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art.002/6/002/5/002/4/002/3/002/2/002/1

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     ARTICLE 2 AS AMENDED

RELATING TO STATE AID

     SECTION 1. Sections 45-13.2-4 and 45-13.2-6 of the General Laws in Chapter 45-13.2

entitled "Municipal Incentive Aid" is hereby amended to read as follows:

     45-13.2-4. State Aid Incentive Program appropriated. – There are hereby appropriated

funds for a state aid program entitled "Municipal Incentive Aid Program." For fiscal year 2014,

fiscal year 2015 and fiscal year 2016, the amount of five million dollars ($5,000,000) shall be

appropriated., and an amount of ten million dollars ($10,000.000) will be requested for

appropriation for fiscal year 2015 and for fiscal year 2016. Municipal Incentive Aid shall be

administered and managed by the division of municipal finance within the department of revenue.

     45-13.2-6. Distributions. -- (a) Municipal Incentive Aid described in this chapter shall be

distributed to eligible municipalities on the basis of the most recent population estimate for each

municipality as a share of the total state population reported by the U.S. Department of

Commerce, Bureau of the Census as of January 1 in the year of the payment. Such payments shall

be made to eligible communities in March 2014, March 2015, and March 2016 of each year to the

extent that funds are appropriated.

      (b) For fiscal year 2014, municipalities shall be eligible to receive aid under this chapter

if: (1) the municipality has no locally-administered pension; or (2) the municipality notified plan

participants, beneficiaries and others pursuant to chapter 45-65, and submitted to the state's

department of revenue a Funding Improvement Plan ("FIP"), pursuant to section 45-65-6, for

every locally-administered pension plan in that municipality, and each FIP had been approved by

the plan sponsor and the local governing body no later than June 1, 2013; or (3) there existed a

locally-administered pension plan(s) in that municipality, but either: (i) no FIP was required

pursuant to chapter 45-65; or (ii) a FIP is required pursuant to chapter 45-65, but, the due date for

the FIP submission is after the March payment of state aid.

      (c) For fiscal years year 2015 and 2016 and each fiscal year thereafter that municipal

incentive aid is distributed to eligible municipalities under this chapter, municipalities shall be

eligible to receive aid under this chapter, if: (1) the municipality has no locally-administered

pension; or (2) the municipality has transitioned all locally-administered pension plans into

MERS by June 30, 2014; or (3) the municipality had notified plan participants, beneficiaries and

others pursuant to chapter 45-65 and had submitted to the state's department of revenue a FIP,

pursuant to chapter 45-65, for every locally-administered pension plan and each submitted FIP

meets the guidelines of the Study Commission on Locally-Administered Pension Plans created

pursuant to section 45-65-8 or otherwise applicable guidelines or regulations and each FIP has

been approved by the plan sponsor and the local governing body; or (4) the municipality has

implemented the original recommended FIP or an amended FIP pursuant to chapter 45-65 within

one month after the close of the fiscal year and made the required funding payment (formerly

referred to as Annually Required Contribution, or ARC) in compliance with the municipality's

adopted FIP(s) and the funding guidelines established by the Pension Study Commission eighteen

(18) months after an actuary has certified that a locally administered plan is in critical status for a

plan year; and the FIPs are approved by the plan sponsor and the local governing body; or (5)

there existed a locally-administered pension plan in that municipality, but either: (i) no FIP was

required pursuant to chapter 45-65 and either: (A) the municipality is funding one hundred

percent (100%) of its required funding payment; Annually Required Contribution (ARC) or (B)

the municipality has a funded ratio of one hundred percent (100%) or greater; or (ii) FIP is

required pursuant to chapter 45-65, however, the due date for the FIP submission or

implementation is after the March payment of this municipal incentive aid.

      (d) In any fiscal year that a municipality does not receive an appropriation under this

chapter, the amount that would have been allocated to the municipality will be distributed in the

month of May among the other eligible municipalities for that fiscal year, on the basis of the most

recent population estimate for each municipality as a share of the total state population reported

by the U.S. Department of Commerce, Bureau of the Census. For fiscal year 2014, and in any

year thereafter that a municipality is not eligible to receive a distribution under this chapter, the

distribution that said municipality would have received had it been eligible shall be

reappropriated to the immediately following fiscal year, at which time the amount reappropriated

shall be distributed to said municipality provided that said municipality has satisfied the

eligibility requirements of both the prior fiscal year and the then current fiscal year. In the event

that said municipality fails to satisfy the eligibility requirements for the prior and the then current

fiscal year by the time that eligibility to receive distributions in the next fiscal year is determined,

then the amount that would have been distributed to the municipality for said prior year will be

distributed in the month of May among the municipalities that received a distribution in the prior

fiscal year, with the share to be received by each municipality calculated in the same manner as

distributions were calculated in the prior fiscal year.

     SECTION 2. Section 45-13-5.1 of the General Laws in Chapter 45-13 entitled "State

Aid" is hereby amended to read as follows:

     45-13-5.1. General assembly appropriations in lieu of property tax from certain

exempt private and state properties. -- (a) In lieu of the amount of local real property tax on

real property owned by any private nonprofit institution of higher education, or any nonprofit

hospital facility, or any state owned and operated hospital, veterans' residential facility, or

correctional facility occupied by more than one hundred (100) residents which may have been or

will be exempted from taxation by applicable state law, exclusive of any facility operated by the

federal government, the state of Rhode Island, or any of its subdivisions, the general assembly

shall annually appropriate for payment to the several cities and towns in which the property lies a

sum equal to twenty-seven percent (27%) of all tax that would have been collected had the

property been taxable.

      (b) As used in this section, "private nonprofit institution of higher education" means any

institution engaged primarily in education beyond the high school level, the property of which is

exempt from property tax under any of the subdivisions, and "nonprofit hospital facility" means

any nonprofit hospital licensed by the state and which is used for the purpose of general medical,

surgical, or psychiatric care and treatment.

      (c) The grant payable to any municipality under the provision of this section shall be

equal to twenty-seven percent (27%) of the property taxes which, except for any exemption to

any institution of higher education or general hospital facility, would have been paid with respect

to that exempt real property on the assessment list in the municipality for the assessment date of

December 31, 1986 and with respect to such exempt real property appearing on an assessment list

in the municipality on succeeding assessment dates. Provided however that the grant paid for the

fiscal year ending June 30, 2008 shall be based upon the assessment list in the municipality as of

December 31, 2004.

      (d) The state budget offices shall include the amount of the annual grant in the state

budget for the fiscal year commencing July 1, 1988 and each fiscal year thereafter. The amount of

the annual grant payable to each municipality in any year in accordance with this section shall be

reduced proportionately in the event that the total of the annual grants in any year exceeds the

amount appropriated that year for the purposes of this section.

      (e) Distribution of appropriations shall be made by the state on or before July 31 of 1988

and each July 31 thereafter, or following verified receipt of a municipality’s assessment data for

the following fiscal year’s payment, whichever is later, and the payments may be counted as a

receivable by any city or town for a fiscal year ending the preceding June 30.

     (f) Any act or omission by the state with respect to this chapter shall in no way diminish

the duty of any town or municipality to provide public safety or other ordinary services to the

properties or facilities of the type listed in subsection (a).

      (g) Provided, that payments authorized pursuant to this section shall be reduced pro rata,

for that period of time that the municipality suspends or reduces essential services to eligible

facilities. For the purposes of this section "essential services" include, but are not to be limited to,

police, fire and rescue.

     SECTION 3. This article shall take effect as of July 1, 2015 and section 1 of this article

shall apply retroactively to July 1, 2013.