2012 -- S 2242

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LC00399

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - DISTRESSED AREAS

ECONOMIC REVITALIZATION ACT

     Introduced By: Senator Walter S. Felag

     Date Introduced: January 26, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 42-64.3-3 of the General Laws in Chapter 42-64.3 entitled

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"Distressed Areas Economic Revitalization Act" is hereby amended to read as follows:

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     42-64.3-3. Definitions. -- As used in this chapter, the following words and terms shall

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have the following meanings unless the context shall indicate another or different meaning or

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intent:

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      (1) "Council" or "enterprise zone council" means the governmental agency created

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pursuant to section 42-64.3-3.1.

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      (2) "Enterprise zone," "economic revitalization zone," or "zone" means an economically

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distressed United States bureau of the census division or delineation in need of expansion of

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business and industry, and the creation of jobs, which is designated to be eligible for the benefits

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of this chapter.

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      (3) "Governing authority" means the governing body of a state, city or town within

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which a qualified United States bureau of the census division or delineation lies.

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      (4) (i) "Qualified business" or "business facility" means any business corporation, sole

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proprietorship, partnership, or limited partnership or limited liability company which:

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      (A) After the date of its original application for membership in the enterprise zone

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program or the date annual membership is renewed creates and hires a minimum of five percent

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(5%) new or additional enterprise jobs or in the case of a company having twenty (20) employees

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or less, this requirement shall be that the company create and hire one new or additional

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enterprise job, in the respective zone during the same certification year; and

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      (B) Whose total Rhode Island wages including those Rhode Island wages for additional

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enterprise jobs, exceeds the total Rhode Island wages paid to its employees in the prior calendar

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year; and

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      (C) Obtains certificates of good standing from the Rhode Island division of taxation, the

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corporations division of the Rhode Island secretary of state and the appropriate municipal

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authority at the time of certification; and

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      (D) Provides the council with an affidavit stating under oath that the entity seeking

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certification as a qualified business has not within the preceding twelve (12) months from the date

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of application for certification changed its legal status for the purpose of gaining favorable

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treatment under the provisions of chapter 64.3 of this title; and

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      (E) Meets certain other requirements as set forth by the council; and

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      (F) Has received certification from the council pursuant to the rules and regulations

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promulgated by the council.

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      (ii) In the event that an applicant for certification meets the criteria of subdivisions

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(4)(i)(A) and (4)(i)(C) to (F), but fails to meet the requirements of subdivision (4)(i)(B) solely

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because the amount of wages paid to the owner or owners of the business has decreased from the

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prior calendar year, or because the amount of wages paid has decreased from the prior calendar

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year because overtime wages were paid at a rate higher than the normal wage and the normal

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wages paid to the new or additional enterprise jobs required in subdivision (4)(i)(A) caused the

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decrease, the Council may, for good cause shown, certify the applicant as a qualified business.

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The applicant shall have the burden to show, notwithstanding its failure to meet the requirements

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of subdivision (4)(i)(B) above, that the applicant has met the intent of this chapter. For the

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purposes of this provision, owner shall mean a person who has at least twenty percent (20%) of

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the indicia of ownership of the applicant.

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      (5) "Effective date of certification" means the date upon which the qualified business

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meets the tests imposed in subdivisions (4)(i)(A) through (F) above and applies to the calendar

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year for which these tests were performed.

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      (6) "Enterprise job employees" means those full-time employees whose business activity

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originates and terminates from within the enterprise zone business and facility on a daily basis,

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and who are domiciled residents of the state (or who, in the case of employees of a high

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performance manufacturer as that term is defined in section 44-31-1(b)(3)(i), pay personal

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income taxes to the state) and hired (or transferred, in the case of existing out-of-state employees)

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and employed by the qualified business in the enterprise zone after the effective date of

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certification or annual recertification in excess of those full-time employees employed by the

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qualified business in any Rhode Island enterprise zone in the prior calendar year. An employee

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who is hired and terminated in the same certification period does not constitute an enterprise job

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employee.

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      (7) "Wages" means wages, tips and other compensation as defined in the Internal

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Revenue Code of 1986, 26 U.S.C. section 1 et seq.

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     SECTION 2. This act shall take effect upon passage.

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LC00399

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - DISTRESSED AREAS

ECONOMIC REVITALIZATION ACT

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     This act would redefine the criteria for certification as a "qualified business" under the

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distressed areas economic revitalization act.

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     This act would take effect upon passage.

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LC00399

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