TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF SYSTEMS, the official text

S3127 2026 -- S 3127 ======== LC004503 ======== STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2026 ____________ A N A C T RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF SYSTEMS Introduced By: Senators Raptakis, Burke, Quezada, LaMountain, and Thompson Date Introduced: March 20, 2026 Referred To: Senate Finance It is enacted by the General Assembly as follows: 1 SECTION 1. Section 45-10-15 of the General Laws in Chapter 45-10 entitled Audit of 2 Accounts and Installation of Systems is hereby amended to read as follows: 3 45-10-15. Compliance with requirements of “governmental accounting standards 4 board (GASB)” pension funding. Municipal compliance with funding pension and other post- 5 employment benefit plans. 6 (a) For any audit year in which a municipality contributes materially less than 100% of the 7 annual required actuarially determined contribution to its pension plan(s) as ( ADC ) reported in 8 accordance with GASB statement 27 or any successor statement Governmental Accounting 9 Standards Board ( GASB ) requirements to its pension plan(s) , the municipality shall submit to the 10 auditor general and the director of revenue, within three (3) months of completion of the annually 11 audited financial statement, the municipality’s most recent actuarial study of the valuations 12 determining the ADC for the pension plan(s) and management’s recommendations for assuring 13 future payments equal to the annual pension cost (APC) planned future contributions to achieve 14 one hundred percent (100%) ADC funding . 15 (b)(1) For any audit year in which a municipality contributes materially less than one 16 hundred percent (100%) of the ADC reported in accordance with GASB requirements to its other 17 post-employment benefit (“OPEB”) plan(s), the municipality shall submit to the auditor general 18 and the director of revenue, within three (3) months of completion of the annual audited financial 1 statement, the most recent actuarial valuations determining the ADC for the OPEB plan(s) and 2 management’s recommendations for planned future contributions to achieve one hundred percent 3 (100%) ADC funding. 4 (2) Municipalities may create an OPEB trust agreement pursuant to § 45-21-65, if not 5 currently in place. 6 (c) Municipalities shall consult with the auditor general until approved pension and OPEB 7 funding plans are adopted. 8 SECTION 2. Section 45-21-65 of the General Laws in Chapter 45-21 entitled Retirement 9 of Municipal Employees is hereby amended to read as follows: 10 45-21-65. Other post-employment benefits — OPEB trusts. 11 (a) Notwithstanding the provisions of any general or special law, or the provisions of any 12 municipality’s home rule charter, to the contrary, for purposes of funding any unfunded liability 13 for other post-employment benefits including, but not limited to, health care and dental care 14 benefits hereinafter referred to as (“OPEB”) in accordance with government accounting standards 15 board statements 43 and 45 Governmental Accounting Standards Board ( GASB ) requirements , 16 a municipality, acting by its treasurer or director of finance, upon an approving resolution of the 17 city or town council or agency board as applicable, may enter into a trust agreement between the 18 municipality and a corporate trustee which shall be a bank or trust company doing business in the 19 state, or a corporation established pursuant to chapter 5 of this title. This trust agreement shall be 20 in any form deemed proper by the treasurer or director of finance of the municipality, and shall be 21 executed by its treasurer or director of finance and countersigned by its mayor or president of the 22 town council. It shall be lawful for any bank, trust company, or entity organized pursuant to § 45- 23 5-20.1 doing business in the state to act as a depository or trustee under this trust agreement, and 24 to furnish indemnification and pledge securities that may be required by any municipality. 25 (b) OPEB trust funds shall be credited with all amounts appropriated or otherwise made 26 available by the municipality for the purposes of meeting the current and future OPEB costs payable 27 by the municipality. OPEB trust funds shall also be credited with all amounts contributed or 28 otherwise made available by employees of the municipality for the purpose of meeting future OPEB 29 costs payable by the municipality. Amounts in an OPEB trust fund, including any earnings or 30 interest accruing from the investment of these amounts, shall be expended only for the payment of 31 the costs payable by the municipality for OPEB or as otherwise permitted by the terms of the trust 32 and applicable law. The director of finance or treasurer, as applicable, shall invest and reinvest the 33 amounts in the OPEB trust fund not needed for current disbursement in any investment permitted 34 for the municipality’s pension funds consistent with the prudent person rule and investment policies LC004503 - Page 2 of 4 1 of the municipality, if any. 2 (c) Municipalities are hereby authorized to enter into agreements, trusts, contracts, and 3 other arrangements with the state and any of its departments, agencies, boards or commissions 4 relating to the execution, management or operation of the OPEB trust funds, including, but not 5 limited to, investments, and the state and its departments, agencies, boards and commissions are 6 hereby authorized to enter into such agreements, contracts and other arrangements with 7 municipalities. Notwithstanding any provisions of any general or special law or principle of equity 8 to the contrary, the state shall have no liability to any municipality for entering into such 9 agreements. 10 (d) A municipality may employ any qualified bank, trust company, corporation, firm or 11 person to advise it on the investment of the OPEB trust fund and may pay from the OPEB trust 12 fund for this advice and other services. Procurement for these services shall be subject to the 13 procurement procedures and rules governing municipalities in the state. 14 (e) Municipalities are also hereby authorized to enter into agreements, trusts, contracts, and 15 other arrangements with any corporation established pursuant to chapter 5 of this title relating to 16 the execution management or operations of OPEB trust funds including, but not limited to, 17 investments, and the corporations established pursuant to § 45-5-20.1 are hereby authorized to enter 18 into such agreements, trusts, contracts or other arrangements with municipalities. 19 (f) Any OPEB trusts that have been created by municipalities and are in effect on the date 20 hereof are hereby ratified and confirmed. 21 (g) Nothing herein shall be construed to exempt OPEB trusts from the Rhode Island Access 22 to Public Records Act, § 38-2-1 et seq. 23 SECTION 3. This act shall take effect upon passage. ======== LC004503 ======== LC004503 - Page 3 of 4 EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO TOWNS AND CITIES -- AUDIT OF ACCOUNTS AND INSTALLATION OF SYSTEMS *** 1 This act would amend the audit compliance requirements for municipalities contributions 2 to pension plans under the audit of accounts and installation of systems chapter of the general laws. 3 This act would take effect upon passage. ======== LC004503 ======== LC004503 - Page 4 of 4