| Chapter 368 |
| 2025 -- S 1091 Enacted 07/01/2025 |
| A N A C T |
| RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES |
Introduced By: Senators Bissaillon, and Burke |
| Date Introduced: May 23, 2025 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. Section 44-5-2 of the General Laws in Chapter 44-5 entitled "Levy and |
| Assessment of Local Taxes" is hereby amended to read as follows: |
| 44-5-2. Maximum levy. |
| (a) Through and including its fiscal year 2007, a city or 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. Through and including its fiscal year 2007, but in no fiscal year |
| thereafter, 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 through and including fiscal year |
| 2007 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 property |
| valuation and municipal finance in the department of revenue. |
| (b) In its fiscal year 2008, a city or town may levy a tax in an amount not more than five |
| and one-quarter percent (5.25%) in excess of the total amount levied and certified by that city or |
| town for its fiscal year 2007. In its fiscal year 2009, a city or town may levy a tax in an amount not |
| more than five percent (5%) in excess of the total amount levied and certified by that city or town |
| for its fiscal year 2008. In its fiscal year 2010, a city or town may levy a tax in an amount not more |
| than four and three-quarters percent (4.75%) in excess of the total amount levied and certified by |
| that city or town in its fiscal year 2009. In its fiscal year 2011, a city or town may levy a tax in an |
| amount not more than four and one-half percent (4.5%) in excess of the total amount levied and |
| certified by that city or town in its fiscal year 2010. In its fiscal year 2012, a city or town may levy |
| a tax in an amount not more than four and one-quarter percent (4.25%) in excess of the total amount |
| levied and certified by that city or town in its fiscal year 2011. In its fiscal year 2013 and in each |
| fiscal year thereafter, a city or town may levy a tax in an amount not more than four percent (4%) |
| in excess of the total amount levied and certified by that city or town for its previous fiscal year. |
| For purposes of this levy calculation, taxes levied pursuant to chapters 34 and 34.1 of this title shall |
| not be included. For FY 2018, in the event that a city or town, solely as a result of the exclusion of |
| the motor vehicle tax in the new levy calculation, exceeds the property tax cap when compared to |
| FY 2017 after taking into account that there was a motor vehicle tax in FY 2017, said city or town |
| shall be permitted to exceed the property tax cap for the FY 2018 transition year, but in no event |
| shall it exceed the four percent (4%) levy cap growth with the car tax portion included; provided, |
| however, nothing herein shall prohibit a city or town from exceeding the property tax cap if |
| otherwise permitted pursuant to subsection (d) of this section. |
| (c) The division of property valuation in the department of 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 division of property and municipal finance |
| within thirty (30) days of final action, in the form required, the adopted tax levy and rate and other |
| pertinent information. |
| (d) The amount levied by a city or town may exceed the percentage increase as specified |
| in subsection (a) or (b) 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 revenue. |
| (2) The city or town experiences or anticipates an emergency situation, which causes or |
| will cause the levy to exceed the percentage increase as specified in subsection (a) or (b) of this |
| section. 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. Without |
| limiting the generality of the foregoing, an emergency shall be deemed to exist when the city or |
| town experiences or anticipates health insurance costs, retirement contributions, or utility |
| expenditures that exceed the prior fiscal year’s health insurance costs, retirement contributions, or |
| utility expenditures by a percentage greater than three (3) times the percentage increase as specified |
| in subsection (a) or (b) of this section. |
| (3) A city or town forecasts or experiences debt services expenditures that exceed the prior |
| year’s debt service expenditures by an amount greater than the percentage increase as specified in |
| subsection (a) or (b) of this section and that 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 revenue which shall certify the debt service increase above the |
| percentage increase as specified in subsection (a) or (b) of this section 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) The city or town experiences substantial growth in its tax base as the result of major |
| new construction that necessitates either significant infrastructure or school housing expenditures |
| by the city or town or a significant increase in the need for essential municipal services and such |
| increase in expenditures or demand for services is certified by the department of revenue. |
| (5) Effective for tax assessment dated on or after December 31, 2025, and subject to all |
| requirements set forth in this section, the taxes levied on new housing units added to the municipal |
| tax base during a fiscal year may exceed the maximum levy. For the purposes of this subsection, |
| subject to the qualifying requirements below, new housing units shall include newly constructed |
| residential properties, meaning single-family homes, two-family homes, single-family attached |
| structures, multi-family dwellings, mixed-use developments where residential units constitute at |
| least fifty percent (50%) of the building's total square footage as well as existing buildings |
| converted into residential housing units qualifying under adaptive reuse in § 45-24-37; provided |
| such conversions meet all applicable zoning and building code requirements and increase the |
| municipality's total housing stock. New construction shall also include modular and manufactured |
| homes. This provision shall apply provided that: |
| (i) A city or town has issued over ten (10) certificates of occupancy for new housing units |
| during the fiscal year in which the exemption is sought; and |
| (ii) Such units are part of a development project that includes at least ten percent (10%) of |
| the units designated as low- or moderate-income housing as defined in §§ 45-53-3 and 42-128-8.1; |
| and |
| (iii) Such units are taxed utilizing the same valuation methods and rates as similar units in |
| the respective city or town; and |
| (iv) The taxes levied on these qualifying new housing units may only exceed the maximum |
| levy for the fiscal year in which the certificate of occupancy is issued and two (2) fiscal years |
| thereafter in which the municipality shall phase in the full taxes for these units into the maximum |
| levy by the fourth fiscal year following the issuance of a certificate of occupancy for the new |
| housing unit(s). |
| (e) Any levy pursuant to subsection (d) of this section in excess of the percentage increase |
| specified in subsection (a) or (b) of this section shall be approved by the affirmative vote of at least |
| four-fifths (⅘) of the full membership 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 also approve the excess levy. |
| (f) Nothing contained in this section constrains the payment of present or future obligations |
| as prescribed by § 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. |
| SECTION 2. This act shall take effect upon passage. |
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| LC002878 |
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