2016 -- H 7326

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LC003313

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

     

     Introduced By: Representatives Shekarchi, Ackerman, Hull, Bennett, and Lima

     Date Introduced: January 27, 2016

     Referred To: House Municipal Government

     It is enacted by the General Assembly as follows:

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

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Assessment of Local Taxes" is hereby amended to read as follows:

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     44-5-12. Assessment at full and fair cash value. -- (a) All real property subject to

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taxation shall be assessed at its full and fair cash value, or at a uniform percentage of its value,

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not to exceed one hundred percent (100%), to be determined by the assessors in each town or

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city; provided, that:

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      (1) Any residential property encumbered by a covenant recorded in the land records in

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favor of a governmental unit or Rhode Island housing and mortgage finance corporation

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

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

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      (2) In assessing real estate that is classified as farm land, forest, or open space land in

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accordance with chapter 27 of this title, the assessors shall consider no factors in determining the

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full and fair cash value of the real estate other than those that relate to that use without regard to

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neighborhood land use of a more intensive nature;

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      (3) Warwick. - The city council of the city of Warwick is authorized to provide, by

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ordinance, that the owner of any dwelling of one to three (3) family units in the city of Warwick

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who makes any improvements or additions on his or her principal place of residence in the

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amount up to fifteen thousand dollars ($15,000), as may be determined by the tax assessor of the

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city of Warwick, is exempt from reassessment of property taxes on the improvement or addition

 

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until the next general citywide reevaluation of property values by the tax assessor. For the

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purposes of this section, "residence" is defined as voting address. This exemption does not apply

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to any commercial structure. The property owner shall supply all necessary plans to the building

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official for the improvements or addition and shall pay all requisite building and other permitting

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fees as now are required by law; and

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      (4) Central Falls. - The city council of the city of Central Falls is authorized to provide,

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by ordinance, that the owner of any dwelling of one to eight (8) units who makes any

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improvements or additions to his or her residential or rental property in an amount not to exceed

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twenty-five thousand dollars ($25,000), as determined by the tax assessor of the city of Central

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Falls, is exempt from reassessment of property taxes on the improvement or addition until the

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next general citywide reevaluation of property values by the tax assessor. The property owner

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shall supply all necessary plans to the building official for the improvements or additions and

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shall pay all requisite building and other permitting fees as are now required by law.

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      (5) Tangible property shall be assessed according to the asset classification table as

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defined in § 44-5-12.1.

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      (6) Provided, however, that, for taxes levied after December 31, 2015, new construction

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on development property is exempt from the assessment of taxes under this chapter at the full and

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fair cash value of the improvements, as long as:

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      (i) An owner of development property files an affidavit claiming the exemption with the

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local tax assessor by December 31 each year; and

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      (ii) The assessor shall then determine if the real property on which new construction is

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located is development property. If the real property is development property, the assessor shall

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exempt the new construction located on that development property from the collection of taxes on

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improvements, until such time as the real property no longer qualifies as development property,

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as defined herein.

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     For the purposes of this section, "development property" means: (A) Real property on

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which a single-family residential dwelling or residential condominium is situated and said single-

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family residential dwelling or residential condominium unit is not occupied, has never been

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occupied, is not under contract, and is on the market for sale; or (B) Improvements and/or

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rehabilitation of single-family residential dwellings or residential condominiums that the owner

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of such development property purchased out of a foreclosure sale, auction, or from a bank, and

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which property is not occupied. Such property described in § 44-5-12(a)(6)(ii) shall continue to

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be taxed at the assessed value at the time of purchase until such time as such property is sold or

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occupied and no longer qualifies as development property. As to residential condominiums, this

 

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exemption shall not affect taxes on the common areas and facilities as set forth in § 34-36-27. In

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no circumstance shall such designation as development property extend beyond two (2) tax years

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and a qualification as a development property shall only apply to property that applies for, or

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receives, construction permits after July 1, 2015. Further, the exemptions set forth in this section

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shall not apply to land.

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

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as of December 31, 2021.

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     For purposes of this section, "development property" means commercial real estate which

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shall be defined as any real estate other than:

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     (A) Real estate containing one to four (4) residential units;

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     (B) Real estate on which no buildings or structures are located and which is zoned for

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single-family residential use; or

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     (C) Single-family residential units such as condominiums, town houses, or homes singly

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or in a subdivision when sold, leased or otherwise conveyed on a unit basis, even though these

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units may be part of a larger building or parcel of real estate containing more than four (4)

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residential units.

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     (iii) Property described in §44-5-12(a)(6)(ii) shall continue to be taxed at the assessed

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value at the time of purchase until such time as such property is sold or occupied and no longer

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qualifies as development property. As to condominiums, this exemption shall not affect taxes on

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the common areas and facilities as set forth in §34-36-27. In no circumstance shall such

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designation as development property extend beyond two (2) tax years and a qualification as a

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development property shall only apply to property which applies for or receives a construction

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permit after July 1, 2016. Further, the exemptions set forth in this section shall not apply to land.

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

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under the provisions of this section a document that may be signed before a notary public

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containing language to the effect that they are aware of the additional taxes imposed by the

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provisions of § 44-5-39 in the event that they use land classified as farm, forest, or open space

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land for another purpose.

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      (c) Pursuant to the provisions of § 44-3-29.1, all wholesale and retail inventory subject to

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taxation is assessed at its full and fair cash value, or at a uniform percentage of its value, not to

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exceed one hundred percent (100%), for fiscal year 1999, by the assessors in each town and city.

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Once the fiscal year 1999 value of the inventory has been assessed, this value shall not increase.

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The phase-out rate schedule established in § 44-3-29.1(d) applies to this fixed value in each year

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of the phase out.

 

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - LEVY AND ASSESSMENT OF LOCAL TAXES

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     This act would amend the definition of "developmental property" in connection with the

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exemption from taxation for new construction to provide that such property shall mean

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commercial real estate, subject to certain listed exceptions.

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     This act would take effect upon passage.

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