The bill proposes the establishment of Chapter 73 in Title 44 of the General Laws, which focuses on the transfer of a portion of state income taxes from new employees of not-for-profit healthcare institutions and educational institutions to the city of Providence. It defines key terms such as "city," "director," "educational institution," "healthcare institution," "health service corporation," "initial employment level," "new employee," and "not-for-profit corporation."

The bill outlines the procedures for these institutions to report their initial employment levels and the corresponding state income taxes withheld. Specifically, by July 30, 2026, institutions must provide the director of the state division of taxation and the city’s chief financial officer with their initial employment level for the calendar year 2025 and the total amount of state income taxes withheld. Additionally, by December 31, 2026, institutions must report the aggregate number of new employees and the total amount of state income taxes submitted for those employees.

Starting September 1 of each fiscal year beginning in 2028, the state will remit 25% of the state income taxes collected from the aggregate number of new employees since the initial reporting period to the city treasurer.

The bill also amends existing laws to clarify that state withholding taxes received for calendar years 2026 and thereafter will be remitted to the city of Providence as a separate allocation, rather than being included in general appropriations. This aims to provide financial support to the city in managing the increased expenses associated with the growth of healthcare and educational sectors. The act will take effect upon passage.

Statutes affected:
3227: 35-4-1, 45-13-1