2015 -- H 5971

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LC001783

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     

     Introduced By: Representative Raymond E. Gallison

     Date Introduced: March 25, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 44-5-22 and 44-5-69 of the General Laws in Chapter 44-5 entitled

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"Levy and Assessment of Local Taxes" are hereby amended to read as follows:

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     44-5-22. Certification of tax roll. -- The tax levy shall be applied to the assessment roll

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and the resulting tax roll certified by the assessors to the city or town clerk, city or town treasurer,

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or tax collector, as the case may be, and to the department of revenue division of municipal

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finance, not later than the next succeeding August 15. In the case of a fire district, the tax levy

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shall be applied to the assessment roll and the resulting tax roll certified by such fire district's tax

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assessor, treasurer, or other appropriate fire district official to the town clerk, town treasurer, tax

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assessor or tax collector, as the case may be, and to the department of revenue, division of

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municipal finance, not later than thirty (30) business days prior to its annual meeting ten (10)

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business days after the mailing of the first property tax bill.

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     44-5-69. Local fire districts -- Requirements of annual budget -- Annual financial

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statements and publication of property tax data. -- Every fire district authorized to assess and

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collect taxes on real and personal property in the several towns in the state shall be required to

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have annual financial statements audited by an independent auditing firm approved pursuant to §

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45-10-4 by the auditor general. The auditor general may waive or modify form and content of

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financial statements and scope of the audit, based upon the size of the fire districts. The financial

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statements for fiscal year 2015 and every fiscal year thereafter shall be presented at the district's

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first annual meeting subsequent to receipt of said financial statements. At least ten (10) days prior

 

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to said annual meeting, a copy of such financial statements shall be filed by the fire district with

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the town clerk for the town in which the district(s) is located. A copy of the financial statements

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shall be simultaneously sent to the auditor general and the division of municipal finance in the

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department of revenue. The fire districts shall also provide to the division of municipal finance in

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the department of revenue the adopted budget thirty (30) forty-five (45) days of final action, and

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other information on tax rates, budgets, assessed valuations, and other pertinent data upon forms

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provided by the division of municipal finance. The information shall be published by the

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department of revenue.

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     SECTION 2. Section 45-12-22.2 of the General Laws in Chapter 45-12 entitled

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"Indebtedness of Towns and Cities" is hereby amended to read as follows:

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     45-12-22.2. Monitoring of financial operations -- Corrective action. -- Subsections (a)

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through (e) below shall apply to cities and towns.

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      (a) The chief financial officer of each municipality and each school district within the

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state shall continuously monitor financial operations by tracking actual versus budgeted revenue

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and expense.

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      (b) The chief financial officer of the municipality shall submit a report on a monthly

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basis to the municipality's chief executive officer, each member of the city or town council, and

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school district committee certifying the status of the municipal budget from all fund sources,

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including the school department budget from all fund sources, or regional school district budget

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from all fund sources. The chief financial officer of the municipality shall also submit a quarterly

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report on or before the 25th day of the month succeeding the end of each fiscal quarter to the

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division of municipal finance, the commissioner of education, and the auditor general certifying

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the status of the municipal budget, including the school budget that has been certified by the

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school department. Each quarterly report submitted must be signed by the chief executive officer,

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chief financial officer, the superintendent of the school district, and chief financial officer for the

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school district. The report has to be submitted to the city own council president and the school

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committee chair. It is encouraged, but not required, to have the council president/school

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committee chair sign the report. The chief financial officer of the school department or school

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district shall certify the status of the school district's budget and shall assist in the preparation of

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these reports. The monthly and quarterly reports shall be in a format prescribed by the division of

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municipal finance, the commissioner of education, and the state auditor general. The reports shall

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contain a statement as to whether any actual or projected shortfalls in budget line items are

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expected to result in a year-end deficit; the projected impact on year-end financial results,

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including all accruals and encumbrances; and how the municipality and school district plans to

 

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address any such shortfalls. In the event that the school reporting is not provided, then state

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education aid may be withheld pursuant to the provisions of § 16-2-9.4(d).

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      (c) If any of the quarterly reports required under subsection (b) project a year-end deficit,

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the chief financial officer of the municipality shall submit to the state division of municipal

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finance, the commissioner of education, and the auditor general a corrective action plan signed by

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the chief executive officer and chief financial officer on or before the last day of the month

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succeeding the close of the fiscal quarter, which provides for the avoidance of a year-end deficit

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or structural deficit that could impact future years, and the school superintendent shall also

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comply with the provisions of § 16-2-11(c) to assist in this effort. The plan may include

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recommendations as to whether an increase in property taxes and/or spending cuts should be

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adopted to eliminate the deficit. The plan shall include a legal opinion by municipal counsel that

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the proposed actions under the plan are permissible under federal, state, and local law. The state

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division of municipal affairs may rely on the written representations made by the municipality in

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the plan and will not be required to perform an audit.

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      (d) If the division of municipal finance concludes the plan required hereunder is

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insufficient and/or fails to adequately address the financial condition of the municipality, the

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division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.

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      (e) The reports required shall include the financial operations of any departments or

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funds of municipal government, including the school department or the regional school district,

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notwithstanding the status of the entity as a separate legal body. This provision does not eliminate

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the additional requirements placed on local and regional school districts by §§ 16-2-9(f) and 16-3-

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11(e)(3).

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      Subsections (f) through (j) (k) below shall apply to fire districts.

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      (f) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire

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district within the state shall continuously monitor the fire district's financial operations by

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tracking actual versus budgeted revenue and expense.

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      (g) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire

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district shall submit a quarterly report on or before the 25th day of the month succeeding the end

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of each fiscal quarter to the division of municipal finance and the state auditor general certifying

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the status of the fire district's budget. Each quarterly report submitted must be signed by the chair

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of the governing body and the treasurer/chief financial officer. The report shall be submitted to

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the fire district clerk who shall send said report to the members of the governing body and the

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members of the town council. The quarterly reports shall be in a format prescribed by the division

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of municipal finance and the state auditor general. The reports shall contain a statement as to

 

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whether any actual or projected shortfalls in budget line items are expected to result in a year-end

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deficit; the projected impact on year-end financial results including all accruals and

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encumbrances; and how the fire district plans to address any such shortfalls.

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     (h) The auditor general may determine that certain fire districts, based on their size, may

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submit semi-annual budgets for actual comparison instead of quarterly reports.

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      (h)(i) If any of the quarterly reports or semi-annual budgets required under subsection (g)

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or (h) above project a year-end deficit, the treasurer/chief financial officer or other fiduciary, as

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applicable, of the fire district shall submit to the division of municipal finance and the state

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auditor general a corrective action plan signed by the chair of the governing body and

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treasurer/chief financial office, or other fiduciary as applicable, of the fire district on or before the

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last day of the month succeeding the close of the fiscal quarter, which provides for the avoidance

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of a year-end deficit or structural deficit that could impact future years. The plan may include

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recommendations as to whether an increase in property taxes and/or spending cuts should be

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adopted to eliminate the deficit. The plan shall include a legal opinion by legal counsel that the

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proposed actions under the plan are permissible under federal, state, and local law. Said plan shall

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be sent to the members of the fire district's governing body and the members of the town council.

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The division of municipal finance may rely on the written representations made by the governing

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body of the fire district in the plan and is not be required to perform an audit.

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      (i)(j) If the division of municipal finance concludes the plan required hereunder is

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insufficient and/or fails to adequately address the financial condition of the fire district, the

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division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.

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      (j)(k) The reports and plans required above shall also include, but not be limited to, a

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comprehensive overview of the financial operations of the fire district, including a list of the

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value of the fire district's assets (tangibles and intangibles) and liabilities.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

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     This act would amend the time period in which fire districts must certify tax rolls from

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not later than thirty (30) business days prior to a fire district's annual meeting to not later than ten

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(10) business days after mailing of the first property tax bill, and would amend the time period in

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which fire districts must provide adopted budgets from thirty (30) to forty-five (45) days of final

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action. This act would also require that quarterly reports and semi-annual budgets be submitted to

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the fire district clerk.

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     This act would take effect upon passage.

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