TITLE 42

State Affairs and Government

CHAPTER 42-64.22

Tax Stabilization Incentive

SECTION 42-64.22-2



   § 42-64.22-2  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

Providence-Fall River, RI-MA metropolitan area median income, as defined

annually by the United States Department of Housing and Urban Development.



   (4) "Applicant" means a qualifying community or hope

community applying for incentives 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 tax stabilization agreement based upon any capital investment made by an

affiliate.



   (6) "Capital investment" in a qualified development project

means expenses by a business or any affiliate of the business 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; and/or



   (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 business acquires or

leases a qualified business facility, 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 business facility, shall be considered a capital

investment by the business and, if pertaining generally to the qualified

business facility being acquired or leased, shall be allocated to the premises

of the qualified business facility on the basis of the gross leasable area of

the premises in relation to the total gross leasable area in the qualified

business facility. The capital investment described herein may include any

capital investment made or acquired within twenty-four (24) months prior to the

date of application so long as the amount of capital investment made or

acquired by the business, any affiliate of the business, or any owner after the

date of application equals at least fifty percent (50%) of the amount of

capital investment, allocated to the premises of the qualified business

facility being acquired or leased on the basis of the gross leasable area of

such premises in relation to the total gross leasable area in the qualified

business facility made or acquired prior to the date of application.



   (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 commission or 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" means non-residential development.



   (10) "Developer" means a person, firm, corporation,

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

qualified community and/or Hope Community may apply for reimbursement under

this chapter. The eligibility period shall be subject to the term defined in

the qualifying tax stabilization agreement granted by said community. The

amounts subject to reimbursement shall cease upon any termination or cessation

of the underlying qualified tax stabilization agreement.



   (13) "Forgone tax revenue" means the amount of revenue that a

municipality would have received from a qualified development project had a tax

stabilization agreement not been in place, less the amount of revenue the

municipality would be expected to receive from that qualified development

project with a tax stabilization agreement in place.



   (14) "Full-time job" means a position for which a person 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.



   (15) "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.



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

under subsection (16) of this chapter.



   (17) "Project cost" means the costs incurred in connection

with the qualified development 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.



   (18) "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.



   (19) "Qualifying communities" are those municipalities within

the state that are not defined as a hope community.



   (20) "Qualified development project" includes:



   (i) Rehabilitation of an existing structure where the total

cost of development budget exceeds fifty percent (50%) of adjusted basis in

such a qualifying property as of the date that the parties applied for said

qualifying tax stabilization agreement; or



   (ii) Construction of a new building wherein:



   (A) The subject community has issued a tax stabilization

agreement, as set forth herein and pursuant to § 44-3-9 of the general

laws as well as other applicable rules, regulations and, procedures;



   (B) Construction commences within twelve (12) months of the

subject tax stabilization agreement being approved; and



   (C) Completion of the proposed development project occurs

within thirty six (36) months, subject to the approval of qualifying or hope

communities.



   (21) "Qualifying property" means any building or structure

used or intended to be used essentially for offices or commercial enterprises

or residential purposes.



   (22) "Qualifying tax stabilization agreement" are those tax

stabilization agreements with a minimum term of twelve (12) years, granted by a

qualified and/or hope community in connection with a qualifying project.



   (23) "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 Providence-Fall River, RI-MA

metropolitan 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, § 5.)