2015 -- S 0710

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LC001784

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Senators Ruggerio, Pearson, and Lombardi

     Date Introduced: March 18, 2015

     Referred To: Senate Finance

     (Revenue)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-5-22 and 44-5-69 of the General Laws in Chapter 44-5 entitled

"Levy and Assessment of Local Taxes" are hereby amended to read as follows:

     44-5-22. Certification of tax roll. -- The tax levy shall be applied to the assessment roll

and the resulting tax roll certified by the assessors to the city or town clerk, city or town treasurer,

or tax collector, as the case may be, and to the department of revenue division of municipal

finance, not later than the next succeeding August 15. In the case of a fire district, the tax levy

shall be applied to the assessment roll and the resulting tax roll certified by such fire district's tax

assessor, treasurer, or other appropriate fire district official to the town clerk, town treasurer, tax

assessor or tax collector, as the case may be, and to the department of revenue, division of

municipal finance, not later than thirty (30) business days prior to its annual meeting ten (10)

business days after the mailing of the first property tax bill.

     44-5-69. Local fire districts -- Requirements of annual budget -- Annual financial

statements and publication of property tax data. -- Every fire district authorized to assess and

collect taxes on real and personal property in the several towns in the state shall be required to

have annual financial statements audited by an independent auditing firm approved pursuant to §

45-10-4 by the auditor general. The auditor general may waive or modify form and content of

financial statements and scope of the audit, based upon the size of the fire districts. The financial

statements for fiscal year 2015 and every fiscal year thereafter shall be presented at the district's

first annual meeting subsequent to receipt of said financial statements. At least ten (10) days prior

to said annual meeting, a copy of such financial statements shall be filed by the fire district with

the town clerk for the town in which the district(s) is located. A copy of the financial statements

shall be simultaneously sent to the auditor general and the division of municipal finance in the

department of revenue. The fire districts shall also provide to the division of municipal finance in

the department of revenue the adopted budget thirty (30) forty-five (45) days of final action, and

other information on tax rates, budgets, assessed valuations, and other pertinent data upon forms

provided by the division of municipal finance. The information shall be published by the

department of revenue.

     SECTION 2. Section 45-12-22.2 of the General Laws in Chapter 45-12 entitled

"Indebtedness of Towns and Cities" is hereby amended to read as follows:

     45-12-22.2. Monitoring of financial operations -- Corrective action. -- Subsections (a)

through (e) below shall apply to cities and towns.

      (a) The chief financial officer of each municipality and each school district within the

state shall continuously monitor financial operations by tracking actual versus budgeted revenue

and expense.

      (b) The chief financial officer of the municipality shall submit a report on a monthly

basis to the municipality's chief executive officer, each member of the city or town council, and

school district committee certifying the status of the municipal budget from all fund sources,

including the school department budget from all fund sources, or regional school district budget

from all fund sources. The chief financial officer of the municipality shall also submit a quarterly

report on or before the 25th day of the month succeeding the end of each fiscal quarter to the

division of municipal finance, the commissioner of education, and the auditor general certifying

the status of the municipal budget, including the school budget that has been certified by the

school department. Each quarterly report submitted must be signed by the chief executive officer,

chief financial officer, the superintendent of the school district, and chief financial officer for the

school district. The report has to be submitted to the city own council president and the school

committee chair. It is encouraged, but not required, to have the council president/school

committee chair sign the report. The chief financial officer of the school department or school

district shall certify the status of the school district's budget and shall assist in the preparation of

these reports. The monthly and quarterly reports shall be in a format prescribed by the division of

municipal finance, the commissioner of education, and the state auditor general. The reports shall

contain a statement as to whether any actual or projected shortfalls in budget line items are

expected to result in a year-end deficit; the projected impact on year-end financial results,

including all accruals and encumbrances; and how the municipality and school district plans to

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address any such shortfalls. In the event that the school reporting is not provided, then state

education aid may be withheld pursuant to the provisions of § 16-2-9.4(d).

      (c) If any of the quarterly reports required under subsection (b) project a year-end deficit,

the chief financial officer of the municipality shall submit to the state division of municipal

finance, the commissioner of education, and the auditor general a corrective action plan signed by

the chief executive officer and chief financial officer on or before the last day of the month

succeeding the close of the fiscal quarter, which provides for the avoidance of a year-end deficit

or structural deficit that could impact future years, and the school superintendent shall also

comply with the provisions of § 16-2-11(c) to assist in this effort. The plan may include

recommendations as to whether an increase in property taxes and/or spending cuts should be

adopted to eliminate the deficit. The plan shall include a legal opinion by municipal counsel that

the proposed actions under the plan are permissible under federal, state, and local law. The state

division of municipal affairs may rely on the written representations made by the municipality in

the plan and will not be required to perform an audit.

      (d) If the division of municipal finance concludes the plan required hereunder is

insufficient and/or fails to adequately address the financial condition of the municipality, the

division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.

      (e) The reports required shall include the financial operations of any departments or

funds of municipal government, including the school department or the regional school district,

notwithstanding the status of the entity as a separate legal body. This provision does not eliminate

the additional requirements placed on local and regional school districts by §§ 16-2-9(f) and 16-3-

11(e)(3).

      Subsections (f) through (j) (k) below shall apply to fire districts.

      (f) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire

district within the state shall continuously monitor the fire district's financial operations by

tracking actual versus budgeted revenue and expense.

      (g) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire

district shall submit a quarterly report on or before the 25th day of the month succeeding the end

of each fiscal quarter to the division of municipal finance and the state auditor general certifying

the status of the fire district's budget. Each quarterly report submitted must be signed by the chair

of the governing body and the treasurer/chief financial officer. The report shall be submitted to

the fire district clerk who shall send said report to the members of the governing body and the

members of the town council. The quarterly reports shall be in a format prescribed by the division

of municipal finance and the state auditor general. The reports shall contain a statement as to

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whether any actual or projected shortfalls in budget line items are expected to result in a year-end

deficit; the projected impact on year-end financial results including all accruals and

encumbrances; and how the fire district plans to address any such shortfalls.

     (h) The auditor general may determine that certain fire districts, based on their size, may

submit semi-annual budgets for actual comparison instead of quarterly reports.

      (h)(i) If any of the quarterly reports or semi-annual budgets required under subsection (g)

or (h) above project a year-end deficit, the treasurer/chief financial officer or other fiduciary, as

applicable, of the fire district shall submit to the division of municipal finance and the state

auditor general a corrective action plan signed by the chair of the governing body and

treasurer/chief financial office, or other fiduciary as applicable, of the fire district on or before the

last day of the month succeeding the close of the fiscal quarter, which provides for the avoidance

of a year-end deficit or structural deficit that could impact future years. The plan may include

recommendations as to whether an increase in property taxes and/or spending cuts should be

adopted to eliminate the deficit. The plan shall include a legal opinion by legal counsel that the

proposed actions under the plan are permissible under federal, state, and local law. Said plan shall

be sent to the members of the fire district's governing body and the members of the town council.

The division of municipal finance may rely on the written representations made by the governing

body of the fire district in the plan and is not be required to perform an audit.

      (i)(j) If the division of municipal finance concludes the plan required hereunder is

insufficient and/or fails to adequately address the financial condition of the fire district, the

division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.

      (j)(k) The reports and plans required above shall also include, but not be limited to, a

comprehensive overview of the financial operations of the fire district, including a list of the

value of the fire district's assets (tangibles and intangibles) and liabilities.

     SECTION 3. 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

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     This act would amend the time period in which fire districts must certify tax rolls from

not later than thirty (30) business days prior to a fire district's annual meeting to not later than ten

(10) business days after mailing of the first property tax bill, and would amend the time period in

which fire districts must provide adopted budgets from thirty (30) to forty-five (45) days of final

action. This act would also require that quarterly reports and semi-annual budgets be submitted to

the fire district clerk.

     This act would take effect upon passage.

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