Chapter 454 |
2025 -- S 0940 SUBSTITUTE A AS AMENDED Enacted 07/02/2025 |
A N A C T |
RELATING TO TAXATION -- HISTORIC PRESERVATION TAX CREDITS 2013 |
Introduced By: Senators Bissaillon, Lawson, Tikoian, DiPalma, Ciccone, Thompson, Britto, Patalano, Urso, and Dimitri |
Date Introduced: April 04, 2025 |
It is enacted by the General Assembly as follows: |
SECTION 1. Section 42-64.20-5 of the General Laws in Chapter 42-64.20 entitled |
"Rebuild Rhode Island Tax Credit" is hereby amended to read as follows: |
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 a 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 in which event the commerce corporation shall have the discretion to modify the minimum |
project cost requirement. |
(4) Until July 1, 2025, pursuant to P. L. 2022 ch. 271 and P. L. 2022 ch. 272, for |
construction projects in excess of ten million dollars ($10,000,000), all construction workers shall |
be paid in accordance with the wages and benefits required pursuant to chapter 13 of title 37 with |
all contractors and subcontractors required to file certified payrolls on a monthly basis for all work |
completed in the preceding month on a uniform form prescribed by the director of labor and |
training. Failure to follow the requirements pursuant to chapter 13 of title 37 shall constitute a |
material violation and a material breach of the agreement with the state. The commerce corporation, |
in consultation with the director of labor and training and the tax administrator, shall promulgate |
such rules and regulations as are necessary to implement the enforcement of this subsection. The |
provisions of this subsection shall expire and sunset on July 1, 2025. |
(5) Notwithstanding any general or special law or rule or regulation to the contrary, for |
construction projects that have executed a tax credit agreement on or after July 1, 2025, and |
involving a budget of direct hard construction costs (as defined in § 44-33.6-2) in excess of twenty- |
five million dollars ($25,000,000), all construction workers shall be paid in accordance with the |
wages and benefits required pursuant to chapter 13 of title 37 with all contractors and |
subcontractors required to file certified payrolls on a monthly basis for all work completed in the |
preceding month on a uniform form prescribed by the director of labor and training. Failure to |
follow the requirements pursuant to chapter 13 of title 37 shall constitute a material violation and |
a material breach of the agreement with the state. The commerce corporation, in consultation with |
the director of labor and training and the tax administrator, shall promulgate such rules and |
regulations as are necessary to implement the enforcement of this subsection. |
(c) The commerce corporation shall develop separate, streamlined application processes |
for the issuance of rebuild RI tax credits for each of the following: |
(1) Qualified development projects that involve certified historic structures; |
(2) Qualified development projects that involve recognized historical structures; |
(3) Qualified development projects that involve at least one manufacturer; and |
(4) Qualified development projects that include affordable housing or workforce housing. |
(d) Applications made for a historic structure or recognized historic structure tax credit |
under chapter 33.6 of title 44 shall be considered for tax credits under this chapter. The division of |
taxation, at the expense of the commerce corporation, shall provide communications from the |
commerce corporation to those who have applied for and are in the queue awaiting the offer of tax |
credits pursuant to chapter 33.6 of title 44 regarding their potential eligibility for the rebuild RI tax |
credit program. |
(e) Applicants (1) Who have received the notice referenced in subsection (d) above and |
who may be eligible for a tax credit pursuant to chapter 33.6 of title 44; (2) Whose application |
involves a certified historic structure or recognized historical structure; or (3) Whose project is |
occupied by at least one manufacturer shall be exempt from the requirements of subsections |
(b)(3)(ii) and (b)(3)(iii). The following procedure shall apply to such applicants: |
(i) The division of taxation shall remain responsible for determining the eligibility of an |
applicant for tax credits awarded under chapter 33.6 of title 44; |
(ii) The commerce corporation shall retain sole authority for determining the eligibility of |
an applicant for tax credits awarded under this chapter; and |
(iii) The commerce corporation shall not award in excess of fifteen percent (15%) of the |
annual amount authorized in any fiscal year to applicants seeking tax credits pursuant to this |
subsection (e); and |
(iv) No tax credits shall be awarded under this chapter unless the commerce corporation |
receives confirmation from the department of labor and training that there has been compliance |
with the prevailing wage requirements set forth in subsection (b) of this section. |
(f) Maximum project credit. |
(1) For qualified development projects, the maximum tax credit allowed under this chapter |
shall be the lesser of (i) Thirty percent (30%) of the total project cost; or (ii) 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. |
(2) The credit allowed pursuant to this chapter, inclusive of any sales and use tax |
exemptions allowed pursuant to this chapter, shall not exceed fifteen million dollars ($15,000,000) |
for any qualified development project under this chapter; except as provided in subsection (f)(3) of |
this section; provided however, any qualified development project that exceeds the project cap upon |
passage of this act shall be deemed not to exceed the cap, shall not be reduced, nor shall it be further |
increased. 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 the building. Provided, however, that for |
purposes of this subsection and no more than once in a given fiscal year, the commerce corporation |
may consider the development of land and buildings by a developer on the “I-195 land” as defined |
in § 42-64.24-3(6) as a separate, qualified development project from a qualified development |
project by a tenant or owner of a commercial condominium or similar legal interest including |
leasehold improvement, fit out, and capital investment. Such qualified development project by a |
tenant or owner of a commercial condominium or similar legal interest on the I-195 land may be |
exempted from subsection (f)(1)(i) of this section. |
(3) The credit allowed pursuant to this chapter, inclusive of any sales and use tax |
exemptions allowed pursuant to this chapter, shall not exceed twenty-five million dollars |
($25,000,000) for the project for which the I-195 redevelopment district was authorized to enter |
into a purchase and sale agreement for parcels 42 and P4 on December 19, 2018, provided that |
project is approved for credits pursuant to this chapter by the commerce corporation. |
(4) For qualified development projects involving the development of housing and mixed |
use projects involving housing which are restricted to require at least twenty percent (20%) of the |
housing units being affordable housing or workforce housing development for residents making no |
more than between eighty percent (80%) and one hundred twenty percent (120%) of the area |
median income (AMI) shall be allowed sales and use tax exemptions of up to thirty percent (30%) |
of the maximum project credit in addition to the maximum project credit of fifteen million dollars |
($15,000,000) pursuant to this chapter. Any sales and use tax exemptions allowed in addition to the |
maximum project credit shall be for purchases made by June 30, 2028. |
(g) 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, § 23-19.14-1 et seq.; 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. |
(h) Maximum aggregate credits. The aggregate sum authorized pursuant to this chapter, |
inclusive of any sales and use tax exemptions allowed pursuant to this chapter, shall not exceed |
two hundred twenty-five million dollars ($225,000,000), excluding any tax credits allowed |
pursuant to subsection (f)(3) of this section. |
(i) Tax credits shall not be allowed under this chapter prior to the taxable year in which the |
project is placed in service. |
(j) 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. |
(k) 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 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. |
(l) 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. |
(m) 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. 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. In the event that the seller is not a |
natural person, the seller’s tax calculation under chapter 11, 13, 14, or 17 of title 44, as applicable, |
for the year of revocation, or adjustment, shall be increased by including the total amount of the |
sales proceeds without proration. |
(n) The tax credit allowed under this chapter may be used as a credit against corporate |
income taxes imposed under chapter 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. |
(o) 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. |
(p) 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 commerce corporation, shall establish by regulation a |
redemption process for tax credits. |
(q) 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 the |
project: (1) Furniture, fixtures, and equipment, except automobiles, trucks, or other motor vehicles; |
or (2) 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. |
(r) The commerce corporation shall promulgate rules and regulations for the administration |
and certification of additional tax credit under subsection (g), including criteria for the eligibility, |
evaluation, prioritization, and approval of projects that qualify for such additional tax credit. |
(s) The commerce corporation shall not have any obligation to make any award or grant |
any benefits under this chapter. |
SECTION 2. Section 44-33.6-3 of the General Laws in Chapter 44-33.6 entitled "Historic |
Preservation Tax Credits 2013" is hereby amended to read as follows: |
44-33.6-3. Tax credit. |
(a) Subject to the maximum credit provisions set forth in subsections (c) and (d) below, |
any person, firm, partnership, trust, estate, limited liability company, corporation (whether for |
profit or nonprofit) or other business entity that incurs qualified rehabilitation expenditures for the |
substantial rehabilitation of a certified historic structure, provided the rehabilitation meets standards |
consistent with the standards of the Secretary of the United States Department of the Interior for |
rehabilitation as certified by the commission and said person, firm, partnership, trust, estate, limited |
liability company, corporation or other business entity is not a social club as defined in § 44-33.6- |
2, shall be entitled to a credit against the taxes imposed on such person or entity pursuant to chapter |
11, 12, 13, 14, 17, or 30 of this title in an amount equal to the following: |
(1) Twenty percent (20%) of the qualified rehabilitation expenditures; or |
(2) Twenty-five percent (25%) of the qualified rehabilitation expenditures provided that |
either: |
(i) At least twenty-five percent (25%) of the total rentable area of the certified historic |
structure will be made available for a trade or business; or |
(ii) The entire rentable area located on the first floor of the certified historic structure will |
be made available for a trade or business. |
(b) Tax credits allowed pursuant to this chapter shall be allowed for the taxable year in |
which such certified historic structure or an identifiable portion of the structure is placed in service |
provided that the substantial rehabilitation test is met for such year. |
(c) Maximum project credit. The credit allowed pursuant to this chapter shall not exceed |
five million dollars ($5,000,000) for any certified rehabilitation project under this chapter. No |
building to be completed in phases or in multiple projects shall exceed the maximum project credit |
of five million dollars ($5,000,000) for all phases or projects involved in the rehabilitation of such |
building. |
(d) Maximum aggregate credits. The aggregate credits authorized to be reserved pursuant |
to this chapter shall not exceed sums estimated to be available in the historic preservation tax credit |
trust fund pursuant to this chapter. |
(e) Subject to the exception provided in subsection (g) of this section, if the amount of the |
tax credit exceeds the taxpayer’s total tax liability for the year in which the substantially |
rehabilitated property is placed in service, the amount that exceeds the taxpayer’s tax liability may |
be carried forward for credit against the taxes imposed for the succeeding ten (10) years, or until |
the full credit is used, whichever occurs first for the tax credits. 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. Credits may be allocated to partners, members, or owners that |
are exempt from taxation under section 501(c)(3), section (c)(4) or section 501(c)(6) of the U.S. |
Code and these partners, members, or owners must be treated as taxpayers for purposes of this |
section. |
(f) If the taxpayer has not claimed the tax credits in whole or part, taxpayers eligible for |
the tax credits may assign, transfer, or convey the credits, in whole or in part, by sale or otherwise |
to any individual or entity, including, but not limited to, condominium owners in the event the |
certified historic structure is converted into condominiums and assignees of the credits that have |
not claimed the tax credits in whole or part may assign, transfer, or convey the credits, in whole or |
in part, by sale or otherwise to any individual or entity. The assignee of the tax credits may use |
acquired credits to offset up to one hundred percent (100%) of the tax liabilities otherwise imposed |
pursuant to chapter 11, 12, 13 (other than the tax imposed under § 44-13-13), 14, 17, or 30 of this |
title. The assignee may apply the tax credit against taxes imposed on the assignee until the end of |
the tenth calendar year after the year in which the substantially rehabilitated property is placed in |
service or until the full credit assigned is used, whichever occurs first. Fiscal year assignees may |
claim the credit until the expiration of the fiscal year that ends within the tenth year after the year |
in which the substantially rehabilitated property is placed in service. The assignor shall perfect the |
transfer by notifying the state of Rhode Island division of taxation, in writing, within thirty (30) |
calendar days following the effective date of the transfer and shall provide any information as may |
be required by the division of taxation to administer and carry out the provisions of this section. |
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 this |
title. If a tax credit is subsequently recaptured under this chapter, revoked, or adjusted, the seller’s |
tax calculation for the year of revocation, recapture, or adjustment shall be increased by the total |
amount of the sales proceeds, without proration, as a modification under chapter 30 of this title. In |
the event that the seller is not a natural person, the seller’s tax calculation under chapter 11, 12, 13 |
(other than with respect to the tax imposed under § 44-13-13), 14, 17, or 30 of this title, as |
applicable, for the year of revocation, recapture, or adjustment, shall be increased by including the |
total amount of the sales proceeds without proration. |
(g) Credits allowed to partners, members, or owners that are exempt from taxation under |
section 501(c)(3), section (c)(4) or section 501(c)(6) of the U.S. Code, and only said credits, shall |
be fully refundable. |
(h) Substantial rehabilitation of property that either: |
(1) Is exempt from real property tax; |
(2) Is a social club; or |
(3) Consists of a single-family home or a property that contains less than three (3) |
residential apartments or condominiums shall be ineligible for the tax credits authorized under this |
chapter; provided, however, a scattered site development with five (5) or more residential units in |
the aggregate (which may include single-family homes) shall be eligible for tax credit. In the event |
a certified historic structure undergoes a substantial rehabilitation pursuant to this chapter and |
within twenty-four (24) months after issuance of a certificate of completed work the property |
becomes exempt from real property tax, the taxpayer’s tax for the year shall be increased by the |
total amount of credit actually used against the tax. |
(i) 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. |
(j) For construction projects that have executed a tax credit agreement on or after July 1, |
2025, and involving a budget of direct hard construction costs (as defined in § 44-33.6-2) in excess |
of ten million dollars ($10,000,000) twenty-five million dollars ($25,000,000), all construction |
workers construction workers shall be paid in accordance with the wages and benefits required |
pursuant to chapter 13 of title 37 and all contractors and subcontractors shall file certified payrolls |
on a monthly basis for all work completed in the preceding month on a uniform form prescribed by |
the director of labor and training. Failure to follow the requirements pursuant to chapter 13 of title |
37 shall constitute a material violation and a material breach of the agreement with the state. The |
tax administrator, in consultation with the director of labor and training, shall promulgate such rules |
and regulations as are necessary to implement the enforcement of this subsection. |
(k) No tax credits shall be awarded under this chapter unless the division of taxation |
receives confirmation from the department of labor and training that there has been compliance |
with the prevailing wage requirements set forth in subsection (j) of this section. |
SECTION 3. This act shall take effect upon passage. |
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LC001980/SUB A |
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