2017 -- H 5375

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LC000934

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO TAXATION - JOBS INCENTIVE PROGRAM

     Introduced By: Representatives Morin, Casey, Johnston, Carson, and Messier

     Date Introduced: February 03, 2017

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-48.3-4 and 44-48.3-6 of the General Laws in Chapter 44-48.3

entitled "Rhode Island New Qualified Jobs Incentive Act 2015" are hereby amended to read as

follows:

     44-48.3-4. Rhode Island qualified jobs incentive program.

     (a) The Rhode Island qualified jobs incentive program is hereby established as a program

under the jurisdiction of and shall be administered by the commerce corporation. The program

may provide tax credits to eligible businesses for an eligibility period not to exceed ten (10)

years.

     (b) An eligible business under the program shall be entitled to a credit against taxes

imposed pursuant to chapters 11, 13, 14, 17 or 30 of title 44 as further provided under this

chapter.

     (c) The minimum number of new full-time jobs required to be eligible for a tax credit

under this program shall be as follows:

     (1) For a business in a targeted industry that employs not more than one hundred (100)

full-time employees on the date of application to the commerce corporation, the creation of at

least ten (10) five (5) new full-time jobs in this state;

     (2) For a business in a targeted industry that employs more than one hundred (100) full-

time employees on the date of application to the commerce corporation, either the creation of new

full-time jobs in this state in an amount not less than ten percent (10%) five percent (5%) of the

business's existing number of full-time employees or the creation of at least one hundred (100)

fifty (50) new full-time jobs in this state;

     (3) For a business in a non-targeted industry that employs not more than two hundred

(200) full-time employees on the date of application to the commerce corporation, the creation of

at least twenty (20) ten (10) new full-time jobs in this state; or

     (4) For a business in a non-targeted industry that employs more than two hundred (200)

full-time employees on the date of application to the commerce corporation, either the creation of

new full-time jobs in this state in an amount not less than ten percent (10%) five percent (5%) of

the business's existing number of full-time employees or the creation of at least one hundred

(100) fifty (50) new full-time jobs in this state.

     (d) When a business applies for an incentive under this chapter, in order to assist the

commerce corporation in determining whether the business is eligible for the incentives under

this chapter, the business's chief executive officer, or equivalent officer, shall attest under oath:

     (1) That any projected creation of new full-time jobs would not occur, or would not occur

in the state of Rhode Island, but for the provision of tax credits under the program;

     (2) The business will create new full-time jobs in an amount equal to or greater than the

applicable number set forth in subsection (c) of this section;

     (3) That the business's chief executive officer, or equivalent officer, has reviewed the

information submitted to the commerce corporation and that the representations contained therein

are accurate and complete.

     (e) The commerce corporation shall establish, by regulation, the documentation an

applicant shall be required to provide under this subsection. Such documentation may include

documentation showing that the applicant could reasonably locate the new positions outside of

this state, or that the applicant is considering locating the positions outside of this state, or that it

would not be financially feasible for the applicant to create the positions without the tax credits

provided in this chapter.

     (f) In the event that this attestation by the business's chief executive officer, or equivalent

officer, required under subsection (d) of this section is found to be willfully false, the commerce

corporation may revoke any award of tax credits in their entirety, which revocation shall be in

addition to any other criminal or civil penalties that the business and/or the officer may be subject

to under applicable law. Additionally, the commerce corporation may revoke any award of tax

credits in its entirety if the eligible business is convicted of bribery, fraud, theft, embezzlement,

misappropriation, and/or extortion involving the state, any state agency or political subdivision of

the state.

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     44-48.3-6. Total amount of tax credit for eligible business.

     (a) The base amount of the tax credit for an eligible business for each new full-time job

shall be up to two thousand five hundred dollars ($2,500) annually.

     (b) The total tax credit amount shall be calculated and credited to the business annually

for each year of the eligibility period after the commerce corporation, in consultation with the

division of taxation, has verified that the jobs covered by the tax credit have generated sufficient

personal income taxes to comply with subsection (e) of this section.

     (c) In addition to the base amount of the tax credit, the amount of the tax credit to be

awarded for each new full-time job may be increased, pursuant to the provisions of subsection (d)

of this section, if the business meets any of the following criteria or such other additional criteria

determined by the commerce corporation from time to time in response to evolving economic or

market conditions:

     (1) For a business located within a hope community;

     (2) For a targeted industry;

     (3) For a business located within a transit oriented development area; and

     (4) For an out-of-state business that relocates a business unit or units or creates a

significant number of new full-time jobs during the commitment period.

     (d) For any application made to the commerce corporation from 2015 through 2018, the

tax credit for an eligible business for each new full-time job shall not exceed seven thousand five

hundred dollars ($7,500) annually.

     (e) Notwithstanding the provisions of subsections (a) through (d)(c) of this section, for

each application approved by the commerce corporation, the amount of tax credits available to be

obtained by the business annually shall not exceed the reasonable W-2 withholding received by

the state for each new full-time job created by a business for applications received by the

commerce corporation in 2015 through 2018.

     (f) The commerce corporation shall establish regulations regarding the conditions under

which a business may submit more than one application for tax credits over time. The commerce

corporation may place limits on repeat applications.

     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 - JOBS INCENTIVE PROGRAM

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     This act would reduce the number of jobs to be created for eligibility for the jobs

incentive program or percentage of existing employees for businesses that employ not less than

one hundred (100) employees, or five percent (5%) of existing employees for businesses that

employ no less than two hundred (200) employees and fifty (50) or five percent (5%) of existing

employees for businesses that employ more than two hundred (200) employees. This act would

also eliminate the mandatory seven thousand five hundred dollar ($7,500) cap on tax credits.

     This act would take effect upon passage.

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