2015 -- S 0122 SUBSTITUTE A

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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 -- STAY INVESTED IN RI

WAVEMAKER FELLOWSHIP

     Introduced By: Senators Pearson, Satchell, Kettle, Picard, and Jabour

     Date Introduced: January 22, 2015

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.26

STAY INVESTED IN RI WAVEMAKER FELLOWSHIP

     42-64.26-1. Short title. -- This chapter shall be known as the "Stay Invested in RI

Wavemaker Fellowship."

     42-64.26-2. Legislative findings. -- The general assembly finds and declares:

     (1) A well-educated citizenry is critical to this state's ability to compete in the national

and global economies.

     (2) Higher education both benefits individual students and is a public good benefitting the

state as a whole.

     (3) Excessive student loan debt is impeding economic growth in this state. Faced with

excessive repayment burdens, many individuals are unable to start businesses, invest or buy

homes, and may be forced to leave the state in search of higher paying jobs elsewhere.

     (4) Relieving student loan debt would give these individuals greater control over their

earnings, would increase entrepreneurship and demand for goods and services, and would enable

employers in this state to recruit and retain graduates in the fields of science, technology,

engineering and mathematics.

     (5) The Stay Invested in RI Wavemaker Fellowship is designed to achieve the following

goals:

     (i) Promote economic opportunity for people in this state by ensuring access to the

training and higher education that higher-paying jobs require;

     (ii) Bring more and higher-paying jobs to this state by increasing the skill level of this

state's workforce;

     (iii) Offer educational opportunity and retraining to individuals impacted by job loss,

workplace injury, disability or other hardship;

     (iv) Keep young people in the state through incentives for educational opportunity and

creation of more high-paying jobs;

     (v) Encourage an entrepreneurial economy in Rhode Island; and

     (vi) Accomplish all of the goals in this chapter with as little bureaucracy as possible.

     42-64.26-3. Definitions. -- As used in this chapter:

     (1) "Eligible graduate" means an individual who meets the eligibility requirements under

this chapter.

     (2) "Applicant" means an eligible graduate who applies for a tax credit for education loan

repayment expenses under this chapter.

     (3) "Award" means a tax credit awarded by the commerce corporation to an applicant as

provided under this chapter.

     (4) "Taxpayer" means an applicant who receives a tax credit under this chapter.

     (5) "Commerce corporation" means the Rhode Island commerce corporation established

pursuant to chapter 64 of title 42.

     (6) "Eligible expenses" or "education loan repayment expenses" means annual higher

education loan repayment expenses, including, without limitation, principal, interest and fees, as

may be applicable, incurred by an eligible graduate and which the eligible graduate is obligated to

repay for attendance at a post-secondary institution of higher learning.

     (7) "Eligibility period" means a term of up to four (4) consecutive service periods

beginning with the date that an eligible graduate receives initial notice of award under this

chapter and expiring at the conclusion of the fourth service period after such date specified.

     (8) "Eligibility requirements" means the following qualifications or criteria required for

an applicant to claim an award under this chapter:

     (i) That the applicant shall have graduated from an accredited two (2) year, four (4) year

or graduate post-secondary institution of higher learning with an associate's, bachelor's, graduate,

or post-graduate degree and at which the applicant incurred education loan repayment expenses;

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     (ii) That the applicant shall be a full-time employee with a Rhode Island-based employer

located in this state throughout the eligibility period, whose employment is for work in one or

more of the following covered fields: life, natural or environmental sciences; computer,

information or software technology; advanced mathematics or finance; engineering; industrial

design or other commercially related design field; or medicine or medical device technology.

     (9) "Full-time employee" means a person who 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.

     (10) "Service period" means a twelve (12) month period beginning on the date that an

eligible graduate receives initial notice of award under this chapter.

     (11) "Student loan" means a loan to an individual by a public authority or private lender

to assist the individual to pay for tuition, books, and living expenses in order to attend a post-

secondary institution of higher learning.

     (12) "Rhode Island-based employer" means (i) an employer having a principal place of

business or at least fifty-one percent (51%) of its employees located in this state; or (ii) an

employer registered to conduct business in this state that reported Rhode Island tax liability in the

previous tax year.

     (13) "Fund" refers to the "Stay Invested in RI Wavemaker Fellowship Fund" established

pursuant to § 42-64.26-4.

     42-64.26-4. Establishment of fund; Purposes; Composition. -- (a) There is hereby

established the "Stay Invested in RI Wavemaker Fellowship Fund" (the "fund") to be

administered by the commerce corporation as set forth in this chapter.

     (b) The purpose of the fund is to expand employment opportunities in the state and to

retain talented individuals in the state by providing tax credits in relation to education loan

repayment expenses to applicants who meet the eligibility requirements under this chapter.

     (c) The fund shall consist of:

     (1) Money appropriated in the state budget to the fund;

     (2) Money made available to the fund through federal programs or private contributions;

and

     (3) Any other money made available to the fund.

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     (d) The fund shall be used to pay for the redemption of tax credits or reimbursement to

the state for tax credits applied against a taxpayer's tax liability. The fund shall be exempt from

attachment, levy or any other process at law or in equity. The director of the department of

revenue shall make a requisition to the commerce corporation for funding during any fiscal year

as may be necessary to pay for the redemption of tax credits presented for redemption or to

reimburse the state for tax credits applied against a taxpayer's tax liability. The commerce

corporation shall pay from the fund such amounts as requested by the director of the department

of revenue necessary for redemption or reimbursement in relation to tax credits granted under this

chapter.

     42-64.26-5. Administration. -- (a) Application.-- An eligible graduate claiming an award

under this chapter shall submit to the commerce corporation an application in the manner that the

commerce corporation shall prescribe.

     (b) Upon receipt of a proper application from an applicant who meets all of the eligibility

requirements, the commerce corporation shall select applicants on a competitive basis to receive

credits for up to a maximum amount for each service period of one thousand dollars ($1,000) for

an associate's degree holder, four thousand dollars ($4,000) for a bachelor's degree holder, and six

thousand dollars ($6,000) for a graduate or post-graduate degree holder, but not to exceed the

education loan repayment expenses incurred by such taxpayer during each service period

completed, for up to four (4) consecutive service periods provided that the taxpayer continues to

meet the eligibility requirements throughout the eligibility period. The commerce corporation

shall delegate the selection of the applicants that are to receive awards to a fellowship committee

to be convened by the commerce corporation and promulgate the selection procedures the

fellowship committee will use, which procedures shall require that the committee's consideration

of applications be conducted on a name-blind and employer-blind basis and that the applications

and other supporting documents received or reviewed by the fellowship committee shall be

redacted of the applicant's name, street address, and other personally-identifying information as

well as the applicant's employer's name, street address, and other employer-identifying

information. The commerce corporation shall determine the composition of the fellowship

committee and the selection procedures it will use in consultation with the state's chambers of

commerce.

     (c) The credits awarded under this chapter shall not exceed one hundred percent (100%)

of the education loan repayment expenses incurred by such taxpayer during each service period

completed for up to four (4) consecutive service periods. Tax credits shall be issued annually to

the taxpayer upon proof that (i) the taxpayer has actually incurred and paid such education loan

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repayment expenses; (ii) the taxpayer continues to meet the eligibility requirements throughout

the service period; (iii) The award shall not exceed the original loan amount plus any capitalized

interest less award previously claimed under this section; and (iv) that the taxpayer claiming an

award is current on his or her student loan repayment obligations.

     (d) The commerce corporation shall not commit to overall awards in excess of the

amount contained in the fund.

     (e) The commerce corporation shall reserve seventy percent (70%) of the awards issued

in a calendar year to applicants who are permanent residents of the state of Rhode Island or who

attended an institution of higher education located in Rhode Island when they incurred the

education loan expenses to be repaid.

     (f) In administering award, the commerce corporation shall:

     (1) Require suitable proof that an applicant meets the eligibility requirements for award

under this chapter;

     (2) Determine the contents of applications and other materials to be submitted in support

of an application for award under this chapter; and

     (3) Collect reports and other information during the eligibility period for each award to

verify that a taxpayer continues to meet the eligibility requirements for an award.

     42-64.26-6. Reporting. -- (a) The commerce corporation shall require taxpayers to

submit annual reports, in such form and on such dates as the commerce corporation shall require,

in order to confirm that the taxpayer continues to meet all of the eligibility requirements of this

chapter and as a prerequisite to funding any award of tax credits under this chapter.

     (b) Notwithstanding any other provision of law, no taxpayer shall receive an award

without first consenting to the public disclosure of the receipt of any award given under this

chapter. The commerce corporation shall annually publish a list of taxpayers receiving awards

under this program, their post-secondary institution of higher learning, and their employer on the

commerce corporation website and in such other locations as it deems appropriate.

     42-64.26-7. Remedies. -- (a) If an eligible graduate receiving an award under this chapter

violates any provision of this chapter or ceases to meet the eligibility requirements of this chapter,

the commerce corporation may, on reasonable notice:

     (1) Withhold further award until the taxpayer complies with the eligibility or other

requirements of the award; or

     (2) Terminate the award.

     42-64.26-8. Carry forward and redemption of tax credits. -- (a) If the amount of the

tax credit allowed under this chapter exceeds the taxpayer's total tax liability for the year in which

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the credit is allowed, the amount of such credit that exceeds the taxpayer's tax liability may be

carried forward and applied against the taxes imposed for the succeeding four (4) years, or until

the full credit is used, whichever occurs first.

     (b) The tax credit allowed under this chapter may be used as a credit against personal

income taxes imposed under chapter 30 of title 44.

     (c) The division of taxation shall at the request of a taxpayer redeem such credits in

whole or in part for one hundred percent (100%) of the value of the tax credit.

     (d) Any amounts paid to a taxpayer for the redemption of tax credits allowed pursuant to

this section shall be exempt from taxation under title 44 of the General Laws.

     42-64.26-9. Implementation guidelines, rules, regulations. -- (a) The commerce

corporation may adopt implementation guidelines, rules, and regulations pursuant to § 42-35-3 as

are necessary for the implementation of this chapter.

     (b) The commerce corporation shall adopt guidelines to assure integrity and eliminate

potential conflicts of interest in the issuing of awards.

     (c) The division of taxation may adopt implementation guidelines, directives, criteria, and

rules and regulations pursuant to section 42-35-3 of the General Laws, as are necessary for the

implementation of the division's responsibilities under this chapter.

     42-64.26-10. Promotion by state agencies. -- (a) The commerce corporation and any

other agencies engaging in education-related outreach shall integrate promotion of the program

into existing educational opportunity outreach efforts to the extent possible in a manner consistent

with the scope of the program and its centrality to the state's efforts to raise educational

attainment, including, without limitation, promoting the program to Rhode Island permanent

residents who enroll in accredited Rhode Island colleges or universities and receive financial aid

in the form of student loans.

     42-64.26-11. Program integrity. -- Program integrity being of paramount importance,

the commerce corporation shall establish procedures to ensure ongoing compliance with the terms

and conditions of the program established herein and to safeguard the expenditure of public

funds.

     42-64.26-12. Sunset. -- No incentives or credits shall be authorized pursuant to this

chapter after December 31, 2018.

     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 -- STAY INVESTED IN RI

WAVEMAKER FELLOWSHIP

***

     This act would establish the "Stay Invested in RI Wavemaker Fellowship Fund" which

would be a fund supported by contributions from state, federal, and private sources. The fund

would pay for the redemption of tax credits that would be applied against a taxpayer's tax

liability. The credits would be awarded by the commerce corporation on a competitive basis to

college, graduate and post-graduate degree holders who are working within certain high-demand

professions in Rhode Island. The act also provides no incentives or credits would be authorized

after December 31, 2018.

     This act would take effect upon passage.

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