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art.012/7/012/6/012/5/012/4/012/3/012/2/012/1

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     ARTICLE 12 AS AMENDED

RELATING TO ECONOMIC DEVELOPMENT

     SECTION 1. Section 42-64-36 of the General Laws in Chapter 42-64 entitled "Rhode

Island Commerce Corporation" is hereby amended to read as follows:

     42-64-36. Program accountability.

     (a) The board of the Rhode Island commerce corporation shall be responsible for

establishing accountability standards, reporting standards and outcome measurements for each of

its programs to include, but not be limited to, the use of tax credits, loans, loan guarantees and other

financial transactions managed or utilized by the corporation. Included in the standards shall be a

set of principles and guidelines to be followed by the board to include:

     (1) A set of outcomes against which the board will measure each program's and offering's

effectiveness;

     (2) A set of standards for risk analysis for all of the programs especially the loans and loan

guarantee programs; and

     (3) A process for reporting out all loans, loan guarantees and any other financial

commitments made through the corporation that includes the purpose of the loan, financial data as

to payment history and other related information.

     (b) The board shall annually prepare a report starting in January 2015 which shall be

submitted to the house and senate. The report shall summarize the above listed information on each

of its programs and offerings and contain recommendations for modification, elimination or

continuation.

     (c) The commerce corporation shall prepare a report beginning January 1, 2019 which shall

be submitted to the house and senate within a period of thirty (30) days of the close of each quarter.

The report shall summarize the information listed in subsection (a) of this section on each of its

programs and offerings, including any modifications, adjustments, clawbacks, reallocations,

alterations or other changes, made from the close of the prior fiscal quarter and include comparison

data to the reports submitted pursuant to §§ 42-64.20-9(b), 42-64.21-8(a) and (8)(c), 42-64.22-

14(a), 42-64.23-5(d), 42-64.24-5(d), 42-64.25-12, 42-64.26-6, 42-64.27-4, 42-64.28-9, 42-64.29-

7(a), 42-64.31-3, 44-48.3-13(b) and (13)(c), chapters 64.20, 64.21, 64.22, 64.23, 64.24, 64.25,

64.26, 64.27, 64.28, 64.29, 64.30, 64.31, 64.32 of title 42 and § 44-48.3-13.

     (d) The board shall coordinate its efforts with the office of revenue analysis to not duplicate

information on the use of tax credits and other tax expenditures.

     SECTION 2. Section 42-64.20-10 of the General Laws in Chapter 42-64.20 entitled

"Rebuild Rhode Island Tax Credit" is hereby amended to read as follows:

     42-64.20-10. Sunset.

     No credits shall be authorized to be reserved pursuant to this chapter after December 31,

2018 June 30, 2020.

     SECTION 3. Section 42-64.21-9 of the General Laws in Chapter 42-64.21 entitled "Rhode

Island Tax Increment Financing" is hereby amended to read as follows:

     42-64.21-9. Sunset.

     The commerce corporation shall enter into no agreement under this chapter after December

31, 2018 June 30, 2020.

     SECTION 4. Section 42-64.22-15 of the General Laws in Chapter 42-64.22 entitled "Tax

Stabilization Incentive" is hereby amended to read as follows:

     42-64.22-15. Sunset.

     The commerce corporation shall enter into no agreement under this chapter after December

31, 2018 June 30, 2020.

     SECTION 5. Section 42-64.23-8 of the General Laws in Chapter 42-64.23 entitled "First

Wave Closing Fund" is hereby amended to read as follows:

     42-64.23-8. Sunset.

     No financing shall be authorized to be reserved pursuant to this chapter after December 31,

2018 June 30, 2020.

     SECTION 6. Section 42-64.24-8 of the General Laws in Chapter 42-64.24 entitled "I-195

Redevelopment Project Fund" is hereby amended to read as follows:

     42-64.24-8. Sunset.

     No funding, credits, or incentives shall be authorized or authorized to be reserved pursuant

to this chapter after December 31, 2018 June 30, 2020.

     SECTION 7. Section 42-64.25-14 of the General Laws in Chapter 42-64.25 entitled "Small

Business Assistance Program" is hereby amended to read as follows:

     42-64.25-14. Sunset.

     No grants, funding, or incentives shall be authorized pursuant to this chapter after

December 31, 2018 June 30, 2020.

     SECTION 8. Section 42-64.26-12 of the General Laws in Chapter 42-64.26 entitled "Stay

Invested in RI Wavemaker Fellowship" is hereby amended to read as follows:

     42-64.26-12. Sunset.

     No incentives or credits shall be authorized pursuant to this chapter after December 31,

2018 June 30, 2020.

     SECTION 9. Section 42-64.27-6 of the General Laws in Chapter 42-64.27 entitled "Main

Street Rhode Island Streetscape Improvement Fund" is hereby amended to read as follows:

     42-64.27-6. Sunset.

     No incentives shall be authorized pursuant to this chapter after December 31, 2018 June

30, 2020.

     SECTION 10. Section 42-64.28-10 of the General Laws in Chapter 42-64.28 entitled

"Innovation Initiative" is hereby amended to read as follows:

     42-64.28-10. Sunset.

     No vouchers, grants, or incentives shall be authorized pursuant to this chapter after

December 31, 2018 June 30, 2020.

     SECTION 11. Section 42-64.29-8 of the General Laws in Chapter 42-64.29 entitled

"Industry Cluster Grants" is hereby amended to read as follows:

     42-64.29-8. Sunset.

     No grants or incentives shall be authorized to be reserved pursuant to this chapter after

December 31, 2018 June 30, 2020.

     SECTION 12. Section 42-64.31-4 of the General Laws in Chapter 42-64.31 entitled "High

School, College, and Employer Partnerships" is hereby amended to read as follows:

     42-64.31-4. Sunset.

     No grants shall be authorized pursuant to this chapter after December 31, 2018 June 30,

2020.

     SECTION 13. Chapter 42-64.32 of the General Laws entitled "Air Service Development

Fund" is hereby amended by adding thereto the following section:

     42-64.32-6. Sunset.

     No grants, credits or incentives shall be authorized or authorized to be reserved pursuant

to this chapter after June 30, 2020.

     SECTION 14. Section 44-48.3-14 of the General Laws in Chapter 44-48.3 entitled "Rhode

Island New Qualified Jobs Incentive Act 2015" is hereby amended to read as follows:

     44-48.3-14. Sunset.

     No credits shall be authorized to be reserved pursuant to this chapter after December 31,

2018 June 30, 2020.

     SECTION 15. Section 42-64.25-6 of the General Laws in Chapter 42-64.25 entitled "Small

Business Assistance Program" is hereby amended to read as follows:

     42-64.25-6. Micro-loan allocation.

     Notwithstanding anything to the contrary in this chapter, not less than ten percent (10%)

and not more than twenty-five percent (25%) of program funds will be allocated to "micro loans"

with a principal amount between two thousand dollars ($2,000) and twenty-five thousand dollars

($25,000). Micro loans will be administered by lending organizations, which will be selected by

the commerce corporation on a competitive basis and shall have experience in providing technical

and financial assistance to microenterprises.

     SECTION 16. Sections 44-31.2-2 and 44-31.2-5 of the General Laws in Chapter 44-31.2

entitled "Motion Picture Production Tax Credits" are hereby amended to read as follows:

     44-31.2-2. Definitions.

     For the purposes of this chapter:

     (1) "Accountant's certification" as provided in this chapter means a certified audit by a

Rhode Island certified public accountant licensed in accordance with chapter 3.1 of title 5.

     (2) "Application year" means within the calendar year the motion picture production

company files an application for the tax credit.

     (3) "Base investment" means the actual investment made and expended by a state-certified

production in the state as production-related costs.

     (4) "Documentary production" means a non-fiction production intended for educational or

commercial distribution that may require out-of-state principal photography.

     (5) "Domiciled in Rhode Island" means a corporation incorporated in Rhode Island or a

partnership, limited liability company, or other business entity formed under the laws of the state

of Rhode Island for the purpose of producing motion pictures as defined in this section, or an

individual who is a domiciled resident of the state of Rhode Island as defined in chapter 30 of this

title.

     (6) "Final production budget" means and includes the total pre-production, production, and

post-production out-of-pocket costs incurred and paid in connection with the making of the motion

picture. The final production budget excludes costs associated with the promotion or marketing of

the motion picture.

     (7) "Motion picture" means a feature-length film, documentary production, video,

television series, or commercial made in Rhode Island, in whole or in part, for theatrical or

television viewing or as a television pilot or for educational distribution. The term "motion picture"

shall not include the production of television coverage of news or athletic events, reality television

show(s) nor shall it apply to any film, video, television series, or commercial or a production for

which records are required under 18 U.S.C. § 2257, to be maintained with respect to any performer

in such production or reporting of books, films, etc. with respect to sexually explicit conduct.

     (8) "Motion picture production company" means a corporation, partnership, limited

liability company, or other business entity engaged in the business of producing one or more motion

pictures as defined in this section. Motion picture production company shall not mean or include:

     (a) Any company owned, affiliated, or controlled, in whole or in part, by any company or

person who or that is in default:

     (i) On taxes owed to the state; or

     (ii) On a loan made by the state in the application year; or

     (iii) On a loan guaranteed by the state in the application year; or

     (b) Any company or person who or that has discharged an obligation to pay or repay public

funds or monies by:

     (i) Filing a petition under any federal or state bankruptcy or insolvency law;

     (ii) Having a petition filed under any federal or state bankruptcy or insolvency law against

such company or person;

     (iii) Consenting to, or acquiescing or joining in, a petition named in (i) or (ii);

     (iv) Consenting to, or acquiescing or joining in, the appointment of a custodian, receiver,

trustee, or examiner for such company's or person's property; or

     (v) Making an assignment for the benefit of creditors or admitting in writing or in any legal

proceeding its insolvency or inability to pay debts as they become due.

     (9) "Primary locations" means the locations that (1) At least fifty-one percent (51%) of the

motion picture principal photography days are filmed; or (2) At least fifty-one percent (51%) of the

motion picture's final production budget is spent and employs at least five (5) individuals during

the production in this state; or (3) For documentary productions, the location of at least fifty-one

percent (51%) of the total productions days, which shall include pre-production and post-

production locations.

     (10) "Rhode Island film and television office" means an office within the department of

administration that has been established in order to promote and encourage the locating of film and

television productions within the state of Rhode Island. The office is also referred to within as the

"film office".

     (11) "State-certified production" means a motion picture production approved by the

Rhode Island film office and produced by a motion picture production company domiciled in

Rhode Island, whether or not such company owns or controls the copyright and distribution rights

in the motion picture; provided, that such company has either:

     (a) Signed a viable distribution plan; or

     (b) Is producing the motion picture for:

     (i) A major motion picture distributor;

     (ii) A major theatrical exhibitor;

     (iii) Television network; or

     (iv) Cable television programmer.

     (12) "State-certified production cost" means any pre-production, production, and post-

production cost that a motion picture production company incurs and pays to the extent it occurs

within the state of Rhode Island. Without limiting the generality of the foregoing, "state-certified

production costs" include: set construction and operation; wardrobes, make-up, accessories, and

related services; costs associated with photography and sound synchronization, lighting, and related

services and materials; editing and related services, including, but not limited to: film processing,

transfers of film to tape or digital format, sound mixing, computer graphics services, special effects

services, and animation services, salary, wages, and other compensation, including related benefits,

of persons employed, either directly or indirectly, in the production of a film including writer,

motion picture director, producer (provided the work is performed in the state of Rhode Island);

rental of facilities and equipment used in Rhode Island; leasing of vehicles; costs of food and

lodging; music, if performed, composed, or recorded by a Rhode Island musician, or released or

published by a person domiciled in Rhode Island; travel expenses incurred to bring persons

employed, either directly or indirectly, in the production of the motion picture, to Rhode Island (but

not expenses of such persons departing from Rhode Island); and legal (but not the expense of a

completion bond or insurance and accounting fees and expenses related to the production's

activities in Rhode Island); provided such services are provided by Rhode Island licensed attorneys

or accountants.

     44-31.2-5. Motion picture production company tax credit.

     (a) A motion picture production company shall be allowed a credit to be computed as

provided in this chapter against a tax imposed by chapters 11, 14, 17 and 30 of this title. The amount

of the credit shall be twenty-five percent (25%) thirty percent (30%) of the state certified production

costs incurred directly attributable to activity within the state, provided that the primary locations

are within the state of Rhode Island and the total production budget as defined herein is a minimum

of one hundred thousand dollars ($100,000). The credit shall be earned in the taxable year in which

production in Rhode Island is completed, as determined by the film office in final certification

pursuant to subsection 44-31.2-6(c).

     (b) For the purposes of this section: "total production budget" means and includes the

motion picture production company's pre-production, production and post-production costs

incurred for the production activities of the motion picture production company in Rhode Island in

connection with the production of a state-certified production. The budget shall not include costs

associated with the promotion or marketing of the film, video or television product.

     (c) Notwithstanding subsection (a), the credit shall not exceed five million dollars

($5,000,000) seven million dollars ($7,000,000) and shall be allowed against the tax for the taxable

period in which the credit is earned and can be carried forward for not more than three (3)

succeeding tax years. Pursuant to rules promulgated by the tax administrator, the administrator may

issue a waiver of the five million dollars ($5,000,000) seven million dollars ($7,000,000) tax credit

cap for any feature-length film or television series up to the remaining funds available pursuant to

section (e).

     (d) Credits allowed to a motion picture production company, which is a subchapter S

corporation, partnership, or a limited liability company that is taxed as a partnership, shall be passed

through respectively to persons designated as partners, members or owners on a pro rata basis or

pursuant to an executed agreement among such persons designated as subchapter S corporation

shareholders, partners, or members documenting an alternate distribution method without regard to

their sharing of other tax or economic attributes of such entity.

     (e) No more than fifteen million dollars ($15,000,000) in total may be issued for any tax

year beginning after December 31, 2007 for motion picture tax credits pursuant to this chapter

and/or musical and theatrical production tax credits pursuant to chapter 31.3 of this title. Said

credits shall be equally available to motion picture productions and musical and theatrical

productions. No specific amount shall be set aside for either type of production.

     SECTION 17. This Article shall take effect upon passage.