SECTION 1. WHEREAS, Industrial mill buildings are an important part of the historic fabric and architectural heritage of our state; and

WHEREAS, Rhode Island's mill buildings employed one hundred forty thousand (140,000) people, more than half of the state's workforce, at their peak in 1920, and were among the largest and most productive factories in the world; and

WHEREAS, Many of these buildings today are suited to new residential, commercial, and institutional uses because of their large floor areas, strong masonry construction, high ceilings, large windows, and ability to support heavy floor loads; and

WHEREAS, Commercial and fine artists have given new life to old mills by establishing new working and/or living spaces in these buildings; and

WHEREAS, Federal, state and municipal restrictions discourage the indiscriminate demolition of many of these mill buildings; and

WHEREAS, Many mill buildings are vacant or underutilized because of their deteriorated physical condition, environmental concerns, or isolated location; and

WHEREAS, Most mill buildings are located in urban neighborhoods that have suffered from lack of new residential, commercial, and industrial investment; and

WHEREAS, It is the policy of the state to preserve its industrial heritage, and to promote the adaptive reuse of industrial mill buildings so that they may contribute to the revitalization of economically challenged urban neighborhoods; and

WHEREAS, It is the policy of the state to encourage commercial and fine artists to live and work in Rhode Island and in settings that are suitable to their work.

SECTION 2. Chapter 44-3 of the General Laws entitled "Property Subject to Taxation" is hereby amended by adding thereto the following section:

44-3-31.2. Special property tax consideration for designated properties in Providence. -- The city of Providence may by ordinance provide special tax consideration for designated properties on the landmark list as part of the mill restoration program and in the arts and entertainment district in the city of Providence.

Upon enactment, property taxes levied on eligible properties as of December 31, 2000 shall reflect adapted tax considerations. Owners of eligible properties are required to begin renovations by December 31, 2005 in order to qualify for continued tax considerations. Properties that fail to meet this deadline will be required retroactively to pay the difference between their actual tax payments and what they would have paid if ineligible for the specified tax considerations.

Eligible properties shall be taxable properties located on the landmark list approved by ordinance in the city of Providence and shall be eligible if certified by the city building inspector as in need of substantial rehabilitation.

Tax benefits for eligible properties shall be transferable to new owners or tenants, but the life of the tax consideration shall not be extended.

"Substantial rehabilitation" shall mean rehabilitation that adheres to the applicable building and fire codes, extends to all occupiable floors of the building, and equals at least fifty percent (50%) of the current replacement value of the structure, as certified by the city building inspector.

Nothing in this section shall be construed to diminish the authority of any body to review and approve the construction plans for overall appearance or historical preservation standards.

During the period of eligibility, the city of Providence shall also be authorized to use special consideration in taxing tangible property located in businesses in eligible properties. For the ten (10) year period, the rate of thirty-three dollars and forty-four cents ($33.44) shall be applied annually to tangible property value, as it is determined and may change from year to year. This consideration shall apply to all taxable businesses occupying eligible properties during the period of eligibility, regardless of when they first occupied the property.

SECTION 3. This act shall take effect upon passage.