Rhode Island 2025 Regular Session

Rhode Island House Bill H6162 Latest Draft

Bill / Introduced Version Filed 04/02/2025

                             
 
 
 
2025 -- H 6162 
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LC002647 
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S T A T E O F R H O D E I S L A N D 
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 Kislak, Slater, Ajello, and Biah 
Date Introduced: April 02, 2025 
Referred To: House Municipal Government & Housing 
(Providence) 
 
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 1 
Assessment of Local Taxes" is hereby amended to read as follows: 2 
44-5-2. Maximum levy. 3 
(a) Through and including its fiscal year 2007, a city or town may levy a tax in an amount 4 
not more than five and one-half percent (5.5%) in excess of the amount levied and certified by that 5 
city or town for the prior year. Through and including its fiscal year 2007, but in no fiscal year 6 
thereafter, the amount levied by a city or town is deemed to be consistent with the five and one-7 
half percent (5.5%) levy growth cap if the tax rate is not more than one hundred and five and one-8 
half percent (105.5%) of the prior year’s tax rate and the budget resolution or ordinance, as 9 
applicable, specifies that the tax rate is not increasing by more than five and one-half percent (5.5%) 10 
except as specified in subsection (c) of this section. In all years when a revaluation or update is not 11 
being implemented, a tax rate is deemed to be one hundred five and one-half percent (105.5%) or 12 
less of the prior year’s tax rate if the tax on a parcel of real property, the value of which is unchanged 13 
for purpose of taxation, is no more than one hundred five and one-half percent (105.5%) of the 14 
prior year’s tax on the same parcel of real property. In any year through and including fiscal year 15 
2007 when a revaluation or update is being implemented, the tax rate is deemed to be one hundred 16 
five and one-half percent (105.5%) of the prior year’s tax rate as certified by the division of property 17 
valuation and municipal finance in the department of revenue. 18 
(b) In its fiscal year 2008, a city or town may levy a tax in an amount not more than five 19   
 
 
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and one-quarter percent (5.25%) in excess of the total amount levied and certified by that city or 1 
town for its fiscal year 2007. In its fiscal year 2009, a city or town may levy a tax in an amount not 2 
more than five percent (5%) in excess of the total amount levied and certified by that city or town 3 
for its fiscal year 2008. In its fiscal year 2010, a city or town may levy a tax in an amount not more 4 
than four and three-quarters percent (4.75%) in excess of the total amount levied and certified by 5 
that city or town in its fiscal year 2009. In its fiscal year 2011, a city or town may levy a tax in an 6 
amount not more than four and one-half percent (4.5%) in excess of the total amount levied and 7 
certified by that city or town in its fiscal year 2010. In its fiscal year 2012, a city or town may levy 8 
a tax in an amount not more than four and one-quarter percent (4.25%) in excess of the total amount 9 
levied and certified by that city or town in its fiscal year 2011. In its fiscal year 2013 and in each 10 
fiscal year thereafter, a city or town may levy a tax in an amount not more than four percent (4%) 11 
in excess of the total amount levied and certified by that city or town for its previous fiscal year. 12 
For purposes of this levy calculation, taxes levied pursuant to chapters 34 and 34.1 of this title shall 13 
not be included. For FY 2018, in the event that a city or town, solely as a result of the exclusion of 14 
the motor vehicle tax in the new levy calculation, exceeds the property tax cap when compared to 15 
FY 2017 after taking into account that there was a motor vehicle tax in FY 2017, said city or town 16 
shall be permitted to exceed the property tax cap for the FY 2018 transition year, but in no event 17 
shall it exceed the four percent (4%) levy cap growth with the car tax portion included; provided, 18 
however, nothing herein shall prohibit a city or town from exceeding the property tax cap if 19 
otherwise permitted pursuant to subsection (d) of this section. 20 
(c) The division of property valuation in the department of revenue shall monitor city and 21 
town compliance with this levy cap, issue periodic reports to the general assembly on compliance, 22 
and make recommendations on the continuation or modification of the levy cap on or before 23 
December 31, 1987, December 31, 1990, and December 31, every third year thereafter. The chief 24 
elected official in each city and town shall provide to the division of property and municipal finance 25 
within thirty (30) days of final action, in the form required, the adopted tax levy and rate and other 26 
pertinent information. 27 
(d) The amount levied by a city or town may exceed the percentage increase as specified 28 
in subsection (a) or (b) of this section if the city or town qualifies under one or more of the following 29 
provisions: 30 
(1) The city or town forecasts or experiences a loss in total non-property tax revenues and 31 
the loss is certified by the department of revenue. 32 
(2) The city or town experiences or anticipates an emergency situation, which causes or 33 
will cause the levy to exceed the percentage increase as specified in subsection (a) or (b) of this 34   
 
 
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section. In the event of an emergency or an anticipated emergency, the city or town shall notify the 1 
auditor general who shall certify the existence or anticipated existence of the emergency. Without 2 
limiting the generality of the foregoing, an emergency shall be deemed to exist when the city or 3 
town experiences or anticipates health insurance costs, retirement contributions, or utility 4 
expenditures that exceed the prior fiscal year’s health insurance costs, retirement contributions, or 5 
utility expenditures by a percentage greater than three (3) times the percentage increase as specified 6 
in subsection (a) or (b) of this section. 7 
(3) A city or town forecasts or experiences debt services expenditures that exceed the prior 8 
year’s debt service expenditures by an amount greater than the percentage increase as specified in 9 
subsection (a) or (b) of this section and that are the result of bonded debt issued in a manner 10 
consistent with general law or a special act. In the event of the debt service increase, the city or 11 
town shall notify the department of revenue which shall certify the debt service increase above the 12 
percentage increase as specified in subsection (a) or (b) of this section the prior year’s debt service. 13 
No action approving or disapproving exceeding a levy cap under the provisions of this section 14 
affects the requirement to pay obligations as described in subsection (d) of this section. 15 
(4) The city or town experiences substantial growth in its tax base as the result of major 16 
new construction that necessitates either significant infrastructure or school housing expenditures 17 
by the city or town or a significant increase in the need for essential municipal services and such 18 
increase in expenditures or demand for services is certified by the department of revenue. 19 
(e) Any levy pursuant to subsection (d) of this section in excess of the percentage increase 20 
specified in subsection (a) or (b) of this section shall be approved by the affirmative vote of at least 21 
four-fifths (⅘) of the full membership of the governing body of the city or town, or in the case of a 22 
city or town having a financial town meeting, the majority of the electors present and voting at the 23 
town financial meeting shall also approve the excess levy. 24 
(f) Nothing contained in this section constrains the payment of present or future obligations 25 
as prescribed by § 45-12-1, and all taxable property in each city or town is subject to taxation 26 
without limitation as to rate or amount to pay general obligation bonds or notes of the city or town 27 
except as otherwise specifically provided by law or charter. 28 
(g) Notwithstanding anything to the contrary, the City of Providence is permitted a one-29 
year levy cap exemption for fiscal year 2026 not to exceed eight percent (8%). 30 
SECTION 2. This act shall take effect upon passage. 31 
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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 permit the City of Providence a one-year levy cap for fiscal year 2026 not 1 
to exceed eight percent (8%). This act is enabling legislation in furtherance of a unanimously passed 2 
Providence City Council resolution dated March 20, 2025, and approvingly signed by Mayor Brett 3 
Smiley on March 24, 2025. 4 
This act would take effect upon passage. 5 
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