PROVIDENCE — With just about everyone clamoring these days to make Rhode Island more business friendly, two local lawmakers are aiming to do just that.
Lincoln Rep. Gregory Costantino submitted a bill to give commercial customers some of the same protections against utility shut-offs – and similar abilities to get shut-off utilities restored — as are now granted to residential customers.
Cumberland Rep. James McLaughlin has introduced legislation to cut in half the $500 minimum corporate tax for the first three years a business is in operation.
Costantino’s bill was scheduled for a hearing in the House Corporations Committee Tuesday.
Currently, Public Utilities Commission (PUC) regulations prevent residential customers from being shut off for non-payment on a Friday, Saturday, Sunday or Monday if the Monday is a state holiday, Costantino’s bill would set the same requirements for business customers. Business customers facing shut-offs would also be required to get 10 days advance notice of such an action.
The freshman Democrat would also require that any rates and charges assessed to business customers for heat, light, water or telephone services “shall be reasonable and just and every unjust or unreasonable charge is “prohibited and declared unlawful.”
Businesses that do have their utilities shut off would be able to have them restored under Costantino’s bill if it makes an initial payment of 10 percent of is unpaid balance; agrees to pay an amount totaling one-thirty-sixth of 40 percent of the unpaid balance per month for 36 months and keeps current with new charges. If the business does that, the remainder of its unpaid balance would be forgiven and considered as bad debt for the purposes of reimbursement by the state.
That would be a one-time deal, however. If the business customer fails to make the scheduled payments it would again be subject to shut-off and the entire arrearage would be due and payable.
Pawtucket’s George Wiley Center, which won the shut-off protections for residential customers after a fight that lasted more than a decade, supports Costantino’s bill.
“A small business can lose a whole weekend’s income if they are shut off on a Friday,” said the Wiley Center’s Maggie Burns, noting that even the threat of cutting a business off on Friday, with the possibility that utility services might not be restored until the following Monday or later, even if they pay their back bills, can intimidate a small business.
“The Wiley Center is wholly supportive” of the bill, “because we’re all about small business and people trying to earn a living and not getting harassed by the big corporate interests.” Besides, she said, losing a whole weekend’s business could make it even harder for a small business owner to pay his or her bill.
McLaughlin says his bill on the minimum corporate tax would give Rhode Island “a strong competitive edge,” over Massachusetts and other states.
“Our smaller businesses are getting slammed with this $500 minimum and it’s placing a barrier in front of potential start-ups,” McLaughlin argued. Rebuilding our fiscal health has been a slow process, and I’m hoping something like this will provide faster relief to the people in this state.”
Gov. Lincoln Chafee included a proposal in his budget to gradually reduce the corporate income tax from the current 9 percent to 7 percent, also over a three-year period. Both House Speaker Gordon Fox and Senate President Teresa Paiva Weed have said they want to find ways to reduce taxes on businesses this year, both to help the struggling economy and to keep Rhode Island from being at the bottom of so many lists that gauge business-friendliness.
Warwick Sen. William Walaska is sponsoring the same legislation in the Senate, reducing the tax from $500 to $250 for the first three years a new business files tax returns then bringing it up to $500 after that.
In a written statement, he said, said his constituents have spoken to him about reducing the minimum corporate tax on various occasions. He believes that a lower minimum corporate tax could drive more businesses to open up shop and expand in Rhode Island, he said.
“Many of my constituents think the $500 minimum corporation tax is unfair, especially while the state is still in economic recovery,” Walaska said. “Looking at the big picture, it’s also just another area in which Rhode Island is at a disadvantage compared to our neighboring states. We keep hearing that we’re not business friendly. It’s time we take more measures to rectify that.”
Woonsocket Rep. Robert Phillips is a co-sponsor of McLaughlin’s bill in the House.
Each bill has been referred to its respective chamber’s Finance Committee.