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art.008/3/008/2/015/2/015/1
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ARTICLE 8 AS AMENDED
RELATING TO MUNICIPALITIES

     SECTION 1. Section 45-12-22.2 of the General laws in Chapter 45-12 entitled
"Indebtedness of Towns and Cities" is hereby amended to read as follows:
     45-12-22.2. Monitoring of financial operations – Corrective action. -- Subsections (a)
through (e)(h) below shall apply to cities and towns.
     (a) The chief financial officer of each municipality and each school district within the
state shall continuously monitor financial operations by tracking actual versus budgeted revenue
and expense.
     (b) The chief financial officer of the municipality shall submit a report on a monthly basis
to the municipality's chief executive officer, each member of the city or town council, and school
district committee certifying the status of the municipal budget from all fund sources, including
the school department budget from all fund sources, or regional school district budget from all
fund sources. The chief financial officer of the municipality shall also submit a quarterly report
on or before the 25th day of the month succeeding the end of each fiscal quarter budget-to-actual
financial information on or before the 25th day succeeding the last day of the sixth, ninth, and
twelfth month of each fiscal year to the division of municipal finance, the commissioner of
education, and the auditor general pursuant to the provisions outlined in subsection (d) certifying
the status of the municipal budget, including the school budget that has been certified by the
school department. Each quarterly report submitted must be signed by the chief executive officer,
chief financial officer, the superintendent of the school district, and chief financial officer for the
school district. The report has to be submitted to the city own council president and the school
committee chair. It is encouraged, but not required, to have the council president/school
committee chair sign the report. The chief financial officer of the school department or school
district shall certify the status of the school district's budget and shall assist in the preparation of
these reports. The monthly report and quarterly reports budget-to-actual financial information as
required in this section shall be in a format prescribed by the division of municipal finance, the
commissioner of education, and the state auditor general. The budget-to-actual financial
information and the monthly reports shall contain a statement as to whether any actual or
projected shortfalls in budget line items are expected to result in a year-end deficit; the projected
impact on year-end financial results, including all accruals and encumbrances; and how the
municipality and school district plans to address any such shortfalls. In the event that the school
reporting is not provided, then state education aid may be withheld pursuant to the provisions of §
16-2-9.4(d).
     (c) In order to facilitate electronic upload to the "Transparency Portal", as defined herein,
the chief financial officer of the municipality shall also submit, as part of the annual audited
financial statements of the municipality, a municipal-data report for the municipality’s general
fund containing content and in a format designated by the division of municipal finance and the
office of the auditor general. Such municipal-data report shall be included in the scope of the
annual audit and shall be included in the municipality’s financial statements as supplementary
information.
     (d) All budget-to-actual financial information as required in subsection (b), municipal
data report as required in subsection (c), and reports required pursuant to the provisions of § 44-
35-10 shall be submitted to the division of municipal finance through the use of the division’s
Transparency Portal, in the format required by the division of municipal finance, which will be
located on the division’s website. The division of municipal finance will create a finalized report
from all information submitted through the Transparency Portal ("Transparency Report"). The
division of municipal finance will submit the Transparency Report to the municipality to be
signed by the chief executive officer, chief financial officer, superintendent of the school district,
and chief financial officer for the school district. All signed Transparency Reports shall be posted
to the municipality’s website within ten (10) business days of receipt of such report. The
municipalities shall provide a copy of the signed Transparency Report to the commissioner of
education, the office of the auditor general, the municipality’s council president, and the school
committee chair. In addition, a copy of the signed Transparency Report, which has been
designated by the division of municipal finance for inclusion in the municipality's audited
financial statements, shall be provided by the municipality to its auditor.
     (c)(e)If any of the quarterly reports budget-to-actual financial information required under
subsection (b) project a year-end deficit, the chief financial officer of the municipality shall
submit to the state division of municipal finance, the commissioner of education, and the auditor
general a corrective action plan, signed by the chief executive officer and chief financial officer,
on or before the last day of the month succeeding the close of the fiscal quarter in which budget-
to-actual financial information is required, which that provides for the avoidance of a year-end
deficit or structural deficit that could impact future years, and the school superintendent shall also
comply with the provisions of § 16-2-11(c) to assist in this effort. The plan may include
recommendations as to whether an increase in property taxes and/or spending cuts should be
adopted to eliminate the deficit. The plan shall include a legal opinion by municipal counsel that
the proposed actions under the plan are permissible under federal, state, and local law. The state
division of municipal affairs may rely on the written representations made by the municipality in
the plan and will not be required to perform an audit.
     (d)(f) If the division of municipal finance concludes the plan required hereunder is
insufficient and/or fails to adequately address the financial condition of the municipality, the
division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.
     (e)(g) The monthly reports and budget-to-actual financial information required shall
include the financial operations of any departments or funds of municipal government, including
the school department or the regional school district, notwithstanding the status of the entity as a
separate legal body. This provision does not eliminate the additional requirements placed on local
and regional school districts by §§ 16-2-9(f) and 16-3-11(e)(3).
     (h) The "Transparency Portal" shall be an electronic interface that will be implemented,
maintained, and monitored by the state division of municipal finance with the assistance of the
state department of administration. In addition, the division of municipal finance shall post to its
website a list of participating and non-participating entities for each reporting cycle identified
under subsections (b), (c), and required reports pursuant to § 44-35-10.
       Subsections (f)(i) through (j)(m) below shall apply to fire districts.
     (f)(i) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire
district within the state shall continuously monitor the fire district's financial operations by
tracking actual versus budgeted revenue and expense.
     (g)(j) The treasurer/chief financial officer or other fiduciary, as applicable, of the fire
district shall submit a quarterly report on or before the 25th day of the month succeeding the end
of each fiscal quarter to the division of municipal finance and the state auditor general certifying
the status of the fire district's budget. Each quarterly report submitted must be signed by the chair
of the governing body and the treasurer/chief financial officer. The report shall be submitted to
the members of the governing body and the members of the town council. The quarterly reports
shall be in a format prescribed by the division of municipal finance and the state auditor general.
The reports shall contain a statement as to whether any actual or projected shortfalls in budget
line items are expected to result in a year-end deficit; the projected impact on year-end financial
results including all accruals and encumbrances; and how the fire district plans to address any
such shortfalls.
     (h)(k) If any of the quarterly reports required under subsection (g)(j) above project a
year-end deficit, the treasurer/chief financial officer or other fiduciary, as applicable, of the fire
district shall submit to the division of municipal finance and the state auditor general a corrective
action plan signed by the chair of the governing body and treasurer/chief financial officer, or
other fiduciary as applicable, of the fire district on or before the last day of the month succeeding
the close of the fiscal quarter, which that provides for the avoidance of a year-end deficit or
structural deficit that could impact future years. The plan may include recommendations as to
whether an increase in property taxes and/or spending cuts should be adopted to eliminate the
deficit. The plan shall include a legal opinion by legal counsel that the proposed actions under the
plan are permissible under federal, state, and local law. Said plan shall be sent to the members of
the fire district's governing body and the members of the town council. The division of municipal
finance may rely on the written representations made by the governing body of the fire district in
the plan and is will not be required to perform an audit.
     (i)(l) If the division of municipal finance concludes the plan required hereunder is
insufficient and/or fails to adequately address the financial condition of the fire district, the
division of municipal finance can elect to pursue the remedies identified in § 45-12-22.7.
     (j)(m) The reports and plans required above shall also include, but not be limited to, a
comprehensive overview of the financial operations of the fire district, including a list of the
value of the fire district's assets (tangibles and intangibles) and liabilities. 
     SECTION 2. Section 44-35-10 of the General laws in Chapter 44-35 entitled "Property
Tax and Fiscal Disclosure – Municipal Budgets" is hereby amended to read as follows:
     44-35-10. Balanced municipal budgets – Additional reporting requirements –
Electronic reporting/municipal uniform chart of accounts. -- (a) The operating budgets for all
cities and towns shall provide for total appropriations which that do not exceed total estimated
receipts, taking into account any general fund surplus or deficit estimated to be carried over from
the current fiscal year. The funding of accumulated deficits shall be consistent with the provisions
of § 45-12-22.
     (b) The chief elected official in each city and town shall provide to the division of
municipal finance within thirty (30) days of final action, in the form and format required by the
division, the adopted budget survey.
     (c) Within thirty (30) days of final action as referenced in subsection (b) above each city
or town shall provide to the division a five- (5) year (5) forecast, in the form and format required
by the division, for major funds as defined by generally accepted accounting principles as
established by the governmental accounting standards board (GASB). The forecast shall include,
but not be limited to, a scenario reflecting pensions and post employment Benefits other than
pensions (OPEB) obligations at one hundred percent (100%) of the annual required contribution
(ARC), both for the general and unrestricted school funds. The forecast shall also reflect any and
all underlying assumptions.
     (d) The reports required under subsections (b) and (c) shall be submitted in accordance
with the requirements outlined under § 45-12-22.2 (d).
     (d)(e) Within sixty (60) days of executing changes in healthcare benefits, pension
benefits, and OPEB, a municipality shall provide a fiscal impact statement to the division of
municipal finance, reflecting the impact on any unfunded liability and annual required
contribution (ARC), as well as the impact on the five- (5) year (5) forecast. The fiscal impact
statements shall show underlying actuarial assumptions and provide support for underlying
assumptions.
     (e)(f) A municipality shall join electronic reporting/implement municipal uniform chart
of accounts (UCOA), within six (6) months of implementation. 
     SECTION 3. Section 42-142-4 of the General laws in Chapter 42-142 entitled
"Department of Revenue" is hereby amended to read as follows:
     42-142-4. Division of property valuation and municipal finance. -- (a) There is hereby
established within the department of revenue a division of property valuation and municipal
finance. The head of the office shall be the chief of property valuation and municipal finance.
     (b) The division of property valuation and municipal finance shall have the following
duties:
     (i) Provide assistance and guidance to municipalities in complying with state law;
     (ii) To eEncourage cooperation between municipalities and the state in calculating,
evaluating, and distributing state aid;
     (iii) To maintain a data center of information of use to municipalities; Encourage the
exchange of information between the division and other governmental entities in an effort to
increase shared services by making available, through the use of web-based applications or other
mediums, municipal vendor contracts and/or any other data the division deems appropriate;
     (iv) To mMaintain and compute financial and equalized property value information for
the benefit of municipalities and public policy decision makers;
     (v) To eEncourage and assure compliance with state laws and policies relating to
municipalities, especially in the areas of public disclosure, tax levies, financial reporting, and
property tax issues;
     (vi) To eEncourage cooperation between municipalities and the state by distributing
information and by providing technical assistance to municipalities;
     (vii) To gGive guidance to public decision makers on the equitable distribution of state
aid to municipalities; and
     (viii) To pProvide technical assistance for property tax administration. 
     SECTION 4. Section 45-13-12 of the General Laws in Chapter 45-13 entitled "State Aid"
is hereby amended to read as follows:
     45-13-12. Distressed communities relief fund. -- (a) There is established a fund to
provide state assistance to those Rhode Island cities and towns which that have the highest
property tax burdens relative to the wealth of taxpayers.
     (b) Establishment of indices. Four (4) indices of distress shall be established to determine
eligibility for the program. Each community shall be ranked by each distress index and any
community which that falls into the lowest twenty percent (20%) of at least three (3) of the four
(4) indices shall be eligible to receive assistance. The four (4) indices are established as follows:
     (1) Percent of tax levy to full value of property. This shall be computed by dividing the
tax levy of each municipality by the full value of property for each municipality. For the 1990-91
fiscal year, tax levy and full value shall be as of the assessment date December 31, 1986.
     (2) Per capita income. This shall be the most recent estimate reported by the U.S.
Department of Commerce, Bureau of the Census.
     (3) Percent of personal income to full value of property. This shall be computed by
multiplying the per capita income above by the most recent population estimate as reported by the
U.S. Department of Commerce, Bureau of the Census, and dividing the result by the full value of
property.
     (4) Per capita full value of property. This shall be the full value of property divided by
the most recent estimate of population by the U.S. Department of Commerce, Bureau of the
Census.
     (c) Distribution of funds. Funds shall be distributed to each eligible community on the
basis of the community's tax levy relative to the total tax levy of all eligible communities. For the
fiscal year 1990-91, the reference year for the tax levy shall be the assessment date of December
31, 1988. For each fiscal year thereafter, except for fiscal year 2007-2008, the reference year and
the fiscal year shall bear the same relationship. For the fiscal year 2007-2008, the reference year
shall be the same as for the distributions made in fiscal year 2006-2007.
     Any newly qualifying community shall be paid fifty percent (50%) of current law
requirements the first year it qualifies. The remaining fifty percent (50%) shall be distributed to
the other distressed communities proportionately. When any community falls out of the distressed
community program, it shall receive a one-time payment of fifty percent (50%) of the prior year
requirement exclusive of any reduction for first-year qualification; however, in the event that the
total appropriation is increased from the prior year's appropriation, each eligible community shall
receive: (1) A distribution based on the community's tax levy relative to the total tax levy of all
eligible communities; and (2) A percentage of the amount of said increased appropriation which
percentage shall be calculated based on a community's distribution relative to the total increase in
the appropriation. The community shall be considered a distressed community in the fall-out
year.
     (d) Appropriation of funds. The state of Rhode Island shall appropriate funds in the
annual appropriations act to support this program. For each of the fiscal years ending June 30,
2011, June 30, 2012, and June 30, 2013, seven hundred eighty-four thousand four hundred fifty-
eight dollars ($784,458) of the total appropriation shall be distributed equally to each qualifying
distressed community.
     (e) Payments. Payments shall be made to eligible communities each August.
     (f) Mandatory participation for collection of debts. Any community determined to be a
distressed community under this chapter shall, within three (3) months of said determination,
contract with the tax administrator, in accordance with § 42-142-7, to allow the tax administrator
to collect outstanding liabilities owed to the distressed community. The division of municipal
finance shall determine which of said liabilities shall be subject to the collection by the tax
administrator.
     SECTION 5. This article shall take effect upon passage.