2015 -- H 5086

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LC000471

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION

     

     Introduced By: Representatives Blazejewski, Maldonado, Solomon, Kazarian, and

     Date Introduced: January 14, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is

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hereby amended by adding thereto the following section:

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     44-30-28. Stay Invested in RI Tax Credit. – (a) This section shall be known and may be

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cited as the "Stay Invested in RI Tax Credit Program" and is designed to achieve the following

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goals:

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     (1) Promote economic opportunity for people in this state by ensuring access to the

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training and higher education that higher-paying jobs require;

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     (2) Bring more and higher-paying jobs to this state by increasing the skill level of this

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state's workforce;

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     (3) Offer educational opportunity and retraining to individuals impacted by job loss,

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workplace injury, disability or other hardship;

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     (4) Keep young people in this state through incentives for educational opportunity and

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creation of more high-paying jobs;

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     (5) Encourage an entrepreneurial economy in Rhode Island; and

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     (6) Accomplish all of the goals in this chapter with as little bureaucracy as possible.

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     (b) Calculation of Graduate Tax Credit. Graduates of accredited institutions of higher

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education who receive an associate's degree, a bachelor of science or arts degree, or a master's

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degree and who remain or become residents of and employed in Rhode Island, shall be eligible

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for a tax credit against their personal income tax, based upon the amount of their student loan

 

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balance, for a period of no longer than ten (10) years after their graduation from the accredited

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institution at which the eligible student loan(s) were accrued, and so long as the person remains a

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legal resident of and employed in Rhode Island. Said credit shall be calculated as follows:

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     (1) For each year after the person graduates as set forth in subsection (b) of this section, a

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person shall be eligible to claim a tax credit against his or her personal income tax in an amount

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equal to the payments made in a given tax year, including principal and interest, by the graduate

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toward undergraduate or graduate student loan debt, up to a maximum amount for single tax year

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of one thousand dollars ($1,000) for an associate's degree holder, five thousand dollars ($5,000)

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for a bachelor's degree holder, and six thousand dollars ($6,000) for a graduate degree holder. In

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the event the Rhode Island graduation tax credit allowed under this section exceeds the amount of

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Rhode Island income tax, the excess amount shall be fully refundable.

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     (2) Provided, the balance amount used in this calculation shall not exceed the original

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loan amount plus any capitalized interest less credits previously claimed under this section.

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     (3) Provided further, a party claiming the tax credit provided for under this section shall

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need to be current on his or her student loan repayment obligations in order to obtain the credit.

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     (4) For a graduate relocating to Rhode Island during a tax year, the tax credit shall be pro-

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rated based on the portion of the tax year the graduate resides and is employed in Rhode Island.

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     (5) An individual must maintain records relating to loan payments claimed under the

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educational opportunity tax credit for seven (7) years after those payments are claimed.

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     (c) Administration. The following requirements shall be met through the administration

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of the program:

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     (1) The division of taxation shall prepare forms to permit a person to claim the tax credit

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provided for herein. The division of taxation may also promulgate rules and regulations necessary

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to implement the provisions of this section.

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     (2) The board of education, the higher education assistance authority established pursuant

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to chapter 57 of title 16, the Rhode Island commerce corporation, and any other agency engaging

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in education-related outreach shall integrate promotion of the program into existing educational

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opportunity outreach efforts to the extent possible in a manner consistent with the scope of the

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program and its centrality to the state's efforts to raise educational attainment.

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     (3) The board of education, in consultation with the state tax administrator, shall make

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information about the program available on the board's publicly accessible website.

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     (4) Any accredited Rhode Island community college, college or university shall, at a

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minimum, provide information about the program in financial aid award materials, entrance

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interviews, exit interviews, materials listing financial aid resources and, as appropriate, any

 

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promotional materials provided by state agencies, to the extent such contacts with students are

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already part of the accredited Rhode Island community college, college or university's

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procedures.

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     (5) An individual may take advantage of any forbearance or deferment provisions in the

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relevant loan agreements without forfeiting the right to claim the educational opportunity tax

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credit when the individual resumes repayment.

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     (d) As used herein, the term "student loan" shall mean a loan from an eligible lender. An

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eligible lender, subject to further particular or more restrictive definition by regulation of the

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division of taxation, means any governmental or private agency, corporation, organization, or

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institution designated as an "eligible lender" by Federal statute, regulation, or administrative

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ruling for the purposes of the guaranteed student loan program.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION

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     This act would create the Stay Invested in RI Tax Credit authorizing a tax credit against

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state personal income tax for up to ten (10) years after graduation from an institution of higher

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education, for graduates who reside and work in Rhode Island.

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     This act would take effect upon passage.

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