Chapter 470
2006 -- H 7063 SUBSTITUTE A
Enacted 07/07/06
A N A C T
RELATING
TO TAXATION -- PROPERTY SUBJECT TO TAXATION
Introduced
By: Representatives Anguilla, Malik, Ginaitt, Corvese, and Rose
Date
Introduced: February 02, 2006
It is enacted by the General Assembly as
follows:
SECTION 1. Section
44-3-3 of the General Laws in Chapter 44-3 entitled "Property
Subject to Taxation" is hereby amended to
read as follows:
44-3-3.
Property exempt. -- The following property is exempt from taxation:
(1) Property belonging
to the state except as provided in section 44-4-4.1;
(2) Lands ceded
or belonging to the United States;
(3) Bonds and
other securities issued and exempted from taxation by the government of
the United States, or of this state;
(4) Real estate,
used exclusively for military purposes, owned by chartered or
incorporated organizations approved by the
adjutant general, and composed of members of the
national guard, the naval militia, or the
independent chartered military organizations;
(5) Buildings for
free public schools, buildings for religious worship, and the land upon
which they stand and immediately surrounding
them, to an extent not exceeding five (5) acres so
far as the buildings and land are occupied and
used exclusively for religious or educational
purposes;
(6) Dwellings
houses and the land on which they stand, not exceeding one acre in size,
or the minimum lot size for zone in which the
dwelling house is located, whichever is the greater,
owned by or held in trust for any religious
organization and actually used by its officiating clergy,
to an amount not exceeding one hundred fifty
thousand dollars ($150,000) for each house and
land owned and used; provided that the city council
of Warwick may exempt by ordinance the
property previously described in this
subdivision within the city of Warwick to an amount not
exceeding four hundred thousand dollars
($400,000); and except in Bristol where the property
previously described in this paragraph is exempt
to an amount not exceeding five hundred
thousand dollars ($500,000); provided also
dwelling houses and the land on which they stand in
Bristol, not exceeding one acre in size, or the
minimum lot size for zone in which the dwelling
house is located, whichever is the greater,
owned by or held in trust for any religious organization
and or actually used as a convent or nunnery
by its religious order, to an amount not exceeding
five hundred thousand dollars ($500,000) for
each house and land owned and used; provided,
further that in the town of Lincoln, the
exemption shall be three hundred thousand dollars
($300,000) for parsonages of the various
churches in the town, which exemption shall be limited
solely to property actually used by the
respective religion's officiating clergy as the clergy's
official place of residence.
(7) Intangible
personal property owned by, or held in trust for, any religious or charitable
organization, if the principal or income is used
or appropriated for religious or charitable
purposes;
(8) Buildings and
personal estate owned by any corporation used for a school, academy,
or seminary of learning, and of any incorporated
public charitable institution, and the land upon
which the buildings stand and immediately
surrounding them to an extent not exceeding one acre,
so far as they are used exclusively for
educational purposes, but no property or estate whatever is
hereafter exempt from taxation in any case where
any part of its income or profits or of the
business carried on there is divided among its
owners or stockholders;
(9) Estates,
persons, and families of the president and professors for the time being of
Brown University for not more than ten thousand
dollars ($10,000) for each officer, the officer's
estate, person, and family included, but only to
the extent that any person had claimed and
utilized the exemption prior to, and for a
period ending either on or after December 31, 1996;
(10) Property
especially exempt by charter unless the exemption has been waived in
whole or in part;
(11) Lots of land
used exclusively for burial grounds;
(12) Property,
real and personal, held for or by an incorporated library, society, or any
free public library, or any free public library
society, so far as the property is held exclusively for
library purposes, or for the aid or support of
the aged poor, or poor friendless children, or the poor
generally, or for a hospital for the sick or
disabled;
(13) Real or
personal estate belonging to or held in trust for the benefit of incorporated
organizations of veterans of any war in which
the United States has been engaged, the parent
body of which has been incorporated by act of
congress, to the extent of four hundred thousand
dollars ($400,000) if actually used and occupied
by the association; provided, that the city council
of the city of Cranston may by ordinance exempt
the real or personal estate as previously
described in this subdivision located within the
city of Cranston to the extent of five hundred
thousand dollars ($500,000);
(14) Property,
real and personal, held for or by the fraternal corporation, association, or
body created to build and maintain a building or
buildings for its meetings or the meetings of the
general assembly of its members, or subordinate
bodies of the fraternity, and for the
accommodation of other fraternal bodies or
associations, the entire net income of which real and
personal property is exclusively applied or to
be used to build, furnish, and maintain an asylum or
asylums, a home or homes, a school or schools,
for the free education or relief of the members of
the fraternity, or the relief, support, and care
of worthy and indigent members of the fraternity,
their wives, widows, or orphans, and any fund
given or held for the purpose of public education,
almshouses, and the land and buildings used in
connection therewith;
(15) Real estate
and personal property of any incorporated volunteer fire engine
company or incorporated volunteer ambulance or
rescue corps in active service;
(16) The estate
of any person who in the judgment of the assessors is unable from
infirmity or poverty to pay the tax; providing,
that in the town of Burrillville the tax shall
constitute a lien for five (5) years on the
property where the owner is entitled to the exemption. At
the expiration of five (5) years, the lien shall
be abated in full. Provided, if the property is sold or
conveyed or if debt secured by the property is
refinanced during the five (5) year period, the lien
immediately becomes due and payable; any person
claiming the exemption aggrieved by an
adverse decision of an assessor shall appeal the
decision to the local board of tax review, and
thereafter according to the provisions of
section 44-5-26;
(17) Household
furniture and family stores of a housekeeper in the whole, including
clothing, bedding, and other white goods, books,
and all other tangible personal property items
which are common to the normal household;
(18) Improvements
made to any real property to provide a shelter and fallout protection
from nuclear radiation, to the amount of one
thousand five hundred dollars ($1,500); provided,
that the improvements meet applicable standards
for shelter construction established from time to
time by the Rhode Island emergency management
agency. The improvements are deemed to
comply with the provisions of any building code
or ordinance with respect to the materials or the
methods of construction used and any shelter or
its establishment is deemed to comply with the
provisions of any zoning code or ordinance;
(19) Aircraft for
which the fee required by section 1-4-6 has been paid to the tax
administrator;
(20)
Manufacturer's inventory.
(i) For the
purposes of sections 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is
deemed to be a manufacturer within a city or
town within this state if that person uses any
premises, room, or place in it primarily for the
purpose of transforming raw materials into a
finished product for trade through any or all of
the following operations: adapting, altering,
finishing, making, and ornamenting; provided,
that public utilities, non-regulated power
producers commencing commercial operation by
selling electricity at retail or taking title to
generating facilities on or after July 1, 1997,
building and construction contractors, warehousing
operations including distribution bases or
outlets of out-of-state manufacturers, and fabricating
processes incidental to warehousing or
distribution of raw materials such as alteration of stock for
the convenience of a customer, are excluded from
this definition.
(ii) For the
purposes of sections 44-3-3, 44-4-10, and 44-5-38, the term
"manufacturer's
inventory" or any similar term means and
includes the manufacturer's raw materials, the
manufacturer's work in process, and finished
products manufactured by the manufacturer in this
state, and not sold, leased, or traded by the
manufacturer or its title or right to possession
divested; provided, that the term does not
include any finished products held by the manufacturer
in any retail store or other similar selling
place operated by the manufacturer whether or not the
retail establishment is located in the same
building in which the manufacturer operates the
manufacturing plant.
(iii) For the
purpose of section 44-11-2, a "manufacturer" is a person whose
principal
business in this state consists of transforming
raw materials into a finished product for trade
through any or all of the operations described
in paragraph (i) of this subdivision. A person will
be deemed to be principally engaged if the gross
receipts which that person derived from the
manufacturing operations in this state during
the calendar year or fiscal year mentioned in section
44-11-1 amounted to more than fifty percent
(50%) of the total gross receipts which that person
derived from all the business activities in
which that person engaged in this state during the
taxable year. For the purpose of computing the
percentage, gross receipts derived by a
manufacturer from the sale, lease, or rental of
finished products manufactured by the
manufacturer in this state, even though the
manufacturer's store or other selling place may be at a
different location from the location of the
manufacturer's manufacturing plant in this state, are
deemed to have been derived from manufacturing.
(iv) Within the meaning
of the preceding paragraphs of this subdivision, the term
"manufacturer" also includes persons
who are principally engaged in any of the general activities
coded and listed as establishments engaged in
manufacturing in the standard industrial
classification manual prepared by the technical
committee on industrial classification, office of
statistical standards, executive office of the
president, United States bureau of the budget, as
revised from time to time, but eliminating as
manufacturers those persons, who, because of their
limited type of manufacturing activities, are
classified in the manual as falling within the trade
rather than an industrial classification of
manufacturers. Among those thus eliminated, and
accordingly also excluded as manufacturers
within the meaning of this paragraph, are persons
primarily engaged in selling, to the general
public, products produced on the premises from which
they are sold, such as neighborhood bakeries,
candy stores, ice cream parlors, shade shops, and
custom tailors, except, that a person who
manufactures bakery products for sale primarily for
home delivery, or through one or more non-baking
retail outlets, and whether or not retail outlets
are operated by person, is a manufacturer within
the meaning of this paragraph.
(v) The term
"Person" means and includes, as appropriate, a person, partnership,
or
corporation.
(vi) The
department of administration shall provide to the local assessors any
assistance
that is necessary in determining the proper
application of the definitions in this subdivision.
(21) Real and
tangible personal property acquired to provide a treatment facility used
primarily to control the pollution or
contamination of the waters or the air of the state, as defined
in chapter 12 of title 46 and chapter 25 of
title 23, respectively, the facility having been
constructed, reconstructed, erected, installed,
or acquired in furtherance of federal or state
requirements or standards for the control of
water or air pollution or contamination, and certified
as approved in an order entered by the director
of environmental management. The property is
exempt as long as it is operated properly in
compliance with the order of approval of the director
of environmental management; provided, that any
grant of the exemption by the director of
environmental management in excess of ten (10)
years shall be approved by the city or town in
which the property is situated. This provision
applies only to water and air pollution control
properties and facilities installed for the
treatment of waste waters and air contaminants resulting
from industrial processing; furthermore, it
applies only to water or air pollution control properties
and facilities placed in operation for the first
time after April 13, 1970;
(22) New
manufacturing machinery and equipment acquired or used by a manufacturer
and purchased after December 31, 1974.
Manufacturing machinery and equipment is defined as:
(i) Machinery and
equipment used exclusively in the actual manufacture or conversion
of raw materials or goods in the process of
manufacture by a manufacturer as defined in
subdivision (20) of this section, and machinery,
fixtures, and equipment used exclusively by a
manufacturer for research and development or for
quality assurance of its manufactured products;
(ii) Machinery
and equipment which is partially used in the actual manufacture or
conversion of raw materials or goods in process of
manufacture by a manufacturer as defined in
subdivision (20) of this section, and machinery,
fixtures, and equipment used by a manufacturer
for research and development or for quality
assurance of its manufactured products, to the extent
to which the machinery and equipment is used for
the manufacturing processes, research and
development or quality assurance. In the
instances where machinery and equipment is used in
both manufacturing and/or research, and
development, and/or quality assurance activities and
non-manufacturing activities, the assessment on
machinery and equipment is prorated by
applying the percentage of usage of the
equipment for the manufacturing, research, and
development and quality assurance activity to
the value of the machinery and equipment for
purposes of taxation, and the portion of the
value used for manufacturing, research, and
development, and quality assurance is exempt
from taxation. The burden of demonstrating this
percentage usage of machinery and equipment for
manufacturing and for research, and
development and/or quality assurance of its
manufactured products rests with the manufacturer;
and
(iii) Machinery
and equipment described in section 44-18-30(7) and (22) that was
purchased after July 1, 1997; provided that the
city or town council of the city or town in which
the machinery and equipment is located adopts an
ordinance exempting the machinery and
equipment from taxation. For purposes of this
subsection, city councils and town councils of any
municipality may by ordinance wholly or
partially exempt from taxation the machinery and
equipment discussed in this subsection for the
period of time established in the ordinance and
may by ordinance establish the procedures for taxpayers
to avail themselves of the benefit of any
exemption permitted under this section;
provided, that the ordinance does not apply to any
machinery or equipment of a business, subsidiary
or any affiliated business which locates or
relocates from a city or town in this state to
another city or town in the state.
(23) Precious
metal bullion, meaning any elementary metal which has been put through a
process of melting or refining, and which is in
a state or condition that its value depends upon its
content and not its form. The term does not
include fabricated precious metal which has been
processed or manufactured for some one or more
specific and customary industrial, professional,
or artistic uses;
(24)
Hydroelectric power generation equipment, which includes, but is not limited
to,
turbines, generators, switchgear, controls,
monitoring equipment, circuit breakers, transformers,
protective relaying, bus bars, cables,
connections, trash racks, headgates, and conduits. The
hydroelectric power generation equipment must
have been purchased after July 1, 1979, and
acquired or used by a person or corporation who
owns or leases a dam and utilizes the equipment
to generate hydroelectric power;
(25) Subject to
authorization by formal action of the council of any city or town, any real
or personal property owned by, held in trust
for, or leased to an organization incorporated under
chapter 6 of title 7, as amended, or an
organization meeting the definition of "charitable trust" set
out in section 18-9-4, as amended, or an
organization incorporated under the not for profits
statutes of another state or the District of
Columbia, the purpose of which is the conserving of
open space, as that term is defined in chapter
36 of title 45, as amended, provided the property is
used exclusively for the purposes of the
organization;
(26) Tangible
personal property, the primary function of which is the recycling, reuse, or
recovery of materials (other than precious
metals, as defined in section 44-18-30(24)(ii) and (iii)),
from or the treatment of "hazardous
wastes", as defined in section 23-19.1-4, where the
"hazardous wastes" are generated
primarily by the same taxpayer and where the personal property
is located at, in, or adjacent to a generating
facility of the taxpayer. The taxpayer may, but need
not, procure an order from the director of the
department of environmental management
certifying that the tangible personal property
has this function, which order effects a conclusive
presumption that the tangible personal property
qualifies for the exemption under this
subdivision. If any information relating to
secret processes or methods of manufacture,
production, or treatment is disclosed to the
department of environmental management only to
procure an order, and is a "trade
secret" as defined in section 28-21-10(b), it shall not be open to
public inspection or publicly disclosed unless
disclosure is otherwise required under chapter 21 of
title 28 or chapter 24.4 of title 23;
(27) Motorboats
as defined in section 46-22-2 for which the annual fee required in
section 46-22-4 has been paid;
(28) Real and
personal property of the Providence performing arts center, a non-business
corporation;
(29) Tangible
personal property owned by, and used exclusively for the purposes of, any
religious organization located in the city of
Cranston;
(30) Real and
personal property of the Travelers Aid Society of Rhode Island, a
nonprofit corporation, the Union Mall Real Estate
Corporation, and any limited partnership or
limited liability company which is formed in
connection with, or to facilitate the acquisition of,
the Providence YMCA Building; and
(31) Real and
personal property of Meeting Street Center or MSC Realty, Inc., both not-
for-profit Rhode Island corporations, and any
other corporation, limited partnership, or limited
liability company which is formed in connection
with, or to facilitate the acquisition of, the
properties designated as the Meeting Street
National Center of Excellence on Eddy Street in
Providence, Rhode Island.
SECTION 2. This
act shall take effect upon passage.
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LC01430/SUB
A/3
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