2023 -- H 5377

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LC000040

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION

     

     Introduced By: Representatives Alzate, Giraldo, Cruz, Felix, and Stewart

     Date Introduced: February 03, 2023

     Referred To: House Municipal Government & Housing

     It is enacted by the General Assembly as follows:

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      SECTION 1. Section 44-3-9 of the General Laws in Chapter 44-3 entitled "Property

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

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     44-3-9. Exemption or stabilizing of taxes on property used for manufacturing,

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commercial, or residential purposes.

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     (a)(1) Except as provided in this section, the electors of any city or town qualified to vote

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on a proposition to appropriate money or impose a tax when legally assembled, may vote to

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authorize the city or town council, for a period not exceeding twenty (20) years, and subject to the

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conditions as provided in this section, to exempt from payment, in whole or in part, real and

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personal property which has undergone environmental remediation, is historically preserved, or is

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used for affordable housing, manufacturing, commercial, or residential purposes, or to determine a

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stabilized amount of taxes to be paid on account of the property, notwithstanding the valuation of

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the property or the rate of tax; provided, that after public hearings, at least ten (10) days’ notice of

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which shall be given in a newspaper having a general circulation in the city or town, the city or

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town council determines that:

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     (i) Granting of the exemption or stabilization will inure to the benefit of the city or town

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by reason of:

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     (A) The willingness of the manufacturing or commercial concern to locate in the city or

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town, or of individuals to reside in such an area; or

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     (B) The willingness of a manufacturing firm to expand facilities with an increase in

 

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employment or the willingness of a commercial or manufacturing concern to retain or expand its

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facility in the city or town and not substantially reduce its work force in the city or town; or

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     (C) An improvement of the physical plant of the city or town which will result in a long-

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term economic benefit to the city or town and state; or

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     (D) An improvement which converts or makes available land or facility that would

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otherwise be not developable or difficult to develop without substantial environmental remediation;

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or

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     (ii) Granting of the exemption or stabilization of taxes will inure to the benefit of the city

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or town by reason of the willingness of a manufacturing or commercial or residential firm or

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property owner to construct new or to replace, reconstruct, convert, expand, retain, or remodel

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existing buildings, facilities, machinery, or equipment with modern buildings, facilities, fixtures,

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machinery, or equipment resulting in an increase or maintenance in plant, residential housing, or

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commercial building investment by the firm or property owned in the city or town;

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     (2) Provided that should the city or town council make the determination in subsection

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(a)(1)(i)(B) of this section, any exemption or stabilization may be granted as to new buildings,

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fixtures, machinery, or equipment for new buildings, firms or expansions, and may be granted as

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to existing buildings, fixtures, machinery and equipment for existing employers in the city or town.

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     (b) Cities shall have the same authority as is granted to towns except that authority granted

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to the qualified electors of a town and to town councils shall be exercised in the case of a city by

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the city council.

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     (c) For purposes of this section, “property used for commercial purposes” means any

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building or structures used essentially for offices or commercial enterprises.

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     (d) Except as provided in this section, property, the payment of taxes on which has been so

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exempted or which is subject to the payment of a stabilized amount of taxes, shall not, during the

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period for which the exemption or stabilization of the amount of taxes is granted, be further liable

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to taxation by the city or town in which the property is located so long as the property is used for

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the manufacturing or commercial, or residential purposes for which the exemption or stabilized

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amount of taxes was made.

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     (e) Notwithstanding any vote of the qualified electors of a town and findings of a town

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council or of any vote and findings by a city council, the property shall be assessed for and shall

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pay that portion of the tax, if any, assessed by the city or town in which the real or personal property

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is located, for the purpose of paying the indebtedness of the city or town and the indebtedness of

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the state or any political subdivision of the state to the extent assessed upon or apportioned to the

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city or town, and the interest on the indebtedness, and for appropriation to any sinking fund of the

 

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city or town, which portion of the tax shall be paid in full, and the taxes so assessed and collected

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shall be kept in a separate account and used only for that purpose.

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     (f) Nothing in this section shall be deemed to permit the exemption or stabilization

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provided in this section for any manufacturing or commercial concern relocating from one city or

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town within the state of Rhode Island to another.

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     (g) Renewable energy resources, as defined in § 39-26-5, qualify for tax stabilization

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agreements pursuant to subsection (a) of this section.

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     (h) Notwithstanding the foregoing, the city council of the city of Providence may extend

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the twenty-year (20) period in subsection (a) of this section by an additional ten (10) years for real

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property located at 111 Westminster Street (also identified as 55 Kennedy Plaza), Providence,

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Rhode Island, identified as assessor’s plat 20, lot 14.

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     (i) Pursuant to subsection (a) of this section, tax exemption or stabilization granted to

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residential development projects, shall require, as a condition of the agreement between the city or

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town and the entity seeking relief, that:

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     (1) Residential development projects of five (5) to nine (9) housing units include a number

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of affordable housing units not less than a number equal to eighteen percent (18%) of the market-

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rate units developed, or contribute an amount equal to eighteen percent (18%) of the total value of

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the development project to be deposited in a city or town account for use in providing or

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maintaining affordable housing;

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     (2) Residential development projects of ten (10) or more housing units shall include a

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number of affordable housing units not less than a number equal to eighteen percent (18%) of the

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market-rate units developed; and

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     (3) Any such affordable housing units created, whether on-site or off-site, must be

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comparable in size and quality to the average of all market-rate housing units in the development.

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     (j) In the event that the calculation set forth in subsections (i)(1) or (i)(2) of this section

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results in a remainder, a city or town granting tax exemption or stabilization for a residential

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development project may establish payment terms requiring the developer to contribute an amount

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reasonably equivalent to the remainder to a city or town account for use in providing or maintaining

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affordable housing.

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     (k) For the purposes of the section, affordable housing shall be defined as housing for sale

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or rent with combined rental costs or combined mortgage loan debt service, property taxes, and

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required insurance that do not exceed thirty percent (30%) of the gross annual income of a

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household earning up to eighty percent (80%) of the Providence-Fall River, RI-MA metropolitan

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area median income, as defined annually by the United States Department of Housing and Urban

 

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Development.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION

***

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     This act would require cities and towns to implement affordable housing requirements

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upon all developers of tax stabilization applications for developments of five (5) or more housing

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units based upon median income as defined by the federal Department of Housing and Urban

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Development (HUD).

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     This act would take effect upon passage.

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