Under The Dome 5/12/25

Revenue Estimating Conference Adopts Final Numbers

 

The Revenue Estimating Conference (REC) completed its work Friday afternoon after six hours of debate. For FY25, the conferees adopted revenues of $5.6176 billion which is $61 million more than anticipated during the November 2024 REC. Personal Income Tax collection accounted for $37.1 million of the addition revenue, showing Rhode Island has not experienced the personal income decline that some other states have seen. Sales and Use Taxes collections were down $22 million. Business Corporations Taxes were up $3 million. Taxes on Public Utilities Gross came in $9.7 million higher than anticipated; Insurance Company taxes were up $8.5 million and Lottery revenues were up $7.1 million. Caseload total costs were also down $39 million.

 

While that is good news, the picture for the upcoming fiscal year is more challenging. Total estimated general revenues for FY2026 are $5.4863 billion ($131.3 million less than FY2025). Income Tax collections are estimated to increase another 2.5% to $1.999 billion. Business Corporate taxes and Financial Institution taxes are expected to go down while the Public Utilities Gross tax is estimated to bring in slightly higher revenue in FY2026. Once again, sales tax collections are expected to decline. Lottery revenues are expected to increase only by 1.9%. Caseload estimates for FY2026 are $260 million more than originally estimated; however, some of that increase - $197.8 million - is currently booked as qualifying for federal fundings. Whether that will change is a fair question. Governor McKee’s budget, as originally proposed, is a $5.7431 billion budget, $256.8 million more than revenues predicted to be available next year. The Governor’s budget also included a digital tax that is unlikely to bring in immediate revenue based on the experience of other states that adopted the tax. They are not collecting it as they wait for court challenges to play out.

 

Budget meetings between the House and Senate are already underway. They hope to have a budget passed by the third week of June. The House Fiscal staff will be providing an overview of the REC and budget process Wednesday at 4:00. It can be livestreamed at https://capitoltvri.cablecast.tv/

 

Bullying Bill Passes in SubA Form

 

The Workplace Psychological Safety Act (often referred to as the bullying bill) was passed in a SubA form by the Senate Labor & Gaming Committee. Although amended, the changes were minimal. The bill exempts out businesses with fewer than fifteen employees. Covered businesses would still have to implement training programs, adopt complaint processes, maintain records of complaints, and are not permitted to use mediation or arbitration to deal with allegations unless agreed to by the individual submitting the complaint. Damages still include punitive damages, compensatory damages, injunctive relief, or up to $5,000 per complaint depending upon the circumstances. The SubA requires a regulatory review of the law five years after enactment. Workplace bullying includes the following activities: “Conduct may include false accusations, sabotage of work performance, consistent ignoring or ostracism, removal of major responsibilities, consistent unreasonable workloads, excessive monitoring, consistent micromanagement, persistent hypercriticism, impossible deadlines, pressure to engage in

unethical behavior or give up rights or benefits, retaliation for speaking up, or repeated verbal abuse.” https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0959A.pdf

 

 

This Week At the State House

 

 

Monday, May 12th

 

Senate Committee on Artificial Intelligence & Emerging Tech

 

AI Regulations for “Sensitive” systems – Hiring, Education, Lending, Housing…

 

The Senate Committee on Artificial Intelligence & Emerging Tech is meeting on Monday at 4:00 in room 313. S.627, An Act Relating to Commercial Law – Artificial Intelligence Act establishes regulations with the intent to ensure the ethical development, integration, and deployment of high-risk Artificial Intelligence (AI) systems, particularly those influencing consequential decisions in areas like employment, education, lending, housing, healthcare, and legal services. It would require developers, integrators, and deployers to use reasonable care to prevent algorithmic discrimination, implement risk management policies, conduct regular impact assessments, and provide transparency regarding the use of AI systems. Starting October 1, 2025, developers would be required to disclose known risks to the attorney general and affected parties, while deployers are required to notify consumers when AI is used in decision-making and offer avenues to appeal adverse outcomes. The act would further mandate that synthetic digital content generated by AI be clearly marked, with exceptions for informational content. Additionally, this act would provide exemptions for AI systems governed by equivalent federal standards, used for internal business purposes, or developed for specific federal agencies. The attorney general would hold exclusive enforcement. If you have concerns about this legislation, please contact the Chamber. https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0627.pdf

 

 

Proposed Revisions to the Identity Theft Act of 2015

 

S.1037, An Act Relating to Criminal Offenses – Identity Theft Act of 2015, was introduced in the Senate Friday, May 9th and is scheduled for hearing Monday, May 12th . The bill changes “personal information” to “personally identifiable” information. It requires businesses to implement controls and procedures to restrict and manage access to the data “in transit and at rest.” Companies that disclose data to third parties must now have a written contract stating the third party will maintain reasonable security measures. S.1037 adds subcontractors of the third party as well. Lastly, the bill increases the penalties for reckless violations of the Act from $100 per record to $1000 per record; and for knowing and willful violations, the penalty increases from $200 per record to $2000 per record. S.1037 gives the courts the ability to impose additional penalties as it deems warranted under the circumstances. https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1037.pdf

Testimony for either bill may be submitted to SLegislation@rilegislature.gov

 

 

Tuesday, May 13th

 

House Environment Committee Focuses on Packaging and Paper Recycling

 

H.6205, An Act Relating to Health and Safety – Extended Producer Responsibility for Packaging and Paper Act https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H6205.pdf will be heard in the House Committee on Environment & Natural Resources At the Rise in the House Lounge. This bill is one of three bills related to the debate over the adoption of a bottle redemption bill and is the companion to S.939 that was heard last week. For two years, a joint House and Senate commission has been meeting to debate the pros and cons of adopting a bottle deposit and redemption bill. The members of the commission did not reach consensus, so three bills were introduced last week – a bottle deposit bill with a ten-cent fee per can/bottle; a bottle deposit combined with an extended producer responsibility program for most types of packaging (EPR); and a bill focusing only on EPR. H.6205, which focuses only on EPR was put forward by the beverage industry.

 

H.6202, An Act Relating to Health and Safety – Beverage Container Recycling Act, calls for a ten-cent deposit on almost all beverage containers. The bill envisions the creation of recycling centers, not a requirement placed on retailers to redeem beverage containers, with penalties placed on a beverage producer organization if recycling target rates are not met. Deposits that are not redeemed by consumers are to be used for recycling education programs, the creation of additional recycling centers and other activities required as a result of the deposit and redemption program. The 27-page bill can be found at https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H6206.pdf

 

H.6207, An Act Relating to Health and Safety combines both a ten-cent bottle deposit on most beverages (soda, water, juices, alcohol, etc.) and an EPR program. If your business produces and packages products, sells products under a brand, or imports products that are unbranded, please read H.6207. https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H6207.pdf

 

Testimonies for any of these bills should be submitted to HouseEnvironmentandNaturalResources@rilegislature.gov

 

 

Senate Finance Hears Tax Penalty Waivers

 

 

Tuesday, At the Rise in Room 211, the Senate Finance Committee will take testimony on two bills addressing potential waivers to tax penalties.

S.656, An Act Relating to Taxation – Rhode Island Tax Amnesty Act of 2017, authorize the tax administrator to waive interest and penalties on delinquent taxes paid in full during a one-week amnesty period each fiscal year. The bill would reinstate a suspended driver’s license upon payment in full. https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0656.pdf

 

S.657, An Act Relating to Taxation – Rhode Island Tax Amnesty Act of 2017, has the same waiver of interest and penalties, but does not include the reinstatement of a suspended driver’s license. https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0657.pdf

Testimony may be submitted to SenateFinance@rilegislature.gov

 

 

Wednesday, May 14th

 

House Budget Update

 

The House Finance Committee will receive a budget update from the House Fiscal Staff at 4:00. Live streaming is available at https://capitoltvri.cablecast.tv/

 

Weapons Hearing Day

 

If you plan to be at the State House Wednesday, be aware that the Senate Judiciary Committee will be hearing bills related to weapons At the Rise. These issues often bring crowds of people, so plan accordingly.

 

 

Thursday, May 15th

 

Hearing on TDI Taxes and Benefits in the Senate Finance Committee

 

S.974, An Act Related to Labor and Labor Relations – Temporary Disability Insurance – Contributions, will be heard, At the Rise, in Room 211. This bill, sponsored by the new Senate President Val Lawson, increases the taxable wage base for TDI from $38,000 to $100,000. The bill also increases the TDI benefit rate from 4.62% to 5.38% for calendar year 2026 and to 5.77% starting January 1, 2027. S.974 also increases Temporary Caregiver Insurance benefits from the current eight weeks to ten weeks beginning January 1, 2027, and further to twelve weeks beginning January 1, 2028. Testimony may be submitted to SenateFinance@rilegislature.gov

 

 

 

The following new bills have been filed:

Senate Bill No. 1037 Gu, Zurier, Burke, Ciccone, Urso, DiPalma, Vargas, Paolino, Tikoian, Lawson, 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.) https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1037.pdf

Senate Bill No. 1038 Euer, Mack, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- ENVIRONMENTAL JUSTICE ACT (Establishes requirements which would have to be met by an applicant prior to the issuing of

permits for an activity that would have an environmental impact on or would increase the cumulative impacts on an environmental justice area.) https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1038.pdf

Senate Bill No. 1040 Euer, Bell, Gu, AN ACT RELATING TO TAXATION -- TAX ON GAINS FROM THE SALE OR EXCHANGE OF REAL PROPERTY (Creates new tax on gains from sale or exchange of real property held for short periods of time, 6 years or less, establishes a comprehensive framework to calculate and implement enforcement and provides imprisonment and/or fines for those who evade taxes.) https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1040.pdf

Senate Bill No. 1045 Tikoian, Ciccone, Felag, LaMountain, Sosnowski, Gallo, DiPalma, Patalano, Burke, Appollonio, AN ACT RELATING TO TAXATION -- BUSINESS CORPORATION TAX (Exempts subchapter S corporations in the first year of existence from paying the minimum tax.) https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1045.pdf

 

Senate Bill No. 1058 Ciccone, Burke, Patalano, Tikoian, Raptakis, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WAREHOUSE WORKER PROTECTION ACT (Requires employers to provide each employee of a warehouse distribution center, upon hire, with written description of quotas applicable to the employee within defined time periods and adverse employment action for failure to meet the quota.) https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S1058.pdf