2016 -- H 7821

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LC005303

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS - MICRO BUSINESSES

     Introduced By: Representatives Barros, Abney, Tobon, Kazarian, and Coughlin

     Date Introduced: March 03, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Preamble.

     WHEREAS, The Small business Administration's (SBA) definition of small businesses

does not specifically target and address micro business reality (ownership, human capacity,

financial capacity, micro business culture and context); and

     WHEREAS, The Small Business Act of July 30, 1953 (15 U.S.C. §631 et seq.) creating

the Small Business Administration (SBA), generally defines small business by the size of the firm

and the average annual receipts. These two widely used standards are, on the average five

hundred (500) employees for most manufacturing and mining industries, and seven million

dollars ($7,000,000) in average annual receipts for most non-manufacturing industries. While

there are many exceptions, these two (2) are the primary size standards in the industries; and

     WHEREAS, The State of Rhode Island currently uses the Federal Small Business

Administration's (SBA) definition of Small Businesses as a synonym for Micro Enterprises

(Micro Businesses); and

     WHEREAS, According to information found on the Census.gov website, micro

enterprises make up ninety-five percent (95%) of the twenty-eight million (28,000,000) U.S.

companies tracked by the census; and

     WHEREAS, The State of Rhode Island does not have a definition for micro businesses;

and

     WHEREAS, There is an urgent need for a predictable process or continuum, where

entrepreneurs move from micro businesses, to small businesses, to medium businesses and finally

to large businesses in the state of Rhode Island; now therefore be it

     RESOLVED, It is enacted by the general assembly as follows:

     SECTION 2. Title 37 of the General Laws entitled "PUBLIC PROPERTY AND

WORKS" is hereby amended by adding thereto the following chapter:

CHAPTER 14.2

THE MICRO BUSINESSES ACT

     37-14.2-1. Short title. -- This chapter shall be known and may be cited as "The Micro

Businesses Act".

     37-14.2-2. Purpose -- The purpose of this chapter is to carry out the state's policy of

supporting the fullest possible participation of micro businesses in the economic activity in the

state of Rhode Island, including, but not limited to, state directed public construction programs

and projects and in-state purchases of goods and services. The purpose includes assisting micro

businesses throughout the life of any contracts with the state of Rhode Island or its agencies.

     37-14.2-3. Definitions. -- As used in this chapter, the following words and terms shall

have the following meanings unless the context shall clearly indicate another or different meaning

or intent:

     (1) "Compliance" means the condition existing when a contractor has met and

implemented the requirements of this chapter.

     (2) "Contract" means a mutually binding legal relationship or any modification thereof

obligating the seller to furnish supplies or services, including construction, and the buyer to pay

for them. As used in this chapter, a lease is a contract.

     (3) "Contractor" means one who participates, through a contract or subcontract, in any

procurement or program covered by this chapter and includes lessees and material suppliers.

     (4) "Micro business" means a business entity, regardless of whether it is in the form of a

corporation, limited liability company, limited partnership, general partnership or sole

proprietorship, which has a total of ten (10) or fewer members, owners, and employees and has

assets totaling five hundred thousand dollars ($500,000) or less.

      (5) "MB coordinator" means the official designated to have overall responsibility for

promoting coordinating, documenting, and implementing efforts related to micro businesses.

     (6) "Noncompliance" means the condition existing when a recipient or contractor has

failed to implement the requirements of this chapter. 

     37-14.2-4. Compilation and reporting of data on micro business enterprises. -- (a)

The department of administration shall compile and maintain data on the existence of micro

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businesses to facilitate the achievement of the purpose of this chapter. Within sixty (60) days of

the effective date of this statute, the department of administration shall submit a report to the

governor and general assembly that describes the methodology being used to compile such data.

The report shall provide details of each category, specify in-state and out-of-state businesses,

dollar amounts and type of appropriation, code and corresponding definitions that it is using to

identify, track, and calculate data on micro businesses. The report shall be made public

contemporaneously with its submission to the governor and general assembly.

     (b) The department of administration shall review on an annual basis the financial

documents of micro businesses including, but not limited to, the tax returns, bank statements, and

financial statements, of the businesses as well as all employment documents relating to the

number of employees. Those businesses that refuse to comply with the requests of the department

of administration seeking this information shall be subject to a civil penalty in the amount of one

thousand dollars ($1,000) per refusal after an opportunity for hearing before the director of the

department of administration or the director's designee.

     (c) On or before January 1, 2017, and on or before the first day of January in all years

thereafter, the department of administration shall submit a report to the governor and general

assembly consisting of data concerning the existence of micro business enterprises in the state.

The data shall include, but not be limited to, the number of micro business enterprises, the

distribution of micro business enterprises among the thirty-nine (39) cities or towns in the state,

the number of minority business enterprises which are micro business enterprises, the number of

micro business enterprises owned or controlled by women and the number of minority business

enterprises which are micro business enterprises, the number of micro business enterprises which

are owned or controlled by socially disadvantaged people and economically disadvantaged people

and data on the percentage of micro business enterprises among business enterprises of other

sizes in the state.

     (d) At the request of the director of the department of administration, the secretary of

state and all other general officers of the state, all agencies of the state and all of its cities and

towns shall make reasonable modifications to their record keeping procedures to facilitate the

compilation of data concerning the existence of micro business enterprises in Rhode Island.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS - MICRO BUSINESSES

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     This act would create "The Micro Businesses Act" in order to support participation of

micro businesses in the economic activity in the state, including state directed public construction

projects and in-state purchases. It would require the department of administration to compile data

and to submit an annual report to the governor and general assembly.

     This act would take effect upon passage.

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