law15141-19

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art.019/4/019/3

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ARTICLE 19 AS AMENDED

RELATING TO COMMERCE CORPORATION AND ECONOMIC DEVELOPMENT

SECTION 1. Section 42-64-13 of the General Laws in Chapter 42-64 entitled "Rhode

Island Commerce Corporation" is hereby amended to read as follows:

42-64-13. Relations with municipalities. -- (a) (1) With respect to projects situated on

federal land, the Rhode Island commerce corporation is authorized to plan, construct, reconstruct,

rehabilitate, alter, improve, develop, maintain, and operate projects: (i) in conformity with the

applicable provisions of chapter 1 of title 2 except that the projects shall not require the approval

of a town or city council provided for in § 2-1-21, and (ii) without regard to the zoning or other

land use ordinances, codes, plans, or regulations of any municipality or political subdivision;

provided, however, that the exemption from the zoning or other land use ordinances, codes, plans,

or regulations shall be subject to the corporation's compliance with the provisions of this

subsection. Projects which are planned, constructed, reconstructed, rehabilitated, altered,

improved, or developed by the corporation on federal land in accordance with the provisions of

this subsection may be maintained and operated by lessees from and successors in interest to the

corporation in the same manner as if the projects had been in existence prior to the enactment of

the zoning or other land use ordinances, codes, plans, or regulations which, but for this chapter,

would otherwise be applicable. With respect to other projects of the commerce corporation, or

projects receiving state incentives as administered by the commerce corporation, developers are

authorized to plan, construct, reconstruct, rehabilitate, alter, improve, develop, maintain, and

operate a project subject only to the state building code and the state fire code, and all inspections

regarding any such project shall be conducted by the state building commissioner or his designee

without regard to the building and fire codes of any municipality or political subdivision;

provided, however, that the exemption from the building and fire codes shall be subject to the

corporation's compliance with the provisions of this subsection.

(2) As used in this section, "the comprehensive plan" means a comprehensive plan

adopted pursuant to chapter 22 of title 45 by a planning board or commission; "the applicable

comprehensive plan" shall mean the comprehensive plan of any municipality within which any

project is to be situated, in whole or in part; and "the project plan" shall mean a general

description of a proposed project situated on federal land, describing in reasonable detail its

location, nature, and size. A zoning ordinance adopted by a municipality pursuant to chapter 24 of

title 45 shall not be deemed to be a comprehensive plan nor a statement of the land use goals,

objectives, and standards.

(3) If any project plan of the corporation with respect to projects situated on federal land

conforms to the land use goals, objectives, and standards of the applicable comprehensive plan as

of the time of the corporation's adoption of the project plan, or if there is no applicable

comprehensive plan, then before proceeding with the project described in the project plan, the

corporation shall refer the project plan to the appropriate community advisory committee which

may thereafter hold any public hearings as it may deem to be desirable for the purpose of

permitting the public to comment on the project plan. The community advisory committee shall

not later than forty-five (45) days after its receipt of the project plan, transmit its comments on the

project plan, in either written or oral form, to the corporation and thereupon, or upon the

community advisory committee's failure to take any action within the time specified, the

corporation shall be authorized to proceed with the project described in the project plan without

regard to the zoning or other land use ordinances, codes, plans, or regulations of a municipality

within which the project is to be situated in whole or in part.

(4) If any project plan of the corporation with respect to projects situated on federal land

does not conform to the land use goals, objectives, and standards of the applicable comprehensive

plan as of the time of the corporation's adoption of the project plan, then, before proceeding with

the project described in the project plan, the corporation shall refer the project plan to the local

governing body of any municipality within which any project is to be situated, in whole or in part.

The local governing body may thereafter hold any public hearings as it may deem to be desirable

for the purpose of permitting the public to comment on the project plan. The local governing

body shall, not later than forty-five (45) days after its receipt of the project plan, advise the

corporation of its approval or disapproval of that plan. If it shall disapprove the project plan, the

corporation shall nevertheless be authorized to proceed with the project described in the project

plan (without regard to the zoning or other land use ordinances, codes, plans, or regulations of a

municipality within which the project is to be situated in whole or in part) upon the subsequent

affirmative vote of a majority of the members of the board of directors then holding office as

directors taken at a meeting open to the public. If the local governing body approves the project

plan or fails to take any action within the time specified, the corporation shall be authorized to

proceed with the project described in the project plan without regard to the zoning or other land

use ordinances, codes, plans, or regulations of a municipality within which the project is to be

situated in whole or in part.

(5) The project plan's conformity with the applicable comprehensive plan shall be

determined by the board of directors of the corporation and its determination shall be binding and

conclusive for all purposes.

(b) With respect to projects situated on real property other than federal land, the

corporation shall plan, construct, reconstruct, rehabilitate, alter, improve, develop, maintain, and

operate projects in conformity with the applicable zoning or other land use ordinances, codes,

plans, or regulations of any municipality or political subdivision of the state in which those

projects are situated.

altering, or improving any project, comply with all requirements of state and federal laws, codes,

or regulations applicable to that planning, construction, reconstruction, rehabilitation, alteration,

or improvement. The corporation shall adopt a comprehensive building code (which may, but

need not be, the BOCA Building Officials and Code Administrators International Code) with

which all projects shall comply. That adoption shall not preclude the corporation's later adoption

of a different comprehensive building code or of its alteration, amendment, or supplementation of

any comprehensive building code so adopted. Except as otherwise specifically provided to the

contrary, no municipality or other political subdivision of the state shall have the power to modify

or change in whole or in part the drawings, plans, or specifications for any project of the

corporation; nor to require that any person, firm, or corporation employed with respect to that

project perform work in any other or different manner than that provided by those drawings,

plans, and specifications; nor to require that any such person, firm, or corporation obtain any

approval, permit, or certificate from the municipality or political subdivision in relation to the

project; and the doing of that work by any person, firm, or corporation in accordance with the

terms of those drawings, plans, specifications, or contracts shall not subject the person, firm, or

corporation to any liability or penalty, civil or criminal, other than as may be stated in the

contracts or may be incidental to the proper enforcement thereof; nor shall any municipality or

political subdivision have the power to require the corporation, or any lessee or successor in

interest, to obtain any approval, permit, or certificate from the municipality or political

subdivision as a condition of owning, using, maintaining, operating, or occupying any project

acquired, constructed, reconstructed, rehabilitated, altered, or improved by the corporation or

pursuant to drawings, plans, and specifications made or approved by the corporation; provided,

however, that nothing contained in this subsection shall be deemed to relieve any person, firm, or

corporation from the necessity of obtaining from any municipality or other political subdivision

of the state any license which, but for the provisions of this chapter, would be required in

connection with the rendering of personal services or sale at retail of tangible personal property.

(d) Except to the extent that the corporation shall expressly otherwise agree, a

municipality or political subdivision, including, but not limited to, a county, city, town, or district,

in which a project of the corporation is located, shall provide for the project, whether then owned

by the corporation or any successor in interest, police, fire, sanitation, health protection, and other

municipal services of the same character and to the same extent as those provided for other

residents of that municipality or political subdivision, but nothing contained in this section shall

be deemed to require any municipality or political subdivision to make capital expenditures for

the sole purpose of providing any of these services for that project.

(e) In carrying out a project, the corporation shall be empowered to enter into contractual

agreements with municipalities and public corporations and those municipalities and public

corporations are authorized and empowered, notwithstanding any other law, to enter into any

contractual agreements with the corporation and to do all things necessary to carry out their

obligations under the agreements.

(f) Notwithstanding the provisions of any general, special, or local law or charter,

municipalities and public corporations are empowered to purchase, or to lease for a term not

exceeding ninety-nine (99) years, projects of the corporation, upon any terms and conditions as

may be agreed upon by the municipality or public corporation and the corporation.

SECTION 2. Section 42-64.16-2 of the General Laws in Chapter 42-64.16 entitled "The

Innovate Rhode Island Small Business Program" is hereby amended to read as follows:

42-64.16-2. Establishment of matching funds program. -- (a) There is established the

Rhode Island SBIR/STTR Matching Funds Program to be administered by STAC. In order to

foster job creation and economic development in the state, STAC may provide grants to eligible

businesses to match funds received by a business as a SBIR or STTR Phase I or II award, loans to

eligible businesses to match funds received by a business as a SBIR or STTR Phase II award, and

to encourage businesses to apply for further Phase II and Phase III SBIR or STTR awards,

respectively and commercialize their technology and research.

(b) Eligibility. - In order to be eligible for a grant under this section, a business must

satisfy all of the following conditions:

(1) The business must be a for-profit, Rhode Island-based business with fifty (50) or

fewer employees. For the purposes of this section, Rhode Island-based business is one that has its

principal place of business and at least fifty-one percent (51%) of its employees residing in this

state.

(2) The business must have received an SBIR/STTR Phase I award from a participating

federal agency in response to a specific federal solicitation. To receive the full Phase I matching

grant, the business must also have submitted a final Phase I report, demonstrated that the

sponsoring agency has interest in the Phase II proposal, and submitted a Phase II proposal to the

agency. To receive the full Phase II matching loan grant, the business must also have submitted a

final Phase II report, demonstrated that the sponsoring agency has interest in the Phase III

proposal, and submitted a Phase III proposal to the agency.

(3) The business must satisfy all federal SBIR/STTR requirements.

(4) The business shall not receive concurrent funding support from other sources that

duplicates the purpose of this section.

(5) For a Phase I and II matching grant, the business must certify that at least fifty-one

percent (51%) of the research described in the federal SBIR/STTR Phase I, II and any further

SBIR/STTR proposal proposals and commercialization will be conducted in this state and that the

business will remain a Rhode Island-based business for the duration of the SBIR/STTR Phase I, II

any further SBIR/STTR project projects and commercialization. For a Phase II matching loan, the

business must certify that at least fifty- one percent (51%) of the research described in the federal

SBIR/STTR Phase III proposal will be conducted in this state and that the business will remain a

Rhode Island-based business for the duration of the SBIR/STTR Phase III project.

(6) For a Phase I and II matching grant, the business must demonstrate its ability to

conduct research in its SBIR/STTR Phase II proposal. For a Phase II matching loan, the business

must demonstrate its ability to conduct research in its SBIR/STTR Phase III proposal.

received by a business through a SBIR/STTR Phase I or II proposal up to a maximum of one

hundred thousand dollars ($100,000) one hundred fifty thousand dollars ($150,000). Seventy-five

percent (75%) of the total grant shall be remitted to the business upon receipt of the SBIR/STTR

Phase I or II award and application for funds under this section. Twenty-five percent (25%) of the

total grant shall be remitted to the business upon submission by the business of the Phase II

application to the funding agency and acceptance of the Phase I or II report by the funding

agency. A business may receive only one grant under this section per year. A business may

receive only one grant under this section with respect to each federal proposal submission. Over

its lifetime, a business may receive a maximum of six (6) awards under this section.

(d) Phase II Matching Loan. - STAC may award loans to match the funds received by a

business through a SBIR/STTR Phase II proposal up to a maximum of three hundred thousand

dollars ($300,000) that must be secured by sufficient assets of the business. Seventy-five percent

(75%) of the total loan shall be remitted to the business upon receipt of the SBIR/STTR Phase II

award and application for funds under this section. Twenty-five percent (25%) of the total loan

shall be remitted to the business upon submission by the business of the Phase III application to

the funding agency and acceptance of the Phase I report by the funding agency. A business may

receive only one loan under this section per year. A business may receive only one loan under this

section with respect to each federal proposal submission. Over its lifetime, a business may receive

a maximum of six (6) loans under this section.

(e)(d) Application. - A business shall apply, under oath, to STAC for a grant or loan

under this section on a form prescribed by STAC that includes at least all of the following:

(1) The name of the business, the form of business organization under which it is

operated, and the names and addresses of the principals or management of the business.

(2) For a Phase I or II matching grant, an acknowledgement of receipt of the Phase I or II

report and Phase II proposal by the relevant federal agency. For a Phase II matching loan, an

acknowledgement of receipt of the Phase II report and Phase III proposal by the relevant federal

agency.

(3) Any other information necessary for STAC to evaluate the application.

SECTION 3. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.20

REBUILD RHODE ISLAND TAX CREDIT

42-64.20-1. Short title. -- This chapter shall be known and may be cited as the "Rebuild

Rhode Island Tax Credit Act."

42-64.20-2. Findings and declarations. -- (a) It is hereby found and declared that due to

long-term and short-term stagnant or declining economic trends in Rhode Island, businesses in

the state have found it difficult to make investments that would stimulate economic activity and

create new jobs for the citizens of the state. Moreover, such economic trends have caused

business closures or out-of-state business relocations, while other out-of-state businesses are

deterred from relocating to this state. This situation has contributed to a high rate of

unemployment in the state. Consequently, a need exists to promote the retention and expansion of

existing jobs, stimulate the creation of new jobs, attract new business and industry to the state,

and stimulate growth in real estate developments and/or businesses that are prepared to make

meaningful investment and foster job creation in Rhode Island.

(b) Through the establishment of a rebuild Rhode Island tax credit program, Rhode Island

can take steps to stimulate business development; retain and attract new business and industry to

the state; create good-paying jobs for its residents; assist with business, commercial, and

industrial real estate development; and generate revenues for necessary state and local

governmental services.

42-64.20-3. Definitions. -- As used in this chapter:

(1) "Adaptive Reuse" means the conversion of an existing structure from the use for

which it was constructed to a new use by maintaining elements of the structure and adapting such

elements to a new use.

(2) "Affiliate" means an entity that directly or indirectly controls, is under common

control with, or is controlled by the business. Control exists in all cases in which the entity is a

member of a controlled group of corporations as defined pursuant to § 1563 of the Internal

Revenue Code of 1986 (26 U.S.C. § 1563) or the entity is an organization in a group of

organizations under common control as defined pursuant to subsection (b) or (c) of § 414 of the

Internal Revenue Code of 1986 (26 U.S.C. § 414). A taxpayer may establish by clear and

convincing evidence, as determined by the tax administrator, that control exists in situations

involving lesser percentages of ownership than required by those statutes. An affiliate of a

business may contribute to meeting either the capital investment or full-time employee

requirements of a business that applies for a credit under this chapter.

(3) "Affordable housing" means housing for sale or rent with combined rental costs or

combined mortgage loan debt service, property taxes, and required insurance that do not exceed

thirty percent (30%) of the gross annual income of a household earning up to eighty percent

(80%) of the area median income, as defined annually by the United States Department of

Housing and Urban Development.

(4) "Applicant" means a developer applying for a rebuild Rhode Island tax credit under

this chapter.

(5) "Business" means a corporation as defined in general laws § 44-11-1(4), or a

partnership, an S corporation, a non-profit corporation, a sole proprietorship, or a limited liability

corporation. A business shall include an affiliate of the business if that business applies for a

credit based upon any capital investment made by an affiliate.

(6) "Capital investment" in a real estate project means expenses by a developer incurred

after application for:

(i) Site preparation and construction, repair, renovation, improvement, equipping, or

furnishing on real property or of a building, structure, facility, or improvement to real property;

(ii) Obtaining and installing furnishings and machinery, apparatus, or equipment,

including but not limited to material goods for the operation of a business on real property or in a

building, structure, facility, or improvement to real property.

In addition to the foregoing, if a developer acquires or leases a qualified development

project, the capital investment made or acquired by the seller or owner, as the case may be, if

pertaining primarily to the premises of the qualified development project, shall be considered a

capital investment by the developer and, if pertaining generally to the qualified development

project being acquired or leased, shall be allocated to the premises of the qualified development

project on the basis of the gross leasable area of the premises in relation to the total gross leasable

area in the qualified development project. The capital investment described herein shall be

defined through rules and regulations promulgated by the commerce corporation.

(7) "Certified historic structure" means a property which is located in the state of Rhode

Island and is

(i) Listed individually on the national register of historic places; or

(ii) Listed individually in the state register of historic places; or

(iii) Located in a registered historic district and certified by either the Rhode Island

historical preservation and heritage commission created pursuant to § 42-45-2 or the Secretary of

the Interior as being of historic significance to the district.

(8) "Commerce corporation" means the Rhode Island commerce corporation established

pursuant to general laws § 42-64-1 et. seq.

(9) "Commercial" shall mean non-residential development.

(10) "Developer" means a person, firm, business, partnership, association, political

subdivision, or other entity that proposes to divide, divides, or causes to be divided real property

into a subdivision or proposes to build, or builds a building or buildings or otherwise improves

land or existing structures, which division, building, or improvement qualifies for benefits under

this chapter.

(11) "Development" means the improvement of land through the carrying out of building,

engineering, or other operations in, on, over, or under land, or the making of any material change

in the use of any buildings or land for the purposes of accommodating land uses.

(12) "Eligibility period" means the period in which a developer may claim a tax credit

under this act, beginning with the tax period in which the commerce corporation accepts

certification from the developer that it has met the requirements of the act and extending

thereafter for a term of five (5) years.

(13) "Full-time employee" means a person who is employed by a business for

consideration for a minimum of at least thirty-five (35) hours per week, or who renders any other

standard of service generally accepted by custom or practice as full-time employment, or who is

employed by a professional employer organization pursuant to an employee leasing agreement

between the business and the professional employer organization for a minimum of thirty-five

(35) hours per week, or who renders any other standard of service generally accepted by custom

or practice as full-time employment, and whose wages are subject to withholding.

(14) "Hope community" means a municipality for which the five (5) year average

percentage of families with income below the federal poverty level exceeds the state five (5) year

average percentage, both as most recently reported by the U.S. Department of Commerce, Bureau

of the Census.

(15) "Mixed use" means a development comprising both commercial and residential

components.

(16) "Partnership" means an entity classified as a partnership for federal income tax

purposes.

(17) "Placed in service" means the earlier of i) substantial construction or rehabilitation

work has been completed which would allow for occupancy of an entire structure or some

identifiable portion of a structure, as established in the application approved by the commerce

corporation board or ii) receipt by the developer of a certificate, permit or other authorization

allowing for occupancy of the project or some identifiable portion of the project by the municipal

authority having jurisdiction.

(18) "Project" means qualified development project as defined under subsection (23) of

this chapter.

(19) "Project area" means land or lands under common ownership or control in which a

qualified development project is located.

(20) "Project cost" means the costs incurred in connection with the qualified development

project or qualified residential or mixed use project by the applicant until the issuance of a

permanent certificate of occupancy, or until such other time specified by the commerce

corporation, for a specific investment or improvement, as defined through rules and regulations

promulgated by the commerce corporation.

(21) "Project financing gap" means

(i) The part of the total project cost that remains to be financed after all other sources of

capital have been accounted for (such sources will include, but not be limited to, developer-

contributed capital), which shall be defined through rules and regulations promulgated by the

commerce corporation, or

(ii) The amount of funds that the state may invest in a project to gain a competitive

advantage over a viable and comparable location in another state by means described in this

chapter.

(22) "Qualified development project" means a specific construction project or

improvement, including lands, buildings, improvements, real and personal property or any

interest therein, including lands under water, riparian rights, space rights and air rights, acquired,

owned, leased, developed or redeveloped, constructed, reconstructed, rehabilitated or improved,

undertaken by a developer, owner or tenant, or both, within a specific geographic area, meeting

the requirements of this chapter, as set forth in an application made to the commerce corporation.

(23) "Recognized historical structure" means a property which is located in the state of

Rhode Island and is commonly considered to be of historic or cultural significance as determined

by the commerce corporation in consultation with the state historic preservation officer.

(24) "Residential" means a development of residential dwelling units.

(25) "Targeted industry" means any advanced, promising or otherwise prioritized

industry identified in the economic development vision and policy promulgated pursuant General

Laws § 42-64.17-1 or, until such time as any such economic development vision and policy is

promulgated, as identified by the commerce corporation.

(26) "Transit oriented development area" means an area in proximity to transit

infrastructure that will be further defined by regulation of the commerce corporation in

consultation with the Rhode Island department of transportation.

(27) "Workforce housing" means housing for sale or rent with combined rental costs or

combined mortgage loan debt service, property taxes, and required insurance that do not exceed

thirty percent (30%) of the gross annual income of a household earning between eighty percent

(80%) and one hundred and forty percent (140%) of the area median income, as defined annually

by the United States Department of Housing and Urban Development.

42-64.20-4. Establishment of program. -- The rebuild Rhode Island tax credit program

is hereby established as a program under the jurisdiction and administration of the commerce

corporation. The program may provide tax credits to applicants meeting the requirements of this

chapter for an eligibility period of five (5) years. On an annual basis, the commerce corporation

shall confer with the executive office of commerce, the department of administration, and the

division of taxation regarding the availability of funds for the award of new tax credits.

42-64.20-5. Tax credits. -- (a) An applicant meeting the requirements of this chapter may

be allowed a credit as set forth hereinafter against taxes imposed upon such person under

applicable provisions of title 44 of the general laws for a qualified development project.

(b) To be eligible as a qualified development project entitled to tax credits, an applicant's

chief executive officer or equivalent officer shall demonstrate to the commerce corporation, at the

time of application, that:

(1) The applicant has committed capital investment or owner equity of not less than

twenty percent (20%) of the total project cost;

(2) There is a project financing gap in which after taking into account all available private

and public funding sources, the project is not likely to be accomplished by private enterprise

without the tax credits described in this chapter; and

(3) The project fulfills the state's policy and planning objectives and priorities in that:

(i) The applicant will, at the discretion of the commerce corporation, obtain a tax

stabilization agreement from the municipality in which the real estate project is located on such

terms as the commerce corporation deems acceptable;

(ii) It (A) is a commercial development consisting of at least 25,000 square feet occupied

by at least one business employing at least 25 full-time employees after construction or such

additional full-time employees as the commerce corporation may determine; (B) is a multi-family

residential development in a new, adaptive reuse, certified historic structure, or recognized

historical structure consisting of at least 20,000 square feet and having at least 20 residential units

in a hope community; or (C) is a mixed use development in a new, adaptive reuse, certified

historic structure, or recognized historical structure consisting of at least 25,000 square feet

occupied by at least one business, subject to further definition through rules and regulations

promulgated by the commerce corporation; and

(iii) Involves a total project cost of not less than $5,000,000, except for a qualified

development project located in a hope community or redevelopment area designated under § 45-

32-4 of the general laws in which event the commerce corporation shall have the discretion to

modify the minimum project cost requirement.

shall be exempt from the requirements of subsections (b)(3)(ii) and (b)(3)(iii) of this section. The

following procedure shall apply to such applicants:

(1) The division of taxation shall remain responsible for determining the eligibility of an

applicant for tax credits awarded under chapter 44-33.6 of the General Laws;

(2) The commerce corporation shall retain sole authority for determining the eligibility of

an applicant for tax credits awarded under this chapter; and

(3) The commerce corporation shall not award in excess of fifteen percent (15%) of the

annual amount appropriated in any fiscal year to applicants seeking tax credits pursuant to this

subsection (c).

(d) Maximum project credit. (i) For qualified development projects, the maximum tax

credit allowed under this chapter shall be the lesser of (1) thirty percent (30%) of the total project

cost; or (2) the amount needed to close a project financing gap (after taking into account all other

private and public funding sources available to the project), as determined by the commerce

corporation.

(ii) The credit allowed pursuant to this chapter shall not exceed fifteen million dollars

($15,000,000) for any qualified development project under this chapter. No building or qualified

development project to be completed in phases or in multiple projects shall exceed the maximum

project credit of fifteen million dollars ($15,000,000) for all phases or projects involved in the

rehabilitation of such building.

(e) Credits available under this chapter shall not exceed twenty percent (20%) of the

project cost, provided, however, that the applicant shall be eligible for additional tax credits of not

more than ten percent (10%) of the project cost, if the qualified development project meets any of

the following criteria or other additional criteria determined by the commerce corporation from

time to time in response to evolving economic or market conditions:

(1) The project includes adaptive reuse or development of a recognized historical

structure;

(2) The project is undertaken by or for a targeted industry;

(3) The project is located in a transit oriented development area;

(4) The project includes residential development of which at least twenty percent (20%)

of the residential units are designated as affordable housing or workforce housing;

(5) The project includes the adaptive reuse of property subject to the requirements of the

industrial property remediation and reuse act, sections 23-19.14-1, et seq. of the general laws; or

(6) The project includes commercial facilities constructed in accordance with the

minimum environmental and sustainability standards, as certified by the commerce corporation

pursuant to Leadership in Energy and Environmental Design or other equivalent standards.

(f) Tax credits shall not be allowed under this chapter prior to the taxable year in which

the project is placed in service.

(g) The amount of a tax credit allowed under this chapter shall be allowable to the

taxpayer in up to five annual increments; no more than thirty percent (30%) and no less than

fifteen percent (15%) of the total credits allowed to a taxpayer under this chapter may be

allowable for any taxable year.

(h) If the portion of the tax credit allowed under this chapter exceeds the taxpayer's total

tax liability for the year in which the relevant portion of the credit is allowed, the amount that

exceeds the taxpayer's tax liability may be carried forward for credit against the taxes imposed for

the succeeding four (4) years, or until the full credit is used, whichever occurs first. Credits

allowed to a partnership, a limited liability company taxed as a partnership, or multiple owners of

property shall be passed through to the persons designated as partners, members or owners

respectively pro rata or pursuant to an executed agreement among such persons designated as

partners, members or owners documenting an alternate distribution method without regard to

their sharing of other tax or economic attributes of such entity.

(i) The commerce corporation in consultation with the division of taxation shall establish,

by regulation, the process for the assignment, transfer or conveyance of tax credits.

(j) For purposes of this chapter, any assignment or sales proceeds received by the

taxpayer for its assignment or sale of the tax credits allowed pursuant to this section shall be

exempt from taxation under title 44 of the general laws. If a tax credit is subsequently revoked or

adjusted, the seller's tax calculation for the year of revocation or adjustment shall be increased by

the total amount of the sales proceeds, without proration, as a modification under chapter 30 of

title 44 of the general laws. In the event that the seller is not a natural person, the seller's tax

calculation under chapters 11, 13, 14, or 17 of title 44 of the general laws, as applicable, for the

year of revocation, or adjustment, shall be increased by including the total amount of the sales

proceeds without proration.

(k) The tax credit allowed under this chapter may be used as a credit against corporate

income taxes imposed under chapters 11, 13, 14, or 17, of title 44, or may be used as a credit

against personal income taxes imposed under chapter 30 of title 44 for owners of pass-through

entities such as a partnership, a limited liability company taxed as a partnership, or multiple

owners of property.

(l) In the case of a corporation, this credit is only allowed against the tax of a corporation

included in a consolidated return that qualifies for the credit and not against the tax of other

corporations that may join in the filing of a consolidated tax return.

(m) Upon request of a taxpayer and subject to annual appropriation, the state shall

redeem such credit in whole or in part for ninety percent (90%) of the value of the tax credit. The

division of taxation, in consultation with the commerce corporation, shall establish by regulation

a redemption process for tax credits.

(n) Projects eligible to receive a tax credit under this chapter may, at the discretion of the

commerce corporation, be exempt from sales and use taxes imposed on the purchase of the

following classes of personal property only to the extent utilized directly and exclusively in such

project: (1) furniture, fixtures and equipment, except automobiles, trucks or other motor vehicles;

or (2) such other materials, including construction materials and supplies, that are depreciable and

have a useful life of one year or more and are essential to the project.

(o) The commerce corporation shall promulgate rules and regulations for the

administration and certification of additional tax credit under subsection (e) of this section,

including criteria for the eligibility, evaluation, prioritization, and approval of projects that

qualify for such additional tax credit.

(p) The commerce corporation shall not have any obligation to make any award or grant

any benefits under this chapter.

42-64.20-6. Administration. -- (a) To obtain the tax credit authorized in this chapter,

applicants shall apply to the commerce corporation board for approval of a qualified development

project for credits under this chapter. Such approval shall at a minimum require:

(1) That the applicant has submitted a completed application as developed by the

commerce corporation in consultation with the division of taxation;

(2) That the chief executive of the commerce corporation provide written confirmation to

the commerce corporation board (i) that the commerce corporation has reviewed the application

and any determination regarding the potential impact on the project's ability to stimulate business

development; retain and attract new business and industry to the state; create jobs, including

good-paying jobs, for its residents; assist with business, commercial, and industrial real estate

development; and generate revenues for necessary state and local governmental services; and (ii)

the total credits to be awarded to the applicant.

(3) That the secretary of commerce provide written confirmation to the commerce

corporation board that the recommendation of the commerce corporation is consistent with the

purposes of this chapter; and

(4) That the director of the office of management and budget provide (i) written

confirmation to the commerce corporation board that the total credits recommended by the

commerce corporation do not exceed the existing and anticipated revenue capacity of the state

and its funding commitment described in 42-64.20-7; and (ii) an analysis of the fiscal impact, if

any, in the year of application and any subsequent year. Such determination shall be made in a

timely manner.

(b) As the commerce corporation board determines whether to grant credits under this

chapter, it shall consider the purposes for which this chapter is established, which include (but are

not necessarily limited to) the following: (i) to create jobs with an emphasis on jobs that pay at

least the most recent state median wage as defined by the Department of Labor and Training; and

(ii) to spur economic growth and new development in Rhode Island.

shall apply to the commerce corporation for a certification that the project has met all

requirements of this chapter and any additional requirements set by the commerce corporation

subsequent to the time the qualified development project is placed in service. The commerce

corporation shall issue to the applicant a certification or a written response detailing any

deficiencies precluding certification. The commerce corporation may deny certification, or may

revoke the delivery of tax credits if the project does not meet all requirements of this chapter and

any additional requirements set by the commerce corporation.

(d) Upon issuance of a certification by the commerce corporation under subsection (c) of

this section, the division of taxation shall, on behalf of the State of Rhode Island, issue tax credit

certificates equaling one hundred percent (100%) of the tax credits approved by the commerce

corporation.

(e) In the event that tax credits or a portion of tax credits are revoked by the commerce

corporation and such tax credits have been transferred or assigned, the commerce corporation will

pursue its recapture rights and remedies against the applicant of the tax credits who shall be liable

to repay to the commerce corporation the face value of all tax credits assigned or transferred, and

all fees paid by the applicant shall be deemed forfeited. No redress shall be sought against

assignees or transferees of such tax credits provided the tax credits were acquired by way of an

arms-length transaction, for value, and without notice of violation, fraud or misrepresentation.

(f) The commerce corporation and division of taxation shall promulgate such rules and

regulations as are necessary to carry out the intent and purpose and implementation of the

responsibilities of each under this chapter.

42-64.20-7. Rebuild Rhode Island tax credit fund. -- There is hereby established at the

commerce corporation a restricted account known as the rebuild Rhode Island tax credit fund (the

"fund") in which all amounts appropriated for the redemption and/or reimbursement of tax credits

under this chapter shall be deposited. The Fund shall be used to pay for the redemption of tax

credits or reimbursement to the state for tax credits applied against a taxpayer's liability. The

Fund shall be exempt from attachment, levy or any other process at law or in equity. The director

of the department of revenue shall make a requisition to the commerce corporation for funding

during any fiscal year as may be necessary to pay for the redemption of tax credits presented for

redemption or to reimburse the state for tax credits applied against a taxpayer's tax liability. The

commerce corporation shall pay from the Fund such amounts as requested by the director of the

department of revenue necessary for redemption or reimbursement in relation to tax credits

granted under this chapter.

42-64.20-8. Program integrity. -- (a) Program integrity being of paramount importance,

the commerce corporation shall establish procedures to ensure ongoing compliance with the terms

and conditions of the program established herein, including procedures to safeguard the

expenditure of public funds and to ensure that the funds further the objectives of the program.

(b) The commerce corporation shall adopt implementation guidelines, directives, criteria,

and rules and regulations pursuant to § 42-35-3 of the general laws, as are necessary to implement

this chapter, including, but not limited to: examples of the enumeration of specific targeted

industries; specific delineation of incentive areas; the determination of additional limits; the

promulgation of procedures and forms necessary to apply for a tax credit, including the

enumeration of the certification procedures; the allocation of new tax credits in consultation with

the executive office of commerce, division of taxation and department of administration; and

provisions for tax credit applicants to be charged an initial application fee, and ongoing service

fees, to cover the administrative costs related to the tax credit.

42-64.20-9. Reporting requirements. -- (a) By August 1st of each year, each applicant

receiving credits under this chapter shall report to the commerce corporation and the division of

taxation the following information:

(1) The number of total full-time employees employed at the development;

(2) The total project cost;

(3) The total cost of materials or products purchased from Rhode Island businesses; and

(4) Such other reasonable information deemed necessary by the secretary of commerce.

(b) By September 1, 2016 and each year thereafter, the commerce corporation shall report

the name, address, and amount of tax credit for each credit recipient during the previous state

fiscal year to the governor, the speaker of the house of representatives, the president of the senate,

and the chairpersons of the house and senate finance committees, the house and senate fiscal

advisors, and the department of revenue. Such report shall include any determination regarding

the potential impact on an approved qualified development project's ability to stimulate business

development; retain and attract new business and industry to the state; create good-paying jobs

for its residents; assist with business, commercial, and industrial real estate development; and

generate revenues for necessary state and local governmental services.

the total number of approved projects, project costs, and associated amount of approved tax

credits approved during the prior fiscal year. This report shall be available to the public for

inspection by any person and shall be published by the commerce corporation on its website and

by the secretary of commerce on the executive office of commerce website.

(d) By October 1st of each year the division of taxation shall report the name, address,

and amount of tax credit received for each credit recipient during the previous state fiscal year to

the governor, the chairpersons of the house and senate finance committees, the house and senate

fiscal advisors, and the department of labor and training.

(e) By November 1st of each year the division of taxation shall report in the aggregate the

information required under subsection 42-64.20-9(a). This report shall be available to the public

for inspection by any person and shall be published by the tax administrator on the tax division

website.

42-64.20-10. Sunset. -- No credits shall be authorized to be reserved pursuant to this

chapter after December 31, 2018.

SECTION 4. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.21

RHODE ISLAND TAX INCREMENT FINANCING

42-64.21-1. Short title. -- This act shall be known and may be cited as the "Rhode Island

Tax Increment Financing Act of 2015."

42-64.21-2. Legislative findings. -- (a) It is hereby found and declared that due to long-

term and short-term stagnant or declining economic trends in Rhode Island, businesses in the

state have found it difficult to make investments that would stimulate economic activity and

create new jobs for the citizens of the state. Moreover, such economic trends have caused

business closures or out-of-state business relocations, while other out-of-state businesses are

deterred from relocating to this state. This situation has contributed to a high rate of

unemployment in the state. Consequently, a need exists to promote the retention and expansion of

existing jobs, stimulate the creation of new jobs, attract new business and industry to the state,

and stimulate growth in real estate developments and/or businesses that are prepared to make

meaningful investment and foster job creation in Rhode Island.

(b) Through the establishment of a tax increment financing program, Rhode Island can

take steps to stimulate business development; retain and attract new business and industry to the

state; create good-paying jobs for its residents; assist with business, commercial, and industrial

real estate development; and generate revenues for necessary state and local governmental

services.

42-64.21-3. Definitions. -- as used in this chapter:

(1) "Applicant" means a developer proposing to enter into a tax increment financing

agreement under this chapter.

(2) "Commerce corporation" means the Rhode Island commerce corporation established

pursuant to general laws § 42-64-1 et. seq.

(3) "Developer" means a person, firm, corporation, partnership, association, political

subdivision, or other entity that proposes to divide, divides, or causes to be divided real property

into a subdivision or proposes to build, or builds a building or buildings or otherwise improves

land or existing structures, which division, building, or improvement qualifies for benefits under

this chapter.

(4) "Hope Community" means a municipality for which the five (5) year average

percentage of families with income below the federal poverty level exceeds the state five (5) year

average percentage, both most recently reported by the U.S. Department of Commerce, Bureau of

the Census.

(5) "Eligible revenue" means the incremental revenues set forth in § 42-64.21-5 of this

chapter.

(6) "Incremental" means (i) net new revenue to the State of Rhode Island as defined by

the commerce corporation, in consultation with the department of revenue as established in

Chapter 42-142 of the general laws, or (ii) existing revenue at substantial risk of loss to the State

of Rhode Island as defined by the commerce corporation in consultation with the department of

revenue.

(7) "Project area" means land or lands under common ownership or control as certified by

the commerce corporation.

(8) "Project financing gap" means:

(i) The part of the total project cost that remains to be financed after all other sources of

capital have been accounted for, including, but not limited to, developer-contributed capital,

which shall be defined through rules and regulations promulgated by the commerce corporation;

(ii) The amount of funds that the state may invest in a project to gain a competitive

advantage over a viable and comparable location in another state by means described in this

chapter.

(9) "Qualified development project" means a specific construction project or

improvement, including lands, buildings, improvements, real and personal property or any

interest therein, including lands under water, riparian rights, space rights and air rights, acquired,

owned, leased, developed or redeveloped, constructed, reconstructed, rehabilitated or improved,

undertaken by a developer, owner or tenant, or both, within a specific geographic area, meeting

the requirements of this chapter, as set forth in an application made to the commerce corporation.

(10) "Qualifying TIF area" shall mean an area containing a qualified development project

identified by the commerce corporation as a priority because of its potential to generate, preserve

or otherwise enhance jobs or its potential to produce, preserve or otherwise enhance housing

units. The commerce corporation shall take into account the following factors in determining

whether a qualified development project is a priority:

(i) Generation or preservation of manufacturing jobs;

(ii) Promotion of targeted industries;

(iii) Location in a port or airport district;

(iv) Location in an industrial or research park;

(v) Location in a transit oriented development area;

(vi) Location in a hope community;

(vii) Location in an area designated by a municipality as a redevelopment area under §

45-32-4 of the general laws; and

(viii) Location in an area located within land approved for closure under any federal

commission on base realignment and closure action.

(11) "Revenue increment base" means the amounts of all eligible revenues from sources

within the qualifying TIF area in the calendar year preceding the year in which the TIF agreement

is executed, as certified by the division of taxation.

(12) "TIF agreement" means an agreement between the commerce corporation and a

developer, under which, in exchange for the benefits of the funding derived from qualification

under this chapter, the developer agrees to perform any work or undertaking necessary for a

qualified development project, including the clearance, development or redevelopment,

construction, or rehabilitation of any structure or improvement of commercial, industrial, or

residential property; public infrastructure; preexisting municipally-owned stadium of 10,000 seats

or greater; or utilities within a qualifying TIF area.

(13) "TIF payment" means reimbursement of all or a portion of the project financing gap

of a qualified development project from the division of taxation as provided under this chapter.

(14) "Targeted industry" means any advanced, promising or otherwise prioritized

industry identified in the economic development vision and policy promulgated pursuant General

Laws § 42-64.17-1 or, until such time as any such economic development vision and policy is

promulgated, as identified by the commerce corporation.

(15) "Transit oriented development area" means an area in proximity to transit

infrastructure that will be further defined by regulation of the commerce corporation in

consultation with the Rhode Island department of transportation.

42-64.21-4. TIF program. -- The commerce corporation shall establish a tax increment

financing program for the purpose of encouraging qualified development projects in qualifying

TIF areas.

42-64.21-5. Financing. -- (a) Up to the limits established in subsection (b) of this section

and in accordance with a TIF agreement, the division of taxation shall pay to the developer

incremental state revenues directly realized from projects or businesses operating in the

qualifying TIF area from the taxes assessed and collected under chapters 11, 13, 14, 17, 18, 19,

and 30 of Title 44 of the general laws or realized from such venue ticket sales or parking taxes as

may be established and levied under state law.

(b) Up to 75 percent of the projected annual incremental revenues may be allocated under

a TIF agreement. The incremental revenue for the revenues listed in subsection (a) of this section

shall be calculated as the difference between the amount collected in any fiscal year from any

eligible revenue source included in the TIF agreement, less the revenue increment base for that

eligible revenue.

incremental revenues allocated under a TIF agreement and transfer such amounts to the general

treasurer for deposit in a restricted account known as the TIF fund. The TIF fund shall be used

solely to pay for the incentives granted under this chapter. The director of the department of

revenue shall annually determine if a surplus exists in the TIF fund over amounts necessary to

fund incentives under this chapter in a fiscal year and may authorize the general treasurer to

transfer any surplus to the general fund. The unexpended balance of such sum of money received

and appropriated for the TIF fund remaining in the treasury at the close of each fiscal year, shall

be continued to and is hereby annually appropriated for the same account for the ensuing year.

(d) Under conditions defined by the commerce corporation and in consultation with the

department of revenue, those taxes eligible for inclusion in this TIF program may instead be

exempted up to the levels permitted by this act in cases of significant taxpayers. Such significant

taxpayers may instead be required to contribute payments in lieu of taxes (PILOTs) into a

dedicated fund established by the commerce corporation. Such payments shall be up to 75 percent

of the amount that would otherwise be due to the state in the form of taxation as per the

provisions of this statute. Such dedicated funds must be used for the purposes described in this

act. The commerce corporation may issue revenue bonds secured by this dedicated fund. Such

bonds shall not be a general obligation of the state.

(e) The commerce corporation shall promulgate an application form and procedure for

the program.

42-64.21-6. Agreements permitted. -- (a) The commerce corporation is authorized to

enter into a TIF agreement with a developer for any qualified development project located within

a qualifying TIF area. The TIF agreement between the commerce corporation and the developer

shall contain a provision acknowledging that the benefits of said agreement, with the exception of

42-64.21-5 (d) of this chapter, are subject to such annual appropriation.

(b) The decision whether or not to enter into a TIF agreement is solely within the

discretion of the commerce corporation. However, to enter into an agreement with the commerce

corporation as authorized in this chapter, applicants shall apply:

(1) To the commerce corporation for approval of the proposed project. Such approval

shall require:

(i) That the applicant has submitted a completed application as developed by the

commerce corporation;

(ii) That the chief executive officer of the commerce corporation provide written

confirmation to the commerce corporation board that (A) the commerce corporation has reviewed

the application and any determination regarding the potential impact on the project's ability to

promote the retention and expansion of existing jobs, stimulate the creation of new jobs,

including good-paying jobs, attract new business and industry to the state, and stimulate growth

in real estate developments and/or businesses that are prepared to make meaningful investment

and foster job creation in the state; and (B) the length of the TIF agreement and the percentage of

incremental revenues to be allocated under the TIF agreement.

(iii) That the secretary of commerce provide written confirmation to the commerce

corporation board that the recommendation of the commerce corporation is consistent with the

purposes of this chapter.

pursuant to this section may, upon notice to and consent of the corporation, pledge and assign as

security for any loan, any or all of its right, title and interest in and to the TIF agreement and in

the TIF payments due thereunder, and the right to receive same, along with the rights and

remedies provided to the developer under such agreement. Any such assignment shall be an

absolute assignment for all purposes, including the federal bankruptcy code.

(d) Any pledge of TIF payments made by the developer shall be valid and binding from

the time when the pledge is made and filed in the records of the commerce corporation. The TIF

agreement and payments so pledged and thereafter received by the developer shall immediately

be subject to the lien of the pledge without any physical delivery thereof or further act, and the

lien of any pledge shall be valid and binding as against all parties having claims of any kind in

tort, contract, or otherwise against the developer irrespective of whether the parties have notice

thereof.

(e) The commerce corporation shall be entitled to impose an application fee and impose

other charges upon developers associated with the review of a project and the administration of

the program.

(f) Maximum agreement amount. In no event shall the amount of the reimbursements

under a TIF agreement exceed 30 percent of the total cost of the project and provided further, that

the commerce corporation may exempt public infrastructure, a preexisting municipally-owned

stadium of 10,000 seats or greater, or utilities from said 30 percent cap.

42-64.21-7. Program integrity. -- Program integrity being of paramount importance, the

commerce corporation shall establish procedures to ensure ongoing compliance with the terms

and conditions of the program established herein, including procedures to safeguard the

expenditure of public funds and to ensure that the funds further the objectives of the program.

42-64.21-8. Reporting requirements. -- (a) By September 1, 2016 and each year

thereafter, the commerce corporation shall report the name, address, and incentive amount of each

agreement entered into during the previous state fiscal year to the division of taxation.

(b) By December 1, 2016 and each year thereafter, the division of taxation shall provide

the governor with the sum, if any, to be appropriated to fund the program. The governor shall

submit to the general assembly printed copies of a budget including the total of the sums, if any,

as part of the governor's budget required to be appropriated for the program created under this

chapter.

the governor, the speaker of the house, the president of the senate, the chairpersons of the house

and senate finance committees, and the house and senate fiscal advisors the address and incentive

amount of each agreement entered into during the previous state fiscal year as well as any

determination regarding the measurable impact of each and every agreement on the retention and

expansion of existing jobs, stimulation of the creation of new jobs, attraction of new business and

industry to the state, and stimulation of growth in real estate developments and/or businesses that

are prepared to make meaningful investment and foster job creation in the state.

42-64.21-9. Sunset. -- The commerce corporation shall enter into no agreement under

this chapter after December 31, 2018.

SECTION 5. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.22

TAX STABILIZATION INCENTIVE

42-64.22-1. Findings and declarations. -- The general assembly finds and declares:

(a) The general assembly seeks to enact several economic stimulus laws to assist Rhode

Island businesses and municipalities, including legislation providing incentives to encourage

economic and real estate development and to create jobs throughout this state.

(b) In order to encourage this economic growth, the general assembly seeks to enhance

and strengthen several of the current statutes governing economic development in this state. The

general assembly's goal is to create an economic stimulus program to promote development and

growth and address the economic challenges currently impacting the State and local

municipalities.

42-64.22-2. Definitions. -- As used in this chapter:

(1) "Adaptive reuse" means the conversion of an existing structure from the use for which

it was constructed to a new use by maintaining elements of the structure and adapting such