2013 -- H 5930

=======

LC02185

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO TAXATION - MAXIMUM LEVY

     

     

     Introduced By: Representatives McLaughlin, MacBeth, Phillips, Hull, and Bennett

     Date Introduced: March 27, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

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

1-2

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

1-3

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

1-4

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

1-5

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

1-6

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

1-7

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

1-8

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

1-9

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

1-10

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

1-11

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

1-12

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

1-13

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

1-14

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

1-15

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

1-16

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

1-17

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

1-18

in the department of revenue.

1-19

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

1-20

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

2-1

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

2-2

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

2-3

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

2-4

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

2-5

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

2-6

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

2-7

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

2-8

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

2-9

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

2-10

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

2-11

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

2-12

that city or town for its previous fiscal year.

2-13

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

2-14

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

2-15

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

2-16

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

2-17

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

2-18

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

2-19

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

2-20

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

2-21

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

2-22

qualifies under one or more of the following provisions:

2-23

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

2-24

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

2-25

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

2-26

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

2-27

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

2-28

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

2-29

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

2-30

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

2-31

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

2-32

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

2-33

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

2-34

section.

3-1

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

3-2

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

3-3

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

3-4

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

3-5

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

3-6

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

3-7

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

3-8

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

3-9

subsection (d) of this section.

3-10

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

3-11

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

3-12

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

3-13

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

3-14

for services is certified by the department of revenue.

3-15

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

3-16

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

3-17

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

3-18

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

3-19

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

3-20

approve the excess levy.

3-21

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

3-22

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

3-23

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

3-24

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

3-25

or charter.

3-26

     SECTION 2. This act shall take effect upon passage.

     

=======

LC02185

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - MAXIMUM LEVY

***

4-1

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

4-2

     This act would take effect upon passage.

     

=======

LC02185

=======

H5930