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Rhode IslandH71272026 Regular SessionHouseWALLET
AN ACT MAKING APPROPRIATIONS FOR THE SUPPORT OF THE STATE FOR THE FISCAL YEAR ENDING JUNE 30, 2027.
Sponsored By: Marvin L. Abney (Democratic)
Signed by Governor
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143 provisions identified: 79 benefits, 25 costs, 39 mixed.
Higher Medicaid rates for nursing homes
The law raises Medicaid payments to nursing facilities on a set schedule. For the 12 months starting October 1, 2025, rates rise 2.3% over 2024 plus a 3.0% base‑rate staffing adjustment. Rates rise an additional 2.5% on October 1, 2026. These increases apply to both fee‑for‑service and managed care payments.
25% state credit for child care
Rhode Island gives a child and dependent care credit equal to 25% of your federal credit. The state credit cannot be more than your Rhode Island tax bill for the year.
Bigger break on Social Security taxes
Rhode Island expands the subtraction for Social Security income. Starting with tax years that begin on or after January 1, 2029, all Social Security that is in federal income is fully subtracted in Rhode Island. Before 2029, the subtraction applies only if your federal adjusted gross income is below the law’s limits for your filing status.
Child tax credit starts 2027
Starting with 2027 tax years, Rhode Island gives $320 per child age 18 or under. The credit phases down for income above $261,000 by 20 percentage points for each $7,450 (or fraction) over that amount. The credit is CPI‑indexed using 2026 as the base and rounded down to the nearest $5. You must be domiciled in Rhode Island and file a state return.
Credit for other‑state taxes and withholding
If you paid income tax to another U.S. state, you can take a Rhode Island credit under §44‑30‑74. Also, Rhode Island income tax withheld from your pay counts as paid toward your state tax for that year.
Credit for scholarship donations
Rhode Island gives an income tax credit for donations to qualifying scholarship organizations under chapter 62 of title 44. The chapter sets who qualifies and the credit limits.
Historic rehab and home credits continue
Rhode Island’s historic structures tax credit remains available under program rules. If you already hold a historic homeownership assistance credit, you can carry forward any unused amount for tax year 2017 and later.
Military pensions not taxed
Rhode Island lets you subtract military pension income from state taxable income. This applies to tax years that start on or after January 1, 2023.
New pension break for seniors
If you are at full Social Security retirement age, you can subtract up to $50,000 of taxable pension and annuity income. Your federal AGI must be under $107,000 (single, HOH, or MFS) or under $133,750 (MFJ or qualifying widow(er)). This applies to tax years that begin on or after January 1, 2025. Amounts are adjusted for inflation as the law provides.
State break for opportunity zone investors
If you invest in a Rhode Island opportunity zone and hold it at least seven years, you can claim a state modification equal to the extra state benefit over the federal benefit. The amount depends on the federal and state calculations for your investment.
Tax break for organ donors
If you donate a human organ, you can subtract up to $10,000 of unreimbursed travel, lodging, and lost wages in the year of the transplant. You can claim this once, and only if you are a full‑year Rhode Island resident.
Tax break for RI college savings
You can subtract up to $500 (single) or $1,000 (joint) from Rhode Island income for contributions to a Rhode Island tuition savings account. You must be the account participant when you contribute, and rollovers or beneficiary changes do not count. The subtraction cannot reduce your federal AGI below zero. Unused amounts may carry over as computed on your return.
Tax credit for Wavemaker fellows
Participants in the Stay Invested in RI Wavemaker Fellowship can claim a state tax credit if they meet the program rules. The credit lowers your Rhode Island income tax as set in the statute.
Extra sales‑tax break for housing
Rebuild RI projects that set aside at least 20% of units as affordable or workforce housing can claim extra sales and use tax exemptions. The extra amount can be up to 30% of the project’s maximum credit. With a $15,000,000 cap, that equals up to $4,500,000 in exemptions. The extra exemptions only apply to purchases made on or before June 30, 2028.
Credits for jobs, films, and projects
Rhode Island continues state tax credits for qualifying employers and projects. The Qualified Jobs Incentive, the Rebuild Rhode Island credit, and the motion picture production credit let eligible businesses reduce state taxes under program rules.
State deduction for licensed cannabis costs
For tax years beginning January 1, 2025, businesses licensed under chapters 28.6 or 28.11 can deduct on their Rhode Island return expenses that federal law (section 280E) disallows. This state modification lowers Rhode Island taxable income for licensed entities.
Relief for R&D cost addbacks
For tax years beginning on or after January 1, 2026, you can claim a Rhode Island modification for prior amounts you had to add back that are deductible under the updated federal §174A (as of July 4, 2025). The total modification for each amortized expenditure cannot exceed 100% of that expense.
Voters decide $120M for housing
At the November 2026 election, voters decide whether the state can issue up to $120,000,000 in bonds for affordable and accessible housing. At least $25,000,000 must support homes for ownership. The bonds take effect only if voters approve.
Voter bonds for colleges and CTE
In November 2026, voters will decide major college and training bonds. The law places a $215 million question on the ballot for higher-ed projects: $105 million for URI’s Integrated Health Building, $50 million for RIC’s Adams Library and student success center, and $60 million for a CCRI Workforce Innovation Center. It also asks for $50 million for local career and technical education. If voters approve, the state can issue these bonds and spend only up to the listed amounts.
Voters decide $115M for business sites
At the November 2026 election, voters will be asked to approve up to $115 million in bonds for economic development. $70 million is for site development and $45 million is for growth‑industry infrastructure. The state can issue the bonds for eligible projects if voters approve.
Industrial infrastructure bonds for key sectors
The state authorizes $115 million in bonds for industrial infrastructure, if voters approve. It sets aside $70 million for site readiness, land assembly, remediation, utilities, and projects like Quonset and the I‑195 District. It also sets aside $45 million for ocean, defense, life sciences, and data industry facilities, including test ranges and onshore sites.
Multi‑year capital projects and debt
The state funds many capital projects across FY2028–FY2031, including health facilities and highways. Unspent capital funds carry to the next year for the same purpose, subject to legislative approval. A standing appropriation covers bond principal and interest if other funds are not available. The Treasurer may advance general funds to the bond fund before bonds are sold, and must repay advances from bond proceeds.
More Rebuild RI credits available
The total Rebuild Rhode Island tax credit cap rises to $250 million, excluding subsection (f)(3) credits. This makes more credit capacity available for qualifying development projects.
Stronger DEM enforcement and appeal fees
DEM can inspect sites under its rules, and sometimes without a warrant. Willfully refusing an administrative warrant can mean up to six months in jail and up to a $10,000 fine per refusal. You now pay fees to appeal: $50–$100 for enforcement appeals and $500–$10,000 for application appeals. You have 20 days to request a hearing after a violation notice; immediate orders can last up to 45 days and be extended once. If DEM suspends your license, you have two years to fix it before revocation, with a 60‑day certified‑mail warning. DEM can let other state or local officials enforce its rules, and penalties go to a dedicated account.
Medicaid limits GLP‑1 drug coverage
Beginning July 1, 2026, Medicaid stops covering GLP‑1 drugs unless they are prescribed to treat type 2 diabetes. If you use these drugs for other reasons, Medicaid coverage ends and you may have to pay out of pocket.
Higher top tax rate for high earners
For tax years starting January 1, 2027, income over $648,398 is taxed at 8.99%. Only the income above that amount is taxed at this top rate.
No new jobs tax credits after 2027
After December 31, 2027, businesses cannot get new reservations under the Qualified Jobs Incentive Act. Existing reservations made before that date stay in place.
Nursing home pay and rate overhaul
The state replaces cost‑based Medicaid nursing home rates with a price‑based system. Rates account for resident acuity and Medicaid occupancy, include direct‑care and indirect‑care per diems, fair‑rental value, pass‑throughs, and inflation indexing, with updates using cost reports. Transition rules protect facilities from sudden losses, including a first‑year cap of $5 per day on changes. Facilities that get staffing‑related increases must certify each year that funds reached direct‑care wages; EOHHS can audit. Unspent or misused funds face a clawback plus a 25% penalty.
Estate and trust tax adjustment rules
If you are a beneficiary, your Rhode Island return must add or subtract your share of the fiduciary adjustment. Your state taxable income can go up or down based on the estate or trust calculation.
Prevailing wage on big Rebuild RI projects
For Rebuild RI projects with tax credit agreements on or after July 1, 2025 and over $25,000,000 in direct hard costs, construction workers must be paid prevailing wages and benefits. Contractors and subs must file monthly certified payrolls on the state form. Not following these rules is a material breach of the tax credit agreement.
Small business PPP tax and credit
For tax years starting in 2020, forgiven PPP loan amounts over $250,000 are taxable in Rhode Island. Starting in 2025, owners of pass‑throughs that elect the entity‑level tax get a state credit equal to 90% of their share of that tax. Starting in 2026, if you claim the federal §174A research deduction, you must add back the difference from the old §174 on your RI return.
No prior authorization for primary care orders
If your in‑network primary care provider orders a covered test, visit, or procedure, your plan cannot require prior authorization. This rule does not apply to prescription drugs. It aims to reduce delays and paperwork for patients.
Higher Medicaid payments to hospitals
Starting July 1, 2026, Medicaid raises hospital payments off prior baselines. Inpatient fee‑for‑service DRG and outpatient fee‑for‑service rates are set at 102.5% of the July 1, 2025 rates. Managed‑care inpatient and outpatient hospital rates are set at 102.5% of the January 1, 2025 rates. Beginning July 1, 2027, future updates follow CMS hospital price indices, and where required, increases are paid retroactive to July 1 within set timelines.
More crisis help for kids and survivors
Rhode Island sets up 9‑8‑8 crisis centers for 24/7 phone, text, and chat help. The state provides $900,000 for mobile response and stabilization for uninsured and underinsured children and youth. It gives $400,000 to the GO Team to support child victims on scene. Starting July 1, 2026, grants fund housing, counseling, job training, relocation aid, and case management for survivors of domestic and sexual violence. The state also creates five Family Care Community regions, each with one partnership to deliver prevention and family support.
More nursing-home pay from rate hikes
Nursing homes must spend 80% of any inflation‑index rate increase each October 1 on eligible direct‑care worker pay, benefits, and payroll taxes. Starting October 1, 2025, 100% of the 3% base‑rate staffing adjustment must go to direct‑care compensation, including hiring more eligible staff. For the October 1, 2016 adjustment, 85% had to go to direct‑care pay and benefits.
State help to lower exchange premiums
The state created a Marketplace Affordability Program to lower premiums for people who enroll through Rhode Island’s health insurance exchange. The Exchange can run a state subsidy program and sends any state subsidy to your chosen insurer to lower your monthly bill. You must live in Rhode Island, enroll through the Exchange, and be found eligible for the federal premium tax credit; the state may also help some above the federal income cap who meet other 36B rules. For plan year 2027, help is prioritized for households under 200% of the federal poverty level.
TDI benefits funded through FY2027
Temporary Disability Insurance benefits remain funded through June 30, 2027. Eligible workers continue to receive income‑replacement checks from the TDI funds.
Fairer community solar credits for renters
Community remote net‑metering must include at least one low‑ or moderate‑income housing account or at least three eligible accounts. No single recipient can get more than 50% of credits, and the rest must be shared, with each other share below what a 25 kW system makes in a year. Credit transfers are limited by a three‑year average of usage (or projections until that average exists). Low‑ and moderate‑income housing qualifies if at least 50% of units are at or below 80% of AMI, rents are affordable, and the term is at least 30 years. The value of credits must benefit tenants.
RI Housing funds Neighborhood Opportunities
Beginning July 1, 2026, Rhode Island Housing must provide funds for the Neighborhood Opportunities Program for FY2027. It must report the funding amount and the number of housing units created. This supports more housing during the year ending June 30, 2027.
Weatherization help run by Energy Office
The Office of Energy Resources now runs the Weatherization Assistance Program and similar heating and weatherization programs. The Department of Human Services may advise to keep services smooth. Low‑income households continue to get help cutting energy use and bills through this Office.
Hope Scholarship and student aid funding
The law makes the Rhode Island Hope Scholarship a permanent program at Rhode Island College. The state funds it each year and can accept donations. RIC must report on eligible students, other aid, and total costs; an evaluation is due by July 1, 2030. Also, CollegeBoundSaver receipts flow to the Treasurer and then to the higher‑ed aid office to support student financial aid in FY2027.
Hope Scholarship can continue
The law removes the end date that would have stopped the Rhode Island College Hope Scholarship after June 30, 2030. The program can keep going if the General Assembly funds it each year.
Pre‑K priority for low‑income kids
Pre‑K funds now prioritize four‑year‑olds in families at or below 185% of the federal poverty line. Priority also goes to children living in communities with more low‑performing schools. Eligible families move higher on the list for seats.
Unemployment benefits funded through FY2027
The state funds Employment Security benefit payments through June 30, 2027. Eligible claimants can still receive unemployment benefits during FY2027.
Tax amnesty through Feb 15, 2027
A 75‑day tax amnesty ends February 15, 2027. If you apply, and pay taxes and interest for periods ending on or before December 31, 2025 (or enter an approved hardship plan), penalties and prosecution are waived. Interest is charged at the normal rate minus 25%. People under criminal investigation or in fraud cases do not qualify.
Cultural projects bond, if voters approve
The state authorizes $50 million in bonds for cultural projects, if voters approve. It provides $45 million to build a new Rhode Island State History Center and $5 million in matching grants for historic sites and cultural centers run by towns and nonprofits.
Environmental and recreation bonds need approval
The state authorizes $50 million in bonds for environmental and recreation projects, if voters approve. This includes $3 million for brownfields cleanup (up to 80% match), $8 million for parks and facilities, $1 million for local recreation grants (up to 80% match), and $1 million for marine facility needs. It also includes $20 million for the Resilient Rhody Infrastructure Fund, $7 million for the Narragansett Bay watershed, and $10 million for energy‑efficiency financing.
Tighter oversight of federal recovery funds
Beginning July 1, 2026, unspent SFRF and Capital Projects Fund money can be reappropriated next year for the same uses, with General Assembly approval. The Pandemic Recovery Office is funded to monitor SFRF/CPF programs and report underspends. If an underspend is $1,000,000 or less and 20% or less of the program, a governor’s reclassification takes effect at once. If over $1,000,000 or over 20%, it takes effect after 30 days unless both chambers reject it. The Department of Administration also gets funds to oversee CPF awards.
Voters decide $100M in 2026 bonds
At the November 2026 general election, voters will be asked to approve $50 million for environment and energy projects and $50 million for cultural projects. The green bond splits funds across brownfields ($3M), facility improvements ($8M), local recreation ($1M), marine infrastructure ($1M), Resilient Rhody ($20M), Bay restoration ($7M), and energy efficiency ($10M). Some brownfields and recreation grants can match up to 80%. The cultural bond includes $45M for a State History Center and $5M for preservation matching grants.
More stable funding for RIPTA transit
Starting July 1, 2025, 10% of available highway maintenance proceeds go each year to RIPTA operations. Starting July 1, 2026, RIPTA also receives at least $14.3 million each fiscal year. This creates more stable operating funds for transit service.
State funds local roads and bridges
The state provides $10 million for RhodeRestore grants to cities and towns for roads, sidewalks, and bridges. Twenty‑five percent is split equally among municipalities and 75% by road miles; each city or town must provide a 67% match. The state also can use capital funds to pay the non‑federal match for priority transportation projects, including the Washington Bridge.
State taxes fund Pawtucket redevelopment
Beginning July 1, 2026 for FY2027, state economic activity taxes collected under the law are used for Pawtucket’s bond debt service, reserves, nearby infrastructure in the ballpark, arts, and growth districts, and a redevelopment revolving fund.
Extra funding for multilingual learners
Schools get a 20% funding boost on top of core per‑pupil aid for each child in the three lowest multilingual proficiency levels. Districts must report each year by September 1 how they plan and used these funds. The state also evaluated MLL counts by district, including how many are at or below 185% of poverty by WIDA levels, to guide funding design.
More state aid for high-need students
Starting July 1, 2026, the student success factor rises from 40% to 43%. It applies to students whose family income is at or below 185% of the federal poverty level. This boosts high‑need education aid to local districts.
Use program data to count low-income students
By October 1, 2024, the state develops ways to identify low‑income students using enrollment in programs like SNAP and RIteCare. By October 1, 2025, it must report how DHS program data will be matched to student records for the funding formula. For the FY2027 budget, DESE must include a foundation‑aid estimate using expanded direct certification with Medicaid matching and an estimate using the current method.
More existing power can meet renewable rule
An electric supplier can count up to 25% of its annual retail sales from existing renewable and zero‑emission resources. This limit applies to each supplier each year.
What counts as zero-emission power
Zero‑emission resources include NRC‑licensed nuclear plants and large hydro (not small hydro). Units in the NEPOOL control area qualify. Units outside qualify only if their energy is delivered into NEPOOL and proven by contracts, ISO‑NE settlements, NERC tags, or other required proof. Certified NE‑GIS certificates can also be used for compliance.
New rules to slow health costs
The law creates a Health Spending Accountability and Transparency Program. The commissioner sets annual cost-growth targets for 2026–2027 under the 2023 Compact and, by July 1, 2027, sets five‑year targets that renew every five years. The state also sets primary care spending targets on the same cycle. Insurers must report spending, premiums, primary care, and quality data. If a payer or large provider exceeds the target in two of three years, the commissioner can require a performance plan, take testimony, and fine them; a large provider is one with at least 120,000 member months. The Exchange sets yearly affordability percentages by September 30 for state premium help, subject to funding. The state runs the AHEAD Model Grant Program and reports starting October 31, 2026.
Rebuild RI credits open through 2027
The state may authorize reservations for Rebuild Rhode Island tax credits through December 31, 2027. No new reservations are allowed after that date.
Caps on Medicaid provider rate growth
For SFY2027, Medicaid limits hospital, nursing facility, and FQHC rate increases to 2.5%. The law removes annual increases for residential substance abuse services. Starting October 1, 2026, any rate updates are limited to the lower of half the report’s recommended increase or 100% of the Medicare rate named in the report.
New septic rules and recorded orders
DEM must set minimum rules for where and how on‑site sewage systems are built and maintained. In parts of Jamestown that rely on wells, DEM also applies cumulative‑effects checks to some systems. DEM orders about a property’s sewage system can be recorded on land records, and a buyer must comply with any recorded order. DEM issues a recordable release after the work is done right.
RIC dorm upgrades and possible fees
The state approves financing for Rhode Island College residence renovations. Total project cost is $20,600,000. Total debt service cannot exceed $36,500,000 overall or $1,825,000 a year. Payments come from Residential Life student fees, so students may see fee changes.
Higher gas tax and CPI indexing
The gas tax is $0.32 per gallon through June 30, 2025, $0.40 from July 1, 2025 to June 30, 2026, and $0.38 on or after July 1, 2026. Beginning July 1, 2027, the tax is adjusted every two years by CPI‑U, rounded to the nearest cent, and cannot go below the legal minimum.
More income counted on RI taxes
Rhode Island taxes interest from other states’ municipal bonds and some federally exempt U.S. authority interest. If you claimed the federal sales tax deduction for a qualified vehicle, you must add it back on your RI return. Any unemployment benefits not taxed federally must be included in RI taxable income.
Tax on nonqualified 529 withdrawals
If you take a nonqualified 529 withdrawal or roll funds to a non‑state plan, you must add back income to Rhode Island. The add‑back is the smaller of a formula using the withdrawal amount, fees, and earnings, or your past three years of RI 529 contribution modifications minus prior nonqualified withdrawals.
Tougher rules for underground fuel tanks
DEM can record orders on underground storage facilities in city and state records. A buyer who takes a property with a recorded order must meet its terms. Owners and operators must keep proof of financial responsibility for cleanup and third‑party injury or damage, consistent with federal rules.
Higher elective tax on pass-throughs
For tax years starting January 1, 2027, a pass‑through can elect to pay Rhode Island tax at 8.99% at the entity level. This replaces the prior 5.99% rate for earlier years. The entity must elect each year and pay the tax. If it elects, it does not have to withhold on nonresident owners for that year.
New vape and tobacco inventory taxes
Vape products are taxed starting January 1, 2025: $0.50 per mL for prefilled, sealed, nonrefillable units; 10% of wholesale cost for others. One‑time floor taxes apply to inventory snapshots: ENDS at 12:01 a.m. on January 1, 2025 (retail returns due January 16, 2025); certain nicotine products at 12:01 a.m. on October 1, 2025 (due October 16, 2025); and cigarettes at 12:01 a.m. on September 1, 2026 at $0.0375 per cigarette (due September 15, 2026). Dealers must file and pay tobacco taxes within 5 days of getting products and keep required records on‑site.
Lower credits for large solar
For net‑metering systems of 1 MW or more, credits use the utility charges in effect on July 1, 2026. Projects approved after April 15, 2023 that count toward the 275 MW cap get a 20% smaller credit. Starting January 1, 2045, remote public‑entity and multi‑municipal systems are credited at the wholesale ISO‑NE energy price, unless they met the 2018 interconnection filing and payment carve‑out.
Monthly grid fee on large projects
Starting January 1, 2027, net‑metering and community remote systems 1 MW or larger pay a monthly grid access fee. The initial rates are $1.40/kW for 1–<3 MW, $3.00/kW for 3–<5 MW, and $4.49/kW for 5 MW and above. Systems under 1 MW pay no fee. Your monthly fee equals your system’s kW size times the rate.
Utilities can pass compliance costs
Electric companies may recover in customer rates all prudent extra costs to meet renewable rules. This includes buying certificates, alternative compliance payments, and certain program fees. Your electric bill can rise when these costs are included.
New Medicaid rates for children’s services
Starting July 1, 2026, the state can put in place new Medicaid reimbursement rates for children’s services from the rate‑setting project. Payments to providers may change, which can affect service access or availability for families.
Recovery housing must be certified
Recovery housing must meet state certification based on NARR standards and register by January 1, 2027. State agencies and state‑funded providers must refer people only to certified homes. Only certified facilities can get state funds for recovery housing. This raises quality but adds rules for providers.
URI campus projects financed with bonds
URI will finance $20 million for repaving and hardscape work and $14.4 million for automotive and administrative services using 20‑year RIHEBC bonds. Total debt service for repaving is capped at $34.875 million overall and $1.74375 million per year, supported by university general revenues and parking services. The other project’s debt service is capped at $25.15 million overall and $1.2575 million per year, paid from general revenues. These projects improve facilities but could affect parking fees or campus budgets.
Stricter rules for big school projects
For projects starting after July 1, 2026, the state will not fund school construction over $10,000,000 unless the prime contractor is prequalified. Large projects must also include an owner’s program manager and a commissioning agent. Their combined cost is capped at 3% of total project costs and counts as eligible for state housing aid.
New shellfish project areas and limits
The director can mark parts of state waters as shellfish or marine life project areas. Once set, the director can limit or close harvesting, place markers, and use emergency rules to help cultivation. These steps can restrict taking in some places but support growth for producers.
Prequalification to bid big school projects
Starting July 1, 2026, the School Building Authority prequalifies prime contractors, architects, and engineers for school jobs over $10,000,000. Prequalification lasts up to two years. Reviews check past performance, safety and environmental compliance, maintainability, and use of women‑ and minority‑owned subcontractors. A list of approved firms is posted at least once a year.
Limits set for internal service funds
The State Controller sets and manages internal service funds with spending caps. Examples include Health Insurance ($377.4 million), Information Technology ($64.1 million), and the State Auto Fleet ($21.7 million). Agencies can be reimbursed for services within these limits.
Local car-tax aid and sales-tax caps
For FY2024, the law sets specific state payments to cities, towns, and fire districts to replace motor vehicle excise revenue, using the same shares as FY2023. After the excise tax is phased out, the state sets each community’s sales‑tax cents share using those post‑phaseout proportions. Annual increases in those shares are capped at two percentage points from the prior year. For FY2026, a special rule picks the larger of two statutory calculations.
State buildings must cut emissions
The Office of Energy Resources sets performance and emissions standards for state‑owned and state‑occupied buildings by March 31, 2030. The standards include an annual emissions level and a schedule that ends in 2050. The office must report on compliance within 90 days of each due date and issue corrective plans if needed. Facilities can be exempted for economic or unique limits, and those decisions must be published.
Voter question: governor line-item veto power
A constitutional amendment will go to voters at the next general election to let the governor reduce or reject items in appropriation bills while approving other parts. If a majority approves, it takes effect January 1, 2027. The amendment bars creating new words or sentences by partial approval.
Quarterly municipal aid, but amounts frozen
Starting in FY2025, state reimbursements to cities, towns, and fire districts are paid in four equal parts on Aug 1, Nov 1, Feb 1, and May 1. Beginning in FY2027, each gets the same dollar amount it received in FY2026. This stabilizes payment timing but freezes amounts.
State staffing caps and contractor checks
The law sets 13,330.8 authorized full‑time positions for FY2027 and defines what counts as an FTE. The University of Rhode Island is exempt from FTE limits retroactive to July 1, 2025. Before agencies place contractors under state supervisors or replace state workers with contracts, they need a formal need finding and a public hearing. Limited‑term jobs funded by non‑general revenue sources end when that funding ends.
Electricity must reach 100% clean
Starting in 2027, utilities must supply at least 35% clean electricity, with annual increases to reach 100% by 2050. Zero‑emission resources now count toward the requirement. If they fall short, alternative payments are $40/MWh for new resources and $11/MWh for existing resources. Utilities can bank extra compliance for three future years; the old 30% banking cap is removed.
More general fund from special accounts
Effective July 1, 2025, 15% of cash receipts in many restricted accounts transfer to the general fund. Exclusions include nonprofit gifts, federal grant indirect cost assessments, debt service transfers, listed protected accounts, and cases barred by law or court order. The state may also invest idle capital development funds, and investment income goes to the general fund to help pay debt service unless federal rules require otherwise.
Rules for issuing state bonds
The Treasurer, with the Governor’s approval, can issue voter‑approved bonds and short‑term notes. Refunding bonds can replace older bonds but cannot extend beyond 20 years from the original issue. Premiums and accrued interest from bond sales go to the Capital Plan Fund after sale costs, and extra proceeds can retire debt. Bonds under this law are tax‑exempt under Rhode Island law and backed by the state’s full faith and credit. The state can also accept federal or private funds for these projects.
Changes to hospital DSH payments
The law updates how hospitals qualify for and split DSH funds. A hospital must have at least a 1% Medicaid inpatient use rate in the base year and stay licensed. Pool D money is split in proportion to each hospital’s base‑year uncompensated‑care costs after a set index. The uncompensated‑care index is set at 5.30% for payment years ending September 30, 2026 and 2027. Hospitals cannot count graduate medical education uncompensated costs toward DSH.
Hospital funding and reporting rules
For FFY2025, the state creates DSH Pool C up to $12.9 million, with total DSH for participating hospitals capped at $27.7 million, payable by June 30, 2025 if federally approved by June 23, 2025. For FFY2026, total DSH is capped at $13.9 million (Pool C up to $12.9 million; Pool D up to $1.0 million), payable by June 30, 2026 if approved by June 23, 2026. For FFY2027, total DSH is capped at $23.9 million (Pool C up to $12.9 million; Pool D up to $11.0 million), and hospitals must receive DSH payments by June 30, 2027. Hospitals using DRG payments must file year‑end settlement reports within one year; the state may withhold up to 10% of payments until a late report is filed. EOHHS must collect monthly uninsured patient data from all hospitals. Starting July 1, 2026, EOHHS may pursue Medicaid plan and waiver changes within budget and without harming beneficiaries.
Corporate R&D addback and 20‑year NOLs
Starting January 1, 2026, corporations must add back to RI income the excess of the §174A R&E deduction over what old §174 would have allowed, capped so each expense is not added back by more than 100%. Starting January 1, 2025, net operating losses cannot be carried back but may be carried forward 20 years, subject to federal limits and state adjustments. Rhode Island also allows the corporate opportunity zone deduction if the investment was held at least seven years; Taxation may issue rules to speed up how this applies.
Electric bill credits and local net metering
Beginning January 1, 2027, half of alternative compliance payments fund direct bill credits for electric customers. The utility must file a credit plan with the Public Utilities Commission within 60 days of getting the funds, under Office of Energy Resources oversight. Block Island and Pascoag utilities must offer net metering through a PUC‑approved tariff after a public hearing. Existing tariffs stay in place until a new one is approved.
Grants for care and home changes
The law gives Planned Parenthood $600,000 to support reproductive and related health services. It also provides $515,278 for the Livable Home Modification Grant Program so people can add accessibility features and stay in their homes. Any unspent home‑mod funds carry over to the next year.
LIHEAP stays with Human Services
The Department of Human Services continues to run LIHEAP. DHS can ask the Office of Energy Resources for advice. This helps keep energy help to low‑income households running without disruption.
More legal help for renters
The state gives $90,000 to Rhode Island Legal Services for housing and eviction defense for indigent people. This adds legal help for low‑income renters facing eviction.
Supportive housing pilot for 125 people
The state runs a six‑year supportive housing pilot for 125 high‑utilizer people who are homeless. It uses $875,000 in HUD/DOJ grant funds. Contracts are capped at $1,500,000 per year and $6,000,000 total. No new agreements start after July 1, 2027 without more approval from the General Assembly.
Districts can fund after‑school, summer
Districts may set aside some state funds for after‑school and summer programs, full‑day kindergarten, and pathway programs. They can do this only after basic education and all required programs are fully funded. Families may see more local options.
More funding for Learn365RI programs
The law gives $2,000,000 to Learn365RI. It sends $100,000 each to the Rhode Island Afterschool Network, Teach for America Ignite, and Onward We Learn. The rest supports the main program.
Training funds for care and hospitality workers
The state provides $600,000 to train direct care staff to improve resident care. At least $150,000 funds hospitality training, including certified food and alcohol safety classes in multiple languages.
One‑year extension for business incentives
The state extends through December 31, 2027 the ability to authorize or reserve: Tax Increment Financing, Tax Stabilization Incentives, the First Wave Closing Fund, I‑195 Redevelopment Fund incentives, Wavemaker Fellowship credits, Main Street Streetscape incentives, and Innovation Initiative support. Applicants get another year to secure these tools.
Advance notice before legislative grants
Agencies must notify the House and Senate Finance Chairs in writing at least 20 days before issuing grants listed on the legislative letter of intent. A written statement of legislative intent is kept on file in the finance committees.
Airport impact aid for host towns
The first $1,000,000 for airport impact aid is split by formula. Sixty percent is based on each airport’s share of passengers among airports with over 1,000,000 passengers. Forty percent is split by each listed airport’s share of 2026 landings. The Commerce Corporation pays host cities and towns, and each host community gets at least $25,000.
DEM takes over Big River planning
Starting July 1, 2026, DEM runs land use planning and rules for the Big River Reservoir. Current rules stay in force until DEM formally adopts them. The water resources board keeps its powers over fresh water resource management.
Energy tracking for public buildings
State agencies must track monthly energy use for state office buildings 25,000 square feet or larger and report each year starting March 31, 2029. The Office of Energy Resources (OER) posts each facility’s fuel use and emissions within 180 days. OER also offers technical and financial help for a voluntary benchmarking program for town and school buildings over 25,000 square feet and reports progress each year starting May 1, 2028. OER runs projects paid for by any voter‑approved state energy bonds.
Funds for police standards commission
The law sets aside $75,000 for the Police Officers Commission on Standards and Training. The money covers administrative, IT, and operating costs.
More lake grants; new land manager
The Bays, Rivers and Watersheds Fund now covers lakes and ponds and can receive state money, gifts, lease, and septage fees. The state can give grants for lake work like invasive species control; projects must be publicly advertised and include matching funds, with limits on private‑only sites. The Department of Environmental Management now manages Big River Reservoir lands.
Planning for new camps and scenic areas
DEM surveys public and private camping and recreation sites and reports to the General Assembly each March 1. The director can take steps, including funding actions, to add facilities in the public interest. DEM may accept grants and bequests into restricted accounts, with spending subject to General Assembly appropriation and an annual October 1 report. DEM keeps a public inventory of scenic roads and areas.
State centralizes vehicle fleet management
The Department of Administration must centralize management of light and medium duty state vehicles. The goal is more consistent, efficient fleet operations.
State to publish town road data
RIDOT will keep a database of every municipal roadway. It lists each road’s name, condition, length, and pedestrian features. Cities and towns must update it each year to support planning and oversight.
Stronger standards for waste and hazardous sites
DEM sets and enforces minimum standards for septage, industrial‑waste, and waste‑oil sites. DEM sets minimum design, siting, and operation rules for refuse disposal facilities, subject to the Environmental Standards Board. DEM runs the state’s hazardous waste program under the Hazardous Waste Management Act.
Water board must repay state agencies
The Water Resources Board must reimburse state agencies for services they provide to the Board. Payments come from the water development fund and must cover the full cost, using procedures set by the Department of Administration.
More support for local transit services
The Office of Healthy Aging must reimburse RIPTA for elderly and disabled rides within 15 days of a request. For each $15 cruise passenger fee in Newport, $10 goes to the city and $5 to RIPTA for transit on Aquidneck Island. These steps help keep local transit services running.
Clearer funding for school building fund
Starting July 1, 2026, the law lists what dollars flow into the School Building Authority capital fund: loan repayments, bond refinance savings and other payments, investment earnings, bond proceeds, and administrative fees. This helps manage and refill the fund for school projects.
Colleges keep unspent FY2027 funds
Any unspent or uncommitted money for URI, RIC, and CCRI on June 30, 2027 stays available in FY2028. The funds must be used for the same purposes. This keeps projects and services from stalling between years.
SNAP counts boost school funding
For school aid, the state uses SNAP to identify low‑income students. It multiplies the number of SNAP‑certified students by 1.6 when figuring district aid. This raises counted need and can increase funds to those schools.
Stronger school funding estimates and oversight
DESE must include a foundation‑aid estimate in its budget using the latest data and adjust for student count changes. It must update aid figures using October 1 enrollment and report them by December 1. DESE must write rules to carry out these laws and report local contribution levels and compliance to each city or town. The School Building Authority must keep GAAP‑standard fiscal controls and align project approvals with funding. By December 31, 2025, DESE must report how to improve the consistency and validity of high‑cost special education data.
Program funds carry over each year
Unspent program money at year‑end is reappropriated to the next fiscal year. The money stays available right away for the same uses so work can continue without gaps.
Clean energy fund rules updated
The Renewable Energy Development Fund is run by the Rhode Island Commerce Corporation. The fund can now support clean transportation, EV chargers, and energy storage, along with other allowed uses. The Office of Energy Resources must review and approve any spending, contracts, grants, or program activities from the fund.
Special rate rules for new hospital owners
When a court‑approved purchaser acquires a hospital through receivership and is licensed after January 1, 2013, its initial Medicaid managed‑care rates are newly negotiated. After the first full contract year, annual negotiated increases follow the stated July 1 schedule and method.
Net‑metering must be same meter
Starting July 1, 2060, to qualify for net‑metering, a system must be connected behind the same meter as the customer’s load. Off‑site or other setups will not qualify after that date.
Newport cruise fee now $15
Cruise passengers landing in Newport pay $15 per passenger, up from $10. Ferries and common carriers on in‑state routes are excluded. This change takes effect upon passage.
No new historic home credits
The state does not issue new credits under the Historic Homeownership Assistance Act. Only carryforwards of credits already issued may be used.
Licensed sellers only for tobacco and vapes
Starting January 1, 2025, wholesale purchases of most tobacco products (except cigars) and vaping products must come from Rhode Island‑licensed distributors, manufacturers, or importers. Buying from unlicensed sellers is not allowed. Products from unlicensed sellers are subject to tax.
No discounts on cigarette stamps
Starting September 1, 2026, cigarette tax stamps are sold only to licensed distributors at 100% of face value. The state no longer sells stamps at a discount.
State approves DEM and Defender leases
The state approves a 10‑year DEM lease at 235 Promenade Street with annual rent caps ($2.6M years 1–5; $2.8M years 6–10) and a $27M total cap. It also renews the Public Defender’s lease at 160 Pine Street for up to five years, with annual rent capped at $435,093.96 and a total cap of $2,175,469.80. Payments are subject to yearly appropriations.
Ends extra utility renewable payments
The law repeals statutes that gave electric utilities extra remuneration tied to long‑term contracts for new renewable energy. This includes ending the authority for payments up to 1% of annual contract costs that had been allowed through December 31, 2026.
Higher annual licensing fees for hospitals
Hospitals must pay an annual licensing fee based on net patient‑services revenue. Tier 1 inpatient is 13.12% and outpatient is 13.30%; Tier 2 is 2.63% inpatient and 2.66% outpatient; Tier 3 is 1.31% inpatient and 1.33% outpatient. State‑owned hospitals pay 5.25%. Payments are due before June 25 each year, with a return due by August 1.
RI taxes items federal law excludes
For tax years beginning on or before January 1, 2025, Rhode Island can require you to include items even if Congress later makes them federally tax‑free. The tax administrator may issue emergency rules to protect state revenue.
Reflectors required on long freshwater docks
The director can require docks or piers over 20 feet long on freshwater lakes or ponds to have reflective materials on all water‑facing sides. The materials must be wide and bright enough for boaters to see. This improves safety but adds a compliance step for dock owners.
Energy efficiency charges and bill caps
The commission must approve all cost‑effective efficiency projects and a yearly funding plan within 60 days. It creates a performance pay plan for utilities tied to customer savings. For 2027–2029, the total direct‑bill charge to fund efficiency cannot exceed $75,000,000 each year. Existing per‑kWh and per‑decatherm charges that fund efficiency remain, and the 0.3‑mill renewable charge runs through December 31, 2031. $2,500,000 a year goes from these funds to the RI Infrastructure Bank, and an older study mandate is repealed.
Grants for nursing and mental health
The state funds Ladders to Licensure grants for at least two partnerships, one in behavioral health and one in nursing. Employers in these partnerships must provide a 25% in‑kind match and a 10% cash match. The grants help workers train and earn licenses.
Cigarette tax up; cigar tax cap
Starting September 1, 2026, the cigarette excise tax is $0.2625 per cigarette. Also, each cigar’s excise tax cannot be more than $2.00 per cigar. This raises costs for cigarette buyers but can lower tax on high‑priced cigars.
2024 town payments and corrections
For FY2024, listed cities, towns, and fire districts receive four equal payments: Aug 1, Nov 1, Feb 1, and May 1. East Providence’s schedule is Nov 1, Feb 1, May 1, and Aug 1. The Revenue Director may deduct prior overpayments or add supplemental amounts on any payment date to correct totals.
ARPA funds kept separate in budget
Starting July 1, 2026, ARPA State Fiscal Recovery and Capital Projects Fund money is not counted in section 1 federal appropriations unless this act names it. Those ARPA funds stay separate unless specifically listed.
Governor flex to move and cover funds
The Governor may transfer appropriations and FTE limits when functions shift between agencies, except where law fixes duties in a specific agency. The Governor may also use the contingency fund for emergencies, shortfalls, or unusual one‑time costs, with gubernatorial approval required for all uses.
Green building rules move offices
On July 1, 2026, the state building code commissioner takes over Green Buildings Act rulemaking. Current rules stay in force and are enforced by the Department of Administration until they transfer.
Lottery commissions and prize funding approved
For the fiscal year ending June 30, 2027, the Lottery Division may pay commissions and move money to the prize fund. This keeps lottery operations funded during the year.
New rules for land trusts
The state keeps a central list of land held by public and private land trusts. All trusts must record deeds and easements locally and file copies, bylaws, and annual reports with the Secretary of State and DEM. DEM may charge reasonable filing fees. A private land trust must have at least five Rhode Island citizens and get 501(c)(3) status within two years; it cannot exist only for one donor and must have open membership. DEM contacts each trust every two years and can wind down inactive trusts and transfer or hold the land to keep its original purpose.
Utilities must fully fix dug-up roads
When a utility disturbs a roadway, it must repave and repair from curb to curb or as required by its permit. Utilities recover these costs using standard accounting rules, which can affect rates.
Yearly PBM rebate reports and review
Starting March 1, 2027, pharmacy benefit managers must file yearly reports on rebates, fees, and retained rebate percentages. The insurance commissioner posts the reports within 60 days while protecting trade secrets. By October 1, 2027, the commissioner delivers an analysis and may hire experts. Insurers pay the study costs, capped at $175,000 total. The commissioner can set rules to run the program.
Stronger oversight of environmental programs
The state creates a Water and Air Protection Program account and requires DEM to report each year by January 15 on fines, fees, and spending. The paint stewardship program must update its plan every five years starting by December 31, 2026, and whenever fees, covered products, or program goals change.
Utility renewables pilots and fuel waivers
The electric utility may own and run up to 15 MW of renewable demo projects, with at least two at or near nonprofit affordable housing. The Public Utilities Commission must approve, and costs and benefits may be included in rates. The director can issue written, 20‑day fuel rule waivers during extreme supply problems, and renew them if needed. Waivers can apply after events like natural disasters or refinery failures when it serves the public interest.
New admin for energy efficiency programs
The Office of Energy Resources runs competitive bids for statewide efficiency programs and may use a third‑party administrator, with commission‑approved cost recovery. The administrator must file a triennial plan and work with the council and office; utilities transfer program funds if a third party runs programs. The law also expands the Energy Resources Act’s definition of “Department” to include the executive offices of health and human services, commerce, and housing.
Utilities must join ISO New England
Any electric company that owns or controls a transmission line in Rhode Island must be a member of ISO New England or its FERC‑approved successor. This is a utility requirement that may affect system operations, not a direct fee on households.
Broader payer rules and data standards
The law broadens who counts as a payer to include public programs and insurers that run employer plans. It sets standard definitions for total health spending and primary care spending and excludes certain telehealth and retail sites from primary care. For a program’s first year, the Exchange uses an alternative public input process with a meeting, a 30‑day comment period, and clear documents.
Sponsors & Cosponsors
Sponsor
Marvin L. Abney
Democratic • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 6/5/2026
ARTICLE 13 PASSAGE AS AMENDED
Yes: 74 • No: 0
House vote • 6/5/2026
ARTICLE 8 PASSAGE PASSAGE OF AMENDMENT
Yes: 70 • No: 0
House vote • 6/5/2026
ARTICLE 10 PASSAGE PASSAGE OF AMENDMENT
Yes: 72 • No: 0
House vote • 6/5/2026
ARTICLE 7 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 12 • No: 60
House vote • 6/5/2026
ARTICLE 7 PASSAGE AS AMENDED
Yes: 64 • No: 10
House vote • 6/5/2026
ARTICLE 8 PASSAGE AS AMENDED
Yes: 73 • No: 0
House vote • 6/5/2026
ARTICLE 1 PASSAGE PASSAGE OF AMENDMENT
Yes: 73 • No: 0
House vote • 6/5/2026
ARTICLE 3 PASSAGE PASSAGE OF AMENDMENT
Yes: 72 • No: 0
House vote • 6/5/2026
ARTICLE 6 PASSAGE AS AMENDED
Yes: 55 • No: 18
House vote • 6/5/2026
ARTICLE 12 PASSAGE PASSAGE OF AMENDMENT
Yes: 62 • No: 9
House vote • 6/5/2026
ARTICLE 9 PASSAGE
Yes: 74 • No: 0
House vote • 6/5/2026
ARTICLE 10 PASSAGE AS AMENDED
Yes: 74 • No: 0
House vote • 6/5/2026
ARTICLE 11 PASSAGE PASSAGE OF AMENDMENT
Yes: 68 • No: 0
House vote • 6/5/2026
ARTICLE 11 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 14 • No: 54
House vote • 6/5/2026
ARTICLE 11 PASSAGE AS AMENDED
Yes: 57 • No: 12
House vote • 6/5/2026
ARTICLE 12 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 13 • No: 59
House vote • 6/5/2026
ARTICLE 2 PASSAGE
Yes: 73 • No: 1
House vote • 6/5/2026
ARTICLE 3 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 16 • No: 56
House vote • 6/5/2026
ARTICLE 3 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 16 • No: 56
House vote • 6/5/2026
ARTICLE 4 PASSAGE
Yes: 72 • No: 0
House vote • 6/5/2026
ARTICLE 5 PASSAGE PASSAGE OF AMENDMENT
Yes: 68 • No: 0
House vote • 6/5/2026
ARTICLE 5 PASSAGE AS AMENDED
Yes: 62 • No: 9
House vote • 6/5/2026
ARTICLE 6 PASSAGE PASSAGE OF AMENDMENT
Yes: 69 • No: 0
House vote • 6/5/2026
ARTICLE 7 PASSAGE PASSAGE OF AMENDMENT
Yes: 71 • No: 0
House vote • 6/5/2026
ARTICLE 1 PASSAGE AS AMENDED PASSAGE OF AMENDMENT
Yes: 10 • No: 64
House vote • 6/5/2026
ARTICLE 1 PASSAGE AS AMENDED
Yes: 65 • No: 9
House vote • 6/5/2026
ARTICLE 14 PASSAGE
Yes: 66 • No: 9
House vote • 6/5/2026
APP. FY ENDING JUNE 30, 2027 PASSAGE AS AMENDED
Yes: 65 • No: 10
House vote • 6/5/2026
ARTICLE 3 PASSAGE AS AMENDED
Yes: 71 • No: 0
House vote • 6/5/2026
ARTICLE 13 PASSAGE PASSAGE OF AMENDMENT
Yes: 72 • No: 0
House vote • 6/5/2026
ARTICLE 12 PASSAGE AS AMENDED
Yes: 74 • No: 0
Actions Timeline
Signed by Governor — Chapter 084
6/12/2026GovernorTransmitted to Governor
6/10/2026GovernorSenate passed Sub A as amended in concurrence
6/9/2026SenateCommittee recommends passage of Sub A as amended in concurrence
6/8/2026Referred to Senate Finance
6/8/2026SenateHouse passed Sub A as amended (floor amendment)
6/5/2026HouseScheduled to be heard and /or considered in anticipation of House passage (06/08/2026)
6/5/2026HousePlaced on House Calendar (06/05/2026)
5/29/2026HouseCommittee recommends passage of Sub A
5/29/2026Scheduled for consideration (05/29/2026)
5/27/2026Introduced, referred to House Finance
1/15/2026House
Bill Text
H7127 - As Introduced
1/15/2026
H7127 - Substitute
1/15/2026
H7127 - Substitute As Amended
1/15/2026
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