​2023 New Laws and Enactment Dates
 
The General Assembly has completed the process of transmitting bills to the Governor for his consideration.  Governor McKee had the option to sign a bill into law, veto a bill or allow a bill to become law without his signature.  In 2023, the Senate introduced 1135 bills, while the House introduced 1535 bills, for a total of 2670 bills.  A total of 397 new public laws were adopted this year, not including local laws or resolutions.  If local laws and resolutions are included, the number soars to 913 bills passed in 2023.  Governor McKee signed 338 bills into law in the month of June. 
 
Throughout the year, the Chamber actively tracked 329 pieces of legislation.  Below is a list of new laws along with the effective dates.
 
 
Budget - H.5200 Sub Aaa – The $14 billion budget was signed into law by Governor McKee.  This budget includes the Chamber’s priority issue of reducing the tangible tax for all businesses and eliminating the tangible tax for 75% of Rhode Island businesses.  Fifty thousand dollars of value will be eliminated from the tangible tax assessment in all municipalities with the State providing reimbursement to communities.  Chapter 79 of the 2023 Public Laws.  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5200Aaa.pdf
Both S.928 SubAaa and H.6333 SubA mirror the tangible tax language in the budget.  Those bills were signed into law, becoming Chapters 327 and 328 of the 2023 Public Laws.
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0928Aaa.pdf
http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H6333A.pdf
 
Wage Theft/Independent Contractor  - S.1079 SubAaa and H.5902 SubAaa – create felony penalties if an employer knowingly and willfully: (1) fails to pay employees on a regular pay day and the amount owed is over $1500,  (2) fails to pay any employee wages owed at the time of termination of employment and the amount is over $1500, or (3) fails to pay wages owed to a deceased employee to the appropriate person/entity within 30 days of death, and the amounts owed are greater than $1500.  The bills adopt the Fair Labor Standards Act (FLSA) definition of independent contractor by directing the Department of Labor and Training (DLT) to review all complaints of misclassification using those factors.  The bills require DLT to undergo an investigation of complaints with the assistance of the Underground Economy Task Force.  The findings, along with a recommendation, is given to the Director of DLT who then passes it along to the Attorney General with the Director’s recommendations.  A business that misclassifies employees under the new test, is liable for civil penalties in the amount of $1500 - $3,000 for each misclassified employee for the first offense and up to $5000 for each misclassified employee for any subsequent offense.  The money is divided equally between the DLT and the individual harmed.  Any “construction industry” related entity that knowingly and willfully violates the new standard is guilty of a misdemeanor if the value is less than $1500, or a felony if the value is greater than $1500 and it is a second offense.  If the construction related business or individual misclassifies employees in a manner that is not knowing and willful, the penalty reverts back to a civil penalty of $1,500-$3,000 per misclassified employee.  Lastly, any “party” that is not an employer but intentionally contracts with an employer that intends to misclassify employees is subject to the same penalties as the employer.  Chapters 244 and 245 of the 2023 Public Laws were signed by the Governor. http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S1079Aaa.pdf
http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5902Aaa.pdf
 
Independent Contractor Registration - H.5710 SubA and S.427 SubB require independent contractors to file electronically with the Department of Labor and Training (DLT) on an annual basis, “regardless of how many forms are filed.”  This would seem to suggest an annual filing for each client.  There is no fee tied to the filing requirement. DLT is required to submit the list to the Division of Taxation each April 1st. The new law becomes effective January 1, 2024. Chapters 242 and 243 of the 2023 Public Laws were signed by the Governor.   http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5710A.pdf
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0427B.pdf
 
Electric Vehicle Parking Lot Infrastructure – S.988 aa was signed into law by the Governor.  S.988aa requires large employers – defined as those with 100 employees located in a single complex – to install circuitry and other necessary equipment to support Level 2 or DC fast chargers in new parking lots as well as lots undergoing a 50% expansion renovation.  The mandate also applies to big box stores, grocery stores, housing developments with more than twenty units, malls, hotels, and certain municipal buildings.  The bill was amended during the final hours of session to apply only to new projects awarded subsequent to January 1, 2024, that receive any form of public funding.  Public funding is defined as “funds derived from federal, state or municipal sources; in-kind remuneration from any federal, state or municipal source; gifts or grants from any federal, state or municipal source; revenue sharing or other federal, state or municipal payments of any nature, intergovernmental transfers; tax stabilization agreements, revenues resulting from the sale of state or municipal bonds; or by the sale or lease of any property owned by the federal government, the State of Rhode Island, and/or any municipality of the state.”  Chapter 268 of the 2023 Public Laws. http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0988aa.pdf
 
Gift Card Sales - H.5732SubA and S.759SubAaa were signed into law by Governor McKee. 
The new law requires businesses that sell gift cards for their own store or affiliated businesses, to display a notice at the location where the cards are sold.  The notice must caution the purchaser about prepaid card scams and instruct the purchaser on what to do if they suspect they might be a potential victim of such a scam. The Department of Business Regulation is charged with determining the content and form of the notice.  The approved sign, in both English and Spanish, can be found at:  https://dbr.ri.gov/gift-card-fraud-mandate  Failure to display the notice can result in a penalty of up to $250 per violation.  The law is in effect now.  Chapter 167 and 168 of the 2023 Public Laws http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5732A.pdf http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0759Aaa.pdf
 
New State Holiday for Employers - June 19th became the newest state holiday when Governor McKee signed both H.5380 SubA and S.444 SubA into law.  Chapters 81 and 82 of the 2023 Public Laws designate June 19th (Juneteenth National Freedom Day) a state holiday making employees eligible for holiday pay if they work that day without a special state exemption.  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5380A.pdf
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0444A.pdf
 
Ban on Polystyrene Containers – H.5090 SubA and S.14 SubB ban most food establishments from using polystyrene containers for food and beverages beginning January 1, 2025.  Any establishment that fails to comply is subject to a fine of up to $100.  Exemptions do exist for hospitals, agricultural fairs, nursing homes, etc.  Chapters 273 and 274 were signed into law by the Governor.  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5090A.pdf
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0014B.pdf
 
Non-disclosure Agreements – S.342aa was signed into law and became 2023 Public Law Chapter 252.  S.342aa makes it an unlawful employment practice to require an employee as a condition of employment, to execute a nondisclosure agreement or an agreement with a clause that requires alleged violations of civil rights remain confidential, or a non-disparagement agreement concerning alleged violations of civil rights or alleged unlawful conduct.  It became effective June 22, 2023.  http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0342aa.pdf
 
Unemployment Benefit Sunset – S.716 aa and H.5989 SubA became law when the Governor signed the legislation and they became 2023 Public Law Chapters 146 and 147.  Both bills allow individuals to collect unemployment benefits if they are “partially employed,” which is defined as earning up to 150% of the weekly benefit rate the person would be entitled to if totally unemployed and eligible.  The 150% threshold was adopted by the General Assembly in 2021 in an attempt to incentivize individuals to return to work during the COVID pandemic.  The bills changed the sunset date from June 30, 2023 to June 30, 2025.  http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0716aa.pdf
http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5989A.pdf
 
 
Private Right of Action for Violations of TCI and Holiday Pay - S.828aa and H.5591 SubA provide a private right of action as a penalty for an employer’s violation of the temporary caregiver’s law.  Employers are required to reinstate the employee at the return from leave and restore seniority and other benefits to the employee.  Additionally, the employer is required to maintain the employee’s health insurance while the employee is out on leave.  Lastly, the new laws provide a private right of action to employees that fail to correctly receive Sunday or Holiday pay.  The Governor signed both bills, now Chapters 248 and 249 of the 2023 Public Laws, and they became effective upon passage.
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0828aa.pdf
http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5591A.pdf
Take It Outside Moratorium – H.5264 SubA and S.683 became law back in March when the Governor signed the bills extending the moratorium on municipalities from April 1, 2023 to February 15, 2024.  Cities and Towns may not restrict food establishments from providing outdoor dining as long as the business is in compliance with local and state building codes and safety codes.  The laws are Chapters 5 and 6 of the 2023 Public Laws.  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5264A.pdf
http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0683.pdf
 
Data Breach – H.5684 SubAaa became effective without the Governor’s signature. H.5684 SubAaa requires State agencies and municipalities to notify affected employees/customers within 30 days of discovery of a data breach and pay for five years of remediation services for adults and remediation services for minors until the age of twenty.  The House amended H.5684 to apply to State agencies and municipalities only.  Businesses remain under the same rules of notification to customers within 45 days of discovery of a data breach and including information as to what customers can do to protect themselves. The law is Chapter 375 of the 2023 Public Laws.  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5684Aaa.pdf
 
 
New Health Care Mandates
 
A number of new health care mandates also passed into law this year.  The effect on health care premiums is not yet known. 
 
Epinephrine Injectors (Epi-pens) – S.575 SubA, now Chapter 263 of the 2023 Public Laws, requires insurers to provide coverage for at least one type of epinephrine auto-injector and cartridges, with no co-pay or deductible.  Insureds after January 1, 2025, may obtain a two-pack of injectors or cartridges once every twelve months.  A deductible may be applied to health plans that are paired with a federally qualified health savings account under 26 U.S. Code 223.
 
HIV Treatments – S.563 SubAaa was signed by the Governor and became Chapter 254 of the 2023 Public Laws. The law requires insurers to cover treatment of pre-exposure prophylaxis (“PrEP”) for the prevention of HIV and post-exposure prophylaxis (“PEP”) to prevent HIV infection starting January 1, 2024.
 
Screening for Dense Breast Tissue – H.5283 SubA and S.1134 were signed by the Governor and became 2023 Public Law Chapters 331 and 332.  These laws require insurers to cover additional screenings for individuals diagnosed with dense breast tissue.
 
Coverage for Specialty Drugs – S.871 SubA became 2023 Public Law Chapter 233 when the Governor signed it into law.  Effective January 1, 2025, insurers must limit any required copayment of coinsurance applicable to specialty drugs for rare conditions to an amount not to exceed $150 per month for a 30-day supply of any single drug. This limit is inclusive of any copayment or coinsurance. This limit is applicable after any deductible is reached and until the individual's maximum out-of-pocket limit has been reached.
 
 
Bills That Did Not Make the Cut
 
Workplace Psychological Safety Act - S.821 SubA, died in the House Labor Committee.  This bill proposed to create rules, and procedures for employers and penalties for employers that fail to comply,  to curtail behaviors in the workplace including: exclusion, marginalization, spreading of lies, withholding vital information, abusive gestures, frequent request for work below competence level, long-term assigning of tasks beyond the employee’s duties without compensation, physical isolation, ignoring, regular inconsistent instructions, unmanageable workloads, taking credit for work, making snide comments or ridicule publicly, exclusion from work-related social gatherings, changes that could jeopardize future career prospects, discounting a person’s work proposals or opinions, persistent criticism, excessive monitoring, threat of dismissal, and changing work conditions or duties. 
 
Parental and Family Medical Leave Expansion - S.145 passed the Senate but died in the House Labor Committee.  H.5990 was heard in the House Labor Committee. The bills proposed to increase the amount of parental or family leave available to an employee from thirteen (13) weeks to twenty-four (24) weeks in any two (2) calendar years.
 
Wage Stubs and Employee Handbook Mandate - S.663 passed the Senate but died in the House Labor Committee.  H.5707 was heard in the House Labor Committee. The bills would have required employers to provide wage payment information and a type of “mini employee handbook” to employees in each employee’s primary language.
 
Non-compete Clauses – S.888, was passed by the Senate the last night of session, but was not transmitted to the House before the session came to a close.  The bill sought to eliminate the use of non-compete agreements except when they are used during the purchase and sale of a business.  Agreements not to share client lists, trade secrets or business plans were still enforceable under the legislation. 
 
 

​Last Week At the State House
 
House Passes Budget
 
The House passed a $14 billion budget in a record 2 hours 45 minutes. Most amendments offered were technical in nature; however additional monies were added for early childhood learning efforts.  A double counting of $5 million in ARPA funds in the current year fiscal budget freed up some monies for other programs.  The budget now sits in the Senate Finance Committee and will be heard Tuesday at 3:00 pm.  The House and Senate hope to finish their 2023 business this week.
 
Data Breach Bill Passes Committee
 
You received a “Call to Action” last week concerning H.5684 SubA. This bill proposed to change notice requirements and remediation service requirements following a data breach within a company.  The bill was filed in response to the RIPTA data breach in which the agency failed to comply with the current law of notification to individuals within 45 days of the breach.
The Committee passed a SubA that keeps the notification requirement at 45 days for non-governmental entities but still requires businesses to pay for 5 years of remediation services for each adult customer whose information was compromised and remediation services to age 20 for minors.
Chairwoman Baginski stated during the hearing that discussions with the various interested parties continue.  The Chamber continues to advocate for amendments to the remediation service requirements
 
 
Monday, June 12th
 
Wage Theft - H.5902 An Act Relating to Labor and Labor Relations – Payment of Wages is scheduled for a vote Monday at 3:00 in the House Judiciary Committee. 
 
Last week, the Senate passed S.1079 without changing the definition of independent contractor.  The Senate bill creates felony penalties if an employer knowingly and willfully: (1) fails to pay employees on a regular pay day and the amount owed is over $1500  (2) pay any employee wages owed at the time of termination of employment and the amount is over $1500  (3) fails to withhold union dues and pay those dues to the union, (4) fails to pay wages owed to a deceased employee to the appropriate person/entity within 30 days of death, and the amounts owed are greater than $1500 or (5) misclassifies an individual as an independent contractor.  S.1079 as amended is scheduled for a vote in the House Judiciary Committee Tuesday, but it will likely be amended.  
 
The House Judiciary Committee posted a SubA for H.5902 yesterday afternoon.  The SubA can be viewed at:  http://webserver.rilegislature.gov/BillText/BillText23/Proposed23/H5902A.pdf
 
The Sub A keeps all of the Senate language declaring it a felony to knowingly and willfully fail to pay employees on the regular pay day, at the time of termination, and to deceased employees provided the amount owed is greater than $1500. (It does not include the collection of union dues)
The proposed amendment directs the Department of Labor and Training (DLT) to review all complaints of misclassification and to review those complaints using factors consistent with the Fair Labor Standards Act (FLSA).  What is the test under the FLSA? 
The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls. Among the factors which the Court has considered significant are:
1.     The extent to which the services rendered are an integral part of the principal's business.
2.     The permanency of the relationship.
3.     The amount of the alleged contractor's investment in facilities and equipment.
4.     The nature and degree of control by the principal.
5.     The alleged contractor's opportunities for profit and loss.
6.     The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7.     The degree of independent business organization and operation.
 
There are certain factors which are immaterial in determining whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an alleged independent contractor is licensed by State/local government are not considered to have a bearing on determinations as to whether there is an employment relationship. Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status. (see USDOL Wage and Hour Division https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship )
H.5902 SubA requires DLT to undergo an investigation of complaints together with the assistance of the Underground Economy Task Force.  The findings, along with a recommendation, is given to the Director of DLT who then passes it along to the Attorney General with the Director’s recommendations.
 
A business that misclassifies employees under the new test, is liable for civil penalties in the amount of $1500 - $3,000 for each misclassified employee for the first offense and up to $5000 for each misclassified employee for any subsequent offense.  The money is divided equally between the DLT and the individual harmed.  Any “construction industry” related entity that knowingly and willfully violates the new standard is guilty of a misdemeanor if the value is less than $1500, or a felony if the value is greater than $1500.  If the construction related business or individual misclassifies employees in a manner that is not knowing and willful, the penalty appears to revert back to a civil penalty of $1,500-$3,000 per misclassified employee for the first offense and up to $5,000 for a subsequent offense. (It may be difficult to claim a subsequent offense was not knowing and willful).
 
Lastly, any “party” that is not an employer but intentionally contracts with an employer that intends to misclassify employees is subject to the same penalties as the employer.
 
H.5902 SubA includes an annual reporting requirement for both DLT and the Attorney General’s office.  The reports must include a disaggregating of complaints including those found to have no violation present.  The effective date of the new definition and penalties is January 1, 2024.
 
 
Gift Card Sales - A bill placing notice requirements on businesses that sell gift cards is scheduled for a vote Monday in the House Corporations Committee at the Rise.  H.5732, An Act Relating to Commercial Law – Gift Card Fraud, originally required all entities that sell gift cards to display a notice at the location where cards are sold.  The notice must caution the purchaser about prepaid card scams and instruct the purchaser on what to do if they suspect they might be a potential victim of such a scam. The Department of Business Regulation is charged with determining the content and form of the notice.  The original bill also included a provision requiring employers to train employees on how to identify and respond to gift card fraud.  This language was removed in the amendment under consideration Monday.  The amendment also reduces the penalty from the original $500 per violation to “up to $250” per violation.  If passed, the law would take effect upon passage.
 
 
TDI and TCI Requirements - The House Labor Committee is scheduled to vote on H.5591 which provides a private right of action as a penalty for an employer’s violation of the temporary caregiver’s law.  Employers are required to reinstate the employee at the return from leave and restore seniority and other benefits to the employee.  Additionally, the employer is required to maintain the employee’s health insurance while the employee is out on leave.  H.5591 also prohibits employers from retaliating against an employee that exercises rights under the temporary caregiver’s law.  Lastly, the bill oddly provides a private right of action to employees that fail to correctly receive Sunday or Holiday pay.  RIGL 25-3-9 already gives employees the ability to file a civil suit and, if successful, the employee is entitled to reinstatement, double the amount of back pay, interest, attorney fees and court costs.
 
New State Holiday for Employers - June 19th, referred to as Juneteenth, may become the newest state holiday for which employers are required to pay holiday pay to employees.  H.5380 and S.444, Act Relating to Holidays and Days of Special Observances is scheduled for a vote Monday in the House Special Legislation Committee at 3:45 pm. 
 
Independent Contractor Registration – H.5710 SubA, An Act Relating to Labor and Labor Relations – Workers Compensation is scheduled for a vote Monday in House Labor. The amended language requires independent contractors to file electronically with the Department of Labor on an annual basis, “regardless of how many forms are filed.”  This would seem to suggest an annual filing for each client.  The bill currently has an effective date of January 1, 2024.  The Senate companion bill, S.427, was amended last week to remove the $50 registration filing fee, but this version does not reference electronic means of filing and takes effect upon passage.  The Senate bill is scheduled for a vote Tuesday in House Labor.
 
Tuesday, June 13th
 
Non-compete Clauses – S.888, An Act Relating to Labor and Labor Relations eliminates the use of non-compete agreements except when they are used during the purchase and sale of a business.  Agreements not to share client lists, trade secrets or business plans are still enforceable under the legislation.  S.888 is scheduled for a vote in the Senate Judiciary Committee as is H.5929, An Act Relating to Labor and Labor Relations which bans the use of non-disclosure and non-disparage agreements when dealing with alleged violations of civil rights.
 

​***  Call to Action!!!  ***
 
Wage Theft and Independent Contractor Misclassification Felony
 
Last week the Chamber testified on H.5902, An Act Relating to Labor and Labor Relations – Payment of Wages.  We believe this bill will be scheduled for a vote in some form before the end of the legislative session. The Chamber needs every business that operates as an independent contractor or hires independent contractors to contact their legislators now!
 
The Attorney General has requested a change in the law to increase the criminal consequences for failing to pay employees properly and for misclassifying individuals as independent contractors instead of employees.
 
There was a strong movement from the unions attending the hearing to change the definition of an independent contractor to make it more difficult to operate in Rhode Island as an independent contractor.
 
Under consideration is a definition that states individuals may only be independent contractors if their activities are outside the normal course of a business’s activities.  If you have a bookkeeper on staff, you could not hire an independent contractor to complete payments or financial reports.  If you are a nursing home with nurses on staff, per diem nurses could not be hired.  If you have an IT person on staff, you could not hire an independent contractor to trouble shoot a particular problem.  If your employee takes FMLA, you cannot hire an independent contractor to fill in during the absence. 
 
A second test under consideration bases the decision on control over the employee and whether the occupation is one that is traditionally filled by independent contractors.  To legally be an independent contractor under this alternate test, the person must meet both factors.  The courts will have to decide which occupations fall into that category and how to handle emerging occupations going forward.
 
If H.5902 passes with the felony language in place, and the definition changes, businesses will have to cease hiring independent contractors that no longer fit the definition or face felony charges and prison time.
 
We need you to contact your legislators now.  If you operate your business as a sole proprietor or if you hire independent contractors, it is imperative that you tell your legislators not to change the definition of an independent contractor.  Provide your name, the name and location of your business, an explanation of how you utilize independent contractors, and what will happen if you have to hire employees to replace your current independent contractors. 
 
Thank you for your help!
Monday, May 15th
 
The House Oversight Committee is meeting Monday at 3:00 to hear a presentation from the RI Department of Transportation concerning the progress and plans for meeting the greenhouse gas emission reductions required under the 2021 Act on Climate.  Governor McKee announced that the Rhode Island Department of Environmental Management (DEM) is moving to adopt the California Advanced Clean Cars II Standards (ACCII).  In its most simple form, McKee stated that ACCII requires a ramp-up of the sale of ZEVs in Rhode Island from 35% of all new vehicles sold in Rhode Island in 2026 to 100% ZEVS in 2035. Eligible ZEVs include battery electric vehicles, plug-in hybrid vehicles, and fuel cell electric vehicles. The Providence Journal reported an interim target of 68% of sales in 2030.    Residents will still be able to purchase fossil fuel cars from other states, and will be able to purchase used fossil fuel vehicles.  However, should the new sale targets not be met, the State will be forced to alter the rule in order to meet the 2021 Act on Climate.
 
The proposed regulation can be found at https://dem.ri.gov/environmental-protection-bureau/air-resources/advanced-clean-cars-ii-advanced-clean-trucks  Comments must be submitted to DEM by May 18th by using the following form:  https://ri.commentinput.com/?id=PTBJi
 
The Oversight Committee will likely hear more about this program as well as efforts underway to create electric vehicle charging stations along the interstate corridor.
 
Tuesday, May 16th
 
The Senate Commerce Committee is meeting Tuesday at the Rise (approximately 4:30) in Room 212.  Scheduled for hearing is S.166, An Act Relating to Public Property and Works – The Green Buildings Act.  The bill requires the Office of Energy Resources to establish building energy performance standards for large commercial and residential buildings.  “Large building” includes residential and commercial buildings with 25,000 sq. ft or more starting January 1, 2023.  Beginning January 1, 2026, the definition includes buildings with more than 20,000 sq. ft. and it brings in buildings with over 15,000 sq. ft. starting January 1, 2029.  Owners of large buildings would be required to fill out annual reports disclosing energy use.  Should buildings not meet the required energy performance standards adopted by the state, the bill outlines pathways to gradually decrease energy use and emissions until the building comes into compliance.  The ten-page bill can be found, in its entirety at  http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0166.pdf  If you wish to submit comments on the bill, email testimony to slegislation@rilegislature.gov
 
 
Wednesday, May 17th
 
The Senate Labor Committee is meeting at 4:00 pm in Room 212.  Two bills scheduled for hearing are S.427 and S.425.
 
S.427, An Act Relating to Labor and Labor Relations – Workers Compensation – General Provisions, requires independent contractors to file an annual declaration to the Workers’ Compensation Court along with a $50 filing fee.  The fee is to be filed once, regardless of how many forms are filed; and it appears the independent contractor would be required to file a form for each client relationship.  The Department of Labor and Training would provide a report to the Department of Revenue listing all independent contractors filing with the court.
 
S.425, An Act Relating to Criminal Offenses – Identity Theft Protection Act of 2015, amends notification requirements when a company experiences a security breach.  Under current law, businesses that use or store personal information – including account numbers and credit card numbers, among other items – must notify consumers of a breach within 45 days of the breach event.  This timeframe was meant to provide businesses with the time needed to close off any unauthorized access and stop bad actors from doing more harm before the breach becomes public.  S.425 shortens the notification deadline to 15 calendar days; and the State Police must be notified within 24 hours of the detection of the breach. The legislation also awkwardly refers to employees of a local bargaining unit, and the requirement to notify the union leadership of the breach if employees are unionized.  This language makes sense, if the business affected is a state or local government, but does not make sense if the breach takes place in a private company with affected customers.  Any business that fails to comply with the notification rules is subject to a civil penalty of $100 per record for a reckless violation, and $200 per record for a knowing and willful violation.  The language in the bill calls for an effective date upon passage.
 
Testimony on either of these bills may be submitted to the committee by 3:00 pm at: SLegislation@rilegislature.gov
 
 
The Senate Committee on Special Legislation & Veterans Affairs is meeting Wednesday at 4:30 pm in Room 211.  The committee will be voting to pass S.444, An Act Relating to Holidays and Days of Special Observance, seeks to establish June 19th (or the Monday following the 19th if the day falls on a Saturday or Sunday) as Juneteenth National Freedom Day. This day would become a mandated holiday for businesses at the time and a half requirement unless exempt under another state law. 
 
 
There were no new bills of particular interest to the business community filed last week.

Call to Action!  PLEASE READ!
 
The Chamber is asking you to come to the State House this week and/or contact your legislators TODAY! 
 
Tangible Tax Exemption – Tuesday, May 9th
 
On the business-friendly side of the ledger, S.928 and S.955, Acts Relating to Taxation – Statewide Tangible Property Tax Exemption are being heard in the Senate Finance Committee Tuesday, May 9th at the Rise (approximately 4:30 pm).  S.928 provides a tangible property assessed value exemption up to $100,000 beginning in the tax year ending December 31, 2024.  The exemption applies to both municipal and fire district assessments. Similar to the car excise tax phase-out, the state would reimburse the taxing entity for the loss in revenue.  S.955 provides tangible tax relief as well, and reimbursement to the taxing entity, but phases it in over a longer period of time.  The exemption starts at $5,000 of assessed value in the tax year ending December 31, 2024; increases to $20,000 in 2025; $50,000 in 2026; $100,000 in 2027; and $250,000 in the tax year ending December, 31, 2028. 
 
An estimated 85% of all current tangible property taxpayers would have no tax liability once the $100,000 exemption level is reached.  That means approximately 32,000 small businesses may no longer be required to file the annual tax form and to pay the tax.
 
Property taxes levied by cities and towns represent arguably the most onerous and anticompetitive tax burden imposed on businesses in Rhode Island.  Rhode Island has some of the nation’s highest property taxes in the country – 9th highest property tax collections per capita.  Why is this important? Because, studies have shown that high commercial real estate and tangible taxes discourage investment and hinder economic development, and tangible taxes may also discourage businesses from making the capital investments needed to expand or to become more productive.
 
Please send an email to SenateFinance@rilegislature.gov before 3:00 pm Tuesday, May 9th.  Simply tell the committee, your name, company name and location, and how the paying of the tangible tax affects your business. Thank them for considering your testimony.
 
 
Wage Theft and Independent Contractor Misclassification Felony – Thursday, May 11th
 
The Chamber does not ask you to come to the State House often, but we are asking now.  On Thursday, May 11th at the Rise, approximately 4:30 pm in the House Lounge, the House Judiciary Committee will be taking testimony on H.5902, An Act Relating to Labor and Labor Relations – Payment of Wages.  This will likely be the only hearing on this House bill, regardless of any amendments that may come after the initial hearing Thursday.  Why does that matter?  Please read this entire article to understand the potential scope of this proposal.
 
The Attorney General has requested a change in the law to increase the criminal consequences for failing to pay employees properly and for classifying individuals as independent contractors when the government believes those individuals should be considered employees.  There are two distinct pieces to this bill – failure to pay wages properly and the misclassification of employees as independent contractors:
 
Failure to pay employees includes:

• Willful failure to pay wages on a regular pay day.  This will likely include any businesses paying employees on a bi-weekly basis without permission or a specific exemption from the state.
• Willful failure to pay any employee wages owed at the time of termination of employment.  Businesses are required to pay employee wages owed on the “next regular payday.”   If the business is liquidating or merging, employee wages are due within 24 hours of the separation of employment
• Willful failure to withhold union dues and pay those dues to the union
• Willful failure to pay wages owed to a deceased employee to the appropriate person/entity within 30 days of death

 
If the amount of wages owed in any of the scenarios mentioned above, is valued between $1,500 and $5,000, the employer is subject to imprisonment for up to three years and a fine equal to two times the value of the wages.  If the amount owed is between $5,000 and $10,000, the employer is subject to imprisonment for up to six years and a fine equal to two times the value of the wages.  If the amount of wages owed is more than $10,000, the employer is subject to imprisonment up to ten years and a fine equal to two times the wages owed.  It is unclear who would stand in the shoes of the employer to be subject to prison time.
 
Misclassification of employees:

• Under current Rhode Island law, the ability of an individual to operate as an independent contractor (IC) is determined through the use of the US Internal Revenue Service’s common law factor analysis.  There have been numerous legal cases and agency guidance documents issued over decades to help a very diverse business environment determine who can be an IC and who must be subject to employee status.
• Factors include items such as: level of control over the person, ownership of necessary equipment, written contract existence, how job-related expenses are handled, how vacations are handled, how long the relationship has lasted, does the individual have multiple clients, does the individual have the ability to make profits or losses, etc.  There is no magic number of factors that need to be met to be considered an IC. 
• The continued use of the IRS test is extremely important as industries are unique and emerging with new technologies and services.  There is no “one size fits all” definition across industry sectors.

 
H.5902 changes the knowing and willful misclassification of an employee as an independent contractor to a felony subject to imprisonment up to three years and a fine of up to two times the value of the wages or $10,000, whichever is greater, for the first offense.  Any subsequent offense, within a five-year timeframe, is a felony subject to imprisonment up to five years and a fine of three times the value of the wages or $20,000 whichever is greater.  Again, it is unclear who within the company would serve actual prison time.
 
*** IMPORTANT*** There is an effort to change the definition of independent contractor in the State of Rhode Island to make it more difficult to classify an individual as an independent contractor.  While H.5902 does not include language to change the definition, there is an effort underway to amend the bill after the Thursday hearing and no further hearing would be required under the legislative rules.  The Senate has a bill that limits IC status to those who can meet all of the following: (1) free from control and direction of the hiring entity, (2) the activity is outside the usual course of the hiring entity’s business, and (3) the person is customarily engaged in an independently established trade, occupation, or business, of the same nature as that involved in the work performed.  Should this language or some version of this language be inserted into H.5902, the ability of individuals to operate as an independent contractors will disappear and businesses that fail to place their independent contractors on the payroll as employees, will be guilty of a felony.
 
We need you to contact your legislators now.  If the wage theft piece of H.5902 is a concern to your business, tell them why.  If you hire independent contractors, it is imperative that you tell your legislators not to change the definition of an independent contractor.  Provide your name, the name and location of your business, and explanation of how you utilize independent contractors, and what will happen if you have to hire employees to replace your current independent contractors. 
 
Written testimony for the committee should be submitted by noon Thursday, May 11th at:  HouseJudiciary@rilegislature.gov  If you can attend the hearing Thursday, please submit written testimony as well.  Thank you for your help!
 
 
 
The following new bill has been filed:
 
House Bill No. 6357  Morales, Henries, Stewart, Giraldo, J. Lombardi, Sanchez, Speakman, Batista, Cruz, Biah, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- CREATING GREEN JUSTICE ZONES AND FURTHERING ENVIRONMENTAL JUSTICE (Creates Green Justice Zones to further Environmental Justice for traditionally underserved Rhode Islander communities.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6357.pdf
 
Senate Bill No. 955  de la Cruz, Rogers, Tikoian, DiPalma, Lombardo, Ciccone, Burke, Pearson, AN ACT RELATING TO TAXATION -- STATEWIDE TANGIBLE PROPERTY TAX EXEMPTION (Phases in a permanent tax exemption over 5 years for tangible personal property of businesses of less than $250,000 of assessed value. Provides reimbursement from state revenues for the amount of lost tax revenue resulting from the exemption.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0955.pdf
 
House Bill No. 6372  Solomon, AN ACT RELATING TO HIGHWAYS -- CONSTRUCTION AND STATE MAINTENANCE OF STATE ROADS (Requires DOT to notify any surrounding residential property owners and commercial businesses of any proposed temporary or permanent closure to vehicular traffic of any street, highway or bridge, and to hold a public meeting in regards to closure.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6372.pdf
​

​This Week At the State House
 
Tuesday, May 2nd  
 
The Senate Commerce Committee will meet Tuesday at the Rise (approximately 4:30pm) in Room 212 to discuss a few bills of interest to the business community. 
 
S.173, An Act Relating to Labor and Labor Relations – The Commuter Transportation Benefits Act, affects businesses with 500 or more employees working in the state.  The bill requires these entities to create a pre-tax transportation benefit consistent with section 132(f) of the IRS Code at the maximum benefit levels allowable.  The amount would be deducted from an employee’s gross income.  State and local employers are exempt as are employees subject to a collective bargaining agreement or any business that can show the establishment of the program would pose a severe financial hardship.  Any employer that fails to comply is subject to a civil penalty for the first offense of $100-$250 and will have 90 days to come into compliance.  After the 90 days have passed, if the employer still fails to comply, a civil penalty of $250 will be assessed every 30 days until the entity implements a program.
 
S.473, An Act Relating to Labor and Labor Relations – Payment of Wages requires every Rhode Island business, with thirty or more employees, to post competitive salary ranges for open positions on the company’s hiring page or on third-party hiring platforms.  If an employer fails to post the appropriate information, it is guilty of a misdemeanor and can be fined $400 for each separate offense or imprisoned up to one year.
 
S.754, An Act Relating to Commercial Law – Rhode Island Data Transparency and Privacy Protection Act, is an eighteen-page bill that seeks to restrict the sale of an individual’s personal information to third parties.  This often happens on the internet and is why you see pop-up ads for products and services related to internet searches and other on-line activities.  But there are many reasons businesses collect and sell data to assist customers.  S.754 applies to owners of websites or online services with more than ten employees.  Personal data includes a name and a credit card number, or a license number, debit card number, geolocation data, etc. An owner of such a site must clearly disclose all of the categories of information it collects, as well as all third parties to whom the owner discloses the information.  Customers must be given an opportunity to opt out of the collection of the data, and they must be permitted to review any data collected and to correct it if they wish.  The bill exempts company loyalty programs, rewards programs and club programs such as discount clubs.  S.754 exempts financial institutions and HIPAA organizations, but then pulls them back in on the last page of the bill.  The bill exempts a number of specialized entities like educational facilities, human research programs, contractors working with the government, etc.  Violations of the proposal fall under the penalties of the deceptive trade practices act and includes a fine of $100 to $500 for each inappropriate disclosure of data.  There is no private right of action permitted.  This bill is very comprehensive.  If you have an interest in this issue, the bill can be viewed at:  http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0754.pdf
 
If you wish to submit written testimony, email it to slegislation@rilegislature.gov by 3:00pm Tuesday, May 2, 2023.
 
Wednesday, May 3rd
 
The House Finance Committee will be discussing the expansion of family and parental leave in the form of H.5990, An Act Relating to Labor and Labor Relations – Rhode Island Parental and Family Leave Act.  At 4:00 in Room 35, this very simple bill will be heard.  H.5990 increases the amount of parental or family leave available to an employee from thirteen (13) weeks to twenty-four (24) weeks in any two (2) calendar years.  If an employer provides paid leave to employees for a period of time, the additional weeks added under this proposal may remain as unpaid leave. The bill calls for an effective date “upon passage.”  The law, as it stands today, applies to employers with 50 or more employees.  Leave is available for the care of family members, defined as “a parent, spouse, child, mother-in-law, father-in-law, or the employee himself or herself.”  To submit written testimony, use the following link:  HouseFinance@rilegislature.gov
 
 
Thursday, May 4th
 
A familiar bill is scheduled for hearing in the Senate Labor Committee Thursday at the Rise in room 211.  S.243, An Act Relating to Health and Safety – Catastrophic Illness in Children Relief Fund has been considered in previous years.  It creates a fund to financially assist families of children with grave illnesses.  S.243 relies on revenues collected through a new $1.50 per employee tax on businesses. According to the Department of Labor and Training’s March report, there are 490,000 nonfarm employees which includes 65,900 government employees.  Presumably, this tax would raise over $600,000 for the fund.  If you wish to submit testimony, email it to  SenateFinance@rilegislature.gov by 3:00 pm Thursday.
 
 
The following new bill has been filed:
 
House Bill No. 6327  Fellela, Messier, Potter, Cruz, Serpa, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- HEALTHY AND SAFE FAMILIES AND WORKPLACES ACT (Mandates that the work week be reduced to thirty-two hours and rate of pay for a thirty-two (32) hour workweek would remain the same as the rate of pay for forty hours.)  http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6327.pdf
 
House Bill No. 6343  Alzate, Henries, Stewart, Speakman, Cotter, Spears, Casimiro, Kazarian, McEntee, Kislak, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MENSTRUATION LEAVE ACT (Grants leave of up to three (3) days per month to menstruating employees.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6343.pdf
 
House Bill No. 6344  Alzate, Stewart, Potter, Cruz, Sanchez, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- HEALTHY AND SAFE FAMILIES AND WORKPLACES ACT (Mandates that the work week be reduced to thirty-two hours and rate of pay for a thirty-two (32) hour workweek would remain the same as the rate of pay for forty hours.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6344.pdf
 

​Message from the Department of Labor – Don’t Overpay Unemployment Tax
 
The Rhode Island Department of Labor is urging all businesses to double check their unemployment tax rate which can be found on your quarterly TX-17 form.
 
According to DLT, many employers have been using an incorrect or old tax rate and overpaying/underpaying their unemployment taxes. Please check your tax rate prior to paying your next quarterly TX-17. First quarter taxes for 2023 are due on or before April 30. While DLT does issue refunds for overpaid taxes, the simple step of checking the rate can save both time and money for businesses and for the state. Underpaying your taxes will lead to unwanted penalties and interest. If you have a payroll company paying your quarterly taxes, make sure they are using the correct rate for your company.
Employers may contact the Employer Tax Division at (401) 574-8700, option 1 to obtain their tax rate. You will need your company name, address, Federal ID and your state account number to obtain your tax rate.
 
 
This Week At the State House
 
Tuesday, April 25th
 
Calling all retailers and restaurants – on Tuesday at the Rise (approximately 4:30) in room 212, the Senate Commerce Committee is taking testimony on S.759, An Act Relating to Commercial Law – Gift Card Fraud.  S.759 requires all entities that sell gift cards to display a notice at the location where cards are sold.  The notice must caution the purchaser about prepaid card scams and instruct the purchaser on what to do if they suspect they might be a potential victim of such a scam. Employers must train employees on how to identify and respond to gift card fraud and the Attorney General is directed to distribute materials to assist with training.  Failure to comply with this law carries a penalty of $500.  Written testimony should be emailed to slegislation@rilegislature.gov
 
H.5897, An Act Relating to Public Utilities and Carries, is the topic of discussion in the House Corporations Committee at the Rise in room 135.  This bill creates a tiered rate system for electricity and natural gas customers whose household income level is below 150% of the federal poverty level and who are eligible for LIHEAP assistance or Medicaid. For these households, the plan envisions capping electric rates to ensure that they pay no more than 3% of their income on electricity or 6% of their income if the house utilizes electricity as a sole source of heat.  The program will be funded by increased rates assessed on all other customers.  The Keiser Foundation 2021 report estimates 11.5% of individuals in Rhode Island were living in households under 100% of the poverty level (the latest census report estimates it at 11.4%) and 13.7% of individuals were living in households under 199% of the poverty level.  Keiser did not provide a breakdown for 150% of poverty level.
 
Wednesday, April 26th
 
It will be a busy day in the Senate Labor Committee Wednesday at 4:00 sharp in room 212. 
 
S.821, An Act Relating to Labor and Labor Relations – Workplace Psychological Safety Act will be heard.  This is the new version of what was previously called the workplace “bullying” bill.  The bill begins by stating that employees have a right to a physically safe work environment and to a psychologically safe workplace.  The term “employee” includes full and part-time workers, independent contractors and temporary employees.  Employers have a “responsibility” to monitor, prevent, discourage and address issues or allegations of psychological abuse in the workplace.  “Psychological abuse” specifically includes behaviors such as: exclusion, marginalization, spreading of lies, withholding vital information, abusive gestures, frequent request for work below competence level, long-term assigning of tasks beyond the employee’s duties without compensation, physical isolation, ignoring, regular inconsistent instructions, unmanageable workloads, taking credit for work, making snide comments or ridicule publicly, exclusion from work-related social gatherings, changes that could jeopardize future career prospects, discounting a person’s work proposals or opinions, persistent criticism, excessive monitoring, threat of dismissal, and changing work conditions or duties.  Within ninety days of enactment, all employers must adopt policy procedures to comply with the law and train managers and supervisors to handle complaints.  Employers must have an independent third-party reporting option for employees (which includes independent contractors).  When psychological abuse occurs between employees of different employers, all employers are concerned are responsible for investigating and responding to the complaint.  S.821 includes a quarterly reporting process; and establishes a fund to pay for state agency response to violations of the act.  Employers will pay a premium – similar to workers compensation – in which each employer pays more as complaints are filed.  The bill includes fines for employers that fail to properly respond to complaints, and to individuals that engage in psychological abuse.  The bill can be read in its entirety at: http://webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0821.pdf 
 
A number of minimum wage bills are also on the schedule for hearing and possible consideration. S.37, An Act Relating to Labor and Labor Relations – Minimum Wages, increases the minimum wage to $15 per hour starting January 1, 2024 and to $20 per hour starting January 1, 2025.  S.138 An Act Relating to Labor and Labor Relations – Minimum Wages, keeps the current minimum wage increase schedule in place and then increases the wage by the CPI starting January 1, 2028 (if the CPI decreases, the wage does not decrease).  S.142 is a resolution creating an eleven-member study commission to complete a comprehensive study of Rhode Island’s minimum wage and report its findings in 2025.  S.826, An Act Relating to Labor and Labor Relations – Minimum Wages, increases the minimum wage to $15.50 per hour starting January 1, 2025, $17 per hour starting January 1, 2026, $18.50 January 1, 2027, and $20 per hour January 1, 2028.  S.837, An Act Relating to Labor and Labor Relations – Minimum Wages keeps the current wage increase schedule, and then increases the minimum wage by the CPI starting January 1, 2026.
Also on the Wednesday agenda is Senate Labor is S.663, An Act Relating to Labor and Labor Relations – Payment of Wages which changes an employer’s responsibilities as it relates to providing for employees with statements of earnings.  Today employers must include the hours worked, deductions from gross earnings and an explanation of those deductions.  S.663 adds items such as the last four digits of the social security number, deduction explanations in the employee’s preferred language, the employer’s address and name, and output information if pay is based on quantity.  S.663 also requires employers to provide a type of “mini employee handbook” to employees in each employee’s primary language. The information includes items such as: wage information, benefits, holiday information, sick time, and travel and expense policies.  DataUSA reports that 22.4% of Rhode Island households report speaking a primary language other than English.  While the most common non-English language spoken in Rhode Island is Spanish followed by Portuguese, there are reportedly forty-one languages spoken as a primary language in the State.  Some families are fluent in both their primary language and English, others are not.  S.636 requires employers to adapt to the needs of each individual employee.
 
Finally, S.430, An Act Relating to Labor and Labor Relations – Minimum Wages, changes the definition of “employee” in the State of Rhode Island.  The legislation adopts what is known as the “ABC” test to determine whether an individual is an employee or an independent contractor (IC).  If passed, S.430 would require and individual to meet three standards to be classified as an IC: (1) free from the control and direction of the hiring entity; (2) person performs work that is outside the usual course of the hiring entity's business; AND (3) person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.  The state definition would override the use of the IRS federal factors.  Particularly troublesome is the second factor “outside the usual course” of business.  If you have someone on staff that performs a similar function, or if your mission includes a particular function, any outside individual hired will have to be classified as an employee.  This could easily include lawyers, CPAs, computer service professionals, nurses, occupational therapists, cleaners, etc.
 
If you wish to submit testimony on any of the bills in Senate Labor, it must be emailed to SLegislation@rilegislature.gov prior to 3:00 pm Wednesday.
 
 
The Senate Committee on Environment & Agriculture is scheduled to VOTE on S.770, An Act Relating to State Affairs and Government – Environmental Justice Act.  Part of this bill addresses the ability of the public to participate in discussions over permitting facilities in environmental justice areas such as:  “Electric generating facility; Resource recovery facility or incinerator; Sludge combustor facility or incinerator; Transfer station, recycling center, or other solid waste facility; Landfill that accepts ash, construction or demolition debris, or solid waste; Medical waste incinerator; Pyrolysis or gasification facility;  Scrap metal facility; Auto salvage operations and/or facility; Asphalt plant; Petroleum storage facility; Ethylene oxide manufacturing and/or storage facility; Construction and/or demolition debris processing facility; or  The renewal of any permit listed in this definition.” However, S.770 also requires such facilities to perform a cumulative impact analysis as part of the permit application or permit renewal process.  The analysis must look at current and potential future impacts of emissions for activities included under the permit request.  If a business fails to complete the analysis, the permit cannot move forward.  It is still unclear if the Department of Environmental Management has the database capabilities to allow businesses to undergo this analysis since a business will not only have to have access to their own information, but information of other businesses in the area.  Unless the cumulative analysis requirement is removed, companies currently in the industries listed above may not be able to continue operation, directly affecting other businesses and individuals that rely on those activities.
 
 
The following new bill has been filed:
 
House Bill No. 6287  Slater, Diaz, AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- ELECTRICIANS (Amends the state's apprenticeship laws to make them more consistent with applicable federal regulations and makes said laws more comprehendible and consistent with each other.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6287.pdf
 
House Bill No. 6311  Phillips, Cardillo, J. Brien, Corvese, Costantino, Lima, Casey, Noret, Dawson, AN ACT RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES (Protects and continue health insurance coverage for the dependent of an employee who wishes to change their health insurance coverage to Medicare or are currently on Medicare.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6311.pdf
 
 

​Legislature Prepares to Enter Break Week
 
This week will mark the end of phase two of the legislative session.  Most bills filed prior to the February deadline have received a hearing in the House.  The Senate has moved more slowly in its introduction of bills, for appropriate reasons, leaving many hearings to come.  The General Assembly will be on break from April 10th through April 14th.  When the legislature returns, we can expect numerous Senate hearings, posting of amendments to bills, passage of bills, and a focus on the development of the FY2024 budget.
 
Senate Leadership Announces Support for Tangible Tax Relief
 
At the Chamber’s Eggs and Issues breakfast last week, Senate President Dominick Ruggerio and Senator Melissa Murray announced the introduction of legislation to eliminate the tangible tax for approximately 85% of businesses in Rhode Island.  This nuisance tax is well known to companies, as it is not only a double tax on equipment and furniture, but the annual filing form requires time as owners report the value of items purchases, the number of years each piece of equipment/furniture has been in use, and then calculates the depreciation to arrive at a final value for each item in use. 
 
The legislation would provide a $100,000 exemption to all tangible tax accounts. Those with more than $100,000 worth of tangible assets would have to pay the tax on the assets above $100,000, but would still receive an equal amount of tax relief.  Since the tangible tax is a municipal-level tax rather than a state one, the state would reimburse each city, town and fire district annually for their lost revenue, just as it does for revenue they lost from the phased-out vehicle excise tax. The exemption is estimated to save businesses about $36.6 million.

The legislation would take effect in fiscal year 2025, with reimbursement based on the prior year’s FY 2024 tax roll.  The bill would also require municipalities and fire districts to cap their tangible property tax rate at the level applied in fiscal year 2023. The tax cap would not apply in the case of municipalities and fire districts that utilize a uniform tax rate for all classes of property.
 
The Chamber has been working with RIPEC on this issue.  RIPEC completed a study on the tangible tax to assist legislators in understanding the financial impact associated with various levels of tangible tax exemption options.  The Chamber thanks RIPEC for its hard work on this issue.  The bill has yet to be assigned a number.



This Week At the State House
 
Tuesday, April 4th
 
The House Committee on Innovation, Internet & Technology is meeting at the Rise (approximately 4:30pm) in Room 135.  Two bills of interest will be heard by the committee members. 
 
H.5684, An Act Relating to Criminal Offenses – Identity Theft Protection Act of 2015, amends notification requirements when a company experiences a security breach.  Under current law, business that use or store personal information – including account numbers and credit card numbers, among other items – must notify consumers of a breach within 45 days of the breach event.  This timeframe was meant to provide businesses with the time needed to close off any unauthorized access and stop bad actors from doing more harm before the breach becomes public.  H.5684 shortens the notification deadline to 15 calendar days; and the State Police must be notified within 24 hours of the detection of the breach. The legislation also awkwardly refers to employees of a local bargaining unit, and the requirement to notify the union leadership of the breach if employees are unionized.  This language makes sense, if the business affected is a state or local government, but does not make sense if the breach takes place in a private company with affected customers.  Any business that fails to comply with the notification rules is subject to a civil penalty of $100 per record for a reckless violation, and $200 per record for a knowing and willful violation.  The language in the bill calls for an effective date upon passage.
 
H.6236, An Act Relating to Commercial Law – Rhode Island Data Transparency and Privacy Protection Act, is an eighteen page bill that seeks to restrict the sale of an individual’s personal information to third parties.  This often happens on the internet and is why you see pop-up ads for products and services related to internet searches and other on-line activities.  But there are many reasons businesses collect and sell data to assist customers.  H.6236 applies to owners of websites or online services with more than ten employees.  Personal data includes a name and a credit card number, or a license number, debit card number, geolocation data, etc. An owner of such a site must clearly disclose all of the categories of information it collects, as well as all third parties to whom the owner discloses the information.  Customers must be given an opportunity to opt out of the collection of the data, and they must be permitted to review any data collected and to correct it if they wish.  The bill exempts company loyalty programs, rewards programs and club programs such as discount clubs.  H.6236 exempts financial institutions and HIPAA organizations, but then pulls them back in on the last page of the bill.  The bill exempts a number of specialized entities like educational facilities, human research programs, contractors working with the government, etc.  Violations of the proposal fall under the penalties of the deceptive trade practices act and includes a fine of $100 to $500 for each inappropriate disclosure of data.  There is no private right of action permitted.  This bill is very comprehensive.  If you have an interest in this issue, the bill can be viewed at:  http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H6236.pdf
 
Written testimony can be submitted to the committee at:  HouseInnovationInternetandTechnology@rilegislature.gov
 
 
Wednesday, April 5th
 
The House Corporations Committee is meeting at 4:00pm in Room 101.  H.5664, An Act Relating to Corporations, Associations and Partnerships – The Rhode Island Limited Liability Act, provides members of an LLC with the ability to avoid dissolution if one or more members wish to buy out those members who want to dissolve the corporation.  A member could file with the court, and notify the other members of the desire to stop the dissolution. If necessary, the court can help to decide the value of the company, and those members who wish to remain in the LLC can pay the proportionate share to transfer the LLC.  The bill can be viewed at: http://webserver.rilegislature.gov/BillText/BillText23/HouseText23/H5664.pdf  If you wish to submit written testimony, submit it to: HouseCorporations@rilegislature.gov
 
 
The following new bills have been filed:
 
House Bill No. 6232  Azzinaro, Corvese, Cardillo, Noret, J. Lombardi, Diaz, Hull, Fellela, Bennett, Kennedy, AN ACT RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES (Annually increases the rate of physicians’ reimbursement for each in-network health care service that are reimbursed below the average reimbursement rates set by Connecticut and Massachusetts.)
http://webserver.rilin.state.ri.us/BillText/BillText23/HouseText23/H6232.pdf
 
Senate Bill No. 855  Gu, AN ACT RELATING TO HEALTH AND SAFETY -- STATE BUILDING CODE (Requires the state building code standards committee to revise the state energy conservation code to meet 2024 International Energy Conservation Code electric readiness provisions.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0855.pdf
 
Senate Bill No. 858  Gu, Pearson, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- 2021 ACT ON CLIMATE (Requires an owner of a stationary refrigeration system in Rhode Island to register their system with the department of environmental management.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0858.pdf
 
Senate Bill No. 884  Mack, Kallman, Euer, AN ACT RELATING TO TOWNS AND CITIES -- GENERAL POWERS (Assess a vacancy tax of one percent (1%) of the total assessed value of all real property based on the real property's assessed value for vacant units.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0884.pdf
 
Senate Bill No. 888  LaMountain, Lauria, McKenney, Tikoian, Burke, Valverde, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- RHODE ISLAND NONCOMPETITION AGREEMENT ACT (Prohibits noncompetition agreements except for noncompetition agreements between a seller and buyer of a business.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0888.pdf
 
Senate Bill No. 909  Mack, Euer, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- GREEN JUSTICE ZONES AND ENVIRONMENTAL JUSTICE (Establishes the first Green Justice Zone and environmental justice, a model that may be replicated in future years to ensure that all communities throughout the state have clean air and clean water.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0909.pdf
 
Senate Bill No. 911  Mack, Kallman, Murray, Valverde, Bell, Ujifusa, Acosta, Euer, Lawson, AN ACT RELATING TO PROPERTY -- RESIDENTIAL LANDLORD AND TENANT (Creates a tenant bill of rights to the right to counsel, the right to habitability, the right to organize free, the right to be free from discrimination, the right to first refusal if the landlord decides to sell the property, and right to renew lease.)
http://webserver.rilin.state.ri.us/BillText/BillText23/SenateText23/S0911.pdf