AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES (Provides cities and towns with the authority to tax properties considered qualifying affordable housing at a rate higher than otherwise permitted.)

H8006A

2026 -- H 8006 SUBSTITUTE A
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LC005578/SUB A
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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 TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

Introduced By:
Representatives Slater, Baginski, Casey, Speakman, and Corvese

Date Introduced:
February 27, 2026

Referred To:
House Municipal Government & Housing
It is enacted by the General Assembly as follows:
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SECTION 1. Section 44-5-13.11 of the General Laws in Chapter 44-5 entitled "Levy and
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Assessment of Local Taxes" is hereby amended to read as follows:
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44-5-13.11.
Qualifying low-income housing — Assessment and taxation
Qualifying
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affordable housing -- Assessment and taxation.
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(a) Findings. The general assembly finds that developing affordable housing units and
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creating new housing units through adaptive reuse are matters of state-wide concern. For that
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reason, no city or town shall have the authority to tax properties qualifying for and utilizing this
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section at any rate higher than otherwise provided for in this section.
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(b)

Any

This section is applicable to any
residential property that has been issued an
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occupancy permit on or after January 1, 1995,
after substantial rehabilitation as defined by the U.S.
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Department of Housing and Urban Development and is encumbered by a covenant recorded in the
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land records in favor of a governmental unit or Rhode Island housing and mortgage finance
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corporation restricting either or both the rents that may be charged to tenants of the property or the
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incomes of the occupants of the property, is subject to a tax that equals eight percent (8%) of the
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property’s previous years’ gross scheduled rental income or a lesser percentage as determined by
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each municipality.

which meets one of the three (3) categories as set forth in subsections (b)(1),
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(b(2) and (b)(3) of this section:
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(1) New construction or projects meeting the requirements of § 45-24-37(h) are subject to
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a tax that equals eight percent (8%) of the property's previous years' gross scheduled rental income

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or a lesser percentage as determined by each municipality; provided that, the property meets the
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following requirements, where:
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(i) At least forty percent (40%) of the rental dwelling units in the property are encumbered
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by a covenant recorded in the land records in favor of a governmental unit or Rhode Island housing
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and mortgage finance corporation; provided that, the rent, heat, and utilities other than telephone
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constitute no more than thirty percent (30%) of the gross annual household income for the
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occupants of the unit whose gross annual income is eighty percent (80%) or less of area median
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income, adjusted for family size; or
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(ii) At least thirty percent (30%) of the rental dwelling units in the property are encumbered
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by a covenant recorded in the land records in favor of a governmental unit or Rhode Island housing
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and mortgage finance corporation; provided that, the rent, heat, and utilities other than telephone
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constitute no more than thirty percent (30%) of the gross annual household income for the
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occupants of the unit whose gross annual household income is sixty percent (60%) or less of area
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median income, adjusted for family size.
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(2) Conversion of existing structures. Effective until July 1, 2037, at which time the
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provisions of this subsection shall sunset and no longer be applicable. Other than those conversions
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which qualify under subsection (b)(1) of this section, where an existing building is converted from
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non-residential use(s), prior to the expiration or repeal of this section; and provided that, it meets
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the requirements of this subsection set forth below, it shall be subject to a fixed percentage of the
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prior year’s gross scheduled rental income for the following thirty (30) years as outlined below:
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Year

Schedule
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1

8%
23

2

8%
24

3

8%
25

4

8%
26

5

8%
27

6

8%
28

7

8%
29

8

8%
30

9

8%
31

10

8%
32

11

8%
33

12

8%
34

13

8%

LC005578/SUB A - Page 2 of 7
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14

8%
2

15

8%
3

16

10%
4

17

10%
5

18

10%
6

19

10%
7

20

10%
8

21

12%
9

22

12%
10

23

12%
11

24

12%
12

25

12%
13

26

12%
14

27

12%
15

28

12%
16

29

12%
17

30

12%
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(i) Qualifying Requirements:
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(A) The building is comprised of no less than ten thousand square feet (10,000 ft2) or ten
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(10) residential dwelling units; and
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(B) For cities and towns that have low- or moderate-income housing in excess of ten
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percent (10%) of its year-round housing units where at least ten percent (10%) of the rental dwelling
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units on the property are restricted to levels affordable to households at or below one hundred
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twenty percent (120%) statewide area median income; or for cities and towns that do not have low-
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or moderate-income housing in excess of ten percent (10%) of its year-round housing units, where
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at least ten percent (10%) of the rental dwelling units on the property are restricted so that the rent,
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heat, and utilities other than telephone constitute no more than thirty percent (30%) of the gross
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annual household income for the occupants of the unit whose gross annual household income is
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eighty percent (80%) or less of area median income, adjusted for family size; and
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(C) The building has been issued an occupancy permit; and
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(D) The taxpayer utilizing the tax treatment of this section shall ensure that any contractor
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and/or subcontractors on this project shall:
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(I) Have all valid and effective registrations and/or licenses required in order to carry out
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their construction contracts.

LC005578/SUB A - Page 3 of 7
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(II) Ensure that all craft labor employed on the project have completed at least an
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Occupational Safety & Health Administration (OSHA) ten (10) hour training course for safety
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established by the U.S. Department of Labor, Occupational Safety & Health Administration.
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(III) Comply with all state, federal and local laws including, but not limited to, providing
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workers’ compensation insurance, prompt payment of wages and benefits, and proper classification
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of workers and employees as employees as opposed to independent contractors.
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(IV) Any person that does not have a current registration with the Rhode Island contractors’
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registration and licensing board and a properly filed notice of designation as an independent
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contractor pursuant to § 28-29-17.1 shall be presumed to be an employee.
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(V) A person shall only be considered an independent contractor if, when the person is
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performing work at the site, the person is free from direct control and direction in connection with
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completing their scope of work, both under the persons contract (if there is one) and in fact.
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(VI) Not hire and/or utilize any contractor or subcontractor that has:
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(aa) Been debarred or suspended by any federal, state or local government agency or
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authority in the past three (3) years;
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(bb) Any type of business, contracting or trade license, registration, or other certification
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revoked or suspended in the past three (3) years; and
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(cc) Been found in violation of any tax laws, prompt payment laws, wage and hour laws,
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prevailing wage laws, environmental laws or others, where the result of such violation was the
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payment of a fine, back pay damages or any other type of penalty in the amount of one thousand
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dollars ($1,000) or more within the last five (5) years.
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(VII) Registered apprenticeship program. Where the budget for the hard costs of the
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residential conversion is in excess ten million dollars ($10,000,000), the taxpayer shall ensure that
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one hundred percent (100%) of the hours worked on the residential conversion project shall be
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performed by all trade construction contractors and subcontractors who have or are affiliated with
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an apprenticeship program as defined in 29 C.F.R. § 29 et seq., for the craft employed. Additionally,
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the taxpayer shall ensure that all bidding documents for the work to be performed on the residential
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conversion project includes express and conspicuous language evidencing the requirement found
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in this subsection. As part of its contract with the construction manager and/or general contractor,
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the taxpayer shall require that not less than ten percent (10%) of the total hours worked by the
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contractors' and subcontractors' employees on the project are completed by apprentices registered
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in the aforementioned apprenticeship programs.
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(VIII) Prevailing wage. Where the budget for the hard costs of the residential conversion
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is in excess of twenty-five million dollars ($25,000,000), all construction workers on that project

LC005578/SUB A - Page 4 of 7
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providing services in connection with the residential conversion shall be paid in accordance with
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the wages and benefits required pursuant to chapter 13 of title 37 ("labor and payment of debts by
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contractors") and all contractors and subcontractors shall file certified payrolls on a monthly basis
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for all work completed in the preceding month on a uniform form prescribed by the director of
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labor and training (the “prevailing wage requirements”). Failure to follow the prevailing wage
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requirements shall constitute a material violation and a material breach of this section and the
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project shall not remain eligible for tax treatment under this section.
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(ii) Confirmation of compliance. Tax treatment pursuant to this subsection shall not be
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provided by the municipality unless the municipal tax assessor receives confirmation from the
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department of labor and training that there has been compliance with the contracting standards,
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registered apprenticeship and prevailing wage requirements set forth in this section. Failure to
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follow contracting standards, registered apprenticeship and the prevailing wage requirements
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imposed in this section shall constitute a material violation and a material breach of this section
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and the municipality may revoke the pending tax treatment and/or may not award the same.
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(iii) Applicability. The tax structure allowed for in this subsection shall only apply to those
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portions of a building used for residential purposes and shall not include any portion of a mixed-
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use building that is not used as a residence or accessory to the residential use.
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(3) Low- or moderate-income housing. Notwithstanding the provisions of subsections
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(b)(1) and (b)(2) of this section, any residential rental unit or units that otherwise meet the definition
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of low- and moderate-income housing under § 42-128-8.1 are subject to a tax that equals eight
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percent (8%) of those units’ previous years’ gross scheduled rental or a lesser percentage as
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determined by the municipality, with the remainder of the property taxed pursuant to applicable
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law. Such units shall not have to comply with the requirements of subsection (b)(1) or (b)(2) of this
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section in order to qualify for the tax treatment set forth herein.
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(c) In all instances where a property is taxed pursuant to this section, property owners
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annually shall provide the local assessor all required information to show compliance with the
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requirements of this section, including a deed restriction and a monitoring agreement, if required,
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a certified residential rent roll of the property reflecting each dwelling unit and the gross rental
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income for each unit in the property, and for buildings comprised in part of non-residential uses,
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evidence deemed necessary by the local assessor to demonstrate the fractional portion of each
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property that should be taxed at the appropriate non-residential rate. The assessor shall then tax the
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residential portion at the appropriate rate set in subsection (a) or (b) of this section, and the
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remainder at the appropriate other applicable rate.
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(d) Properties that have been taxed under this section by a municipality as of December 31,

LC005578/SUB A - Page 5 of 7
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2025, shall continue receiving any previously established tax rate or agreement unless the property
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owner affirmatively rejects the same or until said agreement expires by its terms. Said prior tax
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treatment is transferable to any subsequent property owner if the conditions of the tax treatment are
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met by the new owner to the satisfaction of the tax assessor.
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SECTION 2. This act shall take effect upon passage.
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LC005578/SUB A - Page 6 of 7
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES
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This act would provide cities and towns with the authority to tax properties considered
2
qualifying affordable housing at a rate higher than otherwise permitted.
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This act would take effect upon passage.
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LC005578/SUB A
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LC005578/SUB A - Page 7 of 7