2013 -- S 0826 SUBSTITUTE A

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LC02159/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Senators Miller, Goodwin, Ruggerio, Goldin, and Jabour

     Date Introduced: April 04, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-5-11.8 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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     44-5-11.8. Tax classification. -- (a) Upon the completion of any comprehensive

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revaluation or any update, in accordance with § 44-5-11.6, any city or town may adopt a tax

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classification plan, by ordinance, with the following limitations:

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     (1) The designated classes of property shall be limited to the four classes as defined in

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subsection (b) of this section.

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     (2) The effective tax rate applicable to any class excluding class 4 shall not exceed by

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fifty percent (50%) the rate applicable to any other class, except in the city of Providence, and

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the town of Glocester; however, in the year following a revaluation or statistical revaluation or

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update, the city or town council of any municipality may, by ordinance, adopt tax rates for the

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property class for all ratable tangible personal property no greater than twice the rate applicable to

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any other class provided that the municipality documents to, and receives written approval from

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the office of municipal affairs that the rate difference is necessary to ensure that the estimated tax

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levy on the property class for all ratable tangible personal property is not reduced from the prior

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year as a result of the revaluation or statistical revaluation.

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     (3) Any tax rate changes from one year to the next shall be applied such that the same

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percentage rate change is applicable to all classes, excluding class 4, except in the city of

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Providence, and the town of Glocester.

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     (4) Notwithstanding subdivisions (2) and (3) of this subsection, the tax rates applicable to

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wholesale and retail inventory within Class 3 as defined in subsection (b) of this section are

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governed by § 44-3-29.1.

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     (5) The tax rates applicable to motor vehicles within Class 4 as defined in subsection (b)

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of this section are governed by § 44-34.1-1.

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     (6) The provisions of chapter 35 of this title relating to property tax and fiscal disclosure

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applies to the reporting of and compliance with these classification restrictions.

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     (b) Classes of Property.

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     (1)(i) Class 1: Residential real estate consisting of no more than five (5) dwelling units,

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land classified as open space, and dwellings on leased land including mobile homes. In the city of

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Providence, this class may also include residential properties containing partial commercial or

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business uses and residential real estate of more than five (5) dwelling units.

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     (i) A homestead exemption provision is also authorized within this class, provided

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however, that the actual effective rate applicable to property qualifying for this exemption shall

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be construed as the standard rate for this class against which the maximum rate applicable to

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another class shall be determined, except in the city of Providence, and the town of Glocester.

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     (ii) In lieu of a homestead exemption, any city or town may divide this class into non-

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owner and owner occupied property, and adopt separate tax rates in compliance with the within

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tax rate restrictions.

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     (2) Class 2: Commercial and industrial real estate, residential properties containing partial

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commercial or business uses and residential real estate of more than five (5) dwelling units. In the

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city of Providence, properties containing partial commercial or business uses and residential real

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estate of more than five (5) dwelling units may be included in Class 1.

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     (3) Class 3: All ratable tangible personal property.

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     (4) Class 4: Motor vehicles and trailers subject to the excise tax created by chapter 34 of

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this title.

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     (c) The city council of the city of Providence, and the town council of the town of

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Glocester may by ordinance provide for and adopt a tax rate on various classes as it shall deem

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appropriate. Provided, that the tax rate for Class 2 shall not be more than two (2) times the tax

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rate of Class 1; the tax rate applicable to Class 3 shall not exceed the tax rate of Class 1 by more

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than two hundred percent (200%). Providence and Glocester shall be able to establish homestead

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exemptions up to fifty percent (50%) of value. The and the calculation provided in subsection

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(b)(1)(i) shall not be used in setting the differential tax rates. The tax rate for Class 2 shall not be

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more than two times the tax rate of Class 1; the tax rate applicable to Class 3 shall not exceed the

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tax rate of Class 1 by more than two hundred percent (200%).

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     (d) Notwithstanding the provisions of subsection (a) of this section the town council of

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the town of Middletown may hereafter, by ordinance, adopt a tax classification plan in

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accordance with the provisions of subsections (a) and (b) of this section, to be applicable to taxes

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assessed on or after the assessment date of December 31, 2002.

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     (e) Notwithstanding the provisions of subsection (a) of this section, the town council of

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the town of Little Compton may hereafter, by ordinance, adopt a tax classification plan in

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accordance with the provisions of subsections (a) and (b) of this section and the provisions of §

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44-5-79, to be applicable to taxes assessed on or after the assessment date of December 31, 2004.

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     SECTION 2. This act shall take effect upon passage.

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LC02159/SUB A

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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 that for Class 1 residential real estate property, any city or town,

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other than the city of Providence, could divide that class into non-owner and owner occupied

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property and adopt separate tax rates that would be in compliance with the applicable tax rate

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restrictions.

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     This act would take effect upon passage.

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LC02159/SUB A

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