The bill amends Chapter 44-5 of the General Laws, which governs local tax levies and assessments, by introducing a new maximum levy structure for cities and towns. This structure allows for a gradual decrease in the percentage increase permitted for tax levies, starting with a maximum of 5.5% through fiscal year 2007 and decreasing to 4% in fiscal year 2013 and beyond. It also specifies that certain taxes, such as those under chapters 34 and 34.1, will not be included in the levy calculation. Additionally, the bill includes a provision for the city of Providence, allowing it to exceed the maximum levy for fiscal year 2026 based on revenue generated from the Class 2B rate, and outlines conditions under which municipalities can exceed the specified percentage increases, requiring approval from a significant majority of the governing body or the electorate.

Moreover, the bill introduces new legal language regarding tax classification, allowing cities and towns to adopt tax classification plans with specific limitations, including a cap on the effective tax rate for property classes. It creates new classifications for residential and industrial real estate, modifies existing classifications, and grants Providence the authority to set different tax rates for owner-occupied and non-owner-occupied properties. The bill mandates that all real property be assessed at its full and fair cash value and introduces specific provisions for assessing electricity generation facilities. It also includes language to inform landowners about potential additional taxes for changing land use and establishes a phase-out rate schedule for inventory assessments. The act is set to take effect immediately upon passage, facilitating the implementation of these changes.