2014 -- H 7631 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Representatives Edwards, Williams, Marshall, Nunes, and Finn

     Date Introduced: February 26, 2014

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-5-12 of the General Laws in Chapter 44-5 entitled "Levy and

Assessment of Local Taxes" is 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, or at a uniform percentage of its value,

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 Rhode Island housing and mortgage finance corporation

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

assessed and taxed in accordance with section 44-5-13.11;

      (2) In assessing real estate which is classified as farm land, 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 which 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 section 44-5-12.1.

     (6) Provided, however, that, for taxes levied after December 31, 2014, 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 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 which 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 the § 44-5-12(a)(6)(ii), 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

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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 which applies for or

receives construction permits after July 1, 2014. Further, the exemptions set forth in this section

shall not apply to land.

     The exemptions set forth in this subsection (a)(6) for development property shall expire

as of December 31, 2021.

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

under the provisions of this section a document which 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 section 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 section 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 section 44-3-29.1(d) applies to this fixed

value in each year of the phase-out.

     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 create an exemption from taxation for certain residential property

developments which have not been completed or, if completed, have not been sold and occupied.

The exemption would not affect taxes on common areas and facilities for residential

condominiums. The exemption would expire on December 31, 2021.

     This act would take effect upon passage.

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