President and CEO, Rhode Island Hospitality and Tourism Association
Typically in late June and early July, legislators at the state house work at a rapid pace to vote on remaining matters before ending the annual legislative session and going home for the summer. Moreover, it’s usually around this time of year when some of the most critical issues concerning Rhode Island’s residents and business owners alike are decided upon. True to form, the end of the 2005 legislative session brought numerous important bills to the pen of the Governor, with several of them directly affecting the hospitality industry.
One of the key roles of the Rhode Island Hospitality and Tourism Association is to monitor legislation that has the potential of impacting the industry; both by pushing for the measures that help the industry to grow and flourish, and also by lobbying against the measures that could negatively impact your business. While you run your company, we help protect its livelihood on Smith Hill with the support of our members.
More often than one might think, a piece of legislation that looks benign on the onset can transform into a significant issue. Nothing is never certain until a bill is passed or defeated, which is why it is critical for the Association to follow bills every step of the way.
In an instance that occurred in the last few weeks, legislators added an amendment to the floor of the house in an attempt to protect consumers from “escheat,” or fees associated with unclaimed property. However, legislation was almost passed that would have made restaurant gift certificates eligible for escheat, making it “abandoned property” if not redeemed within three years. Because it is illegal to place expiration dates on gift certificates, it would have meant restaurants would have had to send monies to the state from any gift certificates that were unclaimed after three years.
The Association quickly redrafted a bill which the legislature passed, stating that gift certificates “shall not be presumed to be abandoned.” Many thanks go out to Representative Patrick Kennedy, Speaker Murphy, Senate President Montalbano, Attorney General Lynch and General Treasurer Tavares for insuring that gift certificates would be exempt from escheat laws, as well as Vincenzo Iemma from Capriccio’s for his active participation with the Association in resolving this issue. It goes to show that both the Association and its members need to remain attentive to the goings-on at the state house in an effort to protect the industry’s continued prosperity.
Here is a brief recap of additional legislation that was voted on or resolved during the last few weeks of the legislative session:
Fire Safety Code Legislation
One of this legislative session’s most critical issues for hospitality businesses was the classification of “organized dining facilities” under the fire safety code. As the deadline for businesses to install sprinkler systems approached, several key members of the Association worked in partnership with fire sprinkler companies and local and state fire officials to reclassify certain businesses as organized dining facilities, which in turn exempt these businesses from the “nightclub” definition under the fire safety code.
Accordingly, an “organized dining facility,” “a place of public accommodation… where private events are held and where the primary source of revenue is derived from rental charges for the use of the facility and service of food…” for weddings, banquets, fundraisers and the like, shall be required to comply with the requirements for all other “Places of Assembly.”
In addition, the Fire Safety Code Board of Appeal & Review also issued a revised schedule for businesses to install sprinkler systems. The new schedule is as follows:
- July 1, 2005: Deadline to have a signed contract for the design of the sprinkler system, covering the subject facility, in place
- October 31, 2005: Deadline for the completion of the design of the complete sprinkler system proposed for the facility
- December 31, 2005: Deadline for securing all approvals for the proposed sprinkler system
- July 1, 2006: Deadline for the filing of any appeal, or request for extension, of the final October 31, 2006 deadline
- October 31, 2006: Final deadline for compliance
Minimum Wage Increase
Earlier this year, the House of Representatives passed legislation that would increase the minimum wage from $6.75 to $7.25 an hour, to be effective January 1, 2006. Under the legislation, the minimum wage increase would be followed by another increase to $7.50, effective January 1, 2007.
The legislature made up its mind long ago that it was going to raise the minimum wage. But, with the lobbying efforts of the Association, we were able to negotiate a lower rate – from $7.25 to $7.10 for the first increase, and from $7.50 to $7.40 for the second increase.
On June 29, Governor Carcieri vetoed the minimum wage bill. At the time of this editorial’s deadline, it was unknown whether the legislature would take up the veto before adjourning.
Casino Question Shelved for 2005
Supporters of the proposed West Warwick Casino and Harrah’s Entertainment have dropped their efforts in seeking a special election for this November. The statewide vote would have asked Rhode Islanders to vote on a “state-operated” casino, run by Harrah’s and the Narragansett Indian Tribe under contract with the State Lottery Commission.
Casino supporters cite timing issues as the reason for ending their push for a special election in 2005. The new casino legislation was revised from language submitted in 2004, which was ruled unconstitutional by the state Supreme Court last year. The Legislature has requested an advisory opinion from the Supreme Court on the constitutionality of this year’s casino legislation. The Court will rule sometime after oral arguments are made on August 15th, thereby making it impossible for the Legislature to vote on a referendum before they adjourned for the year.
