2025 -- S 0940

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LC001980

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 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

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-33.6-2, 44-33.6-3, 44-33.6-4, 44-33.6-9 and 44-33.6-11 of the

General Laws in Chapter 44-33.6 entitled "Historic Preservation Tax Credits 2013" are hereby

amended to read as follows:

     44-33.6-2. Definitions.

     As used in this chapter:

     (1) “Certified historic structure” means a property which is 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 commission or

Secretary of the Interior as being of historic significance to the district.

     (2) “Certified rehabilitation” means any rehabilitation of a certified historic structure

consistent with the historic character of such property or the district in which the property is located

as determined by the commission guidelines.

     (3) “Commission” means the Rhode Island historical preservation and heritage commission

created pursuant to § 42-45-2.

     (4) “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.

     (5) “Exempt from real property tax” means, with respect to any certified historic structure,

that the structure is exempt from taxation pursuant to § 44-3-3.

     (6) “Hard construction costs” means the direct contractor costs for labor, material,

equipment, and services associated with an approved project, contractor’s overhead and profit, and

other direct construction costs.

     (7) “Holding period” means twenty-four (24) months after the commission issues a

certificate of completed work to the owner. In the case of a rehabilitation which may reasonably be

expected to be completed in phases as described in subdivision (15) of this section, “holding

period” shall be extended to include a period of time beginning on the date of issuance of a

certificate of completed work for the first phase or phases for which a certificate of completed work

is issued and continuing until the expiration of twenty-four (24) months after the certificate of

completed work issued for the last phase.

     (8) “Part 2 application” means the Historic Preservation Certification Application Part 2—

Description of Rehabilitation.

     (9) “Placed in service” means that substantial rehabilitation work has been completed

which would allow for occupancy of the entire structure or some identifiable portion of the

structure, as established in the Part 2 application.

     (10) “Principal residence” means the principal residence of the owner within the meaning

of section 121 of the Internal Revenue Code [26 U.S.C. § 121] or any successor provision.

     (11) “Qualified rehabilitation expenditures” means any amounts the amounts applied for

and presented to the division of taxation in the cost certification prepared by an independent

certified public accountant for calculation of allowable tax credits under this chapter based on the

formula set forth herein, which amounts were expended in the rehabilitation of a certified historic

structure properly capitalized to the building and either:

     (i) Depreciable under the Internal Revenue Code, 26 U.S.C. § 1 et seq.; or

     (ii) Made with respect to property (other than the principal residence of the owner) held for

sale by the owner. Fees paid pursuant to this chapter are not qualified rehabilitation expenditures.

Notwithstanding the foregoing, except in the case of a nonprofit corporation, there will be deducted

from qualified rehabilitation expenditures for the purposes of calculating the tax credit any funds

made available to the person (including any entity specified in § 44-33.5-3(a)) incurring the

qualified rehabilitation expenditures in the form of a direct grant from a federal, state, or local

governmental entity or agency or instrumentality of government.

     (12) “Registered historic district” means any district listed in the National Register of

Historic Places or the state register of historic places.

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     (13) “Remain idle” means that substantial work has ceased at the subject project; work

crews have been reduced by more than twenty-five percent (25%) for reasons unrelated to

scheduled completion of work in accordance with the project schedule, reasonably unanticipated

physical conditions, or force majeure; or the project schedule that was originally submitted by the

taxpayer to the commission has been extended by more than twelve (12) months for reasons other

than reasonably unanticipated physical conditions or an event of force majeure (by way of example,

and not in limitation, any delays, work stoppage, or workforce reduction caused by issues with

project funding, finances, disputes, or violation of laws shall be deemed to cause a project to remain

idle).

     (14) “Scattered site development” means a development project for which the developer

seeks unified financing to rehabilitate dwelling units in two (2) or more buildings located in an area

that is defined by a neighborhood revitalization plan and is not more than one mile in diameter.

     (15) “Social club” means a corporation or other entity and/or its affiliate that offers its

facilities primarily to members for social or recreational purposes and the majority source of its

revenue is from funds and/or dues paid by its members and/or an entity defined as a social club

pursuant to the Internal Revenue Code section 501(c)(7).

     (16) “Substantial construction” means that: (i) The owner of a certified historic structure

has entered into a contract with the division of taxation and paid the processing fee; (ii) The

commission has certified that the certified historic structure’s rehabilitation will be consistent with

the standards set forth in this chapter; and (iii) The owner has expended ten percent (10%) of its

qualified rehabilitation expenditures, estimated in the contract entered into with the division of

taxation for the project or its first phase of a phased project.

     (17) “Substantial rehabilitation” means, with respect to a certified historic structure, that

the qualified rehabilitation expenses of the building during the twenty-four-month (24) period

selected by the taxpayer ending with or within the taxable year exceed the adjusted basis in such

building and its structural components as of the beginning of such period. In the case of any

rehabilitation, which may reasonably be expected to be completed in phases set forth in

architectural plans and specifications completed before the rehabilitation begins, the above

definition shall be applied by substituting “sixty-month (60) period” for “twenty-four-month (24)

period.”

     (18) “Trade or business” means an activity that is carried on for the production of income

from the sale or manufacture of goods or performance of services, excluding residential rental

activity.

     44-33.6-3. Tax credit.

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     (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%) Thirty percent (30%) of the qualified rehabilitation expenditures

provided that at least eighty percent (80%) of the total rental area of the certified historic structure

will be made available for multi-family housing; or

     (2) Twenty-five percent (25%) of the qualified rehabilitation expenditures provided that

either for all other projects:

     (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) eight million dollars ($8,000,000) 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) eight million dollars

($8,000,000) 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

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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 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, or the

taxpayer that received an allocation of the tax credits, has not claimed the tax credits in whole or

part, taxpayers eligible for the tax credits such person or entity 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

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(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 with a budget of direct hard costs in excess of ten million

dollars ($10,000,000) twenty million dollars ($20,000,000), all 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

("prevailing wage requirements"). Failure to follow the prevailing wage requirements imposed

hereunder and 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. Failure to follow

the prevailing wage requirements imposed hereunder and pursuant to chapter 13 of title 37 shall

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constitute a material violation and a material breach of the agreement with the state and shall require

the pending tax credits to be revoked.

     44-33.6-4. Administration.

     (a) To claim the tax credit authorized in this chapter, taxpayers shall apply:

     (1) To the commission prior to the certified historic structure being placed in service for a

certification that the certified historic structure’s rehabilitation will be consistent with the standards

of the Secretary of the United States Department of the Interior for rehabilitation;

     (2) To the commission after completion of the rehabilitation work of the certified historic

structure for a certification that the rehabilitation is consistent with the standards of the Secretary

of the United States Department of the Interior for rehabilitation; and

     (3) To the division of taxation after completion of the rehabilitation work of the certified

historic structure for a certification as to the amount of tax credit for which the rehabilitation

qualifies. The commission and the division of taxation may rely on the facts represented in the

application without independent investigation and, with respect to the amount of tax credit for

which the rehabilitation qualifies, upon the certification of a certified public accountant licensed in

the state of Rhode Island. The applications shall be developed by the commission and the division

of taxation and may be amended from time to time.

     (b) Within thirty (30) days after the commission’s and division of taxation’s receipt of the

taxpayer’s application requesting certification for the completed rehabilitation work:

     (1) The commission shall issue the taxpayer a written determination either denying or

certifying the rehabilitation; and

     (2) Division of taxation shall issue a certification of the amount of credit for which the

rehabilitation qualifies. To claim the tax credit, the division of taxation’s certification as to the

amount of the tax credit shall be attached to all state tax returns on which the credit is claimed.

     (c) No taxpayer may benefit from the provisions of this chapter unless the owner of the

certified historic structure grants a restrictive covenant to the commission, agreeing that during the

holding period no material alterations to the certified historic structure will be made without the

commission’s prior approval and agreeing that such shall be done in a manner consistent with the

standards of the Secretary of the United States Department of the Interior; and, in the event the

owner applies for the twenty-five percent (25%) thirty percent (30%) tax credit, that either:

     (1) At at least twenty-five percent (25%) thirty percent (30%) of the total rentable rental

area of the certified historic structure will be made available for a trade or business; or

     (2) The entire rentable area located on the first floor of the certified historic structure will

be made available for a trade or business, in either case, for a period of sixty (60) months after the

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placed in service date of the certified historic structure or identifiable portion thereof multifamily

housing.

     (d) The division of taxation shall charge a fee equal to three percent (3%) one percent (1%)

of qualified rehabilitation expenditures. The fee shall be payable upon submission of the Part 2

application. The fee shall be non-refundable refundable upon receipt of a certificate of occupancy

for the project.

     (e) Notwithstanding any provisions of the general laws or regulations adopted thereunder

to the contrary, including, but not limited to, the provisions of chapter 2 of title 37, the division of

taxation is hereby expressly authorized and empowered to enter into contracts with persons, firms,

partnerships, trusts, estates, limited liability companies, corporations (whether for profit or

nonprofit) or other business entities that incur qualified rehabilitation expenditures for the

substantial rehabilitation of certified historic structures or some identifiable portion of a structure.

Upon payment of the portion of the fee set forth in subdivision (d) above, the division of taxation

and the applicant shall enter into a contract for tax credits consistent with the terms and provisions

of this chapter.

     (f) Upon satisfaction of the requirements set forth herein and the payment of the fees as set

forth in subdivision (d) above, the division of taxation shall, on behalf of the State of Rhode Island,

guarantee the delivery of one hundred percent (100%) of the tax credit and use of one hundred

percent (100%) of the tax credit in the tax year a certified historic structure is placed in service

through a contract with persons, firms, partnerships, trusts, estates, limited liability companies,

corporations (whether for profit or nonprofit) or other business entities that will incur qualified

rehabilitation expenditures for the substantial rehabilitation of a certified historic structure or some

identifiable portion of a structure.

     (g) Any contract executed pursuant to this chapter by a person, firm, partnership, trust,

estate, limited liability company, corporation (whether for profit or nonprofit) or other business

entity shall be assignable to:

     (1) An affiliate thereof without any consent from the division of taxation;

     (2) A banking institution as defined by § 44-14-2(2) or credit union as defined in § 44-15-

1.1(1) without any consent from the division of taxation; or

     (3) A 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 certified historic structures or some identifiable

portion of a structure, with such assignment to be approved by the division of taxation, which

approval shall not be unreasonably withheld or conditioned. For purposes of this subsection,

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“affiliate” shall be defined as any entity controlling, controlled by or under common control with

such person, firm, partnership, trust, estate, limited liability company, corporation (whether for

profit or nonprofit) or other business entity.

     (h) If information comes to the attention of the commission or division of taxation at any

time up to and including the last day of the holding period that is materially inconsistent with

representations made in an application, the commission may deny the requested certification or

revoke a certification previously given, and in either instance all fees paid by the applicant shall be

deemed forfeited. In the event that tax credits or a portion of tax credits are subject to recapture for

ineligible costs and such tax credits have been transferred, assigned and/or allocated, the state will

pursue its recapture remedies and rights against the applicant of the tax credits, and all fees paid by

the applicant shall be deemed forfeited. No redress shall be sought against assignees, transferees or

allocates of such credits provided they acquired the tax credits by way of an arms-length

transaction, for value, and without notice of violation, fraud or misrepresentation.

     (i) The commission, in consultation with the division of taxation, shall promulgate such

rules and regulations as are necessary to carry out the intent and purpose of this chapter.

     44-33.6-9. Reporting requirements.

     (a) Each taxpayer requesting certification of a completed rehabilitation shall report to the

commission and the division of taxation the following information:

     (1) The number of total jobs created;

     (2) The number of Rhode Island businesses retained for work;

     (3) The total amount of qualified rehabilitation expenditures upon which tax credits were

calculated and awarded;

     (4) The total cost of materials or products purchased from Rhode Island businesses;

     (5) Such other information deemed necessary by the tax administrator.

     (b) Any agreements or contracts entered into under this chapter by the division, the

commission, or the commerce corporation and the taxpayer shall be sent to the division of taxation

and be available to the public for inspection by any person and shall be published by the tax

administrator on the tax division website.

     (c) By August 15th of each year the division of taxation shall report the name, address, and

amount of tax credit received for each credit recipient during the previous state fiscal year to the

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

advisors, and the department of labor and training. This report shall be available to the public for

inspection by any person and shall be published by the tax administrator on the tax division website.

     (d) By September 1st of each year the division of taxation shall report in the aggregate the

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information required under subsection (a) of this section. This report shall be available to the public

for inspection by any person and shall be published by the tax administrator on the tax division

website.

     (e) By September 1, 2018, and biennially thereafter the division of taxation shall report in

the aggregate the total number of approved projects, project costs, and associated amount of

approved tax credits.

     (f) By September 1 of each year the division of taxation shall report on:

     (1) The projects that have received conditional awards of tax credits from the queue, for

which the owner of a certified historic structure has entered into a contract with the division of

taxation and paid the processing fee, with such information to include the project owner name,

property address, amount of reserved award and queue number; and

     (2) The applicants in queue, with such information to include the project owner name,

property address, amount of requested award and queue number. Any applicant that refuses the

tax credit award or fails to meet the requirements to preserve the award shall be removed from the

report. This report shall be available to the public for inspection by any person and shall be

published by the tax administrator on the tax division website.

     (g) No tax credits shall be awarded under this chapter until the department of labor and

training certifies that the project is in compliance with the prevailing wage requirements set forth

in this chapter.

     44-33.6-11. Sunset.

     No credits shall be authorized to be reserved pursuant to this chapter on or after June 30,

2026 2030, or upon the exhaustion of the maximum aggregate credits, whichever comes first.

     SECTION 2. 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

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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) For construction projects with a budget of direct hard costs in excess of twenty million

dollars ($20,000,000), as set forth in the incentive agreement, 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

(“prevailing wage requirements”). Failure to follow the prevailing wage requirements imposed

hereunder and pursuant to chapter 13 of title 37 shall constitute a material violation and a material

breach of the agreement with the state and shall require any pending tax credits to be revoked.

     (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

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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)(4) 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

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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.

     (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

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(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

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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.

     (t) No tax credits shall be awarded under this chapter until the department of labor and

training certifies that the project is in compliance with the prevailing wage requirements set forth

in subsection (b)(4) of this section.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- HISTORIC PRESERVATION TAX CREDITS 2013

***

     This act would amend sections of law relative to historic tax credits including increasing

the maximum project credit and implementing requirements relative to following prevailing wage

requirements.

     This act would take effect upon passage.

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