AN ACT RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF SYSTEMS (Amends the audit compliance requirements for municipalities' contributions to pension plans under the budget of accounts and installation of systems chapter.)

H7369

2026 -- H 7369
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LC004186
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF
SYSTEMS

Introduced By:
Representatives Felix, Santucci, Tanzi, McNamara, Place, Casey,
Chippendale, Giraldo, Cruz, and Stewart

Date Introduced:
January 28, 2026

Referred To:
House Municipal Government & Housing
(Auditor General)
It is enacted by the General Assembly as follows:
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SECTION 1. Section 45-10-15 of the General Laws in Chapter 45-10 entitled "Audit of
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Accounts and Installation of Systems" is hereby amended to read as follows:
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45-10-15.
Compliance with requirements of “governmental accounting standards
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board (GASB)” pension funding.
Municipal compliance with funding pension and other post-
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employment benefit plans.
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(a)
For any audit year in which a municipality contributes materially less than 100% of the
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annual required

actuarially determined
contribution
to its pension plan(s) as

("ADC")
reported in
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accordance with
GASB statement 27 or any successor statement

Governmental Accounting
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Standards Board ("GASB") requirements to its pension plan(s)
, the municipality shall submit to the
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auditor general and the director of revenue, within three (3) months of completion of the
annually
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audited
financial statement, the
municipality’s
most recent actuarial
study of the

valuations
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determining the ADC for the pension
plan(s) and management’s recommendations for
assuring
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future payments equal to the annual pension cost (APC)

planned future contributions to achieve
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one hundred percent (100%) ADC funding
.
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(b)(1) For any audit year in which a municipality contributes materially less than one
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hundred percent (100%) of the ADC reported in accordance with GASB requirements to its other
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post-employment benefit (“OPEB”) plan(s), the municipality shall submit to the auditor general
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and the director of revenue, within three (3) months of completion of the annual audited financial

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statement, the most recent actuarial valuations determining the ADC for the OPEB plan(s) and
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management’s recommendations for planned future contributions to achieve one hundred percent
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(100%) ADC funding.
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(2) Municipalities may create an OPEB trust agreement pursuant to § 45-21-65, if not
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currently in place.
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(c) Municipalities shall consult with the auditor general until approved pension and OPEB
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funding plans are adopted.
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SECTION 2. Section 45-21-65 of the General Laws in Chapter 45-21 entitled "Retirement
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of Municipal Employees" is hereby amended to read as follows:
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45-21-65. Other post-employment benefits — OPEB trusts.
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(a) Notwithstanding the provisions of any general or special law, or the provisions of any
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municipality’s home rule charter, to the contrary, for purposes of funding any unfunded liability
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for other post-employment benefits including, but not limited to, health care and dental care
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benefits hereinafter referred to as (“OPEB”) in accordance with
government accounting standards
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board statements 43 and 45

Governmental Accounting Standards Board ("GASB") requirements
,
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a municipality, acting by its treasurer or director of finance, upon an approving resolution of the
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city or town council or agency board as applicable, may enter into a trust agreement between the
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municipality and a corporate trustee which shall be a bank or trust company doing business in the
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state, or a corporation established pursuant to chapter 5 of this title. This trust agreement shall be
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in any form deemed proper by the treasurer or director of finance of the municipality, and shall be
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executed by its treasurer or director of finance and countersigned by its mayor or president of the
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town council. It shall be lawful for any bank, trust company, or entity organized pursuant to § 45-
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5-20.1 doing business in the state to act as a depository or trustee under this trust agreement, and
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to furnish indemnification and pledge securities that may be required by any municipality.
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(b) OPEB trust funds shall be credited with all amounts appropriated or otherwise made
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available by the municipality for the purposes of meeting the current and future OPEB costs payable
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by the municipality. OPEB trust funds shall also be credited with all amounts contributed or
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otherwise made available by employees of the municipality for the purpose of meeting future OPEB
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costs payable by the municipality. Amounts in an OPEB trust fund, including any earnings or
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interest accruing from the investment of these amounts, shall be expended only for the payment of
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the costs payable by the municipality for OPEB or as otherwise permitted by the terms of the trust
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and applicable law. The director of finance or treasurer, as applicable, shall invest and reinvest the
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amounts in the OPEB trust fund not needed for current disbursement in any investment permitted
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for the municipality’s pension funds consistent with the prudent person rule and investment policies

LC004186 - Page 2 of 4
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of the municipality, if any.
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(c) Municipalities are hereby authorized to enter into agreements, trusts, contracts, and
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other arrangements with the state and any of its departments, agencies, boards or commissions
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relating to the execution, management or operation of the OPEB trust funds, including, but not
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limited to, investments, and the state and its departments, agencies, boards and commissions are
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hereby authorized to enter into such agreements, contracts and other arrangements with
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municipalities. Notwithstanding any provisions of any general or special law or principle of equity
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to the contrary, the state shall have no liability to any municipality for entering into such
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agreements.
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(d) A municipality may employ any qualified bank, trust company, corporation, firm or
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person to advise it on the investment of the OPEB trust fund and may pay from the OPEB trust
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fund for this advice and other services. Procurement for these services shall be subject to the
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procurement procedures and rules governing municipalities in the state.
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(e) Municipalities are also hereby authorized to enter into agreements, trusts, contracts, and
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other arrangements with any corporation established pursuant to chapter 5 of this title relating to
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the execution management or operations of OPEB trust funds including, but not limited to,
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investments, and the corporations established pursuant to § 45-5-20.1 are hereby authorized to enter
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into such agreements, trusts, contracts or other arrangements with municipalities.
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(f) Any OPEB trusts that have been created by municipalities and are in effect on the date
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hereof are hereby ratified and confirmed.
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(g) Nothing herein shall be construed to exempt OPEB trusts from the Rhode Island Access
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to Public Records Act, § 38-2-1 et seq.
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SECTION 3. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF
SYSTEMS
***
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This act would amend the audit compliance requirements for municipalities' contributions
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to pension plans under the audit of accounts and installation of systems chapter of the general laws.
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This act would take effect upon passage.
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