2025 -- H 5688

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LC001479

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Representatives Speakman, Casey, Kislak, and Diaz

     Date Introduced: February 26, 2025

     Referred To: House Municipal Government & Housing

     (Providence)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-5-13.11 of the General Laws in Chapter 44-5 entitled "Levy and

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

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

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

1, 1995, after substantial rehabilitation as defined by the U.S. Department of Housing and Urban

Development 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 the incomes of the occupants of the

property is,:

     (1) At least forty percent (40%) of the rental dwelling units in the property to levels

affordable to households at or below eighty percent (80%) statewide area median income, adjusted

for family size; or

     (2) At least thirty percent (30%) of the rental dwelling units in the property to levels

affordable to households at or below sixty percent (60%) statewide area median income, adjusted

for family size, as established by § 45-53-3 are subject to a tax that equals eight percent (8%) of

the property’s previous years’ gross scheduled rental income or a lesser percentage as determined

by each municipality.

     (b) Any residential rental housing that is created by converting an existing building, from

non-residential use, and is issued an occupancy permit, shall be subject to a fixed percentage of the

prior year’s gross scheduled rental income for the following thirty (30) years as outlined below:

      Year Schedule

      1 8%

      2 8%

      3 8%

      4 8%

      5 8%

      6 8%

      7 8%

      8 8%

      9 8%

      10 8%

      11 8%

      12 8%

      13 8%

      14 8%

      15 8%

      16 10%

      17 10%

      18 10%

      19 10%

      20 10%

      21 12%

      22 12%

      23 12%

      24 12%

      25 12%

      26 12%

      27 12%

      28 12%

      29 12%

      30 12%

     (c) The term “residential property” as used in this section shall not include any portion of

a mixed-use building that is not used as a residence or in service of a residence. In those instances,

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property owners shall provide evidence deemed necessary by the local assessor to demonstrate the

fractional portion of each property that should be taxed at the appropriate non-residential rate. The

assessor shall then tax the residential portion at the appropriate rate set in subsections (a) or (b) of

this section, and the remainder at the appropriate non-residential rate.

     (d) For those properties that have been approved for tax treatment under this section by an

assessor as of December 31, 2024, the manner in which the assessor has applied this statute in the

past may continue receiving any previously established tax rate agreed to by the municipality and

the property owner unless the property owner affirmatively rejects the same. Said prior tax

treatment is transferrable to any subsequent property owner if the conditions of the tax treatment

are met by the new owner to the satisfaction of the assessor.

     (e) Creating low-income housing and creating new housing through adaptive reuse are

matters of state-wide concern. For that reason, no city or town shall have the authority to tax

properties qualifying for and utilizing this section at any rate higher than otherwise provided for in

this section.

     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 provide an 8% tax rate for those properties that are encumbered by a deed

restriction for low-income housing set at 80% or 60% of adjusted median income established by

HUD, and would provide a tax stabilization schedule for those buildings which are converted to

residential properties starting at 8% of rent rolls and gradually increasing over thirty (30) years.

     This act would take effect upon passage.

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