AN ACT RELATING TO TOWNS AND CITIES -- STATE AID (Includes municipal detention facility corporations as exempt from taxation, and requires that an amount equal to 27% of all tax that would have been collected if the property was taxable be paid to the municipality annually.)

S2087

2026 -- S 2087
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LC003803
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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 -- STATE AID

Introduced By:
Senators Acosta, Mack, Vargas, Zurier, Quezada, Bell, Bissaillon, and
Kallman

Date Introduced:
January 16, 2026

Referred To:
Senate Finance
It is enacted by the General Assembly as follows:
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SECTION 1. Section 45-13-5.1 of the General Laws in Chapter 45-13 entitled "State Aid"
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is hereby amended to read as follows:
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45-13-5.1. General assembly appropriations in lieu of property tax from certain
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exempt private and state properties.
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(a) In lieu of the amount of local real property tax on real property owned by any private
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nonprofit institution of higher education, the Pokanoket Management Group, a Rhode Island
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nonprofit corporation, trustee of the Pokanoket Tribe Land Trust, or any nonprofit hospital facility,
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or any municipal detention facility corporation created pursuant to § 45-54-1,
or any state owned
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and operated hospital, veterans’ residential facility, or correctional facility occupied by more than
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one hundred (100) residents which may have been or will be exempted from taxation by applicable
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state law, exclusive of any facility operated by the federal government, the state of Rhode Island,
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or any of its subdivisions, the general assembly shall annually appropriate for payment to the
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several cities and towns in which the property lies a sum equal to twenty-seven percent (27%) of
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all tax that would have been collected had the real property been taxable; provided, however, said
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percentage shall be subject to adjustment pursuant to subsection (e) of this section.
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(b) In no event shall any city or town record in a fiscal year both: (1) Taxes and/or payments
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under a stabilization agreement with a for-profit hospital facility; and (2) Distributions of
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appropriations under this section attributable to the prior nonprofit status of said for-profit hospital
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facility.

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(c) As used in this section, “private nonprofit institution of higher education” means any
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institution engaged primarily in education beyond the high school level, the property of which is
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exempt from property tax under any of the subdivisions, and “nonprofit hospital facility” means
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any nonprofit hospital licensed by the state and which is used for the purpose of general medical,
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surgical, or psychiatric care and treatment.
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(d) The grant payable to any municipality under the provision of this section shall be equal
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to twenty-seven percent (27%) of the property taxes that, except for any exemption to any
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institution of higher education or general hospital facility, would have been paid with respect to
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that exempt real property on the assessment list in the municipality for the assessment date of
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December 31, 1986, and with respect to such exempt real property appearing on an assessment list
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in the municipality on succeeding assessment dates. Provided, however, that the grant paid for the
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fiscal year ending June 30, 2008, shall be based upon the assessment list in the municipality as of
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December 31, 2004.
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(e) The state budget offices shall include the amount of the annual appropriation in the state
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budget for the fiscal year commencing July 1, 1988, and each fiscal year thereafter. The amount of
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the annual distribution of appropriation payable to each eligible municipality in any year in
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accordance with this section shall be reduced proportionately in the event that the total of the annual
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appropriation in the state budget is insufficient to pay the eligible municipalities the amounts
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otherwise payable to said communities pursuant to subsection (a) of this section.
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(f) Distribution of appropriations shall be made by the state on or before July 31 of 1988
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and each July 31 thereafter or following verified receipt of a municipality’s assessment data for the
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following fiscal year’s payment, whichever is later, and the payments may be counted as a
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receivable by any city or town for a fiscal year ending the preceding June 30.
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(g) Any act or omission by the state with respect to this chapter shall in no way diminish
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the duty of any town or municipality to provide public safety or other ordinary services to the
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properties or facilities of the type listed in subsection (a).
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(h) Provided, that payments authorized pursuant to this section shall be reduced pro rata,
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for that period of time that the municipality suspends or reduces essential services to eligible
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facilities. For the purposes of this section “essential services” include, but are not to be limited to,
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police, fire and rescue.
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SECTION 2. This act shall take effect upon passage.
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LC003803
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TOWNS AND CITIES -- STATE AID
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This act would include municipal detention facility corporations as exempt from taxation
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under state law, and require the general assembly to appropriate, annually, for payment to the city
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or town where the property is located a sum equal to twenty-seven percent (27%) of all tax that
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would have been collected if the property was taxable.
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This act would take effect upon passage.
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LC003803
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