TITLE 42

State Affairs and Government

CHAPTER 42-64

Rhode Island Commerce Corporation

SECTION 42-64-20



   § 42-64-20  Exemption from taxation. –

(a) The exercise of the powers granted by this chapter will be in all respects

for the benefit of the people of this state, the increase of their commerce,

welfare, and prosperity and for the improvement of their health and living

conditions and will constitute the performance of an essential governmental

function and the corporation shall not be required to pay any taxes or

assessments upon or in respect of any project or of any property or moneys of

the Rhode Island COMMERCE CORPORATION, levied by any municipality or political

subdivision of the state; provided, that the corporation shall make payments in

lieu of real property taxes and assessments to municipalities and political

subdivisions with respect to projects of the corporation located in the

municipalities and political subdivisions during those times that the

corporation derives revenue from the lease or operation of the projects.

Payments in lieu of taxes shall be in amounts agreed upon by the corporation

and the affected municipalities and political subdivisions. Failing the

agreement, the amounts of payments in lieu of taxes shall be determined by the

corporation using a formula that shall reasonably ensure that the amounts

approximate the average amount of real property taxes due throughout the state

with respect to facilities of a similar nature and size. Any municipality or

political subdivision is empowered to accept at its option an amount of

payments in lieu of taxes less than that determined by the corporation. If,

pursuant to § 42-64-13(f), the corporation shall have agreed with a

municipality or political subdivision that it shall not provide all of the

specified services, the payments in lieu of taxes shall be reduced by the cost

incurred by the corporation or any other person in providing the services not

provided by the municipality or political subdivision.



   (b) The corporation shall not be required to pay state taxes

of any kind, and the corporation, its projects, property, and moneys and,

except for estate, inheritance, and gift taxes, any bonds or notes issued under

the provisions of this chapter and the income (including gain from sale or

exchange) from these shall at all times be free from taxation of every kind by

the state and by the municipalities and all political subdivisions of the

state. The corporation shall not be required to pay any transfer tax of any

kind on account of instruments recorded by it or on its behalf.



   (c) For purposes of the exemption from taxes and assessments

upon or in respect of any project under subsections (a) or (b) of this section,

the corporation shall not be required to hold legal title to any real or

personal property, including any fixtures, furnishings or equipment which are

acquired and used in the construction and development of the project, but the

legal title may be held in the name of a lessee (including sublessees) from the

corporation. This property, which shall not include any goods or inventory used

in the project after completion of construction, shall be exempt from taxation

to the same extent as if legal title of the property were in the name of the

corporation; provided that the board of directors of the corporation adopts a

resolution confirming use of the tax exemption for the project by the lessee.

Such resolution shall not take effect until thirty (30) days from passage. The

resolution shall include findings that: (1) the project is a project of the

corporation under § 42-64-3(20), and (2) it is in the interest of the

corporation and of the project that legal title be held by the lessee from the

corporation. In adopting the resolution, the board of directors may consider

any factors it deems relevant to the interests of the corporation or the

project including, for example, but without limitation, reduction in potential

liability or costs to the corporation or designation of the project as a

"Project of Critical Economic Concern" pursuant to Chapter 117 of this title.



   (d) For purposes of the exemption from taxes and assessments

for any project of the corporation held by a lessee of the corporation under

subsection (c) of this section, any such project shall be subject to the

following additional requirements:



   (1) The total sales tax exemption benefit to the lessee will

be implemented through a reimbursement process as determined by the division of

taxation rather than an up-front purchase exemption;



   (2) The sales tax benefits granted pursuant to RIGL

42-64-20(c) shall only apply to project approved prior to July 1, 2011 and

shall: (i) only apply to materials used in the construction, reconstruction or

rehabilitation of the project and to the acquisition of furniture, fixtures and

equipment, except automobiles, trucks or other motor vehicles, or materials

that otherwise are depreciable and have a useful life of one year or more, for

the project for a period not to exceed six (6) months after receipt of a

certificate of occupancy for any given phase of the project for which sales tax

benefits are utilized; and (ii) not exceed an amount equal to the income tax

revenue received by the state from the new full-time jobs with benefits

excluding project construction jobs, generated by the project within a period

of three (3) years from after the receipt of a certificate of occupancy for any

given phase of the project. "Full- time jobs with benefits" means jobs that

require working a minimum of thirty (30) hours per week within the state, with

a median wage that exceeds by five percent (5%) the median annual wage for the

preceding year for full-time jobs in Rhode Island, as certified by the

department of labor and training with a benefit package that is typical of

companies within the lessee's industry. The sales tax benefits granted pursuant

to Rhode Island general laws subsection 42-64-20(c) shall not be effective for

projects approved on or after July 1, 2011.



   (3) The corporation shall transmit the analysis required by

RIGL 42-64-10(a)(2) to the house and senate fiscal committee chairs, the

department of labor and training and the division of taxation promptly upon

completion. Annually thereafter, the department of labor and training shall

certify to the house and senate fiscal committee chairs, the house and senate

fiscal advisors, the corporation and the division of taxation the actual number

of new full-time jobs with benefits created by the project, in addition to

construction jobs, and whether such new jobs are on target to meet or exceed

the estimated number of new jobs identified in the analysis above. This

certification shall no longer be required when the total amount of new income

tax revenue received by the state exceeds the amount of the sales tax exemption

benefit granted above.



   (4) The department of labor and training shall certify to the

house and senate fiscal committee chairs and the division of taxation that jobs

created by the project are "new jobs" in the state of Rhode Island, meaning

that the employees of the project are in addition to, and without a reduction

of, those employees of the lessee currently employed in Rhode Island, are not

relocated from another facility of the lessee's in Rhode Island or are

employees assumed by the lessee as the result of a merger or acquisition of a

company already located in Rhode Island. Additionally, the corporation, with

the assistance of the lessee, the department of labor and training, the

department of human services and the division of taxation shall provide

annually an analysis of whether any of the employees of the project qualify for

RIte Care or RIte Share benefits and the impact such benefits or assistance may

have on the state budget.



   (5) Notwithstanding any other provision of law, the division

of taxation, the department of labor and training and the department of human

services are authorized to present, review and discuss lessee specific tax or

employment information or data with the corporation, the house and senate

fiscal committee chairs, and/or the house and senate fiscal advisors for the

purpose of verification and compliance with this resolution; and



   (6) The corporation and the project lessee shall agree that,

if at any time prior to the state recouping the amount of the sales tax

exemption through new income tax collections from the project, not including

construction job income taxes, the lessee will be unable to continue the

project, or otherwise defaults on its obligations to the corporation, the

lessee shall be liable to the state for all the sales tax benefits granted to

the project plus interest, as determined in RIGL 44-1-7, calculated from the

date the lessee received the sales tax benefits.



History of Section.

(P.L. 1974, ch. 100, § 14; P.L. 1976, ch. 277, § 7; P.L. 1995, ch.

400, § 4; P.L. 2006, ch. 246, art. 30, § 17; P.L. 2009, ch. 5, art.

11, § 1; P.L. 2010, ch. 239, § 7; P.L. 2011, ch. 151, art. 19, §

21; P.L. 2013, ch. 243, § 3; P.L. 2013, ch. 490, § 3.)