Under The Dome

This Week At the State House
 
Tuesday, June 4^th
 
A new bill was introduced May 29^th and is scheduled for hearing Tuesday in the House Judiciary Committee.  While the bill is directed at the Washington Bridge, it gives rise to concerns about retroactive changes to law.  H.8318, An Act Relating to Courts and Civil Procedure – Causes of Action retroactively changes the statute of repose for the Washington Bridge.  What does that mean?  Under current law, any person, firm, corporation or legal entity that is involved in the design, construction, repair, modification, etc. to real property can be sued for damages or injuries within ten years of the “substantial completion” of a construction project.  This was litigated in 1985 and upheld by the Rhode Island Supreme Court and it is similar to laws in 46 other states.  H.8318 changes the law as it pertains to the Washington bridge by extending the statute of limitations to ten years from the “date of discovery” or by December 1, 2033, whichever is later, unless the case would be time barred as of the date this legislation becomes law.  So, if the bill were to pass into law July 1, 2024, any entity involved in the Washington bridge where “substantial completion” did not occur before July 1, 2014, would be reachable to sue for liability.  In some instances, this extends the window of liability to close to 20 years.  The reason for setting a time limit to sue in most cases relates to ability to find eye witnesses with memories that are accurate, loss of potential evidence, the influence of other factors that are hard to quantify or qualify over the years.  Insurance companies rely on statutes of limitations and statutes of repose to assess risk in setting premiums or deciding to insure entities.   (See new file bills below for the actual language)
 
 
The Senate Committee on Environment and Agriculture is voting Tuesday on S.2952, An Act Relating to Health and Safety – Building Decarbonization Act. The bill bans municipalities from issuing a permit for the construction or alteration of any commercial, residential, or mixed-use buildings if the initial application is submitted after December 31, 2024 and if the building is not made “electric ready.” Electric ready means the building is designed with sufficient capacity for a future retrofit of a mixed-use building to an all-electric building, including space, drainage, electrical conductors, etc.  The bill gives municipalities the authority to go further and require these buildings to be all-electric, instead of “electric ready” unless it is deemed technically infeasible.  No permits can be issued after December 31, 2026, unless the building is all-electric with the option to install a back up system to operate when the electric grid goes down. https://webserver.rilegislature.gov/BillText/BillText24/SenateText24/S2952.pdf 
 
The Senate Labor Committee is scheduled to vote on S.2120, An Act Relating to Businesses and Professions.  This is the Senate companion for H.7015 SubA that was featured in last week’s edition.  If you are in the real estate business, are in the market to buy or sell a house, or if you are a house inspector, contact your legislator quickly.   The bill bans anyone, other than a licensed electrician, from testing wires, conduits and apparatus which includes fixtures, lighting, etc. What this means, is that a potential buyer’s house inspector would no longer be able to inspect switches, lights, or look at a panel to alert the buyer to potential problems.  Buyers, should they wish to have the dwelling’s electrical system included in an inspection would need to hire a licensed electrician to perform the inspection – within the customary ten-day inspection period.  Under current law, a house inspector is permitted to look at these items and recommend the buyer seek advice from a licensed electrician if something appears amiss.  If passed into law, the bill would take effect January 30, 2025.  https://webserver.rilegislature.gov/BillText/BillText24/SenateText24/S2120.pdf 
 
 
Wednesday, June 5^th  
 
The Senate Health and Human Services Committee will be voting on S.2084, An Act Relating to Health and Safety Catastrophic Illness in Children Relief Fund.  S.2084 places a $1.50 per employee tax on businesses to financially fund a new state program entitled the “Catastrophic Illness in Children Relief Fund.”  This fund is meant to aid families of children with serious illnesses.  https://webserver.rilegislature.gov/BillText/BillText24/SenateText24/S2084.pdf 
 
Friday June 6^th
 
The House members will be debating and voting on the State’s budget Friday late afternoon into the evening.  As passed by the House Finance Committee last Friday night, the budget contains 14 Articles.  Below are some highlights:
 

• The Committee retained language allowing the Governor to transfer surplus ARPA funds to the Unemployment Trust Fund, if any funds remain.  There is no guarantee that monies will be transferred, but the possibility exists.  The budget also extends the timing of the annual adjustment of the UI tax rate in the event monies are available at the end of the fiscal year and the transfer affects the rate.
• Pass Through Entities (PTE) – the Committee adopted the Governor’s recommendation to change the state tax credit definition which is the amount of tax paid by the pass-through entity level that is passed through to an owner.  The Governor proposed to change the definition starting January 1, 2025 from 100% to “ninety percent (90%) of the amount of tax paid by the pass-through entity at the entity level that is passed through to an owner on a pro rata basis.” This will raise the income tax for PTEs.  It is estimated to raise $8.1 million in FY2025 and $16.5 million in FY2026.
• Net Loss Carryforward – for the taxable year beginning January 1, 2025, the deduction can be carried forward for 20 taxable years. 
• Extended the following Economic Development Programs for one more year – Rebuild Rhode Island tax credit, RI Tax Increment Financing, Tax Stabilization Incentive, First Wave Closing Fund, I-195 Redevelopment Project Fund, Small Business Assistance Program, Stay Invested in RI Wavemaker Fellowships, and the Main Street RI Streetscape Improvement Fund
• Delinquent Taxpayers – a list of delinquent taxpayers owing $50,000 or more (where the taxes have been unpaid for 90 days or more) would be posted on a public website
• No Reduction in the Corporate Income Tax – the Governor had proposed a $50 decrease with a revenue loss of $2.5 million
• Eliminated the Governor’s recommendation to add $2 million to capitalize the Small Business Assistance Program.  The Committee believes $3.5 million is still available to make additional loans so it did not include the $2 million request.
• A Medical Debt Relief Program – a new $1 million one-time appropriation.  Eligible RI citizens with 400% or less than the federal poverty line or whose debt is more than 5% of the citizen’s adjusted gross income (and more than $600) can apply
• $250,000 from general revenues for a new electric leaf blower rebate program to be administered by the Office of Energy Resources.  The goal is to encourage commercial landscapers to adopt zero-emissions technology.
• $2 million for a new electric vehicle charging adapter pilot program for residential electric vehicle charging stations
• Cigarette Tax Increase of 25 cents per pack, and a two-tiered tax on vape products.  The Committee also codified the flavored vape ban put in place by the RI Department of Health, but did not include menthol in that list of flavors.  This should allow stores to sell menthol flavored vape products.
• Article 12 makes numerous changes to the Pension system.  It affects individuals differently.  The language can be viewed at:  https://webserver.rilegislature.gov/BillText24/HouseText24/Article-012-SUB-A.pdf
• Bond questions to be placed before the electorate include an additional $20 million for housing, bringing the total housing bond to $120 million; $87 million for URI Biomedical Sciences Building; $73 million for RIC Cybersecurity Building; $53 million for Green Economy Bond ($15 million for Port of Davisville, $2 million for climate resiliency, $5 million for brownfields remediation, $5 million for local recreation projects, $10 million for municipal resiliency, $3 million for the Newport Cliff Walk, $5 million for agriculture land preservation, $3 million for open space, and $5 million for forests and habitat management); $10 million for Cultural Arts ($2 million for Tomaquag Museum, $2 million for Newport Contemporary Ballet, $2 million for trinity Repertory Company and $4 million for RI Council on the Arts).