ARTICLE 38 SUBSTITUTE A AS AMENDED

Relating To STATE AFFAIRS AND GOVERNMENT

SECTION 1. Title 42 of the General Laws entitled "State Affairs and Government" is hereby amended by adding thereto the following chapter:

CHAPTER 142
DEPARTMENT OF REVENUE

42-142-1. Department of revenue. – (a) There is hereby established within the executive branch of state government a department of revenue.

(b) The head of the department shall be the director of revenue, who shall be appointed by the governor, with the advice and consent of the senate, and shall serve at the pleasure of the governor.

(c) The department shall contain the division of taxation (chapter 44-1), the division of motor vehicles (chapter 32-2), the division of state lottery (chapter 42-61), the office of revenue analysis (chapter 42-142), and the division of property valuation (chapter 42-142).

42-142-2. Powers and duties of the department. – The department of revenue shall have the following powers and duties:

(a) To operate a division of taxation.

(b) To operate a division of motor vehicles;

(c) To operate a division of state lottery;

(d) To operate an office of revenue analysis; and

(e) To operate a division of property valuation.

42-142-3. Office of revenue analysis. – (a) There is hereby established within the department of revenue an office of revenue analysis. The head of the office shall be the chief of revenue analysis, who shall hold office for the term of five (5) years from the time of his or her appointment and until his or her successor is duly appointed and qualified. The chief shall be eligible for reappointment, and shall not engage in any other occupation. The head of the office shall have an advanced degree in economics or statistics;

(b) The director of revenue shall grant to the chief of revenue analysis reasonable access to appropriate expert staff and access to taxation data sufficient to carry out the duties of the office;

(c) The division shall analyze, evaluate, and appraise the tax system of the state, and make recommendations for its revision in accordance with the best interests of the economy of the state;

(d) The division shall be responsible for preparing the tax expenditures report as required in section 44-48.1-1;

(e) The division shall be responsible for preparing cost benefit analyses of all tax expenditures.

42-142-4. Division of property valuation. – (a) There is hereby established within the department of revenue a division of property valuation. The head of the office shall be the chief of property valuation.

(b) The division of property valuation shall have the following duties:

(i) Provide assistance and guidance to municipalities in complying with state law;

(ii) To encourage cooperation between municipalities and the state in calculating, evaluating and distributing state aid;

(iii)_ To maintain a data center of information of use to municipalities;

(iv) To maintain and compute financial and equalized property value information for the benefit of municipalities and public policy decision makers;

(v) To encourage and assure compliance with state laws and policies relating to municipalities especially in the areas of public disclosure, tax levies, financial reporting, and property tax issues;

(vi) To encourage cooperation between municipalities and the state by distributing information and by providing technical assistance to municipalities;

(vii) To give guidance to public decision makers on the equitable distribution of state aid to municipalities;

(viii) To provide technical assistance for property tax administration.

SECTION 2. Section 16-3-19 of the General Laws in Chapter 16-3 entitled "Establishment of Regional School Districts" is hereby amended to read as follows:

16-3-19. Costs of operation -- Payment of debts -- Apportionment among district members. -- (a) (1) The cost of the operation of a regional school district and the cost of payment of an indebtedness of the regional school district authorized by the regional school district financial meeting or regional representatives under the provisions of section 16-3-14 shall be borne by the member towns and/or cities that comprise the regional school district in that proportion that the equalized weighted assessed valuation of the property of the towns and cities that lie within the regional school district as determined from the latest figure certified by the department of administration revenue bears to the total equalized weighted assessed valuation of the total property of the regional school district, or, if the figures from the department of administration revenue are not available, the latest figures on equalized weighted assessed valuation used by the state department of elementary and secondary education in determining equalization aid under chapter 7 of this title shall be used.

(2) However, the apportionment of the cost of operating a regional school district and the cost of paying indebtedness may be determined by the members towns and/or cities that comprise the regional school district in a manner approved by a majority vote within each member community.

(b) On or before March 1 in each year the treasurer of the regional school district shall determine the proportionate share of the cost of the operation and the cost of the capital debt service payments of the regional school district for the next regional school district fiscal year to be borne by the towns and/or cities that comprise the regional school district in the manner prescribed in subsection (a) of this section, and he or she shall notify the town or city treasurer of the towns and/or cities comprising the regional school district of the total amount of money necessary to be raised from the regional school district taxpayers of each town or city for the operation of the regional school district for the fiscal year following.

SECTION 3. Sections 16-7-16, 16-7-21 and 16-7-36 of the General Laws in Chapter 16-7 entitled "Foundation Level School Support" are hereby amended to read as follows:

16-7-16. Definitions. -- The following words and phrases used in sections 16-7-15 to 16-7-34 have the following meanings:

(1) "Adjusted equalized weighted assessed valuation" means the equalized weighted assessed valuation of a community as determined by the department of administration revenue or as apportioned by the commissioner pursuant to the provisions of section 16-7-21;

(2) "Average daily membership" means the average number of pupils in a community during a school year as determined pursuant to the provisions of section 16-7-22, less any students who are served in a program operated by the state and which program is part of the operations aid formula;

(3) "Basic program" means the cost of education of resident pupils in grades twelve (12) and below in average daily membership for the reference year as determined by the mandated minimum program level plus all transportation costs including school bus monitors;

(4) "Certified personnel" means all persons who are required to hold certificates issued by or under the authority of the board of regents for elementary and secondary education;

(5) "Community" means any city, town, or regional school district established pursuant to law and/or the department of children, youth, and families; provided, however, that the department of children, youth, and families shall not have those administrative responsibilities and obligations as set forth in chapter 2 of this title; provided, however, that the member towns of the Chariho regional high school district, created by P.L. 1958, chapter 55 as amended, shall constitute separate and individual communities for the purpose of determining and distributing the foundation level school support including state aid for noncapital excess expenses for the special education of children with disabilities provided for in section 16-24-6 for all grades financed in whole or in part by the towns irrespective of any regionalization and any school operated by the state department of elementary and secondary education;

(6) "Department of children, youth, and families" means that department created pursuant to chapter 72 of title 42. For purposes of this section, sections 16-7-20, 16-24-2, and 42-72-5(b)(22), "children" means those children who are placed, assigned, or otherwise accommodated for residence by the department of children, youth, and families in a state operated or supported community residence licensed by a state agency and the residence operates an educational program approved by the department of elementary and secondary education;

(7) "Equalized weighted assessed valuation" means the equalized weighted assessed valuation for a community as determined by the department of administration division of property valuation pursuant to the provisions of section 16-7-21;

(8) "Full time equivalency students" means the time spent in a particular activity divided by the amount of time in a normal school day;

(9) "Incentive entitlement" means the sum payable to a local school district under the formula used;

(10) "Mandated minimum program level" means the amount that shall be spent by a community for every pupil in average daily membership as determined pursuant to the provisions of section 16-7-18;

(11) "Reference year" means the next year prior to the school year immediately preceding that in which the aid is to be paid; and

(12) "Regularly employed" and "service" as applied to certified personnel have the same meaning as defined in chapter 16 of this title.

16-7-21. Determination and adjustment of equalized weighted assessed valuation. -- On or before August 1 of each year the division of property valuation within the department of administration revenue, shall determine and certify to the commissioner of elementary and secondary education the equalized weighted assessed valuation for each city and town in the following manner:

(1) The total assessed valuations of real and tangible personal property for each city and town as of December 31 of the third preceding calendar year shall be weighted by bringing the valuation to the true and market value of real and tangible personal property. The total assessed valuations of real and tangible personal property for all cities and towns shall be applied to the true and market valuations of the property for all cities and towns and the resulting percentage shall determine the average throughout the state. This percentage applied to the sum of the total true and market value of real and tangible personal property of each city and town shall be the equalized weighted assessed valuation of each city and town.

(2) The equalized weighted assessed valuation for each city and town shall be allocated to the particular city or town, and in the case of a regional school district which does not service all grades, except the Chariho regional high school district, the commissioner of elementary and secondary education shall apportion that proportion of the equalized weighted assessed valuation of the member cities or towns which the average daily membership serviced by the regional school district bears to the total average daily membership, and the equalized weighted assessed valuation of the member cities and towns shall be appropriately reduced.

(3) The equalized weighted assessed valuation for each community as allocated or apportioned in accordance with subdivision (2) of this section shall be adjusted by the ratio which the median family income of a city or town bears to the statewide median family income as reported in the latest available federal census data. The total state adjusted equalized weighted assessed valuation shall be the same as the total state equalized weighted assessed valuation.

16-7-36. Definitions. -- The following words and phrases used in sections 16-7-35 to 16-7-47 have the following meanings:

(1) "Adjusted equalized weighted assessed valuation" means the equalized weighted assessed valuation for a community as determined by the division of property valuation within the department of administration revenue in accordance with section 16-7-21; provided, however, that in the case of a regional school district the commissioner of elementary and secondary education shall apportion the adjusted equalized weighted assessed valuation of the member cities or towns among the regional school district and the member cities or towns according to the proportion that the number of pupils of the regional school district bears to the number of pupils of the member cities or towns.

(2) "Approved project" means a project which has complied with the administrative regulations governing sections 16-7-35 through 16-7-47, and which has been authorized to receive state school housing reimbursement by the commissioner of elementary and secondary education.

(3) "Community" means any city, town, or regional school district established pursuant to law; provided, however, that the member towns of the Chariho regional high school district, created by P.L. 1958, ch. 55, as amended, shall constitute separate and individual communities for the purposes of distributing the foundation level school support for school housing for all grades financed in whole or in part by the towns irrespective of any regionalization.

(4) "Reference year" means the year next prior to the school year immediately preceding that in which aid is to be paid.

SECTION 4. Section 31-2-1 of the General Laws in Chapter 31-2 entitled "Division of Motor Vehicles" is hereby amended to read as follows:

31-2-1. Establishment -- Duties -- Chief of division. -- Within the department of administration revenue there shall be a division of motor vehicles. The division will be responsible for activities assigned to it by law, including, but not limited to, motor vehicle registration, testing and licensing of motor vehicle operators, inspection of motor vehicles, and enforcement of laws relating to the issuance, suspension and revocation of motor vehicle registrations and drivers' licenses. The division shall administer the financial responsibility law. The chief of the division shall use the title and designation "registrar" or "administrator" on all licenses, registrations, orders of suspensions, financial responsibility notices or orders, or any other official documents issued or promulgated by the division. He or she shall exercise all powers and duties prescribed by chapters 1 -- 27 of this title and shall supervise and direct the promotion of highway traffic safety.

SECTION 5. Section 35-1-2 of the General Laws in Chapter 35-1 entitled "Fiscal Functions of Department of Administration" is hereby repealed.

35-1-2. Division of research. -- Within the department of administration there shall be a division of research for the purpose of carrying on a continuing program of research in the fields of governmental and financial administration and taxation. All agencies of the state government shall furnish to this division all data which may be required in carrying out its studies.

SECTION 6. Section 36-4-2 of the General Laws in Chapter 36-4 entitled "Merit System" is hereby amended to read as follows:

36-4-2. Positions in unclassified service. -- The classified service shall comprise all positions in the state service now existing or hereinafter established, except the following specific positions which with other positions heretofore or hereinafter specifically exempted by legislative act shall constitute the unclassified service:

(1) Officers and legislators elected by popular vote and persons appointed to fill vacancies in elective offices.

(2) Employees of both houses of the general assembly.

(3) Officers, secretaries, and employees of the office of the governor, office of the lieutenant governor, department of state, department of the attorney general, and the treasury department.

(4) Members of boards and commissions appointed by the governor, members of the state board of elections and the appointees of the board, members of the commission for human rights and the employees of the commission, and directors of departments.

(5) The following specific offices:

(i) In the department of administration: director, chief information officer;

(ii) In the department of business regulation: director;

(iii) In the department of elementary and secondary education: commissioner of elementary and secondary education;

(iv) In the department of higher education: commissioner of higher education;

(v) In the department of health: director;

(vi) In the department of labor and training: director, administrative assistant, administrator of the labor board and legal counsel to the labor board;

(vii) In the department of environmental management: director;

(viii) In the department of transportation: director;

(ix) In the department of human services: director;

(x) In the state properties committee: secretary;

(xi) In the workers' compensation court: judges, administrator, deputy administrator, clerk, assistant clerk, clerk secretary;

(xii) In the department of elderly affairs: director;

(xiii) In the department of mental health, retardation, and hospitals: director;

(xiv) In the department of corrections: director, assistant director (institutions/operations), assistant director (rehabilitative services), assistant director (administration), and wardens;

(xv) In the department of children, youth and families: director, one assistant director, one associate director, and one executive director;

(xvi) In the public utilities commission: public utilities administrator;

(xvii) In the water resources board: general manager;

(xviii) In the human resources investment council: executive director.

(6) Chief of the hoisting engineers, licensing division, and his or her employees; executive director of the veterans memorial building and his or her clerical employees.

(7) One confidential stenographic secretary for each director of a department and each board and commission appointed by the governor.

(8) Special counsel, special prosecutors, regular and special assistants appointed by the attorney general, the public defender and employees of his or her office, and members of the Rhode Island bar occupying a position in the state service as legal counsel to any appointing authority.

(9) The academic and/or commercial teaching staffs of all state institution schools, with the exception of those institutions under the jurisdiction of the board of regents for elementary and secondary education and the board of governors for higher education.

(10) Members of the military or naval forces, when entering or while engaged in the military or naval service.

(11) Judges, referees, receivers, clerks, assistant clerks, and clerical assistants of the supreme, superior, family, and district courts, the traffic tribunal, jurors and any persons appointed by any court.

(12) Election officials and employees.

(13) Administrator, executive high sheriff, sheriffs, chief deputy sheriffs, deputy sheriffs, and other employees of the sheriff's division within the department of administration and security officers of the traffic tribunal.

(14) Patient or inmate help in state charitable, penal, and correctional institutions and religious instructors of these institutions and student nurses in training, residents in psychiatry in training, and clinical clerks in temporary training at the institute of mental health within the state of Rhode Island medical center.

(15) (i) Persons employed to make or conduct a temporary and special inquiry, investigation, project or examination on behalf of the legislature or a committee therefor, or on behalf of any other agency of the state if the inclusion of these persons in the unclassified service is approved by the personnel administrator. The personnel administrator shall notify the house fiscal advisor and the senate fiscal advisor whenever he or she approves the inclusion of a person in the unclassified service.

(ii) The duration of the appointment of a person, other than the persons enumerated in this section, shall not exceed ninety (90) days or until presented to the department of administration. The department of administration may extend the appointment another ninety (90) days. In no event shall the appointment extend beyond one hundred eighty (180) days.

(16) Members of the division of state police.

(17) Executive secretary of the Blackstone Valley district commission.

(18) Artist and curator of state owned art objects.

(19) Mental health advocate.

(20) Child advocate.

(21) The position of aquaculture coordinator and dredge coordinator within the coastal resources management council.

(22) Employees of the office of the health insurance commissioner.

(23) In the department of revenue: the director, secretary, attorney.

SECTION 7. Sections 42-6-1, 42-6-2 and 42-6-3 of the General Laws in Chapter 42-6 entitled "Departments of State Government" are hereby amended to read as follows:

42-6-1. Enumeration of departments. -- All the administrative powers and duties heretofore vested by law in the several state departments, boards, divisions, bureaus, commissions, and other agencies shall be vested in the following departments and other agencies which are specified in this title:

(a) Executive department (chapter 7 of this title);

(b) Department of state (chapter 8 of this title);

(c) Department of the attorney general (chapter 9 of this title);

(d) Treasury department (chapter 10 of this title);

(e) Department of administration (chapter 11 of this title);

(f) Department of business regulation (chapter 14 of this title);

(g) Department of children, youth, and families (chapter 72 of this title);

(h) Department of corrections (chapter 56 of this title);

(i) Department of elderly affairs (chapter 66 of this title);

(j) Department of elementary and secondary education (chapter 60 of title 16);

(k) [Deleted by P.L. 1996, ch. 226, section 5.]

(l) Department of environmental management (chapter 17.1 of this title);

(m) Department of health (chapter 18 of this title);

(n) Board of governors for higher education (chapter 59 of title 16);

(o) Department of labor and training (chapter 16.1 of this title);

(p) Department of mental health, retardation, and hospitals (chapter 12.1 of this title);

(q) Department of human services (chapter 12 of this title);

(r) [Deleted by P.L. 1996, ch. 100, art. 29, section 8.]

(s) Department of transportation (chapter 13 of this title);

(t) Public utilities commission (chapter 14.3 of this title).

(u) [Deleted by P.L. 1995, ch. 370, art. 14, section 1.]

(v) Department of revenue (chapter 142 of title 44).

42-6-2. Heads of departments. -- The governor, secretary of state, attorney general, and general treasurer, hereinafter called general officers, shall each be in charge of a department. There shall also be a director of administration, a director of revenue, a director of human services, a director of mental health, retardation, and hospitals, a director of transportation, a director of business regulation, a director of labor and training, a director of environmental management, a director for children, youth, and families, a director of elderly affairs, and director of corrections. Each director shall hold office at the pleasure of the governor and he or she shall serve until his or her successor is duly appointed and qualified unless the director is removed from office by special order of the governor.

42-6-3. Appointment of directors. -- (a) At the January session following his or her election to office, the governor shall appoint a director of administration, a director of revenue, a director of human services, a director of mental health, retardation, and hospitals, a director of transportation, a director of business regulation, a director of labor and training, a director of environmental management, a director for children, youth and families, a director of elderly affairs, and a director of corrections. The governor shall, in all cases of appointment of a director while the senate is in session, notify the senate of his or her appointment and the senate shall, within sixty (60) legislative days after receipt of the notice, act upon the appointment. If the senate shall, within sixty (60) legislative days, vote to disapprove the appointment it shall so notify the governor, who shall forthwith appoint and notify the senate of the appointment of a different person as director and so on in like manner until the senate shall fail to so vote disapproval of the governor's appointment. If the senate shall fail, for sixty (60) legislative days next after notice, to act upon any appointment of which it has been notified by the governor, the person so appointed shall be the director. The governor may withdraw any appointment of which he or she has given notice to the senate, at any time within sixty (60) legislative days thereafter and before action has been taken thereon by the senate.

(b) Except as expressly provided in section 42-6-9, no director of any department shall be appointed or employed pursuant to any contract of employment for a period of time greater than the remainder of the governor's current term of office. Any contract entered into in violation of this section after [July 1, 1994]is hereby declared null and void.

SECTION 8. Sections 42-11-2 and 42-11-12 of the General Laws in Chapter 42-11 entitled "Department of Administration" are hereby amended to read as follows:

42-11-2. Powers and duties of department. -- The department of administration shall have the following powers and duties:

(a) To prepare a budget for the several state departments and agencies, subject to the direction and supervision of the governor;

(b) To administer the budget for all state departments and agencies, except as specifically exempted by law;

(c) To devise, formulate, promulgate, supervise, and control accounting systems, procedures, and methods for the state departments and agencies, conforming to such accounting standards and methods as are prescribed by law;

(d) To purchase or to contract for the supplies, materials, articles, equipment, printing, and services needed by state departments and agencies, except as specifically exempted by law;

(e) To prescribe standard specifications for those purchases and contracts and to enforce compliance with specifications;

(f) To supervise and control the advertising for bids and awards for state purchases;

(g) To regulate the requisitioning and storage of purchased items, the disposal of surplus and salvage, and the transfer to or between state departments and agencies of needed supplies, equipment, and materials;

(h) To maintain, equip, and keep in repair the state house, state office building, and other premises owned or rented by the state for the use of any department or agency, excepting those buildings, the control of which is vested by law in some other agency;

(i) To provide for the periodic inspection, appraisal or inventory of all state buildings and property, real and personal;

(j) To require reports from state agencies on the buildings and property in their custody;

(k) To issue regulations to govern the protection and custody of the property of the state;

(l) To assign office and storage space and to rent and lease land and buildings for the use of the several state departments and agencies in the manner provided by law;

(m) To control and supervise the acquisition, operation, maintenance, repair, and replacement of state-owned motor vehicles by state agencies;

(n) To maintain and operate central duplicating and mailing service for the several state departments and agencies;

(o) To furnish the several departments and agencies of the state with other essential office services;

(p) To survey and examine the administration and operation of the state departments and agencies, submitting to the governor proposals to secure greater administrative efficiency and economy, to minimize the duplication of activities, and to effect a better organization and consolidation of functions among state agencies;

(q) To assess and collect all taxes levied by the state by virtue of the various laws of the state;

(r) To analyze, evaluate, and appraise the tax system of the state, and to make recommendations for its revision in accordance with the best interests of the economy of the state;

(s) To operate a merit system of personnel administration and personnel management as defined in section 36-3-3 in connection with the conditions of employment in all state departments and agencies within the classified service;

(t) To assign or reassign, with the approval of the governor, any functions, duties, or powers established by this chapter to any agency within the department;

(u) To establish, maintain, and operate a data processing center or centers, approve the acquisition and use of electronic data processing services by state agencies, furnish staff assistance in methods, systems and programming work to other state agencies, and arrange for and effect the centralization and consolidation of punch card and electronic data processing equipment and services in order to obtain maximum utilization and efficiency;

(v) To devise, formulate, promulgate, supervise, and control a comprehensive and coordinated statewide information system designed to improve the data base used in the management of public resources, to consult and advise with other state departments and agencies and municipalities to assure appropriate and full participation in this system, and to encourage the participation of the various municipalities of this state in this system by providing technical or other appropriate assistance toward establishing, within those municipalities, compatible information systems in order to obtain the maximum effectiveness in the management of public resources;

(1) The comprehensive and coordinated statewide information system may include a Rhode Island geographic information system of land-related economic, physical, cultural and natural resources.

(2) In order to ensure the continuity of the maintenance and functions of the geographic information system, the general assembly may annually appropriate such sum as it may deem necessary to the department of administration for its support.

(w) To administer a statewide planning program including planning assistance to the state departments and agencies;

(x) To administer a statewide program of photography and photographic services;

(y) To negotiate with public or private educational institutions in the state, in cooperation with the department of health, for state support of medical education;

(z) To promote the expansion of markets for recovered material and to maximize their return to productive economic use through the purchase of materials and supplies with recycled content by the state of Rhode Island to the fullest extent practically feasible;

(aa) To approve costs as provided in section 23-19-32; and

(bb) To provide all necessary civil service tests for child protective investigators and social workers at least twice each year and to maintain an adequate hiring list for these positions at all times.

(cc) To prepare a report every three (3) months by all current property leases or rentals by any state or quasi-state agency to include the following information:

(1) Name of lessor;

(2) Description of the lease (purpose, physical characteristics, and location);

(3) Cost of the lease;

(4) Amount paid to date;

(5) Date initiated;

(6) Date covered by the lease.

(dd) To provide by December 31, 1995 the availability of automatic direct deposit to any recipient of a state benefit payment, provided that the agency responsible for making that payment generates one thousand (1,000) or more such payments each month.

(ee) To operate a division of motor vehicles. The division will be responsible for activities assigned to it by law, including but not limited to, motor vehicle registration, testing and licensing of motor vehicle operators, inspection of motor vehicles, and enforcement of laws relating to the issuance, suspension and revocation of motor vehicle registrations and drivers' licenses. The division shall administer the financial responsibility law. The chief of the division shall use the title and designation "administrator" on all licenses, registrations, orders of suspensions, financial responsibility notices or orders, or any other official documents issued or promulgated by the division.

(ff) (ee) To operate the Rhode Island division of sheriffs as provided in section 42-11-21.

(gg) To operate a statewide child support enforcement program in accordance with title IV-D of the Social Security Act and under title 15 of the Rhode Island general laws.

42-11-12. Transfer of functions from the department of community affairs. -- (a) There are hereby transferred to the department of administration those functions formerly administered by the department of community affairs relating to:

(1) Administration of aid to municipalities;

(2) Local planning assistance;

(3) Community development training; and

(4) Technical local government assistance;

(5) Equalized weighted assessed;

(6) Property tax administration assistance; and

(7) Building code standards committee.

(b) In addition to any of its other powers and responsibilities, the department is authorized and empowered to accept any grants made available by the United States government or any agency thereof, and the department, with the approval of the governor, is authorized and empowered to perform such acts and enter into all necessary contracts and agreements with the United States of America or any agency thereof as may be necessary in such manner and degree as shall be deemed to be in the best interest of the state. The proceeds of the grants so received shall be paid to the general treasurer of the state and by him or her deposited in a separate fund and shall be utilized for the purposes of those grants.

SECTION 9. Sections 42-61-1, 42-61-3 and 42-61-4 of the General Laws in Chapter 42-61 entitled "State Lottery" are hereby amended to read as follows:

42-61-1. Division of state lottery established. -- There is established a state lottery division within the department of administration. revenue.

42-61-3. Appointment of director of lotteries. -- The lotteries shall be under the immediate supervision and direction of a director, who shall be a qualified person to administer an enterprise of the nature of a lottery. The director shall be appointed by the governor to a five (5) year term with the advice and consent of the senate. The appointment shall be reviewed or vetted by the Permanent Joint Committee on State Lottery according to Article 6 Section 15 of the Rhode Island Constitution. The director shall serve until his or her successor is appointed and qualified. Any vacancy occurring in the office of the director shall be filled in the same manner as the original appointment. Pursuant to section 42-6-4, in the case of a vacancy while the senate is not in session, the governor shall appoint a director to hold the office until the next session thereof; provided, that no person should serve in such a position for more than three (3) legislative days after the senate convenes unless that person's name shall have been submitted to the senate for its approval. The director shall devote his or her entire time and attention to the duties of his or her office and shall not be engaged in any other profession or occupation. He or she shall receive any salary that the director of the department of administration revenue shall determine and shall be in the unclassified service.

The director of lotteries shall be removable by the governor, pursuant to the provisions of section 36-1-7 and for cause only, and removal solely for partisan or personal reasons unrelated to capacity or fitness for the office shall be unlawful.

42-61-4. Powers and duties of director. -- The director shall have the power and it shall be his or her duty to:

(1) Supervise and administer the operation of lotteries in accordance with this chapter, chapter 61.2 of this title and with the rules and regulations of the division;

(2) Act as the chief administrative officer having general charge of the office and records and to employ necessary personnel to serve at his pleasure and who shall be in the unclassified service and whose salaries shall be set by the director of the department of administration revenue, pursuant to the provisions of section 36-4-16. 42-61-3.

(3) In accordance with this chapter and the rules and regulations of the division, license as agents to sell lottery tickets those persons, as in his or her opinion, who will best serve the public convenience and promote the sale of tickets or shares. The director may require a bond from every licensed agent, in an amount provided in the rules and regulations of the division. Every licensed agent shall prominently display his or her license, or a copy of their license, as provided in the rules and regulations of the committee;

(4) Confer regularly as necessary or desirable, and not less than once each month, with the permanent joint committee on state lottery on the operation and administration of the lotteries; make available for inspection by the committee, upon request, all books, records, files, and other information, and documents of the division; advise the committee and recommend those matters that he or she deems necessary and advisable to improve the operation and administration of the lotteries;

(5) Suspend or revoke any license issued pursuant to this chapter, chapter 61.2 of this title or the rules and regulations promulgated under this chapter and chapter 61.2 of this title;

(6) Enter into contracts for the operation of the lotteries, or any part of the operation of the lotteries, and into contracts for the promotion of the lotteries;

(7) Ensure that monthly financial reports are prepared providing gross monthly revenues, prize disbursements, other expenses, net income, and the amount transferred to the state general fund for keno and for all other lottery operations; submit this report to the state budget officer, the auditor general, the permanent joint committee on state lottery, the legislative fiscal advisors, and the governor no later than the twentieth business day following the close of the month; the monthly report shall be prepared in a manner prescribed by the members of the revenues estimating conference; at the end of each fiscal year the director shall submit an annual report based upon an accrual system of accounting which shall include a full and complete statement of lottery revenues, prize disbursements and expenses, to the governor and the general assembly, which report shall be a public document and shall be filed with the secretary of state;

(8) Carry on a continuous study and investigation of the state lotteries throughout the state, and the operation and administration of similar laws which may be in effect in other states or countries;

(9) Implement the creation and sale of commercial advertising space on lottery tickets as authorized by section 42-61-4 of this chapter as soon as practicable after June 22, 1994;

(10) Promulgate rules and regulations which shall include but not be limited to:

(i) The price of tickets or shares in the lotteries;

(ii) The number and size of the prizes on the winning tickets or shares;

(iii) The manner of selecting the winning tickets or shares;

(iv) The manner of payment of prizes to the holders of winning tickets or shares;

(v) The frequency of the drawings or selections of winning tickets or shares;

(vi) The number and types of location at which tickets or shares may be sold;

(vii) The method to be used in selling tickets or shares;

(viii) The licensing of agents to sell tickets or shares, except that a person under the age of eighteen (18) shall not be licensed as an agent;

(ix) The license fee to be charged to agents;

(x) The manner in which the proceeds of the sale of lottery tickets or shares are maintained, reported, and otherwise accounted for;

(xi) The manner and amount of compensation to be paid licensed sales agents necessary to provide for the adequate availability of tickets or shares to prospective buyers and for the convenience of the general public;

(xii) The apportionment of the total annual revenue accruing from the sale of lottery tickets or shares and from all other sources for the payment of prizes to the holders of winning tickets or shares, for the payment of costs incurred in the operation and administration of the lotteries, including the expense of the division and the costs resulting from any contract or contracts entered into for promotional, advertising, consulting, or operational services or for the purchase or lease of facilities, lottery equipment, and materials, for the repayment of moneys appropriated to the lottery fund;

(xiii) The superior court upon petition of the director after a hearing may issue subpoenas to compel the attendance of witnesses and the production of documents, papers, books, records, and other evidence in any matter over which it has jurisdiction, control or supervision. If a person subpoenaed to attend in the proceeding or hearing fails to obey the command of the subpoena without reasonable cause, or if a person in attendance in the proceeding or hearing refuses without lawful cause to be examined or to answer a legal or pertinent question or to exhibit any book, account, record, or other document when ordered to do so by the court, that person may be punished for contempt of the court;

(xiv) The manner, standards, and specification for a process of competitive bidding for division purchases and contracts; and

(xv) The sale of commercial advertising space on the reverse side of, or in other available areas upon, lottery tickets provided that all net revenue derived from the sale of the advertising space shall be deposited immediately into the state's general fund and shall not be subject to the provisions of section 42-61-15; and

(11) [Effective until June 30, 2006.]Notwithstanding any general law, public law, or regulation to the contrary, implement, without division approval, changes in the structures of the following lottery games: Powerball, Keno and Hot Trax.

SECTION 10. Sections 44-1-1 and 44-1-2 of the General Laws in Chapter 44-1 entitled "State Tax Officials" are hereby amended to read as follows:

44-1-1. Tax administrator -- Appointment. -- There shall be a tax administrator within the department of administration revenue appointed by the director of administration revenue with the approval of the governor.

44-1-2. Powers and duties of tax administrator. -- The tax administrator is required:

(1) To assess and collect all taxes previously assessed by the division of state taxation in the department of revenue and regulation, including the franchise tax on domestic corporations, corporate excess tax, tax upon gross earnings of public service corporations, tax upon interest bearing deposits in national banks, the inheritance tax, tax on gasoline and motor fuels, and tax on the manufacture of alcoholic beverages;

(2) To assess and collect the taxes upon banks and insurance companies previously administered by the division of banking and insurance in the department of revenue and regulation, including the tax on foreign and domestic insurance companies, tax on foreign building and loan associations, deposit tax on savings banks, and deposit tax on trust companies;

(3) To assess and collect the tax on pari-mutuel or auction mutuel betting, previously administered by the division of horse racing in the department of revenue and regulation; .

(4) To collect the fees and to account for all funds relating to the registration of motor vehicles and the licensing of operators, previously administered by the division of motor vehicles in the department of revenue and regulation.

SECTION 11. Section 44-1-30 of the General Laws in Chapter 44-1 entitled "State Tax Officials" is hereby repealed.

44-1-30. Report by the tax administrator to the speaker of the house of representatives. -- The tax administrator shall periodically report to the speaker of the house of representatives on the adequacy of the estate tax exemption, the marital deduction, and the orphan's deduction provided in chapter 22 of title 44 in light of changing economic conditions and on the trends in death taxation at both the federal and state levels. The reports are due on January 31st of each fifth (5th) year after 1985.

SECTION 12. Sections 44-5-2, 44-5-11.7 and 44-5-69 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" are hereby amended to read as follows:

44-5-2. Maximum levy. -- (a) A city and town may levy a tax in an amount not more than five and one-half percent (5.5%) in excess of the amount levied and certified by that city or town for the prior year. The amount levied by a city or town is deemed to be consistent with the five and one-half percent (5.5%) levy growth cap if the tax rate is not more than one hundred and five and one-half percent (105.5%) of the prior year's tax rate and the budget resolution or ordinance, as applicable, specifies that the tax rate is not increasing by more than five and one-half percent (5.5%) except as specified in subsection (c) of this section. In all years when a revaluation or update is not being implemented, a tax rate is deemed to be one hundred five and one-half percent (105.5%) or less of the prior year's tax rate if the tax on a parcel of real property, the value of which is unchanged for purpose of taxation, is no more than one hundred five and one-half percent (105.5%) of the prior year's tax on the same parcel of real property. In any year when a revaluation or update is being implemented, the tax rate is deemed to be one hundred five and one-half percent (105.5%) of the prior year's tax rate as certified by the division of local government assistance in the department of administration.

(b) The office of municipal affairs division of property valuation in the department of administration revenue shall monitor city and town compliance with this levy cap, issue periodic reports to the general assembly on compliance, and make recommendations on the continuation or modification of the levy cap on or before December 31, 1987, December 31, 1990, and December 31, every third year thereafter. The chief elected official in each city and town shall provide to the office of municipal affairs within thirty (30) days of final action, in the form required, the adopted tax levy and rate and other pertinent information.

(c) The amount levied by a city or town may exceed the five and one-half percent (5.5%) increase as specified in subsection (a) of this section if the city or town qualifies under one or more of the following provisions:

(1) The city or town forecasts or experiences a loss in total non-property tax revenues and the loss is certified by the department of administration.

(2) The city or town experiences or anticipates an emergency situation, which causes or will cause the levy to exceed five and one-half percent (5.5%). In the event of an emergency or an anticipated emergency, the city or town shall notify the auditor general who shall certify the existence or anticipated existence of the emergency.

(3) A city or town forecasts or experiences debt services expenditures which are more than one hundred five and one-half percent (105.5%) of the prior year's debt service expenditures and which are the result of bonded debt issued in a manner consistent with general law or a special act. In the event of the debt service increase, the city or town shall notify the department of administration which shall certify the debt service increase above one hundred five and one-half percent (105.5%) of the prior year's debt service. No action approving or disapproving exceeding a levy cap under the provisions of this section affects the requirement to pay obligations as described in subsection (d) of this section.

(4) Any levy pursuant to subsection (c) of this section in excess of the five and one-half percent (5.5%) shall be approved by a majority vote of the governing body of the city or town or in the case of a city or town having a financial town meeting, the majority of the electors present and voting at the town financial meeting shall approve the excess levy.

(d) Nothing contained in this section constrains the payment of present or future obligations as prescribed by section 45-12-1, and all taxable property in each city or town is subject to taxation without limitation as to rate or amount to pay general obligation bonds or notes of the city or town except as otherwise specifically provided by law or charter.

44-5-11.7. Permanent legislative oversight commission. -- (a) (1) There is created a permanent legislative commission on property taxation. The commission consists of the following members:

(i) Chairperson of the house finance committee, or designee;

(ii) Chairperson of the senate finance committee, or designee;

(iii) Chief of the office of municipal affairs, or designee;

(iv) The president of the league of cities and towns;

(v) The executive director of the Rhode Island public expenditures council, or designee; and

(vi) One member of the Rhode Island Assessors' Association.

(vii) Director of the property valuation within the department of revenue.

(2) The commission at its first meeting shall elect a chairperson from its membership.

(b) The purpose of the commission is to study and evaluate property tax related issues including, but not limited to:

(1) Revaluation process;

(2) Exemptions and classifications;

(3) Uniform depreciation rates; and

(4) Any other issues which the commission determines are relevant to the issue of property taxation.

(c) The members shall receive no compensation for their services. All departments and agencies of the state shall furnish advice and information, documentary or otherwise to the commission and its agents as is deemed necessary or desirable by the commission to facilitate the purposes of the commission.

(d) The commission shall meet no less than three (3) times per year and shall report its findings and recommendations to the general assembly on an annual basis.

44-5-69. Local fire districts -- Publication of property tax data. -- Every fire district authorized to assess and collect taxes on real and personal property in the several cities and towns in the state shall provide to the office of municipal affairs in the to the division of property valuation in the department of administration revenue information on tax rates, budgets, assessed valuations and other pertinent data upon forms provided by the office of municipal affairs. The information shall be included in the department's annual state report on local governmental finances and tax equalization.

SECTION 13. Section 44-13-13 of the General Laws in Chapter 44-13 entitled "Public Service Corporation Tax" is hereby amended to read as follows:

44-13-13. Taxation of certain tangible personal property. -- The lines, cables, conduits, ducts, pipes, machines and machinery, equipment, and other tangible personal property within this state of telegraph, cable, and telecommunications corporations and express corporations, used exclusively in the carrying on of the business of the corporation shall be exempt from local taxation; provided, that nothing in this section shall be construed to exempt any "community antenna television system company" (CATV) from local taxation; and provided, that the tangible personal property of companies exempted from local taxation by the provisions of this section shall be subject to taxation in the following manner:

(1) Definitions. - Whenever used in this section and in sections 44-13-13.1 and 44-13-13.2, unless the context otherwise requires:

(i) "Average assessment ratio" means the total assessed valuation as certified on tax rolls for the reference year divided by the full market value of the valuation as computed by the Rhode Island department of administration revenue in accordance with section 16-7-21;

(ii) "Average property tax rate" means the statewide total property levy divided by the statewide total assessed valuation as certified on tax rolls for the most recent tax year;

(iii) "Company" means any telegraph, cable, telecommunications, or express company doing business within the state of Rhode Island;

(iv) "Department" means the department of administration revenue;

(v) "Population" shall mean the population as determined by the most recent census;

(vi) "Reference year" means the calendar year two (2) years prior to the calendar year preceding that in which the tax payment provided for by this section is levied;

(vii) "Value of tangible personal property" of companies means the net book value of tangible personal property of each company doing business in this state as computed by the department of administration revenue. "Net book value" means the original cost less accumulated depreciation; provided, that no tangible personal property shall be depreciated more than seventy-five percent (75%) of its original cost.

(2) On or before March 1 of each year, each company shall declare to the department, on forms provided by the department, the value of its tangible personal property in the state of Rhode Island on the preceding December 31.

(3) On or before April 1, 1982 and each April 1 thereafter of each year, the department division of property valuation shall certify to the tax administrator the average property tax rate, the average assessment ratio, and the value of tangible personal property of each company.

(4) The tax administrator shall apply the average assessment ratio and the average tax rate to the value of tangible personal property of each company and, by April 15 of each year, shall notify the companies of the amount of tax due.

(5) The tax shall be due and payable within sixty (60) days of the mailing of the notice by the tax administrator. If the entire tax is not paid to the tax administrator when due, there shall be added to the unpaid portion of the tax, and made a part of the tax, interest at the rate provided for in section 44-1-7 from the date the tax was due until the date of the payment. The amount of any tax, including interest, imposed by this section shall be a debt due from the company to the state, shall be recoverable at law in the same manner as other debts, and shall, until collected, constitute a lien upon all the company's property located in this state.

(6) The proceeds from the tax shall be allocated in the following manner:

(i) Payment of reasonable administrative expenses incurred by the department of administration revenue, not to exceed three quarters of one percent (.75%), the payment to be identified as general revenue and appropriated directly to the department;

(ii) The remainder of the proceeds shall be deposited in a restricted revenue account and shall be apportioned to the cities and towns within this state on the basis of the ratio of the city or town population to the population of the state as a whole. Estimated revenues shall be distributed to cities and towns by July 30 and may be recorded as a receivable by each city and town for the prior fiscal year.

SECTION 14. Section 44-34-12 of the General Laws in Chapter 44-34 entitled "Excise on Motor Vehicles and Trailers" is hereby amended to read as follows:

44-34-12. Cooperation of state agencies. -- The department of administration shall provide space and secretarial and clerical services to the Rhode Island vehicle value commission without charge to the commission. The department of transportation, and the department of administration revenue shall provide, consistent with law, information that is in their possession, which the commission determines to be useful or necessary in the conduct of its responsibilities.

SECTION 15. Section 44-34.1-3 of the General Laws in Chapter 44-34.1 entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998" is hereby amended to read as follows:

44-34.1-3. Permanent oversight commission. -- (a) There is created a permanent oversight commission on inventory taxes and automobile excise taxes. The commission shall consist of the following members:

(1) Chairperson of house finance committee, or designee;

(2) Chairperson of senate finance committee, or designee;

(3) Chairperson of the Rhode Island vehicle value commission;

(4) Three (3) members of the Rhode Island Assessors Association;

(5) Director of department of administration revenue, or designee;

(6) Chief of the office of municipal affairs division of property valuation, or designee;

(7) The president of the Rhode Island League of Cities and Towns, or designee;

(8) The administrator of the Rhode Island division of motor vehicles, or designee;

(9) The mayor of the city of Providence, or designee.

(b) The purpose of the commission shall be to study and evaluate the phase-out of the automobile excise tax and to establish procedures when necessary to facilitate the phase-out of the tax by July 1, 2005.

(c) The commission, at its first meeting, shall elect a chairperson from its membership.

(d) The commission shall meet no less than two (2) times per year at the call of the chairperson or upon the request of at least three (3) of its members.

(e) The members shall receive no compensation for their services. All departments and agencies of the state shall furnish advice and information, documentary or otherwise, to the commission and its agents as is deemed necessary or desirable by the commission to facilitate the purposes of the commission.

SECTION 16. Section 44-48.1-1 of the General Laws in Chapter 44-48.1 entitled "Tax Expenditure Reporting" is hereby amended to read as follows:

44-48.1-1. Tax expenditure reporting. -- (a) On or before the second Tuesday in January of each even numbered year beginning in 2004, the state tax administrator, to the extent possible within the appropriations provided for the purpose chief of the office of revenue analysis, shall deliver a tax expenditure report to the general assembly. Each report will provide the minimum information for one hundred percent (100%) of tax expenditures in effect on January 1 of the calendar year preceding the report's publication.

(b) For the purposes of this section, a "tax expenditure" is any tax credit, deduction, exemption, exclusion, credit preferential tax rate, tax abatement, and tax deferral that provides preferential treatment to selected taxpayers, whether directly through Rhode Island general laws or constitutional provisions or indirectly through adoption of other tax codes.

(c) The information included for each tax expenditure shall include, but shall not be limited to:

(1) The legal reference of the expenditures, including information whether the expenditure is required as a result of federal or state constitutional, judicial, or statutory mandate.

(2) Amount of revenues forgone or an estimate, if the actual amount cannot be determined, for the calendar year immediately preceding the publication of the report. The report shall also include an estimate of revenue forgone for the calendar year in which the report is published and the year following the report's publication. The tax administrator shall develop an index of the reliability of each estimate using five (5) levels with level one being most reliable. Where actual tax returns are the source of the estimate, the estimate should be assigned reliability level one. Where no reliable data exists for the estimate, the estimate should be assigned reliability level five (5). The reliability level shall be reported for the estimate of the revenues forgone.

(3) To the extent allowable by law, identification of the beneficiaries of the exemption by number, income, class and industry.

(4) A comparison of the tax expenditure to the tax systems of the other New England states, with emphasis on Massachusetts and Connecticut.

(5) The data source(s) and analysis methodology.

(6) To the extent allowable by law, identification of similar taxpayers or industries that do not enjoy the exemption.

(d) Each report shall include a section containing recommendations for improving the effectiveness of the report as a tax policy tool. This section shall identify the resources required to implement these recommendations and shall also contain an estimate of the costs associated with such recommendations.

(e) On or before the second Tuesday in January 2004, the chief of the office of revenue analysis shall make available to the general assembly a plan to improve Rhode Island's tax expenditure reporting effort. The plan shall include measurable criteria to evaluate improvements in the reliability of tax expenditure item estimates and the identification of beneficiaries of each tax expenditure by number, income, class and industry. The plan shall also include cost estimates of additional resources necessary to implement the plan, and may include any other information that the tax administrator deems appropriate for inclusion in said plan.

SECTION 17. Section 44-58-3 of the General Laws in Chapter 44-58 entitled "Streamlined Sales Tax System" is hereby amended to read as follows:

44-58-3. "Tax administrator" defined. -- As used in this chapter, "tax administrator" means the tax administrator within the department of administration revenue as provided for in section 44-1-1 44-143-1.

SECTION 18. Sections 45-12-22.2 and 45-12-22.7 of the General Laws in Chapter 45-12 entitled "Indebtedness of Towns and Cities" are hereby amended to read as follows:

45-12-22.2. Monitoring of financial operations -- Corrective action. -- (a) The chief financial officer of each municipality and each school district within the state shall continuously monitor their financial operations by tracking actual versus budgeted revenue and expense.

(b) The chief financial officer of the municipality shall submit a report on a monthly basis to the municipality's chief executive officer, each member of the city or town council, and school district committee certifying the status of the municipal budget including the school department budget or regional school district. The chief financial officer of the municipality shall also submit a report on a quarterly basis to the state office of municipal affairs division of property valuation certifying the status of the municipal budget. The chief financial officer of the school department or school district shall certify the status of the school district's budget and shall assist in the preparation of these reports. The monthly and quarterly reports shall be in a format prescribed by the state office of municipal affairs division of property valuation and the state auditor general. The reports shall contain a statement as to whether any actual or projected shortfalls in budget line items are expected to result in a year-end deficit, the projected impact on year-end financial results including all accruals and encumbrances, and how the municipality and school district plans to address any such shortfalls.

(c) If any reports required under this section project a year-end deficit, the chief financial officer of the municipality shall submit to the state office of municipal affairs a corrective action plan no later than thirty (30) days after completion of the monthly budget analysis referred to in subsection (b) above, which provides for the avoidance of a year-end deficit. The plan may include recommendations as to whether an increase in property taxes and/or spending cuts should be adopted to eliminate the deficit. The plan shall include a legal opinion by municipal counsel that the proposed actions under the plan are permissible under federal, state, and local law. The state office of municipal affairs may rely on the written representations made by the municipality in the plan and will not be required to perform an audit.

(d) If the state office of municipal affairs division of property valuation concludes the plan required hereunder is insufficient and/or fails to adequately address the financial condition of the municipality, the state office of municipal affairs division of property valuation can elect to pursue the remedies identified in section 45-12-22.7.

(e) The reports required shall include the financial operations of any departments or funds of municipal government including the school department or the regional school district, notwithstanding the status of the entity as a separate legal body. This provision does not eliminate the additional requirements placed on local and regional school districts by sections 16-2-9(f) and 16-3-11(e)(3).

45-12-22.7. Enforcement and remedies. -- In the event that a municipality does not comply with the requirements of this law the state auditor general or state office of municipal affairs through the division or property valuation through the director of administration revenue may elect any or all of the following remedies:

(1) Petition the superior court for mandatory injunctive relief seeking compliance with the provisions of this section. The superior court shall make a finding of fact as to whether there has been compliance with the provisions of this section. As herein before stated, the approval or disapproval of a plan shall be conclusive upon the court in making its finding as to compliance.

(2) In the event a municipality fails to provide a year-end deficit elimination plan under section 45-12-22.3, such noncompliance shall allow for the implementation of a financial review commission pursuant to section 45-9-3.

(3) Withholding of state aid. In the event that the state director of administration revenue with the concurrence of the auditor general elect to withhold state aid, said amounts shall be placed in a special account within the general fund. At such time the municipality comes into compliance with the reporting requirements of this section, said funds shall be released to the municipality by order of the state director of administration revenue and state auditor general.

SECTION 19. Title 42 of the General Laws entitled “State Affairs and Government” is hereby amended by adding thereto the following chapter:

CHAPTER 7.2

OFFICE OF HEALTH AND HUMAN SERVICES

42-7.2-1. Statement of Intent. -- The purpose of this Chapter is to develop a consumer-centered system of publicly-financed state administered health and human services that supports access to high quality services, protects the safety of the state’s most vulnerable citizens, and ensures the efficient use of all available resources by the five departments responsible for the health and human services programs serving all Rhode Islanders and providing direct assistance and support services to more than 250,000 individuals and families: the department of children, youth and families; the department of elderly affairs; the department of health; the department of human services; and the department of mental health, retardation and hospitals , collectively referred to within as “departments”. It is recognized that the executive office of health and human services and the departments have undertaken a variety of initiatives to further this goal and that they share a commitment to continue to work in concert to preserve and promote each other’s unique missions while striving to attain better outcomes for all the people and communities they serve. However, recent and expected changes in federal and state policies and funding priorities that affect the financing, organization, and delivery of health and human services programs pose new challenges and opportunities that have created an even greater need for structured and formal interdepartmental cooperation and collaboration. To meet this need while continuing to build on the achievements that have already been made, the interests of all Rhode Islanders will best be served by codifying in the state’s general laws the purposes and responsibilities of the executive office of health and human services and the position of secretary of health and human services.

42.7.2-2. Executive Office of Health and Human Services. -- There is hereby established within the executive branch of state government an executive office of health and human services. This office shall lead the state’s five health and human services departments in order to:

(a) Improve the economy, efficiency, coordination, and quality of health and human services policy and planning, budgeting and financing.

(b) Design strategies and implement best practices that foster service access, consumer safety and positive outcomes.

(c) Maximize and leverage funds from all available public and private sources, including federal financial participation, grants and awards.

(d) Increase public confidence by conducting independent reviews of health and human services issues in order to promote accountability and coordination across departments.

(e) Ensure that state health and human services policies and programs are responsive to changing consumer needs and to the network of community providers that deliver assistive services and supports on their behalf.

42-7.2-3. Secretary of health and human services -- Appointment. — The executive office of health and human services shall be administered by a secretary of health and human services, hereafter referred to as “secretary”. The position of secretary is hereby created in the unclassified service. The secretary shall be appointed by the governor, and shall be subject to advice and consent of the senate. The secretary shall hold office at the pleasure of the governor and until a successor is appointed and qualified. Before entering upon the discharge of duties, the secretary shall take an oath to faithfully execute the duties of the office.

42-7.2-4. Responsibilities of the secretary. -- (a) The secretary shall be responsible to the governor for supervising the executive office of health and human services and for providing strategic leadership and direction to the five departments.

(b) Notwithstanding the provisions set forth in this chapter, the governor shall appoint the directors of the departments within the executive office of health and human services. Directors appointed to those departments shall continue to be subject to the advice and consent of the senate and shall continue to hold office as set forth in §§ 42-6-1 et seq. and 42-72-1(c).

42-7.2-5. Duties of the secretary. -- The secretary shall be authorized to:

(a) Coordinate the administration and financing of health care benefits, human services and programs including those authorized by the Medicaid State Plan under Title XIX of the US Social Security Act. However, nothing in this section shall be construed as transferring to the secretary the powers, duties or functions conferred upon the departments by Rhode Island public and general laws for the administration of federal/state programs financed in whole or in part with Medicaid funds or the administrative responsibility for the preparation and submission of any state plans, state plan amendments, or authorized federal waiver applications.

(b) Serve as the governor’s chief advisor and liaison to federal policymakers on Medicaid reform issues as well as the principal point of contact in the state on any such related matters.

(c) Review and ensure the coordination of any new departmental waiver requests and renewals as well as any initiatives and proposals requiring amendments to the Medicaid state plan with the potential to affect the scope, amount or duration of publicly-funded health care services, provider payments or reimbursements, or access to or the availability of benefits and services as provided by Rhode Island general and public laws. The secretary shall consider whether any such waivers or amendments are legally and fiscally sound and consistent with the state’s policy and budget priorities. The secretary shall also assess whether a proposed waiver or amendment is capable of obtaining the necessary approvals from federal officials and achieving the expected positive consumer outcomes. Department directors shall, within the timelines specified, provide any information and resources the secretary deems necessary in order to perform the reviews authorized in this section;

(d) Beginning in 2006, prepare and submit to the governor and to the joint legislative committee for health care oversight, by no later than December 1 of each year, a comprehensive overview of all Medicaid expenditures included in the annual budgets developed by the departments. . The directors of the departments shall assist and cooperate with the secretary in fulfilling this responsibility by providing whatever resources, information and support shall be necessary.

(e) Resolve administrative, jurisdictional, operational, program, or policy conflicts among departments and their executive staffs and make necessary recommendations to the governor.

(f) Assure continued progress toward improving the quality, the economy and efficiency of state-administered health and human services. In this capacity, the secretary shall:

(1) Oversee implementation of reforms in the human resources practices of the departments that streamline and upgrade services, achieve greater economies of scale and establish the coordinated system of the staff education, cross- training, and career development services necessary to recruit and retain a highly-skilled, responsive, and engaged health and human services workforce;

(2) Encourage the departments to utilize consumer-centered approaches to service design and delivery that expand their capacity to respond efficiently and responsibly to the diverse and changing needs of the people and communities they serve;

(3) Develop all opportunities to maximize resources by leveraging the state’s purchasing power, centralizing and standardizing contractual services, pursuing alternative funding sources through grants, awards and partnerships and securing all available federal financial participation for programs and services provided through the departments;

(g) Ensure preparation of a coordinated comprehensive budget for the health and human services departments;

(h) Improve the ability of departments to utilize objective data to evaluate health and human services policy goals, resource use and outcome evaluation and to perform short and long-term policy planning and development.

(i) Foster the establishment of an integrated approach to interdepartmental information and data management that will facilitate the transition to consumer-centered system of state administered health and human services.

(j) At the direction of the governor or the general assembly, conduct independent reviews of state-administered health and human services programs, policies and related agency actions and activities and assist the department directors in identifying strategies to address any issues or areas of concern that may emerge thereof. The department directors shall provide any information and assistance deemed necessary by the secretary when undertaking such independent reviews.

(k) Provide regular and timely reports to the governor and make recommendations with respect to the state’s health and human services agenda.

(1) Employ such personnel and contract for such consulting services as may be required to perform the powers and duties lawfully conferred upon the secretary.

(m) Implement the provisions of any general or public law or regulation related to the disclosure, confidentiality and privacy of any information or records, in the possession or under the control of the executive office or the departments assigned to the executive office, that may be developed or acquired for purposes directly connected with the secretary’s duties set forth herein.

42-7.2-6. Departments assigned to the executive office -- Powers and duties. -- (a) The departments assigned to the secretary shall:

(1) Exercise their respective powers and duties in accordance with their statutory authority and the general policy established by the governor or by the secretary acting on behalf of the governor or in accordance with the powers and authorities conferred upon the secretary by this chapter;

(2) Provide such assistance or resources as may be requested or required by the governor and/or the secretary; and

(3) Provide such records and information as may be requested or required by the governor and/or the secretary to the extent allowed under the provisions of any applicable general or public law, regulation, or agreement relating to the confidentiality, privacy or disclosure of such records or information.

(b) Except as provided herein, no provision of this chapter or application thereof shall be construed to limit or otherwise restrict the department of children, youth and families, the department of elderly affairs, the department of health, the department of human services, and the department of mental health, retardation and hospitals from fulfilling any statutory requirement or complying with any valid rule or regulation.

42-7.2-7. Independent advisory council – Purposes. -- (a) The secretary shall establish an independent advisory council, hereafter referred to as “advisory council” composed of representatives of the network of health and human services providers, the communities the departments serve, state and local policy makers and any other stakeholders or consumers interested in improving access to high quality health and human services.

(b) The advisory council shall assist the secretary in identifying: issues of concern and priorities in the organization and/or delivery of services; areas where there is need for interdepartmental collaboration and cooperation; and opportunities for building sustainable and effective public-private partnerships that support the missions of the departments. The advisory council shall also provide guidance to the secretary in developing a plan to further the purposes of the executive office and assist the departments in meeting their unique missions and shared responsibilities.

(c) With the assistance of the department directors, the secretary shall hold health and human services forums and open meetings that encourage community, consumer and stakeholder input on health and human services issues, proposals and activities and actions of the executive office that have been identified by the advisory council as areas of concern or important policy priorities or opportunities for the state.

42-7.2-8. Assignment and reassignment of advisory bodies. -- The governor may, by executive order, reassign any advisory bodies, boards, or commissions associated or affiliated with the departments to the secretary of health and human services or assign any such entities that may be created.

42-7.2-9.  Appointment of employees. – The secretary, subject to the provisions of applicable state law, shall be the appointing authority for all employees of the executive office of health and human services. The secretary may assign this function to such subordinate officers and employees of the executive office as may to him or her seem feasible or desirable. The appointing authority of the secretary provided for herein shall not affect, interfere with, limit, or otherwise restrict the appointing authority vested in the directors for the employees of the departments under applicable general and public laws.

42-7.2-10. Appropriations and disbursements. – The general assembly shall annually appropriate such sums as it may deem necessary for the purpose of carrying out the provisions of this chapter. The state controller is hereby authorized and directed to draw his orders upon the general treasurer for the payment of such sum or sums, or so much thereof as may from time to time be required, upon receipt by him or her of proper vouchers approved by the secretary of the executive office of health and human services, or his or her designee.

42-7.2-11. Rules and regulations. -- The executive office of health and human services shall be deemed an agency for purposes of § 42-35-1, et seq. of the Rhode Island general laws. The secretary shall make and promulgate such rules and regulations, fee schedules not inconsistent with state law and fiscal policies and procedures as he or she deems necessary for the proper administration of this chapter and to carry out the policy and purposes thereof.

42-7.2-12. Medicaid program study. – The secretary of the executive office of health and human services shall conduct a study of the Medicaid programs administered by state to review and analyze the options available for reducing or stabilizing the level of uninsured Rhode Islanders and containing Medicaid spending. As part of this process, the study shall consider the flexibility afforded the state under the federal Deficit Reduction Act of 2006 and any other changes in federal Medicaid policy or program requirements occurring on or before December 31, 2006, as well as the various approaches proposed and/or adopted by other states through federal waivers, state plan amendments, public-private partnerships, and other initiatives. In exploring these options, the study shall examine fully the overall administrative efficiency of each program for children and families, elders and adults with disabilities and any such factors that may affect access and/or cost including, but not limited to, coverage groups, benefits, delivery systems, and applicable cost-sharing requirements. The secretary shall ensure that the study focuses broadly on the Medicaid programs administered by all five of the state's five health and human services departments, irrespective of the source or manner in which funds are budgeted or allocated. The directors of the departments shall cooperate with the secretary in preparing this study and provide any information and/or resources the secretary deems necessary to assess fully the short and long-term implications of the options under review both for the state and the people and the communities the departments serve. The secretary shall submit a report and recommendations based on the findings of the study to the general assembly and the governor no later than March 1, 2007.

42-7.2-12.1 Human Services Call Center Study (211). -- The secretary of the executive office of health and human services shall conduct a feasibility and impact study of the potential to implement a statewide 211 human services call center and hotline. As part of the process, the study shall catalog existing human service information hotlines in Rhode Island, including, but not limited to, state-operated call centers and private and not-for-profit information hotlines within the state. The study shall include analysis of whether consolidation of some or all call centers into a centralized 211 human services information hotline would be economically and practically advantageous for both the public users and agencies that currently operate separate systems. The study shall include projected cost estimates for any recommended actions, including estimates of cost additions or savings to private service providers. The directors of all state departments and agencies shall cooperate with the secretary in preparing this study and provide any information and/or resources the secretary deems necessary to assess fully the short and long-term implications of the operations under review both for the state and the people and the communities the departments serve. The secretary shall submit a report and recommendations based on the findings of the study to the general assembly, the governor, and the house and senate fiscal advisors no later than February 1, 2007.

42-7.2-13. Severability. – If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such invalidity shall not effect other provisions or applications of the chapter, which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

42-7.2-14. Cooperation of other state executive branch agencies. – As may be appropriate from time to time, the departments and other agencies of the state of the executive branch that have not been assigned to the executive office of health and human services under this chapter shall assist and cooperate with the executive office as may be required by the governor requested by the secretary.

42-7.2-15. Applicability. -- Nothing in this chapter shall change, transfer or interfere with, or limit or otherwise restrict the general assembly’s sole authority to appropriate and re-appropriate fiscal resources to the departments; the statutory or regulatory duties of the directors of the departments, or the appointing authority for the employees of the departments vested in the directors under applicable general and public laws.

SECTION 20. Section 36-4-2 of the General Laws in Chapter 36-4 entitled “Merit System” is hereby amended to read as follows:

36-4-2.  Positions in unclassified service. – The classified service shall comprise all positions in the state service now existing or hereinafter established, except the following specific positions which with other positions heretofore or hereinafter specifically exempted by legislative act shall constitute the unclassified service:

(1) Officers and legislators elected by popular vote and persons appointed to fill vacancies in elective offices.

(2) Employees of both houses of the general assembly.

(3) Officers, secretaries, and employees of the office of the governor, office of the lieutenant governor, department of state, department of the attorney general, and the treasury department.

(4) Members of boards and commissions appointed by the governor, members of the state board of elections and the appointees of the board, members of the commission for human rights and the employees of the commission, and directors of departments.

(5) The following specific offices:

(i) In the department of administration: director, chief information officer;

(ii) In the department of business regulation: director;

(iii) In the department of elementary and secondary education: commissioner of elementary and secondary education;

(iv) In the department of higher education: commissioner of higher education;

(v) In the department of health: director;

(vi) In the department of labor and training: director, administrative assistant, administrator of the labor board and legal counsel to the labor board;

(vii) In the department of environmental management: director;

(viii) In the department of transportation: director;

(ix) In the department of human services: director;

(x) In the state properties committee: secretary;

(xi) In the workers' compensation court: judges, administrator, deputy administrator, clerk, assistant clerk, clerk secretary;

(xii) In the department of elderly affairs: director;

(xiii) In the department of mental health, retardation, and hospitals: director;

(xiv) In the department of corrections: director, assistant director (institutions/operations), assistant director (rehabilitative services), assistant director (administration), and wardens;

(xv) In the department of children, youth and families: director, one assistant director, one associate director, and one executive director;

(xvi) In the public utilities commission: public utilities administrator;

(xvii) In the water resources board: general manager;

(xviii) In the human resources investment council: executive director.

(xix) In the office of health and human services: secretary of health and human services.

(6) Chief of the hoisting engineers, licensing division, and his or her employees; executive director of the veterans memorial building and his or her clerical employees.

(7) One confidential stenographic secretary for each director of a department and each board and commission appointed by the governor.

(8) Special counsel, special prosecutors, regular and special assistants appointed by the attorney general, the public defender and employees of his or her office, and members of the Rhode Island bar occupying a position in the state service as legal counsel to any appointing authority.

(9) The academic and/or commercial teaching staffs of all state institution schools, with the exception of those institutions under the jurisdiction of the board of regents for elementary and secondary education and the board of governors for higher education.

(10) Members of the military or naval forces, when entering or while engaged in the military or naval service.

(11) Judges, referees, receivers, clerks, assistant clerks, and clerical assistants of the supreme, superior, family, and district courts, the traffic tribunal, jurors and any persons appointed by any court.

(12) Election officials and employees.

(13) Administrator, executive high sheriff, sheriffs, chief deputy sheriffs, deputy sheriffs, and other employees of the sheriff's division within the department of administration and security officers of the traffic tribunal.

(14) Patient or inmate help in state charitable, penal, and correctional institutions and religious instructors of these institutions and student nurses in training, residents in psychiatry in training, and clinical clerks in temporary training at the institute of mental health within the state of Rhode Island medical center.

(15) Persons employed to make or conduct a temporary and special inquiry, investigation, project or examination on behalf of the legislature or a committee therefor, or on behalf of any other agency of the state if the inclusion of these persons in the unclassified service is approved by the personnel administrator. The personnel administrator shall notify the house fiscal advisor and the senate fiscal advisor whenever he or she approves the inclusion of a person in the unclassified service.

(ii) The duration of the appointment of a person, other than the persons enumerated in this section, shall not exceed ninety (90) days or until presented to the department of administration. The department of administration may extend the appointment another ninety (90) days. In no event shall the appointment extend beyond one hundred eighty (180) days.

(16) Members of the division of state police.

(17) Executive secretary of the Blackstone Valley district commission.

(18) Artist and curator of state owned art objects.

(19) Mental health advocate.

(20) Child advocate.

(21) The position of aquaculture coordinator and dredge coordinator within the coastal resources management council.

(22) Employees of the office of the health insurance commissioner.

SECTION 21. Section 42-11-2 of the General Laws in Chapter 42-11 entitled “Department of Administration” is hereby amended to read as follows:

42-11-2. Powers and duties of department. – The department of administration shall have the following powers and duties:

(a) To prepare a budget for the several state departments and agencies, subject to the direction and supervision of the governor;

(b) To administer the budget for all state departments and agencies, except as specifically exempted by law;

(c) To devise, formulate, promulgate, supervise, and control accounting systems, procedures, and methods for the state departments and agencies, conforming to such accounting standards and methods as are prescribed by law;

(d) To purchase or to contract for the supplies, materials, articles, equipment, printing, and services needed by state departments and agencies, except as specifically exempted by law;

(e) To prescribe standard specifications for those purchases and contracts and to enforce compliance with specifications;

(f) To supervise and control the advertising for bids and awards for state purchases;

(g) To regulate the requisitioning and storage of purchased items, the disposal of surplus and salvage, and the transfer to or between state departments and agencies of needed supplies, equipment, and materials;

(h) To maintain, equip, and keep in repair the state house, state office building, and other premises owned or rented by the state for the use of any department or agency, excepting those buildings, the control of which is vested by law in some other agency;

(i) To provide for the periodic inspection, appraisal or inventory of all state buildings and property, real and personal;

(j) To require reports from state agencies on the buildings and property in their custody;

(k) To issue regulations to govern the protection and custody of the property of the state;

(l) To assign office and storage space and to rent and lease land and buildings for the use of the several state departments and agencies in the manner provided by law;

(m) To control and supervise the acquisition, operation, maintenance, repair, and replacement of state-owned motor vehicles by state agencies;

(n) To maintain and operate central duplicating and mailing service for the several state departments and agencies;

(o) To furnish the several departments and agencies of the state with other essential office services;

(p) To survey and examine the administration and operation of the state departments and agencies, submitting to the governor proposals to secure greater administrative efficiency and economy, to minimize the duplication of activities, and to effect a better organization and consolidation of functions among state agencies;

(q) To assess and collect all taxes levied by the state by virtue of the various laws of the state;

(r) To analyze, evaluate, and appraise the tax system of the state, and to make recommendations for its revision in accordance with the best interests of the economy of the state;

(s) To operate a merit system of personnel administration and personnel management as defined in § 36-3-3 in connection with the conditions of employment in all state departments and agencies within the classified service;

(t) To assign or reassign, with the approval of the governor, any functions, duties, or powers established by this chapter to any agency within the department;

(u) To establish, maintain, and operate a data processing center or centers, approve the acquisition and use of electronic data processing services by state agencies, furnish staff assistance in methods, systems and programming work to other state agencies, and arrange for and effect the centralization and consolidation of punch card and electronic data processing equipment and services in order to obtain maximum utilization and efficiency;

(v) To devise, formulate, promulgate, supervise, and control a comprehensive and coordinated statewide information system designed to improve the data base used in the management of public resources, to consult and advise with other state departments and agencies and municipalities to assure appropriate and full participation in this system, and to encourage the participation of the various municipalities of this state in this system by providing technical or other appropriate assistance toward establishing, within those municipalities, compatible information systems in order to obtain the maximum effectiveness in the management of public resources;

(1) The comprehensive and coordinated statewide information system may include a Rhode Island geographic information system of land-related economic, physical, cultural and natural resources.

(2) In order to ensure the continuity of the maintenance and functions of the geographic information system, the general assembly may annually appropriate such sum as it may deem necessary to the department of administration for its support.

(w) To administer a statewide planning program including planning assistance to the state departments and agencies;

(x) To administer a statewide program of photography and photographic services;

(y) To negotiate with public or private educational institutions in the state, in cooperation with the department of health, for state support of medical education;

(z) To promote the expansion of markets for recovered material and to maximize their return to productive economic use through the purchase of materials and supplies with recycled content by the state of Rhode Island to the fullest extent practically feasible;

(aa) To approve costs as provided in § 23-19-32; and

(bb) To provide all necessary civil service tests for child protective investigators and social workers at least twice each year and to maintain an adequate hiring list for these positions at all times.

(cc) To prepare a report every three (3) months by all current property leases or rentals by any state or quasi-state agency to include the following information:

(1) Name of lessor;

(2) Description of the lease (purpose, physical characteristics, and location);

(3) Cost of the lease;

(4) Amount paid to date;

(5) Date initiated;

(6) Date covered by the lease.

(dd) To provide by December 31, 1995 the availability of automatic direct deposit to any recipient of a state benefit payment, provided that the agency responsible for making that payment generates one thousand (1,000) or more such payments each month.

(ee) To operate a division of motor vehicles. The division will be responsible for activities assigned to it by law, including but not limited to, motor vehicle registration, testing and licensing of motor vehicle operators, inspection of motor vehicles, and enforcement of laws relating to the issuance, suspension and revocation of motor vehicle registrations and drivers' licenses. The division shall administer the financial responsibility law. The chief of the division shall use the title and designation "administrator" on all licenses, registrations, orders of suspensions, financial responsibility notices or orders, or any other official documents issued or promulgated by the division.

(ff) To operate the Rhode Island division of sheriffs as provided in § 42-11-21.

(gg) To operate a statewide child support enforcement program in accordance with title IV-D of the Social Security Act and under title 15 of the Rhode Island general laws.

(hh) To encourage municipalities, school districts, and quasi-public agencies to achieve cost savings in health insurance, purchasing, or energy usage by participating in state contracts, or by entering into collaborative agreements with other municipalities, districts, or agencies. To assist in determining whether the benefit levels including employee cost sharing and unit costs of such benefits and costs are excessive relative to other municipalities, districts, or quasi-public agencies as compared with state benefit levels and costs.

SECTION 22. Chapter 37-2 of the General Laws entitled “State Purchases” is hereby amended by adding thereto the following section:

37-2-59.1. Establishment of the Rhode Island Strategic Purchasing Advisory Commission. -- In order to provide a means of collaboration between the state, cities/towns and school committees a permanent advisory commission is established named the “Rhode Island Strategic Purchasing Advisory Commission.” This Advisory Commission will consist of nine (9) members including; : (1) the state purchasing agent or his or her designee, who will serve as chair, (2) a designee of the board of regents of the Rhode Island department of elementary and secondary education, (3) a designee of the board of governors of higher education; ,(4) a designee of the Rhode Island School Committees Association; , (5) a designee of the Rhode Island League of Cities and Towns; , (6) a designee of the Association of School Business Officials; , (7) a designee of the Rhode Island Municipal Purchasing Agents Association, (8) a designee of the Rhode Island economic development corporation and; , (9) a designee of the state budget officer.

SECTION 23. Section 37-6-2 of the General Laws in Chapter 37-6 entitled "Acquisition of Land" is hereby amended to read as follows:

37-6-2. Rules, regulations, and procedures of committee. -- (a) The state properties committee is hereby authorized and empowered to adopt and prescribe rules of procedure and regulations, and from time to time amend, change, and eliminate rules and regulations, and make such orders and perform such actions as it may deem necessary to the proper administration of this chapter and sections 37-7-1 -- 37-7-9. In the performance of the commission's duties hereunder, the commission may in any particular case prescribe a variation in procedure or regulation when it shall deem it necessary in view of the exigencies of the case and the importance of speedy action in order to carry out the intent and purpose of this chapter and sections 37-7-1 -- 37-7-9. The commission shall file written notice thereof in the office of the secretary of state. All filings shall be available for public inspection.

(b) The following siting criteria shall be utilized whenever current existing leases expire or additional office space is needed:

(1) A preference shall be given to sites designated as enterprise zone census tracts pursuant to chapter 64.3 of title 42, or in blighted and/or substandard areas pursuant to section 45-31-8, or in downtown commercial areas where it can be shown the facilities would make a significant impact on the economic vitality of the community's central business district;

(2) Consideration should be given to adequate access via public transportation for both employees as well as the public being served, and, where appropriate, adequate parking;

(3) A site must be consistent with the respective community's local comprehensive plan; and

(4) The division of planning within the department of administration shall be included in the evaluation of all future lease proposals.

(c) The state properties committee shall explain, in writing, how each site selected by the committee for a state facility meets the criteria described in subsection (b) of this section.

(d) For any lease, rental agreement or extension of an existing rental agreement for leased office and operating space which carries a term of five (5) years or longer, including any options or extensions that bring the total term to five (5) years or longer, where the state is the tenant and the aggregate rent of the terms exceeds five hundred thousand dollars ($500,000) the State Properties Committee shall request approval of the general assembly prior to entering into any new agreements or signing any extensions with existing landlords. The state properties committee, in the form of a resolution, shall provide information relating to the purpose of the lease or rental agreement, the agency's current lease or rental costs, the expiration date of any present lease or rental agreement, the range of costs of a new lease or rental agreement, the proposed term of a new agreement, and the location and owner of the desired property.

SECTION 24. This article shall take effect upon passage.