H 7461Cities & Towns

Towns and Cities - State Aid

The state will pay towns for lost tax revenue on land owned by the Pokanoket Tribe Land Trust.

Held for study

Population
Affected

Introduced Jan 30, 2026Committee House Finance

Plain-English Summary

This legislation amends Rhode Island's state aid laws regarding payments in lieu of taxes (PILOT). Currently, the state reimburses municipalities for a portion of the property taxes lost due to the presence of tax-exempt institutions like nonprofit colleges and hospitals. This bill adds the Pokanoket Management Group, trustee of the Pokanoket Tribe Land Trust, to the list of eligible tax-exempt entities. Consequently, the state will annually appropriate funds to the municipalities where this tribal land is located, equal to 27% of the taxes that would have otherwise been collected.

For younger readers

Towns collect money called property taxes from land owners to pay for things like schools, police, and fire trucks. Some groups, like hospitals and colleges, don't have to pay these taxes. When this happens, the state government usually gives the town some money to help make up for it. This bill adds the Pokanoket Tribe's land to that special list. Now, the state will give the town money to replace some of the taxes the Tribe doesn't have to pay. This helps the town keep its services running while respecting the Tribe's land.

Who & Where It Applies

Impacted groups

Pokanoket TribePokanoket Management GroupTown of BristolState TaxpayersMunicipal Property Owners

Impacted communities

Bristol

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Supports Indigenous sovereignty and land stewardship by financially recognizing the specific status of the Pokanoket Tribe Land Trust without penalizing the local community.
Ensures that municipalities hosting tribal lands receive necessary funding to maintain public services like schools and infrastructure, protecting the welfare of local residents.
Promotes social justice by integrating tribal land trusts into the state's established support systems, rectifying historical exclusions from state aid programs.
Reimburses the municipality at only 27% of the potential tax value, leaving a funding gap that could still burden local taxpayers or strain municipal services.
Relies on state appropriations which can be reduced pro-rata if the budget is insufficient, potentially creating financial instability for the town and the services it provides to the tribe.
Frames the tribe's relationship to the state similarly to a hospital or college rather than acknowledging full sovereign status which might warrant different government-to-government agreements.

For Conservatives

protects the property rights of the land trust while ensuring the local municipality is compensated for services rendered, such as police and fire protection.
Prevents local property taxes from rising by having the state cover the cost of the exemption, rather than shifting the burden to local homeowners and businesses.
Clarifies the financial relationship between the tribe, the town, and the state, potentially reducing the likelihood of costly litigation regarding tax status in the future.
Increases state government spending by adding another entity to the list of groups receiving taxpayer-funded aid, expanding the financial burden on the state.
Creates a special financial carve-out for a specific group based on identity, which may be viewed as government favoritism rather than equal application of the law.
Sets a precedent that could encourage other land trusts or specific interest groups to lobby for similar state-subsidized tax exemptions.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 3 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) 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 municipal detention facility corporation created pursuant to § 45-54-1, 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, 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.

(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.