Chapter 186 |
2019 -- H 5145 SUBSTITUTE A Enacted 07/15/2019 |
A N A C T |
RELATING TO BUSINESSES AND PROFESSIONS |
Introduced By: Representatives Ruggiero, Shekarchi, Marszalkowski, Blazejewski, and |
Date Introduced: January 17, 2019 |
It is enacted by the General Assembly as follows: |
SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS" |
is hereby amended by adding thereto the following chapter: |
CHAPTER 89 |
TRANSPARENCY AND SUSTAINABILITY STANDARDS FOR RHODE ISLAND |
BUSINESSES ACT |
5-89-1. Purpose. |
The purpose of this chapter is to support Rhode Island business entities in their global |
sustainability efforts by providing this enabling legislation that permits a Rhode Island entity to |
signal its commitment to global sustainability. This chapter does not purport to prescribe which |
sustainability standards an entity chooses to adopt. Thus, a Rhode Island entity is free to choose |
standards promulgated or developed by any entity. |
5-89-2. Legislative findings. |
The legislature finds that: |
(1) The state of Rhode Island is committed to initiatives designed to support |
sustainability practices by providing a platform for manufacturers and businesses to demonstrate |
their corporate commitment to social responsibility and sustainability. |
(2) The Rhode Island department of environmental management has a suite of voluntary |
green certification programs for the hospitality and tourism industry, landscapers, golf courses, |
and other industries. |
(3) In recognition of the increasing interest from investors, customers, and employees for |
greater transparency in sustainability practices, this legislation provides Rhode Island businesses |
a means to demonstrate to their customers, investors, and employees that they are committed to |
sustainability that embodies business practices and systems that are designed to foster innovation |
and long-term profits as well as environmental and societal benefits. |
(4) Rhode Island's program shall be implemented by way of voluntary enabling |
legislation and applies only to those who seek to become certified as reporting entities. There is |
no single blueprint for best practices in sustainability among or within industries, and this |
legislation shall allow businesses to craft a sustainability blueprint that meets their specific needs, |
provided that the entity's governing body approves its standards and assessment measures and |
that they are made publicly available. |
5-89-3. Definitions. |
As used in this chapter only, the following terms shall have the following meanings: |
(1) "Acknowledged" means with respect to any document or instrument required to be |
executed by an authorized person pursuant to this chapter, the authorized person executing such |
the document or instrument has certified, under penalty of perjury, that the information set forth |
in such the document or instrument is accurate and complete to the best of such the authorized |
person's actual knowledge after due inquiry. |
(2) "Assessment measures" means with respect to any entity, the policies, procedures, or |
practices adopted by such the entity to adduce objective factual information to assess the entity's |
performance in meeting its standards, including any procedures for internal or external |
verification of such the information. |
(3) "Authorized person" means, with respect to any entity, any person or entity who has |
been duly authorized in accordance with the organizational documents of the entity and the laws |
of this state (whether statutory, common law or otherwise) under which the entity is incorporated, |
formed, or organized to execute such the documents and instruments and make such the |
acknowledgments as are required by this chapter. |
(4) "Certification of adoption of transparency and sustainability standards" means a |
certificate, issued by the department of environmental management, attesting that a reporting |
entity has fulfilled sustainability metrics and filed with the secretary of state a standards statement |
pursuant to this chapter. Such The certificate shall state on its face that the state has not reviewed |
the contents or implementation of the matters referenced in the standards statement, nor verified |
any reports made by the reporting entity. |
(5) "Control,'' including the terms "controlling,'' "controlled by,'' and "under common |
control with,'' means the possession, directly or indirectly, of the power to direct or cause the |
direction of the management and policies of a person or entity, whether through the ownership of |
equity or other voting securities, by contract or otherwise. |
(6) "Entity'' means any corporation (stock or nonstock), or a limited-liability company, |
existing under the applicable laws of this state. |
(7) "Governing body'' means the board of directors or equivalent governing body, person, |
or entity having the power to manage and direct the business and affairs of the entity, and shall |
include any duly authorized and empowered committee of the board of directors or equivalent |
governing body. |
(8) "Nonreporting entity'' means any person or entity (including any entity) that is not a |
reporting entity. |
(9) "Organizational documents'' means the certificate of incorporation, bylaws, |
partnership agreement, limited-liability company agreement, articles of association or other |
agreement, document, or instrument containing the provisions by which an entity is formed or |
organized and by which its internal affairs are governed, in each case as amended, modified, |
supplemented, and/or restated and in effect as of any date of determination. |
(10) "Provider'' means, as to any entity, any third party that is engaged to provide |
professional consulting services or advice to assist entities or enterprises in measuring, managing, |
or reporting the impact of their business and operations on issues of social and environmental |
impact. |
(11) "Report'' means a report with respect to a reporting period for a reporting entity |
containing the following: |
(i) A summary of the standards and assessment measures in effect during the applicable |
reporting period, which summary shall include the third-party criteria and any other source used |
to develop the entity's standards and assessment measures and the process by which they were |
identified, developed, and approved by the entity; |
(ii) A summary of the actions or activities by which the entity has sought to meet the |
standards during the applicable reporting period, including engagement with and disclosure to |
stakeholders, if any; |
(iii) The most recent available objective and factual information developed pursuant to |
the assessment measures, if any, with respect to the entity's performance in meeting its standards |
during the reporting period, and an assessment by the governing body whether the entity has been |
successful in meeting the standards, and in the case of any failure to meet such the standards, a |
summary of any additional efforts the governing body has determined the entity will undertake to |
improve its performance in respect thereof, or its determination not to undertake such the |
additional efforts; |
(iv)(A) The identity of any provider assisting the entity in measuring, managing, or |
reporting the impact of the entity's business and operations in light of its standards; or |
(B) A statement that the entity has not engaged the services of any provider for such |
these purposes; |
(v) A summary of any changes to the standards, assessment measures, or reporting |
period, the process by which such the changes were identified, developed, and approved by the |
entity, and the third-party criteria used to develop any changes to the standards; |
(vi) A summary of the actions or activities planned for the next succeeding reporting |
period with respect to measuring, managing, and reporting with respect to the standards if such |
the actions and activities are materially different from those described for the applicable reporting |
period; and |
(vii) Notwithstanding the foregoing, no entity shall be required to include in any report |
any information that such the entity determines in good faith is subject to an attorney-client or |
other applicable privilege or would result in the disclosure of trade secrets or other competitively |
sensitive information. |
(12) "Reporting entity'' means an entity that has been issued a certificate of adoption of |
transparency and sustainability standards and that has not become and continues to be a |
nonreporting entity pursuant to § 5-89-6. |
(13) "Reporting period'' means a period of one year, the initial such period to begin not |
more than one year following the filing of the standards statement, and subsequent reporting |
periods to begin on the day following the last date of the prior reporting period, unless a |
governing body elects to shorten the duration of a reporting period that has not begun in order to |
change the start date for subsequent reporting periods. |
(14) "Standards'' means, with respect to an entity, the principles, guidelines, or standards |
adopted by the entity to assess and report the impacts of its activities on society and the |
environment, which principles, guidelines, or standards shall be based on or derived from third- |
party criteria. The Rhode Island department of environmental management green certification |
standards may be used as initial guidelines for all applicants in businesses covered by the |
certification program. |
(15) "Standards statement'' means the filing described in § 5-89-5. |
(16) "Third party'' means, with respect to any entity, any person or entity other than any |
person or entity that controls, is controlled by, or under common control with such the entity, |
including any governmental or nongovernmental organization that provides services, standards, |
or criteria with respect to measuring, managing, or reporting the social and environmental impact |
of businesses or other enterprises. |
(17) "Third-party criteria'' means any principles, guidelines, or standards developed and |
maintained by a third party (including a provider) that are used to assist businesses or other |
enterprises in measuring, managing, or reporting the social and environmental impact of |
businesses or other entities. |
5-89-4. Certificate of adoption of transparency and sustainability standards. |
(a) The secretary of state, in coordination with the director of the department of |
environmental management, shall issue a certificate of adoption of transparency and sustainability |
standards to any entity if the secretary of state shall have determined that the following conditions |
have been satisfied: |
(1) Such The entity shall have executed and acknowledged, and delivered to the secretary |
of state, a standards statement; |
(2) Such The entity shall have paid all fees and costs assessed by the secretary of state; |
and |
(3) Such The entity remains a reporting entity, and if such the entity is registered or |
formed with the secretary of state, it is in good standing upon the records of the secretary of state. |
(b) Each reporting entity shall, for all purposes of the laws of this state, be authorized and |
permitted to disclose, publicly or privately, that it is a reporting entity. |
(c) The secretary of state is hereby authorized to promulgate rules and regulations |
necessary to implement this chapter and shall issue any such certificate required pursuant to this |
chapter and shall further be permitted to charge a reasonable fee for any certificates issued and /or |
renewed. |
5-89-5. Statement of adoption of transparency and sustainability standards. |
If the governing body of an entity has adopted resolutions setting forth the entity's |
standards and assessment measures, the entity may file a standards statement that: |
(1) Acknowledges that the governing body of the entity has adopted resolutions setting |
forth the entity's standards and assessment measures; |
(2) Identifies an Internet internet link on the principal website maintained by or on |
behalf of the entity at which the standards and assessment measures, the third-party criteria used |
to develop the standards, a description of the process by which such the standards were |
identified, developed, and approved and any report filed or to be filed by the entity are and will be |
readily available at no cost and without the requirement of the provision of any information, and |
will remain available for so long as the entity remains a reporting entity (the "website''); |
(3) Acknowledges that the entity has agreed to acknowledge and deliver to the secretary |
of state, its most recent report concurrently with its annual report as specified in § 7-1.2-1501, or |
§ 7-6-90, or § 7-16-66; |
(4) Acknowledges that the entity has committed to: |
(i) Use the assessment measures to assess the entity's performance in meeting its |
standards; |
(ii) Review and assess its standards and assessment measures from time to time, and |
make such changes thereto as the governing body in good faith determines are necessary or |
advisable in furtherance of meeting the entity's standards; |
(iii) Prepare and make readily available to the public at no cost and without the |
requirement of the provision of any information (by posting on the website at the identified |
Internet internet link) a copy of its report within ninety (90) days of the end of each reporting |
period; and |
(5) Is acknowledged by an authorized person. |
5-89-6. Reporting entity status - Renewal statement. |
(a) A reporting entity shall become a nonreporting entity on January 1 of the following |
year if the reporting entity shall have failed to submit the renewal statement to the secretary of |
state in accordance with this chapter without the need for further action by the secretary of state. |
A reporting entity's renewal statement shall: |
(1) Acknowledge that any changes since its most recent filing of a renewal statement or |
restoration statement, or, if no renewal statement or restoration statement has been filed, since the |
filing of its standards statement, to its address within the state or standards and assessment |
measures, and a description of the process by which such the changes were identified, developed, |
and approved by the entity and the third-party criteria used to develop any changes to the |
standards are available on the website; |
(2) Acknowledge that, for the most recent reporting period for which a report was |
required to be made available, if any, a report was made available on the website in accordance |
with this chapter within the time period provided for in § 5-89-5(4)(iii); |
(3) Provide an Internet internet link to the report for the most recent reporting period, if |
any, on the website; and |
(4) Be acknowledged by an authorized person. |
(b) No standards statement shall be accepted by the secretary of state for an entity if it has |
become a nonreporting entity pursuant to subsection (a) of this section within the prior year. |
5-89-7. Restoration statement. |
(a) If any reporting entity shall become a nonreporting entity for failure to file a renewal |
statement, it may file a restoration statement. The restoration statement shall: |
(1) Acknowledge that any changes since its most recent filing of a renewal statement or |
restoration statement, or, if no renewal statement or restoration statement has been filed, since the |
filing of its standards statement, to its address within the state or standards and assessment |
measures, and a description of the process by which such the changes were identified, developed, |
and approved by the entity and the third-party criteria used to develop any changes to the |
standards are available on the website; |
(2) Acknowledge that a report for all the reporting periods ended more than ninety (90) |
days prior to filing the restoration statement have been made available on the website in |
accordance with this chapter; |
(3) Provide an Internet internet link on the website to the report for the most recent |
reporting period and any other reporting period for which an Internet internet link has not been |
previously provided in a renewal statement or restoration statement; and |
(4) Be acknowledged by an authorized person. |
(b) Any nonreporting entity that files a restoration statement shall thereupon |
automatically become a reporting entity, without the need for further action by the secretary of |
state. |
5-89-8. Limitation of liability. |
Neither the failure by an entity to satisfy any of its standards, nor the selection of specific |
assessment measures, nor any other action taken by or on behalf of the entity pursuant to this |
chapter, or any omission to take any action required by this chapter to seek, obtain, or maintain |
status as a reporting entity, shall, in and of itself, create any right of action on the part of any |
person or entity or otherwise give rise to any claim for breach of any fiduciary or similar duty |
owed to any person or entity. |
5-89-9. Fees. |
No document required to be filed under this chapter shall be effective until the applicable |
fees required by this section are paid and upon the receipt of a statement under § 5-89-5, the fee |
for which shall be one hundred dollars ($100),; or a renewal statement under § 5-89-6, the fee for |
which shall be ten dollars ($10.00),; or a restoration statement under § 5-89-7, the fee for which |
shall be fifty dollars ($50.00), shall be paid to and collected by the secretary of state. |
5-89-10. Enabling. |
This act is enabling and applies only to those businesses who that seek to become |
certified as a reporting entity and, who that comply with all applicable registration requirements. |
Reporting entities are enabled to craft whatever sustainability blueprint they require that meets |
their specific needs as there is no single blueprint for best practices in sustainability among or |
within industries. |
SECTION 2. This act shall take effect on January 1, 2020. |
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LC000164/SUB A |
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