2015 -- H 5521

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LC001345

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - DISTRESSED AREAS

ECONOMIC REVITALIZATION ACT

     Introduced By: Representatives Reilly, Edwards, Canario, Phillips, and Ruggiero

     Date Introduced: February 12, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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

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

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

intent:

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

pursuant to § 42-64.3-3.1.

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

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

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

of this chapter.

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

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

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

proprietorship, partnership, or limited partnership, or limited liability company, limited liability

partnership or other form of corporate entity registered to do business in the state of Rhode Island

which:

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

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

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

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

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

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

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

year; and

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

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

authority at the time of certification; and

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

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

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

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

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

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

promulgated by the council.

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

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

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

prior calendar year, the Council may, for good cause shown, certify the applicant as a qualified

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

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

For the purposes of this provision, owner shall mean a person who has at least twenty percent

(20%) of the indicia of ownership of the applicant.

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

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

year for which these tests were performed.

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

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

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

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

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

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

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

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

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

employee.

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

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

     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 STATE AFFAIRS AND GOVERNMENT - DISTRESSED AREAS

ECONOMIC REVITALIZATION ACT

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     This act would expand the definition of qualified businesses with respect to enterprise

zones to include limited liability partnerships and any other form of business corporation.

     This act would take effect upon passage.

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