2020 -- H 7658 | |
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LC004669 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
____________ | |
A N A C T | |
RELATING TO STATE AFFAIRS AND GOVERNMENT -- MANUFACTURING AND | |
ECONOMIC DEVELOPMENT--TAX INCENTIVES | |
| |
Introduced By: Representative Alex D. Marszalkowski | |
Date Introduced: February 26, 2020 | |
Referred To: House Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND |
2 | GOVERNMENT" is hereby amended by adding thereto the following chapter: |
3 | CHAPTER 64.34 |
4 | THE REFUNDABLE INVESTMENT TAX CREDIT ACT |
5 | 42-64.34-1. Short title. |
6 | This chapter shall be known and may be cited as the "Refundable Investment Tax Credit |
7 | Act." |
8 | 42-64.34-2. Legislative findings. |
9 | Although chapter 31 of title 44 of the Rhode Island general laws (the "investment tax credit |
10 | act") establishes tax credits for eligible taxpayers for certain investments for the construction of |
11 | facilities, the acquisition of tangible personal property, and the training of employees, the |
12 | investment tax credit act does not allow for the taking of these tax credits by certain business |
13 | entities, and further does not provide for refunds to the extent that the tax credits exceed the eligible |
14 | taxpayers' tax liability. Through the establishment of a refundable investment tax credit program |
15 | for manufacturers, Rhode Island can foster further investment by manufacturing businesses, and |
16 | thereby encourage businesses to contribute in a meaningful way to the economic development of |
17 | this state. In so doing, this program will further advance the competitiveness of Rhode Island and |
18 | its companies in the national and global economies and result in the creation and retention of jobs |
| |
1 | and tax revenues for the state. |
2 | 42-64.34-3. Definitions. |
3 | As used in this chapter: |
4 | (1) "Business" means a manufacturer that is a C corporation, S corporation, partnership, |
5 | limited partnership, limited liability partnership, limited liability company, or sole proprietorship; |
6 | (2) "Commerce corporation" means the Rhode Island commerce corporation established |
7 | pursuant to chapter 64 of title 42; |
8 | (3) "Eligible taxpayer" means a taxpayer eligible for an investment tax credit pursuant to § |
9 | 44-31-1; |
10 | (4) "Manufacturer" and "Manufacturing" shall have the same meanings as provided in §§ |
11 | 44-31-1(b)(1) and (b)(2) and shall further include any entity described in major groups 20 through |
12 | 39 in the Standard Industrial Classification Manual prepared by the technical committee on |
13 | industrial classification, office of statistical standards, executive office of the president, United |
14 | States Bureau of Budget, as revised from time to time; |
15 | (5) "Refund or redemption" means the taking of a tax credit against a tax liability or |
16 | obtaining a refund for a tax credit or a portion thereof; |
17 | (6) "Targeted industries" shall have the same meaning as provided in § 42-64.20-3 (the |
18 | "rebuild Rhode Island tax credit act") and the regulations promulgated thereunder; |
19 | (7) "Tax liability" means: |
20 | (i) The amount of tax owed to the state of Rhode Island calculated as the Rhode Island |
21 | adjusted taxable income minus any Rhode Island tax credit on schedule B-CR other than credits |
22 | allowed under this chapter; or |
23 | (ii) The minimum tax for filers of Form RI 11120S; or |
24 | (iii) The Rhode Island annual fee for filing. |
25 | 42-64.34-4. Establishment of program. |
26 | A refundable investment tax credit program is hereby established as a program under the |
27 | jurisdiction of and administered by the commerce corporation. |
28 | 42-64.34-5. Refundable tax credits. |
29 | (a) To be eligible to take and redeem tax credits under this chapter, a business must submit |
30 | a completed application to the commerce corporation for approval prior to making the investment |
31 | that will give rise to the requested tax credit. Such application shall be developed by the commerce |
32 | corporation. |
33 | (b) The commerce corporation may take into account the following factors in determining |
34 | whether to approve an application for a refundable investment tax credit pursuant to this chapter: |
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1 | the nature and amount of the business's investment; the necessity of the investment and/or credit; |
2 | whether the business is engaged in a targeted industry; the number of jobs created by the business's |
3 | investment; whether the investment took place in a Hope community as defined in § 42-64.20-3 |
4 | and the regulations promulgated thereunder; and such other factors as the commerce corporation |
5 | deems relevant. |
6 | (c) The refundable tax credit shall be available only to the extent that the business's |
7 | investment credit exceeds that business's tax liability for the tax year in which the credit is available. |
8 | (d) The amount of the refundable tax credit available to any business in any given tax year |
9 | shall not exceed the sum of one hundred thousand dollars ($100,000). |
10 | (e) Prior to approving an application for refundable credits, the commerce corporation shall |
11 | require the business to enter into an incentive agreement setting forth the business's eligibility to |
12 | use or redeem the tax credits and the terms and conditions governing the approval and receipt of |
13 | the refundable tax credits. |
14 | (f) To take or redeem a refundable tax credit authorized by the corporation, an eligible |
15 | business shall apply annually to the commerce corporation for a certification that the business has |
16 | met all the requirements of this chapter and the incentive agreement. The commerce corporation |
17 | shall either issue a certification to the business or provide a written response detailing any |
18 | deficiencies precluding certification. The commerce corporation may deny an applicant for |
19 | certification, or declare the incentive agreement null and void if the business does not meet all |
20 | requirements of this chapter and any additional terms and conditions of the incentive agreement. |
21 | (g) Upon issuance of a certification by the commerce corporation under subsection (f) of |
22 | this section, and at the request of the business, the division of taxation shall, on behalf of the state |
23 | of Rhode Island issue redemption tax certificate(s) as specified in the certification issued by the |
24 | commerce corporation pursuant to subsection (f) of this section. |
25 | (h) A taxpayer shall be entitled to take investment tax credits, up to the limit authorized in |
26 | this chapter, against taxes imposed pursuant to chapters 11 and 30 of title 44. |
27 | (i) Subject to annual appropriation in the state budget and upon written request of a |
28 | taxpayer, the state shall refund the amount of the tax credit provided under this chapter in whole or |
29 | in part up to one hundred percent (100%) of the value of the redemption certificates issued under |
30 | subsection (g) of this section reduced by the amount of the tax credit taken, if any; provided, |
31 | however, that taxpayer may only claim a refund of a credit amount, in whole or part, for the year |
32 | for which the tax credit was issued. Credits carried over pursuant to subsection (j) of this section |
33 | shall not be refundable. |
34 | (j) If the tax credit allowed under this chapter exceeds the taxpayer's total tax liability for |
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1 | the year in which the credit is allowed, the amount that exceeds the taxpayer's tax liability after |
2 | taking account any credit taken under this chapter may either be refunded pursuant to subsection |
3 | (i) of this section or carried forward for credit against the tax liability for the succeeding years, or |
4 | until the tax credit is used in full, whichever occurs first. |
5 | (k) In the case of a corporation that files a consolidated return, this credit shall only be |
6 | allowed against the tax of a corporation included in a consolidated return that qualifies for the credit |
7 | and not against the tax of other corporations that may join in the filing of a consolidated tax return. |
8 | (l) Credits allowed to a partnership, a limited liability company taxed as a partnership, or |
9 | multiple owners of property shall be passed through to the persons designated as partners, members |
10 | or owners respectively pro rata or pursuant to an executed agreement among such persons |
11 | designated as partners, members or owners documenting an alternate distribution method without |
12 | regard to their sharing of other tax or economic attributes of such entity. |
13 | (m) Any expenses used for calculating the tax credit under this chapter cannot be used in |
14 | calculating a tax credit under any other tax credit program in Rhode Island law. |
15 | (n) In the event any taxpayer seeking a refund under this chapter has outstanding Rhode |
16 | Island tax obligations, the division of taxation shall be permitted to apply said refund to the |
17 | outstanding tax obligations. |
18 | 42-64.34-6. Refundable investment tax credit fund. |
19 | There is hereby established at the commerce corporation a restricted account known as the |
20 | refundable investment tax credit fund (the "fund") into which all amounts appropriated in the state |
21 | budget for the redemption of tax credits under this chapter shall be deposited. The fund shall be |
22 | used to pay for the redemption of investment tax credits pursuant to the provisions of this chapter |
23 | and for which a taxpayer is eligible under § 44-31-1. The fund shall be exempt from attachment, |
24 | levy or any other process at law or in equity. The director of the department of revenue shall make |
25 | a requisition to the commerce corporation for funding during any fiscal year as may be necessary |
26 | to pay for the redemption pursuant to this chapter. The commerce corporation shall pay from the |
27 | fund such amounts as requested by the director of the department of revenue necessary to redeem |
28 | tax credits pursuant to this chapter. |
29 | 42-64.34-7. Program integrity. |
30 | (a) Program integrity being of paramount importance, the commerce corporation shall |
31 | establish procedures to ensure ongoing compliance with the terms and conditions of the program |
32 | established herein, including procedures to safeguard approval of redemption of the credits and to |
33 | ensure that authorized redemptions further the objectives of the program. |
34 | (b) The commerce corporation and division of taxation may promulgate such rules and |
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1 | regulations pursuant to chapter 35 of title 42 (the "administrative procedures act") as deemed |
2 | necessary to carry out the intent, purpose and implementation of the program established under this |
3 | chapter. |
4 | 42-64.34-8. Reporting requirements. |
5 | (a) By September 1, 2020 and each year thereafter, the commerce corporation shall report |
6 | the name and address of each business entering into an incentive agreement during the previous |
7 | state fiscal year to the division of taxation. The commerce corporation shall also make this |
8 | information publicly available on its website. In addition, the commerce corporation shall provide |
9 | the division of taxation a copy of each incentive agreement as they are executed. |
10 | (b) By December 1, 2020, and each year thereafter, the office of management and budget |
11 | shall provide the governor with the sum, if any, to be appropriated to fund the refundable investment |
12 | tax credit program. |
13 | SECTION 2. Section 42-64.20-5 of the General Laws in Chapter 42-64.20 entitled |
14 | "Rebuild Rhode Island Tax Credit" is hereby amended to read as follows: |
15 | 42-64.20-5. Tax credits. |
16 | (a) An applicant meeting the requirements of this chapter may be allowed a credit as set |
17 | forth hereinafter against taxes imposed upon such person under applicable provisions of title 44 of |
18 | the general laws for a qualified development project. |
19 | (b) To be eligible as a qualified development project entitled to tax credits, an applicant's |
20 | chief executive officer or equivalent officer shall demonstrate to the commerce corporation, at the |
21 | time of application, that: |
22 | (1) The applicant has committed a capital investment or owner equity of not less than |
23 | twenty percent (20%) of the total project cost; |
24 | (2) There is a project financing gap in which after taking into account all available private |
25 | and public funding sources, the project is not likely to be accomplished by private enterprise |
26 | without the tax credits described in this chapter; and |
27 | (3) The project fulfills the state's policy and planning objectives and priorities in that: |
28 | (i) The applicant will, at the discretion of the commerce corporation, obtain a tax |
29 | stabilization agreement from the municipality in which the real estate project is located on such |
30 | terms as the commerce corporation deems acceptable; |
31 | (ii) It (A) Is a commercial development consisting of at least 25,000 square feet occupied |
32 | by at least one business employing at least 25 full-time employees after construction or such |
33 | additional full-time employees as the commerce corporation may determine; (B) Is a multi-family |
34 | residential development in a new, adaptive reuse, certified historic structure, or recognized |
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1 | historical structure consisting of at least 20,000 square feet and having at least 20 residential units |
2 | in a hope community; or (C) Is a mixed-use development in a new, adaptive reuse, certified historic |
3 | structure, or recognized historical structure consisting of at least 25,000 square feet occupied by at |
4 | least one business, subject to further definition through rules and regulations promulgated by the |
5 | commerce corporation; and |
6 | (iii) Involves a total project cost of not less than $5,000,000, except for a qualified |
7 | development project located in a hope community or redevelopment area designated under § 45- |
8 | 32-4 in which event the commerce corporation shall have the discretion to modify the minimum |
9 | project cost requirement. |
10 | (c) The commerce corporation shall develop separate, streamlined application processes |
11 | for the issuance of rebuild RI tax credits for each of the following: |
12 | (1) Qualified development projects that involve certified historic structures; |
13 | (2) Qualified development projects that involve recognized historical structures; |
14 | (3) Qualified development projects that involve at least one manufacturer; and |
15 | (4) Qualified development projects that include affordable housing or workforce housing. |
16 | (d) Applications made for a historic structure or recognized historic structure tax credit |
17 | under chapter 33.6 of title 44 shall be considered for tax credits under this chapter. The division of |
18 | taxation, at the expense of the commerce corporation, shall provide communications from the |
19 | commerce corporation to those who have applied for and are in the queue awaiting the offer of tax |
20 | credits pursuant to chapter 33.6 of title 44 regarding their potential eligibility for the rebuild RI tax |
21 | credit program. |
22 | (e) Applicants (1) Who have received the notice referenced in subsection (d) above and |
23 | who may be eligible for a tax credit pursuant to chapter 33.6 of title 44, (2) Whose application |
24 | involves a certified historic structure or recognized historical structure, or (3) Whose project is |
25 | occupied by at least one manufacturer shall be exempt from the requirements of subsections |
26 | (b)(3)(ii) and (b)(3)(iii). The following procedure shall apply to such applicants: |
27 | (i) The division of taxation shall remain responsible for determining the eligibility of an |
28 | applicant for tax credits awarded under chapter 33.6 of title 44; |
29 | (ii) The commerce corporation shall retain sole authority for determining the eligibility of |
30 | an applicant for tax credits awarded under this chapter; and |
31 | (iii) The commerce corporation shall not award in excess of fifteen percent (15%) of the |
32 | annual amount authorized in any fiscal year to applicants seeking tax credits pursuant to this |
33 | subsection (e). |
34 | (f) Applicants whose project is occupied by at least one manufacturer shall be exempt from |
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1 | the requirements of subsections (b)(3)(ii) and (b)(3)(iii) of this section, and the commerce |
2 | corporation may establish minimum project cost amounts required for eligibility under this section. |
3 | (f)(g) Maximum project credit. |
4 | (1) For qualified development projects, the maximum tax credit allowed under this chapter |
5 | shall be the lesser of (i) Thirty percent (30%) of the total project cost; or (ii) The amount needed to |
6 | close a project financing gap (after taking into account all other private and public funding sources |
7 | available to the project), as determined by the commerce corporation. |
8 | (2) The credit allowed pursuant to this chapter, inclusive of any sales and use tax |
9 | exemptions allowed pursuant to this chapter, shall not exceed fifteen million dollars ($15,000,000) |
10 | for any qualified development project under this chapter; except as provided in subsection (f)(3) of |
11 | this section; provided however, any qualified development project that exceeds the project cap upon |
12 | passage of this act shall be deemed not to exceed the cap, shall not be reduced, nor shall it be further |
13 | increased. No building or qualified development project to be completed in phases or in multiple |
14 | projects shall exceed the maximum project credit of fifteen million dollars ($15,000,000) for all |
15 | phases or projects involved in the rehabilitation of the building. Provided, however, that for |
16 | purposes of this subsection and no more than once in a given fiscal year, the commerce corporation |
17 | may consider the development of land and buildings by a developer on the "I-195 land" as defined |
18 | in § 42-64.24-3(6) as a separate, qualified development project from a qualified development |
19 | project by a tenant or owner of a commercial condominium or similar legal interest including |
20 | leasehold improvement, fit out, and capital investment. Such qualified development project by a |
21 | tenant or owner of a commercial condominium or similar legal interest on the I-195 land may be |
22 | exempted from subsection (f)(1)(i) of this section. |
23 | (3) The credit allowed pursuant to this chapter, inclusive of any sales and use tax |
24 | exemptions allowed pursuant to this chapter, shall not exceed twenty-five million dollars |
25 | ($25,000,000) for the project for which the I-195 redevelopment district was authorized to enter |
26 | into a purchase and sale agreement for parcels 42 and P4 on December 19, 2018, provided that |
27 | project is approved for credits pursuant to this chapter by the commerce corporation. |
28 | (g)(h) Credits available under this chapter shall not exceed twenty percent (20%) of the |
29 | project cost, provided, however, that the applicant shall be eligible for additional tax credits of not |
30 | more than ten percent (10%) of the project cost, if the qualified development project meets any of |
31 | the following criteria or other additional criteria determined by the commerce corporation from |
32 | time to time in response to evolving economic or market conditions: |
33 | (1) The project includes adaptive reuse or development of a recognized historical structure; |
34 | (2) The project is undertaken by or for a targeted industry; |
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1 | (3) The project is located in a transit-oriented development area; |
2 | (4) The project includes residential development of which at least twenty percent (20%) of |
3 | the residential units are designated as affordable housing or workforce housing; |
4 | (5) The project includes the adaptive reuse of property subject to the requirements of the |
5 | industrial property remediation and reuse act, § 23-19.14-1 et seq.; or |
6 | (6) The project includes commercial facilities constructed in accordance with the minimum |
7 | environmental and sustainability standards, as certified by the commerce corporation pursuant to |
8 | Leadership in Energy and Environmental Design or other equivalent standards. |
9 | (h)(i) Maximum aggregate credits. The aggregate sum authorized pursuant to this chapter, |
10 | inclusive of any sales and use tax exemptions allowed pursuant to this chapter, shall not exceed |
11 | two hundred ten million dollars ($210,000,000), excluding any tax credits allowed pursuant to |
12 | subsection (f)(3) of this section. |
13 | (i)(j) Tax credits shall not be allowed under this chapter prior to the taxable year in which |
14 | the project is placed in service. |
15 | (j)(k) The amount of a tax credit allowed under this chapter shall be allowable to the |
16 | taxpayer in up to five, annual increments; no more than thirty percent (30%) and no less than fifteen |
17 | percent (15%) of the total credits allowed to a taxpayer under this chapter may be allowable for any |
18 | taxable year, except for projects with a project financing gap of less than five hundred thousand |
19 | dollars ($500,000). |
20 | (k)(l) If the portion of the tax credit allowed under this chapter exceeds the taxpayer's total |
21 | tax liability for the year in which the relevant portion of the credit is allowed, the amount that |
22 | exceeds the taxpayer's tax liability may be carried forward for credit against the taxes imposed for |
23 | the succeeding four (4) years, or until the full credit is used, whichever occurs first. Credits allowed |
24 | to a partnership, a limited-liability company taxed as a partnership, or multiple owners of property |
25 | shall be passed through to the persons designated as partners, members, or owners respectively pro |
26 | rata or pursuant to an executed agreement among persons designated as partners, members, or |
27 | owners documenting an alternate distribution method without regard to their sharing of other tax |
28 | or economic attributes of such entity. |
29 | (l)(m) The commerce corporation, in consultation with the division of taxation, shall |
30 | establish, by regulation, the process for the assignment, transfer, or conveyance of tax credits. |
31 | (m)(n) For purposes of this chapter, any assignment or sales proceeds received by the |
32 | taxpayer for its assignment or sale of the tax credits allowed pursuant to this section shall be exempt |
33 | from taxation under title 44. If a tax credit is subsequently revoked or adjusted, the seller's tax |
34 | calculation for the year of revocation or adjustment shall be increased by the total amount of the |
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1 | sales proceeds, without proration, as a modification under chapter 30 of title 44. In the event that |
2 | the seller is not a natural person, the seller's tax calculation under chapter 11, 13, 14, or 17 of title |
3 | 44, as applicable, for the year of revocation, or adjustment, shall be increased by including the total |
4 | amount of the sales proceeds without proration. |
5 | (n)(o) The tax credit allowed under this chapter may be used as a credit against corporate |
6 | income taxes imposed under chapter 11, 13, 14, or 17, of title 44, or may be used as a credit against |
7 | personal income taxes imposed under chapter 30 of title 44 for owners of pass-through entities such |
8 | as a partnership, a limited-liability company taxed as a partnership, or multiple owners of property. |
9 | (o)(p) In the case of a corporation, this credit is only allowed against the tax of a corporation |
10 | included in a consolidated return that qualifies for the credit and not against the tax of other |
11 | corporations that may join in the filing of a consolidated tax return. |
12 | (p)(q) Upon request of a taxpayer and subject to annual appropriation, the state shall |
13 | redeem this credit, in whole or in part, for ninety percent (90%) of the value of the tax credit. The |
14 | division of taxation, in consultation with the commerce corporation, shall establish by regulation a |
15 | redemption process for tax credits. |
16 | (q)(r) Projects eligible to receive a tax credit under this chapter may, at the discretion of |
17 | the commerce corporation, be exempt from sales and use taxes imposed on the purchase of the |
18 | following classes of personal property only to the extent utilized directly and exclusively in the |
19 | project: (1) Furniture, fixtures, and equipment, except automobiles, trucks, or other motor vehicles; |
20 | or (2) Other materials, including construction materials and supplies, that are depreciable and have |
21 | a useful life of one year or more and are essential to the project. |
22 | (r)(s) The commerce corporation shall promulgate rules and regulations for the |
23 | administration and certification of additional tax credit under subsection (e), including criteria for |
24 | the eligibility, evaluation, prioritization, and approval of projects that qualify for such additional |
25 | tax credit. |
26 | (s)(t) The commerce corporation shall not have any obligation to make any award or grant |
27 | any benefits under this chapter. |
28 | SECTION 3. Sections 44-48.3-3 and 44-48.3-4 of the General Laws in Chapter 44-48.3 |
29 | entitled "Rhode Island New Qualified Jobs Incentive Act 2015" are hereby amended to read as |
30 | follows: |
31 | 44-48.3-3. Definitions. |
32 | As used in this chapter, unless the context clearly indicates otherwise, the following words |
33 | and phrases shall have the following meanings: |
34 | (1) "Affiliate" or "affiliated entity" means an entity that directly or indirectly controls, is |
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1 | under common control with, or is controlled by the business. Control exists in all cases in which |
2 | the entity is a member of an affiliated group of corporations as defined pursuant to § 1504 of the |
3 | Internal Revenue Code of 1986 (26 U.S.C. § 1504) or the entity is an organization in a group of |
4 | organizations under common control as defined pursuant to subsection (b) or (c) of § 414 of the |
5 | Internal Revenue Code of 1986 (26 U.S.C. § 414). A taxpayer may establish by clear and |
6 | convincing evidence, as determined by the commerce corporation, that control exists in situations |
7 | involving lesser percentages of ownership than required by those statutes. An affiliate of a business |
8 | may contribute to meeting full-time employee requirements of a business that applies for a credit |
9 | under this chapter. |
10 | (2) "Business" means an applicant that is a corporation, state bank, federal savings bank, |
11 | trust company, national banking association, bank holding company, loan and investment |
12 | company, mutual savings bank, credit union, building and loan association, insurance company, |
13 | investment company, broker-dealer company or surety company, limited liability company, |
14 | partnership or sole proprietorship. |
15 | (3) "Commerce corporation" means the Rhode Island commerce corporation established |
16 | pursuant to chapter 64 of title 42. |
17 | (4) "Commitment period" means the period of time that at a minimum is twenty percent |
18 | (20%) greater than the eligibility period. |
19 | (5) "Eligibility period" means the period in which a business may claim a tax credit under |
20 | the program, beginning at the end of the tax period in which the commerce corporation issues a |
21 | certification for the business that it has met the employment requirements of the program and |
22 | extending thereafter for a term of not more than ten (10) years. |
23 | (6) "Eligible position" or "full-time job" means a full-time position in a business which has |
24 | been filled with a full-time employee who earns no less than the median hourly wage as reported |
25 | by the United States Bureau of Labor Statistics for the state of Rhode Island, provided, that for |
26 | economically fragile industries such as manufacturing, the commerce corporation may reduce the |
27 | wage threshold. An economically fragile industry shall not include retail. |
28 | (7) "Full-time employee" means a person who is employed by a business for consideration |
29 | for at least thirty-five (35) hours a week, or who is employed by a professional employer |
30 | organization pursuant to an employee leasing agreement between the business and the professional |
31 | employer organization for at least thirty-five (35) hours a week, and whose wages are subject to |
32 | withholding. |
33 | (8) "Hope community" means municipalities with a percentage of families below the |
34 | poverty level that is greater than the percentage of families below the poverty level for the state as |
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1 | a whole as determined by the United States Census Bureau's most recent American Community |
2 | Survey. |
3 | (9) "Incentive agreement" means the contract between the business and the commerce |
4 | corporation, which sets forth the terms and conditions under which the business shall be eligible to |
5 | receive the incentives authorized pursuant to the program. |
6 | (10) "Incentive effective date" means the date the commerce corporation issues a |
7 | certification for issuance of tax credit based on documentation submitted by a business pursuant to |
8 | § 44-48.3-7. |
9 | (11) "Manufacturer" means any entity that: |
10 | (i) Uses any premises within the state primarily for the purpose of transforming raw |
11 | materials into a finished product for trade through any or all of the following operations: adapting, |
12 | altering, finishing, making, processing, refining, metalworking, and ornamenting, but shall not |
13 | include fabricating processes incidental to warehousing or distribution of raw materials, such as |
14 | alteration of stock for the convenience of a customer; or |
15 | (ii) Is described in codes 31-33 of the North American Industry Classification System, as |
16 | revised from time to time. |
17 | (11)(12) "New full-time job" means an eligible position created by the business that did |
18 | not previously exist in this state and which is created after approval of an application to the |
19 | commerce corporation under the program. Such job position cannot be the result of an acquisition |
20 | of an existing company located in Rhode Island by purchase, merger, or otherwise. For the purposes |
21 | of determining the number of new full-time jobs, the eligible positions of an affiliate shall be |
22 | considered eligible positions of the business so long as such eligible position(s) otherwise meets |
23 | the requirements of this section. |
24 | (12)(13) "Partnership" means an entity classified as a partnership for federal income tax |
25 | purposes. |
26 | (13)(14) "Program" means the incentive program established pursuant to this chapter. |
27 | (14)(15) "Targeted industry" means any industry identified in the economic development |
28 | vision and policy promulgated under § 42-64.17-1 or, until such time as any economic development |
29 | vision and policy is promulgated, as identified by the commerce corporation. |
30 | (15)(16) "Taxpayer" means a business granted a tax credit under this chapter or such person |
31 | entitled to the tax credit because the business is a pass through entity such as a partnership, S |
32 | corporation, sole proprietorship or limited liability company taxed as a partnership. |
33 | (16)(17) "Transit oriented development area" means an area in proximity to mass-transit |
34 | infrastructure including, but not limited to, an airport, rail or intermodal facility that will be further |
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1 | defined by regulation of the commerce corporation in consultation with the Rhode Island |
2 | department of transportation. |
3 | 44-48.3-4. Rhode Island qualified jobs incentive program. |
4 | (a) The Rhode Island qualified jobs incentive program is hereby established as a program |
5 | under the jurisdiction of and shall be administered by the commerce corporation. The program may |
6 | provide tax credits to eligible businesses for an eligibility period not to exceed ten (10) years. |
7 | (b) An eligible business under the program shall be entitled to a credit against taxes |
8 | imposed pursuant to chapters 11, 13, 14, 17 or 30 of title 44 as further provided under this chapter. |
9 | (c) The minimum number of new full-time jobs required to be eligible for a tax credit under |
10 | this program shall be as follows: |
11 | (1) For a business in a targeted industry that employs not more than one hundred (100) full- |
12 | time employees on the date of application to the commerce corporation, the creation of at least ten |
13 | (10) new full-time jobs in this state; |
14 | (2) For a business in a targeted industry that employs more than one hundred (100) full- |
15 | time employees on the date of application to the commerce corporation, either the creation of new |
16 | full-time jobs in this state in an amount not less than ten percent (10%) of the business's existing |
17 | number of full-time employees or the creation of at least one hundred (100) new full-time jobs in |
18 | this state; |
19 | (3) For a business in a non-targeted industry that employs not more than two hundred (200) |
20 | full-time employees on the date of application to the commerce corporation, the creation of at least |
21 | twenty (20) new full-time jobs in this state; or |
22 | (4) For a business in a non-targeted industry that employs more than two hundred (200) |
23 | full-time employees on the date of application to the commerce corporation, either the creation of |
24 | new full-time jobs in this state in an amount not less than ten percent (10%) of the business's |
25 | existing number of full-time employees or the creation of at least one hundred (100) new full-time |
26 | jobs in this state; or |
27 | (5) Notwithstanding subsections (c)(1) through (c)(4) of this section, for a manufacturer, |
28 | the creation of new full-time jobs in this state in an amount not less than ten percent (10%) of the |
29 | manufacturer's existing number of full-time employees, or the creation of at least one hundred (100) |
30 | new full-time jobs in this state. |
31 | (d) When a business applies for an incentive under this chapter, in order to assist the |
32 | commerce corporation in determining whether the business is eligible for the incentives under this |
33 | chapter, the business's chief executive officer, or equivalent officer, shall attest under oath: |
34 | (1) That any projected creation of new full-time jobs would not occur, or would not occur |
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1 | in the state of Rhode Island, but for the provision of tax credits under the program; |
2 | (2) The business will create new full-time jobs in an amount equal to or greater than the |
3 | applicable number set forth in subsection (c) of this section; |
4 | (3) That the business's chief executive officer, or equivalent officer, has reviewed the |
5 | information submitted to the commerce corporation and that the representations contained therein |
6 | are accurate and complete. |
7 | (e) The commerce corporation shall establish, by regulation, the documentation an |
8 | applicant shall be required to provide under this subsection. Such documentation may include |
9 | documentation showing that the applicant could reasonably locate the new positions outside of this |
10 | state, or that the applicant is considering locating the positions outside of this state, or that it would |
11 | not be financially feasible for the applicant to create the positions without the tax credits provided |
12 | in this chapter. |
13 | (f) In the event that this attestation by the business's chief executive officer, or equivalent |
14 | officer, required under subsection (d) of this section is found to be willfully false, the commerce |
15 | corporation may revoke any award of tax credits in their entirety, which revocation shall be in |
16 | addition to any other criminal or civil penalties that the business and/or the officer may be subject |
17 | to under applicable law. Additionally, the commerce corporation may revoke any award of tax |
18 | credits in its entirety if the eligible business is convicted of bribery, fraud, theft, embezzlement, |
19 | misappropriation, and/or extortion involving the state, any state agency or political subdivision of |
20 | the state. |
21 | (g) The definition of manufacturer in this chapter is limited to the eligibility for the program |
22 | in this chapter only and shall not modify or define the legal standing of a manufacturer for any |
23 | other purpose set forth in title 44. |
24 | SECTION 4. This act shall take effect upon passage. |
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LC004669 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO STATE AFFAIRS AND GOVERNMENT -- MANUFACTURING AND | |
ECONOMIC DEVELOPMENT--TAX INCENTIVES | |
*** | |
1 | This act would establish the "refundable investment tax credit act" to provide for a |
2 | refundable investment tax credit for certain investments in the construction of facilities, acquisition |
3 | of tangible property, and the training of employees in the state. The refundable tax credit program |
4 | to be established by this act would be administered by the commerce corporation. |
5 | This act would take effect upon passage. |
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LC004669 | |
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