An Update from the State House
It’s All About the Budget
At close to 1:00am Friday morning, the House Finance Committee passed a FY2018 budget capping out at $9.2 billion. As promised, the bill contained no new broad based taxes, made some cuts, added new spending and included the phase out of the car excise tax. The budget now must lay on the House desk for seven days, although both Democrats and Republicans agreed to bend the rule slightly to allow the House to begin voting on the bill this Thursday. Because the House adopted a 10pm rule whereby debate is supposed to stop at 10pm, it is likely house members will need two days to debate the proposal. All proposed amendments must be submitted by representatives by 4pm today.
The Governor was successful in getting a portion of her Promise RI free tuition program. If enacted, students who graduate or achieve a GED by age 19 will qualify for two years of free tuition at CCRI, expected to cost $4.5 million. The student would be required to maintain a 2.5 gpa and to reside in Rhode Island for two years after graduation. No community service requirement is attached to the tuition program. Since the unveiling, some have questioned what will happen to students who decide to go on to college to obtain a bachelor’s degree. If they go to a school outside Rhode Island, technically they would be in default. It’s unclear if the student would need to pay the tuition back to the State in this situation.
The minimum wage will increase from $9.60 per hour to $10.10 January 1, 2018 and to $10.60 January 1, 2019. This increase was a partial victory for the business community. The increase is spread over two years allowing businesses to adjust to the higher labor cost.
The Speaker’s effort to phase out the car excise tax was included in the budget. The fiscal impact is $26 million for the first year of the phase-out.
The timing for corporate estimated tax payments will change if this budget passes. Article 8 calls for mirroring the federal tax law. Payments would be due April 15th, June 15th, September 15th and December 15th. This appears to be a positive change for business.
Article 7 includes the authority for the state’s purchasing officer to establish up to a 1% administrative fee that would be collected from all state contractors listed on master price agreements. The fees are to be deposited into a restricted receipt account to be utilized for implementing technology for e-bidding, on-line vendor registration, bid notifications and other costs related to procurement costs. The 1% fee would likely be rolled into the bid submitted by contractors for the various projects.
One surprise to some was the inclusion of the proposal to eliminate registration fees on trucks or tractors over 4,000 pounds. There certainly was a political will to eliminate the fees, but it was unclear whether the money to do so would be available. The proposal survived.
The question most asked is, “how does the budget add new programs, not expand broad based taxes, and still remain balance?” Good question. The budget calls for a $25 million decrease in spending and calls upon the Governor to make the cuts accordingly. Likewise, the legislative budget has been cut by $2 million. National Grid’s Electric Distribution Fund (the fund Rhode Islander’s pay into for efficiency programs) is scooped by $12.5 million. The Infrastructure Bank is scooped by $2.5 million. The Refundable Investment Tax Credit saw a $3.25 million cut. The Refundable Job Training Tax Credit was reduced by $2 million. The RI Health and Education Building Corporation gets a $4.8 million scoop. Quonset Development Corporation gives up $1 million; RI Housing loses $1 million; NBC has $2.5 million removed; the PUC must begin paying rent for its building to the tune of $333,420.00. It has been reported that the total one-time scoops are just over $60 million. One could certainly argue that it is all “state money” (collected in different ways) that is being reallocated for alternative uses.
What’s not in this budget is an expansion of marijuana dispensaries or the legalization of marijuana. Also, there is no proposal to tax sugary beverages.
Paid Leave Bill Posted for Vote
On Wednesday at the Rise the Senate Labor Committee is scheduled to vote on the Paid Leave bill – S.290, An Act Relating to Labor and Labor Relations – Healthy and Safe Families and Workplaces Act. This is the bill that would require employers to provide paid leave to their employees. It’s unclear at this time if the bill will be amended in any way. As written, the bill requires employees to be given 7 days paid leave; the employer cannot ask for any documentation until 72 hours have passed; the leave can be used for the person or anyone they have an affinity to; and the time is accrued at 1 hour for every 40 hours worked.
The following new bill was filed:
House Bill No. 6328, 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.)
An Update from the State House
Proposal to Change Corporate Tax Payment Schedule Floated
An idea for changing the Corporate Estimated Tax schedule is being floated for input. Under current law, companies pay 40% of their estimated taxes in the third month of their fiscal year and then pay 60% is the sixth month. However, most states – and the federal government – collect estimated corporate tax payments on a more uniform schedule over the course of the year: 50% in April and 50% in September. If you have any thoughts on this proposal, please email the Chamber so that we can pass the information along to the appropriate party.
Bill Seeks to Place New Rules on Drive Through Windows
S.498, An Act Relating to Food and Drugs – Drive Through Windows, will be heard in the Senate Health and Human Services Committee Tuesday, June 20th. S.498 state that “Every establishment selling drinks or food by the use of drive-through windows shall install at the ordering station…equipment to be used to assist the deaf and hard-of hearing in ordering and shall train its personnel in the use of such equipment.” The bill, if passed, would take effect upon passage.
Chicken/Veal/Pig Bill passes House Environment Committee
H.6023 An Act Relating to Animal Husbandry – Unlawful Confinement of A Covered Animal, passed the House Environment Committee last week in a SubA form (amended). The bill no longer addresses the purchase and sale of animals raised in confined spaces, which would have forced restaurants and hotels to determine if the meat they want to buy complies with the proposed law concerning the treatment of chickens, calves and sows. As passed by the House Committee, the bill bans farmers from raising chickens in cages if they are unable to completely spread their wings while in the cage. Sows must be able to turn around completely in the holding area; and calves may not be raised on short tethers or in small cages. For non “foodies” this means, if this bill is enacted by the Senate and Governor, Rhode Island farmers will no longer be permitted to raise veal as customers know it.
Senate’s Turn to Address Sugary Drinks
S.452, An Act Relating to Taxation – Sugary Drinks, will be heard in the Senate Finance Committee Thursday at the Rise in room 211. This bill – identical to H.5787 - places a tax on drinks based on the sugar content per ounce: Tier 1: Beverages with less than five grams (5g) of sugar per twelve fluid ounces would not be taxed; Tier 2: Beverages with more than five grams (5g) but less than twenty grams (20g) of sugar per twelve fluid ounces (12 fl. oz.) would be taxed at a rate of one cent ($0.01) per ounce. Tier 3: Beverages with twenty grams (20g) of sugar or more per twelve (12) fluid ounces would be taxed at a rate of two cents ($0.02) per ounce. As an example, a 14 oz. bottle of ice tea having 21g of sugar would be taxed $0.28. Medical drinks, pure fruit juices and milks are exempt. The tax is to be paid by the distributor; but if the distributor fails to pay the tax, then the retailer is responsible for payment. Proponents believe S.452 would raise at least $30 million annually.
The following new bills were filed:
House Bill No. 6293, AN ACT RELATING TO BUSINESSES AND PROFESSIONS - ELECTRICIANS - TRADES LICENSING - PENALTY FOR VIOLATIONS (Each individual violating law governing electricians, plumbers, and other trades constitutes a separate offense for firms/corporations.)
House Bill No. 6305, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RESILIENT RHODE ISLAND ACT OF 2014 - CLIMATE CHANGE COORDINATING COUNCIL (Directs the climate change coordinating council to study a carbon pricing program.)
House Bill No. 6307, AN ACT RELATING TO FOOD AND DRUGS - UNIFORM CONTROLLED SUBSTANCES ACT (Requires health care professionals upon issuance of initial opioid prescription to discuss with patient/parent/guardian risk of developing dependence/addiction/potential of overdose/death/adverse risks of concurrent use of alcohol/other psychoactive drugs)
Senate Bill No. 937, AN ACT RELATING TO HEALTH AND SAFETY -- HOSPITAL CONVERSIONS (Streamlines the procedure for the approval of mergers of nonprofit hospitals.)
Senate Bill No. 941, AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS -- TRANSPORTATION NETWORK COMPANY SERVICES (Subjects TNC vehicle owners to the regulation of transportation network companies.)
Senate Bill No. 942, AN ACT RELATING TO INSURANCE - INSURANCE CONSUMER PROTECTION SALES ACT (Creates a system of consumer protection for regulation by DBR of noninsurance business entities in disclosing personal identifiable financial information for insurance sales.)
Lighthouse Media Solutions is launching a new brand that celebrates all things New England with New England Living -- a TV show, magazine and website dedicated to the quintessential experience of this unique lifestyle.
New England Living TV premieres Sunday, April 2, at 11:30 a.m. on Boston CBS affiliate WBZ TV 4. The magazine and NewEnglandLiving.TV website will debut in early March.
The weekly television magazine show, hosted and co-produced by award-winning journalist Parker Kelley celebrates the art of living and entertaining in New England.
“I am enchanted with all things related to the home and that includes art, architecture, design and décor,” said Kelley. “We created this show for people like me who love home design shows but we threw in a new twist - food, cooking and entertaining.”
Each half-hour episode of New England Living TV as well as New England Living magazine and NewEnglandLiving.TV will focus on the things that matter most to everyone – family, friends, good food and, of course, home. Every show takes the viewer to a quintessential New England town, showcases a beautiful home and introduces the players who helped create it. Since the kitchen is the heart of the home, guests are invited to a dinner party and Kelley cooks up a meal in the kitchen with a local chef. “It’s a formula that hasn’t been done before and we’re excited to lead the way,” said veteran film director and co-producer Gene Allen.
In season one, the show travels to 13 destinations from Chatham, Massachusetts, to Camden, Maine. Also included in the series are top-notch architects, talented artists and designers, celebrities, renowned chefs and aerial videography.
New England Living magazine and NewEnglandLiving.TV also capture the essence of the TV show and all that is New England. Lighthouse Media Solutions is undertaking the new brand with several partners.
"This is an exciting venture for us” said Russell Piersons, president/CEO of Lighthouse Media Solutions. “We are pleased to create this new brand with our partners Clarke-Subzero/Wolf, New England Supply-Kohler and AW Hastings-Marvin Windows and Doors along with many other participants. This partnership with upscale products and organizations and reaching upscale consumers is a perfect fit for LMS and a great product for the New England markets.”
We are excited to announce that our 2017 Board of Directors has officially been instated. To help members learn more about our Board, we have added a new component to our monthly e-newsletter. Our “5 Questions with the Board” feature will profile a different Board member each month!
This month, we welcome and introduce our new Board Vice Chair, Ms. Amy Martel! Amy is the EVP & Chief Operating Officer at People's Credit Union.
1. What was your primary motivation for becoming a member of the Newport County Chamber of Commerce?
People’s Credit Union is a community-based organization grown from cooperative roots of people helping people, which is similar to the Chamber’s member-focused foundation. Like the Chamber, the Credit Union has a vision to support, grow, and strengthen the communities we serve through education, advocacy, and general cooperation. This shared vision was my primary reason for wanting to be part of the Chamber.
2. What do you find most interesting about your business or industry?
Banking and financial services overall are very dynamic, and I enjoy watching the industry evolve year after year. Today, people have so many ways to interact with their bank or credit union, including online, mobile, and in-branch channels, and these options continue to expand. I am excited to see how People’s Credit Union will be able to serve our members with new technologies and services tomorrow and beyond.
3. How has your membership with the Newport County Chamber of Commerce helped to advance your business or industry?
In order to better serve our membership and the community overall, People’s Credit Union requires opportunities to meet and interact with members and local business and civic leaders. By being part of the Chamber, we are given occasions to network with people that provide input on how we can improve and how we can continue to enhance our communities. These interactions are invaluable to us.
4. What is your favorite Newport County Chamber of Commerce event or program?
There are almost too many to mention, but if I have to narrow down my choice, I would select the events related to the Women in Business series. More than 70% of the leadership team at People’s Credit Union is female, so being able to attend events with like-minded peers in leadership roles helps to create a network that encourages growth and provides positive role models for all groups. I also enjoy the economic update luncheons, which the Credit Union sponsors. These events focus on local issues impacting our business community and the overall economic welfare of Newport County, and I find these events to be timely and educational.
5. What do you hope to bring to the Newport County Chamber of Commerce as a Board Member in 2017?
The Chamber has launched quite a few great new programs over the past few years and has some exciting plans on the horizon that should establish Newport County as a thriving business innovation center, creating and sustaining economic well-being for years to come. As a board member and as the vice chair, I hope to provide support and guidance to the Chamber to propel these great initiatives forward in a successful manner.
An Update from the State House
Car Excise Tax Proposal Scheduled for Hearing
Tuesday will be a big day at the State House as the Finance Committee hears testimony on H.6267, An Act Relating to Taxation – Excise on Motor Vehicles and Trailers. This is the first big step to keep a promise the Speaker made to his constituents during the election last year. The Governor applauded the effort made to address a big issue in the State; and Senate President Dominick Ruggerio filed the bill in the Senate – S.935 – signaling that the excise tax will likely be included in the budget.
Marijuana Headed for a Study Commission
While legislative issues are never 100% settled until the gavel goes down the last night of session, it does appear that marijuana will not be legalized this year. Proponents and Opponents continue to argue over the Colorado experience and what it means. If legalized and taxed, marijuana could yield significant revenue, but at the same time, could cost the State of Rhode Island up to two-thirds of the revenue raised for the purpose of paying for administration, law enforcement and treatment programs. On Tuesday, the House Judiciary Committee will vote on H.5551SubA, a study commission that is charged with reporting its findings to the legislature by March 1 2018.
Burrillville Energy Plant Scheduled for Hearing
The Senate Judiciary Committee has scheduled a hearing for Tuesday June 13th, to accept testimony on three bills: S.714, An Act Relating to Taxation – Burrillville Property Tax; S.756, An Act Relating to State Affairs and Government – Energy Facility Siting Act; and S.769, An Act Relating to State Affairs and Government – Energy Facility Siting Act. Under current law, the Town Council of Burrillville may pass a resolution or ordinance to tax the personal and real property of any energy generating facility. S.714 changes the law to say personal and real property IS TAXABLE, meaning the Town Council has no discretion on the matter. Both S.756 and S.769 look as if they are state-wide initiatives, but are really meant to stop the Burrillville Power Plant project. S.756 states that the energy facility siting board could not proceed to a final hearing or issue a final decision on the siting of a plant if any one of the agencies on the board declares it is unable to form and advisory opinion due to lack of information (which is broadly defined). S.769 changes the number of members on the energy facility siting board. There are currently three (3) members. S.769 would require that an additional two (2) members from a host community be named to the board when the board is reviewing a potential energy generation plant.
Rhode Island’s Tax Structure
The House Finance Committee met last week for 4½ hours listening to taxi cab drivers, pet service owners, advocates for women, farmers, and flea market owners all asking for relief of the sales tax burdens, leaving more than one legislator asking, “how did we get here?” Rhode Island’s sales tax policy did appear rather random as to what is taxable and what is not taxable. That said, with the State facing a sizeable budget deficit, it is difficult to see how relief might be provided to the advocates who attended the hearing, but their message certainly was heard. One proposed tax increase was H.5787, An Act Relating to Taxation – Sugary Drinks. H.5787 places a tax on drinks based on the sugar content per ounce: Tier 1: Beverages with less than five grams (5g) of sugar per twelve fluid ounces would not be taxed; Tier 2: Beverages with more than five grams (5g) but less than twenty grams (20g) of sugar per twelve fluid ounces (12 fl. oz.) would be taxed at a rate of one cent ($0.01) per ounce. Tier 3: Beverages with twenty grams (20g) of sugar or more per twelve (12) fluid ounces would be taxed at a rate of two cents ($0.02) per ounce. Medical drinks, pure fruit juices and milks are exempt. The tax is to be paid by the distributor; but if the distributor fails to pay the tax, then the retailer is responsible for payment. Many health care advocates testified in favor of the bill, citing the need to curb childhood obesity. Opponents of the bill – including the Chamber – testified against the bill pointing out the complexity of the tax and the right of individuals to choose what they want to consume. Proponents believe H.5787 would raise at least $30 million annually.
The following new bills were filed:
House Bill No. 6267, AN ACT RELATING TO TAXATION -- EXCISE ON MOTOR VEHICLES AND TRAILERS (Provides for the reduction and elimination of the motor vehicle excise tax. Also provides that cities, towns, and fire districts would be reimbursed for the revenues lost by the reduction and elimination of the excise tax.)
Senate Bill No. 922, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- REBUILD RHODE ISLAND TAX CREDIT (Adds a definition for "manufacturer" for purposes of providing a tax credit application exemption to certain projects under the RI Tax Credit Act to include occupants that are manufacturers.)
Senate Bill No. 929, AN ACT RELATING TO BUSINESSES AND PROFESSIONS – CONTRACTORS’ REGISTRATION AND LICENSING BOARD (Requires an applicant for any license or registration issued by the contractors’ registration and licensing board to undergo a national criminal records check.)
House Resolution No. 6278, HOUSE RESOLUTION CREATING A SPECIAL LEGISLATIVE COMMISSION TO BE KNOWN AS "GROWING TOURISM IN THE STATE OF RHODE ISLAND" (Creates an 18 member "Growing Tourism in the State of Rhode Island" commission to examine, evaluate and provide recommendations to manage and grow Rhode Island's tourism economy, and reports back by 1/5/19, and expires on 3/5/19.)
House Bill No. 6279, AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES (Amends from ten (10) years to twelve (12) years the period which the city of Central Falls may authorize a stabilization of taxes on qualifying property located in the city of Central Falls.)
An Update from the State House
Committees Pass Bills
For months legislative committees have been holding hearings on bills. While a few have passed already, a bulk of the legislation that passes does so at this time year, as proponents and opponents have had time to attempt to work out differences. The following piece of legislation saw activity last week:
H.5397, An Act Relating to Property – Mortgage Foreclosure and Sale, passed the House Judiciary Committee. The bill increases the penalty for failure to file a foreclosure deed, within 45 days of a foreclosure, from $40 a month to $300 a month with a maximum penalty of $2000. The penalty only applies to financial institutions.
Committees Schedule Bills for Consideration This Week
The following pieces of legislation are scheduled to be voted upon this week:
S.350 SUB A An Act Relating to Labor and Labor Relations – Payment of Wages. This bill has been amended to reflect concerns raised by the business community. If passed, employers could only withhold amounts from any employees wages that are specifically authorized under federal or state law (i.e. taxes) or are withheld based on a voluntary written agreement between the employer and the employee (i.e health insurance premium co-pays, health club membership dues, etc.). S.350 SUB A is scheduled to be voted on in the Senate Labor Committee May 31st.
Senate Resolution 774 is also scheduled for a vote in the Senate Labor Committee. The Resolution asks the Department of Labor and Training to create a “Return to Work” study group to look at the possibility of developing a hybrid TDI program similar to the RI Workers Compensation program to treat and rehabilitate workers experiencing medical conditions unrelated to work. The Chamber testified on the bill requesting inclusion on that working group. The Department said they would include the business community.
H.5646, An Act Relating to Corporations, Associations and Partnerships – RI Business Corporation Act, is scheduled for a vote in the House Corporations Committee on Tuesday, May 30th. H.5646 would substitute a CPA certification that a corporation/limited partnership/limited liability company owes no taxes/fees to the state in place of a certificate of good standing from the tax division for conversions, dissolutions, withdrawals or cancellations.
Senate Labor To Hear Workplace Bullying Bill
S.189, An Act Relating to Labor and Labor Relations – Healthy Workplace, will be heard in the Senate Labor Committee Wednesday May 31st. Under S.189, an employer would be held vicariously liable for the abusive actions of an employee unless the employer “exercised reasonable care to prevent and promptly correct any actionable behavior; and (2) The complainant employee unreasonably failed to take advantage of appropriate preventative or corrective opportunities provided by the employer.” An employee that commits a bullying action could be held individually liable unless the person was acting at the direction of the employer “under actual or implied threat of an adverse employment action.”
Sugary Beverage Tax Hearing Scheduled
The House Finance Committee will take testimony on H.5787, An Act Relating to Taxation – Sugary Drinks, Wednesday, May 31st. H.5787 places a tax on bottled drinks based on the sugar content per ounce: Tier 1: Beverages with less than five grams (5g) of sugar per twelve fluid ounces would not be taxed; Tier 2: Beverages with more than five grams (5g) but less than twenty grams (20g) of sugar per twelve fluid ounces (12 fl. oz.) would be taxed at a rate of one cent ($0.01) per ounce. Tier 3: Beverages with twenty grams (20g) of sugar or more per twelve (12) fluid ounces would be taxed at a rate of two cents ($0.02) per ounce. Medical drinks, pure fruit juices and milks are exempt. The tax is to be paid by the distributor; but if the distributor fails to pay the tax, then the retailer is responsible for payment. Failure to pay the tax results in a misdemeanor charge, requirement to pay the tax and payment of a penalty equal to 50% of the tax owed. All distributors would be required to obtain a license to sell sugary drinks in Rhode Island.
The following new bills were filed:
House Bill No. 6251, AN ACT RELATING TO MOTOR AND OTHER VEHICLES -- EXPIRATION DATES (Grants the administrator of the division of motor vehicles the power to extend the expiration dates up to ninety (90) days of permits, licenses, registrations, certificates, placards, and other privileges, under limited circumstances.)
House Bill No. 6255, AN ACT RELATING TO ALCOHOLIC BEVERAGES -- RETAIL LICENSES (Amends the number of occasions upon which a Class A license holder under this chapter may dispense unlimited samples of wine products.)
House Resolution No. 6260, HOUSE RESOLUTION EXTENDING THE REPORTING AND EXPIRATION DATES OF THE SPECIAL LEGISLATIVE COMMISSION TO STUDY THE LOW AND MODERATE INCOME ACT
‘Paid sick leave’ bill not business friendly
Advocacy for the business community and focusing on improving the overall business climate are key components of what the Newport County Chamber of Commerce does for our members.
Representing all types of businesses, we are particularly concerned about major legislative initiatives that could change the landscape of business in our state. The “paid sick leave” bill, coupled with the continued pressure of minimum wage increases, predictive scheduling, TDI changes and additional mandates could make it difficult to conduct business in Rhode Island.
For example, on the surface, paid sick leave sounds like a reasonable benefit. The title of the bill, Healthy and Safe Families and Workplaces Act, while well intended, is equally problematic for employers as it is for employees. In fact, many mandated provisions run counter to best practices in human resource management and may actually detract from attracting the best talent.
Legislation would require every employer to provide employees with 1 hour of paid sick and safe leave time for every 30 hours worked up to a maximum of 56 hours a year. Unused sick/safe time must be carried over to the next year, unless the employer chooses to pay the employee for the unused time.
Additionally, if the employee is seasonal and comes back to the employer within a year, the unused sick time carries over as does the accrual of time.
New legislation would create a bureaucratic mess. There are complicated accrual formulas, postings and record keeping requirements, and the penalties for noncompliance are severe. The bill not only applies to full-time workers, but also to part-time workers, on-call workers, seasonal workers, temporary workers and student interns.
Rhode Island employers would have to incur the considerable expense to revamp and modify their payroll systems, making our state a national outlier. This is not the message we want to send after all of our efforts to improve our unemployment rate and attract national companies to our state.
The intervention of government into the normal and private working relationship between management and its employees is a massive overreach. Mandates do not promote productivity but reduce competition, stifling innovation.
Please join the Newport County Chamber of Commerce for a Rhode Island State Senate District 13 candidate debate on Thursday, June 29, from 8 to 9:30 a.m. at Belle Mer in Newport. This is an opportunity for business leaders to pose questions to our elected leaders, so they can understand first-hand how their legislation could impact the local economy. To register, visit NewportChamber.com and sign up by Monday, June 19.
The Chamber of Commerce Politics and Pancakes Series tackles the challenging business issues that will affect many of us if our voices are not heard. We are dedicated to bringing government officials and leaders to Newport County for breakfast speaking programs to discuss issues of dire importance to the business community.
We welcomed Gov. Gina Raimondo to discuss her budget as proposed for the kick-off event of this series in March, and we look forward to this debate as well as many more engaging speakers and topics of importance throughout the year.
An Update from the State House
New Bill Filed to Address Woonsocket Tax Code
H.6226 (link below) was filed last week. Currently, the City of Woonsocket has three classes of property rates: 1) tangible personal property and motor vehicles; 2) residential real estate less than four units; and 3) commercial and industrial real estate as well as residential real estate with more than four units. The new proposed legislation appears to break the first class into two subgroups: 1)(i) tangible property and 1)(ii) motor vehicles. This language change was proposed to prepare for the potential motor vehicle tax phase out should the State’s budget include such phase out. The second change comes in the second tax classification. H.6226 clarifies the ability of the City to implement a homestead exemption for residential property. However, new language concerning residential property, grants the City authority “to divide this class into nonowner and owner-occupied and homestead properties and adopt separate tax rates.” If passed non owner occupied residential properties could be taxed at a different rate than owner occupied residential property. The bill has been sent to the House Municipal Government Committee for review.
Wage Lien Bill Passes Senate
S.192, An Act Relating to Labor and Labor Relations – Payment of Wages passed the Senate 34-0 last Wednesday (3 not voting). This bill would allow employees to place a lien on an employer’s property if he/she believes wages have not been properly paid. The process is as follows:
House Committee to Reconsider Passage of Marijuana Study Legislative Commission Bill
H.5551 Sub A, A Joint Resolution Creating a Special Legislative Commission to Study the Effects of Legalizing Marijuana passed on May 16, 2017 is scheduled for reconsideration by the House Judiciary Committee on May 24, 2017. The Resolution calls for the creation of a 17 member commission to “conduct a comprehensive review and make recommendations regarding marijuana and the effects of its use on the residents of Colorado and Washington to the extent available, and to study the fiscal impact to those states; and thereafter the potential impact on Rhode Island.” The commission is charged with reporting its findings to the legislature by March 1, 2018. The Senate version S.277, was heard by the Senate Judiciary Committee on May 18th and held for further study.
Minimum Wage Hearing Update
The Chamber, in a rare joint hearing of the Senate Finance Committee and the Senate Labor Committee, registered its opposition to increasing the minimum wage, during what was a lower key hearing than in the House Labor Committee. Jobs for Justice, the lead proponent, continued to state that were it not for employees, there would be no businesses in Rhode Island. They also emphasized the fact that Massachusetts and Connecticut have a higher minimum wage than Rhode Island. Opponents talked about the business community’s need for predictability and the multiple year increases that the state has experienced recently. The business industry advocates also mentioned was the difficulty that the effective date of July 1, 2017 brings with it.
House Finance Committee Endures Marathon Hearing
For five hours, the House Finance Committee listened to testimony concerning bills that are geared to stop the Burrillville Power Plant and H.5369, An Act Relating to Health and Safety – Energize RI: Clean Energy Investment and Carbon Pricing Act of 2017. While the Chamber took no position on the anti-Invenergy bills at this time, the Chamber did testify against H.5369. H.5369 imposes a $15 per ton carbon tax on all fossil fuels for the years 2018 and 2019, and escalates $5 per ton (plus an inflation rate) every year thereafter. The fee would result in a first-year tax of 13.1 cents per gallon on gasoline, 15.5 cents per gallon on diesel fuel, 9 cents per gallon on LPG and 14.5 cents per gallon on jet fuel. The tax would go up from that point starting in 2020. There is also a tax on natural gas, propane, coal and all other fossil fuels according to their carbon content. Forty percent of the taxes collected would be returned to individuals over the age of 18 with a bump for heads of households. Thirty percent would be returned to business based on the number of employees. Presumably taxes would be collected all year and returned after tax filing time when the Department of Revenue can determine how many Rhode Islanders are over 18 and how many have children, as well as how many employees each company might have had during the year. H.5369 was held for further study.
The following new bills were filed:
House Bill No. 6224, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION--BENEFITS (Repeals a provision of the workers' compensation law that provides that for injuries on and after July 1, 2023, "material hindrance" includes only compensable injuries causing a greater than sixty-five percent (65%) degree of functional impairment.)
House Bill No. 6226, AN ACT RELATING TO TAXATION -- WOONSOCKET (Creates several new subsections in the Woonsocket property tax code.)
An Update from the State House
Revenue Estimating Conference Reveals Challenge for Legislature
A marathon meeting of the State’s Revenue Estimating Conference resulted in an agreement that the State of Rhode Island is facing a $60.1 million shortfall in the current year revenues and a $39.5 million revenue shortfall for FY2018. The Corporate tax collections are expected to bring in $125 million this year – last year the state collected $134.9 million; and the revenue associated with the collection of sales tax on internet sales was also less than expected. These are just two of the line items that came in low. In addition to the revenue challenge, expenses were up by about $15 million. What does that mean? Officials must find a way to close a $100-$115 million gap. House Finance Chairman Marvin Abney stated that previous legislatures have gone through this before and that they will find a way to do it again. “We have to,” he said. The Chairman, now overseeing the creation of his second budget, suggested that the committee needs to look at current programs to determine what is working positively for the state, and then look at options for cutting expenses.
State law requires a budget to be passed by June 30th. The legislature hopes to meet that deadline with time to spare.
Senate Labor Committee Passes Wage Lien Bill
S.192, An Act Relating to Labor and Labor Relations – Payment of Wages passed the Senate Labor Committee with a few amendments, much to the surprise of members of the business community. It is scheduled to be voted on by the entire Senate Wednesday 17th. Unfortunately, the changes to the bill were minimal. This bill would allow employees to place a lien on an employer’s property if he/she believes wages have not been properly paid. The process is as follows:
S.192 provides little due process rights for employers and encourages employees to use the process because the employee has no costs associated with sending a letter, and very little cost for filing a lien. Additionally, even if the employer believes no wages are owed, it will be cheaper to pay the employee the amount demanded than to pay court fees and attorney fees to fight an unfounded or misunderstood claim. It is important to note that the Department of Labor and Training supported the concept of the bill.
The Chamber opposes the passage of S.192.
Treasurer Releases Local Pension Plan
General Treasurer Seth Magaziner is circulating a plan to address the problem of municipal underfunded pension programs – called the Healthy Local Pension (HELP) proposal. Most of the 34 locally administered pension plans are currently less than 60% funded, qualifying for critical status, and 12 plans finished FY2015 with a funding level below 40%. The escalating liabilities affect municipal investments in infrastructure and schools as well as the local tax structure.
The HELP legislation provides an optional pathway for these communities to join the state-run MERS system, which provides lower overhead costs, professional management and responsible governance. All 116 plans already in MERS have an average funding level of 83%. Under current law, however, a municipality must conform immediately to the MERS requirements such as retirement age, years of service and length of amortization schedules in order to join the program. The Treasurer’s proposal would allow municipalities to join MERS and phase in their plans to eventually match the MERS requirements. One option would allow municipalities to maintain their current benefit levels for existing employees, but require all new employees to confirm to MERS requirements. Municipalities could also choose to renegotiate benefits with existing employees in order to reduce their unfunded liability faster. The bill would also provide an option for municipalities with closed plans, in which no new participants will be added, to turn over management of the systems to Treasury without changes in benefits. These closed plans would not be considered part of the MERS system.
The Chamber supports the HELP proposal.
The following new bills were filed:
House Bill No. 6203, AN ACT RELATING TO EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX RELIEF ACT (Permits the Cumberland Town Council to establish limits on the number of students from the Cumberland school district who may enroll in any charter public school, Davies, and the Met Center.) This bill is scheduled to be head in the House Health, Education & Welfare Committee Wednesday, May 17th at approximately 4:30pm.
House Bill No. 6211, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- INDIVIDUALIZED WORKER SAVINGS ACCOUNT PROGRAM ACT (Abolishes the current temporary disability insurance program and replace it with a more flexible, expansive and mandatory new program that compensates all workers who become disabled due to non-work related injuries.)
Senate Resolution No. 882, SENATE RESOLUTION CREATING A SPECIAL LEGISLATIVE COMMISSION TO CONDUCT A COMPREHENSIVE REVIEW AND MAKE RECOMMENDATIONS REGARDING THE CREATION OF A WORLD-CLASS EDUCATION SYSTEM IN RHODE ISLAND (Creates an 11 member commission to conduct a review and make recommendations on the creation of a world-class education system in Rhode Island, and who would report back to the Senate by March 1, 2018, and expire on July 1, 2018.)
Senate Bill No. 886, AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS --DUTIES OF UTILITIES AND CARRIERS (Requires pub. utilities/electric distribution cos. to provide prompt/adequate service to ratepayers for new service/upgrades with penalty up to $10,000 with electric distribution cos. to provide written estimates/itemized bill for work in excess of $500.)
Senate Bill No. 888, AN ACT RELATING TO HEALTH AND SAFETY -- ELECTRONIC WASTE PREVENTION, REUSE AND RECYCLING ACT (Amends the electronic waste preventions, reuse and recycling act.)
An Update from the State House
Call To Action!!!
The Chamber needs your help now! Please contact your State Representative and State Senator to tell them you OPPOSE the passage of H.5413 and S.290. These bills would mandate businesses to provide the most generous paid leave benefit in New England, (it is more generous than any other state law) to their employees.
H.5413 and S.290 require the following:
Time can also be taken for domestic violence issues, if a school is closed for a health emergency or if the employee or someone with affinity is being stalked.
Please contact your State Representative and State Senator and report any response back to the Chamber. Thank you!!!
Phase Three of Legislative Session Underway
As stated previously in UTD, the legislature has entered phase three of the legislative session. A majority of the hearings have taken place, and negotiations between the House, Senate and Governor’s office have begun over bills that may pass during session. This process requires both leadership teams to determine which bills have general support from the members of the legislature. The Revenue Estimating Conference ends this week, meaning all three branches will agree on a final revenue number for the 2018 fiscal year budget and negotiations on the budget will accelerate as well. All of this flurry of activity signals the legislature’s desire to adjourn sometime in mid to late June. Whether they achieve that goal is largely based on the ability to resolve differing budget priorities.
Senate Labor Committee Schedules Vote on Lien Bill - Wednesday
S.192, An Act Relating to Labor and Labor Relations – Payment of Wages is scheduled to be voted on Wednesday, May 10th in the Senate Labor Committee. This bill would allow employees to place a lien on an employer’s property if he/she believes wages have not been properly paid. The process is as follows:
S.192 provides little due process rights for employers and encourages employees to use the process because the employee has no costs associated with sending a letter, and very little cost for filing a lien. Additionally, even if the employer believes no wages are owed, it will be cheaper to pay the employee the amount demanded than to pay court fees and attorney fees to fight and unfounded or misunderstood claim. It is important to note that the Department of Labor and Training supported the concept of the bill.
The Chamber opposes the passage of S.192. Please contact your Senator to express your opposition to this bill.
Senate Environment Amends Bill to Double Tax
S.442, An Act Relating to Waters and Navigation – Climate Change Coastal Adaptation Trust Fund, was amended last week and is headed for the Senate floor. In the original form, S.442 called for a doubling of the petroleum per barrel that was first adopted in 1989. The 5 cents per barrel fee was adopted to create a fund to allow DEM to quickly react to any petroleum spill in the coastal waters of RI. However the fund has been “raided” over the years for other projects. S.442 would have doubled the tax to 10 cents per barrel – raising an additional $1.8 million a year for projects made necessary due to rising tides and flooding. The Senate Committee passed S.442SubstituteA creating the Climate change coastal Adaptation Trust Fund, but eliminated the new 5 cent per barrel fee. The new version allows for money to be designated out of the general revenue fund at the legislature’s discretion, allows for the receipt of grant money and donations.
The following new bills were filed:
House Bill No. 6184, AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION (Precludes electric distribution companies from including their gas transmission contracts or cost of facilities in the rate base for electricity customers.)
House Bill No. 6192, AN ACT RELATING TO TOWNS AND CITIES (Exempts both the land and building of the Stadium Theatre Performing Arts Centre in Woonsocket and as identified by street address and plat and lot number.)
House Bill No. 6193, AN ACT RELATING TO ALCOHOLIC BEVERAGES (Prohibits individuals from completing alcohol-server training requirements from online or Internet sources.)
House Bill No. 6198, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- TEMPORARY DISABILITY INSURANCE (Allows employees, of an employer that sponsors disability insurance programs, to elect to exempt them from temporary disability insurance coverage.)