2001 -- S 0340
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LC01737
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2001
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A N A C T
RELATING TO CREATION OF THE COMMUNITY AND NEIGHBORHOOD PARTNERSHIP TAX CREDIT
Introduced By
: Senators Perry, Felag, Kells, Cicilline and WaltonIt is enacted by the General Assembly as follows:
SECTION 1. Title 44 of the General Laws entitled "Taxation" is hereby amended by adding thereto the following chapter:
CHAPTER 59
COMMUNITY PARTNERSHIP TAX CREDITS
44-59-1. Short title. -- This chapter shall be known and may be cited as the "Community and Neighborhood Partnership Act of 2001."
44-59-2. Purposes of act. -- The purpose of the Community and Neighborhood Partnership Act of 2001 is to encourage the private sector to contribute to the projects of neighborhood or community organizations that provide services to low-income people, families, communities, or areas.
44-59-3. Definitions. -- (1) "Community services" means any useful and necessary services such as counseling and advice, emergency assistance, medical care, recreational facilities, housing facilities, economic development assistance, job training, neighborhood and community assistance, redevelopment, education, or crime prevention furnished to low-income individuals or groups or to an impoverished area.
(2) "Low-income" refers to people whose income does not exceed one hundred twenty-five percent (125%) of federal poverty standards. Such certifications shall be made on the basis of federal census studies and current indices of social and economic conditions.
(3) "Impoverished area" means any area in the state which is certified as such by the appropriate state agency and approved by the governor. Such certifications shall be made on the basis of federal census studies and current indices of social and economic conditions.
(4) "Assistance" means providing any financial assistance, labor, material, services, and/or technical advice to aid in the improvement of any part or all of an impoverished area.
(5) "Business entity" means any business firm or individual which:
(i) conducts or operates a trade or business in the state; and
(ii) is subject to: the state income tax on corporations; the financial institution franchise tax; the public service company franchise tax; the insurance premiums tax; the gross tax; the adjusted gross tax; or the supplemental net income tax.
(6) "Rural area" means an area of under fifteen thousand (15,000) population not in a standard metropolitan statistical area.
(7) "Approved organization" means a project operated by an organization performing community services in an impoverished area and holding a ruling from the Internal Revenue Service of the United States department of the treasury that the organization is exempt from income taxation under the provisions of the Internal Revenue Code and approved by the state agency administering the credit.
(8) "Approval" means any business firm or individual which contributes to a nonprofit engaged in the above categories for assistance in an impoverished area may receive a tax credit if the director of the department approves the proposal of the nonprofit setting forth the program to be conducted, the area selected, the estimated amount to be invested in the program, and the plans for administering the program.
(9) "Credit" means that the division of taxation shall grant a tax deduction against any gross, adjusted gross, or supplemental net income tax due equal to forty percent (40%) of the contribution by a business firm or person to a program the proposal for which was approved.
44-59-4. Scope, exceptions and exclusions. -- The credit allowed to a business entity or individual under this section may not exceed for any taxable year the lesser of two hundred thousand dollars ($200,000) or the total amount of tax otherwise payable by the business entity for the taxable year.
Any excess credit that would be allowed but for limitations stated above may be carried over and applied as credit for succeeding taxable years until:
(i) the earlier of the full amount of the excess is used; or
(ii) the expiration of the fifth taxable year after the taxable year in which the contribution is made.
The amount of credits permitted within the state in any given year is not to exceed three million dollars ($3,000,000). A minimum donation of one thousand dollars ($1000) is established. A nonprofit can receive no more than three hundred fifty thousand dollars ($350,000) in credits.
44-59-5. Administrative agency. -- The housing resource commission, with assistance from the division of taxation, shall administer the provisions of this chapter.
Administrative funds shall be provided to the agency for one full-time staff member and such necessary part-time support staff member and a budget to solicit and mail applications, educational materials, and workshops.
44-59-6. Administrative and procedural provisions. -- The housing resource commission (HRC), is hereby authorized to promulgate rules and regulations for the approval or disapproval of proposals by nonprofit organizations. In approving or disapproving a proposal, and in determining the maximum amount of contributions to an approved project that will be eligible for the tax credits provided, the HRC shall consider:
(1) the need for the project in relation to the other projects proposed; (2) geographic distribution of projects; and (3) other relevant factors. The HRC shall give priority in issuing certificates to applicants whose programs directly benefit enterprise zones or other priority projects which are created by the HRC and approved by the governor. The HRC shall promptly notify an applicant in writing whether, or the extent to which, the tax credit is allowable in the state fiscal year in which the application is filed.
Any business firm or person which desires to claim a tax credit as provided in this chapter shall file an application form, that the HRC may prescribe, which shall contain: (1) the name of the approved project to which the contribution was made; (2) the amount of the contribution; (3) a certification as to the value of any nonmonetary contribution. The application shall include a certificate evidencing approval of the contribution or program by the HRC.
The HRC may disallow any credit which is not claimed by a business or individual within five (5) years, or used by a nonprofit within nine (9) months.
44-59-7. Severability. -- If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or application of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
SECTION 2. This act shall take effect on July 1, 2001.
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LC01737
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO CREATION OF THE COMMUNITY AND NEIGHBORHOOD PARTNERSHIP TAX CREDIT
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This act would create the community and neighborhood partnership tax credit act of 2001 providing for a tax deduction against a person's or firm's income tax which or who contributes to state approved neighborhood and/or community organization which engage in activities to assist low-income persons.
This act would take effect on July 1, 2001.