2012 -- S 2472

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LC01769

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TAXATION -- EXCISE ON MOTOR VEHICLES AND TRAILERS

     Introduced By: Senators DiPalma, Lanzi, Pichardo, and Picard

     Date Introduced: February 16, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-34-11 of the General Laws in Chapter 44-34 entitled "Excise on

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Motor Vehicles and Trailers" is hereby amended to read as follows:

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     44-34-11. Rhode Island vehicle value commission. -- (a) There is hereby authorized,

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created, and established the "Rhode Island vehicle value commission" whose function it is to

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establish presumptive values of vehicles and trailers subject to the excise tax.

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      (b) The commission shall consist of the following seven (7) members as follows:

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      (1) The director of the department of revenue or his/her designee from the department of

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revenue, who shall serve as chair;

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      (2) Five (5) local tax officials named by the governor, at least one of whom shall be from

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a city or town under ten thousand (10,000) population and at least one of whom is from a city or

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town over fifty thousand (50,000) population in making these appointments the governor shall

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give due consideration to the recommendations submitted by the President of the Rhode Island

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League of Cities and Towns and each appointment shall be subject to the advice and consent of

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the senate;

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      (3) And one motor vehicle dealer appointed by the governor upon giving due

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consideration to the recommendation of the director of revenue and subject to the advice and

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consent of the senate.

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      (4) All members shall serve for a term of three (3) years.

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      (5) Current legislative appointees shall cease to be members of the commission upon the

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effective date of this act. Non-legislative appointees to the commission may serve out their terms

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whereupon their successors shall be appointed in accordance with this act. No one shall be

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eligible for appointment to the commission unless he or she is a resident of this state.

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      (6) Public members of the commission shall be removable by the governor pursuant to

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section 36-1-7 for cause only, and removal solely for partisan or personal reasons unrelated to

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capacity or fitness for the office shall be unlawful.

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      (7) The governor shall appoint a chairperson from the commission's members. The

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commission shall elect from among its members other officers as it may deem appropriate.

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      (c) The commission shall annually determine the presumptive values of vehicles and

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trailers subject to the excise tax in the following manner:

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      (1) Not earlier than September 30 and not later than December 31 of each year, the

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commission shall by rule adopt a methodology for determining the presumptive value of vehicles

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and trailers subject to the excise tax which shall give consideration to the following factors:

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      (i) Ninety percent (90%) of The the average retail price of similar vehicles of the same

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make, model, type, and year of manufacture as reported by motor vehicle dealers or by official

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used car guides, such as that of the National Automobile Dealers Association for New England.

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Where regional guides are not available, the commission shall use other publications deemed

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appropriate; and

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      (ii) Other information concerning the average retail prices for make, model, type, and

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year of manufacture of motor vehicles as the director and the Rhode Island vehicle value

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commission may deem appropriate to determine fair values.

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      (2) On or before February 1 of each year, it shall adopt a list of values for vehicles and

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trailers of the same make, model, type, and year of manufacture as of the preceding December 31

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in accordance with the methodology adopted between September 30 and December 31; the list

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shall be subject to a public hearing at least five (5) business days prior to the date of its adoption.

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      (3) Nothing in this section shall be deemed to require the commission to determine the

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presumptive value of vehicles and trailers which are unique, to which special equipment has been

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added or to which special modifications have been made, or for which adequate information is

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not available from the sources referenced in subdivision (1) of this subsection; provided, that the

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commission may consider those factors in its lists or regulations.

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      (4) The commission shall annually provide the list of presumptive values of vehicles and

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trailers to each tax assessor on or before February 15 of each year.

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      (d) The commission shall adopt rules governing its organization and the conduct of its

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business; prior to the adoption of the rules, the chair shall have the power to call meetings, and a

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simple majority of the members of the commission, as provided for in subsection (b) of this

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section, is necessary for a quorum, which quorum by majority vote shall have the power to

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conduct business in the name of the commission. The commission may adopt rules and elect from

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among its members such other officers as it deems necessary.

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      (e) The commission shall have the power to contract for professional services that it

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deems necessary for the development of the methodology for determining presumptive values, for

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calculating presumptive values according to the methodology, and for preparing the list of

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presumptive values in a form and format that is generally usable by cities and towns in their

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preparation of tax bills. The commission shall also have the power to incur reasonable expenses

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in the conduct of its business as required by this chapter and to authorize payments for the

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expenses.

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      (f) Commission members shall receive no compensation for the performance of their

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duties but may be reimbursed for their reasonable expenses incurred in carrying out such duties.

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      (g) The commission shall respond to petitions of appeal by local boards of review in

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accordance with the provisions of section 44-34-9.

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      (h) The commission shall establish, by rule, procedures for adopting an annual budget

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and for administering its finances. After July 1, 1986, one-half ( 1/2) of the cost of the

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commission's operations shall be borne by the state and one-half ( 1/2) shall be borne by cities

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and towns within the state, with the city and town share distributed among cities and towns on a

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per capita basis.

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      (i) Within ninety (90) days after the end of each fiscal year, the commission shall

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approve and submit an annual report to the governor, the speaker of the house of representatives,

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the president of the senate, and the secretary of state of its activities during that fiscal year. The

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report shall provide: an operating statement summarizing meetings or hearings held, meeting

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minutes if requested, subjects addressed, decisions rendered, rules or regulations promulgated,

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studies conducted, policies and plans developed, approved, or modified, and programs

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administered or initiated; a consolidated financial statement of all funds received and expended

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including the source of the funds, a listing of any staff supported by these funds, and a summary

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of any clerical, administrative or technical support received; a summary of performance during

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the previous fiscal year including accomplishments, shortcomings and remedies; a synopsis of

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hearings, complaints, suspensions, or other legal matters related to the authority of the

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commission; a summary of any training courses held pursuant to this subsection, a briefing on

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anticipated activities in the upcoming fiscal year; and findings and recommendations for

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improvements. The report shall be posted electronically on the general assembly and the secretary

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of state's websites as prescribed in section 42-20-8.2. The director of the department of revenue

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shall be responsible for the enforcement of this provision.

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     SECTION 2. Chapter 44-34 of the General Laws entitled "Excise on Motor Vehicles and

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Trailers" is hereby amended by adding thereto the following section:

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     44-34-15. Minimum tax. – Any city or town by ordinance may establish a minimum tax

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not to exceed one hundred dollars ($100) per year reduced in proportion to the days in the years

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the vehicle was located in such city or town, and any previously applied motor vehicle excise tax

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in excess of the ordinance enacted minimum tax shall be applied a credit to the minimum tax.

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     SECTION 3. Section 44-34.1-1 of the General Laws in Chapter 44-34.1 entitled "Motor

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Vehicle and Trailer Excise Tax Elimination Act of 1998" is hereby amended to read as follows:

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     44-34.1-1. Excise tax phase-out. -- (a) (1) Notwithstanding the provisions of chapter 34

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of this title or any other provisions to the contrary, the motor vehicle and trailer excise tax

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established by section 44-34-1 may be phased out. The phase-out shall apply to all motor vehicles

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and trailers, including leased vehicles.

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     (2) Lessors of vehicles that pay excise taxes directly to municipalities shall provide

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lessees, at the time of entering into the lease agreement, an estimate of annual excise taxes

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payable throughout the term of the lease. In the event the actual excise tax is less than the

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estimated excise tax, the lessor shall annually rebate to the lessee the difference between the

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actual excise tax and the estimated excise tax.

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     (b) Pursuant to the provisions of this section, all motor vehicles shall be assessed a value

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by the vehicle value commission. That value shall be assessed according to the provisions of

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section 44-34-11(c)(1) and in accordance with the terms as defined in subsection (d) of this

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section; provided, however, that the maximum taxable value percentage applicable to model year

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values as of December 31, 1997, shall continue to be applicable in future year valuations aged by

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one year in each succeeding year.

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     (c) (1) The motor vehicle excise tax phase-out shall commence with the excise tax bills

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mailed to taxpayers for the fiscal year 2000. The phase-out, beyond fiscal year 2003, shall be

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subject to annual review and appropriation by the general assembly. The tax assessors of the

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various cities and towns and fire districts shall reduce the average retail value of each vehicle

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assessed by using the prorated exemptions from the following table:

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     Local Fiscal Year State fiscal year

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     Exempt from value Local Exemption Reimbursement

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     fiscal year 1999 0 $1,500

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     fiscal year 2000 $1,500 $2,500

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     fiscal year 2001 $2,500 $3,500

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     fiscal year 2002 $3,500 $4,500

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     fiscal years 2003, 2004

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     and 2005 $4,500 $4,500

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     for fiscal year 2006 and $5,000 $5,000

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     for fiscal year 2007 $6,000 $6,000

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      for fiscal years 2008, 2009 and 2010 the exemption and the state fiscal year

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reimbursement shall be increased, at a minimum, to the maximum amount to the nearest two

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hundred and fifty dollar ($250) increment within the allocation of one and twenty-two hundredths

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percent (l.22%) of net terminal income derived from video lottery games pursuant to the

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provisions of section 42-61-15, and in no event shall the exemption in any fiscal year be less than

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the prior fiscal year.

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     for fiscal year 2011 and thereafter, the exemption shall be five hundred dollars ($500).

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Cities and towns may provide an additional exemption; provided, however, any such additional

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exemption shall not be subject to reimbursement.

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     (2) The excise tax phase-out shall provide levels of assessed value reductions until the tax

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is eliminated or reduced as provided in this chapter.

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     (3) Current exemptions shall remain in effect as provided in this chapter.

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     (4) The excise tax rates and ratios of assessment shall be maintained at a level identical to

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the level in effect for fiscal year 1998 for each city, town, and fire district; provided, in the town

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of Johnston the excise tax rate and ratios of assessment shall be maintained at a level identical to

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the level in effect for fiscal year 1999 levels and the levy of a city, town, or fire district shall be

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limited to the lesser of the maximum taxable value or net assessed value for purposes of

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collecting the tax in any given year. Provided, however, for fiscal year 2011 and thereafter, the

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rates and ratios of assessment may be less than but not more than the rates described in this

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subsection (4).

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     (d) Definitions.

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     (1) "Maximum taxable value" means the value of vehicles as prescribed by section 44-34-

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11 reduced by the percentage of assessed value applicable to model year values as determined by

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the Rhode Island vehicle value commission as of December 31, 1997, for the vehicles valued by

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the commission as of December 31, 1997. For all vehicle value types not valued by the Rhode

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Island vehicle value commission as of December 31, 1997, the maximum taxable value shall be

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the latest value determined by a local assessor from an appropriate pricing guide, multiplied by

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the ratio of assessment used by that city, town, or fire district for a particular model year as of

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December 31, 1997.

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     (2) "Net assessed value" means the motor vehicle values as determined in accordance

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with section 44-34-11 less all personal exemptions allowed by cities, towns, fire districts, and the

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state of Rhode Island exemption value as provided for in section 44-34.1-1(c)(1).

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     (e) If any provision of this chapter shall be held invalid by any court of competent

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jurisdiction, the remainder of this chapter and the applications of the provisions hereof shall not

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be effected thereby.

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     SECTION 4. This act shall take effect upon passage, and shall be applicable to the

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assignment of values as of December 31, 2011, and each year thereafter, and to the excise tax

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levy and minimum tax levy for the tax year 2012 and each tax year thereafter.

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LC01769

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- EXCISE ON MOTOR VEHICLES AND TRAILERS

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     This act would establish motor vehicle valuations at ninety percent (90%) of average

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retail price, and would also establish a minimum tax.

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     This act would take effect upon passage and would apply to the assignment of values as

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of December 31, 2011 and each year thereafter, and to the excise tax levy and minimum tax levy

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for the tax year 2012, and each tax year thereafter.

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LC01769

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