2016 -- S 2688 SUBSTITUTE A

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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: Senators Pichardo, Metts, Ciccone, Nesselbush, and Miller

     Date Introduced: March 08, 2016

     Referred To: Senate 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 Bureau 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 of this chapter 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) "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.

     (2) "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.

     (3) "Micro business" means a Rhode Island based 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 gross sales totaling five hundred thousand dollars ($500,000) or less.

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

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

     (5) "Registered" means those micro businesses that have provided their business name,

address, owner contact information, number of employees, and annual gross sales to the

department of administration.

     37-14.2-4. Compilation and reporting of data on micro businesses. -- (a) The

department of administration shall compile and maintain data on the existence of registered 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

and to report annual utilization of registered micro businesses in state-directed public construction

programs and projects and in-state purchases of goods and services. The report shall be made

public contemporaneously with its submission to the governor and general assembly.

     (b) The department of administration shall maintain a micro business registration

database which shall include the business name, address, owner contact information, number of

employees, and annual gross sales. Such registration of micro businesses with the department of

administration shall be on a voluntary basis, and does not supersede any mandated business

registration requirements with the secretary of state or other general offices, as well as with any

city or town as applicable.

     (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 registration of micro businesses in the state. The data

shall include, but not be limited to, the number of registered micro businesses, the distribution of

registered micro businesses among the thirty-nine (39) cities or towns in the state, the number of

registered micro businesses that are also Rhode Island certified minority business enterprises, and

the number of registered micro businesses that are also Rhode Island certified women business

enterprises.

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

state or all other general officers of the state, all agencies of the state and all cities and towns shall

make reasonable modifications to their record keeping procedures to facilitate the compilation of

data concerning the existence of micro businesses 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

***

     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. The act would also 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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