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:

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

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

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

commercial, or residential purposes.

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

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

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

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

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

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

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

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

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

town council determines that:

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

by reason of:

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

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

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

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

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

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

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

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

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

or

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

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

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

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

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

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

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

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

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

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

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

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

the city council.

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

building or structures used essentially for offices or commercial enterprises.

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

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

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

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

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

amount of taxes was made.

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

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

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

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

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

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

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

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

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

town within the state of Rhode Island to another.

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

agreements pursuant to subsection (a) of this section.

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

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

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

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

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

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

town and the entity seeking relief, that:

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

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

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

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

maintaining affordable housing;

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

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

market-rate units developed; and

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

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

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

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

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

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

affordable housing.

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

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

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

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

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

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Development.

     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

***

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

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

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

Development (HUD).

     This act would take effect upon passage.

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