2013 -- H 5271

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LC00202

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION - MAXIMUM LEVY

     Introduced By: Representatives McLaughlin, Ackerman, Phillips, Newberry, and Costantino

     Date Introduced: February 06, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-5-2 of the General Laws in Chapter 44-5 entitled "Levy and

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Assessment of Local Taxes" is hereby amended to read as follows:

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     44-5-2. Maximum levy. -- (a) Through and including its fiscal year 2007, a city or town

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may levy a tax in an amount not more than five and one-half percent (5.5%) in excess of the

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amount levied and certified by that city or town for the prior year. Through and including its

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fiscal year 2007, but in no fiscal year thereafter, the amount levied by a city or town is deemed to

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be consistent with the five and one-half percent (5.5%) levy growth cap if the tax rate is not more

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than one hundred and five and one-half percent (105.5%) of the prior year's tax rate and the

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budget resolution or ordinance, as applicable, specifies that the tax rate is not increasing by more

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than five and one-half percent (5.5%) except as specified in subsection (c) of this section. In all

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years when a revaluation or update is not being implemented, a tax rate is deemed to be one

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hundred five and one-half percent (105.5%) or less of the prior year's tax rate if the tax on a

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parcel of real property, the value of which is unchanged for purpose of taxation, is no more than

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one hundred five and one-half percent (105.5%) of the prior year's tax on the same parcel of real

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property. In any year through and including fiscal year 2007 when a revaluation or update is

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being implemented, the tax rate is deemed to be one hundred five and one-half percent (105.5%)

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of the prior year's tax rate as certified by the division of property valuation and municipal finance

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in the department of revenue.

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      (b) In its fiscal year 2008, a city or town may levy a tax in an amount not more than five

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and one-quarter percent (5.25%) in excess of the total amount levied and certified by that city or

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town for its fiscal year 2007. In its fiscal year 2009, a city or town may levy a tax in an amount

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not more than five percent (5%) in excess of the total amount levied and certified by that city or

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town for its fiscal year 2008. In its fiscal year 2010, a city or town may levy a tax in an amount

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not more than four and three-quarters percent (4.75%) in excess of the total amount levied and

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certified by that city or town in its fiscal year 2009. In its fiscal year 2011, a city or town may

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levy a tax in an amount not more than four and one-half percent (4.5%) in excess of the total

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amount levied and certified by that city or town in its fiscal year 2010. In its fiscal year 2012, a

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city or town may levy a tax in an amount not more than four and one-quarter percent (4.25%) in

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excess of the total amount levied and certified by that city or town in its fiscal year 2011. In its

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fiscal year 2013 and in each fiscal year thereafter, a city or town or fire district, may levy a tax in

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an amount not more than four percent (4%) in excess of the total amount levied and certified by

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that city or town for its previous fiscal year.

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      (c) The division of property valuation in the department of revenue shall monitor city

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and town and fire districts' compliance with this levy cap, issue periodic reports to the general

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assembly on compliance, and make recommendations on the continuation or modification of the

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levy cap on or before December 31, 1987, December 31, 1990, and December 31, every third

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year thereafter. The chief elected official in each city and town and fire district shall provide to

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the division of property and municipal finance within thirty (30) days of final action, in the form

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required, the adopted tax levy and rate and other pertinent information.

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      (d) The amount levied by a city or town or fire district may exceed the percentage

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increase as specified in subsection (a) or (b) of this section if the city or town or fire district

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qualifies under one or more of the following provisions:

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      (1) The city or town or fire district forecasts or experiences a loss in total non-property

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tax revenues and the loss is certified by the department of revenue.

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      (2) The city or town or fire district experiences or anticipates an emergency situation,

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which causes or will cause the levy to exceed the percentage increase as specified in subsection

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(a) or (b) of this section. In the event of an emergency or an anticipated emergency, the city or

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town or fire district shall notify the auditor general who shall certify the existence or anticipated

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existence of the emergency. Without limiting the generality of the foregoing, an emergency shall

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be deemed to exist when the city or town or fire district experiences or anticipates health

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insurance costs, retirement contributions or utility expenditures which exceed the prior fiscal

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year's health insurance costs, retirement contributions or utility expenditures by a percentage

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greater than three (3) times the percentage increase as specified in subsection (a) or (b) of this

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section.

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      (3) A city or town or fire district forecasts or experiences debt services expenditures

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which exceed the prior year's debt service expenditures by an amount greater than the percentage

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increase as specified in subsection (a) or (b) of this section and which are the result of bonded

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debt issued in a manner consistent with general law or a special act. In the event of the debt

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service increase, the city or town or fire district shall notify the department of revenue which shall

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certify the debt service increase above the percentage increase as specified in subsection (a) or (b)

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of this section the prior year's debt service. No action approving or disapproving exceeding a levy

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cap under the provisions of this section affects the requirement to pay obligations as described in

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subsection (d) of this section.

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      (4) The city or town or fire district experiences substantial growth in its tax base as the

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result of major new construction which necessitates either significant infrastructure or school

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housing expenditures by the city or town or fire district or a significant increase in the need for

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essential municipal services or fire safety services and such increase in expenditures or demand

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for services is certified by the department of revenue.

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     (e) Any levy pursuant to subsection (d) of this section in excess of the percentage

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increase specified in subsection (a) or (b) of this section shall be approved by the affirmative vote

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of at least four-fifths (4/5) of the full membership of the governing body of the city or town or

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fire district or in the case of a city or town or fire district having a financial town meeting, or its

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equivalent, the majority of the electors present and voting at the town financial meeting shall also

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approve the excess levy.

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     (f) Nothing contained in this section constrains the payment of present or future

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obligations as prescribed by section 45-12-1, and all taxable property in each city or town or fire

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district is subject to taxation without limitation as to rate or amount to pay general obligation

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bonds or notes of the city or town or fire district except as otherwise specifically provided by law

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or charter.

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     SECTION 2. This act shall take effect upon passage.

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LC00202

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - MAXIMUM LEVY

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     This act would make fire districts subject to the maximum levy.

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     This act would take effect upon passage.

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