2026 -- H 8450

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LC006320

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATION ACT -- THE RHODE ISLAND BUSINESS CLIMATE

REFORM ACT

     Introduced By: Representatives Newberry, Shekarchi, Finkelman, Chippendale,
Marszalkowski, Slater, Phillips, J. Brien, Santucci, and Solomon

     Date Introduced: April 15, 2026

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. This act shall be known and may be cited as "The Rhode Island Business

Climate Reform Act."

     SECTION 2. Sections 7-1.2-711 and 7-1.2-1408 of the General Laws in Chapter 7-1.2

entitled "Rhode Island Business Corporation Act" are hereby amended to read as follows:

     7-1.2-711. Actions by shareholders.

     (a) Definitions. In this section:

     (1) “Derivative proceeding” means a civil suit in the right of a domestic corporation or, to

the extent provided in subsection (h) of this section, in the right of a foreign corporation.

     (2) “Shareholder” includes a beneficial owner whose shares are held in a voting trust or

held by a nominee on the beneficial owner's behalf.

     (b) Standing. A shareholder may not commence or maintain a derivative proceeding unless

the shareholder:

     (i) Was a shareholder of the corporation at the time of the act or omission complained of

or became a shareholder through transfer by operation of law from one who was a shareholder at

that time; and

     (ii) Fairly and adequately represents the interests of the corporation in enforcing the right

of the corporation.

     (c) Demand. No shareholder may commence a derivative proceeding until:

     (1) A written demand had been made upon the corporation to take suitable action; and

     (2) Ninety (90) days have expired from the date the demand was made unless the

shareholder has earlier been notified that the demand has been rejected by the corporation or unless

irreparable injury to the corporation would result by waiting for the expiration of the ninety (90)

day period.

     (d) Stay of proceedings. If the corporation commences an inquiry into the allegations made

in the demand or complaint, the court may stay any derivative proceeding for such period as the

court deems appropriate.

     (e) Dismissal.

     (1) On motion by the corporation, the court shall dismiss a derivative proceeding if one of

the groups specified in subsection (e)(2) or (e)(6) has determined in good faith after conducting a

reasonable inquiry upon which its conclusions are based that the maintenance of the derivate

proceedings is not in the best interests of the corporation.

     (2) Unless a panel is appointed pursuant to subsection (e)(6), the determination in

subsection (e)(1) must be made by:

     (i) A majority vote of independent directors present at a meeting of the board of directors

if the independent directors constitute a quorum; or

     (ii) A majority vote of a committee consisting of two (2) or more independent directors

appointed by majority vote of independent directors present at a meeting of the board of directors,

whether or not such independent directors constituted a quorum.

     (3) None of the following by itself causes a director to be considered not independent for

purposes of this section:

     (i) The nomination or election of the directors or persons who are defendants in the

derivative proceedings or against whom action is demanded;

     (ii) The naming of the director as a defendant in the derivative proceeding or as a person

against whom action is demanded; or

     (iii) The approval by the director of the act being challenged in the derivative proceeding

or demand if the act resulted in no personal benefit to the director.

     (4) If a derivative proceeding is commenced after a determination has been made rejecting

a demand by a shareholder, the complaint must allege with particularity facts establishing either

(A) that a majority of the board of directors did not consist of independent directors at the time the

determination was made, or (B) that the requirements of subsection (e)(1) of this section have not

been met.

     (5) If a majority of the board of directors does not consist of independent directors at the

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time the determination is made, the corporation has the burden of proving that the requirements of

subsection (e)(1) have been met. If a majority of the board of directors consists of independent

directors at the time the determination is made, the plaintiff has the burden of proving that the

requirements of subsection (e)(1) have not been met.

     (6) The court may appoint a panel of one or more independent persons upon motion by the

corporation to make a determination whether the maintenance of the derivative proceeding is in the

best interests of the corporation. In such case, the plaintiff has the burden of proving that the

requirements of subsection (e)(1) have not been met.

     (f) Discontinuance or settlement. A derivative proceeding may not be discontinued or

settled without the court's approval. If the court determines that a proposed discontinuance or

settlement will substantially affect the interests of the corporation's shareholders or a class of

shareholders, the court shall direct that notice be given to the shareholders affected.

     (g) Payment of expenses. On termination of the derivative proceeding the court may:

     (1) Order the corporation to pay the plaintiff's reasonable expenses (including counsel fees)

incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the

corporation;

     (2) Order the plaintiff to pay any defendant's reasonable expenses (including counsel fees)

incurred in defending the proceeding if it finds that the proceeding was commenced or maintained

without reasonable cause or for an improper purpose; or

     (3) Order a party to pay an opposing party's reasonable expenses (including counsel fees)

incurred because of the filing of a pleading, motion or other paper, if it finds that the pleading,

motion or other paper was not well grounded in fact, after reasonable inquiry, or warranted by

existing law or a good faith argument for the extension, modification or reversal of existing law

and was interposed for an improper purpose, such as to harass or cause unnecessary delay or

needless increase in the cost of litigation.

     (h) Applicability to foreign corporations. In any derivative proceeding in the right of a

foreign corporation, the matters covered by this subchapter are governed by the laws of the

jurisdiction of incorporation of the foreign corporation except for subsections (d), (f), and (g) of

this section.

     (i) Imposition of minimum ownership requirements for initiating derivative actions. On

and after July 1, 2026, the following requirements shall apply to any shareholder derivative action

brought pursuant to the provisions of this section:

     (1) Publicly traded entities and for-profit private entities with five hundred (500) or more

equity owners or shareholders, and that have elected the statutory business judgment rule may

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impose a minimum ownership threshold of up to five percent (5%) of the outstanding equity for

owners to initiate derivative actions.

     (2) Attorneys' fees awarded in these derivative actions shall be limited by specifically

disqualifying mere disclosure-only settlements as "substantial benefits" for the purpose of such

awards, regardless of the materiality of the disclosures.

     7-1.2-1408. Registered office and registered agent of foreign corporation.

     (a) Each foreign corporation authorized to transact business in this state must shall have

and continuously maintain in this state a registered agent, who is either:

     (1) An individual resident in this state; or

     (2) A corporation, limited partnership, limited liability partnership, limited liability

company, and in each case either domestic or one authorized to transact business in this state.

Provided, on and after July 1, 2026, the secretary of state may serve as a registered agent for a

foreign corporation or a foreign limited liability company.

     (b) Foreign corporations who are the holders of mortgages on real estate located within this

state which do not maintain the loan documentation and records within the state shall authorize the

registered agent to accept mortgage discharge payment and to issue a discharge of the mortgages

upon the payment.

     SECTION 3. Chapter 7-1.2 of the General Laws entitled "Rhode Island Business

Corporation Act" is hereby amended by adding thereto the following sections:

     7-1.2-815. Business judgment rule.

     (a) Unless the corporate or controlling documents for an entity subject to the provisions of

this chapter specify a different standard for the conduct of a director or manager of the entity, then

it shall be conclusively presumed that the entity has elected for application of the business judgment

rule to govern the conduct of decisions made by directors or managers as provided pursuant to the

provisions of subsection (b) of this section.

     (b) A director or manager who makes a business judgment for an entity electing application

of the business judgment rule pursuant to subsection (a) of this section shall be presumed to have

satisfied the requirements of this chapter if all of the following conditions are satisfied:

     (1) The director or manager has acted in good faith;

     (2) The director or manager does not have an interest in the subject of the business

judgment;

     (3) The director or manager was informed with respect to the subject of the business

judgment to the extent the director or manager believes was appropriate, and that belief was

reasonable, under the circumstances; and

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     (4) The director or manager believes that the business judgment was in the best interests of

the corporation or entity and its shareholders or equity owners, and that belief is rational.

     (c) A person challenging the conduct of a director or manager as a breach under this chapter

has the burden of proving failure of the director or manager to satisfy the requirements of subsection

(a) of this section and, if that burden is sustained, of proving the director's or manager's failure to

satisfy the requirements under any provision of this chapter, and in a damage action under any

section of this chapter, the burden of proving that the breach was the proximate cause of damage

suffered by the corporation or its shareholders or equity owners.

     (d) For the purpose of this section, a director or manager has an interest in a transaction or

conduct that is the subject of a business judgment only if any of the following conditions are

satisfied:

     (1) The director, or manager or an associate of the director or manager, is a party to the

transaction or conduct;

     (2) The director or manager or an associate of the director or manager has a material

pecuniary interest in the transaction or conduct other than usual and customary directors' or

managers' fees and benefits, of which the director or manager knows or should be aware, that would

reasonably be expected to affect the director's or manager's judgment in a manner adverse to the

corporation or entity or its shareholders or equity owners; or

     (3) The director or manager is subject to a controlling influence by a party to the transaction

or conduct, other than the corporation or entity or by a person who has a material pecuniary interest

in the transaction or conduct, and that controlling influence could reasonably be expected to affect

the director's or manager's judgment with respect to the transaction or conduct in a manner adverse

to the corporation or entity or its shareholders or equity owners.

     (e) As used in this section, "associate" means any of the following persons:

     (1) The spouse of the director; a child, grandchild, parent, sibling, uncle, aunt, nephew,

niece, step-child, stepparent, or step-sibling of the director, including adoptive relationships, and

the spouse of such a person; a mother-in-law, father-in law, brother-in-law, or sister-in-law of the

director; a person, other than a domestic employee, having the same home as the director; and a

trust or estate of which the director or a person designated in this subsection is a substantial

beneficiary.

     (2) A trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.

     (3) A person with respect to whom the director or manager has a business or financial

relationship other than a person described in subsection (d)(1) or (d)(2) of this section, but if and

only if the relationship would reasonably be expected to affect the director's or manager's judgment

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with respect to the transaction or conduct in question in a manner adverse to the corporation or

entity or its shareholders or equity owners. For the purpose of this subsection, the following

presumptions affecting the burden of proof apply:

     (i) The director's or manager's judgment is presumed not to be adversely affected solely

because the director or manager is a director or principal manager of the business organization.

     (ii) The director's or manager's judgment is presumed not to be adversely affected if the

director or manager is the beneficial owner or record holder of not more than ten percent (10%) of

any class of equity interest.

     (iii) The director's or manager's judgment is presumed to be adversely affected if the

director or manager is the beneficial or record holder, other than in a custodial capacity, of more

than ten percent (10%) of any class of equity interest.

     7-1.2-1806. Advanced determinations of director independence.

     Publicly traded corporations and for-profit corporations that elected the statutory business

judgment rule may petition Rhode Island superior courts to hold an evidentiary hearing to

determine the independence of a special committee of directors tasked with reviewing related party

transactions, such as those involving the corporation and a controlling shareholder, director, or

officer. Prior to the evidentiary hearing, the corporation shall notify each of its shareholders to

provide them with the opportunity to participate in the proceeding. Once the superior court validates

the independence of the committee, that decision shall be binding absent facts, which were not

presented to the court, that prove one or more directors is not independent and disinterested with

respect to the applicable transaction.

     7-1.2-1807. Waiver of class-by-class voting.

     A corporation organized under the provisions of this chapter may include language in its

governing documents allowing the corporation to waive class-by-class share voting in certain

circumstances, permitting all classes of its stock to vote as a single class.

     7-1.2-1808. Shielded communications.

     Shareholders, members, and partners of a corporation organized under the provisions of

this chapter shall not be entitled to review certain communications, to include emails, text

messages, social media posts, and similar electronic communication, unless the communication

effectuates an official action of the entity. Publicly traded entities and corporate entities that elect

the statutory business judgment rule may deny inspection demands if the entity is involved, or

expects to be involved, in a derivative proceeding or other litigation proceeding involving the

entity. Nothing in this section shall be construed as limiting a court of competent jurisdiction from

ordering the production or disclosure of any document of communication.

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     SECTION 4. Section 7-16-11 of the General Laws in Chapter 7-16 entitled "The Rhode

Island Limited Liability Company Act" is hereby amended to read as follows:

     7-16-11. Resident agent.

     (a) Each domestic or foreign registered limited liability company shall have a resident agent

for service of process on the limited liability company who shall be either:

     (1) An individual resident of this state; or

     (2) A corporation, limited partnership, or limited liability company, and in each case either

domestic or one authorized to transact business in this state. Provided, on and after July 1, 2026,

the secretary of state may serve as a resident agent for a foreign limited liability company. Provided

further, that on and after July 1, 2026, an entity applying to be a foreign limited liability company

in Rhode Island shall not be required to provide a certificate of good standing from their home or

domestic jurisdiction as part of the application process.

     (b)(1) A domestic or foreign registered limited liability company may change its resident

agent or the address of its resident agent by filing with the secretary of state a statement signed by

any authorized person that authorizes the change.

     (2) A change of a resident agent or address of the resident agent for a domestic or foreign

registered limited liability company under this subsection is effective when the secretary of state

accepts the statement for filing.

     (c)(1) A resident agent that changes address in the state shall file with the secretary of state

a statement of the change of address signed by the resident agent or on the resident agent's behalf.

     (2) The statement shall include:

     (i) The name of the limited liability company for which the change is effective;

     (ii) The old and new addresses of the resident agent; and

     (iii) The date on which the change is effective.

     (3) The change of address of the resident agent is effective when the secretary of state

accepts the statement for filing.

     (d)(1) A resident agent may resign by filing with the secretary of state a counterpart or

photocopy of the signed resignation, together with a statement that the resignation has been

delivered or sent to the limited liability company.

     (2) Unless a later time is specified in the resignation, it is effective thirty (30) days after it

is filed.

     (e) The secretary of state is appointed the agent of the domestic limited liability company

for service of process if no resident agent has been appointed, if the resident agent's authority has

been revoked, or if the resident agent cannot be found or served following the exercise of reasonable

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diligence.

     SECTION 5. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited

Liability Company Act" is hereby amended by adding thereto the following sections:

     7-16-78. Anonymous limited liability company filings.

     (a) On and after July 1, 2026, entities may be formed and filed as anonymous limited

liability companies ("ALLC"). An ALLC filing will require the same filings as a traditional LLC,

but the names of members and managers shall not be required to be placed on public filings;

provided, however, the ALLC filing shall include the registered agent.

     (b) Equity owners' or members' names shall be listed with an internal operating agreement

of the ALLC.

     7-16-79. Rhode Island protected series limited liability company.

     A limited liability company agreement may establish or provide for the establishment of

one or more designated series of members, managers, limited liability company interests or assets.

Any series may have separate rights, powers or duties with respect to specified property or

obligations of the limited liability company or profits and losses associated with specified property

or obligations, and any series may have a separate business purpose or investment objective. No

provision of this chapter shall be construed to limit the application of the principle of freedom of

contract to a series that is not a protected series or a registered series. Other than as specifically

provided for otherwise in this chapter, a series may not merge, convert or consolidate.

     7-16-80. Limitation of liability.

     A limited liability company operating agreement may provide for the limitation or

elimination of any and all liabilities for breach of contract and breach of duties, including fiduciary

duties, of a member, manager or other person to a limited liability company or to another member

or manager or to another person that is a party to or is otherwise bound by a limited liability

company operating agreement; provided that, a limited liability company operating agreement may

not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the

implied contractual covenant of good faith and fair dealing.

     SECTION 6. Chapter 8-2 of the General Laws entitled "Superior Court" is hereby amended

by adding thereto the following sections:

     8-2-41. Complex commercial litigation calendar.

     (a) On and after July 1, 2027, there shall be a separate calendar for the administration and

determination of complex commercial litigation matters.

     (b) Complex commercial litigation calendar. The presiding judge of the superior court shall

create a complex commercial litigation calendar ("CCLC") which shall replace the business

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calendar in superior court and shall assign personnel to the extent warranted to exclusively hear

and decide all eligible complex commercial litigation matters. The calendar shall be referred to as

the "complex commercial litigation calendar." This calendar shall take the place of the business

calendar in the superior court, and shall utilize the same judges and staff who are currently assigned

to the business calendar.

     (c) Eligible cases.

     (1) Cases eligible for the this calendar shall include any case that includes a claim asserted

by any party either directly or by declaratory judgment with an amount in controversy of one

million dollars ($1,000,000) or more, designated in the pleadings for either jury or non-jury trials,

or involves an exclusive choice of court agreement or a judgment resulting from an exclusive choice

of court agreement, or is so designated by the presiding judge, qualifies for assignment to the

CCLC.

     (2) Excluded cases include any case containing a claim for personal, physical or mental

injury; mortgage foreclosure actions; mechanics' lien actions; condemnation proceedings; and any

case involving an exclusive choice of court agreement where a party to the agreement is an

individual acting primarily for personal, family, or household purposes or where the agreement

relates to an individual or collective contract of employment.

     (3) Any party may request a judicial conference to seek assignment to the CCLC, and

acceptance of any matter in addition to the sections listed in subsection (c)(1) of this section shall

be at the discretion of the judge(s) assigned to the calendar.

     (d) Timing. All matters assigned to the CCLC shall be expedited. All memoranda from all

interested parties in a matter assigned to the calendar shall be completed within sixty (60) days of

the filing of the certified record. No continuances or postponements shall be granted except for

good cause shown. Such continuances as are necessary shall be granted for the shortest practicable

time.

     (e) Use of section. Under no circumstances shall any party be permitted to utilize this

section as a basis for dismissal of an action, as this section is enacted for the benefit and

convenience of the superior court.

     8-2-42. Court of chancery.

     (a) There is hereby established, within the superior court but acting as a separate court, the

court of chancery. The court of chancery shall operate independently from the superior court. The

courts shall have jurisdiction to hear and determine all matters and causes in equity only, except as

otherwise agreed to by the parties or pursuant to the provisions of § 8-2-43(b).

     (b) The court of chancery shall consist of five (5) chancellors. One chancellor shall be the

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chief chancellor. Chancellors of the court of chancery shall be selected and appointed in the same

manner as magistrates of the superior court. Each chancellor shall be appointed for a term of ten

(10) years, with advice and consent of the senate.

     (c) The court of chancery shall not have jurisdiction to determine any matter wherein

monetary compensation is the exclusive or sole claim for relief.

     (d) All jurisdiction and powers of the court of chancery may be exercised in chambers. The

court of chancery shall sit without juries.

     (e) Upon a final determination of all equitable issues, the court of chancery shall transfer

any remaining matters to the appropriate trial court for resolution.

     (f) The court of chancery is to be self-sustaining, funded through court fees generated by

the court of chancery. Accordingly the court of chancery shall set fees commensurate with the

requirement that the court shall be self-sustaining.

     8-2-43. Jurisdiction of courts of chancery.

     (a) Except as provided in subsection (b) of this section, the courts of chancery shall hear

disputes in equity only. These may include matters involving fiduciary duty, mediation and

arbitration, governance, appraisal, books-and-records inspection demands, and other equitable or

statutorily assigned matters, business and technology disputes, and disputes involving deed

covenants or restrictions.

     (b) Persons and entities may include provisions in their governing documents that designate

the court of chancery as the exclusive venue for resolving internal disputes and waive the right to

a jury trial for internal claims. Internal claims shall cover a broad scope of claims, including

derivative claims and allegations of breaches of fiduciary duty. A jury trial waiver shall be

enforceable even if the entity's members, owners, officers or governing persons did not individually

sign such waiver.

     SECTION 7. Section 9-26-4.1 of the General Laws in Chapter 9-26 entitled "Levy and Sale

on Execution" is hereby amended to read as follows:

     9-26-4.1. Homestead estate exemption.

     (a) In addition to the property exempt from attachment as set forth in § 9-26-4, an estate of

homestead to the extent of five hundred thousand dollars ($500,000) in the land and buildings, or

personal property that the owner uses as a residence, may be acquired pursuant to this section by

an owner of a home or an individual who rightfully possesses the premises by lease, as a life tenant,

as a beneficiary of a revocable or irrevocable trust or otherwise, and who occupies or intends to

occupy the home as his or her principal residence. Provided, effective July 1, 2026, the estate of

homestead for land, buildings, and personal property that the owner uses as a residence, shall be

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unlimited in value, and such land and buildings and personal property shall be exempt from

attachment, levy on execution, and sale for payment of debts or legacies, except as provided for

otherwise in this section. The estate of homestead provided pursuant to this section shall be

automatic by operation of law, and without any requirement or necessity for the filing of a

declaration, a statement in a deed, or any other documentation. The estate shall be exempt from the

laws of attachment, levy on execution, and sale for payment of debts or legacies, except in the

following cases:

     (1) Sale for taxes, sewer liens, water liens, lighting district assessments, and fire district

assessments;

     (2) For a debt contracted prior to the acquisition of the estate of homestead;

     (3) For a debt contracted for the purchase of the home;

     (4) Upon an order issued by the family court to enforce its judgment that a spouse pay a

certain amount weekly or otherwise for the support of a spouse or minor children;

     (5) Where a building or buildings are situated on land not owned by the owner of a

homestead estate are attached, levied upon or sold for the ground rent of the lot upon which the

building or buildings are situated;

     (6) For a debt due to, or a lien in favor of, the department of human services and/or the

state of Rhode Island for reimbursement of medical assistance, as provided for in § 40-8-15;.

     (7) For a debt heretofore or hereafter owing to a federally insured deposit-taking institution

or a person regulated or licensed under title 19.

     (b) For the purposes of this section, “owner of a home” includes a sole owner, lessee (but

only a lessee who or that was the owner of a home prior to a transfer to the lessor), joint tenant,

tenant by the entirety, or tenant in common; provided, that only one individual may acquire an

estate of homestead in the home for the benefit of his or her family; and provided further, that an

estate of homestead may be acquired on only one principal residence for the benefit of a family.

For the purposes of this section, “family” includes either a parent and child or children, a husband

and wife and their children, if any, or a sole owner. The provisions of this section shall not apply

to any debt owing to a regulated institution, a debt secured by a mortgage or other voluntary lien

on a home, or a mechanics' lien on the property comprising the estate as provided for under chapter

28 of title 34. Notwithstanding any other provisions of law, it shall not be necessary to record a

declaration of homestead in order to take advantage of the homestead estate exemption.

     (c) An estate of homestead shall be subordinate to a mortgage encumbering the home that

was signed by all the owners of the home at the time of execution of said mortgage. A mortgage

executed by fewer than all of the owners of a home that is subject to an estate of homestead shall

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be superior only to the homestead estate of the owners who are parties to the mortgage and their

non-titled spouses and minor children, if any.

     (d) For purposes of this chapter, a mortgage shall include an instrument granting a security

interest in a manufactured home or cooperative housing unit. The subordination shall not require

the signature of a spouse who is not an owner. No statement that a homestead estate shall be

subordinate to the mortgage shall be required in the mortgage instrument and nothing contained in

a mortgage or any document executed in connection with the mortgage shall affect or be construed

to create, modify, or terminate a homestead estate, other than to subordinate it to the mortgage as

aforesaid. A mortgage lender shall not require or record a release of homestead in connection with

the making and recording of a mortgage.

     SECTION 8. Title 9 of the General Laws entitled "COURTS AND CIVIL PROCEDURE

— PROCEDURE GENERALLY" is hereby amended by adding thereto the following chapter:

CHAPTER 36

RHODE ISLAND RAPID ARBITRATION ACT

     9-36-1. Definitions.

     For purposes of this chapter only, unless the context requires otherwise:

     (1) "Agreement" means an agreement described in § 9-36-3.

     (2) "Arbitration" means an arbitration conducted pursuant to the provisions of this chapter.

     (3) "Arbitrator" means a person named in an agreement, selected under an agreement, or

appointed by the parties to an agreement or the court of chancery, to preside over an arbitration and

issue a final award. If an arbitration proceeds before more than one arbitrator:

     (i) References in this chapter to an arbitrator shall be deemed to be references to the

arbitrators; and

     (ii) Unless otherwise provided in an agreement, references in this chapter to an act of an

arbitrator shall be deemed to be references to an act of a majority of the arbitrators.

     (4) "Business entity" means any corporation, association, partnership, or limited liability

company as organized under title 7.

     (5) "Consumer" means an individual who seeks or acquires, by purchase or lease, any

goods or services for personal, family, or household purposes.

     (6) "Final award" means an award designated as final and issued in an arbitration by an

arbitrator.

     (7) "Organization" means a civic association, neighborhood alliance, homeowners

maintenance corporation, homeowners maintenance association, condominium association or other

similar entity charged with or assuming the duties of maintaining the public areas, open space, or

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common facilities within a residential development or community.

     9-36-2. Purpose of the chapter.

     The purpose of this chapter is to provide Rhode Island business, corporate and nonprofit

entities a method by which the entities may resolve disputes in a prompt, cost-effective, and

efficient manner, through voluntary arbitration conducted by expert arbitrators, and to ensure rapid

resolution of those business disputes. This chapter is intended to provide an additional option by

which sophisticated entities may resolve their disputes. Therefore, nothing in this chapter is

intended to impair the ability of entities to use other arbitral procedures of the entities choosing,

including procedures that afford lengthier proceedings and allow for more extensive discovery.

     9-36-3. Effect of arbitration agreement.

     (a) A written agreement to submit to arbitration any controversy existing at or arising after

the effective date of the agreement is valid, enforceable, and irrevocable, save upon grounds as

exist at law or in equity for the revocation of any contract, without regard to the justiciable character

of the controversy, as long as:

     (1) The agreement is signed by the parties to an arbitration;

     (2) At least one party to the agreement is an entity formed or organized under the laws of

this state or having its principal place of business in this state;

     (3) No party to the agreement is a consumer;

     (4) The agreement provides that it shall be governed by or construed under the laws of this

state, without regard to principles of conflict of laws, regardless of whether the laws of this state

govern the parties' other rights, remedies, liabilities, powers and duties; and

     (5) The agreement includes an express reference to this chapter, the "Rhode Island rapid

arbitration act;"

     (6) During the pendency of an arbitration, an agreement may be amended to alter the

procedures of the arbitration only with the approval of an arbitrator, but the agreement may not be

amended in order to alter the time set forth in § 9-36-8(b).

     (b) A party to an agreement is deemed to have waived objection and consented to:

     (1) The arbitration procedures set forth in this chapter;

     (2) The submission exclusively to an arbitrator of issues of substantive and procedural

arbitrability;

     (3) The exclusive personal and subject matter jurisdiction of an arbitration, with venue

waived as long as the hearing is conducted within this state;

     (4) The exclusive personal and subject matter jurisdiction of the courts of the state for the

limited purposes set forth in § 9-36-4; and

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     (5) Except as otherwise limited by the agreement, an arbitrator's power and authority to:

     (i) Determine in the first instance the scope of the arbitrator's remedial authority, subject

to review solely pursuant to the provisions of § 9-36-9; and

     (ii) Grant relief, including to award any legal or equitable remedy appropriate in the sole

judgment of the arbitrator.

     (c) A party to an agreement is deemed to have waived the right to:

     (1) Seek to enjoin an arbitration;

     (2) Remove any action subject to the provisions of this chapter to a federal court;

     (3) Appeal or challenge an interim ruling or order of an arbitrator;

     (4) Appeal or challenge a final award, except under § 9-36-9; and

     (5) Challenge whether an arbitration has been properly held, except pursuant to the

provisions of § 9-36-9.

     9-36-4. Jurisdiction.

     (a) Jurisdiction of the supreme court. Except as otherwise provided in an arbitration

agreement, the consummation of the arbitration agreement confers jurisdiction on the supreme

court to hear only a challenge to a final award under § 9-36-9. The supreme court shall not have

jurisdiction to hear appeals of:

     (1) The appointment of an arbitrator under § 9-36-5;

     (2) The determination of an arbitrator's fees under § 9-36-6(b);

     (3) The issuance or denial of an injunction in aid of arbitration under subsection (b)(5) of

this section; and

     (4) The grant or denial of an order enforcing a subpoena issued under § 9-36-7(b).

     (b) A party to any agreement shall be deemed to have waived the right to such appeals. The

supreme court, in consultation with the court of chancery, may publish rules for arbitration

proceedings under this chapter and, unless an agreement provides for different rules, may specify

that those rules govern arbitration proceedings under this chapter.

     (c) Jurisdiction of the court of chancery. The making of an agreement confers jurisdiction

on the court of chancery only to:

     (1) Appoint an arbitrator under § 9-36-5;

     (2) Enter judgment under § 9-36-10(b);

     (3) Upon the request of an arbitrator, enforce a subpoena issued under § 9-36-7(b);

     (4) Determine an arbitrator's fees under § 9-36-6(b); and

     (5) Issue, only before an arbitrator accepts appointment, an injunction in aid of an

arbitration; provided that, the injunction may not divest the arbitrator of jurisdiction or authority.

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Notwithstanding the foregoing, no court has jurisdiction to enjoin an arbitration under this chapter.

The court of chancery may promulgate rules to govern proceedings under this chapter.

     (d) Jurisdiction of the superior court. The consummation of an arbitration agreement

confers jurisdiction on the superior court only to enter judgment under § 9-36-10(c).

     9-36-5. Appointment of arbitrator by the court of chancery.

     (a) The court of chancery, on petition or on application of a party in an existing case, has

exclusive jurisdiction to appoint one or more arbitrators upon:

     (1) The consent of all parties to an agreement;

     (2) The failure or inability of an arbitrator named in or selected under an agreement to serve

as an arbitrator;

     (3) The failure of an arbitration agreement to name an arbitrator or to provide a method for

selecting an arbitrator;

     (4) The inability of the parties to an agreement to appoint an arbitrator; or

     (5) The failure of a procedure set forth in an arbitration agreement for selecting an

arbitrator.

     (b) Following the petition or application, each party shall propose to the court of chancery

no more than three (3) persons that are qualified and willing to serve as an arbitrator.

     (c)(1) The court of chancery shall, within thirty (30) days of the service of the petition or

application, appoint an arbitrator and, in so doing, may take into account:

     (i) The terms of an agreement;

     (ii) The persons proposed by the parties; and

     (iii) Reports made under § 9-36-6(d).

     (2) An arbitrator appointed by the court of chancery may only be:

     (i) A person named in or selected under the arbitration agreement;

     (ii) An expert in any nonlegal discipline described in the arbitration agreement; or

     (iii) A member in good standing of the bar of the supreme court for at least ten (10) years.

     (d) An arbitrator so appointed has all the powers of an arbitrator specifically named in an

agreement. Unless otherwise provided in an agreement, the court of chancery shall appoint a single

arbitrator.

     9-36-6. Arbitrator fees and expenses of arbitration.

     (a) A person accepting an appointment as an arbitrator shall:

     (1) Consent to the terms of this chapter; and

     (2)(i) Accept the consequences set forth in subsection (b) of this section for failing to

comply with the provisions of § 9-36-8(b).

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     (ii) An arbitrator is immune from civil liability for or resulting from any act or omission

done or made in connection with an arbitration, unless the arbitrator's act or omission was made or

done in bad faith, with malicious intent, or in a manner exhibiting a willful, wanton disregard of

the rights, safety, or property of another.

     (b) Unless otherwise provided in an agreement, an arbitrator's fees and expenses, together

with other expenses incurred in the conduct of an arbitration, but not including counsel fees of

parties to the arbitration, shall be borne as provided in a final award. Notwithstanding the foregoing,

an arbitrator that fails to issue a final award in compliance with § 9-36-8(b) is not entitled to full

payment of the arbitrator's fees. The arbitrator's fees shall be reduced by twenty-five percent (25%)

if the final award is less than thirty (30) days late; the arbitrator's fees shall be reduced by seventy-

five percent (75%) if the final award is between thirty (30) and sixty (60) days late; and the

arbitrator's fees shall be reduced by one hundred percent (100%) if the final award is more than

sixty (60) days late; provided, however, upon petition by an arbitrator, the court of chancery may

summarily determine, on clear and convincing evidence, that exceptional circumstances exist such

that the reductions in fee provided in this subsection should be modified or eliminated.

     (c) An arbitrator may retain appropriate counsel, in consultation with the parties. The

arbitrator's counsel may make rulings on issues of law, to the extent requested to do so by the

arbitrator, which shall have the same effect as a ruling by the arbitrator, if the arbitrator so

determines. The fees and expenses incurred by the arbitrator's counsel shall be included in the

arbitrator's expenses described in subsection (b) of this section.

     (d) An arbitrator that fails to issue a final award in compliance with § 9-36-8(b) shall,

within ninety (90) days of the failure, report that failure to the clerk of the court of chancery,

indicating:

     (1) The date on which the arbitrator accepted appointment as an arbitrator; and

     (2) The date on which the final award was issued.

     9-36-7. Hearing -- Witnesses -- Prehearing evidence gathering -- Rulings before final

award.

     (a) Unless otherwise provided in an arbitration agreement, an arbitrator shall appoint a time

and place for a hearing or an adjourned hearing, either of which shall be held within the state unless

otherwise provided in an agreement. A party to an arbitration is entitled to be heard, to present

evidence relevant to the arbitration, and to cross-examine witnesses appearing at a hearing.

Notwithstanding the foregoing, an arbitrator may make such interim rulings and issue such interim

orders as the arbitrator deems necessary to determine what evidence and which witnesses may be

presented at the hearing, including to limit the presentation of evidence and witnesses as necessary

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to satisfy § 9-36-8(b). An arbitrator may resolve an arbitration on the evidence produced at a

hearing notwithstanding the failure of a party duly notified to appear or participate at the hearing.

     (b) Unless otherwise provided in an agreement, an arbitrator has the power to administer

oaths and may order the attendance of witnesses and the production of books, records, contracts,

papers, accounts, and all other documents and evidence under the control or in the possession of

the parties to the arbitration. Only if provided in the arbitration agreement, shall an arbitrator have

the power to issue subpoenas, and all provisions of law compelling a person under subpoena to

testify are applicable. Only if provided in the arbitration agreement, shall an arbitrator award

commissions to permit a deposition to be taken, in the manner and on the terms designated by the

arbitrator, of a witness who cannot be subpoenaed to appeal for the arbitration hearing.

     (c) An arbitrator may make such rulings, including rulings of law, and issue such orders or

impose such sanctions as the arbitrator deems proper to resolve an arbitration in a timely, efficient,

and orderly manner.

     9-36-8. Awards.

     (a) A final award shall be in writing and signed by an arbitrator, shall be provided to each

party to an arbitration, and shall include a form of judgment for entry under § 9-36-10. Unless

otherwise provided in an agreement, an arbitrator may make any award, whether legal or equitable

in nature, deemed appropriate by the arbitrator. Unless otherwise provided in an arbitration

agreement, an arbitrator may make in a final award rulings on any issue of law that the arbitrator

considers relevant to an arbitration.

     (b) Subject to subsection (c) of this section, an arbitrator shall issue a final award within

the time fixed by an agreement or, if not so fixed, within one hundred twenty (120) days of the

arbitrator's acceptance of the arbitrator's appointment.

     (c) Parties to an arbitration may extend the time for the final award by unanimous consent

in writing either before or after the expiration of that time, but the extension may not exceed,

whether singly or in the aggregate, sixty (60) days after the expiration of the period set by

subsection (b) of this section.

     9-36-9. Challenges -- Court powers to vacate, modify, or correct a final award.

     (a) An appeal to a final award may be taken to the supreme court in the manner as appeals

are taken from orders or judgments in a civil action.

     (b) An appeal to a final award shall be taken within fifteen (15) days of the issuance of the

final award.

     (c) In an appeal of a final award, the supreme court may only vacate, modify, or correct the

final award in conformity with the Federal Arbitration Act, 9 U.S.C. §§ 1-16; 9 U.S.C. §§ 201-208;

LC006320 - Page 17 of 26

9 U.S.C. §§ 301-307. The supreme court shall have the authority to order confirmation of a final

award, which confirmation shall be deemed to be confirmation under § 9-36-10(a).

     (d) Notwithstanding any other provision of this section, an agreement may provide for:

     (1) No appellate review of a final award; or

     (2) Appellate review of a final award by one or more arbitrators, in which case appellate

review shall proceed as provided in the agreement. An appellate arbitrator may be appointed by the

court of chancery of the state under § 9-36-5. An appellate arbitrator shall have authority to order

confirmation of a final award, which confirmation shall be deemed to be confirmation under § 9-

36-10(a).

     9-36-10. Confirmation of a final award -- Judgment on final award.

     (a) Unless an appeal is taken under § 9-36-9 or unless an agreement provides for appellate

review by one or more arbitrators, a final award, without further action by the court of chancery of

the state, is deemed to have been confirmed by the court of chancery on the fifth business day

following the period for appeal under § 9-36-9(b). If an agreement provides for no appellate review

of a final award, the final award is deemed to have been so confirmed on the fifth business day

following the award's issuance.

     (b) Except for a final award solely for money damages, upon application to the court of

chancery by a party to an arbitration in which a final award has been confirmed under subsection

(a) of this section, the court of chancery shall promptly enter a final judgment in conformity with

that final award. A final judgment, so entered, has the same effect as if rendered in an action by the

court of chancery.

     (c) If a final award is solely for money damages, upon application to the superior court by

a party to an arbitration in which a final award has been confirmed under subsection (a) of this

section, the clerk of the superior court shall promptly enter a judgment on the judgment docket in

conformity with that final award. The clerk of the superior court shall enter in the judgment docket

the names of the parties, the amount of the final award, the time from which interest, if any, runs,

and the amount of the costs, with the true date of the filing and entry. A final judgment, so entered,

has the same force and effect as if rendered in an action at law, and, from that date, and may be

perfected as a lien on all the real estate of the debtor, in the same manner and as fully as judgments

rendered in the superior court are perfected as liens, and may be executed and enforced in the same

way as judgments of the superior court.

     9-36-11. Application of chapter.

     It is the policy of this chapter to give maximum effect to the principle of freedom of

contract and to the enforceability of agreements.

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     9-36-12. Short title.

     This chapter may be cited as the "Rhode Island Rapid Arbitration Act."

     SECTION 9. Chapter 18-1 of the General Laws entitled "Application of Laws to Trusts"

is hereby amended by adding thereto the following section:

     18-1-6. Additional provisions governing trusts.

     (a) Notwithstanding any provisions to the contrary in this title 18 ("fiduciaries"), or this

chapter 1 of title 18 (“application of law to trusts”), the following provisions shall apply to any

trusts formed under the provisions of this chapter, effective July 1, 2026.

     (1) Trustees may allocate trustees' duties to different parties, in order to allow family

members or trusted advisors to retain control of investment and distribution decisions.

     (2) Trusts may be established to last for up to one thousand (1,000) years for an initial

period of the trust as so-called "dynasty trusts", and may be extended for additional one thousand

(1,000) year periods an infinite number of times.

     (3) Individuals inside or outside of Rhode Island may serve as trust protectors and trust

advisors through entities including LLCs, without any requirement to register with any Rhode

Island government entity.

     (4) Private settlement of trust matters without court supervision is permitted.

     (5) Holders of general powers of appointment, parents/guardians, or persons with

substantially similar interests may represent minor, unborn, or remainder beneficiaries.

     (6) Claims based on forced heirship, protecting beneficiaries whose families reside in

forced heirship jurisdictions, are hereinafter prohibited.

     (7) Trusts shall not be required to register and shall not be required to make any trust

documents publicly available, and there shall be automatically sealed any trust-related judicial

proceedings unless specifically ordered otherwise by a court of competent jurisdiction.

     (8) No contest or in terrorem clauses shall be generally presumed valid, without common

exceptions.

     (9) Self-settled or "domestic asset protection" trusts, as well as nominee trusts, are

recognized as permissible; provided, the length of time for creditor lookback provisions in domestic

asset protection trusts shall be two (2) years with a six (6) month period for known creditors.

     (10) Beneficiary notice requirements may be modified or eliminated by the trust document,

creating so-called "silent" or "quiet" trusts.

     (11) Trusts may remain in effect for the forever or in perpetuity, and the rule of perpetuities,

so called, shall not be applied to trusts.

     (12) Grantors of trusts may be beneficiaries.

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     (13) Community property trusts are recognized.

     (14) The state formally recognizes and adopts the provisions of the Uniform Directed Trust

Act.

     18-1-7. Nominee trusts established.

     (a) A nominee trust may be established in this state as follows:

     (1) The party seeking to establish a nominee trust must execute a certificate sworn to or

stated to be executed under the penalties of perjury, and in either case signed by a person who from

the records of the registry of deeds for the municipality in which real estate owned by a

nontestamentary trust lies, and that person appears to be a trustee thereunder and which certifies as

to the following:

     (i) The identity of the trustees or the beneficiaries thereunder;

     (ii) The authority of the trustees to act with respect to real estate owned by the trust; or

     (iii) The existence or nonexistence of a fact which constitutes a condition precedent to acts

by the trustees or which are in any other manner germane to affairs of the trust.

     (b) A document executed in compliance with and meeting the requirements of subsection

(a) of this section shall be binding on all trustees and the trust estate in favor of a purchaser or other

person relying in good faith on the certificate. The certificate most recently recorded in the registry

of deeds for the municipality in which the real estate lies shall control.

     SECTION 10. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business

Corporation Tax" is hereby amended to read as follows:

     44-11-2. Imposition of tax.

     (a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net

income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided

in §§ 44-11-13 — 44-11-15, for the taxable year. For tax years beginning on or after January 1,

2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net

income, as defined in § 44-11-13 — 44-11-15, for the taxable year.

     (b) A corporation shall pay the amount of any tax as computed in accordance with

subsection (a) after deducting from “net income,” as used in this section, fifty percent (50%) of the

excess of capital gains over capital losses realized during the taxable year, if for the taxable year:

     (1) The corporation is engaged in buying, selling, dealing in, or holding securities on its

own behalf and not as a broker, underwriter, or distributor;

     (2) Its gross receipts derived from these activities during the taxable year amounted to at

least ninety percent (90%) of its total gross receipts derived from all of its activities during the year.

“Gross receipts” means all receipts, whether in the form of money, credits, or other valuable

LC006320 - Page 20 of 26

consideration, received during the taxable year in connection with the conduct of the taxpayer's

activities.

     (c) A corporation shall not pay the amount of the tax computed on the basis of its net

income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for

each one hundred dollars ($100) of gross income for the taxable year or a tax of one hundred dollars

($100), whichever tax shall be the greater, if for the taxable year the corporation is either a “personal

holding company” registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-

1 et seq., “regulated investment company,” or a “real estate investment trust” as defined in the

federal income tax law applicable to the taxable year. “Gross income” means gross income as

defined in the federal income tax law applicable to the taxable year, plus:

     (1) Any interest not included in the federal gross income; minus

     (2) Interest on obligations of the United States or its possessions, and other interest exempt

from taxation by this state; and minus

     (3) Fifty percent (50%) of the excess of capital gains over capital losses realized during the

taxable year.

     (d)(1) A small business corporation having an election in effect under subchapter S, 26

U.S.C. § 1361 et seq., shall not be subject to the Rhode Island income tax on corporations, except

that the corporation shall be subject to the provisions of subsection (a), to the extent of the income

that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after

January 1, 2015, a small business corporation having an election in effect under subchapter S, 26

U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e).

     (2) The shareholders of the corporation who are residents of Rhode Island shall include in

their income their proportionate share of the corporation's federal taxable income.

     (3) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.]

     (4) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.]

     (e) Minimum tax. The tax imposed upon any corporation under this section, including a

small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et

seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after

January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400). Provided, for

tax years beginning after July 1, 2026, the minimum tax provided for under this subsection shall be

eliminated.

     SECTION 11. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 12.1

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FRANCHISE TAX

     44-12.1-1. Fee imposed.

     (a) Every corporation, joint-stock company, limited liability company, partnership,

statutory trusts or association incorporated in this state or qualified to do business in this state,

whether or not doing business for profit, shall pay an annual franchise fee to the state.

     (b) The franchise fee established herein shall be a minimum of four hundred fifty dollars

($450) for all noncorporation entities to include limited liability companies, partnerships, and

statutory trusts.

     (c) The franchise fee for corporations shall be based upon the number of shares issued, as

follows:

     (1) For a corporation with five thousand (5,000) authorized shares or less, the franchise fee

shall be four hundred fifty dollars ($450);

     (2) For a corporation with five thousand one (5,001) and up to ten thousand (10,000)

authorized shares, the franchise fee shall be seven hundred fifty dollars ($750); and

     (3) For a corporation with ten thousand one (10,001) authorized shares or more, the

franchise fee shall be one thousand dollars ($1,000).

     (d) The franchise fee as described in this section shall be deductible from and against the

business corporation tax described in § 44-11-2, or a corresponding tax owed by entities identified

in § 44-12.1-1(a).

     (e) As used in this chapter:

     (1) “Fee” means the franchise fee established pursuant to this section;

     (2) “Return” means the fee return describe in § 44-12.1-2; and

     (3) “Secretary” means the secretary of state.

     44-12.1-2. Filing of returns -- Contents.

     Every entity subject to the provisions of this chapter shall, on or before March 15, annually,

file with the secretary of state as of the last day of its next preceding taxable year a fee return

(hereinafter the “return”), under oath or affirmation, signed by its treasurer or by an authorized

officer or agent of the entity, if organized, and if not organized, under oath of someone authorized

to act by the entity, containing information as the secretary of state may require, including:

     (1) The name of the entity and the location of its principal office.

     (2) The amount of its capital stock authorized, and the par value thereof, if applicable.

     (3) The amount of its capital stock authorized, without par value, if applicable.

     44-12.1-3. Valuation of no-par stock.

     In the case of corporations having capital stock of no-par value, one hundred dollars ($100)

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per share shall be deemed to be the par value for the purposes of this chapter.

     44-12.1-4. Assessment of fee -- Notice of amount.

     The secretary of state, as soon as possible after the filing of the return, shall assess, as of

the last day of its next preceding taxable year, a fee upon each entity as provided in this chapter

and shall mail a notice of the amount of the fee to each entity, but failure to receive the notice shall

not invalidate the fee or excuse the nonpayment of the fee.

     44-12.1-4.1. Hearing on application.

     Any entity aggrieved by the action of the secretary of state in determining the amount of

any fee or penalty imposed under the provisions of this chapter may apply to the secretary of state

in writing, within thirty (30) days after the notice of the action is mailed to it, for a hearing relative

thereto. The secretary of state shall fix a time and place for the hearing and shall so notify the

applicant. At the hearing, the secretary shall correct manifest errors, if any, disclosed at the hearing

and assess and collect the lawfully due fee together with any penalty or interest on the fee.

     44-12.1-5. Payment of fee.

     The fee shall be payable at the earlier of March 15 or within fifteen (15) days after its

assessment and, if not paid when due, shall bear interest from the date of its assessment at the

annual rate provided by § 44-1-7 for interest on delinquent payment of state taxes, until paid.

     44-12.1-5.1. Claims for refund -- Hearing upon denial.

     (a) Any entity subject to the provisions of this chapter may file a claim for refund with the

secretary at any time within two (2) years after the fee has been paid. If the secretary shall determine

that the fee has been overpaid, the secretary shall make a refund with interest at the annual rate

provided by § 44-1-7.1 from the date of overpayment.

     (b) Any entity whose claim for refund has been denied may, within thirty (30) days from

the date of the mailing by the secretary of the notice of the decision, request a hearing, and the

secretary shall, as soon as practicable, set a time and place for the hearing and shall notify the

applicant.

     44-12.1-6. Penalty for failure to make return.

     If the fee and return that is required to be made by § 44-12.1-2 is not made within the time

fixed by this chapter, the officer or agent neglecting or refusing to make the return shall be fined

not exceeding five hundred dollars ($500).

     44-12.1-7. Lien on real estate.

     The fee shall from the date of assessment become a lien upon the real estate of the entity

liable for the fee until the fee is collected.

     44-12.1-8. Forfeiture of charter or articles for nonpayment of fee.

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     The secretary may, after July 15 of each year, make up a list of all entities which have

failed to pay any franchise fee assessed for two (2) years after the fee became due and payable,

shall certify to the correctness of the list, and shall file the list as a public record in the office of the

secretary of state. Upon the filing of the certified list, the charter, articles of organization, or articles

of association of each of the entities shall become forfeited by reason of the failure to pay the fee,

and all the entities shall cease to be bodies corporate, except as provided in § 7-1.2-1324. The

secretary of state shall mail a notice of the forfeiture of charter or articles to each entity at its last

known address, but failure to receive the notice shall not invalidate the forfeiture. Any entity or any

stockholder, officer, manager or agent of the entity, continuing to act thereafter under any forfeited

charter or articles, except as provided in § 7-1.2-1324, or pending an appeal from the forfeiture as

provided, shall be deemed guilty of a misdemeanor and upon conviction shall be fined not less than

fifty dollars ($50.00) nor more than one thousand dollars ($1,000) for each offense.

     44-12.1-9. Publication of forfeitures -- Vacation on payment of fee.

     The secretary of state shall publish on the secretary of state's website the names of all

entities whose charters or articles have been forfeited. The forfeiture shall be vacated as to any

entity, which shall pay all fees and all interest then due to the secretary within sixty (60) days of

the date of the publication.

     44-12.1-10. Appeal of forfeitures.

     Any entity, by any stockholder, equity owner, manager or officer of the entity, aggrieved

by the forfeiture of the charter or articles of the entity may appeal from the forfeiture, within thirty

(30) days from the date of the publication, to the sixth division of the district court, and the court

shall proceed as soon as possible to hear the appeal after the manner of equitable causes. If the

appellant shall show to the satisfaction of the court that the forfeiture of the charter or articles of

the entity was erroneous under the provisions, or that the fee assessed was improper or erroneous

in whole or in part, and in that case if the appellant shall pay all fees and all interest then due under

this chapter, then the court shall sustain the appeal and shall vacate the forfeiture as to the appellant

entity. Upon failure to show error in the forfeiture under the provisions, or to pay all fees and all

interest due, the court shall dismiss the appeal and confirm the forfeiture. Upon the sustaining of

the appeal of any entity, the clerk of the district court shall, within ten (10) days, file with the

secretary of state an attested copy of the decree vacating the forfeiture as to the appellant entity. A

party aggrieved by a final order of the court may seek review in the supreme court by writ of

certiorari in accordance with the procedures contained in § 42-35-16.

     44-12.1-11. Corporations exempt.

     The provisions of this section shall not apply to the following entities: Roger Williams

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General Hospital, Women and Infants Hospital of Rhode Island, Rhode Island Hospital, St. Joseph's

Hospital, Butler Hospital, Newport Hospital, South County Hospital, Lincoln School, St. George's

School, the Mary C. Wheeler School, Incorporated, insurance or surety companies, corporations

mentioned in §§ 7-6-4, 27-25-1, and 44-13-4, and all corporations exempt by charter or by the law

of this state.

     44-12.1-12. Declarations under penalty of perjury.

     The oath or affirmation required by this chapter as to any report or written statement shall

not be required if the report or statement to be sworn to contains or is verified by a written

declaration that it is made under the penalties of perjury; and whoever signs or issues any report or

statement containing or verified by a written declaration shall, if the report or statement is willfully

false, be guilty of perjury.

     44-12.1-13. Appeals -- Interest on refunds.

     Appeals from administrative orders or decisions made pursuant to any provisions of this

chapter shall be to the sixth division district court pursuant to chapter 8 of title 8. The right to appeal

shall be expressly made conditional upon prepayment of all fees, interest, and penalties unless the

entity moves for and is granted an exemption from the prepayment. If the court, after appeal, holds

that the entity is entitled to a refund, the entity shall also be paid interest on the amount at the rate

provided in § 44-1-7.1.

     SECTION 12. Section 6 of this act shall take effect July 1, 2027. Sections 10 and 11 of this

act shall take effect January 1, 2027. The remaining sections of this act shall take effect upon

passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATION ACT -- THE RHODE ISLAND BUSINESS CLIMATE

REFORM ACT

***

     This act would adopt a number of concepts from other jurisdictions with the goal of

promoting a stronger climate for business growth in Rhode Island. This act would impose a

"Franchise Fee" on most corporations, LLCs and partnerships, in lieu of the corporation tax. This

act would, further, create a court of chancery to handle actions in equity, establish numerous

provisions to govern arbitrations, and eliminate the cap on the homestead estate exemption.

     Section 6 of this act would take effect July 1, 2027. Sections 10 and 11 of this act would

take effect January 1, 2027. The remaining sections of this act would take effect upon passage.

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