Lawmakers repeal controversial workers’ comp law

Officers of small corporations and limited liability companies will once again be able to wield a hammer at most construction sites without having to purchase expensive workers’ compensation coverage for themselves, thanks to a legislative vote that fixes a law that went into effect last September.

The measure, which unanimously passed the Senate and netted only six dissenting votes in the House, was signed into law by Gov. John Lynch on Jan. 4. It is a partial repeal of the now-infamous House Bill 471. Those small-business officers will still have to buy coverage for work their firms do on public sites, which — most agree — was the original intent of the bill.

But somehow, a provision that all construction sites be included – a provision championed by construction unions – got inserted into the bill last year, causing “unintended consequences,” said Sen. David M. Gottesman, D-Nashua.

“Everybody missed it,” said Gottesman. “We missed the boat. We made a mistake.”

Republicans in the Senate wanted to go further, noting that even the public works part of the bill would have unintended consequences. For one, they said, the language not only included state contractors, but firms engaged on a state construction site doing other kinds of work, such as snow plow operators. The bill contained language that would exempt “routine maintenance operations,” but still might affect others, putting some small firms that depend on such contracts out of business, Republicans argued.

“We need to go back to square one to find out where the problems are,” said Robert J. Letourneau, R-Derry, who favored a complete repeal.

Democrats wanted to leave the rest of the bill alone, arguing that it “levels the playing field” by closing the loophole that allows many firms bidding on state projects to avoid workers’ compensation by subcontracting that work to so-called “independent” contractors.

The Republican amendment failed along party lines, and then senators of both parties joined together in a 23-0 vote for the partial repeal, which sailed through the House, 329-6, with only one timid question about whether “executives” should be enabled to engage in hazardous jobs without paying into the compensation systems.

The bill also requires that insurance companies refund prorated premiums of coverage purchased earlier to comply with the law.

In other business-related legislation, the House:

• Passed a bill that will create a “tavern license” for bars that don’t want to serve food. Under current laws, only private clubs are exempt from the requirement that restaurants serving alcohol must sell $75,000 worth of food, or that liquor sales are limited to 50 percent of revenue. Cocktail lounges with such licenses can stop serving food after 9 p.m., but underage drinkers are often still there. Under a tavern license, only those who are older than 21 could enter the premises. The new licenses will cost $12,000, and $24,000 for taverns with more than 50 seats.

Under an amendment passed by the House, municipalities could ban taverns in their town. The bill still must go through the House Ways and Means Committee before going over to the Senate.

• Passed a bill that puts all discount medical plans under the jurisdiction of the Insurance Department because it is confusing which state agency regulates them.

• Passed a bill clarifying regulations on career schools without exempting business training courses.

• Voted to ban direct campaign contributions from corporations and unions, restricting such donations from political action committees instead. A recent court decision allowed direct contributions from corporations, but not unions.

• Voted to eliminate the time limits a planning board has to review building permits, leaving it to the board’s discretion.

For its part, the Senate passed a bill tightening restrictions on individual real estate brokers, requiring them to submit any criminal record reports from other states, as opposed to just relying on the state’s record check, and making it easier to deny a licensee if its license had been revoked in other states.

The Senate also tabled a bill that would allow the Public Utilities Commission to seek reparations for consumers absent a complaint, and increase civil penalties tenfold for all utilities and agents — and perhaps even more for larger utilities. The maximum penalty against a utility would be $250,000, or 2.5 percent of annual gross revenue from in-state sales. The money for the fines now would be distributed for the benefit of the utility’s ratepayers, “or otherwise in the public interest,” as determined by the commission.