2024 -- S 2879

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LC004952

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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 Mack, Quezada, Zurier, Bissaillon, and Ciccone

     Date Introduced: March 22, 2024

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-5-12 and 44-5-13.11 of the General Laws in Chapter 44-5 entitled

"Levy and Assessment of Local Taxes" are hereby amended to read as follows:

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

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

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

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

provided, that:

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

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

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

the qualifications of § 44-5-13.11 shall be assessed and taxed in accordance with § 44-5-13.11;

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

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

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

neighborhood land use of a more intensive nature;

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

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

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

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

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

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

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

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

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

required by law; and

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

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

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

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

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

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

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

and other permitting fees as are now required by law.

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

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

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

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

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

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

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

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

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

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

collected for real property with renewable energy resources thereupon.

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

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

cash value of the improvements, as long as:

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

local tax assessor by December 31 each year; and

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

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

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

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

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defined herein.

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

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

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

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

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

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

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

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

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

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

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

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

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

in this section shall not apply to land.

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

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

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

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

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

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

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

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

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

of the phase out.

     44-5-13.11. Qualifying low-income housing — Assessment and taxation.

     (a) Any residential rental property that has been issued an occupancy permit on or after

January 1, 1995, after its development or substantial rehabilitation as defined by the U.S.

Department of Housing and Urban Development that meets the definition of low- or moderate-

income housing under § 45-53-3 and is encumbered by a covenant recorded in the land records in

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

either or both the rents that may be charged to tenants of the property or and the incomes of the

occupants of the property, is subject to a tax that equals eight percent (8%) of the property’s

previous years’ gross scheduled rental income rent potential or a lesser percentage as determined

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by each municipality.

     (b) If only a portion of the units in the property meet the requirements of subsection (a) of

this section, the municipality shall apply the eight percent (8%) rate only to the portion of the

property that meets the requirements of that subsection.

     (c) Municipal tax assessors shall promulgate written procedures regarding how property

owners may request the application of this statute to a particular residential property or portion

thereof. The procedures shall include an annual requirement for the provision of documentation of

gross rent potential and signed certification by the property owner or legal representative thereof

that the property meets the requirements of this section. Supporting documentation of the property's

affordability restrictions will only be required to be updated if there has been a change to those

restrictions.

     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

***

     This act would provide that only residential properties and new or rehabilitated residential

affordable housing units would be subject to the tax under § 44-5-13.11 relating to taxation of low-

income housing.

     This act would take effect upon passage.

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