2019 -- S 0786

========

LC002363

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

A N   A C T

RELATING TO TOWNS AND CITIES -- MUNICIPAL DETENTION FACILITY

CORPORATIONS

     Introduced By: Senators Crowley, Quezada, Metts, Cano, and Goldin

     Date Introduced: April 04, 2019

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

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

Detention Facility Corporations" is hereby repealed.

     45-54-7. Exemption from taxation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     45-54-1. Corporations created.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     45-54-23. Transfers to governmental body.

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

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

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

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

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

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

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

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

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

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

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

(90) days after:

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

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

to function in the city or town.

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

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

LC002363 - Page 2 of 4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     SECTION 4. This act shall take effect upon passage.

========

LC002363

========

LC002363 - Page 3 of 4

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- MUNICIPAL DETENTION FACILITY

CORPORATIONS

***

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

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

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

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

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

purposes.

     This act would take effect upon passage.

========

LC002363

========

LC002363 - Page 4 of 4