The Rhode Island General Assembly recessed shortly before 2:00am on Saturday, June 21. Nearly 2,600 bills were introduced by legislators during the 2025 session.
When the 2025 legislative session began on January 7th, RI lawmakers filed into the state house staring down a $250 million deficit. As is true most every session, and especially under the pressure of a growing deficit, the budget bill (budget) was the most important piece of legislation this year.
Transmitted to Governor McKee on June 21, the budget bill became effective without his signature on June 29 for Fiscal Year 2026 beginning on July 1.
Among the budget’s more noteworthy provisions are the following:
Non-Owner-Occupied Tax. Dubbed the “Taylor Swift tax,” the budget creates a non-owner-occupied residential property tax, effective July 1, 2026. Affected properties will be subject to a 0.5 percent annual tax on the portion of their value exceeding $1.0 million, indexed to inflation, with all resulting revenues dedicated to the Low-Income Housing Tax Credit Fund. The tax does not apply to commercial property or property rented for more than half the year.
Real Estate Conveyance Tax Increase. Increases the first and second tiers of the real estate conveyance tax will increase from 0.46 percent to 0.75 percent, effective October 1, 2025, for a top effective rate of 1.5 percent. The first tier applies to all real estate transfers, with revenues allocated in accordance with current law. The second tier applies to residential transfers exceeding $800,000, indexed to inflation. The second tier rate will now be split, with 0.50 percent of the 0.75 percent allocated to the Housing Production Fund, and the remaining 0.25 percent to the Housing Resources and Homelessness restricted account.
Hotel Tax on Whole Home Rentals. Creates a new tax equal to the five percent State Hotel Tax on whole-home short-term rentals, effective January 1, 2026. The provision dedicates 50 percent of new tax revenues to the Housing Resources and Homelessness restricted account, and 25 percent each to the municipality and tourism district in which the rental occurs.
Health Services Funding Assessment. Establishes an assessment on health insurer premiums to generate $30.0 million annually to support primary care and other critical healthcare programs.
Prior Authorization. Establishes a three-year pilot program to eliminate prior authorization requirements in the Medicaid program for any service, treatment, or procedure ordered by a primary care provider in the normal course of treatment. The takes effect on October 1, 2025, and sunsets on October 1, 2028. Providers include those in family medicine, geriatrics, internal medicine, obstetrics and gynecology, or pediatrics. Pharmacy benefits are excluded from the pilot.
Primary Care Rates. Adds $26.4 million, including $8.3 million from general revenues, to raise primary care rates to 100 percent of Medicare rates, effective October 1, 2025.
Nicotine Pouch Tax. Provides that the 80 percent wholesale tax currently applied to “other tobacco products,” be applied to nicotine pouches (small synthetic fiber pouches containing nicotine designed to be placed between a person’s gum and lip). These products were not previously included in the 80 percent of wholesale cost tax applied to tobacco or other tobacco products.
Gas Tax. Increases the motor fuel tax to $0.41 from the estimated current law amount of $0. and allocates the additional two cents to the Rhode Island Public Transit Authority.
URI Athletics Complex Renewal. Includes $65.8 million from Rhode Island Capital Plan funds and $17.3 million from university funds, to renovate six athletic facilities including Meade Stadium East Grandstands, Track and Field, Beck Baseball Field, the softball field, Tootell Aquatics Center, and the soccer field.
340B Program. Allows the Executive Office of Health and Human Services to prohibit discriminatory action related to reimbursement of 340B covered entities and 340B contract pharmacies in the Medicaid plan. Each 340B covered entity will submit a report annually to the Speaker of the House, the Senate President, the Governor, and the Auditor General, detailing participation in the program, which will be posted on the Auditor General’s website.
Truck Tolling Reimplementation. The reimplementation of truck tolling is projected to generate $10.0 million in toll revenue for FY 2026, increasing to $40.0 million in FY 2027. The Department of Transportation is currently conducting a condition assessment of the gantry equipment to identify any necessary repairs or replacements. Additionally, the department is gathering information to evaluate potential changes needed for the tolling program.
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Aside from the budget bill, other noteworthy bills passed by the General Assembly include the following:
Assault Weapons Ban (H 5436 A). Effective July 1, 2026, this act prohibits the manufacture, purchase, sale, or transfer of certain firearms, sometimes referred to as military-style or assault weapons, including certain types of semi-automatic rifles and shotguns with a fixed magazine exceeding six rounds or a revolving cylinder. Individuals in lawful possession of the covered firearms can continue to possess them. The act includes exceptions for law enforcement agencies and federally licensed firearms dealers. Federally licensed dealers will still be authorized to accept the specified firearms and to sell them to other licensed dealers, law enforcement, or to individuals who can lawfully possess them outside of Rhode Island.
Minimum Wage Increase (H 5029 A, S 125 A). These acts increase the minimum wage in Rhode Island to $16 on January 1, 2026, and to $17 on January 1, 2027.
Payday Lending (H 5042 A, S 229 A). Effective January 1, 2027, these acts repeal the provisions of the general laws allowing deferred deposit providers, also known as “payday lenders.”
Information for New Employees (H 5679 Aaa, S 70 Aaa). Effective January 1, 2026, these acts require an employer, at the start of an individual’s employment, to provide employees with a written notice containing employment information relative to wages, rates of pay, allowances, benefits, deductions from pay, and identifying information relative to the employer.
Temporary Disability Insurance/Temporary Caregiver Insurance (S 974 aa, H 6066 A). These acts raise the TDI and TCI wage replacement rates from the current 60% to 70% starting on January 1, 2027, followed by 75% on January 1, 2028. This expansion will be funded through an increase of the payroll contribution cap from $89,200 to $100,000. These acts also add “siblings” to the list of family members for whom TCI is available.
Employment Protection for Menopause (H 6161, S 361). Effective immediately, these acts update and expand the current law to include menopause and menopause related conditions in the law on fair employment practices pertaining to pregnancy and pregnancy related conditions.
PFAs in Firefighter Gear (H 5019, S 241). Effective January 1, 2027, these acts prohibit the manufacture, sale or distribution in Rhode Island of any firefighting personal protective equipment containing intentionally added PFAS chemicals in Rhode Island.
Personal Electronic Devices in Schools (S 771 A, H 5598 A). Effective October 1, 2026, each public school in Rhode Island is required to have a policy regarding the use of personal electronic devices on school grounds and during school-sponsored activities to “reduce distractions, maintain environments focused on learning and protect the privacy and safety of students and staff.” Each public school will be required to notify all student parents or guardians of the school’s policy.
340B Program Expansion (H 5634 A, S 114 A). These acts prohibit insurers, pharmacy benefits managers and other payors from engaging in discriminatory practices against community hospitals, clinics and other health care provider agencies that purchase prescriptions through the federal 340B discount program. These acts also allow for an expansion in the number of 340B pharmacies with which pharmaceutical manufacturers must contract to provide drugs at a discount.
PCP Prior Authorization Pilot Program (H 5120A, S 168B). Effective October 1, 2025, until October 1, 2028, these acts will prohibit insurers from imposing prior authorization requirements for any admission, item, service, treatment, or procedure ordered by a primary care provider, including general internists, family physicians, pediatricians, geriatricians, OB-GYNs, nurse practitioners, physician assistants and other health care providers who are credentialed with an insurer as a primary care provider. The pilot program excludes pharmacy benefits.
Public Reporting of Nonprofit Salaries (H 6235 Aaa, S 576 A). These acts require any nonprofit that receives grants or other funding from the General Assembly in excess of $50,000, to report the previous year’s compensation of the five highest-paid employees making $100,000 or more. The reporting requirements also apply to non-profit entities who have requested grants or other funding from the General Assembly.
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While we’ve updated our government relations clients on the final status of various bills, below is the link to the 2025 Public Laws List from the General Assembly’s web site. Here you will be able to find a list of those bills passed by the General Assembly which were enacted into law. The list can be viewed by three sorts: Chapter Number, Bill Number and Subject.
https://webserver.rilegislature.gov/lawrevision/plshort/plindx2025.htm
Should you have any questions regarding any legislation, please contact Brian Jordan, Executive Director, Government & Legislative Strategies, at bjordan@pldolaw.com, or at (401) 824-5120.
