The bill amends Section 44-5-2 of the General Laws in Chapter 44-5, which governs the levy and assessment of local taxes by cities and towns. It establishes a new maximum levy structure, maintaining the current cap of five and one-half percent (5.5%) for fiscal year 2007, with a gradual reduction to four percent (4%) for fiscal year 2013 and beyond. The bill also introduces provisions that allow cities and towns to exceed the levy cap under specific circumstances, such as loss of non-property tax revenues or emergencies. Notably, it includes a significant insertion that permits municipalities to exceed the maximum levy for taxes on new housing units added to the tax base starting December 31, 2025, provided certain conditions are met, such as issuing over ten certificates of occupancy for new housing units in the fiscal year and including a percentage of low- or moderate-income housing in the development.

Additionally, the bill allows for the taxation of qualifying new housing units using the same valuation methods and rates as existing similar units within the municipality. Taxes on these new housing units may exceed the maximum levy only for the fiscal year in which a certificate of occupancy is issued and for two subsequent fiscal years, with a gradual phase-in of full taxes by the fourth fiscal year following the issuance. The bill also stipulates that any levy exceeding the specified percentage increase must receive approval from at least four-fifths of the governing body or a majority of electors present at a financial town meeting. Importantly, the provisions do not limit the payment of existing or future obligations related to general obligation bonds or notes, and the act is set to take effect upon its passage.

Statutes affected:
1091: 44-5-2