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Lawmakers debate LLC buyout option and regulatory sandboxes to attract biotech and crypto firms
Summary
Representative Plaes introduced three bills: HB 7,339 would allow buyouts of LLC members who petition for dissolution; HB 7,413 and HB 7,337 would create regulatory sandboxes with limited, temporary statutory waivers (explicitly excluding human genetic modification and certain environmental and ethical protections). DBR raised staffing and fiscal concerns during the hearing.
Representative Plaes presented a package of bills aimed at encouraging business formation and innovation.
HB 7,339 would give remaining LLC members the option to buy out a member who seeks dissolution at fair market value — a change Plaes described as aligning Rhode Island with New York and Delaware and reducing the cost and disruption associated with dissolutions.
HB 7,413 (biotechnology) and HB 7,337 (cryptocurrency/blockchain) would establish regulatory sandboxes allowing approved participants to request temporary exemptions from certain state statutes and regulations during a limited trial period. Plaes emphasized the bills explicitly exclude human genetic modification, required federal and state environmental protections and ethical standards for human and animal research.
Plaes disputed parts of the Department of Business Regulation’s written comments that, he said, misread the bill and understated the statutory exemptions’ limits. DBR raised implementation concerns, estimating substantial initial fiscal impacts and the need for additional staff and scientific expertise to review applications.
Committee members asked whether existing regulatory sandboxes or programs already in place under previous secretarial actions addressed similar goals and whether DBR would coordinate with agencies such as the Department of Health or Department of Environmental Management on technical reviews. Plaes said DBR would be the coordinating agency and could seek expertise from other agencies as needed.
Discussion noted potential fiscal impacts and the need to balance regulatory flexibility with public safeguards; no committee vote on the bills’ merits was recorded during the hearing.
