Title 42
State Affairs and Government

Chapter 64.20
Rebuild Rhode Island Tax Credit

§ 42-64.20-3. Definitions.

As used in this chapter:

(1) “Adaptive reuse” means the conversion of an existing structure from the use for which it was constructed to a new use by maintaining elements of the structure and adapting such elements to a new use.

(2) “Affiliate” means an entity that directly or indirectly controls, is under common control with, or is controlled by the business. Control exists in all cases in which the entity is a member of a controlled group of corporations as defined pursuant to section 1563 of the Internal Revenue Code of 1986 (26 U.S.C. § 1563) or the entity is an organization in a group of organizations under common control as defined pursuant to subsection (b) or (c) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. § 414). A taxpayer may establish by clear and convincing evidence, as determined by the tax administrator, that control exists in situations involving lesser percentages of ownership than required by those statutes. An affiliate of a business may contribute to meeting either the capital investment or full-time employee requirements of a business that applies for a credit under this chapter.

(3) “Affordable housing” means housing for sale or rent with combined rental costs or combined mortgage loan debt service, property taxes, and required insurance that do not exceed thirty percent (30%) of the gross annual income of a household earning up to eighty percent (80%) of the area median income, as defined annually by the United States Department of Housing and Urban Development.

(4) “Applicant” means a developer applying for a rebuild Rhode Island tax credit under this chapter.

(5) “Business” means a corporation as defined in § 44-11-1, or a partnership, an S corporation, a nonprofit corporation, a sole proprietorship, or a limited liability corporation. A business shall include an affiliate of the business if that business applies for a credit based upon any capital investment made by an affiliate.

(6) “Capital investment” in a real estate project means expenses by a developer incurred after application for:

(i) Site preparation and construction, repair, renovation, improvement, equipping, or furnishing on real property or of a building, structure, facility, or improvement to real property;

(ii) Obtaining and installing furnishings and machinery, apparatus, or equipment, including but not limited to, material goods for the operation of a business on real property or in a building, structure, facility, or improvement to real property.

In addition to the foregoing, if a developer acquires or leases a qualified development project, the capital investment made or acquired by the seller or owner, as the case may be, if pertaining primarily to the premises of the qualified development project, shall be considered a capital investment by the developer and, if pertaining generally to the qualified development project being acquired or leased, shall be allocated to the premises of the qualified development project on the basis of the gross leasable area of the premises in relation to the total gross leasable area in the qualified development project. The capital investment described herein shall be defined through rules and regulations promulgated by the commerce corporation.

(7) “Certified historic structure” means a property located in the state of Rhode Island and is:

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

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

(iii) Located in a registered historic district and certified by either the Rhode Island historical preservation and heritage commission created pursuant to § 42-45-2 or the Secretary of the United States Department of the Interior as being of historic significance to the district.

(8) “Commerce corporation” means the Rhode Island commerce corporation established pursuant to § 42-64-1 et seq.

(9) “Commercial” shall mean nonresidential development.

(10) “Construction worker” means any laborer, mechanic, or machine operator employed by a contractor or subcontractor in connection with the construction, alteration, repair, demolition, reconstruction, or other improvements to real property.

(11) “Developer” means a person, firm, business, partnership, association, political subdivision, or other entity that proposes to divide, divides, or causes to be divided real property into a subdivision or proposes to build or builds a building or buildings or otherwise improves land or existing structures, which division, building, or improvement qualifies for benefits under this chapter.

(12) “Development” means the improvement of land through the carrying out of building, engineering, or other operations in, on, over, or under land, or the making of any material change in the use of any buildings or land for the purposes of accommodating land uses.

(13) “Eligibility period” means the period in which a developer may claim a tax credit under this act, beginning with the tax period in which the commerce corporation accepts certification from the developer that it has met the requirements of the act and extending thereafter for a term of five (5) years.

(14) “Full-time employee” means a person who is employed by a business for consideration for a minimum of at least thirty-five (35) hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, or who is employed by a professional employer organization pursuant to an employee leasing agreement between the business and the professional employer organization for a minimum of thirty-five (35) hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose wages are subject to withholding.

(15) “Hope community” means a municipality for which the five-year (5) average percentage of families with income below the federal poverty level exceeds the state five-year (5) average percentage, both as most recently reported by the U.S. Department of Commerce, Bureau of the Census.

(16) “Manufacturer” shall mean any entity that:

(i) Uses any premises within the state primarily for the purpose of transforming raw materials into a finished product for trade through any or all of the following operations: adapting, altering, finishing, making, processing, refining, metalworking, and ornamenting, but shall not include fabricating processes incidental to warehousing or distribution of raw materials, such as alteration of stock for the convenience of a customer; or

(ii) Is described in codes 31-33 of the North American Industry Classification System, as revised from time to time.

(17) “Mixed use” means a development comprising both commercial and residential components.

(18) “Partnership” means an entity classified as a partnership for federal income tax purposes.

(19) “Placed in service” means the earlier of (i) Substantial construction or rehabilitation work has been completed that would allow for occupancy of an entire structure or some identifiable portion of a structure, as established in the application approved by the commerce corporation board; or (ii) Receipt by the developer of a certificate, permit, or other authorization allowing for occupancy of the project or some identifiable portion of the project by the municipal authority having jurisdiction.

(20) “Project” means qualified development project as defined under subsection (24).

(21) “Project area” means land or lands under common ownership or control in which a qualified development project is located.

(22) “Project cost” means the costs incurred in connection with the qualified development project or qualified residential or mixed use project by the applicant until the issuance of a permanent certificate of occupancy, or until such other time specified by the commerce corporation, for a specific investment or improvement, as defined through rules and regulations promulgated by the commerce corporation.

(23) “Project financing gap” means:

(i) The part of the total project cost that remains to be financed after all other sources of capital have been accounted for (the sources will include, but not be limited to, developer-contributed capital), which shall be defined through rules and regulations promulgated by the commerce corporation; or

(ii) The amount of funds that the state may invest in a project to gain a competitive advantage over a viable and comparable location in another state by means described in this chapter.

(24) “Qualified development project” means a specific construction project or improvement, including lands, buildings, improvements, real and personal property or any interest therein, including lands under water, riparian rights, space rights and air rights, acquired, owned, leased, developed or redeveloped, constructed, reconstructed, rehabilitated or improved, undertaken by a developer, owner or tenant, or both, within a specific geographic area, meeting the requirements of this chapter, as set forth in an application made to the commerce corporation.

(25) “Recognized historical structure” means a property located in the state of Rhode Island and commonly considered to be of historic or cultural significance as determined by the commerce corporation in consultation with the state historic preservation officer.

(26) “Residential” means a development of residential dwelling units.

(27) “Targeted industry” means any advanced, promising, or otherwise prioritized industry identified in the economic development vision and policy promulgated pursuant to § 42-64.17-1 or, until such time as any such economic development vision and policy is promulgated, as identified by the commerce corporation.

(28) “Transit-oriented development area” means an area in proximity to transit infrastructure that will be further defined by regulation of the commerce corporation in consultation with the Rhode Island department of transportation.

(29) “Workforce housing” means housing for sale or rent with combined rental costs or combined mortgage loan debt service, property taxes, and required insurance that do not exceed thirty percent (30%) of the gross annual income of a household earning between eighty percent (80%) and one hundred and forty percent (140%) of the area median income, as defined annually by the United States Department of Housing and Urban Development.