law23079-06

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art.006/3/006/2

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ARTICLE 6 AS AMENDED

RELATING TO HOUSING

SECTION 1. Section 42-55-5.1 of the General Laws in chapter 42-55 entitled "Rhode

Island Housing and Mortgage Finance Corporation" is hereby amended to read as follows:

42-55-5.1. Subsidiary corporations.

(a) To further its purposes, the corporation shall have the power to form one or more

subsidiary corporations under either § 7-1.2-1101 et seq. or § 7-6-1 et seq. in accordance with the

procedures therein contained. Each subsidiary corporation shall be governed by the section under

which it is formed, provided that each shall be subject to the same restrictions and limitations as to

its powers and purposes to which the corporation is subject under this chapter and shall be deemed

a state agency only for the purposes of § 42-46-1 et seq. and § 38-2-1 et seq. The corporation may

delegate any of its powers, obligations, and duties under this chapter to any subsidiary corporation

by inclusion of its powers, obligations, and duties in the articles of incorporation of the subsidiary

corporation. Subsidiary corporations so formed shall constitute legal entities separate and distinct

from each other, the corporation, and the state. The corporation shall not be liable for the debts or

obligations or for any actions or inactions of its subsidiary corporations unless the corporation

expressly agrees otherwise in writing. The corporation may make loans or grants to a subsidiary

corporation from time to time to enable the subsidiary corporation to carry out its purposes. The

commissioners of the corporation shall constitute all of the directors of each subsidiary corporation.

(b) The state, any municipality or any state commission, public authority, agency, officer,

department, board, or division authorized and empowered to enter into agreements with, to grant,

convey, lease, or otherwise transfer any property to, or to otherwise transact business with the

corporation, shall have the same authorization and power to engage in these activities with each

subsidiary corporation of the corporation.

betterment of real property is, subject to the period of limitations set forth in § 9-1-25, liable in

actions of tort only to the extent that those actions do not arise from the performance of any

functions found or deemed to be essential or discretionary governmental functions. Any recovery

in an action or any recovery by any person in one or more of any actions against the subsidiary

entity, its directors, employees, or agents, shall not exceed one hundred thousand dollars ($100,000)

per plaintiff in the absence of fraud or willful misconduct. In the absence of fraud or willful

misconduct, the directors are not personally liable to any party on account of any action (whether

tort or otherwise) arising from or related to the manner or terms of the disposition of the subsidiary's

assets, nor shall the manner or terms of the disposition constitute a defense to any obligation owed

to the corporation.

SECTION 2. Section 42-55-24 of the General Laws in chapter 42-55 entitled "Tax

exemption" is hereby amended to read as follows:

42-55-24. Tax exemption.

The exercise of the powers granted by this chapter will be in all respects for the benefit of

the people of the state, for their wellbeing and prosperity and for the improvement of their social

and economic conditions, and the corporation, or any subsidiary thereof created or authorized

pursuant to § 42-55-5.1, shall not be required to pay any tax or assessment on any property owned

by the corporation or by any subsidiary thereof under the provisions of this chapter or upon the

income from the property; nor shall the corporation or any subsidiary thereof be required to pay

any recording fee or transfer tax of any kind on account of instruments recorded by it or on its

behalf. Any bonds, notes, or other obligations issued by the corporation or any subsidiary thereof

under the provisions of this chapter, their transfer, and the income from them (including any profits

made on their sale), shall at all times be free from taxation by the state or any political subdivision

or other instrumentality of the state, excepting inheritance, estate, and gift taxes.

SECTION 3. Section 42-64.34-2 of the General Laws in chapter 42-64.34 entitled "The

Department of Housing" is hereby amended to read as follows:

42-64.34-2. Powers and duties.

The secretary of housing shall have all powers and duties pursuant to § 42 64.19 3(a)(4).

(a) The department of housing shall be the state's lead agency for housing, homelessness,

and community development in the state of Rhode Island.

(b) The secretary of housing shall have the following powers and duties:

(1) All powers and duties pursuant to § 42-64.19-3(a)(4);

(2) To supervise the work of the department of housing and to act as its chief administrative

officer;

(3) To coordinate the administration and financing of various departments or offices within

the department of housing;

(4) To serve as the governor's chief advisor and liaison to federal policymakers on housing,

homelessness, and community development as well as the principal point of contact on any such

related matters;

(5) To coordinate the housing, homelessness, and community development programs of

the state of Rhode Island and its departments, agencies, commissions, corporations, and

subdivisions;

(6) To employ such personnel and contracts for such consulting services as may be required

to perform the powers and duties conferred upon the secretary of housing;

(7) To oversee and direct the administration of funds that may be appropriated from time

to time to the department of housing;.

department of housing, the department is hereby expressly authorized, by and through the secretary

of housing:

(1) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and

otherwise deal in and with, real or personal property, or any interest in real or personal property,

wherever situated.;

(2) To accept any gifts or grants or loans of funds or property or financial or other aid in

any form from the federal government or any agency or instrumentality of the federal government,

or from the state or any agency or instrumentality of the state, or from any other source and to

comply, subject to the provisions of this chapter, with the terms and conditions of the gifts, grants,

or loans.;

(3) Subject to the provisions of § 37-2-1 et seq., to negotiate and to enter into contracts,

agreements, 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 effectuate the purposes of the department of

housing; and

(4) To carry out this chapter and perform the duties of the general laws and public laws

insofar as those provisions relate to any regulatory areas within the jurisdiction of the department

of housing.

SECTION 4. Chapter 42-64.34 of the General Laws entitled "The Department of Housing"

is hereby amended by adding thereto the following sections:

42-64.34-3. Rules and regulations.

The secretary of housing may promulgate such rules and regulations in accordance with

the provisions of chapter 35 of this title 42 as are necessary and proper to carry out the duties

assigned to him or her the secretary or to the department of housing by this title or any other

provision of law.

42-64.34-4. Severability.

If any provision of this chapter or the application thereof to any person or circumstance is

held invalid, such invalidity shall not affect other provisions or applications of the chapter; which

can be given effect without the invalid provision or application, and to this end the provisions of

this chapter are declared to be severable.

SECTION 5. Title 44 of the General Laws entitled "Taxation" is hereby amended by adding

thereto the following chapter:

CHAPTER 44-71

LOW-INCOME HOUSING TAX CREDITS

44-71-1. Short Title.

This chapter shall be known and may be cited as the "Low-Income Housing Tax Credit

Act."

44-71-2. Findings and declarations.

It is hereby found and declared that the state is facing significant housing challenges, which

must be addressed for the welfare of the State's state’s residents. The purpose of the Rhode Island

lowincome housing tax credit established pursuant to this chapter is to increase the development

and availability of affordable housing in the state.

44-71-3. Definitions.

As used in this chapter:

(1) "Applicant" means a developer applying for a Rhode Island low-income housing tax

credit.

(2) "Compliance period" means the period of fifteen (15) taxable years beginning with the

taxable year in which the Rhode Island low-income housing project is completed.

(3) "Department" means the Department of Housing department of housing established

pursuant to § 42-64.34-1.

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

subdivision, or other entity that proposes to build or builds a qualified Rhode Island project.

(5) "Eligibility statement" means a statement authorized and issued by the Department

department certifying that a given project is a qualified Rhode Island project and setting forth the

annual amount of the Rhode Island low-income housing tax credit allocated to the project. The

eligibility statement shall be on a form promulgated by the Department department in consultation

with the division of taxation.

(6) "Federal low-income housing tax credit" means the federal tax credit as provided in

section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year.

(7) "Low-income project" means a qualified low-income housing project, as defined in

section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, which

that has restricted rents.

(8) "Qualified Rhode Island project" means a qualified low-income housing project, as

defined in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable

year, which is located in the state of Rhode Island, which that meets the requirements of this

chapter, and whose owner enters into a tax credit agreement with the Department department.

(9) "Rhode Island low-income housing tax credit" means the tax credit established pursuant

to § 44-71-4.

(10) "Tax credit agreement" means an agreement between the owner of the qualified Rhode

Island project and the Department department and filed as an affordable housing restriction in the

land records of the city or town where the real estate lies that requires the project to be operated in

accordance with the requirements of this chapter for not less than thirty (30) years from the

expiration date of the compliance period.

(11) "Taxpayer" means a person, firm, partnership, trust, estate, limited liability company,

corporation (whether for profit or nonprofit), or other entity having an ownership interest in a

qualified Rhode Island project, either directly or through one or more pass-through entities, that is

subject to the taxes imposed on such person or entity pursuant to chapter 11, 13, 14, 17, or 30 of

this title.

44-71-4. Establishment of Rhode Island low-income housing tax credit program.

The Rhode Island low-income housing tax credit program is hereby established as a

program under the jurisdiction and administration of the Department department. The program

may provide tax credits for a period of five (5) years to applicants that are competitively selected

and that meet the requirements of this chapter. The Department department shall not obligate

Rhode Island low-income housing tax credits that cumulatively total in excess of thirty million

dollars ($30 million) ($30,000,000) in any fiscal year.

44-71-5. Rhode Island low-income housing tax credits.

(1a) A taxpayer owning an interest in a qualified Rhode Island project may be allowed a

Rhode Island low-income housing tax credit against the taxes imposed pursuant to chapter 11, 13,

14, 17 or 30 of this title with respect to that qualified Rhode Island project in an amount authorized,

determined, and allocated by the Department department based on the qualified Rhode Island

project's need for the credit for economic feasibility, provided that the Department department

issues an eligibility statement for that qualified Rhode Island project.

(2b) At the time of application to the Department department for an eligibility statement,

an applicant shall, through its chief executive officer or equivalent authorized officer, demonstrate

to the Department department that:

(a1) The project is a qualified Rhode Island project;

(b2) The owner of the qualified Rhode Island project has entered into a tax credit agreement

with the Department department; and

(c3) The applicant satisfies other additional criteria determined by the Department

department from time to time.

(3c) The Rhode Island low-income housing tax credit allocated to a taxpayer with respect

to a qualified Rhode Island project shall be taken against the taxpayer's taxes imposed pursuant to

chapters chapter 11, 13, 14, 17 or 30 of this title. The amount of a tax credit allowed under this

chapter shall be allowable to the taxpayer in five equal annual increments. 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 taken, 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.

(4d) A qualified Rhode Island project that receives other incentives or tax credits available

under the general laws of this state is also eligible to receive an allocation of Rhode Island low

income housing tax credits pursuant to this chapter.

(5e) Upon request of a taxpayer and subject to annual appropriation, the state shall redeem

this 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 department, shall establish by regulation a redemption process

for tax credits.

44-71-6. Administration.

(1a) Upon issuance of the eligibility statement the Department department shall, on behalf

of the State of Rhode Island, award tax credits and issue tax credit certificates in the amount

authorized and allocated in accordance with the eligibility statement and the tax credit agreement.

The Department department shall provide copies of eligibility statements and tax credit

certificates to the division of taxation within thirty (30) days of issuance, including copies of all

eligibility statements and tax credit certificates that are reissued, transferred, sold, or assigned.

(2b) The owner of a qualified Rhode Island project eligible for the Rhode Island low-

income housing tax credit shall submit, at the time of filing the project owner's state tax return, the

original tax credit certificate issued by the Department department with respect to such qualified

Rhode Island project. In the case of failure to attach the tax credit certificate, a credit under this

section shall not be allowed with respect to such qualified Rhode Island project for that year until

the original tax credit certificate is provided to the division of taxation.

44-71-7. Recapture.

(1a) If under Section 42 of the 1986 Internal Revenue Code, as amended, a portion of any

federal low-income housing tax credits taken on a low-income project is required to be recaptured,

the Rhode Island low-income housing tax credit authorized with respect to such qualified Rhode

Island project shall also be recaptured. The state recapture amount shall be equal to the amount of

the Rhode Island low-income housing tax credits previously claimed times a fraction, the numerator

of which shall be the amount of recaptured federal low-income housing tax credits and the

denominator of which shall be the amount of federal low-income housing tax credits previously

claimed.

(2b) The Department department shall provide notification of recapture determinations to

the division of taxation within thirty (30) days. Such notifications shall include the proportion of

the Rhode Island low-income housing tax credit to be recaptured, the identity of each taxpayer

subject to the recapture, and the amount of credit previously allocated to such taxpayer.

44-71-8. Transferability.

All or any portion of unused tax credits issued in accordance with the provisions of this

chapter may be transferred, sold, or assigned to taxpayers eligible under the provisions of this

chapter.

44-71-9. Rules and regulations.

The Department department, in consultation with the division of taxation, shall adopt

guidelines, directives, criteria, and rules and regulations pursuant to § 42-35-1 et seq. to implement

the purposes of the Rhode Island low-income housing tax credit program.

44-71-10. Reporting.

By November 1, 2024, and each year thereafter, the Department department shall report

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

senate fiscal advisors, the amount of Rhode Island low-income housing tax credits that were

approved during the prior fiscal year. A summary of any tax credit agreements entered into under

this chapter by the Department department and applicants shall be sent to the division of taxation

and shall be public and shall be published by the tax administrator on the tax division website.

44-71-11. Low-Income Housing Tax Credit Fund.

There is hereby established at the department of housing a restricted account known as the

low-income housing tax credit fund (the "fund") in which all amounts appropriated for the program

authorized in this chapter shall be deposited. The fund shall be used for the purpose of securing

payment for the redemption of tax credits or to for reimbursement to the state for tax credits applied

against a taxpayer's liability.

44-71-12. Sunset.

No credits shall be authorized to be reserved pursuant to this chapter after June 30, 2028.

SECTION 6. Section 45-24-76 of the General Laws in Chapter 45-24 entitled “Zoning

Ordinances” is hereby amended to read as follows:

45-24-76. Accessory dwelling units annual reporting.

(a) Each municipality within the state shall furnish to the division of statewide planning

Department of Housing department of housing information on:

(1) Any ordinances enacted related to accessory dwelling units, including those that

implement this section of law during the previous calendar year;

(2) All accessory dwelling units permitted during each of the two (2) previous calendar

years; and

(3) All accessory dwelling units issued a certificate of occupancy during each of the two

(2) previous calendar years.

(b) Municipalities shall provide the information in subsection (a) annually by February 1.

Statewide planning The Department of Housing department of housing shall produce an annual

report of municipal activity related to accessory dwelling units, with the information identified in

subsection (a) on a statewide basis and disaggregated by municipality and shall provide a copy of

the report to the speaker of the house, the president of the senate, and the secretary of housing by

March 1.

SECTION 7. Section 45-53-11 of the General Laws in Chapter 45-53 entitled “Low and

Moderate-Income Housing” is hereby amended to read as follows:

45-53-11. Annual comprehensive permit report.

(a) The division of statewide planning (the “division”) established pursuant to chapter 11

of title 42 The Department of Housing department of housing shall maintain records and shall

prepare a report (“report”) on an annual basis to be submitted to the speaker of the house, the

president of the senate, and the housing resources commission, and the secretary of housing. The

report shall also be made available on the division’s department’s website for a period of at least

three (3) years, and shall also be deemed to be a public record. The report shall be due on or before

March 15, of each year, commencing in calendar year 2023.

(b) The report required by this section shall contain the following for the preceding twelve-

month (12) calendar period covered by the report:

(1) The number of letters of eligibility issued for low- and moderate-income housing for

applications made pursuant to this chapter and § 42-55-5.3, the federal, state, and municipal subsidy

programs under which they were eligible, and the number of proposed subsidized units involved,

by city and town, during the preceding calendar year, as provided by the Rhode Island housing

corporation.

(2) The status of each comprehensive permit application for which a letter of eligibility

was issued disaggregated by municipality.

(3) The number of comprehensive permit applications that have had building permits

issued, including the number of market rate housing units, the number of low- and moderate-

income housing units, and the AMI restrictions associated both pursuant to § 45-53-4, aggregated

by the total number of such applications in the state and disaggregated by each municipality in the

state.

(4) The number of comprehensive permit applications that have had certificates of

occupancy issued, aggregated by the total number of such applications in the state and

disaggregated by each municipality in the state.

comprehensive permit activity described in subsection (b) of this section by February 1.

SECTION 8. This article shall take effect upon passage.