Under The Dome 2/24/2025

Legislative Break Week

 

The General Assembly observed the annual February legislative break last week.

 

 

Next Week At the State House

 

Monday, February 24th

 

AI 101

The Senate Artificial Intelligence & Emerging Technology Committee will have a presentation at 2:30pm in Room 313 by URI Professor Zhu (Drew) Zhang on Artificial Intelligence. To watch the livestream, visit https://capitoltvri.cablecast.tv/. Prior to legislative break the committee had a Cybersecurity 101 presentation by RIC Cybersecurity Institute Director Douglas Alexander, which can be viewed here: https://capitoltvri.cablecast.tv/show/10806?site=1.

 

 

Tuesday, February 25th

 

Changes in Health Club Services

The House of Representatives convenes at 4pm and will vote on H 5215, which would require health clubs to stop automatic deductions from consumer accounts within 30 days of receiving written notice, as well as require 60 days notice of proposed rate increase or substantial change in services to the consumer.

 

 

AEDs at Golf Courses

The House Health & Human Services Committee is scheduled to consider at the Rise (approximately 4:30pm) in Room 135 H 5083 Sub A, which would include public or private golf courses in the list of public places required to have automated external defibrillators and at least one person trained tin AED use.

 

 

Healthcare Professional Complaints

The House Health & Human Services Committee will also conduct a hearing on H 5303, which would require the establishment of a searchable database of healthcare professions’ complaint histories, accessible to healthcare employers. License holders can review and dispute entries inaccurately attributed to the license holder. If you wish to submit written comment, please email it to HouseHealthandHumanServices@rilegislature.gov.

 

 

Small Employer Health Insurance

The House Corporations Committee will conduct a hearing at the Rise in Room 101 on H 5418, which would amend the definition of small employers for the purposes of insurance availability from less than 50 employees to less than 100 employees. If you wish to submit written comment, please email it to: HouseCorporations@rilegislature.gov.

 

 

Single Payer Healthcare

The House Corporations Committee will also conduct a hearing on H 5465, which would establish a universal single payer health care insurance program paid for by consolidating government and private payments to multiple insurance carriers into a Medicare-for-all style single payer program. If you wish to submit written comment, please email it to: HouseCorporations@rilegislature.gov.

 

 

Taxes & Fees

The Senate Finance Committee will conduct a hearing at the Rise in Room 211 on sections of Budget Article 5 relative to Taxes and Fees. The information provided below about these articles comes from the House and Senate Fiscal Staff analyses that provide helpful summaries of the sections. If you wish to provide comments on any of these issues, email testimony to: SenateFinance@rilegislature.gov.

 

Taxes and Fees – Article 5, Section 2, 5, 11, 12, 13, 14, 15, 16, 18

 

Section 2 increases the technology surcharge imposed by the DMV by $1, from $2.50 to $3.50.

 

Section 5 sunsets the Job Growth Act tax incentive as of January 1, 2026. The incentive allows eligible employees of qualified companies to lower their adjusted gross income for tax purposes by up to 50.0 percent of their income earned from bonuses. According to the Governor’s Office of Revenue Analysis (ORA), the modification is taken by fewer than 10 taxpayers annually. The revenue impact of eliminating this underutilized tax expenditure for FY2026 is $1,489 and is $2,979 in FY2027.

 

Section 11 sunsets the Specialized Mill Building Investment Tax Credit as of January 1, 2026. The State has provided a credit of 10.0 percent of the rehabilitation and reconstruction costs of a certified rehabilitated mill building. The credit was associated with the Mill Building and Economic Revitalization Act, which sunset in 2009. ORA indicates the credit has not been used since tax year 2019.

 

Section 12 has two notable changes. R&D Credit for Qualified Research Expenses - Carryforward: Extends the period of time that R&D expense tax credits may be carried forward by a taxpayer from seven years to fifteen. The State allows a taxpayer to claim a credit against certain business taxes for certain research expenses. Unused amounts of the credit earned in a taxable year may be carried forward up to seven succeeding tax years. The Governor recommends extending this carryforward period to fifteen, bringing Rhode Island in line with Massachusetts and Connecticut. ORA indicates that there is no fiscal impact. Section 12 also sunsets the New R&D Facilities Deduction and Property Credit as of January 1, 2026. The State

has allowed eligible taxpayers to deduct expenditures related to the development of any new tangible property related to research and development, including construction and acquisition costs. Eligible taxpayers may also claim a 10.0 percent credit against certain business taxes for tangible property primarily used for R&D. Taxpayers must choose either the deduction or the credit. According to the ORA, these tax expenditures are underutilized, as fewer than 30 taxpayers were projected to claim the deduction in 2024.

 

Section 13 provides $235 million in aid to municipalities to reimburse for lost revenue from the repeal of the motor vehicle excise tax. It eliminates the sales tax inflator, and sets annual reimbursement at the higher of Fy24 or FY25 funding levels.

 

Section 14 sunsets the Small Business Capital Investment Wage Credit as of January 1, 2026. The State has provided eligible entrepreneurs of qualifying businesses a tax credit for 3.0 percent of employee wages in excess of the $50,000. According to the ORA, this credit is statutorily obsolete. There has been no activity related to this tax expenditure since at least TY2019.

 

Section 15 sunsets the Small Business Investment Deduction and Modification as of January 1, 2026. Taxpayers may take a deduction or modification to offset their business or income tax liability if they have made a qualifying investment in a certified venture capital partnership. According to the Office of Revenue Analysis (ORA) this is an underutilized tax expenditure. The revenue impact of repealing this tax expenditure is $6,551 in FY2026 and $13,102 in FY2027.

 

Section 16 authorizes a financial institution data match system for state tax collection purposes. The section specifically requires the Division of Taxation to develop and operate the data match system. It requires all financial institutions doing business in the state to develop a data matching system to facilitate the identification and seizure of non-exempt financial assets of delinquent taxpayers as identified by the Division. It requires financial institutions to report data matching information to the Division at least quarterly, including delinquent taxpayers’ names, addresses, social security numbers, account numbers, and balances. The section also provides the financial institutions with legal protections associated with the disclosure of this information to Taxation. The section prohibits the financial institution and the third party from disclosing information exchanged in the data match system (including to the account holder) unless authorized by the tax administrator. It includes penalties in the event this is violated. The ORA estimates that the data matching program will yield an additional $5.3 million in general revenue in FY2026, and $8.0 million in FY2027, based on an October 15, 2026, program start date.

 

Section 18 prohibits municipalities from establishing and enforcing restrictions related to home based businesses whose activity is not public facing, to ensure remote workers do not need a home occupation permit.

 

 

Wednesday, February 26th

Taxes & Fees

The House Finance Committee will conduct a hearing at 4pm in Room 35 on sections of Budget Article 5 relative to Taxes and Fees and Article 6 relative to Economic Development. The information provided below about these articles comes from the House and Senate Fiscal Staff

analyses that provide helpful summaries of the sections. If you wish to provide comments on any of these issues, email testimony to HouseFinance@rilegislature.gov.

 

Sections 5, 11, 12, 14, 15, 16 are described above.

 

Section 1 extends the Job Development Fund assessment to non-profit organizations with more than 500 employees. The Governor’s budget office estimates raising $2.3 million in new funding from this initiative.

 

Sections 8 and 9 assume an additional $4.4 million in revenues from a proposal to increase the cigarette tax by 50 cents to $5.00 per 20-pack, effective September 2, 2025 (including a floor tax adjustment for retailers). This assumption was calculated by assuming $4.7 million more in excise tax offset by a $0.3 million reduction in applicable sales tax to reflect a decline in consumption linked to the higher cost. The estimated FY 2027 value is $3.3 million.

 

Section 17 imposes a new tax on a company’s annual gross revenue derived from digital advertising services in Rhode Island. The initiative is estimated to generate $9.5 million in FY2026 based on a January 1, 2026 effective date. This grows to $19.6 million in FY2027 with a full year of the tax. The digital advertising gross revenues tax (DAT) is equal to 10.0 percent of the assessable base for a taxpayer with annual gross revenues exceeding $1.0 billion. The article also prohibits a business that derives income from digital advertising services in Rhode Island from directly passing on the cost of the tax to a customer who purchases the digital advertising by means of as separate fee, surcharge, or line-item. Businesses with annual gross revenues below $1.0 billion are exempt from the tax. Taxpayers must apportion their digital advertising revenue based on the number of devices accessing the advertising in Rhode Island compared to the total number accessing it outside of the state. The Governor’s proposal is based on Maryland’s digital advertising tax, the only state currently to pass this idea. Businesses are currently challenging the legality of the program in court.

 

Article 6 – Economic Development

 

Article 6 reauthorizes the Executive Office of Commerce’s incentive programs for an additional year by extending the statutory sunset provisions placed on them from December 31, 2025, to December 31, 2026 (Rebuild RI, Wavemaker Fellowship, Innovate RI, Innovation Initiative, Main Streets Revitalization, First Wave Closing Fund, I-195 Redevelopment Fund). It also permanently eliminates the sunset for the Small Business Assistance Program Act, and does not extend the sunset for the P-Tech program, effectively ending the program on December 31 of this year. The article deregulates retail sales operations on legal holidays, other than Christmas and Thanksgiving, by eliminating holiday operations licensing requirements. The repeal of holiday business licensing would negatively impact most municipal revenues, but the magnitude is unknown. Lastly, Article 6 simplifies how a consumer may be able to opt out of contracts with health clubs and dating services by adding e-mail as an allowed form of contract termination communication. The repeal of holiday business licensing would negatively impact most municipal revenues, but the magnitude is unknown.

 

 

Thursday, February 27th

 

Wavier of Interest on Commercial Properties

The House Committee on Municipal Government & Housing is scheduled to consider at the Rise in the House Lounge H 5269, which would allow the waiver of interest on overdue taxes for commercial properties.

 

Homestead Exemptions

The House Committee on Municipal Government & Housing will also conduct a hearing on H 5308, which would permit every municipality to offer homestead exemptions up to 20% of assessed value on residential properties. If you wish to submit written comment, please email it to HouseMunicipalGovernmentandHousing@rilegislature.gov.

 

 

Commercial Driving Instruction

The House Committee on State Government & Elections is scheduled to consider at the Rise in Room 101 H 5231, which would provide that commercial driving instruction include training on the recognition, prevention, and reporting of human trafficking.

 

 

Climate Superfund

The House Environment & Natural Resources Committee will conduct a hearing at the Rise in Room 135 on H 5424, which would recover funds from entities that extracted or refined fossil fuesl and were responsible for more than one billion tons of covered greenhouse gas emissions. If you wish to provide comments, please email testimony to HouseEnvironmentandNaturalResources@rilegislature.gov.

 

 

 

Real Estate Conveyance Tax

The House Finance Committee will conduct a hearing at the Rise in Room 35 on section 10 of Budget Article 5 relative to the real estate conveyance tax (RECT) statute. The State currently imposes a tax on each deed, instrument, or writing by which interests in real estate are conveyed to a purchaser when the value of the transfer is greater than $100. The tax rate is $2.30 for each additional $500 in value (0.46 percent). For transactions valued $800,000 and above, the RECT rate applied to the value above that amount doubles from $2.30 to $4.60 per each $500 (0.92 percent of the additional value). Section 10 of Article 5 amends the real estate conveyance tax statute. For residential real estate transactions valued above $800,000 a new tax is imposed (in addition to two described above) on the amount above the first $800,000. The new tax is applied at a rate of $1.65 per $500, or fractional part of it (0.33 percent for a total of 1.25 percent on the value over $800,000). As a comparison, Massachusetts has a real estate conveyance tax of $2.28 per $500 (0.456 percent). Connecticut’s tax is 0.75 percent for residential real estate below $800,000, 1.25 percent for property above $800,000 but below $2.5 million. The tax is 2.25 percent on transactions valued above $2.5 million. If you wish to provide comments on any of these issues, email testimony to HouseFinance@rilegislature.gov.

 

 

Economic Development

The Senate Finance Committee will conduct a hearing at 4pm in Room 211 on Article 6 relative to Economic Development, which is described above. If you wish to provide comments on any of these issues, email testimony to: SenateFinance@rilegislature.gov.

 

 

 

The following new bills have been filed:

Senate Bill No. 316

BY Zurier, Pearson, Britto, de la Cruz, DiPalma

ENTITLED, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND COMMERCE CORPORATION (Requires a seventy-five percent (75%) supermajority vote by the board of directors to establish a quorum and to approve any action taken by the commerce corporation.)

Senate Bill No. 318

BY Tikoian, Lawson, Dimitri, Burke, Urso, Britto, Sosnowski, Rogers, LaMountain, de la Cruz

ENTITLED, AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS -- LONG TERM CONTRACTING STANDARDS FOR RENEWABLE ENERGY (Allows for the procurement of nuclear power.)

Senate Bill No. 326

BY Ujifusa, Euer, Bell, Kallman, Valverde, Gu, Britto, DiMario, Mack, Sosnowski

ENTITLED, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND CLIMATE SUPERFUND ACT OF 2025 (Establishes the Rhode Island Climate Superfund Act cost recovery program.)

Senate Bill No. 329

BY Murray, Gu, Ciccone, Sosnowski, Lawson, Felag, Bissaillon, Urso, Acosta, Pearson

ENTITLED, AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Creates an additional tax rate of 3% on taxable income over $625,000 in 2025 dollars. Applies to tax years 2026 and thereafter and not retroactively.)

Senate Bill No. 330

BY Burke, LaMountain, Tikoian, Raptakis, Appollonio

ENTITLED, AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES (Allows the waiver of interest on overdue taxes for commercial properties.)

Senate Bill No. 338

BY Sosnowski, Euer, McKenney, Kallman, Murray, Valverde

ENTITLED, AN ACT RELATING TO HEALTH AND SAFETY -- ECONOMIC AND CLIMATE RESILIENCE ACT OF 2025 (Establishes a fee on companies that sell fossil fuels in Rhode Island and establishes a fund to disburse the collected funds.)

Senate Bill No. 346

BY Bell, Ujifusa, Murray, Valverde, Lawson, DiMario, Mack, Euer, Quezada, Kallman

ENTITLED, AN ACT RELATING TO HEALTH AND SAFETY -- THE RHODE ISLAND COMPREHENSIVE HEALTH INSURANCE PROGRAM (Establishes a single-payer health care insurance system, consolidating public and private payments into a more efficient Medicare-for-all style program, funded by progressive taxes, to reduce health care costs.)

Senate Bill No. 353

BY McKenney, LaMountain, Burke

ENTITLED, AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE IN PARTICULAR ACTIONS -- ARBITRATION (Extends time for a party to apply for stay of arbitration to180 days; invalidates any provision that penalizes a party for seeking legal representation; requires arbitrator to provide notice of default to a party for failure to pay fees.)

Senate Bill No. 358

BY Gu, Zurier, DiPalma, Burke, Bell, Kallman, Bissaillon, Euer, Tikoian

ENTITLED, AN ACT RELATING TO COURTS AND CIVIL PROCEDURE -- PROCEDURE GENERALLY -- CAUSES OF ACTION (Provides a civil cause of action for individuals injured by artificial intelligence.)

Senate Bill No. 361

BY Urso, Sosnowski, Murray, Euer, Gallo, Lawson, Felag, DiPalma, Tikoian, Britto

ENTITLED, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- FAIR EMPLOYMENT PRACTICES (Updates and expands the current law to include menopause and menopause related conditions in the law on fair employment practices pertaining to pregnancy and pregnancy related conditions.)