2015 -- H 6104

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LC002435

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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 TAXATION -- RHODE ISLAND LIVABLE HOME TAX CREDIT ACT

     Introduced By: Representatives Naughton, Canario, Shekarchi, Bennett, and Keable

     Date Introduced: April 17, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

adding thereto the following chapter:

CHAPTER 70

RHODE ISLAND LIVABLE HOME TAX CREDIT ACT

     44-70-1. Short title. -- This chapter shall be known and may be cited as the "Rhode

Island Livable Home Tax Credit Act."

     44-70-2. Definitions. -- For the purpose of this chapter:

     (1) "Corporation" means Rhode Island housing and mortgage finance corporation.

     (2) "Director" means the executive director of that corporation.

     44-70-3. Tax credits. -- For taxable years beginning on and after January 1, 2016, any

taxpayer who purchases a new residence or retrofits or hires someone to retrofit an existing

residence, provided that such new residence or the retrofitting of such existing residence is

designed to improve accessibility, provide universal visitability, and meets the eligibility

requirements established by guidelines developed by the corporation, shall be allowed a credit

against the tax imposed pursuant to § 44-30-1 of an amount equal to five thousand dollars

($5,000) for such new residence, or fifty percent (50%) of the total amount spent for the

retrofitting of such existing residence, not to exceed five thousand dollars ($5,000). The credit

shall be allowed for the taxable year in which the residence has been purchased or construction,

retrofitting, or renovation of the residence or residential structure or unit has been completed.

Such a credit shall require application by the taxpayer as provided in § 44-70-4.

     44-70-4. Applications. -- Eligible taxpayers shall apply for the credit by making

application to the corporation, which shall issue a certification for an approved application to the

taxpayer. The taxpayer shall attach the certification to the applicable income tax return. The total

amount of tax credits granted under this section for any fiscal year shall not exceed five hundred

thousand dollars ($500,000). In each year, the corporation shall allocate two hundred fifty

thousand dollars ($250,000) in tax credits for the purchase or construction of new residences and

two hundred fifty thousand dollars ($250,000) in tax credits for the retrofitting or renovation of

existing residences or residential structures or units. If the amount of tax credits approved in a

fiscal year for the purchase or construction of new residences is less than two hundred fifty

thousand dollars ($250,000), the director of the corporation shall allocate the remaining balance

of such tax credits for the retrofitting or renovation of existing residences or residential structures

or units. If the amount of tax credits approved in a fiscal year for the retrofitting or renovation of

existing residences or residential structures or units is less than two hundred fifty thousand dollars

($250,000), the director shall allocate the remaining balance of such tax credits for the purchase

or construction of new residences. In the event applications for the tax credit exceed the amount

allocated by the director for the fiscal year, the corporation shall issue the tax credits pro rata

based upon the amount of tax credit approved for each taxpayer and the amount of tax credits

allocated by the director.

     44-70-5. Limitations. -- (a) No credit shall be allowed under this chapter for the

purchase, construction, retrofitting, or renovation of residential rental property.

     (b) In no case shall the director issue any tax credit relating to transactions or dealings

between affiliated entities. In no case shall the director issue any tax credit more than once to the

same or different persons relating to the same retrofitting, renovation, or construction project.

     (c) In no case shall the amount of credit taken by a taxpayer pursuant to this chapter

exceed the taxpayer's income tax liability for the taxable year. If the amount of credit allowed for

the taxable year in which the residence has been purchased or construction, retrofitting, or

renovation of the residence or residential structure or unit has been completed exceeds the

taxpayer's income tax liability imposed for such taxable year, then the amount that exceeds the

tax liability may be carried over for credit against the income taxes of such taxpayer in the next

seven (7) taxable years or until the total amount of the tax credit issued has been taken, whichever

is sooner. Credits granted to a partnership, limited liability company, or electing small business

corporation (S corporation) shall be allocated to the individual partners, members, or

shareholders, respectively, in proportion to their ownership or interest in such business entities.

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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 LIVABLE HOME TAX CREDIT ACT

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     This act would establish the "Rhode Island Livable Home Tax Credit Act", and provide

for its administration.

     This act would take effect upon passage.

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