2014 -- S 2335

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LC004371

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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 PUBLIC FINANCE -- RHODE ISLAND TRANSPORTATION

INFRASTRUCTURE FUND -- CREATION -- ALLOCATIONS TO FUND

     Introduced By: Senators DiPalma, Felag, Ottiano, Miller, and DaPonte

     Date Introduced: February 12, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 35-4 of the General Laws entitled "State Funds" is hereby amended

by adding thereto the following sections:

     35-4-11.1. Rhode Island transportation infrastructure fund -- Creation --

Allocations to fund. -- (a) There is hereby created a restricted receipt account within the Rhode

Island intermodal surface transportation fund established in § 35-4-11, to be known as the Rhode

Island transportation infrastructure fund or transportation infrastructure fund. Unexpended

balances remaining in the Rhode Island transportation infrastructure fund shall not be subject to

the ten percent (10%) indirect charge.

     (b) Commencing with the start of FY 2015, and continuing for five (5) additional

consecutive fiscal years thereafter until FY 2020, pursuant to the ninety-seven percent (97%)

limitation on state spending contained in Article IX, Section 16 of the constitution of the state of

Rhode Island, one quarter of one percent (0.25%) of the state's annual appropriation shall be

allocated and deposited into the transportation infrastructure fund every fiscal year, until the total

amount of the annual allocation is equal to one and one-half percent (1.5%) of the state's total

appropriation, at which point the one and one-half percent (1.5%) rate shall remain in place until

further action of the general assembly. Such deposit shall be deemed to be in compliance with the

ninety-seven percent (97%) limitation within said Article IX, Section 16.

     (c) From FY 2015 through to and including FY 2018, an amount equivalent to the value

of all Rhode Island department of transportation debt, which is being assumed by the state and

covered through appropriations from the general fund, shall be subtracted from the motor fuel tax

provided for in chapter 36 of title 31 and deposited into the Rhode Island transportation

infrastructure fund. Beginning in FY 2019, and annually thereafter, forty-five million dollars

($45,000,000) of the Rhode Island department of transportation's motor fuel tax allocation which

was previously used for debt service, shall be deposited into the Rhode Island transportation

infrastructure fund. This amount shall be in addition to the amount appropriated pursuant to

subsection (b).

     (d) Commencing with FY 2015, and ending at the conclusion of FY 2019, a five percent

(5%) surcharge shall be assessed on all fees collected by the division of motor vehicles. Funds

collected from such surcharge shall be deposited into the Rhode Island transportation

infrastructure fund. This amount shall be in addition to the amount appropriated pursuant to

subsection (b).

     35-4-11.2. Appropriations to support fund – Use of bonds to initially support fund. -

- (a) The general assembly shall annually make appropriations from the general fund to the Rhode

Island transportation infrastructure fund to address any shortfalls in revenue from the reduction or

elimination of any tolls on any of the four (4) bridges in the East Bay Bridge system, specifically

the Mt. Hope Bridge, the Newport or Newport-Pell Bridge, the Jamestown Verrazzano Bridge,

and the Sakonnet River Bridge, as appropriate. Such appropriations shall be in addition to the

amount appropriated pursuant to § 35-4-11.1.

     (b) Upon its inception, and up until the Rhode Island transportation infrastructure fund is

appropriately funded as determined by the general assembly, general obligation bonds shall be

proposed to the voters to support the fund in accomplishing its objectives. The initial general

obligation bond proposals shall be submitted to the voters at the general election to be held in

November, 2014.

     SECTION 2. Section 35-3-20.1 of the General Laws in Chapter 35-3 entitled "State

Budget" is hereby amended to read as follows:

     35-3-20.1. Limitation on state spending. -- (a) For the fiscal year ending June 30, 2009,

no appropriation, supplemental appropriation, or budget act shall cause the aggregate state

general revenue appropriations enacted for the fiscal year to exceed ninety-seven and eight tenths

of one percent (97.8%) of the estimated state general revenues for the fiscal year from all sources,

including estimated unencumbered general revenues not continued or reappropriated to the new

fiscal year remaining at the end of the previous fiscal year. Estimated unencumbered general

revenues are calculated by taking the estimated general revenue cash balance at the end of the

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fiscal year less estimated revenue anticipation bonds or notes, estimated general revenue

encumbrances, estimated continuing general revenue appropriations, and the amount of the

budget reserve and cash stabilization account at the end of the fiscal year. The amount of the

general revenue estimate and estimated unencumbered general revenue remaining shall be

determined by the state controller and approved by the auditor general in conformance with

accounting procedures currently in use. The excess of any unencumbered general revenue shall be

determined by subtracting from the actual unencumbered general revenues at the end of any fiscal

year an amount which together with the latest estimated general revenues is necessary to fund the

ensuing fiscal year's general revenue budget, including the required estimated general revenue

supplemental and annual appropriations. Provided further, the applicable percentage shall

decrease by two-tenths of one percent (.2%) for the succeeding four (4) fiscal years as follows:

     Fiscal year ending June 30, 2010 97.6%

     Fiscal year ending June 30, 2011 97.4%

     Fiscal year ending June 30, 2012 97.2%

     Fiscal years ending June 30, 2013 and thereafter 97.0%

      (b) The amount between the applicable percentage in subsection (a) and one hundred

percent (100%) of the estimated state general fund revenue for any fiscal year as estimated in

accordance with subsection (a) shall be appropriated in any given fiscal year into the budget

reserve and cash stabilization account; provided, that for the fiscal year ending June 30, 2009, no

payment will be made which would increase the total of the budget reserve and cash stabilization

account to more than three and four-tenths of one percent (3.4%) of only the estimated state

general fund revenues as set by subsection (a). In the event that the payment to be made into the

budget reserve and cash stabilization account would increase the amount in the account to more

than three and four-tenths of one percent (3.4%) of estimated state general revenues, the amount

shall be transferred to the Rhode Island Capital Plan fund, to be used solely for capital projects.

Provided further the applicable percentage shall increase by four-tenths of one percent (.4%) for

the four (4) succeeding fiscal years as follows:

     Fiscal year ending June 30, 2010 3.8%

     Fiscal year ending June 30, 2011 4.2%

     Fiscal year ending June 30, 2012 4.6%

     Fiscal years ending June 30, 2013 and thereafter 5.0%

     However, there shall be no expenditures of money under this section without passage of a

specific appropriation by the general assembly. (c) Within forty-five (45) days after the close of

any fiscal year, all unencumbered general revenue in the year end surplus account from the fiscal

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year shall be transferred to the general fund.

     (d) Commencing with the start of FY 2015, and continuing for the four (4) additional

years thereafter until FY 2019, the general assembly shall reallocate the equivalent of one tenth of

one percent (.1%) of general revenues from the Rhode Island capital plan fund to the Rhode

Island public transit authority. In each successive fiscal year after FY 2015 and continuing up to

and including FY 2019, the amount of this reallocation shall be increased by one tenth of one

percent (.1%) until it reaches the amount of one-half of one percent (0.5%) in FY 2010.

     SECTION 3. Sections 24-12-2, 24-12-5, 24-12-40.F and 24-12-40.G of the General Laws

in Chapter 24-12 entitled "Rhode Island Turnpike and Bridge Authority" are hereby amended to

read as follows:

     24-12-2. Authority created -- Composition. – (a) There is hereby created a body

corporate and politic to be known as the "Rhode Island turnpike and bridge authority." The

authority shall consist of five (5) members, including the director of transportation, who shall be a

member ex officio, and four (4) members appointed by the governor.

     (b) Provided, that effective July 1, 2015, the authority shall be transferred and

reconstituted as a separate division within the Rhode Island department of transportation. In such

capacity, the authority shall be known as the Rhode Island turnpike and bridge division. On and

after July 1, 2015, all references in the general laws to the Rhode Island turnpike and bridge

authority shall be deemed to refer to the Rhode Island turnpike and bridge division within the

department of transportation. The new division shall be the toll collecting agent of the department

of transportation. With the exception of the Newport Bridge no tolls shall be collected on any

bridge without express authorization of the general assembly.

     (c) The department of transportation shall prepare and deliver a report to the general

assembly not later than December 31, 2014, setting forth a plan to accomplish the consolidation,

acquisition, and implementation of this transfer of the Rhode Island turnpike and bridge authority

to the department of transportation.

     24-12-5. Power to construct, reconstruct, renovate, acquire, maintain, repair,

operate or manage projects or additional facilities and to issue bonds. -- In order to facilitate

vehicular traffic, remove many of the present handicaps and hazards on the congested highways

in the state, alleviate the barriers caused by large bodies of water, and promote the agricultural

and industrial development of the state, the Rhode Island turnpike and bridge authority is hereby

authorized and empowered: to construct the Newport Bridge, the turnpike, any portion thereof or

any additional facility hereafter authorized to be constructed; to acquire the Mount Hope Bridge,

to acquire the Sakonnet River Bridge, to acquire the Jamestown Verrazzano Bridge and any

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additional facility hereafter authorized to be acquired; to maintain, construct, reconstruct,

renovate, acquire, repair, operate or manage any project or projects; and to issue bonds of the

authority as provided in this chapter to finance any project or projects; provided, however, that

the Mount Hope Bridge shall only be acquired as provided for by section 24-12-40A. Provided

further, that effective July 1, 2014, the authority of the Rhode Island turnpike and bridge authority

to issue bonds shall be modified so that all such bonding shall be accomplished by the state only

through the issuance of general obligation bonds. Debt service on bonds shall be paid for by the

Rhode Island turnpike and bridge authority through revenue generated from tolls on the Newport

Pell bridge, and other sources, including annual appropriations from the general fund as needed.

     24-12-40.F. Title to Sakonnet River Bridge vested in Rhode Island turnpike and

bridge authority -- Institution of tolls. – (a) All powers, control, and jurisdiction of and title to

the Sakonnet River Bridge is authorized to be transferred to the Rhode Island turnpike and bridge

authority. Beginning February 1, 2014, the authority may charge and collect tolls for the use of

the Sakonnet River Bridge to provide funds sufficient with any other monies available therefor

for paying the costs of acquiring, leasing, maintaining, repairing and operating, the Jamestown

Verrazzano Bridge, the Mount Hope Bridge, the Newport Bridge, and the Sakonnet River Bridge,

the turnpike and additional facilities. Until February 1, 2014, the Authority shall not charge and

collect tolls in excess of those in place on the Newport Bridge on June 1, 2013. Should any part

of this section contravene or be inconsistent with any term or provision of the general laws, the

provisions of this section shall control.

     (b) Provided, that effective July 1, 2014, title to the Sakonnet River Bridge shall be

transferred to the department of transportation. Provided further, that effective July 1, 2014, any

authority to collect tolls on said bridge shall be deemed revoked and voided, and no tolls shall be

collected on said bridge without express authorization by the general assembly.

     24-12-40.G. Title to Jamestown Verrazzano Bridge vested in Rhode Island turnpike

and bridge authority. – (a) All powers, control, and jurisdiction of and title to the Jamestown

Verrazzano Bridge is authorized to be transferred to the Rhode Island turnpike and bridge

authority.

     (b) Provided, that effective July 1, 2014, title to the Jamestown Verrazzano Bridge shall

be transferred to the department of transportation. Provided further, that effective July 1, 2014,

any authority to collect tolls on said bridge shall be deemed revoked and voided, and no tolls shall

be collected on said bridge without express authorization by the general assembly.

     SECTION 4. Chapter 31-36 of the General Laws entitled "Motor Fuel Tax" is hereby

amended by adding thereto the following section:

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     31-36-24. Joint commission to study motor fuel tax. -- (a) There is hereby created a

joint legislative commission to monitor, study, report and make recommendations on all areas of

the motor fuel tax and to seek out ways to replace such tax.

     (b) The commission consists of twelve (12) members of the general assembly: six (6) of

whom shall be members of the house of representatives, to include the chair or deputy chair of the

committee on finance, and five (5) other members, one of whom shall be from the minority party,

all to be appointed by, and to serve at the discretion of, the speaker of the house of

representatives; and six (6) of whom shall be from the senate, to include the chair or vice chair of

the committee on finance, and five (5) other members, one of whom from the minority party, all

to be appointed by, and to serve at the discretion of, the president of the senate.

     (c) The commission shall have co-chairpersons, one appointed by the speaker of the

house of representatives and one by the president of the senate.

     (d) The commission may review or study any matter related to the motor vehicle fuel tax

and shall seek ways to devise and implement a replacement for the motor vehicle fuel tax. The

commission may request and shall receive from any instrumentality of the state. The commission

shall make recommendations to the speaker of the house and the president of the senate on or

before March 1, 2015.

     (e) The commission shall have the power to hold hearings, shall meet at least quarterly,

may make recommendations to the general assembly, state agencies, private industry or any other

entity, and shall report to the general assembly on its findings and recommendations as it

determines appropriate, in addition to the recommendations required pursuant to subsection (d).

     SECTION 5. Chapter 31-47.4 of the General Laws entitled "Uninsured Motorist

Identification Database Procedure" is hereby amended by adding thereto the following section:

     31-47.4-11. Funds to be deposited into transportation infrastructure fund. -- All

funds and revenue generated as a result of the establishment of the uninsured motorist

identification database pursuant to this chapter shall be deposited into the Rhode Island

transportation infrastructure fund established pursuant to § 35-4-11.1. This amount shall be in

addition to the amount appropriated pursuant to § 35-4-11.1.

     SECTION 6. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes -

Liability and Computation" is hereby amended by adding thereto the following section:

     44-18-18.2. Sales and use tax prospective rate changes. -- (a) As to any sales and use

tax rate imposed which was to be reduced from seven percent (7%) to six and one-half percent

(6.5%) upon passage of any federal law which authorizes states to require remote sellers to collect

and remit sales and use taxes, said sales and use taxes shall instead be reduced from seven percent

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(7%) to six and six hundred twenty-five one thousandths percent (6.625%), if and when federal

law authorizes states to require remote sellers to collect and remit sales and use taxes. The six and

six hundred twenty-five one thousandths percent (6.625%) sales and use tax rate shall take effect

for tax years beginning on or after the date that the state requires remote sellers to collect and

remit sales and use taxes.

     (b) Of the sales and use tax collected under the prospective six and six hundred twenty-

five one thousandths percent (6.625%) rate, one hundred twenty-five one thousandths percent

(0.125%) shall be deposited into the Rhode Island transportation infrastructure fund. This one

hundred twenty-five one thousandths percent (0.125%) allocation shall take effect for tax years

beginning on or after the date that the state requires remote sellers to collect and remit sales and

use taxes.

     (c) For purposes of clarification, this section shall take effect upon passage; provided, the

adjustment in sales and use tax rates set forth herein are prospective and shall take place as

provided for in this section, specifically for tax years beginning on or after the date that the state

requires remote sellers to collect and remit sale and use taxes.

     SECTION 7. This act shall take effect on July 1, 2014. The remaining sections of this act

shall take effect upon passage.

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LC004371

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC FINANCE -- RHODE ISLAND TRANSPORTATION

INFRASTRUCTURE FUND -- CREATION -- ALLOCATIONS TO FUND

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     This act would provide a new method to fund transportation and bridge costs in Rhode

Island. The act would establish the Rhode Island transportation infrastructure fund as a restricted

receipt account within the Rhode Island intermodal surface transportation fund. The act would

provide further annual allocations to the transportation infrastructure fund from various sources.

The act would also transfer the Rhode Island turnpike and bridge authority into a division within

the Rhode Island department of transportation. The act would also allocate certain sales and use

tax revenues to the transportation infrastructure fund.

     This act would take effect on July 1, 2014. The remaining sections of this act would take

effect upon passage

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LC004371

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