2016 -- S 2966

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LC005729

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TAXATION -- HISTORIC PRESERVATION TAX CREDITS 2013

     

     Introduced By: Senators Satchell, Conley, Nesselbush, Cote, and Doyle

     Date Introduced: May 10, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-33.6-4 of the General Laws in Chapter 44-33.6 entitled "Historic

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Preservation Tax Credits 2013" is hereby amended to read as follows:

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     44-33.6-4. Administration. -- (a) To claim the tax credit authorized in this chapter,

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taxpayers shall apply:

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      (1) To the commission prior to the certified historic structure being placed in service for

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a certification that the certified historic structure's rehabilitation will be consistent with the

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standards of the Secretary of the United States Department of the Interior for rehabilitation;

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      (2) To the commission after completion of the rehabilitation work of the certified historic

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structure for a certification that the rehabilitation is consistent with the standards of the Secretary

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of the United States Department of the Interior for rehabilitation; and

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      (3) To the division of taxation after completion of the rehabilitation work of the certified

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historic structure for a certification as to the amount of tax credit for which the rehabilitation

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qualifies. The commission and the division of taxation may rely on the facts represented in the

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application without independent investigation and, with respect to the amount of tax credit for

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which the rehabilitation qualifies, upon the certification of a certified public accountant licensed

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in the state of Rhode Island. The applications shall be developed by the commission and the

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division of taxation and may be amended from time to time.

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      (b) Within thirty (30) days after the commission's and division of taxation's receipt of the

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taxpayer's application requesting certification for the completed rehabilitation work:

 

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      (1) The commission shall issue the taxpayer a written determination either denying or

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certifying the rehabilitation; and

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      (2) Division of taxation shall issue a certification of the amount of credit for which the

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rehabilitation qualifies. To claim the tax credit, the division of taxation's certification as to the

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amount of the tax credit shall be attached to all state tax returns on which the credit is claimed.

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      (c) No taxpayer may benefit from the provisions of this chapter unless the owner of the

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certified historic structure grants a restrictive covenant to the commission, agreeing that during

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the holding period no material alterations to the certified historic structure will be made without

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the commission's prior approval and agreeing that such shall be done in a manner consistent with

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the standards of the Secretary of the United States Department of the Interior; and, in the event

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the owner applies for the twenty-five percent (25%) tax credit, that either:

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      (1) At least twenty-five percent (25%) of the total rentable area of the certified historic

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structure will be made available for a trade or business; or

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      (2) The entire rentable area located on the first floor of the certified historic structure will

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be made available for a trade or business, in either case, for a period of sixty (60) months after the

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placed in service date of the certified historic structure or identifiable portion thereof.

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      (d) The division of taxation shall charge a fee equal to three percent (3%) of qualified

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rehabilitation expenditures. The fee shall be payable upon submission of the Part 2 application no

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later than ninety (90) days after the date of the commission's written determination certifying the

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rehabilitation. The fee shall be non-refundable.

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      (e) Notwithstanding any provisions of the general laws or regulations adopted thereunder

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to the contrary, including, but not limited to, the provisions of chapter 2 of title 37, the division of

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taxation is hereby expressly authorized and empowered to enter into contracts with persons,

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firms, partnerships, trusts, estates, limited liability companies, corporations (whether for profit or

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nonprofit) or other business entities that incur qualified rehabilitation expenditures for the

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substantial rehabilitation of certified historic structures or some identifiable portion of a structure.

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Upon payment of the portion of the fee set forth in subdivision (d) above, the division of taxation

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and the applicant shall enter into a contract for tax credits consistent with the terms and

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provisions of this chapter.

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      (f) Upon satisfaction of the requirements set forth herein and the payment of the fees as

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set forth in subdivision (d) above, the division of taxation shall, on behalf of the State of Rhode

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Island, guarantee the delivery of one hundred percent (100%) of the tax credit and use of one

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hundred percent (100%) of the tax credit in the tax year a certified historic structure is placed in

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service through a contract with persons, firms, partnerships, trusts, estates, limited liability

 

LC005729 - Page 2 of 4

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companies, corporations (whether for profit or nonprofit) or other business entities that will incur

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qualified rehabilitation expenditures for the substantial rehabilitation of a certified historic

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structure or some identifiable portion of a structure.

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      (g) Any contract executed pursuant to this chapter by a person, firm, partnership, trust,

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estate, limited liability company, corporation (whether for profit or nonprofit) or other business

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entity shall be assignable to:

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      (1) An affiliate thereof without any consent from the division of taxation;

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      (2) A banking institution as defined by subdivision 44-14-2(2) or credit union as defined

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in subdivision 44-15-1.1(1) without any consent from the division of taxation; or

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      (3) A person, firm, partnership, trust, estate, limited liability company, corporation

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(whether for profit or nonprofit) or other business entity that incurs qualified rehabilitation

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expenditures for the substantial rehabilitation of certified historic structures or some identifiable

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portion of a structure, with such assignment to be approved by the division of taxation, which

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approval shall not be unreasonably withheld or conditioned. For purposes of this subsection,

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"affiliate" shall be defined as any entity controlling, controlled by or under common control with

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such person, firm, partnership, trust, estate, limited liability company, corporation (whether for

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profit or nonprofit) or other business entity.

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      (h) If information comes to the attention of the commission or division of taxation at any

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time up to and including the last day of the holding period that is materially inconsistent with

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representations made in an application, the commission may deny the requested certification or

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revoke a certification previously given, and in either instance all fees paid by the applicant shall

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be deemed forfeited. In the event that tax credits or a portion of tax credits are subject to

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recapture for ineligible costs and such tax credits have been transferred, assigned and/or

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allocated, the state will pursue its recapture remedies and rights against the applicant of the tax

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credits, and all fees paid by the applicant shall be deemed forfeited. No redress shall be sought

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against assignees, transferees or allocates of such credits provided they acquired the tax credits by

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way of an arms-length transaction, for value, and without notice of violation, fraud or

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misrepresentation.

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      (i) The commission, in consultation with the division of taxation, shall promulgate such

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rules and regulations as are necessary to carry out the intent and purpose of this chapter.

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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 -- HISTORIC PRESERVATION TAX CREDITS 2013

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     This act would provide that applicants for historic tax credits shall have ninety (90) days

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after the date of the commission's written determination certifying the rehabilitation to pay the

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required three percent (3%) non-refundable fee to the division of taxation.

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     This act would take effect upon passage.

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