2019 -- H 5959

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LC002362

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TOWNS AND CITIES -- MUNICIPAL DETENTION FACILITY

CORPORATIONS

     

     Introduced By: Representatives Maldonado, Craven, Tobon, Barros, and Serpa

     Date Introduced: April 04, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 45-54-7 of the General Laws in Chapter 45-54 entitled "Municipal

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Detention Facility Corporations" is hereby repealed.

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     45-54-7. Exemption from taxation.

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     The exercise of the powers granted by this chapter will be in all respects for the benefit of

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the people of the state and for the facilitation of the conduct of their public business, and as the

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acquisition, construction, operation, and maintenance by the corporation of the projects defined in

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this chapter will constitute the performance of essential governmental functions, the corporation

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is not required to pay any taxes or assessments upon the projects or upon any property acquired,

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or upon the income from the projects, or any other state or local tax of any kind or description,

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nor is the corporation required to pay any recording fee or transfer tax of any kind or description,

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and the bonds, issued under the provisions of this chapter, their transfer, and the income from

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them (including any profit made on the sale) at all time free from taxation by the state, or any

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political subdivision or other instrumentality of the state, excepting estate taxes, and the

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corporation shall pay property taxes and assessments on its properties located outside the

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boundaries of the city or town whose council established the corporation.

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     SECTION 2. Sections 45-54-1 and 45-54-23 of the General Laws in Chapter 45-54

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entitled "Municipal Detention Facility Corporations" are hereby amended to read as follows:

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     45-54-1. Corporations created.

 

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     (a) For the purposes stated in this chapter there is incorporated in each city and town a

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body corporate and politic which shall be known as the municipal detention facility corporation

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of the municipality. The corporation is a public corporation, which is an instrumentality and

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agency of the municipality, but has a distinct legal existence from the municipality, and which

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has purposes that are consistent with the declaration of purpose set out in this chapter, and which

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has powers that are necessary and incidental to the effectuation of the stated purposes.

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     (b) The corporation of any city or town shall not have the authority to transact any

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business or exercise any powers under this chapter until the city or town council shall by

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resolution declare that there is a need for the corporation to function in the city or town.

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     (c) The corporation of each city or town shall cease to exist unless the city or town

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council passes the resolution specified in subsection (b) prior to December 31, 1991, the

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corporation of the municipality has entered into a contract for the operation of a detention facility

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with the United States Marshals' Service prior to December 31, 1991, and the site of the detention

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facility has received all necessary zoning approvals by December 31, 1991.

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     (d) For the purposes of this chapter, the municipal detention facility corporation shall be

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deemed a fully taxable entity for the purposes of all state and local taxes.

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     45-54-23. Transfers to governmental body.

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     (a) When all bonds issued under the provisions of the chapter for each specific project

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and their interest have been paid, or a sufficient amount for the payment of all the bonds and their

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interest to the maturity of the bonds have been set aside in trust for the benefit of the bondholders,

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the specific project financed under the provisions of this chapter may be transferred to the

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municipality leasing the project on terms and conditions and for consideration that the

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corporation determines. If the corporation is dissolved, all funds of the corporation not required

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for the payment of bonds shall be paid to the treasurer of the municipality in which the

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corporation is established for the use of the municipality, and all property belonging to the

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corporation shall be vested in the municipality and delivered to it. No part of the net earnings of

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the authority shall be distributed to, or inure to the benefit of, any private person.

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     (b) Notwithstanding any law to the contrary, the corporation shall cease to exist ninety

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(90) days after:

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     (1) A vote of dissolution of the corporation's board of directors; and

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     (2) A resolution of a city or town council that there is no longer a need for the corporation

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to function in the city or town.

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     SECTION 3. Section 44-4-6 of the General Laws in Chapter 44-4 entitled "Situs and

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Ownership of Taxable Property" is hereby amended to read as follows:

 

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     44-4-6. Tenant for life or years.

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     (a) Estates in the possession of a tenant for life or for a term of ten (10) or more years

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when by the terms of his or her lease the tenant for years is required to pay the taxes on the estate,

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may be taxed to the tenant, who, for the purposes of taxation is deemed the owner.

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     (b) Notwithstanding any provisions to the contrary in chapter 54 of title 45, any lease in

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which a municipal detention center is the tenant and is to be deemed the owner for the purposes

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of taxation must be approved by a majority vote of the city or town council of the municipality in

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which the municipal detention center is located prior to the municipal detention center being

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treated as the owner of the property for tax purposes. Approval by the city or town council shall

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be required for each tax year during the term of the lease with the municipal detention center. In

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the event that the city or town council does not approve the treatment of the tenant as the owner

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of the property for tax purposes, the title owner of the property shall be responsible for full

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payment of all real property taxes owed to the city or town for the property leased to the

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municipal detention center. This section shall apply to all municipal detention centers presently in

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existence regardless of whether the lease was entered into prior to the approval of this section.

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     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- MUNICIPAL DETENTION FACILITY

CORPORATIONS

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     This act would strip any municipal detention facility corporation of tax exempt status,

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including the Wyatt Detention Facility, and subject them to full state and local tax obligations.

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This act would also provide that the corporation would cease to exist ninety (90) days after a

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dissolution vote of its board of directors and a resolution of the city or town council of no further

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need and require annual city or town council approval of any lease making it the taxpayer for tax

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purposes.

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     This act would take effect upon passage.

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