2021 -- H 5808

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LC001758

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

____________

A N   A C T

RELATING TO TOWNS AND CITIES -- GENERAL POWERS

     

     Introduced By: Representatives Morales, Williams, Ranglin-Vassell, Lombardi, and
Batista

     Date Introduced: February 24, 2021

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 45-2 of the General Laws entitled "General Powers" is hereby

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amended by adding thereto the following section:

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     45-2-2.2. Power to tax educational tuition, room and board.

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     (a) Definitions: As used in this section, the following words shall have the following

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meanings:

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     (1) “Net tuition income” means the income derived by a private educational institution

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from student tuition, room, and board, plus any fees paid by the student, minus any financial aid

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awarded to the student in the form of grants. Financial aid in the form of loans shall not affect the

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calculation of net tuition income.

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     (2) “Private institution of higher education” means a private college, university, or

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seminary.

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     (3) “Private institution of K-12 education” means a private school containing any grades

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from kindergarten through grade twelve (K-12); provided, however that, should such a school also

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contain a pre-kindergarten program, that program shall not be considered part of the private

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institution of K-12 education, and no pre-kindergarten tuition shall be taxable under this section.

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     (b)(1) Every municipality may impose an annual tax upon net tuition income of a private

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institution of K-12 education or a private institution of higher education located within the

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municipality.

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     (2) The municipality may adopt by ordinance the tax rate structure and brackets subject to

 

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the following:

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     (i) For every private institution of K-12 education, no tax shall be imposed on the first

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thirteen thousand dollars ($13,000) of annual net tuition income from any individual student. The

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amount exempt from taxation shall be adjusted annually by the total percentage increase in the

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Nominal Gross Domestic Product of the United States (NGDP) published by the United States

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Department of Commerce Bureau of Economic Analysis;

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     (ii) For every private institution of higher education, no tax shall be imposed on the first

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twenty-five thousand dollars ($25,000) of annual net tuition income from any individual student.

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The amount exempt from taxation shall be adjusted annually by the total percentage increase in the

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Nominal Gross Domestic Product of the United States (NGDP) published by the United States

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Department of Commerce Bureau of Economic Analysis; and

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     (iii) The municipality shall have the authority to create programs for tax credits against this

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tax.

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     (3) All revenue raised from this tax shall not count towards the maximum levy established

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in § 44-5-2.

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     SECTION 2. Sections 44-3-3 and 44-3-17 of the General Laws in Chapter 44-3 entitled

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"Property Subject to Taxation" are hereby amended to read as follows:

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     44-3-3. Property exempt.

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     (a) The following property is exempt from taxation:

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     (1) Property belonging to the state, except as provided in § 44-4-4.1;

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     (2) Lands ceded or belonging to the United States;

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     (3) Bonds and other securities issued and exempted from taxation by the government of

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the United States or of this state;

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     (4) Real estate, used exclusively for military purposes, owned by chartered or incorporated

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organizations approved by the adjutant general and composed of members of the national guard,

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the naval militia, or the independent, chartered-military organizations;

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     (5) Buildings for free public schools, buildings for religious worship, and the land upon

28

which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so

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far as the buildings and land are occupied and used exclusively for religious or educational

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purposes;

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     (6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or

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the minimum lot size for zone in which the dwelling house is located, whichever is the greater,

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owned by, or held in trust for, any religious organization and actually used by its officiating clergy;

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provided, further, that in the town of Charlestown, where the property previously described in this

 

LC001758 - Page 2 of 14

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paragraph is exempt in total, along with dwelling houses and the land on which they stand in

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Charlestown, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling

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house is located, whichever is the greater, owned by, or held in trust for, any religious organization

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and actually used by its officiating clergy, or used as a convent, nunnery, or retreat center by its

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religious order;

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     (7) Intangible personal property owned by, or held in trust for, any religious or charitable

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organization, if the principal or income is used or appropriated for religious or charitable purposes;

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     (8) Buildings and personal estate owned by any corporation used for a school, academy, or

9

seminary of learning, and of any incorporated public charitable institution, and the land upon which

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the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far

11

as they are used exclusively for educational purposes, but no property or estate whatever is hereafter

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exempt from taxation in any case where any part of its income or profits, or of the business carried

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on there, is divided among its owners or stockholders; provided, however, that unless any private

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nonprofit corporation organized as a college or university located in the town of Smithfield reaches

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a memorandum of agreement with the town of Smithfield, the town of Smithfield shall bill the

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actual costs for police, fire, and rescue services supplied, unless otherwise reimbursed, to said

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corporation commencing March 1, 2014; provided further, that, municipalities may impose an

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income tax on the net tuition income of private institutions of education located in the state pursuant

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to the terms set forth in §45-2-2.2;

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     (9) Estates, persons, and families of the president and professors for the time being of

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Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer's

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estate, person, and family included, but only to the extent that any person had claimed and utilized

23

the exemption prior to, and for a period ending, either on or after December 31, 1996;

24

     (10) Property especially exempt by charter unless the exemption has been waived in whole

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or in part;

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     (11) Lots of land exclusively for burial grounds;

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     (12) Property, real and personal, held for, or by, an incorporated library, society, or any

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free public library, or any free public library society, so far as the property is held exclusively for

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library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor

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generally, or for a nonprofit hospital for the sick or disabled;

31

     (13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated

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organizations of veterans of any war in which the United States has been engaged, the parent body

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of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars

34

($400,000) if actually used and occupied by the association; provided, that the city council of the

 

LC001758 - Page 3 of 14

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city of Cranston may by ordinance exempt the real or personal estate as previously described in

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this subdivision located within the city of Cranston to the extent of five hundred thousand dollars

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($500,000);

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     (14) Property, real and personal, held for, or by, the fraternal corporation, association, or

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body created to build and maintain a building or buildings for its meetings or the meetings of the

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general assembly of its members, or subordinate bodies of the fraternity, and for the

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accommodation of other fraternal bodies or associations, the entire net income of which real and

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personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or

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asylums, a home or homes, a school or schools, for the free education or relief of the members of

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the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their

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wives, widows, or orphans, and any fund given or held for the purpose of public education,

12

almshouses, and the land and buildings used in connection therewith;

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     (15) Real estate and personal property of any incorporated volunteer fire engine company

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or incorporated volunteer ambulance or rescue corps in active service;

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     (16) The estate of any person who, in the judgment of the assessors, is unable from infirmity

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or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax

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shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption.

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At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold

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or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the

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lien immediately becomes due and payable; any person claiming the exemption aggrieved by an

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adverse decision of an assessor shall appeal the decision to the local board of tax review and

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thereafter according to the provisions of § 44-5-26;

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     (17) Household furniture and family stores of a housekeeper in the whole, including

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clothing, bedding, and other white goods, books, and all other tangible personal property items that

25

are common to the normal household;

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     (18) Improvements made to any real property to provide a shelter and fallout protection

27

from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that

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the improvements meet applicable standards for shelter construction established, from time to time,

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by the Rhode Island emergency management agency. The improvements are deemed to comply

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with the provisions of any building code or ordinance with respect to the materials or the methods

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of construction used and any shelter or its establishment is deemed to comply with the provisions

32

of any zoning code or ordinance;

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     (19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator;

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     (20) Manufacturer's inventory.

 

LC001758 - Page 4 of 14

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     (i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be

2

a manufacturer within a city or town within this state if that person uses any premises, room, or

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place in it primarily for the purpose of transforming raw materials into a finished product for trade

4

through any or all of the following operations: adapting, altering, finishing, making, and

5

ornamenting; provided, that public utilities; non-regulated power producers commencing

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commercial operation by selling electricity at retail or taking title to generating facilities on or after

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July 1, 1997; building and construction contractors; warehousing operations, including distribution

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bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing

9

or distribution of raw materials, such as alteration of stock for the convenience of a customer; are

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excluded from this definition;

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     (ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term "manufacturer's

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inventory," or any similar term, means and includes the manufacturer's raw materials, the

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manufacturer's work in process, and finished products manufactured by the manufacturer in this

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state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested;

15

provided, that the term does not include any finished products held by the manufacturer in any retail

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store or other similar selling place operated by the manufacturer whether or not the retail

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establishment is located in the same building in which the manufacturer operates the manufacturing

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plant;

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     (iii) For the purpose of § 44-11-2, a "manufacturer" is a person whose principal business

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in this state consists of transforming raw materials into a finished product for trade through any or

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all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be

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principally engaged if the gross receipts that person derived from the manufacturing operations in

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this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than

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fifty percent (50%) of the total gross receipts that person derived from all the business activities in

25

which that person engaged in this state during the taxable year. For the purpose of computing the

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percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished

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products manufactured by the manufacturer in this state, even though the manufacturer's store or

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other selling place may be at a different location from the location of the manufacturer's

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manufacturing plant in this state, are deemed to have been derived from manufacturing;

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     (iv) Within the meaning of the preceding paragraphs of this subdivision, the term

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"manufacturer" also includes persons who are principally engaged in any of the general activities

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coded and listed as establishments engaged in manufacturing in the Standard Industrial

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Classification Manual prepared by the Technical Committee on Industrial Classification, Office of

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Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as

 

LC001758 - Page 5 of 14

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revised from time to time, but eliminating as manufacturers those persons, who, because of their

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limited type of manufacturing activities, are classified in the manual as falling within the trade

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rather than an industrial classification of manufacturers. Among those thus eliminated, and

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accordingly also excluded as manufacturers within the meaning of this paragraph, are persons

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primarily engaged in selling, to the general public, products produced on the premises from which

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they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and

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custom tailors, except, that a person who manufactures bakery products for sale primarily for home

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delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are

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operated by the person, is a manufacturer within the meaning of this paragraph;

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     (v) The term "Person" means and includes, as appropriate, a person, partnership, or

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corporation; and

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     (vi) The department of revenue shall provide to the local assessors any assistance that is

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necessary in determining the proper application of the definitions in this subdivision;

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     (21) Real and tangible personal property acquired to provide a treatment facility used

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primarily to control the pollution or contamination of the waters or the air of the state, as defined

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in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed,

17

reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or

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standards for the control of water or air pollution or contamination, and certified as approved in an

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order entered by the director of environmental management. The property is exempt as long as it is

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operated properly in compliance with the order of approval of the director of environmental

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management; provided, that any grant of the exemption by the director of environmental

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management in excess of ten (10) years is approved by the city or town in which the property is

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situated. This provision applies only to water and air pollution control properties and facilities

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installed for the treatment of waste waters and air contaminants resulting from industrial

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processing; furthermore, it applies only to water or air pollution control properties and facilities

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placed in operation for the first time after April 13, 1970;

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     (22) New manufacturing machinery and equipment acquired or used by a manufacturer and

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purchased after December 31, 1974. Manufacturing machinery and equipment is defined as:

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     (i) Machinery and equipment used exclusively in the actual manufacture or conversion of

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raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision

31

(20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and

32

development or for quality assurance of its manufactured products;

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     (ii) Machinery and equipment that is partially used in the actual manufacture or conversion

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of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision

 

LC001758 - Page 6 of 14

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(20), and machinery, fixtures, and equipment used by a manufacturer for research and development

2

or for quality assurance of its manufactured products, to the extent to which the machinery and

3

equipment is used for the manufacturing processes, research and development, or quality assurance.

4

In the instances where machinery and equipment is used in both manufacturing and/or research and

5

development and/or quality assurance activities and non-manufacturing activities, the assessment

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on machinery and equipment is prorated by applying the percentage of usage of the equipment for

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the manufacturing, research and development, and quality-assurance activity to the value of the

8

machinery and equipment for purposes of taxation, and the portion of the value used for

9

manufacturing, research and development, and quality assurance is exempt from taxation. The

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burden of demonstrating this percentage usage of machinery and equipment for manufacturing and

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for research and development and/or quality assurance of its manufactured products rests with the

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manufacturer; and

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     (iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was

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purchased after July 1, 1997; provided that the city or town council of the city or town in which the

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machinery and equipment is located adopts an ordinance exempting the machinery and equipment

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from taxation. For purposes of this subsection, city councils and town councils of any municipality

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may, by ordinance, wholly or partially exempt from taxation the machinery and equipment

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discussed in this subsection for the period of time established in the ordinance and may, by

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ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any

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exemption permitted under this section; provided, that the ordinance does not apply to any

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machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates

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from a city or town in this state to another city or town in the state;

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     (23) Precious metal bullion, meaning any elementary metal that has been put through a

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process of melting or refining, and that is in a state or condition that its value depends upon its

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content and not its form. The term does not include fabricated precious metal that has been

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processed or manufactured for some one or more specific and customary industrial, professional,

27

or artistic uses;

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     (24) Hydroelectric power-generation equipment, which includes, but is not limited to,

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turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers,

30

protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The

31

hydroelectric power-generation equipment must have been purchased after July 1, 1979, and

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acquired or used by a person or corporation who or that owns or leases a dam and utilizes the

33

equipment to generate hydroelectric power;

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     (25) Subject to authorization by formal action of the council of any city or town, any real

 

LC001758 - Page 7 of 14

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or personal property owned by, held in trust for, or leased to an organization incorporated under

2

chapter 6 of title 7, as amended, or an organization meeting the definition of "charitable trust" set

3

out in § 18-9-4, as amended, or an organization incorporated under the not-for-profits statutes of

4

another state or the District of Columbia, the purpose of which is the conserving of open space, as

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that term is defined in chapter 36 of title 45, as amended, provided the property is used exclusively

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for the purposes of the organization;

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     (26) Tangible personal property, the primary function of which is the recycling, reuse, or

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recovery of materials (other than precious metals, as defined in § 44-18-30(24)(ii) and (iii)), from,

9

or the treatment of "hazardous wastes," as defined in § 23-19.1-4, where the "hazardous wastes"

10

are generated primarily by the same taxpayer and where the personal property is located at, in, or

11

adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order

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from the director of the department of environmental management certifying that the tangible

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personal property has this function, which order effects a conclusive presumption that the tangible

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personal property qualifies for the exemption under this subdivision. If any information relating to

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secret processes or methods of manufacture, production, or treatment is disclosed to the department

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of environmental management only to procure an order, and is a "trade secret" as defined in § 28-

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21-10(b), it shall not be open to public inspection or publicly disclosed unless disclosure is

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otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23;

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     (27) Motorboats as defined in § 46-22-2 for which the annual fee required in § 46-22-4 has

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been paid;

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     (28) Real and personal property of the Providence Performing Arts Center, a non-business

22

corporation as of December 31, 1986;

23

     (29) Tangible personal property owned by, and used exclusively for the purposes of, any

24

religious organization located in the city of Cranston;

25

     (30) Real and personal property of the Travelers Aid Society of Rhode Island, a nonprofit

26

corporation, the Union Mall Real Estate Corporation, and any limited partnership or limited liability

27

company that is formed in connection with, or to facilitate the acquisition of, the Providence YMCA

28

Building;

29

     (31) Real and personal property of Meeting Street Center or MSC Realty, Inc., both not-

30

for-profit Rhode Island corporations, and any other corporation, limited partnership, or limited

31

liability company that is formed in connection with, or to facilitate the acquisition of, the properties

32

designated as the Meeting Street National Center of Excellence on Eddy Street in Providence,

33

Rhode Island;

34

     (32) The buildings, personal property, and land upon which the buildings stand, located on

 

LC001758 - Page 8 of 14

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Pomham Island, East Providence, currently identified as Assessor's Map 211, Block 01, Parcel

2

001.00, that consists of approximately twenty-one thousand three hundred (21,300) square feet and

3

is located approximately eight hundred sixty feet (860'), more or less, from the shore, and limited

4

exclusively to these said buildings, personal estate and land, provided that said property is owned

5

by a qualified 501(c)(3) organization, such as the American Lighthouse Foundation, and is used

6

exclusively for a lighthouse;

7

     (33) The Stadium Theatre Performing Arts Centre building located in Monument Square,

8

Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by

9

the Stadium Theatre Foundation, a Rhode Island nonprofit corporation;

10

     (34) Real and tangible personal property of St. Mary Academy – Bay View, located in East

11

Providence, Rhode Island;

12

     (35) Real and personal property of East Bay Community Action Program and its

13

predecessor, Self Help, Inc; provided, that the organization is qualified as a tax-exempt corporation

14

under § 501(c)(3) of the United States Internal Revenue Code;

15

     (36) Real and personal property located within the city of East Providence of the Columbus

16

Club of East Providence, a Rhode Island charitable nonprofit corporation;

17

     (37) Real and personal property located within the city of East Providence of the Columbus

18

Club of Barrington, a Rhode Island charitable nonprofit corporation;

19

     (38) Real and personal property located within the city of East Providence of Lodge 2337

20

BPO Elks, a Rhode Island nonprofit corporation;

21

     (39) Real and personal property located within the city of East Providence of the St.

22

Andrews Lodge No. 39, a Rhode Island charitable nonprofit corporation;

23

     (40) Real and personal property located within the city of East Providence of the Trustees

24

of Methodist Health and Welfare service a/k/a United Methodist Elder Care, a Rhode Island

25

nonprofit corporation;

26

     (41) Real and personal property located on the first floor of 90 Leonard Avenue within the

27

city of East Providence of the Zion Gospel Temple, Inc., a religious nonprofit corporation;

28

     (42) Real and personal property located within the city of East Providence of the Cape

29

Verdean Museum Exhibit, a Rhode Island nonprofit corporation;

30

     (43) The real and personal property owned by a qualified 501(c)(3) organization that is

31

affiliated and in good standing with a national, congressionally chartered organization and thereby

32

adheres to that organization's standards and provides activities designed for recreational,

33

educational, and character building purposes for children from ages six (6) years to seventeen (17)

34

years;

 

LC001758 - Page 9 of 14

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     (44) Real and personal property of the Rhode Island Philharmonic Orchestra and Music

2

School; provided, that the organization is qualified as a tax-exempt corporation under § 501(c)(3)

3

of the United States Internal Revenue Code;

4

     (45) The real and personal property located within the town of West Warwick at 211

5

Cowesett Avenue, Plat 29-Lot 25, which consists of approximately twenty-eight thousand seven

6

hundred fifty (28,750) square feet and is owned by the Station Fire Memorial Foundation of East

7

Greenwich, a Rhode Island nonprofit corporation;

8

     (46) Real and personal property of the Comprehensive Community Action Program, a

9

qualified tax-exempt corporation under § 501(c)(3) of the United States Internal Revenue Code;

10

     (47) Real and personal property located at 52 Plain Street, within the city of Pawtucket of

11

the Pawtucket Youth Soccer Association, a Rhode Island nonprofit corporation;

12

     (48) Renewable energy resources, as defined in § 39-26-5, used in residential systems and

13

associated equipment used therewith in service after December 31, 2015;

14

     (49) Renewable energy resources, as defined in § 39-26-5, if employed by a manufacturer,

15

as defined in subsection (a) of this section, shall be exempt from taxation in accordance with

16

subsection (a) of this section;

17

     (50) Real and personal property located at 415 Tower Hill Road within the town of North

18

Kingstown, of South County Community Action, Inc., a qualified tax-exempt corporation under §

19

501(c)(3) of the United States Internal Revenue Code;

20

     (51) As an effort to promote business growth, tangible business or personal property, in

21

whole or in part, within the town of Charlestown's community limits, subject to authorization by

22

formal action of the town council of the town of Charlestown;

23

     (52) All real and personal property located at 1300 Frenchtown Road, within the town of

24

East Greenwich, identified as assessor's map 027, plat 019, lot 071, and known as the New England

25

Wireless and Steam Museum, Inc., a qualified tax-exempt corporation under § 501(c)(3) of the

26

United States Internal Revenue Code;

27

     (53) Real and tangible personal property of Mount Saint Charles Academy located within

28

the city of Woonsocket, specifically identified as the following assessor's plats and lots: Logee

29

Street, plat 23, lot 62, Logee Street, plat 24, lots 304 and 305; Welles Street, plat 23, lot 310;

30

Monroe Street, plat 23, lot 312; and Roberge Avenue, plat 24, lot 47;

31

     (54) Real and tangible personal property of Steere House, a Rhode Island nonprofit

32

corporation, located in Providence, Rhode Island;

33

     (55) Real and personal property located within the town of West Warwick of Tides Family

 

LC001758 - Page 10 of 14

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Services, Inc., a Rhode Island nonprofit corporation;

2

     (56) Real and personal property of Tides Family Services, Inc., a Rhode Island nonprofit

3

corporation, located in the city of Pawtucket at 242 Dexter Street, plat 44, lot 444;

4

     (57) Real and personal property located within the town of Middletown of Lucy's Hearth,

5

a Rhode Island nonprofit corporation;

6

     (58) Real and tangible personal property of Habitat for Humanity of Rhode Island–Greater

7

Providence, Inc., a Rhode Island nonprofit corporation, located in Providence, Rhode Island;

8

     (59) Real and personal property of the Artic Playhouse, a Rhode Island nonprofit

9

corporation, located in the town of West Warwick at 1249 Main Street;

10

     (60) Real and personal property located at 321 Main Street, within the town of South

11

Kingstown, of the Contemporary Theatre Company, a qualified, tax-exempt corporation under §

12

501(c)(3) of the United States Internal Revenue Code;

13

     (61) Real and personal property of The Samaritans, Inc., a Rhode Island nonprofit §

14

501(c)(3) corporation located at 67 Park Place, Pawtucket, Rhode Island, to the extent the city

15

council of Pawtucket may from time to time determine;

16

     (62) Real and personal property of North Kingstown, Exeter Animal Protection League,

17

Inc., dba "Pet Refuge," 500 Stony Lane, a Rhode Island nonprofit corporation, located in North

18

Kingstown, Rhode Island;

19

     (63) Real and personal property located within the city of East Providence of Foster

20

Forward (formerly the Rhode Island Foster Parents Association), a Rhode Island charitable

21

nonprofit corporation;

22

     (64) Real and personal property located at 54 Kelly Avenue within the town of East

23

Providence, of the Associated Radio Amateurs of Southern New England, a Rhode Island nonprofit

24

corporation;

25

     (65) Real and tangible personal property of Providence Country Day School, a Rhode

26

Island nonprofit corporation, located in East Providence, Rhode Island and further identified as plat

27

406, block 6, lot 6, and plat 506, block 1, lot 8;

28

     (66) As an effort to promote business growth, tangible business or personal property, in

29

whole or in part, within the town of Bristol's community limits, subject to authorization by formal

30

action of the town council of the town of Bristol; and

31

     (67) Real and tangible personal property of the Heritage Harbor Foundation, a Rhode

32

Island nonprofit corporation, located at 1445 Wampanoag Trail, Suites 103 and 201, within the city

33

of East Providence.

34

     (b) Except as provided below, when a city or town taxes a for-profit hospital facility, the

 

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1

value of its real property shall be the value determined by the most recent full revaluation or

2

statistical property update performed by the city or town; provided, however, in the year a nonprofit

3

hospital facility converts to or otherwise becomes a for-profit hospital facility, or a for-profit

4

hospital facility is initially established, the value of the real property and personal property of the

5

for-profit hospital facility shall be determined by a valuation performed by the assessor for the

6

purpose of determining an initial assessed value of real and personal property, not previously taxed

7

by the city or town, as of the most recent date of assessment pursuant to § 44-5-1, subject to a right

8

of appeal by the for-profit hospital facility which shall be made to the city or town tax assessor with

9

a direct appeal from an adverse decision to the Rhode Island superior court business calendar.

10

     A "for-profit hospital facility" includes all real and personal property affiliated with any

11

hospital as identified in an application filed pursuant to chapter 17 or 17.14 of title 23.

12

Notwithstanding the above, a city or town may enter into a stabilization agreement with a for-profit

13

hospital facility under § 44-3-9 or other laws specific to the particular city or town relating to

14

stabilization agreements. In a year in which a nonprofit hospital facility converts to, or otherwise

15

becomes, a for-profit hospital facility, or a for-profit hospital facility is otherwise established, in

16

that year only the amount levied by the city or town and/or the amount payable under the

17

stabilization agreement for that year related to the for-profit hospital facility shall not be counted

18

towards determining the maximum tax levy permitted under § 44-5-2.

19

     44-3-17. Tax exempt property -- Listing and valuation.

20

     (a) The tax assessor of every city and town shall annually list the estimated value of the

21

property, which is exempt from taxation because of the nonprofit status of the owner of the land.

22

     (b) The annual list, created pursuant to the provisions of subsection (a) of this section, shall

23

include an explanation of each exemption including a citation to any relevant general laws

24

applicable to the exemption.

25

     (c) Any resident of the state or legal entity located in the state may challenge the tax

26

exemption by filing a petition in superior court. The litigation costs, including, but not limited to,

27

attorney fees, for any successful challenge of a tax exemption shall be paid out of the proceeds of

28

taxes collected following the successful challenge.

29

     (d) The department of revenue is authorized to audit the owner of any land listed as exempt

30

pursuant to the provisions of subsection (a) of this section for the purpose of determining proper

31

tax exemption status. The department shall institute collection proceedings in circumstances

32

determined by the department as appropriate to challenge any claimed tax exemption. The

33

department shall be reimbursed its collection costs for each successful challenge and collection and

34

shall be paid out of the taxes collected from the owner of the property. All activity of the department

 

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in conducting audits, challenges and collections pursuant to the provisions of this subsection shall

2

be exempt from the department's full-time employee (FTE) cap.

3

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- GENERAL POWERS

***

1

     This act would authorize municipalities to tax net tuition income for all private institutions

2

of K-12 or higher education. Financial aid would be exempt. No tax would be imposed on thirteen

3

thousand dollars ($13,000) annually for tuition for kindergarten through grade twelve (K-12) and

4

for twenty-five thousand dollars ($25,000) for postsecondary education and training. This act

5

would also require municipalities to include an explanation of the basis for tax exemption status

6

for property located in the municipality. Any person or legal entity in the state would be authorized

7

to challenge the exempt status

8

     This act would take effect upon passage.

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