2017 -- S 0320

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LC001398

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO TAXATION -- MOTOR VEHICLE EXCISE TAX AND REAL ESTATE

PROPERTY TAX

     Introduced By: Senators Ciccone, Jabour, Miller, Cote, and Lombardo

     Date Introduced: February 16, 2017

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 34.2

MOTOR VEHICLE EXCISE TAX EQUALIZATION ACT

     44-34.2-1. Findings.

     The general assembly hereby makes the following findings:

     (1) Based upon the December 31, 2014, motor vehicle excise tax rate levied, every city

and town has a different motor vehicle tax rate, ranging from nine dollars and seventy-five cents

($9.75) per one thousand dollars ($1,000) of valuation in New Shoreham to sixty dollars ($60.00)

per one thousand dollars ($1,000) of valuation in Providence.

     (2) Based upon the motor vehicle tax rate levied for all cities and towns as of December

31, 2014, the statewide average was twenty-nine dollars and ten cents ($29.10) per one thousand

dollars ($1,000) of valuation.

     (3) Based upon the December 31, 2014, motor vehicle excise tax levy in each

municipality, if on a statewide motor vehicle tax rate of twenty-nine dollars and ten cents

($29.10) per one thousand dollars ($1,000) of valuation was enacted, eighteen (18) cities and

towns would lose tax revenue and twenty-one (21) cities and towns would benefit.

     44-34.2-2. Statewide motor vehicle excise tax rate.

     Notwithstanding any provision of the general law to the contrary:

     (1) Effective December 31, 2017, no city or town shall set its own motor vehicle excise

tax levy.

     (2) Commencing on December 31, 2017, there shall be a statewide uniform motor vehicle

tax rate of twenty-nine dollars and ten cents ($29.10) per one thousand dollars ($1,000) of motor

vehicle valuation.

     44-34.2-3. Motor vehicle excise tax rate equalization program.

     (a) Each city or town that financially benefits from the application of a statewide uniform

tax levy of twenty-nine dollars and ten cents ($29.10), when compared to the prior year's motor

vehicle excise tax revenue, may retain fifty percent (50%) of its financial benefit.

     (b) The other fifty percent (50%) of their financial benefit shall be paid into the motor

vehicle tax equalization fund established by §44-34.2-4.

     44-34.2-4. Motor vehicle excise tax equalization fund.

     (a) There is hereby established the motor vehicle tax equalization fund to reimburse cities

and towns for the tax revenue they lost due to the establishment of a statewide motor vehicle tax

levy rate by §44-34.2-2.

     (b) The fund shall be administered by the director of revenue who is the head of the

department of revenue within the executive branch of state government created by §42-142-1.

     (c) The fund shall be partially funded yearly by cities and towns that have financially

benefitted from the adoption of a statewide motor vehicle excise tax rate in §44-34.2-2, in

accordance with §44-34.2-3(a).

     (d) The fund shall also receive all monies yearly allotted by the general assembly

pursuant to §44-34.1-1(c)(1) concerning the motor vehicle excise tax phase-out exemption. These

funds shall be utilized by the cities and towns for the sole purpose of real estate property tax

relief.

     (e) Commencing on July 1, 2018, the fund shall also receive all fees generated by the

division of motor vehicles through §§31-3.1-6 and 31-41.1-11 and chapters 3, 6, 10 and 10.1 of

title 31.

     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 -- MOTOR VEHICLE EXCISE TAX AND REAL ESTATE

PROPERTY TAX

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     This act would create a statewide uniform motor vehicle excise tax rate, and would

establish a fund to reimburse the cities and towns that will financially lose taxes due to the

enactment of the rate. It would be funded by motor vehicle related fees and the motor vehicle

excise tax phase-out exemption would be paid by the state to the cities and towns for the sole

purpose of providing real estate property tax relief.

     This act would take effect upon passage.

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