44-5-2. Maximum levy.

(a) Through and including its fiscal year 2007, a city or town may levy a tax in an amount

not more than five and one-half percent (5.5%) in excess of the amount levied and certified by that

city or town for the prior year. Through and including its fiscal year 2007, but in no fiscal year

thereafter, the amount levied by a city or town is deemed to be consistent with the five and one-

half percent (5.5%) levy growth cap if the tax rate is not more than one hundred and five and one-

half percent (105.5%) of the prior year's tax rate and the budget resolution or ordinance, as

applicable, specifies that the tax rate is not increasing by more than five and one-half percent (5.5%)

except as specified in subsection (c) of this section. In all years when a revaluation or update is not

being implemented, a tax rate is deemed to be one hundred five and one-half percent (105.5%) or

less of the prior year's tax rate if the tax on a parcel of real property, the value of which is unchanged

for purpose of taxation, is no more than one hundred five and one-half percent (105.5%) of the

prior year's tax on the same parcel of real property. In any year through and including fiscal year

2007 when a revaluation or update is being implemented, the tax rate is deemed to be one hundred

five and one-half percent (105.5%) of the prior year's tax rate as certified by the division of property

valuation and municipal finance in the department of revenue.

(b) In its fiscal year 2008, a city or town may levy a tax in an amount not more than five

and one-quarter percent (5.25%) in excess of the total amount levied and certified by that city or

town for its fiscal year 2007. In its fiscal year 2009, a city or town may levy a tax in an amount not

more than five percent (5%) in excess of the total amount levied and certified by that city or town

for its fiscal year 2008. In its fiscal year 2010, a city or town may levy a tax in an amount not more

than four and three-quarters percent (4.75%) in excess of the total amount levied and certified by

that city or town in its fiscal year 2009. In its fiscal year 2011, a city or town may levy a tax in an

amount not more than four and one-half percent (4.5%) in excess of the total amount levied and

certified by that city or town in its fiscal year 2010. In its fiscal year 2012, a city or town may levy

a tax in an amount not more than four and one-quarter percent (4.25%) in excess of the total amount

levied and certified by that city or town in its fiscal year 2011. In its fiscal year 2013 and in each

fiscal year thereafter, a city or town may levy a tax in an amount not more than four percent (4%)

in excess of the total amount levied and certified by that city or town for its previous fiscal year.

For purposes of this levy calculation, taxes levied pursuant to chapters 34 and 34.1 of this title shall

not be included. For FY 2018, in the event that a city or town, solely as a result of the exclusion of

the motor vehicle tax in the new levy calculation, exceeds the property tax cap when compared to

FY 2017 after taking into account that there was a motor vehicle tax in FY 2017, said city or town

shall be permitted to exceed the property tax cap for the FY 2018 transition year, but in no event

shall it exceed the four percent (4%) levy cap growth with the car tax portion included; provided,

however, nothing herein shall prohibit a city or town from exceeding the property tax cap if

otherwise permitted pursuant to subsection (d) of this section.

(d) The amount levied by a city or town may exceed the percentage increase as specified

in subsection (a) or (b) of this section if the city or town qualifies under one or more of the following

provisions:

(1) The city or town forecasts or experiences a loss in total non-property tax revenues and

the loss is certified by the department of revenue.

(2) The city or town experiences or anticipates an emergency situation, which causes or

will cause the levy to exceed the percentage increase as specified in subsection (a) or (b) of this

section. In the event of an emergency or an anticipated emergency, the city or town shall notify the

auditor general who shall certify the existence or anticipated existence of the emergency. Without

limiting the generality of the foregoing, an emergency shall be deemed to exist when the city or

town experiences or anticipates health insurance costs, retirement contributions, or utility

expenditures that exceed the prior fiscal year's health insurance costs, retirement contributions, or

utility expenditures by a percentage greater than three (3) times the percentage increase as specified

in subsection (a) or (b) of this section.

(3) A city or town forecasts or experiences debt services expenditures that exceed the prior

year's debt service expenditures by an amount greater than the percentage increase as specified in

subsection (a) or (b) of this section and that are the result of bonded debt issued in a manner

consistent with general law or a special act. In the event of the debt service increase, the city or

town shall notify the department of revenue which shall certify the debt service increase above the

percentage increase as specified in subsection (a) or (b) of this section the prior year's debt service.

No action approving or disapproving exceeding a levy cap under the provisions of this section

affects the requirement to pay obligations as described in subsection (d) of this section.

(4) The city or town experiences substantial growth in its tax base as the result of major

new construction that necessitates either significant infrastructure or school housing expenditures

by the city or town or a significant increase in the need for essential municipal services and such

increase in expenditures or demand for services is certified by the department of revenue.

(5) In the city of Providence, for fiscal year 2026, any additional revenue generated from

the Class 2B rate exceeding twenty-eight dollars and eighty cents ($28.80) per one thousand dollars

($1,000) may exceed the maximum levy. For the purposes of this subsection, "Class 2A" and "Class

2B" shall have the same meaning as in § 44-5-11.18(1)(ii).

(6) Effective for tax assessment dated on or after December 31, 2025, and subject to all

requirements set forth in this section, the taxes levied on new housing units added to the municipal

tax base during a fiscal year may exceed the maximum levy. For the purposes of this subsection,

subject to the qualifying requirements below, new housing units shall include newly constructed

residential properties, meaning single-family homes, two-family homes, single-family attached

structures, multi-family dwellings, mixed-use developments where residential units constitute at

least fifty percent (50%) of the building's total square footage as well as existing buildings

converted into residential housing units qualifying under adaptive reuse in § 45-24-37; provided

such conversions meet all applicable zoning and building code requirements and increase the

municipality's total housing stock. New construction shall also include modular and manufactured

homes. This provision shall apply provided that:

(i) A city or town has issued over ten (10) certificates of occupancy for new housing units

during the fiscal year in which the exemption is sought; and

(ii) Such units are part of a development project that includes at least ten percent (10%) of

the units designated as low- or moderate-income housing as defined in §§ 45-53-3 and 42-128-8.1;

and

(iii) Such units are taxed utilizing the same valuation methods and rates as similar units in

the respective city or town; and

(iv) The taxes levied on these qualifying new housing units may only exceed the maximum

levy for the fiscal year in which the certificate of occupancy is issued and two (2) fiscal years

thereafter in which the municipality shall phase in the full taxes for these units into the maximum

levy by the fourth fiscal year following the issuance of a certificate of occupancy for the new

housing unit(s).

(e) Any levy pursuant to subsection (d) of this section in excess of the percentage increase

specified in subsection (a) or (b) of this section shall be approved by the affirmative vote of at least

four-fifths (⅘) of the full membership of the governing body of the city or town, or in the case of a

city or town having a financial town meeting, the majority of the electors present and voting at the

town financial meeting shall also approve the excess levy.

(f) Nothing contained in this section constrains the payment of present or future obligations

as prescribed by § 45-12-1, and all taxable property in each city or town is subject to taxation

without limitation as to rate or amount to pay general obligation bonds or notes of the city or town

except as otherwise specifically provided by law or charter.

(g) Notwithstanding anything to the contrary, the town of Little Compton is permitted a

one-year levy cap exemption for fiscal year 2026 not to exceed twelve percent (12%), and subject

to approval by the Little Compton Financial Town Meeting.

(h) Notwithstanding anything to the contrary, the City of Providence is permitted a one-

year levy cap exemption for fiscal year 2026 not to exceed eight percent (8%).

(i) Notwithstanding anything to the contrary, the city of Central Falls, in fiscal years 2027

and thereafter, may levy an amount in excess of the percentage increase as specified in subsection

(a) or (b) of this section if it requires additional revenue to fulfill its obligation to contribute the

amount required by § 16-7-23.3 and such need is certified by the department of revenue.

SECTION 10. Section 45-38.2-2 of the General Laws in Chapter 45-38.2 entitled "School

Building Authority Capital Fund" is hereby amended to read as follows: