law21162-14

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art.014/7/014/6/014/5/014/4/014/3/014/2/016/1

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ARTICLE 14 AS AMENDED

RELATING TO HOUSING

SECTION 1. Chapter 42-51 of the General Laws entitled "Governor's Commission on

Disabilities" is hereby amended by adding thereto the following section:

42-51-13. Livable home modification program.

(a) There is hereby established the livable home modification program for home

modification and accessibility enhancements to construct, retrofit, and/or renovate residences to

allow individuals with significant disabilities to remain in community settings.

(b) Any eligible resident who retrofits or hires an individual to retrofit an existing

residence;, provided that, such retrofitting meets the qualification criteria and guidelines as

established by the commission, shall be eligible for a livable home modification grant of fifty

percent (50%) of the total amount spent, not to exceed an amount annually appropriated by the

commission in accordance with § 35-3-24.

(1) Income eligibility and other qualifications for a grant;

(2) Application guidelines;

(3) The maximum reimbursement;

(4) Filing claims for reimbursement; and

(5) Appeal procedures for applicants who are determined to be ineligible.

(d) By August 15 of each year, the commission shall submit an annual report to the

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

committees for the period from July 1 to June 30 on the actual;:

(1) Number of grants issued to qualifying individuals;

(2) Number of applications which who that did not qualify;

(3) Total dollar amount of grants issued;

(4) Average dollar amount of the grants issued;

(5) Number of retrofits by accessibility features; and

(6) Prognosis for the individual if the retrofit had not been made which that which shall

determine:

(i) Increased likelihood of falls and other related emergency room, hospital, and/or

rehabilitation expenses;

(ii) Loss of independence; and

(iii) Move into a long-term-care facility.

SECTION 2. Section 42-64.19-3 of the General Laws in Chapter 42-64.19 entitled

"Executive Office of Commerce" is hereby amended to read as follows:

42-64.19-3. Executive office of commerce.

(a) There is hereby established within the executive branch of state government an

executive office of commerce effective February 1, 2015, to serve as the principal agency of the

executive branch of state government for managing the promotion of commerce and the economy

within the state and shall have the following powers and duties in accordance with the following

schedule:

(1) On or about February 1, 2015, to operate functions from the department of business

regulation;

(2) On or about April 1, 2015, to operate various divisions and functions from the

department of administration;

(3) On or before September 1, 2015, to provide to the Senate and the House of

Representatives a comprehensive study and review of the roles, functions, and programs of the

department of administration and the department of labor and training to devise recommendations

and a business plan for the integration of these entities with the office of the secretary of commerce.

The governor may include such recommendations in the Fiscal Year 2017 budget proposal.; and

(4) On or before July 1, 2021, to provide for the hiring of a deputy secretary of commerce

and housing, who shall report directly to the secretary of commerce. The deputy secretary of

commerce and housing shall:

(i) Prior to hiring, have completed and earned a minimum of a master's graduate degree in

the field of urban planning, economics, or a related field of study or possess a juris doctor law

degree. Preference shall be provided to candidates having earned an advanced degree consisting of

an L.L.M. Law law degree or Ph.D in urban planning or economics. Qualified candidates must

have documented five (5) years’ full-time experience employed in the administration of housing

policy and/or development.;

(ii) Be responsible for overseeing all housing initiatives in the state of Rhode Island and

developing a housing plan, including, but not limited to, the development of affordable housing

opportunities to assist in building strong community efforts and revitalizing neighborhoods;

(iii) Coordinate with all agencies directly related to any housing initiatives including, but

not limited to, the Rhode Island housing and mortgage finance corporation, coastal resources

management council (CRMC), and state departments including, but not limited to,: the department

of environmental management (DEM), the department of business regulation (DBR), the

department of transportation (DOT) and statewide planning; and

(iv) Coordinate with the housing resources commission to formulate an integrated housing

report to include findings and recommendations to the governor, speaker of the house, senate

president, each chambers' chamber’s finance committee, and any committee whose purview is

reasonably related to, including, but not limited to, issues of housing, municipal government, and

health on or before December 31, 2021, and annually thereafter which report shall include, but not

be limited to, the following:

(A) The total number of housing units in the state with per community counts, including

the number of Americans with Disabilities Act compliant special needs units.;

(B) The occupancy and vacancy rate of the units referenced in (A) subsection

(a)(4)(iv)(A).;

of the prior three (3) years in figures and as a percentage.;

(D) The number of net new units in development and number of units completed since the

prior report.;

(E) For each municipality the number of single-family, two-(2) family (2), and three-(3)

family (3) units, and multi-unit housing delineated sufficiently to provide the lay reader a useful

description of current conditions, including a statewide sum of each unit type.;

(F) The total number of units by income type.;

(G) A projection of the number of status quo units.;

(H) A projection of the number of units required to meet housing formation trends.;

(I) A comparison of regional and other similarly situated state funding sources which that

support housing development including a percentage of private, federal, and public support.;

(J) A reporting of unit types by number of bedrooms for rental properties including an

accounting of all:

(I) Single-family units;

(II) Accessory dwelling units;

(III) Two-(2) family (2) units;

(IV) Three-(3) family (3) units;

(V) Multi-unit sufficiently delineated units;

(VI) Mixed use sufficiently delineated units; and

(VII) Occupancy and Vacancy vacancy rates for the prior three (3) years.;

(K) A reporting of unit types by ownership including an accounting of all:

(I) Single-family units;

(II) Accessory dwelling units;

(III) Two-(2) family (2) units;

(IV) Three-(3) family (3) units;

(V) Multi-unit sufficiently delineated units;

(VI) Mixed use sufficiently delineated units; and

(VII) Occupancy and Vacancy vacancy rates for the prior three (3) years.;

(L) A reporting of the number of applications submitted or filed for each community

according to unit type and an accounting of action taken with respect to each application to include,

approved, denied, appealed, approved upon appeal, and if approved, the justification for each

approval.;

(M) A reporting of permits for each community according to affordability level that were

sought, approved, denied, appealed, approved upon appeal, and if approved, the justification for

each approval.;

(N) A reporting of affordability by municipality which that shall include the following:

(I) The percent and number of units of extremely low-, very low-, low-, moderate-, fair-

market rate, and above-market-rate units; including the average and median costs of those units.;

(II) The percent and number of units of extremely low-, very low-, low-, and moderate-

income housing units required to satisfy the ten percent (10%) requirement pursuant to chapter 24

of title 45; including the average and median costs of those units.;

(III) The percent and number of units for the affordability levels above moderate-income

housing, including a comparison to fair-market rent and fair-market homeownership; including the

average and median costs of those units.;

(IV) The percentage of cost burden by municipality with population equivalent.;

(V) The percentage and number of home financing sources, including all private, federal,

state, or other public support.; and

(VI) The cost growth for each of the previous five (5) years by unit type at each

affordability level, by unit type.;

(O) A reporting of municipal healthy housing stock by unit type and number of bedrooms

and provide providing an assessment of the state's existing housing stock and enumerate

enumerating any risks to the public health from that housing stock, including, but not limited to,:

the presence of lead, mold, safe drinking water, disease vectors (insects and vermin), and other

conditions which that are an identifiable health detriment. Additionally, the report shall provide

the percentage of the prevalence of health risks by age of the stock for each community by unit

type and number of bedrooms.; and

(P) A recommendation shall be included with the report required under this section which

that shall provide consideration to any and all populations, ethnicities, income levels, and other

relevant demographic criteria determined by the deputy secretary, and with regard to any and all of

the criteria enumerated elsewhere in the report separately or in combination, provide

recommendations to resolve any issues which that provide an impediment to the development of

housing, including specific data and evidence in support for of the recommendation. All data and

methodologies used to present evidence are subject to review and approval of the chief of revenue

analysis, and that approval shall include an attestation of approval by the chief to be included in the

report.

(b) In this capacity, the office shall:

(1) Lead or assist state departments and coordinate business permitting processes in order

to:

(i) Improve the economy, efficiency, coordination, and quality of the business climate in

the state;

(ii) Design strategies and implement best practices that foster economic development and

growth of the state's economy;

(iii) Maximize and leverage funds from all available public and private sources, including

federal financial participation, grants, and awards;

(iv) Increase public confidence by conducting customer centric operations whereby

commercial enterprise enterprises are supported and provided programs and services that will

grow and nurture the Rhode Island economy; and

(v) Be the state's lead agency for economic development.

(2) Provide oversight and coordination of all housing initiatives in the state of Rhode

Island.

functions which that promote, enhance, or regulate various service and functions in order to

promote the reform and improvement of the regulatory function of the state.

SECTION 3. Chapter 42-128 of the General Laws entitled "Housing Resources Act of

1998" is hereby amended by adding thereto the following sections:

42-128-2.1. Housing Production Fund.

(a) There is hereby established a restricted receipt account within the general fund of the

state, to be known as the housing production fund. Funds from this account shall be administered

by the Rhode Island housing and mortgage finance corporation, subject to program and reporting

guidelines adopted by the coordinating committee of the Rhode Island housing resources

commission for housing production initiatives, including:

(1) Financial assistance by loan, grant, or otherwise, for the planning, production, or

preservation of affordable housing in Rhode Island for households earning not more than eighty

percent (80%) of area median income; and

(2) Technical and financial assistance for cities and towns to support increased local

housing production, including by reducing regulatory barriers and through the housing incentives

for municipalities program; and.

(b) In administering the housing production fund, the Rhode Island housing and mortgage

finance corporation shall give priority to households either exiting homelessness or earning not

more than thirty percent (30%) of area median income.

SECTION 4. Sections 42-128-2 and 42-128-11 Chapter 42-128 of the General Laws

entitled "Housing Resources Act of 1998" are hereby amended to read as follows.

42-128-2. Rhode Island housing resources agency created.

There is created within the executive department a housing resources agency with the

following purposes, organization, and powers:

(1) Purposes:

(i) To provide coherence to the housing programs of the state of Rhode Island and its

departments, agencies, commissions, corporations, and subdivisions.

(ii) To provide for the integration and coordination of the activities of the Rhode Island

housing and mortgage finance corporation and the Rhode Island housing resources commission.

(2) Coordinating committee – Created – Purposes and powers:

(i) The coordinating committee of the housing resources agency shall be comprised of the

chairperson of the Rhode Island housing and mortgage finance corporations corporation; the

chairperson of the Rhode Island housing resources commission; the director of the department of

administration, or the designee of the director; and the executive director of the Rhode Island

housing and mortgage finance corporation. The chairperson of the Rhode Island housing resources

commission shall be chairperson of the coordinating committee.

(ii) The coordinating committee shall:

(a) (A) Shall develop and shall implement, with the approval of the Rhode Island housing

and mortgage finance corporation and the Rhode Island housing resources commission, a

memorandum of agreement describing the fiscal and operational relationship between the Rhode

Island housing and mortgage finance corporation and the Rhode Island housing resources

commission and shall define which programs of federal assistance will be applied for on behalf of

the state by the Rhode Island housing and mortgage finance corporation and the Rhode Island

housing resources commission.

(b) (B) is Is authorized and empowered to negotiate and to enter into contracts and

cooperative agreements with agencies and political subdivisions of the state, not-for-profit

corporations, for profit corporations, and other partnerships, associations and persons for any lawful

purpose necessary and desirable to effect the purposes of this chapter, subject to the provisions of

chapter 2 of title 37 as applicable.

(3) There is hereby established a restricted receipt account within the general fund of the

state. Funds from this account shall be used to provide for housing and homelessness initiatives

including housing production, the lead hazard abatement program, housing rental subsidy, housing

retention assistance, and homelessness services and prevention assistance with priority given to

homeless veterans and homeless prevention assistance and housing retention assistance with

priority to veterans.

42-128-11. Executive director – Employees.

The commission governor shall appoint from qualified candidates, with the advice of the

coordinating committee, an executive director, who shall not be subject to the provisions of chapter

4 of title 36, and who shall serve as the state housing commissioner and may also serve in the

executive office of commerce as the deputy secretary of housing. The commission shall set the

compensation and the terms of employment of the executive director. The commission shall also

cause to be employed such staff and technical and professional consultants as may be required to

carry out the powers and duties set forth in this chapter. All staff, including the executive director,

may be secured through a memorandum of agreement with the Rhode Island housing and mortgage

finance corporation, or any other agency or political subdivision of the state with the approval of

the relevant agency or political subdivision, as provided for in § 42-128-2(2)(ii). Any person who

is in the civil service and is transferred to the commission may retain civil service status.

SECTION 5. Title 42 of the General Laws entitled "State Affairs and Government" is

hereby amended by adding thereto the following chapter:

CHAPTER 42-128.4 42-128.3

HOUSING INCENTIVES FOR MUNICIPALITIES

42-128.4 42-128.4-1 42-128.3-1. Short title.

This chapter shall be known as "Housing Incentives for Municipalities."

42-128.4-2 42-128.3-2. Establishment of program.

There is hereby established a housing incentive for municipalities program to be

administered as set forth in section § 42-128-2.1, in consultation with the division of statewide

planning and the Rhode Island housing and mortgage finance corporation.

42-128.4-4 42-128.4-3 42-128.3-3. Purposes.

The coordinating committee is authorized and empowered to carry out the program for the

following purposes:

(a) (1) To foster and maintain strong collaborations with municipalities in the state.

(b) (2) To support and assist municipalities in promoting housing production that

adequately meets the needs of Rhode Island's current and future residents.

residents within their local communities.

(d) (4) To enable residents to live near convenient public transit and other commercial and

cultural resources.

(e) (5) To make development decisions fair, predictable, and cost effective.

(f) (6) To foster distinctive, attractive, and resilient communities, while preserving the

state's open space, farmland, and natural beauty.

42-128.4-4 42-128.3-4. Definitions.

As used in this chapter:

(1) "The coordinating Coordinating committee" means the Rhode Island housing

resources coordinating committee established pursuant to § 42-128-2(2).

(2) "Eligible locations'' means an area designated by the coordinating committee as a

suitable site for a housing incentive district by virtue of its infrastructure, existing underutilized

facilities, or other advantageous qualities, including (i) proximity Proximity to public transit

centers, including commuter rail, bus, and ferry terminals; or (ii) proximity Proximity to areas of

concentrated development, including town and city centers or other existing commercial districts.

(3) "Eligible student" means an individual that who (i) lives Lives in a newly constructed

dwelling unit within a housing incentive district, to the extent that the unit could not have been

realized under the underlying zoning,; and (ii) attends Attends a school in the city or town.

(4) (5) "School impact offset payments" means a payment to a city or town to help offset

increased municipal costs of educating eligible students.

(5) (4) "Housing incentive district" means an overlay district adopted by a city or town

pursuant to this chapter. A housing incentive district is intended to encourage residential

development and must permit minimum residential uses. A housing incentive district may

accommodate uses complimentary complementary to the primary residential uses, as deemed

appropriate by the adopting city or town; however, the majority of development on lots within a

housing incentive district must be residential. Land development plans within a housing incentive

district shall be treated as minor land development plans, as defined by § 45-23-32, unless otherwise

specified by ordinance.

42-128.4-5 42-128.3-5. Adoption of housing incentive districts.

(a) In its zoning ordinance, a city or town may adopt a housing incentive district in any

eligible location.

(b) The adoption, amendment, or repeal of such ordinance shall be in accordance with the

provisions of chapter 45-24 of title 45.

requirements established by the coordinating committee.

(d) The zoning ordinance for each housing incentive district shall specify the procedure for

land development and subdivision review within the district in accordance with this chapter and

the regulations of the coordinating committee.

(e) Nothing in this chapter shall affect a city or town's authority to amend its zoning

ordinances under chapter 45-24 of title 45.

42-128.4-6 42-128.3-6. Assistance to municipalities.

(a) The coordinating committee is authorized and empowered, at its discretion, to provide

all manner of support and assistance to municipalities in connection with fostering local housing

production, including, but not limited to:

(1) Providing technical assistance for the preparation, adoption, or implementation of laws,

regulations, or processes related to residential development; and

(2) Authorizing the Rhode Island housing and mortgage finance corporation to issue school

impact offset payments to participating municipalities.

42-128.4-7 42-128.3-7. Rules and regulations - Reports.

(a) The coordinating committee is hereby authorized to promulgate such rules and

regulations as are necessary to fulfill the purposes of this chapter, including, but not limited to,

provisions relating to: application criteria; eligible locations for housing incentive districts;

minimum requirements for housing incentive districts; eligible students for the calculation

of school impact offset payments; and the amount and method of payment to cities and towns

for school impact offset payments.

(b) The coordinating committee shall include in its annual report information on the

commitment and disbursement of funds allocated under the program. The report shall be provided

to the governor, the secretary of commerce, speaker of the house of representatives, and the

president of the senate.

42-128.4-8 42-128.3-8. Program integrity.

Program integrity being of paramount importance, the coordinating committee 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 purposes of the program.

42-128.4-9 42-128.3-9. Cooperation.

Any department, agency, council, board, or other public instrumentality of the state shall

cooperate with the coordinating committee in relation to the implementation, execution, and

administration of the program created under this chapter.

SECTION 6. Section 44-25-1 of the General Laws in Chapter 44-25 entitled "Real Estate

Conveyance Tax" is hereby amended to read as follows:

44-25-1. Tax imposed – Payment – Burden.

(a) There is imposed, on each deed, instrument, or writing by which any lands, tenements,

or other realty sold is granted, assigned, transferred, or conveyed to, or vested in, the purchaser or

purchasers, or any other person or persons, by his, or her, or their direction, or on any grant,

assignment, transfer, or conveyance or such vesting, by such persons which that has the effect of

making any real estate company an acquired real estate company, when the consideration paid

exceeds one hundred dollars ($100), a tax at the rate of two dollars and thirty cents ($2.30) for each

five hundred dollars ($500), or fractional part of it, that is paid for the purchase of property or the

interest in an acquired real estate company (inclusive of the value of any lien or encumbrance

remaining at the time of the sale, grant, assignment, transfer or conveyance or vesting occurs, or in

the case of an interest in an acquired real estate company, a percentage of the value of such lien or

encumbrance equivalent to the percentage interest in the acquired real estate company being

granted, assigned, transferred, conveyed or vested), which. The tax is payable at the time of making,

the execution, delivery, acceptance or presentation for recording of any instrument affecting such

transfer grant, assignment, transfer, conveyance or vesting. In the absence of an agreement to the

contrary, the tax shall be paid by the grantor, assignor, transferor or person making the conveyance

or vesting.

(b) In addition to the tax imposed by paragraph subsection (a), there is imposed, on each

deed, instrument, or writing by which any residential real property sold is granted, assigned,

transferred, or conveyed to, or vested in, the purchaser or purchasers, or any other person or

persons, by his, or her, or their direction, or on any grant, assignment, transfer, or conveyance or

such vesting, by such persons which that has the effect of making any real estate company an

acquired real estate company, when the consideration paid exceeds eight hundred thousand dollars

($800,000), a tax at the rate of two dollars and thirty cents ($2.30) for each five hundred dollars

($500), or fractional part of it, of the consideration in excess of eight hundred thousand dollars

($800,000) that is paid for the purchase of property or the interest in an acquired real estate company

(inclusive of the value of any lien or encumbrance remaining at the time of the sale, grant,

assignment, transfer, or conveyance or vesting occurs, or in the case of an interest in an acquired

real estate company, a percentage of the value of such lien or encumbrance equivalent to the

percentage interest in the acquired real estate company being granted, assigned, transferred,

conveyed, or vested). The tax imposed by this paragraph subsection shall be paid at the same time

and in the same manner as the tax imposed by paragraph subsection (a).

(bc) In the event no consideration is actually paid for the lands, tenements, or realty, the

instrument or interest in an acquired real estate company of conveyance shall contain a statement

to the effect that the consideration is such that no documentary stamps are required.

(d) The tax shall be distributed as follows:

(i) (1) With respect to the tax imposed by paragraph subsection (a): the tax administrator

shall contribute to the distressed community relief program the sum of thirty cents ($.30) per two

dollars and thirty cents ($2.30) of the face value of the stamps to be distributed pursuant to § 45-

13-12, and to the housing resources commission restricted receipts account the sum of thirty cents

($.30) per two dollars and thirty cents ($2.30) of the face value of the stamps. Funds will be

administered by the office of housing and community development, through the housing resources

commission. The state shall retain sixty cents ($.60) for state use. The balance of the tax shall be

retained by the municipality collecting the tax.

(ii) (2) With respect to the tax imposed by paragraph subsection (b): the tax administrator

shall contribute the entire tax to the housing production fund established pursuant to § 42-128-2.1.

(iii) (3) Notwithstanding the above, in the case of the tax on the grant, transfer, assignment

or conveyance or vesting with respect to an acquired real estate company, the tax shall be collected

by the tax administrator and shall be distributed to the municipality where the real estate owned by

the acquired real estate company is located; provided, however, in the case of any such tax collected

by the tax administrator, if the acquired real estate company owns property located in more than

one municipality, the proceeds of the tax shall be allocated amongst said municipalities in the

proportion the assessed value of said real estate in each such municipality bears to the total of the

assessed values of all of the real estate owned by the acquired real estate company in Rhode Island.

Provided, however, in fiscal years 2004 and 2005, from the proceeds of this tax, the tax

administrator shall deposit as general revenues the sum of ninety cents ($.90) per two dollars and

thirty cents ($2.30) of the face value of the stamps. The balance of the tax on the purchase of

property shall be retained by the municipality collecting the tax. The balance of the tax on the

transfer with respect to an acquired real estate company, shall be collected by the tax administrator

and shall be distributed to the municipality where the property for which interest is sold is

physically located. Provided, however, that in the case of any tax collected by the tax administrator

with respect to an acquired real estate company where the acquired real estate company owns

property located in more than one municipality, the proceeds of the tax shall be allocated amongst

the municipalities in proportion that the assessed value in any such municipality bears to the

assessed values of all of the real estate owned by the acquired real estate company in Rhode Island.

(d) (e) For purposes of this section, the term "acquired real estate company" means a real

estate company that has undergone a change in ownership interest if (i) (1) such The change does

not affect the continuity of the operations of the company; and (ii) (2) the The change, whether

alone or together with prior changes has the effect of granting, transferring, assigning, or conveying

or vesting, transferring directly or indirectly, 50% or more of the total ownership in the company

within a period of three (3) years. For purposes of the foregoing subsection (ii) hereof (e)(2), a

grant, transfer, assignment or conveyance or vesting, shall be deemed to have occurred within a

period of three (3) years of another grant(s), transfer(s), assignment(s), or conveyance(s) or

vesting(s) if during the period the granting, transferring, assigning, or conveying or party provides

the receiving party a legally binding document granting, transferring, assigning, or conveying or

vesting said the realty or a commitment or option enforceable at a future date to execute the grant,

transfer, assignment, or conveyance or vesting.

(e) (f) A real estate company is a corporation, limited liability company, partnership or

other legal entity which that meets any of the following:

(i) (1) Is primarily engaged in the business of holding, selling, or leasing real estate, where

90% or more of the ownership of said the real estate is held by 35 or fewer persons and which

company either (a) (i) derives 60% or more of its annual gross receipts from the ownership or

disposition of real estate; or (b) (ii) owns real estate the value of which comprises 90% or more of

the value of the entity's entire tangible asset holdings exclusive of tangible assets which that are

fairly transferrable and actively traded on an established market; or

(ii) (2) 90% Ninety percent or more of the ownership interest in such entity is held by 35

or fewer persons and the entity owns as 90% or more of the fair market value of its assets a direct

or indirect interest in a real estate company. An indirect ownership interest is an interest in an entity

90% or more of which is held by 35 or fewer persons and the purpose of the entity is the ownership

of a real estate company.

(f) (g) In the case of a grant, assignment, transfer or conveyance or vesting which that

results in a real estate company becoming an acquired real estate company, the grantor, assignor,

transferor, or person making the conveyance or causing the vesting, shall file or cause to be filed

with the division of taxation, at least five (5) days prior to the grant, transfer, assignment, or

conveyance or vesting, notification of the proposed grant, transfer, assignment, or conveyance or

vesting, the price, terms and conditions of thereof, and the character and location of all of the real

estate assets held by the real estate company and shall remit the tax imposed and owed pursuant to

subsection (a) hereof. Any such grant, transfer, assignment, or conveyance or vesting which results

in a real estate company becoming an acquired real estate company shall be fraudulent and void as

against the state unless the entity notifies the tax administrator in writing of the grant, transfer,

assignment, or conveyance or vesting as herein required in subsection (f) (g) hereof and has paid

the tax as required in subsection (a) hereof. Upon the payment of the tax by the transferor, the tax

administrator shall issue a certificate of the payment of the tax which certificate shall be recordable

in the land evidence records in each municipality in which such real estate company owns real

estate. Where the real estate company has assets other than interests in real estate located in Rhode

Island, the tax shall be based upon the assessed value of each parcel of property located in each

municipality in the state of Rhode Island.

SECTION 7. Section 44-25-2 of the General Laws in Chapter 44-25 entitled "Real Estate

Conveyance Tax" is hereby amended to read as follows:

44-25-2. Exemptions.

(a) The tax imposed by this chapter does not apply to any instrument or writing given to

secure a debt.

(b) The tax imposed by this chapter does not apply to any deed, instrument, or writing

wherein the United States, the state of Rhode Island, or its political subdivisions are designated the

grantor.

has or shall be executed, delivered, accepted, or presented for recording in furtherance of, or

pursuant to, that certain master property conveyance contract dated December 29, 1982, and

recorded in the land evidence records of the city of Providence on January 27, 1983, at 1:30 p.m.

in book 1241 at page 849, and relating to the capital center project in the city of Providence.

(d) The qualified sale of a mobile or manufactured home community to a resident-owned

organization as defined in § 31-44-1 is exempt from the real estate conveyance tax imposed under

this chapter.

(e) No transfer tax or fee shall be imposed by a land trust or municipality upon the

acquisition of real estate by the state of Rhode Island or any of its political subdivisions.

(f) Nothing in § 44-25-1 shall be construed to impose a tax upon any grant, assignment,

transfer, conveyance, or vesting of any interest, direct or indirect, among owners, members, or

partners in any real estate company with respect to an affordable housing development where:

(i) (1) The housing development has been financed in whole or in part with federal low-

income housing tax credits pursuant to § 42 of the Internal Revenue Code (26 U.S.C. § 42); or

(ii) (2) At least one of the owners, members, or partners of the company is a Rhode Island

nonprofit corporation or an entity exempt from tax under § 501(c)(3) of the Internal Revenue Code

[26 U.S.C. § 42, or is owned by a Rhode Island nonprofit corporation or an entity that is exempt

from tax under § 501(c)(3) of the Internal revenue Revenue Code, and the housing development is

subject to a recorded deed restriction or declaration of land use restrictive covenants in favor of the

Rhode Island housing and mortgage finance corporation, the state of Rhode Island housing

resources commission, the federal home loan bank or any of its members, or any other state or local

government instrumentality under an affordable housing program. No such real estate company

shall be an acquired real estate company under this section.

SECTION 8. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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

CHAPTER 160

RHODE ISLAND PAY FOR SUCCESS ACT

42-160-1. Short title.

This act shall be known and may be cited as the "Rhode Island Pay for Success Act."

42-160-2. Legislative findings.

The general assembly hereby finds and declares as follows:

(1) Pay-for-success contracts are executed detailing the outcomes, associated repayment,

and evaluation process to be conducted by a third party. The proceeds are disbursed to a nonprofit

organization(s) that will execute the intervention delivering services and other resources, such as

housing, to the target population. An independent evaluator monitors the outcomes of the

intervention to determine if success was met. If the intervention improves financial and social

outcomes in accordance with established metrics, the government, as outcome payor, pays back the

investors with interest using a portion of the savings accrued from the successful outcomes. If the

evaluator determines that success was not met, meaning there is no improvement in financial or

social outcomes, the investors lose money.

(2) In 2016 the United States Department of Justice (DOJ) and the United States

Department of Housing and Urban Development (HUD) awarded funding to the Rhode Island

Coalition to End Homelessness to pursue a pay for success social impact bond in Rhode Island

focusing on housing and supportive services for persons experiencing homelessness who are high

utilizers of the health care healthcare and justice systems. The pilot program will leverage eight

hundred seventy-five thousand dollars ($875,000) in outcome payment funding from the HUD/DOJ

grant as well as the intervention and independent evaluation process described in the grant

agreement.

42-160-3. Annual reporting.

(1) The executive office, in collaboration with the Rhode Island Coalition to End

Homelessness, shall provide yearly progress reports to the general assembly beginning no later than

January 30, 2022, and annually thereafter until January 30, 2027. These reports will include

recommendations on a proposed structure for entering into pay for success contracts, for

administering the program, and for any and all matters related thereto that the executive office

deems necessary to administer future pay for success projects at the conclusion of the pilot program

in 2026. As a condition of this project, HUD requires that a third party conduct a transparent and

rigorous evaluation of the intervention to determine whether the outcomes have indeed achieved

success. The evaluation results will be reported yearly to the governor and general assembly.

42-160-4. Definitions.

For the purpose of this chapter:

(a) (9) "Performance targets" means the level of performance, as measured by an

independent evaluator, which that represent represents success. Success is defined in the pay-for-

success contract.

(b) (5) "Independent evaluator" means an independent entity selected by the state whose

role includes assessing and reporting on the achievement of performance targets at the frequency

required in the pay for success contract.

contractual performance targets are achieved as determined by the independent evaluator and

approved by the office of management and budget.

(d) (8) "Pay for success contracts" are contracts designed to improve outcomes and lower

costs for contracted government services that are subject to the following requirements:

(1) (i) A determination that the contract will result in significant performance

improvements and budgetary savings across all impacted agencies if the performance targets are

achieved;

(2) (ii) A requirement that a substantial portion of any payment be conditioned on the

achievement of specific outcomes based on defined performance targets;

(3) (iii) An objective process by which an independent evaluator will determine whether

the performance targets have been achieved;

(4) (iv) A calculation of the amount and timing of payments that would be earned by the

service provider during each year of the agreement if performance targets are achieved as

determined by the independent evaluator; and

(5) (v) Payments shall only be made if performance targets are achieved. Additionally, the

success payment made pursuant to this chapter shall not exceed ten percent (10%) more than actual

costs incurred by the program intermediary.

(1) "Coordinated entry system (CES)" means the partnership of all homeless service

providers in the state through this initiative of the Rhode Island continuum of care. CES manages

all diversion/entry to the shelter system through the coordinated entry hotline and manages the

permanent housing placement part of the program, once persons are in a shelter or are living on the

street.

(2) "Executive office" means the Rhode Island executive office of health and human

services.

(3) "Homeless management information system (HMIS)" means the database used to

collect information in order to track and report on the scope of homelessness prevention/assistance

and human service needs across the Rhode Island continuum of care (COC) as well as individually

at each organization. The Rhode Island Coalition to End Homelessness is the current HMIS state

lead.

(4) "Homelessness" means the category 1 and category 4 definitions outline by HUD:

(i) Category 1-Literally homeless: the situation of an individual or family lacking a fixed,

regular, and adequate nighttime residence, meaning:

(A) Has a primary nighttime residence that is a public or private place not meant for human

habitation;

(B) Is living in a publicly or privately operated shelter designated to provide temporary

living arrangements (including congregate shelters, transitional housing, and hotels and motels paid

for by charitable organizations or by federal, state and local government programs); or

who resided in an emergency shelter or place not meant for human habitation immediately before

entering that institution.

(ii) Category 4-Fleeing/attempting to flee domestic violence: Any individual or family

who:

(A) Is fleeing, or is attempting to flee, domestic violence;

(B) Has no other residence; and

(5) (6) "Nonprofit organization" means a nonprofit organization that is exempt from federal

taxation pursuant to § 501(c)(3) of the federal internal revenue code Internal Revenue Code, 26

U.S.C. § 501(c)(3).

(6) (7) "Outcome payor" means the the Rhode Island state government.

(7) (10) "Permanent supportive housing (PSH)" means a permanent deeply subsidized unit,

tenant or project based subsidy, with supportive services, generally for persons experiencing

homelessness for long periods of time who also have other significant challenges such as disability

or mental illness.

(8) (12) "Social impact bond", "pay-for-success bond" or "bond" means a contract between

the public and private sectors in which a commitment is made to pay for improved financial and

social outcomes that result in public sector savings. These contract agreements are funded by

appropriation.

(9) (14) "Target population" means highly vulnerable persons that who experience long-

term homelessness and incur significant costs within the criminal justice, shelter, and/or health care

healthcare systems, likely related to their housing instability, with an estimated average per person

cost of Medicaid claims for adults in shelter, top twenty-five (25) clients, totaling two hundred

twenty-nine thousand, six hundred ninety-five dollars and forty-four cents ($229,695.44), as per

the Rhode Island Medicaid and HMIS data match for adults in shelter. Eligibility will be confirmed

by data matching, case conferencing, and coordination with health care healthcare providers and

the coordinated entry system (CES); data sources will be provided by the department of corrections,

executive office of health and human services, and the Rhode Island homeless management

information system.

(10) (11) "Program intermediary" means a firm that contracts with a state agency to

establish and delivery deliver a service or program intervention by doing any of the following:

(i) Delivering or contracting for relevant services or outcomes;

(ii) Raising capital to finance the delivery of services or outcomes;

(iii) Providing ongoing project management and investor relations for the social impact

funding instrument.

42-160-5. Pilot program established.

There is established a five-(5) year (5) pay-for-success pilot program to be administered

by the Rhode Island executive office of health and human services. The pilot will follow the

proposal outlined in the 2016 pay-for-success grant proposal to HUD and 2017 feasibility study.

The pay-for-success project will provide a housing and supportive services intervention (PSH) for

one hundred twenty-five (125) persons in Rhode Island experiencing homelessness who are high

utilizers of the health care healthcare and justice systems. The pilot program will leverage eight

hundred seventy-five thousand dollars ($875,000) of HUD/DOJ grant funds. Contract agreements

with the executive office of health and human services pursuant to this chapter shall not exceed one

million five hundred thousand dollars ($1,500,000) per fiscal year or six million dollars

($6,000,000) in the aggregate over the five (5) years of the pilot program, as determined by the

department; provided, no agreements shall be entered by the department after July 1, 2026, without

further authorization by the general assembly.

42-160-6. Establishment of restricted receipt account.

There is hereby created within the general fund of the state a restricted receipt account

entitled or to be known as "Pay for Success." The account shall be housed within the budget of the

executive office of health and human services and shall be utilized to record all receipts and

program expenditures associated with this chapter. All such monies deposited shall be exempt from

the indirect cost recovery provisions of § 35-4-27.

SECTION 9. Section 6 of this article shall take effect on January 1, 2022. All other sections

of this article shall take effect upon passage.