2014 -- H 8104 SUBSTITUTE A

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LC005208/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO STATUTES AND STATUTORY CONSTRUCTION

     

     Introduced By: Representatives DeSimone, and Newberry

     Date Introduced: April 30, 2014

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 3-10-1 and 3-10-5 of the General Laws in Chapter 3-10 entitled

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"Taxation of Beverages" are hereby amended to read as follows:

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     3-10-1. Manufacturing tax rates -- Exemption of religious uses. -- (a) There shall be

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assessed and levied by the tax administrator on all beverages manufactured, rectified, blended, or

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reduced for sale in this state a tax of three dollars and thirty cents ($3.30) on every thirty-one (31)

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gallons, and a tax at a like rate for any other quantity or fractional part. On any beverage

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manufactured, rectified, blended, or reduced for sale in this state consisting in whole or in part of

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wine, whiskey, rum, gin, brandy spirits, ethyl alcohol, or other strong liquors (as distinguished

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from beer or other brewery products), the tax to be assessed and levied is as follows:

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      (1) Still wines (whether fortified or not), one dollar and forty cents ($1.40) per gallon;

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      (2) Still wines (whether fortified or not) made entirely from fruit grown in this state,

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thirty cents ($.30) per gallon;

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      (3) Sparkling wines (whether fortified or not), seventy five cents ($.75) per gallon;

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      (4) Whiskey, rum, gin, brandy spirits, cordials, and other beverages consisting in whole

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or in part of alcohol which that is the product of distillation, five dollars and forty cents ($5.40)

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per gallon, except that whiskey, rum, gin, brandy spirits, cordials, and other beverages consisting

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in whole or in part of alcohol which that is the product of distillation but which that contains

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alcohol measuring thirty (30) proof or less, one dollar and ten cents ($1.10) per gallon;

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      (5) Ethyl alcohol to be used for beverage purposes, seven dollars and fifty cents ($7.50)

 

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per gallon; and

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      (6) Ethyl alcohol to be used for nonbeverage purposes, eight cents ($.08) per gallon.

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      (b) Sacramental wines are not subject to any tax if sold directly to a member of the

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clergy for use by the purchaser, or his or her congregation for sacramental or other religious

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purposes.

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      (c) A brewer who brews beer in this state which that is actively and directly owned,

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managed, and operated by an authorized legal entity which that has owned, managed, and

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operated a brewery in this state for at least twelve (12) consecutive months, shall receive a tax

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exemption on the first one hundred thousand (100,000) barrels of beer that it produces and

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distributes in this state in any calendar year. A barrel of beer is thirty one (31) gallons.

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     3-10-5. Information supplemental to returns -- Audit of books. -- (a) The tax

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administrator may at any time request further information from any person or from the officers

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and employees of any corporation which that he or she may deem necessary to verify, explain, or

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correct any return made in pursuance of the provisions of this chapter, and for the like purpose,

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the administrator or his or her authorized agent may examine the books of account of that person

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or corporation during business hours.

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      (b) Each Class A licensee authorized to sell intoxicating beverages at wholesale or retail

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in this state shall file an annual report on or before February 1 with the division of taxation in the

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form required by the tax administrator. Such report shall included, but not be limited to, total

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sales of alcoholic beverages, sales tax, and excise tax collections on such sales for the

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immediately preceding calendar year. Annually, on or before May 1, the tax administrator shall

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prepare and submit to the chairs of the house and senate finance committees a report reflecting

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data from the annuals annual reports submitted by said licensee to the division of taxation. The

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tax administrator's report shall compile total sales of alcoholic beverages, sales tax, and excise tax

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collections by county.

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     SECTION 2. Sections 5-20.6-2, 5-20.6-3, 5-20.6-4, 5-20.6-5, 5-20.6-6 and 5-20.6-8 of

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the General Laws in Chapter 5-20.6 entitled "Relationships in Residential Real Estate

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Transactions" are hereby amended to read as follows:

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     5-20.6-2. Definitions. -- As used in this chapter, the following terms shall have the

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following meanings:

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      (1) "Affiliated licensee" means a licensed real estate salesperson or real estate broker as

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defined in section § 5-20.5-1 associated with a particular principal broker.

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      (2) "Brokerage" means a principal broker as defined in section § 5-20.5-8 and his or her

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affiliated licensees.

 

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      (3) "Buyer" means a person who acquires or seeks to acquire an ownership interest in

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real estate.

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      (4) "Client" means a buyer, seller, tenant, or landlord who has agreed to representation

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by a licensee in a real estate transaction, evidenced by an executed, mandatory relationship

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disclosure, to whom a licensee owes the duties set forth in section § 5-20.6-5.

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      (5) "Client representation contract" means an express, written contract between a

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principal broker or his or her affiliated licensees and a client that who authorizes the principal

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broker or his or her affiliated licensees to act as a client representative for a buyer, seller,

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landlord, or tenant and meets the requirements of section § 5-20.6-10.

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      (6) "Confidential information" means the following information:

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      (i) A buyer buyer's or tenant's willingness to pay more than the offered price;

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      (ii) A seller seller's or landlord's willingness to accept less than the asking price;

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      (iii) A buyer buyer's or tenant's previous offers made to purchase or lease real estate;

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      (iv) A seller seller's or landlord's previous offers received to purchase or lease real estate;

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      (v) Any parties' motivating factors;

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      (vi) Any parties' willingness to agree to other financing terms;

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      (vii) Any facts or suspicions regarding circumstances, other than known, material defects

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of a property that a licensee must in all cases disclose, that may psychologically impact or

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stigmatize any real estate; or

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      (viii) Any information about a party's assets, liabilities, income, or expenses.

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      (7) "Customer" means a buyer, seller, tenant, or landlord who has agreed to certain

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assistance by a licensee in a real estate transaction, evidenced by an executed, mandatory

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relationship disclosure, to whom a licensee owes the duties set forth in section § 5-20.6-4.

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      (8) "Designated client representative" means an affiliated licensee appointed by the

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principal broker or his or her designee to represent a buyer, seller, tenant, or landlord in a real

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estate transaction.

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      The affiliated licensee so designated shall obtain the informed, written consent of the

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buyer, seller, tenant, or landlord with a signed mandatory relationship disclosure pursuant to

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section § 5-20.6-8.

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      (9) "Designee" means an associate broker as defined in section § 5-20.5-1 whom a

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principal broker authorizes to act on his or her behalf.

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      (10) "Director" means the director of business regulation for the state.

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      (11) "Dual facilitator" means a single licensee who, with the prior written consent of

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both parties assists a seller client and a buyer client in the same transaction subject to the

 

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limitations set forth in section § 5-20.6-6.

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      (12) "Landlord" means a person who leases or attempts to lease his or her ownership

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interest in real estate to another person.

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      (13) "Lease" means an express written or oral contract between a landlord and tenant for

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the use or occupancy by the tenant of real estate that is owned by another person.

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      (14) "Licensee" means an individual licensed by the director as a real estate broker or

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real estate salesperson pursuant to chapter 5-20.5 20.5 of this title.

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      (15) "Mandatory relationship disclosure" means a form that describes the relationship

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between a consumer and a principal broker and his or her affiliated licensees that meets the

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requirements of section § 5-20.6-8.

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      (16) "Ministerial acts" means acts of an administrative nature that licensees perform for

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client or customers, including, but not limited to, showing property; preparing offers or

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agreements to sell, purchase, exchange, rent, or lease; conveying offers or agreements to the

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parties; and providing information and assistance.

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      (17) "Principal broker" means a real estate broker licensed by the director who is

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designated by the brokerage to be responsible for the supervision and activities of his or her

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affiliated licensees in accordance with this chapter and chapter 5-20.5 20.5 of this title.

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      (18) "Real estate" refers to vacant land on which a building is intended to be constructed

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for use as one or two (2) residential dwellings or land with physical improvements consisting of a

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house and/or structure comprised of four (4) or fewer residential units.

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      (19) "Sales agreement" means an express written contract signed by the buyer and seller

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for the purchase and sale of the real estate.

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      (20) "Sell," "sale," or "sold" means a transaction for the transfer of real estate from a

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seller to a buyer, including, but not limited to, exchanges of real estate between the seller and

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buyer and transactions involving the creation of a sales agreement.

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      (21) "Seller" means a person who sells or attempts to sell an ownership interest in real

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estate to another person.

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      (22) "Tenant" means a person who acquired or seeks to acquire an interest in real estate

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that entitles him or her to occupy or use a property that is owned by another person.

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      (23) "Transaction coordinator" means a principal broker or his or her designee who

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supervises a real estate transaction in a capacity in which one affiliated licensee represents a

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buyer or tenant as a designated client representative and another affiliated licensee represents a

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seller or landlord as a designated client representative in the same transaction. A transaction

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coordinator does not own owe any fiduciary duties to any party in a transaction except the duties

 

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to protect the confidential information of the parties and to properly account for money placed in

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his or her care.

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      (24) "Transaction facilitator" means a licensee who provides assistance to a buyer, seller,

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tenant, or landlord, or both, in a real estate transaction. A transaction facilitator does not owe any

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fiduciary duties to any party in a transaction but does owe the duties set forth in section § 5-20.6-

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4.

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     5-20.6-3. Relationships -- Creation and presumption. -- (a) It shall be presumed that

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all licensees in a real estate transaction are transaction facilitators unless, the licensee obtains the

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informed, written consent of a buyer, seller, tenant, or landlord with an executed mandatory

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relationship disclosure to represent that person as a designated client representative.

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      (b) The provisions of this chapter are expressly intended to abrogate the common law of

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agency; no type of agency representation shall be assumed by a brokerage, principal broker,

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licensee, buyer, seller, tenant, or landlord nor shall agency representation be created by

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implication.

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      (c) Types of relationships. - The following types of relationships are recognized:

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      (1) Assistance as a transaction facilitator to assist one or more customers; and

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      (2) Representation of a buyer, seller, tenant, or landlord as a designated client

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representative.

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     5-20.6-4. Duties owed by a transaction facilitator to a customer. -- (a) A transaction

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facilitator owes the following duties to a customer:

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      (1) To perform agreed-upon ministerial acts timely and competently;

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      (2) To perform these acts with honesty, good faith, reasonable skill, and care;

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      (3) To properly account for money or property placed in the care and responsibility of

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the principal broker; and

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      (4) To protect confidential information when assisting customers as a dual facilitator.

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      (b) A licensee acting as a transaction facilitator does not owe any fiduciary duties to a

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customer except those duties specified in paragraph subsection (a).

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     5-20.6-5. Duties owed by a designated client representative to client. -- (a) If an

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affiliated licensee is appointed by the principal broker or his or her designee to represent a buyer,

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seller, tenant, or landlord in a real estate transaction and obtains the written consent of a buyer,

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seller, tenant, or landlord with an executed, mandatory relationship disclosure to represent that

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person as a designated client representative, the licensee owes the following legal duties and

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obligations to his or her client:

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      (1) To perform the terms of the client representation contract, if any, with reasonable

 

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skill and care;

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      (2) To promote the client's best interest in good faith and honesty;

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      (3) To protect the client's confidential information during the relationship and after its

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termination;

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      (4) To perform agreed-upon ministerial acts timely and competently;

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      (5) To perform these acts with honesty, good faith, reasonable skill and care; and

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      (6) To properly account for money or property placed in the care and responsibility of

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the principal broker.

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      (b) A principal broker or his or her designee may appoint one or more affiliated licensees

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to act as the designated client representative(s) of a seller or landlord and one or more affiliated

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licensees to act as the designated client representative(s) of a buyer or tenant in the same

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transaction; provided; that, all parties to the transaction receive written notice that an inherent

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conflict of interest may exist when designated client representatives are affiliated with the same

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principal broker.

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      (c) A designated, client representative of a seller client or landlord client shall have no

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duty to protect the confidential information of a buyer customer or tenant customer involved in a

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transaction with his or her client. Conversely, a designated client representative of a buyer client

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or tenant client shall have no duty to protect the confidential information of a seller customer or

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landlord customer involved in a transaction with his or her client.

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      (d) In the event that one or more affiliated licensees represent a seller as a designated

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client representative and one or more affiliated licensees represent the buyer as a designated client

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representative in the same transaction, the principal broker or his or her designee shall act in a

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capacity as the transaction coordinator and shall protect the confidential information of all parties

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to the transaction and properly account for funds.

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      (e) No affiliated licensees of the principal broker, other than those licensee(s)

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specifically designated to represent the client as a designated client representative, shall represent

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the client or owe any other duties except that affiliated licensees not appointed to represent a

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client in a transaction shall have the duty to protect the client's confidential information.

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      (f) All other affiliated licensees of the principal broker not appointed as a designated

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client representative for a party in a real estate transaction may represent another party with

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conflicting interests in the same transaction.

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      (g) A designated client representative is exclusively responsible for the performance of

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any duties owed to the client.

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      (h) An appointment of a designated, client representative by a principal broker or his or

 

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her designee to represent a client shall not limit the principal broker's liability or responsibility for

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any breach of duty owed to a client by the designated client representative.

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     5-20.6-6. Dual facilitator. -- (a) A licensee may assist both the buyer client and the seller

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client or tenant client and landlord client in the same transaction only as a neutral dual facilitator.

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      (b) The dual facilitator relationship between the licensee and buyer and seller, or

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between the licensee and tenant client and landlord client, exists solely for the specific transaction

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between the parties. In the event the transaction is not completed or fails to close, then the dual

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facilitator remains the designated client representative for the respective buyer and the seller or

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tenant and landlord in all future, separate transactions where there is no relationship with the

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other party.

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      (c) A licensee may be a neutral dual facilitator only after he or she has obtained the

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informed, written consent of his or her principal broker and all parties involved in the transaction

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before presenting an offer to a seller client on behalf of a buyer client or to a landlord client on

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behalf of a tenant client. Such consent shall specifically inform all parties to the transaction of the

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following:

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      (1) The dual facilitator is authorized to assist both parties in a transaction but shall be

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neutral as to any conflicting interests between the parties to the transaction;

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      (2) A dual facilitator shall owe a duty to protect the confidential information of all

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parties and a duty to account for funds;

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      (3) Confidential information obtained by a dual facilitator from either party may not be

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disclosed except:

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      (i) If disclosure is expressly authorized;

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      (ii) If such disclosure is required by law;

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      (iii) If such disclosure is intended to prevent illegal conduct; or

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      (iv) If such disclosure is necessary to prosecute a claim against a person represented or to

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defend a claim against the licensee. The duty to protect confidential information shall continue

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after the completion of the transaction; and

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      (4) If a comparative market analysis was prepared for a seller client or a buyer client and

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a dual facilitation situation subsequently arises, the dual facilitator may only provide the

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comparative market analysis to the other party with the prior consent of the party for whom it was

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initially prepared. A dual facilitator shall not be able to prepare a comparative market analysis for

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either party after a dual facilitation situation arises as it may adversely affect one party's

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bargaining position relative to the other party.

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      In the event that either the seller client or buyer client in the case of a sale of property, or

 

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the landlord client and the tenant client in the case of a rental of property, does not consent to dual

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facilitation, then the principal broker or his or her designee, may, with the consent of the

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party(ies) withholding consent designate another licensee to represent one of the parties as a

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designated client representative.

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      In the event that an affiliated licensee is acting as a dual facilitator, the principal broker

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or his or her designee shall act as a transaction coordinator in the transaction and shall protect the

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parties' confidential information. In the event that the clients of a principal broker consent to his

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or her acting as a disclosed dual facilitator, the principal broker may also oversee the transaction

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as a transaction coordinator.

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     5-20.6-8. Mandatory relationship disclosure. -- (a) The Rhode Island real estate

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commission shall approve a mandatory relationship disclosure that conforms to the requirements

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of this section.

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      (b) A licensee shall provide a prospective buyer, seller, tenant, or landlord in a real estate

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transaction with a copy of the mandatory relationship disclosure and shall obtain a signed

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acknowledgement of receipt from the buyer, seller, tenant, or landlord prior to the disclosure of

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any confidential information. If a buyer, seller, tenant, or landlord, refuses to sign an

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acknowledgement of receipt, the licensee shall set forth, sign, and date a written declaration of the

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facts of the refusal.

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      (c) The mandatory relationship disclosure shall contain the following information:

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      (1) A list of the types of representation or assistance available to a prospective buyer,

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seller, tenant, or landlord consistent with section § 5-20.6-3;

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      (2) A statement that a principal broker and his or her affiliated licensees must disclose

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their relationship as a designated client representative, transaction facilitator, or transaction

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coordinator to the buyer, seller, tenant, or landlord in any transaction;

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      (3) The legal duties and obligations owed to the buyer, seller, tenant, or landlord in each

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type of relationship as set forth in this chapter and chapter 5-20.5 of this title;

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      (4) A conspicuous notice that a licensee cannot act as a client representative for a

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prospective buyer, seller, tenant, or landlord unless the licensee obtains the informed written

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consent of a prospective buyer, seller, tenant, or landlord with a signed mandatory relationship

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disclosure;

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      (5) A box for the client or customer to select the type of representation or assistance that

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he or she desires;

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      (6) A box for the client or customer to acknowledge the type of representation or

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assistance that a real estate licensee is offering to the other party in the same transaction.

 

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      (7) A statement that a principal broker may designate one or more affiliated licensees to

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act as the designated client representative(s) of a seller or landlord and one or more affiliated

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licensees to act as the designated client representative(s) of a buyer or tenant in the same

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transaction; provided, that the licensee obtains the consent from the client being represented;

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      (8) A statement that, when the principal broker or his or her designee appoints

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designated client representatives to represent clients on different sides of a transaction, he or she

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shall: (i) act in a neutral capacity as a transaction coordinator; (ii) protect all parties' confidential

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information; and (iii) properly account for funds;

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      (9) A statement that all affiliated licensees not appointed as a designated client

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representative for the client may represent another party in a transaction with conflicting interests;

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      (10) An explanation of the potential conflicts of interest that exist if a licensee acts for

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more than one party in the same transaction;

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      (11) A statement that a principal broker and his or her affiliated licensees must disclose

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their relationship as a designated client representative, transaction facilitator, or transaction

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coordinator to the buyer, seller, tenant, or landlord in any transaction;

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      (12) A statement that the failure of a licensee to give a prospective buyer, seller, tenant,

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or landlord the mandatory relationship disclosure timely, or the failure of a licensee to obtain any

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other written consent required by this chapter, shall be a violation of Rhode Island real estate

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license law and may subject the licensee to disciplinary action;

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      (13) A statement that if a consumer desires to change the nature of a relationship with a

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licensee from a customer relationship to a client relationship that a licensee's relationship with a

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buyer, seller, tenant, or landlord as a designated client representative must be established no later

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than the preparation of a sales agreement, offer to purchase, or lease; and

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      (14) Written confirmation from each party signing the mandatory relationship disclosure

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that he or she has received, read, and understood this mandatory relationship disclosure and has

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consented to the relationship confirmed above.

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      (d) In all instances, a licensee's relationship with a buyer, seller, tenant, or landlord as a

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designated client representative must be established, and the mandatory relationship disclosure

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executed, no later than the preparation of a sales agreement, offer to purchase, or lease.

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     SECTION 3. Sections 5-34-3, 5-34-4, 5-34-7, 5-34-40, 5-34-43, 5-34-44 and 5-34-45 of

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the General Laws in Chapter 5-34 entitled "Nurses" are hereby amended to read as follows:

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     5-34-3. Definitions. -- As used in this chapter:

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      (1) "Advanced practice registered nurse" (APRN) is the title given to an individual

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licensed to practice advanced practice registered nursing within one of the following roles:

 

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certified nurse practitioner (CNP), certified registered nurse anesthetist (CRNA) as defined in

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chapter 5-34.2, 34.2 of this title, or certified clinical nurse specialist (CNS), and who functions in

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a population focus. An APRN may serve as a primary or acute-care provider of record.

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      (2) "Advanced practice registered nursing" means an independent and expanded scope of

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nursing in a role and population focus approved by the Board of Nurse Registration and Nursing

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Education board of nurse registration and nursing education that includes the registered nurse

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scope of practice and may include, but is not limited to, performing acts of advanced assessment,

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diagnosing, prescribing and ordering. Each APRN is accountable to patients, the nursing

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profession, and the Board of Nursing board of nursing for complying with the requirements of

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this chapter and the quality of advanced nursing care rendered; recognizing limits of knowledge

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and experience; planning for the management of situations beyond the APRN's expertise; and for

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consulting with or referring patients to other health care providers as appropriate.

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      (3) "Approval" means the process where the board of nursing evaluates and grants

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official recognition to basic, nursing education programs meeting established criteria and

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standards.

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      (4) "Certified nurse practitioner" is an advanced practice nurse utilizing independent

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knowledge of physical assessment, diagnosis, and management of health care and illnesses. The

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practice includes prescriptive privileges. Certified nurse practitioners are members of the health

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care delivery system practicing in areas including, but not limited to: family practice, pediatrics,

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adult health care, geriatrics, and women's health care in primary, acute, long-term and critical

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care settings in health care facilities and the community. Certified nurse practitioners may be

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recognized as the primary care provider or acute-care provider of record.

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      (5) "Certified Clinical Nurse Specialist" is an advanced practice registered nurse that

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who independently provides care to clients,; facilitates attainment of health goals,; and provides

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innovation in nursing practice, based on clinical expertise, evidence-based decision-making, and

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leadership skills. The clinical nurse specialist practices with individual clients and populations;

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nurses, and other multidisciplinary team members and organizations to effect system-wide

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systemwide changes to improve programs of care. The practice may include prescriptive

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privileges.

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      (6) Certified registered nurse anesthetist is as defined in chapter 5-34.2 34.2 of this title

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("Nurse Anesthetist").

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      (7) "Department" means the department of health.

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      (8) "Health" means optimum well-being.

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      (9) "Healthcare" means those services provided to promote the optimum well-being of

 

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individuals.

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      (10) "Licensed" means the status of qualified individuals who have completed a

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designated process by which the board of nursing grants permission to individuals accountable

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and/or responsible for the practice of nursing and to engage in that practice, prohibiting all others

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from legally doing so.

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      (11) "Nursing" means the provision of services that are essential to the promotion,

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maintenance, and restoration of health throughout the continuum of life. It provides care and

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support of individuals and families during periods of wellness, illness, and injury, and

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incorporates the appropriate health care plan of care prescribed by a licensed, advanced practice

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registered nurse, certified nurse midwife, licensed physician, dentist, or podiatrist. It is a distinct

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component of health services. Nursing practice is based on specialized knowledge, judgment, and

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nursing skills acquired through educational preparation in nursing and in the biological, physical,

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social, and behavioral sciences.

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      (12) "Practical nursing" is practiced by licensed practical nurses (L.P.N.s). It is an

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integral part of nursing based on a knowledge and skill level commensurate with education. It

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includes promotion, maintenance, and restoration of health and utilizes standardized procedures

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leading to predictable outcomes, which that are in accord with the professional nurse regimen

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under the direction of a registered nurse. In situations where registered nurses are not employed,

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the licensed practical nurse functions under the direction of a licensed physician, dentist,

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podiatrist, or other licensed health care providers authorized by law to prescribe. Each L.P.N. is

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responsible for the nursing care rendered.

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      (13) "Population foci" means focus of the patient population. Population focus shall

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include:

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      (i) Family/Individual across the lifespan;

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      (ii) Adult-gerontology;

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      (iii) Neonatal;

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      (iv) Pediatrics;

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      (v) Women's health/gender-related; and

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      (vi) Psychiatric/mental health.

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      (14) "Professional nursing" is practiced by registered nurses (R.N.s). The practice of

31

professional nursing is a dynamic process of assessment of an individual's health status,;

32

identification of health care needs,; determination of health care goals with the individual and/or

33

family participation; and the development of a plan of nursing care to achieve these goals.

34

Nursing actions, including teaching and counseling, are directed toward the promotion,

 

LC005208/SUB A - Page 11 of 210

1

maintenance, and restoration of health and evaluation of the individual's response to nursing

2

actions and the medical regimen of care. The professional nurse provides care and support of

3

individuals and families during periods of wellness and injury, and incorporates, where

4

appropriate, the medical plan of care as prescribed by a licensed physician, dentist, or podiatrist,

5

or other licensed health care providers authorized by law to prescribe. Each R.N. is directly

6

accountable and responsible to the consumer for the nursing care rendered.

7

      (15) "Psychiatric and mental health nurse clinical specialist" is a certified clinical nurse

8

specialist working in the population foci of psychiatric/mental health as an advanced practice

9

nurse utilizing independent knowledge in psychiatric mental health assessment,; diagnosis, health

10

promotion, psychotherapeutic modalities and management of mental health and illnesses. The

11

practice may include prescription privileges within their scope of practice.

12

     5-34-4. Board of nursing -- Establishment -- Composition -- Appointment, terms,

13

and removal of members -- Director of nurse registration and nursing education. -- (a)

14

Within the division of professional regulation, pursuant to chapter 26 of this title, there is a board

15

of nurse registration and nursing education, sometimes referred to herein as the "board of

16

nursing". The board shall be composed of fifteen (15) members. The term of office shall be for

17

three (3) years. No member shall serve more than two (2) consecutive terms. The member shall

18

serve until a qualified successor is appointed to serve. In making those appointments, the director

19

of the department of health shall consider persons suggested by professional nurse organizations

20

and the practical nurse's association.

21

      (b) Present members of the board holding office under the provisions of this chapter

22

shall serve as members of the board until the expiration of their terms or until qualified successors

23

are appointed. The fifteen-(15) member board shall include: eleven (11) professional nurses, two

24

(2) practical nurses appointed by the director of health and approved by the governor, and two (2)

25

members of the general public appointed by the governor. Three (3) professional nurses shall be

26

from different basic education programs preparing students to become nurses; one professional

27

nurse shall be from a nursing service administration; four (4) professional non-administrative,

28

clinical nurses not licensed as advanced practice nurses,; and three (3) professional advanced

29

practice nurses, one who holds a license as a certified, registered nurse anesthetist, one who holds

30

a license as a certified, registered nurse practitioner, and one who holds a license as a certified

31

clinical nurse specialist. No educational program or cooperating agency shall have more than one

32

representative on the board.

33

      (c) The director of health may remove any member from the board for cause including,

34

but not limited to, neglect of any duty required by law, or incompetence, or unprofessional

 

LC005208/SUB A - Page 12 of 210

1

conduct, or willful misconduct. A member subject to disciplinary proceedings shall be

2

disqualified from board business until the charge is adjudicated. There shall also be a director of

3

nurse registration and nursing education appointed by the director of health in accordance with

4

the provisions of chapter 4 of title 36.

5

     5-34-7. Board of nursing -- General powers. -- The board of nurse registration and

6

nursing education is authorized, subject to the approval of the director of the department of

7

health, to:

8

      (1) Adopt, review, or revise rules, and regulations consistent with the law that may be

9

necessary to effect provisions of the chapter;

10

      (2) Approve nursing education programs according to the rules established by the board;

11

      (3) Require standards for nursing practice within organized nursing services and the

12

individual practice of licensees;

13

      (4) Approve the examinations for licensure;

14

      (5) Establish requirements to validate competence for reinstatement to the active list;

15

      (6) Conduct hearings upon charges calling for discipline of a licensee or revocation of a

16

license;

17

      (7) Issue subpoenas to compel the attendance of witnesses at and administer oaths to

18

persons giving testimony at hearings;

19

      (8) Cause the prosecution or enjoinder of all persons violating this chapter;

20

      (9) Maintain a record of all its proceedings;

21

      (10) Submit an annual report to the director of the department of health;

22

      (11) Utilize other persons that who may be necessary to carry on the work of the board;

23

      (12) Conduct public hearings, investigations, and studies of nursing practice, nursing

24

education, and related matters and prepare and issue publications that, in the judgment of the

25

board, allow the nursing profession to provide safe, effective nursing services to the public;

26

      (13) Determine qualifications necessary for prescriptive privileges for advanced practice

27

registered nurses;

28

      (14) Grant prescriptive privileges to advanced practice registered nurses; and

29

      (15) [Deleted by P.L. 2013, ch. 83, section 1 and P.L. 2013, ch. 93, section 1];

30

      (16) [Deleted by P.L. 2013, ch. 83, section 1 and P.L. 2013, ch. 93, section 1];

31

      (17) Adopt criteria for recognizing national certifying bodies for APRN roles and

32

population foci.

33

     5-34-40. Advanced practice nurse advisory committee. -- (a) The seven-(7) member

34

committee consists of two (2) certified nurse practitioners, two (2) certified registered nurse

 

LC005208/SUB A - Page 13 of 210

1

anesthetists, two (2) certified clinical nurse specialists, and one consumer. The director of health

2

shall appoint the committee. In making appointments to the committee, the director shall consider

3

persons recommended by professional nurse organizations and professional medical associations.

4

The professional members of the committee shall be currently engaged in practice. The consumer

5

members shall be: (1) knowledgeable in consumer health concerns; (2) a resident of the state; (3)

6

not licensed as a health care practitioner; (4) not a parent, spouse, sibling, or child of a person

7

licensed as a health care practitioner, and not a student in a professional program; (5) not having a

8

direct financial interest in health care services; and (6) not a member or an employee of any board

9

of control of any public or private health care service.

10

      (b) Each member appointment shall be for three (3) years, with no member serving more

11

than two, (2) consecutive, three (3) year three-year (3) terms, except that in making the initial

12

appointments, the director designates: four (4) members for a term of two (2) years; three (3)

13

members for a term of three (3) years three (3) years; and the consumer members for three (3)

14

year three-year (3) terms.

15

      (c) This committee must meet not fewer than two (2) times per year. The committee has

16

the following functions:

17

      (1) To assess advanced nursing practice for the purpose of improving patient care.

18

      (2) (i) To review all complaints regarding advanced practice nurses, and recommend any

19

and all disciplinary or corrective action that they deem appropriate, including revocation and

20

suspension of license, upon proof that an advanced practice nurse has:

21

      (A) Aided or abetted an uncertified person to practice as an advanced practice nurse;

22

      (B) Become addicted to the use of liquor or controlled substances;

23

      (C) Negligently, willfully, or intentionally acted in a manner inconsistent with the health

24

and safety of persons entrusted to his or her care;

25

      (D) Had his or her authorization to practice as an advanced practice nurse denied,

26

revoked, or suspended in another state;

27

      (E) Engaged in the performance of medical functions beyond the scope of practice

28

authorized by the provisions of this chapter;

29

      (F) Willfully failed to file or record medical records and reports;

30

      (G) Mental incompetence; or

31

      (H) Willfully failed to maintain standards established by the nursing profession.

32

      (ii) The recommendation shall be submitted to the board of nursing for implementation.

33

      (3) To advise periodically to the board of nurse registration and nursing education

34

regarding advanced nurse practice.

 

LC005208/SUB A - Page 14 of 210

1

     5-34-43. Criminal records review. -- (a) Notwithstanding any provision of law to the

2

contrary contained in any general or public law, rule, or regulation, any person seeking a license

3

to practice under this chapter, or who is previously licensed and authorized to practice under this

4

chapter and is seeking employment, shall undergo a federal and statewide criminal background

5

check (BCI), which that shall be processed prior to receiving a license to practice or to enter into

6

employment.

7

      (b) The applicant shall apply to the bureau of criminal identification for a national

8

criminal records check that shall include fingerprints submitted to the federal bureau of

9

investigation Federal Bureau of Investigation. Upon the discovery of any disqualifying

10

information, the bureau of criminal identification will inform the applicant in writing of the

11

nature of the disqualifying information; and, without disclosing the nature of the disqualifying

12

information, will notify the licensing agency or the potential employer in writing that

13

disqualifying information has been discovered.

14

      (c) The applicant against whom disqualifying information has been found, may request

15

that a copy of the criminal background report be sent to the licensing agency or the potential

16

employer. The licensing agency or the potential employer shall make a judgment regarding the

17

issuing of a license.

18

      (d) In those situations in which no disqualifying information has been found, the bureau

19

of criminal identification shall inform the applicant and the licensing agency or the potential

20

employer in writing of this fact.

21

      (e) It shall be the responsibility of the applicant to pay for the criminal records check.

22

     5-34-44. Advanced practical registered nurses as independent practitioners. --

23

APRNs are licensed, independent practitioners within standards established or recognized by the

24

board of nursing. Each APRN is accountable to patients, the nursing profession, and the board of

25

nursing for:

26

      (1) Complying with the requirements of this chapter and the quality of advanced nursing

27

care rendered;

28

      (2) Recognizing limits of knowledge and experience;

29

      (3) Planning for the management of situations beyond the APRN's expertise;

30

      (4) Consulting with or referring patients to other licensed health care providers as

31

appropriate.

32

      (5) In the case of CRNAs, comply complying with the requirements of chapter 5-34.2

33

34.2 of this title of the Rhode Island general laws, including subsection § 5-34.2-5(b) regarding

34

scope of practice. In the case of any conflict between this chapter and chapter 5-34.2 34.2 of this

 

LC005208/SUB A - Page 15 of 210

1

title with regard to the licensure and practice of CRNAs, chapter 5-34.2 34.2 of this title shall

2

control.

3

     5-34-45. Licensure of APRNs. -- (a) An applicant for initial licensure to practice as an

4

APRN shall:

5

      (1) Submit a completed, written application and appropriate fees as established by the

6

board of nursing;

7

      (2) Hold a current RN license or privilege to practice and shall not hold an encumbered

8

license or privilege to practice as an RN in any state or territory;

9

      (3) Have completed an accredited graduate or post-graduate level APRN program in one

10

of the three roles (RNP, CRNA, or CNS) and at least one population focus;

11

      (4) Be currently certified by a national certifying body recognized by the board of

12

nursing in the APRN role and population foci appropriate to educational preparation;

13

      (5) Report any criminal conviction, nolo contendere plea, Alford plea, or other plea

14

arrangement in lieu of conviction;

15

      (6) Have committed no acts or omissions that are grounds for disciplinary action as set

16

forth in this chapter; and

17

      (7) Provide other evidence as required by regulation.

18

      (b) The board of nursing may issue an initial APRN license to clinical nurse specialists

19

without a certification exam when:

20

      (1) A national certification exam does not exist for the current population foci; and

21

      (2) The applicant has submitted a portfolio to the board of nursing that includes proof of

22

graduation,; course descriptions,; official transcript that includes courses in pharmacology,

23

pathophysiology and physical assessment,; and letters of recommendation from his/her employer

24

attesting to the CNS's practice at the advanced-practice level.

25

      (c) After January 1, 2015, all clinical nurse specialists seeking initial licensure as an

26

APRN must meet all the criteria as stated in this chapter, including national certification in a role

27

and population foci recognized by the board of nursing.

28

      (d) The board of nursing may issue a license by endorsement to an APRN licensed under

29

the laws of another state if, in the opinion of the board of nursing, the applicant meets the

30

qualifications for licensure in this jurisdiction. An applicant for APRN licensure by endorsement

31

shall:

32

      (1) Submit a completed, written application and appropriate fees as established by the

33

board of nursing;

34

      (2) Hold a current license or privilege to practice as an RN and APRN in a state or

 

LC005208/SUB A - Page 16 of 210

1

territory;

2

      (3) Not have Have an encumbered unencumbered license or privilege to practice in any

3

state or territory;

4

      (4) Have completed an accredited graduate or post-graduate level APRN program in one

5

of the three roles (CNP, CRNA or CNS) and at least one population focus or meets the standards

6

for grandfathering as described in this chapter;

7

      (5) Be currently certified by a national certifying body recognized by the board of

8

nursing in the APRN role and at least one population focus appropriate to educational

9

preparation;

10

      (6) Meet continued competency requirements as set forth in board of nursing regulations;

11

      (7) Report any conviction, nolo contendere plea, Alford plea, or other plea arrangement

12

in lieu of conviction;

13

      (8) Have committed no acts or omissions, which that are grounds for disciplinary action

14

in another jurisdiction; and

15

      (9) Provide other evidence as required by the board of nursing in its regulations.

16

      (e) APRN licenses issued under this chapter shall be renewed every two (2) years

17

according to a schedule established by the board of nursing BON. An applicant for APRN license

18

renewal shall:

19

      (1) Submit a renewal application as directed by the board of nursing and remit the

20

required fee as set forth in regulation;

21

      (2) Maintain national certification in the appropriate APRN role and at least one

22

population focus, authorized by licensure, through an ongoing recertification maintenance

23

program of a nationally recognized certifying body recognized by the board of nursing; and

24

      (3) Meet other requirements set forth in regulations.

25

      (f) The board of nursing may reactivate or reinstate an APRN license as set forth in

26

board of nursing BON regulation.

27

     SECTION 4. Sections 6-2-2, 6-2-3, 6-2-4, 6-2-5, 6-2-6, 6-2-8, 6-2-11 and 6-2-13 of the

28

General Laws in Chapter 6-2 entitled "Registration and Protection of Trademarks" are hereby

29

amended to read as follows:

30

     6-2-2. Application for registration. -- (a) Subject to the limitations stated in this chapter,

31

any person who adopts and uses a mark may file in the office of the secretary of state, on a form

32

to be furnished by him or her, an application for registration of that mark stating, but not limited

33

to, the following information:

34

      (1) The name and business address of the person applying for the registration, and, if a

 

LC005208/SUB A - Page 17 of 210

1

business corporation, non-profit corporation, limited liability partnership, limited partnership, or

2

limited liability company, the state of incorporation or formation, as applicable;

3

      (2) The goods or services in connection with which the mark is used and the mode or

4

manner in which the mark is used in connection with the goods or services, and the class in which

5

the goods or services fall;

6

      (3) The date when the mark was first used anywhere and the date when it was first used

7

in the state by the applicant or his or her predecessor in business; and

8

      (4) A statement that the applicant is the owner of the mark and that no other person has

9

the right to use the mark in the state, either in the identical form of the mark or in such near

10

resemblance to it as might be calculated to deceive or to be mistaken for it.

11

      (b) The application shall be signed and verified by the applicant or by a member of the

12

firm or an officer of the business corporation non-profit corporation,; authorized partner of the

13

limited liability partnership,; general partner of the limited partnership,; authorized person of the

14

limited liability company,; or association applying for registration.

15

      (c) The application shall be accompanied by a specimen or facsimile of the mark in

16

triplicate.

17

      (d) The application for registration shall be accompanied by a filing fee of fifty dollars

18

($50.00), payable to the secretary of state.

19

     6-2-3. Registrability. -- No person may register a mark if it:

20

      (1) Consists of or comprises immoral, deceptive, or scandalous matter;

21

      (2) Consists of or comprises matter which that may disparage or falsely suggest a

22

connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them

23

into contempt or disrepute;

24

      (3) Consists of or comprises the flag or coat of arms or other insignia of the United

25

States, or of any state or municipality, or of any foreign nation or any simulation thereof;

26

      (4) Consists of or comprises the name, signature, or portrait of any living individual,

27

except with his or her written consent;

28

      (5) When applied to the goods or services of the applicant, is merely descriptive or

29

deceptively misdescriptive of them,; or when applied to the goods or services of the applicant, is

30

primarily geographically descriptive or deceptively misdescriptive of them,: or is primarily

31

merely a surname. Provided, however, that nothing in this subdivision shall prevent the

32

registration of a mark used in the state by the applicant which that has become distinctive of the

33

applicant's goods or services. The secretary of state may accept as evidence that the mark has

34

become distinctive, as applied to the applicant's goods or services, proof of continuous use as a

 

LC005208/SUB A - Page 18 of 210

1

mark by the applicant in the state or elsewhere for the five (5) years next preceding the date of the

2

filing of the application for registration; or

3

      (6) So resembles a mark registered in the state or a mark or trade name previously used

4

in the state by another and not abandoned, as to be likely, when applied to the goods or services

5

of the applicant, to cause confusion or mistake or to deceive.

6

     6-2-4. Certificate of registration. -- (a) Upon compliance by the applicant with the

7

requirements of this chapter, the secretary of state shall cause a certificate of registration to be

8

issued and delivered to the applicant.

9

      (b) The certificate of registration shall be issued under the signature of the secretary of

10

state and the seal of the state, and it shall show the name and business address and, if a business

11

corporation, non-profit corporation, limited liability partnership, limited partnership or limited

12

liability company, the state of incorporation, or formation, as applicable, of the person claiming

13

ownership of the mark,; the date claimed for the first use of the mark anywhere and the date

14

claimed for the first use of the mark in the state,; the class of goods or services and a description

15

of the goods or services on which the mark is used,; a reproduction of the mark,; the registration

16

date,; and the term of the registration.

17

      (c) Any certificate of registration issued by the secretary of state under the provisions of

18

this section, or a copy of a certificate of registration duly certified by the secretary, shall be

19

admissible in evidence as competent and sufficient proof of the registration of the mark in any

20

action or judicial proceedings in any court of the state.

21

      (d) Registration of or renewal of a mark provided by this chapter shall be constructive

22

notice of the registrant's claim of ownership and shall, when introduced in any action, be prima

23

facie evidence of the registrant's exclusive right to use the registered mark in this state on goods

24

or services specified in the registration subject to any conditions or limitations stated in the

25

registration, but shall not preclude an opposing party from proving any legal or equitable defense

26

or defect which that might have been asserted if the mark had not been registered.

27

     6-2-5. Duration and renewal. -- (a) Registration of a mark under this chapter shall be

28

effective for a term of ten (10) years from the date of registration and, upon application filed

29

within six (6) months prior to the expiration of the term, on a form to be furnished by the

30

secretary of state, the registration may be renewed for a like term. A renewal fee of fifty dollars

31

($50.00), payable to the secretary of state, shall accompany the application for renewal of the

32

registration.

33

      (b) A mark registration may be renewed for successive periods of ten (10) years in like

34

manner.

 

LC005208/SUB A - Page 19 of 210

1

      (c) The secretary of state shall notify registrants of marks under this chapter of the

2

necessity of renewal within the year next preceding the expiration of the ten (10) years from the

3

date of registration, by writing to the last known address of the registrants.

4

      (d) All applications for renewals under this chapter, whether of registrations made under

5

this chapter or of registrations effected under any prior law, shall include a statement that the

6

mark is still in use in the state.

7

     6-2-6. Assignment. -- Any mark and its registration under this chapter shall be assignable

8

with the good will of the business in which the mark is used, or with that part of the good will of

9

the business connected with the use of and symbolized by the mark. Assignment shall be by

10

instruments in writing duly executed, and may be recorded with the secretary of state upon the

11

payment of a fee of twenty dollars ($20.00) payable to the secretary of state, who, upon recording

12

of the assignment, shall issue in the name of the assignee a new certificate for the remainder of

13

the term of the registration or of its last renewal. An assignment of any registration shall be void

14

as against any subsequent purchaser for valuable consideration without notice, unless it is

15

recorded with the secretary of state within three (3) months after the date of assignment or prior

16

to any subsequent purchase.

17

     6-2-8. Cancellation. -- The secretary of state shall cancel:

18

      (1) Any registration concerning which that the secretary of state shall receive concerning

19

a voluntary request for cancellation from the registrant or the assignee of record;

20

      (2) Any registration granted and not renewed in accordance with the provision of this

21

chapter;

22

      (3) Any registration which that the superior court shall find:

23

      (i) That the registered mark has been abandoned;

24

      (ii) That the registrant is not the owner of the mark;

25

      (iii) That the registration was improperly granted;

26

      (iv) That the registration was fraudulently obtained; or

27

      (v) That the registered mark is so similar, as to be likely to cause confusion or mistake or

28

to deceive, to a mark registered by another person in the United States patent office, prior to the

29

date of the filing of the application for registration by the registrant under this chapter, and not

30

abandoned; provided, however, that should the registrant prove that he or she is the owner of a

31

concurrent registration of his or her mark in the United States patent office covering an area

32

including the state, the registration under this chapter shall not be cancelled;

33

      (4) Any registration ordered cancelled by the superior court.

34

     6-2-11. Infringement. -- Subject to the provisions of section § 6-2-14, any person who

 

LC005208/SUB A - Page 20 of 210

1

shall:

2

      (1) Use, without consent of the registrant, any reproduction, counterfeit, copy, or

3

colorable imitation of a mark registered under this chapter in connection with the sale, offering

4

for sale, or advertising of any goods or services on or in connection with which the use is likely to

5

cause confusion or mistake or to deceive as to the source of origin of the goods or services; or

6

      (2) Reproduce, counterfeit, copy, or colorably imitate any mark and apply the

7

reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers,

8

receptacles, or advertisements intended to be used upon or in conjunction with the sale or other

9

distribution in the state of the goods or services; shall be liable to a civil action by the owner of

10

the registered mark for any or all of the remedies provided in section § 6-2-13, except that under

11

this section the registrant shall not be entitled to recover profits or damages unless the acts have

12

been committed with knowledge that the mark is intended to be used to cause confusion or

13

mistake or to deceive.

14

     6-2-12. Injury to business reputation -- Dilution. -- Likelihood of injury to business

15

reputation or of dilution of the distinctive quality of a mark registered under this chapter, or a

16

mark valid at common law, or a trade name valid at common law, shall be a ground for injunctive

17

relief notwithstanding the absence of competition between the parties or the absence of confusion

18

as to the source of goods or services.

19

     6-2-13. Remedies. -- Any owner of a mark registered under this chapter may proceed by

20

suit to enjoin the manufacture, use, display, or sale of any counterfeits or imitations, and the

21

superior court may grant injunctions to restrain the manufacture, use, display, or sale as may be

22

deemed just and reasonable by the court, and may require the defendants to pay to the owner all

23

profits derived from and all damages suffered by reason of the wrongful manufacture, use,

24

display, or sale; and the court may also order that any counterfeits or imitations in the possession

25

or under the control of any defendant in the case, be delivered to an officer of the court, or to the

26

complainant, to be destroyed.

27

     SECTION 5. Sections 6-9-1, 6-9-2, 6-9-3 and 6-9-4 of the General Laws in Chapter 6-9

28

entitled "Sale of Oils" are hereby repealed.

29

     6-9-1. "Spermaceti oil" defined. -- All oils sold under the names of sperm, spermaceti,

30

lamp, summer, fall, winter, and second winter oils are deemed pure winter-pressed or summer-

31

strained spermaceti oil.

32

     6-9-2. Liability for sale of adulterated oil for spermaceti. -- All oils sold under the

33

names mentioned in section 6-9-1 which are adulterated with whale, lard, or any other oil of less

34

value than pure spermaceti oil, shall be deemed whale oil; and the vendor shall be liable to the

 

LC005208/SUB A - Page 21 of 210

1

purchaser for double the amount of the difference in value between pure spermaceti oil and whale

2

oil, whenever the quantity sold exceeds five (5) gallons, and four (4) times the difference

3

whenever the quantity is less than five (5) gallons, unless the proportions of the respective oils are

4

disclosed to the purchaser at the time of sale.

5

     6-9-3. Forfeiture for sale of adulterated oil without disclosure. -- Every person who

6

shall sell any oil commonly known under the names of sperm, spermaceti, lamp, summer, fall,

7

winter, and second winter oils, which have been adulterated from pure spermaceti oil by a

8

mixture of whale, lard, or any other inferior oil, and shall not disclose to the purchaser the

9

proportions of the oils of which it consists at the time of sale, in the manner prescribed in section

10

6-9-2, shall for each offense forfeit twenty-five dollars ($25.00) to the use of the person suing for

11

disclosure.

12

     6-9-4. Liability for undisclosed sale of tight-pressed oil. -- All oils sold under any of

13

the names mentioned in section 6-9-3 which shall have been mixed with tight-pressed oil, shall be

14

deemed tight-pressed oil; and the vendor of tight-pressed oil or of tight-pressed oil under any of

15

the names mentioned in section 6-9-1 shall be liable to the purchaser for double the value of the

16

difference between the first quality of spermaceti oil and tight-pressed oil, unless at the time of

17

sale the vendor shall disclose to the purchaser the mixture, and if not mixed, its quality; and if

18

disclosure shall not be made the vendor shall forfeit twenty-five dollars ($25.00) to the use of the

19

person suing for disclosure.

20

     SECTION 6. Sections 6-10-2, 6-10-3 and 6-10-6 of the General Laws in Chapter 6-10

21

entitled "Labeling of Thread" are hereby amended to read as follows:

22

     6-10-2. Length of small units to be shown -- Bobbins -- Packages for household use. -

23

- When the net weight of the thread in or on any unit is less than two (2) ounces avoirdupois, the

24

unit shall be marked to show the length of the thread in yards as unwound from the unit. Ready-

25

wound bobbins which that are not sold separately shall not be required to be individually marked,

26

but the package containing the bobbins shall be marked to show the number of bobbins contained

27

in the package and the net weight or measure of the thread on each bobbin. Any retail unit of

28

thread, sold only for household use, consisting of a package containing two (2) or more similar

29

individual units, which that are not sold separately, shall be marked to show the number of

30

individual units in the package and the net weight or measure of the thread in each individual

31

unit, but this provision shall not apply where the individual units are separately marked.

32

     6-10-3. Identification of manufacturer or distributor. -- The marking required by this

33

chapter shall in all cases be in combination with the name and place of business of the

34

manufacturer or distributor of the thread, or a trademark, symbol, brand, or other mark which that

 

LC005208/SUB A - Page 22 of 210

1

positively identifies the manufacturer or distributor and which shall be filed with the state sealer

2

of weights and measures in the state department of labor and training.

3

     6-10-6. Penalty for violations. -- Any person, firm, or corporation who willfully violates

4

any of the provisions of this chapter shall be guilty of a misdemeanor, and shall upon conviction

5

be punished by a fine of not more than fifty dollars ($50.00) for each separate offense.

6

     SECTION 7. Sections 6-11-2, 6-11-3, 6-11-4, 6-11-5 and 6-11-7 of the General Laws in

7

Chapter 6-11 entitled "Gold and Silver Products" are hereby amended to read as follows:

8

     6-11-2. Labeling of gold plate, filled, and rolled products. -- Any person, firm,

9

corporation, or association who or which that makes for sale or sells, or offers to sell or dispose

10

of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise

11

made in whole or in part of inferior metal having deposited or plated on the article or brazed or

12

otherwise affixed to it a plate, plating, covering, or sheet of gold or of any alloy of gold, and

13

which the article is known in the market as "rolled gold plate,", "gold plate,", "gold filled,", or

14

"gold electroplate,", or by any similar designation, and having stamped, branded, engraved, or

15

imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any

16

box, package, cover, or wrapper in which the article is encased or enclosed, any word or mark

17

usually employed to indicate the fineness of gold, unless that word is accompanied by other

18

words plainly indicating that the article or some part of the article is made of rolled gold plate, or

19

gold plate or gold electroplate, or is gold filled, as the case may be, is guilty of a misdemeanor.

20

     6-11-3. Sterling silver. -- Any person, firm, corporation, or association who or which

21

that makes for sale or sells, or offers to sell or dispose of, or has in his, her, or its possession with

22

intent to sell or dispose of, any article of merchandise made in whole or in part of silver or of any

23

alloy of silver, and having marked, stamped, branded, engraved, or imprinted upon any part of the

24

article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper

25

in which the article is encased or enclosed, the words "sterling silver" or "sterling," or any

26

colorable imitation thereof, unless nine hundred twenty-five one-thousandths (925/1000) of the

27

component parts of the metal appearing or purporting to be silver of which the article is

28

manufactured are pure silver, subject to the qualifications prescribed by this chapter, is guilty of a

29

misdemeanor; provided, that in the case of all articles, there shall be allowed a divergence in

30

fineness of four one-thousandths (4/1000) parts from the previously mentioned standard.

31

     6-11-4. Coin silver. -- Any person, firm, corporation, or association who or which that

32

makes for sale or sells, or offers to sell, or dispose of, or has in his, her, or its possession with

33

intent to sell or dispose of, any article of merchandise made in whole or in part of silver or of any

34

alloy of silver, and having marked, stamped, branded, engraved, or imprinted upon any part of the

 

LC005208/SUB A - Page 23 of 210

1

article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper

2

in which the article is encased or enclosed, the words "coin" or "coin silver," or any colorable

3

imitation thereof, unless nine hundred one-thousandths (900/1000) of the component parts of the

4

metal appearing or purporting to be silver of which the article is manufactured are pure silver,

5

subject to the qualifications prescribed by this chapter, is guilty of a misdemeanor; provided, that

6

in the case of all articles, there shall be allowed a divergence in fineness of four one-thousands

7

(4/1000) parts from the previously mentioned standards.

8

     6-11-5. Labeling as to fineness of silver products. -- Any person, firm, corporation, or

9

association who or which that makes for sale or sells, or offers to sell, or dispose of, or has in his,

10

her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or

11

in part of silver or of any alloy of silver, and having stamped, branded, engraved, or imprinted

12

upon any part of the article, or upon any tag, card, or label attached to it, or upon any box,

13

package, cover, or wrapper in which the article is encased or enclosed, any mark or word (other

14

than the word "sterling" or the word "coin") indicating, or designed or intended to indicate, that

15

the silver or alloy of silver in the article is of greater degree of fineness than the actual fineness or

16

quality of the silver or alloy, unless the actual fineness of the silver or alloy of silver of which the

17

article is composed is not less by more than four one-thousandths (4/1000) parts than the actual

18

fineness indicated by the mark or word (other than the word "sterling" or "coin") stamped,

19

branded, engraved, or imprinted upon any part of the article or upon any tag, card, or label

20

attached to it, or upon any box, package, cover, or wrapper in which the article is encased or

21

enclosed, subject to the qualifications prescribed in this chapter, is guilty of a misdemeanor.

22

     6-11-7. Labeling of silver plated products as sterling or coin silver. -- Any person,

23

firm, corporation, or association who or which that makes for sale or sells, or offers to sell or

24

dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of

25

merchandise made in whole or in part of inferior metal having deposited or plated on it or brazed

26

or otherwise affixed to it a plate, plating, covering, or sheet of silver or of any alloy of silver, and

27

which article is known in the market as "silver plate" or "silver electroplate,", or by any similar

28

designation, and having stamped, branded, engraved, or imprinted upon any part of the article, or

29

upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which

30

the article is encased or enclosed, the word, "sterling" or the word "coin,", either alone or in

31

conjunction with any other words or marks, is guilty of a misdemeanor.

32

     SECTION 8. Sections 6-11.1-1, 6-11.1-2, 6-11.1-3, 6-11.1-4, 6-11.1-5, 6-11.1-6, 6-11.1-

33

7, 6-11.1-9, 6-11.1-10 and 6-11.1-13 of the General Laws in Chapter 6-11.1 entitled "Purchase

34

and Sale of Precious Metals" are hereby amended to read as follows:

 

LC005208/SUB A - Page 24 of 210

1

     6-11.1-1. License required -- "Person" defined. -- (a) No person, including a

2

pawnbroker, consignment shop, or salvage yard operator or second-hand dealer, as defined in

3

section § 5-21-1, shall engage in the business of buying or receiving for the purpose of selling:

4

gold, silver, platinum group metals, or precious stones, or any articles containing those items,

5

including catalytic converters, other than coins purchased for their numismatic value rather than

6

their metal content, referred to in this chapter as "precious metals,", from the general public for

7

the purpose of reselling the precious metals in any condition without first obtaining a license from

8

the attorney general of the state of Rhode Island, also called "the attorney general" in this chapter.

9

The attorney general shall not issue any license to a person who has not registered a permanent

10

place of business within the state for the purchase or sale of precious metals. The criteria for

11

determining a person's permanent place of business shall be formulated by the attorney general

12

immediately on or after July 1, 1981.

13

      (b) The word "person," when used in this chapter, shall include individuals, partnerships,

14

associations, and corporations.

15

      (c) This chapter shall not apply to any financial institution which that is covered by

16

federal or state deposit insurance, nor to jewelry and silverware manufacturers purchasing

17

precious metals directly from trade suppliers.

18

      (d) The word "catalytic converter" when used in this chapter shall be defined as an air

19

pollution abatement device that removes pollutants from motor vehicle exhaust, either by

20

oxidizing them into carbon dioxide and water or reducing them to nitrogen.

21

     6-11.1-2. Application for license -- Annual fee -- Attorney general to promulgate

22

rules and regulations. [Effective December 31, 2013.] -- (a) Application for the license shall be

23

in writing, under oath, and in the form prescribed by the attorney general and shall contain the

24

name and the address (both of the residence and place of business) of the applicant, and if the

25

applicant is a partnership or association, of every member, and if a corporation, of each officer

26

and director and of the principal owner or owners of the issued and outstanding capital stock; also

27

the city or town with the street and number where the business is to be conducted, and any further

28

information that the attorney general may require.

29

      (b) After receipt of an application for a license, the attorney general shall conduct an

30

investigation to determine whether the facts presented in the application are true. The attorney

31

general may also request a record search and a report from the national crime and information

32

center National Crime and Information Center (NCIC) of the federal bureau of investigation

33

Federal Bureau of Investigation. If the application discloses that the applicant has a disqualifying

34

criminal record, or if the investigation indicates that any of the facts presented in the application

 

LC005208/SUB A - Page 25 of 210

1

are not true,; or if the records of the department of the attorney general indicate criminal activity

2

on the part of the person signing the application and any other persons named in the application,;

3

or if the NCIC report indicates an outstanding warrant for the person signing the application and

4

any other persons named in the application,; then the attorney general may initiate a nationwide

5

criminal records check that shall include fingerprints submitted to the federal bureau of

6

investigation Federal Bureau of Investigation regarding the person signing the application and

7

any other persons named in the application. Upon the annual renewal of a license or the opening

8

of a new branch designated in the license, the attorney general may initiate a nationwide criminal

9

records check that shall include fingerprints submitted to the federal bureau of investigation

10

Federal Bureau of Investigation regarding the licensee and any other persons named in the

11

license. The individual who is subject to the national records check shall be responsible for the

12

cost of conducting such check.

13

      (c) The applicant at the time of making his or her initial application only shall pay to the

14

attorney general the sum of fifty dollars ($50.00) as a fee for investigating the application and the

15

additional sum of fifty dollars ($50.00) shall be paid annually. The licensee shall pay an

16

additional fifty dollars ($50.00) annually for each branch designated in the license. Licenses shall

17

not be assignable or transferable to any other person or entity.

18

     6-11.1-3. Identification and authority of seller -- Posting of prices -- Weighing. -- (a)

19

Every person required to be licensed under this chapter shall require positive proof of

20

identification with photograph, date of birth, and current address of every seller from whom

21

precious metals or an article made from or containing a precious metal is to be purchased and

22

shall require the seller to sign a statement on a form to be approved by the attorney general stating

23

that the seller is the legal owner of the property or is the agent of the owner authorized to sell the

24

property, and when and where or in what manner the property was obtained.

25

      (b) Every person required to be licensed under this chapter shall, before purchasing any

26

precious metal or article made from or containing a precious metal, shall require the seller, if a

27

minor, to be accompanied by the parent or legal guardian of the minor.

28

      (c) Every person required to be licensed under this chapter shall post the prices per ounce

29

that are currently being paid for precious metals in full sight of the prospective seller and the

30

precious metals shall be weighed in full sight of the prospective seller.

31

     6-11.1-4. Record of transactions required -- Reports to police. [Effective December

32

31, 2013.] -- (a) Every person licensed under this chapter shall keep a copy of the report form

33

obtained from or under the direction of the attorney general, containing a comprehensive record

34

of all transactions concerning precious metals including catalytic converters. The comprehensive

 

LC005208/SUB A - Page 26 of 210

1

record shall be hand printed legibly or typed. The record shall include the name, address,

2

telephone number and date of birth of the seller,; a complete and accurate description of the

3

property purchased or sold including any serial numbers or other identifying marks or symbols,;

4

and the date and hour of the transaction.

5

      (b) All persons licensed under this chapter shall deliver or mail weekly to the chief of

6

police of the city or town in which the business is located and electronically submit to the

7

attorney general, in a manner specified by the attorney general, all report forms from the

8

preceding seven-day (7) period.

9

      (c) Every person licensed under this chapter shall retain a copy of the report form for a

10

period of one year from the date of the sale stated on the form.

11

     6-11.1-5. Fourteen day holding period -- Recovery of stolen property -- Return to

12

rightful owner. [Effective December 31, 2013.] Fourteen-day holding period -- Recovery of

13

stolen property -- Return to rightful owner. [Effective December 31, 2013.] -- (a) All persons

14

licensed under this chapter shall retain in their possession in an unaltered condition for a period of

15

fourteen (14) days all precious metals or articles made from or containing a precious metal,

16

including catalytic converters, except items of bullion, including coins, bars, and medallions,

17

which that do not contain serial numbers or other identifying marks. The fourteen (14) day -day

18

(14) holding period shall commence with the date the report of its acquisition was delivered to or

19

received by the chief of police or the attorney general, whichever is later. The records so received

20

by the chief of police and the attorney general shall be available for inspection only by law

21

enforcement officers for law enforcement purposes. If the chief of police has probable cause that

22

precious metals or an article made from or containing a precious metal has been stolen, he or she

23

may give notice, in writing, to the person licensed, to retain the metal or article for an additional

24

period of fifteen (15) days, and the person shall retain the property for this additional fifteen (15)

25

day -day (15) period, unless the notice is recalled, in writing, within the fifteen (15) day -day (15)

26

period;. within Within the fifteen (15) day -day (15) period the chief of police, or his or her

27

designee, shall designate, in writing, an officer to secure the property alleged to be stolen and the

28

persons in possession of the property shall deliver the property to the officer upon display of the

29

officer's written designation by the chief of police or his or her designee. Upon receipt of the

30

property from the officer, the clerk or person in charge of the storage of alleged stolen property

31

for a police department shall enter into a book a description of every article of property alleged to

32

be stolen which that was brought to the police department and shall attach a number to each

33

article. The clerk or person in charge of the storage of alleged stolen property shall deliver the

34

property to the owner of the property upon satisfactory proof of ownership, without any cost to

 

LC005208/SUB A - Page 27 of 210

1

the owner, provided that the following steps are followed:

2

      (1) A complete photographic record of the property is made;

3

      (2) A signed declaration of ownership under penalty of perjury is obtained from the

4

person to whom the property is delivered;

5

      (3) The person from whom the custody of the property was taken is served with written

6

notice of the claim of ownership and is given ten (10) days from the mailing of the notice to file a

7

petition in district court objecting to the delivery of the property to the person claiming

8

ownership. If a petition is filed in a timely manner, the district court shall, at a hearing, determine

9

by a preponderance of the evidence that the property was stolen and that the person claiming

10

ownership of the property is the true owner. The decision of the district court may only be

11

appealable by writ of certiorari to the supreme court.

12

      (b) The clerk or person in charge of the storage of alleged stolen property shall not be

13

liable for damages for any official act performed in good faith in the course of carrying out the

14

provisions of this section. The photographic record of the alleged stolen property shall be allowed

15

to be introduced as evidence in any court of this state in place of the actual alleged stolen

16

property; provided that the clerk in charge of the storage of the alleged stolen property shall take

17

photographs of the property, and those photographs shall be tagged and marked and remain in his

18

possession or control.

19

     6-11.1-6. Persons injured by violations of chapter -- Damages and costs. -- Any

20

person who has been damaged or injured by the failure of a person required to be licensed under

21

this chapter to comply with the provisions of this chapter, may recover the actual damages

22

sustained. The court, in its discretion, may also award punitive damages and/or the costs of suit

23

and reasonable attorneys' fees to a prevailing plaintiff.

24

     6-11.1-7. Penalties. -- (a) Every person who shall violate the provisions of this chapter

25

shall be guilty of a misdemeanor and shall be fined not more than five hundred dollars ($500) or

26

imprisoned for not more than one year, or both.

27

      (b) If the value of the property involved in a transaction which that is in violation of this

28

chapter exceeds five hundred dollars ($500), a person convicted of a violation shall be fined not

29

more than two thousand dollars ($2,000) or imprisoned for not more than three (3) years or both.

30

      (c) The attorney general shall have the authority to suspend the license of any person

31

required to be licensed under this chapter as a result of violations of this chapter or attorney

32

general regulations leading to penalties under this chapter.

33

     6-11.1-9. Refusal to issue license. -- The attorney general shall refuse to issue a license

34

when the attorney general has found that the application for the license contains a false

 

LC005208/SUB A - Page 28 of 210

1

representation of a material fact,; when investigation reveals that the person applying for the

2

license has previously been guilty of a violation of this chapter or has been a partner of a

3

partnership, member of an association, or an officer or director of a corporation which that has

4

previously been guilty of a violation of this chapter,; or has a disqualifying criminal record as

5

defined in section § 6-11.1-13. The attorney general may, in his or her discretion, issue a license

6

if the disqualifying criminal record is more than ten (10) years old.

7

     6-11.1-10. Suspension, revocation, and nonrenewal of license. -- The attorney general,

8

upon his or her own motion or upon receipt of a signed, written complaint which alleges alleging

9

violations of this chapter or of the rules and regulations promulgated pursuant to this chapter,

10

may, after a hearing, suspend, revoke, or refuse to renew any license issued pursuant to this

11

chapter.

12

     6-11.1-13. Disqualifying criminal records -- Employees or agents of licensee. -- A

13

licensee convicted in a court of this state, a court of another state, or in a federal court, of a felony

14

charge of forgery,; embezzlement,; obtaining money under false pretenses,; bribery,; larceny,;

15

extortion,; conspiracy to defraud,; receiving stolen goods,; burglary,; breaking and entering,; or

16

any similar offense or offenses,; or tax evasion associated with the conduct of business under a

17

license issued pursuant to this chapter,; shall forfeit his or her license. Prior to forfeiture of the

18

license, the licensee may request a hearing on the forfeiture. The attorney general, when so

19

requested, shall hold a hearing. No licensee shall employ or engage any person as an employee or

20

agent while engaging in the business of trading in precious metals who has been convicted of any

21

of the offenses as they are described in this section and which shall be deemed to be a

22

disqualifying criminal record.

23

     SECTION 9. Sections 6-13-1, 6-13-2, 6-13-2.1, 6-13-3, 6-13-4, 6-13-5, 6-13-6, 6-13-11,

24

6-13-12, 6-13-12.1, 6-13-16, 6-13-18, 6-13-19, 6-13-20 and 6-13-21 of the General Laws in

25

Chapter 6-13 entitled "Unfair Sales Practices" are hereby amended to read as follows:

26

     6-13-1. Definitions. -- (a) "Cost to the retailer" means the invoice cost of the

27

merchandise to the retailer within thirty (30) days prior to the date of the sale, or the replacement

28

cost of the merchandise to the retailer within thirty (30) days prior to the date of the sale, in the

29

quantity last purchased, whichever is lower; less all trade discounts except customary discounts

30

for cash; to which shall be added:

31

      (1) Freight charges not otherwise included in the cost of the merchandise;

32

      (2) Cartage to the retail outlet if performed or paid for by the retailer, which cartage cost

33

shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to the

34

retailer, unless the retailer claims and proves a lower cartage cost; and

 

LC005208/SUB A - Page 29 of 210

1

      (3) A markup to cover in part the cost of doing business, which markup, in the absence

2

of proof of a lesser cost, shall be six percent (6%) of the total cost at the retail outlet.

3

      (b) "Cost to the wholesaler" means the invoice cost of the merchandise to the wholesaler

4

within thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to

5

the wholesaler within thirty (30) days prior to the date of the sale, in the quantity last purchased,

6

whichever is lower; less all trade discounts except customary discounts for cash; to which shall be

7

added:

8

      (1) Freight charges not otherwise included in the cost of the merchandise; and

9

      (2) Cartage to the retail outlet if performed or paid for by the wholesaler, which cartage

10

cost shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to

11

the wholesaler, unless the wholesaler claims and proves a lower cartage cost; and

12

      (3) A markup to cover in part the cost of doing business, which markup, in the absence

13

of proof of a lesser cost, shall be two percent (2%) of the total cost at the wholesale

14

establishment.

15

      (c) Where two (2) or more items are advertised,; offered for sale,; or sold at a combined

16

price,; the price of each item shall be determined in the manner stated in subsections (a) and (b).

17

      (d) "Sell at retail,", "sales at retail,", and "retail sale" mean and include any transfer of

18

title to tangible personal property for a valuable consideration made in the ordinary course of

19

trade or in the usual prosecution of the seller's business to the purchaser for consumption or use

20

other than resale or further processing or manufacturing. In this and in the preceding subsection

21

the previous terms shall include any transfer of property where title is retained by the seller as

22

security for the payment of the purchase price.

23

      (e) "Retailer" means and includes every person, co-partnership, corporation, or

24

association engaged in the business of making sales at retail within this state; provided, that, in

25

the case of a retailer engaged in the business of making sales both at retail and at wholesale, the

26

term shall be applied only to the retail portion of the business.

27

      (f) "Wholesaler" means and includes every person, partnership, corporation, or

28

association engaged in the business of making sales at wholesale within this state; provided, that,

29

in the case of a wholesaler engaged in the business of making sales both at wholesale and at

30

retail, the term shall be applied only to the wholesale portion of the business.

31

      (g) Whenever any person, partnership, corporation, or association in the course of doing

32

business performs the functions of both wholesaler and retailer without actually being engaged in

33

the business of making sales at wholesale, the term "wholesaler" means and includes that function

34

of the business of preparation for sale at the retail outlet, and the term "retailer" shall be applied

 

LC005208/SUB A - Page 30 of 210

1

only to the retail portion of the business.

2

      (h) "Household" means and includes those who dwell under the same roof, house, or

3

apartment.

4

      (i) "Rebate" means a refund of a portion of the purchase price made to consumer to

5

induce purchase of product.

6

     6-13-2. Computation of cost of tobacco products. -- For purposes of this chapter,:

7

      (1) The tax imposed by chapter 20 of title 44 shall be deemed to be a part of the original

8

cost of cigarettes to the wholesaler;

9

      (2) The invoice or replacement cost of cigarettes, cigars, smoking tobacco, chewing

10

tobacco, snuff, and other tobacco products, to any wholesaler or retailer, shall be deemed to be

11

the minimum price in this state at which the products may be purchased in this state by the

12

wholesaler or retailer; and

13

      (3) Merchandise given gratis to a wholesaler or to a retailer for display, advertising, or

14

promotion purposes, or otherwise, shall not be considered in determining the cost of merchandise

15

to the wholesaler or retailer, as the case may be.

16

     6-13-2.1. Sales of milk. -- (a) It shall be unlawful for any person, with intent to injure

17

competitors or destroy competition, to sell within the state any milk or render any service in

18

connection with the sale or distribution of milk at a price less than the cost of the milk or services,

19

including, in the case of milk sold, the original purchase price, and in every instance all regular

20

direct or indirect elements of cost, services, physical handling, and financial investment in the

21

milk in question. No milk dealer shall, with this intent, use any method or device, either by

22

discount or rebate,; free service,; advertising allowance,; or by a combination price for the milk

23

together with another commodity or service,; as a result of which that results in the total price of

24

the milk and the other commodity or service is being less than the aggregate of the prices for the

25

milk and commodity or service when sold or offered for sale or performed separately or

26

otherwise.

27

      (b) Any person who shall violate the provisions of this section shall upon conviction be

28

subject to the penalty provided in section § 6-13-3. The provisions of sections §§ 6-13-3 -- 6-13-8

29

shall apply to milk in the same manner as if milk were "merchandise.".

30

     6-13-3. Penalty for advertising or sale to injure competitors or destroy competition. -

31

- Any retailer, who, with intent to injure competitors or destroy competition, advertises, offers to

32

sell, or sells at retail any item of merchandise at less than cost to the retailer, or any wholesaler

33

who, with intent as previously mentioned, advertises, offers to sell, or sells at wholesale any item

34

of merchandise at less than cost to the wholesaler, shall, if the offender is an individual, be

 

LC005208/SUB A - Page 31 of 210

1

punished by a fine of not more than five hundred dollars ($500) or by imprisonment for not less

2

than one month nor more than one year, or both; or, if the offender is a corporation, by a fine as

3

previously mentioned. Notwithstanding the provisions of this section, as it pertains to a Class A

4

or a Class B distributor of tobacco, any offense of this title shall be punished by a fine of not

5

more than five thousand dollars ($5,000) for a first offense,; a fine of not more than ten thousand

6

dollars ($10,000) and a license suspension of not more than fourteen (14) calendar days for a

7

second offense,; and a fine of not more than twenty thousand dollars ($20,000) and a license

8

suspension or revocation for a third offense.

9

     6-13-4. Below cost sales as evidence of intent. Below-cost sales as evidence of intent.--

10

Evidence of any advertisement,; offer to sell,; or sale of any item of merchandise by any retailer

11

or wholesaler at less than cost to him or her, as defined in this chapter, shall be prima facie

12

evidence of intent to injure competitors or destroy competition.

13

     6-13-5. Sales exempt from chapter. -- This chapter shall not apply with respect to

14

advertising or offering to sell or selling, at retail or at wholesale, as the case may be, if done:

15

      (1) In an isolated transaction and not in the usual course of business;

16

      (2) Where merchandise is sold in bona fide clearance sales, if advertised or offered for

17

sale as such or marked and sold as such, or where merchandise is marked down in an effort to sell

18

the merchandise after bona fide efforts to sell the merchandise prior to the markdown;

19

      (3) Where perishable merchandise must be sold promptly in order to forestall loss;

20

      (4) Where merchandise is imperfect or damaged or its sale is being discontinued, if

21

advertised or offered for sale as such or marked and sold as such;

22

      (5) Where merchandise is advertised or offered for sale or sold upon the final liquidation

23

of any business;

24

      (6) Where merchandise is advertised or offered for sale or sold for charitable purposes or

25

to relief agencies;

26

      (7) Where merchandise is sold on contract to any department, board, or commission of

27

this state, or of any of its political subdivisions, or to any institution maintained thereby; or

28

      (8) Where merchandise is advertised or offered for sale or sold by any fiduciary or other

29

officer acting under the order or direction of any court.

30

     6-13-6. Enforcement of chapter. -- Upon the complaint of any person, the superior court

31

shall have jurisdiction to restrain and enjoin any act forbidden or declared illegal by any

32

provisions of this chapter; and it shall be the duty of the attorney general of this state to enforce

33

and restrain the violation of the sections of this chapter.

34

     6-13-11. Discount price advertisement. -- It shall be unlawful to use, communicate, or

 

LC005208/SUB A - Page 32 of 210

1

publish any advertisement that states that an item or product is being sold or offered for sale at

2

below the regular price or at a percentage off the regular price without posting the regular price at

3

the point of purchase. Whenever an item or product is advertised for sale at below the regular

4

price or at a percentage off the regular price, the advertisement shall clearly state whether there is

5

an additional charge for equipment or services which that are reasonably necessary for the proper

6

use of the product. Any person, firm, or corporation who or that shall violate the provisions of

7

this section shall be punished by a fine of not more than five hundred dollars ($500).

8

     6-13-12. Sales of gift certificates. – (a) "Gift certificate" means a record evidencing a

9

promise, made for monetary consideration, by the seller or issuer for the record that goods or

10

services will be provided to the owner of the record to the value shown in the record and includes,

11

but is not limited to,: (1) a A record that contains a microprocessor chip, magnetic strip, or other

12

means of storage of information that is pre-funded and for which the value is decremented upon

13

each use,; (2) a A gift card, an electronic gift card, stored-value card or certificate,; (3) a A store

14

card,; (4) prepaid Prepaid long-distance telephone service that is activated by a prepaid card that

15

requires dialing an access number or an access code for each call in addition to dialing the phone

16

number to which the user of the prepaid card seeks to connect,; or (5) a A similar record or card.

17

Any person, firm, or corporation that sells gift certificates for any product or merchandise sold by

18

the person, firm, or corporation, shall be required to record the sales and keep an accurate and

19

complete record of each gift certificate sold. The record shall include the date of sale,; the full

20

value of the certificate,; the identification number assigned by the retailer to the certificate,; and

21

the state in which the sale of the certificate took place. The retailer shall further be required to

22

give to the purchaser of gift certificates exceeding fifty dollars ($50.00) a written and numbered

23

receipt evidencing the sale of the certificate. It shall be unlawful for any person, firm, or

24

corporation of any kind to charge any surcharge or additional monthly or annual service or

25

maintenance fees on gift certificates or to limit the time for the redemption of a gift certificate or

26

to place an expiration date upon the gift certificate. No gift certificate or any agreement with

27

respect to such gift certificate may contain language suggesting that an expiration date may apply

28

to the gift certificate. Any person, firm, or corporation that shall violate the provisions of this

29

section shall be punished by a fine of not more than two hundred dollars ($200). Due to the

30

unlimited redemption period, the division of taxation shall not escheat the funds paid for those

31

unredeemed gift certificates. Any unused portion of a redeemed gift certificate shall be afforded

32

to the consumer by reissuing the gift certificate for the unused amount or providing cash where

33

the balance due the consumer is less than one dollar ($1.00). This section shall not apply to the

34

following:

 

LC005208/SUB A - Page 33 of 210

1

      (a)(b) Gift certificates that are distributed to a consumer pursuant to an awards, loyalty,

2

or promotional program without any money or other thing of value being given in exchange for

3

the gift certificate by the consumer. Any restrictions or limitations which that such gift

4

certificates may be subject to must be disclosed to the consumer, in writing, at the time the gift

5

certificates are distributed to the consumer.

6

      (b)(c) Prepaid wireless telephone service or prepaid wireless telephone card. "Prepaid

7

wireless telephone service" means wireless telephone service that is activated in advance by

8

payment for a finite dollar amount of service or for a finite set of minutes that terminate either

9

upon use by a customer and delivery by the wireless provider of an agreed-upon amount of

10

service corresponding to the total dollar amount paid in advance or within a certain period of time

11

following the initial purchase or activation, unless additional payments are made.

12

      (c)(d) Gift cards or prepaid or store value cards that are issued by state-chartered

13

financial institutions and credit unions or that are issued by third-party issuers usable at multiple,

14

unaffiliated merchants or service providers,; provided that said financial institutions, credit

15

unions, or third-party issuers comply with the guidelines on disclosure and marketing as

16

published by the office of the comptroller of the currency.

17

     6-13-12.1. Donation of gift certificates. -- Any gift certificate/card as defined in section

18

§ 6-13-12 which that has been donated for fundraising purposes, shall be exempt from the

19

provisions of section § 6-13-12 relating to expiration dates, provided, that the gift certificate/card

20

clearly states that the gift certificate/card has been donated for charity purposes and is subject to a

21

clearly defined expiration date, not less than one year from the issuance of the gift certificate/card

22

to the gift certificate/card recipient.

23

     6-13-15. Prohibition against recording credit card or social security numbers on

24

checks. -- It shall be unlawful, during a sale at retail of any goods or merchandise, to record any

25

credit card or all or part of a social security number obtained from a purchaser as a means of

26

identification upon the check of the purchaser tendered for the sale. Any person, firm, or

27

corporation that shall violate the provisions of this section shall be punished by a fine of not more

28

than one hundred dollars ($100). This section does not prohibit any person from requesting

29

production of, or recording, a credit card number as a condition for cashing or accepting a check,

30

provided the person has agreed with the credit card issuer to cash or accept checks from card

31

holders of the issuer,; the issuer has agreed to guarantee card holder checks cashed or accepted by

32

that person,; and the card holder has given actual, apparent, or implied authority for the use of his

33

or her card number in the manner and for the purpose described in this section.

34

     6-13-16. Prohibition against recording personal information in credit card

 

LC005208/SUB A - Page 34 of 210

1

transactions. -- (a) No person, firm, partnership, or corporation which that accepts credit cards

2

for the transaction of business shall require the credit card holder to write or cause to be written

3

on a transaction form any personal identification information, including, but not limited to, the

4

credit card holder's address or telephone number, that is not required by the credit card issuer to

5

complete the credit card transactions.

6

      (b) The credit card holder's address and telephone number may be required on a

7

transaction form where: (1) this information is necessary for shipping, delivery, installation of

8

purchased merchandise, consumer rental transactions, warranty, or for special orders; (2)

9

authorization from the credit card issuer as to the availability of credit is required by the issuer to

10

complete the credit card transaction; or (3) the person, firm, partnership, or corporation processes

11

credit card transactions by mailing transaction forms to the designated bankcard center for

12

settlement.

13

      (c) This section shall not preclude a person, firm, partnership, or corporation that accepts

14

credit cards from requesting this personal identification and recording it, if it is provided by the

15

card holder pursuant to that request.

16

      (d) Any person, firm, partnership, or corporation who or that shall violate the provisions

17

of this section shall be punished by a fine of not more than one hundred dollars ($100).

18

     6-13-17. Requiring consumers to furnish social security numbers. -- (a) Unless

19

otherwise required by federal law, no person shall require that a consumer of goods or services

20

disclose all or part of a social security number incident to the sale of consumer goods or services;

21

provided, however, that:

22

      (1) Insurance companies and institutions licensed by the state or federal government for

23

financial services may require applicants for those services to disclose their social security

24

number;

25

      (2) Social security numbers may be required for the providing and billing of health care

26

or pharmaceutical-related services, including the issuance of identification cards and account

27

numbers for users of health care or pharmaceutical-related services; and

28

      (3) Disclosure may be required of a consumer as a condition of applying for a credit card

29

for the purchase of goods or services.

30

      (b) Any person violating the provisions of this section shall be guilty of a misdemeanor,

31

and upon conviction, shall be fined not more than five hundred dollars ($500).

32

      (c) In any civil action alleging a violation of this section, the court may award damages,

33

reasonable attorney's fees, and costs to a prevailing consumer, and afford injunctive relief against

34

any person or business that commits or proposes to commit a violation of this section.

 

LC005208/SUB A - Page 35 of 210

1

     6-13-18. Check cashing discrimination. -- A business that willingly accepts personal

2

checks from Rhode Island customers for goods or services shall be prohibited from refusing

3

checks based solely on the geographic area in which the customer lives within the state of Rhode

4

Island. Any person, firm, or corporation which shall violate violating the provisions of this

5

section shall be punished by a civil penalty of not more than one hundred dollars ($100) per

6

violation.

7

     6-13-19. Requiring consumers to furnish social security numbers. -- No person, firm,

8

corporation, or other business entity which that offers discount cards for purchases made at any

9

business maintained by the offeror shall require that a consumer of goods who applies for a

10

discount card furnish all or part of his or her social security number as a condition precedent to

11

the application for the consumer discount card. No information obtained on the application or by

12

use of a discount card can be sold or given to any other person, firm, corporation, or business

13

entity, provided, that the person, firm, corporation, or other business may: (a) disclose such

14

information to its affiliates, to service providers that perform services for it, or as required by law;

15

and/or (b) transfer such information in connection with the sale of its business operations.

16

     6-13-20. Rebate restrictions -- prohibited. -- No person, firm, business, partnership or

17

corporation which that issues rebates to its customers in the course of their transactions of

18

business shall restrict their use to one per household per item purchased; provided, however, that

19

this section shall not apply to rebates on the sale of beverages.

20

     6-13-21. Price gouging -- Essential commodities. -- (a) Upon a declaration of a state of

21

emergency by the governor, or federal disaster declaration by the president, it shall be an unfair

22

sales practice for individuals or retailers, to participate in price gouging, by making sales, or

23

offering to sell, within the area for which the market emergency is declared, essential

24

commodities to consumers for an amount that represents an unconscionably high price.

25

      (b) As used in this section:

26

      (1) "Unconscionably high price" means the amount charged represents a gross disparity

27

between the average prices at which the same or similar commodity was readily available and

28

sold or offered for sale within the local trade area in the usual course of business during the thirty

29

(30) days immediately before the declaration of the market emergency, and the additional charges

30

are not substantially attributable to increased cost to retailers, imposed by their suppliers,

31

including replacement costs imposed by the vendors' source. Additionally, the average price

32

calculation during said thirty (30) day -day (30) period shall not include discounted prices set and

33

offered as a result of bona fide manufacturer's or supplier's limited discounts or rebates.

34

      (i) Under a federal disaster declaration by the president or upon a declaration of a state of

 

LC005208/SUB A - Page 36 of 210

1

emergency by the governor, it is unlawful and a violation of chapter 6-13 of title 6, and

2

subdivision § 30-15-9(e)(12) of title 30, to sell, or offer to sell, at an unconscionably high price,

3

any essential commodity.

4

      (2) "Price gouging" means charging a consumer an unconscionably high price for

5

essential commodities during a declared market emergency.

6

      (3) "Essential commodities" means any goods, services, materials, merchandise,

7

supplies, equipment, resources, or other article of commerce, and includes, without limitation,

8

home heating fuels, motor fuels, food, water, ice, chemicals, petroleum products, and lumber

9

necessary for consumption or use as a direct result of the market emergency.

10

      (4) "Market emergency" means any declaration of a state of emergency by the governor

11

or federal disaster declaration by the president. The market emergency shall exist until the

12

declaration expires or is terminated.

13

      (5) "Individual" means a person, corporation, partnership, limited liability company,

14

association, joint venture, agency, or any other legal or commercial entity.

15

      (6) "Consumer" means an individual who enters into a transaction primarily for personal,

16

family, or household purposes.

17

      (7) "Retailer" means and includes every individual licensed to engage in the business of

18

making sales at retail within this state.

19

      (c) This section shall not prohibit the fluctuation in price of essential commodities which

20

that occur during the normal course of business.

21

      (d) Any violation of this section shall constitute an unfair sales practice under the terms

22

of chapter 13.1 of this title 6.

23

      (e) In addition to the penalties provided in chapter 13.1 of this title 6, and subdivision

24

30-15-9(e)(12), the court may impose orders and civil penalties, including, but not limited to:

25

      (1) A fine of not more than one thousand dollars ($1,000) per violation with an aggregate

26

total not to exceed twenty-five thousand dollars ($25,000) for any twenty-four (24) hour -hour

27

(24) period;

28

      (2) An order to pay costs of litigation relating to the offense;

29

      (3) An order for disgorgement of profits earned; and

30

      (4) Any other relief determined by the court to be appropriate.

31

      (f) All monetary penalties so collected shall accrue to the enforcing authority to further

32

consumer enforcement efforts.

33

     SECTION 10. Sections 6-13.1-1, 6-13.1-3, 6-13.1-5, 6-13.1-5.2, 6-13.1-7, 6-13.1-14, 6-

34

13.1-15, 6-13.1-17, 6-13.1-20, 6-13.1-21, 6-13.1-22, 6-13.1-23, 6-13.1-24, 6-13.1-25, 6-13.1-28

 

LC005208/SUB A - Page 37 of 210

1

and 6-13.1-29 of the General Laws in Chapter 6-13.1 entitled "Deceptive Trade Practices" are

2

hereby amended to read as follows:

3

     6-13.1-1. Definitions. -- As used in this chapter:

4

      (1) "Documentary material" means the original or a copy of any book, record, report,

5

memorandum, paper, communication, tabulation, map, chart, photograph, mechanical

6

transcription, or other tangible document or recording wherever situated.

7

      (2) "Examination" of documentary material includes the inspection, study, or copying of

8

any documentary material, and the taking of testimony under oath or acknowledgment in respect

9

of any documentary material or copy of any documentary material.

10

      (3) "Person" means natural persons, corporations, trusts, partnerships, incorporated or

11

unincorporated associations, and any other legal entity.

12

      (4) "Rebate" means the return of a payment or a partial payment, which that serves as a

13

discount or reduction in price.

14

      (5) "Trade" and "commerce" mean the advertising, offering for sale, sale, or distribution

15

of any services and any property, tangible or intangible, real, personal, or mixed, and any other

16

article, commodity, or thing of value wherever situate, and include any trade or commerce

17

directly or indirectly affecting the people of this state.

18

      (6) "Unfair methods of competition and unfair or deceptive acts or practices" means any

19

one or more of the following:

20

      (i) Passing off goods or services as those of another;

21

      (ii) Causing likelihood of confusion or of misunderstanding as to the source,

22

sponsorship, approval, or certification of goods or services;

23

      (iii) Causing likelihood of confusion or of misunderstanding as to affiliation, connection,

24

or association with, or certification by, another;

25

      (iv) Using deceptive representations or designations of geographic origin in connection

26

with goods or services;

27

      (v) Representing that goods or services have sponsorship, approval, characteristics,

28

ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship,

29

approval, status, affiliation, or connection that he or she does not have;

30

      (vi) Representing that goods are original or new if they are deteriorated, altered,

31

reconditioned, reclaimed, used, or secondhand; and if household goods have been repaired or

32

reconditioned, without conspicuously noting the defect which that necessitated the repair on the

33

tag which that contains the cost to the consumer of the goods;

34

      (vii) Representing that goods or services are of a particular standard, quality, or grade, or

 

LC005208/SUB A - Page 38 of 210

1

that goods are of a particular style or model, if they are of another;

2

      (viii) Disparaging the goods, services, or business of another by false or misleading

3

representation of fact;

4

      (ix) Advertising goods or services with intent not to sell them as advertised;

5

      (x) Advertising goods or services with intent not to supply reasonably expectable public

6

demand, unless the advertisement discloses a limitation of quantity;

7

      (xi) Making false or misleading statements of fact concerning the reasons for, existence

8

of, or amounts of price reductions;

9

      (xii) Engaging in any other conduct that similarly creates a likelihood of confusion or of

10

misunderstanding;

11

      (xiii) Engaging in any act or practice that is unfair or deceptive to the consumer;

12

      (xiv) Using any other methods, acts, or practices which that mislead or deceive members

13

of the public in a material respect;

14

      (xv) Advertising any brand name goods for sale and then selling substituted brand names

15

in their place;

16

      (xvi) Failure to include the brand name and or manufacturer of goods in any

17

advertisement of the goods for sale, and, if the goods are used or secondhand, failure to include

18

the information in the advertisement;

19

      (xvii) Advertising claims concerning safety, performance, and comparative price unless

20

the advertiser, upon request by any person, the consumer council, or the attorney general, makes

21

available documentation substantiating the validity of the claim;

22

      (xviii) Representing that work has been performed on or parts replaced in goods when

23

the work was not in fact performed or the parts not in fact replaced; or

24

      (xix) Failing to separately state the amount charged for labor and the amount charged for

25

services when requested by the purchaser as provided for in section § 44-18-12(b)(3).

26

      (xx) Advertising for sale at a retail establishment the availability of a manufacturer's

27

rebate by displaying the net price of the advertised item (the price of the item after the rebate has

28

been deducted from the item's price) in the advertisement, unless the amount of the

29

manufacturer's rebate is provided to the consumer by the retailer at the time of the purchase of the

30

advertised item. It shall be the retailer's burden to redeem the rebate offered to the consumer by

31

the manufacturer.

32

      (xxi) [Deleted by P.L. 2007, ch. 31, section 1 and P.L. 2007, ch. 38, section 1_.

33

     6-13.1-3. Interpretation. -- It is the intent of the legislature that in construing sections

34

     §§ 6-13.1-1 and 6-13.1-2 due consideration and great weight shall be given to the

 

LC005208/SUB A - Page 39 of 210

1

interpretations of the federal trade commission Federal Trade Commission and the federal courts

2

relating to section 5(a) of the Federal Trade Commission Act. 15 U.S.C. section 45(a)(1), as from

3

time to time amended.

4

     6-13.1-5. Restraining prohibited acts. -- (a) Whenever the attorney general has reason

5

to believe that any person is using, has used, or is about to use any method, act, or practice

6

declared to be unlawful by section § 6-13.1-2, and that proceedings would be in the public

7

interest, the attorney general may bring an action in the name of the state against the person to

8

restrain by temporary or permanent injunction the use of the method, act, or practice, upon the

9

giving of appropriate notice to that person. The notice must generally state the relief sought and

10

be served in accordance with section § 6-13.1-7 and at least three (3) days before the hearing of

11

the action.

12

      (b) The action may be brought in the superior court of the county in which the person

13

shall dwell, or be found,; or have his principal place of business,; or, with consent of the parties,;

14

or if the person is a nonresident or has no principal place of business within this state or if the

15

superior court shall not be in session in the counties previously said to be applicable, may be

16

brought in the superior court of Providence County. The superior courts are authorized to issue

17

temporary or permanent injunctions to restrain and prevent violations of this chapter, and the

18

injunctions shall be issued without bond.

19

      (c) The court may make any additional orders or judgments that may be necessary to

20

restore to any person in interest any moneys or property, real or personal, which that may have

21

been acquired by means of any practice in this chapter declared to be unlawful, including the

22

appointment of a receiver in any case where the superior court finds that the assets of a

23

corporation are in danger of being misapplied, dissipated, wasted, or lost, or the revocation of a

24

license or certificate authorizing that person to engage in business in this state, or both.

25

      (d) Actions under this chapter may be brought without regard to the pendency of

26

criminal proceedings arising out of the same acts or practices and no action shall bar the

27

institution of criminal proceedings arising out of the same acts or practices. No involuntary

28

admission by any person in the action shall be admissible in any subsequent criminal proceeding.

29

     6-13.1-5.2. Private and class actions. -- (a) Any person who purchases or leases goods

30

or services primarily for personal, family, or household purposes and thereby suffers any

31

ascertainable loss of money or property, real or personal, as a result of the use or employment by

32

another person of a method, act, or practice declared unlawful by section § 6-13.1-2, may bring

33

an action under the rules of civil procedure Rules of Civil Procedure in the superior court of the

34

county in which the seller or lessor resides,; is found,; has his or her principal place of business,

 

LC005208/SUB A - Page 40 of 210

1

or is doing business,; or in the superior court of the county as is otherwise provided by law, to

2

recover actual damages or two hundred dollars ($200), whichever is greater. The court may, in its

3

discretion, award punitive damages and may provide other equitable relief that it deems necessary

4

or proper.

5

      (b) Persons entitled to bring an action under subsection (a) of this section may, if the

6

unlawful method, act, or practice has caused similar injury to numerous other persons similarly

7

situated and if they adequately represent the similarly situated persons, bring an action on behalf

8

of themselves and other similarly injured and situated persons to recover damages as provided for

9

in subsection (a) of this section. In any action brought under this section, the court may in its

10

discretion order, in addition to damages, injunctive or other equitable relief.

11

      (c) Upon commencement of any action brought under subsection (a) of this section, the

12

clerk of court shall mail a copy of the complaint or other initial pleading to the attorney general

13

and, upon entry of any judgment or decree in the action, shall mail a copy of the judgment or

14

decree to the attorney general.

15

      (d) In any action brought by a person under this section, the court may award, in addition

16

to the relief provided in this section, reasonable attorney's fees and costs.

17

      (e) Any permanent injunction, judgment, or order of the court made under section § 6-

18

13.1-5 shall be prima facie evidence in an action brought under this section that the respondent

19

used or employed a method, act, or practice declared unlawful by section § 6-13.1-2.

20

     6-13.1-7. Investigations -- Procedure -- Remedies for failure to comply. -- (a) When it

21

appears to the attorney general that a person has engaged in, is engaging in, or is about to engage

22

in, any act or practice declared to be unlawful by this chapter, or when the attorney general

23

believes it to be in the public interest that an investigation should be made to ascertain whether a

24

person in fact has engaged in, is engaging in, or is about to engage in, any act or practice declared

25

to be unlawful by this chapter, he or she may execute, in writing, and cause to be served upon any

26

person who is believed to have information, documentary material, or physical evidence relevant

27

to the alleged or suspected violation, an investigative demand, stating the general subject matter

28

of the investigation and the statute and section under which the alleged or the suspected violation

29

is alleged of which is under investigation and requiring and require the person to furnish, under

30

oath or otherwise, a report in writing stating the relevant facts and circumstances of which the

31

person has knowledge, or to appear and testify or to produce relevant documentary material or

32

physical evidence for examination, at any reasonable time and place that may be stated in the

33

investigative demand, concerning the advertisement, sale, or offering for sale of any goods or

34

services or the conduct of any trade or commerce that is the subject matter of the investigation.

 

LC005208/SUB A - Page 41 of 210

1

All civil investigative demands shall be filed in the superior court of the county in which the

2

person served with the demand shall dwell or have his principal place of business.

3

      (b) At any time before the return date specified in an investigative demand, or within

4

twenty (20) days after the demand has been served, whichever period is shorter, a petition to

5

extend the return date or to modify or set aside the demand, stating good cause, may be filed in

6

the superior court in which the person served with the demand shall dwell or have his or her

7

principal place of business, or in the superior court of Providence County.

8

      (c) To accomplish the objectives and to carry out the duties prescribed by this chapter,

9

the attorney general, in addition to other powers conferred upon him or her by this chapter, may

10

issue subpoenas to any person,; administer an oath or affirmation to any person,; conduct hearings

11

in aid of any investigation or inquiry,; and prescribe any forms and promulgate any rules and

12

regulations that may be necessary, which rules and regulations shall have the force of law;

13

provided that none of the powers conferred by this chapter shall be used for the purpose of

14

compelling any natural person to furnish testimony or evidence which that might tend to

15

incriminate the person or subject him or her to a penalty or forfeiture; and provided further that

16

information obtained pursuant to the powers conferred by this chapter shall not be made public or

17

disclosed by the attorney general or his or her employees beyond the extent necessary for law

18

enforcement purposes in the public interest.

19

      (d) Service of any notice, demand, or subpoena under this chapter shall be made

20

personally within this state, but if personal service cannot be obtained, substituted service may be

21

made in the following manner:

22

      (1) Personal service without this state;

23

      (2) The mailing of any notice, demand, or subpoena under this chapter by registered or

24

certified mail to the last known place of business, residence, or abode within or without this state

25

of the person for whom the service is intended;

26

      (3) As to any person other than a natural person, in the manner provided in the Rules of

27

Civil Procedure rules of civil procedure as if a complaint or other pleading which institutes a civil

28

proceeding had been filed; or

29

      (4) Service that the superior court may direct in lieu of personal service within this state.

30

      (e) A person upon whom a demand is served pursuant to the provisions of this section

31

shall comply with the terms of the demand unless otherwise provided by order of court. Subject

32

to the protections provided for in subsection (c) of this section relating to self incrimination, any

33

person who, with intent to avoid, evade, or prevent compliance, in whole or in part, with any civil

34

investigative demand under this section, removes from any place, conceals, withholds, or

 

LC005208/SUB A - Page 42 of 210

1

destroys, mutilates, alters, or by any other means falsifies any documentary material in the

2

possession, custody, or control of any person subject of any demand, or knowingly conceals any

3

relevant information, shall be fined not more than five thousand dollars ($5,000).

4

      (f) If any person fails or refuses to file any statement or report, or obey any subpoena or

5

investigative demand issued by the attorney general, the attorney general may file in the superior

6

court of the county in which the person shall dwell or be found,; or has his or her principal place

7

of business,; or of Providence County, if the superior court at the previously mentioned county

8

shall not be in session, or if the person is a nonresident or has no principal place of business in

9

this state,; or of the other county as may be agreed upon by the parties to the petition,; and serve

10

upon the person a petition for an order of the court for the enforcement of this section, and the

11

petition may request and the court shall have jurisdiction to grant after notice and a hearing, an

12

order:

13

      (1) Granting injunctive relief to restrain the person from engaging in the advertising or

14

sale of any merchandise or the conduct of any trade or commerce that is involved in the alleged or

15

suspected violation;

16

      (2) Vacating, annulling, or suspending the corporate charter of a corporation created by

17

or under the laws of this state or revoking or suspending the certificate of authority to do business

18

in this state of a foreign corporation or revoking or suspending any other licenses, permits, or

19

certificates issued pursuant to law to the person which that are used to further the allegedly

20

unlawful practice; and

21

      (3) Granting any other relief that may be required, until the person files the statement or

22

report, or obeys the subpoena or investigative demand.

23

      (g) Any final order so entered shall be subject to appeal to the state supreme court. Any

24

disobedience of any final order entered under this section by any court shall be punished as a

25

contempt of court.

26

     6-13.1-14. Penalties. -- Any person who violates the provision provisions of section §§

27

6-13.1-12 and/or 6-13.1-13 shall be guilty of a misdemeanor and shall pay a fine of five hundred

28

dollars ($500).

29

     6-13.1-15. Piracy of recordings. -- (a) As used in this section, "article" means a

30

phonograph record, disc, wire, tape, film, compact disc, audio or video cassette, compact video

31

disc, or other device on which sounds or images are or can be recorded or otherwise stored.

32

      (b) Unless exempt under subsection (d), it is unlawful for any person, firm, partnership,

33

corporation, or association knowingly to:

34

      (1) Transfer or cause to be transferred any sounds recorded on any article on which

 

LC005208/SUB A - Page 43 of 210

1

sounds are recorded onto any other article;

2

      (2) Transfer or cause to be transferred any performance, whether live before an audience

3

or transmitted by wire or through the air by radio or television, onto any article; or

4

      (3) Sell, distribute, circulate, offer for sale, distribution, or circulation, possess for the

5

purpose of sale, distribution, or circulation, or cause to be sold, distributed, circulated, offered for

6

sale, distribution, or circulation, or possessed for sale, distribution, or circulation, any article on

7

which sounds or performances have been transferred without the consent of the person who owns

8

the master article from which the sounds are derived or the right to record the performance.

9

      (c) It is unlawful for any person, firm, partnership, corporation, or association to sell,

10

distribute, circulate, offer for sale, distribution, or circulation or possess for the purposes of sale,

11

distribution, or circulation, any article on which sounds or images have been transferred unless

12

the article bears the actual name and address of the transferor of the sounds in a prominent place

13

on its outside face or package.

14

      (d) This section does not apply to any person who transfers or causes to be transferred

15

any sounds or images intended for, or in connection with, radio or television broadcast

16

transmission or related uses, for archival purposes or solely for the personal use of the person

17

transferring or causing the transfer and without any compensation being derived by the person

18

from the transfer.

19

      (e) Every person who violates the provisions of this section is guilty of a felony and:

20

      (1) For the first offense is punishable by a fine of not more than five thousand dollars

21

($5,000) or by imprisonment in the state prison for not more than six (6) years, or by both fine

22

and imprisonment.

23

      (2) For a subsequent offense is punishable by a fine of not more than five thousand

24

dollars ($5,000) or by imprisonment in the state prison for not more than ten (10) years, or by

25

both fine and imprisonment.

26

      (3) The court in its judgment of conviction may order the forfeiture and destruction or

27

other disposition of all infringing articles and all implements, devices, and equipment used in the

28

manufacture of the infringing articles.

29

     6-13.1-17. Contracts -- Provision to sell real estate. -- It is unlawful for any person,

30

firm, partnership, corporation, or association to provide in any contract for the purchase of

31

consumer goods or documents related to them, a provision allowing the seller the power to sell or

32

attach real estate for default, without first obtaining an order by a court exercising proper

33

jurisdiction of the subject matter.

34

     6-13.1-20. Credit reports -- Definitions. -- As used in this chapter:

 

LC005208/SUB A - Page 44 of 210

1

      (1) "Credit bureau" means any entity or person which who or that, for monetary fees,

2

dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of

3

assembling or evaluating consumer credit information or other information on consumers for the

4

purpose of furnishing credit reports to third parties;

5

      (2) (i) "Credit report" means any written, oral, or other communication of any

6

information by a credit bureau bearing on a consumer's credit worthiness, credit standing, or

7

credit capacity, which that is used or expected to be used or collected in whole or in part for the

8

purpose of serving as a factor in establishing the consumer's eligibility for:

9

      (A) Credit or insurance to be used primarily for personal, family, or household purposes;

10

      (B) Employment purposes; or

11

      (C) Other purposes authorized under the federal Fair Credit Reporting Act, 15 U.S.C.

12

section 1681 et seq.

13

      (ii) "Credit report" does not include:

14

      (A) Any report containing information solely as to transactions or experiences between

15

the consumer and the person making the report;

16

      (B) Any authorization or approval of a specific extension of credit directly or indirectly

17

by the issuer of a credit card or similar device;

18

      (C) Any report in which a person who has been requested by a third party to make a

19

specific extension of credit directly or indirectly to a consumer conveys his or her decision with

20

respect to that request, if the third party advises the consumer of the name and address of the

21

person to whom the request was made and the person makes the disclosures to the consumer

22

required under the federal Fair Credit Reporting Act, 15 U.S.C. section 1681 et seq.; or

23

      (D) Any report containing information solely on a consumer's character, general

24

reputation, personal characteristics, or mode of living which that is obtained through personal

25

interviews with neighbors, friends, or associates of the consumer reported on, or with others with

26

whom he or she is acquainted or who may have knowledge concerning those items of

27

information, only if the report is not used in granting, extending, or decreasing credit.

28

     6-13.1-21. Credit reports -- Notice to individual -- Requirements of users of credit

29

reports. -- (a) No person or business shall request a credit report in connection with a consumer's

30

application for credit, employment, or insurance unless a consumer is first informed that a credit

31

report may be requested in connection with the application.

32

      (b) Whenever credit or insurance for personal, family, or household purposes, or

33

employment, involving a consumer is denied or the charge for that credit or insurance is increased

34

either wholly or partly because of information contained in a credit report from a credit bureau,

 

LC005208/SUB A - Page 45 of 210

1

the user of the credit report shall advise the consumer against whom the adverse action has been

2

taken and supply the name and address of the credit bureau making the report.

3

     6-13.1-22. Access to credit reports. -- Any consumer who requests disclosure of his or

4

her credit file from a credit bureau shall be entitled to have mailed to the consumer, a copy of the

5

information in the files of the credit bureau that pertains to the consumer at the time of the

6

consumer's request for disclosure within four (4) working days of the request. The credit bureau

7

may impose a reasonable charge for the report, but that charge shall not exceed eight dollars

8

($8.00) per report. The maximum charge for the report may be raised annually not to exceed the

9

increase in the Consumer Price Index (CPI). The copy shall be furnished without charge if the

10

request for a copy of the report is the result of a consumer being notified that adverse action has

11

been taken on a credit application based on the credit report, provided the request for the report is

12

made within sixty (60) days of receipt of the notice.

13

     6-13.1-23. Disputed credit report. -- (a) If the completeness or accuracy of any item of

14

information contained in a consumer's file is disputed by that consumer, and the dispute is

15

directly conveyed to the credit bureau by the consumer, the credit bureau shall within thirty (30)

16

calendar days reinvestigate the current status of that information unless it has reasonable grounds

17

to believe that the dispute by the consumer is frivolous or irrelevant. If after the reinvestigation

18

that information is found to be inaccurate or can no longer be verified, the credit bureau shall

19

promptly delete that information. The presence of contradictory information in the consumer's file

20

does not in and of itself constitute reasonable grounds for believing the dispute is frivolous or

21

irrelevant.

22

      (b) If the reinvestigation does not resolve the dispute, the consumer may file a brief

23

statement stating the nature of the dispute. The credit bureau may limit statements of dispute to

24

not more than one hundred (100) words if it provides the consumer with assistance in writing a

25

clear summary of the dispute.

26

      (c) Whenever a statement of dispute is filed, unless there is reasonable grounds to

27

believe that it is frivolous or irrelevant, the credit bureau shall, in any subsequent consumer report

28

containing the information in question, clearly note that it is disputed by the consumer and

29

provide either the consumer's statement or a clear and accurate codification or summary of that

30

statement.

31

      (d) Following any deletion or correction of information which that is found to be

32

inaccurate or whose accuracy can no longer be verified or any notation as to disputed

33

information, the credit bureau shall properly furnish a copy of the corrected credit report to the

34

consumer at no charge, and at the request of the consumer, furnish a copy of the corrected report

 

LC005208/SUB A - Page 46 of 210

1

to any person specifically designated by the consumer who has within two (2) years prior thereto

2

received a credit report for employment purposes, or within six (6) months received a credit

3

report for any other purpose, which that contained the deleted, corrected, or disputed information.

4

The credit bureau shall clearly and conspicuously disclose to the consumer his rights to make that

5

request. The disclosure shall be made at or prior to the time the information is deleted or the

6

consumer's statement regarding the disputed information is received.

7

     6-13.1-24. Registration with secretary of state. -- Any credit bureau doing business in

8

this state shall immediately register in the office of the secretary of state and shall state its

9

corporate or company name,; agent for service of process,; business address; and phone number.

10

Any credit bureau shall notify the office of secretary of state, in writing, of any change in name,

11

agent, address, or telephone number within thirty (30) days of the change.

12

     6-13.1-25. Penalties. -- A violation of section §§ 6-13.1-21, 6-13.1-22 or 6-13.1-23 shall

13

constitute a deceptive trade practice for enforcement purposes. Any credit bureau which that

14

negligently fails to comply with the requirements imposed under this chapter with respect to any

15

consumer and which that does not achieve compliance within three (3) working days of being

16

notified of its noncompliance by the consumer is liable to that consumer in an amount equal to

17

the sum of ten dollars ($10.00) per day for each day of noncompliance, beginning on the fourth

18

day following the date that the credit bureau is notified by the consumer of the noncompliance;

19

provided that there is noncompliance as determined by the court, plus any actual damages

20

sustained by the consumer as a result of the negligent failure; and in the case of any successful

21

action to enforce any provision under this chapter, the costs of the action together with reasonable

22

attorney's fees as determined by the court.

23

     6-13.1-28. Financing of motor vehicles -- Term and rate of interest prominently

24

displayed. -- (a) Any contract to finance the sale of a motor vehicle shall prominently display the

25

term and rate of interest.

26

      (b) The borrower's initials or signature shall appear immediately adjacent to the term and

27

to the rate of interest on the loan agreement which that shall only serve as an acknowledgement

28

that the borrower has been informed of the terms and rate. The borrower shall also be required to

29

separately sign the loan agreement to bind themselves himself or herself to the contract.

30

      (c) Any agreement to finance a motor vehicle that does not comply with the provision of

31

this section shall be voidable within thirty (30) days at the option of the borrower; provided,

32

however, the borrower shall be responsible for any damage to the vehicle.

33

     6-13.1-29. Furnishing of credit reports. -- No credit bureau doing business in this state

34

shall use all or part of a consumer's social security number as the sole factor when determining

 

LC005208/SUB A - Page 47 of 210

1

whether a credit report in its files matches the identity of a person who is the subject of a credit

2

inquiry from a user of credit reports. When a social security number is used as a factor, a credit

3

bureau may disclose a credit report in its files to an inquiring user of credit reports only if the

4

name and, at a minimum, at least one other identifier such as address,; prior address,; date of

5

birth,; mother's maiden name,; place of employment,; or prior place of employment,; also match

6

the identity of the person who is the subject of the inquiry.

7

     SECTION 11. Sections 6-13.2-2, 6-13.2-3, 6-13.2-4, 6-13.2-5, 6-13.2-6 and 6-13.2-7 of

8

the General Laws in Chapter 6-13.2 entitled "Comparison Price Advertising for Precious Metal

9

and Stones" are hereby amended to read as follows:

10

     6-13.2-2. Definitions. -- The following words as used in this chapter, unless a different

11

meaning is required by the context or is specifically prescribed, shall have the following

12

meanings:

13

      (1) "Advertisement" means any oral, written, or graphic statement or representation

14

made in connection with the solicitation of business in any manner for the purpose of soliciting a

15

consumer in this state by a seller and includes, without limitation because of enumeration,

16

statements and representations, but does not include price tags or in-store signs, or printed in any

17

sales literature or brochure excepting catalogs. The terms "producer", "manufacturer",

18

"wholesaler", "importer", or words of similar meaning, mean sellers that are engaged in resales,

19

not sellers of products or services for consumer, personal, family, or household use or

20

consumption. No price comparison may be made by a seller for precious metal and stones at

21

wholesale, wholesale prices, factory prices, or the like. If the prices for the sale being offered are

22

the net-cost prices retailers usually and customarily pay when they buy that merchandise for

23

resale, sales may be termed net-cost sales and in that event sellers may advertise cost prices

24

providing the substantiation of net-cost prices that are maintained for six (6) months. In no event

25

may retailers, in their departments that sell precious metals or stones, hold themselves nor or their

26

sale out as wholesalers or as wholesale prices or otherwise;

27

      (2) "Consumer property" means precious metals and stones sold primarily for personal,

28

family, gift, or household use and not for resale or for use or consumption in a trade or business.

29

For purposes of this chapter, "consumer property" includes "merchandise";

30

      (3) "Date", as applied to "date on which a price comparison is stated in the

31

advertisement" in newspapers or other printed publications, means either the date of publication

32

or distribution or the date on which the completed advertising copy is submitted to the printer for

33

final printing and publication, provided the submission date does not exceed thirty (30) days from

34

the date of actual publication or distribution;

 

LC005208/SUB A - Page 48 of 210

1

      (4) "Precious metal" means metals which that are prized because of chemical and

2

physical properties (notably resistance resistant to corrosion, hardness, strength, and beauty)

3

desirable in jewelry, coinage, and objects of art, and which that are at the same time relatively

4

rare or inexpensive. Gold, silver, and the six (6) metals of the platinum group are usually

5

considered precious metals;

6

      (5) "Precious stones" means one of the three (3) traditional categories of natural

7

gemstones, the most valuable, as distinguished from semi-precious and decorative. Diamond,

8

ruby, emerald, sapphire and pearl have long been considered "precious," but, in accordance with

9

their spiraling prices, alexandrite, black opal, cat's eye, demantoid, and jadeite are included in this

10

category;

11

      (6) "Price comparison" means the comparison, whether or not expressed wholly or in

12

part in dollars, cents, fractions or percentages, in an advertisement, of a seller's current price for

13

consumer property or services with any other price or statement of value for consumer property,

14

whether or not these prices are actually stated in the advertisement; or, the making of price

15

reductions claims or savings claims with respect to the seller's current price. The term includes,

16

but shall not be limited to, such comparisons as "fifty percent off ",; "up to seventy percent off ",;

17

"save one-third",; "half-price" sale",; thirty percent to seventy percent off ",; "was twenty dollars,

18

now half price",; "ten-dollar value, now eight dollars",; "was seven dollars now six dollars",; "list

19

price fifty dollars, our price twenty-nine dollars",; "clearance price",; or "liquidation price";

20

      (7) "Sale" means a reduction from the seller's price at which consumer property is

21

offered to the public for a fixed period of time; and

22

      (8) "Seller" means a person engaged in the sale of consumer property and includes

23

individuals, corporations, partnerships, associations, and any other form of business organization

24

or entity. The term shall not include banks, savings and loan associations, insurance companies,

25

and public utilities.

26

     6-13.2-3. Records of fact. -- Any seller advertising products or services in Rhode Island

27

for the purpose of soliciting a consumer in this state in which these advertisements are contained

28

contain representations of statements as to any type of saving claims, including reduced price

29

claims and comparative value claims, shall maintain, for six (6) months, adequate records which

30

that disclose the factual basis for these representations or statements and from which the validity

31

of any claims can be established.

32

     6-13.2-4. Price comparison -- General. -- (a) It shall be an unfair or deceptive act or

33

practice for a seller to make any price comparison:

34

      (1) Based upon a price other than one at which the consumer property was either sold or

 

LC005208/SUB A - Page 49 of 210

1

offered for sale by the seller or a competitor, or will be sold or offered for sale by the seller in the

2

future, in the regular course of business in the trade area in which the price comparison is made;

3

      (2) In which the consumer property materially differs in composition,; grade or quality,;

4

style or design,; model,; name or brand,; kind or variety,; or service and performance

5

characteristics,; unless the general nature of the material differences is conspicuously disclosed in

6

the advertisement with the price comparison, or the class of property being offered is similar to

7

but is of superior quality grade, materials, or draftsmanship than the consumer property to which

8

the seller is comparing its product; or

9

      (3) Unless all the material price terms and conditions of any offer which is that are based

10

upon the purchase of other merchandise are conspicuously disclosed. Those types of offers shall

11

include, but are not limited to "Free" "free",; "two for one",; "two-fer",; "half-price sale",; "one

12

cent sale",; "fifty percent off ",; or other similar type of offer.

13

      (b) No price comparison under this section may be made by a seller based on a price

14

which that exceeds his or her cost plus normal markup regularly used by him or her in the sale of

15

that property, or consumer property or services of like kind.

16

     6-13.2-5. Price comparison advertisements. -- It shall be an unfair or deceptive act or

17

practice for a seller to advertise or make any price comparison:

18

      (1) Based upon a price at which consumer property was sold by the seller unless:

19

      (i) The price is a price at which the consumer property was actually sold in substantial

20

quantities by the seller in the last ninety (90) days immediately preceding the date on which the

21

price comparison is stated in the advertisement; or

22

      (ii) The price is a price at which the consumer property was actually sold in substantial

23

quantities by the seller during any other period and the advertisement discloses with the price

24

comparison the date, time, or seasonal period when the sales were made.

25

      (2) Based upon a price at which the seller has offered for sale but has not sold consumer

26

property unless:

27

      (i) The price is a the price at which the consumer property was actually offered for sale

28

by the seller for at least four (4) weeks during the last ninety (90) days immediately preceding the

29

date on which the price comparison is stated in the advertisement; or

30

      (ii) The price is a price at which the consumer property was actually offered for sale by

31

the seller for at least four (4) weeks during any other ninety (90) day -day (90) period, and the

32

advertisement clearly discloses the date, time, or seasonal period of that offer.

33

      (3) In which the seller represents that the seller is conducting a "sale" unless:

34

      (i) The termination date of the "sale" is clearly stated in the advertisement; except that

 

LC005208/SUB A - Page 50 of 210

1

this disclosure shall not apply to "clearance", "closeouts", "permanent markdown", or "special

2

purchases" with limited quantities and are advertised as such; and

3

      (ii) The day after the "sale" ends, the consumer property reverts in price to the price

4

charged by the seller for the item before the "sale" began or to a price which that is higher than

5

the "sale" price, except for "clearance", "closeout", or "permanent markdown" sales where the

6

item will be reduced in price until it is removed from sale.

7

      (4) Referencing a higher price at which consumer property will be offered or sold in the

8

future unless:

9

      (i) The advertisement clearly discloses that the price comparison is based upon a future

10

price increase;

11

      (ii) The effective date of the future higher price, if more than ninety (90) days after the

12

price comparison is first stated in an advertisement, is clearly disclosed in the advertisement; and

13

      (iii) The future higher price increase takes effect on the date disclosed in the

14

advertisement or, if not disclosed in the advertisement, within ninety (90) days after the price

15

comparison is stated in the advertisement, except where compliance becomes impossible because

16

of circumstances beyond the seller's control.

17

      (5) Based upon advertised savings of a particular percentage or a range of percentages

18

(e.g., "save thirty percent" or "twenty percent to sixty percent off") unless:

19

      (i) The minimum percent reduction is clearly stated in the advertisement in the manner

20

as conspicuously as the maximum percentage reduction, when applicable;

21

      (ii) The basis other than a regular price comparison for the advertised percentage

22

reduction is clearly and conspicuously disclosed in the advertisement.

23

      (6) Based upon the use of the term "original" or "originally", to fail to disclose that

24

intermediate markdowns have been taken, if that is the case. A seller may use the term "original"

25

or "originally", when offering a reduction from an original price that was the price at which the

26

consumer property was actually offered for sale in the recent, regular course of business. If the

27

comparative price, identified as "original" or "originally", is not also the last, previous selling

28

price, that fact shall be disclosed, by stating the last, previous selling price, (e.g., "originally

29

$599.95, formerly $499.95, now $399.95") or indicating "intermediate markdowns taken".

30

     6-13.2-6. Competitor's prices. -- It shall be an unfair or deceptive act or practice for a

31

seller to make any price comparison:

32

      (1) Based upon a competitor's price unless:

33

      (i) The competitor's price is either a price at which the competitor sold or advertised

34

consumer property for sale at any time within the ninety (90) day -day (90) period immediately

 

LC005208/SUB A - Page 51 of 210

1

preceding the date on which the price comparison is stated in the advertisement, or the date on

2

which the completed advertising copy was submitted to the printer for final printing and

3

publication, provided each submission date does not exceed eight (8) weeks from the date of

4

actual publication or distribution;

5

      (ii) The competitor's price is a price that is representative of prices at which the

6

consumer property is sold or advertised for sale in the trade area in which the price comparison is

7

made and is not an isolated price; or

8

      (iii) Disclosure is made with the price comparison that the price used as a basis for the

9

comparison was not the seller's own price.

10

      (2) Based upon a "manufacturer's suggested price",; "distributor's suggested price",; "list

11

price",; "suggested retail", or any similar term implying a suggested or list price established by

12

anyone other than the seller, unless either:

13

      (i) The seller has actually offered and sold the consumer property for sale at the

14

suggested price as its regular price; or

15

      (ii) The seller can substantiate that it is the actual price at which the consumer property

16

was being offered for sale by representative retailers in the trade area in which the claim is made

17

at any time within the ninety (90) day -day (90) period immediately preceding either the date on

18

which the price comparison is stated in the advertisement,; the comparative price is for property

19

of same composition, grade, or quality, style or design, model, name or brand, kind or variety,; or

20

the date on which the completed advertising copy was submitted to the printer for final printing

21

and publication, provided the submission date does not exceed eight (8) weeks from the date of

22

actual publication or distribution.

23

     6-13.2-7. Retail price labels. -- A price label or tag permanently imprinted on or affixed

24

to consumer property or its container, by the manufacturer or supplier ("preticketed price"), and

25

not under control of the retail seller or instigated by him or her, or which that is required to be

26

attached to consumer property under federal law, need not be covered, obliterated, or removed for

27

purposes of compliance with this statute, unless that item was actually sold at that labeled price in

28

not insubstantial quantities on a substantial basis:

29

      (1) When the retail seller's current offering price is attached to, printed on, or placed on a

30

label, tag, or sign accompanying the consumer property, provided no price comparison is made

31

by the retail seller based solely on the manufacturer's price thereon unless the comparison would

32

be valid based on past sales records; or

33

      (2) When the retail seller's original offering price attached to, printed on, or placed on a

34

label, tag, or sign accompanying the consumer property, is identical to the preticketed price.

 

LC005208/SUB A - Page 52 of 210

1

     SECTION 12. Sections 6-13.3-1, 6-13.3-2, 6-13.3-3 and 6-13.3-4 of the General Laws in

2

Chapter 6-13.3 entitled "Environmental Marketing Act" are hereby amended to read as follows:

3

     6-13.3-1. Declaration of policy. -- (1) It is the public policy of the state that

4

environmental marketing claims, whether explicit or implied, must be substantiated by competent

5

and reliable evidence so as not to deceive or mislead consumers about the environmental impact

6

of products and packages.

7

      (2) Accurate and useful information about the environmental impact of products and

8

packages must be made available to consumers. The uniform standards for environmental

9

marketing claims, as contained in the FTC Federal Trade Commission guidelines for

10

environmental marketing claims are hereby adopted by the state of Rhode Island.

11

     6-13.3-2. Deceptive environmental marketing claims. -- It is unlawful for any person,

12

in the course of that person's business, vocation or occupation, to make any untruthful, deceptive,

13

or misleading environmental marketing claims about a product or package sold or offered for sale

14

in this state. For the purposes of this chapter, "person" means any individual, corporation,

15

partnership, or other legal entity.

16

     6-13.3-3. Remedies. -- (a) If the attorney general has probable cause to believe that a

17

person is violating or has violated section § 6-13.3-2, the attorney general may bring suit in the

18

name of Rhode Island in the appropriate court to restrain that person from further violations of

19

that section.

20

      (b) Before filing a suit under subsection (a) of this section, the attorney general shall, in

21

writing, notify the person charged with the alleged violation of the alleged unlawful conduct and

22

the relief to be sought. No suit shall be brought by the attorney general until thirty (30) days after

23

that notice.

24

      (c) The court may award reasonable attorney fees at trial and on appeal to a prevailing

25

party in a suit brought under this section.

26

     6-13.3-4. Defenses. -- It shall be a defense to any suit brought under this chapter that the

27

person's environmental marketing claims conform to the standards or are consistent with the

28

examples contained in the guides for use of environmental marketing claims published by the

29

federal trade commission Federal Trade Commission July 27, 1992.

30

     SECTION 13. Sections 6-14-3, 6-14-4, 6-14-6, 6-14-7, 6-14-8, 6-14-9, 6-14-10, 6-14-11,

31

6-14-11.1, 6-14-12 and 6-14-13 of the General Laws in Chapter 6-14 entitled "Closing Out Sales"

32

are hereby amended to read as follows:

33

     6-14-3. License required for sale. -- No person shall offer for sale a stock of goods,

34

wares, and merchandise under the description of "closing-out sale,"; "going-out-of-business

 

LC005208/SUB A - Page 53 of 210

1

sale,"; "discontinuance-of-business sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must

2

vacate,"; "forced out,"; "removal,"; or other designation of like meaning, or a sale of goods,

3

wares, and merchandise damaged by fire, smoke, water, or otherwise, unless he or she shall have

4

first obtained a license to conduct a sale from the clerk of the city or town in which he or she

5

proposes to conduct a sale.

6

     6-14-4. Application for license. -- The applicant for a license shall make an application

7

to the clerk, in writing and under oath, at least fourteen (14) days prior to the opening date of the

8

sale, showing all the facts in regard to the "closing out sale,"; "going-out-of-business sale,";

9

"discontinuance-of-business sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must vacate,";

10

"forced out,"; "removal,"; or other designation of like meaning, or in regard to the damage caused

11

to the goods, wares, and merchandise by fire, smoke, water, or otherwise, and showing all the

12

facts in regard to the sale which that the applicant proposes to conduct and the place and manner

13

of conducting the sale including an inventory of the goods, wares, and merchandise to be sold at

14

the sale, which inventory shall contain only goods, wares, and merchandise actually in the place

15

of business in or at which the sale is to be conducted at the time of the application together with

16

the established retail price of the goods, wares, and merchandise, and a statement, as far as

17

possible, of the names of the persons from whom the goods, wares, and merchandise to be sold

18

were obtained,; the date of the delivery of the goods, wares and merchandise to the person

19

applying for the license; and the place from which the goods, wares, and merchandise were last

20

taken; and all details to fully identify the goods, wares, and merchandise to be sold. The

21

application shall specify the proposed period of time over which the sale shall continue, which

22

period shall not exceed sixty (60) days; provided, that if it shall be made to appear upon sworn

23

application to the city or town clerk, at any time during the period of sixty (60) days, that all of

24

the goods, wares, and merchandise described and inventoried in the original application have not

25

been sold and if upon the application it is accompanied by a statement of inventory of what

26

remains, a license supplemental to the one provided for in section § 6-14-6 shall be issued by the

27

clerk upon the same terms and conditions as the original license granting authority to continue the

28

sale for a period of only thirty (30) days. The original application shall also specify whether the

29

applicant proposes to advertise or conduct the sale as a "closing out sale,"; "going-out-of-business

30

sale,"; "discontinuance-o-f business sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must

31

vacate,"; "forced out,"; "removal,"; or other designation of like meaning, or a sale of goods,

32

wares, and merchandise damaged by fire, smoke, water, or otherwise.

33

     6-14-6. Issuance of license -- Bond -- Change of ownership. -- If the clerk shall be

34

satisfied from the application that the proposed sale is of the character which that the applicant

 

LC005208/SUB A - Page 54 of 210

1

desires to conduct and advertise, the clerk shall issue a license, upon the payment of the fee of

2

one hundred dollars ($100), together with a good and sufficient bond, payable to the city or town

3

in the penal sum of one thousand dollars ($1,000), with sureties approved by a justice of the

4

district court whose judicial district is situated in the city or town in which the sale is to be

5

conducted, conditioned upon compliance with sections §§ 6-14-3 and 6-14-4 and other pertinent

6

sections of this chapter, to the person applying for the license, authorizing him or her to advertise

7

and conduct a sale of the particular kind mentioned in the application, according to the

8

requirements of this chapter; provided, that, after a change in the ownership of the whole of the

9

goods, wares, and merchandise, or of the entire balance in case a portion has already been sold,

10

no person shall carry on the sale until the new owner of the goods, wares, and merchandise or

11

balance of the goods, wares, and merchandise shall have obtained from the city or town clerk the

12

license required by section § 6-14-3 in the manner previously provided; provided further,

13

however, that any merchant who shall have been conducting a business in the same location

14

where the sale is to be held for a period of at least one full year, prior to the holding of the sale,

15

shall be exempted from the payment of the fee and the filing of the bond provided for in this

16

section.

17

     6-14-7. Record of license application. -- Every city or town clerk to whom application is

18

made as provided for in section § 6-14-4, shall endorse upon the application the date of its filing,;

19

and shall preserve the application as a record of this office,; and shall make an abstract of the

20

facts stated in the application in a book kept for that purpose, properly indexed, containing the

21

name of the person asking for the license,; the nature of the proposed sale,; the place where the

22

sale is to be conducted,; its duration,; the inventory value of the goods, wares, and merchandise to

23

be sold; and a general statement as to where the goods, wares, and merchandise came from, and

24

shall make in the book a notation as to the issuance or refusal of that license applied for together

25

with the date of the issuance or refusal; and shall endorse on the application the date the license is

26

granted or refused, and the application and abstract shall be prima facie evidence of all statements

27

therein contained. A copy of the application shall be forwarded by the city or town clerk to the

28

office of the department of the attorney general.

29

     6-14-8. Acts authorized by license. -- The license as provided for in sections §§ 6-14-3 -

30

- 6-14-6 shall be valid only for a sale of the goods, wares, and merchandise inventoried and

31

described in the application for the license in the manner and at the time and place mentioned and

32

presented in the application and any advertising relating to the sale shall prominently state the

33

designation of the sale as contained in the license granted,; the final date of the sale,; and the

34

license number. No license shall thereafter issue for conducting a sale of any goods, wares, and

 

LC005208/SUB A - Page 55 of 210

1

merchandise which that have been removed from the place of sale inventoried and described in

2

the application for the license under the provisions of this chapter at any other place or places.

3

     6-14-9. Additions to stock in contemplation of sale. -- No person, in contemplation of

4

conducting a "closing-out-sale,"; "going-out-of-business sale,"; "discontinuance-of-business

5

sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must vacate,"; "forced out,"; "removal,"; or

6

a sale of other designation of like meaning,; or a sale of goods, wares, and merchandise damaged

7

by fire, smoke, water, or otherwise, under a license as provided for in sections §§ 6-14-3 -- 6-14-

8

6, shall order any goods, wares, or merchandise for the purpose of selling and disposing of the

9

goods, wares, or merchandise at the sale, and any unusual purchase and additions to the stock of

10

the goods, wares, and merchandise within thirty (30) days prior to the filing of the application for

11

license to conduct the sale mentioned in section § 6-14-3 shall be presumptive evidence that the

12

purchases and additions to stock were made in contemplation of the sale and for the purpose of

13

selling the purchases and additions to stock at the sale.

14

     6-14-10. Additions during sale. -- No person carrying on or conducting a "closing-out

15

sale,"; "going-out-of-business sale,"; "discontinuance-of-business sale,"; "selling out,";

16

"liquidation,"; "lost our lease,"; "must vacate,"; "forced out,"; "removal,"; or a sale of other

17

designation of like meaning,; or a sale of goods, wares, and merchandise damaged by fire, smoke,

18

water, or otherwise, under a license as provided for in sections §§ 6-14-3 -- 6-14-6 shall, during

19

the continuance of the sale, for the purpose of selling and disposing of the goods, wares, and

20

merchandise at the sale, add any goods, wares, and merchandise to the stock of goods, wares, or

21

merchandise described and inventoried in the original application for the license, and no goods,

22

wares, or merchandise described and inventoried in the original application, and each addition of

23

goods, wares, or merchandise to the stock of goods, wares, or merchandise described and

24

inventoried in the application, for the purpose of selling and disposing of the goods, wares, and

25

merchandise at the sale, and each sale of the goods, wares, and merchandise at the sale, that were

26

not inventoried and described in the application, shall constitute a separate offense under this

27

chapter.

28

     6-14-11. Continuance of business after expiration of license. -- Any person who, under

29

the provisions of this chapter, conducts a "closing-out-sale,"; "going-out-of-business sale,";

30

"discontinuance-of-business sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must vacate,";

31

"forced out,"; "removal,"; or a sale of other designation of like meaning, or a sale of goods,

32

wares, and merchandise damaged by fire, smoke, water, or otherwise, beyond the date specified

33

by the sale, or who upon conclusion of the sale: (1) Continues that business which that had been

34

represented as "closing out," or "going out of business," or by similar designation as described in

 

LC005208/SUB A - Page 56 of 210

1

this chapter; or (2) Having discontinued the business, resumes the business within one year from

2

the expiration date of the license for the sale provided for in this chapter, under the same name, or

3

under a different name, at the same location, or elsewhere in the same city or town where the

4

inventory for the sale was filed, or who, upon conclusion of the sale, continues business contrary

5

to the designation of the sale; shall be deemed guilty of a misdemeanor and shall, upon

6

conviction, be fined in a sum not less than fifty dollars ($50.00) nor more than five hundred

7

dollars ($500) or shall be imprisoned for not less than ten (10) days nor more than six (6) months,

8

or both, within the discretion of the court.

9

     6-14-11.1. Purchase of stock or inventory following a sale. -- (a) It shall be unlawful

10

for any person who purchases from another the remaining stock or inventory or a portion of the

11

stock or inventory remaining from a "closing-out sale,"; "going-out-of-business sale,";

12

"discontinuance-of-business sale,"; "selling out,"; "liquidation,"; "lost our lease,"; "must vacate,";

13

"forced out,"; "removal,"; or other designation of like meaning,; or a sale of goods, wares, and

14

merchandise damaged by fire, smoke, water, or otherwise,; or who purchases stock or inventory

15

from a person who no longer sells similar merchandise at the same location,; to engage in the

16

following conduct:

17

      (1) To advertise that the stock previously belonging to the original person or business is

18

being offered for sale unless it is clearly stated what portion of the total merchandise as a

19

percentage of the total dollar value of the entire inventory being offered for sale is the goods that

20

were purchased from the original person or business.

21

      (2) To offer for sale stock previously belonging to the original person or business along

22

with additional merchandise unless items belonging to the original person or business are clearly

23

labeled as such.

24

      (b) Any person who shall violate the provisions of this section shall be deemed guilty of

25

a misdemeanor, and shall, upon conviction, be fined in the sum of not less than fifty dollars

26

($50.00) nor more than five hundred dollars ($500), or shall be imprisoned for not less than ten

27

(10) days nor more than six (6) months, or both, within the discretion of the court. In lieu of, or in

28

addition to the penalty previously provided in this subsection, the court may order the defendant

29

to pay to the court a sum not to exceed five hundred dollars ($500) for the purpose of paying for

30

an advertisement, prepared by the department of the attorney general, for placement in Rhode

31

Island newspapers, pointing out the violation(s) of this section as presented in the false

32

advertising, provided that the advertisement shall not indicate the name or address of the person

33

convicted under the provisions of this section.

34

     6-14-12. Unlicensed sales. -- Any person who shall advertise, represent, or hold out for

 

LC005208/SUB A - Page 57 of 210

1

sale a stock of goods, wares, and merchandise under the description of "closing-out sale,";

2

"going-out-of-business sale,"; "discontinuance-of-business sale,"; "selling out,"; "liquidation,";

3

"lost our lease,"; "must vacate,"; "forced out,"; "removal,"; or other designation of like meaning,;

4

or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, without

5

first having complied with the provisions of this chapter, shall be deemed guilty of a

6

misdemeanor and shall, upon conviction, be fined in a sum not less than fifty dollars ($50.00) nor

7

more than five hundred dollars ($500), or shall be imprisoned for not less than ten (10) days nor

8

more than six (6) months, or both, within the discretion of the court.

9

     6-14-13. Penalty for violations generally. -- Any person who shall hold, conduct, or

10

carry on any sale of goods, wares, or merchandise under the description of "closing-out sale,";

11

"going-out-of-business sale,"; "discontinuance-of-business sale,"; "selling out,"; "liquidation,";

12

"lost our lease,"; "must vacate,"; "forced out,"; "removal,"; or other designation of like meaning,;

13

or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, contrary

14

to the provisions of this chapter, or who shall violate any of the provisions of this chapter, shall be

15

deemed guilty of a misdemeanor and shall, upon conviction, be fined in the sum of not less than

16

fifty dollars ($50.00) nor more than five hundred dollars ($500), or shall be imprisoned for not

17

less than ten (10) days nor more than six (6) months, or both, within the discretion of the court. In

18

lieu of, or in addition to, the penalty previously provided in this section, the court may order the

19

defendant to pay to the court a sum not to exceed five hundred dollars ($500) for the purpose of

20

paying for an advertisement, prepared by the department of the attorney general, for placement in

21

Rhode Island newspapers, pointing out the violation(s) of this chapter as presented in the false

22

advertising, provided that the advertisement shall not indicate the name or address of the person

23

convicted under the provisions of this chapter.

24

     SECTION 14. Sections 6-16-1, 6-16-2, 6-16-5, 6-16-5.1, 6-16-6, 6-16-8.1, 6-16-8.2 and

25

6-16-9 of the General Laws in Chapter 6-16 entitled "Uniform Fraudulent Transfer Act" are

26

hereby amended to read as follows:

27

     6-16-1. Definitions. -- As used in this chapter:

28

      (1) "Affiliate" means:

29

      (i) A person who directly or indirectly owns, controls, or holds with power to vote

30

twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a

31

person who holds the securities:

32

      (A) As a fiduciary or agent without sole discretionary power to vote the securities; or

33

      (B) Solely to secure a debt, if the person has not exercised the power to vote;

34

      (ii) A corporation, twenty percent (20%) or more of whose outstanding voting securities

 

LC005208/SUB A - Page 58 of 210

1

are directly or indirectly owned, controlled, or held with power to vote by the debtor or a person

2

who directly or indirectly owns, controls, or holds, with power to vote, twenty percent (20%) or

3

more of the outstanding voting securities of the debtor, other than a person who holds the

4

securities:

5

      (A) As a fiduciary or agent without sole power to vote the securities; or

6

      (B) Solely to secure a debt, if the person has not in fact exercised the power to vote;

7

      (iii) A person whose business is operated by the debtor under a lease or other agreement,

8

or a person substantially all of whose assets are controlled by the debtor; or

9

      (iv) A person who operates the debtor's business under a lease or other agreement or

10

controls substantially all of the debtor's assets.

11

      (2) "Asset" means property of a debtor, but the term does not include:

12

      (i) Property to the extent it is encumbered by a valid lien;

13

      (ii) Property to the extent it is generally exempt under nonbankruptcy law; or

14

      (iii) An interest in property held in tenancy by the entireties to the extent it is not subject

15

to process by a creditor holding a claim against only one tenant.

16

      (3) "Claim" means a right to payment, whether or not the right is reduced to judgment,

17

liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,

18

equitable, secured, or unsecured.

19

      (4) "Creditor" means a person who has a claim.

20

      (5) "Debt" means liability on a claim.

21

      (6) "Debtor" means a person who is liable on a claim.

22

      (7) "Insider" includes:

23

      (i) If the debtor is an individual:

24

      (A) A relative of the debtor or of a general partner of the debtor;

25

      (B) A partnership in which the debtor is a general partner;

26

      (C) A general partner in a partnership described in subdivision (7)(i)(B); or

27

      (D) A corporation of which the debtor is a director, officer, or person in control;

28

      (ii) If the debtor is a corporation:

29

      (A) A director of the debtor;

30

      (B) An officer of the debtor;

31

      (C) A person in control of the debtor;

32

      (D) A partnership in which the debtor is a general partner;

33

      (E) A general partner in a partnership described in subdivision (7)(ii)(D); or

34

      (F) A relative of a general partner, director, officer, or person in control of the debtor;.

 

LC005208/SUB A - Page 59 of 210

1

      (iii) If the debtor is a partnership:

2

      (A) A general partner in the debtor;

3

      (B) A relative of a general partner in, a general partner of, or a person in control of the

4

debtor;

5

      (C) Another partnership in which the debtor is a general partner;

6

      (D) A general partner in a partnership described in subdivision (7)(iii)(C); or

7

      (E) A person in control of the debtor;

8

      (iv) An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and

9

      (v) A managing agent of the debtor.

10

      (8) "Lien" means a charge against, or an interest in, property to secure payment of a debt

11

or performance of an obligation, and includes a security interest created by agreement,; a judicial

12

lien obtained by legal or equitable process or proceedings,; a common-law lien,; or a statutory

13

lien.

14

      (9) "Person" means an individual, partnership, corporation, association, organization,

15

government or governmental subdivision or agency, business trust, estate, trust, or any other legal

16

or commercial entity, but does include the Rhode Island depositors economic protection

17

corporation.

18

      (10) "Property" means anything that may be the subject of ownership.

19

      (11) "Relative" means an individual related by consanguinity within the third degree as

20

determined by the common law, a spouse, or an individual related to a spouse within the third

21

degree as so determined, and includes an individual in an adoptive relationship within the third

22

degree.

23

      (12) "Transfer" means every mode, direct or indirect, absolute or conditional, voluntary

24

or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes

25

payment of money, release, lease, and creation of a lien or other encumbrance.

26

      (13) "Valid lien" means a lien that is effective against the holder of a judicial lien

27

subsequently obtained by legal or equitable process or proceedings.

28

     6-16-2. Insolvency. -- (a) A debtor is insolvent if the sum of the debtor's debts is greater

29

than all of the debtor's assets at a fair valuation.

30

      (b) A debtor who is generally not paying his or her debts as they become due is

31

presumed to be insolvent.

32

      (c) A partnership is insolvent under subsection (a) if the sum of the partnership's debts is

33

greater than the aggregate, at a fair valuation, of all of the partnership's assets and the sum of the

34

excess of the value of each general partner's nonpartnership assets over the partner's

 

LC005208/SUB A - Page 60 of 210

1

nonpartnership debts.

2

      (d) Assets under this section do not include property that has been transferred, concealed,

3

or removed with intent to hinder, delay, or defraud creditors or that has have been transferred in a

4

manner making the transfer voidable under this chapter.

5

      (e) Debts under this section do not include an obligation obligations to the extent it is

6

they are secured by a valid lien on property of the debtor not included as an asset.

7

     6-16-5. Transfers fraudulent as to present creditors. -- (a) A transfer made or

8

obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer

9

was made or the obligation was incurred if the debtor made the transfer or incurred the obligation

10

without receiving a reasonably equivalent value in exchange for the transfer or obligation and the

11

debtor was insolvent at that time, or the debtor became insolvent as a result of the transfer or

12

obligation.

13

      (b) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before

14

the transfer was made if the transfer was made to an insider for an antecedent debt,; the debtor

15

was insolvent at that time,; and the insider had reasonable cause to believe that the debtor was

16

insolvent.

17

     6-16-5.1. Transfers fraudulent as to depository creditors of financial institutions

18

closed by proclamation of the governor dated January 1, 1991 -- Remedies. -- (a) A transfer

19

made or obligation incurred by any financial institution closed by proclamation of the governor

20

dated January 1, 1991, is fraudulent as to any depository creditor of record of any such financial

21

institution as of January 1, 1991, if the transfer or obligation involved either:

22

      (1) The withdrawal of deposits from the financial institution by any officer, director, or

23

employee of the financial institution or of the Rhode Island share and deposit indemnity

24

corporation, with knowledge of the actual or impending insolvency and/or the impending closing

25

of the financial institution or of the actual or impending insolvency of and/or the actual or

26

impending cessation of business by the Rhode Island share and deposit indemnity corporation,

27

and for the purpose of avoiding the loss of funds and/or access to funds in any depository account

28

in the financial institution;

29

      (2) The encumbrance of any assets of the financial institution to or for the benefit of any

30

officer, director, or employee of the financial institution or of the Rhode Island share and deposit

31

indemnity corporation, with knowledge of the actual or impending insolvency and/or the

32

impending closing of the financial institution or of the actual or impending insolvency of and/or

33

the actual and/or impending cessation of business by the Rhode Island share and deposit

34

indemnity corporation, and for the purpose of avoiding the loss of funds and/or access to funds in

 

LC005208/SUB A - Page 61 of 210

1

any depository account in the financial institution; or

2

      (3) A transfer or obligation defined as fraudulent under section §§ 6-16-4 or 6-16-5.

3

      (b) In addition to any remedies provided by section § 6-16-7, (1) any financial institution

4

closed by proclamation of the governor dated January 1, 1991,; and (2) any assignees of and

5

successors in interest to any such financial institution,; and (3) any depository creditors creditor

6

of record of any such financial institution as of January 1, 1991, who suffers monetary loss as a

7

result of a transfer or conveyance defined as fraudulent under this section or who is otherwise

8

aggrieved by the transfer or conveyance, shall have a private cause of action at law and in equity

9

against any officer, director, or employee of the financial institution or of the Rhode Island share

10

and deposit indemnity corporation to whom the subject transfer was made or to whom or for

11

whose benefit any assets of the financial institution were encumbered.

12

     6-16-6. When transfer is made or obligation is incurred. -- For the purposes of this

13

chapter:

14

      (1) A transfer is made:

15

      (i) With respect to an asset that is real property other than a fixture, but including the

16

interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so

17

far perfected that a good faith good-faith purchaser of the asset from the debtor against whom

18

applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is

19

superior to the interest of the transferee; and

20

      (ii) With respect to an asset that is not real property or that is a fixture, when the transfer

21

is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than

22

under this chapter that is superior to the interest of the transferee;

23

      (2) If applicable law permits the transfer to be perfected as provided in subdivision (1)

24

and the transfer is not so perfected before the commencement of an action for relief under this

25

chapter, the transfer is deemed made immediately before the commencement of the action;

26

      (3) If applicable law does not permit the transfer to be perfected as provided in

27

subdivision (1), the transfer is made when it becomes effective between the debtor and the

28

transferee;

29

      (4) A transfer is not made until the debtor has acquired rights in the asset transferred;

30

      (5) An obligation is incurred:

31

      (i) If oral, when it becomes effective between the parties; or

32

      (ii) If evidenced by a writing, when the writing executed by the obligor is delivered to or

33

for the benefit of the obligee.

34

     6-16-8.1. Intentional concealment of support. -- (a) Whoever receives or conceals an

 

LC005208/SUB A - Page 62 of 210

1

asset of another knowing that the asset is being transferred for the purpose of concealing it to

2

avoid payment of an order or judgment for support issued pursuant to chapters 5, 9, 10, 11.1, and

3

13 under of title 15, or pursuant to any similar laws of other states, shall be punished by a fine of

4

not more than five thousand dollars ($5,000) or by imprisonment for not more than two (2) years,

5

or by both that fine and imprisonment.

6

      (b) Whoever shall transfer an asset for the purpose of concealing it to avoid payment of

7

an order or judgment for support issued pursuant to chapters 5, 9, 10, 11.1, and 13 under of title

8

15, or pursuant to any similar laws of other states, shall be punished by a fine of not more than

9

five thousand dollars ($5,000) or by imprisonment for not more than two (2) years, or both by

10

that fine or imprisonment.

11

     6-16-8.2. Fraudulent conveyance by transferor of child support -- Civil action. -- (a)

12

A person who has been adjudged to be in contempt of an order or judgment for child support

13

entered pursuant to chapters 9, 10, 11.1, and 13 under of title 15 who knowingly makes a

14

conveyance without fair consideration to an individual for a fraudulent purpose relating to

15

avoiding payment of the order or judgment shall be liable in a civil action to the obligee under the

16

order or judgment in an amount equal to the value of the conveyance made.

17

      (b) A person shall not be liable under this section if the conveyance made does not

18

exceed one hundred dollars ($100) in value in any calendar year.

19

      (c) For the purpose of this section, "conveyance" means any payment of money, gift,

20

assignment, transfer, or lease of tangible or intangible property.

21

      (d) A conveyance shall be deemed to be made without fair consideration unless the

22

conveyance was made in exchange for property or goods of equal value or to satisfy an existing

23

debt created in good faith.

24

     6-16-9. Extinguishment of cause of action. -- A cause of action with respect to a

25

fraudulent transfer or obligation under this chapter is extinguished unless action is brought:

26

      (1) Under section § 6-16-4(a)(1), within four (4) years after the transfer was made or the

27

obligation was incurred or, if later, within one year after the transfer or obligation was or could

28

reasonably have been discovered by the claimant;

29

      (2) Under section §§ 6-16-4(a)(2) or 6-16-5(a), within four (4) years after the transfer

30

was made or the obligation was incurred; or

31

      (3) Under section § 6-16-5(b), within one year after the transfer was made or the

32

obligation was incurred.

33

     SECTION 15. Sections 6-26-2, 6-26-3, 6-26-4, 6-26-6 and 6-26-7 of the General Laws in

34

Chapter 6-26 entitled "Interest and Usury" are hereby amended to read as follows:

 

LC005208/SUB A - Page 63 of 210

1

     6-26-2. Maximum rate of interest. -- (a) Subject to the provisions of title 19, no person,

2

partnership, association, or corporation loaning money to or negotiating the loan of money for

3

another, except duly licensed pawnbrokers, shall, directly or indirectly, reserve, charge, or take

4

interest on a loan, whether before or after maturity, at a rate which that shall exceed the greater of

5

twenty-one percent (21%) per annum or the alternate rate specified in subsection (b) of this

6

section of the unpaid principal balance of the net proceeds of the loan not compounded, nor taken

7

in advance, nor added on to the amount of the loan.

8

      (b) The alternate rate means the rate per annum which that is equal to nine percentage

9

points (9%) plus an index which that is the domestic prime rate as published in the Money Rates

10

section of The Wall Street Journal on the last business day of each month preceding the later of

11

the date of the debtor's agreement or the date on which the interest rate is redetermined in

12

accordance with the terms of the debtor's agreement. If the Wall Street Journal ceases publication

13

of the prime rate, the director of business regulation shall designate a substantially equivalent

14

index. In the event an index is published as a range of rates, then the lowest rate shall be the

15

index.

16

      (c) (1) For purposes of this section, interest shall not be construed to include:

17

      (i) Charges pursuant to chapters chapter 30 and 31 of title 27;

18

      (ii) Premiums for insurance in an amount not exceeding the reasonable value of property

19

offered as security for a loan against any substantial risk of loss, liability, damage, or destruction

20

in conformity with the insurance laws of this state;

21

      (iii) Premiums for insurance providing loss of income or involuntary unemployment

22

coverage if the coverage is not a factor in the approval by the lender of the extension of credit and

23

the debtor gives specific written indication that the cost of this coverage has been conspicuously

24

disclosed to the debtor,; that the debtor realizes that the coverage is not a condition for the

25

extension of credit,; and that the debtor voluntarily desires the coverage;

26

      (iv) Commercial loan commitment or availability fees to assure the availability of a

27

specified amount of credit for a specified period of time or, at the borrower's option,

28

compensating balances in lieu of the fees;

29

      (v) Reasonable attorney's fees customarily charged for the preparation of loan, security,

30

or mortgage documents and for the collection of defaulted loans;

31

      (vi) Fees for title examination or title insurance;

32

      (vii) Other customary and reasonable costs incident to the closing, supervision, and

33

collection of loans in this state; and

34

      (viii) Consideration received for the redemption, sale, transfer, or other disposition of

 

LC005208/SUB A - Page 64 of 210

1

equity securities by a small business investment company licensed under the provisions of the

2

"Small Business Investment Act of 1958", 15 U.S.C. section 631 et seq., as amended, or an entity

3

which that would qualify for regulation as a business development company under the provisions

4

of the "Investment Company Act of 1940", 15 U.S.C. section 80a-1 et seq., as amended, whether

5

or not the equity securities were acquired by a small business investment company or business

6

development company in connection with or as an incident to the extension of credit.

7

      (2) Any of the preceding charges, if paid or advanced by the lender, may be considered

8

part of the net proceeds of the loan, and if paid by the debtor, shall not be deducted from the net

9

proceeds of the loan.

10

      (d) Notwithstanding anything to the contrary in this chapter or in any other provision of

11

Rhode Island law, the provisions of this chapter shall not be applicable with respect to credit card

12

transactions as defined in chapter 26.1 of this title. Chapter 26.1 shall apply exclusively to all

13

such transactions.

14

      (e) Notwithstanding the provisions of subsection (a) of this section and/or any other

15

provision in this chapter to the contrary, there is no limitation on the rate of interest which that

16

may be legally charged for the loan to, or use of money by, a commercial entity, where the

17

amount of money loaned exceeds the sum of one million dollars ($1,000,000) and where

18

repayment of the loan is not secured by a mortgage against the principal residence of any

19

borrower; provided, that the commercial entity has first obtained a pro forma methods analysis

20

performed by a certified public accountant licensed in the state of Rhode Island indicating that the

21

loan is capable of being repaid.

22

     6-26-3. Criminal usury. -- Any person, who, on his or her own behalf or on behalf of

23

any other person, partnership, corporation, or association, shall willfully and knowingly violate

24

any of the provisions of section § 6-26-2, shall be guilty of criminal usury and shall be

25

imprisoned for not more than five (5) years.

26

     6-26-4. Usurious contracts -- Penalty. -- (a) Every contract made in violation of any of

27

the provisions of section § 6-26-2, and every mortgage, pledge, deposit, or assignment made or

28

given as security for the performance of the contract, shall be usurious and void.

29

      (b) Nothing contained in this section shall affect the rights of an indorsee endorsee or

30

transferee of a negotiable instrument, who purchases the instrument before maturity, for value,

31

and without notice of its usurious character.

32

      (c) Nothing contained in this section shall affect the rights, duties or liabilities of any

33

persons acting under the provisions of title 19, and if the borrower shall, either before or after

34

suit, make any payment on the contract, either of principal or interest, or of any part of either, and

 

LC005208/SUB A - Page 65 of 210

1

whether to the lender or to any assignee, indorsee endorsee, or transferee of the contract, the

2

borrower shall be entitled to recover from the lender the amount so paid in an action of the case.

3

Receipts shall be given whenever payments are made of either principal or interest.

4

      (d) The provisions previously stated in this section shall not apply to any financial

5

institution and its subsidiaries, credit union, or bank holding company and its subsidiaries,

6

organized under the laws of the state,; any other entity regulated by the department of business

7

regulation,; a national bank and its subsidiaries,; federal savings and loan association or federal

8

credit union,; or a bank, company, or association collectively and individually referred to as a

9

regulated financial institution. In the event a regulated financial institution knowingly contracts or

10

charges a usurious rate of interest in violation of any of the provisions of section § 6-26-2, it shall

11

forfeit the entire interest on the debt. In case the usurious rate of interest has been paid, the person

12

by whom it has been paid, or his or her legal representative, may recover from the regulated

13

financial institution in an action in the nature of an action on the debt, twice the amount of the

14

interest so paid, provided that the action is commenced within two (2) years from the time the

15

usurious transaction occurred.

16

     6-26-6. Damages and interest on foreign protested bill of exchange. -- Whenever any

17

foreign bill of exchange is or shall be drawn or endorsed within this state for the payment of any

18

sum of money, and the bill is or shall be returned from any place or country outside the limits of

19

the United States protested for nonacceptance or nonpayment, the drawer or endorser shall be

20

subject to the payment of ten percent (10%) damages on the bill and charges for protest, and the

21

bill shall carry an interest of six percent (6%) per annum from the date of the protest.

22

     6-26-7. Action on foreign protested bill. -- Any person having a right to demand any

23

sum of money upon a foreign protested bill of exchange as stated in section § 6-26-6, may

24

commence and prosecute an action for principal, damages, interest, and charges of protest against

25

the drawers and endorsers, jointly or severally, or against either of them separately; and judgment

26

shall and may be given for the principal, damages, and charges, and interest upon the principal

27

after the rate established in section § 6-26-6, to the time of the judgment, together with costs of

28

suit.

29

     SECTION 16. Sections 6-26.1-1, 6-26.1-2, 6-26.1-3, 6-26.1-4, 6-26.1-5, 6-26.1-9, 6-

30

26.1-11 and 6-26.1-12 of the General Laws in Chapter 6-26.1 entitled "Credit Card Lending" are

31

hereby amended to read as follows:

32

     6-26.1-1. Definitions. -- For purposes of this chapter, the following definitions shall

33

apply:

34

      (1) "Credit card device" includes any means of making a credit card transaction available

 

LC005208/SUB A - Page 66 of 210

1

to a borrower pursuant to a credit card plan, including, but not limited to, a card, draft or check,

2

identification code, other means of identification, or other credit device or code, whether made

3

directly or indirectly by means of telephone, point of sale terminal, automated teller machine,

4

computer or other electronic or other communication or device, or through the mail.

5

      (2) "Credit card lender" or "lender" means any entity that is a lending institution as

6

defined by section § 19-9-1, or licensee as defined by section § 19-14-1, which that offers or

7

extends credit in the form of a credit card transaction.

8

      (3) "Credit card transaction" means any loan or extension of credit made pursuant to a

9

credit card plan. Without limitation of the foregoing, a credit card transaction may be extended

10

under a credit card plan by a credit card lender's acquisition of obligations arising out of the

11

honoring by a merchant, or other third-party,; a credit card lender or other financial institution

12

(whether chartered or organized under the laws of this or any other state, the District of

13

Columbia, the United States or any district, territory or possession of the United States, or any

14

foreign country),; or a government or governmental subdivision or agency of a credit card device.

15

      (4) "Credit card plan" or "plan" means any arrangement or plan between a borrower and

16

a credit card lender for open-end, revolving extensions of credit made available through a credit

17

card device, provided, however, said "credit card plan" or "plan" does not include an extension of

18

credit, the repayment of which is secured by real property.

19

     6-26.1-2. Authorization to make loans -- Usury. -- Any credit card lender may, subject

20

to any limitations on lending authorities contained in its charter or otherwise imposed by law,

21

offer and extend credit to a borrower and in connection with the credit may charge and collect

22

interest, interest fees, and charges, and other charges permitted by this chapter and may take any

23

security as collateral in connection with it that may be acceptable to the credit card lender.

24

     6-26.1-3. Variable rates. -- If the agreement governing a credit card plan so provides, the

25

periodic percentage rate or rates of interest under the plan may vary in accordance with a

26

schedule or formula. The periodic rate or rates may vary from time to time as the rate determined

27

in accordance with the schedule or formula varies and the periodic rate or rates, as so varied, may

28

be made applicable to all or any part of outstanding, unpaid indebtedness under the plan on or

29

after the first day of the billing cycle that contains the effective date of the variation, including

30

any indebtedness arising out of purchases made or loans obtained prior to the variation in the

31

periodic percentage rate or rates. Without limitation, a permissible schedule or formula pursuant

32

to this section may include provisions in the agreement governing the plan for a change in the

33

periodic percentage rate or rates of interest applicable to all or any part of outstanding unpaid

34

indebtedness, whether by variation of the then-applicable periodic percentage rate or rates of

 

LC005208/SUB A - Page 67 of 210

1

interest,; variation of an index or margin,; or otherwise, contingent upon the happening of any

2

event or circumstance specified in the plan, which event or circumstance may include, but not be

3

limited to, the failure of the borrower to perform in accordance with the terms of the plan.

4

     6-26.1-4. Interest. -- A credit card lender may charge and collect interest under a credit

5

card plan on outstanding unpaid indebtedness in the borrower's account under the plan at any

6

daily, weekly, monthly, annual, or other periodic percentage rate or rates that the agreement

7

governing the plan provides or as established in the manner provided in the agreement governing

8

the plan. If the agreement governing the plan so provides, the outstanding unpaid indebtedness

9

may include the amount of any interest, interest fees and charges, and other charges outstanding.

10

Interest may be calculated using an average daily balance,; two-cycle, average daily balance,;

11

adjusted balance; or previous balance method; or using any other balance computation method

12

provided for in the agreement governing the plan. Credit card transactions may be included in the

13

outstanding unpaid indebtedness as of any time as may be specified in the agreement governing

14

the plan. Periodic billing cycles may be established in any manner and shall have the duration that

15

may be specified in the agreement governing the plan.

16

     6-26.1-5. Interest fees and charges. -- (a) In addition to, or in lieu of, interest at a

17

periodic percentage rate or rates as provided in section § 6-26.1-4, a credit card lender may, if the

18

agreement governing the credit card plan so provides, charge and collect, as interest, in any

19

manner or form that the plan may provide, one or more of the following:

20

      (1) Daily, weekly, monthly, annual, or other periodic charges in any amount or amounts

21

that the agreement may provide for the privileges made available to the borrower under the plan;

22

      (2) A transaction charge or charges in any amount or amounts that the agreement may

23

provide for each separate purchase, loan, or other transaction under the plan;

24

      (3) A minimum charge for each daily, weekly, monthly, annual or other scheduled

25

billing period under the plan during any portion of which there is an outstanding unpaid

26

indebtedness under the plan;

27

      (4) Reasonable fees for services rendered or for reimbursement of expenses incurred in

28

good faith by the credit card lender or its agents in connection with the plan, or other reasonable

29

fees incident to the application for and the opening, administration and termination of a plan

30

including, without limitation, commitment, application and processing fees,; official fees and

31

taxes,; costs incurred by reason of examination of title, inspection, appraisal, recording, mortgage

32

satisfaction, or other formal acts necessary or appropriate to the security for the plan,; and filing

33

fees;

34

      (5) Returned payment charges or charges imposed for the return of a draft or check

 

LC005208/SUB A - Page 68 of 210

1

drawn on a credit card plan evidencing an extension of credit under the plan;

2

      (6) Documentary evidence charges;

3

      (7) Stop payment fees;

4

      (8) Overlimit charges;

5

      (9) Automated teller machine charges or other electronic or interchange fees or charges;

6

      (10) Prepayment charges authorized under subsection (b) of this section; and

7

      (11) Subject to any limitations contained in this chapter, any other fees and charges that

8

are set forth in the agreement governing the plan.

9

      (b) An individual borrower may pay the outstanding unpaid indebtedness charged to the

10

borrower's account under a plan in full at any time. Except for a charge imposed to terminate a

11

plan if the agreement governing the plan so provides, a credit card lender may not impose any

12

prepayment charge in connection with the payment of outstanding unpaid indebtedness in full by

13

an individual borrower. The terms of prepayment of the outstanding unpaid indebtedness relating

14

to a credit card plan involving a borrower other than an individual borrower shall be as the lender

15

and the borrower may agree.

16

      (c) No charges assessed in accordance with this section shall be deemed void as a

17

penalty or otherwise unenforceable under any statute or the common law.

18

     6-26.1-9. Delinquent installments. -- (a) If the agreement governing a credit card plan so

19

provides, a credit card lender may impose, as interest, a late or delinquency charge upon any

20

outstanding unpaid installment payments or portions of it under the plan which that are in default;

21

provided, however, that no more than one such late or delinquency charge may be imposed in

22

with respect of to any single installment payment or portion of it, regardless of the period during

23

which it remains in default; and provided further, however, that for the purpose only of the

24

preceding provision all payments by the borrower shall be deemed to be applied to satisfaction of

25

installment payments in the order in which they become due. Nothing contained in this section

26

shall limit, restrict, or otherwise affect the right of a credit card lender to change the percentage

27

rate or rates of interest applicable to the credit plan between the credit card lender and a borrower

28

upon the occurrence of a delinquency or default or other failure of the borrower to perform in

29

accordance with the terms of the plan.

30

      (b) No charges assessed by a credit card lender in accordance with this section shall be

31

deemed void as a penalty or otherwise unenforceable under any statute or the common law.

32

     6-26.1-11. Amendment of agreement. -- (a) Unless the agreement governing a credit

33

card plan otherwise provides, a credit card lender may at any time and from time to time amend

34

the agreement in any respect, whether or not the amendment or the subject of the amendment was

 

LC005208/SUB A - Page 69 of 210

1

originally contemplated or addressed by the parties or is integral to the relationship between the

2

parties. Without limiting the foregoing, the amendment may change terms by the addition of new

3

terms or by the deletion or modification of existing terms, whether relating to plan benefits or

4

features,; the rate or rates of interest,; the manner of calculating interest or outstanding unpaid

5

indebtedness,; variable schedules or formulas,; interest fees and charges,; fees,; collateral

6

requirements,; methods for obtaining or repaying extensions of credit,; attorneys' fees,; plan

7

termination,; the manner for amending the terms of the agreement,; arbitration or other alternative

8

dispute resolution mechanisms,; or other matters of any kind whatsoever. Unless the agreement

9

governing a credit card plan otherwise expressly provides, any amendment may, on and after the

10

date upon which it becomes effective as to a particular borrower, apply to all then outstanding,

11

unpaid indebtedness in the borrower's account under the plan, including any indebtedness that

12

arose prior to the effective date of the amendment. An agreement governing a credit card plan

13

may be amended pursuant to this section regardless of whether the plan is active or inactive or

14

whether additional borrowings are available under it. Any amendment that does not increase the

15

rate or rates of interest charged by a credit card lender to a borrower under section §§ 6-26.1-3 or

16

section 6-26.1-4 may become effective as determined by the credit card lender, subject to

17

compliance by the credit card lender with any applicable notice requirements under the Truth in

18

Lending Act (15 U.S.C. section § 1601 et seq.), and the regulations promulgated under it, as in

19

effect from time to time. Any notice of an amendment sent by the credit card lender may be

20

included in the same envelope with a periodic statement or as part of the periodic statement or in

21

other materials sent to the borrower.

22

      (b) (1) If an amendment increases the rate or rates of interest charged by a credit card

23

lender to a borrower under section§§ 6-26.1-3 or section 6-26.1-4, the credit card lender shall

24

mail or deliver to the borrower, at least fifteen (15) days before the effective date of the

25

amendment, a clear and conspicuous written notice that shall describe the amendment and shall

26

also set forth the effective date of it and any applicable information required to be disclosed

27

pursuant to the following provisions of this section.

28

      (2) Any amendment that increases the rate or rates of interest charged by a credit card

29

lender to a borrower under section§§ 6-26.1-3 or section 6-26.1-4 may become effective as to a

30

particular borrower if the borrower does not, within fifteen (15) days of the earlier mailing or

31

delivery of the written notice of the amendment (or any longer period that may be established by

32

the credit card lender), furnish written notice to the credit card lender that the borrower does not

33

agree to accept the amendment. The notice from the credit card lender shall set forth the address

34

to which a borrower may send notice of the borrower's election not to accept the amendment and

 

LC005208/SUB A - Page 70 of 210

1

shall include a statement that, absent the furnishing of notice to the credit card lender of

2

nonacceptance within the referenced fifteen (15) day (or longer) time period fifteen day (15) time

3

period, the amendment will become effective and apply to the borrower. As a condition to the

4

effectiveness of any notice that a borrower does not accept the amendment, the credit card lender

5

may require the borrower to return to it all credit devices. If, after fifteen (15) days from the

6

mailing or delivery by the credit card lender of a notice of an amendment (or any longer period

7

that may have been established by the credit card lender as referenced above), a borrower uses a

8

plan by making a purchase or obtaining a loan, notwithstanding that the borrower has prior to the

9

use furnished the credit card lender notice that the borrower does not accept an amendment, the

10

amendment may be deemed by the credit card lender to have been accepted and may become

11

effective as to the borrower as of the date that the amendment would have become effective but

12

for the furnishing of notice by the borrower (or as of any later date selected by the credit card

13

lender).

14

      (3) Any amendment that increases the rate or rates of interest charged by a credit card

15

lender to a borrower under section§§ 6-26.1-3 or section 6-26.1-4 may, in lieu of the procedure

16

referenced in subdivision (2) of this subsection, become effective as to a particular borrower if the

17

borrower uses the plan after a date specified in the written notice of the amendment that is at least

18

fifteen (15) days after the mailing or delivery of the notice (but that need not be the date the

19

amendment becomes effective) by making a purchase or obtaining a loan; provided, that the

20

notice from the credit card lender includes a statement that the described usage after the

21

references date will constitute the borrower's acceptance of the amendment.

22

      (4) Any borrower who furnishes timely notice electing not to accept an amendment in

23

accordance with the procedures referenced in subdivision (2) of this subsection and who does not

24

subsequently use the plan, or who fails to use the borrower's plan as referenced in subdivision (3)

25

of this subsection, shall be permitted to pay the outstanding unpaid indebtedness in the borrower's

26

account under the plan in accordance with the rate or rates of interest charged by a credit card

27

lender to a borrower under section§§ 6-26.1-3 or section 6-26.1-4 without giving effect to the

28

amendment; provided, however, that the credit card lender may convert the borrower's account to

29

a closed-end credit account on credit terms substantially similar to those set forth in the then-

30

existing agreement governing the borrower's plan.

31

      (5) Notwithstanding the other provisions of this section, no notice required by this

32

section of an amendment of an agreement governing a credit card plan shall be required, and any

33

amendment may become effective as of any date agreed upon between a credit card lender and a

34

borrower, with respect to any amendment that is agreed upon between the credit card lender and

 

LC005208/SUB A - Page 71 of 210

1

the borrower, either orally or in writing.

2

      (c) For purposes of this section, the following are examples of amendments that shall not

3

be deemed to increase the rate or rates of interest charged by a credit card lender to a borrower

4

under section§§ 6-26.1-3 or section 6-26.1-4:

5

      (1) A decrease or increase in the required number or amount of periodic installment

6

payments;

7

      (2) Any change to a plan that increases the rate or rates in effect immediately prior to the

8

change by less than one-quarter of one percentage point (0.25%) per annum; provided that a

9

credit card lender may not make more than one such change in reliance on this subdivision with

10

respect to a plan within any twelve (12) month -month (12) period;

11

      (3) (i) A change in the schedule or formula used under a variable-rate plan under section

12

§ 6-26.1-3 that varies the determination date of the applicable rate,; the time period for which the

13

applicable rate will apply; or the effective date of any variation of the rate, or any other similar

14

change; or

15

      (ii) Any other change in the schedule or formula used under a variable-rate plan under

16

section § 6-26.1-3; provided, that the initial interest rate that would result from any change under

17

this subdivision (3), as determined on the effective date of the change or, if the notice of the

18

change is mailed or delivered to the borrower prior to the effective date, as of any date within

19

sixty (60) days before mailing or delivery of the notice, will not be an increase from the rate in

20

effect on the date under the existing schedule or formula.

21

      (4) A change from a variable-rate plan to a fixed rate, or from a fix fixed-rate to a

22

variable-rate plan so long as the initial rate that would result from such a change, as determined

23

on the effective date of the change, or if the notice of the change is mailed or delivered to the

24

borrower prior to the effective date, as of any date within sixty (60) days before mailing or

25

delivery of the notice, will not be an increase from the rate in effect on the date under the existing

26

plan;

27

      (5) A change from a daily periodic rate to a periodic rate other than daily or from a

28

periodic rate other than daily to a daily periodic rate; and

29

      (6) A change in the method of determining the outstanding unpaid indebtedness upon

30

which interest is calculated (including, without limitation, a change with respect to the date by

31

which, or the time period within which, a new balance or any portion of it must be paid to avoid

32

additional interest).

33

      (d) The procedures for amendment by a credit card lender of the terms of a plan to which

34

a borrower, other than an individual borrower, is a party may, in lieu of the foregoing provisions

 

LC005208/SUB A - Page 72 of 210

1

of this section, be as the agreement governing the plan may otherwise provide.

2

     6-26.1-12. Materiality of terms. -- All terms, conditions and other provisions of and

3

relating to a credit card plan as contained in this chapter or any other applicable chapter, or in the

4

agreement governing the plan (other than those which are interest under this chapter,) including,

5

without limitation, provisions relating to the method of determining the outstanding unpaid

6

indebtedness on which interest is applied,; time periods within which interest or interest fees and

7

charges may be avoided,; reasons for default and the right to cure any default,; right to

8

accelerate,; account cancellation,; choice of law,; change in terms requirements,; right to charge

9

and collect attorneys' fees,; court and collection costs; and the compounding of interest or interest

10

fees and charges, shall be, and hereby are deemed to be, material to the determination of interest

11

applicable to a plan under Rhode Island law, under the most favored lender doctrine, and under

12

Section 85 of the National Credit Card Lender Act (12 U.S.C. section § 85) or Section 521 of the

13

Depository Institutions Deregulation and Monetary Control Act of 1980 (12 U.S.C. section §

14

1831d) 1831(d)).

15

     SECTION 17. Sections 6-27-4, 6-27-5, 6-27-9, 6-27-10 and 6-27-11 of the General Laws

16

in Chapter 6-27 entitled "Truth in Lending and Retail Selling" are hereby amended to read as

17

follows:

18

     6-27-4. Maximum charge -- Refunds. -- (a) No creditor shall impose a finance charge in

19

excess of an amount equal to eighteen percent (18%) simple interest per annum. This subsection

20

shall not apply to any transaction in connection with which the finance charge does not exceed

21

ten dollars ($10.00). Notwithstanding the provision of any retail installment contract to the

22

contrary, a buyer may prepay in full the unpaid balance of any retail installment contract at any

23

time before its final due date and, if the buyer does so, shall receive a refund credit on the retail

24

installment contract for the prepayment. The amount of the refund credit of finance charges on

25

precomputed loans, made for an original term of sixty (60) months or less, may be calculated on

26

the method commonly referred to as the rule of 78's 78s or sum of the digits. Refund credits of

27

finance charges on precomputed loans, made for an original term greater than sixty (60) months,

28

must be at least the amount as that produced by the rule of anticipation.

29

      (b) Where the amount of refund credit is less than one dollar ($1.00), no refund credit

30

need be made.

31

      (c) Notwithstanding any contrary provision of law, the maximum finance charge which

32

that may be applied under a revolving or open-end credit plan in connection with a transaction

33

arising out of a retail sale of consumer goods, including the retail sale of gasoline, or services,

34

shall not exceed the rate or rates agreed to by the creditor and a retail buyer compared on the

 

LC005208/SUB A - Page 73 of 210

1

average daily balance of the open-end or revolving account or the unpaid balance of the open-end

2

or revolving account outstanding as of the end of the current billing cycle. Regardless of any

3

agreement to the contrary, a transaction under a revolving or open-end credit plan is subject to

4

this section whenever a solicitation for the extension of credit is made by a creditor whose

5

primary activity in Rhode Island is soliciting Rhode Island customers through the mails, and the

6

solicitation originates outside Rhode Island but is directed to, and received by, a retail buyer who

7

resides, and responds to the solicitation, in Rhode Island.

8

      (d) This section shall not apply to any person doing business under and as permitted by

9

any general or special law of this state or of the United States relating to: (1) financial institutions,

10

(2) credit unions, or (3) licensees pursuant to title 19, chapter 44 of title 6, and section § 6-26-2.

11

      (e) Under each revolving or open-end credit plan a late fee not to exceed twelve dollars

12

($12.00) may be assessed on each minimum payment not paid in full within forty (40) days

13

following the billing date of the statement on which the minimum payment first appears.

14

     6-27-5. Consumer notes. -- (a) If any contract between a retail seller and a retail buyer

15

for the sale of consumer goods and services requires or involves the execution of a promissory

16

note by a retail buyer in connection with an extension of credit by the retail seller, or by a creditor

17

to whom the retail buyer was referred by the retail seller and to whom the retail seller regularly,

18

as part of the ordinary conduct of its business, and with the actual knowledge of the creditor,

19

refers retail buyers for credit, the words "nonnegotiable consumer note" shall be placed

20

prominently on the note, and an assignee of a note with the words "nonnegotiable consumer note"

21

appearing prominently on the note shall take the note subject to the claims and defenses permitted

22

under section § 6A-3-306, irrespective of whether or not the assignee qualifies as a "holder in due

23

course" as defined in section § 6A-3-302. For the purposes of this section "consumer goods"

24

means tangible personal property used or bought for use primarily for personal, family, or

25

household purposes.

26

      (b) A creditor who obtains a note from the maker in violation of this section shall be

27

punished by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars

28

($500).

29

      (c) If a note is obtained by a creditor from a maker in violation of this section, no

30

finance, delinquency, collection, repossession, or refinancing charges may be recovered in any

31

action or proceeding based on the contract for sale by the creditor, and if the charges are

32

recovered from a maker by a holder in due course, the maker may recover the charges from the

33

creditor who violated the provisions of this section.

34

      (d) The provisions of this section shall not apply to any notes executed in connection

 

LC005208/SUB A - Page 74 of 210

1

with any financing which that is insured under federal housing administration regulations.

2

     6-27-9. Retail sales -- Refunds. -- (a) Except where a customer has been clearly

3

informed by either a poster or other appropriate notice placed at the point of display or at the cash

4

register or at the store entrance that all sales are final and that the merchandise is not returnable,

5

wherever a customer who has paid cash for an item, and who has in his or her possession a sales

6

slip or other evidence that he or she has purchased the item in a retail outlet, returns the item,

7

unused, within ten (10) business days from the date of purchase, he or she shall be entitled to a

8

refund in the same manner as paid in an amount equivalent to that paid at the time of sale.

9

      (b) This section shall not apply to the sale of books, magazines, or any publications,;

10

food,; perishable items,; merchandise which that is substantially custom-made or custom-

11

finished,; items for internal consumption,; and items sold "as is,"; or any items presently

12

prohibited for refund, return, or exchange by a retailer by federal or state law or any rule or

13

regulation promulgated by any state agency.

14

      (c) Any person, corporation, or entity, refusing or neglecting to post in accordance with

15

subsection (a), shall be deemed guilty of a misdemeanor for each violation and shall be punished

16

by a fine of not less than five hundred dollars ($500) or more than one thousand dollars ($1,000).

17

     6-27-10. Disclosure. -- (a) Any application form or written solicitation for a revolving or

18

open-end credit plan provided or offered by a creditor to a resident of this state shall contain or be

19

accompanied by either of the following disclosures: (1) A disclosure of each of the following, if

20

applicable: (i) Any periodic interest or finance charge rate that may be applied to the credit card

21

account, expressed as an annual percentage rate, or in the case of a credit card account with a

22

variable rate, the means for determining that rate; (ii) If two (2) or more periodic rates may be

23

used to compute the finance charge, each rate, the range of balances to which each rate is

24

applicable, and the corresponding annual percentage rate with respect to each periodic rate; (iii)

25

Any membership, participation, or other similar fee imposed for the issuance of a credit card or, if

26

the creditor does not impose a fee, the disclosure shall so indicate; (iv) The period within which

27

any credit extended or principal amount withdrawn from a credit card account shall be repaid to

28

avoid incurring a finance charge, and if no period is offered that fact shall be stated, except that a

29

creditor may, at its option and without disclosure, impose no finance charge when payment is

30

received after the time period's expiration; and (v) Any per-transaction fee or similar fee; or (2)

31

A disclosure that satisfies the initial disclosure statement requirements of "Regulation Z". (b)

32

Any information required to be disclosed pursuant to this section shall be disclosed in a clear and

33

conspicuous manner. (c) The provisions of this section shall not apply to oral solicitations or

34

solicitations made through or applications contained in a catalogue, magazine, newspaper, or

 

LC005208/SUB A - Page 75 of 210

1

other print media that is mailed or otherwise distributed to people in more than one state. (d) A

2

creditor need not present the disclosures required by subsection (a) of this section in chart form,

3

or use any specific terminology, except as expressly provided in this section. The following chart

4

shall not be construed in any way as a standard by which to determine whether a creditor which

5

that elects not to use the chart has provided the required disclosures in a manner which that

6

satisfies subsection (a) of this section. However, disclosures shall be conclusively presumed to

7

satisfy the requirements of subsection (a) of this section if a chart with captions substantially as

8

follows is completed with the applicable terms offered by the creditor, or if the creditor presents

9

the applicable terms in tabular, list, or narrative format using terminology substantially similar to

10

the captions included in the following chart:

11

VARIABLE ANNUALIZED

12

ANNUAL MEMBERSHIP MINIMUM OR CHARGE

13

PERCENTAGE RATE INDEX PARTICIPATION TRANSACTION FREE-RIDE

14

RATE AND SPREAD FEE FEE PERIOD

15

     (e) For the purposes of this section, "Regulation Z" means the regulation promulgated

16

and as amended by the federal reserve board Federal Reserve Board pursuant to the federal truth

17

in lending provisions Federal Truth in Lending Provisions of the "Consumer Credit Protection

18

Act," 15 U.S.C. section § 1601 et seq. (f) Nothing in this section shall be deemed or construed to

19

prohibit a creditor from disclosing additional terms, conditions, or information, whether or not

20

relating to the disclosures required under this section, in conjunction with the disclosures required

21

by this section. (g) This section does not apply to any application form or written solicitation for

22

a revolving or open-end credit plan where the credit to be extended will be secured by a lien on

23

real property. (h) Any person who knowingly and willfully violates any provision of this section

24

shall be subject to a civil penalty of not less than five hundred dollars ($500) nor more than five

25

thousand dollars ($5,000) per violation. Any application or solicitation violating this section shall

26

be treated as a single violation regardless of the number of applications or solicitations

27

distributed.

28

     6-27-11. Additional disclosures. -- In the case of any open-end consumer credit plan

29

secured by a consumer's principal residence, the following provisions shall apply:

30

      (1) The disclosures required by subdivisions (2) and (3) of this section shall be provided

31

to the consumer on a separate document on or before the closing date.

32

      (2) The following information shall be disclosed:

33

      (i) The annual percentage rate which that will be in effect when credit is first extended in

34

connection with the loan or a description of the manner in which the rate will be computed.;

 

LC005208/SUB A - Page 76 of 210

1

      (ii) The manner in which any changes in the annual percentage rate of interest will be

2

made, and the timing of any changes, including any index or other rate of interest to which the

3

changes in rates are related.;

4

      (iii) Any fee imposed for the availability of the account, including but not limited to,

5

annual fees, application fees, and the fees commonly designated as "points".;

6

      (iv) In the case of a variable rate, the maximum annual percentage rate that may be

7

imposed at any time under the plan and the maximum amount by which the annual percentage

8

rate may change in any one-year period. If no limit exists, that fact shall be disclosed.;

9

      (v) The maximum interest payment for a thirty (30) day -day (30) period at the highest

10

interest rate permitted under the terms of the open-end plan and based on the maximum amount

11

of credit available under the plan.;

12

      (vi) A statement that the plan is secured by the consumer's dwelling and, in the event of

13

any default, the consumer risks the loss of the home.;

14

      (vii) If applicable, a statement that the disclosures are good-faith estimates of the terms

15

and conditions applicable to the plan, and are subject to change before the plan is opened.;

16

      (viii) If applicable, a statement that the creditor has the right to change the terms and

17

conditions during the plan, including the index and margin used to determine the interest rate and

18

payment amount, at any time.; and

19

      (ix) If applicable, a statement that although interest-only payments may be less on a

20

monthly basis, they retire no principal, prolong the obligation, and result in greater total expenses

21

over the life of the loan.

22

      (3) (i) In addition to the requirements of this chapter, any advertisement to aid, promote,

23

or assist, directly or indirectly, the extension of consumer credit through an open-end credit plan

24

secured by the consumer's principal dwelling that states a specific monthly payment based on a

25

variable rate of interest shall state all of the following terms:

26

      (A) Any maximum or fixed amount which that could be imposed; and

27

      (B) The periodic rates expressed as annual percentage rates.

28

      (ii) If any advertisement described in subdivision (3)(i) contains a statement that any

29

interest expense incurred with respect to a plan is or may be tax deductible, the advertisement

30

shall include a clear and conspicuous statement that the interest expense may not be completely

31

deductible for all taxpayers.

32

      (iii) No advertisement described in subdivision (3)(i) with respect to any home equity

33

loan may refer to the loan as "free money or easy money."

34

     SECTION 18. The title of Chapter 6-28 of the General Laws entitled "Door to Door

 

LC005208/SUB A - Page 77 of 210

1

Sales" is hereby amended to read as follows:

2

CHAPTER 6-28

3

Door to Door Sales

4

CHAPTER 6-28

5

DOOR-TO-DOOR SALES

6

     SECTION 19. Sections 6-28-2, 6-28-4, 6-28-5, 6-28-6 and 6-28-7 of the General Laws in

7

Chapter 6-28 entitled "Door-to-Door Sales" are hereby amended to read as follows:

8

     6-28-2. Definitions. -- As used in this chapter:

9

      (1) "Business Day" means any calendar day, except Sunday or any legal holiday on

10

which regular mail deliveries are not made.

11

      (2) "Consumer Goods or Services" means goods or services purchased, leased, or rented

12

primarily for personal, family, or household purposes, including courses of instruction or training

13

regardless of the purpose for which they are taken.

14

      (3) "Door-to-Door Sale" means a sale, lease, or rental of consumer goods or services

15

with a purchase price of twenty-five dollars ($25.00) or more, whether under single or multiple

16

contracts, in which the seller or his or her representative personally solicits the sale, including

17

those in response to, or following an invitation by, the buyer, and the buyer's agreement or offer

18

to purchase is made at a home other than that of the person soliciting the transaction, or at a place

19

other than the regular place of business of the seller. The term "door-to-door sale" does not

20

include a transaction:

21

      (i) Made pursuant to the prior negotiations made by the buyer at the seller's permanent

22

business establishment where the goods are regularly sold;

23

      (ii) In which the buyer has initiated the contact and the goods or services are needed to

24

meet a bona-fide immediate, personal emergency of the buyer, and the buyer furnishes the seller

25

with a separate, dated and signed personal statement in the buyer's handwriting describing the

26

situation requiring immediate remedy and expressly acknowledging and waiving the right to

27

cancel the sale within three (3) business days;

28

      (iii) Made entirely by mail or telephone, and without any other contact between the

29

buyer and seller or its representative prior to delivery of the goods or performance of the services;

30

      (iv) In which the buyer has initiated the contact and specifically requested the seller to

31

visit his or her home for the purpose of repairing or performing maintenance upon the buyer's

32

personal property. If in the course of such a visit, the seller sells the buyer the right to receive

33

additional services or goods other than replacement parts necessarily used in performing the

34

maintenance or in making the repairs, the sale of those additional goods or services would not fall

 

LC005208/SUB A - Page 78 of 210

1

within the exclusion;

2

      (v) Pertaining to the sale or rental of real property,; to the sale of insurance,; or to the

3

sale of securities or commodities by a broker-dealer duly registered in the State of Rhode Island;

4

      (vi) Which That involves arts and crafts sold at fairs or other locations such as shopping

5

malls, civil civic centers, and schools; or

6

      (vii) In which the consumer is accorded the right of rescission by the provisions of the

7

Consumer Credit Protection Act, § 15 U.S.C. 1635, or regulations issued pursuant to that act.

8

      (4) "Place of Business" means the main or permanent branch office or local address of a

9

seller.

10

      (5) "Purchase Price" means the total price paid or to be paid for the consumer goods or

11

services, including all interest and service charges.

12

      (6) "Seller" means any person, partnership, corporation, or association engaged in the

13

door-to-door sale of consumer goods or services.

14

     6-28-4. Notices required on agreement and at time of sale -- Cancellation -- Return

15

of deposit -- Damages. -- (a) No agreement of the buyer in a door-to-door sale shall be effective

16

unless it is signed and dated by the buyer and unless it contains the following in ten (10) point) -

17

point (10), bold-face type or larger directly above the space reserved in the agreement for the

18

signature of the buyer:

19

      Notice to buyer: (1) Do not sign this agreement if any of the spaces intended for the

20

agreed terms to the extent of then available information are left blank. (2) You are entitled to a

21

copy of this agreement at the time you sign it. (3) You may at any time pay off the full, unpaid

22

balance due under this agreement, and in so doing you may be entitled to receive a partial rebate

23

of the finance and insurance charges. (4) The seller has no right to unlawfully enter your premises

24

or commit any breach of the peace to repossess goods purchased under this agreement. (5) You

25

may cancel this agreement if it has not been signed at the main office or a branch office of the

26

seller, provided you notify the seller at his or her main office or branch office shown in the

27

agreement by registered or certified mail, which that shall be posted not later than midnight of the

28

third calendar day after the day on which the buyer signs the agreement, excluding Sunday and

29

any holiday on which regular mail deliveries are not made. See the attached notice of cancellation

30

form for an explanation of buyer's rights.

31

      (b) The seller may select the method of providing the buyer with the duplicate notice of

32

cancellation, form set forth in subsection (a) of this section, provided, however, that in the event

33

of cancellation the buyer must be able to retain a complete copy of the agreement. Furthermore, if

34

both forms are not attached to the agreement, the seller is required to alter the last sentence in the

 

LC005208/SUB A - Page 79 of 210

1

statement above in subsection (a) to conform to the actual location of the forms.

2

      (c) Additionally, the seller shall, at the time of the sale, give notice to the buyer of all the

3

buyer's rights that substantially complies comply with this chapter. The notice must:

4

      (1) Appear in the agreement under the conspicuous caption: "Notice of Cancellation;";

5

and

6

      (2) Read as follows:

7

      ...(date of transaction) "You may cancel this transaction, without any penalty or

8

obligation, within three (3) business days from the above date. If you cancel, your cancellation

9

notice must state that you do not wish to be bound by the agreement and mailed by registered or

10

certified mail not later than midnight three (3) days following the buyer's signing the agreement,

11

excluding Sunday and any holiday on which regular mail deliveries are not made. All

12

cancellations must be mailed to:

13

      (insert name and address of the seller)."

14

      (d) Whenever the agreement fails to conform to the provisions of this section and the

15

buyer or his or her agent has notified the seller of his or her intent to cancel the agreement by

16

registered mail, return receipt requested, the seller shall, within twenty (20) days, return any

17

deposit made by the buyer. Failure to return any deposit shall enable the buyer to recover from

18

the seller double damages in any subsequent legal proceeding.

19

     6-28-5. Seller's obligations on cancellation. -- (a) Within twenty (20) days after a door-

20

to-door sale has been cancelled, the seller shall tender to the buyer any payments made by the

21

buyer and any note or other evidence of indebtedness. Any security interest arising out of the

22

transaction will be canceled.

23

      (b) If the down payment downpayment includes goods traded in, the goods shall be

24

tendered in substantially as good condition as when received. If the seller fails to tender the goods

25

as provided by this section, the buyer may elect to recover an amount equal to the trade-in

26

allowance stated in the agreement.

27

      (c) The seller may retain as a cancellation fee five percent (5%) of the cash price,; five

28

dollars ($5.00) ,; or the amount of the cash down payment, whichever is least. If the seller fails to

29

comply with an obligation imposed by this section, or if the buyer avoids the sale on any ground

30

independent of his right to cancel under section § 6-28-3, the seller is not entitled to retain a

31

cancellation fee.

32

      (d) Until the seller has complied with the obligations imposed by this section, the buyer

33

may retain possession of goods delivered to him or her by the seller and has a lien on the goods

34

for any recovery to which the buyer is entitled.

 

LC005208/SUB A - Page 80 of 210

1

     6-28-6. Statement required on note. -- Any note or other evidence of indebtedness

2

given by a buyer in connection with a door-to-door sale shall be dated not earlier than the date of

3

the agreement or offer to purchase. The seller shall cause the words "Nonnegotiable consumer

4

note" to be placed prominently on the note, and an assignee or holder of a note or other evidence

5

of indebtedness with the words "Nonnegotiable consumer note" appearing prominently on the

6

note shall take the note subject to the claims and defenses permitted under section § 6A-3-306,

7

irrespective of whether or not an assignee or holder qualifies as a "holder in due course" as

8

defined in section § 6A-3-302.

9

     6-28-7. Buyer's obligations on cancellation. -- (a) Except as provided in section § 6-28-

10

5(d), within twenty (20) days after a door-to-door sale has been cancelled by the buyer, upon

11

demand the buyer shall tender to the seller any goods delivered by the seller pursuant to the sale,

12

but the buyer is not obligated to tender at any place other than his or her own address. Buyer's

13

compliance with the seller's instructions regarding the return shipment of the goods shall be at the

14

seller's expense and risk. If the seller fails without interference from the buyer to take possession

15

of the goods within twenty (20) days after cancellation, the goods shall become the property of

16

the buyer without obligation to pay for them.

17

      (b) The buyer shall take reasonable care of the goods in his or her possession both prior

18

to cancellation and during the twenty (20) day -day (20) period following. During the twenty (20)

19

day -day (20) period after cancellation, except for the buyer's duty of care, the goods are at the

20

seller's risk.

21

      (c) If the seller has performed any services pursuant to a door-to-door sale prior to its

22

cancellation, the seller is entitled to no compensation except the cancellation fee provided in this

23

chapter. If the seller's services result in the alteration of property of the buyer, the seller shall

24

restore the property to substantially as good condition as it was at the time the services were

25

rendered.

26

     SECTION 20. Sections 6-28.1-2, 6-28.1-3 and 6-28.1-4 of the General Laws in Chapter

27

6-28.1 entitled "Unfair Home Improvement Loans to Senior Citizens" are hereby amended to read

28

as follows:

29

     6-28.1-2. Definitions. -- (a) "Consumer" means an individual who seeks or acquires, by

30

purchase or lease, any goods or services for personal, family, or household purposes.

31

      (b) "Disabled person" means any person who has a physical or mental impairment that

32

substantially limits one or more major life activities.

33

      (c) "Goods" means tangible chattels bought or leased for use primarily for personal,

34

family, or household purposes, including certificates or coupons exchangeable for these goods,

 

LC005208/SUB A - Page 81 of 210

1

and including goods which that, at the time of the sale or subsequently, are to be so affixed to real

2

property as to become a part of real property whether or not severable from real property.

3

      (d) "Home solicitation" means any transaction made at the consumer's primary

4

residence, except those transactions initiated by the consumer. A consumer response to an

5

advertisement is not a home solicitation.

6

      (e) "Person" means an individual, partnerships, corporation, limited-liability company,

7

association, or other group, however organized.

8

      (f) "Senior citizens citizen" means a person who is sixty-five (65)years of age or older.

9

      (g) "Services" means work, labor, and services for other than a commercial or business

10

and including services furnished in connection with the sale or repair of goods.

11

      (h) "Transaction" means an agreement between a consumer and any other person,

12

whether or not the agreement is a contract enforceable by action, and includes the making of, and

13

the performance pursuant to, that agreement.

14

     6-28.1-3. Home solicitation. -- (a) The following unfair methods of competition and

15

unfair or deceptive acts or practices undertaken by any person in a transaction intended to result

16

or which results in the sale or lease of goods or services to any consumer are unlawful:

17

      The home solicitation of a consumer who is a senior citizen where a loan is made

18

encumbering the primary residence of that consumer for the purposes of paying for home

19

improvements and where the transaction is part of a pattern or practice in violation of either

20

subsection (h) or (i) of 15 U.S.C. section § 1639 or subsection (e) of 12 CFR 226.32.

21

      (b) A third party shall not be liable under this section unless: (1) there There was an

22

agency relationship between the party who engaged in home solicitation and the third party,; or

23

(2) the The third party had actual knowledge of or participated in the unfair or deceptive

24

transaction. A third party who is a holder in due course under a home solicitation transaction shall

25

not be liable under this section.

26

     6-28.1-4. Penalty for violation. -- Anyone who violates any provision of this chapter

27

shall be guilty of a misdemeanor. Any person, firm, or corporation, which who or that has been

28

found guilty, as previously stated, or any person, firm, or corporation acquiring derivative rights

29

from someone found guilty shall be prohibited from maintaining any civil action for the recovery

30

of any debt created as a result of the violation and shall issue a discharge of any encumbrance

31

recorded on the real property securing the debt.

32

     SECTION 21. Section 6-29-1 of the General Laws in Chapter 6-29 entitled "Referral

33

Selling" is hereby amended to read as follows:

34

     6-29-1. Home solicitation referral selling. -- No seller in a home solicitation sale or a

 

LC005208/SUB A - Page 82 of 210

1

cash sale as defined in section § 6-28-2 shall offer to pay a commission or give a rebate or

2

discount to the buyer in consideration of the buyer's giving to the seller the names of prospective

3

purchasers or otherwise aiding the seller in making a sale to another person, unless the seller

4

actually delivers to the purchaser a chart showing the actual experience of purchasers for the three

5

(3) calendar years ending prior to the contract under consideration, including the number of and

6

monies paid to those who participated in the plan, and unless there shall be a separate, written

7

agreement signed and dated by the buyer and also signed by the seller containing the following in

8

ten (10) point -point (10) bold-face type or larger, directly above the space reserved in the

9

agreement for the signature of the buyer:

10

      (1) No purchase of goods or services between the parties to the sale has been induced by

11

the promise of monies to be earned under this agreement.;

12

      (2) The purchase price of any goods or services in any transaction between the parties to

13

the sale has not been increased in any way because of this agreement.;

14

      (3) No payments due under this agreement may be held up, credited, or set-off toward

15

payment of any obligation between the parties except on written authorization specifically

16

allowing that action.; and

17

      (4) No other representations or agreements, oral or written, have been made by the

18

parties to the sale relating to the terms of this agreement.

19

     SECTION 22. Sections 6-30-3, 6-30-4 and 6-30-6 of the General Laws in Chapter 6-30

20

entitled "Distribution of Credit Cards" are hereby amended to read as follows:

21

     6-30-3. Exceptions. -- The provisions of this chapter shall not apply to:

22

      (1) The issuance of any credit card to any individual who shall at the time of the issuance

23

have a credit account relationship with the issuer.

24

      (2) The issuance of any credit card to any individual whose credit account shall have

25

been transferred to the issuer by any other person engaged in the business of granting or

26

extending credit by the use of a credit card.

27

      (3) The renewal of any credit card previously issued which that has been used by the

28

cardholder during the previous new or renewal term.

29

     6-30-4. Penalty for violation. -- Anyone who violates any provision of this chapter shall

30

be guilty of a misdemeanor. Any person, firm, or corporation, which who or that has been found

31

guilty of violating any provision of this chapter, or any person, firm, or corporation acquiring

32

derivative rights from someone found guilty shall be prohibited from maintaining any civil action

33

for the recovery of any debt created through the use of the credit card.

34

     6-30-6. Credit card transactions -- Printing of accounting numbers on receipts. -- (a)

 

LC005208/SUB A - Page 83 of 210

1

As used in this section, the following terms shall have the following meanings:

2

      (1) "Cardholder" means the person named on the face of a credit card to whom or for

3

whose benefit the credit card is issued by an issuer and shall include any employee or other agent

4

or authorized user of the card;

5

      (2) "Credit card" shall be defined as stated in section § 6-30-2;

6

      (3) "Issuer" means the financial institution or other business organization which that

7

issues a credit card or its duly authorized agent;

8

      (4) "Person" means an individual or corporation, partnership, trust, association, joint-

9

venture pool, syndicate, sole proprietorship, unincorporated organization, or any other legal

10

entity; and

11

      (5) "Provider" means a person who furnishes money, goods, services, or anything else of

12

value upon presentation, whether physically, in writing, verbally, electronically, or otherwise of a

13

credit card by the cardholder, or any agent or employee of such person.

14

      (b) Except as otherwise provided in this section, no provider shall print or otherwise

15

produce or reproduce, or permit the printing or other production or reproduction of either of the

16

following:

17

      (1) Any part of the credit card account number, other than the last five (5) digits or other

18

characters on any receipt provided or made available to the cardholder; or

19

      (2) The credit card expiration date on any receipt provided or made available to the

20

cardholder.

21

      (c) This section shall not apply to a credit card transaction in which the sole means

22

available to the provider of recording the credit card account number is by handwriting or by

23

imprint of the card.

24

      (d) This section shall not apply to receipts issued for transactions on the electronic

25

benefits transfer card system.

26

      (e) Any cardholder, whose credit card has been the subject of a violation of this section,

27

or the issuer of such a card, may bring a civil action in the superior court against the provider who

28

violated the provisions of this section to recover or obtain one or all of the following remedies:

29

      (1) Damages or expenses, or both, which that the cardholder or issuer incurred due to the

30

provider's violation of this section;

31

      (2) Court costs, including reasonable attorneys' fees;

32

      (3) Injunctive or equitable relief, as appropriate; and

33

      (4) Any other relief the court deems proper.

34

      (f) The provisions of this section shall become effective on January 1, 2007, with respect

 

LC005208/SUB A - Page 84 of 210

1

to any cash register or other machine or device that electronically prints receipts for credit card

2

transactions that is in use prior to January 1, 2005.

3

      (g) The provisions of this section shall become effective on January 1, 2005, with respect

4

to any cash register or other machine or device that electronically prints receipts for credit card

5

transactions that is first put into use on or after January 1, 2005.

6

     SECTION 23. Sections 6-31-1, 6-31-2, 6-31-3 and 6-31-5 of the General Laws in

7

Chapter 6-31 entitled "Unit Pricing" are hereby amended to read as follows:

8

     6-31-1. Definitions. -- As used in this chapter:

9

      (1) "Consumer commodity" means any food, drug, device, or cosmetic and other article,

10

product, or commodity of any other kind or class, except for drugs sold only by prescription,

11

which that:

12

      (i) Are customarily produced for sale to retail sales agencies or instrumentalities for

13

consumption by individuals,; for use by individuals for purposes of personal care; or in the

14

performance of services ordinarily rendered in or around the household; and

15

      (ii) Usually are consumed or expended in the course of the consumption or use.

16

      (2) "Director" means the director of business regulation.

17

      (3) "Retail price" means the price at which the consumer commodity is sold to the

18

ultimate customer.

19

      (4) "Sale at Retail" means sale of a consumer commodity to the ultimate customer.

20

      (5) "Total price" of a consumer commodity means the full purchase price of a consumer

21

commodity without regard to units of weight, measure, or count.

22

      (6) "Ultimate customer" is a person who purchases a product other than for resale.

23

      (7) "Unit price" of a consumer commodity means the retail price of a consumer

24

commodity expressed in terms of the retail price of the commodity per the unit of weight,

25

measure, or count, as the director designates, computed to the nearest whole cent or fraction

26

thereof as the director designates.

27

     6-31-2. Consumer information required. -- (a) (1) Every person who sells, offers for

28

sale, or exposes for sale at retail any aluminum foil, bread, carbonated soft drinks, cereals,

29

cooking oils, dog or cat food, facial tissues, fish, fowl, fruits, grains, meats, napkins, plastic food

30

wrapping, vegetables, waxed paper, or other consumer commodity designated by the director,

31

shall disclose to the consumer the unit price of the consumer commodity as provided in this

32

chapter.

33

      (2) The same unit of weight, measure, or count shall be utilized to express the unit price

34

of different sizes or brand names of the same or similar consumer commodities. All stamps, tags,

 

LC005208/SUB A - Page 85 of 210

1

or labels expressing the total price shall be standardized within each place of business, and shall

2

set forth the cents from dollars by use of a decimal point, different type or type size, or a cents

3

sign.

4

      (b) Every person who sells, offers for sale, or exposes for sale at retail any consumer

5

commodity shall disclose to the consumer the total price of the consumer commodity as provided

6

in this chapter.

7

      (c) Wherever meat, poultry, fish, fresh vegetables, and fresh fruit are sold by a measure

8

of weight and are packaged or wrapped for sale by a retailer in advance of being sold, offered for

9

sale, or exposed for sale, an accurate computing scale of adequate capacity shall be placed in a

10

conspicuous accessible location so the buyer may weigh the product which that is being

11

purchased.

12

     6-31-3. Means of disclosure. -- Persons subject to the requirements of section § 6-31-2

13

shall disclose the unit price and total price to consumers in one or more of the following

14

appropriate ways:

15

      (1) If the consumer commodity is so located that it is not conspicuously visible to the

16

consumer, or if the consumer commodity is so located that the price information, if displayed in

17

accordance with subdivision (2), would not be conspicuously visible to the consumer, by a sign or

18

list bearing the price information conspicuously placed near the point of procurement; or

19

      (2) By attachment of a stamp, tag, or label directly adjacent to the consumer commodity,

20

on the shelf on which the commodity is displayed, or by stamping or affixing the price

21

information on the commodity itself; provided, however, that upon each commodity shall be

22

stamped or affixed the total price of the commodity in arabic numerals, if and when a

23

computerized system is used; or

24

      (3) In accord with regulations promulgated by the director.

25

     6-31-5. Director's powers. -- (a) The director shall do all of the following:

26

      (1) Designate by regulation those consumer commodities, in addition to the consumer

27

commodities specifically enumerated in section § 6-31-2(a), as to which display of the unit price

28

shall be required, upon a determination that the display will be in the best interest of consumers;

29

      (2) Designate by regulation the unit of weight, measure, or count in terms of which the

30

unit price of each consumer commodity shall be expressed, provided that no designated unit shall

31

be such as to require persons subject to the provisions of section § 6-31-2(a) to measure any

32

consumer commodity solely for the purpose of complying with section § 6-31-2(a);

33

      (3) Designate by regulation whether the unit price of each consumer commodity subject

34

to the provisions of section § 6-31-2(a) shall be expressed to the nearest whole cent or to an

 

LC005208/SUB A - Page 86 of 210

1

appropriate fraction thereof;

2

      (4) Exempt, by regulation, classes of retail establishments from any or all requirements

3

of this chapter upon a determination that because sales of consumer commodities regulated by

4

this chapter are purely incidental to the business of the classes of retail establishments,

5

compliance with this chapter is impracticable and unnecessary for adequate protection of

6

consumers; provided, however, that any person, firm, corporation, or other business entity with

7

less than eight (8) full-time employees shall be exempt from the provisions of this chapter;

8

      (5) Prescribe, by regulation, means for the disclosure of price information upon

9

determination that they are more effective than those prescribed in section § 6-31-3; and

10

      (6) Promulgate any other regulation necessary to effectuate the provisions of this chapter

11

in accordance with the best interests of consumers.

12

      (b) The director shall give public notice of his or her intention to promulgate regulations

13

pursuant to subsection (a) and shall receive the opinions of interested parties on the regulations.

14

Regulations shall take effect thirty (30) days from the date on which the notice is given.

15

      (c) The director shall hold hearings whenever he or she has probable cause to believe, or

16

whenever twenty-five (25) or more citizens state in writing to the director their belief, that the

17

actions of any person subject to the provisions of this chapter have evidenced a pattern of

18

noncompliance with any or all of those provisions. Pursuant to the hearings, to which the

19

suspected violator shall be invited with written notice at least ten (10) days before the hearing is

20

held, the director shall, upon a finding that a pattern of noncompliance has been shown:

21

      (1) Issue a warning citation; or

22

      (2) Report any pattern of noncompliance to the attorney general who shall cause

23

appropriate proceedings to be instituted in the proper courts.

24

     SECTION 24. Sections 6-32-1, 6-32-2, 6-32-3 and 6-32-5 of the General Laws in

25

Chapter 6-32 entitled "Lay Away Sales" are hereby amended to read as follows:

26

     6-32-1. "Lay away sales" defined "Lay-away sales" defined. -- As used in this

27

chapter, "lay-away sales" means any sale of goods in which the goods are offered for sale to the

28

public on terms which that permit periodic payment for the goods, and with respect to which

29

delivery is deferred until completion of payment of the entire purchase price.

30

     6-32-2. Duties of the seller. -- It shall be unlawful for any seller of goods:

31

      (1) To fail to disclose or to misrepresent in any way the store's policy with reference to a

32

"lay-away" sale;

33

      (2) To represent to a buyer who is purchasing on a "lay-away" sale that the specific

34

goods chosen by the buyer or an exact duplicate of the goods are being laid away for that buyer

 

LC005208/SUB A - Page 87 of 210

1

when that is not a fact;

2

      (3) To fail to disclose to the buyer that the specified goods or their exact duplicate will

3

only be set aside for a certain period of time;

4

      (4) To deliver to the buyer after payments (pursuant to the lay-away sale) are completed,

5

goods which that are not identical to, or exact substitutes to of, those specified, unless prior

6

approval in writing has been received from the buyer;

7

      (5) To increase the price of the goods specified either by way of increasing the payments

8

or substituting goods that are of a lower quality or price;

9

      (6) To fail to deliver to the buyer, on any date payment is made, a receipt showing the

10

amount and the date of that payment, and, upon request, the balance of payments made up to that

11

date.

12

     6-32-3. Right to cancel -- Method -- Exception for special order merchandise. Right

13

to cancel -- Method -- Exception for special-order merchandise. -- (a) In addition to any right

14

otherwise to revoke an offer, the buyer may cancel a lay-away plan sale by written notice of

15

cancellation to the seller at the address specified for notice of cancellation provided by the seller

16

not later than midnight ten (10) days following the buyer's signing the agreement, excluding

17

Sunday and any holiday on which regular mail deliveries are not made. After the ten (10) days the

18

seller may retain no more than ten percent (10%) of the total payments made. The notice of

19

cancellation shall be by personal delivery of registered or certified mail.

20

      (b) This right to cancel a lay-away plan sale shall not apply to special order merchandise,

21

whichthat, for the purposes of this section, means:

22

      (1) Merchandise which that is to be custom made and the seller has made either a

23

commitment for its procurement or a substantial beginning of its production; or

24

      (2) Merchandise that substantially differs from the merchandise that the seller ordinarily

25

offers for sale.

26

     6-32-5. Seller's obligations on cancellation. -- Within thirty (30) days after a lay-away

27

sale has been cancelled, the seller shall tender to the buyer any payments made by the buyer and

28

any note or other evidence of indebtedness. If the down payment includes goods traded in, the

29

goods shall be tendered in substantially as good condition as when received. If the seller fails to

30

tender the goods as provided in this section, the buyer may elect to recover an amount equal to

31

the trade in allowance stated in the agreement.

32

     SECTION 25. Section 6-34.1-1 of the General Laws in Chapter 6-34.1 entitled "Law

33

Applicable to Construction Contracts" is hereby amended to read as follows:

34

     6-34.1-1. Law applicable to construction contracts. -- (a) If a contract is principally for

 

LC005208/SUB A - Page 88 of 210

1

the construction or repair of improvements to real property located in Rhode Island and the

2

contract contains a provision that makes the contract or any conflict arising under it subject to the

3

law of another state,; to litigation in the courts of another state,; or to arbitration in another state,;

4

that provision is voidable by the party that is obligated by the contract to perform the construction

5

or repair.

6

      (b) A contract is principally for the construction or repair of improvements to real

7

property located in Rhode Island if the contract obligates a party, as its principal obligation under

8

the contract, to provide labor, or labor and materials, for the construction or repair of

9

improvements to real property located in Rhode Island as a general contractor or subcontractor.

10

      (c) A contract is not principally for the construction or repair of improvements to real

11

property located in Rhode Island if:

12

      (1) The contract is a partnership agreement or other agreement governing an entity or

13

trust;

14

      (2) The contract provides for a loan or other extension of credit and the party promising

15

to construct or repair improvements does so as part of its agreements with the lender or other

16

extender of credit; or

17

      (3) The contract is for the management of real property or improvements and the

18

obligation to construct or repair is part of that management.

19

      (d) Subsections (b) and (c) of this section are not an exclusive list of situations in which

20

a contract is or is not principally for the construction or repair of improvements to real property

21

located in this state.

22

      (e) The superior court of the state of Rhode Island shall have exclusive jurisdiction in

23

relation to the construing or enforceability of section § 6-34.1-1.

24

     SECTION 26. Sections 6-36-2, 6-36-3, 6-36-6, 6-36-9, 6-36-11, 6-36-12, 6-36-23 and 6-

25

36-24 of the General Laws in Chapter 6-36 entitled "Antitrust Law" are hereby amended to read

26

as follows:

27

     6-36-2. Purpose -- Rules of construction. -- (a) The purposes of this chapter are:

28

      (1) To complement the laws of the United States governing monopolistic and restrictive

29

trade practices; and

30

      (2) To promote the unhampered growth of commerce and industry throughout the state

31

by prohibiting unreasonable restraints of trade and monopolistic practices, inasmuch as these

32

have the effect of hampering, preventing, or decreasing competition. It is intended, that as a

33

result, the prices of goods and services to consumers will be fairly determined by free market

34

free-market competition in activities affecting trade or commerce in this state, including the

 

LC005208/SUB A - Page 89 of 210

1

manufacturing, distribution, financing, and service sectors of the economy, except as otherwise

2

provided by the statutes, regulations, and judicial decisions of this state. The general assembly

3

intends to fully exercise its power to affect and regulate commerce in order to effectuate the

4

purpose of this chapter.

5

      (b) This chapter shall be construed in harmony with judicial interpretations of

6

comparable federal antitrust statutes insofar as practicable, except where provisions of this

7

chapter are expressly contrary to applicable federal provisions as construed.

8

     6-36-3. Definitions. -- For the purposes of this chapter, the terms defined in this section

9

have the following meanings:

10

      (1) "Commodity" means any goods, merchandise, wares, produce, chose in action,

11

article of commerce, or any other tangible or intangible property, real, personal, or mixed, for use,

12

consumption, enjoyment, or resale;

13

      (2) "Department" means the department of attorney general of this state;

14

      (3) "Documentary material" means any original or copy of any book, record,

15

memorandum, paper communication, tabulation, map, chart, photograph, mechanical

16

transcription, or other tangible document or recording;

17

      (4) "Investigative demand" or "demand" means an investigative demand pursuant to

18

section § 6-36-9(b);

19

      (5) "Person" means any natural person or the estate of any natural person,; or trust or

20

association of persons, whether formal or otherwise,; or any corporation, partnership, company,

21

or any other legal or commercial entity;

22

      (6) "Public body" means the state of Rhode Island,; any of its public agencies,; cities and

23

towns,; its other political subdivisions; and other authorities;

24

      (7) "Service" means any kind of activity performed in whole or in part for financial gain

25

including, but not limited to, personal services;

26

      (8) "Trade or commerce" means any economic activity of any type whatsoever involving

27

any commodity or service or business activity whatsoever.

28

     6-36-6. Certain contracts unlawful. -- A contract for the supplying of commodities or

29

furnishing of services,; or for the fixing of prices charged for the commodities or services,; or for

30

the giving or selling of a discount or rebate, on the condition, agreement, or understanding that

31

one party shall not deal in the commodities or services of a competitor or competitors of the other

32

party; is unlawful where the effect of the contract or the condition, agreement, or understanding

33

may be to lessen competition or tend to create a monopoly in any line of commerce in any region

34

of this state.

 

LC005208/SUB A - Page 90 of 210

1

     6-36-9. Investigation by attorney general. -- (a) General power of investigation. -

2

Whenever it appears to the attorney general, upon reasonable cause, that any person has engaged

3

in, engages in, or is about to engage in any act or practice prohibited by this chapter,; or that any

4

person has assisted or participated in any plan, scheme, agreement, or combination of the nature

5

prohibited by this chapter,; or whenever the attorney general believes it to be in the public interest

6

that an investigation be made,; he or she may, in his or her discretion, either require or permit the

7

complainant to file with the attorney general a statement in writing under oath or otherwise as to

8

all facts and circumstances concerning the subject matter which that the attorney general believes

9

to be in the public interest to investigate. The attorney general may also require any other data

10

and information from the complainant that he or she deems relevant and may make any special

11

and independent investigations that he or she deems necessary in connection with the matter. In

12

addition, the attorney general may take any measures that will not violate due process of law to

13

preserve the confidentiality of the complainant's identity.

14

      (b) Investigative demand. - (1) Whenever the attorney general has reason to believe that

15

any person may have knowledge or be in possession, custody, or control of any documentary

16

material pertinent to an investigation of a possible violation of this chapter, the attorney general

17

may issue in writing and cause to be served upon the person an investigative demand by which

18

the attorney general may:

19

      (i) Compel the attendance of the person and require him or her to submit to examination

20

and give testimony under oath;

21

      (ii) Require the production of documentary material pertinent to the investigation for

22

inspection or copying; and/r and/or

23

      (iii) Require answer to written interrogatories to be furnished under oath.

24

      (2) The power to issue investigative demands shall not neither abate or nor terminate by

25

reason of the bringing of any action or proceeding under this chapter. The attorney general may

26

issue successive investigative demands to the same person in order to obtain additional

27

information pertinent to an ongoing investigation.

28

      (c) Contents of investigative demand. - Each investigative demand shall:

29

      (1) State the section or sections of the chapter the alleged violation of which is under

30

investigation, and the general subject matter of this investigation;

31

      (2) Prescribe a reasonable return date no less than forty (40) days after service of the

32

investigative demand, provided that an earlier date may be prescribed under compelling

33

circumstances, but in no event less than twenty (20) days;

34

      (3) Specify the time and place at which the person is to appear and give testimony,;

 

LC005208/SUB A - Page 91 of 210

1

produce documentary material,; and furnish answers to interrogatories,; or do any or a

2

combination of these things;

3

      (4) Describe by class any documentary material required to be produced, so as to clearly

4

indicate what is demanded; and

5

      (5) Contain any interrogatories to which written answers under oath are required.

6

      (d) Prohibition against unreasonable demand. - No investigative demand shall:

7

      (1) Contain any requirement which that would be unreasonable or improper if contained

8

in a subpoena issued by a court of this state; or

9

      (2) Require the disclosure of any material or information which that would be privileged,

10

or which for any other reason would not be required to be disclosed by a subpoena issued by a

11

court of this state, including, but not limited to, trade secrets or confidential scientific, technical,

12

merchandising, production, management, or commercial information, to the extent that the

13

material or information is protected pursuant to the rules of civil procedure of the superior court.

14

      (e) Offer of documentary evidence. - Where the information requested upon oral

15

examination or written interrogatory pursuant to an investigative demand may be derived or

16

ascertained from the business records of the person upon whom the demand has been served,; or

17

from an examination, audit, or inspection of the business records,; or from a compilation,

18

abstract, or summary based on the records,; and the burden of deriving or ascertaining the answer

19

is substantially the same for the attorney general as for the person from whom the information is

20

requested, it is sufficient for that person to specify the records from which the answer may be

21

derived or ascertained and to afford the attorney general reasonable opportunity to examine,

22

audit, or inspect the records and to make copies, compilations, abstracts, or summaries.

23

      (f) Service of investigative demand. - An investigative demand may be served by any

24

means provided under the Rhode Island rules of civil procedure for service of a complaint in a

25

civil action.

26

      (g) Motion to quash. - Within forty (40) days after the service of an investigative demand

27

or at any time before the return date specified in the demand, whichever period is shorter, the

28

person served may file in a state superior court and serve upon the attorney general a petition for

29

an order of court modifying or setting aside the demand. The time allowed for compliance in

30

whole or part with the demand as deemed proper and ordered by the court shall not run while the

31

petition is pending before the court. The petition shall specify each ground upon which the

32

petitioner relies in seeking relief, and may be based upon any failure of the demand to comply

33

with the provisions of this chapter or upon any constitutional or other legal right, privilege, or

34

qualified privilege of the party, including that the material or information sought constitutes trade

 

LC005208/SUB A - Page 92 of 210

1

secrets or confidential scientific, technical, merchandising, production, management, or

2

commercial information. If qualified privilege is raised, the court may order the person to comply

3

with the demand only upon showing of particularized need and subject to an appropriate

4

protective order. The provisions of this subsection shall be the sole and exclusive means for

5

challenging the requirements of a demand.

6

      (h) Those authorized to examine. - The examination of all persons pursuant to this

7

section shall be conducted by the attorney general or a representative designated in writing by

8

him or her before an officer authorized to administer oaths in this state. The statements made

9

shall be taken down stenographically or by a sound recording device and shall be transcribed.

10

      (i) Right of persons served with investigative demands. - (1) Any person required to

11

attend and give testimony or to submit documentary material pursuant to this section shall be

12

entitled to retain or, on payment of lawfully prescribed cost, to procure a copy of any document

13

he or she produces and of his or her own statements as transcribed.

14

      (2) Any person compelled to appear under a demand for oral testimony pursuant to this

15

section may be accompanied, represented, and advised by counsel. Counsel may advise the

16

person in confidence, either upon the request of the person or upon counsel's own initiative, with

17

respect to any question asked of the person. The person or counsel may object on the record to

18

any question, in whole or part, and shall briefly state for the record the reason for the objection.

19

An objection may properly be made, received, and entered upon the record when it is claimed that

20

the person is entitled to refuse to answer the question on grounds of any constitutional or other

21

legal right or privilege, including the privilege against self incrimination. The person shall not

22

otherwise object to or refuse to answer any question, and shall not by him or herself or through

23

counsel otherwise interrupt the oral examination. If the person refuses to answer any question, the

24

attorney general may petition the superior court for an order compelling the person to answer the

25

question.

26

      (3) The information and materials supplied to the attorney general pursuant to an

27

investigative demand shall not be permitted to become public or disclosed by the attorney general

28

or his or her employees beyond the extent necessary for antitrust enforcement purposes in the

29

public interest.

30

      (4) Upon the completion of a case brought under this chapter, the attorney general shall

31

return any documents, answers, and transcripts, and all copies of the material, which that have not

32

passed into the control of the court through their introduction into the record, to the person who

33

provided the documents, answers, or testimony. If no case in which the material may be used has

34

been commenced within a reasonable time after completion of the examination or analysis of all

 

LC005208/SUB A - Page 93 of 210

1

documentary material, but in no event later than two (2) years after production of the

2

documentary material, the attorney general shall, upon written request of the person who

3

produced the material, return all documents, answers, and transcripts, and all copies of the

4

material, to the person who provided them.

5

      (5) The attorney general shall have the authority, at any time, to modify or revoke any

6

civil investigative demand and to stipulate to protective orders with respect to documents and

7

information submitted in response to a demand. The protective orders may include provisions

8

appropriate to the full and adequate protection of trade secrets.

9

      (j) Witness expenses. - All persons served with an investigative demand, other than

10

those persons whose conduct or practices are being investigated, or any officer, director, or

11

person in the employment of the person under investigation, shall be paid the same fees and

12

mileage as paid witnesses in the courts of this state. No person shall be excused from attending

13

the inquiry pursuant to the mandate of an investigative demand,; from giving testimony,; from

14

producing documentary material,; or from being required to answer questions on the ground of

15

failure to tender or pay a witness fee or mileage unless demand for the fees or mileage is made at

16

the time testimony is about to be taken and unless payment is not made upon demand.

17

      (k) Refusal of witness to testify or produce documents. - Any person who shall neglect

18

or refuse to attend and give testimony or to answer any lawful inquiry or to produce documentary

19

material, if in his or her power to do so, in obedience to an investigative demand pursuant to this

20

section, may be adjudged in civil contempt by the superior court until the time that he or she

21

purges him or herself of contempt by testifying, producing documentary material, or presenting

22

written answers as ordered. Any person who commits perjury or false swearing in response to an

23

investigative demand pursuant to this section shall be punishable pursuant to the provisions of

24

chapter 33 of title 11.

25

      (l) Duty to testify immunity. - (1) If, in any investigation brought by the attorney general

26

pursuant to this section, any individual shall refuse to attend,; to give testimony,; to produce

27

documentary material,; or to answer a written interrogatory in obedience to an investigative

28

demand, or under order of court, on the ground that the testimony or material required of him or

29

her may tend to incriminate him or her, that person may be ordered to attend and to give

30

testimony,; to produce documentary material; or to answer the written interrogatory,; or to do an

31

applicable combination of these. The order as previously stated shall be an order of court given

32

after a hearing in which the attorney general has established a need for the grant of immunity, as

33

provided in this subsection.

34

      (2) The attorney general may petition any superior court justice for an order as described

 

LC005208/SUB A - Page 94 of 210

1

in subdivision (l)(1). The petition shall set forth the nature of the investigation and the need for

2

the immunization of the witness.

3

      (3) Testimony so compelled shall not be used against the witness as evidence in any

4

criminal proceedings against him or her in any court. However, the grant of immunity shall not

5

immunize the witness from civil liability arising from the transactions about which testimony is

6

given, and he or she may nevertheless be prosecuted or subjected to penalty or forfeiture for any

7

perjury, false swearing, or contempt committed in answering, or in failing to answer, or in

8

producing evidence, or failing to do so, in accordance with the order. If a person refuses to testify

9

after being granted immunity from prosecution and after being ordered to testify as previously

10

stated, he or she may be adjudged in civil contempt by the superior court until the time that he or

11

she purges him or herself of contempt by testifying,; producing documentary material,; or

12

presenting written answers as ordered. The foregoing shall not prevent the attorney general from

13

instituting other appropriate contempt proceedings against any person who violates any of the

14

above provisions.

15

      (m) Duty of public officials. - It shall be the duty of all officials of this state and its

16

public bodies, their deputies, assistants, clerks, subordinates, or employees, and all other persons

17

to render and furnish to the attorney general when so requested all information and assistance in

18

their possession or within their power.

19

     6-36-11. Enforcement. -- (a) Action for treble damages. - Any person or public body,

20

including the United States, who shall be injured in his or her business or property by reason of a

21

violation of the provisions of this chapter may sue in superior court and shall recover threefold

22

the damages sustained by him or her, together with reasonable costs of suit and any reasonable

23

attorneys' fees that may be granted at the discretion of the court. The reasonable costs of suit may

24

include, but shall not be limited to, the expenses of discovery and document reproduction. In any

25

action under this section the fact that a person or public body has not dealt directly with the

26

defendant shall not bar or otherwise limit recovery. Provided, however, that the court shall

27

exclude from the amount of the damages awarded in the action, any amount of monetary relief

28

which that duplicates amounts which that have been awarded for the same injury, but shall not

29

exclude reasonable costs and attorneys' fees.

30

      (b) Action by attorney general. - The attorney general shall investigate suspected

31

violations of the provisions of this chapter and if he or she shall conclude that a violation is

32

imminent, is occurring, or has occurred, he or she may institute on behalf of the state of Rhode

33

Island or any of its departments, subdivisions, agencies, or its cities and towns, an action in

34

superior court seeking appropriate relief. The attorney general may bring an action in federal

 

LC005208/SUB A - Page 95 of 210

1

court on behalf of the state of Rhode Island; or any of its political subdivisions or agencies,; or its

2

cities and towns, to recover the damages provided for by the federal antitrust laws, and pursuant

3

to the federal laws may undertake any measures that he or she deems necessary for the successful

4

conduct of the action.

5

     6-36-12. Attorney general -- Suits parens patriae. -- (a) The attorney general may

6

bring a civil action in superior court in the name of the state, as parens patriae on behalf of

7

persons residing in this state, to secure monetary relief as provided in this section for injuries

8

sustained by the persons to their property by reason of any violation of this chapter. This parens

9

patriae action shall take precedence, have priority status, and automatically stay any other action

10

by a city or town in superior court seeking monetary relief for the same injuries sustained by the

11

persons to their property by reason of any violation of this chapter. The court shall exclude from

12

the amount of monetary relief awarded in this action any amount of monetary relief:

13

      (1) Which That duplicates amounts which that have been awarded for the same injury; or

14

      (2) Which That is properly allocable to persons who have excluded their claims pursuant

15

to subsection (c)(1) of this section.

16

      (b) The court shall award the state as monetary relief threefold the total damage

17

sustained as described in subsection (a) of this section and the costs of suit, including a

18

reasonable attorney's fee.

19

      (c) (1) In any action brought under subsection (a) of this section, the attorney general

20

shall, at the times, in the manner, and with the content that the court may direct, cause notice of

21

the action to be given by publication.

22

      (2) Any person on whose behalf an action is brought under subsection (a) may elect to

23

exclude from adjudication the portion of the state claim for monetary relief attributable to him or

24

her by filing notice of the election with the court within the time specified in the notice given

25

pursuant to subsection (c)(1) of this section.

26

      (3) The final judgment in an action under subsection (a) shall be res judicata as to any

27

claim under section § 6-36-11 by any person on behalf of whom the action was brought and who

28

fails to give the notice within the period specified in the notice given pursuant to subsection (c)(1)

29

of this section.

30

      (d) An action under subsection (a) shall not be dismissed or compromised without the

31

approval of the court, and notice of any proposed dismissal or compromise shall be given by

32

publication at the times, in the manner, and with the content that the court may direct.

33

      (e) In any action under subsection (a):

34

      (1) The amount of the plaintiff's attorney's fees, if any, shall be determined by the court,

 

LC005208/SUB A - Page 96 of 210

1

and any attorney's fees awarded to the attorney general shall be deposited with the state as general

2

revenues; and

3

      (2) The court may, in its discretion, award a reasonable attorney's fee to a prevailing

4

defendant upon a finding that the attorney general has acted in bad faith, vexatiously, wantonly,

5

or for oppressive reasons.

6

      (f) Monetary relief recovered in an action under this section shall: (1) be Be distributed

7

in any manner that the court in its discretion may authorize; or (2) be Be deemed a civil penalty

8

by the court and deposited with the state as general revenues; subject in either case to the

9

requirement that any distribution procedure adopted afford each person a reasonable opportunity

10

to secure his or her appropriate portion of the net monetary relief.

11

      (g) In any action under this section the fact that a person or public body has not dealt

12

directly with the defendant shall not bar or otherwise limit recovery. Provided, however, that the

13

court shall exclude from the amount of monetary relief awarded in the action any amount of

14

monetary relief which that duplicates amounts which that have been awarded for the same injury.

15

No provision of this chapter shall be construed to limit the standing of any person or public body,

16

whether the person or public body is a direct or indirect purchaser, from bringing suit on his or

17

her own behalf.

18

     6-36-23. Limitation of actions. -- Any action brought to enforce the provisions of this

19

chapter shall be barred unless commenced within four (4) years after the cause of action arose, or

20

if the cause of action is based upon a conspiracy in violation of this chapter, within four (4) years

21

after the plaintiff discovered, or by the exercise of reasonable diligence should have discovered,

22

the facts relied upon for proof of the conspiracy. No cause of action barred on July 1, 1979, shall

23

be revived by this chapter. For purposes of this section, a cause of action for a continuing

24

violation is deemed to arise at any time during the period of the violation.

25

     6-36-24. Suspension of limitation. -- Whenever any civil or criminal proceedings shall

26

be commenced by the state to prevent, restrain, or punish a violation of this chapter, the running

27

of the statute of limitations in respect of to every private right of action arising under this chapter

28

and based in whole or in part on any matter complained of in the proceeding shall be suspended

29

during the pendency of the action and for one year thereafter; provided, however, that whenever

30

the running of the statute of limitations in with respect of to a cause of action arising under either

31

section §§ 6-36-10 or § 6-36-11 or both shall be suspended under this section, any action to

32

enforce the section shall be forever barred unless commenced either within the period of

33

suspension or within four (4) years after the cause of action accrued, whichever is later.

34

     SECTION 27. Sections 6-38-2 and 6-38-4 of the General Laws in Chapter 6-38 entitled

 

LC005208/SUB A - Page 97 of 210

1

"Insulation Contracts" are hereby amended to read as follows:

2

     6-38-2. Definitions. -- For the purpose of this chapter:

3

      (1) "Degree of flammability" means the rating of fire retardation of insulation products.

4

      (2) "Insulation" means any product made of either cellular, granular, fibrous, or

5

formaldehyde-based or polyurethane-based material which that, through gas-filled voids within

6

these materials, is designed to retard the passage of heat through the ceiling, roof, walls, or floor

7

of a structure.

8

      (3) "Insulation contractor" means any individual, firm, partnership, corporation,

9

company, association, or joint stock association which that advertises itself as, solicits as, or holds

10

itself to be one which that is primarily engaged in the business of installing insulation and which

11

that has gross receipts for the installation of insulation of two thousand five hundred dollars

12

($2,500) or more for all labor, or four thousand five hundred dollars ($4,500) or more for all

13

materials in any one calendar year.

14

      (4) "Resistance factor" has the same meaning as "thermal resistance" as defined in the

15

American Society of Heating, Refrigeration, and Air-conditioning Engineers (ASHRAE)

16

Handbook of Fundamentals.

17

      (5) "Vapor barrier" means any material specifically designed or intended for the purpose

18

of restricting the passage of moisture through walls and ceilings and designed or intended to

19

protect a structure against mildew, rot, peeling paints, and a breakdown of insulation.

20

     6-38-4. Contract provisions. -- Contracts provided under the provisions of this chapter

21

must include, but may not be limited to, the following:

22

      (1) The type of insulation as defined in section § 6-38-2, the manufacturer, and the

23

commercial brand name, if any. Under this provision, any insulation contractor intending to

24

install a ureaformaldehyde insulation product must conspicuously include within any contract

25

required under the provisions of this chapter the following notice in its entirety:

26

      "CAUTION: Under some conditions ureaformaldehyde insulation may cause the release

27

of formaldehyde gas into living areas, and the development of adverse health effects. Continued

28

exposure to formaldehyde can cause nausea and vomiting, respiratory difficulties, headaches, eye

29

irritation, and allergic reactions. The symptoms may develop anywhere from a few days to more

30

than six (6) months after the gas is released. This notice of caution shall be acknowledged by the

31

purchaser by signifying in an appropriate box that the purchaser has read and understands the

32

nature and terms of the notice, provided, however, that the acknowledgment shall not constitute a

33

waiver of any rights pursuant to the contract.";

34

      (2) The resistance factor of the insulation per product inch and the thickness in inches of

 

LC005208/SUB A - Page 98 of 210

1

the insulation to be installed.;

2

      (3) The degree of flammability of those properties. Under this provision, any insulation

3

contractor intending to install a polyurethane-based insulation product must conspicuously

4

include within any contract required under the provisions of this chapter the following notice in

5

its entirety:

6

      "NOTICE In the event of fire, a urethane-based product, if burned, can emit a highly

7

toxic and deadly gas.";

8

      (4) The area to be insulated as calculated in square feet, and a generic description of the

9

area to be insulated, i.e., walls, roof, and/or floors.;

10

      (5) The method by which the insulation contractor intends to install the insulation.;

11

      (6) The type of ventilation to be installed in the insulated area. If no ventilation is to be

12

installed, the contract must state this or must state that no ventilation is required, and the reasons

13

for the statement must be provided.;

14

      (7) The type of vapor barrier to be installed. If no vapor barrier is to be installed, the

15

contract must state this or must state that no vapor barrier is required and the reasons for the

16

statement must be provided.;

17

      (8) A guarantee against product settling or a statement as to the maximum percentage by

18

which the insulation product can be expected to settle and over what period of time the settling

19

can take place.;

20

      (9) A detailed description of structural changes required to install insulation, and an

21

estimate of the cost of those changes. If no structural changes are required, the contract must state

22

this.;

23

      (10) A statement of the insulation contractor's intent to complete all work necessary to

24

restore the structure and surrounding area to its condition prior to commencement of installation

25

of insulation.;

26

      (11) The provisions of all product and installer warranties.; and

27

      (12) The name, business address, and owner of the firm, partnership, corporation,

28

company, association, or joint stock association providing the goods and services as described in

29

the contract.

30

     SECTION 28. Sections 6-41-1, 6-41-4 and 6-41-10 of the General Laws in Chapter 6-41

31

entitled "Uniform Trade Secrets Act" are hereby amended to read as follows:

32

     6-41-1. Definitions. -- As used in this chapter, unless the context requires otherwise:

33

      (1) "Improper means" includes theft, bribery, misrepresentation, breach or inducement of

34

a breach of a duty to maintain secrecy, or espionage through electronic or other means;

 

LC005208/SUB A - Page 99 of 210

1

      (2) "Misappropriation" means:.

2

      (i) Acquisition of a trade secret of another by a person who knows or has reason to know

3

that the trade secret was acquired by improper means; or

4

      (ii) Disclosure or use of a trade secret of another without express or implied consent by a

5

person who:

6

      (A) Used improper means to acquire knowledge of the trade secret; or

7

      (B) At the time of disclosure or use, knew or had reason to know, that his or her

8

knowledge of the trade secret was:

9

      (I) Derived from or through a person who had utilized improper means to acquire it;

10

      (II) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its

11

use; or

12

      (III) Derived from or through a person who owed a duty to the person seeking relief to

13

maintain its secrecy or limit its use; or

14

      (C) Before a material change of his or her position, knew or had reason to know, that it

15

was a trade secret and that knowledge of it had been acquired by accident or mistake;.

16

      (3) "Person" means a natural person, corporation, business trust, estate, trust, partnership,

17

association, joint venture, government, governmental subdivision or agency, or any other legal or

18

commercial entity;.

19

      (4) "Trade secret" means information, including a formula, pattern, compilation,

20

program, device, method, technique, or process, that:

21

      (i) Derives independent economic value, actual or potential, from not being generally

22

known to, and not being readily ascertainable by proper means by, other persons who can obtain

23

economic value from its disclosure or use; and

24

      (ii) Is the subject of efforts that are reasonable under the circumstances to maintain its

25

secrecy.

26

     6-41-4. Attorney's fees. -- If,: (a) a claim of misappropriation is made in bad faith,; or (b)

27

a motion to terminate an injunction is made or resisted in bad faith,; or (c) willful and malicious

28

misappropriation exists, the court may award reasonable attorney's fees to the prevailing party.

29

     6-41-10. Severability. -- If any provision of this chapter or its application to any person

30

or circumstances is held invalid, the invalidity does not affect other provisions or applications of

31

the chapter which that can be given effect without the invalid provision or application, and to this

32

end the provisions of this chapter are severable.

33

     SECTION 29. Section 6-42-2 of the General Laws in Chapter 6-42 entitled "Checks and

34

Other Instruments - Dishonor" is hereby amended to read as follows:

 

LC005208/SUB A - Page 100 of 210

1

     6-42-2. Term of notes -- Form of notice of dishonor. -- (a) A notice of dishonor sent by

2

a holder to a maker or drawer pursuant to section § 6-42-1 shall substantially comply with the

3

following form:

4

     NOTICE OF DISHONORED CHECK

5

     DATE_________________________________________________________________

6

     NAME OF ISSUER______________________________________________________

7

     STREET ADDRESS_____________________________________________________

8

     CITY AND STATE______________________________________________________

9

     You are according to law hereby notified that a check or instrument numbered ________

10

and dated ________ 20________, drawn on ________ (bank or other financial institution) of

11

________, in the amount of ________ has been returned unpaid with the notation that the

12

payment has been refused because of rule. Within thirty (30) days from the mailing of this notice,

13

you must pay or tender to

14

     (holder)

15

     at____________________________________________________________________

16

sufficient money to pay the check

17

     (address of holder)

18

draft or instrument in full. If payment of the above amount is not made within thirty (30) days of

19

the mailing of this notice of dishonor, you may be liable under section § 6-42-3, in addition to the

20

amount of the check, draft, or other instrument, and a collection fee of twenty-five dollars

21

($25.00), for an amount of up to three (3) times the amount of the check, draft, or other

22

instrument, but in no case less than two hundred dollars ($200) and not more than one thousand

23

dollars ($1,000).

24

     _____________________________________________________________________

25

     (signature of holder)

26

      (b) The notice provided for in subsection (a) shall be sent certified mail, return receipt

27

requested, or by regular mail when such mailing is supported by an affidavit of service by mail.

28

     SECTION 30. Section 6-43-1 of the General Laws in Chapter 6-43 entitled "Regulation

29

of the Rental of Video Recordings to Minors" is hereby amended to read as follows:

30

     6-43-1. Regulation of rentals to minors. -- (a) No person, firm, or corporation, engaged

31

in the business of the rental of video cassette recordings shall rent a recording which that has been

32

labeled, advertised, or otherwise held out to be "X", "XX", or "XXX" to any person who is under

33

the age of eighteen (18). The use of the designation "X", "XX", or "XXX" on a video cassette

34

recording or its packaging shall constitute the labeling and advertisement for purposes of this

 

LC005208/SUB A - Page 101 of 210

1

chapter.

2

      (b) If the person, firm, or corporation renting a video cassette recording is in doubt as to

3

the age of any person seeking to rent a recording which that has been labeled, advertised, or

4

otherwise held out to be "X", "XX", or "XXX", demand may be made that the person produce any

5

of the following documents: (1) a A birth certificate; (2) a A baptismal certificate; (3) an An

6

armed services identification card; (4) a A Rhode Island motor vehicle operator's license; or (5) a

7

A Rhode Island identification card; and may require that any person who has shown a document

8

as set forth in this section substantiating his or her age, to sign his or her name in a book kept for

9

this purpose indicating which document was presented. If a person whose age is questioned shall

10

sign the book before he or she rents a video cassette recording, and it is later determined that the

11

person was not over eighteen (18) years of age, it shall be considered prima facie evidence that

12

the person, firm, or corporation renting the recording acted in good faith in renting to the person.

13

      (c) Nothing contained in this chapter shall be construed as adopting, incorporating, or

14

referring to the motion picture rating system of the motion picture association of America or of

15

any other private or public organization.

16

     SECTION 31. Sections 6-44-3, 6-44-5, 6-44-6, 6-44-8 and 6-44-9 of the General Laws in

17

Chapter 6-44 entitled "Rental Purchase Agreements" are hereby amended to read as follows:

18

     6-44-3. General requirements of disclosure. -- (a) Each lessor shall give to the lessee,

19

prior to the execution of the lease, a dated, written statement on which the lessor and lessee are

20

identified setting out accurately and in a clear and conspicuous manner the following information

21

with respect to the lease, as applicable:

22

      (1) A brief description or identification of the leased property, including whether the

23

property is new or used;

24

      (2) The amount of any payment required by the lessee at or before the execution of the

25

lease;

26

      (3) The amount paid or payable by the lessee for fees or taxes;

27

      (4) The amount and description of other charges payable by the lessee and not included

28

in the periodic payments;

29

      (5) A statement of the amount or method of determining the amount of any liabilities the

30

lease imposes upon the lessee at the end of the term of the lease,; whether or not the lessee has the

31

option to purchase the leased property and the price at which the leased property may be

32

purchased at the end of the lease,; and the method of determining the early purchase option price

33

at any point in time;

34

      (6) A statement identifying all express warranties and guarantees made by the

 

LC005208/SUB A - Page 102 of 210

1

manufacturer or lessor with respect to the leased property and identifying the party responsible

2

for maintaining or servicing the leased property together with a description of the responsibility;

3

      (7) A brief description of insurance provided or paid for by the lessor or required of the

4

lessee, including the types and amount of the coverages and costs;

5

      (8) The number, amount, and due dates or periods of payments under the lease and the

6

total amount of the periodic payments; and

7

      (9) A statement of the conditions under which the lessee or lessor may terminate the

8

lease prior to the end of the term or that no right to terminate exists and the amount or method of

9

determining the amount of any penalty or other charge for delinquency, default, late payments, or

10

early termination.

11

      (b) The disclosures required under this section may be made in the lease contract to be

12

signed by the lessee or may be made in a separate, written document which that shall be attached

13

to the lease contract. Any of the information required to be disclosed under this section may be

14

given in the form of estimates where the lessor is not in a position to know the exact information.

15

     6-44-5. Reinstatement. -- (a) A lessee who fails to make timely lease payments has the

16

right to reinstate the original rental purchase agreement without losing any rights or options

17

previously acquired under the rental purchase agreement within three (3) lease terms after the

18

expiration of the last lease term for which the lessee made a timely payment if the lessee

19

surrenders the leased property to the lessor when the lessor or its agent requests him or her to

20

surrender the leased property.

21

      (b) Before reinstating a rental purchase agreement, a lessor may require a lessee to pay

22

any unpaid lease payments,; delinquency charges,; a reasonable reinstatement fee of not more

23

than five dollars ($5.00),; and a delivery charge if redelivery of the leased property is necessary.

24

      (c) If reinstatement occurs pursuant to this section, the lessor shall provide the lessee

25

with either the same property leased by the lessee prior to reinstatement or substitute property that

26

is of comparable quality and condition. If substitute property is provided, the lessor shall provide

27

the lessee with all of the disclosures required by section § 6-44-3 of this chapter.

28

     6-44-6. Early purchase option. -- A rental purchase agreement must provide that, at any

29

time after the initial payment, the lessee may acquire ownership of the property by complying

30

with the terms of an early purchase option which that must be clearly set forth in the rental

31

purchase agreement.

32

     6-44-8. Advertisements. -- (a) If an advertisement for a rental purchase agreement states

33

the amount of any payment or states that any or no initial payment is required, the advertisement

34

shall also clearly and conspicuously state the following items, as applicable:

 

LC005208/SUB A - Page 103 of 210

1

      (1) That the transaction advertised is a lease;

2

      (2) The total of initial payments required at or before execution of the lease or delivery

3

of the property, whichever is later;

4

      (3) That a security deposit is required, if applicable;

5

      (4) The number, amounts, and timing of scheduled payments; and

6

      (5) For a lease in which the liability of the lessee at the end of the lease term is based on

7

the anticipated residual value of the property, that an extra charge may be imposed at the end of

8

the lease term.

9

      (b) If an advertisement for a consumer lease refers to or states the amount of any

10

payment and that the lessee has the right to acquire ownership of any particular item, the

11

advertisement shall further clearly and conspicuously state the following items, as applicable:

12

      (1) The total of payments necessary to acquire ownership, if ownership is acquired

13

through the accumulation of periodic payments,; the price at which the leased property may be

14

purchased at the end of the lease,; and the method of determining the purchase price at any point

15

in time if acquired through the exercise of the early option to purchase; and

16

      (2) That the consumer lessee acquires no ownership right if the total amount necessary to

17

acquire ownership is not paid or the option to purchase is not exercised by payment of the

18

purchase price.

19

      (c) Any owner or the agents or employees of any owner of any medium in which an

20

advertisement appears or through which it is disseminated shall not be liable under this section.

21

     6-44-9. Enforcement. -- (a) A lessee who has suffered a loss due to a violation of this

22

chapter by a lessor is entitled to recover from the lessor actual damages, reasonable attorney's

23

fees, and court costs.

24

      (b) A lessor shall not be held liable in any action brought under this section if he or she

25

shows by a preponderance of the evidence that the violation was not intentional and resulted from

26

a bona fide error, notwithstanding the maintenance of procedures reasonably adopted to avoid any

27

error. A bona fide error shall include, but shall not be limited to, clerical, calculation, computer

28

malfunction, and programming and printing errors; provided, that an error of legal judgment with

29

respect to a person's obligations under this chapter shall not be a bona fide error.

30

      (c) A lessor shall not be deemed liable under this chapter for a violation of the provisions

31

of section § 6-44-3 if, within sixty (60) days after discovering the error and before an action is

32

filed in accordance with the provisions of this section or written notice of the error is received

33

from the consumer, the lessor notifies the consumer of the error and makes whatever adjustments

34

in the account necessary to assure that the consumer shall not be required to pay an amount in

 

LC005208/SUB A - Page 104 of 210

1

excess of the amounts actually disclosed. This provision shall apply whether the discovery of the

2

error was made through the lessor's own procedures or otherwise.

3

      (d) An action shall not be brought under this chapter more than one year after the

4

occurrence of the act, method, or practice which that is the subject of the action, or more than one

5

year after the last payment in a transaction involving the method, act, or practice which that is the

6

subject of the action, whichever is later.

7

     SECTION 32. Sections 6-45-1, 6-45-2, 6-45-3, 6-45-4, 6-45-5 and 6-45-7 of the General

8

Laws in Chapter 6-45 entitled "Consumer Enforcement of Assistive Technology Device

9

Warranties" are hereby amended to read as follows:

10

     6-45-1. Definitions. -- The following words and phrases as used in this chapter, for the

11

purposes of this chapter, have the following meanings:

12

      (1) "Assistive technology device" means any item, piece of equipment, or product

13

system, whether acquired commercially off the shelf, modified, or customized, that is used or

14

designed to be used to increase, maintain, or improve any functional capability of an individual

15

with disabilities. An assistive technology device system that as a whole is within the definition of

16

this term is itself an assistive technology device, and in this case, this term also applies to each

17

component product of the assistive technology device system that is itself ordinarily an assistive

18

technology device. This term includes, but is not limited to:

19

      (i) Wheelchairs and scooters of any kind, and other aids that enhance the mobility or

20

positioning of an individual, such as motorization, motorized positioning features, and the

21

switches and controls for any motorized features;

22

      (ii) Hearing aids, telephone communication devices for persons who are deaf or hard of

23

hearing, and other assistive listening devices;

24

      (iii) Computer equipment and reading devices with voice output, optical scanners,

25

talking software, Braille printers, and other aids and devices that provide access to text;

26

      (iv) Computer equipment with voice output, artificial larynges, voice amplification

27

devices, and other alternative and augmentative communication devices;

28

      (v) Voice recognition computer equipment, software and hardware accommodations,

29

switches, and other forms of alternative access to computers;

30

      (vi) Environmental control units; and

31

      (vii) Simple mechanical aids that enhance the functional capabilities of an individual

32

with disabilities.

33

      (2) "Assistive technology device dealer" means a dealer who is in the business of selling

34

or leasing assistive technology devices. A dealer shall be an assistive technology device dealer

 

LC005208/SUB A - Page 105 of 210

1

with respect to a particular sale or lease of a product that constitutes an assistive technology

2

device as to that sale or lease, if he or she is in the business generally of selling or leasing that

3

product or kind of product, without regard to whether that product constitutes an assistive

4

technology device for other buyers.

5

      (3) "Assistive technology device system" means the final product resulting from a

6

manufacturer customizing, adapting, reconfiguring, refitting, refurbishing, or composing into a

7

system one or more component products, whether or not new, that may be assistive technology

8

devices or standard products of the same or other manufacturer.

9

      (4) "Collateral costs" means expenses incurred by a consumer in connection with the

10

repair of a nonconformity, including the costs of obtaining another device or service to substitute

11

for the absence, due to a nonconformity or attempt to repair, of the device sold or leased to the

12

consumer, if no loaner was offered to the consumer, except to the extent the person opposing

13

liability for these costs shall prove that incurring these expenses was not reasonable in light of the

14

sophistication of, and the means readily available, to the consumer.

15

      (5) "Conforming replacement" means a new device in good working order that is

16

identical to or has functional capabilities equal to or greater than those of the original device.

17

      (6) "Consumer" of an assistive technology device means the person who is a party,

18

whether the buyer or the lessee, to the contract of sale or lease, respectively, of that device. This

19

party may be, but is not necessarily, the user.

20

      (7) "Dealer" means the person who is the party, whether the seller or the lessor, to the

21

contract with the consumer of sale or lease of the device.

22

      (8) "Demonstrator" means an assistive technology device that would be new but for its

23

use, since its manufacture, only for the purpose of demonstrating the device to the public or

24

prospective buyers or lessees.

25

      (9) "Early termination cost" means any expense or obligation that a lessor incurs as a

26

result of both the termination of a written lease before the termination date set forth in that lease

27

and the return of the device to the manufacturer. Early termination cost includes a penalty for

28

prepayment under a finance arrangement.

29

      (10) "Early termination savings" means any expense or obligation that a lessor avoids as

30

a result of both the termination of a written lease before the termination date set forth in that lease

31

and the return of the device to the manufacturer, which shall include an interest charge that the

32

lessor would have paid to finance the device or, if the lessor does not finance the device, the

33

difference between the total amount for which the lease obligates the consumer during the period

34

of the lease term remaining after the early termination and the present value of that amount at the

 

LC005208/SUB A - Page 106 of 210

1

date of the early termination.

2

      (11) "Individual with disabilities" means any individual who is considered to have a

3

mental or physical disability or impairment for the purposes of any other law of this state or of the

4

United States, including any rules or regulations under this state or of the United States.

5

      (12) "Loaner" means a device provided to the consumer for use by the user free of

6

charge that need not be new, or nor be identical to, or nor have functional capabilities equal to or

7

greater than those of the original device, but that meets the following conditions:

8

      (i) It is in good working order;

9

      (ii) It performs at a minimum the most essential functions of the original device, in light

10

of the disabilities of the user; and

11

      (iii) Any differences between it and the original device do not create a threat to safety.

12

      (13) "Manufacturer" means:

13

      (i) The person who manufactures or assembles an assistive technology device,;

14

      (ii) The person who manufactures or assembles a product that becomes a component

15

product of an assistive technology device system, to the extent such product is itself ordinarily an

16

assistive technology device,; and,

17

      (iii) Agents of a person described in subsection (13)(i) or (13)(ii) of this section,

18

including an importer, a distributor, factory branch, distributor branch, and any warrantors of the

19

manufacturer's devices, provided that such agents shall not include, with respect to a particular

20

transaction, the dealer, unless the dealer is also a person described in subsection (13)(i) or (13)(ii)

21

of this section.

22

      (14) "Nonconformity" of an assistive technology device means any failure of the device

23

to conform to any applicable express or implied warranties that substantially impairs the use,

24

value, or safety of the device. The implied warranties described in the preceding sentence include,

25

but are not limited to, the implied warranty of merchantability described in section §§ 6A-2-314

26

or 6A-2.1-212, and the implied warranty of fitness for a particular purpose described in section §§

27

6A-2-315 or 6A-2.1-213 and subject to the provisions of section § 6-45-2.

28

      (15) "Term A" means the year following the date the device is first delivered into the

29

possession of the consumer.

30

      (16) "Term B" means the two (2) years following the date the device is first delivered

31

into the possession of the consumer.

32

      (17) "User" of an assistive technology device means the individual with a disability who,

33

by reason of this disability, needs and actually uses that device.

34

     6-45-2. Effect on implied warranties of Uniform Commercial Code. -- (a) For

 

LC005208/SUB A - Page 107 of 210

1

purposes of section §§ 6A-2-314 or 6A-2.1-212 and section §§ 6A-2-315 or 6A-2.1-213, with

2

respect to a sale or a lease of an assistive technology device, the term "seller" or "lessor" includes

3

the manufacturer of the device.

4

      (b) For purposes of section §§ 6A-2-315 or 6A-2.1-213, with respect to a sale or lease of

5

an assistive technology device, the seller or lessor shall be deemed to know that the particular

6

purpose, for which the device is required, is to increase, maintain, or improve those functional

7

capabilities that are appropriate to the kind of device involved, in light of any knowledge that the

8

seller or lessor may have acquired of the disabilities of the consumer.

9

      (c) For purposes of section §§ 6A-2-315 or 6A-2.1-213, with respect to a sale or lease of

10

an assistive technology device, the seller or lessor shall be deemed to know that the consumer is

11

relying on the seller's or lessor's skill or judgment to select or furnish a suitable device in light of

12

the knowledge that the seller or lessor has, or is deemed to have by reason of subsection (b) of

13

this section, unless the consumer specifies a particular device and signs and is furnished a copy of

14

a writing that:

15

      (1) Particularly describes the device that the consumer is specifying;

16

      (2) States that this person is specifying that device described; and

17

      (3) Contains the following notice, conspicuously in type that is at least four (4) points

18

larger than the surrounding text: "There is no warranty (guarantee) that this product will be fit for

19

your particular needs. There is only a warranty (guarantee) that the product will be fit for the

20

purposes that it ordinarily meets. This is because you have specified the product you want to buy

21

instead of relying on the seller's/lessor's knowledge to help choose one based upon your particular

22

needs."

23

      (d) With respect to a sale or lease of an assistive technology device, the implied warranty

24

of merchantability described in section §§ 6A-2-314 or 6A-2.1-212, and the implied warranty of

25

fitness for a particular purpose described in section §§ 6A-2-315 or 6A-2.1-213, shall not be

26

excluded or modified, pursuant to section §§ 6A-2-316 or 6A-2.1-214 or otherwise.

27

     6-45-3. Repair of assistive technology device with nonconformity. -- (a) If a new

28

assistive technology device or demonstrator has a nonconformity and the consumer first reports

29

that nonconformity to the manufacturer of the device or its authorized dealer within Term B, then

30

the manufacturer of the device shall be jointly obligated, together with any authorized dealer, if

31

an assistive technology device dealer was involved in the sale or lease of the device, to effect any

32

repairs as are necessary to conform the device to all warranties, notwithstanding that those repairs

33

might be made after the expiration of Term B.

34

      (b) For all purposes of this chapter, a consumer reports a nonconformity when he or she:

 

LC005208/SUB A - Page 108 of 210

1

      (1) Makes any communication, written or oral, that describes a problem with the device,

2

or that may be reasonably understood as an expression of dissatisfaction with any aspect of the

3

operation of the device, which communication need only indicate in any way the nature of the

4

problem, such as an indication of the functions that the device is not achieving or achieving

5

unsatisfactorily to the consumer, and need not be in technical language or attempt to state the

6

cause of the problem;

7

      (2) Does not refuse to make the device available to the manufacturer or dealer for repair;

8

and

9

      (3) The problem indicated by the consumer's communication constitutes, or is caused by,

10

a nonconformity.

11

      (c) It shall be presumed that the consumer has made the device available to the

12

manufacturer or dealer for repair if he or she allows the manufacturer or dealer to take it from the

13

consumer's home or other location where the user customarily uses the device. The consumer

14

shall be required to deliver the device to another location only upon a showing that it would be a

15

substantially greater hardship for the manufacturer and dealer to take the device from the

16

consumer's home, or other location where the user customarily uses the device, than for the

17

consumer to deliver the device.

18

      (d) Whether or not the rights of the consumer provided by section § 6-45-5(a) have

19

arisen, and in addition to the remedies relating to collateral costs provided by this chapter, a

20

person who is under an obligation to repair pursuant to this section is obliged immediately to

21

provide the consumer a loaner, if the absence of a loaner would be a threat to the safety of the

22

user, but in any event when the out-of-service period exceeds seven (7) days, as determined by

23

section §§ 6-45-4(b) and (c).

24

     6-45-4. Reasonable number of attempts to repair. -- (a) A "reasonable number of

25

attempts to repair" an assistive technology device with a nonconformity means the occurrence of

26

one or both of the following:

27

      (1) The same nonconformity, that is first reported during Term A, is subject to repair two

28

(2) or more times during Term B.; or

29

      (2) The device is out-of-service for an aggregate of thirty (30) or more calendar days

30

during Term A because of one or more nonconformities.

31

      (b) For purposes of counting the days for which a device is out-of-service because of one

32

or more nonconformities, an out-of-service period shall begin with and include the day which that

33

is the later of:

34

      (1) The day the nonconformity first appears,; or

 

LC005208/SUB A - Page 109 of 210

1

      (2) The business day prior to the day on which the consumer first reports the

2

nonconformity to the manufacturer of the device or its authorized dealer.

3

      (c) For purposes of counting the days for which a device is out-of-service because of one

4

or more nonconformities, an out-of-service period shall end with and include, the day on which

5

the device is returned after repair, and is then free of nonconformities, to the possession of the

6

consumer, unless this return is made by 10:00 a.m. of that day, in which case the out-of-service

7

period shall end with and include the previous day.

8

      (d) In the event an out-of-service period has commenced during Term A, then for

9

purposes of subsection (a)(2) of this section, Term A shall continue until the end of this out-of-

10

service period.

11

     6-45-5. Replacement or refund for device. -- (a) If, after a reasonable number of

12

attempts to repair, a nonconformity develops in a new assistive technology device or

13

demonstrator, the manufacturer shall carry out the requirement under subsections (a)(1) and (a)(2)

14

of this section, at the sole option of the consumer upon his or her request for it:

15

      (1) (i) In the case of a sale, the manufacturer shall refund to the consumer and to any

16

holder of a perfected security interest, as their interest may appear, the full purchase price plus

17

any finance charge or sales tax paid by the consumer at the point of sale and collateral costs, less

18

a reasonable allowance for use.

19

      (ii) In the case of a lease, the manufacturer shall refund to the lessor and to any holder of

20

a perfected security interest, as their interest may appear, the current value of the lease and refund

21

to the consumer the amount that the consumer paid under the lease plus any collateral costs, less a

22

reasonable allowance for use.

23

      (2) The manufacturer shall provide a conforming replacement.

24

      (b) (1) To receive the refund described in subsection (a)(1) of this section or the

25

replacement described in subsection (a)(2) of this section, the consumer shall offer to the

26

manufacturer of the device or its authorized dealer to transfer possession of the device.

27

      (2) The manufacturer shall make the refund required by this section within fourteen (14)

28

calendar days after the offer described in this subsection.

29

      (3) The manufacturer shall make the replacement required by this section within thirty

30

(30) calendar days after the offer described in this subsection.

31

      (4) If the replacement required by this section is not made within fourteen (14) calendar

32

days after the offer described in this subsection, then the manufacturer shall provide the consumer

33

a loaner for use until replacement is made.

34

      (5) The manufacturer may require that, simultaneously with the manufacturer timely

 

LC005208/SUB A - Page 110 of 210

1

making the refund payment described in subsection (a)(1) of this section or the replacement

2

described in subsection (a)(2) of this section, the consumer shall deliver possession of the original

3

device to the manufacturer or its authorized dealer and sign any documents necessary to, or to

4

provide reasonable evidence of, a transfer of title and possession of the device to any person as

5

the manufacturer shall designate.

6

      (6) The manufacturer may impose the requirements described in subsection (b)(5) of this

7

section only if:

8

      (i) The time and place of the mutual activities described in subsections (b)(2), (b)(3), and

9

(b)(5) of this section are readily accessible to the consumer; and

10

      (ii) The manufacturer provides the consumer a writing that is received no later than four

11

(4) business days before the time of these mutual activities, and states in clear and understandable

12

language the time and place of these mutual activities and the requirements allowed by subsection

13

(b)(5) of this section that the consumer must meet at that time and place.

14

      (c) A reasonable allowance for use shall be that amount obtained by multiplying the full

15

purchase price (or in the case of a lease, the total amount for which the lease obligates the

16

consumer) by a fraction, the denominator of which is the number of days in the useful life of the

17

device and the numerator of which is the number of days after delivery of the device to the

18

consumer and prior to the beginning of the first out-of-service period as defined in section § 6-45-

19

4(b).

20

      (d) As used in subsection (c) of this section, the useful life of the device equals the

21

greater of:

22

      (1) Five (5) years,; or

23

      (2) Any other time that the consumer may prove to be the expected useful life of devices

24

of the same kind.

25

      (e) The current value of the lease equals the total amount for which that lease obligates

26

the consumer during the period of the lease remaining after its early termination, plus the lessor's

27

early termination costs and the value of the device at the lease expiration date, less the lessor's

28

early termination savings.

29

      (f) In the case of a manufacturer of an assistive technology device system of which one

30

or more component products are not new, if the dealer gives the consumer, prior to his or her

31

decision to enter into the sale or lease, a written statement specifying the component products that

32

are not new, and containing the following statement: "You will not have replace-or-refund rights

33

under the Assistive Technology Lemon Law for the component products listed on this sheet,",

34

then the manufacturer shall not have the duties and liabilities of a manufacturer under this section

 

LC005208/SUB A - Page 111 of 210

1

with respect to these component products, but only with respect to component products that are

2

new and to the work performed by the manufacturer in creating the assistive technology device

3

system.

4

     6-45-7. Remedies. -- (a) In addition to pursuing any other remedy, a consumer may bring

5

an action to recover any damages caused by a violation of this chapter, plus taxable costs and

6

reasonable attorneys' fees. For a violation of any of the obligations provided by section § 6-45-

7

5(a), whether relative to a refund as described in section § 6-45-5(a)(1) or to a replacement as

8

described in section § 6-45-5(a)(2), the court shall award damages equal to the greater of:

9

      (1) Actual damages; or

10

      (2) The sum of:

11

      (i) Two (2) times the amount obtained as:

12

      (A) The amount that should have been refunded under section § 6-45-5(a)(1), or that

13

should have been refunded under section § 6-45-5(a)(1) had the consumer chosen that option,;

14

minus

15

      (B) The amount that was actually refunded, if any,; minus

16

      (C) The amount, if any, of the difference between the amounts described in clauses (A)

17

and (B) that was attributable to a good faith dispute by the manufacturer as to:

18

      (I) The amount of collateral costs,; or

19

      (II) The length of a useful life greater than five (5) years in calculating the reasonable

20

allowance for use under section §§ 6-45-5(c) and 6-45-5(d),; and

21

      (ii) The amount described in subparagraph subsection (a)(2)(i)(C) of this section.

22

      (b) Actual damages caused by a violation of this chapter shall include collateral costs,

23

beginning at the time of the violation, whether or not the consumer acquired the rights provided

24

by section § 6-45-5(a).

25

      (c) The remedies of a buyer or lessee described in section §§ 6A-2-715 or 6A-2.1-520,

26

with respect to an assistive technology device, shall not be excluded or limited.

27

      (d) The rights and remedies provided to the consumer by this chapter shall be in addition

28

to those available under any other law.

29

      (e) Any waiver by a consumer of rights under this chapter is void.

30

     SECTION 33. Sections 6-46-2, 6-46-3, 6-46-4, 6-46-5, 6-46-6, 6-46-7 and 6-46-11 of the

31

General Laws in Chapter 6-46 entitled "Equipment Dealerships" are hereby amended to read as

32

follows:

33

     6-46-2. Definitions. -- For the purposes of this chapter, the terms defined in this section

34

have the following meanings:

 

LC005208/SUB A - Page 112 of 210

1

      (1) "Current net price" means the price listed in the supplier's price list or catalog in

2

effect at the time the dealer agreement is terminated, less any applicable discounts allowed.

3

      (2) "Dealer" means a person, corporation, or partnership primarily engaged in the

4

business of retail sales of farm and utility tractors, forestry equipment, industrial or construction

5

equipment, farm implements, farm machinery, yard and garden equipment, attachments,

6

accessories, and repair parts. The term "dealer" shall not include a single-line dealer primarily

7

engaged in the retail sale and service of industrial, forestry, and construction equipment.

8

      (3) "Dealer agreement" means a written or oral contract or agreement between a dealer

9

and a wholesaler, manufacturer, or distributor by which the dealer is granted the right to sell or

10

distribute goods or services or to use a trade name, trademark, service mark, logotype, or

11

advertising or other commercial symbol.

12

      (4) "Inventory" means farm, utility, forestry, industrial or construction equipment,

13

implements, machinery, yard and garden equipment, attachments, or repair parts.

14

      (5) "Net cost" means the price the dealer paid the supplier for the inventory, less all

15

applicable discounts allowed, plus the amount the dealer paid for freight costs from the supplier's

16

location to the dealer's location. In the event of termination of a dealer agreement by the supplier,

17

"net cost" includes the reasonable cost of assembly and/or disassembly performed by a dealer.

18

      (6) "Single-line dealer" means a person, partnership, or corporation who or that:

19

      (i) Has purchased seventy-five percent (75%) or more of the dealer's total new product

20

inventory from a single supplier; and

21

      (ii) Who has a total annual average sales volume for the previous three (3) years in

22

excess of twenty million dollars ($20,000,000) for the entire territory for which the dealer is

23

responsible.

24

      (7) "Supplier" means a wholesaler, manufacturer, or distributor of inventory who enters

25

into a dealer agreement with a dealer.

26

      (8) "Termination" of a dealer agreement means the cancellation, non-renewal, or non-

27

continuance of the agreement.

28

     6-46-3. Notice of termination of dealer agreements. -- (a) Notwithstanding any

29

agreement to the contrary, prior to the termination of a dealer agreement, a supplier shall notify

30

the dealer of the termination not less than one hundred twenty (120) days prior to the effective

31

date of the termination. No supplier may terminate, cancel, or fail to renew a dealer agreement

32

without cause. For purposes of this subsection "cause" means failure by an equipment dealer to

33

comply with requirements imposed upon the equipment dealer by the dealer agreement, provided

34

the requirements are not substantially different from those requirements imposed upon other

 

LC005208/SUB A - Page 113 of 210

1

similarly situated dealers in this state.

2

      (b) The supplier may immediately terminate the agreement at any time upon the

3

occurrence of any of the following events:

4

      (1) The filing of a petition for bankruptcy or for receivership either by or against the

5

dealer;

6

      (2) The making by the dealer of an intentional and material misrepresentation as to the

7

dealer's financial status;

8

      (3) Any default by the dealer under a chattel mortgage or other security agreement

9

between the dealer and the supplier;

10

      (4) The commencement of voluntary or involuntary dissolution or liquidation of the

11

dealer if the dealer is a partnership or corporation;

12

      (5) A change in location of the dealer's principal place of business as provided in the

13

agreement without the prior written approval of the supplier;

14

      (6) Withdrawal of an individual proprietor, partner, major shareholder, or the involuntary

15

termination of the manager of the dealership, or a substantial reduction in the interest of a partner

16

or major shareholder without the prior, written consent of the supplier.

17

      (c) Unless there is an agreement to the contrary, a dealer who intends to terminate a

18

dealer agreement with a supplier shall notify the supplier of that intent not less than one hundred

19

twenty (120) days prior to the effective date of the termination.

20

      (d) Notification required by either party under this section shall be in writing and shall be

21

made by certified mail or by personal delivery and shall contain:

22

      (1) A statement of intention to terminate the dealer agreement;

23

      (2) A statement of the reasons for the termination; and

24

      (3) The date on which the termination shall be effective.

25

     6-46-4. Supplier's duty to repurchase inventory. -- (a) Whenever a dealer enters into a

26

dealer agreement under which the dealer agrees to maintain an inventory, and the agreement is

27

terminated by either party as provided in this chapter, the supplier, upon written request of the

28

dealer filed within thirty (30) days of the effective date of the termination, shall repurchase the

29

dealer's inventory as provided in this chapter. There shall be no requirement for the supplier to

30

repurchase inventory pursuant to this section if:

31

      (1) The dealer has made an intentional and material misrepresentation as to the dealer's

32

financial status;

33

      (2) The dealer has defaulted under the chattel mortgage or other security agreement

34

between the dealer and supplier; or

 

LC005208/SUB A - Page 114 of 210

1

      (3) The dealer has filed a voluntary petition in bankruptcy.

2

      (b) Whenever a dealer enters into a dealer agreement in which the dealer agrees to

3

maintain an inventory and the dealer or the majority stockholder of the dealer, if the dealer is a

4

corporation, dies, or becomes incompetent, the supplier shall, at the option of the heir, personal

5

representative, or guardian of the dealer, or the person who succeeds to the stock of the majority

6

stockholder, repurchase the inventory as if the agreement had been terminated. The heir, personal

7

representative, guardian, or succeeding stockholder has six (6) months from the date of the death

8

of the dealer or majority stockholder to exercise the option under this chapter.

9

     6-46-5. Repurchase terms. -- (a) Within ninety (90) days from the receipt of the written

10

request of the dealer, a supplier under the duty to repurchase inventory pursuant to this chapter

11

may examine any books or records of the dealer to verify the eligibility of any item for

12

repurchase. Except as otherwise provided in this chapter, the supplier shall repurchase from the

13

dealer all inventory, required signage, special tools, books, supplies, data processing equipment,

14

and software previously purchased from the supplier or other qualified vendor in the possession

15

of the dealer on the date of termination of the dealer agreement.

16

      (b) The supplier shall pay the dealer:

17

      (1) One hundred percent (100%) of the net cost of all new and undamaged and complete

18

farm and utility tractors, forestry equipment, light industrial equipment, farm implements, farm

19

machinery, or yard and garden equipment purchased within the past thirty six (36) months from

20

the supplier, less a reasonable allowance for deterioration attributable to weather conditions at the

21

dealer's location;

22

      (2) Ninety percent (90%) of the current net prices of all new and undamaged repair parts;

23

      (3) Eighty-five percent (85%) of the current net price of all new and undamaged

24

superseded repair parts;

25

      (4) Eighty-five percent (85%) of the latest available published net price of all new and

26

undamaged non-current repair parts;

27

      (5) Either the fair market value, or assume the lease responsibilities of any specific data

28

processing hardware that the supplier required the equipment dealer to acquire or purchase to

29

satisfy the reasonable requirements of the dealer agreement, including computer systems

30

equipment required and approved by the supplier to communicate with the supplier;

31

      (6) Repurchase at seventy-five percent (75%) of the net cost specialized repair tools,

32

signage, books, and supplies previously purchased pursuant to requirements of the supplier and

33

held by the equipment dealer on the date of termination. Specialized repair tools must be unique

34

to the supplier product line and must be complete and in usable condition; and

 

LC005208/SUB A - Page 115 of 210

1

      (7) Repurchase, at average, as-is value shown in current industry guides, dealer-owned

2

rental fleet financed by the supplier or its finance subsidiary.

3

      (c) The party that initiates the termination of the dealer agreement shall pay the cost of

4

the return, handling, packing, and loading of this inventory.

5

      (d) Payment to the dealer required under this section shall be made by the supplier not

6

later than forty-five (45) days after receipt of the inventory by the supplier. A penalty shall be

7

assessed in the amount of two percent (2%) per day of any outstanding balance over the required

8

forty-five (45) days. The supplier shall be entitled to apply any payment required under this

9

section to be made to the dealer, as a set-off against any amount owed by the dealer to the

10

supplier.

11

     6-46-6. Exceptions to repurchase requirement. -- The provisions of this chapter shall

12

not require the repurchase from a dealer of:

13

      (1) A repair part with a limited storage life or otherwise subject to physical or structural

14

deterioration including, but not limited to, gaskets or batteries;

15

      (2) A single repair part normally priced and sold in a set of two or more items;

16

      (3) A repair part that, because of its condition, cannot be marketed as a new part without

17

repackaging or reconditioning by the supplier or manufacturer;

18

      (4) Any inventory that the dealer elects to retain;

19

      (5) Any inventory ordered by the dealer after receipt of notice of termination of the

20

dealer agreement by either the dealer or supplier;

21

      (6) Any inventory that was acquired by the dealer from a source other than the supplier.

22

     6-46-7. Transfer of business. -- (a) No supplier shall unreasonably withhold or delay

23

consent to any transfer of the dealer's business or transfer of the stock or other interest in the

24

dealership, whenever the dealer to be substituted meets the material and reasonable business and

25

financial requirements of the supplier. Should a supplier determine that a proposed transferee

26

does not meet these requirements, it shall give the dealer written notice stating the specific

27

reasons for withholding consent. No prospective transferee may be disqualified to be a dealer

28

because it is a publicly held corporation. A supplier shall have ninety (90) days to consider a

29

dealer's request to make a transfer under this subsection.

30

      (b) No supplier shall unreasonably withhold consent to the transfer of the dealer's

31

business to a member or members of the family of the dealer or the principal owner of the

32

dealership, if the family member meets the reasonable business ability, business experience, and

33

character standards of the supplier, and if the transferee can demonstrate that the dealership will

34

be adequately capitalized. Should a supplier determine that the designated family member does

 

LC005208/SUB A - Page 116 of 210

1

not meet those requirements, the supplier shall provide the dealer with written notice of the

2

supplier's objection and specific reasons for withholding its consent. As used in this subsection,

3

"family" means and includes the spouse, parent, siblings, children, stepchildren, and lineal

4

descendants, including those by adoption of the dealer or principal owner of the dealership.

5

      (c) In any dispute as to whether a supplier has denied consent in violation of this section,

6

the supplier shall have the burden of proving a substantial and reasonable justification for the

7

denial of consent.

8

     6-46-11. Waiver of chapter void. -- (a) The provisions of this chapter shall be deemed to

9

be incorporated in every agreement and shall supersede and control all other provisions of the

10

agreement. No supplier may require any dealer to waive compliance with any provision of this

11

chapter. Any contract or agreement purporting to do so is void and unenforceable to the extent of

12

the waiver or variance.

13

      (b) Nothing in this chapter may be construed to limit or prohibit good-faith settlements

14

of disputes voluntarily entered into between the parties.

15

     SECTION 34. Sections 6-47-1 and 6-47-2 of the General Laws in Chapter 6-47 entitled

16

"Internet Access and Advertising by Facsimile" are hereby amended to read as follows:

17

     6-47-1. Advertising by fax. -- (a) No person or entity conducting business in the state of

18

Rhode Island shall transmit by facsimile (fax), or cause to be faxed, documents consisting of

19

unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any

20

realty, goods, services, or extension of credit unless:

21

      (1) In the case of a fax, that person or entity must establish a toll-free telephone number

22

that a recipient of the unsolicited faxed documents may call to notify the sender not to fax the

23

recipient any further unsolicited documents.

24

      (2) In the case of faxed material, the statement shall be in at least nine (9) point -point (9)

25

type. The statement shall be the first text in the body of the message and shall be of the same size

26

as the majority of the text of the message.

27

      (b) Upon notification by a recipient of his or her request not to receive any further

28

unsolicited fax, no person or entity conducting business in the state of Rhode Island shall fax or

29

cause to be faxed any unsolicited documents to that recipient.

30

      (c) As used in this chapter, "unsolicited fax" means any document or documents

31

consisting of advertising material for the lease, sale, rental, gift offer, or other disposition of any

32

realty, goods, services, or extension of credit that meet both of the following requirements:

33

      (1) The documents are addressed to a recipient with whom the initiator does not have an

34

existing business or personal relationship.

 

LC005208/SUB A - Page 117 of 210

1

      (2) The documents are not sent at the request of, or with the express consent of, the

2

recipient.

3

      (d) As used in this chapter, "fax" or "caused to be faxed" does not include or refer to the

4

transmission of any documents by a telecommunications utility or Internet internet service

5

provider to the extent that the telecommunications utility or Internet internet service provider

6

merely carries that transmission over its network.

7

      (e) The recipient of an unsolicited fax, transmitted in violation of subsection (b) of this

8

section, may bring a civil action in superior court against the person or entity that transmitted the

9

unsolicited fax or caused it to be transmitted in violation of subsection (b). Any transmission of

10

an unsolicited fax in violation of subsection (b) shall be considered a violation of chapter 6-13.1

11

of this title, known as the Deceptive Trade Practices Act, and may subject the person or entity

12

that transmitted, or caused to be transmitted, the unsolicited fax to prosecution by the attorney

13

general pursuant to chapter 6-13.1 of this title. In any such action by either the recipient of such

14

unsolicited fax or the attorney general on behalf of the recipient or recipients, damages may be

15

awarded in the amount of five hundred dollars ($500) for each violation, not to exceed a total of

16

fifty thousand dollars ($50,000). The attorney general may, in such circumstances as he or she

17

may deem appropriate, aggregate multiple claims against a person or entity alleged to have

18

committed multiple violations of this section, and maintain a class action on behalf of all

19

recipients of the unsolicited faxes. In any action brought under this section, the court may award,

20

in addition to the relief provided in this section, reasonable attorneys' fees and costs.

21

     6-47-2. Unsolicited electronic mail. -- (a) No person or entity may initiate the

22

transmission of a commercial electronic mail message from a computer located in Rhode Island

23

or to an electronic mail address that the sender knows, or has reason to know, is held by a Rhode

24

Island resident unless that person or entity establishes a toll-free telephone number or valid sender

25

operated return e-mail address that the recipient of the unsolicited documents may call or e-mail

26

to notify the sender not to e-mail any further unsolicited documents.

27

      (b) All unsolicited commercial electronic messages subject to this section shall include a

28

statement informing the recipient of the toll-free telephone number that the recipient may call, or

29

a valid return address to which the recipient may write or e-mail, as the case may be, notifying the

30

sender not to e-mail the recipient any further unsolicited commercial electronic mail messages to

31

the e-mail address or addresses specified by the recipient.

32

      (c) Upon notification by a recipient of his or her request not to receive any further

33

unsolicited commercial electronic mail messages, no person or entity subject to subsection (a)

34

shall e-mail, or cause to be e-mailed, any unsolicited documents to that recipient.

 

LC005208/SUB A - Page 118 of 210

1

      (d) No person or entity may initiate the transmission of a commercial electronic mail

2

message from a computer located in Rhode Island or to an electronic mail address that the sender

3

knows, or has reason to know, is held by a Rhode Island resident, that fraudulently uses a third-

4

party's internet domain name without permission of the third party, or otherwise fraudulently

5

misrepresents any information in identifying the point of origin or the transmission path of a

6

commercial electronic mail message.

7

      (e) As used in this section, "commercial electronic messages" means any e-mailed

8

document or documents consisting of commercial advertising material, the principal purpose of

9

which is to promote the for-profit sale or lease of goods or services to the recipient and which that

10

meet both of the following requirements:

11

      (1) The documents are addressed to a recipient with whom the initiator does not have an

12

existing business or personal relationship.

13

      (2) The documents are not sent at the request of, or with the express consent of, the

14

recipient.

15

      (f) As used in this section, "e-mail" or "caused to be e-mailed" does not include or refer

16

to the transmission of any documents by a telecommunications utility or Internet internet service

17

provider to the extent that the telecommunications utility or Internet internet service provider

18

merely carries that transmission over its network.

19

      (g) For purposes of this section, a person or entity has reason to know that the intended

20

recipient of a commercial electronic mail message is a Rhode Island resident if the recipient has

21

requested of the sender not to receive any further unsolicited commercial electronic messages.

22

      (h) Any person or entity who or that violates the provisions of this chapter shall be liable

23

for damages to the recipient of an unsolicited commercial electronic mail message in the amount

24

of one hundred dollars ($100) for each such violation. In addition, the recipient may recover

25

reasonable attorney's fees and costs.

26

     SECTION 35. Sections 6-48-5 and 6-48-6 of the General Laws in Chapter 6-48 entitled

27

"Consumer Empowerment and Identity Theft Prevention Act of 2006" are hereby amended to

28

read as follows:

29

     6-48-5. Security freeze -- Timing, covered entities, cost. -- (a)(1) A consumer may

30

elect to place a "security freeze" on his or her credit report by making a request by certified mail

31

to a consumer reporting agency at an address designated by the consumer reporting agency to

32

receive such requests.

33

      (b)(2) A consumer reporting agency shall place a security freeze on a consumer's credit

34

report no later than five (5) business days after receiving from the consumer:

 

LC005208/SUB A - Page 119 of 210

1

      (1)(i) A written request as described in subsection (a);

2

      (2)(ii) Proper identification; and

3

      (3)(iii) Payment of a fee, if applicable.

4

      (c)(3) The consumer reporting agency shall send a written confirmation of the security

5

freeze to the consumer within ten (10) business days of placing the freeze and at the same time

6

shall provide the consumer with a unique personal identification number, password, or similar

7

device to be used by the consumer when providing authorization for the release of his or her

8

credit for a specific period of time, or when permanently removing the freeze.

9

      (d)(4) If the consumer wishes to allow his or her credit report to be accessed for a

10

specific period of time while a freeze is in place, he or she shall contact the consumer reporting

11

agency, using a point of contact designated by the consumer reporting agency, to request that the

12

freeze be temporarily lifted, and provide the following:

13

      (1)(i) Proper identification;

14

      (2)(ii) The unique personal identification number or password provided by the consumer

15

reporting agency pursuant to subsection (c) (a)(3) of this section;

16

      (3)(iii) The proper information regarding the time period for which the report shall be

17

available to users of the credit report; and

18

      (4)(iv) A fee if applicable.

19

      (e)(5) A consumer reporting agency that receives a request from a consumer to

20

temporarily lift a freeze on a credit report pursuant to subsection (d) (a)(4) of this section shall

21

comply with the request no later than three (3) business days after receiving the request.

22

      (f)(6) A consumer reporting agency may develop procedures involving the use of

23

telephone, fax, or, upon the consent of the consumer in the manner required by the Electronic

24

Signatures in Global and National Commerce Act hereinafter referred to as ("E-Sign") for legally

25

required notices, by the Internet, e-mail, or other electronic media to receive and process a request

26

from a consumer to temporarily lift a freeze on a credit report pursuant to subsection (d) (a)(4) of

27

this section in an expedited manner.

28

      (g)(7) A consumer reporting agency shall remove or temporarily lift a freeze placed on a

29

consumer's credit report only in the following cases:

30

      (1)(i) Upon consumer request, pursuant to subsection (d) (a)(4) or (j) (a)(10) of this

31

section; and

32

      (2)(ii) If the consumer's credit report was frozen due to a material misrepresentation of

33

fact by the consumer. If a consumer reporting agency intends to remove a freeze upon a

34

consumer's credit report pursuant to this paragraph, the consumer reporting agency shall notify

 

LC005208/SUB A - Page 120 of 210

1

the consumer in writing prior to removing the freeze on the consumer's credit report.

2

      (h)(8) If a third-party requests access to a consumer credit report on which a security

3

freeze is in effect,; and this request is in connection with an application for credit or any other

4

use,; and the consumer does not allow his or her credit report to be accessed,; then the third-party

5

may treat the application as incomplete.

6

      (i)(9) A security freeze shall remain in place until the consumer requests, using a point of

7

contact designated by the consumer reporting agency, that the security freeze be removed. A

8

consumer reporting agency shall remove a security freeze within three (3) business days of

9

receiving a request for removal from the consumer, who provides all of the following:

10

      (1)(i) Proper identification;

11

      (2)(ii) The unique personal identification number or password provided by the consumer

12

reporting agency pursuant to subsection (c) (a)(3) of this section; and

13

      (3)(iii) A fee, if applicable.

14

      (j)(10) A consumer reporting agency shall require proper identification of the person

15

making a request to place or remove a security freeze.

16

      (k)(11) A consumer reporting agency may not suggest or otherwise state or imply to a

17

third- party third party that the consumer's security freeze reflects a negative credit score, history,

18

report, or rating.

19

      (l)(12) The provisions of this section do not apply to the use of a consumer credit report

20

by any of the following:

21

      (1)(i) A person, or the person's subsidiary, affiliate, agent, or assignee with which the

22

consumer has, or, prior to assignment, had an account, contract, or debtor-creditor relationship for

23

the purposes of reviewing the account or collecting the financial obligation owing for the account,

24

contract, or debt;

25

      (2)(ii) A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to

26

whom access has been granted under subsection (d) (a)(4) of this section for purposes of

27

facilitating the extension of credit or other permissible use;

28

      (3)(iii) Any person acting pursuant to a court order, warrant, or subpoena;

29

      (4)(iv) A state or local agency which that administers a program for establishing and

30

enforcing child support obligations;

31

      (5)(v) The department of health or its agents or assigns acting to investigate fraud;

32

      (6)(vi) The attorney general or its agents or assigns acting to investigate fraud;

33

      (7)(vii) The division of taxation or its agents or assigns acting to investigate or collect

34

delinquent taxes or unpaid court orders or to fulfill any of its other statutory responsibilities;

 

LC005208/SUB A - Page 121 of 210

1

      (8)(viii) The use of a credit report by a person for purposes of prescreening as defined by

2

the federal Fair Credit Reporting Act (15 U.S.C. section 1681 et. seq.);

3

      (9)(ix) Any person or entity administering a credit file monitoring subscription service to

4

which the consumer has subscribed;

5

      (10)(x) Any person or entity for the purpose of providing a consumer with a copy of his

6

or her credit report upon the consumer's request; and

7

      (11)(xi) Any person or entity for use in setting or adjusting a rate, adjusting a claim, or

8

underwriting for insurance purposes.

9

      (m)(13) A consumer may be charged a fee of no more than ten dollars ($10.00) for any

10

security freeze services, including, but not limited to, the placement, temporary lifting, and

11

permanent removal of a security freeze. The consumer may not be charged for a one-time reissue

12

of a new personal identification number; provided, however, the consumer may be charged not

13

more than five dollars ($5.00) for subsequent instances of loss of the personal identification

14

number. However, a consumer reporting agency may not charge any fee to a victim of identity

15

theft who has submitted a copy of an incident report from, or a complaint to, a law enforcement

16

agency, or to a consumer who is of sixty-five (65) years of age or older.

17

     (b) Entities not required to place a security freeze.

18

      (a) The following entities are not required to place a security freeze on a credit report:

19

      (1) A consumer reporting agency that acts only as a reseller of credit information by

20

assembling and merging information contained in the database of another consumer reporting

21

agency or multiple consumer credit reporting agencies, and does not maintain a permanent data

22

base of credit information from which new consumer credit report are produced. However, a

23

consumer reporting agency acting as a reseller shall honor any security freeze placed on a

24

consumer credit report by another consumer reporting agency.

25

      (2) A check services or fraud prevention services company, which that issues reports on

26

incidents of fraud or authorizations for the purpose of approving or processing negotiable

27

instruments, electronic funds transfers, or similar methods of payments.

28

      (3) A deposit account information service company, which that issues reports regarding

29

account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative information

30

regarding a consumer, to inquiring banks or other financial institutions for use only in reviewing a

31

consumer request for a deposit account at the inquiring bank or financial institution.

32

      (4) Any database or file which that consists of any information adverse to the interests of

33

the consumer, including, but not limited to, criminal record information,; personal loss history

34

information,; information used for fraud prevention or detection,; tenant screening,; and

 

LC005208/SUB A - Page 122 of 210

1

employment screening.

2

     6-48-6. Notice of rights. -- At any Any time that a consumer is required to receive a

3

summary of rights required under section 609 of the federal Fair Credit Reporting Act, (15 U.S.C.

4

section 1681 et. seq.) the following notice shall be included:

5

      Consumers have the right to obtain a security freeze

6

      You may obtain a security freeze on your credit report to protect your privacy and ensure

7

that credit is not granted in your name without your knowledge. You have a right to place a

8

"security freeze" on your credit report pursuant to the R.I.G.L. to chapter 6-48 chapter 48 of title

9

6 to of the Identity Theft Prevention Act of 2006.

10

      The security freeze will prohibit a consumer reporting agency from releasing any

11

information in your credit report without your express authorization or approval.

12

      The security freeze is designed to prevent credit, loans, and services from being

13

approved in your name without your consent. When you place a security freeze on your credit

14

report, within five (5) business days you will be provided a personal identification number or

15

password to use if you choose to remove the freeze on your credit report or to temporarily

16

authorize the release of your credit report for a specific period of time after the freeze is in place.

17

To provide that authorization, you must contact the consumer reporting agency and provide all of

18

the following:

19

      (1) The unique personal identification number or password provided by the consumer

20

reporting agency.

21

      (2) Proper identification to verify your identity.

22

      (3) The proper information regarding the period of time for which the report shall be

23

available to users of the credit report.

24

      A consumer reporting agency that receives a request from a consumer to temporarily lift

25

a freeze on a credit report shall comply with the request no later than three (3) business days after

26

receiving the request.

27

      A security freeze does not apply to circumstances where you have an existing account

28

relationship and a copy of your report is requested by your existing creditor or its agents or

29

affiliates for certain types of an account review, collection, fraud control, or similar activities.

30

      If you are actively seeking a new credit, loan, utility, telephone, or insurance account,

31

you should understand that the procedures involved in lifting a security freeze may slow your

32

own applications for credit. You should plan ahead and lift a freeze -- either completely, if you

33

are shopping around, or specifically for a certain creditor -- with enough advance notice before

34

you apply for new credit for the lifting to take effect.

 

LC005208/SUB A - Page 123 of 210

1

      You have a right to bring a civil action against someone who violates your rights under

2

the credit reporting laws. The action can be brought against a consumer reporting agency or a

3

user of your credit report.

4

      Unless you are sixty-five (65) years of age or older, or you are a victim of identity theft

5

with an incident report or complaint from a law enforcement agency, a consumer reporting

6

agency has the right to charge you up to ten dollars ($10.00) to place a freeze on your credit

7

report,; up to ten dollars ($10.00) to temporarily lift a freeze on your credit report, depending on

8

the circumstances,; and up to ten dollars ($10.00) to remove a freeze from your credit report. If

9

you are sixty-five (65) years of age or older or are a victim or [of] identity theft with a valid

10

incident report or complaint, you may not be charged a fee by a consumer reporting agency for

11

placing, temporarily lifting, or removing a freeze.

12

     SECTION 36. Sections 6-49-2, 6-49-3, 6-49-4 and 6-49-5 of the General Laws in

13

Chapter 6-49 entitled "Electronic Mail Fraud" are hereby amended to read as follows:

14

     6-49-2. Legislative findings. -- It is hereby found and declared as follows:

15

      Consumers are bombarded with electronic communications, often times in a fraudulent

16

attempt to solicit personal and private information. In the interest of protecting the citizens of

17

Rhode Island, it is imperative that the general assembly establish safeguards against such

18

practices. Notwithstanding any provision of the general or public law, rule, or regulation, the

19

general assembly shall establish regulations pertaining to the prevention of electronic mail fraud.

20

     6-49-3. Definitions. -- For the purpose of this chapter, the following words and phrases

21

shall have the following meanings:

22

      (1) "Assist the transmission" means actions taken by a person to provide substantial

23

assistance or support which that enables any person to formulate, compose, send, originate,

24

initiate, or transmit a commercial electronic mail message or a commercial electronic text

25

message when the person providing the assistance knows that the initiator of the commercial

26

electronic mail message or the commercial electronic text message is engaged, or intends to

27

engage, in any practice that violates the consumer protection act.

28

      (2) "Commercial electronic mail message" means an electronic mail message sent for the

29

purpose of promoting real property, goods, or services for sale or lease. It does not mean an

30

electronic mail message to which an interactive computer service provider has attached an

31

advertisement in exchange for free use of an electronic mail account, when the sender has agreed

32

to such an arrangement.

33

      (3) "Commercial electronic text message" means an electronic text message sent to

34

promote real property, goods, or services for sale or lease.

 

LC005208/SUB A - Page 124 of 210

1

      (4) "Electronic mail address" means a destination, commonly expressed as a string of

2

characters, to which electronic mail may be sent or delivered.

3

      (5) "Electronic mail message" means an electronic message sent to an electronic mail

4

address and a reference to an internet domain, whether or not displayed, to which an electronic

5

mail message can be sent or delivered.

6

      (6) "Electronic text message" means a text message sent to a cellular telephone or pager

7

equipped with short message service or any similar capability, whether the message is initiated as

8

a short message service message or as an electronic mail message.

9

      (7) "Initiate the transmission" refers to the action by the original sender of an electronic

10

mail message or an electronic text message, not to the action by any intervening, interactive

11

computer service or wireless network that may handle or retransmit the message, unless such

12

intervening, interactive computer service assists in the transmission of an electronic mail message

13

when it knows that the person initiating the transmission is engaged, or intends to engage, in any

14

act or practice that violates the consumer protection act.

15

      (8) "Interactive computer service" means any information service, system, or access

16

software provider that provides or enables computer access by multiple users to a computer

17

server, including, specifically, a service or system that provides access to the internet and such

18

systems operated or services offered by libraries or educational institutions.

19

      (9) "Internet" means collectively the myriad of computer and telecommunications

20

facilities, including equipment and operating software, that comprise the interconnected world

21

wide worldwide network of networks that employ the transmission control protocol/internet

22

protocol, or any predecessor or successor protocols to such protocol, to communicate information

23

of all kinds by wire or radio.

24

      (10) "Internet domain name" refers to globally unique, hierarchical reference to an

25

Internet internet host or service, assigned through centralized, internet naming authorities,

26

comprising a series of character strings separated by periods, with the right-most string specifying

27

the top of the hierarchy.

28

      (11) "Person" means a person, corporation, partnership, or association.

29

      (12) "Personally identifying information" means an individual's: (a) (i) social security

30

number; (b) (ii) driver's license number; (c) (iii) bank account number; (d) (iv) credit or debit card

31

number; (e) (v) personal identification number; (f) (vi) automated or electronic signature; (g) (vii)

32

unique biometric data; (h) (viii) account passwords; or (i) (ix) any other piece of information that

33

can be used to access an individual's financial accounts or to obtain goods or services.

34

      (13) "Web page" means a location, with respect to the world wide web, that has a single,

 

LC005208/SUB A - Page 125 of 210

1

uniform, resource locator, or other single location with respect to the Internet internet.

2

     6-49-4. Prohibited activity. -- No person may solicit, request, or take any action to

3

induce another person to provide personally identifying information by means of a web page,

4

electronic mail message, or otherwise using the Internet internet in a manner as previously

5

defined in section § 6-49-3, by representing oneself, either directly or by implication, to be a

6

business or individual, without the authority or approval of such business or individual. No

7

person may conspire with another person to engage in any act that violates the provisions of this

8

chapter.

9

     6-49-5. Damages. -- (a) Damages to a consumer resulting from the practices prohibited

10

by this chapter are up to five hundred dollars ($500) per violation, or actual damages, whichever

11

is greater.

12

      (b) A person engaged in the business of providing internet access service to the public,;

13

an owner of a web page,; or trademark owner who is adversely affected by reason of a violation

14

of this chapter, may bring an action against a person who violates this chapter to:

15

      (1) Enjoin further violations of this chapter; and

16

      (2) Recover the greater of actual damages or five thousand dollars ($5,000) per violation

17

of this chapter.

18

      (c) The court may increase the damages up to three (3) times the damages allowed by

19

this section if the defendant has engaged in a pattern and practice of violating this chapter. The

20

court may award costs and reasonable attorneys' fees to a prevailing party.

21

     SECTION 37. Sections 6-50-2, 6-50-4, 6-50-3, 6-50-5, 6-50-6, 6-50-7 and 6-50-9 of the

22

General Laws in Chapter 6-50 entitled "The Rhode Island Fair Dealership Act" are hereby

23

amended to read as follows:

24

     6-50-2. Definitions. -- In this chapter:

25

      (1) "Community of interest" means a continuing financial interest between the grantor

26

and the grantee in either the operation of the dealership business or the marketing of such goods

27

or services;

28

      (2) "Dealer" means a person who is a grantee of a dealership situated in this state;

29

      (3) "Dealership" means any of the following:

30

      (i) A contract or agreement, either expressed or implied, whether oral or written,

31

between two (2) or more persons, by which a person is granted the right to sell or distribute goods

32

or services, or use a trade name, trademark, service mark, logotype, advertising, or other

33

commercial symbol, in which there is a community of interest in the business of offering, selling,

34

or distributing goods or services at wholesale, retail, by lease, agreement, or otherwise.

 

LC005208/SUB A - Page 126 of 210

1

      (4) "Good cause" means, for the purposes of this act, good cause for terminating,

2

canceling, or nonrenewal and shall include, but not be limited to, failure by the dealer to comply

3

with the reasonable requirements imposed by the grantor or any of the reasons listed in

4

subdivisions §§ 6-50-4(a)(1) -- (a)(6) 6-50-4(a)(1) - (a)(6) inclusive.

5

      (5) "Grantor" means a person who grants a dealership;

6

      (6) "Person" means a natural person, partnership, joint venture, corporation, or other

7

entity.

8

     6-50-3. Purposes; rules of construction; variation by contract Purposes -- rules of

9

construction -- variation by contract. -- (a) This chapter shall be liberally construed and applied

10

to promote its underlying remedial purposes and policies.

11

      (b) The underlying purposes and policies of this chapter are:

12

      (1) To promote the compelling interest of the public in fair business relations between

13

dealers and grantors, and in the continuation of dealerships on a fair basis;

14

      (2) To protect dealers against unfair treatment by grantors;

15

      (3) To provide dealers with rights and remedies in addition to those existing by contract

16

or common law;

17

      (4) To govern dealerships, including any renewals or amendments, to the full extent

18

consistent with the constitutions of this state and the United States.

19

      (c) The effect of this chapter may not be varied by contract or agreement. Any contract

20

or agreement purporting to do so is void and unenforceable to that extent only.

21

     6-50-4. Notice of termination or change in dealership. -- (a) Notwithstanding the

22

terms, provisions, or conditions of any agreement to the contrary, a grantor shall provide a dealer

23

sixty (60) days prior, written notice of termination, cancellation, or nonrenewal. The notice shall

24

state all the reasons for termination, cancellation, or nonrenewal and shall provide that the dealer

25

has thirty (30) days in which to cure any claimed deficiency; provided that a dealer has a right to

26

cure three (3) times in any twelve (12) month -month (12) period during the period of the

27

dealership agreement. The sixty (60) day -day (60) notice provisions of this section shall not

28

apply and the termination, cancellation, or nonrenewal may be made effective immediately upon

29

written notice, if the reason for termination, cancellation, or nonrenewal is in the event the dealer:

30

(1) voluntarily Voluntarily abandons the dealership relationship; (2) is Is convicted of a felony

31

offense related to the business conducted pursuant to the dealership; (3) engages Engages in any

32

substantial act which that tends to materially impair the goodwill of the grantor's trade name,

33

trademark, service mark, logotype, or other commercial symbol; (4) makes Makes a material

34

misrepresentation of fact to the grantor relating to the dealership; (5) attempts Attempts to

 

LC005208/SUB A - Page 127 of 210

1

transfer the dealership (or a portion thereof) without authorization of the grantor; or (6) is Is

2

insolvent, files, or suffers to be filed against it, any voluntary or involuntary bankruptcy petition,

3

or makes an assignment for the benefit of creditors or similar disposition of assets of the dealer

4

business.

5

      (b) If the reason for termination, cancellation, or nonrenewal is nonpayment of sums due

6

under the dealership, the dealers shall be entitled to written notice of such default, and shall have

7

ten (10) days in which to cure such default from the date of such notice. A dealer has the right to

8

cure three (3) times in any (12) month twelve-month (12) period during the period of the

9

dealership agreement.

10

      (c) If the reason for termination, cancellation, or nonrenewal is for violation of any law,

11

regulation, or standard relating to public health or safety, the dealer shall be entitled to immediate,

12

written notice and shall have twenty-four (24) hours to cure such violation.

13

     6-50-5. Repurchase of inventories. -- If a dealership is terminated by the grantor, the

14

grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the

15

dealer for resale under the dealership agreement at the fair, wholesale market value. This section

16

applies only to merchandise with a name, trademark, label, or other mark on it which identifies

17

the grantor.

18

     6-50-6. Application to arbitration agreements. -- This chapter shall not apply to

19

provisions for the binding arbitration of disputes contained in a dealership agreement, if the

20

criteria for determining whether good cause existed for a termination, cancellation, or

21

nonrenewal, and the relief provided is no less than that provided for in this chapter.

22

     6-50-7. Action for damages and injunctive relief. -- If any grantor violates this chapter,

23

a dealer may bring an action against such grantor in any court of competent jurisdiction for

24

damages sustained by the dealer as a consequence of the grantor's violation, together with the

25

actual costs of the action, including reasonable, actual attorneys' fees., and the The dealer also

26

may be granted injunctive relief against unlawful termination, cancellation, or nonrenewal.

27

     6-50-9. Nonapplicability. -- This chapter shall not apply to malt beverage dealerships,;

28

motor vehicle dealerships,; insurance agency relationships,; any relationship relating to the sale or

29

administration of insurance or any similar contract with an entity organized under Chapters

30

chapters 19 or 20 of Title title 27,; fuel distribution dealerships,; and door-to-door sales

31

dealerships.

32

     SECTION 38. Sections 6-51-1, 6-51-2, 6-51-3 and 6-51-4 of the General Laws in

33

Chapter 6-51 entitled "The Rhode Island Automobile Repossession Act" are hereby amended to

34

read as follows:

 

LC005208/SUB A - Page 128 of 210

1

     6-51-1. Legislative findings. -- The general assembly finds and declares that:

2

      (a) Rhode Island consumers who have purchased, through an extension of credit, or

3

leased an automobile may fall behind on payments during difficult economic or emotional times

4

and should be allowed to cure a default on the loan or lease within the time provided under this

5

chapter.

6

      (b) If the consumer is unable to cure such a default and the lessor or secured party

7

repossesses the automobile, the repossession cannot take place on the property owned or rented

8

by the consumer without their his or her consent except as provided by this chapter or by judicial

9

action. In the event of repossession, a consumer is allowed to redeem the automobile within the

10

time provided by this chapter.

11

      (c) The lessor or secured party who holds title to the automobile shall be allowed to

12

dispose of the automobile after repossession in order to recover the fair market value of the

13

vehicle and expenses from the repossession according to the provisions of this chapter and any

14

other applicable laws of this state.

15

     6-51-2. Definitions. -- For purposes of this chapter:

16

      (a) "Automobile" means any self-propelled, motored device in, upon, or by which any

17

person is, or may be, transported or drawn upon a highway and is used or brought for use

18

primarily for personal, family, or household purposes and shall include:

19

      (1) An automobile as defined by subsection § 31-1-3(d);

20

      (2) A motorcycle as defined by subsection § 31-1-3(j)(l) ;

21

      (3) A suburban vehicle as defined by subsection § 31-1-3(u)(aa).

22

      (b) "Automobile lease agreement" means the bargain, with respect to the lease, of the

23

lessor and the consumer in fact as found in their language. and the The term includes a sublease

24

agreement.

25

      (c) "Automobile loan agreement" means a transaction that creates or provides for a

26

security interest in an automobile in which: (i) an (1) An individual incurs an obligation primarily

27

for personal, family, or household purposes; (ii) a (2) A security interest secures the obligation;

28

and (iii) the (3) The automobile is held or acquired primarily for personal, family, or household

29

purposes.

30

      (d) "Consumer" means any natural person: (1) in In an automobile lease agreement who

31

acquires, applies for, or is offered the right to possession and use of goods under an automobile

32

lease and includes a legal representative of, fiduciary for, or successor in interest to, an individual

33

who is a lessee, but does not include a guarantor on a consumer lease; or (2) in In an automobile

34

loan agreement with respect to an obligation secured by a security interest in the automobile: (i)

 

LC005208/SUB A - Page 129 of 210

1

owes Owes payment or other performance of the obligation; (ii) has Has provided property other

2

than the collateral to secure payment or other performance of the obligation; or (iii) is Is

3

otherwise accountable in whole or part for payment or other performance of the obligation and

4

the term does not include issuers or nominated persons under a letter of credit.

5

      (e) "Lessor" means a person or business who transfers the right to possession and use of

6

an automobile under a lease. Unless the context clearly indicates otherwise, the term includes a

7

sublessor.

8

      (f) "Secured party" means a person or business that holds a security interest arising under

9

an automobile loan agreement.

10

     6-51-3. Default, notice, right to cure, reinstatement. -- (a) The default provisions of a

11

consumer automobile lease or automobile loan agreement are enforceable only to the extent that:

12

      (1) The consumer does not make one or more payments required by the lease or loan

13

agreement; or

14

      (2) The lessor or secured party establishes that the prospect of payment, performance, or

15

realization of the lessor's or secured party's interest in the automobile is significantly impaired.

16

      (b) After a default under an automobile lease or loan agreement by the consumer, the

17

lessor or secured party may not accelerate, take judicial action to collect, or repossess the

18

automobile until the lessor or secured party gives the consumer the notice required by this section

19

and the consumer does not cure the default in the time allowed under this section. A lessor or

20

secured party may initiate a procedure to cure by sending to the consumer, at any time after the

21

consumer has been in default for ten (10) days, a notice of the right to cure the default. Said

22

notice shall be delivered via certified mail, return receipt requested, or via first-class mail, at the

23

consumer's address last known to the lessor or secured party. The time when notice is given shall

24

be deemed to be upon actual delivery of the notice to the consumer or three (3) business days

25

following the mailing of the notice to the consumer at the consumer's address last known to the

26

lessor or secured party.

27

      (c) The notice shall be in writing and shall conspicuously state the rights of the consumer

28

upon default in substantially the following form:

29

      The heading shall read: "Rights of Defaulting consumer under Rhode Island General

30

Laws." The body of the notice shall read: "You may cure your default in (describe automobile

31

lease or loan agreement in a manner enabling the consumer to identify it) by paying to (name and

32

address of lessor or secured party) (amount due) before (date which that is at least twenty-one

33

(21) days after notice is delivered). If you pay this amount within the time allowed you are no

34

longer in default and may continue with the automobile (lease or loan) agreement as though no

 

LC005208/SUB A - Page 130 of 210

1

default has occurred.

2

      If you do not cure your default by the date stated above, the lessor or secured party may

3

sue you to obtain a judgment for the amount of the debt and may take possession of the

4

automobile.

5

      If the lessor or secured party takes possession of the automobile, you may get it back by

6

paying the full amount of your debt plus any reasonable expenses incurred by the lessor or

7

secured party if you make the required payment within twenty (20) days after the lessor or

8

secured party takes possession.

9

      If (the secured party) sells the vehicle repossessed from the consumer for an amount

10

exceeding the amount outstanding on the automobile (loan) agreement including reasonable

11

expenses related to judicial action and or repossession, the excess funds shall be returned

12

promptly to the defaulting consumer.

13

      You have the right to cure a default only once in any twelve (12) month -month (12)

14

period during the period of the automobile (lease or loan) agreement. If you default again within

15

the next twelve (12) months in making your payments, we may exercise our rights without

16

sending you another right to cure notice. If you have questions, telephone (name of lessor or

17

secured party) at (phone number)."

18

      (d) Within the period for cure stated in the notice under this section, the consumer may

19

cure the default by tendering the amount of all unpaid sums due at the time of tender, including

20

any unpaid delinquency or default charges, but without additional security deposit or prepayment

21

of period payments not yet due. Cure restores the rights of the lessor or secured party and

22

consumer under the automobile loan or lease agreement as if the default had not occurred.

23

      (e) A consumer has the right to cure only once in any twelve (12) month -month (12)

24

period during the period of the automobile lease or loan agreement.

25

     6-51-4. Repossession of automobile as a result of default under a loan or lease

26

agreement. -- (a) Subject to the provisions of section § 6-50-3, of this chapter, a lessor or secured

27

party under a consumer automobile lease or loan agreement may take possession of the

28

automobile. In taking possession, the lessor or secured party under a consumer automobile lease

29

or loan agreement may proceed without prior hearing pursuant to section § 6-50-3, and only if the

30

possession can be obtained without a breach of peace and, unless the consumer consents to an

31

entry, at the time of such entry, without entry upon property owned by, or rented to the consumer,

32

except as provided for in chapter 39-12.1 of title 39.

33

      (b) Any lessor or secured party obtaining possession of an automobile under the

34

provisions of this chapter shall notify the police department of the city or town in which such

 

LC005208/SUB A - Page 131 of 210

1

possession occurred pursuant to section § 6A-9-609(B)(b)(2).

2

      (c) The consumer under an automobile lease or loan agreement may redeem the

3

automobile from the lessor or secured party and have the automobile lease or loan agreement

4

reinstated at any time within twenty (20) days of the lessor's or secured party's taking possession

5

of the automobile, or thereafter until the lessor or secured party has either disposed of the

6

automobile,; entered into a contract for its disposition,; or gained the right to retain the

7

automobile.

8

      (d) The lessor or secured party may, after gaining possession of the automobile, sell or

9

otherwise dispose of the automobile after the twenty (20) day twenty-day (20) redemption period

10

provided for in subsection (c) of this section.

11

     SECTION 39. Sections 6-52-1, 6-52-2, 6-52-3 and 6-52-4 of the General Laws in

12

Chapter 6-52 entitled "Safe Destruction of Documents Containing Personal Information" are

13

hereby amended to read as follows:

14

     6-52-1. Definitions. -- As used in this chapter:

15

      (1) "Business" means a sole proprietorship, partnership, corporation, association, limited

16

liability company, or other group, however organized and whether or not organized to operate at a

17

profit, including a financial institution organized, chartered, or holding a license or authorization

18

certificate under the laws of this state or any other state, or the parent, affiliate, or subsidiary of a

19

financial institution. This term includes any entity that destroys records, including, but not limited

20

to, the state, a state agency, or any political subdivision of the state.

21

      (2) "Customer" means an individual who provides personal information to a business for

22

the purpose of purchasing or leasing a product or obtaining a service from the business or whose

23

personal information has been provided to another business from that business.

24

      (3) "Personal information" means the following information that identifies, relates to,

25

describes, or is capable of being associated with a particular individual: his or her signature,;

26

social security number,; physical characteristics or description,; passport number,; driver's license

27

or state identification card number,; insurance policy number,; bank account number,; credit card

28

number,; debit card number,; any other financial information or confidential health care

29

information, including all information relating to a patient's health care history,; diagnosis

30

condition,; treatment,; or evaluation obtained from a health care provider who has treated the

31

patient which explicitly or by implication identifies a particular patient.

32

      (4) "Record" means any material, regardless of the physical form, on which personal

33

information is recorded or preserved by any means, including written or spoken words,

34

graphically depicted, printed, or electromagnetically transmitted. Record does not include

 

LC005208/SUB A - Page 132 of 210

1

publicly available directories containing information an individual has voluntarily consented to

2

have publicly disseminated or listed, such as name, address, or telephone number.

3

     6-52-2. Safe destruction of documents. -- A business shall take reasonable steps to

4

destroy or arrange for the destruction of a customer's personal information within its custody and

5

control that is no longer to be retained by the business by shredding, erasing, or otherwise

6

destroying and/or modifying the personal information in those records to make it unreadable or

7

indecipherable through any means for the purpose of:

8

      (1) Ensuring the security and confidentiality of customer personal information;

9

      (2) Protecting against any reasonably foreseeable threats or hazards to the security or

10

integrity of customer personal information; and

11

      (3) Protecting against unauthorized access to, or use of, customer personal information

12

that could result in substantial harm or inconvenience to any customer.

13

     6-52-3. Violations. -- A business that does not take the reasonable steps when disposing

14

of a customer's personal information set out in section § 6-52-2 is in violation of this chapter. For

15

the purposes of this chapter, each record unreasonably disposed of constitutes an individual

16

violation of this chapter.

17

      (1) A customer who incurs actual damages due to a violation of this chapter may bring a

18

civil action in superior court.

19

      (2) Whenever the attorney general has reason to believe that a violation of this chapter

20

has occurred and that proceedings would be in the public interest, the attorney general may bring

21

an action in the name of the state against the business in violation. The business who that violates

22

this chapter may be liable in a suit by the attorney general for actual damages of the aggrieved

23

customer and a civil penalty of five hundred dollars ($500) for each violation, not to exceed fifty

24

thousand dollars ($50,000).

25

     6-52-4. Exemptions. -- This chapter does not apply to any of the following:

26

      (1) Any bank, credit union, or financial institution as defined under the federal Gramm

27

Leach Bliley Law that is subject to the regulation of the Office of the Comptroller of Currency,;

28

the Federal Reserve,; the National Credit Union Administration,; the Securities and Exchange

29

Commission,; the Federal Deposit Insurance Corporation,; the Federal Trade Commission,; the

30

Office of Thrift Supervision; and the U.S. Department of the Treasury, or the Department of

31

Business Regulation; and is subject to the privacy and security provisions of the Gramm Leach

32

Bliley Act, 15 U.S.C. section 6801 et seq;

33

      (2) Any health insurer, non profit non-profit hospital, or medical service corporation, as

34

defined in chapters 27-19 and 27-20; chapters 19 and 20 of title 27, and any health care facility

 

LC005208/SUB A - Page 133 of 210

1

that is subject to the standards for privacy of individually identifiable health information and the

2

security standards for the protection of electronic health information of the Health Insurance

3

Portability and Accountability Act of 1996;

4

      (3) Any consumer report agency that is subject to, and in compliance with, the Federal

5

Credit Reporting Act. 15 U.S. C. section 1681 et seq., as amended.; or

6

      (4) Any business that enters into a contractual agreement with another business to

7

complete the destruction of a customer's personal information and has physical evidence of that

8

contractual agreement.

9

     SECTION 40. Sections 6-53-1, 6-53-2, 6-53-3, 6-53-4, 6-53-5, 6-53-6, 6-53-7, 6-53-8, 6-

10

53-9, 6-53-10, 6-53-11, 6-53-12 and 6-53-13 of the General Laws in Chapter 6-53 entitled

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"Purchase and Sale of Tools and Electronics" are hereby amended to read as follows:

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     6-53-1. License required -- "Person" defined. -- (a) No person, including a

13

pawnbroker, consignment shop, salvage yard operator, or second hand second-hand dealer as

14

defined in section § 5-21-1, shall engage in the business of buying or receiving for the purpose of

15

selling tools or electronic equipment, whether or not readily identifiable with a serial number, to

16

include, but not limited to, generators, powers tools, video game consoles, MP3 players,

17

computers, audio and video equipment, referred to in this chapter as "tools and electronics or

18

trade-ins and store credits of the aforementioned," from the general public for the purpose of

19

reselling the tools and electronics in any condition without first obtaining a license from the

20

attorney general of the State of Rhode Island ("attorney general"). The attorney general shall not

21

issue any license to a person who has not registered a permanent place of business within the state

22

for the purchase or sale of tools and electronics. The criteria for determining a person's permanent

23

place of business shall be formulated by the attorney general within ninety (90) days after

24

passage.

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      (b) The word "person," when used in this chapter, shall include individuals, partnerships,

26

associations, and corporations.

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     6-53-2. Application for license -- Annual fee -- Attorney general to promulgate rules

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and regulations. [Effective December 31, 2013.] -- (a) Application for the license shall be in

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writing, under oath, and in the form prescribed by the attorney general and shall contain the name

30

and the address (both of the residence and place of business) of the applicant, and if the applicant

31

is a partnership or association, of every member,; and if a corporation, of each officer and director

32

and of the principal owner or owners of the issued and outstanding capital stock; also the city or

33

town with the street and number where the business is to be conducted, and any further

34

information that the attorney general may require. After receipt of an application for a license, the

 

LC005208/SUB A - Page 134 of 210

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attorney general shall conduct an investigation to determine whether the facts presented in the

2

application are true. The attorney general may also request a record search and a report from the

3

national crime and information center National Crime and Information Center (NCIC) of the

4

federal bureau of investigation Federal Bureau of Investigation. If the application discloses that

5

the applicant has a disqualifying criminal record,; or if the investigation indicates that any of the

6

facts presented in the application are not true,; or if the records of the department of the attorney

7

general indicate criminal activity on the part of the person signing the application and any other

8

persons named in the application,; or if the NCIC report indicates an outstanding warrant for the

9

person signing the application and any other persons named in the application,; then the attorney

10

general may initiate a nationwide criminal records check that shall include fingerprints submitted

11

to the federal bureau of investigation Federal Bureau of Investigation regarding the person

12

signing the application and any other persons named in the application. Upon the annual renewal

13

of a license, or the opening of a new branch designated in the license, the attorney general may

14

initiate a nationwide criminal records check that shall include fingerprints submitted to the federal

15

bureau of investigation Federal Bureau of Investigation regarding the licensee and any other

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persons named in the license. The individual who is subject to the national records check shall be

17

responsible for the cost of conducting such check.

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      (b) The applicant, at the time of making his or her initial application only, shall pay to

19

the attorney general the sum of fifty dollars ($50.00) as a fee for investigating the application and

20

the additional sum of fifty dollars ($50.00) shall be paid annually. The licensee shall pay an

21

additional fifty dollars ($50.00) annually for each branch designated in the license. Licenses shall

22

not be assignable or transferable to any other person or entity. If the applicant is a holder of a

23

precious metals and dealers license, the fees as required in this section shall be waived.

24

     6-53-3. Identification and authority of seller. -- (a) Every person required to be

25

licensed under this chapter shall require positive proof of identification with photograph, date of

26

birth, and current address of every seller from whom tools and electronics is are to be purchased

27

and shall require the seller to sign a statement, on a form to be approved by the attorney general,

28

stating that the seller is the legal owner of the property or is the agent of the owner authorized to

29

sell the property, and when and where or in what manner the property was obtained.

30

      (b) Every person required to be licensed under this chapter shall, before purchasing any

31

tool or electronic device, require the seller, if a minor, to be accompanied by the parent or legal

32

guardian of the minor.

33

     6-53-4. Record of transactions required -- Reports to police. [Effective December 31,

34

2013.] -- (a) Every person licensed under this chapter shall keep a copy of the report form

 

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obtained from or under the direction of the attorney general, containing a comprehensive record

2

of all transactions concerning tools and electronics. The comprehensive record shall be hand

3

printed legibly or typed. The record shall include the name, address, telephone number, and date

4

of birth of the seller,; a complete and accurate description of the property purchased or sold,

5

including any serial numbers or other identifying marks or symbols,; and the date and hour of the

6

transaction.

7

      (b) All persons licensed under this chapter shall deliver or send electronically to the chief

8

of police of the city or town in which the business is located, and electronically submit to the

9

attorney general, in a manner specified by the attorney general, copies of all report forms from the

10

preceding seven (7) day -day (7) period.

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      (c) Every person licensed under this chapter shall retain a copy of the report for a period

12

of one year from the date of the sale stated on the form.

13

     6-53-5. Fourteen day holding period -- Recovery of stolen property -- Return to

14

rightful owner. [Effective December 31, 2013.] -- (a) All persons licensed under this chapter

15

shall retain in their possession, in an unaltered condition, for a period of fourteen (14) days, all

16

tools and electronics, including items which that do not contain serial numbers or other

17

identifying marks. The fourteen (14) day -day (14) holding period shall commence with the date

18

the report of its acquisition was delivered to or received by the chief of police or the attorney

19

general, whichever is later. The records so received by the chief of police or the attorney general

20

shall be available for inspection only by law enforcement officers for law enforcement purposes.

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If the chief of police has probable cause to believe that tools and electronics have been stolen, he

22

or she may give notice, in writing, to the person licensed, to retain the tools, electronics, or article

23

for an additional period of fifteen (15) days, and the person shall retain the property for this

24

additional fifteen (15) day -day (15) period unless the notice is recalled, in writing, within the

25

fifteen (15) day -day (15) period;. within Within the fifteen (15) day -day (15) period, the chief of

26

police, or his or her designee, shall designate, in writing, an officer to secure the property alleged

27

to be stolen and the persons in possession of the property shall deliver the property to the officer

28

upon display of the officer's written designation by the chief of police or his or her designee.

29

Upon receipt of the property from the officer, the clerk or person in charge of the storage of

30

alleged stolen property for a police department shall enter into a book a description of every

31

article of property alleged to be stolen which that was brought to the police department and shall

32

attach a number to each article. The clerk or person in charge of the storage of alleged stolen

33

property shall deliver the property to the owner of the property upon satisfactory proof of

34

ownership, without any cost to the owner, provided that the following steps are followed:

 

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      (1) A complete photographic record of the property is made;

2

      (2) A signed declaration of ownership under penalty of perjury is obtained from the

3

person to whom the property is delivered;

4

      (3) The person from whom the custody of the property was taken is served with written

5

notice of the claim of ownership and is given ten (10) days from the mailing of the notice to file a

6

petition in district court objecting to the delivery of the property to the person claiming

7

ownership. If a petition is filed in a ti