AN ACT REDUCING INCOME TAXES AND UNEMPLOYMENT INSURANCE RATES AND PROVIDING FOR WORKFORCE TRAINING.
Whereas , The deferred operation of this act would tend to defeat its purpose, which is, in part, to make certain fiscal provisions forthwith for the fiscal year ending June 30, 1998, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. The fourth paragraph of subsection (a) of section 12 of chapter 7A of the General Laws, as appearing in section 4 of chapter 88 of the acts of 1997, is hereby amended by striking out the figure "5" and inserting in place thereof the following figure:- 7.5.
SECTION 2. The second paragraph of section 2H of chapter 29 of the General Laws, as amended by section 4 of chapter 10 of the acts of 1997, is hereby further amended by striking out the word "five" and inserting in place thereof the following figure:- 7.5.
SECTION 3. Chapter 29 of the General Laws is hereby amended by inserting after section 2QQ, inserted by section 3 of chapter 78 of the acts of 1998, the following section:-
Section 2RR. (a) There is hereby established and set up on the books of the commonwealth a separate fund to be known as the Workforce Training Fund, in this section called the Fund. There shall be credited to the Fund the workforce training contributions required by section 14L of chapter 151A.
(b) Subject to appropriation, the commissioner, which in this section shall have the meaning assigned by section 1 of chapter 151A, shall make expenditures from the Fund for the following purposes:
(1) To provide grants to employers, employer groups, labor organizations and training providers for projects to provide education and training to existing employees and newly hired workers. In determining who shall receive grants, the commissioner shall consider the following criteria:
(i) whether the project will increase the skills of low-wage, low-skilled workers;
(ii) whether the project will create or preserve jobs at wages sufficient to support a family;
(iii) whether the project will have a positive economic impact on a region with high levels of unemployment or a high concentration of low-skilled workers;
(iv) whether the employer has made a commitment to provide significant private investment in training during the duration of the grant and after the grant has expired;
(v) whether the project will supplement, rather than replace, private investments in training;
(vi) whether the employer is a small business that lacks the capacity to provide adequate training without such assistance;
(vii) whether the project will provide residents of the commonwealth with training for jobs that could otherwise be filled only by residents of other nations; and
(viii) whether the project is consistent with the workforce development blueprint prepared by the regional employment board.
Such grants shall be for amounts not to exceed $250,000 and shall be for a term not to exceed two years.
(2) To provide technical assistance to increase training opportunities available to employees. The commissioner may provide this direct technical assistance by using existing institutions such as regional employment boards, community colleges, labor organizations, administrative entities for service delivery areas under the federal Job Training Partnership Act, and other entities that have expertise in providing technical assistance regarding employee training or with employees of the department of labor and workforce development or of the corporation for business, work and learning. Such expenditures shall not exceed $3,000,000 each year and the commissioner shall demonstrate that each dollar expended generates not less than $5 in private investment in job training.
(c) The commissioner shall adopt regulations to carry out the purposes of this section, including the criteria set forth in paragraph (1) of subsection (b). The commissioner may contract with a private organization to carry out some or all of the commissioner's duties provided in this section.
(d) Not later than September 1 of each year, the commissioner shall file a report in writing with the joint committee on commerce and labor and the house and senate committees on ways and means concerning the grants made in the fiscal year ending on the preceding June 30, together with such recommendations and additional information as the commissioner considers appropriate.
SECTION 3A. Section 2RR of said chapter 29, inserted by section 3 of this act, is hereby repealed.
SECTION 4. Section 64 of said chapter 29, as appearing in the 1996 Official Edition, is hereby amended by striking out the third paragraph and inserting in place thereof the following paragraph:-
An employee may defer compensation; provided, however, that such deferral does not exceed the maximum allowable under the appropriate provisions of the Code, as amended and in effect for the taxable year, and appropriate regulations thereunder.
SECTION 5. Section 64B of said chapter 29, as so appearing, is hereby amended by striking out the fourth paragraph and inserting in place thereof the following paragraph:-
An employee may defer compensation; provided, however, that such deferral does not exceed the maximum allowable under the appropriate provisions of the Code, as amended and in effect for the taxable year, and appropriate regulations thereunder.
SECTION 6. Section 1 of chapter 62 of the General Laws, as so appearing, is hereby amended by inserting after the word "year", in line 7, the following words:- ; provided, however, that references in this chapter to sections 162(a), 274(m) and 274(n) of the Internal Revenue Code of the United States shall refer to said Code as amended and in effect for the taxable year.
SECTION 7. Paragraph (m) of said section 1 of said chapter 62, as so appearing, is hereby amended by striking out the second paragraph and inserting in place thereof the following paragraph:-
The term "capital gain income" shall mean gain from the sale or exchange of a capital asset; provided, however, that for purposes of determining Part A and Part C gross income, gains and losses shall be netted within short term and long term categories. The terms short term capital gain, short term capital loss, long term capital gain, long term capital loss, net short term capital gain, net short term capital loss, net long term capital gain, net long term capital loss shall have the meanings provided in section 1222 of the Internal Revenue Code of the United States, as amended and in effect for the taxable year. In determining the amount of gain or loss on any sale, exchange or other disposition of property, the provisions of section 6F shall be taken into account; provided, further, that losses from the sale or exchange of capital assets shall not include any item the deduction of which is, or but for some other section would be, prohibited by section 165(c), section 262, or section 267 of the Code.
SECTION 8. Paragraph (1) of subsection (a) of section 2 of said chapter 62, as so appearing, is hereby amended by striking out subparagraph (D).
SECTION 9. Said subsection (a) of said section 2 of said chapter 62, as so appearing, is hereby further amended by adding the following paragraph:-
(3)(A) Notwithstanding any other provision of this chapter, in the case of a distribution within the meaning of subsection (d)(3) of section 408A of the Code as amended and in effect for the taxable year, any amount included as income for federal tax purposes under said section 408A by reason of such distribution shall be included in gross income and, to the extent such distribution is included in adjusted gross income under subsection (c), shall be taken into account in determining taxable income under this chapter in the same manner as under subparagraph (A) of said subsection (d)(3) of said section 408A of said Code.
(B) Gain from the sale of a principal residence included in federal gross income under section 121 of the Code in effect on January 1, 1988, but excluded from federal gross income under section 121 of the said Code in effect for the taxable year, shall not be included in Massachusetts adjusted gross income. For the purposes of recognizing gain on the sale of a principal residence, the provisions of section 1034 of said Code shall not apply.
SECTION 10. Section 3 of said chapter 62 is hereby amended by striking out, in line 103, as appearing in the 1996 Official Edition, the words "two thousand two hundred dollars" and inserting in place thereof the following figure:- $3,815.
SECTION 11. Said section 3 of said chapter 62 is hereby further amended by striking out the figure "$3,815", inserted by section 10 of this act, and inserting in place thereof the following figure:- $4,400.
SECTION 12. Said section 3 of said chapter 62 is hereby further amended by striking out, in line 110, as appearing in the 1996 Official Edition, the words "three thousand four hundred dollars" and inserting in place thereof the following figure:- $5,895.
SECTION 13. Said section 3 of said chapter 62 is hereby further amended by striking out the figure "$5,895", inserted by section 12 of this act, and inserting in place thereof the following figure:- $6,800.
SECTION 14. Said section 3 of said chapter 62 is hereby further amended by striking out, in line 116, as appearing in the 1996 Official Edition, the words "four thousand four hundred dollars" and inserting in place thereof the following figure:- $7,630.
SECTION 15. Said section 3 of said chapter 62 is hereby further amended by striking out the figure "$7,630", inserted by section 14 of this act, and inserting in place thereof the following figure:- $8,800.
SECTION 16. Section 4 of said chapter 62, as appearing in the 1996 Official Edition, is hereby amended by striking out subsection (a) and inserting in place thereof the following subsection:-
(a)(1) Part A taxable income consisting of capital gains shall be taxed at the rate of 12 per cent.
(2) Part A taxable income consisting of interest and dividends shall be taxed at the rate of 5.95 per cent.
SECTION 17. Section 5 of said chapter 62, as so appearing, is hereby amended by adding the following subsection:-
(c) Notwithstanding any other provision of this chapter, a Roth IRA, so-called, as defined in section 408A of the Code, as amended and in effect for the taxable year, or an education individual retirement account, as defined in section 530 of said Code as amended and in effect for the taxable year, and any income accruing in a Roth IRA or an education individual retirement income account or any distribution therefrom shall be subject to tax under this chapter only to the extent that such income is included as income for federal income tax purposes under said section 408A or said section 530 of said Code.
SECTION 18. Subsection (i) of section 6 of said chapter 62, as appearing in section 63 of chapter 43 of the acts of 1997, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- Said expenditures shall be the actual cost to the taxpayer or $15,000, whichever is less; provided, however, that said credit shall be available to eligible taxpayers beginning in the tax year in which the repair or replacement of said cesspool or septic system was completed; and provided, further, that said credit shall not exceed $1,500 in any tax year and any excess credit may be applied over the following five subsequent tax years up to an aggregate maximum of $6,000.
SECTION 19. The Experience Rate Table in paragraph (1) of subsection (i) of section 14 of chapter 151A of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by striking out the column headed B and inserting in place thereof the following column:-
| B |
| 2.2% |
| or |
| more |
| but |
| less |
| than |
| 2.6% |
| 7.225 |
| 7.025 |
| 6.825 |
| 6.625 |
| 6.425 |
| 6.225 |
| 6.025 |
| 5.825 |
| 5.625 |
| 5.425 |
| 5.225 |
| 5.025 |
| 4.825 |
| 4.625 |
| 4.425 |
| 4.225 |
| 4.125 |
| 4.025 |
| 3.925 |
| 3.825 |
| 3.725 |
| 3.625 |
| 3.525 |
| 3.425 |
| 3.325 |
| 3.225 |
| 3.125 |
| 3.025 |
| 2.925 |
| 2.825 |
| 2.725 |
| 2.625 |
| 2.525 |
| 2.425 |
| 2.325 |
| 2.225 |
| 2.125 |
| 2.025 |
| 1.925 |
| 1.825 |
| 1.725 |
| 1.625 |
| 1.525 |
| 1.425 |
| 1.325 |
SECTION 19A. Said Experience Rate Table in said paragraph (1) of said subsection (i) of said section 14 of said chapter 151A is hereby further amended by striking out the column headed B, inserted by section 19 of this act, and inserting in place thereof the following column:-
| B |
| 2.2% |
| or |
| more |
| but |
| less |
| than |
| 2.6% |
| 7.3 |
| 7.1 |
| 6.9 |
| 6.7 |
| 6.5 |
| 6.3 |
| 6.1 |
| 5.9 |
| 5.7 |
| 5.5 |
| 5.3 |
| 5.1 |
| 4.9 |
| 4.7 |
| 4.5 |
| 4.3 |
| 4.2 |
| 4.1 |
| 4.0 |
| 3.9 |
| 3.8 |
| 3.7 |
| 3.6 |
| 3.5 |
| 3.4 |
| 3.3 |
| 3.2 |
| 3.1 |
| 3.0 |
| 2.9 |
| 2.8 |
| 2.7 |
| 2.6 |
| 2.5 |
| 2.4 |
| 2.3 |
| 2.2 |
| 2.1 |
| 2.0 |
| 1.9 |
| 1.8 |
| 1.7 |
| 1.6 |
| 1.5 |
| 1.4 |
SECTION 20. Said chapter 151A is hereby further amended by inserting after section 14K the following section:-
Section 14L. (a) Each employer liable to pay a contribution under subsection (i) of section 14 shall also pay, in the same manner and at the same times as the commissioner prescribes for the contribution required by section 14, a workforce training contribution of 0.075 per cent of so much of its payroll as is subject to this chapter. To the extent consistent with federal law, the commissioner shall adjust the rate of said contribution so that the total amount of said contributions in a year substantially equals $18,000,000, and shall adjust to the same extent the rate of the contribution required by section 14. The commissioner shall deposit the proceeds of said workforce training contributions in the Workforce Training Fund, established by section 2RR of chapter 29.
(b) Except where inconsistent with the provisions of this section, the terms and conditions of this chapter that apply to the payment of and the collection of contributions shall apply to the same extent to the payment of and the collection of the workforce training contribution required by this section; provided, however, that said contributions shall not be credited to the employer's account or the solvency account established pursuant to section 14, 14A or 14C.
SECTION 20A. Section 14L of said chapter 151A, inserted by section 20 of this act, is hereby repealed.
SECTION 21. Notwithstanding the provisions of section 14 of chapter 151A of the General Laws, the experience rate of an employer qualifying therefor under subsection (b) of said section 14 of said chapter 151A shall be the rate which appears in the column designated "B" for calendar year 1999.
SECTION 21A. Section 21 of this act is hereby repealed.
SECTION 22. The regulations required by subsection (c) of section 2RR of chapter 29 of the General Laws shall take effect not later than December 31, 1998.
SECTION 23. Sections 1 and 2 of this act shall take effect as of June 30, 1998.
SECTION 24. Sections 3, 19, 20 and 21 of this act shall take effect on January 1, 1999.
SECTION 25. Sections 3A, 20A and 21A of this act shall take effect on December 31, 2001.
SECTION 26. Section 19A of this act shall take effect on January 1, 2002.
SECTION 27. Sections 4, 5, 6, 7, 8, 9, 17 and 18 of this act shall take effect for tax years beginning on or after January 1, 1998.
SECTION 28. Sections 10, 12 and 14 of this act shall take effect for tax years beginning on or after January 1, 1998 but before January 1, 1999. Sections 11, 13, 15 and 16 of this act shall take effect for tax years beginning on or after January 1, 1999.