08-R374

2008 -- S 3104 SUBSTITUTE A

Enacted 07/08/08

C O N C U R R E N T R E S O L U T I O N

APPROVING PROJECT STATUS FOR 110 PROVIDENCE OWNER, LLC

Introduced By: Senators Moura, Perry, Goodwin, Jabour, and Pichardo

Date Introduced: June 12, 2008

     WHEREAS, Rhode Island General Laws Section 42-64-20 authorizes the economic

development corporation to engage in projects which are sales tax exempt subject to approval of

the general assembly; and

     WHEREAS, Rhode Island General Laws Section 42-64-20.1 establishes the procedure

whereby the economic development corporation adopts and submits a request for approval by the

general assembly that includes:

     (1) A full description of the project to which the tax exemption is related;

     (2) The corporation's findings required by subsection 42-64-10(a)(1); and

     (3) The corporation's analysis of impact required by subsection 42-64-10(a)(2); and

     WHEREAS, The general assembly, through its finance committees, thoroughly reviews

the request for approval submitted by the economic development corporation in order to ensure

that the 110 Providence Owner, LLC project complies with all conditions established by the

corporation; and

      WHEREAS, The corporation has estimated the number of new jobs to be two hundred

seventy-four (274), the amount of personal income tax revenue to be received over three (3) years

to be five hundred sixty two thousand two hundred thirty-nine dollars ($562,239), and the

estimated loss of sales tax revenue to be five hundred sixty two thousand two hundred thirty nine

dollars ($562,239) in FY 2010; and

      WHEREAS, The general assembly must assure that the project is in the best interests of

the citizens of Rhode Island prior to approval; now, therefore be it

      RESOLVED, That project status is hereby approved for 110 Providence Owner, LLC

subject to the following additional requirements:

      The total sales tax exemption benefit identified in the project status request, five hundred

sixty two thousand two hundred thirty-nine dollars ($562,239), will be implemented through a

reimbursement process rather than up-front purchase exemption and shall apply to purchases

made on or after July 1, 2009;

      The sales tax benefits granted pursuant to Section 42-64-20(c) shall only apply to

materials used in the construction, reconstruction or rehabilitation of the project and to the

acquisition of furniture, fixtures and equipment, except automobiles, trucks or other motor

vehicles, for the project for a period not to exceed six (6) months after receipt of a certificate of

occupancy for any given phase of the project for which sales tax benefits are utilized;

      The corporation shall send the analysis required by subsection 42-64-10(a)(2) to the

house and senate fiscal committee chairs, the house and senate fiscal advisors, the department of

labor and training and the division of taxation promptly upon completion. Annually thereafter,

the department of labor and training shall certify to the house and senate fiscal committee chairs,

the house and senate fiscal advisors, the corporation and the division of taxation that the actual

number of new full-time jobs with benefits created by the project, not including construction jobs,

is on target to meet or exceed the estimated number of new jobs identified in the analysis above,

which in the case of 110 Providence Owner, LLC is 274. This certification shall no longer be

required when the total amount of new income tax revenue received by the state over three (3)

years exceeds the amount of the sales tax exemption benefit granted above. For purposes of this

section, “full-time jobs with benefits” means jobs that require working a minimum of thirty (30)

hours per week within the state, with a median wage that exceeds by five percent (5.0%) the

median annual wage for full-time jobs in Rhode Island or within the lessee’s industry, with a

benefit package that is typical of companies within the lessee’s industry;

      The department of labor and training shall certify to the house and senate fiscal

committee chairs, the house and senate fiscal advisors, and the division of taxation that jobs

created by the project are “new jobs” in the state of Rhode Island, meaning that the employees of

the project are in addition to, and without a reduction of, those employees of the lessee currently

employed in Rhode Island, are not relocated from another facility of the lessee’s in Rhode Island

or are employees assumed by the lessee as the result of a merger or acquisition of a company

already located in Rhode Island. Additionally, the corporation, with the assistance of the lessee,

the department of labor and training, the department of human services and the division of

taxation shall provide annually an analysis of whether any of the employees of the project qualify

for RIte Care or RIte Share benefits and the impact such benefits or assistance may have on the

state budget. Notwithstanding any other provision of law or rule or regulation, the division of

taxation, the department of labor and training and the department of human services are

authorized to present, review and discuss lessee specific tax or employment information or data

with the corporation, the house and senate fiscal committee chairs, and/or the house and senate

fiscal advisors for the purpose of verification and compliance with this resolution; and

      The corporation and the project lessee shall agree that, if at any time prior to pay back of

the amount of the sales tax exemption through new income tax collections over three (3) years,

the lessee will be unable to continue the project, or otherwise defaults on its obligations to the

corporation, the lessee shall be liable to the state for all the sales tax benefits granted to the

project plus interest, as determined in Section 44-1-7, calculated from the date the lessee received

the sales tax benefits.

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LC03133/SUB A

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