2024 -- S 2571

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LC005284

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

     

     Introduced By: Senators McKenney, Valverde, Gu, Lauria, and Burke

     Date Introduced: March 01, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-5-12 of the General Laws in Chapter 44-5 entitled "Levy and

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Assessment of Local Taxes" is hereby amended to read as follows:

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     44-5-12. Assessment at full and fair cash value.

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     (a) All real property subject to taxation shall be assessed at its full and fair cash value, as

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of December 31 in the year of the last update or revaluation, or at a uniform percentage thereof, not

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to exceed one hundred percent (100%), to be determined by the assessors in each town or city;

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provided, that:

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     (1) Any residential property encumbered by a covenant recorded in the land records in

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favor of a governmental unit or the Rhode Island housing and mortgage finance corporation

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restricting either or both the rents that may be charged or the incomes of the occupants shall be

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assessed and taxed in accordance with § 44-5-13.11;

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     (2) In assessing real estate that is classified as farmland, forest, or open space land in

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accordance with chapter 27 of this title, the assessors shall consider no factors in determining the

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full and fair cash value of the real estate other than those that relate to that use without regard to

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neighborhood land use of a more intensive nature;

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     (3) Warwick. The city council of the city of Warwick is authorized to provide, by

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ordinance, that the owner of any dwelling of one to three (3) family units in the city of Warwick

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who makes any improvements or additions on his or her principal place of residence in the amount

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up to fifteen thousand dollars ($15,000), as may be determined by the tax assessor of the city of

 

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Warwick, is exempt from reassessment of property taxes on the improvement or addition until the

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next general citywide reevaluation of property values by the tax assessor. For the purposes of this

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section, “residence” is defined as voting address. This exemption does not apply to any commercial

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structure. The property owner shall supply all necessary plans to the building official for the

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improvements or addition and shall pay all requisite building and other permitting fees as now are

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required by law; and

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     (4) Central Falls. The city council of the city of Central Falls is authorized to provide, by

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ordinance, that the owner of any dwelling of one to eight (8) units who makes any improvements

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or additions to his or her residential or rental property in an amount not to exceed twenty-five

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thousand dollars ($25,000), as determined by the tax assessor of the city of Central Falls, is exempt

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from reassessment of property taxes on the improvement or addition until the next general citywide

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reevaluation of property values by the tax assessor. The property owner shall supply all necessary

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plans to the building official for the improvements or additions and shall pay all requisite building

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and other permitting fees as are now required by law.

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     (5) Tangible property shall be assessed according to the asset classification table as defined

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in § 44-5-12.1. Renewable energy resources shall only be taxed as tangible property under § 44-5-

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3(c) and the real property on which they are located shall not be reclassified, revalued, or reassessed

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due to the presence of renewable energy resources, excepting only reclassification of farmland as

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addressed in § 44-27-10.1. Subject to the aforementioned exception for farmland, all assessments

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of real property with renewable energy resources thereon shall revert to the last assessed value

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immediately prior to the renewable developer’s purchasing, leasing, securing an option to purchase

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or lease, or otherwise acquiring any interest in the real property. However, notwithstanding the

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above, but without any limitation on taxpayer rights under § 44-5-26, no municipality shall be liable

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or otherwise responsible for any rebates, refunds, or any other reimbursements for taxes previously

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collected for real property with renewable energy resources thereupon.

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     (6) Provided, however, that, for taxes levied after December 31, 2015, new construction on

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development property is exempt from the assessment of taxes under this chapter at the full and fair

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cash value of the improvements, as long as:

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     (i) An owner of development property files an affidavit claiming the exemption with the

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local tax assessor by December 31 each year; and

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     (ii) The assessor shall then determine if the real property on which new construction is

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located is development property. If the real property is development property, the assessor shall

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exempt the new construction located on that development property from the collection of taxes on

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improvements, until such time as the real property no longer qualifies as development property, as

 

LC005284 - Page 2 of 4

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defined herein.

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     For the purposes of this section, “development property” means: (A) Real property on

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which a single-family residential dwelling or residential condominium is situated and said single-

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family residential dwelling or residential condominium unit is not occupied, has never been

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occupied, is not under contract, and is on the market for sale; or (B) Improvements and/or

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rehabilitation of single-family residential dwellings or residential condominiums that the owner of

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such development property purchased out of a foreclosure sale, auction, or from a bank, and which

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property is not occupied. Such property described in subsection (a)(6)(ii) of this section shall

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continue to be taxed at the assessed value at the time of purchase until such time as such property

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is sold or occupied and no longer qualifies as development property. As to residential

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condominiums, this exemption shall not affect taxes on the common areas and facilities as set forth

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in § 34-36-27. In no circumstance shall such designation as development property extend beyond

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two (2) tax years and a qualification as a development property shall only apply to property that

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applies for, or receives, construction permits after July 1, 2015. Further, the exemptions set forth

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in this section shall not apply to land.

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     (7) In assessing real estate that is classified as a low- and moderate-income housing under

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§ 45-53-3, the assessors shall use the last current sales price of the property, within the last five (5)

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years, as the assessed value. Any property that has not been sold within the last five (5) years may

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be assessed based upon the newly calculated maximum sales price, as determined by the property's

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monitoring agent, which shall constitute the new assessed value for the next five (5) years, or until

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the next resale, whichever occurs first.

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     (b) Municipalities shall make available to every land owner whose property is taxed under

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the provisions of this section a document that may be signed before a notary public containing

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language to the effect that they are aware of the additional taxes imposed by the provisions of § 44-

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5-39 in the event that they use land classified as farm, forest, or open space land for another purpose.

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     (c) Pursuant to the provisions of § 44-3-29.1, all wholesale and retail inventory subject to

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taxation is assessed at its full and fair cash value, or at a uniform percentage of its value, not to

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exceed one hundred percent (100%), for fiscal year 1999, by the assessors in each town and city.

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Once the fiscal year 1999 value of the inventory has been assessed, this value shall not increase.

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The phase-out rate schedule established in § 44-3-29.1(d) applies to this fixed value in each year

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of the phase out.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

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     This act would limit real estate tax assessments for low- and moderate-income housing

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units to the last current sales price within a five (5) year period. This act would also allow real

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estate tax assessments for those properties with a last current sales price greater than five (5) years

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to be calculated under an alternative assessment procedure.

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     This act would take effect upon passage.

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