RI Chamber Coalition: State operates without budget, stays in limbo

​An Update from the State House
 
Unless you were on vacation last week, you probably have heard that the legislature ended on an abrupt note Friday. The Senate amended Article 11 of the budget (Car Tax Phase Out) to require a freeze of the phase out of the tax if at any time the reduction in tax caused the State to dip into the rainy day fund.  When the House discovered the amendment was going to be offered, the Speaker closed the House desk, meaning no new business could be transmitted to the House from the Senate or from any House Committee as well.  The budget remains in the Senate awaiting transmission to the House.  Because it technically remains in the Senate, the Senate could reconsider the vote on the budget, amend it back to reflect the way it was drafted prior to the amendment and then wait for the House to open the desk to receive it.  Alternatively, the House could decide to open the desk, accept the amended budget and vote on it. 
 
If no budget is passed, the state will continue to operate.  Under law, in the event no budget is passed, spending will continue at a level equal to the last fiscal year budget.  Rhode Island is not alone.  9 states have failed to pass a budget as of July 1, 2017 (Illinois has been without a budget for two years).  Two more states passed a budget and are awaiting signatures from their Governors. 
 
Until the impasse is bridged, bills will remain in limbo – creating a positive and a negative outcome depending upon your position on the many bills that began moving the last couple days of session.  Bills are not dead, because the legislature could decide to come back into session at which point all bills would be alive.  Should the legislature choose not to return, then all bills would die on December 31st. 
 
Future issues of Under the Dome will only be written when there is news to report.  Until then, please have a safe and enjoyable summer!
 
 
Paid Leave
 
Two of the major bills in play were the paid leave bills – S.290 and H.5413.  On June 29th, the House passed its version of paid leave (H.5413 SubA).  For the business community, this bill was more palatable, although still not without its challenges.  The House bill contained a state preemption of municipal ordinances so that the State of Rhode Island would have one set of paid leave rules for all businesses.  The Senate version specifically stated that each city or town could adopt ordinances calling for more generous paid leave benefits for employees of companies located within their borders.  The House version more clearly stated that employees must provide notice to employers when they wish to take paid leave, provided the employer has a written policy concerning how such notice must be given.  Both versions still contained language addressing paid leave for seasonal employees that utilized a municipal statute in state law.  The use of that statute appeared to bring seasonal municipal employees under the requirements of paid leave while other municipal employees were exempt.  Lastly, the House version exempted union construction companies from the paid leave act.
 
On June 30th, the House Labor Committee amended the senate version to mirror its House version, thus creating S.290 SubB.  The Senate amended H.5413 SubA later that evening on the Senate floor by reinstating most of the language from S.290 SubA.  So where are the bills now?  S.290 SubB is in the House Labor Committee waiting for the House desk to be opened for transmittal.  H.5413 is in the Senate awaiting the opening of the House desk for transmittal.  The bills are very different.
 
Bills Transmitted to the Governor
 
A couple bills of interest were transmitted to the Governor prior to the suspension of legislative activities. 
 
S.350 SubB, An Act Relating to Labor and Labor Relations – Payment of Wages, bars employers from deducting from any employee’s wages, amounts for “spoilage or breakage, shortages or losses, and fines or penalties for tardiness, misconduct or quitting.”  Federal law already prohibits deducting from wages for these items from many employees.  The original version of S.350 would have barred the deduction of any amount of wages unless specifically allowed under federal or state law.  The original language would have barred the deduction for health insurance premiums, gym memberships, charitable deductions, etc. 
 
H.5397 SubA and S.388 SubA, Acts Relating to Property – Mortgage Foreclosure, increase the penalty on financial institutions for failure to file a foreclosure deed within the required 45 days of the purchase of the property at foreclosure sale.  The penalty increases from $40 per month to $300 per month up to an aggregate of $2000.00.  This is meant to provide municipalities with the ability to determine who owns properties for tax purposes and upkeep.