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H 7249Cities & Towns

Towns and Cities - State Aid

This bill adds the Pokanoket Tribe Land Trust to the list of properties eligible for state reimbursement to towns.

Held for study
Population
Affected
15
Email Legislator
Introduced Jan 21, 2026Committee House Finance

Plain-English Summary

This legislation updates Rhode Island's state aid laws regarding "Payment in Lieu of Taxes" (PILOT). Currently, the state reimburses cities and towns for a portion of the property taxes they lose because certain properties, like non-profit hospitals and universities, are tax-exempt. This bill adds the Pokanoket Management Group, acting as trustee of the Pokanoket Tribe Land Trust, to the list of eligible tax-exempt entities. Consequently, the state will now provide financial aid to any municipality where the Pokanoket Tribe Land Trust owns tax-exempt property to help cover the cost of local services.

For younger readers

In Rhode Island, some organizations like colleges and hospitals don't have to pay property taxes to the town they are in. Because the town loses that tax money but still has to provide police and fire protection, the state government gives the town some money to help out. This new law adds the Pokanoket Tribe Land Trust to the list of groups. This means if the Tribe owns land that isn't taxed, the state will send money to the town where that land is located to help pay for community services.

Who & Where It Applies

Impacted groups
Pokanoket Management GroupPokanoket Tribe Land TrustMunicipal GovernmentsLocal Property TaxpayersState Budget Office
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
Amount unknown
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Supports indigenous land stewardship by financially assisting the municipalities that host Pokanoket Tribe Land Trust properties, thereby reducing local economic friction regarding the tribe's tax-exempt status.
  • Ensures that towns hosting these specific non-profit lands receive adequate state funding to maintain public services like fire and safety without unfairly burdening local taxpayers or reducing services to the poor.
  • Promotes social justice by formally recognizing the Pokanoket Management Group within the state's financial aid structure, aligning with broader goals of equity and recognition for indigenous groups.
  • Allocates state funds to reimburse municipalities for this specific trust, which diverts money that could otherwise be used for direct social welfare programs, education, or housing assistance.
  • Does not address the broader structural issue that the reimbursement rate is only twenty-seven percent, meaning municipalities still bear the majority of the financial burden for hosting tax-exempt entities.
  • Creates a specific carve-out for one entity rather than establishing a comprehensive, equitable framework for all indigenous land trusts in the state, potentially creating disparity among different tribal groups.
For Conservatives
  • Ensures that local municipalities receive financial compensation to fund essential services like police and fire departments that protect these properties, supporting public safety infrastructure.
  • Helps prevent increases in local property taxes by having the state reimburse the town for revenue lost due to the tax-exempt status of the land trust.
  • Formalizes the financial relationship between the land trust and the state, ensuring transparency in how tax exemptions are handled for this specific group under the law.
  • Increases state government spending by expanding the list of entities eligible for taxpayer-funded reimbursement payments, adding to the burden on the state budget.
  • Creates a special legislative carve-out for a specific group, which may be viewed as government picking winners and losers rather than applying tax laws universally and equally.
  • Expands the scope of the Payment in Lieu of Taxes program, potentially encouraging other special interest groups to lobby for similar specific exemptions and subsidies.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 12 additions

SECTION 1. Section 45-13-5.1 of the General Laws in Chapter 45-13 entitled "State Aid" is hereby amended to read as follows: 45-13-5.1. General assembly appropriations in lieu of property tax from certain exempt private and state properties. (a)(1) In lieu of the amount of local real property tax on real property owned by any private nonprofit institution of higher education, the Pokanoket Management Group, a Rhode Island nonprofit corporation, trustee of the Pokanoket Tribe Land Trust, or any nonprofit hospital facility, or any state owned and operated hospital, veterans’ residential facility, or correctional facility occupied by more than one hundred (100) residents which may have been or will be exempted from taxation by applicable state law, exclusive of any facility operated by the federal government, except as otherwise provided for in subsection (2) of this subsection, the state of Rhode Island, or any of its subdivisions, the general assembly shall annually appropriate for payment to the several cities and towns in which the property lies a sum equal to twenty-seven percent (27%) of all tax that would have been collected had the real property been taxable; provided, however, said percentage shall be subject to adjustment pursuant to subsection (e) of this section.

(2) Provided, any facility operated by the federal Department of Defense including, but not limited to, the Naval Station Newport, shall be eligible for payment in lieu of taxes provided by this section. The reason for this eligibility is the scale of employment, the regional economic benefit, and the specific municipal demands on those municipalities on which federal Department of Defense facilities are operated. These municipal demands include police, fire and rescue, public works infrastructure, utilities oversight, parks and beach operations, planning and permitting, library services, senior center programming, and emergency response services.

(b) In no event shall any city or town record in a fiscal year both: (1) Taxes and/or payments under a stabilization agreement with a for-profit hospital facility; and (2) Distributions of appropriations under this section attributable to the prior nonprofit status of said for-profit hospital facility.

(c) As used in this section, “private nonprofit institution of higher education” means any institution engaged primarily in education beyond the high school level, the property of which is exempt from property tax under any of the subdivisions, and “nonprofit hospital facility” means any nonprofit hospital licensed by the state and which is used for the purpose of general medical, surgical, or psychiatric care and treatment.

(d) The grant payable to any municipality under the provision of this section shall be equal to twenty-seven percent (27%) of the property taxes that, except for any exemption to any institution of higher education or general hospital facility, would have been paid with respect to that exempt real property on the assessment list in the municipality for the assessment date of December 31, 1986, and with respect to such exempt real property appearing on an assessment list in the municipality on succeeding assessment dates. Provided, however, that the grant paid for the fiscal year ending June 30, 2008, shall be based upon the assessment list in the municipality as of December 31, 2004.

(e) The state budget offices shall include the amount of the annual appropriation in the state budget for the fiscal year commencing July 1, 1988, and each fiscal year thereafter. The amount of the annual distribution of appropriation payable to each eligible municipality in any year in accordance with this section shall be reduced proportionately in the event that the total of the annual appropriation in the state budget is insufficient to pay the eligible municipalities the amounts otherwise payable to said communities pursuant to subsection (a) of this section.

(f) Distribution of appropriations shall be made by the state on or before July 31 of 1988 and each July 31 thereafter or following verified receipt of a municipality’s assessment data for the following fiscal year’s payment, whichever is later, and the payments may be counted as a receivable by any city or town for a fiscal year ending the preceding June 30.

(g) Any act or omission by the state with respect to this chapter shall in no way diminish the duty of any town or municipality to provide public safety or other ordinary services to the properties or facilities of the type listed in subsection (a).

(h) Provided, that payments authorized pursuant to this section shall be reduced pro rata, for that period of time that the municipality suspends or reduces essential services to eligible facilities. For the purposes of this section “essential services” include, but are not to be limited to, police, fire and rescue.

SECTION 2. This act shall take effect upon passage.