ARTICLE 25 SUBSTITUTE A AS AMENDED

RELATING TO STATE AID

SECTION 1. Sections 45-13-1, 45-13-5.1 and 45-13-12 of the General Laws in Chapter 45-13 entitled “State Aid” are hereby amended to read as follows:

45-13-1.  Apportionment of annual appropriation for state aid. – (a) As used in this chapter, the following words and terms have the following meanings:

(1) "Population" means the most recent estimates of population for each city and town as reported by the United States department of commerce, bureau of the census.

(2) "Income" means the most recent estimate of per-capita income for a city, town or county as reported by the United States department of commerce, bureau of the census.

(3) "Tax effort" means the total taxes imposed by a city or town for public purposes or the totals of those taxes for the cities or towns within a county (except employee and employer assessments and contributions to finance retirement and social insurance systems and other special assessments for capital outlay) determined by the United States secretary of commerce for general statistical purposes and adjusted to exclude amounts properly allocated to education expenses.

(4) "Reference year" means the second fiscal year preceding the beginning of the fiscal year in which the distribution of state aid to cities and towns is made provided however that the reference year for distributions made in fiscal year 2007-2008 shall be the third fiscal year preceding the beginning of the fiscal year 2007-2008.

(b) Aid to cities and towns shall be apportioned as follows: For each county, city or town, let R be the tax effort divided by the square of per capita income, i.e., R = (tax effort)/(income x income).

The amount to be allocated to the counties shall be apportioned in the ratio of the value of R for each county divided by the sum of the values of R for all five (5) counties.

The amount to be allocated for all cities and for all towns within a county shall be the allocation for that county apportioned proportionally to the total tax effort of the towns and cities in that county.

The amount to be allocated to any city or town is the amount allocated to all cities or all towns within the county apportioned in the ratio of the value of R for that city (or town) divided by the sum of the values of R for all cities (or all towns) in that county; provided, further, that no city or town shall receive an entitlement in excess of one hundred forty-five percent (145%) of that city or town's population multiplied by the average per capita statewide amount of the annual appropriation for state aid to cities and towns. Any excess entitlement shall be allocated to the remainder of the cities and towns in the respective county in accordance with the provisions of this section.

For fiscal year 2004, notwithstanding the provisions of subsection (a), aid calculations shall be based on a blended rate of ninety percent (90%) of the data from the 1990 census and ten percent (10%) of the data from the 2000 census. In each of the succeeding nine (9) fiscal years, the calculations shall be based on a blended rate that increases the percentage of data utilized from the 2000 census by ten percent (10%) from the previous year and decreases the percentage of the data utilized from the 1990 census by ten percent (10%) from the previous year.

(c) The total amount of aid to be apportioned pursuant to subsection (b) above shall be specified in the annual appropriation act of the state and shall be equal to the following:

(1) For fiscal years ending June 30, 1994 through June 30, 1998, the total amount of aid shall be based upon one percent (1%) of total state tax revenues in the reference year.

(2) For the fiscal year ending June 30, 1999, the total amount of aid shall be based upon one and three-tenths percent (1.3%) of total state tax revenues in the reference year.

(3) For the fiscal year ending June 30, 2000, the total amount of aid shall be based upon one and seven-tenths percent (1.7%) of total state tax revenues in the reference year.

(4) For the fiscal year ending June 30, 2001, the total amount of aid shall be based upon two percent (2.0%) of total state tax revenues in the reference year.

(5) For the fiscal year ending June 30, 2002, the total amount of aid shall be based upon two and four-tenths percent (2.4%) of total state tax revenues in the reference year.

(6) For the fiscal year ending June 30, 2003, the total amount of aid shall be based upon two and four-tenths percent (2.4%) of total state tax revenues in the reference year.

(7) For the fiscal year ending June 30, 2004, the total amount of aid shall be based upon two and seven-tenths percent (2.7%) of total state tax revenues in the reference year.

(8) For the fiscal year ending June 30, 2005, the total amount of aid shall be fifty-two million four hundred thirty-eight thousand five hundred thirty-two dollars ($52,438,532).

(9) For the fiscal year ending June 30, 2006, the total amount of aid shall be based upon three percent (3.0%) of total state tax revenues in the reference year.

(10) For the fiscal year ending June 30, 2007 the total amount of aid shall be sixty-four million six hundred ninety-nine thousand three dollars ($64,699,003).

(11) For the fiscal year ending June 30, 2008, the total amount of aid shall be based upon three and seven-tenths percent (3.7%) of total state tax revenues in the reference year. sixty-four million six hundred ninety-nine thousand three dollars ($64,699,003).

(12) For the fiscal year ending June 30, 2009 and each year thereafter, the total amount of aid shall be based upon four and one-tenths percent (4.1%) three percent (3.0%) of total state tax revenues in the reference year.

(13) For the fiscal year ending June 30, 2010, the total amount of aid shall be based upon four and four-tenths percent (4.4%) of total state tax revenues in the reference year.

(14) For the fiscal year ending June 30, 2011, the total amount of aid shall be based upon four and seven-tenths percent (4.7%) of total state tax revenues in the reference year.

(d) The assent of two-thirds ( 2/3) of the members elected to each house of the general assembly shall be required to repeal or amend this section.

45-13-5.1. General assembly appropriations in lieu of property tax from certain exempt private and state properties. – (a) In lieu of the amount of local real property tax on real property owned by any private nonprofit institution of higher education, or any nonprofit hospital facility, or any state owned and operated hospital, veterans' residential facility, or correctional facility occupied by more than 100 residents which may have been or will be exempted from taxation by applicable state law, exclusive of any facility operated by the federal government, the state of Rhode Island, or any of its subdivisions, the general assembly shall annually appropriate for payment to the several cities and towns in which the property lies a sum equal to twenty-seven percent (27%) of all tax that would have been collected had the property been taxable.

(b) As used in this section, "private nonprofit institution of higher education" means any institution engaged primarily in education beyond the high school level, the property of which is exempt from property tax under any of the subdivisions, and "nonprofit hospital facility" means any nonprofit hospital licensed by the state and which is used for the purpose of general medical, surgical, or psychiatric care and treatment.

(c) The grant payable to any municipality under the provision of this section shall be equal to twenty-seven percent (27%) of the property taxes which, except for any exemption to any institution of higher education or general hospital facility, would have been paid with respect to that exempt real property on the assessment list in the municipality for the assessment date of December 31, 1986 and with respect to such exempt real property appearing on an assessment list in the municipality on succeeding assessment dates. Provided however that the grant paid for the fiscal year ending June 30, 2008 shall be based upon the assessment list in the municipality as of December 31, 2004.

(d) The state budget offices shall include the amount of the annual grant in the state budget for the fiscal year commencing July 1, 1988 and each fiscal year thereafter. The amount of the annual grant payable to each municipality in any year in accordance with this section shall be reduced proportionately in the event that the total of the annual grants in any year exceeds the amount appropriated that year for the purposes of this section.

(e) Distribution of appropriations shall be made by the state on or before July 31 of 1988 and each July 31 thereafter, and the payments may be counted as a receivable by any city or town for a fiscal year ending the preceding June 30.

(f) Any act or omission by the state with respect to this chapter shall in no way diminish the duty of any town or municipality to provide public safety or other ordinary services to the properties or facilities of the type listed in subsection (a).

(g) Provided, that payments authorized pursuant to this section shall be reduced pro rata, for that period of time that the municipality suspends or reduces essential services to eligible facilities. For the purposes of this section "essential services" include, but are not to be limited to, police, fire and rescue.

45-13-12. Distressed communities relief fund. – (a) There is established a fund to provide state assistance to those Rhode Island cities and towns which have the highest property tax burdens relative to the wealth of taxpayers.

(b) Establishment of indices. Four (4) indices of distress shall be established to determine eligibility for the program. Each community shall be ranked by each distress index and any community which falls into the lowest twenty percent (20%) of at least three (3) of the four (4) indices shall be eligible to receive assistance. The four (4) indices are established as follows:

(1) Percent of tax levy to full value of property. This shall be computed by dividing the tax levy of each municipality by the full value of property for each municipality. For the 1990-91 fiscal year, tax levy and full value shall be as of the assessment date December 31, 1986.

(2) Per capita income. This shall be the most recent estimate reported by the U.S. department of commerce, bureau of the census.

(3) Percent of personal income to full value of property. This shall be computed by multiplying the per capita income above by the most recent population estimate as reported by the U.S. department of commerce, bureau of the census, and dividing the result by the full value of property.

(4) Per capita full value of property. This shall be the full value of property divided by the most recent estimate of population by the U.S. department of commerce, bureau of the census.

(c) Distribution of funds. Funds shall be distributed to each eligible community on the basis of the community's tax levy relative to the total tax levy of all eligible communities. For the fiscal year 1990-91, the reference year for the tax levy shall be the assessment date of December 31, 1988. For each fiscal year thereafter except for fiscal year 2007-2008, the reference year and the fiscal year shall bear the same relationship. For the fiscal year 2007-2008 the reference year shall be the same as for the distributions made in fiscal year 2006-2007.

Any newly qualifying community shall be paid fifty percent (50%) of current law requirements the first year it qualifies. The remaining fifty percent (50%) shall be distributed to the other distressed communities proportionately. When any community falls out of the distressed community program, it shall receive a one-time payment of fifty percent (50%) of the prior year requirement exclusive of any reduction for first year qualification. The community shall be considered a distressed community in the fall-out year.

(d) Appropriation of funds. The state of Rhode Island shall appropriate to eligible communities the sum of five million dollars ($5,000,000) plus the collections from the real estate conveyance tax pursuant to § 44-25-1(c) which have been deposited as general revenues. Provided, however, in fiscal years 2004 and 2005 the State of Rhode Island shall distribute to eligible communities the funds appropriated to the distressed communities relief program in the annual appropriation act, including collections from the video lottery terminal revenue pursuant to § 42-61.2-7(b). appropriate funds in the annual appropriations act to support this program.

(e) Payments. Payments shall be made to eligible communities each March from amounts collected pursuant to § 44-25-1(c) during the period July 1 to December 31 and in August from collections during the period January 1 to June 30. Provided, however, in fiscal years 2004 and 2005 payments shall be made to eligible communities as follows: fifty percent (50%) in August of each fiscal year and fifty percent (50%) in the following March of each fiscal year. equal to one half of the appropriated amount and each August equal to one half of the appropriated amount.

SECTION 2. Section 29-6-2 of the General Laws in Chapter 29-6 entitled “State Aid to Libraries” is hereby amended to read as follows:

29-6-2. Public library services. – (a) For each city or town, the state's share to support local public library services shall be equal to at least twenty-five percent (25%) of both the amount appropriated and expended in the second preceding fiscal year by the city or town from local tax revenues and funds from the public library's private endowment that supplement the municipal appropriation; provided, however, the state in any year shall not be obligated to match any amount from the endowment that exceeds six percent (6%) of the three (3) year average market value, calculated at the end of the calendar year, of the investments in the endowment. The amount of the grant payable to each municipality in any year in accordance with this section shall be reduced proportionately in the event that the total of those grants in any year exceeds the amount appropriated that year for the purposes of this section. Provided further, however, that the reference year for the state’s share of support to be paid in the year ending June 30, 2008 shall be the third preceding year.

(b) Those public libraries that do not qualify for aid pursuant to the provisions of subsection (a) of this section may apply for resource sharing grants, to be used exclusively for the purpose of payment of the cooperating libraries automated network (CLAN) annual assessment charges. Eligible public libraries shall apply directly to the office of library and information services for these resource sharing grants, and the grants shall be awarded to the libraries individually, rather than to the city or town. Eligible libraries must be or become members of the CLAN upon receipt of the grant, serve municipalities that meet minimum standards for Rhode Island public libraries, and meet standards for member libraries of the library of Rhode Island (LORI) network.

(c) Provided, that notwithstanding any other provisions of this chapter to the contrary, the state's share to support local public library services shall also include funding to the Pontiac Free Library in the city of Warwick for said library's participation in the cooperating libraries automated network (CLAN). Such funding shall be provided regardless of whether the city of Warwick appropriates funds from local tax revenues to said library. The amount of said state support shall be equal to the average of the amount appropriated by the city of Warwick to each library in said municipality for participation in the CLAN program, in accordance with the provisions of and formulas set forth in subsection (a) herein. Provided, further, that in the event the city of Warwick appropriates funds from local tax revenues for the Pontiac Free Library, then the amount of the state's share to said library shall be calculated in accordance with the provisions of subsection (a) herein for any year in which such calculation is applicable.

SECTION 3. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” is hereby amended to read as follows:

42-61.2-7.  Division of revenue. – (a) Notwithstanding the provisions of § 42-61-15, the allocation of net terminal income derived from video lottery games is as follows:    

(1) For deposit in the general fund and to the state lottery division fund for administrative purposes: Net terminal income not otherwise disbursed in accordance with subdivisions (a)(1) (2)– (a)(6) herein;

(i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally allocated to the distressed communities as defined in § 45-13-12 provided that no eligible community shall receive more than twenty-five percent (25%) of that community's currently enacted municipal budget as its share under this specific subsection. Distributions made under this specific subsection are supplemental to all other distributions made under any portion of general laws § 45-13-12. For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and shall be made from general appropriations.

 (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars ($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of § 44-33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 (iii) One and twenty-two one hundredths of one percent (1.22%) to fund § 44-34.1-1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event shall the exemption in any fiscal year be less than the prior fiscal year.

(iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent (0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and shall be made from general appropriations.

(2) To the licensed video lottery retailer:

(a) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars ($384,996);

(ii) On and after the effective date of the NGJA Master Contract, to the licensed video lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars ($384,996).

(b) Prior to the effective date of the UTGR Master Contract, to the present licensed video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven thousand six hundred eighty-seven dollars ($767,687);

(ii) On and after the effective date of the UTGR Master Contract, to the licensed video lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars ($767,687).

(3) To the technology providers who are not a party to the GTECH Master Contract as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net terminal income of the provider's terminals;

(ii) To contractors who are a party to the Master Contract as set forth and referenced in Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

(iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted proportionately from the payments to technology providers the sum of six hundred twenty-eight thousand seven hundred thirty-seven dollars ($628,737);

(4) To the city of Newport one and one hundreth percent (1.01%) of net terminal income of authorized machines at Newport Grand and to the town of Lincoln one and twenty-six hundreths (1.26%) of net terminal income of authorized machines at Lincoln Park; and

(5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars ($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a Tribal Development Fund to be used for the purpose of encouraging and promoting: home ownership and improvement, elderly housing, adult vocational training; health and social services; childcare; natural resource protection; and economic development consistent with state law. Provided, however, such distribution shall terminate upon the opening of any gaming facility in which the Narragansett Indians are entitled to any payments or other incentives; and provided further, any monies distributed hereunder shall not be used for, or spent on previously contracted debts.

(6) Unclaimed prizes and credits shall remit to the general fund of the state;

(7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(6) shall be made on an estimated monthly basis. Payment shall be made on the tenth day following the close of the month except for the last month when payment shall be on the last business day.

SECTION 4. This article shall take effect as of July 1, 2007.