As used in this chapter:

(1)  “Adjudicative officer” means the deciding official, without regard to whether the official is designated as an administrative law judge, a hearing officer or examiner, or otherwise, who presided at the adversary adjudication.

(2)  “Adjudicatory proceedings” means any proceeding conducted by, or on behalf of, the state, administratively or quasi-judicially, which may result in the loss of benefits; the imposition of a fine; the adjustment of a tax assessment; the denial, suspension, or revocation of a license or permit; or which may result in the compulsion or restriction of the activities of a party. Any agency charged by statute with investigating complaints shall be deemed to have substantial justification for the investigation and for the proceedings subsequent to the investigation.

(3)  “Agency” means any state and/or municipal board, commission, council, department, or officer, other than the legislature or the courts, authorized by law to make rules or to determine contested cases; to bring any action at law or in equity, including, but not limited to, injunctive and other relief; or to initiate criminal proceedings. This shall include contract boards of appeal, tax proceedings, and employment security administrative proceedings.

(4)  “Municipality” means the individual cities and towns in the state of Rhode Island and including, but not limited to, any city or town housing authority, fire, water, sewer district, local or regional school district, public building authority, or other municipal financed agency or department.

(5)  “Party” means any individual whose net worth is less than five hundred thousand dollars ($500,000) at the time the adversary adjudication was initiated; and, any individual, partnership, corporation, association, or private organization doing business and located in the state, which is independently owned and operated, not dominant in its field, and which employs one hundred (100) or fewer persons at the time the adversary adjudication was initiated.

(6)  “Reasonable litigation expenses” means those expenses which were reasonably incurred by a party in adjudicatory proceedings, including, but not limited to, attorney’s fees, witness fees of all necessary witnesses, and other costs and expenses as were reasonably incurred, except that:

(i)  The award of attorney’s fees may not exceed one hundred fifty dollars ($150) per hour, unless the court determines that special factors justify a higher fee;

(ii)  No expert witness may be compensated at a rate in excess of the highest rate of compensation for experts paid by this state.

(7)  “Substantial justification” means that the initial position of the agency, as well as the agency’s position in the proceedings, has a reasonable basis in law and fact.