYLE ROME EHRENBERG ~C

2 Liberty Square, 10th doorBoston, MA 02109

(617) 367-7200

irussell@pylerome.com

Nicole Horberg Decter (BBO #658268)SEGAL ROITMAN, LLP

111 Devonshire Street, 5th 'FloorBoston, MA 02109(617) 742-0208

z~decter@segalroitman.com

TABLE OF CONTENTS

I. STATEMENT OF THE ISSUES PRESENTED FOR REVIEW. ...1

II. STATEMENT OF THE INTEREST OF THE AMICI. .........1

III. STATEMENT OF THE CASE . ..........................3

III. ARGUMENT . .......................................4

A. THE INDEPENDENT CONTRACTOR STATUTE

EMBODIES VITAL STATE INTERESTS AND

MUST BE BROADLY CONSTRUED TO

EFFECTUATE THOSE INTERESTS . ................4

1. Misclassification of employees harms

employees and the Commonwealth. .......4

2. Consistent with its language and

purpose the Independent Contractor

Statute must be construed broadly. ....6

B. THE PLAIN LANGUAGE OF M.G.L. c. 112,

~ 87RR, THE REAL ESTATE LICENSING STATUTE,

DOES NOT CREATE AN EXCEPTION TO

M.G.L. c. 149, § 148B, THE

INDEPENDENT CONTRACTOR STATUTE. ...........12

C. THE LEGISLATIVE HISTORY OF THE

RELEVANT STATUTES CONFIRMS THAT

REAL ESTATE AGENTS ARE NOT EXEMPT

FROM M.G.L. c. 149, ~ 148B . ...............15

1. The only attempt to exclude

real estate agents from coverage

under ~ 148B failed . .................15

2. A worker may be an employee

for some purposes and not othersand when the Legislature has

exempted workers from coverage by

laws intended to protect employees,it has done so explicitly. ...........18

3. The 2010 amendment to M.G.L. c. 112,

~ 87RR, merely acknowledged that

real estate agents - like other

types of employees - may be paidon a commission basis . ...............21

i

D. HYPOTHETICAL CONCERNS ABOUT COMPLYING

WITH THE LAW IS NOT A VALID REASON

FOR EXEMPTING THE REAL ESTATE INDUSTRY

FROM M.G.L. c. 149, ~ 148B . ...............22

E. BOSTON PADS IS NOT A TYPICAL REAL ESTATE

COMPANY. ..................................25

CONCLUSION ...•

.....................................29

CERTIFICATE OF SERVICE ..............................31

CERTIFICATE OF COMPLIANCE ...........................32

ii

TABLE OF AUTHORITIES

Cases

Awuah v. Coverall North America, Inc. ,

460 Mass. 484 (2011) ...............................24

.....Cook v. Patient Edu, LLC,465 Mass. 548 (2013) ........ ......................10

Depianti v. Jan-Pro Franchising Int'1, Inc.,465 Mass. 607 (2013) ...........................passim

Donovan v. Agnew,712 F.2d 1509 (lst Cir. 1983) ......................18

Duracraft Corp. v. Holmes Products Corp.,427 Mass. 156 (1998) ...............................16

Lutl2er v. Z. Wilson, Inc. ,528 F. Supp. 1166 (S.D. Ohio 1981) .................20

Perdomo v. Ask 4 Realty & Mgmt. , Inc. ,298 F. App'x 820 (11th Cir. 2008) ..................20

Smith v. Winter Place, LLC,447 Mass. 363 (2006) ................................9

Somers v. Converged Access, Inc. ,454 Mass. 582 (2009) .............................5, 9

Taylor v. Eastern Connection Operating, Inc.,465 Mass. 191 (2013) ................................6

Weems v. Citigroup Inc.,453 Mass. 147 (2009) ...............................22

Statutes

26 U.S.C. ~ 3121 ....................................18

29 U.S.C. ~ 201 .....................................18

29 U.S.C. § 203 .....................................18

M.G.L. c. 112, ~ 87RR .......................12, 13, 21

M.G.L. c. 149, ~ 148 ........................18, 21, 25

M.G.L. c. 149, § 148B ......................5, 6, 8, 22

M.G.L. c. 149, ~ 150 ................................22

M.G.L. c. 149, ~ 150A ...............................23

iii

M.G.L. c. 149, §~ 47 ................................23

M.G.L. c. 151A, ~ 6 .................................18

M.G.L. C. 151A~ ~ 6(P) ... ..........................19

M.G.L. c. 152, ~ 1 ..................................18

M.G.L. c. 152, ~ 1(4) ............................ 19

Other Authorities

An Advisory from the Attorney General's Fair Labor

Division on M.G.L. c. 149, s 148B, 2008/1........4, 8 ',

Regulations '

26 C.F.R. § 31.3121 .................................18

455 CMR ~ 2.01 ......................................25

iv

I. STATEMENT OF THE ISSUES PRESENTED FOR REVIEW.

Amici adopt the statement of the issues presented

by Plaintiffs-Appellants.

II. STATEMENT OF THE INTEREST OF THE AMICI.

The Massachusetts Employment Lawyers Association

("MELA") is a voluntary membership organization of over

100 lawyers who regularly represent employees in labor,

employment, and civil rights disputes in Massachusetts.

MELA is an affiliate of the National Employment Lawyers

Association (~~NELA"), a membership organization of over

3,000 lawyers who regularly represent employees in such

disputes. NELA is one of the largest organizations in

the United States whose members litigate and counsel

individuals, employees, and applicants with claims

arising out of the workplace.

As part of its advocacy efforts, MELA has filed

numerous amicus curiae briefs before this Court, singly

or jointly with other amici. The interest of MELA in

this case is that of protecting the rights of its

members' clients, by ensuring that M.G.L. c. 149, ~

148B's goals of preventing employee misclassification

and wage theft are fully realized. Amici have

frequently dealt with employers who rely upon the

misclassification of workers as independent contractors

1

as a means of avoiding application of the

Commonwealth's wage laws. Often, the improper acts of

these employers include attempting to impose the costs

and risks of running a business upon their workers by

charging workers improper fees and making improper

deductions from their wages. Amici believe that it is

vitally important that M.G.L. c. 149, ~ 148 continue to

be applied as it was drafted and thus that it be

construed to cover all industries in the Commonwealth.

The Massachusetts Building Trades Council, AFL-CIO

("N.~TC"), is a statewide coalition consisting of 74

local labor unions who represent over 75,000 men and

women employed in Massachusetts in the construction

industry. The MBTC's affiliated local unions represent

workers in every facet of private and public sector

construction work, including but not limited to,

electricians, laborers, elevator constructors,

carpenters, drivers, masons, plumbers, pipefitters, and

painters, sprinkler fitters and teamsters. The MBTC

has, on a routine basis, submitted amicus briefs to

this Court where issues critical to workers' economic

security, health, and safety within the Commonwealth.

This case is of exceptional. importance to the MBTC and

its affiliates, because stringent enforcement of the

2

Independent Contractor, Overtime., and Non-payment of

Wages statutes protect all workers' economic security

and physical safety, maintain a level playing field for

law-abiding companies, and ensure that the Commonwealth

has appropriate enforcement tools to garner compliance

with its laws. Narrowing the scope of the Independent

Contractor Statute to exclude categories of workers -

without any implicit, much less explicit, statutory

exclusion (as the Defendants-Appellees and their amici

advocate) - strains credulity. More importantly, such

an interpretation could compromise the vital

protections guaranteed under the Statute, not only to

real estate agents, but to any category of workers that

an employer elected to misclassify for the purpose of

denying the payment of compensation due under the

Commonwealth's laws.

III. STATEMENT OF THE CASE.

Amici adopt the Statement of the Case presented

by Plaintiffs-Appellants, including the Statement of

Prior Proceedings and the Statement of Facts.

3

III . ARGUMENT .

A. THE INDEPENDENT CONTRACTOR STATUTE EMBODIESVITAL STATE INTERESTS AND MUST BE BROADLYCONSTRUED TO EFFECTUATE THOSE INTERESTS.

1. Misclassification of employees harms

employees and... the..... Commonwealth...

The need for proper classification of individuals

in the workplace has been recognized at all levels of

government in the Commonwealth. The Attorney General

has stated that:

Entities that misclassify individuals are in manycases committing insurance fraud and depriveindividuals of the many protections and benefits,both public and private, that employees enjoy.Misclassified individuals are often left withoutunemployment insurance and workers' compensationbenefits. In addition, misclassified individualsdo not have access to employer-provided healthcare and may be paid reduced wages or cash aswage payments.

An Advisory from the Attorney General, Amendments to

Massachusetts Independent Contractor Law, Advisory

2008/1 (Add. 1).l Similarly, Governor Deval Patrick,

in creating a Joint Task Force to address employee

misclassification, stated .that:

[T]he practice of employee misclassification: (1)exploits vulnerable workers and deprives them of..legal benefits and protections; (2) givesunlawful businesses an unfair competitiveadvantage over lawful businesses by illegally

1 References to the Addendum to this brief are cited as"Add. [page number]." -

0

driving down violators' taxes, wages, and otheroverhead costs; (3) defrauds the government ofsubstantial tax revenues; and (4) harms consumerswho suffer at the hands of unlicensed businessesthat fail to maintain minimum levels of skillsand knowledge.

Executive Order No. 499 (Add. 8-9).

The Legislature has attempted to address these

concerns by passing legislation aimed at .curbing

misclassification. One such piece of legislation is

M.G.L. c. 149, § 148B, the Independent Contractor

Statute. This statute, inter a1ia, establishes a test

for determining whether a worker is an "employee" for

purposes of the application of chapter 149, which

includes the minimum wage and overtime laws, and

allows for a suit to be brought against an employer

for failing to properly classify its workers.

This Court has recognized that one of the

"legislative purposes] behind the independent

contractor statute is to protect employees from being

deprived of the benefits enjoyed by employees through

their misclassification as independent contractors."

Somers v. Converged Access, Inc., 454 Mass. 582, 59.2

(2009) ; see also Depianti v, ~7an-Pro Franchising

Int'1, Inc., 465 Mass. 607,. 620 (2013) ("The purpose

of the independent contractor statute is `to protect

workers by classifying them as employees, and thereby

grant them the benefits and rights of employment,

where the circumstances indicate that they are, in

fact, employees'."), quoting Taylor v. Eastern

Connection Operating, Inc., 465 Mass. 191, 198 (2013).

2. Consistent with its language and

purpose the Independent Contractor

Statute must be construed broadly.

In "light of the statute's broad remedial

purpose," this Court has held that it would be an

"error" to read a limitation into the statute where

the statutory language does not require it. Depianti,

465 Mass. at 621. The statute explicitly applies to

individuals "performing any service." M.G.L. c. 149,

~ 148B (emphasis added). Nothing in the text of the

statute limits its application to certain industries

operating in the Commonwealth.

However, the Superior Court, in ruling that real

estate agents are exempt from coverage under ~ 148B,

wrongly created a limitation that the statutory

language does not require. In their amicus brief, the

Massachusetts Association of Realtors and the Greater

Boston Real Estate Board ("MAR Amici") likewise urge

the Court to adopt an exceedingly narrow

interpretation of the Independent Contractor Statute,

C~

i one that is not supported by the statute's language or

its purpose. They argue that the statute was

originally intended to govern the construction

industry and that, therefore, "the Court should not

presume that the legislature intended to disrupt the

settled expectations of those in the real estate

industry." MAR Amicus Br. at 20. As discussed in

more detail below, see infra at 15-17, this would not

be the first time that the real estate industry has

tried - and failed - to exclude itself from the

Independent Contractor Statute. In any event, the

language, purpose, and legislative history of the

Statute all require the Court to reject Defendants-

Appellees' and their amici's attempts to artificially

narrow its scope.

The plain language of the Independent Contractor

Statute applies to all industries. While the MAR

Amici cite the title of the chapter of the session

laws through which the Independent Contractor Statute

was enacted as evidence that it was intended to be

limited to the public construction sector, MAR Amicus

Br. at 21, the title of th`e Independent Contractor

Statute itself is not limited to any particular

industry; the statute is entitled: "Persons performing

service not authorized under this chapter deemed

employees; exception." M.G.L. c. 149, ~ 148B. The

language in the body of the statute is similarly

broad. It applies to "any service" and its remedies,.

apply against "(w]hoever fails to properly classify an

individual as an employee Id., (a), (d)

(emphasis added).

A broad interpretation of the Independent

Contractor Statute is similarly supported by its

purpose, as this Court has enunciated in Somers and

Depianti, discussed above. The Attorney General's

Office has similarly emphasized the importance of a

broad application of the statute, stating that "[t]he

need for proper classification of individuals in the

workplace is of paramount importance to the

Commonwealth." An Advisory from the Attorney

General's Fair Labor Division on M.G.L. c. 149, ~

148B, 2008/1 (Add. 1).

Notably, the Attorney General made clear in its

Advisory that the statute is not limited to the public

construction industry, explaining: "The 2004

amendment was part of legislation making broad changes

to.the laws governing the public construction

industry. However, the Law, including the 2004

'3

amendment, applies more broadly to a wide range of

industries." Id. (emphasis added). The Attorney

General recognizes no exemption from the statute for

the real estate industry - a significant point, given

that the Attorney General's interpretation of ~ 148B

is entitled to substantial deference. See Smith v.

Winter Place, LLC, 447 Mass. 363, 368 (2006).

The fact that the real estate industry

customarily classifies agents as independent

contractors is also not a basis for exempting that

industry from the Independent Contractor Statute. All

industries are affected when a new statute governing

the treatment of workers is enacted. If those

industries have a custom of violating the law, then

naturally they will be more greatly affected.

However, that is no reason not to enforce the statute

against them. To the contrary, to effectuate the

public policy underlying the Independent Contractor

Statute — "to protect employees from being deprived of

the benefits enjoyed by employees through their

misclassification as independent contractors," Somers,

454 Mass. at 592 — courts must apply the statute to

industries that have traditionally violated it.

~~

The MAR Amici's argument that the existence of

criminal remedies in the statute "further supports the

conclusion that the statute should not be interpreted

to apply to real estate professionals," MAR Amici Br.

at 27, must fail for two reasons. First, this is not

a criminal case advanced by the Attorney General; it

is a civil case brought by employees. The private

civil action and the criminal enforcement provisions

are separate parts of the wage statutes. Depianti,

465 Mass. at 612 ("The Attorney General's right to

enforce G.L. c. 149 and the right of private citizens

to enforce provisions of that chapter represent

parallel and distinct enforcement mechanisms.").

Second, where, as here, there is no ambiguity in

either the language or intent of the statute, there is

no basis for construing it to exclude an entire

industry despite the absence of any statutory language

suggesting such an exclusion. See Cook v. Patient

Edu, LLC, 465 Mass. 548, 555-56 (2013). This is true

whether the statute contains criminal penalties or

not . Id. z

2 Moreover, the fact that common la.w vicariousliability principles may apply to the broker-agentrelationship does not mean, as the MAR Amici suggest,that it would be impossible for real estate companies

m

In order to protect all employees in the

Commonwealth from wage theft and other abuses arising

from misclassification, it is vitally important that

this Court not adopt a limitation to the application

of ~ 148B that is not required by the statutory

language. There is no indication that the Legislature

ever determined that wage theft through

misclassification does not occur in the real estate

industry or that businesses within that industry

should be immune from suits for recovery of lost

wages . 3

to comply with the requirements of the IndependentContractor Statute. The vicarious liability doctrineapplies in all sorts of non-employment contexts,including, for example, the franchisor-franchiseecontext, as this Court recognized in Depianti, 465Mass. at 616. There is simply no correlation betweenthis doctrine, which applies in actions brought byconsumers or other third parties, and the IndependentContractor Statute, which applies to determine whetheran entity must comply with the wage laws.

3 This is true even where a real estate agent is paidonly through commissions, which are, as explainedbelow, indisputably considered wages under the laws of

the Commonwealth.

11

B. THE PLAIN LANGUAGE OF M.G.L. c. 112, ~ 87RR,

THE REAL ESTATE LICENSING STATUTE, DOES NOT

CREATE AN EXCEPTION TO M.G.L. c. 149, §

148B, THE INDEPENDENT CONTRACTOR STATUTE.

Real estate licensing is regulated by M.G.L. c.

1.12, ~ 87RR That.... statute provides ....that.....

A salesman may be affiliated with a brokereither as an employee or as an independentcontractor and may, by agreement be paid asan outside salesperson on a commission-onlybasis but shall be under such supervision ofsaid broker as to ensure compliance with thesection and said broker shall be responsiblewith the salesman for any violation ofsection eighty-seven AAA committed by saidsalesman.

M.G.L. c. 112, ~ 87RR. A plain reading of this

language establishes only: (1) that the Legislature

acknowledges that real estate agents have been

classified as both employees and independent

contractors within the real estate industry, (2) that

real estate agents may be paid on a commission-only

basis, and (3) that, regardless of whether a real

estate agent ~s classified as an employee or an

independent contractor, and regardless of whether a

real estate agent is paid on a commission basis, a

real estate agent must be under sufficient supervision

by a broker in order to ensure compliance with the

other obligations spelled out in ~ 87RR.

12

Nothing in the language of this licensing statute

creates an exemption from the Independent Contractor

Statute. On its face, the statutory language gives no

indication that it is intended to guarantee that a

broker be allowed to classify all real estate agents

as independent contractor for all purposes. Nor does

it indicate that it is intended to exempt real estate

agents from coverage under M.G.L. c. 149, ~ 148B.

Rather, it is intended solely to address the

requirement that a broker supervise an agent to ensure

compliance with the licensing requirements of the

statute, and mandates that, regardless of the manner

in which the real estate agent is classified, this

supervision will be provided.

In other words, a broker may classify a real

estate agent as either an employee or an independent

contractor, so long as the agent meets the applicable

tests for those classifications, "but" the agent must

still be subject to the statutorily required

supervision, regardless of how the agent is

classified. M.G.L. c. 112, ~ 87RR (emphasis added).

The use of the word "but" informs a broker that the

proper supervision must be provided, regardless of

whether the real estate agent is an employee or an

~~

independent contractor. Thus, a broker may not avoid

providing the required supervision merely by ',

classifying an agent as an independent contractor.

The Superior Court erroneously interpreted M.G.L.

c. 112, ~ 87RR, to guarantee that a real estate

business may, at its discretion, treat a real estate

agent as an independent contractor for all purposes. r

Indeed, the entire opinion is based upon the Superior

Court's conclusion that, under ~ 87RR, a real estate

business must be able to treat real estate agents as

independent contractors and that the Independent

Contractor Statute cannot apply to real estate agents.

Thus, the Superior Court held that ~ 87RR created an

exemption from coverage under ~ 148B for real estate

agents.

However, ~ 87RR does not address the issue of

whether a real estate agent is an independent

contractor or an employee for purposes of the payment

of wages - despite also acknowledging that real estate

agents can be "employee [s] or independent

contractor[s]." M.G.L. c. 112, ~ 87RR. Accordingly,

the question of whether a real estate agent is an

employee for wage purpose s. is determined in the same

way as it. is for any other employee, namely, by

14

applying the test established by ~ 148B. Because ~

87RR does not address the question of whether a real

estate agent is an employee for the purposes of the

payment of wages, it does not conflict with ~ 148B and

it does not create an exemption to that statute.

C. THE LEGISLATIVE HISTORY OF THE RELEVANT

STATUTES CONFIRMS THAT REAL ESTATE AGENTS

ARE NOT EXEMPT FROM M.G.L. c. 149, ~ 148B.

1.. The only attempt to exclude real estateagents from coverage under ~ 148Bfailed.

Had the Legislature intended to exempt the real

estate industry from the Independent Contractor

Statute through the real estate licensing statute, it

would have done so through the use of clear and

explicit language. Yet the real estate licensing

statute does not even mention §.148B. Indeed, the

only time that an attempt was made to explicitly

exempt real estate agents from coverage under M.G.L.

c. 149, ~ 148, the legislation was vetoed by the

Governor. The Legislature included the following

language in Section 8 of Chapter 304 of the Acts of

~~:

The second paragraph of section 87RR of

chapter 112 of the General Zaws is herebyamended by striking out the third sentence

and inserting in place thereof the following

sentence: Notwithstanding section 1488 of

15

Chapter 149, a salesmen or broker may beaffiliated with a broker either as anemployee or as independent contractor, asdetermined by their written agreement andcustomer work practices, but shall be undersuch supervision of the broker as willensure compliance with this section ...

(Add. 42)(emphasis added). However, Governor Patrick

vetoed this language. In his message to the

Legislature, he stated:

I am disapproving section 8 because it seeks

to exempt real estate sales persons and

brokers from the independent contractor

laws, G.L. c. 149, ~ 148B, recently enacted

to reduce employee misclassification and

abuse of workers' status. The section wouldallow real estate sales persons and brokers

to rely on written agreements to avoid theclassification rules for independent

contractors. The Secretary of Labor and

Workforce Development and I are working to

address employee misclassification in our

underground economy task force, and we are

concerned that this section is inconsistentwith that objective.

(Add. 47) .

This legislative history establishes that the

Legislature believed that real estate agents were

covered by ~ 148B and that an explicit amendment was

necessary to create an exemption.4 The Governor viewed

4 See Duracraft Corp. v. Holmes Products Corp., 427Mass. 156,, 163 (1998) ("Statutes ar.e to beinterpreted, not alone according to their simple,literal or strict verbal meaning, but in connectionwith their development, their progression through the

~~~

this amendment as creating an exemption and vetoed it

because he did not believe an exemption was good

policy. Had the 2008 amendment been enacted, it would

clearly have exempted real estate agents from coverage

under ~ 148B. However, the amendment did not become

law - the Legislature passed a different amendment

taking into account the Governor's comments.

Consequently, the exemption relied upon by the'

Superior Court and Defendants-Appellees simply does

not exist.

Accordingly, the legislative history regarding

this issue is clear. No specific exemption for real

estate agents from coverage under M.G.L. c. 149,

~ 148B, has ever existed. The one time that the

Legislature sought to adopt such an exemption, it was

vetoed because the Governor did not agree with the.

attempt "to exempt real estate sales persons and

brokers from the independent contractor laws, G.L. c.

149, ~ 148B." (Add. 47). No such exemption has been

become law.

legislative body, the history of the times, prior

legislation. ").

?_ 7

'' 2. A worker may be an employee for some.

purposes and not others and when the

Legislature. has exempted workers from

coverage by laws intended to protect

employees, it has done so explicitly.

The various statutes that protect emp,loye~es often

have their own definition, or test, that establishes

whether a worker is an "employee." For example, the

definition of employee is different under the wage -

laws, workers' compensation laws, and unemployment

laws. See M.G.L. c. 149, ~ 148; M.G.L, c. 152, ~ 1;

M.G.L. c. 151A, ~ 6. Similarly, the test for

determining whether someone is an employee for federal

income tax purposes is different than the test for

determining whether someone is an employee under the

federal Fair Labor Standards Act, 29 U.S.C. ~ 201, et

seq, Compare 26 U.S.C. ~ 3121(d)(2) (defining

"employee" status for federal tax purposes) and 26~

C.F.R. ~ 31.3121 (adopting test for determining if

worker is an "employee" for tax purposes), w.i.th 29

U.S.C. ~ 203 (defining "employee" under the FLSA) and

Donovan v. Agnew, 712 F.2d 1509, 1510-11 (1st Cir.

1983) (adopting "economic realities" test for

determining if worker is an employee under FLSA).

When a category of workers is specifically

excluded from coverage by one of these statutes, the

Legislature has made the exemption explicit.

Specifically, when it has exempted real estate agents

paid on a commission-only basis from coverage under

the workers' compensation laws and the unemployment

compensation laws, it has done so explicitly. See

M.G.L. c. 152, ~ 1(4) (defining "Employee", as "every

', person in the service of another under any contract of

hire, express or implied, oral or written, excepting ...

a salesperson affiliated with a real estate broker

pursuant to an agreement which specifically provides

for compensation only in the form of commissions

earned from the sale or rental of real property");

M.G.L. c. 151A, ~ 6(p) ("The term `employment' shall

not include [s]ervices performed by an

individual as a real estate broker or salesman if he

is licensed by the state as a real estate broker o.r

salesman, and if he is remunerated solely by way of

commission"}.

Accordingly, it is hardly dispositive that M.G.L.

c. 112, ~ 87RR acknowledges that, depending upon the

circumstances, a real estate agent may be an employee

or an independent contractor. Neither is it

dispositive, as Defendants-Appellees appear to argue,

that the United States Congress or the Legislature of

19

the Commonwealth have exempted real estate agents from

certain tax laws. Brief of Defendants-Appellees at

~~~

Notably, real estate agents are not specifically

exempt from coverage under the most important federal

law related to the payment of wages, the FLSA. Real

estate agents, or salespersons, are covered by the

FLSA except where, based upon the specific facts

related to the work performed, they are found to fit

under one of the broader exemptions established by

that law for an outside salesperson or independent

contractor. See, e.g., Luther v. Z. Wilson, Inc., 528

F. Supp. 1166, 1168 (S.D. Ohio 1981) (finding that

employer had not established that a real estate

salesperson was exempt under outside sales exemption

and thus finding that salesperson was owed minimum.

wages and overtime); Perdomo v. Ask 4 Realty & Mgmt.,

Inc., 298 F. App'x 820, 821 (11th Cir. 2008) (applying

multi-factor economic realities test to determine

whether real estate salesperson was an independent

contractor and thus exempt from coverage under the

FLSA) .

Consequently, and as with any other type of

worker, the question of whether a real estate agent is

20

an employee under § 148B turns on the language and

interpretation of that statute as applied to the

specific facts of this case. If a category of worker

is exempted from coverage by a statute, that exemption

is created through the use of specific language.

3. The 2010 amendment to M.G.L. c. 112, ~

87RR, merely acknowledged that real

estate agents - like other types of

employees - may be paid on a commission

basis.

If the Legislature had intended to exempt real

estate agents from the Independent Contractor Statute,

it would surely have done so in 2010, when it amended

M.G.L. c. 112, ~ 87RR. Instead, the 2010 amendment

merely states that a real estate agent "may, by

agreement, be paid as an outside salesperson on a

commission-only basis." M.G.L. c. 112, ~ 87RR.

Contrary to Defendants-Appellees' arguments, this

amendment has nothing to do with cementing independent

contractor status for real estate agents since there

is no inherent or dispositive link between independent

contractors and commissions. Indeed, many employees

are paid by commissions, and the Massachusetts Wage

Act, M.G.L. c. 149, ~ 148, which applies to payments

to an "employee," specifically covers "commissions."

21

See also Weems v. Citigroup Inc., 453 Mass. 147, 151

(2009) (noting that ~ 148 "expressly states that .

commissions that are definitely determined and due and

payable to the employee, are wages within the meaning

of the act"). Thus, while the 2010 amendment may make

clear that a real estate agent may be paid on a

conunission-only basis, it has no bearing on the issue

of whether a real estate agent is an employee or an

independent contractor for purposes of the payment of

wages.

D. HYP~TFiETICAL CONCERNS ABOUT COMPLYING WITH

THE LAW IS NOT A VALID REASON FOR EXEMPTING

SHE RE~,L ESTATE INDUSTRY FROM M.G.L. c. 149,

~ 148.

The Independent Contractor Statute states that it

applies "[f]or purpose of this chapter and chapter

151." M.G.L. c. 149, ~ 148B(a). The private

enforcement mechanism for that statute allows

employees to pursue claims only under the following

sections: 33E, 148, 148A, 148B, 150C, 152, 152A, or

159C. See M.G.L. c. 149, ~ 150. According to the MAR

Amici, applying ~ 1488 in that manner would have a

detrimental impact on the peal estate industry because

it would then be required to comply with the

requirements of Chapter 149. MAR Amici Br. at 14.

22

The MAR Amici go on to discuss specifically M.G.L. c.

149, ~~ 47, 52, 100, and 150A. However, none of those

are statutes under which employees are permitted to

bring claims, so they are not relevant to the issues

before this Court.

More significantly though, not one of the so-

called burdens identified by the MAR Amici under the

wage laws is singular to the real estate industry.

These provisions impose obligations, which are at

times difficult to satisfy, on all industries. That

is the point. It is absurd for the real estate

industry to suggest that it should not be held to

these requirements of-the wage laws because compliance

seems difficult.

For example, the MAR Amici cite statutes that

require that employers keep records of their

employees' hours and that they provide breaks at

certain intervals. MAR Amici Br. at 14-15 (citing

M.G.L. c. 149, §~ 47, 52, 100). The MAR Amici

complain that it would be hard to keep real estate

agents' hours because they do a lot of work outside of

the office and that breaks would be challenging

because they could be called on at any time. However,

that is no different from any profession in which

23

employees make customer calls, perform delivery

services, or otherwise do their work in numerous

locations and/or are on call for their employer or

clients.

The MAR Amici also argue, somewhat surprisingly,

that real estate companies should be able to take

deductions from their agents' pay without the risk

that those deductions will be deemed to be unlawful

under the Wage Act. MAR Amid Br. at 15-16. But if

real estate agents are employees under ~ 148B (as will

likely be the case as to some real estate companies —

like Defendants-AppEllees in this case — but not

others), then they are subject to protection against

improper deductions from their wages just like any

other employee. If a court determines that, for

example, monthly "desk fees" charged to agent-

employees "operate to require employees to buy their

jobs from employers" and therefore "violate public

policy," Awuah v. Coverall North America, Inc., 460

Mass. 484, 498 (2011), then of course the employer

charging those fees should be held accountable.

Finally, the MAR Amici argue that the minimum

wage laws should not apply to the real estate industry

because they "bluntly contradict[] the fact that real

24

estate professionals typically earn their compensation

in the form of commissions MAR Amici Br. at

16. However, as noted above, the wage laws recognize

that employees may be paid by commission and explain

how the minimum wage and overtime provisions are to be

applied to employees paid by commission. See 455 CMR

~ 2.01 (explaining how to calculate regular and

overtime rate for employees paid on "commission

basis"); M.G.L. c. 149, ~ 148 (stating that it applies

"so far as apt, to the payment of commissions when the

amount of such commissions, less allowable or

authorized deductions, has been definitely determined

and has become due and payable to such employee"). It

wi11 be an issue for the trial court to determine the

damages recoverable for Defendants-Appellees' wage law

violations, but their commission payment structure.

certainly does not exclude them from the requirements

of the wage laws.

E. BOSTON PADS IS NOT A TYPICAL REAL ESTATE

COMPANY.

While Defendants-Appellees attempt to

characterize this case as being about the real estate

industry in general, it bears noting that Defendants-

Appellees operate their real estate company in a

25

manner that does not resemble the "industry standard"

described by the MAR Amici and elsewhere. The MAR

Amici claim that "real estate industry professionals

occupy a unique sphere of the workforce." MAR Amici

Br. at 4. This is so, they argue, because

"professionals within the real estate industry have

long been associated with an independence-based

approach to their careers" and because they "make

their own hours, determine their own business

productivity, are responsible for their own expenses,

are paid on commission rather than receiving a base

salary, ar~d are responsible for their own taxes." Id.

at 4-5. They go on to explain that "the real estate

industry is a highly individualistic and innovative

business. ." and that real estate professionals

enjoy "latitude in terms of setting their own

schedules and developing their own personal style and

marketing techniques." Id. at 5, 6-7.

This description in the MAR Amici's brief of the

"independent and self-made" real estate professional,

id. at 28, does not match the established facts

related to Defendants-Appellees' real estate agents.

Rather than "mak[ing] their own hours," id. at 5,

Defendants-Appellees require their agents to work

~"

specific shifts for a specific number of hours each

month. Append. 50-54, ~~ 29-34.5 Instead of

"determin[ing] their own business productivity," MAR

Amid Br. at 5, Defendants-Appellees discipline agents

who fail to meet the productivity goals they set.

Append. 60-61, 9I9[ 44-45. Rather than being "highly

individualistic" and "developing their own personal

styles and marketing techniques," MAR Amid Br. at 5-

6, Defendants-Appellees' agents must dress a certain

way, answer the phone a certain way, and are even told

by Defendants-Appellees that their clients are not

their own, but instead belong to the company. Append.

44, 64, 9[9I 13, 33; 154-55.

Resources from the website of the National

Association of Realtors further highlight the

difference between Defendants-Appellees and a

traditional independent contractor-based real estate

company. A document entitled "Independent Contractor

Statute - Frequently Asked Questions" contains a list

of "types of activities that should be avoided" by

companies endeavoring to classify their agents as

independent contractors. [Add. 49]. Of the five

5 References to the Joint Appendix in this case arecited as "Append. [page number]."

items on the list, the facts establish that

Defendants-Appellees engage in four:

.Activity to be Avoided Defendants-Appellees

"Requiring the worker to Agents must workperform the services mandatory shifts, duringduring set work hours" which time they must

answer the phone, takeout of the trash, updatefaxes, and are prohibitedfrom going out onshowing. Append. 50-51,y[9I 29-30. Agents mustalso work "front desk"shifts to perform "warmcalling" (i.e., callinglandlords to obtainlistings), update thecompany's database, setup meetings, and marketproperties. Append. 52,

9I 31.

"Requiring the worker to Agents must perform "warmperform the services at a calling" and otherspecific location" activities from the

office during themandatory office andfront desk shifts.Append. 50-52, yI9[ 29-31.

"Making attendance at Agents must regularlystaff meetings mandatory" attend mandatory meetings

with Defendants-Appellees' management.'Append. 35, 9I 4; 114.

"Providing training to Agents must extensivethe worker" complete mandatory

training, which includes60 hours of "front desk"shifts and time spentcompleting 23 "galleries"(photographic andvideographed tours ofproperties). Append. 45-50, 9I9I 21-28.

Add. 50.

Respectfully submitted,

MASSACHUSETTS EMPLOYMENT LAWYERSASSOCIATION & THE MASSACHUSETTSBUILDING TRADES COUNCIL, AFL-CIO,

BY...their_ attorneys.

11 ~~~~~

Ian 0. Russell(BBO #673387)

PYLE ROME EHRENBERG PC2 Liberty Square, 10th FloorBoston, MA 02109(617) 367-7200irussell@pylerome.com

Nicole Horberg Decter(BBO #658268)

SEGAL ROITMAN, LLP111 Devonshire Street, 5th FloorBoston, MA 02109(617) 742-0208ndecter@segalroitman.com

DATED: July 31, 2014

30

CERTIFICATE OF SERVICE

I hereby certify that on July 31, 2014, two trueand accurate copies of this brief were delivered byfirst class mail to:

Hillary SchwabBrant Casavant

FAIR WORK P.C.

192 South Street, Suite 450

Boston, MA 02111

Robert Kutner

Stephen Perry

Christopher Maffucci

CASNER & EDWARDS LLP

303 Congress Street

Boston, MA 02110

31

Ian 0. Russell

CERTIFICATE OF COMPLIANCE

I hereby certify that this brief complies withthe rules of this Court that pertain to the format andfiling of briefs.

Ian 0. Russell

32

', ADDENDUM TABLE OF CONTENTS

An Advisory from the Attorney General's Fair Labor

Division on M.G.L. c. 149, ~ 148B, 2008/1......Add. 1

Executive Order No. 499 .........................Add. 8

St. 2008, c. 304, ~~ 1-32 ......................Add. 13

House No. 5075, Letter to Senate and

House of Representatives from

Gov. Deval Patrick (Aug. 2008) ................Add. 45

National Association of Realtors,

"Independent Contractor Status -

Frequently Asked Questions" ..................Add. 49

An Advisory from the Attorney General's Fair Labor Division onM.G.L. c. 149, s.148B

2008/11

The Office of the Attorney General (AGO) issues the following Advisory regarding M.G.L, c. 149, s.1483, the Massachusetts Independent Contractor Law or the Massachusetts Misclassification Law (the"Law"). This Advisory provides guidance with respect to the Attorney General's understanding of and

i enforcement of the Law. This Advisory is not a formal opinion. Opinions of the Attorney General areformal documents rendered pursuant to specific statutory authority. M.G.L. e. 12. s. 3, 6 and 9. TheAdvisory is intended to provide guidance only and does not create any rights or remedies.

I. INTRODUCTION

A. The Need for Enforcement

The need for proper classification of individuals in the workplace is of paramount importance to theCommonwealth.z Entities that misclassify individuals are in many cases committing insurance fraud anddeprive individuals of the many protections and benefits, both public and private, that employees enjoy.Misclassified individuals are often left without unemployment insurance and workers' compensationbenefits. In addition, misclassified individuals do not have access to employer-provided health care andmay be paid reduced wages or cash as wage payments.

Similarly, entities that misclassify individuals deprive the Commonwealth of taY revenue that the statewould otherwise receive from payroll taxes. In addition, as a result of misclassification, theCommonwealth often incurs additional costs, such as providing health care coverage for uninsuredworkers. Other potential costs for the Commonwealth include providing workers' compensation benefitspaid by the Workers' Compensation Trust Fund, and unemployment assistance without employercontribution into the Division of Unemployment Assistance fund,.among other indirect costs.

Finally, businesses that properly classify employees and follow all of the relevant statutes regardingemployment are likely to be at a distinct competitive disadvantage when vying for the same work,customers or contracts as those businesses that do not play by the rules. Further, by paying the propertaxes and insurance premiums, businesses following the Law are, in effect, subsidizing those businessesthat do not. Misclassification undermines fair market competition and negatively impacts the businessenvironment in the Commonwealth. The AGO expects businesses to contract only with businesses thatproperly classify their workers.

1 This Advisory supersedes the Attorney General's prior Advisories regarding M.G.L. c. 1~9. s. 14$B, including"An Advisory from the Attorney General, Amendments to Massachusetts Independent Contractor Law," Advisory2004/2; and an "Advisory from the Attorney General's Fair Labor and Business Practices Division on the Issue ofEmployee Versus Independent Contractor," Advisory 94/3.z The Commissioner of Revenue is charged with administering the Massachusetts wage withholding laws underM.G.L. c. 6~8, which provides a different definition of employee than ii~.C~.L, c. 149, s. 14~~3, for purposes ofMassachusetts income tax withholding. See .T~e,~~artrnc;nt aflZevenare T7R OS-II ~ F{fect of ~~'e~i~ Fm,~~Tovee~Jassifzcc~tion under;til G.L. c. 1=1.9..s. 14813 nn l3ritlalaolclin~ r~f7ax ors ~T'ae•e.s undef• ~17CT I c t'~1i. In addition, adefinition similar but not identical to M.G.L. c. 149, s. 148B, exists for unemployment insurance purposes. NI.Ci.L.c. 1S 1A. s. 2. The Massachusetts Workers' Compensation Law also provides a different definition of employee.14~LG:L. c. t52, s. 'I(4).

Advisory 2008/1

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Page 1 of 7

B. The History of the Law

The proper classification of employees has long been an issue of great concern in the Commonwealth.Under common law, a number of factors determined the existence of an employer/employee relationshipbased on the totality of the relationship. See, e.g., Commonwealth v. Savage, 31 Mass. App. Ct. 714(1991). Those factors included the degree of control; the opportunity for profit and risk of loss, theemployee's investment in the business facility, the permanency of the relationship, the skill required andthe degree to which the employee's services were integral to the business.

In 1990, Massachusetts enacted the first version of the Law. By enacting the Law, the Legislatureestablished that notwithstanding that a working relationship could be considered to be one of independentcontractor under common law, the worker may still be deemed in employment for the purposes of theLaw. Boston Bicycle Cour^ieNS v. Deputy Di~ecto~ of the Division ofEmployfnent and Ti^aining, 56 Mass.App. Ct. 473, 477 (2002).

Subsequent to its enactment in 1990, the Law has undergone several amendments including: Section 214of Chapter 286 of the Acts of 1992; Section 165 of Chapter 110 of the Acts of 1993; Section 12 ofCha~~ter 23~ oftlie Acts of It398; and Section 26 of Cl~a~ter 193 a[ the acts 012004. The 2004amendment was part of legislation making broad changes to the laws governing the public constructionindustry. However, the Law, including the 2004 amendment, applies more broadly to a wide range ofindustries. The 2004 amendment kept intact, in large part, the standard for determining whether anindividual is an employee, but made several changes from the earlier version of the statute. Theamendment deleted the element "or is performed outside of all places of the business of the enterprise" asan alternative factor in prong two. In addition, the first element of prong two of the Law had read: "suchservice is performed ... outside the usual course of business for which the service is peg foamed..." Afterthe 2004 amendment, the element reads: "the service is performed outside the usual course of business ofthe employe)°." Finally, the amendment added "trade" to the list of activities eligible for independentcontractor status in prong three.

II. THE LAW

M.G.I,. c. 149, s. 1488, provides athree-part test which requires-that all three elements (commonlyreferred to as prongs one, two and three or the A, B, C test) must exist in order for an individual to beclassified other than as an employee. The burden of proof is on the employer, and the inability of anemployer to prove any one of the prongs is sufficient to conclude that the individual in question is anemployee. M.CJ.L, c. 149 s. 14SB (using the term "unless"). See also Sealli v. Citizens I'i~zancial Gror.~n,2006 WL 1581625, * 14 (D. Mass. 2006); Rainbow Development, LLC v. Com., Dept. of IndustrialAccidents, 2005 WL 3543770, *2 (Mass. Sup. Ct. 2005).

Courts have had a limited opportunity to interpret M.G.L,, c. I49t s. 148B. In College News SeNVice v.Deparhnent of Industrial Accidents, 21 Mass.L.Rptr. 464, 2006 WL 2830971, the Superior Court notedthat M.G.L. c. 14}, s. 148 is almost identical to M.G.L. c. 151A, s, 2, the statute used by the Division ofUnemployment Assistance, and therefore relied on the case law analyzing 1VI.G.L. c. 151. s. 2. tointerpret ?~1.G.I,. c. 149, s. l~&L. See *4 ("If the Legislature uses the same language in several provisionsconcerning the same subject matter [e.g., the definition of an employee in distinction from an independentcontractor], the courts will presume it to have given the language the same meaning in each provision.").

Advisory 200811

Add. 2

Page 2 of 7

See also Commonwealth v. Gee°mano, 379 Mass. 268, 275-76 (1979). Because prongs one and three ofM.G.1 . c. 1~9, s. 1 ~8B and M.G.L. c. 1 ~ 1A, s. 2 are nearly identical and because prong two of M.G.L,. c.149, s. 14sB contains one of the two steps of prong two in M.G.L. c. 151A, s. 2, Massachusetts case lawinterpreting IvI.G.L. c. 151A, s. 2 provides a useful guide to interpreting 1!C.G.L. c. 149, s. 14~4B.

A. The Three Prong Test

Prong One: Freedom from Control

The first prong of M.G.I.. c. 149, s, 1488 provides that the individual must be "free from control anddirection in connection with the performance of the service, both under his contract for the performanceof service and in fact" in order for the individual to be an independent contractor. In Commissioner of theDivision of UnenzploymentAssistance v. Town Taxi of Cape Cod, 68 Mass. App. Ct. 426, 434 (2007), theCourt noted in interpreting the nearly identical language of prong one of M.G.L. c, 151A, s. 2 that:

The first part of the test examines the degree of control and direction retained by theemploying entity over the services performed. The burden is upon the employer todemonstrate that the services at issue are performed free from its control or direction. Thetest is not so narrow as to require that a worker be entirely free from direction and controlfrom outside forces.

Id. (citations omitted).

The first prong of the test includes a determination of the employer's actual control and direction of the- individual. See M.CT.I.,. c. 149, s, l4f~B (using the phrase "in fact"). An employment contract or job

description indicating that an individual is free from supervisory direction or control is insufficient byitself to classify an individual as an independent contractor under the Law. To be free from an employer'sdirection and control, a worker's activities and duties should actually be carried out with minimalinstruction. For example, an independent contractor completes the job using his or her own approach withlittle direction and dictates the hours that he or she will work on the job.

Prong Two: Service Outside the Usual Course of the Employer's Business

Prong two of M.G.I... c. 149, s, l ~8I3(a)(2} provides that the service the individual performs must be"outside the usual course of business of the employer" in order for the individual to not be classified as anemployee. Prior to the 2004 amendment, the employer could alternatively demonstrate that the work wasperformed "outside of all places of the business of the enterprise." The Law does not define "usualcourse of business" and Massachusetts courts have had limited opportunities to do so. In Athol DailyNews v. Division ofEmployment and Training, 439 Mass. 171, 179 (2003), the Court found thatnewspaper carriers were performing the "usual course of business" of the newspaper relying on theemployer's own definition of its business. In American Zurich v. Dept. of Industrial Accidents, 2006 WI,2205085, *4 (Mass. Super. 2006), Judge Paul Troy noted that "a worker whose services form a regularand continuing part of the employer's business" and "whose method of operation is not such anindependent business" through which workers' compensation costs can be channeled, "should be found tobe an employee." Id. Yet, "if the worker is performing services that are part of an independent, separate,and distinct business from that of the employer," prong two is not implicated. Id.

Advisory 2008/1

Add. 3

Page 3 of 7

Prong Three: Independent Trade, Occupation, Profession or Business

Prong three provides that 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" in orderfor the individual to be classified other than as an employee. M..Ci.L. c. 1~9, s. ].4$:I~(a)(3}. "Under thethird prong, the court is to consider whether the service in question could be viewed as an independenttrade or business because the worker is capable of performing the service to anyone wishing to availthemselves of the service or, conversely, whether the nature of the business compels the worker to depend

- on asingle-employer for the continuation of the services,"-Coverall v. Division of Zlnemployment - - -Assistance, 447 Mass. 852, 857-58 (2006) (interpreting prong three of M.G.L. c. 151A, s. 2). The courtwent on to note in Coverall:

Although the court can consider whether a worker is capable of performing the service to anyonewishing to avail themselves of the services, the court may also consider whether the nature of thebusiness compels the worker to depend on a single employer for the continuation of the services[citation omitted]. In this regard, we determine whether the worker is wearing the hat of theemployee of the employing company, or is wearing the hat of his own independent enterprise.

Id.

B. Issues Deemed Irrelevant

An employer's failure to withhold taxes, contribute to unemployment compensation, or provide worker'scompensation is not considered when analyzing whether an employee has been appropriately classified asan employee. M.G.L, c. 149, s. 1.4~B(b). Hence, an employer's belief that a worker should be anindependent contractor has no relevance in determining whether there has been violation of the Law.Similarly, the Law deems irrelevant the status of a worker as a "sole proprietor or partnership," for thepurpose of obtaining worker's compensation insurance. M.C'x:L. c. 1'k9, s. 148B{"c).

C. Violation of the Law

M.G.L. c. 1~9, s. 1~8}3(d) provides that an employer violates the statute when twa acts occur. First, theemployer classifies or treats the individual other than as an employee although the worker does not meeteach of the criteria in the three prong test. Second, in receiving services from the individual, theemployer violates one or more of the following laws enumerated in the Law:• The wage and hour laws set forth in M.G.L. c. 149.• The minimum wage law set out in :M:.C.T.I.,. c. 1 S 1. s. lA, lB, and 1 J; 45S C:IvLR 2.()1, et seq.• The overtime law set forth in NI.G.1~. c. 151 s. 1 1A 1B aad 19.• The law requiring employers to keep true and accurate employee payroll records, and to furnish

the records to the Attorney General upon request as required by IvI.G.Z. c. 1 ti 1 s. 15.• Provisions requiring employers to take and pay over withholding ta~Yes on employee wages.

M.Ci.L. c. 62B.3• The worker's compensation provisions punishing knowing misclassification of an employee.

M.G.I,. c. 152, s. 14.

3 As noted in footnote 2, for purposes of income taY withholding, M.{i.L. c. ~2B provides a definition of employeethat differs from the three prong test in NI.G:L. c. 1~9, s. 148B.

Advisory 2008/1

Add. 4

Page 4 of 7

The statute authorizes the Attorney General to impose substantial civil and criminal penalties, and in

certain circumstances, to debar violators from public works contracts. 1vI.G.I,. c. 149, s. 27C(al(31. The

penalties and length of debarment depend upon the nature and number of violations. M.G.L. c. 1~9, s.

I4~B d also creates liability for both business entities and individuals, including corporate officers, and

those with management authority over affected workers.

...III. ENFORCEMENT GUIDELINES

A. General Enforcement Guidelines

The AGO recognizes that enforcement guidelines are useful to employers, entities and individuals who

must determine whether a particular situation or individual has employee status. When enforcing the

Law, the AGO attempts to protect workers, legitimate businesses and the Commonwealth, consistent with

the goals of the Law outlined in the Introduction.

The Law is focused on the misclassification of individuals. In the event that all individuals performing a

service are classified and legitimately treated as employees of an entity (paid W-2 income, received W-2

tax forms, subject to withholdings for federal and state taxes, covered by workers' compensation

insurance, eligible for unemployment compensation benefits, etc.) and are performing the service as an

employee, then there is no misclassification of those workers. Accordingly, in determining whether the

Law has been violated, the initial question is whether an individual or individuals are classified other than

an employee. For example, if painting company X cannot finish a painting job and hires painting

company Y as a subcontractor to finish the painting job, provided that all of the individuals performing

the painting are employees of company Y, then the Law does not apply. However, if painting company X

hires individuals as independent contractors to finish the painting job, then this would be a violation of

prong two and a misclassification under the Law.

The AGO is cognizant that there are legitimate independent contractors and business-to-business

relationships in the Commonwealth. These business relationships are important to the economic

wellbeing of the Commonwealth and, provided that they are legitimate and fulfill their legal requirements,

they will not be adversely impacted by enforcement of the Law. -The difficulty arises when businesses are

created and maintained in order to avoid the Law. The AGO will enforce the Law against entities that

allow, request or contract with corporate entities such as LLCs or S corporations that exist for the purpose

of avoiding the Law. In these situations, the AGO will consider, among other factors, whether: the

services of the alleged independent contractor are not actually available to entities beyond the contracting

entity, even if they purport to be so; whether the business of the contracting entity is no different than the

services performed by the alleged independent contractor; or the alleged independent contractor is only a

business requested or required to be so by the contracting entity.

In reviewing situations for misclassification, the AGO considers certain factors to be strong indications of

misclassification that warrant further investigation and may result in enforcement. These include:

• Individuals providing services for an employer that are not reflected on the employer's business

records;• Individuals providing services who are paid "off the books", "under the table", in cash or

provided no documents reflecting payment;

• Insufficient or no workers' compensation coverage exists;• Individuals providing services are not provided 1099s or W-2s by any entity;

Advisory 2008/1

Add. 5

Page 5 of 7

• The contracting entity provides equipment, tools and supplies to individuals or requires thepurchase of such materials directly from the contracting entity; and

• Alleged independent contractors do not pay income taxes or employer contributions to theDivision of Unemployment Assistance.

Since it is not feasible to address in this Advisory every situation that could occur and since each caseinvolves its own set of facts, it should be recognized that each potential enforcement action shall bereviewed by the AGO on a case-by-case basis, consistent with the Law.

B. Prong Two Guidelines

Due to the nature of prong two and the lack of judicial precedent, the AGO recognizes the complexity thatprong two presents and the concerns regarding legitimate independent contractors, particularly amongcertain segments of the workforce.

As discussed above, the AGO emphasizes that the initial question in determining whether the Law hasbeen violated is whether an individual or individuals are classified other than as an employee. Only whenan individual or.individuals are classified other than as an employee will there be a determination ofwhether any of the prongs — including the complex prong two —are violated.

In Athol Daily News, the Court advised that no prong should be read so broadly as to render the otherfactors of the test superfluous. 439 Mass. at 180. Thus, prong two should not be construed to include allaspects of a business such that prongs one and three become unnecessary.

In its enforcement actions, the AGO will consider whether the service the individual is performing isnecessary to the business of the employing unit or merely incidental in determining whether theindividual may be properly classified as other than an employee under prong two.

Some examples of how the Attorney General will apply prong two4:• A drywall company classifies an individual who is installing drywall as an independent

contractor. This would be a violation of prong two because the individual installing the drywallis performing an essential part of the employer's business.

• A company in the business of providing motor vehicle appraisals classifies an individualappraiser as an independent contractor. This would be a violation of prong two because theappraiser is performing an essential part of the appraisal company's business.

• An accounting firm hires an individual to move office furniture. Prong two is not applicable(although prongs one and three may be) because the moving of furniture is incidental and notnecessary to the accounting firm's business.

4 In interpreting the Illinois independent contractor law, the Supreme Court of Illinois noted in Cmpetland U.S.A.,Inc. v. IL Dept. of EmploymentSecui°ity, 201 I11.2d 351, 386-88 (2002):

The washing of windows or mowing of grass for a business is incidental. But when one is in thebusiness of selling a product, sales calls made by sales representatives are in the usual course ofbusiness because sales calls are necessary. When one is in the business of dispatching limousines,the services of chauffeurs are provided in the usual course of business because the act of driving isnecessary to the business.

Although the Illinois statute is not the same as the Massachusetts statute, the court's analysis is useful forguidance on how the Attorney General will undertake prong two enforcement.

Advisory 2008/1

•..

Page 6 of 7

N.-CONCLUSION

As this Advisory reflects, the AGO will carry out its enforcement responsibilities to serve the goals of theLaw as articulated in the Introduction. The Law has been passed and amended over time to addressserious abuses by various entities, and the AGO's goal is to prevent and remedy those practices withoutdisrupting legitimate business activity.

Advisory 2008/1

Add. 7

Page 7 of 7

THE COMMONWEALTH OF MASSACHUSETTS;, EXECUTIVE DEPARTMENTw

~ d STATE HOUSE • BOSTON 02133

'` (617) 726-4000p~ e

~~M s~~v

OEVAL L PATRICKGOVFAN~R

TIMOTHY P. MURRAYLIEUTENANT GOVERNOR

.~ .

By His Excellency

DEVAL L. PATRICPCGOVERNOR

EXECU'T'IVE ORDER NO.499

Establishing a Joint Enforcement Task Force on theUnderground Economy and Employee Misclassification

WHEREAS, the health of the Commonwealth's economy, itsworkers and its businesses is harmed by the existence of an illegalunderground economy in which individuals and businesses concealtheir activities from government licensing, regulatory and taxingauthorities;

WHEREAS, individuals and businesses that operate in theunderground economy do so in violation of labor, employment, tax,insurance and occupational safety laws, by failing to pay requiredwages, carry workers' compensa~l:ion insurance, comply with health,safety and licensing requirements, or pay income taxes and payrolltaxes that fund unemployment insurance, disability insurance, andMedicare and Social Security benefits;

WHEREAS, certain businesses also improperly classify theiremployees as "independent contractors" (referred to as "employeemisclassification") and hire undocumented workers to avoidcompliance with labor, erriployment, tax, insurance and regulatoryrequirements;

WHEREAS, 'the underground economy and, in particular, thepractice of employee misclassification: (1) exploits vulnerable workersand deprives them of legal benefits and protections; {2) gives

Add. 8

unlawful businesses an unfair competitive advantage over lawfulbusinesses by illegally driving, down violators' taxes, wages, andother overhead costs; (3) defrauds the government of substantial taxrevenues; and (4) harms consumers who suffer at the hands ofunlicensed businesses that fail to maintain minimum levels of skillsand knowledge;

WHEREAS, a recent study based on audits of Massachusettsunemployment records for construction employers between 2002 and2005 found that up to 14% of the employees covered by the ai.~ditswere estimated to have been misclassified by employers;

WHEREAS, efforts to combat the underground economy andemployee misclassification historically have been divided amongvarious agencies, diminishing ~khe timeliness, efFiciency andeffectiveness of such efforts; and

WHEREAS, the creation ofi joint task forces has proven to bean effecfiive mechanism for enhancing interagency cooperation,information sharing, and the prosecution of violators;

NOW, THEREFORE, I, Deva{ L. Patrick, Governor of theCommonwealth of Massachusetts, by virEue of the authority vested inme by the Constitution, Part 2, c. 2, § I, Art. I, do hereby order asfollows:

Section 1. There is hereby established the Joint EnforcementTask Force on fihe Underground Economy and EmployeeMisclassification (the "Task Force").

Section 2. The Task Force shall consist of the followingmembers or their designees: the Director of Labor, theCommissioner of Revenue, 'the Commissioner of the Department ofIndustrial Accidents, the Chief of the Attorney General's Fair LabarDivision, the Commissioner of the Division of Occupational Safety,the Commissioner of the Department of Public Safety, the director ofthe Division of Professional Licensure, the Director of ApprenticeshipTraining and the Director of the Division of UnemploymentAssistance. The Director of Labor shall chair the Task Force.

2

Add. 9

Section 3. The Task Force shall coordinate joint efforts tocombat the underground economy and employee rriisclassification,including efforts to: (a) foster compliance with the law by educatingbusiness owners and employees about applicable requirements.;._(b) conduct joint, targeted inves~tigai;ions and enforcement actionsagainst violators; (c) protect the health, safety and benefit rights ofworkers; and (d) restore competitive equality for law-abidingbusinesses.

In fulfilling its mission, the Task Force shall:

a. Facilitate timely information sharing between and amongTask .Farce members, including through theestablishment of protocols by which participatingagencies will advise or refer to other agencies matters ofpotential investigative interest;

b. Identify those industries and sectors where theunderground economy and employee misclassificationare most prevalent and target Task Force members'investigative and enforcement resources against thosesectors, including through the formation of jointinvestigative and enfiorcement teams;

c. Assess existing investigative and enforcement methods,both in Massachusetts and~in other jurisdictions, anddevelop and recommend strategies to improve thosemethods;

d. Encourage businesses and individuals to identify violatorsby soliciting information from the public, facilitating thefiling of complaints, and enhancing the availablemechanisms by which workers can report suspectedvio{ations;

e. Solicit the cooperation and participation of districtattorneys and other relevant enforcement agencies,including the Insurance Fraud Bureau, and establishprocedures for referring cases to prosecuting authoritiesas appropriate;

Add. 10

f. Work cooperatively with employers, labor, and communitygroups to diminish the. size of the underground economyand reduce the number of employee misclassifications by,among other means, disseminating educational materialsregarding the applicable laws, including the legaldistinctions between independent contractors andemployees, and increasing public awareness of the harmcaused by the underground economy and employeemisclassification;

g. Work cooperatively with federal, commonwealth, andlocal social services agencies to provide assistance tovulnerable populations that have been exploited by theunderground economy and employee misclassification,including but not limited to immigrant workers;

h. Identify potential regulatory or statutory changes thatwould strengthen enforcement efforts, including anychanges needed to resolve existing legal ambiguities orinconsistencies, as well as potential legal procedures forfacilitating individual enforcement efforts; and

i. Consult with representatives of business and organizedlabor, members of the General Court, community groupsand other agencies concerning the activities of the TaskForce and its members and ways of improving itseffectiveness, including consideration of whether toestablish an advisory panel under the secretary of Iaborand workforce development.

Section 4. The Task Force shat( transmit an annual report tothe Governor summarizing tl~e Task Force's activities during thepreceding year. The report shall, without limitation: (a) describe theTask Force's efforts and accomplishments during the year;(b) identify any admiriis~trative or legal barriers impeding 'the moreeffective operation of the Task Force, including any barriers toinformation sharing or joint action; (c) propose, after consultation withrepresentatives of business and organized labor, members of thelegislature and other agencies, appropriate administrative, legislative,

Add. 11

or regulatory changes to strengthen the Task Force's operations andenforcement efforts and reduce or eliminate any barriers to thoseefForts; and (d) identify successful preventative mechanisms for..reducing the. extent of the underground economy and employeemisclassification, thereby reducing the need for greater enforcement.The Task Force also shall take appropriate steps to publicize itsactivities.

Section 5. To the extent permitted by law, every agency witriinthe Executive Branch shall make all reasonable efforts to cooperatewith the Task Force and to furnish such information and assistanceas the Task Force reasonably deems necessary to accomplish itspurposes.

Section 6. Nothing in this Executive Order shall be construedto require aci:ion inconsistent with any applicable state or federal law.

Section 7. This Executive Order shall coritinuz in effect untilamended, superseded, or revoked by s~sbsequent Executive Order.

~, ~ ,.~ ._~i.

Given at the Exe utive Chamber inBoston 'this ~,~~ay of March in the yearof our Lord two thousand and eight andof the Independence of the UnitedStates, two hun ~ 'rt -two.

M1

Q~

`~ DEVAL L. PATRICKGOVERNORCommonwealth of Massachusetts

WILLIAM FRANCIS GALVINSecretary of the Commonwealth

GOD SAVE THE COMMONWEALTH OF MASSACHUSETTS

5

Add. 12

AG~.S

24}f~$

Ch~ptet` 3Q4 AN ACT PROVIDING FOR CAPITAL FACILITY REPAIRS AND IMPP.OVEMEI4TS FQR THECOf~1MONWEALTH.

tNhereas, The deferred operation of this act would tend fits defeat its purpose, which is to pravidefarthwith fr~r the irt~medi~te capital improvem~r~t needs of the comm~r~wealth, therefore i~ is herebyde~3~recl to be are ee~r~ergency law; necessary fc~r the irr~mediate preservation of thy: publicconvenience.

Be if ~nac~ed by the Sena~~ and Nouse cif Representatives irr General Cocrrt ~sseartbled, and bythe authority of the same as foilovis:

SECTI~ht 1. To provide fc~r a program of capital facility repairs ar~d improvements tc~ prntect art

improve fihe capital facilities ofithe carnmonwealth and for a program of capital asset ~cquisitic~nsfor genera! gaver~ment operations, the sums sit fiorfih in sectir~ns 2A, 2B, 2C and 2D, inclusive, forthe several purposes and subject tc~ fih~ conditions specified in this act are hereby made available,subject fo the Paws regulating the disbursement of public funds, which sums shall be in addition toany other amounts previousEy appropriated for these purposes.

NC.~ S~CTI~td Z.

~;

EXECUTIVE OFFICE FOR ADNfBNISTRAT~4N ACED FINANCEOffice of the Secretary

~ 100-7400.. For the recapitalization of the Massachusetts Community Development FinanceGarporation esfablish~d pursuant to s~ctic~n 2 of chapter 40F of the Genera[ Laws; prz~videc~, thatthe carporation shat! prepare a 5-year sfirategic operatic~r~s plan which shah include, buff not belimited to, {i) identification of the financial resources required to meet the missian and on-goinglending operations of the corporatian; (ii} a plan to reduce or elim€Hate the need ~c~r public subsidiesto meet the missian ~f fihe carporafiion; ar~d (iii} identificatie~n of the corporate rel~tiar~ship tc~ andpurpose cif any affiliated or subsidiary co€~parations, including a description of haw the affiliation orsubsidiary relationship is cansistent with the objective of fu[~Iling the rr~issian of the corparationa andprovided further, that the corporation sha!! submit the strategic operations plan to the executiveoffice far administration and finance and fo the hau~e and senate committees Qr~ ways and meansHat later than December 3~ , 2008 $10,000,0(}0

Add. 13

1 ~ 00-92Q0.. For costs associated with the purchase and procurement of equipment far general

government operations ....................... $25Q,~O.Q,OOQ

~:1 ' ~ TI 117~~Cil~~F7~:1~~.~#C~I4'y,1~~1•/:~~t~y !1lI~~~~

X000-0700.. Fnr equipment fnr the depar~menf of correction and other agencies wifihin the........

executive t~fFce of public safety aid security including, but nofi limited t~, medical equipment,

securifiJ equipment and ~ommunieations equipment ............................................. $25,0OO,OClQ

8Q04-2020.. Fc~r the design, canstructi~n arrd implementation of the department of st~fe police

mobile data network and are automated rr~otorvehicle ciliation system, including the use ofi"MDT"

devices............ p15,C?OQ,000

s~ aa-~o~~.. For the rep6ac~menf o~ stag police cruisers; provided, that the state police shalldevelap a 5-year plan which specifies the number of vehicles to be replaced each fiscal year over a

5-year perifld~ provided fiurther, that the department shall report annually to the house and senate

committees an ways and means the number of vehicles and condition of each vehicEe replaced

under this plan; provided further, that the r~pa€~ shalE a9so include, but not be limited ta, the tats(

amount spent in each fiscal year; ~~d provided further, that the f rs~ report shall be Fled by January

1!* ~~1 i1 11

8100-90 0., far the purchase cif state police helicopters; provided, that the state police shall trade

in 1 helicopter frcam the current inventary of helicopters each time a repfacemenfi medium lift

helicopter is purchased, and the value of the trade-in shall be used to reduce fihe negotiated

purchase price of the replacement helicopter.....,.. $25,000,000

EXECUTNE {~FF[CE FC~R ADMINISTRATION AND FINANCE

lnformatian and Technology Division

1790-30fl0.. for casts assaciate with planning and studies, the preparation of plans and

specifications, purchase ar~d procurement ofinformation technoEQgy-related equipment and r~~a~~d

projects; provided, that any federal reie~abursement received by ~ state agency in connectiar~ with

projects funded from phis item may bs retained by fihe state agency and expended for the purposes

of the project, without further ~ppropri~ti4n, in addition to tf~e ame~un~s appropriated in this item,

provided fiurther, that any stag agency receiving federal reimbursements far a project funded from

this items ~fl fle a quarkerly report with fihe executive office ~c~r administration and finance, the

house and senate committees on ways and rrieans, and the joint commiftee an bonding, ca{aital

e~enditures, and state assets that details, by projecfi, an annual estimate of anticipated federal

reimbursement to be received can behalf cif and e; ended for tl~e praj~ct, as will as year-to-date

actin(federal reimbursement received and year-to-date ~ctu~l expenditures of the reimbursement,

Add. 14

by project; and provided furtherth~t $1,800,400 shelf be expended far informati€~n technalogy

systems upgrades afi the appeals court and the supreme judicial court ......................... $451,SOO,OOQ

SE~TIOt~ 2C.

EXECI~TIV~ OFFICE F4RADM~N3STPATION AND FINANCE.C7ffice of the Secretary

1100-8020.. For the Massachusetts flppc~rtunity Refrcatic~n and Exans'sc~r~ Jobs Capita( Program

related fie site remec~iation, preparatian and ancillary infrastructure imprav~ment projects; provided,

that the local executive government body and a fflr-profit entity involved in the project shall jointly

summit a request for funding to the secretary of housing as~d economic development which shall

include sufFcient documenfation including, but net limited to, a prajecf plan with specific gaal~ and

objectives fihafi fiulfy documents fife prflposed project and demonstrates that the businesses

assaciated with the projectwiil generate subs#antial sales from outside the commonwealth and will

result ire the creation of a net increase of at least 100 new permanent full-time jobs in Massachuse'~s

~~vithin 24 months after receipt o~ a grant and commits that the jabs ire to be mair~tain~d for at least

a 5-year period ar~d the jabs da not replace existing jobs elsewhere in fihe cammonwealth; and

pra~ided further, that twig annu~liy the secretary shall issue a ~nrritten report to the clerk of the hQUSe

of representatives and the clerk of the senate, who small forward the same to the chairs of the pause

artd senate commii~ees ran ways and means and the chairs of the joint committ~~ on economic

develapment and emerging technologies which shall include detailed descriptions of any

infrastructure €mprc~vement projects funded under this program, an accoun#ing of the variance, if

any, be~vueen praposed jobs and actuaE creation afjobs, the current and estimated amount of

taxable income. expected from each project and alE fiunds expended fc~r this purpose; provided

further, thafi nest less than $25,000,000 shall be granted to gafieway cities and cities with more than

40,000 inhabitants but fewer than 175,OOQ inhabitan#s where: {~ } fhe unemployment rate is at least

1.5 per cent higher than fihe statewide average; or (2}the median income of tie cifiy is 80 per cent

or I~ss of the state median inccame; and provided furkl~er, that nr~t less than $~ 5,000,040 s9~a11 be

expended on projects in cities in which bofih crifieria are applicable ................. $100,000,000

0640-0300.. for the Massachusetts Cult~raf Faciiifiies Fund established in secfian 42 of chapter

23G of the General Laws far the acquisition, design, consfiructic~n, repair, renovation, rehabifi#atiar~

ar c~fiher capital improvement ar deferred maintenance tQ a cultural lac€(ity $ 0,~J4Q,040

Division t~fCapital A.~sef Marragerrrer~t ar~d IUl~inte~►ance

The Governor disapproved certain I~nguage and re uced,fc~llowing ifem

~ 102-2Qt~8.. for cos#s associated with planning and studies, dispositions, acquisition of land and

bu'sidings and interests (herein by purchase, 6ease for a term, including any e>:tensir~ns, not to

exceed 50 years, gift or other transfers, or by eminent dcamain under chapter 79 of the General

Laws, for the pre{~ar~tion of plans and specifications, repairs, construction, renc~v~tior~s,Add. 15

imprc~ver~ents, asset management and demolition, dispasition and ~eme~iation of state-owned andformer caunty facilities end grounds and for costs associated with repair and maintenance of

buildings anc~ building systems and equipment at various facilities cif the commonwealth; provided,thafi ai3 maintenance and repair work funded irr this item shalt be listed in t~,e capita[ asstmanagement information system administered by the divisian cif capital asset management andmainter~anc~;, provided further; that, where appropriate, the coraimissioner of capital asset

management and rr►aintenance may transfer funds in acc~rdar~ce with the delegation Qf projectcnntr~l and supervision process under sectia 40B of chapter 7 of tha General Laws; provided

further, that ~'~ands sa transferred shelf be distrEbuted based gn the severity cif the need that the repair

will address end c~fh~r criteria developed by the divisian, ire consultatian with the secretary of

~dministratic~n end fnance; prnvided further, that oasts p~y~ble from this item shall inc3ude, but not

b~ limited ta, fihe casts ~f engineering and other services essenfiia(fio these projects rendered bydivision t~f capifi~! asset management and maintenance employees or by consu4tants;

9 7

prr~vided further, that amounts

emended for division empEayees may include the salary and s~9ary~re[~ted eayaenses flf these

employees to the extent ghat they work on or i n support of these projects; pravided further that, upan

certification by the cammissic~ner c~fi education pursuant to sec~ian 4 of chapter 463 of the acts cif

2004, $60,QOO,OOQ sh~l( be expended for costs associated with the construction of the Essex Narth

Shore Agricultural and T~chnic~E Schaal in the fawn cif Danvers; provided further, that not less than$24,00~,OOQ sha[9 be expended Fc~r the constr~ctian of the Massachusetts Psyci~iatric Respite! in

fih~ city of Warcester; and provided furtE~~r, thafi ~1,~0O,OOQ shall b~ expended far infrastructureimprovements end maintenance equipment at fihe Murphy Skating Rink in the South_ Bostan section

of the city of Boston ............................................... ~ $460,000,000

The governor d~sappraved c~rEain language and reduced following ifiem

11 fl0-3001.. Far a grant program to cities and towns for fihe purpose of providing funding fcar the

repair, renovation or canstructian of municipal f~ci6ities ar €nfrastructure or of any cul~ura(, saciaf,recr~atior~al ter other facilities serving ~ municipal purpn~e, including these owned or operated by

nc~nprofi'rt orgni~tions, fiechnc~logY upgrades ar~d purcl~~se of equipment, under rules adopted by

the executive c~fFce far administration and finance based upon the following criteria: an assesst~ner~tof fiscal and budgetary canstraints facing the rnur~icipality; an analysis of the municip~li~y's

proposed budget and ~n~ncing of the repair, re ov~tian, or cc~r~struction project; the municipalifiy's

need far fihe prc~~ect; the b n fifis try the municipality that will resui~ from fihe project; and an overallevaluation of the merits of the grant propc~saE; provided, that the execufiive mice of adminisfiratian

and finance may expend not more than 1 per cent cif the total amount available far the cast ofadministering phis program; provided further, fh~t not fess than $~ OO,OOQ shall be expended far theconsfiruction Qf a concrete ~o~anda~€on for refrigerant pipes afi fihe Bourne Ice Rink; provided further,

that not less than 1,0O ,OQO shall be expended far the lVlunicipal Stadium safiety p~-c~j~ct; providedfurther, that nat less than ~1,200,OOC~ shall bee ended fc~r improvements to the Nevvburyport

Add. 16

senior center in Newburyport, provided further, that not less than $7,000,000 sha[( be expended far

improvements to the Haverhill Stadium in Haverhill; provided fiurther, that not less than X100,000

shall be expended far renovations of Lakeville fawn hall; provided further, That not less than

$~ X0,400 steal! be expended fior renov~fiions ofi Freetcawn town half; provided further, that nc~t less

than $fi OO,OOQ shall be expended for renovations of Middleborough tcswn teal[; pr~avided further, that

not less thin $75, 00 sh~l1 be expended for canstructic~n of ~ parking lot at the Cauncil on Aging in

Middl~barough provided further, thaf not less than $3,50(3,000 shall be expended for wafi~rfront

develcapm~nt in Beverly, provided further, that nc~t less than 10,fl00,000 sell ~e expended for

clean up of the f~rrr~er Belchertown state schaal property; provided further, that nat less than

$4,0OO,OUQ shall k~e expended for restoration of the Loew's Pali PaEace Theatre; pravided further,

that nc~t less than $5 0,000 shall be expended far repairs tQ the H~mi(ton Center in Newton Lower

Falls; provided further, that nc~t 3ess than $30,000,000 shall be expended for repair Qr replacement

of v~ater pipes faceted under state highway routes 1 ar~d 39 in Saugus and that said appropriation

sha11 ~Iso be used for reimbursement to the town of Saugus for fhe cost o~ breaks to said pies

located under said sfiate highways; provided further, that not less than $2,00 ,000 shall be

expended fir the Hope House in the city of Bastan; provided further, that net [ess than $2,C?Q0,000

shal6 be expended for tyre Watertown Boys' and Gir€s' Club, (nc.; prQVided further that net less than

$'1,500,OOfl shall be expended for repairing the irrigation system at the Leo J. Martin golf course in

the city of Easton; provided further, that r at less than $250,000 shelf be expended for the Amesbury

Carriage Museum in the city of Amesbury; provided further, that not less fih~n $1,00 ,000 in

matching funds steal! be expended for the construction of a new senior citizen center in the tawn of

Ca~fon; pravided further, that net [ess than $250,000 shah[ be spent an renovations and

imprr~vemer~ts to the Qalton Town H~if; provided further, that nofi less than $2,50 ,000 shall be

expended fc~rfihe renovafiion and restorafiion of the Everett Nall Theatre in fihe Hyde Park secfiion csf

Briton; provided further, that not less than $40,000 shall be expended for the construe#ion and

maint~~ance of trails in the Tawn of Hearne; provided further, fhat raof {ess than $250,OU0 steal[ be

expended fc~r rehabil~fiation and renovafiions to the Gardner Seniar Center; prr~vided fiur~h~r, that neat

less than $5Q0,00 steal! be expended for the Tawn of Ashland, to create a quiet zone a~ the grade

level crossing on Cherry Strut in Ashland, to improve economic devefapmer~t and public safety in

the Town of Ashland; pravided further, thaf net less than $800,000 shall be expended for the

reconstruction of Ra to 133 from Chestnut Street fio Carlfion Drive and Routs 97 from the Grovelan~

line t~ Moulton Street in fhe Tawn of Georgetown; provided further, that not less thae~ $3QO,OOC~ shall

be expended for BaiBey Lane Bridge Replacement and Road 9rs~provements ire the Town of

Gearge~ow~; provided further, thafi not less than X3,000,000 shall be expended to the te~wn of

Burlington far fihe design, construction, and impl ~ner~t tio~ cif a capital infrastructure improvement

project adj~cen~ to Route 3 and MiddlesexTum ike in the town o~ Burlington; pravided fiurt er, thafi

net less fihan $~C~0,000 shalt be expended far infrastructure improvements related to pedestrian

safety, vehicle access and parking fnr the proposed Andover Youth Center in the Town of Andover;

prc~~i ed furkher, that net leis than 100,QOQ sh~11 be expended fr~r renovations of Charlton Town

Hall; provided further, that not less than $50,000 shall be expended for renovations of fast

Braokfie(d Tawn Hall; pravided further, that not less th~r~ $250,0 0 steal[ be emended to estabEish a

Add. 17

pifat pragr~m for implementing automatic meter-reading technc~[ogy, to be administered jointly bythe Braintree ~le~tric Light Department and the Braintree Water and Sewer Department; providedfurther, fhafi not less than $500,OOQ shat€ be expended for improvements fio the Water and Sewerbuilding in fibs fiovvn of ~rainfir~e; provided further, that not I~ss than $20x,000 shall be expended fiothe ~anie(s ~armste~d Faundation; provided further, teat not less than ~150,0~0 shat{ be e~aendedfor the construction of a new S~[t Shed in the city of Fitchburg; provided further, that not less than$250,000 ~ha91 be ~xpend~d for upgrades tca the el~;vator at the Council on Aging Center ~nBiRlerica; provided f~~rfiher, that not less than 25C1,Q00 shill be expended oi~ rer~ov~tions fc~r theA#hoi Senir~r Center; provided further, that not €ess than $1,000,004 be expended for the resto~atiar~of the Lynch Park Carriage House in the city cif Bev~r6y; provided further, that not less than$25x,000 shat[ be expended for ADA compli~t~ce at the tovun hal[ in Egremont; provided fur~h~r, thatnot less thin $X}0,000 shall ~e expended on the Beebe WoodslNighfield Qrive Walking Path ~~dparking facility in the Town of ~almc~uth; provided further, that not less than $20C3,OOQ shall beexpended of~ the design, ren~vatio~ and rec~nstrt~ction of the Surf Drive Bath House and the t~€dSilver Beach Bath House ire fibs Tawn of Falrncstath; provided ~ur~her, that nc~t less fihar~ $Z,O~lO,QOQshill be expe€~ded for the Town of rramingh~m to construct ~ C3owntown Parking Garage in closepra~t~ityto Framingham Memorial Bu6lding, serving TQV~n Uovernrnent, commercial, and relatedregian~l Public Service and Public Safety opeeatians; provided furkher, fh~t not less than$1,Q00,000 shall be expended for capital impravernents to the Bridgewater senior center in thetown afi Bridgewater; provided further, thafi $75 ,{300 shall be expended fior the Loring SkatingArena in the tawn 4f Framingham; provided further, that not leis than $1,000,000 shall be expendedfor the Presentation School in Brighton; provided further, that not less than $2,00O,OOU shall beexpended o~°a Fenvvay Community Health Center; provided further, t~a~ nQt €ess than $60 ,000 shallbe expended for Prc~jecfi PEace in Boston; provided further, that not less than $250,000 shill bee~rended far c~mmunicat€ons cansoles for the Braintree palice c~eparfinent; provided further, thatnot less than $250,000 Shall be expended fiat creation and deve[c~pment of a seniar center inCanfian; provided fuck er, that nofi less than $~ ,OOO,QQO shalt be expended for design endconsfiruction pf a performing arts center in Milton; provided further, that nofi less than $1,St?O,OOQshall be emended for design and constructian of a senior center in East Bridgewater; providedfurther, that not less th~rr $5,000,000 shall be expended for design and canstructian of a departmentof public works aper~fiions cenfier ire East Bric~gew ter; provided further, fihat nofi less than$'~O,OOQ,000 shall b~ expended far a municipal maintenance facility in Canton; provided further, thatnat less than $100,000 shall be expended for repairs to the Chester fawn hale; provided further, thatnot less than 5U0,000 shall be expended for renc~vati~ns to the nld tQUVr~ half in Easthampt~r~,provided further, that nat less than $24,000,000 shill b expended fc~r the Westfield i termc~da[ ar~ddowntown revitalization inifi[ative; provided further, that nat less than $SQO,Q00 shall be expe~cied forc~tC CQtIC~I~ltJC11ClC~ ~t CITY ~6c'~II f~l LyCiCI; provided further, that nc~~ less fi an $4,917,000 shall be e~aendedfnr waterfrc~n~ development in Lynn; provided further, that nit less than $2,253,395 shall beexpended for reconstruction cif the Ward bath ~c~use in Lynn; provided further, that not less than$1,QOO,fl00 shall be expended for improvements tt~ the Grand Array of the Republic build €rig inLynn; provided further, that no less thin $350;000 shall e e;.~ended for design end renovation of

Add. 18

Topsfield town hail; provided #urther, that $500,OQ0 shalE be expended for capital impravements to

the Trailside museum; provided further, that not less than $200,000 shall be emended for

Watertown Landing; provided further, that the sum of $2£~f~,000 sha16 be made available on a

matching basis wifih the town for the e~ter~sion and repair of sidewalks on Rote #1 ~ 3 in the fawn of

West Newbury; pr~u~ded farther, that nc~t less thin $100,000 be expended fc~r irr~pravernents to the

Cie ar~ment of Publ€c W~arks Maintenance Facilities i~ the city of UVest Spring~ieid; provided further,

~h~t got less thin $~ ,Q00,000 sha€I be expended for the consfructic~n of a seniar cenfier in the TQwr~

of VOfestmir~stee; pr€~vi ed f~€r~h~r, that not less than $1,QOO,OflO be expended fio the Department of

Public Works located ire the Tov~n cif Weymouth; provided further, that $5Q0,000 sha[I b~ expended

fQr repairs anei renavations to the ~anbc~rn House Culfiura! Facility in the Town of Winchester;

provided further, that X100,000 shall be expended for the Veterans memorial Hc~r~or Roll in the Town

of WincFtester, ravided further, that $3,0OO,OQ4 shall ~e expended far fibs design and consfirucfiion

c~~ a parking ~ar~ge in the Town ref iNinchester; provided further, that nc~t less than $1,000,000 shall

be ex ors ed for capital improvements to the V~ir~throp senior center in the town cf Winthrop;

p~c~~ided further, that nofi less than $176,OC}0 shall be expended fc~r development grants to the

1Naters Farm living Nistc~ry IV9useu~r~; prouided furkher, that not less than $240,000 shat! be

~xpe~ded ficar rer~ovat~ons ~t. the town ha(! in the town of Spencer; pravided further, that nc~t less than

$30,Q00 sha{I ~e exp~r~ded for the resfaration of the ~istaric North Purchase street school hose;

provided further ghat n€~fi less than ~25,OOQ shall be expended ft~r ~ comprehensive study to develop

sign end gr~p~ic standards fic~r the Plymouth Historic District; provided further, that not less than

$~S,G~~O sha61 be expended for landscape design and permi#ting for r~E~abif€cation cif the Training

Green in Plymouth; provided further, that not less th~r~ $3,500,000 shat! be e~~nded for design and

consfirucfiian proJect~ recommended by the Plymouth Public space Action Plan (2007); provided

fu~k~~r, that n~fi less than $250,000 shall be expended fior dag recreation space at Ronan park in the

~archester sectian ~f the city of Boston; provided further, that not less thin $~ OO,OQO shall be

expended for nevv facilities and improvemenfis at Almont park in the Matt~pan ~ecfiian cif the city of

Bas~~an; provided further, that nc~t 1~ss than $104,Q00 shall be expended for new facilities and

improvements at Walker Pfaygral~nd afi Norfi~~k Park. in the Mattapan secfiion of the city of Bostcar~;

provided further, that not less than $4,OU0,~(l0 shall be emended for design and constructian

projects an VI/ ter Strut as recommended by the Plymouth Public Space Action Plan (2007);

provided further, fihat not less than X155,000 sl~al9 be expended ficar street lighfis in the firawn of

~oume; provided ft~rkher, that not less than X3,200,000 shall be expended for renc~vatians at the

Falmouth Town Library; provided farther, that not less than $300,000 shall be expended for tie

historic restoraiian offihe Roc(~land Memarial Library; prouicied further, that rent less than $15,000

shall be expended for technology upgrades ~t the P[yme~uth Pubic Library; provided farther, thafi n~fi

less than $80,000 shalt be ~xper~ded fc~r the ~vlodernizafiion of the Plymouth Fire Prever~tian Bureau;

provided further, that nc~t less than $100,000 shalt be axpended fiar fibs establishment of the

Plymc~ufh Historical Records Management Program; provided further, that not less than $500,0 0

shalt e expended fc~r the restoration of the histt~ric Blanchard street schov~ house, ar~d for ACtA

improvements at the town hall, senior center, and library in the town of Uxbridge;- ,~~^°' {_,°~"-,

r

Add. 19

provided further, that notless than ~30Q,000 sf~a(I be e~er~ded for ADA compliance and entry way impravements at thetown hal! in Charlton; provided fu~her, that got less #han X665,735 shall be expended ~c~r° Q!d TownHall renavations in Barre; provided further, that r~c~~ fees th~t~ $1,OQ0,000 shall be expended fordeve(c~pment of a seniar center in Rutland; provided further, that nit less thin $1,50Q,000 shat€ be

expended for developmerst of a senior center in Tempfetflr~; provided further, that not less than

$x,540,000 vhall e ~xpertc6~d fc~r improvements to town hall in Framingham; provided further, that

nat I~~s than $8,000,000 shat! be expended for consfiruction cif a parkfnc~ g~r~ge in NafiPCk; providedfurtf~e~, that n4~ less ~h~n $1(}0,0 0 shat{ be expended for the 1-4~stshorne Nouse in Wakefieid;

provided further, that not less than $1,300, 00 shat( be eacpended for the preservation of the

~~useum ~~African American History; provided further, that nc~t 9es~ than $1,~0~, 00 sha![ beexpended for ~ s~niar renter in ~llalden; provided fiurther, that not less fhan $1,OOO,D00 shale beexpended fc~r canstruc~tion of a new facility for the Lena (park Community Development Corporation;~rgvide f~r~her, that r~c~t 4ess ti~an $~ ,OOq,ClO~ sha![ be expended far thQ preservation of the historic

registry rn ~tc~n~ham; ~rovid~d fL~rther, that nat less than $600,000 sh~l! be expended for the

r~~ocati€~n ref ohs salt storage sE~~ in Andover; pravided further, that not-less than 1,50 ,0 0 shall

be expended #or A.DA improvements at the town hall in Dracut; provided #urth~r, that not ices fihan

$8,000,000 shill be exp~nr~ed for Quabbin developrnen~ ire Bele}~erkawn; provided further, t#~a~ not

less thin X1,500,000 s~~all k~~ expended far EssexTown Hall exterior; provided further, that not lessthan $350,x}00 shill be granted to Gloucester for an ec~nc~mic development study fir a pr~viou~ly-identified area of the city with the potential far job creation; provided further, that not less than

$17 ,000 sh~l( be expended for reimbursements of replaced cu[v~rts damaged in the May 20 6floe~ding in Rr~vvley; p~•avic~ed f~sr~her, that not less khan $25Q,OQ0 small be expended for sidewalk

cor~~tructian anc~ fiat improv~~nents at Sharan Yokaifiis park along Mauna 1/err~on street in tie

Dorchester ~ectian of the city of Bastan; pravided fu~her, than nc~t less than $~ 00,000 shall be

expended for Nark's Ni!{ Housing in t~i~ town of V4lakefeld; provided further, that not fees thin

$40,OOQ shall be expended ~~r new 1N~rld War (E IV1 marial in the town of V1lakefie[d; providedfurther, that net I~ss than $45,000 shall be expended for infiormation techna{agy d~cumenfimanagement soiutians in the town of Wakefield; pravided further, that not less than $40,000 sh~Il be

expended for technalQgy upgrades fir fire department vel~icfes in the town of MarbCehead; providedfurther, that not less than ~5,Ofl0 shat( be expended for technr~[ogY upgrades for fire department~~ehic{es its the tr~vvn of Swamps~c~tt; provided further, that not less thin $25,000 sh~l9 be expendedto enhance the real-ti~ae farer~~ic ability of the Swampscott Police Department with the use cif Live

Scan finger print6r~g; provided fu~:her, thaf nofi ie~s than $200,000 shall be expended fio fund wind or

sokar ~nergY generation systems afi the transfer station in fihe town e~f Marblehead and a designated

buiEding in the town of Sw~~mps~afit; provided furfiher, that nofi less than ~1,OOO,C?0~ shall be

e~perrded fc~r the renovation of tl~e cc~rnmunity safety building in Arlington; provided further, that nab

less than 250,QQ0 shat! b~ emended fir repairs to the Brattle Streefi culverk in Arington; providedfiurt er, that not less than $50,000 shat( be expended for the ~tVesfi Medford community Center;provided further, thaf nat less ~ha~ X30,000 shall be expended on a security system for the FartTaber Military Museum; prc~vi~ed further, that rat (ess than $3,OOfl,000 sha(i be expended far the

Add. 20

Frederick DaugEass House and Museurr~ Ic~cated in the city of New Bedford far costs associated

WEt~1 I"et10V~f1C~l~, enhancement, reconstruction, improvement, expansion, derrooiition, acquisition,

properly repair, and exhibits and collections; provided further, that not ices than $35 ,000 steal[ be

expended on design and repair of the Parting Ways €3uilding in the town of ~cushr~et; provided

further, that nofi less than $5U,OJ0 shall be expended fior Market Ministries programs related to

facilities maintenance, improvements, restorafian, renovation, and educafiiora! capital expenditures;

provided further, that nc~t less than ~1,U00,000 shalE be expended far preservation end ~xp~nsian of

the Levi Standish House in fihe cifiy cif New Bedford; provided furfiher, that not less than X2,000,000

shall die expended far the rehabil€cation of the New Bedford Armory; provided further, that not less

than 2,~90C3,4Ut~ shall be expended far capital imprav~ments at the New Bedford Whaling NEuseum,

provided further, that nit less thin $3,OOQ,000 shall be expended can capital im rovemen~s to the

Zeiterian Theater inc(udi~g, but nab limited fio, demolition, acquisitiar~; renavatian, restaratic~n,

design, and canstr~.iction, including a bal[rc~om, expanded stage facilities and other capital

improvements; provided fu:-th~r, nat 6ess than $2,0OO,OflO shill be emended far egos! capitalization

offihe Western M~~sachusetts Er~t~rprise Fund, Inc. aid the Sautl~ Eastern Economic Development

Corporation; provided further, thafi the cor orations sha![ prepare 5-year sfir~tegic opera#lane plans

which shall include, beat not be lirnit~d to: (i} ider~t9fication of financial resources required to meet the

mission and ongcaing lending operafions of the corporation: and (ii} a plan of action for reducing or

elie~r~inat~ng the need fear public suk~sidies to rra et the missican of the torpor tiara nat later than

December 3~ , 2008; pravided fiurt~er, that not less than $750,flQ0 shal9 be expended for the benefit

of the town of Dartmouth to acquire the former state police barracks for appropriate town use

including, but not limifed to, a municipal, health, or educational facility; prQVided further, that not less

than $1,50Q,000 s ~[I k~e expended fore ansi~n; renovation, c~pifa) impr~v~mertts, relc~catior~, or

demQlitic~n faar the Fairhaven Council on Aging; provided furfiher that nat less than X2,000,000 shall

be expended for planning and design for imprQVements ~o the public safety buildings in the town of

Ashland; provided furkher, that nit less than X1,200,000 shall be expended far repairs and

improvements t~ the senior cenfi~r in the town of Medv~ay; provided further, thafi nofi I~ss than

$750,000 sha91 be expended fc~r rer~ovatians and repairs to the senior cenfier in.the town of Hallistan;

provided further, that nc~t less than X1,500,000 for repairs and renovations to the Danforth Museum

in the town of Fra~ningi~am; prr~vided further, that nr~t less than $2,500,000 steal! be expended far the

rehabilitafiic~n of the historical taws hall in fihe tcawn of Hapkintcan; provided further, that nc~t less thin

$? ,OOO,Ot~O shall be expended fi r a new senior enter in Falmouth; providec4 furkhe~-, That nit less

than $211,000 shill be expended for an engineering study to be conducted on wharves in

M~ttapoise ;provided further, that rant I~ss than 1,000,0 0 shalE be er,~ended for capi#al

imprav~menfis fic~ tie revere Senior center in the city of Revere; provided fur~h r, that not less than

$450,000 shall be expended fiar the purpose Qfi instilling sound barriers af~ng roufie 290 in the

Maynard street section ofthe tawn of Northbarough; provided further, that not less thin $4Qt~,000

sh~l( be exper~d~ci for the purpose of clan up and remediation of 199 Coburn Streef in the fawn of

Northl~c~rou h; prc~vid~d further, that not less fihan $500,OOQ shall be provided to the C~uincy Public

School system to be used fc~r technalogY upgrades; provided, that $100,000 shall be expended for

the reconstruction and instalfatian of public access improvements to the Larabee School building 6n

Add. 21

the town ofi Southampton; provided #ur~her, that not less than $1,00O,OOQ sha!! be expended for

upgrading ~r~d expanding the Martin Luther King Jr. Community Center in Springfield; provided ',

furCher, that not less than $500,000 shall be expended for ed~cafion and technc~l~gy computer

~~grades in Randolph; provided further, that nr~t less than 1,500,Q00 shall be expended for fihe ''

rehabilitation and upgrading of Parcel A of the Dunbar Community Center in Springfield; provided

furt~rer, fiat not less than $1,OQ0,000 shall be expended far the ref~abilitation and upgrading caf the

C3i~ls Club/family Cenf~r in ~pringfeld; provided furfiher, that not less than $300,000 sY~ali be

upended for renovatian's to Roya6stc~n's VO$hitney Hall and RayaEston Town hall to meet ful!

cot~piiance for accessibility under the Americans with Disabilities Act; provided further, that not

less than $2,OUO,U00 shall be expended fir impraverrsents to iNaconah Park in Pittsfield, pravided

further, that nat less than $500,0 0 steal[ be expended for the historic renovation and other

improvements to World War memori~E Stadium in the cifiy of Newburyporfi; provided furfiher, that not

less th~ri $195,Ot}0 s9~all be expended far the development o#'s~reefiscape improvements end

ad~itic~na( parking in the dt~wntowr~ area ~f Borth Andover; provided further, that nod less than

$ 00,000 steal( b~ exp~r~ded for improvements t€~ the Sfievens Estate in Nc~r~h Rndover; provided

~u~ er, that not ~e~s than $1 ~O,OaO shall be expended fir the study, design and development of a

windmill on the Stevens Est~t~ pi~op~rty in North Andover far the purpose cif providing an alternative

energy source; provided further, tnat riot ies~ than $1,000,000 shall be e~aended for fhe design and

cc~P~struction of a center for senior citizens in the town of Scituate; prc~~ided further, that not less than

$100,t~00 be emended for t(~e design of a new senior center in the town of Si~erbc~rn; provided

further, that fihe s€~m of $2~O,C140 s~~all be expended for municipal infrastructure to mitigate beach

ercasian problems in the Plum Islands cti~r~ of fhe town of Newbury, provided further, that $140,000

shall be expended finr a s~L~dy to det~rmi►-~e fihe feasibility of deve{apm~nt ar~d construction of ~nUnderground Railroad, Ciuil Rights end Black heritage Museum and ~ultura( Center in Springfield;

provided further, that $~,OOO,Q00 steal( be expended for the Geriatric Authority of Holyoke; provided

further, fihat $100,000 steal[ be expended far fihe renovationlrestarat~ar~ c~~ the City HaIE of Holyoke;

provided further, that nc~t less than $1,00 ,000 shad! be ~xp nded far the design and consfirucfiion of

a Cape Verdean Community Center at fihe former Mare Gutting Tools site or any other location

deemed ap~rropriate by the community in New Bedard; prcavided further, that not less than

$3,Q0~,000 shall be expended for the design and car~struc~ian cif fih~ Cass d~ Saudade/Portuguese

Cu3tural Center in New Ballard; provided further, that nc~t less than $500,000 steal[ be expended for

improvements tc~ the former Thompson Schoai in Rlevu Bedford, provided ftarfher, that not less than

$1,OOC3,000 be expended far the canstruction of a new Seniar Center and Community Center in the

town of f~ati~k; provided further, that nofi less than $1,400,000 be expended for the construction of a

new public safety building ire the town cif Mil6is; gravid d furkher, that not less fi era $2,500,000 ~h~l~

~e expended fiar the goys and Girls Club ~f Marshfield for the con~tr~ction ~f a new faciEity on [prod

design~fied by the towvn of Marshfield; provided further, that nat less than $250,000 shall be

expended for roof and ceiling repairs for the historic Mendon Town Hall; pravided further, that

$5~Q,000 shall be expended for fihe Restoration and Renov~tian of the Methuen H~~taric Museum in

the City of Methuen; provided f~rtEler, that $1,0OO,OQO shaEl be expended for tf~e widen€ng of the

Now Street Bridge in the City of Methuen; provided f~r~her, that not less than $254,OC30 shall be

Add. 22

expend~c4 far the design and construction of a public safety and public works facility in the Taws ofN8W Bt"a6~iti'e~; provided further, that nc~t less than $500,Qg0 shall be emended for upgrades for the

~'' (~ilton Youth Center; provided further, that not less than $350,0 0 shat[ be expended far a youthsports f~ciiitie~ granf for the. City of Melrose; pra~ided further, th~fi riot less than $50,000 shall beexpended for renovatians and repairs of the historic Bancroft Memorial Library ire Hopedale;provided further, that not Oess than $'1,000,(}00 st~aiE be expended four a senior center in Hopedafe;

provided further, that nr~t less thin $50fl,00a shall be expended far restoratian of fibs W.E.B, DuBois Hc~mesite in the Lawn cif Great Barrington; provided furkher, that not less than $~ 50, 00 shall beexpended for safety improvements at railroad crflssings in the town of Lir~co[n; pravided further, that$~ OO,OOQ shall be expended to renr~va#~, mate lead pair►fi and repaint the eacteric~r of the Chid TownsHaIE building in the town of Chelmsfard; provided further, that 1,0O~,OQO shelf be expended for thepurchase ofifre ~ppar~tus for puk~lic safiety in the town ~f Concord; prr~vided further, that nt~t lessthan $75,000 shall be expended to the city cif Greenfield far a Phase II feasibility and planning studyfar the dowr~tawn upper story development project; provided further, that not less t€~an $80Q,000shall be expended to the cify of Gr~enfs~dd fc~r the redevelopment arrd marketing of the First National

Bank wilding; prQVided further, that not (ass than $2,000,000 shall be ex~a~nded to aid in theconstruction of the Greenfield Transpartativn Center; provided further, that not less than $~ 73,000shall be expended for a histc~ricaf renovatian of the New Salem Academy Building; provided further,

that 300,OOQ sha91 b~ expended far the repair and improvements tc~ the green energy systems atsmith Academy in the town of Hatfield; prQVided fiurther, thafi nofi Less than $100,000 shal{ beexpended fc~r hazardous material remaval in fibs ~Jarth A lebaraugh school district; pro~rided further,that not less than $350,000 shill be expended for Georgetown Squire traffic signal upd~fes end3oop detection installation in the town of C~er~rgetown; provided further, that nc~t less than $800,000shall be exper~de~ for the acquisition of a Fadden firuck in the city of Gloucester; provided further, fihatnot less than $225,000 shelf be expended for the purchase of an aerial bucket truck for the fens gridtree departments in fhe town of Narwell; pravided further that net less than $4,OOt7,000 shall beexpended can the design and construction of a parking garage ar parking improvements in fi~~e cityofi F~li River; provided further, thafi net less than $150,000 shelf be e~aended far modernization andtechnalogy upgrades for fire department vehicles in the city of Everett; provided further, that not lessthan $70,000 shal3 be expended far technology upgrades at the recreatian center in the city ~~FEverefit; provided further, that not le~~ than $30,000 shall b~ expended for techr~c~l4gY uPgrad~s afithe YfvICA in the cit~r of Chelsea; provided furkher, that net less than X100,000 shall be expended formaintenance im~aprc~vement~ ~orthe police headquarters in fibs ci~yc~f West Spring~e~d; providedfurther, fihat nab less than X50,000 shall be expended fQr the Cahoon Museum in the town ofBarnstable far outreach and education promoti€~~ green building t~chr~ologies fior students inKindergarten ti~rc~uh grade 7; provided further, that nafi less than $100,000 be expended fc~rmaintenance improvements for the fire depar~menfi facilities in the city of West Springfiie6d; providedfurther, that not less than $100,0 0 shall be expended for t~aintenan~e improvements fir themunicipal office building in the city ref West Springfield; provided ~~rther, that not Eess than $30,OaClshill be expended fc~r directional signs tai the Ct~zuit Historic and Arts District; provided further, t finot less than 3~?O,C100 shall bee ended for renar+ations and improvements to the Greenwood

Add. 23

memorial bathhouse in the city of Gardner; provided further, that not Isss than $250,OOQ shall beexpended Tor rehabilitafian and renavazions ~a Ashby town hal6; provided further, that $50Q,000 shallbe expended far fihe renovafior~ of historic Lincoln Half as a corr~munity ~pac~ in the Town ofBoard; pravided further, thafi not less than 500,fl00 shelf be exp~raded for improvements to 90Pond Street in the tcawn of Braintree; pravided further, that not leis than $250,C}a0 shall beexpended for the enhancerr~en~ and ir~-oprovement of the Sylvan~;s Thayer Birthplace ar~d historicalcampus in the town of Braintree; provided furCh r, that $5Q0,000 shall be expended for technolagyupgrades far fire department vehicles in the towc~ ofi Sharon; pravided further, that not less thin'~ t ~!1 .' ~- - ~- s-t ~ • i • ass ~ i s •

i t ! ~ t • f i• i" s i w

'~ if ~i1 t- - *- • a r - • ,~ • • s - s - ~ • • •

~, 'iii 1!!

JUa1C9ARY

Triaf Gourt

1102-5600.. For capital n~~ds at court faciEities, including, but na# limited to, e~per~iturs for thepfannir~g, design, and acquisifiion of land and buildings and interests therein by purchase, lease fora term, including any extensions, not to exceed 50 yeas, gib or s~ther transfer; or by eminent domainunder chapter 79 of the General Laws, the preparation of plans ar~d specifications, the consfiruction,r~novatian, reconstruction, alteration, improvement, demc~l6tion, expansion, repair andimprovement, including furnishings and equiprraent and tempe~rary refocafiion costs, as needed forpriority prajects identified by the divisi~in of capital asset management and maintenance and the~ ministra~i~e once of the trial court; for building repairs necessary to correct unsafe andovercrawded conditions, for the rerr~edi~tion ref life safiety code violations, fir fihe remediation ofaccess code and civiE rights vioitians, for the remediafiian o~ environmental hazards and far securifiyimprovements and ether necessary repairs at court facilities owned by the eammonweafth or bypo6itica[ subdivisions of the commonwealth; provided further, that expenditures made from this itemshal(includ ,but c~c~t be limned tc~, expend[tures Earths prajecfis iden#ifred thrcaugi~ the court capitalrepair needs assessment database ~s develaped end maintained key the division of capita! assefimanagement and maintenance and reviewed and approved by tl~e administrative office of the trialcaurfi; provided farther, ~~le~~ GOS~S ~~}~~~}I~ X1"{7171 ~~3iS i~~i1'i SE1~II IC1CIt~CIe, but not be Eimited t~, fife costsof e~gin~~ring ar~d ofiher services essential t these projec#s rendered by division ref cap~ta(ass~~rraanagemen~ and maintenance employees or by consultants; provided further, t afi ~mourtfisexpended for divisicsn emp(Qyees may include the salary and s~(ary-re9ated expenses of theseemployees to the e7:tent that they work an or i suppcsrt flf.these projects; provided further, that notless than $125,00O,OOQ shah be made available for casts r~ffihe reccanst~uction or replacement ofcourt facilities located in the city of Lowell; provided furkhe~-, #hat ~~, OO,OgO shall b~ expended for

repairs and renovat€ons fir the district court facility in tl°~e city of N~verhill; provided further, that not

Add. ~

less than $40,000;000 sha[I payfor costs flf the renovation of the superior court builc[ing locafed inthe city o~ Tauntan; pravided ~urfiher, that not leis than $50,000,000 shalE pay for costs of therenovat~€~n of the court facility locafied i n the town n~F Greenf eld; provided further, ghat nc~t (ens than$75 ,000 shall be made avaii~b(e for the completion of the mastee p(an far NorFalk county, includingfc~r the recc~nstructio~ or replacemenfi of caurt facilities located in the tawn of Dedham; providedfurther, that nit less than $~0~,000 shat! be expended far repairs and renov~#inns tc~ the districtcourt faci9ity i~ Leominster; provided fut~her, that nit I~ss than $72,00O,OOQ shall be e~~nded fc~rthe cc~~ts of the renava~ian of the probate and family court building (orated in the pity of Salem;prQVide further, that not Tess than $2 ,C►0~,00~ shall be expe~aded to corrtpiete a m~st~r p4an inNorFolk county which s}~all include the plan fc~r the development anc~ construction cif ~ centralizedNorfolk county courthouse campus in Qedham square and ~~r the planning, design and constructionof such facilities in accc~rdar~ce with said master plan; pravi ed further, that nat less than $10 ,000shall be expended for upgrades a~ the Pitksfield disfirict court; provided further, that 35,OC10,U00shall be ~xper~ded fc~r renovations ar~d construction of the Hampden county hall of justice in t ~ cityafi Springfield; provicEad further, that $140,OQ0 shall be allocated fc~r immediate capitolimprovements to tea exterior flf the dist~~ict courfi bui6ding in the city of Somerville including, bud notlimited t~, pair~ti~g, resurfacing and refurb4shing; provided, that such funds shall be desigr~at~d tc~the di~triet court is~ the city o~ Som~rvilie and shall not be subject to subcl~uses (a) and (b) of clause(viii) of the third par~gr~ph ref s~cfsor~ 9 of chapter 211 ~ cif the General haws; provided fuck er, th~finat less than $500,000 shelf be expended fior cosfis of renavatir~n and expansion of the probate andfamily cr~urt facilities in the town of Barnstable; prQVided further, that not less than $150,000 shall beexpended on the replacement of the rot~f of the district ccaurt building ire the tavvn of Edgartawn;provided further, that not less #han ~,OOQ,04C~ shat[ payfor casts of fihe rencavatian ofi the disfirictcourt building located in the East Boston section ~f the city of Boston; provided further, fihat not lesstE1an $400,000 sha![ be expended for cosh of an addition to the ~i~trict Court facility located in theTown of ~`almauth; provided further, that $350,OOfl be expended for the master plan andengineering a~F a raglans( justice center and intermoda! transp~rk~tion center fio be located can KingStreet €n the city+~f Northampton; provided further, thafi nc~fi Eess than $60,QOO,Q00 sha[! be payf~r.costs of the renovation of the probate and family court building Io~ated ire the city of Salem; andprav6ded Further that nc~t less than X50,000 shall be expended fflr a fe~sibi4ity study to investigate, irrthe city of Cambridge, fihe reiocafion of Middlesex county court and ancillary facilities, fihe cc~~fi ofrehabilitating, renavati~g and improving the existing court and ancillaryfaciiities and the possibilityof entering infic~ a land swap with other parcels in the city r~~ Cambridge to relocate the facilities........$658,350,00

infc~rrr~atton Techrtalogy aivisic~n

1790-2500.. For costs associated with pla~ir~ing and studies, acquisition flf land ancf buildings endi~t~rests therein by purchase, (ease ~~r a term, including any exi nsi~ns, n€~t fio exceed 5Q years, giftcat• other tr~nsfier, car by eminent domain under chapter 79 of the General ~.aws and for thepreparatian ofi plans and spacificatac~ns, repairs, construction, re ovatiar~s, improvements, asset

Add. 25

management and demalition for a data center that wilt be {orated in west~~n Massachusetts ineither Hampden, Hampshire, Berkshire or Fran~Clin county, prt~vided, that the division sha!!, no laterkhan 120 days before any transfer or lease authorized herein, submit fihe costs associated with suchdata center aid a repart therean to fihe inspectar general; provided, further, that the inspectorgeneral shah review the costs and such reuiew shall include an examine#ion afthe methad~~c~gYused for such costs and within 90 days of receipt of the report, fihe inspector genera! shall prepare areview of such costs and ~I~ the review with the division; provided, that the d vis an shall forwardcopies afi fibs inspector general's review tc~ the ous~ and senate committees ors ways are n~~ansand to the chairmen of the joinfi committee on stun administratir~n and regulatory oversight a~ least30 days before any transfer or conveyance; provided, that casts payable firom this item shall include,but not be iir~it~d to, the costs a~' engineering end other services essential to this prajec~ renderedby di~rision cat capifial asset m~r~~ e ertt end main#enancs employees flr cansuEtants; and providedfurkF~er, that amounts expended for division employees may iracl~ade the saE~ry and salary-rebatedexpenses of th~s~ emplc~ye~s tt~ the e~erat that they wank on ar in s~appart of this project; providedfarfiher, that not a ss than $2,000,000 shall be expended for tl~e reBocation of the data center of the~'hief J~astic~ fc~r Adr~ainistrafi~o~ and Management from Bosfion fio Cambridge $78,0~O,OOQ

!' ! • •

40fl0-~0~0.. far casts ~ssocia~ed with planning end studies, dispositions, acquisition of land andbuildings and interests therein by purchase, [ease for a term, including any extensions, not toexceed ~0 years, gift or other transfer, or by eminent domain under chapter 79 of the General ~.aws,far the prep~ratic~n of plans and specifcations, repairs, construction, rene~vatio~s, impraverr~~nts,asset management ar~d demolition fir health and hum~ra services facilities, all as the camrr~'sssiar~erof capita[ asset management and maintenance, in consultation with the secretary of health gradhuman services and the appropriate carr~missior~ers of the dip rtments v~iithirr the exee~tive affice,shall cansid r appropri~fie; provided, that ail juvenile detention facility proj cis approved for designand cc~nstr~actian by the divisifln of capital assefi management and maintenance shall be consistentin priarify and need with a maser plan tQ be develaped by the division of capita6 asset managementar~d maintenance in consultation with the department of youth services; provided further, thatpraj cfis fihat are not included in the master plan may be approved for Banding by the division ofcap►tal asset man~g~mer~fi and m~sntenance if fibs commissioner of capital asset management andmaintenance determines that circumstances follov~ing the deve(c~prnent of the master pla~~ resulted11'1 ~ C~t"fl~?EIIIt1C~ n~BCI ~t~l"~UC1C~iC1S~ ~~t~ ~?f"U~~C~S; prc~vid~d further, that cc~s~s payable from this itemshall include, but not (irr~~fie be to, the cosfis cif engineering and other services essential to theseprojects rendered by division of capital asset rna~agement ar~d maintenance employees or byconsultants; and pravided further, thafi amounts expended for division employees may include thesalary ar~d salary-re~a~ d expenses of these errrpioyees to the exfienfi that they work on car ire supportof these roj~ct~ $80,OOQ,OQO

Board of Library Cc~mrr~issioners

~~~dd . 2 6

EX~~UTIVE QFF(CE FQR PUBLIC SA~ETYAND SECURITYaffice of the Secretary

X000••3500.. Far a grant program to cities and towns to provide funding far the repair, renovation orconstruction of municipal public safetyfacilities, under rules adopted by the executive office ofpublic safety ar~d security k~ased upon the following criteria: ~n assessment o~ fiscal and budgetaryco~strainfis facing the municipality; an analysis of the municipality's proposed budget ar~d financing~f tie repair, renovafiion, ar construction project; the municip~[ity's geed far the project; the benefitsto the municipality that wi(I result fram the project; and an overaEl evaluation ~f the merits of the grantpr~p~sal; provided, that the execukive office may expend not more than 1 per cent of the t~ta(~mc~unt available far the cost of administering this prn~ram; provided further, that not less than$150,000 shill be expended fior the design of a new palice s~atic~n in L keviEie, pravided farther, thatnot less than $1 Q0,000 shall be expended for repairs to the police station in Middleborough;provided further, that not less t{~an $30 ,000 shall be expended far planning and design of ~ newpublic safetyfaciiityfor police and fire r~epartmenfis in Avon; provided further, that not less than~750,OQ0 shall be e~aended for emergency repairs to HVAC systems at fire departmentheadquarters in Stoughton, provided further, tF€afi not less than $15fl,00Q sh~il be expended farr~loc~tic~n c~fi ar imprcavements to the Milford Public Safety Dispatch Center; prQVided further, thatnot less than $1,800,000 shill k~e e~~nc~ d for renov ticsn of the firs departmentfacifity in NarthBraokfield, provided further, that not less fihan $50,000 shall be ex~aended for a fieasibility study~odetermine the cost of cgnstructing a new handicapped-accessible fire station in the town ofLeicester; provided furfiher, that nat less than $8,0OO,OflO shall be expended for car~str c~ion ofr~ew polio stafiion in Lawrence; provided further, thafi rsot less than $2,0OO,OdO shill e expendedfor construction of ~ new police statian in Salisbury; provided further, that riot less than $580,Q00shall be exper~d~d far fire department facilities in RandolpE z ~ oa~'~,~~ t~~~^~ +h.,+ .,,,+ o,,..,. &~,~,~,

~,dd . 2 7

c~~nn nnn c~,,,n ~.,, ,,.,n„~„a~.,~

provided further, that $250,000 shill be expended for the repair/renovation oaf MaiyokeFire DeparCmentfacilities; provided further, that riot less than $1,OOt?,C100 shall be expended forcor~sfiruction of a new police station in the ta~v~ of Mendo ;

providedfurther; that $250,000 be expended fc~r the enhancement and reconstruction cif pafic~ departmentFacilities in the town of So tram tc~n; provided further, that not less ~har~ ,Q0(1,Q00 shill beexpended tc~ c~verk tl~e forme- N~tianal Guard Armory Building ire the Tc~wr~ of Staughton infix ap~~biic safety facility; ~ravided further, that $2,Q00,000 shall be expended for costs associated withimprovements to the firehouses lacated in the Tows of iNeymout ;provided further, that $500,Q00shall b~ exp~r~d~d for r~r~c~vatians and improvements try the public s~fefy building and fire station ~r~the Tcswn of INincheste~-; pravided further, fih~t nofi less tP~a $550,000 shall be expended far a class

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D~par~ment of Fire Services

8000-4900., For costs assr~ciated with planning and studies, dispositians, acquisition of land anrfbuildings and iriferest~ therein by purchase, lease for a term, including ~r~y extensions, not tc~exceed 50 years, gift ~r r~th~r transfer, or by eminent domain under chapter 79 of the Genera! Laws,far the preparation cif Mans end specifcatian~, repairs, construction, renz~vations, improvements,asset mare ement ar~d demolition for a lire training facility in the city afi Springf eld, all as thecommissic~~er of capital asset management and mainfi~nar~ce, in consultation wifih the state firemarshal, sh~l[ c~nsid~r appropri~t~; provided, that costs p~yab(e from #his item shill include, butrto~ limited be tt~, the costs of enc~ineeri~g and ofiher services essential to this project rendered bydivision of capi~ai asset management aid maintenance era~playees or by consultants; ar~d providedfurther, that amaunt~ expended for division emplay~es may include the sa(~ry and salary-relatedexpenses cif fihese emplrayees to the e~fienfi fihat they work on or in support afi thisproject ...................... $10,0OO,OClO

Q~ce of the Chief Medical Exami~►er

Add. 28

8500-10010.. Far costs assaciated with panning and studies, dispositions, acquisition of fend andbuildings and interests therein by purchase, lease for a term, including any extensions, not to

exceed 5q years, gift or otE~er transfer, ar by eminent domain under chapter 79 of the G~nera6 Laws,

for the preparation ofi pfans and- specif€cati~ns, repairs, construction, renavations, improvements,

asset rr~anac~emen#aid demolition, ir~~fuding furnishings and equipment, far regiana! faciiitic~s for

the affice of the chief medical examiner, al! as the commissioner of capital assefi management and

m~intenanc~, i~ cansultatian with fihe chief medical examiner, shall consider ~ prapr ate provided,that casts payable from this item shall include, but not be limited tc~, the costs a~f et~gi~~ering and

other services essential tc~ these projec#s rendered by division of capita! asset management ar c[

maintenance em layees or by consultants; and provided further, the#amounts expanded for divisifln

employees may include the salary and salary-related expenses of these employees to the extent

thafi they work on or is~ support of these projects ............................................. $15,~OO,ti00

Jails arad Correctional facilities

8 00-7500.. For costs associated with planning and studies, for the preparation of plans and

specif cations, repairs, construction, renovatians, imprcavements, asset ma~~agement and

demolition ar~d other capital impravements at department of correction facilities for fibs purpose of

preventing prisoner suicides, including the capita{ improvements as def~il~d ire Appendix A of the

Hayes Report, a summary of o senratians, findings end recommendatia~s afi Lindsay Hayes,

project director of the National Center on Institutians and Alternatives; pro~r~ded, that costs payable

from this item ~h~[I include, but riot be {invited to, fhe costs of engineering end c~~her services

essential to fihese prc~jeets rendered by division of capital easel managem~r~t and maintenance

employees or by cansultants; and provided further, that amounts expended for divisian empiayees

may include the salary and salary-related e~ense~ of these employees to the extent that they wank

an or in support of these prajects .............................:................ $15,UQ,000

EX~CUTI~ff~ QFFICE HQUSING AND EC~}(VrJMIC L7~V~L.~JPM~NTC3epartment of Business and Technology

~- •-~ ♦ ♦ •s• ' .. • ss'F i#1 Ili

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EXECUTNE flFFI~E FaR PUBL[C S~FETYAND ~ECUR(TYJails an~f Correctional Facilifies

•~~~ t ~~ I ~' ~ '. r ~.. r -'~ ~ ~r 'f r. ~ E~ ~:- r f' ~' a r id r

A~.d . 2 9

buildings and interests therein by purchase, lease for a term, including any extensions, not toexceed 50 years, gift 4r other transfer, or by eminent domain under chapter 79 of fihe Genera! Lawsand for the prepar~fion cif plans and specifications, repairs, construcfian, renovations,improvements, asset management and demolifiion for sty#e and county jails ar~d correcti~na!facilities; provided, ~hafi alf prc~ject~ approved forfunding under this item by the division of capifia[asset management and maintenance shall b~ consistent in priority and need with a corrections'master plan fo be deveir~ped by the division of capital asst management and mainfienance inconsul~ati~n wifi the department of correction and the Massachusetts Sheriffs Associafiion, endapproved by the secretary of public safety and security and the secretary cif administration anc~~C1at1C~ E~3C~lICIICIt~, ~?U~ CICt~ I11Tiit~d t0, the folSow€ng projects as provided fortherein: apre-releasecenter and regioraa! lack-up facility i~r Barnstable county, capital impre~vements to facilities 'snBerkshire and Brista~ counties, the relocation of the "E911" cammunicafiions center andimprc~uements to the facilities in the county of Dukes County, additional capacity in Essex county,additiar~a[ capacity at the V1/estern Massachusetts F~egiorsal Women's CarrectionaE Center inHarr~p~~r~ caur~ty, the replacem~nfi of modularfacilities in Hampshire county, the consfiruction ofaddifiio~al capacity in Middlesex county, the consfirucfiic~n e~f additiana{ capacity, a sto~•agew~rehause, and parking facility improvements in Norfolk county, capi#al improvements to facilities i~Plymouth county, capit~i improvements to facilities in Suffolk county and the construction of

additian~l c~p~city irr Warcest r county; provided furfih r, t6~at projects thafi are not included ire themaster plan may be apprr►ved for funding by the division of capifial asset management andmaintenance if the commissioner of capital asset management and maintenance determines thatcircurr~stances fallowing the development of the master p9an resuEted in a cc~mp~lling need forfunding the projects; provided furkher, that eosfis payable from this item include, but are not limitedta, the casts cif engineering and other services essential to fihe~e projects rendered by division ofcapita! asset management and maintenance employees Qr by c~nsuitants; and provided further,fihat amounts expencl~d for division emp[ayees may include the salary and salary-rebated e easesofi these mployes fiQ the ext~r~t that they work on ~r in support ~f th~s~ projects; provided furfiher,thafi not less than $1 ~O,OOO,OOQ shall be expended fir cosh associated with planning artd studies,preparation of plans and specifications, repairs, construction, renovations, improvements, assetmanagement and demo(itinr~ end other capital imprc~vemenfs at the Middlesex Sheriffs micefacilities to address severe and persistenfi overcrowding and sfia~f firaining needs and far the castsassociated with planning and studies, preparation of plans and specifications, acquisifiian of landand buildings therein by purchase for canstructic~n of a jai6 facilitywifih adequate capacity ire thesaufil~ern portion of Middlesex county to replace the Mi~d(esexjai6 in the city Qf

r ~w- '~ 1 !~1 fit!

4330-9999.. For the purchase or lease of equipment or Other items for a prograrro of intermediatesanctir~ns as authorized in item 0330-8968 o~'sec~ion 2 afchapter 12 Qfthe acts of 1996 inciudir~g,buff not limified ~a, fihe purchase of mobile subs~ar~ce abuse testing vans end afil~er drug testingequipment, the acquisition and build out of leased crr purchased space for day repa~ting centers,including modular units, and the purchase of equipmenfi thaf may qu~li~jr as alternatives to

Add. 30

incarceratian; provided, thaf no funds appropriated in this item shall be expended for the costs ofstate personne6 or cc~nfiracted persgnnel; provided further, that not more than ~ per cent of the fundsauthorized herein shaid be expended for tl~e adminis~ratic~n of any projects funded herein; arsdpravided fiur~her, that the exec~fiive director of the off ce cif cammunifiy carrecfiions shelf ~u~mit arepack detailing ar~y such administrative expenditures tc~ the house and senate committee 4r~ waysand means ................:..................................... $~Q,OQ0,000

Section 98, (a} As used in this section, "state entities" means the commonwealth, state authoritiesas defined in section 1 of chapter 29 and other state er~titiss with respc~nsibilityfor managing andov~rseeir~g pubic funds.(b} It shad{ be fihe dut~r of the board to promofie transparency, public accr~unfiability and adherence tobest practices by alE state entities v~ith respect to investments, harrowing or ether fnancialtransactions made or enured inta by stag entities and involy€rig public funs. The board shall makean annual wrifiter~ report tc, the secretary of adminisfiration ar~d finance, the state treasurer, the stateauditor, fihe pause and senate committees on ways and means and the chairpersons of the jointcamrnittee on bonding, capital expenditures ar~d state assets with respecttc~ its findings regardinginvestments, borrc~w[ng and other financial transactions carried Qut by state entities and Ets activitiestc~ promote transparency, public accountability and best practices with respect th~retc~.(c} In order to carry oufi its duty, fihe board may:t°i }adopt regulations or guidelines requiring sate entities to report, adopt appropriate policies, andadhere fic~ hest practices with respect tc~ investments, borrowing and afiher financial transactions;(2) make recommendations to state entifiies or sfiate officers and propane [egislativ~ changes fi~imprQV~ the management of public funds;(3) employ staff and engage professionals to review and advise it can finar~cia[ transactions enfieredi11~C3 ~l J S~c'~t~: Lf1~i~i8S, and

(4~) conduct oversight hearings with aspect to investment, borrawing ar~d otherf n~nciaitransactions made or entered into by state entities.

S~GTIC)N 4. The first sentence c~fi subsection (e) c~fi sectian 38C of chapter 7 of the General Laws,~s appearing in the 2Q06 afficia& edition, is hereby am nd~d key adding the following wflr s:- ;car(iv} the contract is for the d~niaiition of buildings.

S~CTIC3~ .Chapter 29 0~ fihe Genera! Laws is hereby amended key inserting ~f~er secfii an 2~CXXthe ~a(lowing section:-

Sectian 2`~'YYY. There shall be established and set up ors the boaks of the cc~mmc~nwealth a separatefund, tc~ be knawn as the Courts Capital Project Fund, hereinafter in this sect6~n referred to ~s thefund. The fund shall be credited: (i) the portion of any net cash proceeds from the conveyance, [ease

Add. 31

or other disposition 4f any surplus court facilities uacated and determined to be surplus by thecorr~missioner of the division of capita! asset management and maintenance as a result of or inanticipation of the construcfiic~n of new cr~urt facilities or the cansalidation of court facilitmes in thecities of Cambridge, I~a~vell, Salem end Worcester; (ii) any apprc~priat~ons; (iii) band proceeds; or{iv) ether monies authorized by the general caurt and specifically designated to be credited thereto.The comptro(1er shall disburse amounts in fihe fund at the directiar~ ~~the secretary of administration~r~~ fiir~ance, wif out f€~~fiher appropria#ion, for the purpose of paying costs cif, or payir~~ dawn any...pardon of the debt incurred to pay costs related to the acquisifiion, temporary leasing or- theconstrucfiion of any replacement court facilities. The inspector general of the commonwealth sha[1make an annual aversight inquiry and report on fihe Capital Courts Project fund and itsdisburserr~ents. 5aic~ repart shall be prcavided to the clerks of the house of representatives andsenate, chairs of house and senate committees on ways and means and chairs of fihe j~infic4mrnittee on bonding, capital expend'[fiur~s, and state assets.

SECTION ~. Section 38C ~f ch~pt~r 29 of the General ~avvs, as so appearing, is hereby amendeddry adding the following sentence:- Scheduf~d, periodic payments to be made by the ccmma~wealthpursuant to ~r~y such contract in existence err August 1, 20 8 ar any such c~ntrac~ r~(ated tc~ bindsar pates of fihe cammc~r~wealth which sha6i be entered into by the sfiate treasurer after August 1,20 8 sh~il canstitute general abfigations of the carr~monwealth to which the full faith ar~d credit of thecommonwealth shall hive been pledged.

SECTION 7. C3~~se (() ofi secfiic~n 4 cif chapter 81 A cif the general Laws, as so app~arinq, is herebyamended by adding the folEowing wards:- provided, hawev~r, that fihe authority shall issue sert~~i-ann~aal reprarks tg the secretary of administration and finance, the hawse and s~nafie comrr~i~tees onways and means, the joint cammittee on transportation and the }Dint committee an banding, capital@X~JGCICI1~lli"~5 ~Y7~I St~~E' c~SSE'~Sy detailing the f nancial transactians and revenues assocr~ted with thesafe, concession ar lease of real property held in the name of or under the control of the aufiharifiy,whether by p~reha~e or otherwise, and any fransaetions relating to rea( property currently pe~~din ;and provided fur#her, that the semi-annual repart shall ine[ude the current mark-et values of fhe realproperties related to the transactions.

~~CTI~~ 9. Sectia 9 of chapter 164 of fhe acts of 1851 is hereby re}~ealed.

Add. 32

i ~'' # ! .!f f ~~' ~ ~ f ~ ~ ! i ~ Wit' ~ ~ ~ f

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~EC3BON '~ 3. Section 15 of chapter 463 of the acts of 2004 is hereby amended by striking aut the

lash sentence and inserting in place thereof the tollawing sentence:- Any remaining proceeds shaf!

be used to reduce arsy incurred indebtedness of the Essex North Shore Agriculfiura9 end Technical

School District tc~ the farmer municipa(itie~ of the North Shore Vocatianal Regional Schoe~l District

in accordance with the capital cost allocation provisians of said district's regianal agreement.

SECTIOPI 14. Said chapter463 is herebyfurtheramended by striking out section 11 and inserting

in place fihereof the following:-

Sectifln 11. The district shall be considered an eligible institution for financing assistance pravided

by the heaith and educafiional faci4ities authority established under chapter 614 of the acts of 1968.

The school committee shill establish and mair~~a'sn a capital reserve fund for the purpose of

financing necessaryfaciailymaintcnance and capital imprc~vemenfis. The c~pifi~! reserve fund shall

be subject to the limits on stabilization finds in section 16G 1/2 of chapter 71 ofithe General Laws,

Except as provided in this sectian, fihe U~ner~{ Laws regulating borrowing by regional districts and

limitations are borrowing by regional districts, including but nat limi#ed to chapter 70B ~f the General

Laws and clauses (e}, (g), and (n} of section 16 of chapter 71 of the General Laws, shall apply to the

district. The Essex North Shore agricultural ar~d Tecf~nica{ Schoal District may issue binds far the

canstructir~g, recons#ructir~g, equipping school buildings and other facif~ti~s related thereto for a

term riot #o exc~t;d thirty years.

ETI~N °(5. Sectian 1 ~ of chapter 27 afi the acts of 2007 is hereby arr~er~ded by ~tril~ing out

subsection (a) end inser~inc~ is~ pBace thereat the fo[lowir~g subsectiar~.-

{a)The state fireasurer may, upon r~quesfi of the governor, issue and sell refunding bands of the

commanwea~th in an amount tc~ be specified by the governor from time to time for the purpfls~ of

paying, at maturity Qr upan ~cce6er~tian car redemptiar~, any bands fihen outstanding and issued by

an en#ity other than the commanweafth under section 391 of chapter 7 90 of the acts e~f 1982, chapter

42~ of the acts of 199 ~ ,section 7 of chapfie~ 16 of the acfi~ of ~ 999 or sectiar~ 6 of chapter 53 of fihe

acts ~f '~ 999, or issued by the city of Chelsea under chapter 40D Qf the General Laws to finance

Add. 33

costs of the information technology center in said city, including tie payment of any redemption

premium thereon and any interest accrued or to accrue to the date of maturity; acceleration arredemptian of these bonds. T6~e stag treasurer shall nc~t issue any refunding binds unless he findsthat tie present value, discounted afi the rate that he considers appropriafi~, ofithe principal ar~dinterest payments due on the refunding bonds is less than the present value, discaunted at that rate,

of the principal and interest payments tt~ be paid, firot~ the prflceeds of these refunding bonds and

inu~s~ment earrair~gs thereon, ran the bonds to be refunded, or u~[ess he defi~rmines, in his soi

discretion, fih~fi doing sca i~ advi~a~l~ tt~ subsfiitufie fixed-rate bands for variable-rate bands car 1 form

of variable-rats bands for another. These refunding bands r ay be issued at such lime before the

maturity, acceleratian or redemption of the bonds to be refunded thereby that the state treasurer,with the approval Qfthe gaverr~or, c~nsider~ advisable. Tire issuance ofthes~ bonds, the security

th~refare, the maturities and afiher details thereof, the rights of tie h iders thereof and the rights,duties and obligations of the commonwealth with respect thereto shall be governed by chapter ~9 of

the General Laws relating t4 the issuance of bonds by the commonwealth, insofar as these

previsions maybe apprapriate therefor. Sn connectian with ar~y issuance ~f refunding k~onds under

this seetian, the secretary of administration and finance and other officers of fihe car~m~nwea6~h

whey are parties to the contract for financial assistance, lease or other agreements related to the

bonds being refa~nded and fihe state treasurer may enter into amendments to the car~tract, lease or

other agreements and any ether docurn~r~ts that they consider necessary or desirable to effectuatethe issuance of the bonds. WithQ€~t limiting the generality ofithis secfiion, the prav~sians of section 49

of said c~rapter 29 applicable to sinking funds established with trustees shall apply to the deposif ofrefunding bond proceeds with a trustee, except that these proceeds shall be held far the benefit of

the ~olclers of tF~~ bonds ~o be refunded thereby.

SECTIf~~i 'i 6. Ta meet the expenditures necessary in c~rryir~g oufi secfii~n 2A, the sfiate treasurer

sha~9, upon request ~f t~se gavernor, issue and sell bonds of tine commanwealth in an ama nt'Ca b~

specife~d by the gc~ver-narfrom time t~ time buf not exceeding, in fibs aggregate, $365,000,00 .All

such bands issued by the e~mmanvvealth shall be designated on theirf~ce, Capital improvements

Lean Act of 2008, and shall be issued for a maximum term of years, not exceeding 10 years, as the

governor may recommend to the general court under section 3 of Arfiicle LXII of the Amendments tothe Constitution. The bonds shall be payable not layer than June 30, 2Q23. All interest end payments

on accaunt cif principal can these obiigafi€fins shalE be payable from the General Fund. Bonds and

interest thereon issued under this section shall, notwithstanding any other provisions of this act, be

general obligations of the commonwealth.

SE~~'6 ~1 'i7. To meet fibs expenditures rsecessary in carrying out sectian 2B, the state treasurer

shalk, upon revues± of the overnar, issue and self bonds of the commonwealth in ~n amount to be

specified y the gavernor firom fiit~~ to time but nc~t exceeding, in the aggregate, $451,800,OQfl, Ali

s~.~ch bonds iss€~ed by the cammcanwe.afth shall be designafied on their face, Capital lmprovem~ntsLoan Act of 2008, and shall be issued fc~r a maximum term of years, not exceeding ~U years, as thegovernor may recommend to the general court under section 3 of /Orticle LXII of the Amendments to

Add, 34

the Constitution. The bonds shat[ be payable not later than June 30, 2033. Ail interest and payments

on account of principal on these ob6ig~tions shall bs p~yabi~ from the General Fund. Bonds and

interest theree~n issued under this section steal[, C7OtW(~~3Sfi~t1t~ltl~ ~i~JI (~t~~~` pi'pViSIOt~S (7~ ~~liS ~C~, be

general obligafiions flf the cammonw~;alth.

SE~TI~}~ '[ .1"t~ meet the expenditures r~ecessary in carrying out section 2C, the stag treasurer

shall, upnn request of the governor, issue and sell bonds of the co►~nmonwealth ire an amount to b~specified bythe governor Fram time tc~ time but not exceeding, in the aggregate, $~,973,005,OQ0.

All such bonds issued by the commonwealth shall be designated on their face, Capital lmprovemer~t

Act of 2008, and sha([ be issued for a maximum term of years, not exceeding 30 years, as the

governor may reeamrri nd to the g~n~:ra6 court under sectian 3 e~f Article LXII cif the Amendments fia

the ~anstit~tiQn. The bonds shelf e payable nat later than June 30, 2043. Ai( interest and payments

a~a accounfi cif principal on these obligations shill be payable from the General Fund. Bonds and

interest thereon issued under this section shall, notwithstanding any oth~;r pravisians o~ this act, be

general obligatians ofithe commc~r~wealth.

~CT~~N ~# 9. To meet the expenditures necessary in carrying out section 2D, the stag treasurer

shall, upon request ofi the governe~r, issue and sell bonds of the commnnwea3th in ~n amount to be

specified by the goverr~ar frtam time to time but not exuding, in the aggregate, $560,0OO;OQO. AI!

such bonds issued by the cammonvvealth shall be designafied an their face, Capital Improvement

Act of 2008, and shag! be issued fo►- a maximum berm of years, not exceeding ~0 years, as tf~egovernor may recommend to the general courk under section 3 of ArticEe LXI! of the Amendments try

the Consfiitufiiar~, The bonds shal6 be payable neat (after than June 30, 2048. AI( interest and payments

an accaunt of principal on these abligatians shelf be payable from the General Fund. Bonds and

interest thereon issued under this section shall, notwithstanding any other provisions of this act, be

general abligations ofthe commonwealth.

SECTBON ~0. {a) In order to facilitate fihe reuse of the properties ider~ti~ed in sub5ectian (b}, upon ~

determination by the commissianer that no state agency car executive office has a current or

foreseeable need far the real praperly, the commissioner cif capifal asset management and

maintenance may: (7) subject to secfiions 40E fio 4t~F'I2, incEusive, and sectians 401 and 40J of

chapter 7 of the General Lavus, car►vey, (ease for a tern r at to exceed 99 years, transferorotE~erwise dispose of anyfacility Qr real property identified in subsection (b) to the hosfi municipality

for a direct public use as d~fir~e in section 40F of the Ger~~ral Laws; provided, however, that said

9~ost municipality steal[ have n~ Iris than ~0 days to accept fihe commissioner's r~~Fer ~o acquire tf~e

property, or (2} upon a refusal cif the host municipality of the commissioner's affer pursuant tra cause

1 and subject to sectiar~s 40~ to 40 '/x, inclusive, and sections 40H to 4~J, inclusive, a chapter 7 of

fihe Gener~k Laws, the commissioner of fhe division of capital asset management and maintenance

may canvey, lease fc~r a term not to exceed 99 years, transfer or atherwise disease aft any facility car

real property identified in subsection (b).

(b}This section sha1E apply tt~ the fall€~wing properties:---~ (i) any court facilities vacated and

Add. 35

defiermined to be surplus by the cammissir~ner o~ capital asset management and Er~aintenance and

the chief j~astiee for administration and management as a result of or in anticipation of the

cr~nstruction o~f new courfi facilities or the consalidatic~n of court facilities in the city of Lowe[I, but the

transfer, sale, lease or ether dispasition shall be in acc~~•dance with chapter 290 of the acfis ~f 2004

as amended by sections 59 through 70 cif chapter 7 22 of the acts ofi 2006; ~i~) any courf facilities

vacated and determined to be surplus by the camrr~sssioner t~f capifial asset management and

maintenance and fih chief justice far administration and management as a resuff of ar in

antici~aatic~n of fihe consfirucfiican of new cry r~ facilities or the cansol~dation of court facilities in the city

of Cambridge; viii) any court facilities vacated and determined to be surplus by the commissioner ~f

capital asset management end maintenance anc~ the chief justice for administration and

management as a result of r~r ire anticip~fian of the cnnstructic~n ~f r~ew court facilities or tha

consofidatic~n of caurk facilit€es in the city €~f Woreester; and (iv) any court faci€hies v cafied and

det~r~ained to be surplus by the commissioner of capital asset management and maintenance and

the chief justice for administration and management as a result of or in antici atian of the

canstruction of new court facilities ar the cor~saiidation of cr~urt facilities in the city of Salim,

The exact boundaries ~f each p~rce6 conveyed, 9eased, firar~sferred ar otherwise diseased of

pursuant tc~ this sectsor~ shall be determined bythe cammissioner of the division of capita! asset

management and maintenance after completion of a survey. The consideration fog said

cc~r~v yanee, lease transfer or other disposition shall be the full end fair m~rk~t value cif said parcel

as determined by fihe comrnissianer of the division of capita! asset management and maintenance

pursuant to 1 or more i~dapendent professional appraisals. This parse[ shaft be canveyetf by deed

without warranties or representations by the camra~onwealth.

(c} Notwiths#aiding any general ar special law to fibs contrary, tine grantee or lessee of any properky

identified in subsecfiian (b}shall be respc~nsibl~ for al( casts and expenses, including but not limited

ta, casts associated with any engineering, surveys, appraisals, and deed preparation related to the

~~nveyance aufihorized pursuant to this act as such costs may be determined by.fihe cornmissic~ner

cif the division of capita(asse~ mar~agernent end maintenance.

(d) Nofiwithstanding ar~y general or special !aw to the contrary, the inspecfior general shat! review

and approve the appraisal required p+arsuant to subsection {b}. The inspector general shall prepare

a report of his reviev~r of the methadolr~gy utilized for the appraisal and shall file the report with the

commissioner ofithe division of capita(assefi management and maintenance, the l~o~se and senate

committees on ways and means and the joint committee on bonding, capital expenditures and state

assets. The commissioner of the division of capita6 asset management and maintenance shalE, 30

days before the execufiion cif any canveyar~ce, lease, firansfer or ether disposition pursuant to this

section, or any sub~equer~t amendment theretcs, submit the proposed canveyar~ce, lease, transfer ar

ofiher disposifiic~n or amendment and a report therear~ to the inspector general for his review and

commer~~. The inspector general s~ral3 issue his review and comrrient within 15 days of receipt of the

prc~pc~sed conveyance or amendmertfi, The commissioner of the division of capitaE asset

management and maintenance shall submit the prapased car~v~yance or amendment, ar~d fi1~e

reports end the c~arr~ments of the inspector general; if any, to the house and senate committees on

ways and means and the jairst comr°nittee on bonding, capital e enditures and state assets at least

Add. 36

15 days before executic~r~ of the conveya~ee.

{e) Natwit stanc4ing any genera€ or spec€a! law to the contrary, the net cash proceeds of the sale,

lease, tr~nsf~r car other dispositic~r~ of ar►y court facility identif ed in stabsection (b}shall be depositedinto fibs Courts Capita( Praject Fund established pursuant to section 2l'~'Y of chapter 29 of ~h~

General Laws. Far purposes of this paragraph, the term "net cash proceeds"shall mean ~6!

payments made to the commonwealth as and when paid, less any tr~nsactiQn-related e~snses

and expenses incurred in cannectian with the custody of the property by the division of capital asst

management and maintenance including, but r at limited to, costs associated with the disposal car

pre-develc~pme~t of the property firom which the funds originated incEuding, but rant limited to,

appraisa6s, surveys, site ev~ivafiior~, sifie prep~ratian, plans, recordings, smart growth review end

fe~sibil~ty and other marketing sfudies and ~r~gr rather expenses reEating to fhe d°asp~s~l car prajec~

m~nag~ment services in cc~nnectian wifih any reuse ar redevelopment ~f the property.

ECTIf~N 21. (a) Ta carry out the purposes of items 1102-2008, 17 02-56Q0, 4000-2fl20, 8004-

~.~oa ~n~ s~oo-~ o00 ~~ ~~~t~o~ ~ ~~,~ ~t~m s~oo-s~oa ~~ ~~ct~o~, ~, the commissioner of capitalasst many em~nt ar~d maintenance rnay, notwithstanding sections DOE to 401, inclusive, of

chapter 7 cif the ~er~eral Laws car any ether genera[ or spscia! law to the contrary, but subject to this

subsection, ~cquir~y N~ pUCV~US[::1 lease ar leaseback for a term, including any exfensians, not to

exceed 50 years, gift or other transfer, or by eminent domain under ch~pt~r 79 of the General Lanus,

airy interests inland and bu€Idings cansidered necessary by the cc~mmissior~er to carry out the

purposes of this aet including, but not Iimited to, easements for drainage, access, utilities and

environmental mifiigation and may grant and retain such easemenfi~ and infierests as considered

necessary by the come~nissianer to carry aufi the pur~pc~ses o~F this act.

{b) The commissioner shat€ solicit presposals for anyfacility acquisitian through requests fior

proposals. Each request far propasals shall, at a minimum, include: (1 ~ a description of the facility

for which proposals are sought; (2~ a statement as to whether the commissioner seeks to purchase

or lease the facilities; (3} a statement ~s to whether the commissioner seeks to acquire improved ar

unimproved land, buildings ar~d interests therein; (4) a statement as to whether the selected

proposer steal[ be required ~o undertake the design, consfiruction, renovation, reconstruct►on,alteration, impravement, demolition, expansion or management of a new or existing facility; (5}the

proposed cc~nfractual fierms end condifiions, some of which may b~ considered mandatory or

nonnegatiable, (6}the eva[u~tion criteria that wil! be utilized by fibs cc~mmissic~ner; (7) fibs films and

date for receipt of proposals; {8) the address of the affice to which propas~is sell be delivered;

and (8) such other matters as maybe determined by the cammissioner. Pubaic native t~f each

req~~st fc~r proposals steal[ be published at least 3 weeks before the time specified in the notice far

the receipt of proposals in the central register published by the stafie secretary. At the opening o~ the

proposa6s, the commissioner sha![ prepare a reg'st~r of prc~pc~sals which sha![ include fibs name of

each praposer. The register of proposals steal[ be open for public inspection. Natwithstanding any

general or special law t~ the contrary, tantil the campl~tion of fibs se6ecfiior~ process, fibs confients of

the proposals and the selection process shall not be disclosed to competing proposers and shall

eat be public documenfis.

Add. 37

{c) Any design, construction, renovation, reconstrucfiion, aBteratic~n, improvement, demolition,

e ansion Qr management cif a facility ur~dertake~r under this section shall b~ subject to chapters 7,

30 and 149 c~fi the General Laws and any other geneal or special !aw or regulatiart governi ng the

design, canstructian, renavafiion, reconstruc~~on, altera~i~n, improvement, demolition, expansions or

n~an~gemen~ of real or personal prraperty by the commonwealth.

~~CTOON ~. The information tec}~nology ddvisic~n, in consultation with the operational services

divisi€~n, shaEf require that the pracurement of se~°vices and eq~ipmenfi fiunded under iterr~ 1790-

30C10 of sectian 3 shill corrr~p(ywith the prvcuremer~fi policies fiieci by the sate comptroller under

section 13 of chapter 27 cif the acts of 20(?7 to ensure an open and fair competitive process.

Executive agencies that have ar seek funding under said item 179 -3000 shall submit to the

info~rnat€on technalogy division, a~ intervals to be defiermined by the division, documer~tatian and

deliverables necessary tQ enable it to oversee, ascertain and evaluate project management, status,

progress, performance and eypenditures. The information technalogy division shall specify this

c~acurri~;ntatic~n and deiiv~r~bies, which may include, without fir~it~tinn, project management plans

~r~d r~et~odo(ogy, fiechnalogy designs and specifieafiians, ~cc~untings of amounts expended ar fia

be expended #ar al! g€~ods ar~d services including, uvithout limi#~tion, hardware, software, c6n~u[tant

services end personnel, an assessment o~whet er the project is wit3~in budget and ran schedule for

c;omp~eti~n, an exp[~t~ation of any deviafiions in compietior~ seh~du(es and funding needs fram those

that were originally established fflr the projecfis, pro9ect pans anci c~fiher docurr~er~t deliverables. The

infarmation technology division may make funding ar continued funding~for executive department

agency projects contingent upon its approval of these dacumenfatic~n and deliverables.

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Add. 38

SECTIC9N 24. Section 23 shall take effect 9Q days after the effect€ve date Qf this act.

S~~~"1~~ 25. The secretary of administration and finance, shill submit a report on the progress

and ail expenditures related to the projects specified in this act and any ot4~er projects funded

through the autharizatir~ns in this act to the clerks of the senafie and pause of representatives, the.......

chairs afthe senate ar~d house committees an vrays and means, and the senate and house chairs

of the ja~int committee are b€~nding, capital expenditures and s~~te assets. The re~ork shall include,

but nat be limited to: the total amount appropr6ated for each praject, the total estimated cost afi each

project, the amount expended ft~r the planning and design of each project up to fhe time the report is

flied, the amount expended ~n canstruction of each praject up to fhe time the report is fiCed, the t~ta(

amaun~ currently expended ~n each ~rcaject, the estimated lifetime maintenance schedule and cosf

of each project, the original estimated completian date of each project, the current anticipated

campletion date of each project and, if tie project hay been de-authorized, the reason for end date

of de-authorization. The report sh~l( be submstted are Jung 30 and December 31 of each year far a

periad of 8 years afi~er tie eff~ctiv~ date of Phis act.

S~CT60f~ 6, (a) Nt~twithst~nding any general or special law to the contrary, fihe Massachusetts

Turnpike Authc~rifiy may issue bonds fc~r t~~ purpose of refunding up to $334,9QO,Q00 aggregate

principa(amc~unt of oufstanding metropolitan highway system bonds of the authority that are related

to certain interest rate swaptions previouslyentered iota by the authority. Any bands sc~ issued shill

be subject tc~ the pravisic~ns of chapter 81 A cif the Genera[ Laws and the terms of any applicable

trusfi agreerrienfi entered into by fihe aufihority ar~d in effect as of fihe efFective date of this section.

(b} the authority certi#ies in writing to the secretary of administration and finance that it has

received notice of exercise from fihe ca~r~terparty #o any interest rate swaptians not exercised by the

ct~unterparty before fhe ~ffe~tive date of this acf, then on and after October 1, 2008, the authority

may issue bonds for the purpose ref refunding up ~c~ $465, OO,Q00 aggregate principal amount of

outstanding me~ropalitan hig~away system bonds of the authority that are related to such swaptions.

Ar~y bonds sca issued shall be subject to chapter 81 A of the ~ener~l Laws and the terms of any

applicab6e trust ~greemer~t entered into by the authority ar€d in effect as o~the effective date afthis

secfiio,

(c} The commonwealth, acting by and through the secretary of administration and finance with the

approval of the governor, ~pt~n the request cif the authority, may provide credit support as described

in Phis paragraph, The cammonwealth may pravide funds to the autharity in eider to enable fiF~e

aut arity to pay the principal c~~ ~r in~eresfi on bands cif the authority issued in accardance with this

section or to pay any reimbursement obliga~ior~ owing to the pravi er of insurance or other creditor

liquidity suppo►~ far such bonds. Airy agreement entered into by the camrrdonwealth and the authorityunder this paragraph shill require the aufl~ority to submit anr~ua( reports, within 120 days after the

end cif each f sc~f year of tie authority, fio the secretary of admir~isfiration and f nance, the state

treasurer, tie state auditor, fihe chaieper~ans of the house and senate committees an ways and

mews, the chairpersons afthejoint committee on transportation and the chairpersons afthe faint

Add. 39

committee on bonding, capital expenditures and sfiate assets detailing the fiscal condition of the

authority and its progress in eliminating the need ft~r credit support from the commonwealth. Any

such agreement shall cant~in such other terms, canc{itic~ns and covenants of the commnnvvealth as

the secretary of a~ministratior~ and fin~~ce, with the approval of the governor, may determine ~o be

necessary or appropriate; prc~uided, hawever, #hat a[1 obBigatians of the commc~nwe~lth under this

paragraph shall be subject to appropriation and any such agreement shall recipe that the full faith

and credit of the commonwealth are nafi pledged in support of the ob6igations of the commonwealth

hereunder; and provided fiur~her, t€~at ar~y such agre~me~t shall provide that the authority shill be

obligated to reimburse the commonwealth fc~r any payments made under such agreement on such

terms and conditions as the parties to the agreement sha61 approve.

SE TIC~~t 7, (a}The comm~nwe~lth, acting by and through the secretary of the executive once for

~ minist:-afion and fir~anc~ with the approval o~the governor, upon the request ref the Massac us t~s

Turnpike Authority, may gu~r~nfiee X61 ar ~ porfiion o~ payment obligations ~f the ~ufharity payable in

c;onnectis~n with hedging transactians entered into by the authority before the effective date flf this

act ~nrith respect to mefiropoiifan highway system bands cal the authority; provided, f~awever, that the

~ut~c~rity certifies ~~ writing to the secretary ~f administration and finance that it has received nr~tice

firc~m the caunfierparty under any such hedging transactions that it intends to exercise its rights of

termanatian under the counterp~rt~~s agreement with the authority or that circumstances have

occurred that would al6ow it to terminate its agreement with the authority in the absence of sp~cifi~d

rer~edia! ~ctian bythe authority. The secretary of administration and finance, with the approval of

the gov~~nor and without further authorization, may approve the 'Form, terms and cc~nditic~ns of the

guaranty authorized by t~iis subsection, inc4udir~g without lirraitation, the ~uratir~n afithe guaranty and

the spe~i~c obligat6ons and aggregate amount to be guaranteed by the commonvrealth, and may

execute and deliver, nn behalf of the commonwealth, such guaranty and ar~y related agreements.

with car fir the benefit ~f the caunterparties ce~ntaining such terms, conditions and covenanfis of the

commonwealth as the secretary a~ administration and finance shall approve. The authority and the

cornmonvveaEth, acting by and through the secretary of adminisfiration and finance, may enter into a

reimbursement agreement providing for repayment to the commonwealth of any amounts paid

wider the guaranty aid containing such terms and cc~nditic~ns as tie parties thereto shall approve,

Any g~araratee Qr agreement enfered into by the commonwealth and the authorifiy under this

paragraph sriall require the authority tc~ submit annual reports, within 120 days a~Cer the end o~ each

fiscal year of fihe authority, fic~ fibs secretary of administration and f r~ance, the stafie treasurer, the

sfiate audifior, fibs ch~irper~ans of the house and senate cc~mmi~tees on ways and means, the

chairpersons of tine jant committee on fransportatian and the chairpersons of the joint comm'stEee can

bonding, capital expendifiur~s and state assts detailing the fiscal condition oft e ~uthc~rityand its

progress ire efirr~in~ting the need for the commonwealth's uarant or ether credit su pc~r~. Unless

a# erwise presvided by the secretary of the executive off ce of administration and finance ire tie

terms caf fibs guarantor, tine full faith and credit t~f the commanw~alt shaCl be pledged for the guaranty

provided fir in this subsection. i~the autharityfails or is otherwise unable fo p~ywhen due any

amac~nt guaranfieed that is secured by a piedg~ of fibs full fi lth and credit afi the c~mmQnwealfih

Add. 40

pursuant to this section, the commanwe~(th shall pay such amount upon notice to the state treasurer

a#any time on ar after the due date thereof.

{b}Within 7 5 days of the date of the written certification referred tc~ in subsecfiian (a), the chairman

or executive director of the authority and fhe secretary ofi administratiar~ and finance shall jointlycertifjr in wri~ir~g tc~ the chairpersans of tie house end senate committees on ways and means, the

chairpersons of the faint cc~mrrrittee on transportation, and the chairpersons of the joint committee

an banding, capifial ~xpenditur~s and state assets that, in their judgment, na feasibly aRt~rnatives fo

a pledge r~fith~ cammonwealth's full #with and credifi as pr~v~ded ire subsection (~}exist, and shall

jointly repar~ tc~ the chairpersans of the house and senate committees on ways and means, the

chairpersons of the joint comr~nitt~e on transportation, and the chairpersans cif the joint committee

on bonding, capital expendifures and state assets on ail efforts ur~dertaker~ to avoid the need for a

full faith and credit guarantee of the camman~~vea9fih under subsection (a}.

SEGTI(7M11 29. The state treasurer end a((quasi-public entifiies and independent autf~vrifiies shall

submit bia~~uai repar~s on their borrowing practices to the secretary of administratian and finance,

the state auditor, the chair of the finance advisorgr board established in sectian 97 of chapter 6 Qf

the Genera[ Laws, the chairpersans of the senate and house cammit~~es on ways and means and

the senate and house chairs of the joint cc~mrnittee on bonding, capital expendit~.~res and sfiate

assets. The report shall be due an April 30 and October 31 in each calendar year and shah( include

a[I transactions enured into, other than Exec!-rate borrowing, during the 6 months immediately

preceding fih~ filing affihe report. The report shall include: (1) ~ iist of all transactions rei~fec( fic~

derivafiive ~nancia! producfis; (2}the terms end condifiions of each derivative f nanciai product

transaction; (3}the parties involved in negotiating each derivative financial product transaction; (4)

copies of all agreements enteeed intro between the parties relafiive to derivative financial prad~ct

transaction; ~5) the financial impacfi cif each transac~mQn including, but nc~t iirrai~ed to, the infier~st

rates, fluctuation in interest rates ar~d payments associated therewith; and (6} a written ratic~naie for

the determi~atian ~~ enter into any such transaction. The report shill be signed under oath by the

state treasurer or by the chief financial officer afi the quasi-public entity ar irrde ender~t authority

ding the repr~rt. For purpc~s~s cif this sectian, "derivafiive financial prnducts"shall mean financial

instruments with values derived fram or based upan the value of ath~r assets ar on the ievel cif an

interest rate index includirsg, but net limited tc~, a call option on a band, an interest rate swaptions,

caps, ~Ic~ors, ccall~rs, inverse floaters, auctian rate securities or any other financial transaction other

than fxed-rate, long-term borrowing.

Add. 41

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40J Qf chapter 7 oaf the Ger~er~f Laws, the comm'sssior~~r of capital asst s~anagement andmaintenance may, ICI CC?~1S p~afil~Cl V111~I1 ~~IB ~CIt~'iltllB~P'~~IV~ O'FFGe O~~I18 ~I'IaI CE~l1t`~, ie~s~ to the city of

Add. 42

(~orthampt~n, for a terrt~, including extensions, nat to exceed 99 years; a certain parcel of land onthe west side o~ Gathic strut in the city of Rorthampton containing approximately .47 acres, saidparcel being shown on a plan orgy file wifi~ the divisiar~ of capitaE asset management andmaintenance. The exacfi b~undari~s of fihe parcel steal! be ~efiermined by the commissioner basedupon a survey prepared in ~accorclance with subsection (e}.

~F~) A lease agreement entered into by the commc~nweaEth pursuant to this section shall provide thattl~e parc~(shali b~ used solelyfor municipal and public parking fiaci(ifiies and a~c~ssary usesdarectly rel~fed to the lessee's purposes as determined by the commissioner, in cortsul~ation wifihthe admini~~rative a ce of tf~e triaE court. The lease ~greemerot shall also provide that if the parcelceases to be used fc~r the purposes described in this secfian, the commonwealth may terminate thelease under such terms and conditians as the-lease may prescribe.(c~ Any lease agreement entered ir~fio by the commonwealth pursuant to this section shall provide,by reservation or otherwise, #ar 55 dedicated parking spaces for use by the administrative office o€the trial caurC at no cost tta the camrrrc~nwealtf~. The consideration for tine lease shall be the provisionof those dedicated parking spaces and the cifiy of Nc~rthamptnn's r~sponsibilify for all costs endexpenses asse~cia~ed with the park°rng facilities as provided in subsection (e). The lease shalE elseprovide far amutually-acceptable method flf determining substitute or in-kind consideration to bepaid car ~rcavided by the city of Northampton to the commor~wea(th in the event that the administrativeaffice of the trial court ceases to use all or a porfion c~fthe d dicafied parking, taking intocansider~t€can the cast fio the city of providing 55 repl~cemenfi spaces as covered parking, parkinglot maintenance, parking enforcement ar~d other casts a~saciated with providing parking fatoperatians over the term cif the lease. The commissioner shalE determine, from time to time, inconsult~fian with the administrative off ce of the trial caur~ and the city of Narthampton, the sufific3entnumber of parking spaces based on size and configuration of parking spaces at fihe time, and fihelocatian and access thereto, far use by the administrative once a~ the trial court and the terms andconditians governing such use and operation; provided, however, that the tcital area of such parkingspaces on the parcel shall not materially xce~d the aria c[edicafied to the initial 55 parking spaces.(d) Any lase agreement enterer! into by the cammar►wea,lth pursuant to this act sha11 be on suchother terms and conditions as the cc~mmissianer, in consultation w}th the administrative office of thetrial court, d~err~s appropriate; provided, however, that any such lease agreement shall contain aprevision that requires the lessee to indemnify and hold the commonwealth, the division of capifialassefi management and maintenance and the administrative ofifice of the trial court harm9ess framany persanaE injury or prcaperty darr~~ge caused or suffered by the lessee, its representatives,clienfs9 UC~~I ILJi invitees or other t~r~emb~r of the pubEic. The indemnity ar~d l~ofd harmless provisionshall cover alE costs, expenses, liabilities and legal'Fees in connection with any injury, loss, damage,liability r~i• claim or any proceeding broughfi therea~ or ire defense thereof,(e) The lessee shall be respansible for procuring a61 work ir~ciuding, withaut Eimitation, legal services,surveys, tifife and the preparation of plans and: specifications as deemed necessary or appropriateby the commissioner ~o implement this section and shalE day alb costs and expenses themfar. Thelessee shall also be responsible for all casts, liabilities and expenses c~~ any kind for thedevelopment, canstruction, improvement, repair, rr~aintenance, management end operation a~the

~.dd . 4 3

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S~~TtCDhi 32. Section 27 s~iall b~ ¢ake effect can Octab~r 1, 2008 and shall expire on January 15,

20(79.

Add. 44

I~OUSE No. 5075

~~je (~ommortYaealt~j of ~Ca~sac~ju~ett~

—_ =~~~tr EXECUTIVE DEPARTMENT' ~_'`~~ STATE HOUSE • BOSTON 02133

-~ (617) 725-4000

DEVAL L. PATRICKGOVERNOR

TIMOTHY P. HURRAYLIEUTENANT GOVERNOR

August 10, 2008.

To the Honorable Senate and House of Representatives:

Pursuant to Article LXIII, Section 5 of the Amendments to the Constitu-tion, I am disapproving specific language in section 2C, line items 1102-2008, 1100-3001, 7000-9090, 8000-3500, and Sections 8, 10, 11, 12, 28 and30 of House Bill No. 5055, "An Act Providing For Capital Facility RepairsAnd Improvements For The Commonwealth."

I am pleased to sign the remainder of this General Governmental CapitalNeeds Bond Bill, including:

• $658.3 million to fund the costs of improvements to our court facili-ties;

• $451.8 million to modernize critical state information technology sys-tems;

• Over $400 million for the Division of Capital Asset Management andMaintenance for capital repairs, on-going maintenance and unforeseenemergency capital needs at state office buildings and facilities;

• $250 million for the acquisition of equipment that is currently fundedfrom the annual operating budget;

• $100 million for the Board of Library Commissioners to construct 31new libraries across the state.

These targeted investments will foster local economic growth by pro-viding well-maintained buildings and state-of-the-art equipment. Theseinvestments will provide awell-functioning and responsive government.

~~,~d . 4 5

2 HOUSE — No. 5075 [August

The bill also provides authorization to back certain debt and other pay-ment obligations of the Massachusetts Turnpike Authority ("the Authority")under its interest rate swap agreements. This authorization may be needed tohelp the Authority and its tollpayers avoid hundreds of millions of dollars ofunnecessary costs. It is important to note, however, that the authorizationdoes not take effect until October 1, 2008, and this provides a starting pointfor addressing the Authority's fiscal situation, but it is certainly not acure-all for its fiscal problems.

I am, however, disapproving several provisions of the bill. I am disap-proving language in section 2C, line item 1102-2008, regarding Libraries inWeymouth reading:

`;'provided further, that not less than $1,000,000 shall be expended to thetown of Weymou±h for the general maintenance and any other costs associ-ated with daily operations of the Tufts, Franklin Pratt, North Branch andFagg Libraries located in the town of Weymouth".

I am also reducing the amount of this line item from $461,000,000 to$460,000,000. I am disapproving this language because the Weymouthlibraries earmark is not a state facility, and the purpose of this funding is toprovide for maintenance and repairs to state facilities.

I disapprove of language in section 2C, line item 1100-3001, because itwas funded previously in fiscal year 2007. The language I disapprove states:

"; provided further, that not less than $737,000 shall be expended to reim-burse the town of Southbridge for its purchase of the former National Guardarmory from the commonwealth".

I am also reducing the amount of this line item from $286,725,000 to$285,988,000.

I disapprove language in Section 2C, line item 7000-9090, regarding theBoston Public Library stating:

` ;provided further, that $37,500,000 shall be expended for the phase 11Dof the McI~iin Building renovation and improvement project; provided, how-

ever, that receipt of $22,SOU,000 of which shall be contingent on a match ofnot less than $1 in non-profit, private, city or federal funds for each addi-tional dollar in state funding".

Add. 46

2008] HOUSE — No. 5075 3

The purpose of this item is to provide grants for 31 Libraries on a waiting

list for funding across the Commonwealth. Accordingly, this language wouldhave the affect of circumventing the grant process. I am also reducing theamount of this line item from $137,500,000 to $100,000,000.

I disapprove several earmarked funds in section 2C, line item 8000-3500,because the purpose of this funding is to provide for a competitive grant pro-gram. These earmarks jeopardize the program. Further, these earmarks donot relate to the purpose of this item, which is to fund the repair, renovationand construction of public safety facilities, including police and fire stations.I am therefore reducing the amount of this item from $46,430,000 to$44,680,000.

I am disapproving section 8 because it seeks to exempt real estate salespersons and brokers from the independent contractor laws, G.L. c. 149,§ 148B, recently enacted to reduce employee misclassification and abuse ofworkers' status. The section would allow real estate sales persons and bro-kers to rely on written agreements to avoid the classification rules for inde-pendent contractors. The Secretary of Labor and Workforce Developmentand I are working to address employee misclassification in our undergroundeconomy task force, and we are concerned that this section is inconsistentwith that objective.

I disapprove sections 10 and 1l, because these sections are duplicative ofprovisions in House Bill Number, 5054 "An Act Providing for the Preserva-tion and Improvement of Land, Parks, and Clean Energy in the Common-wealth."

I am disapproving section 12 because the section de-authorizes sections ofthe 1996 transportation bond bill. However, the Commonwealth continues touse authorization from that bill for on-going projects.

I am disapproving section 28 because it requires the valuation of all assetsof the Massachusetts Turnpike Authority. Since most of the Authority'sassets cannot generate income and several are encumbered by long termagreements, current valuation information would not be particularly useful inidentifying revenue opportunities.

1 am also disapproving of section 30, which establishes a special taskforce to examine the future viability of the Authority. I recognize the impor-tance of closely reviewing the Authority's fiscal situation, and I supportefforts to make its practices transparent to the people of the Commonwealth.

Add. 47

4 MOUSE — No. 5075 [August 2008]

Under Secretary Cohen's leadership as chairman of the Authority, theAuthority has already made significant progress in becoming a more ef~-cient and transparent organization, and it will continue to do so.

Unfortunately, the Authority's interest rate swap agreements with invest-ment banks provide that the appointment of an entity, pursuant to law, toreview the Authority's finances could give the investment banks the right toterminate the agreements and require the Authority to make termination pay-ments that could exceed $200 million. Accordingly, although I support itsintent, I disapprove of this section because it creates a financial risk theAuthority and the people of the Commonwealth cannot bear. Through ouractions to try to .protect toll payers from having to incur hundreds of millionsof dollars of unnecessary costs, we must act prudently to ensure that we donot cause those costs to be incurred.

Because I strongly support the objective of this section, I will establish atask force with the identical composition and mission of the task forcedescribed in section 30. Creating a board to review the Authority's fiscal sit-uation without a legal mandate will achieve the same goals of transparencyand sound fiscal analysis without potentially jeopardizing the validity of theAuthority's interest rate swap agreements.

I am pleased to sign the remainder of this bill.

Respectfully submitted,

DEVAL L. PATRICK,Governor. ❑

This Document Has Been Printed On 100% Recycled Paper.

• ~~~

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FREQUENTLY ASKED QUESTIONS

LEGAL AFFAIRS DEPARTMENT "`~

1. What is the difference between an independent contractor and an emalovee?

Employers have a significant degree of control over their employees, and are ableto direct when, how, and where employees accomplish their tasks andresponsibilities. Employers also often provide the necessary "tools of the trade" totheir employees. In contrast, an independent contractor generally can determinewhen, how and where to perform their work, and is responsible for any necessarytools or equipment necessary to provide the services.

For legal purposes, the key distinction between an employee and an independentcontractor is often determined by the amount of control a business exerts over theworker. The more control a business exerts over the worker, the greater the likelihood theworker will be deemed an employee.

2. Are brokers required to classify their salespeople as independent contractors?

No. Brokers can classify their real estate salespeople as either employees or asindependent contractors.

3. What laws and re6ulations apply to a brokerage's classification of its salespeople?

Worker classification laws at the federal and state levels as well as state real estatelicense laws will apply to a brokerage's classification of its salespeople. At thefederal level, the Internal Revenue Service has carved out a special statutory non-employee status for real estate professionals, qualifying them as independentcontractors when all of the following requirements are met:

a. The individual must be a licensed real estate professional;b. Substantially all of their payments must be directly related to sales or other

output, rather than the number of hours worked; andc. Their services must be performed under a written contract providing. that

they will not be treated as employees for federal tax purposes.

State statutes for worker classification and real estate licenses vary in regards todetermining proper classification of real estate licensees. Some states explicitly

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FREQUENTLY ASKED QUESTIONS

LEGAL AFFAIRS DEPARTMENT

recognize real estate licensees as independent contractors when certain conditionsare met, and other states are silent as to real estate licensees so the courts mustapply the applicable test for• determining proper classification. This is why it isvital for real estate professionals to know the laws that pertain to workerclassification in their states.

4. Is an independent contractor written agreement sufficient to classify workers asindependent contractors?

Having an independent contractor agreement is a very important element of establishingan independent contractor relationship with a real estate salesperson, but the existence ofan agreement is not enough to avoid misclassification. Courts and regulatory agencieswill look to the reality of the relationship, how the parties interacted, and how muchcontrol a broker exerts over the real estate salesperson in order to determine the truenature of the relationship between the parties.

5. What types of activities should brokers avoid in order to nroveriv classifysalesueonle as indeaendent contractors?

Under many state, and federal, laws, making certain acts "mandatory" may be consideredan indication of employer-like control over the worker. One of the hallmarks of anindependent contractor relationship is that the independent contractor has the ability todirect and control where, when and how they perform their work.

In order to establish an independent contractor relationship, the following is a list of thetypes of activities that should be avoided:

• Requiring the worker perform the services during set work hours.• Requiring the worker perform the services at a specific location.• Making attendance at staff meetings mandatory.• Providing training to the worker.

• Supplying tools and materials to the worker.

6. Since worker classification is often dependent on the level of control an employerexerts over a worker. does this mean that brokers should not supervise theirindependent contractor salespeople?

No. In fact, according to real estate licensing laws brokers must maintain a certainamount of supervision over their salespeople. Brokers must therefore make sure that theyare balancing their state real estate license laws' supervision requirements with theapplicable requirements in state and federal worker classification laws.

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Add. 50

FREQUENTLY ASKED QUESTIONS

LEGAL. AFFAIRS DEPARTMENT °'"

7. Do federal income taxes have to be withheld from a real estate professional'searnings?

No, if the independent contractor meets the three elements of the IRS's carve out. TheIRS recognizes the unique nature of the real estate industry and created a statutory non-employee status for real estate professionals, provided three elements are met: 1) theindividual is a licensed real estate professional; 2) substantially all of their payments bedirectly related to sales or other output, rather than number of hours worked; and 3) theirservices are performed under a written contract providing that they will not be treated asemployees for federal tax purposes. If these three elements are met, no federal incometaxes need to be withheld from the real estate professional's earnings.

8. Does pualifvin~ as a statutory independent contractor under IRS rules also meanthat state income taxes do not have to be withheld from a real estate professional'searnings?

No, qualifying as a statutory independent contractor under IIZS rules applies only tofederal income taxes. The question of whether state income taxes must be withheld froma real estate professional's earnings is a question of state law. Brokers should check theapplicable state law where they operate.

9. Can a broker provide its independent contractors with ben~~ts such as healthinsurance and 401K participation?

The provision of employee-type benefits, such as health insurance, vacation pay and 4011cparticipation, can be factors pointing to an employer-employee relationship, rather thanthat of an independent contractor. The provision of these types of benefits maycompromise the argument that the relationship with the worker is that of an independentcontractor.

10. What haAUens ff a broker misclassifies an employee as an independent contractor?

Improper classification of workers can cause businesses a number of taY and other legalproblems. At the federal level, the IRS may levy unpaid payroll tares against a businessit believes is misclassifying its warlcers, as well as interest and other penalties. Inaddition, the United States Department of Labor, the National Labor Relations Board,and the Equal Employment Opportunity Ajency have an interest in a business'sclassification of its workers, and may pursue penalties and legal action against businessesbelieved to be engaging in worker misclassification.

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add. 51

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FREQUENTLY ASKED QUESTIONS

LEGAL AFFAIRS DEPARTMENT __ ° °"°° "'

At the state level, businesses may face fines and penalties for violations of state workers'compensation laws, tax laws, and state unemployment compensation laws. Improperclassification can also expose businesses to private causes of action and costly litigation.

11. What resources are available to helu further wide real estate professionals on thisto ic?

A number of resources on this topic are available on ruww.I?Ei~I,~TC~_R_,_~r~s, IndependentContractor resources page: l~ttp -'; ~~r:vv_w~realtor.or~~'to.~icslinci~endent=contractor. Theseresources include:

• "'Ten 1~~ays in Succ~ssfiillv Manage I`our Inde~aendent Contractor Relationships"s I,e~al Affairs_video_on ~_ecent worker ciassr_iication litigation• Chant detailiu~ various state lab~i• lativs approach to classif}~in~ real estate

professionals• Coming soon - Sample independent contractor agreement

Outside resources include:• The IR website's truide to ivoricer classification• L.S. L)e~artment ~f LaborVija~e anc~ Ilaiu~Dir~~isia~uic~ance gn_tivorkcr

classif cationYour state's Department of Labor website

• Your state's real estate licensing authority's website.

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Add. 52