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§42-64.20-3  Definitions. –


Published: 2015

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TITLE 42

State Affairs and Government

CHAPTER 42-64.20

Rebuild Rhode Island Tax Credit

SECTION 42-64.20-3



   § 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 § 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 § 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 general laws

§ 44-11-1(4), or a partnership, an S corporation, a non-profit

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 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 Rhode Island historical preservation and heritage commission

created pursuant to § 42-45-2 or the Secretary of the Interior as being of

historic significance to the district.



   (8) "Commerce corporation" means the Rhode Island commerce

corporation established pursuant to general laws § 42-64-1 et. seq.



   (9) "Commercial" shall mean non-residential development.



   (10) "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.



   (11) "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.



   (12) "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.



   (13) "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.



   (14) "Hope community" means a municipality for which the five

(5) year average percentage of families with income below the federal poverty

level exceeds the state five (5) year average percentage, both as most recently

reported by the U.S. Department of Commerce, Bureau of the Census.



   (15) "Mixed use" means a development comprising both

commercial and residential components.



   (16) "Partnership" means an entity classified as a

partnership for federal income tax purposes.



   (17) "Placed in service" means the earlier of i) substantial

construction or rehabilitation work has been completed which 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.



   (18) "Project" means qualified development project as defined

under subsection (23) of this chapter.



   (19) "Project area" means land or lands under common

ownership or control in which a qualified development project is located.



   (20) "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.



   (21) "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 (such

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.



   (22) "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.



   (23) "Recognized historical structure" means a property which

is located in the state of Rhode Island and is commonly considered to be of

historic or cultural significance as determined by the commerce corporation in

consultation with the state historic preservation officer.



   (24) "Residential" means a development of residential

dwelling units.



   (25) "Targeted industry" means any advanced, promising or

otherwise prioritized industry identified in the economic development vision

and policy promulgated pursuant General Laws § 42-64.17-1 or, until such

time as any such economic development vision and policy is promulgated, as

identified by the commerce corporation.



   (26) "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.



   (27) "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.



History of Section.

(P.L. 2015, ch. 141, art. 19, § 3.)