2015 -- S 0846

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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 -- EXCISE ON MOTOR VEHICLES AND TRAILERS

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

     Date Introduced: April 15, 2015

     Referred To: Senate Judiciary

     (by request)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-34-2, 44-34-3, 44-34-9 and 44-34-11 of the General Laws in

Chapter 44-34 entitled "Excise on Motor Vehicles and Trailers" are hereby amended to read as

follows:

     44-34-2. Assessment -- Valuation -- Proration -- Abatement and cancellation --

Exemptions from tax. -- (a) Except as provided in this section, the tax assessors of each city and

town shall assess and levy in each calendar year on every vehicle and trailer registered under

chapter 3 of title 31, for the privilege of the registration, an excise measured by its value, as

subsequently defined and determined. For the purpose of this excise, the uniform value of each

vehicle shall may be determined by a non-binding recommendation in accordance with the

regulations of the vehicle value commission or alternatively, by the assessor's combination of the

published retail value and trade-in value for the vehicles in the municipality, a determination of

which shall include notice and a public hearing before adoption. Any vehicle which is more than

twenty-five (25) years old, whether or not the vehicle is an antique motor car as defined in § 31-

1-3(a), shall be deemed to possess an average retail value of five hundred dollars ($500). Any

vehicle more than twenty-five (25) years old on June 16, 1987, whether or not the vehicle is an

antique motor car as defined in § 31-1-3(a), shall be deemed to have an average retail value of

five hundred dollars ($500) or its actual retail value whichever is less. The minimum excise tax

on any vehicle, if registered to the same owner for a full year or portion of the year, shall not be

less than five dollars ($5.00) unless the registration is transferred to one or more additional

vehicles or trailers, in which case the minimum or combined excise taxes shall not be less than

five dollars ($5.00). Beginning in fiscal year 2001, the assessor may, but is not required to, issue

minimum tax bills as authorized by this section or any general or public law. Beginning in fiscal

year 2002 and thereafter, the assessor shall not issue minimum tax bills, notwithstanding any

general or public law to the contrary. The assessor may waive the excise tax on any vehicle where

the annual levy would be less than five dollars ($5.00). The state shall not provide reimbursement

for any waiver.

     (b) Should a city or town decline to adopt a value of a type of vehicle or trailer

recommended by the vehicle value commission, then said city or town by and through its local

governing body, shall, on or before February 1 of each year, adopt a list of values for vehicles and

trailers of the same make, model, type, and year of manufacture as of the preceding December 31,

in accordance with a methodology adopted by the tax assessor between September 30 and

December 31, which methodology shall include a combination of the retail value and trade-in

value as published by the vehicle value commission. The list shall be subject to a public hearing

and comment at least five (5) business days prior to the date of its adoption by the local governing

body.

      (b)(c) Vehicle and trailer excises shall be prorated over the calendar year prior to the

year in which the excises are levied and billed, that year being referred to as the calendar year of

proration.

      (c)(d) The excise levy on every vehicle and trailer registered under chapter 3 of title 31

shall be based on the ratio that the number of days the vehicle or trailer is registered is to the

number of days in the calendar year of proration.

      (d)(e) If during the calendar year of proration, the owner of a vehicle or trailer subject to

the excise moves permanently with his or her vehicle to another state and cancels his or her

registration in this state and returns the registration plates, the vehicle shall be exempt from excise

for the ensuing year.

      (e)(f) "Year of manufacture" as used in this section means the year used by the

manufacturer of the vehicle or trailer in connection with the designation by the manufacturer of

the model of the vehicle or trailer. Where the presumptive price of a vehicle or trailer is not

readily obtainable, or special equipment is installed on the vehicle or trailer, the tax assessor shall

prescribe a combination of the retail price and the trade-in price to be used or the manner in

which the combination of the retail price and the trade-in price shall be determined.

      (f)(g) Nothing in this section shall be construed to prevent any city or town council from

granting an abatement, in whole or in part, when there is an error in the assessment of a tax, and

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the tax assessors have certified to the fact, in writing, to the city or town council to cancel taxes

stating the nature of the error, the valuation of the vehicle or trailer, the amount of the assessed

tax and the name of the person to whom the vehicle or trailer was taxed.

      (g)(h) The city or town council may cancel, in whole or in part, an excise tax assessed to

a person who has died leaving no estate, or a person who has moved from the state, and the tax

collector or person acting in the capacity of tax collector certifies to the city or town council the

facts of the case.

      (h)(i) The excise imposed by this section shall not apply to vehicles or trailers owned by

the state of Rhode Island or any of its political subdivisions, or to vehicles or trailers owned by a

corporation, association or other organization whose tangible personal property is exempt under §

44-3-3(1) -- (15), or to vehicles assessed and taxed under § 44-13-13, or those owned by the

United States government. Farm vehicles shall be exempt to the extent prescribed in § 44-5-42.

     (j) "Local governing body" means any town or city council, commission or other elected

governing body vested by state statute, charter, or other law, with jurisdiction to initiate and adopt

local ordinances.

     44-34-3. Assessment roll -- Rate -- Payment -- Penalty upon non-payment. -- (a) The

assessor, on the basis of a list of uniform recommended values for motor vehicles prepared by the

Rhode Island vehicle value commission pursuant to § 44-34-8 44-34-11, shall make a list

containing the value of every vehicle and trailer in the city or town which is subject to the

provisions of § 44-34-2, the values to be at the average retail price as determined under § 44-34-2

or at a uniform percentage of these, not to exceed one hundred percent (100%), to be determined

by the assessors in each city or town; provided, that every vehicle and trailer in the city of

Pawtucket shall be assessed in accordance with §§ 44-5-20.1 and 44-5-20.2; provided, further,

that motor vehicles owned, leased, or utilized by rental companies, as those terms are defined in §

31-34.1-1, shall not be valued for excise tax purposes at an amount greater than the National

Automobile Dealers Association average retail value for new vehicles for the year and vehicle

model in question.

      (b) The excise tax levy shall be applied to the excise assessment roll at the rate

established by the assessors for all other property except manufacturer's machinery and

equipment in accordance with § 44-5-22 and the resulting tax roll shall be certified by the

assessors to the city or town clerk, treasurer, or tax collector, as the case may be, not later than

June 15 next succeeding. Prior to the resulting tax roll being certified to the Pawtucket city clerk,

the excise levy shall be applied to the excise assessment roll in accordance with the property tax

classification described in §§ 44-5-20.3 and 44-5-20.5. In the city of Woonsocket, the excise tax

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levy shall be applied to the excise assessment roll at a rate that will produce no more than

nineteen percent (19%) of the total tax levy as prescribed in § 44-5-11.6. In the town of Lincoln,

the excise tax levy shall be applied to the excise assessment roll at a rate that produces an amount

equal to no more than seventeen percent (17%) of the total real estate tax levy.

      (c) If any vehicle or trailer liable to taxation in any city or town has been omitted from

the tax roll, the tax assessment shall assess the vehicle or trailer on a supplemental excise

assessment roll and shall certify the assessment to the tax collector after June 15, but not later

than December 31 next succeeding.

      (d) As soon after this as possible, the tax collector shall cause excise bills to be sent by

first class mail to all persons, corporations, partnerships, joint stock companies, or associations

that have registered vehicles or trailers during the calendar year of proration. The bills shall be

paid in accordance with § 44-5-7 at the same time and on the same schedule as property tax bills.

Failure to pay the excise at the appropriated time shall bring about a penalty of eighteen percent

(18%) per annum, or, in the case of the city of Cranston, a penalty of twelve percent (12%) per

annum which applies on the date of the delinquency or, for any city or town fiscal year

commencing between January 1, 1980, and December 31, 1980, after approval by the proper local

authority, at the same rate of interest as that which is applied to delinquent property taxes in the

taxing jurisdiction.

      (e) Failure by the tax collector to send, or by the taxpayer to receive, a bill shall not

excuse the nonpayment of the tax or affect its validity or any proceedings for the collection.

      (f) This section does not apply to any and all entities which are exempt from the excise

as prescribed in § 44-34-2.

     44-34-9. Valuation of motor vehicles. -- For the purpose of the imposition of an excise

tax upon motor vehicles, the tax assessor shall determine the value of each motor vehicle in

accordance with the following procedures:

     (1) The vehicle value commission shall annually publish the retail value and trade-in

value for each vehicle and trailer of the same make, type, model, and year of manufacture by

February 15 of each year.

      (1)(2) Each vehicle and trailer of the same make, type, model, and year of manufacture

in this state shall be deemed to have one uniform statewide issued a non-binding recommended

value to that may be utilized in each city and town, except in those instances where no uniform

value is established pursuant to the rules of the vehicle value commission § 44-34-11 or where a

value is established by the assessor pursuant to § 44-34-2 vehicle is more than twenty-five (25)

years old, as set forth in § 44-34-2.

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      (2)(3) The uniform non-binding recommended value of each type of vehicle and trailer

shall be determined by the Rhode Island vehicle value commission or in accordance with the

rules of the vehicle value commission.

      (3)(4) The value of each vehicle or trailer or each type of vehicle or trailer not

established by the Rhode Island vehicle value commission shall be determined by the assessor of

the city or town in which the vehicle or trailer is registered. In making the determination, a

uniform flat combination of the published retail value and trade-in value for the vehicles in the

municipality may shall be utilized by the assessor.

     (5) Notwithstanding any other provision of law to the contrary, the tax assessor may

determine the value of each vehicle and trailer or each type of vehicle and trailer by utilizing a

combination of the Rhode Island vehicle value commission's published retail value and trade-in

value.

     44-34-11. Rhode Island vehicle value commission. -- (a) There is hereby authorized,

created, and established the "Rhode Island vehicle value commission" whose function it is to

establish presumptive recommended values of vehicles and trailers subject to the excise tax.

      (b) The commission shall consist of the following seven (7) members as follows:

      (1) The director of the department of revenue or his/her designee from the department of

revenue, who shall serve as chair;

      (2) Five (5) local tax officials named by the governor, at least one of whom shall be from

a city or town under ten thousand (10,000) population and at least one of whom is from a city or

town over fifty thousand (50,000) population in making these appointments the governor shall

give due consideration to the recommendations submitted by the President of the Rhode Island

League of Cities and Towns and each appointment shall be subject to the advice and consent of

the senate;

      (3) And one motor vehicle dealer appointed by the governor upon giving due

consideration to the recommendation of the director of revenue and subject to the advice and

consent of the senate.

      (4) All members shall serve for a term of three (3) years.

      (5) Current legislative appointees shall cease to be members of the commission upon the

effective date of this act. Non-legislative appointees to the commission may serve out their terms

whereupon their successors shall be appointed in accordance with this act. No one shall be

eligible for appointment to the commission unless he or she is a resident of this state.

      (6) Public members of the commission shall be removable by the governor pursuant to §

36-1-7 for cause only, and removal solely for partisan or personal reasons unrelated to capacity or

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fitness for the office shall be unlawful.

      (7) The governor shall appoint a chairperson from the commission's members. The

commission shall elect from among its members other officers as it may deem appropriate.

      (c) The commission shall annually determine the presumptive non-binding

recommended values of vehicles and trailers subject to the excise tax in the following manner:

      (1) Not earlier than September 30 and not later than December 31 of each year, the

commission shall by rule adopt a methodology for determining the presumptive recommended

value of vehicles and trailers subject to the excise tax which shall give consideration to the

following factors:

      (i) The average retail price and trade-in price of similar vehicles of the same make,

model, type, and year of manufacture as reported by motor vehicle dealers or by official used car

guides, such as that of the National Automobile Dealers Association for New England. Where

regional guides are not available, the commission shall use other publications deemed

appropriate; and

      (ii) Other information concerning the average retail prices and trade-in prices for make,

model, type, and year of manufacture of motor vehicles as the director and the Rhode Island

vehicle value commission may deem appropriate to determine fair values.

      (2) On or before February 1 of each year, it shall adopt a list of recommended values for

vehicles and trailers of the same make, model, type, and year of manufacture as of the preceding

December 31 in accordance with the methodology adopted between September 30 and December

31; the list shall be subject to a public hearing at least five (5) business days prior to the date of its

adoption.

      (3) Nothing in this section shall be deemed to require the commission to determine the

presumptive recommended value of vehicles and trailers which are unique, to which special

equipment has been added or to which special modifications have been made, or for which

adequate information is not available from the sources referenced in subdivision (1) of this

subsection; provided, that the commission may consider those factors in its lists or regulations.

      (4) The commission shall annually publish the retail prices and trade-in prices of

vehicles and trailers subject to the excise tax, and provide the a list of presumptive values of

vehicles and trailers to each tax assessor on or before February 15 of each year.

      (d) The commission shall adopt rules governing its organization and the conduct of its

business; prior to the adoption of the rules, the chair shall have the power to call meetings, and a

simple majority of the members of the commission, as provided for in subsection (b) of this

section, is necessary for a quorum, which quorum by majority vote shall have the power to

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conduct business in the name of the commission. The commission may adopt rules and elect from

among its members such other officers as it deems necessary.

      (e) The commission shall have the power to contract for professional services that it

deems necessary for the development of the methodology for determining presumptive

recommended values, for calculating presumptive recommended values according to the

methodology, and for preparing the list of presumptive recommended values, as well as for

publishing the retail prices and trade-in prices of vehicles and trailers in a form and format that is

generally usable by cities and towns in their preparation of tax bills. The commission shall also

have the power to incur reasonable expenses in the conduct of its business as required by this

chapter and to authorize payments for the expenses.

      (f) Commission members shall receive no compensation for the performance of their

duties but may be reimbursed for their reasonable expenses incurred in carrying out such duties.

      (g) The commission shall respond to petitions of appeal by local boards of review in

accordance with the provisions of § 44-34-9 44-34-8.

      (h) The commission shall establish, by rule, procedures for adopting an annual budget

and for administering its finances. After July 1, 1986, one-half ( 1/2) of the cost of the

commission's operations shall be borne by the state and one-half ( 1/2) shall be borne by cities

and towns within the state, with the city and town share distributed among cities and towns on a

per capita basis.

      (i) Within ninety (90) days after the end of each fiscal year, the commission shall

approve and submit an annual report to the governor, the speaker of the house of representatives,

the president of the senate, and the secretary of state of its activities during that fiscal year. The

report shall provide: an operating statement summarizing meetings or hearings held, meeting

minutes if requested, subjects addressed, decisions rendered, rules or regulations promulgated,

studies conducted, policies and plans developed, approved, or modified, and programs

administered or initiated; a consolidated financial statement of all funds received and expended

including the source of the funds, a listing of any staff supported by these funds, and a summary

of any clerical, administrative or technical support received; a summary of performance during

the previous fiscal year including accomplishments, shortcomings and remedies; a synopsis of

hearings, complaints, suspensions, or other legal matters related to the authority of the

commission; a summary of any training courses held pursuant to this subsection, a briefing on

anticipated activities in the upcoming fiscal year; and findings and recommendations for

improvements. The report shall be posted electronically on the general assembly and the secretary

of state's websites as prescribed in § 42-20-8.2. The director of the department of revenue shall be

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responsible for the enforcement of this provision.

     SECTION 2. Section 44-34.1-1 of the General Laws in Chapter 44-34.1 entitled "Motor

Vehicle and Trailer Excise Tax Elimination Act of 1998" is hereby amended to read as follows:

     44-34.1-1. Excise tax phase-out. -- (a)(1) Notwithstanding the provisions of chapter 34

of this title or any other provisions to the contrary, the motor vehicle and trailer excise tax

established by § 44-34-1 may be phased out. The phase-out shall apply to all motor vehicles and

trailers, including leased vehicles.

     (2) Lessors of vehicles that pay excise taxes directly to municipalities shall provide

lessees, at the time of entering into the lease agreement, an estimate of annual excise taxes

payable throughout the term of the lease. In the event the actual excise tax is less than the

estimated excise tax, the lessor shall annually rebate to the lessee the difference between the

actual excise tax and the estimated excise tax.

     (b) Pursuant to the provisions of this section, all motor vehicles shall be assessed a non-

binding recommended value by the vehicle value commission. That value shall be assessed

according to the provisions of § 44-34-11(c)(1) and in accordance with the terms as defined in

subsection (d) of this section; provided, however, that the maximum taxable value percentage

applicable to model year values as of December 31, 1997, shall continue to be applicable in future

year valuations aged by one year in each succeeding year.

     (c)(1) The motor vehicle excise tax phase-out shall commence with the excise tax bills

mailed to taxpayers for the fiscal year 2000. The phase-out, beyond fiscal year 2003, shall be

subject to annual review and appropriation by the general assembly. The tax assessors of the

various cities and towns and fire districts shall reduce the average retail value of each vehicle

assessed by using the prorated exemptions from the following table:

Local Fiscal Year Exempt from value Local Exemption State fiscal year Reimbursement

fiscal year 1999 0 $1,500

fiscal year 2000 $1,500 $2,500

fiscal year 2001 $2,500 $3,500

fiscal year 2002 $3,500 $4,500

fiscal years 2003, 2004 and 2005 $4,500 $4,500

for fiscal year 2006 and $5,000 $5,000

for fiscal year 2007 $6,000 $6,000

     for fiscal years 2008, 2009 and 2010 the exemption and the state fiscal year

reimbursement shall be increased, at a minimum, to the maximum amount to the nearest two

hundred and fifty dollar ($250) increment within the allocation of one and twenty-two hundredths

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percent (1.22%) of net terminal income derived from video lottery games pursuant to the

provisions of § 42-61-15, and in no event shall the exemption in any fiscal year be less than the

prior fiscal year.

     for fiscal year 2011 and thereafter, the exemption shall be five hundred dollars ($500);

provided, however, that for fiscal years 2017 and thereafter, the exemption shall be six thousand

dollars ($6,000) for residents of distressed communities as defined in § 45-13-12, reimbursement

of which shall come from the state general fund. Cities and towns may otherwise provide an

additional exemption; provided, however, any such additional exemption shall not be subject to

reimbursement.

     (2) The excise tax phase-out shall provide levels of assessed value reductions until the tax

is eliminated or reduced as provided in this chapter.

     (3) Current exemptions shall remain in effect as provided in this chapter.

     (4) The excise tax rates and ratios of assessment shall be maintained at a level identical to

the level in effect for fiscal year 1998 for each city, town, and fire district; provided, in the town

of Johnston the excise tax rate and ratios of assessment shall be maintained at a level identical to

the level in effect for fiscal year 1999 levels and the levy of a city, town, or fire district shall be

limited to the lesser of the maximum taxable value or net assessed value for purposes of

collecting the tax in any given year. Provided, however, for fiscal year 2011 and thereafter, the

rates and ratios of assessment may be less than but not more than the rates described in this

subsection (4).

     (d) Definitions.

     (1) "Maximum taxable value" means the value of vehicles as prescribed by § 44-34-11

reduced by the percentage of assessed value applicable to model year values as determined by the

Rhode Island vehicle value commission as of December 31, 1997, for the vehicles valued by the

commission as of December 31, 1997. For all vehicle value types not valued by the Rhode Island

vehicle value commission as of December 31, 1997, the maximum taxable value shall be the

latest value determined by a local assessor from an appropriate pricing guide, multiplied by the

ratio of assessment used by that city, town, or fire district for a particular model year as of

December 31, 1997.

     (2) "Net assessed value" means the motor vehicle values as determined in accordance

with § 44-34-11 less all personal exemptions allowed by cities, towns, fire districts, and the state

of Rhode Island exemption value as provided for in § 44-34.1-1(c)(1).

     (e) If any provision of this chapter shall be held invalid by any court of competent

jurisdiction, the remainder of this chapter and the applications of the provisions hereof shall not

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be effected thereby.

     SECTION 3. This act shall take effect sixty (60) days after passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- EXCISE ON MOTOR VEHICLES AND TRAILERS

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     This act would provide that the excise tax assessed against vehicles and trailers may be

determined by a non-binding recommendation of the vehicle value commission, or by the

assessor's combination of the published retail and trade-in values.

     This act would take effect sixty (60) days after passage.

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