Summary of Bill SB 2922 (Rhode Island, 2026)
Title: AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT — THE RHODE ISLAND CENTER FOR EMPLOYEE OWNERSHIP
Introduced: March 4, 2026 | Referred to: Senate Labor & Gaming | Sponsors: Senators Ciccone and DiPalma
Effective date: Upon passage
Status: As of April–May 2026, placed on the Senate Calendar; Committee recommends passage.
1) Purpose and Intent
- Create the Rhode Island Center for Employee Ownership (RICEO) to support and facilitate the transition of legacy Rhode Island small businesses to employee-owned business models.
- Address anticipated small business succession challenges, especially as a large share of owners nearing retirement, and improve business continuity, worker engagement, wages, and community benefits through employee ownership.
Key findings cited in the bill:
- Small businesses (about 98.9% of Rhode Island businesses) form the backbone of the economy.
- Retirement is a leading reason for small-business closures nationwide.
- A substantial share of Rhode Island business owners are age 55+, highlighting succession pressures.
- Many owners have not recently undertaken business valuations, which can hinder succession planning.
- Employee ownership is presented as a viable way to preserve legacy businesses and broaden ownership opportunities.
- Other states already operate Centers for Employee Ownership, suggesting a proven model.
2) Establishment and Scope (Chapter 42-169)
2.1 Establishment of RICEO
- The Rhode Island Center for Employee Ownership (RICEO) is created under Rhode Island’s General Laws, to be housed under the Business Development Center (as per § 42-64-39).
- The RICEO’s mission: secure resources, provide technical assistance, and act as a concierge service for legacy business owners and worker-owners exploring employee-owned transitions.
2.2 Director’s Responsibilities
The director of RICEO shall:
- Organize, administer, and operate RICEO; may contract out services as needed.
- Provide referral services to connect owners and worker-owners with legal, financial, and technical resources related to employee ownership.
- Partner with private/public/nonprofit entities (professional associations, financial institutions, chambers of commerce, unions, SBDCs, economic/workforce groups) to promote and educate about employee ownership and succession models.
- Collaborate with state agencies to reduce barriers and expand opportunities for employee-owned businesses.
- Create and maintain a network of technical support providers (CPAs, lawyers, municipal/state agencies, etc.).
- Engage financial institutions and other entities to shape lending guidance for employee-owned models.
- Develop programming to raise awareness of employee ownership as a solution to succession challenges.
- Maintain an inventory of employee-owned businesses (including ESOPs, worker cooperatives, employee ownership trusts).
- Measure outreach success and conduct research on business growth, stability, and employee engagement resulting from RICEO activities.
- Organize and chair the RICEO advisory committee.
3) RICEO Advisory Committee (Section 42-169-2)
3.1 Establishment and Purpose
- The advisory committee coordinates state resources, fosters collaboration between state agencies and small businesses, and promotes RICEO work. State agencies on the committee provide relevant information and assistance.
3.2 Membership and Structure
- Ex officio members (5 total):
- Director, Department of Labor and Training
- Director, Department of Business Regulation
- Director, Secretary of State’s Business Services Division
- Representative from the Rhode Island Commerce Corporation
- Director, RI District Office of the Small Business Administration
- Tenure and appointments: Eleven additional members designated for two-year terms, including:
- One member from each major house caucus (House and Senate)
- Lieutenant Governor-appointed representatives from:
- A worker cooperative business
- An ESOP business
- An Employee Ownership Trust business
- A Rhode Island chamber of commerce
- An RI-academic institution with expertise in employee ownership
- An SBDC representative
- RI Society of CPAs representative
- Leadership: An elected chair from among committee members; term is one year (may be renewed). The RICEO director chairs the first meeting prior to the chair’s election.
3.3 General Provisions
- The act provides for vacancies to be filled by the appointing authority.
- The committee’s purpose is to coordinate resources, promote collaboration, and advance the center’s mission.
4) Definitions (Section 42-169-3)
- Employee-owned business model: Any arrangement where employees own shares or the right to value of shares, including worker cooperatives, ESOPs, or Employee Ownership Trusts, with ownership benefiting all employees equally.
- Legacy small business: An existing RI small business not currently operating under an employee-ownership model.
- Succession planning: Replacing or transferring leadership within a business.
5) Additional Provisions
- Severability: If any provision is found unlawful, the rest remains in effect.
6) Likely Impacts
- For small business owners: A formal pathway and support system to transition to employee ownership (ESOPs, worker co-ops, or employee ownership trusts) instead of closure or sale to third parties.
- For employees: Potentially higher engagement, wages, and benefits through employee ownership structures.
- For government and public agencies: A centralized, coordinated approach to small business succession, leveraging partnerships with private and nonprofit sectors.
- For the economy of Rhode Island: Potential preservation of legacy businesses, reduced turnover, and broader distribution of ownership.
7) Timeline and Process
- The act becomes effective upon passage.
- Establishment and governance structures (RICEO and advisory committee) are created to begin operations as soon as the act is enacted.
- Ongoing reporting and measurement of outcomes are anticipated through RICEO’s duties (inventory, outreach metrics, and impact research).
If you’d like, I can compare SB 2922 to Rhode Island’s existing centers or to models in other states, or draft a one-page briefing for policymakers or stakeholders.
