Legislative Updates
Last Week at the State House
The Chamber provided testimony on four bills last week.
Prohibiting Credit Card Surcharges – Opposed Passage
H 7409 would make it a deceptive trade practice for any retail establishment to impose a surcharge fee on a customer for the use of a credit card. The Chamber articulated, “Credit card processing fees are not optional or discretionary costs. They are imposed by card networks and payment processors and can represent a significant expense, particularly for businesses operating on thin margins. Today, credit card companies charge between 1.5% - 3.5% per transaction depending upon the card (plus flat transaction fees in some cases). Preventing businesses from transparently passing along these costs forces them to absorb fees they did not create and cannot control. In practice, this either raises overall prices for all customers—including those who pay with cash—or threatens the financial viability of the business itself. ...penalizing businesses for passing through credit card processing fees is economically unsound and counterproductive. A fair approach recognizes these fees as a legitimate cost of doing business and allows merchants to address them openly and transparently.” The bill was held for further study.
Workplace Bullying – Opposed Passage
H 7121 would prohibit any type of psychological abuse in the workplace. It would also provide an employee, subject psychological abuse with protections in the workplace and civil remedies against perpetrators of any prohibited activity. This act would further assess civil penalties upon employers. The Chamber explained, “While well meaning, this legislation would place employers in an extremely difficult position and would result in many lawsuits as well as endless investigations. The definition of "psychological abuse" under this bill includes actions such as “mistreatment that has the effect of hurting, weakening, confusing, or frightening a person mentally or emotionally.” These terms are very subjective. They can mean different things to different people, leaving everyone wondering what they can and cannot do or say in the workplace. This bill will curtail the ability of any individuals to work together without fear of being sued and will leave businesses conducting endless investigations. The Committee held the bill for further study.
Restricting Self Service Checkouts – Oppose Passage
H 7290 would limit grocery stores by capping the number of self-service checkout stations they can operate and mandating a minimum ratio of manual checkout stations to self-service checkout stations. Further, it limits the workload and additional duties an employer can assign to an employee that monitors self-service checkout stations. The Chamber conveyed the message that “Businesses must continually adapt to the marketplace. Following the “great resignation,” our business community experienced difficulties finding employees, and it still continues to struggle in this area. One way for the retail industry to adapt is to provide customers with an opportunity to self-check their purchases. Many customers actually prefer this option. H.7290 discourages the use of such technology, thus placing a business in a difficult situation of being unable to serve the majority of its customers. Additionally, and perhaps more disturbingly, the state proposes to enter a particular business and mandate day-to-day operations that are not related to health and safety. From the business perspective, this is state overreach and creates an environment companies will not want to enter.” The bill was held for further consideration
32 Hour Work Week – Opposed Passage
H 7362 would reduce the workweek to 32 hours without reduction in pay from a 40 hour week, and require that work in excess of 32 hours in any workweek to qualify for overtime pay. H 7367 seeks to create a nine member study commission to evaluate reducing the 40 hour workweek to 32 hours. The sponsor of the bill began her testimony by stating that the study commission (H.7367) is her priority, not H.7362. She is searching for a way to encourage employers to provide flexibility to employees with the goal of striking a better “work/life balance.” That could mean consideration of a four-day work week of ten hours a day, or other alternatives. The chamber told Committee members that, in essence, H.7362 requires large employers to give Rhode Island employees 52 additional days of paid vacation or be subject to overtime premium payments. The Chamber reminded the committee CNBC released a ranking entitled “America’s Top States for Business 2025. It applied 135 metrics across 10 key categories. Rhode Island ranked 46th for the cost of doing business, and 46th for business friendly. The Chamber believes the passage of H.7362 will definitely move Rhode Island further down the list, perhaps to the bottom. Both bills were held for further study.
This Week at the State House
The legislature will be in session Tuesday and Wednesday this week, followed by the first of two breaks – February 16th – 20th. The second break week is scheduled for April 20th -24th.
Wednesday, February 11th
Interest on Overdue
The House Municipal and Government Committee has on its agenda for Wednesday at the Rise (approximately 4:30pm) in Room 135, H.7568 https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7568.pdf The bill allows municipalities to waive up to $500 in interest on overdue taxes for commercial properties. Since 2003, cities and towns have had the authority to waive interest on residential properties. H.7568 adds commercial properties that fall into the same category: (1) The property subject to the overdue payment is the property of the taxpayer and has been for the five (5) years immediately preceding the tax payment which is overdue; (2) The request for a waiver of interest is in writing, signed and dated by the taxpayer; and (3) The taxpayer has made timely payments of taxes to the city or town for the five (5) years immediately preceding the tax payment, which is overdue. Testimony can be submitted at: HouseMunicipalGovernmentandHousing@rilegislature.gov
What is in the Governor’s Budget?
Article 11 – Affordability
Article 11 addresses a variety of issues intended to save certain residents and the state money. The summary below is provided by the House Fiscal staff as part of their report to the Finance Committee
Section 1. Pharmacy Benefit Managers. This section creates new requirements for pharmacy benefit managers to disclose to the Office of the Health Insurance Commissioner: the percentage of rebates received from manufacturers, the value of rebates passed on to clients, administrative fees received, and information on pricing, operating practices, and utilization. It requires the Office to publish online transparency information on each manager, although the entities may request that the Office designate certain information as trade secrets. This section also requires the Office to analyze the collected information to produce a report on the role of pharmacy benefit managers by October 1, 2027, including comparisons to regulations in other states and recommendations to improve oversight. It authorizes the Office to levy up to $175,000 on health insurance companies for contractors to produce the report.
Section 2. Motor Fuel Tax. This section reduces the total gas tax by two cents, with the reduction coming from the allocation to the Department of Transportation. Currently, two cents of the gas tax was pledged by the 2003 Assembly to provide the state match for projects financed through the Grant Anticipation Revenue Vehicle Program. The bonds have been retired, making the proceeds available for other uses as planned through the Transportation Improvement Program. The Governor’s budget assumes $8.6 million less from gas tax revenues.
Sections 3 and 5. Energy Efficiency Programs. Energy efficiency programs are currently funded through surcharges on gas and electric customers. The surcharges are based on a least-cost procurement provision, which allows the Public Utilities Commission to determine the funding level for investments based on the annual plans for energy efficiency programs that have been reviewed and approved by the Energy Efficiency and Resource Management Council. These surcharges generated $125.1 million in calendar year 2024, including $93.8 million from electric and $31.2 million from gas. The article extends the least-cost procurement provision by ten years through 2038, changes the annual planning process every three years, and caps the annual amount customers can be charged to $75.0 million for calendar years 2027 through 2029. Subsequent plans can be adjusted for inflation from the new limit. The Rhode Island Infrastructure Bank currently receives an annual allocation of $5.0 million from the funds for clean energy efficiency, energy storage, and other uses. Section 5 reduces that amount to $2.5 million.
Section 4. Electric Distribution Companies. This section requires electric distribution companies that own or operate transmission facilities within the state to be members of ISO New England, Inc., or its successor organization. The Governor’s budget assumes that this will lower ratepayer costs by eliminating a financial incentive for distribution companies, which is available only when membership is voluntary.
Sections 5, 7 and 8. Renewable Energy Fund. These sections extend the Renewable Energy Fund, administered by the Commerce Corporation, for three years to the end of 2031. The fund is supported by a surcharge of 0.3 mills per kilowatt-hour on all customers and an alternative compliance payment of $90 per megawatt-hour for renewable energy obligations. The alternative compliance payments are made by entities that sell electrical energy to end-use consumers in the state in lieu of obtaining renewable energy from the electric grid. These sections define zero-emission resources to include nuclear resources and largescale hydroelectric facilities, establish a tier alternative compliance payment fee of $40 for new renewable resources and $11 for existing resources, and expand the use of the funds to include clean transportation and energy storage. Effective January 1, 2027, 50.0 percent of the revenues from alternative compliance payments must be used to provide rate relief, subject to oversight and approval of the Office of Energy Resources. The fund income in 2024 was $11.8 million, including $3.6 million from energy charges and $0.6 million from alternative compliance payments. Section 8 delays the schedule and rate of meeting renewable energy standards of 100 percent from 2033 to 2050. (The Chamber testified against the 2033 date sharing concerns about the ability to meet the requirements in a cost-effective manner. Rhode Island adopted the most aggressive timeline target in the country.)
Section 6. Road Repair by Public Utility Companies. This section requires any public utility or utility facility to recover all costs associated with road repair in accordance with generally accepted accounting principles. This amortizes these capital costs over a longer time. This minimizes the impact on rate payers.
Sections 9 and 11. Financial Incentives. These sections repeal the long-term contracting incentive to electric distribution companies for newly developed renewable energy resources.
Section 10. Net Metering. Net metering allows customers with eligible renewable energy systems to receive bill credits for all power generated up to 125 percent of the on-site consumption during a billing period. Public entities, including municipalities and quasi-state entities, are allowed to enter into virtual net metering arrangements with renewable energy developers for up to 10 megawatts per project site. This section of the article establishes a monthly tiered grid access fee to be determined by the Public Utilities Commission. The funds would be used by the electric distribution company to offset costs associated with the net metering systems.
Sections 12 and 13. Health Spending Accountability and Transparency Program. These sections codify the Health Insurance Commissioner’s authority to set annual healthcare cost growth targets, currently authorized under Executive Order 19-03, as well as all-payer primary care investment targets. Annual targets shall be set every five years, effective July 1, 2027; cost growth targets for 2026 and 2027 shall be established according to the existing framework. Compliance is currently voluntary. These sections empower the Commissioner to impose performance improvement plans and financial penalties if an insurance provider fails to meet the cost growth target twice in three years. The value of penalties and oversight would be subject to regulation by the Office of the Health Insurance Commissioner. These sections also require the Commissioner to publish an annual report on healthcare spending and quality and to hold a subsequent public hearing. If an entity fails to meet either an annual cost growth or investment target, it may be compelled to participate. The Governor’s recommendation contains $350,000 from general revenues, $50,000 more than enacted, for contracted data collection and analysis to support this work.
Section 14. Individual Marketplace Affordability Program. This section authorizes the Rhode Island Health Benefit Exchange to establish the Individual Market Affordability program, which is intended to provide assistance to individuals who purchase health insurance on the Exchange. The legislation authorizes the Exchange to determine the annual affordability percentages for each upcoming coverage year based on the appropriations. The first coverage year would be 2027, and the legislation requires that for that year, affordability percentages prioritize households with incomes below 200 percent of the federal poverty level. It also requires that any unspent funds be reappropriated to the following year for the same purpose. The Governor’s budget includes $9.5 million from general revenues and appears to assume this would fully cover 2027 premium costs for the six months of FY 2027 for individuals under 200 percent of the federal poverty level who are no longer receiving the federal enhanced subsidies for premium assistance. Enhanced subsidies expired at the end of 2025. While pending federal legislation addresses the issue in different ways, no changes have been adopted for the 2026 coverage year. This level of support would require $20.0 million annually.
The following new bills have been filed:
House Bill No. 7484 (by request) BY Carson, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- BUILDINGS CARBON EMISSIONS REDUCTION ACT (Requires large developments, those to be constructed on a parcel of land that is greater than 50,000 square feet in size provide carbon impact reports as part of the permitting process prior to approval and issuance of a building permit.)
House Bill No. 7490 BY Potter, Bennett, Read, Shanley, Edwards, Messier, Furtado, Giraldo, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES--OVERTIME (Requires small employers with one to fifty (1-50) employees and large employers with fifty (50) or more employees to pay overtime wages to exempt workers if their salary exceeds varying multipliers of minimum wage for a forty (40) hour workweek.)
House Bill No. 7505 BY Stewart, Cotter, Tanzi, Ajello, Carson, Cruz, Speakman, Boylan, Kislak, Potter, AN ACT RELATING TO TAXATION -- RHODE ISLAND NEW QUALIFIED JOBS INCENTIVE ACT 2015 (Sunsets/discontinues the Jobs Development Act rate reduction as of July 1, 2026.)
House Bill No. 7509 BY Carson, AN ACT RELATING TO CRIMINAL OFFENSES -- IDENTITY THEFT PROTECTION ACT OF 2015 (Amends the Identity Theft Protection Act by eliminating current definitions and establishing new definitions. This act also raises the penalty provisions for violations.)
House Bill No. 7514 (Lieutenant Governor) BY Diaz, Slater, McEntee, Shallcross Smith, Edwards, AN ACT RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- PROTECTING RHODE ISLANDERS FROM COERCIVE ECONOMIC TACTICS AT GROCERY STORES (Creates a new chapter to protect Rhode Island consumers from coercive tactics at grocery stores.)
House Bill No. 7543 BY Voas, Potter, O'Brien, Slater, Read, AN ACT RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- INTERNET ACCESS AND ADVERTISING BY FACSIMILE (Requires that video or photography generated by artificial intelligence or “AI” that is posted on a public platform contain a marking disclosing that it has been generated by AI.)
House Bill No. 7561 BY Voas, Stewart, Potter, Dawson, McNamara, O'Brien, Boylan, Fogarty, Hull, Lombardi, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- TEMPORARY DISABILITY INSURANCE -- BENEFITS (Enables employees to no longer have to utilize sick leave, vacation leave, personal leave or other paid time off as a condition to their maternity leave.)
House Bill No. 7595 BY Potter, Alzate, McGaw, Tanzi, Felix, Giraldo, Voas, Kislak, Sanchez, Batista, AN ACT RELATING TO TAXATION -- WEALTH TAX (Imposes a wealth tax on Rhode Island individuals and entities at a rate of one percent (1%) of worldwide wealth.)
Senate Bill No. 2428 BY Euer, Quezada, Appollonio, Famiglietti, Lauria, Lawson, Patalano, McKenney, Kallman, Paolino, AN ACT RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- DECEPTIVE TRADE PRACTICES (Prohibits any person from employing dynamic or surveillance pricing practices in the sale of goods or services to consumers in Rhode Island.)
Senate Bill No. 2498 BY Burke, LaMountain, Tikoian, Thompson, Felag, Patalano, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- INSPECTION OF PERSONNEL FILES (Expands the obligations of employers to create, maintain and retain their employees' personnel records, it requires that records be retained for at least 3 years after employee's termination. It also increases the financial penalties for each violation.)
Senate Bill No. 2499 BY Gu, DiPalma, Zurier, Urso, Ciccone, Burke, McKenney, Bell, Appollonio, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- ARTIFICIAL INTELLIGENCE USE AND FAIR EMPLOYMENT PRACTICES (Creates a comprehensive statutory framework to address and regulate the use of artificial intelligence in the workplace, considering the interests of employers and employees.)
Senate Bill No. 2500 BY Raptakis, de la Cruz, Paolino, Rogers, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- E-VERIFY COMPLIANCE (Establishes the E-Verify compliance program which would require all non-governmental employers within the state with 3 or more employees to apply to participate in the federal E-Verify program and to agree to participate in the program, if accepted.)
Senate Bill No. 2502 BY Ciccone, Urso, Felag, Burke, Dimitri, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKPLACE PSYCHOLOGICAL SAFETY ACT (Protects bullying/psychological abuse in workplace inflicted upon employees by employers/co-employees/provides civil remedies to affected employees/fines against employers/imprisonment/fines against co-employees.)