2018 -- S 2903

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO TAXATION -- MIDDLETOWN TAX LEVY

     

     Introduced By: Senator Louis P. DiPalma

     Date Introduced: May 17, 2018

     Referred To: Senate Finance

     (by request)

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-5 of the General Laws entitled "Levy and Assessment of Local

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Taxes" is hereby amended by adding thereto the following section:

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     44-5-2.3. Middletown - Limitation on annual tax levy increase.

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     (a) Notwithstanding the provisions of § 44-5-2, in its fiscal year 2019 and in each fiscal

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year thereafter, the town may levy a tax in an amount not more than two percent (2%) in excess

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of the total amount levied and certified by the town for the previous fiscal year. For purposes of

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this levy calculation, taxes levied pursuant to chapters 34 and 34.1 of title 44 shall not be

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included. For FY 2019, in the event that the town, solely as a result of the exclusion of the motor

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vehicle tax in the new levy calculation, exceeds the property tax cap when compared to the FY

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2018, after taking into account that there was a motor vehicle tax in 2018, the town shall be

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permitted to exceed the property tax cap for FY 2019 transition year, but in no event shall it

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exceed the two percent (2%) levy cap growth, with the car tax portion included; provided,

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however, nothing herein shall prohibit the town from exceeding the property tax cap if otherwise

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permitted pursuant to subsection (b) of this section.

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     (b) The amount levied by the town may exceed the percentage increase as specified in

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subsection (a) of this section, if the town qualifies, as determined by the town council, under one

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or more of the following provisions:

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     (1) The town forecasts or experiences a loss in total non-property tax revenues and the

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loss is certified by the department of revenue.

 

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     (2) The town experiences or anticipates an emergency situation, which causes or will

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cause the levy to exceed the percentage increase, as specified in subsection (a) of this section. In

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the event of an emergency or an anticipated emergency, the town shall notify the auditor general

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who shall certify the existence or anticipated existence of an emergency. An emergency shall be

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deemed to exist when the town experiences or anticipates health insurance costs, retirement

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contributions, or utility expenditures that exceed the prior fiscal year's health insurance costs,

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retirement contributions, or utility expenditures by a percentage greater than three (3) times the

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percentage increase, as specified in subsection (a) of this section.

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     (3) The town forecasts or experiences debt services expenditures that exceed the prior

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year's debt service expenditures, by an amount greater than the percentage increase, as specified

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in subsection (a) of this section and that are the result of bonded debt issued in a manner

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consistent with general law or a special act. In the event of the debt service increase, the town

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shall notify the department of revenue, which shall certify the debt service increase above the two

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percent (2%) increase of the prior year's debt service. No action approving or disapproving

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exceeding a levy cap, under the provisions of this section, relieves the town of its debt

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obligations.

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     (4) The town forecasts or experiences debt services expenditures, that exceed the prior

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year's debt service expenditures by an amount greater than the percentage increase, as specified in

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subsection (a) of this section and that are the result of bonded debt, issued in a manner consistent

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with general law or a special act, and which has been approved by the electors of the town. In the

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event of such a debt service increase, the town shall notify the department of revenue, who shall

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certify the debt service increase over and above the two percent (2%) increase in the prior year's

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debt service. No action approving or disapproving exceeding the levy cap, under the provisions of

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this section, relieves the town of its debt obligations.

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     (5) The town experiences substantial growth in its tax base as the result of major new

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construction, that necessitates either significant infrastructure or school housing expenditures by

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the town or a significant increase in the need for essential municipal services and such increase in

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expenditures or demand for services is certified by the department of revenue.

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     (c) Any levy pursuant to subsections (b)(1), (b)(2) and (b)(3) of this section in excess of a

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two percent (2%) increase, shall be approved by the majority of the town's electors voting in a

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special election held for that purpose; provided however, any levy pursuant to subsection (b)(4)

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of this section in excess of a two percent (2%) increase shall be approved by the affirmative vote

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of at least four-fifths (4/5) of the full membership of the town council .

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     (d) Nothing contained herein constrains the payment of present or future obligations as

 

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prescribed by § 45-12-1, and all taxable property in the town is subject to taxation without

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limitation as to rate or amount to pay general obligation bonds or notes of the city or town except

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as otherwise specifically provided by law or charter.

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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 -- MIDDLETOWN TAX LEVY

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     This act would prohibit the town of Middletown from annually increasing its tax levy,

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more than two percent (2%) of the total levied by the town, for its prior fiscal year, without the

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occurrence of one or more of five (5) conditions and an affirmative vote of the majority of its

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electors.

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     This act would take effect upon passage.

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