2013 -- S 0734

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION -- RHODE ISLAND ECONOMIC DEVELOPMENT TAX

CREDIT ACCOUNTABILITY ACT OF 2013

     Introduced By: Senators DaPonte, Goodwin, Ruggerio, Paiva Weed, and Lynch

     Date Introduced: March 13, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

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adding thereto the following chapter:

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     CHAPTER 48.2

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"RHODE ISLAND ECONOMIC DEVELOPMENT TAX CREDIT ACCOUNTABILITY ACT

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OF 2013"

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     44-48.2-1. Short title. -- This chapter shall be known and may be cited as the "Economic

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Development Tax Credit Accountability Act of 2013."

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     44-48.2-2. Legislative findings. -- The general assembly finds and declares that:

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     (1) The state of Rhode Island relies on a number of tax incentives, credits, exemptions

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and deductions, to encourage businesses to locate, hire, expand, invest, and remain in the state;

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     (2) These various tax credits and incentives are intended as a tool for economic

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development, promoting jobs and business growth in Rhode Island;

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     (3) A comprehensive analysis and review of these various economic development tax

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incentives would better inform policy makers of the extent to which the incentives are meeting

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their intended purposes and delivering a strong return for the state of Rhode Island.

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     44-48.2-3. Economic development tax credit defined. -- As used in this section, the

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term "economic development tax credit" shall mean any tax credit, deduction, exemption,

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exclusion, preferential tax rate, tax abatement, and tax deferral, administered by the economic

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development corporation for the purpose of recruitment or retention of businesses in the state of

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Rhode Island.

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     44-48.2-4. Economic development tax credit accountability report. -- (a) On or before

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January 1, 2014, and every three (3) years thereafter, the chief of the office of revenue analysis, in

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consultation with the director of the economic development corporation, and the director of the

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department of labor and training, shall prepare a report with regard to all economic development

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tax credit programs. The report shall include, but not be limited to:

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     (1) A baseline assessment of the economic development tax credit programs enacted to

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encourage business growth in the state, including the number of aggregate jobs associated with

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taxpayers eligible for such tax credit programs and the aggregate annual revenue that such

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taxpayers generate for the state through the direct taxes applied to them and through their support

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of the state's economy through employment and other activities;

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     (2) A listing, by program, of the amount of economic development tax credits approved

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by the state during the preceding calendar year;

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     (3) A summary and evaluation of all business tax credit programs administered by the

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economic development corporation. Such summary and evaluation shall include, but need not be

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limited to, for each tax credit program:

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     (i) An assessment of the intended statutory and programmatic goals of the tax credit:

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     (ii) The number of taxpayers granted tax credits under the program during the previous

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twelve (12) month period;

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     (iii) The value of the tax credits granted, listed by the North American Industrial

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Classification System Code associated with the taxpayers receiving such credits;

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     (iv) The value of the tax credits actually claimed and the value of the tax credits carried

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forward, listed by the North American Industrial Classification System Code associated with the

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taxpayers claiming or carrying forward the credits;

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     (v) An assessment and five (5) year projection of the potential impact on the state's

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revenue stream from carry forwards allowed under such tax credit program;

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     (vi) An analysis of the economic impact of the tax credit program and whether the

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statutory and programmatic goals are being met, with obstacles to such goals identified, if

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possible;

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     (vii) The type and value of tax credits assigned and a summary by North American

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Industrial Classification System Codes of taxpayers to which such credits are assigned;

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     (viii) A cost-benefit analysis of the revenue foregone by allowing a tax credit, as

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compared to the economic impact of such credit;

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     (ix) The cost to the state to administer the tax credit program, and a comparison between

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such cost and the net revenue generated to the state by each such program;

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     (x) The average and aggregate administrative and compliance cost, to taxpayers, to

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comply with the requirements of the tax credit program; and

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     (xi) A recommendation as to whether the tax credit program should be continued,

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modified or repealed, the basis for such recommendation and the expected impact of such

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recommendation on the state’s economy;

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     (4) The methodology and assumptions used in carrying out the assessments, projections

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and analyses required pursuant to subdivisions (1), and (3) of this subsection.

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     (b) The chief of the office of revenue analysis shall submit the report required pursuant to

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this section to the governor and the chairs of the senate and house finance committees.

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     (c) All departments, offices, boards, and agencies of the state shall cooperate with the

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chief of the office of revenue analysis and shall provide to the office of revenue analysis any

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records, information (documentary and otherwise), data, and data analysis as may be as necessary

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to complete the report required pursuant to this section.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- RHODE ISLAND ECONOMIC DEVELOPMENT TAX

CREDIT ACCOUNTABILITY ACT OF 2013

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     This act would create the Rhode Island Economic Development Tax Credit

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Accountability Act of 2013 to provide an assessment of the state's tax credit programs.

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     This act would take effect upon passage.

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