Chamber Connections BLOG
Chamber Connections BLOG
At The State House
The Senate Labor Committee will take testimony on Wednesday, January 29th, At the Rise (approximately 4:30 p.m.) in the Senate Lounge, on three bills. S.2092 is the workplace bullying bill that the Senate has passed the last couple years. The bills proposes to make employers vicariously liable for bullying activities between employees. The employee can also be held liable. Abusive conduct includes verbal and physical abuse as well as sexual harassment. S.2143 raises the minimum wage each year until the wage reaches $15 in January, 2025. After that, the wage would increase based on the cost of living index. The bill also raises the tip wage gradually to $15 by 2028. At that point the tipped wage would equal the state’s minimum wage. Effectively, this would change the restaurant business to the European model where tipping does not occur. Lastly, the Committee will take testimony on S.2147, which raises the minimum wage to $11.25 on July 1, 2020, followed by increase every year thereafter ($12, $13, $14 and $15) until the wage reaches $15 on January 1, 2024.
Governor FY2021 Budget
Article 20 – Healthcare Reform Act
The 123-page article touches many areas of the healthcare system. It seeks to insert into state law, the federal Affordable Care Act to ensure that should the federal government disband the program, Rhode Island would continue on its own. It also makes other changes to health insurance. The Article removes insurer’s ability to use prior continuous coverage for one year as an eligibility requirement to enter the individual health insurance market. Carriers must offer all of their health insurance plans to any Rhode Island resident. Carriers cannot require copays or deductibles or other cost-sharing mechanisms for preventative services provided by in-network providers. This same requirement applies to large group health insurance coverage or to small employer health insurance plans.
The Article creates multi-state licensing compact programs for physicians, nurses (RNs and LPN/VNs), psychologists and telepsychologists, physical therapists, and emergency medical personnel (EMTs, advanced EMTs and paramedics). All of these compacts require the states to establish a common database of licensees and to communicate complaints received as well as any actions taken against bad actors.
Last year, the Governor proposed a Medicaid tax/assessment on larger employers. This tax/assessment was placed on qualifying employers based on the number of employees in the company that utilize Medicaid. The Chamber and other business organizations pushed back, arguing that the tax/assessment was substantial and unpredictable since employers can’t ask employees whether or not they access or plan to access Medicaid. This year the Governor chose not to include the tax/assessment; but she did create a reporting requirement for businesses with more than 50 employees. If your business has 50 employees (no distinction between part time and full time) or more on any given day between July 1, 2019 and June 30, 2020, you are included in this requirement. Each July 1 – June 30 is a new year and businesses must make the same determination as to whether they meet the 50 employee threshold.
So what is the program and what are the business requirements?
Rhode Island has a program called RIte Share. Under federal law, Rhode Island is permitted to pay a Medicaid-eligible person’s share of the costs for enrolling in an employer-sponsored health insurance (ESI) if it is cost effective. The ESIs have to meet certain cost and coverage requirements. The Governor’s plan expands RIte Share to include wrap-around services (costs associated with services not included in an ESI but covered under Medicaid) and premium coverage for employees covered by Medicaid but not the ESI.
Employers with more than 50 employees would be required to annually provide to the State “sufficient and necessary information” for the Medicaid agency to determine an employee’s eligibility for the expanded RIte Share program. Also, employers would have to provide quarterly reports (1) notifying the State when an employee is no longer working for the employer or has lost ESI, and (2) stating which employees are covered by ESI and which employees are not covered. Employers would be required to provide employees with information about RIte Share with enrollment materials; and to participate in an employer education and outreach campaign to be run by the Executive Office of Human Services. The first report would be due between November 15, 2020, and December 15, 2020. Lastly, employers would NOT be able to offer “financial incentives for employees to turn down ESI and remain on Medicaid.” This last requirement seems to suggest that employers could not provide any financial “bump” to employees that choose to decline health insurance for any reason (even if the spouse has insurance), because the employer would have to delve into the employee’s reasons for turning down the insurance in order to provide the financial “bump.”
The penalties for noncompliance are steep. Failure to timely report leads to a $2500 fine. Falsifying data is a $5000 fine.
This provision of the Article – reports by employers with 50+ employees – is proposed to become effective upon passage.
Article 14 – Relating to Medical Assistance
Article 14 addresses Medicaid payments and reimbursement rates. Current law allows for direct vendor payments for medical care; and this article would additionally allow the Executive Office of Health and Human Services (EOHHS) to allow for additional payment options. Other changes to the Medicaid program include:
The following bills were filed last week:
House Bill No. 7186 Phillips, Casey, Serodio, Hawkins, Ruggiero, AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- ENFORCEMENT AND COLLECTION (Eliminates the ten dollar ($10.00) fee requirement for the sales tax permit.)
House Bill No. 7224 Edwards, Diaz, Slater, Bennett, Williams, AN ACT RELATING TO PUBLIC PROPERTY AND WORKS-MINORITY BUSINESS ENTERPRISE (Provides that any women's business enterprise that is certified under the Federal Small Business Act would be deemed certified by the department of administration as a women's business enterprise.)
House Bill No. 7225 Edwards, Diaz, Slater, Williams, AN ACT RELATING TO LABOR AND LABOR RELATIONS - PAYMENT OF WAGES (Eliminates repealed statute references and create a mechanism for employees to enforce their existing right to continuation of medical benefits.)
House Bill No. 7226 Edwards, Donovan, Cassar, Canario, Diaz, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- UNLAWFUL EMPLOYMENT PRACTICES (Prohibits an employer, employment agency, labor organization, or employee, to commit any act declared to be an unlawful employment practice; individuals would be held personally liable for such conduct.)
House Bill No. 7227 Donovan, Williams, Alzate, Shekarchi, Blazejewski, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- FAIR EMPLOYMENT PRACTICES (Comprehensively addresses wage discrimination by expanding employee protections and the scope of the remedies available to employees who have experienced wage discrimination.)
House Bill No. 7268 Diaz, Alzate, Mendez, Bennett, AN ACT RELATING TO HEALTH AND SAFETY - PUBLIC HEALTH AND WORKPLACE SAFETY ACT (Provides that any law or regulation which protects a person from exposure to second hand smoke would also provide protection from exposure to second-hand marijuana smoke, regardless of how the smoke was generated.)
House Bill No. 7287 Shekarchi, Edwards, Noret, Serodio, Amore, AN ACT RELATING TO LABOR AND LABOR RELATIONS – MINIMUM WAGES (Repeals § 28-12-9 of the general laws which provides that the director of labor and training may approve of wages below the minimum wage for those persons whose earning capacity is impaired due to physical or mental disability.)
House Bill No. 7306 McEntee, Shekarchi, Bennett, Craven, Knight, AN ACT RELATING TO HEALTH AND SAFETY -- PLASTIC WASTE REDUCTION ACT (Creates the "Plastic Waste Reduction Act" designed to reduce the use of plastic bags by retail establishments by offering recyclable bag options and providing penalties for violations.)
House Bill No. 7307 Cortvriend, Marszalkowski, Speakman, Shekarchi, Ranglin-Vassell, AN ACT RELATING TO HEALTH AND SAFETY - PFAS IN FOOD PACKAGING (Prohibits PFAS, a class of fluorinated organic chemicals, from being used in food packaging.)
House Bill No. 7310 Shanley, Barros, Casimiro, AN ACT RELATING TO TAXATION -- SALES AND USE TAXES (Phases out the tangible tax for businesses over five years, while reimbursing the city, towns, and fire districts 50% of the revenue lost. Provides that each city or town would receive 0.05% of any sales tax revenue generated within said city or town.)
House Bill No. 7311 Shanley, Barros, Casimiro, AN ACT RELATING TO TAXATION -- INVESTMENT TAX CREDIT (Requires a business entity receiving tax incentives from the state of Rhode Island or a local municipality to report their eligibility said tax incentive.)
Senate Bill No. 2030 DiPalma, Euer, Goldin, Seveney, Paolino, AN ACT RELATING TO COMMERCIAL LAW - GENERAL REGULATORY PROVISIONS - INTERNET PRIVACY AND SECURITY (Establishes that manufacturers of devices capable of connecting to the Internet equip the devices with reasonable security features.)
Senate Bill No. 2046 DiPalma, Seveney, Satchell, Valverde, Euer, AN ACT RELATING TO TAXATION - JOBS DEVELOPMENT ACT (Sunsets/discontinues the Jobs Development Act rate reduction as of July 1, 2020.)
Senate Bill No. 2047 Satchell, Valverde, Euer, Conley, Miller, AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Establishes a nineteen percent (19%) carried interest fairness fee for investment management services in order to tax the carried interest income of hedge fund and private equity investors as traditional ordinary earned income.)
Senate Bill No. 2056 Felag, Sosnowski, Cano, DiPalma, Seveney, AN ACT RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND COMPUTATION (Eliminates the sales tax on taxi services and pet care services.)
Senate Bill No. 2059 Satchell, Seveney, Conley, Bell, Quezada, AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Adds three (3) new income tax brackets at rates of 7,99%, 8.49% and 8.99% for taxable income from $275,000 to over $1,000,000 effective January 1, 2021.)
Senate Bill No. 2068 Satchell, Sosnowski, Quezada, Seveney, Coyne, AN ACT RELATING TO HEALTH AND SAFETY -- PROHIBITION OF PFAS IN FOOD PACKAGING ACT (Prohibits PFAS, a class of fluorinated organic chemicals, from being used in food packaging.)
Senate Bill No. 2072 Archambault, AN ACT RELATING TO MOTOR AND OTHER VEHICLES -- SIZE, WEIGHT AND LOAD LIMITS--SMITHFIELD AND LINCOLN (Prohibits commercial motor trucks, with a gross weight rating of twenty-six thousand one pounds (26,001 lbs.) or more, from traveling on Limerock Road, in Smithfield and Lincoln.)
Senate Bill No. 2092 Ciccone, Nesselbush, Bell, Quezada, Picard, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- HEALTHY WORKPLACE (Provides for opt-out of information disclosure by HIE of confidential health care information.)
Senate Bill No. 2108 Sosnowski, McCaffrey, Lynch Prata, Conley, McKenney, AN ACT RELATING TO HEALTH AND SAFETY -- ECONOMIC AND CLIMATE RESILIENCE ACT OF 2020 (Establishes a fee on companies that sell fossil fuels in Rhode Island for consumption or distribution within the state and establishes an "economic and climate resilience fund" to disburse the collected funds.)
Senate Bill No. 2125 Sosnowski, McCaffrey, Lynch Prata, Goodwin, Gallo, AN ACT RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES (Prohibits insurance companies from varying the premium rates charged for a health coverage plan based on the gender of the individual policy holder, enrollee, subscriber, or member.)
Senate Bill No. 2140 Euer, Goldin, Murray, Valverde, Cano, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- FAIR EMPLOYMENT PRACTICES (Forbids an employer to require an employee to execute a nondisclosure agreement; or non-disparagement agreement regarding alleged violations of civil rights or criminal conduct as a condition of employment.)
Senate Bill No. 2143 Quezada, Valverde, Nesselbush, Metts, Ciccone, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES (Gradually increases the hourly minimum wage from $10.50 to $15 by July 1, 2024, and the hourly minimum wage for employees receiving gratuities from $3.89 an hour to $15 an hour by January 1, 2028.)
Governor Releases FY2021 Budget
Last Thursday, Governor Raimondo released her plan for State revenue and spending. The 621 page, $10 billion plan deals with everything from sales tax expansions to bonds to health care. There are 22 separate Articles in the budget. Over the next few weeks, Under the Dome will look at the various articles of the document as well as the potential effects on segments of the business community.
Article 8 – Taxes
Since taxes are on everyone’s mind, we start with Article 8, Relating to Taxes. The Article does the following:
Article 8 also proposes to change the way in which the hotel tax is distributed starting July 1, 2020. The distribution percentage of the tax collected changes, but keep in mind the Governor increases the tax by 1%. Cities and Towns get 20.8% of the tax collected – down from the current 25%. The Providence Convention and Visitors Bureau percentage lowers differently in different regions. Providence and Warwick Tourism districts see their percentage lower from 30% to 25%. The Aquidneck Island Tourism District percentage lowers from 45% to 37.5%. Regional Tourism Districts such as the Blackstone Valley see a decrease from 45% to 37.5%. The amount of hotel tax going to the Commerce Corporation lowers in all regions about 3% to 3.5%. And, for the first time, 16.7% of the hotel tax generated would go to the General Fund for State use.
Article 6 – Fees
This broad Article addresses many different programs:
Article 7 – Environment
Article 7 addresses most of the fees associated with hunting and fishing in the state. In the interest of space, each fee increase will not be listed, but can be found starting on page 125 of the H.7171 http://webserver.rilin.state.ri.us/BillText20/HouseText20/H7171.pdf . The following license fees increase:
Article 7 also establishes new requirements for “landing” marine species. The language states, “All residents and nonresidents…who have charge of a vessel carrying seafood products legally harvested outside Rhode Island water shall obtain a permit to land, sell or offer for sale seafood products in Rhode Island.” The fee for a resident to “land” is $300; $600 for a nonresident. The Article goes on to say “No person, partnership, firm, association, or corporation shall barter or trade in marine species taken by persons licensed …unless a license so to do has been obtained from the director of environmental management.” This language seems to suggest that any individual or company that buys marine species (lobsters, crabs, fish, etc.) from a licensed fisherman/woman must also be licensed to purchase the seafood. The fees range from $300 to $450 depending upon the species to be purchased. While this language may have been designed to affect wholesale or retail dealers of marine species, it could be interpreted to include businesses such as restaurants or, in the most extreme interpretation of the language, to individuals who go to a boat to buy lobsters for dinner.
Lastly, Article 7 increases the Oil Spill Prevention Administration and Response (OSPAR) fee from five cents ($.05) per barrel on petroleum products brought into the state to ten cents ($.10) per barrel. The five cent fee raises about $1.5 million annually. Three cents of the new fee would go to a new climate change fund called the Ocean State Climate Adaptation and Resilience Fund. The other two cents would stay in the OSPAR Fund. Monies in the OPSAR fund have been taken each year for many projects unrelated to the original purpose of the fund. The fund will soon not be able to meet the needs of the original purpose – a preemption fund for marine oil spills.
The following bills were filed last week:
House Bill No. 7107 Knight, Cassar, McEntee, Speakman, Blazejewski, AN ACT RELATING TO PUBLIC PROPERTY AND WORKS -- STATE PURCHASES (Requires the state, including all its agencies and departments, to purchase one hundred percent (100%) of their energy needs from renewable sources by January 1, 2031.)
House Bill No. 7108 Knight, Cassar, McEntee, Speakman, Blazejewski, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- MOTOR VEHICLES OWNED BY A GOVERNMENTAL BODY (Requires that all vehicles owned and operated by a governmental body be electric powered within ten (10) years, exclusive of trucks and law enforcement vehicles.)
House Bill No. 7120 Bennett, McNamara, Edwards, Cassar, Corvese, AN ACT RELATING TO HEALTH AND SAFETY -- LICENSING OF MASSAGE THERAPISTS (Moves the disciplinary process for massage therapists from the board of physical therapy to the board of massage therapists.)
House Bill No. 7142 Williams, Craven, Blazejewski, Knight, Alzate, AN ACT RELATING TO CRIMINAL PROCEDURE - EXPUNGEMENT OF CRIMINAL RECORDS (Provides those persons who have previously been convicted of marijuana possession, which would now constitute a decriminalized offense, to have their records for those convictions automatically expunged regardless of their criminal history.)
House Bill No. 7153 Corvese, Canario, Vella-Wilkinson, Azzinaro, Ucci, AN ACT RELATING TO COMMERCIAL LAW - UNFAIR SALES PRACTICES - GIFT CERTIFICATES (Requires issuers of gift certificates to deposit and hold funds used to purchase the gift certificate in escrow for three (3) years, or until the gift certificate is redeemed, and would restrict certain redemption terms in the event of bankruptcy.)
House Bill No. 7157 Bennett, Lima, Canario, Jackson, Blazejewski, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES (Increases the minimum wage starting on July 1, 2020, from the present amount of $10.50 each year until July 1, 2024 where it will reach $15 per hour.)
House Bill No. 7163 Bennett, Canario, Jackson, Vella-Wilkinson, Handy, AN ACT RELATING TO FOOD AND DRUGS -- SINGLE-USE PLASTIC STRAWS (Prohibits food service establishments from providing plastic straws, unless requested by the consumer. Notices and fined issued upon violation.)
House Bill No. 7164 Bennett, Canario, Jackson, Vella-Wilkinson, Handy, AN ACT RELATING TO FOOD AND DRUGS -- DISPOSABLE FOOD SERVICE CONTAINERS (Prohibits a covered establishment from preparing, selling, processing or providing food or beverages in or on a disposable food service container that is composed in whole or in part of polystyrene foam.)
An Update from the State House
Welcome to the first edition of Under the Dome 2020!
January 7, 2020, was the official start of a new legislative session. Because it is the second year of a legislative cycle, all leaders stay in place and committee assignments are expected to remain the same.
Governor Raimondo will be giving the State of the State Address to the General Assembly and to the public Tuesday, January 14th at 7:00 p.m. She will outline her legislative priorities for 2020 and is expected to talk about her proposed budget which is set to be released Thursday, January 16th.
During the upcoming year, the Chamber may ask you to contact your legislators when the need arises. Please go to the Rhode Island Secretary of State’s web page, https://vote.sos.ri.gov/ and enter your information as requested (if you live in Rhode Island), so that you will know who represents you as a State Representative and a State Senator. Thank you for your help!
The calendar for 2020 has been released. The key dates to keep in mind are:
Opening Day January 7, 2020
Last Day for Senate Public Bill Introduction February 13, 2020
Last Day for House Public Bill Introduction February 13, 2020
Winter Recess February 17-21, 2020
Spring Recess April 13-17, 2020
For those readers who go to the State House often, be aware that Spring Recess is the same week as the Initial House Bill hearing Deadline (commonly referred to as “cross-over week”).
What Is TCI About?
You may have seen reports in the media about Governor Raimondo signing on to a program called TCI. TCI stands for Transportation Climate Initiative. It is an initiative that environmental agencies, from 12 states and the District of Columbia, have been quietly working on for a few years. The states released a draft memorandum of understanding (MOU) December 17, 2019 and have requested public input by February 28, 2020. The MOU can be found at: https://www.transportationandclimate.org/sites/default/files/FINAL%20TCI_draft-MOU_20191217.pdf
The proposal includes a cap on carbon dioxide emissions generated from the use of transportation gasoline and on-road diesel fuel. A transportation emissions cap would be set and would decrease over time. The goal is reduce transportation emissions by either 20%, 22% or 25% over 10 years. Described at its most simplistic level, fuel suppliers in the TCI region would be assigned a certain allowance for emissions; and each suppler would pay a fee to the program to obtain that assigned allowance. If a supplier wishes to exceed its allowance (for example, sell more gasoline or on-road diesel in a state than the cap allows), that supplier would have to buy credits from another supplier that has not exceeded its allowance. Credits are bought and sold at auctions run by the TCI group; and all of the money raised is proposed to be used by states to fund programs to reduce the need for gasoline or on-road diesel. TCI stated “If the regulated entities in the petroleum industry choose to pass the costs of compliance with a cap and invest program on to consumers, our modeling estimates an incremental price increase in 2022 of $0.05, $0.09 or $0.17 per gallon in the 20%, 22% and 25% Cap Reduction Scenarios, respectively.” TCI did not provide an estimate of the amount that would be raised by program. See the following site for the TCI analysis of the program https://www.transportationandclimate.org/sites/default/files/TCI%20Modeling-Results-Summary_12.17.2019.pdf
Rhode Island currently has a cap and trade program (TCI calls it a “cap and investment” program) for emissions related to the generation of electricity. The cost of that cap and trade program is folded into the electricity bills of Rhode Island consumers. This TCI program is similar – just geared toward transportation fuels.
TCI hopes to develop a final MOU by Spring of 2020, at which time each state will decide whether or not to ultimately sign on to participate in the program. By the Fall of 2020, TCI plans to have a final model rule drafted for the participants, with a program implementation rollout as early as 2022. To date, New Hampshire’s Governor Sununu has voiced his reluctance to sign the MOU. Massachusetts Governor Baker and Governor Raimondo have voiced support for the MOU.
The following bills were filed last week:
House Bill No. 7038 (Lombardi, Hull) AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS - REGULATORY POWERS OF ADMINISTRATION (Provides that any rate increase with respect to electric distribution companies would be no greater than the increase in the Consumer Price Index or 5.5%, whichever is greater, unless there is approval of a higher rate by the general assembly.)
House Bill No. 7042 (Shanley, Alzate, Solomon, Johnston, Ruggiero) AN ACT RELATING TO INSURANCE -- UNANTICIPATED OUT-OF-NETWORK BILLS FOR HEALTH CARE SERVICES (Protects people with health insurance from surprise medical bills for emergency and other services by requiring a non-participating health care provider to bill an insured party only for a co-payment, or deductible.)
House Bill No. 7046 (Lombardi, Hull, Walsh, Fogarty, Lyle) AN ACT RELATING TO FOOD AND DRUGS -- COSMETIC LABELING (Requires that all cosmetics manufactured, sold, delivered, or held for offering to be sold contain a label that completely and accurately lists all of its component ingredient.)
House Bill No. 7083 (Casimiro, McEntee, Carson, Knight, Craven) AN ACT RELATING TO TOWNS AND CITIES -- COASTAL AND RIVERINE HOME PROTECTION (Enables cities and towns to provide property tax relief to individuals who take resiliency measures to rehabilitate their property because of flood hazards.)
Senate Bill No. 2003 (Ruggerio, Sosnowski, Coyne, Euer, Miller) AN ACT RELATING TO HEALTH AND SAFETY - PLASTIC WASTE REDUCTION ACT (Creates the "Plastic Waste Reduction Act" designed to reduce the use of plastic bags by retail establishments by offering recyclable bag options and providing penalties for violations.)