It is enacted by the General Assembly as follows:

SECTION 1. Title 42 of the General Laws entitled "State Affairs and Government" is hereby amended by adding thereto the following chapter:

{ADD 42-64.5-1. Short Title. -- ADD} {ADD This chapter shall be known as the "Rhode Island Jobs Development Act". ADD}

{ADD 42-64.5-2. Definitions. -- ADD} {ADD As used in this chapter unless the context clearly indicated otherwise, the following words and phrases shall have the following meanings:

"Adjusted Current Employment", means for any taxable year ending on or after July 1, 1995, the aggregate of the average daily number of full-time equivalent active employees employed within the State by an eligible company and its eligible subsidiaries during such taxable year.

"Affiliated entity" means any corporation owned or controlled by the same persons or shareholders who own or control an eligible company.

"Base employment" means the aggregate number of full-time equivalent active employees employed within the State by an eligible company and its eligible subsidiaries on July 1, 1994.

"Eligible subsidiary" means each corporation 80% or more of the outstanding common stock of which is owned by an eligible company.

"Eligible company" means any corporation, state bank, federal savings bank, trust company, national banking association, bank holding company, loan and investment company, mutual savings bank, credit union, building and loan association, insurance company, investment company, broker-dealer company or surety company or an eligible subsidiary of any of the foregoing, qualified to do business in the State.

"Full-time equivalent active employees" means any employee of an eligible company who (1) works a minimum of 30 hours per week within the State, or two or more part-time employees whose combined weekly hours equal or exceed 30 hours per week within the State and (2) earns no less than 150% of the hourly minimum wage prescribed by Rhode Island law.

"New employment" means for each taxable year the amount of adjusted current employment for such taxable year minus the amount of base employment, but in no event less than zero, provided however, no eligible company is permitted to transfer, assign or hire employees who are already employed within the State by such eligible company from itself or any affiliated entity or utilize any other artifice or device for the purpose of artificially creating new employees in order to qualify for the rate reduction provided for in this chapter.

"Rate reduction" means the reduction in tax rate specified in Section 42-64.5-4 hereof.

"Small business concern" means any eligible company which has a base employment level of less than one hundred (100).

"State" means the State of Rhode Island and Providence Plantations.

"Units of new employment" means (i) for eligible companies, which are not small business concerns, for each taxable year, the amount of new employment for such taxable year divided by fifty (50) and (ii) for eligible companies which are small business concerns, for each taxable year, the amount of new employment for such taxable year divided by ten (10), rounded down to the nearest multiple of ten (10). ADD}

{ADD 42-64.5-3. Tax Rate Reduction. -- ADD} {ADD The rate of tax payable by an eligible company and each of its eligible subsidiaries for any taxable year ending on or after July 1, 1995 on its net income pursuant to the applicable income tax provisions of the general laws, including the provisions of Section 44-11-2(a), 44-14-3(1), 44-14-4 and 44-17-1, shall be reduced by the amount specified in Section 42-64.5-4; such rate reduction shall be applied annually once to those eligible companies which are permitted by law to file a consolidated state tax return and in the case of eligible companies not permitted by law to file consolidated state tax returns, then such rate reduction shall be applied annually to each such eligible company and its eligible subsidiaries; provided, however should any eligible company fail to maintain in any taxable year after 1997 the number of units of new employment it reported for its 1997 tax year, the rate reduction provided for in this chapter shall expire permanently. ADD}

{ADD 42-64.5-4. Reduction Rate Schedule. -- ADD} {ADD The amount of the rate reduction specified in Section 42-64.5-3 for each taxable year ending on or after July 1, 1995 shall be based upon the aggregate amount of new employment of the eligible company and its eligible subsidiaries for such taxable year, and shall be determined by multiplying the numerical equivalent of one-quarter of one percent (.25%) by the number of units of new employment for each such taxable year through the taxable year ending in 1997 and for each taxable year thereafter, the number of units of new employment reported for the taxable year 1997; provided, however, the amount of such rate reduction shall in no event be greater than six percent (6%). ADD}

{ADD 42-64.5-5. Severability. -- ADD} {ADD If any provision of this chapter or the application of any section or part thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application. ADD}

SECTION 2. This act shall take effect upon passage and any provisions of the general laws inconsistent herewith are hereby repealed.