2023 -- H 5950

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LC001801

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

     Introduced By: Representatives Fogarty, Tanzi, Donovan, Shallcross Smith, Boylan,
Handy, Hull, Caldwell, Henries, and Cortvriend

     Date Introduced: March 01, 2023

     Referred To: House Municipal Government & Housing

     (Dept. of Environmental Management)

It is enacted by the General Assembly as follows:

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

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

     44-5-12. Assessment at full and fair cash value.

     (a) All real property subject to taxation shall be assessed at its full and fair cash value, as

of December 31 in the year of the last update or revaluation, or at a uniform percentage thereof, not

to exceed one hundred percent (100%), to be determined by the assessors in each town or city;

provided, that:

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

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

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

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

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

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

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

neighborhood land use of a more intensive nature;

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

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

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

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

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

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

section, “residence” is defined as voting address. This exemption does not apply to any commercial

structure. The property owner shall supply all necessary plans to the building official for the

improvements or addition and shall pay all requisite building and other permitting fees as now are

required by law; and

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

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

or additions to his or her residential or rental property in an amount not to exceed twenty-five

thousand dollars ($25,000), as determined by the tax assessor of the city of Central Falls, is exempt

from reassessment of property taxes on the improvement or addition until the next general citywide

reevaluation of property values by the tax assessor. The property owner shall supply all necessary

plans to the building official for the improvements or additions and shall pay all requisite building

and other permitting fees as are now required by law.

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

in § 44-5-12.1. Renewable energy resources shall only be taxed as tangible property under § 44-5-

3(c) and the real property on which they are located shall not be reclassified, revalued, or reassessed

due to the presence of renewable energy resources., excepting only reclassification of farmland as

addressed Notwithstanding the foregoing, real property that is enrolled in farm, forest or open space

classification addressed in chapter 27 of title 44, which is developed to include the presence of

renewable energy resources on such real property shall have that acreage, which is used for

renewable energy removed from enrollment in farm, forest, or open space, and revert back to its

classification immediately preceding enrollment as farm, forest, or open space, subject to the partial

and dual use provisions set forth in § 44-27-10.1. Subject to the aforementioned exception for

farmland farm, forest, and open space, all assessments of real property with renewable energy

resources thereon shall revert to the last assessed value immediately prior to the renewable

developer’s purchasing, leasing, securing an option to purchase or lease, or otherwise acquiring

any interest in the real property. However, notwithstanding the above, but without any limitation

on taxpayer rights under § 44-5-26, no municipality shall be liable or otherwise responsible for any

rebates, refunds, or any other reimbursements for taxes previously collected for real property with

renewable energy resources thereupon.

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

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

local tax assessor by December 31 each year; and

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

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

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

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

defined herein.

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

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

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

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

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

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

property is not occupied. Such property described in subsection (a)(6)(ii) of this section shall

continue to be taxed at the assessed value at the time of purchase until such time as such property

is sold or occupied and no longer qualifies as development property. As to residential

condominiums, this exemption shall not affect taxes on the common areas and facilities as set forth

in § 34-36-27. In no circumstance shall such designation as development property extend beyond

two (2) tax years and a qualification as a development property shall only apply to property that

applies for, or receives, construction permits after July 1, 2015. Further, the exemptions set forth

in this section shall not apply to land.

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

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

language to the effect that they are aware of the additional taxes imposed by the provisions of § 44-

5-39 in the event that they use land classified as farm, forest, or open space land for another purpose.

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

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

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

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

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

of the phase out.

     SECTION 2. Section 44-27-10.1 of the General Laws in Chapter 44-27 entitled "Taxation

of Farm, Forest, and Open Space Land" is hereby amended to read as follows:

     44-27-10.1. Land withdrawn from classification for commercial renewable-energy

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production — Effect on obligation and the land use change tax.

     (a) Farmlands classified in the farm, forest, or open-space program in this chapter shall not

be subject to a land use change tax if the landowner converts no more than twenty percent (20%)

of the total acreage of land that is actively devoted to agricultural or horticultural use to install a

renewable energy system. Any acreage used for a renewable energy system that is designated for

dual use under subsection (c) of this section shall not be included in the calculation of the twenty

percent (20%) restriction. For purposes of this section, land that is actively devoted to agricultural

or horticultural use shall be defined by rules and regulations established by the department of

environmental management in consultation with the office of energy resources and shall include,

at a minimum, any land that is actively devoted to agricultural or horticultural use that was

previously used to install a renewable energy system. Those rules shall also define renewable

energy system to include, at a minimum, any buffers, access roads, and other supporting

infrastructure associated with the generation of renewable energy.

     (b) The tax assessor shall only withdraw from farmland classification the actual acreage of

the farmland used for a renewable energy system that is not concurrently used as farmland. The

rest of the farmland shall remain eligible as long as it still meets the program qualification criteria.

This reclassification of farmlands shall not be considered an exception to the tax treatment for

renewable energy systems prescribed by § 44-5-3(c) and reclassified farmland shall only be

reclassified, revalued, and taxed to the classification and tax that immediately predated the farmland

classification.

     (c) The dual purpose designation for installing a renewable energy system and utilizing the

land below and surrounding the system for agriculture purposes, shall be determined pursuant to

rules and regulations that will be established by the department of environmental management in

consultation with the office of energy resources. The regulations shall be adopted no later than

December 30, 2017.

     SECTION 3. 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

***

     This act would, for assessment of property tax purposes, provide that real property enrolled

in farm, forest or open space, which has acreage used for renewable energy resources, have that

acreage used for renewable energy removed from enrollment in farm forest or open space

immediately preceding its enrollment as such.

     This act would take effect upon passage.

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