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HB 7421

AN ACT RELATING TO TOWNS AND CITIES -- STATE AID

2026 Regular Session Introduced by Jon Brien and 9 co-sponsors

HB 7421 requires annual, public reporting of the true cost of state mandates to cities, towns, and schools, including unfunded or partially funded amounts, guiding budgets.

05/07/2026 Committee recommended measure be held for further study
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Bill Summary · HB 7421

Summary of HB 7421 (Rhode Island, 2026) – State Aid

Purpose and Intent

HB 7421 aims to improve transparency surrounding state-mandated costs to local governments and school districts. The bill would enhance reporting on state mandates, particularly highlighting costs that are partially funded or unfunded, and would make certain reports publicly accessible. It modifies existing procedures for reimbursement of state-mandated costs to cities, towns, and school districts.

Key Provisions

  • Section 45-13-9 (Amendment to State Aid provisions)
    • (a)(1) The Department of Revenue (DOR) must, by October 1 each year, submit to the Budget Office a report for each city and town detailing the cost of state mandates established after January 1, 1979. This report covers the next preceding July 1 – June 30 period and is used to determine reimbursements.
    • (a)(2) The Budget Office must annually compile a statewide total of these mandated-cost costs. This total is to be used in the state budget proposal for the upcoming fiscal year, guiding consideration by the Governor and General Assembly. Costs tied to the rules and regulations of state departments or agencies should be allocated to the respective department or agency budgets.
    • (b) The State Treasurer must distribute reimbursements for state-mandated costs to cities and towns in July of each year, consistent with appropriations by the General Assembly.
    • (c) The DOR, in collaboration with Local Education Agencies (LEAs), must publish a report identifying school-district costs that are partially funded or unfunded. This report must:
    • Be provided to the General Assembly, leadership offices (Speaker of the House and Senate President), and the Governor.
    • Be accessible to the public and posted on the state’s transparency portal.
  • Section 2 (Effective Date)
    • The act would take effect upon passage.

Who Would Be Affected

  • Local governments: Cities and towns that receive reimbursements for costs of state mandates.
  • School districts (LEAs): Recipients of mandated-cost data, particularly regarding unfunded or partially funded costs.
  • State agencies and departments: Their mandated costs would be identified and allocated to the respective agency budgets.
  • Rhode Island Budget Office and Department of Revenue: Responsible for reporting and data compilation.
  • State Treasurer: Responsible for distributing annual reimbursements.

Procedural and Timeline Considerations

  • Reporting deadlines:
    • October 1 each year: DOR must submit per-city/per-town mandate-cost reports for the prior period.
  • Budget process integration:
    • The Budget Office must include the statewide total of mandate costs in the annual state budget proposal for the next fiscal year.
  • Reimbursements:
    • July each year: State Treasurer distributes reimbursements to cities and towns, subject to appropriations.
  • Transparency and accessibility:
    • The DOR/LEA collaboration must publish a public report on partially funded or unfunded school-district costs, with public access via the state transparency portal.
  • Effective date:
    • Immediate upon passage.

Potential Impact and Rationale

  • Enhanced transparency: The bill requires consolidated reporting on the true cost of mandates, including unfunded obligations, which can inform budget decisions and policy discussions.
  • Better budgeting: By compiling and sharing mandate-cost totals, the state can plan appropriations more accurately and identify gaps between mandated costs and funding.
  • Accountability for state mandates: Local governments would have clearer data on the financial burden created by state requirements.
  • Public visibility: Making reports accessible on the transparency portal increases public understanding of fiscal pressures on local entities.

Overall, HB 7421 strengthens reporting, aligns budget planning with mandate costs, and improves visibility into funded vs. unfunded school district obligations. The act is designed to take effect upon passage.

Compiled from official sources — confirm details with the bill’s official record.

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