Chapter 531

2006 -- H 8219

Enacted 07/06/06

A N A C T

RELATING TO THE TOWN OF NORTH SMITHFIELD

Introduced By: Representative Raymond C. Church

Date Introduced: June 08, 2006

It is enacted by the General Assembly as follows:

SECTION 1. The town council of the town of North Smithfield is hereby authorized to

amend the Code of Ordinances to add section 6-3.11 to chapter 6, Article 1, to read as follows:

Section 6-3.11 Stabilization of taxes for commercial expansion and new development.

A. Purpose

The purpose of this ordinance is to encourage and facilitate the expansion of the town's

real property tax base through the expansion, re-development and rehabilitation of existing

commercial property, including, but not limited to, manufacturing, industrial, office, and retail

buildings; and to encourage new business and development, for commercial property, including

manufacturing, industrial, and office purposes, through the use of tax stabilization. This shall not

apply to new retail or to residential properties. Furthermore, a limited class of exemption for

certain personal property is permitted when investment exceeds ($500,000).

B. Definitions

(a) "Eligible properties due to expansion" shall include buildings or structures used for

industrial, manufacturing, commercial, office, technology, hospital, medical, sales, service and

distribution; and shall also include retail properties presently in operation for ten (10) years or

more. However, exemptions at the expansion rate shall include new development on the

contiguous property of an existing property owner operating an existing eligible property.

(b) "Eligible properties due to new development" shall include manufacturing, industrial,

technology, hospital, medical and office uses only. It shall not include exemptions for other

commercial, retail, residential or other uses than as here specified.

and remodeling of existing buildings, structures, or facilities.

(d) No exemption shall include residential property, in whole, or in part as a mixed use.

(e) "Offices" shall mean buildings or structures utilized primarily to house office space

for use of the owner or rental to others;

(f) "Commercial purposes" shall mean any uses for commercial enterprises in its general

sense, including without limitation any building or structure used for offices, technology, retail,

wholesale, warehouse, distribution and/or storage business, or for the service industry.

(g) "Manufacturing and industrial purposes" shall refer to uses that are primarily for the

production, assembly, or fabrication of materials for sale to others.

(h) "Base year" refers to that year before the issuance of the certificate of occupancy for

the eligible project, and before the exemption takes effect.

(i) "Stabilization period" refers to that period of time during which some percentage

exemption has been granted; for example, a period of four (4) years for those in the "A" bracket

relating to a twenty percent (20%) increase in value for expansion.

(j) "Eligible personal property" shall include personal property owned by a firm or

concern occupying a building, structure, and/or land used for commercial purposes, and which

personal property is used by such firm or concern in its commercial enterprise specifically

limited, however, to computer and telecommunications equipment, research and development,

and laboratory equipment.

C. Program Eligibility - Generally

(a) An application for eligibility must be filed by the property owner before or at the time

of the filing of any required building permit for the development for which tax stabilization is

requested. The application shall be accompanied by certificates: from the zoning inspector that, as

to existing property, the property is presently in compliance with all town and state zoning,

building, and fire codes; and from the tax collector that the payment of all taxes (real and personal

property) and assessments are current. If necessary, proof of filing by the applicant of required

site plan review with the planning board shall also be required with the application.

(b) Each eligible project must be determined by the planning board or its administrative

officer to be in compliance with the town's Comprehensive Plan, as amended. Each project must

also comply with the present town ordinance relating to site plan or development plan review, or

with other reasonable standards that the planning board may determine to be appropriate in the

absence of, or in addition to, such standards as a condition for the granting of approval for

exemption.

to personal property (except personal property where specifically noted) but only to the value of

the buildings or structures increased from the base year by the investment of the property owner.

(d) The exemption shall not result in the reduction from the town's tax levy in the base

year for any eligible property, but only to the increased value due to expansion.

(e) All exemptions granted under this ordinance are nontransferable. In the event of

change of ownership of the property within the stabilization period, the exemption is terminated

automatically as of the date of sale or transfer of ownership. Exemptions to this provision may be

granted by the town council, in its plenary discretion, in situations involving financing

arrangements (such as sale lease-back) or sales to another entity of which a majority interest is

controlled by the original property owner.

(f) The exemption granted by this ordinance shall apply from the next quarter tax bill

from the date of the issuance of a certificate of occupancy to the property owner.

(g) The town administrator shall determine, after consultation with the tax assessor, the

tax collector, the planning board/administrative officer, the zoning inspector, or other appropriate

officials, whether the property owner is eligible and to what extent, and so shall notify the

applicant in writing, and provide a decision in writing regarding eligibility. The decisions of the

above shall be considered by, but shall not be conclusive, as to the administrator's final decision.

All values shall be finally determined by the town administrator in consultation with the tax

assessor, or his/her designee, or, in his/her discretion, by manner of appraisal at his/her direction,

the expense of which shall be borne by the applicant. The preliminary determination of eligibility

shall be contingent upon final determination of values at the completion of construction. The

decision granting exemption shall include a determination that:

1. Granting the exemption or stabilization of taxes will insure to the benefit of the town

by reason of:

(i) The willingness of the eligible applicant to locate in the town; or

(ii) The willingness of the eligible applicant to expand facilities with an increase in

employment.

2. Granting of the exemption or stabilization of taxes will insure to the benefit of the

town by reason of willingness of an eligible applicant to expand, replace, reconstruct, rehabilitate

or reconstruct or remodel existing buildings, structures, or facilities, resulting in an increase in

investment by the firm in the town.

Appeals from the determination of the town administrator shall be to the town council no

later than ten (10) days from that date of the receipt of the administrator's decision. Failure to

timely appeal shall result in the finality of the administrator's decision.

(h) An annual report shall be provided to the town council by the town administrator as to

the number and nature of exemptions granted and the resulting fiscal impact.

D. Program Eligibility – Town Council Appeal

Approval shall be within the discretion of the town administrator to determine the

eligibility of the property for stabilization in accordance with the provisions of this ordinance. If

the applicant should appeal the decision of the town administrator as to the eligibility of the

applicant or the terms thereof, the council shall determine both the eligibility and the terms

thereof. In deciding the appeal, the council shall determine, among other factors in its discretion.

1. Granting the exemption or stabilization of taxes will insure to the benefit of the town

by reason of:

(i) The willingness of the eligible applicant to locate in the town; or

(ii) The willingness of the eligible applicant to expand facilities with an increase in

employment.

2. Granting of the exemption or stabilization of taxes will insure to the benefit of the

town by reason of the willingness of an eligible applicant to expand, replace, reconstruct,

rehabilitate or reconstruct or remodel existing buildings, structures, or facilities, resulting in an

increase in investment by the firm in the town.

E. Tax Stabilization for Eligible Properties Due to Expansion

(a) Properties eligible for tax stabilization due to expansion shall have increased the

assessed value of any eligible property by a minimum of twenty percent (20%) over the base

year, such percentage to be determined by the tax assessor or his or her designee.

TABLE 1

A B C D E

Increase in 20%-39% 40%-59% 60%-79% 80%-99% 100%+

Assessed

Value

Year 1 20% 0% 0% 0% 0%

Year 2 40% 20% 10% 10% 10%

Year 3 60% 40% 20% 20% 20%

Year 4 80% 60% 40% 30% 30%

Year 5 100% 80% 60% 40% 40%

Year 6 100% 100% 80% 50% 50%

Year 7 100% 100% 100% 60% 60%

Year 8 100% 100% 100% 80% 70%

Year 9 100% 100% 100% 100% 80%

Year 10 100% 100% 100% 100% 90%

Year 11 100% 100% 100% 100% 100%

The percentages in the Table represent the percent of tax levy that would be due on the

incremental increase in a subject building(s) assessed valuation over a base year. The columns

represent the increase in a building(s) tax assessment over the base year. The boxed area in the

table represents the tax stabilization scale for this rehabilitated and expanded building. The

percent is applied against the additional taxes that would ordinarily be due on the increased

assessed value only.

However, the increases in the town tax rate generally shall apply, as shall increases in the

assessed valuation due to revaluation.

F. Tax Stabilization for Eligible Properties Due to New Development

Tax stabilization for eligible properties due to new development on land vacant in the

base year are eligible for a five (5)-year tax stabilization incentive as delineated in column B,

above (marked "40%+" in TABLE 1). The new construction shall have a minimum assessed

value of one million dollars ($1,000,000), excluding the value of land and infrastructure

improvements.

However, increases in the town tax rate generally shall apply, as shall increases in the

assessed valuation due to revaluation.

G. Personal Property Exemption for Certain Equipment

Eligible personal property shall be exempt in full (100% exemption) when the new

personal property investment is valued at greater than five hundred thousand dollars ($500,000),

and the personal property is not otherwise eligible for tax exemption under state or federal law.

H. Scope of Exemption

(a) Except as provided in this ordinance, the property that is the subject of exemption or

stabilization shall not, during the period for which the exemption or stabilization is granted and in

effect, be further liable to taxation by the town so long as the property is used for the

manufacturing or commercial purposes for which the exemption or stabilization was made.

(b) Notwithstanding any vote or findings by the town council, the property shall be

assessed for and shall pay that portion of the tax, if any, assessed by the town for the purpose of

paying the indebtedness of the town and the indebtedness of the state or of any political

subdivision of the state to the extent assessed upon or apportioned to the town, and the interest on

the indebtedness, and for appropriation to any sinking fund of the town, which portion of the tax

shall be paid in full, and the taxes so assessed and collected shall be kept in a separate account

and used only for that purpose.

the town for more than ninety (90) days from the time due, then the exemption shall be

disqualified or terminated and all real property taxes on the affected property shall be

immediately owing on the full assessed value of the property for the entire year of the delinquent

payment, including retroactively. No notice beyond that normally provided for the payment of

taxes and assessments shall be required.

(d) Failure to comply with all town and state zoning, building, and fire codes, all federal,

state and local laws and regulations concerning job safety, and all environmental laws and

regulations shall result in the disqualification or termination of any exemption and all real

property taxes, plus interest, on the affected property shall be immediately owing on the full

assessed value of the property for the entire year of the noncompliance, including retroactively.

Notice of termination due to such non-compliance shall be provided to the property owner by

certified mail, and failure of compliance within thirty (30) days from the date of notice shall

result in termination, notwithstanding any other law or time period relating to noncompliance. For

good cause shown, the council may provide exemption of this requirement should the proposed

construction include remediation of the issue of noncompliance.

(e) In the event that the Town establishes different tax rates for different classifications of

real property ("tax classification"), property taxes for a stabilized property will be computed

using:

1. the stabilized property's tax stabilization schedule; and

2. the stabilized property's current assessed value; and

3. and the tax rate as established in the tax year preceding the year that the town adopts

tax classification.

This ordinance shall take effect on the date of passage and in accordance with the town

charter.

SECTION 2. The town council of the town of North Smithfield is authorized to

promulgate rules and regulations consistent with the ordinance authorized by section 1 of this act.

SECTION 3. This act shall take effect upon passage.

=======

LC03442

=======