ARTICLE 17 SUBSTITUTE A

RELATING TO MOTOR VEHICLE EXCISE TAX

SECTION 1. Sections 44-34-1, 44-34-2, 44-34-3, 44-34-4, 44-34-4.1, 44-34-5, 44-34-6, 44-34-7, 44-34-8, 44-34-9, 44-34-11, 44-34-12, 44-34-13 of the General Laws in Chapter 44-34 entitled “Excise on Motor Vehicles and Trailers” are hereby amended to read as follows:

44-34-1. Motor vehicle and trailer excise tax. [Repealed effective July 1, 2005.]. – There is created an excise tax on motor vehicles for the state of Rhode Island. The cities and towns are authorized to administer and collect the excise on registered motor vehicles and trailers in lieu of property tax.

44-34-2. Assessment – Valuation – Proration – Abatement and cancellation – Exemptions from tax. [Repealed effective July 1, 2005.]. – (a) Except as provided in this section, the tax assessors of each city and town shall assess and levy in each calendar year on every vehicle and trailer registered under chapter 3 of title 31, for the privilege of the registration, an excise measured by its value, as subsequently defined and determined. For the purpose of this excise, the uniform value of each vehicle shall be determined in accordance with the regulations of the vehicle value commission. Any vehicle which is more than twenty-five (25) years old, whether or not the vehicle is an antique motor car as defined in § 31-1-3(a), shall be deemed to possess an average retail value of five hundred dollars ($500). Any vehicle more than twenty-five (25) years old on June 16, 1987, whether or not the vehicle is an antique motor car as defined in § 31-1-3(a), shall be deemed to have an average retail value of five hundred dollars ($500) or its actual retail value whichever is less. The minimum excise tax on any vehicle, if registered to the same owner for a full year or portion of the year, shall not be less than five dollars ($5.00) unless the registration is transferred to one or more additional vehicles or trailers, in which case the minimum or combined excise taxes shall not be less than five dollars ($5.00). Beginning in fiscal year 2001, the assessor may, but is not required to, issue minimum tax bills as authorized by this section or any general or public law. Beginning in fiscal year 2002 and thereafter, the assessor shall not issue minimum tax bills, notwithstanding any general or public law to the contrary. The assessor may waive the excise tax on any vehicle where the annual levy would be less than five dollars ($5.00). The state shall not provide reimbursement for any waiver.

(b) Vehicle and trailer excises shall be prorated over the calendar year prior to the year in which the excises are levied and billed, that year being referred to as the calendar year of proration.

(c) The excise levy on every vehicle and trailer registered under chapter 3 of title 31 shall be based on the ratio that the number of days the vehicle or trailer is registered is to the number of days in the calendar year of proration.

(d) If during the calendar year of proration, the owner of a vehicle or trailer subject to the excise moves permanently with his or her vehicle to another state and cancels his or her registration in this state and returns the registration plates, the vehicle shall be exempt from excise for the ensuing year.

(e) "Year of manufacture" as used in this section means the year used by the manufacturer of the vehicle or trailer in connection with the designation by the manufacturer of the model of the vehicle or trailer. Where the presumptive price of a vehicle or trailer is not readily obtainable, or special equipment is installed on the vehicle or trailer, the tax assessor shall prescribe the retail price to be used or the manner in which the retail price shall be determined.

(f) Nothing in this section shall be construed to prevent any city or town council from granting an abatement, in whole or in part, when there is an error in the assessment of a tax, and the tax assessors have certified to the fact, in writing, to the city or town council to cancel taxes stating the nature of the error, the valuation of the vehicle or trailer, the amount of the assessed tax and the name of the person to whom the vehicle or trailer was taxed.

(g) The city or town council may cancel, in whole or in part, an excise tax assessed to a person who has died leaving no estate, or a person who has moved from the state, and the tax collector or person acting in the capacity of tax collector certifies to the city or town council the facts of the case.

(h) The excise imposed by this section shall not apply to vehicles or trailers owned by the state of Rhode Island or any of its political subdivisions, or to vehicles or trailers owned by a corporation, association or other organization whose tangible personal property is exempt under § 44-3-3(1) – (15), or to vehicles assessed and taxed under § 44-13-13, or those owned by the United States government. Farm vehicles shall be exempt to the extent prescribed in § 44-5-42.

44-34-3. Assessment roll – Rate – Payment – Penalty upon non-payment. [Repealed effective July 1, 2005.]. – (a) The assessor, on the basis of a list of uniform values for motor vehicles prepared by the Rhode Island vehicle value commission pursuant to § 44-34-8, shall make a list containing the value of every vehicle and trailer in the city or town which is subject to the provisions of § 44-34-2, the values to be at the average retail price as determined under § 44-34-2 or at a uniform percentage of these, not to exceed one hundred percent (100%), to be determined by the assessors in each city or town; provided, that every vehicle and trailer in the city of Pawtucket shall be assessed in accordance with §§ 44-5-20.1 and 44-5-20.2; provided, further, that motor vehicles owned, leased, or utilized by rental companies, as those terms are defined in § 31-34.1-1, shall not be valued for excise tax purposes at an amount greater than the National Automobile Dealers Association average retail value for new vehicles for the year and vehicle model in question.

(b) The excise tax levy shall be applied to the excise assessment roll at the rate established by the assessors for all other property except manufacturer's machinery and equipment in accordance with § 44-5-22 and the resulting tax roll shall be certified by the assessors to the city or town clerk, treasurer, or tax collector, as the case may be, not later than June 15 next succeeding. Prior to the resulting tax roll being certified to the Pawtucket city clerk, the excise levy shall be applied to the excise assessment roll in accordance with the property tax classification described in §§ 44-5-20.3 and 44-5-20.5. In the city of Woonsocket, the excise tax levy shall be applied to the excise assessment roll at a rate that will produce no more than nineteen percent (19%) of the total tax levy as prescribed in § 44-5-11.6. In the town of Lincoln, the excise tax levy shall be applied to the excise assessment roll at a rate that produces an amount equal to no more than seventeen percent (17%) of the total real estate tax levy.

(c) If any vehicle or trailer liable to taxation in any city or town has been omitted from the tax roll, the tax assessment shall assess the vehicle or trailer on a supplemental excise assessment roll and shall certify the assessment to the tax collector after June 15, but not later than December 31 next succeeding.

(d) As soon after this as possible, the tax collector shall cause excise bills to be sent by first class mail to all persons, corporations, partnerships, joint stock companies, or associations that have registered vehicles or trailers during the calendar year of proration. The bills shall be paid in accordance with § 44-5-7 at the same time and on the same schedule as property tax bills. Failure to pay the excise at the appropriated time shall bring about a penalty of eighteen percent (18%) per annum, or, in the case of the city of Cranston, a penalty of twelve percent (12%) per annum which applies on the date of the delinquency or, for any city or town fiscal year commencing between January 1, 1980, and December 31, 1980, after approval by the proper local authority, at the same rate of interest as that which is applied to delinquent property taxes in the taxing jurisdiction.

(e) Failure by the tax collector to send, or by the taxpayer to receive, a bill shall not excuse the nonpayment of the tax or affect its validity or any proceedings for the collection.

(f) This section does not apply to any and all entities which are exempt from the excise as prescribed in § 44-34-2.

44-34-4. Vehicle and trailer tax situs. – Apportionment for interstate fleets. [Repealed effective July 1, 2005.]. – (a) Tax situs of each vehicle or trailer shall be in the town or city of permanent abode of the owner at the end of the calendar year of proration if an individual, or at the principal place of business in this state, if a partnership, corporation, joint stock company, or association, except that if a vehicle or trailer is customarily kept in some other town or city, then tax situs will be in that municipality.

(b) Rented or leased vehicles shall have tax situs in the town or city where they are customarily kept by the renter or lessee if the rental or leasing contracts shall be long term. For the purpose of this chapter, long-term contracts are for six (6) months or more. If vehicles are rented or leased for less than six (6) months or on a transient basis, then tax situs for the vehicles shall be the town or city where the leasing company or agency stores the vehicles when they are not being rented or leased.

(c) In the case of fleets of vehicles and trailers engaged in interstate commerce the following rules of just apportionment shall apply:

(1) If the fleet owner has a terminal where a number of its vehicles are parked, then the average number of vehicles so parked in proportion to its total fleet value shall determine the excise;

(2) If the fleet owner does not have vehicles parked in this state but has a pickup and drop-off station, then the number of miles traveled by its fleet in this state in proportion to the total number of miles traveled by its fleet shall be the percentage of the total value of its fleet used to determine the excise.

(d) Tax situs for a fleet shall be the town or city where the terminal or station is located.

(e) In the case of more than one pickup and drop-off station of a fleet owner located in the state, the communities in which the stations are situated shall share equally the excise levied against the fleet owner.

(f) The tax assessor may require an owner to disclose any or all information necessary to determine tax situs and value of the vehicles and trailers that are subject to excise.

(g) If the owner fails to supply the requested information, then the tax assessor shall assess the vehicles and trailers at what he or she deems to be their value, and the owner, if over taxes, shall have no remedy for this assessment.

44-34-4.1. Exemptions for buses, trucks and trailers in interstate commerce. [Repealed effective July 1, 2005.]. – Notwithstanding any provision of the general laws to the contrary, the operation of a bus, truck, or trailer by a bus or trucking company in interstate commerce shall not be subject to the provisions of the excise tax imposed by this chapter, on the condition that the bus, truck and/or trailer is utilized exclusively in interstate commerce.

44-34-5. Veterans' and other property tax exemptions. [Repealed effective July 1, 2005.]. – (a) Those veterans, gold star parents, and blind persons who qualify for property tax exemption under §§ 30-22-1 – 30-22-4 and §§ 44-3-4, 44-3-5, and 44-3-12 shall have the exemption applied to their real estate and tangible personal property, other than registered vehicles or trailers, in the communities where they reside as prescribed in those sections. However, if there is not sufficient property to exhaust the exemption, the balance of the exemption shall be applied to the excise tax on his or her motor vehicle or trailer.

(b) The amount of exemption shall not exceed the amount of excise levied on those vehicles owned by the person.

44-34-6. Fire districts. [Repealed effective July 1, 2005.]. – The provisions of this chapter shall apply in all respects in the case of taxes assessed upon motor vehicles by any fire district. Effective with the year 2000 tax roll based upon values of December 31, 1999, the authority of fire districts as authorized by general or public law to levy excise taxes on motor vehicles is eliminated and each district shall be reimbursed for one hundred percent (100%) of current year lost revenues based upon what the levy net of personal exemptions would otherwise have been. That reimbursement shall be based upon submission of information to the department of administration on the dates specified in § 44-34.1-2, and reimbursements shall be paid on the dates specified in that section. Future year reimbursements shall be based upon the year 2000 tax roll and values of December 31, 1999, and indexed by applying the annual change in the December Consumer Price Index – All Urban Consumers (CPI-U).

44-34-7. Severability. [Repealed effective July 1, 2005.]. – If any provision of this chapter is held invalid, the remainder of this chapter and the application of its provisions shall not be affected by this invalidity.

44-34-8. Appeal procedure. [Repealed effective July 1, 2005.]. – (a) Any taxpayer aggrieved by a valuation may appeal that valuation to the tax assessor within thirty (30) days of notice of valuation. When the valuation of the vehicle has been made by the assessor, the assessor shall render a decision within ten (10) days of the filing of the appeal. When the valuation of the vehicle has been made by the Rhode Island vehicle valuation commission, the assessor shall forward the appeal on the form provided by the commission to the Rhode Island vehicle valuation commission within ten (10) days. The commission shall transmit its decision to the tax assessor within twenty (20) days of the receipt of the appeal.

(2) The tax assessor shall notify the aggrieved taxpayer, by writing, of the commission decision within ten (10) days of the receipt of the commission decision.

(b) Within thirty (30) days of the notification of the decision of the tax assessor or the commission, an aggrieved taxpayer may appeal the decision to the district court for the judicial division within which the city or town is located.

(c) A party aggrieved by a final order of the district court may seek review of this order in the state supreme court by writ of certiorari. The petition for a writ of certiorari shall state the errors claimed. Upon the filing of the petition with the clerk of the supreme court, the supreme court may, if it sees fit, issue its writ of certiorari to the district court to certify to the supreme court the record of the proceeding under review, or so much of this as was submitted to the district court by the parties, together with any additional record of the proceedings in the district court.

44-34-9. Valuation of motor vehicles. [Repealed effective July 1, 2005.]. – For the purpose of the imposition of an excise tax upon motor vehicles, the tax assessor shall determine the value of each motor vehicle in accordance with the following procedures:

(1) Each vehicle and trailer of the same make, type, model, and year of manufacture in this state shall be deemed to have one uniform statewide value to be utilized in each city and town, except in those instances where no uniform value is established pursuant to the rules of the vehicle value commission § 44-34-11 or where a value is established by the assessor pursuant to § 44-34-2.

(2) The uniform value of each type of vehicle and trailer shall be determined by the Rhode Island vehicle value commission or in accordance with the rules of the vehicle value commission.

(3) The value of each vehicle or trailer or each type vehicle or trailer not established by the Rhode Island vehicle value commission shall be determined by the assessor of the city or town in which the vehicle or trailer is registered. In making the determination, a uniform flat value for the vehicles in the municipality may be utilized by the assessor.

44-34-11. Rhode Island vehicle value commission. [Repealed effective July 1, 2005.]. – (a) There is created the "Rhode Island vehicle value commission" to establish presumptive values of vehicles and trailers subject to the excise tax.

(b) The commission shall consist of the following nine (9) members: one designee of the director of transportation; five (5) local tax officials named by the governor, at least one of whom shall be from a city or town under ten thousand (10,000) population and at least one of whom is from a city or town over fifty thousand (50,000) population, from a list of nominees submitted by the president of the Rhode Island league of cities and towns; and two (2) designees who are private citizen car owners, one of whom shall be named by the speaker of the house and one of whom shall be named by the president of the senate; and one motor vehicle dealer designated by the director of administration; all departmental designees shall serve at the pleasure of the designating agency, but, for a term of no less than one year, and all other designees shall serve for a term of three (3) years.

(c) The commission shall annually determine the presumptive values of vehicles and trailers subject to the excise tax in the following manner:

(1) Not earlier than September 30 and not later than December 31 of each year, the commission shall by rule adopt a methodology for determining the presumptive value of vehicles and trailers subject to the excise tax which shall give consideration to the following factors:

(i) The average retail price of similar vehicles of the same make, model, type, and year of manufacture as reported by motor vehicle dealers or by official used car guides, such as that of the National Automobile Dealers Association for New England. Where regional guides are not available, the commission shall use other publications deemed appropriate; and

(ii) Other information concerning the average retail prices for make, model, type, and year of manufacture of motor vehicles as the director and the Rhode Island vehicle value commission may deem appropriate to determine fair values.

(2) On or before February 1 of each year, it shall adopt a list of values for vehicles and trailers of the same make, model, type, and year of manufacture as of the preceding December 31 in accordance with the methodology adopted between September 30 and December 31; the list shall be subject to a public hearing at least five (5) business days prior to the date of its adoption.

(3) Nothing in this section shall be deemed to require the commission to determine the presumptive value of vehicles and trailers which are unique, to which special equipment has been added or to which special modifications have been made, or for which adequate information is not available from the sources referenced in subdivision (1) of this subsection; provided, that the commission may consider those factors in its lists or regulations.

(4) The commission shall annually provide the list of presumptive values of vehicles and trailers to each tax assessor on or before February 15 of each year.

(d) The commission shall adopt rules governing its organization and the conduct of its business; prior to the adoption of the rules, the designee of the department of administration shall serve as chairperson of the commission and shall have the power to call meetings, and a simple majority of the members of the commission, as provided for in subsection (b) of this section, is necessary for a quorum, which quorum by majority vote shall have the power to conduct business in the name of the commission.

(e) The commission shall have the power to contract for professional services that it deems necessary for the development of the methodology for determining presumptive values, for calculating presumptive values according to the methodology, and for preparing the list of presumptive values in a form and format that is generally usable by cities and towns in their preparation of tax bills. The commission shall also have the power to incur reasonable expenses in the conduct of its business as required by this chapter and to authorize payments for the expenses.

(f) Compensation for members for attendance at meetings shall initially be at a rate of fifty dollars ($50.00) per meeting unless otherwise determined by the unclassified pay board.

(g) The commission shall respond to petitions of appeal by local boards of review in accordance with the provisions of § 44-34-9.

(h) The commission shall establish, by rule, procedures for adopting an annual budget and for administering its finances. After July 1, 1986 one-half ( 1/2) of the cost of the commission's operations shall be borne by the state and one-half ( 1/2) shall be borne by cities and towns within the state, with the city and town share distributed among cities and towns on a per capita basis.

44-34-12. Cooperation of state agencies. [Repealed effective July 1, 2005.]. – The department of administration shall provide space and secretarial and clerical services to the Rhode Island vehicle value commission without charge to the commission. The department of transportation, and the department of administration shall provide, consistent with law, information that is in their possession, which the commission determines to be useful or necessary in the conduct of its responsibilities.

44-34-13. Tax exemption on vehicles adapted for persons who are disabled. [Repealed effective July 1, 2005.]. – (a) The city or town councils of the various cities and towns may, by ordinance, exempt from taxation up to fifty percent (50%) of the value of any motor vehicle that is necessary to transport a family member with a disability or where the vehicle has been specially adapted to meet the specific needs of the person with a disability. This exemption shall apply to not more than one motor vehicle owned and registered for personal, noncommercial use. After the assessors have allowed an exemption under this section, no further evidence of the existence of the facts required by this section shall be required in any subsequent year in the city or town in which the exemption has been allowed.

(b) For the purpose of this section:

(1) "Special adaptations" includes, but is not limited to: wheelchair lifts; wheelchair carriers; wheelchair ramps; wheelchair securements; hand controls; steering devices; extensions, relocations, and crossovers of operator controls; power assisted controls; raised tops or dropped floors; raised entry doors; or alternative signaling devices to auditory signals.

(2) "Specially adapted motor vehicle" means a motor vehicle with special adaptations; provided, that the cost of the special adaptations meets or exceeds seven percent (7%) of the value of the motor vehicle; provided, further, that the town of Johnston may, by ordinance, provide for an exemption when the cost of special adaptations is not less than two percent (2%).

SECTION 2. Section 4 of Article 28 of Chapter 31 of the 1998 Public Laws entitled “An Act Making Appropriations For The Support of the State For The Fiscal Year Ending June 30, 1999” is hereby repealed.

SECTION 4. On July 1, 2005, the provisions of Chapter 34 of Title 44 entitled "Excise on Motor Vehicle and Trailers" shall be repealed in its entirety.

SECTION 3. Sections 44-34.1-1 and 44-34.1-2 of the General Laws in Chapter 44-34.1 entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998" are hereby amended to read as follows:

44-34.1-1. Excise tax phase-out. -- (a) (1) Notwithstanding the provisions of chapter 34 of this title or any other provisions to the contrary, the motor vehicle and trailer excise tax established by section 44-34-1 may be phased out by the fiscal year 2008. The phase-out may be phased out. The phase-out shall apply to all motor vehicles and trailers, including leased vehicles.

(2) Lessors of vehicles that pay excise taxes directly to municipalities shall provide lessees, at the time of entering into the lease agreement, an estimate of annual excise taxes payable throughout the term of the lease. In the event the actual excise tax is less than the estimated excise tax, the lessor shall annually rebate to the lessee the difference between the actual excise tax and the estimated excise tax.

(b) Pursuant to the provisions of this section, all motor vehicles shall be assessed a value by the vehicle value commission. That value shall be assessed according to the provisions of section 44-34-11(c)(1) and in accordance with the terms as defined in subsection (d) of this section; provided, however, that the maximum taxable value percentage applicable to model year values as of December 31, 1997, shall continue to be applicable in future year valuations aged by one year in each succeeding year.

(c) (1) The motor vehicle excise tax phase-out shall commence with the excise tax bills mailed to taxpayers for the fiscal year 2000. The phase-out, beyond fiscal year 2003, shall be subject to annual review and appropriation by the general assembly. The tax assessors of the various cities and towns and fire districts shall reduce the average retail value of each vehicle assessed by using the prorated exemptions from the following table:

Local Fiscal Year State fiscal year

Exempt from value Local Exemption Reimbursement

fiscal year 1999 0 $1,500

fiscal year 2000 $1,500 $2,500

fiscal year 2001 $2,500 $3,500

fiscal year 2002 $3,500 $4,500

fiscal years 2003 and , 2004 and 2005

each year thereafter $4,500 $4,500

for fiscal year 2006 and each year

thereafter $5,000 $5,000

No city or town shall, in preparation of its annual budget, plan or otherwise rely on the continuation of said phase-out beyond fiscal year 2003, unless it is specifically approved by the general assembly.

(2) The excise tax phase-out shall provide levels of assessed value reductions until the tax is eliminated or reduced as provided in this chapter.

(3) Current exemptions shall remain in effect as provided in this chapter.

(4) The excise tax rates and ratios of assessment shall not be greater than fiscal year 1998 levels for each city, town, and fire district; provided, in the town of Johnston the excise tax rate and ratios of assessment shall not be greater than fiscal year 1999 levels and in no event shall the final taxable value of a vehicle be higher than assessed in the prior fiscal year, and the levy of a city, town, or fire district shall be limited to the lesser of the maximum taxable value or net assessed value for purposes of collecting the tax in any given year. (d) Definitions.

(1) "Maximum taxable value" means the value of vehicles as prescribed by section 44-34-11 reduced by the percentage of assessed value applicable to model year values as determined by the Rhode Island vehicle value commission as of December 31, 1997, for the vehicles valued by the commission as of December 31, 1997. For all vehicle value types not valued by the Rhode Island vehicle value commission as of December 31, 1997, the maximum taxable value shall be the latest value determined by a local assessor from an appropriate pricing guide, multiplied by the ratio of assessment used by that city, town, or fire district for a particular model year as of December 31, 1997.

(2) "Net assessed value" means the motor vehicle values as determined in accordance with section 44-34-11 less all personal exemptions allowed by cities, towns, fire districts, and the state of Rhode Island exemption value as provided for in section 44-34.1-1(c)(1).

44-34.1-2. City and town and fire district reimbursement. -- (a) In fiscal years 2000 through 2008 and thereafter, cities and towns and fire districts shall receive reimbursements, as set forth in this section, from state general revenues equal to the amount of lost tax revenue due to the phase out or reduction of the excise tax. Cities and towns and fire districts shall receive advance reimbursements through state fiscal year 2002. Provided further, however, that beginning in state fiscal year 2005, cities and towns shall receive reimbursements equal to the amount of lost tax revenue due to the phase out or reduction of the excise tax in the prior local fiscal year. In the event the tax is phased out in fiscal year 2008, in fiscal year 2009, cities and towns and fire districts shall receive a permanent distribution of sales tax revenue pursuant to section 44-18-18 in an amount equal to any lost revenue resulting from the excise tax elimination. Lost revenues must be determined using a base tax rate fixed at fiscal year 1998 levels for each city, town, and fire district, except that the Town of Johnston's base tax rate must be fixed at a fiscal year 1999 level.

(b) (1) The director of administration shall determine the amount of general revenues to be distributed to each city and town and fire district for the fiscal years 1999 through 2008 and thereafter so that every city and town and fire district is held harmless from tax loss resulting from this chapter, assuming that tax rates are indexed to inflation through fiscal year 2003.

(2) The director of administration shall index the tax rates for inflation by applying the annual change in the December Consumer Price Index -- All Urban Consumers (CPI-U), published by the Bureau of Labor Statistics of the United States Department of Labor, to the indexed tax rate used for the prior fiscal year calculation; provided, that for state reimbursements in fiscal years 2004 and thereafter, the indexed tax rate shall not be subject to further CPI-U adjustments. The director shall apply the following principles in determining reimbursements:

(i) Exemptions granted by cities and towns and fire districts in the fiscal year 1998 must be applied to assessed values prior to applying the exemptions in section 44-34.1-1(c)(1). Cities and towns and fire districts will not be reimbursed for these exemptions.

(ii) City, town, and fire districts shall be reimbursed by the state for revenue losses attributable to the exemptions provided for in section 44-34.1-1 and the inflation indexing of tax rates through fiscal 2003. Reimbursement for revenue losses shall be calculated based upon the difference between the maximum taxable value less personal exemptions and the net assessed value.

(iii) Inflation reimbursements shall be the difference between:

(A) The levy calculated at the tax rate used by each city and town and fire district for fiscal year 1998 after adjustments for personal exemptions but prior to adjustments for exemptions contained in section 44-34.1-1(c)(1); provided, that for the town of Johnston the tax rate used for fiscal year 1999 must be used for the calculation; and

(B) The levy calculated by applying the appropriate cumulative inflation adjustment through state fiscal 2003 to the tax rate used by each city and town and fire district for fiscal year 1998; provided, that for the town of Johnston the tax rate used for fiscal year 1999 shall be used for the calculation after adjustments for personal exemptions but prior to adjustments for exemptions contained in section 44-34.1-1.

(c) (1) Funds shall be distributed to the cities and towns and fire districts as follows:

(i) On October 20, 1998, and each October 20 thereafter through October 20, 2001, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.

(ii) On February 20, 1999, and each February 20 thereafter through February 20, 2002, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.

(iii) On June 20, 1999, and each June 20 thereafter through June 20, 2002, fifty percent (50%) of the amount calculated by the director of administration to be the difference for the upcoming fiscal year.

(iv) On August 1, 2002, and each August 1 thereafter through August 1, 2007, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the current fiscal year.

(v) On November 1, 2002, and each November 1 thereafter through November 1, 2007, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the current fiscal year.

(vi) On February 1, 2003, and each February 1 thereafter through February 1, 2008, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the current fiscal year.

(vii) On May 1, 2003, and each May 1 thereafter through May 1, 2008, twenty-five percent (25%) of the amount calculated by the director of administration to be the difference for the current fiscal year.

Provided, however, the February and May payments shall be subject to submission of final certified and reconciled motor vehicle levy information.

(2) Each city, town, or fire district shall submit final certified and reconciled motor vehicle levy information by August 30 of each year. Any adjustment to the estimated amounts paid in the previous fiscal year shall be included or deducted from the payment due November 1.

(3) On any of the payment dates specified in paragraphs (1)(i) through (vii) of this subsection, the director is authorized to deduct previously made over-payments or add supplemental payments as may be required to bring the reimbursements into full compliance with the requirements of this chapter.

(4) For the city of East Providence, the payment schedule is twenty-five percent (25%) on February 20, 1999, and each February 20 thereafter through February 20, 2002, twenty-five percent (25%) on June 20, 1999, and each June 20 thereafter through June 20, 2002, which includes final reconciliation of the previous year's payment, and fifty percent (50%) on October 20, 1999, and each October 20 thereafter through October 20, 2002. For local fiscal years 2003 though 2008 and thereafter, the payment schedule is twenty-five percent (25%) on each November 1, twenty-five percent (25%) on each February 1, twenty-five percent (25%) on each May 1, which includes final reconciliation of the previous year's payment, and twenty-five percent (25%) on each August 1; provided, the May and August payments shall be subject to submission of final certified and reconciled motor vehicle levy information.

(5) In the event the tax is phased out in fiscal year 2008, funds distributed to the cities, towns, and fire districts for the following fiscal year 2009 shall be calculated as the funds distributed in the fiscal year of the phase-out 2008. Twenty-five percent (25%) of the amounts calculated shall be distributed to the cities and towns and fire districts on August 1, 2008 in the fiscal year of the phase-out, twenty-five percent (25%) on the following November 1, 2008, twenty-five percent (25%) on the following February 1, 2009, and twenty-five percent (25%) on the following May 1, 2009. The funds shall be distributed to each city and town and fire district in the same proportion as distributed in the fiscal year of the phase-out 2008.

(6) In the event the tax is phased out in fiscal year 2008, to August 1, 2009, of the following fiscal year the director of administration shall calculate to the nearest tenth of one cent ($.001) the number of cents of sales tax received for the fiscal year ending June 30, 2009, of the year following the phase-out equal to the amount of funds distributed to the cities, towns, and fire districts under this chapter during the fiscal year 2009, following the phase-out and the percent of the total funds distributed in the fiscal year 2009, following the phase-out received by each city, town, and fire district, calculated to the nearest one-hundredth of one percent (0.01%). The director of the department of administration shall transmit those calculations to the governor, the speaker of the house, the president of the senate, the chairperson of the house finance committee, the chairperson of the senate finance committee, the house fiscal advisor, and the senate fiscal advisor. The number of cents, applied to the sales taxes received for the prior fiscal year, shall be the basis for determining the amount of sales tax to be distributed to the cities and towns and fire districts under this chapter for second fiscal year 2010, following the phase-out and each year thereafter. The cities and towns and fire districts shall receive that amount of sales tax in the proportions calculated by the director of administration as that received in the fiscal year 2009. following the phase-out.

(7) In the event the tax is phased out in fiscal year 2008, twenty-five percent (25%) of the funds shall be distributed to the cities, towns, and fire districts on August 1, 2009, of the following fiscal year and every August 1 thereafter; twenty-five percent (25%) shall be distributed on the following November 1, 2009, and every November 1 thereafter; twenty-five percent (25%) shall be distributed on the following February 1, 2010, and every February 1 thereafter; and twenty-five percent (25%) shall be distributed on the following May 1, 2010, and every May 1 thereafter.

(8) For the city of East Providence, in the event the tax is phased out in fiscal year 2008, twenty-five percent (25%) shall be distributed on November 1, 2009 of the following fiscal year and every November 1 thereafter, twenty-five percent (25%) shall be distributed on the following February 1, 2010 and every February 1 thereafter; twenty-five percent (25%) shall be distributed on the following May 1, 2010, and every May 1 thereafter; and twenty-five percent (25%) of the funds shall be distributed on the following August 1, 2010 and every August 1 thereafter.

(9) As provided for in section 44-34-6, the authority of fire districts to tax motor vehicles is eliminated effective with the year 2000 tax roll and the state reimbursement for fire districts shall be based on the provisions of section 44-34-6. All references to fire districts in this chapter do not apply to the year 2001 tax roll and thereafter.

SECTION 4. This article shall take effect on June 30, 2005.