2015 -- S 0846 SUBSTITUTE A

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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:

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

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

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follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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for any waiver.

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

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

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

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

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

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

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

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

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body.

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

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

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proration.

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

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

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number of days in the calendar year of proration.

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

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

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

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for the ensuing year.

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

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

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

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

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

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

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

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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

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

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

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

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

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

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facts of the case.

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

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

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

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

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

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

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

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local ordinances.

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

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

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

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

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

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

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

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

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

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

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

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model in question.

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

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

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

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

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

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

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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

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

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

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

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

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

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

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than December 31 next succeeding.

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

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

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

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

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

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

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

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

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

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taxing jurisdiction.

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

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

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

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as prescribed in § 44-34-2.

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

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

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accordance with the following procedures:

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

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

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February 15 of each year.

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

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

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

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

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

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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

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

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rules of the vehicle value commission.

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

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

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

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

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municipality may shall be utilized by the assessor.

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

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

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

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value.

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

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

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

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

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

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revenue, who shall serve as chair;

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

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

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

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

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

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the senate;

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

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

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consent of the senate.

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

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

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

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

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

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

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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.

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

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

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

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

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

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

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

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following factors:

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

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

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

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

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appropriate; and

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

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

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vehicle value commission may deem appropriate to determine fair values.

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

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

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

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

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adoption.

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

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

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

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

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

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

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

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

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

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

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

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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

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among its members such other officers as it deems necessary.

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

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deems necessary for the development of the methodology for determining presumptive

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recommended values, for calculating presumptive recommended values according to the

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

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

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

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

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chapter and to authorize payments for the expenses.

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

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

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

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

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

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

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

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

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per capita basis.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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.

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

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

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

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

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

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trailers, including leased vehicles.

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

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

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

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

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actual excise tax and the estimated excise tax.

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

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

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

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

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

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year valuations aged by one year in each succeeding year.

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

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

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

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

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assessed by using the prorated exemptions from the following table:

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

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fiscal year 1999 0 $1,500

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fiscal year 2000 $1,500 $2,500

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fiscal year 2001 $2,500 $3,500

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fiscal year 2002 $3,500 $4,500

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

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

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

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

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

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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

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

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prior fiscal year.

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

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Cities and towns may otherwise provide an additional exemption; provided, however, any such

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additional exemption shall not be subject to reimbursement.

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

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is eliminated or reduced as provided in this chapter.

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

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

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

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

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

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

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

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

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subsection (4).

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     (d) Definitions.

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

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

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

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

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

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

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

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December 31, 1997.

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

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

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

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

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

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be effected thereby.

 

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     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

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

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

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

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