2017 -- H 5335

========

LC001061

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO TAXATION - PROPERTY SUBJECT TO TAX EXEMPTION

     

     Introduced By: Representative Gregg Amore

     Date Introduced: February 01, 2017

     Referred To: House Finance

     (by request)

It is enacted by the General Assembly as follows:

1

     SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property

2

Subject to Taxation" is hereby amended to read as follows:

3

     44-3-3. Property exempt.

4

     (a) The following property is exempt from taxation:

5

     (1) Property belonging to the state, except as provided in § 44-4-4.1;

6

     (2) Lands ceded or belonging to the United States;

7

     (3) Bonds and other securities issued and exempted from taxation by the government of

8

the United States or of this state;

9

     (4) Real estate, used exclusively for military purposes, owned by chartered or

10

incorporated organizations approved by the adjutant general and composed of members of the

11

national guard, the naval militia, or the independent chartered-military organizations;

12

     (5) Buildings for free public schools, buildings for religious worship, and the land upon

13

which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so

14

far as the buildings and land are occupied and used exclusively for religious or educational

15

purposes;

16

     (6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or

17

the minimum lot size for zone in which the dwelling house is located, whichever is the greater,

18

owned by, or held in trust for, any religious organization and actually used by its officiating

19

clergy; provided, further, that in the town of Charlestown, where the property previously

 

1

described in this paragraph is exempt in total, along with dwelling houses and the land on which

2

they stand in Charlestown, not exceeding one acre in size, or the minimum lot size for zone in

3

which the dwelling house is located, whichever is the greater, owned by, or held in trust for, any

4

religious organization and actually used by its officiating clergy, or used as a convent, nunnery, or

5

retreat center by its religious order;

6

     (7) Intangible personal property owned by, or held in trust for, any religious or charitable

7

organization, if the principal or income is used or appropriated for religious or charitable

8

purposes;

9

     (8) Buildings and personal estate owned by any corporation used for a school, academy,

10

or seminary of learning, and of any incorporated public charitable institution, and the land upon

11

which the buildings stand and immediately surrounding them to an extent not exceeding one acre,

12

so far as they are used exclusively for educational purposes, but no property or estate whatever is

13

hereafter exempt from taxation in any case where any part of its income or profits, or of the

14

business carried on there, is divided among its owners or stockholders; provided, however, that

15

unless any private nonprofit corporation organized as a college or university located in the town

16

of Smithfield reaches a memorandum of agreement with the town of Smithfield, the town of

17

Smithfield shall bill the actual costs for police, fire, and rescue services supplied, unless

18

otherwise reimbursed, to said corporation commencing March 1, 2014;

19

     (9) Estates, persons, and families of the president and professors for the time being of

20

Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer's

21

estate, person, and family included, but only to the extent that any person had claimed and

22

utilized the exemption prior to, and for a period ending, either on or after December 31, 1996;

23

     (10) Property especially exempt by charter unless the exemption has been waived in

24

whole or in part;

25

     (11) Lots of land exclusively for burial grounds;

26

     (12) Property, real and personal, held for, or by, an incorporated library, society, or any

27

free public library, or any free public library society, so far as the property is held exclusively for

28

library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor

29

generally, or for a nonprofit hospital for the sick or disabled;

30

     (13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated

31

organizations of veterans of any war in which the United States has been engaged, the parent

32

body of which has been incorporated by act of Congress, to the extent of four hundred thousand

33

dollars ($400,000) if actually used and occupied by the association; provided, that the city council

34

of the city of Cranston may by ordinance exempt the real or personal estate as previously

 

LC001061 - Page 2 of 11

1

described in this subdivision located within the city of Cranston to the extent of five hundred

2

thousand dollars ($500,000);

3

     (14) Property, real and personal, held for, or by, the fraternal corporation, association, or

4

body created to build and maintain a building or buildings for its meetings or the meetings of the

5

general assembly of its members, or subordinate bodies of the fraternity, and for the

6

accommodation of other fraternal bodies or associations, the entire net income of which real and

7

personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or

8

asylums, a home or homes, a school or schools, for the free education or relief of the members of

9

the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity,

10

their wives, widows, or orphans, and any fund given or held for the purpose of public education,

11

almshouses, and the land and buildings used in connection therewith;

12

     (15) Real estate and personal property of any incorporated volunteer fire engine company

13

or incorporated volunteer ambulance or rescue corps in active service;

14

     (16) The estate of any person who, in the judgment of the assessors, is unable from

15

infirmity or poverty to pay the tax; provided, that in the town of Burrillville, the tax shall

16

constitute a lien for five (5) years on the property where the owner is entitled to the exemption. At

17

the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold or

18

conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the lien

19

immediately becomes due and payable; any person claiming the exemption aggrieved by an

20

adverse decision of an assessor shall appeal the decision to the local board of tax review and

21

thereafter according to the provisions of § 44-5-26;

22

     (17) Household furniture and family stores of a housekeeper in the whole, including

23

clothing, bedding, and other white goods, books, and all other tangible personal property items

24

that are common to the normal household;

25

     (18) Improvements made to any real property to provide a shelter and fallout protection

26

from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided,

27

that the improvements meet applicable standards for shelter construction established, from time to

28

time, by the Rhode Island emergency management agency. The improvements are deemed to

29

comply with the provisions of any building code or ordinance with respect to the materials or the

30

methods of construction used and any shelter or its establishment is deemed to comply with the

31

provisions of any zoning code or ordinance;

32

     (19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator;

33

     (20) Manufacturer's inventory.

34

     (i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to

 

LC001061 - Page 3 of 11

1

be a manufacturer within a city or town within this state if that person uses any premises, room,

2

or place in it primarily for the purpose of transforming raw materials into a finished product for

3

trade through any or all of the following operations: adapting, altering, finishing, making, and

4

ornamenting; provided, that public utilities; non-regulated power producers commencing

5

commercial operation by selling electricity at retail or taking title to generating facilities on or

6

after July 1, 1997; building and construction contractors; warehousing operations, including

7

distribution bases or outlets of out-of-state manufacturers; and fabricating processes incidental to

8

warehousing or distribution of raw materials, such as alteration of stock for the convenience of a

9

customer; are excluded from this definition;

10

     (ii) For the purposes of §§ 44-3-3, 44-4-10, and 44-5-38, the term "manufacturer's

11

inventory", or any similar term, means and includes the manufacturer's raw materials, the

12

manufacturer's work in process, and finished products manufactured by the manufacturer in this

13

state, and not sold, leased, or traded by the manufacturer or its title or right to possession

14

divested; provided, that the term does not include any finished products held by the manufacturer

15

in any retail store or other similar selling place operated by the manufacturer whether or not the

16

retail establishment is located in the same building in which the manufacturer operates the

17

manufacturing plant;

18

     (iii) For the purpose of § 44-11-2, a "manufacturer" is a person whose principal business

19

in this state consists of transforming raw materials into a finished product for trade through any or

20

all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be

21

principally engaged if the gross receipts that person derived from the manufacturing operations in

22

this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than

23

fifty percent (50%) of the total gross receipts that person derived from all the business activities

24

in which that person engaged in this state during the taxable year. For the purpose of computing

25

the percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished

26

products manufactured by the manufacturer in this state, even though the manufacturer's store or

27

other selling place may be at a different location from the location of the manufacturer's

28

manufacturing plant in this state, are deemed to have been derived from manufacturing;

29

     (iv) Within the meaning of the preceding paragraphs of this subdivision, the term

30

"manufacturer" also includes persons who are principally engaged in any of the general activities

31

coded and listed as establishments engaged in manufacturing in the Standard Industrial

32

Classification Manual prepared by the Technical Committee on Industrial Classification, Office

33

of Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as

34

revised from time to time, but eliminating as manufacturers those persons, who, because of their

 

LC001061 - Page 4 of 11

1

limited type of manufacturing activities, are classified in the manual as falling within the trade

2

rather than an industrial classification of manufacturers. Among those thus eliminated, and

3

accordingly also excluded as manufacturers within the meaning of this paragraph, are persons

4

primarily engaged in selling, to the general public, products produced on the premises from which

5

they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and

6

custom tailors, except, that a person who manufactures bakery products for sale primarily for

7

home delivery, or through one or more non-baking retail outlets, and whether or not retail outlets

8

are operated by the person, is a manufacturer within the meaning of this paragraph;

9

     (v) The term "Person" means and includes, as appropriate, a person, partnership, or

10

corporation; and

11

     (vi) The department of revenue shall provide to the local assessors any assistance that is

12

necessary in determining the proper application of the definitions in this subdivision;

13

     (21) Real and tangible personal property acquired to provide a treatment facility used

14

primarily to control the pollution or contamination of the waters or the air of the state, as defined

15

in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been

16

constructed, reconstructed, erected, installed, or acquired in furtherance of federal or state

17

requirements or standards for the control of water or air pollution or contamination, and certified

18

as approved in an order entered by the director of environmental management. The property is

19

exempt as long as it is operated properly in compliance with the order of approval of the director

20

of environmental management; provided, that any grant of the exemption by the director of

21

environmental management in excess of ten (10) years is approved by the city or town in which

22

the property is situated. This provision applies only to water and air pollution control properties

23

and facilities installed for the treatment of waste waters and air contaminants resulting from

24

industrial processing; furthermore, it applies only to water or air pollution control properties and

25

facilities placed in operation for the first time after April 13, 1970;

26

     (22) New manufacturing machinery and equipment acquired or used by a manufacturer

27

and purchased after December 31, 1974. Manufacturing machinery and equipment is defined as:

28

     (i) Machinery and equipment used exclusively in the actual manufacture or conversion of

29

raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision

30

(20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and

31

development or for quality assurance of its manufactured products;

32

     (ii) Machinery and equipment that is partially used in the actual manufacture or

33

conversion of raw materials or goods in process of manufacture by a manufacturer, as defined in

34

subdivision (20), and machinery, fixtures, and equipment used by a manufacturer for research and

 

LC001061 - Page 5 of 11

1

development or for quality assurance of its manufactured products, to the extent to which the

2

machinery and equipment is used for the manufacturing processes, research and development, or

3

quality assurance. In the instances where machinery and equipment is used in both manufacturing

4

and/or research and development and/or quality assurance activities and non-manufacturing

5

activities, the assessment on machinery and equipment is prorated by applying the percentage of

6

usage of the equipment for the manufacturing, research and development, and quality-assurance

7

activity to the value of the machinery and equipment for purposes of taxation, and the portion of

8

the value used for manufacturing, research and development, and quality assurance is exempt

9

from taxation. The burden of demonstrating this percentage usage of machinery and equipment

10

for manufacturing and for research and development and/or quality assurance of its manufactured

11

products rests with the manufacturer; and

12

     (iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was

13

purchased after July 1, 1997; provided that the city or town council of the city or town in which

14

the machinery and equipment is located adopts an ordinance exempting the machinery and

15

equipment from taxation. For purposes of this subsection, city councils and town councils of any

16

municipality may, by ordinance, wholly or partially exempt from taxation the machinery and

17

equipment discussed in this subsection for the period of time established in the ordinance and

18

may, by ordinance, establish the procedures for taxpayers to avail themselves of the benefit of

19

any exemption permitted under this section; provided, that the ordinance does not apply to any

20

machinery or equipment of a business, subsidiary, or any affiliated business that locates or

21

relocates from a city or town in this state to another city or town in the state;

22

     (23) Precious metal bullion, meaning any elementary metal that has been put through a

23

process of melting or refining, and that is in a state or condition that its value depends upon its

24

content and not its form. The term does not include fabricated precious metal that has been

25

processed or manufactured for some one or more specific and customary industrial, professional,

26

or artistic uses;

27

     (24) Hydroelectric power-generation equipment, which includes, but is not limited to,

28

turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers,

29

protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The

30

hydroelectric power-generation equipment must have been purchased after July 1, 1979, and

31

acquired or used by a person or corporation who or that owns or leases a dam and utilizes the

32

equipment to generate hydroelectric power;

33

     (25) Subject to authorization by formal action of the council of any city or town, any real

34

or personal property owned by, held in trust for, or leased to an organization incorporated under

 

LC001061 - Page 6 of 11

1

chapter 6 of title 7, as amended, or an organization meeting the definition of "charitable trust" set

2

out in § 18-9-4, as amended, or an organization incorporated under the not-for-profits statutes of

3

another state or the District of Columbia, the purpose of which is the conserving of open space, as

4

that term is defined in chapter 36 of title 45, as amended, provided the property is used

5

exclusively for the purposes of the organization;

6

     (26) Tangible personal property, the primary function of which is the recycling, reuse, or

7

recovery of materials (other than precious metals, as defined in § 44-18-30(24)(ii) and (iii)), from,

8

or the treatment of "hazardous wastes", as defined in § 23-19.1-4, where the "hazardous wastes"

9

are generated primarily by the same taxpayer and where the personal property is located at, in, or

10

adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order

11

from the director of the department of environmental management certifying that the tangible

12

personal property has this function, which order effects a conclusive presumption that the tangible

13

personal property qualifies for the exemption under this subdivision. If any information relating

14

to secret processes or methods of manufacture, production, or treatment is disclosed to the

15

department of environmental management only to procure an order, and is a "trade secret" as

16

defined in § 28-21-10(b), it shall not be open to public inspection or publicly disclosed unless

17

disclosure is otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23;

18

     (27) Motorboats as defined in § 46-22-2 for which the annual fee required in § 46-22-4

19

has been paid;

20

     (28) Real and personal property of the Providence Performing Arts Center, a non-

21

business corporation as of December 31, 1986;

22

     (29) Tangible personal property owned by, and used exclusively for the purposes of, any

23

religious organization located in the city of Cranston;

24

     (30) Real and personal property of the Travelers Aid Society of Rhode Island, a nonprofit

25

corporation, the Union Mall Real Estate Corporation, and any limited partnership or limited

26

liability company that is formed in connection with, or to facilitate the acquisition of, the

27

Providence YMCA Building;

28

     (31) Real and personal property of Meeting Street Center or MSC Realty, Inc., both not-

29

for-profit Rhode Island corporations, and any other corporation, limited partnership, or limited

30

liability company that is formed in connection with, or to facilitate the acquisition of, the

31

properties designated as the Meeting Street National Center of Excellence on Eddy Street in

32

Providence, Rhode Island;

33

     (32) The buildings, personal property, and land upon which the buildings stand, located

34

on Pomham Island, East Providence, currently identified as Assessor's Map 211, Block 01, Parcel

 

LC001061 - Page 7 of 11

1

001.00, that consists of approximately twenty-one thousand three hundred (21,300) square feet

2

and is located approximately eight hundred sixty feet (860'), more or less, from the shore, and

3

limited exclusively to these said buildings, personal estate and land, provided that said property is

4

owned by a qualified 501(c)(3) organization, such as the American Lighthouse Foundation, and is

5

used exclusively for a lighthouse;

6

     (33) The Stadium Theatre Performing Arts Centre building located in Monument Square,

7

Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by

8

the Stadium Theatre Foundation, a Rhode Island nonprofit corporation;

9

     (34) Real and tangible personal property of St. Mary Academy -- Bay View, located in

10

East Providence, Rhode Island;

11

     (35) Real and personal property of East Bay Community Action Program and its

12

predecessor, Self Help, Inc; provided, that the organization is qualified as a tax-exempt

13

corporation under § 501(c)(3) of the United States Internal Revenue Code;

14

     (36) Real and personal property located within the city of East Providence of the

15

Columbus Club of East Providence, a Rhode Island charitable nonprofit corporation;

16

     (37) Real and personal property located within the city of East Providence of the

17

Columbus Club of Barrington, a Rhode Island charitable nonprofit corporation;

18

     (38) Real and personal property located within the city of East Providence of Lodge 2337

19

BPO Elks, a Rhode Island nonprofit corporation;

20

     (39) Real and personal property located within the city of East Providence of the St.

21

Andrews Lodge No. 39, a Rhode Island charitable nonprofit corporation;

22

     (40) Real and personal property located within the city of East Providence of the Trustees

23

of Methodist Health and Welfare service a/k/a United Methodist Elder Care, a Rhode Island

24

nonprofit corporation;

25

     (41) Real and personal property located on the first floor of 90 Leonard Avenue within

26

the city of East Providence of the Zion Gospel Temple, Inc., a religious nonprofit corporation;

27

     (42) Real and personal property located within the city of East Providence of the Cape

28

Verdean Museum Exhibit, a Rhode Island nonprofit corporation;

29

     (43) The real and personal property owned by a qualified 501(c)(3) organization that is

30

affiliated and in good standing with a national, congressionally chartered organization and

31

thereby adheres to that organization's standards and provides activities designed for recreational,

32

educational, and character building purposes for children from ages six (6) years to seventeen

33

(17) years;

34

     (44) Real and personal property of the Rhode Island Philharmonic Orchestra and Music

 

LC001061 - Page 8 of 11

1

School; provided, that the organization is qualified as a tax-exempt corporation under § 501(c)(3)

2

of the United States Internal Revenue Code;

3

     (45) The real and personal property located within the town of West Warwick at 211

4

Cowesett Avenue, Plat 29-Lot 25, which consists of approximately twenty-eight thousand seven

5

hundred fifty (28,750) square feet and is owned by the Station Fire Memorial Foundation of East

6

Greenwich, a Rhode Island nonprofit corporation;

7

     (46) Real and personal property of the Comprehensive Community Action Program, a

8

qualified tax-exempt corporation under § 501(c)(3) of the United States Internal Revenue Code;

9

     (47) Real and personal property located at 52 Plain Street, within the city of Pawtucket of

10

the Pawtucket Youth Soccer Association, a Rhode Island nonprofit corporation;

11

     (48) Renewable energy resources, as defined in § 39-26-5, used in residential systems

12

and associated equipment used therewith in service after December 31, 2015;

13

     (49) Renewable energy resources, as defined in § 39-26-5, if employed by a

14

manufacturer, as defined in § 44-3-3(a), shall be exempt from taxation in accordance with § 44-3-

15

3(a);

16

     (50) Real and personal property located at 415 Tower Hill Road within the town of North

17

Kingstown, of South County Community Action, Inc., a qualified tax-exempt corporation under §

18

501(c)(3) of the United States Internal Revenue Code;

19

     (51) As an effort to promote business growth, tangible business or personal property, in

20

whole or in part, within the town of Charlestown's community limits, subject to authorization by

21

formal action of the town council of the town of Charlestown;

22

     (52) All real and personal property located at 1300 Frenchtown Road, within the town of

23

East Greenwich, identified as assessor's map 027, plat 019, lot 071, and known as the New

24

England Wireless and Steam Museum, Inc., a qualified tax-exempt corporation under § 501(c)(3)

25

of the United States Internal Revenue Code;

26

     (53) Real and tangible personal property of Mount Saint Charles Academy located within

27

the city of Woonsocket, specifically identified as the following assessor's plats and lots: Logee

28

Street, plat 23, lot 62, Logee Street, plat 24, lots 304 and 305; Welles Street, plat 23, lot 310;

29

Monroe Street, plat 23, lot 312; and Roberge Avenue, plat 24, lot 47;

30

     (54) Real and tangible personal property of Steere House, a Rhode Island nonprofit

31

corporation, located in Providence, Rhode Island;

32

     (55) Real and personal property located within the town of West Warwick of Tides

33

Family Services, Inc., a Rhode Island nonprofit corporation;

34

     (56) Real and personal property of Tides Family Services, Inc., a Rhode Island nonprofit

 

LC001061 - Page 9 of 11

1

corporation, located in the city of Pawtucket at 242 Dexter Street, plat 44, lot 444;

2

     (57) Real and personal property located within the town of Middletown of Lucy's Hearth,

3

a Rhode Island nonprofit corporation; and

4

     (58) Real and tangible personal property of Habitat for Humanity of Rhode Island--

5

Greater Providence, Inc., a Rhode Island nonprofit corporation, located in Providence, Rhode

6

Island.; and

7

     (59) Real and tangible personal property of the East Bay Educational Collaborative, a

8

Rhode Island nonprofit corporation located within the town of Warren, Rhode Island.

9

     (b) Except as provided below, when a city or town taxes a for-profit hospital facility, the

10

value of its real property shall be the value determined by the most recent full revaluation or

11

statistical property update performed by the city or town; provided, however, in the year a

12

nonprofit hospital facility converts to or otherwise becomes a for-profit hospital facility, or a for-

13

profit hospital facility is initially established, the value of the real property and personal property

14

of the for-profit hospital facility shall be determined by a valuation performed by the assessor for

15

the purpose of determining an initial assessed value of real and personal property, not previously

16

taxed by the city or town, as of the most recent date of assessment pursuant to § 44-5-1, subject to

17

a right of appeal by the for-profit hospital facility which shall be made to the city or town tax

18

assessor with a direct appeal from an adverse decision to the Rhode Island superior court business

19

calendar.

20

     A "for-profit hospital facility" includes all real and personal property affiliated with any

21

hospital as identified in an application filed pursuant to chapters 23-17 and/or 23-17.14.

22

Notwithstanding the above, a city or town may enter into a stabilization agreement with a for-

23

profit hospital facility under § 44-3-9 or other laws specific to the particular city or town relating

24

to stabilization agreements. In a year in which a nonprofit hospital facility converts to, or

25

otherwise becomes, a for-profit hospital facility, or a for-profit hospital facility is otherwise

26

established, in that year only the amount levied by the city or town and/or the amount payable

27

under the stabilization agreement for that year related to the for-profit hospital facility shall not be

28

counted towards determining the maximum tax levy permitted under § 44-5-2.

29

     SECTION 2. This act shall take effect upon passage.

========

LC001061

========

 

LC001061 - Page 10 of 11

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PROPERTY SUBJECT TO TAX EXEMPTION

***

1

     This act would make the real and personal property of the East Bay Educational

2

Collaborative exempt from state taxation.

3

     This act would take effect upon passage.

========

LC001061

========

 

LC001061 - Page 11 of 11