§ 44-34.1-2 - City and town and fire district reimbursement.
SECTION 44-34.1-2
§ 44-34.1-2 City and town and firedistrict reimbursement. – (a) In fiscal years 2000 and thereafter, cities and towns and fire districtsshall receive reimbursements, as set forth in this section, from state generalrevenues equal to the amount of lost tax revenue due to the phase out orreduction of the excise tax. Cities and towns and fire districts shall receiveadvance reimbursements through state fiscal year 2002. In the event the tax isphased out, cities and towns and fire districts shall receive a permanentdistribution of sales tax revenue pursuant to § 44-18-18 in an amountequal to any lost revenue resulting from the excise tax elimination. Lostrevenues must be determined using a base tax rate fixed at fiscal year 1998levels for each city, town, and fire district, except that the Town ofJohnston's base tax rate must be fixed at a fiscal year 1999 level.
(b) The director of administration shall determine the amountof general revenues to be distributed to each city and town and fire districtfor the fiscal years 1999 and thereafter so that every city and town and firedistrict is held harmless from tax loss resulting from this chapter, assumingthat tax rates are indexed to inflation through fiscal year 2003.
(2) The director of administration shall index the tax ratesfor inflation by applying the annual change in the December Consumer PriceIndex – All Urban Consumers (CPI-U), published by the Bureau of LaborStatistics of the United States Department of Labor, to the indexed tax rateused for the prior fiscal year calculation; provided, that for statereimbursements in fiscal years 2004 and thereafter, the indexed tax rate shallnot be subject to further CPI-U adjustments. The director shall apply thefollowing principles in determining reimbursements:
(i) Exemptions granted by cities and towns and fire districtsin the fiscal year 1998 must be applied to assessed values prior to applyingthe exemptions in § 44-34.1-1(c)(1). Cities and towns and fire districtswill not be reimbursed for these exemptions.
(ii) City, town, and fire districts shall be reimbursed bythe state for revenue losses attributable to the exemptions provided for in§ 44-34.1-1 and the inflation indexing of tax rates through fiscal 2003.Reimbursement for revenue losses shall be calculated based upon the differencebetween the maximum taxable value less personal exemptions and the net assessedvalue.
(iii) Inflation reimbursements shall be the differencebetween:
(A) The levy calculated at the tax rate used by each city andtown and fire district for fiscal year 1998 after adjustments for personalexemptions but prior to adjustments for exemptions contained in §44-34.1-1(c)(1); provided, that for the town of Johnston the tax rate used forfiscal year 1999 must be used for the calculation; and
(B) The levy calculated by applying the appropriatecumulative inflation adjustment through state fiscal 2003 to the tax rate usedby each city and town and fire district for fiscal year 1998; provided, thatfor the town of Johnston the tax rate used for fiscal year 1999 shall be usedfor the calculation after adjustments for personal exemptions but prior toadjustments for exemptions contained in § 44-34.1-1.
(c) Funds shall be distributed to the cities and towns andfire districts as follows:
(i) On October 20, 1998, and each October 20 thereafterthrough October 20, 2001, twenty-five percent (25%) of the amount calculated bythe director of administration to be the difference for the upcoming fiscalyear.
(ii) On February 20, 1999, and each February 20 thereafterthrough February 20, 2002, twenty-five percent (25%) of the amount calculatedby the director of administration to be the difference for the upcoming fiscalyear.
(iii) On June 20, 1999, and each June 20 thereafter throughJune 20, 2002, fifty percent (50%) of the amount calculated by the director ofadministration to be the difference for the upcoming fiscal year.
(iv) On August 1, 2002, and each August 1 thereafter,twenty-five percent (25%) of the amount calculated by the director ofadministration to be the difference for the current fiscal year.
(v) On November 1, 2002, and each November 1 thereafter,twenty-five percent (25%) of the amount calculated by the director ofadministration to be the difference for the current fiscal year.
(vi) On February 1, 2003, and each February 1 thereafter,twenty-five percent (25%) of the amount calculated by the director ofadministration to be the difference for the current fiscal year.
(vii) On May 1, 2003, and each May 1 thereafter, twenty-fivepercent (25%) of the amount calculated by the director of administration to bethe difference for the current fiscal year.
Provided, however, the February and May payments shall besubject to submission of final certified and reconciled motor vehicle levyinformation.
(2) Each city, town, or fire district shall submit finalcertified and reconciled motor vehicle levy information by August 30 of eachyear. Any adjustment to the estimated amounts paid in the previous fiscal yearshall 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 deductpreviously made over-payments or add supplemental payments as may be requiredto bring the reimbursements into full compliance with the requirements of thischapter.
(4) For the city of East Providence, the payment schedule istwenty-five percent (25%) on February 20, 1999, and each February 20 thereafterthrough February 20, 2002, twenty-five percent (25%) on June 20, 1999, and eachJune 20 thereafter through June 20, 2002, which includes final reconciliationof 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 years2003 and thereafter, the payment schedule is twenty-five percent (25%) on eachNovember 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'spayment, and twenty-five percent (25%) on each August 1; provided, the May andAugust payments shall be subject to submission of final certified andreconciled motor vehicle levy information.
(5) When the tax is phased out, funds distributed to thecities, towns, and fire districts for the following fiscal year shall becalculated as the funds distributed in the fiscal year of the phase-out.Twenty-five percent (25%) of the amounts calculated shall be distributed to thecities and towns and fire districts on August 1, in the fiscal year of thephase-out, twenty-five percent (25%) on the following November 1, twenty-fivepercent (25%) on the following February 1, and twenty-five percent (25%) on thefollowing May 1. The funds shall be distributed to each city and town and firedistrict in the same proportion as distributed in the fiscal year of thephase-out.
(6) When the tax is phased out to August 1, of the followingfiscal year the director of administration shall calculate to the nearest tenthof one cent ($.001) the number of cents of sales tax received for the fiscalyear ending June 30, of the year following the phase-out equal to the amount offunds distributed to the cities, towns, and fire districts under this chapterduring the fiscal year following the phase-out and the percent of the totalfunds distributed in the fiscal year following the phase-out received by eachcity, town, and fire district, calculated to the nearest one-hundredth of onepercent (0.01%). The director of the department of administration shalltransmit those calculations to the governor, the speaker of the house, thepresident of the senate, the chairperson of the house finance committee, thechairperson of the senate finance committee, the house fiscal advisor, and thesenate fiscal advisor. The number of cents, applied to the sales taxes receivedfor the prior fiscal year, shall be the basis for determining the amount ofsales tax to be distributed to the cities and towns and fire districts underthis chapter for second fiscal year following the phase-out and each yearthereafter. The cities and towns and fire districts shall receive that amountof sales tax in the proportions calculated by the director of administration asthat received in the fiscal year following the phase-out.
(7) When the tax is phased out, twenty-five percent (25%) ofthe funds shall be distributed to the cities, towns, and fire districts onAugust 1, of the following fiscal year and every August 1 thereafter;twenty-five percent (25%) shall be distributed on the following November 1, andevery November 1 thereafter; twenty-five percent (25%) shall be distributed onthe following February 1, and every February 1 thereafter; and twenty-fivepercent (25%) shall be distributed on the following May 1, and every May 1thereafter.
(8) For the city of East Providence, in the event the tax isphased out, twenty-five percent (25%) shall be distributed on November 1, ofthe following fiscal year and every November 1 thereafter, twenty-five percent(25%) shall be distributed on the following February 1, and every February 1thereafter; twenty-five percent (25%) shall be distributed on the following May1, and every May 1 thereafter; and twenty-five percent (25%) of the funds shallbe distributed on the following August 1, and every August 1 thereafter.
(9) As provided for in § 44-34-6, the authority of firedistricts to tax motor vehicles is eliminated effective with the year 2000 taxroll and the state reimbursement for fire districts shall be based on theprovisions of § 44-34-6. All references to fire districts in this chapterdo not apply to the year 2001 tax roll and thereafter.
(10) For reimbursements payable in the year ending June 30,2008 and thereafter, the director of administration shall discount thecalculated value of the exemption to ninety-eight percent (98%) in order toestablish a collection rate that is comparable to the collection rate achievedby municipalities in the levy of the motor vehicle excise tax.