law19088-12

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art.012/7/012/6/012/5/012/4/012/3/012/2/012/1

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ARTICLE 12 AS AMENDED

RELATING TO ECONOMIC DEVELOPMENT

SECTION 1. Section 42-64.20-3 of the General Laws in Chapter 42-64.20 entitled

"Rebuild Rhode Island Tax Credit Act" is hereby amended to read as follows:

42-64.20-3. Definitions.

(1) "Adaptive reuse" means the conversion of an existing structure from the use for which

it was constructed to a new use by maintaining elements of the structure and adapting such elements

to a new use.

(2) "Affiliate" means an entity that directly or indirectly controls, is under common control

with, or is controlled by the business. Control exists in all cases in which the entity is a member of

a controlled group of corporations as defined pursuant to § 1563 of the Internal Revenue Code of

1986 (26 U.S.C. § 1563) or the entity is an organization in a group of organizations under common

control as defined pursuant to subsection (b) or (c) of § 414 of the Internal Revenue Code of 1986

(26 U.S.C. § 414). A taxpayer may establish by clear and convincing evidence, as determined by

the tax administrator, that control exists in situations involving lesser percentages of ownership

than required by those statutes. An affiliate of a business may contribute to meeting either the

capital investment or full-time employee requirements of a business that applies for a credit under

this chapter.

(3) "Affordable housing" means 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 area median income, as defined annually by the United States Department of Housing and

Urban Development.

(4) "Applicant" means a developer applying for a rebuild Rhode Island tax credit under this

chapter.

(5) "Business" means a corporation as defined in § 44-11-1(4), or a partnership, an S

corporation, a non-profit corporation, a sole proprietorship, or a limited-liability corporation. A

business shall include an affiliate of the business if that business applies for a credit based upon

any capital investment made by an affiliate.

(6) "Capital investment" in a real estate project means expenses by a developer incurred

after application for:

(i) Site preparation and construction, repair, renovation, improvement, equipping, or

furnishing on real property or of a building, structure, facility, or improvement to real property;

(ii) Obtaining and installing furnishings and machinery, apparatus, or equipment, including

but not limited to, material goods for the operation of a business on real property or in a building,

structure, facility, or improvement to real property.

In addition to the foregoing, if a developer acquires or leases a qualified development

project, the capital investment made or acquired by the seller or owner, as the case may be, if

pertaining primarily to the premises of the qualified development project, shall be considered a

capital investment by the developer and, if pertaining generally to the qualified development project

being acquired or leased, shall be allocated to the premises of the qualified development project on

the basis of the gross leasable area of the premises in relation to the total gross leasable area in the

qualified development project. The capital investment described herein shall be defined through

rules and regulations promulgated by the commerce corporation.

(7) "Certified historic structure" means a property which is located in the state of Rhode

Island and is

(i) Listed individually on the national register of historic places; or

(ii) Listed individually in the state register of historic places; or

(iii) Located in a registered historic district and certified by either the Rhode Island

historical preservation and heritage commission created pursuant to § 42-45-2 or the Secretary of

the Interior as being of historic significance to the district.

(8) "Commerce corporation" means the Rhode Island commerce corporation established

pursuant to § 42-64-1 et seq.

(9) "Commercial" shall mean non-residential development.

(10) "Developer" means a person, firm, business, partnership, association, political

subdivision, or other entity that proposes to divide, divides, or causes to be divided real property

into a subdivision or proposes to build, or builds a building or buildings or otherwise improves land

or existing structures, which division, building, or improvement qualifies for benefits under this

chapter.

(11) "Development" means the improvement of land through the carrying out of building,

engineering, or other operations in, on, over, or under land, or the making of any material change

in the use of any buildings or land for the purposes of accommodating land uses.

(12) "Eligibility period" means the period in which a developer may claim a tax credit

under this act, beginning with the tax period in which the commerce corporation accepts

certification from the developer that it has met the requirements of the act and extending thereafter

for a term of five (5) years.

(13) "Full-time employee" means a person who is employed by a business for consideration

for a minimum of at least thirty-five (35) hours per week, or who renders any other standard of

service generally accepted by custom or practice as full-time employment, or who is employed by

a professional employer organization pursuant to an employee leasing agreement between the

business and the professional employer organization for a minimum of thirty-five (35) hours per

week, or who renders any other standard of service generally accepted by custom or practice as

full-time employment, and whose wages are subject to withholding.

(14) "Hope community" means a municipality for which the five-year (5) average

percentage of families with income below the federal poverty level exceeds the state five-year (5)

average percentage, both as most recently reported by the U.S. Department of Commerce, Bureau

of the Census.

(15) “Manufacturer” shall mean any entity that:

(a)(i) Uses any premises within the state primarily for the purpose of transforming raw

materials into a finished product for trade through any or all of the following operations: adapting,

altering, finishing, making, processing, refining, metalworking, and ornamenting, but shall not

include fabricating processes incidental to warehousing or distribution of raw materials, such as

alteration of stock for the convenience of a customer; or

(b)(ii) Is described in codes 31-33 of the North American Industry Classification System,

as revised from time to time.

(15)(16) "Mixed use" means a development comprising both commercial and residential

components.

(176) "Partnership" means an entity classified as a partnership for federal income tax

purposes.

(187) "Placed in service" means the earlier of (i) substantial Substantial construction or

rehabilitation work has been completed which that would allow for occupancy of an entire

structure or some identifiable portion of a structure, as established in the application approved by

the commerce corporation board or (ii) receipt Receipt by the developer of a certificate, permit, or

other authorization allowing for occupancy of the project or some identifiable portion of the project

by the municipal authority having jurisdiction.

(198) "Project" means qualified development project as defined under subsection (22) (23).

(2019) "Project area" means land or lands under common ownership or control in which a

qualified development project is located.

(210) "Project cost" means the costs incurred in connection with the qualified development

project or qualified residential or mixed use project by the applicant until the issuance of a

permanent certificate of occupancy, or until such other time specified by the commerce corporation,

for a specific investment or improvement, as defined through rules and regulations promulgated by

the commerce corporation.

(221) "Project financing gap" means:

(i) The part of the total project cost that remains to be financed after all other sources of

capital have been accounted for (such the sources will include, but not be limited to, developer-

contributed capital), which shall be defined through rules and regulations promulgated by the

commerce corporation,; or

(ii) The amount of funds that the state may invest in a project to gain a competitive

advantage over a viable and comparable location in another state by means described in this chapter.

(232) "Qualified development project" means a specific construction project or

improvement, including lands, buildings, improvements, real and personal property or any interest

therein, including lands under water, riparian rights, space rights and air rights, acquired, owned,

leased, developed or redeveloped, constructed, reconstructed, rehabilitated or improved,

undertaken by a developer, owner or tenant, or both, within a specific geographic area, meeting the

requirements of this chapter, as set forth in an application made to the commerce corporation.

(243) "Recognized historical structure" means a property which is located in the state of

Rhode Island and is commonly considered to be of historic or cultural significance as determined

by the commerce corporation in consultation with the state historic preservation officer.

(24)(25) "Residential" means a development of residential dwelling units.

(265) "Targeted industry" means any advanced, promising, or otherwise prioritized

industry identified in the economic development vision and policy promulgated pursuant to § 42-

64.17-1 or, until such time as any such economic development vision and policy is promulgated,

as identified by the commerce corporation.

(276) "Transit-oriented development area" means an area in proximity to transit

infrastructure that will be further defined by regulation of the commerce corporation in consultation

with the Rhode Island department of transportation.

(287) "Workforce housing" means 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 between eighty percent

(80%) and one hundred and forty percent (140%) of the area median income, as defined annually

by the United States Department of Housing and Urban Development.

SECTION 2. Section 42-64.20-5 of the General Laws in Chapter 42-64.20 entitled

"Rebuild Rhode Island Tax Credit" is hereby amended to read as follows:

42-64.20-5. Tax credits.

(a) An applicant meeting the requirements of this chapter may be allowed a credit as set

forth hereinafter against taxes imposed upon such person under applicable provisions of title 44 of

the general laws for a qualified development project.

(b) To be eligible as a qualified development project entitled to tax credits, an applicant's

chief executive officer or equivalent officer shall demonstrate to the commerce corporation, at the

time of application, that:

(1) The applicant has committed a capital investment or owner equity of not less than

twenty percent (20%) of the total project cost;

(2) There is a project financing gap in which after taking into account all available private

and public funding sources, the project is not likely to be accomplished by private enterprise

without the tax credits described in this chapter; and

(3) The project fulfills the state's policy and planning objectives and priorities in that:

(i) The applicant will, at the discretion of the commerce corporation, obtain a tax

stabilization agreement from the municipality in which the real estate project is located on such

terms as the commerce corporation deems acceptable;

(ii) It (A) is Is a commercial development consisting of at least 25,000 square feet occupied

by at least one business employing at least 25 full-time employees after construction or such

additional full-time employees as the commerce corporation may determine; (B) is Is a multi-

family residential development in a new, adaptive reuse, certified historic structure, or recognized

historical structure consisting of at least 20,000 square feet and having at least 20 residential units

in a hope community; or (C) is Is a mixed-use development in a new, adaptive reuse, certified

historic structure, or recognized historical structure consisting of at least 25,000 square feet

occupied by at least one business, subject to further definition through rules and regulations

promulgated by the commerce corporation; and

(iii) Involves a total project cost of not less than $5,000,000, except for a qualified

development project located in a hope community or redevelopment area designated under § 45-

32-4 in which event the commerce corporation shall have the discretion to modify the minimum

project cost requirement.

for the issuance of Rebuild rebuild RI tax credits for each of the following:

(1) Qualified development projects that involve certified historic structures;

(2) Qualified development projects that involve recognized historical structures;

(3) Qualified development projects that involve at least one manufacturer; and

(4) Qualified development projects that include affordable housing or workforce housing.

(d) Applications made for a historic structure or recognized historic structure tax credit

under chapter 33.6 of title 44 shall be considered for tax credits under this chapter. The division of

taxation, at the expense of the commerce corporation, shall provide communications from the

commerce corporation to those who have applied for and are in the queue awaiting the offer of tax

credits pursuant to chapter 33.6 of title 44 regarding their potential eligibility for the Rebuild

rebuild RI Tax Credit tax credit program.

(c)(e) Applicants (i) (1) who Who have received the notice referenced in subsection (d)

above and who may be eligible qualifying for a tax credit pursuant to chapter 33.6 of title 44, (ii)

(2) whose Whose application involves a certified historic structure or recognized historical

structure, or (iii) (3) whose Whose project is occupied by at least one manufacturer shall be exempt

from the requirements of subparagraphs subsections (b)(3)(ii) and (b)(3)(iii) of this section. The

following procedure shall apply to such applicants:

(1) (i) The division of taxation shall remain responsible for determining the eligibility of

an applicant for tax credits awarded under chapter 33.6 of title 44;

(2) (ii) The commerce corporation shall retain sole authority for determining the eligibility

of an applicant for tax credits awarded under this chapter; and

(3) (iii) The commerce corporation shall not award in excess of fifteen percent (15%) of

the annual amount appropriated authorized in any fiscal year to applicants seeking tax credits

pursuant to this subsection (ce).

(d)(f) Maximum project credit.

(i) (1) For qualified development projects, the maximum tax credit allowed under this

chapter shall be the lesser of (1 (i) thirty Thirty percent (30%) of the total project cost; or (2) (ii)

the The amount needed to close a project financing gap (after taking into account all other private

and public funding sources available to the project), as determined by the commerce corporation.

(ii) (2) The credit allowed pursuant to this chapter, inclusive of any sales and use tax

exemptions allowed pursuant to this chapter, shall not exceed fifteen million dollars ($15,000,000)

for any qualified development project under this chapter; except as provided in subsection (iii) of

this section (f)(iii) (f)(3) of this section; provided however, any qualified development project

which that exceeds the project cap upon passage of this act shall be deemed not to exceed the cap,

shall not be reduced, nor shall it be further increased. No building or qualified development project

to be completed in phases or in multiple projects shall exceed the maximum project credit of fifteen

million dollars ($15,000,000) for all phases or projects involved in the rehabilitation of such the

building. Provided, however, that for purposes of this subsection and no more than once in a given

fiscal year, the commerce corporation may consider the development of land and buildings by a

developer on the "I-195 land" (as defined in § 42-64.24-3(6) of the general laws) as a separate,

qualified development project from a qualified development project by a tenant or owner of a

commercial condominium or similar legal interest including leasehold improvement, fit out, and

capital investment. Such qualified development project by a tenant or owner of a commercial

condominium or similar legal interest on the I-195 land may be exempted from subparagraph

(d)(i)(1) subsection (f)(i)(1) (f)(1)(i) of this section.

(iii) (3) The credit allowed pursuant to this chapter, inclusive of any sales and use tax

exemptions allowed pursuant to this chapter, shall not exceed twenty-five million dollars

($25,000,000) for the project for which the I-195 redevelopment district was authorized to enter

into a purchase and sale agreement for parcels 42 and P4 on December 19, 2018, provided said

that project is approved for credits pursuant to this chapter by the commerce corporation.

(e)(g) Credits available under this chapter shall not exceed twenty percent (20%) of the

project cost, provided, however, that the applicant shall be eligible for additional tax credits of not

more than ten percent (10%) of the project cost, if the qualified development project meets any of

the following criteria or other additional criteria determined by the commerce corporation from

time to time in response to evolving economic or market conditions:

(1) The project includes adaptive reuse or development of a recognized historical structure;

(2) The project is undertaken by or for a targeted industry;

(3) The project is located in a transit-oriented development area;

(4) The project includes residential development of which at least twenty percent (20%) of

the residential units are designated as affordable housing or workforce housing;

(5) The project includes the adaptive reuse of property subject to the requirements of the

industrial property remediation and reuse act, § 23-19.14-1 et seq.; or

(6) The project includes commercial facilities constructed in accordance with the minimum

environmental and sustainability standards, as certified by the commerce corporation pursuant to

Leadership in Energy and Environmental Design or other equivalent standards.

(f)(h) Maximum aggregate credits. The aggregate sum authorized pursuant to this chapter,

inclusive of any sales and use tax exemptions allowed pursuant to this chapter, shall not exceed one

hundred and fifty million dollars ($150,000,000) two hundred ten million dollars ($210,000,000),

excluding any tax credits allowed pursuant to subsection (f)(iii)(3) of this section.

(gi) Tax credits shall not be allowed under this chapter prior to the taxable year in which

the project is placed in service.

(hj) The amount of a tax credit allowed under this chapter shall be allowable to the taxpayer

in up to five, annual increments; no more than thirty percent (30%) and no less than fifteen percent

(15%) of the total credits allowed to a taxpayer under this chapter may be allowable for any taxable

year.

(ik) If the portion of the tax credit allowed under this chapter exceeds the taxpayer's total

tax liability for the year in which the relevant portion of the credit is allowed, the amount that

exceeds the taxpayer's tax liability may be carried forward for credit against the taxes imposed for

the succeeding four (4) years, or until the full credit is used, whichever occurs first. Credits allowed

to a partnership, a limited-liability company taxed as a partnership, or multiple owners of property

shall be passed through to the persons designated as partners, members, or owners respectively pro

rata or pursuant to an executed agreement among such persons designated as partners, members,

or owners documenting an alternate distribution method without regard to their sharing of other tax

or economic attributes of such entity.

(jl) The commerce corporation, in consultation with the division of taxation, shall establish,

by regulation, the process for the assignment, transfer, or conveyance of tax credits.

(km) For purposes of this chapter, any assignment or sales proceeds received by the

taxpayer for its assignment or sale of the tax credits allowed pursuant to this section shall be exempt

from taxation under title 44. If a tax credit is subsequently revoked or adjusted, the seller's tax

calculation for the year of revocation or adjustment shall be increased by the total amount of the

sales proceeds, without proration, as a modification under chapter 30 of title 44. In the event that

the seller is not a natural person, the seller's tax calculation under chapters chapter 11, 13, 14, or

17 of title 44 of the general laws, as applicable, for the year of revocation, or adjustment, shall be

increased by including the total amount of the sales proceeds without proration.

(ln) The tax credit allowed under this chapter may be used as a credit against corporate

income taxes imposed under chapters chapter 11, 13, 14, or 17, of title 44, or may be used as a

credit against personal income taxes imposed under chapter 30 of title 44 for owners of pass-

through entities such as a partnership, a limited-liability company taxed as a partnership, or multiple

owners of property.

(mo) In the case of a corporation, this credit is only allowed against the tax of a corporation

included in a consolidated return that qualifies for the credit and not against the tax of other

corporations that may join in the filing of a consolidated tax return.

(np) Upon request of a taxpayer and subject to annual appropriation, the state shall redeem

such this credit, in whole or in part, for ninety percent (90%) of the value of the tax credit. The

division of taxation, in consultation with the commerce corporation, shall establish by regulation a

redemption process for tax credits.

(oq) Projects eligible to receive a tax credit under this chapter may, at the discretion of the

commerce corporation, be exempt from sales and use taxes imposed on the purchase of the

following classes of personal property only to the extent utilized directly and exclusively in such

the project: (1) Furniture, fixtures, and equipment, except automobiles, trucks, or other motor

vehicles; or (2) Such other Other materials, including construction materials and supplies, that are

depreciable and have a useful life of one year or more and are essential to the project.

(pr) The commerce corporation shall promulgate rules and regulations for the

administration and certification of additional tax credit under subsection (e), including criteria for

the eligibility, evaluation, prioritization, and approval of projects that qualify for such additional

tax credit.

(qs) The commerce corporation shall not have any obligation to make any award or grant

any benefits under this chapter.

SECTION 3. Section 42-64.20-7 and 42-64.20-10 of the General Laws in Chapter 42-64.20

entitled "Rebuild Rhode Island Tax Credit" are hereby amended to read as follows:

42-64.20-7. Rebuild Rhode Island tax credit fund.

(a) There is hereby established at the commerce corporation a restricted account known as

the rebuild Rhode Island tax-credit fund (the "Fund fund ") in which all amounts appropriated for

the program created under this chapter shall be deposited. The fund shall be used (i)(1) to To pay

for the redemption of tax credits or reimbursement to the state for tax credits applied against a

taxpayer's liability; and (ii)(2) to To redeem or reimburse the state for any sales and use tax

exemptions allowed pursuant to this chapter. The commerce corporation may pledge and reserve

amounts deposited into the fund for the purpose of securing payment for the redemption of tax

credits or for making reimbursements to municipalities pursuant to chapter 64.22 of this title 42 of

the general laws. The fund shall be exempt from attachment, levy, or any other process at law or in

equity. The director of the department of revenue shall make a requisition to the commerce

corporation for funding during any fiscal year as may be necessary to pay for the redemption of tax

credits presented for redemption or to reimburse the state for tax credits applied against a taxpayer's

tax liability. The commerce corporation shall pay from the fund such amounts as requested by the

director of the department of revenue necessary for redemption or reimbursement in relation to tax

credits granted under this chapter; provided, however, that the commerce corporation shall not be

required to pay from the fund such sums pledged and reserved by the commerce corporation, as

permitted in this section, except for redemption of tax credits.

(b) Notwithstanding anything in this chapter to the contrary, the commerce corporation

may make a loan or equity investment as an alternative incentive in lieu of the provision of tax

credits so long as the applicant otherwise qualifies for tax credits under this chapter. In addition to

the qualification requirements of this chapter, any loan or equity investment shall be subject to the

provisions of §§ 42-64.20-5(b), (d), (e), (f), (g), (n), (o), (p), and (h), (i), (j), (q), (r) and (s), 42-

64.20-7, 42-64.20-8, 42-64.20-9, and 42-64.20-10 as if such the loan or equity investment were a

tax credit. The commerce corporation may pay, reserve, and/or pledge monies for a loan or equity

investment from the fund.

42-64.20-10. Sunset.

No credits shall be authorized to be reserved pursuant to this chapter after June 30,

December 31, 2020.

SECTION 4. Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business

Corporation Tax" is hereby amended to read as follows:

44-11-11. "Net income" defined.

(a)(1) “Net income” means, for any taxable year and for any corporate taxpayer, the taxable

income of the taxpayer for that taxable year under the laws of the United States, plus:

(i) Any interest not included in the taxable income;

(ii) Any specific exemptions;

(iii) The tax imposed by this chapter; and minus:

(iv) Interest on obligations of the United States or its possessions, and other interest exempt

from taxation by this state; and

(v) The federal net operating loss deduction.

(2) All binding federal elections made by or on behalf of the taxpayer applicable either

directly or indirectly to the determination of taxable income shall be binding on the taxpayer except

where this chapter or its attendant regulations specifically modify or provide otherwise. Rhode

Island taxable income shall not include the "gross-up of dividends" required by the federal Internal

Revenue Code to be taken into taxable income in connection with the taxpayer's election of the

foreign tax credit.

(b) A net operating loss deduction shall be allowed, which shall be the same as the net

operating loss deduction allowed under 26 U.S.C. § 172, except that:

(1) Any net operating loss included in determining the deduction shall be adjusted to reflect

the inclusions and exclusions from entire net income required by subsection (a) of this section and

§ 44-11-11.1;

(2) The deduction shall not include any net operating loss sustained during any taxable year

in which the taxpayer was not subject to the tax imposed by this chapter; and

(3) The deduction shall not exceed the deduction for the taxable year allowable under 26

U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other

taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for the

five (5) succeeding taxable years.

this chapter, will be treated as they are under federal income tax law and shall not pay the amount

of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in

the same manner as it is treated under federal income tax law as it exists on December 31, 1984.

(d) A corporation which that qualifies as a “foreign sales corporation” (FSC) under the

provisions of subchapter N, 26 U.S.C. § 861 et seq., and which that has in effect for the entire

taxable year a valid election under federal law to be treated as a FSC, shall not pay the amount of

the tax computed under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the

same manner as it is treated under federal income tax law as it exists on January 1, 1985.

(e) For purposes of a corporation’s state tax liability, any deduction to income allowable

under 26 U.S.C. 1400Z-2(c) may be claimed in the case of any investment held by the taxpayer for

at least seven years. The division of taxation shall promulgate, in its discretion, rules and

regulations relative to the accelerated application of deductions under 26 U.S.C. § 1400Z-2(c).

SECTION 5. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

44-30-12. Rhode Island income of a resident individual.

(a) General. The Rhode Island income of a resident individual means his or her adjusted

gross income for federal income tax purposes, with the modifications specified in this section.

(b) Modifications increasing federal adjusted gross income. There shall be added to federal

adjusted gross income:

(1) Interest income on obligations of any state, or its political subdivisions, other than

Rhode Island or its political subdivisions;

(2) Interest or dividend income on obligations or securities of any authority, commission,

or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the

extent exempted by the laws of the United States from federal income tax but not from state income

taxes;

(3) The modification described in § 44-30-25(g);

(4)(i) The amount defined below of a nonqualified withdrawal made from an account in

the tuition savings program pursuant to § 16-57-6.1. For purposes of this section, a nonqualified

withdrawal is:

(A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal

Revenue Code, 26 U.S.C. § 529, other than to the tuition savings program referred to in § 16-57-

6.1; and

(B) A withdrawal or distribution which that is:

(I) Not applied on a timely basis to pay "qualified higher education expenses" as defined

in § 16-57-3(12) of the beneficiary of the account from which the withdrawal is made;

(II) Not made for a reason referred to in § 16-57-6.1(e); or

(III) Not made in other circumstances for which an exclusion from tax made applicable by

Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, pertains if the transfer, rollover,

withdrawal, or distribution is made within two (2) taxable years following the taxable year for

which a contributions modification pursuant to subdivision subsection (c)(4) of this section is taken

based on contributions to any tuition savings program account by the person who is the participant

of the account at the time of the contribution, whether or not the person is the participant of the

account at the time of the transfer, rollover, withdrawal or distribution;

(ii) In the event of a nonqualified withdrawal under subparagraphs subsection(b)(4)(i)(A)

or (b)(4)(i)(B) of this subdivision section, there shall be added to the federal adjusted gross income

of that person for the taxable year of the withdrawal an amount equal to the lesser of:

(A) The amount equal to the nonqualified withdrawal reduced by the sum of any

administrative fee or penalty imposed under the tuition savings program in connection with the

nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the

person's federal adjusted gross income for the taxable year; and

(B) The amount of the person's contribution modification pursuant to subdivision

subsection (c)(4) of this section for the person's taxable year of the withdrawal and the two (2)

prior taxable years less the amount of any nonqualified withdrawal for the two (2) prior taxable

years included in computing the person's Rhode Island income by application of this subsection for

those years. Any amount added to federal adjusted gross income pursuant to this subdivision shall

constitute Rhode Island income for residents, nonresidents and part-year residents; and

(5) The modification described in § 44-30-25.1(d)(3)(i).;

(6) The amount equal to any unemployment compensation received but not included in

federal adjusted gross income.; and

(7) The amount equal to the deduction allowed for sales tax paid for a purchase of a

qualified motor vehicle as defined by the Internal Revenue Code § 164(a)(6).

federal adjusted gross income:

(1) Any interest income on obligations of the United States and its possessions to the extent

includible in gross income for federal income tax purposes, and any interest or dividend income on

obligations, or securities of any authority, commission, or instrumentality of the United States to

the extent includible in gross income for federal income tax purposes but exempt from state income

taxes under the laws of the United States; provided, that the amount to be subtracted shall in any

case be reduced by any interest on indebtedness incurred or continued to purchase or carry

obligations or securities the income of which is exempt from Rhode Island personal income tax, to

the extent the interest has been deducted in determining federal adjusted gross income or taxable

income;

(2) A modification described in § 44-30-25(f) or § 44-30-1.1(c)(1);

(3) The amount of any withdrawal or distribution from the "tuition savings program"

referred to in § 16-57-6.1 which that is included in federal adjusted gross income, other than a

withdrawal or distribution or portion of a withdrawal or distribution that is a nonqualified

withdrawal;

(4) Contributions made to an account under the tuition savings program, including the

"contributions carryover" pursuant to paragraph (iv) of this subdivision subsection (c)(4)(iv) of

this section, if any, subject to the following limitations, restrictions and qualifications:

(i) The aggregate subtraction pursuant to this subdivision for any taxable year of the

taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint

return;

(ii) The following shall not be considered contributions:

(A) Contributions made by any person to an account who is not a participant of the account

at the time the contribution is made;

(B) Transfers or rollovers to an account from any other tuition savings program account or

from any other "qualified tuition program" under section 529 of the Internal Revenue Code, 26

U.S.C. § 529; or

(iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer's federal

adjusted gross income to less than zero (0);

(iv) The contributions carryover to a taxable year for purpose of this subdivision is the

excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition

savings program for all preceding taxable years for which this subsection is effective over the sum

of:

(A) The total of the subtractions under this subdivision allowable to the taxpayer for all

such preceding taxable years; and

(B) That part of any remaining contribution carryover at the end of the taxable year which

exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) taxable

years not included in the addition provided for in this subdivision for those years. Any such part

shall be disregarded in computing the contributions carryover for any subsequent taxable year;

(v) For any taxable year for which a contributions carryover is applicable, the taxpayer

shall include a computation of the carryover with the taxpayer's Rhode Island personal income tax

return for that year, and if for any taxable year on which the carryover is based the taxpayer filed a

joint Rhode Island personal income tax return but filed a return on a basis other than jointly for a

subsequent taxable year, the computation shall reflect how the carryover is being allocated between

the prior joint filers; and

(5) The modification described in § 44-30-25.1(d)(1).;

(6) Amounts deemed taxable income to the taxpayer due to payment or provision of

insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 or

other coverage plan.;

(7) Modification for organ transplantation.

(i) An individual may subtract up to ten thousand dollars ($10,000) from federal adjusted

gross income if he or she, while living, donates one or more of his or her human organs to another

human being for human organ transplantation, except that for purposes of this subsection, "human

organ" means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract

modification that is claimed hereunder may be claimed in the taxable year in which the human

organ transplantation occurs.

(ii) An individual may claim that subtract modification hereunder only once, and the

subtract modification may be claimed for only the following unreimbursed expenses that are

incurred by the claimant and related to the claimant's organ donation:

(A) Travel expenses.

(B) Lodging expenses.

(iii) The subtract modification hereunder may not be claimed by a part-time resident or a

nonresident of this state.;

(8) Modification for taxable Social Security income.

(i) For tax years beginning on or after January 1, 2016:

(A) For a person who has attained the age used for calculating full or unreduced social

security retirement benefits who files a return as an unmarried individual, head of household, or

married filing separate whose federal adjusted gross income for such the taxable year is less than

eighty thousand dollars ($80,000); or

(B) A married individual filing jointly or individual filing qualifying widow(er) who has

attained the age used for calculating full or unreduced social security retirement benefits whose

joint federal adjusted gross income for such the taxable year is less than one hundred thousand

dollars ($100,000), an amount equal to the social security benefits includable in federal adjusted

gross income.

(ii) Adjustment for inflation. The dollar amount contained in subparagraphs 44-30-12

subsections (c)(8)(i)(A) and 44-30-12 (c)(8)(i)(B) of this section shall be increased annually by an

amount equal to:

(A) Such dollar amount contained in subparagraphs subsections 44-30-12 (c)(8)(i)(A) and

44-30-12 (c)(8)(i)(B) of this section adjusted for inflation using a base tax year of 2000, multiplied

by;

(B) The cost-of-living adjustment with a base year of 2000.

(iii) For the purposes of this section the cost-of-living adjustment for any calendar year is

the percentage (if any) by which the consumer price index for the preceding calendar year exceeds

the consumer price index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve-(12) month (12) period ending on

August 31, of such calendar year.

(iv) For the purpose of this section the term "consumer price index" means the last

consumer price index for all urban consumers published by the department of labor. For the purpose

of this section the revision of the consumer price index which is most consistent with the consumer

price index for calendar year 1986 shall be used.

(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),

such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a

married individual filing separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple

of twenty-five dollars ($25.00).;

(9) Modification for up to fifteen thousand dollars ($15,000) of taxable retirement income

from certain pension plans or annuities.

(i) For tax years beginning on or after January 1, 2017, a modification shall be allowed for

up to fifteen thousand dollars ($15,000) of taxable pension and/or annuity income that is included

in federal adjusted gross income for the taxable year:

(A) For a person who has attained the age used for calculating full or unreduced social

security retirement benefits who files a return as an unmarried individual, head of household, or

married filing separate whose federal adjusted gross income for such taxable year is less than the

amount used for the modification contained in § 44-30-12 subsection (c)(8)(i)(A) of this section

an amount not to exceed $15,000 of taxable pension and/or annuity income includable in federal

adjusted gross income; or

(B) For a married individual filing jointly or individual filing qualifying widow(er) who

has attained the age used for calculating full or unreduced social security retirement benefits whose

joint federal adjusted gross income for such taxable year is less than the amount used for the

modification contained in § 44-30-12 subsection (c)(8)(i)(B) of this section an amount not to

exceed $15,000 of taxable pension and/or annuity income includable in federal adjusted gross

income.

(ii) Adjustment for inflation. The dollar amount contained by reference in §§ subsections

44-30-12(c)(9)(i)(A) and 44-30-12(c)(9)(i)(B) of this section shall be increased annually for tax

years beginning on or after January 1, 2018 by an amount equal to:

(A) Such dollar amount contained by reference in §§ 44-30-12 subsections (c)(9)(i)(A)

and 44-30-12(c)(9)(i)(B) of this section adjusted for inflation using a base tax year of 2000,

multiplied by;

(B) The cost-of-living adjustment with a base year of 2000.

(iii) For the purposes of this section, the cost-of-living adjustment for any calendar year is

the percentage (if any) by which the consumer price index for the preceding calendar year exceeds

the consumer price index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve-month (12) period ending on

August 31, of such calendar year.

(iv) For the purpose of this section, the term "consumer price index" means the last

consumer price index for all urban consumers published by the department of labor. For the purpose

of this section, the revision of the consumer price index which is most consistent with the consumer

price index for calendar year 1986 shall be used.

(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),

such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a

married individual filing a separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple

of twenty-five dollars ($25.00).; and

(10) Modification for Rhode Island investment in opportunity zones. For purposes of a

taxpayer’s state tax liability, in the case of any investment in a Rhode Island opportunity zone by

the taxpayer for at least seven (7) years, a modification to income shall be allowed for the

incremental difference between the benefit allowed under 26 U.S.C. § 1400Z-2(b)(2)(B)(iv) and

the federal benefit allowed under 26 U.S.C. § 1400Z-2(c).

(d) Modification for Rhode Island fiduciary adjustment. There shall be added to, or

subtracted from, federal adjusted gross income (as the case may be) the taxpayer's share, as

beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under § 44-

30-17.

(e) Partners. The amounts of modifications required to be made under this section by a

partner, which relate to items of income or deduction of a partnership, shall be determined under §

44-30-15.

SECTION 6. Section 44-31.2-5 and 44-31.2-11 of the General Laws in Chapter 44-31.2

entitled "Motion Picture Production Tax Credits" are hereby amended to read as follows:

44-31.2-5. Motion picture production company tax credit.

(a) A motion picture production company shall be allowed a credit to be computed as

provided in this chapter against a tax imposed by chapters 11, 14, 17, and 30 of this title. The

amount of the credit shall be thirty percent (30%) of the state-certified production costs incurred

directly attributable to activity within the state, provided that the primary locations are within the

state of Rhode Island and the total production budget as defined herein is a minimum of one

hundred thousand dollars ($100,000). The credit shall be earned in the taxable year in which

production in Rhode Island is completed, as determined by the film office in final certification

pursuant to § 44-31.2-6(c).

(b) For the purposes of this section: "total production budget" means and includes the

motion picture production company's pre-production, production, and post-production costs

incurred for the production activities of the motion picture production company in Rhode Island in

connection with the production of a state-certified production. The budget shall not include costs

associated with the promotion or marketing of the film, video, or television product.

dollars ($7,000,000) and shall be allowed against the tax for the taxable period in which the credit

is earned and can be carried forward for not more than three (3) succeeding tax years. Pursuant to

rules promulgated by the tax administrator, the administrator may issue a waiver of the seven

million dollars ($7,000,000) tax credit cap for any feature-length film or television series up to the

remaining funds available pursuant to section (e) of this section.

(d) Credits allowed to a motion picture production company, which is a subchapter S

corporation, partnership, or a limited-liability company that is taxed as a partnership, shall be

passed through respectively to persons designated as partners, members, or owners on a pro rata

basis or pursuant to an executed agreement among such persons designated as subchapter S

corporation shareholders, partners, or members documenting an alternate distribution method

without regard to their sharing of other tax or economic attributes of such entity.

(e) No more than fifteen million dollars ($15,000,000) in total may be issued for any tax

year beginning after December 31, 2007, for motion picture tax credits pursuant to this chapter

and/or musical and theatrical production tax credits pursuant to chapter 31.3 of this title. After

December 31, 2019, no more than twenty million dollars ($20,000,000) in total may be issued for

any tax year for motion picture tax credits pursuant to this chapter and/or musical and theater

production tax credits pursuant to chapter 31.3 of this title. Said credits shall be equally available

to motion picture productions and musical and theatrical productions. No specific amount shall be

set aside for either type of production.

44-31.2-11. Sunset.

No credits shall be issued on or after July 1, 2024 July 1, 2027, unless the production has

received initial certification under § 44-31.2-6(a) prior to July 1, 2024 July 1, 2027.

SECTION 7. Section 44-48.3-6 of the General Laws in Chapter 44-48.3 entitled "Rhode

Island New Qualified Jobs Incentive Act 2015" is hereby amended to read as follows:

44-48.3-6. Total amount of tax credit for eligible business.

(a) The base amount of the tax credit for an eligible business for each new full-time job

shall be up to two thousand five hundred dollars ($2,500) annually.

(b) The total tax credit amount shall be calculated and credited to the business annually for

each year of the eligibility period after the commerce corporation, in consultation with the division

of taxation, has verified that the jobs covered by the tax credit have generated sufficient personal

income taxes to comply with subsection (e) of this section.

awarded for each new full-time job may be increased, pursuant to the provisions of subsection (d)

of this section, if the business meets any of the following criteria or such other additional criteria

determined by the commerce corporation from time to time in response to evolving economic or

market conditions:

(1) For a business located within a hope community;

(2) For a targeted industry;

(3) For a business located within a transit oriented development area; and

(4) For an out-of-state business that relocates a business unit or units or creates a significant

number of new full-time jobs during the commitment period.

(d) For any application made to the commerce corporation from 2015 through 2018, the

tax credit for an eligible business for each new full-time job shall not exceed seven thousand five

hundred dollars ($7,500) annually.

(e) Notwithstanding the provisions of subsections (a) through (d) of this section, for each

application approved by the commerce corporation prior to July 1, 2019, the amount of tax credits

available to be obtained by the business annually shall not exceed the reasonable W-2 withholding

received by the state for each new full-time job created by a business for applications received by

the commerce corporation in 2015 through 2018. For each application approved by the commerce

corporation after July 1, 2019, the amount of tax credits available to be obtained by the business

annually shall not exceed seventy-five percent (75%) of the reasonable W-2 withholding received

by the state for each new full-time job created by a business for applications received by the

commerce corporation.

(f) The commerce corporation shall establish regulations regarding the conditions under

which a business may submit more than one application for tax credits over time. The commerce

corporation may place limits on repeat applications.

SECTION 8. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

amended by adding thereto the following chapter:

CHAPTER 24.6

SPECIAL ECONOMIC DEVELOPMENT DISTRICTS

45-24.6-1. Declaration of purpose.

(a) According to the United States Census Bureau estimates as of 2015, Rhode Island ranks

second among the fifty (50) states in terms of population density. Notwithstanding this, there exists

within the various municipalities of the state, certain large tracts of developable or blighted state-

owned land, which areas represent in and of themselves and are often contiguous with areas of vital

economic importance to the state. In light of this, the state declares that these tracts of state-owned

land, and more specifically those tracts that are twenty (20) or more contiguous acres in size, are

important state assets which require the coordination of federal, state, local, or private action to

efficiently make use of these lands.

(b) It is further declared that coordination is paramount to development as time delays,

redundant approvals, and local eccentricities often impede development projects.

supervision of the development of these areas for the purpose of education, enjoyment, and welfare

of the general public, the promotion of commercial and economic development, the attraction to

our state of appropriate business, industrial, and tourist trade, resources, and investment, the

development of an attractive environment that fosters the social welfare and health of the public.

(d) It is further declared that the developmental tools presently available to municipalities

in the state do not contain sufficient flexibility to address the unique problems arising from the

projects and to govern comprehensive and coordinated development of areas subject to these

projects consistently with the previously-declared public needs and purposes. Proper development

of these areas, consistent with the general welfare, may require designation of special land-use

districts and special land-use controls, which may be more stringent or more flexible than existing

zoning, planning, and other developmental tools, and the adoption, implementation, and

administration of a plan that establishes a framework for development including detailed design

and development criteria, regulations, and enforcement procedures.

(e) It is further declared that the most efficient and effective method to further the

previously declared public policy of the state to encourage the appropriate, comprehensive, and

coordinated development of these properties is to permit the creation of special economic

development districts in the municipalities of the state and the creation of special economic

development district commissions to adopt, implement, and administer plans of development that

establish and enforce design and development criteria and regulations for the development of these

areas.

45-24.6-2. Short title.

This chapter may be known and may be cited as the "Rhode Island Special Economic

Development District Enabling Act".

45-24.6-3. Definitions.

As used in this chapter, the following words and terms have the following meanings, unless

the context indicates another or different meaning or intent:

(1) "Certificate of approval" means the document issued by a special economic

development district commission approving an application for construction, erection, alteration,

demolition, or use of a structure or land within the special economic development district, and

pursuant to which a building permit may be issued.

(2) "Certificate of rejection" means the document issued by a special economic

development district commission rejecting an application for construction, erection, alteration,

demolition, or use of a structure or land within a special economic development district.

(3) "Commission" means a special economic development district commission or

independent public instrumentality authorized by the general assembly and empowered by this

chapter.

(4) "Contiguous acres" means tracts or parcels of land that abut or connect without

excepting therefrom streams, ponds, rivers, roads, bridges, or other types of paths or rights of way.

(5) "Development map" means a map of a special economic development district that

shows the parcels into which the district may have been divided according to the plan of

development.

(6) "District" means any developable or blighted state-owned tracts or parcels of land,

which at its creation, aggregation and/or acquisition by a state agency or instrumentality consists

of or consisted of twenty (20) or more contiguous acres in size.

(7) "Permit" means a building permit issued by a duly licensed building inspector.

(8) "Person" means a natural person or any other legal entity, including, but not limited to,

a corporation, firm, partnership, or trust.

(9) "Plan of development" or "plan" means a plan, including design and development

criteria and regulations, for the development of a special economic development district adopted

by a special economic development district commission pursuant to this chapter.

(10) "Regulations" means the rules regulating the construction, erection, alteration,

demolition, or use of a structure or land within a special development district adopted by a special

economic development commission pursuant to a plan of development.

(11) "Special economic development district" means an area of a municipality or

municipalities that has been or will be established, designated, laid out, or defined by the general

assembly, including, but not limited to, independent public instrumentalities created by the general

assembly.

(12) "Structure" means a building or anything that is constructed or erected and that

requires location on the ground or attachment to something located on the ground.

45-24.6-4. Special economic development districts authorized.

(a) For the purposes stated in § 45-24.6-1, the general assembly may, by statute, establish,

designate, lay out, and define, as special economic development districts, areas that are, may be or

have been the subject of, or substantially affected by combined federal, state, local, or private

action, in the same manner as municipalities are presently empowered to establish, designate, lay

out, and define zoning districts, and which lands are developable or blighted state-owned tracts or

parcels of land, and which, at the time of the creation of the district, consist of twenty (20) or more

contiguous acres in size. Properties owned or controlled by the department of environmental

management shall not be subject to the provisions of this chapter.

(b) The boundaries of a special economic development district established, designated, laid

out, and defined according to the provisions of this chapter, may be amended only by an act of the

general assembly.

a commission as herein provided as a public corporation and instrumentality of the state, to adopt,

implement, and administer a plan of development.

Each district commission shall consist of seven (7) voting members. The governor of the

state of Rhode Island shall appoint, with the advice and consent of the senate, the seven (7) voting

members of the commission. The commission shall have the sole authority to adopt, implement,

and administer a plan of development for the special economic development district.

45-24.6-5. Powers of commission.

A special economic development district commission established under this chapter shall

have all powers necessary and incidental to the adoption, implementation, and administration of a

plan of development, and any other powers that the general assembly may grant in the creation of

the commission.

45-24.6-6. Adoption of special development district plan – Regulation of structures

and uses - Notice.

(a) A special economic development district commission shall adopt a plan of

development. Any plan of development adopted by a special economic development district

commission pursuant to this chapter may regulate and restrict, by means of regulations duly adopted

by the commission, the erection, construction, reconstruction, alteration, repair, or use of buildings,

structures, or land within the special economic development district in a uniform, consistent, and

nondiscriminatory manner that is rationally related to the purposes of this chapter. The plan may

include regulations relating to allowable land uses,; the location and use of buildings,; street

systems,; dimensional, height, and area coverage requirements,; setbacks and build-to lines,;

frontage,; parking requirements,; landscaping,; pedestrian travel,; signs,; design review,; open

spaces,; and population density.

(b) Pursuant to the plan of development, the commission may divide the special economic

development district into several parcels as indicated on a development map, and may regulate

structures and uses differently in different parcels, so long as regulation of similar structures and

uses is uniform within any one parcel.

the commission, at which all interested parties have an opportunity to be heard. Notice of the time,

place, nature, and purpose of the public hearing shall be given to all owners of real property within

the bounds of the special economic development district and within two hundred feet (200') of the

perimeter thereof, by registered or certified mail at least seven (7) days before the date of the

hearing, and by publication of notice in a newspaper of general circulation within the municipality

at least once each week for three (3) successive weeks prior to the date of the hearing.

(d) The municipality shall not have concurrent jurisdiction over the special economic

development district,.

45-24.6-7. Permit required to erect, construct, alter, repair, or demolish structure –

Commission quorum and voting.

(a) Before any structure may be erected, constructed, altered, repaired, or demolished

within a special economic development district, the person proposing the construction or other

alteration shall file with the commission an application for permission to erect, construct, alter,

repair, or demolish the structure, together with plans and specifications, all that may be required by

regulations adopted by the commission. It is the duty of the commission to review the application,

plans, and specifications, and no building permit shall be granted until the commission has acted

on it. No construction or other alteration of a structure may be undertaken within a special

development district without a permit. The commission may, by regulation, coordinate permit

approvals with state building officials and fire marshals, city or town officials, or duly qualified

independent staff or consultants.

(b) Nothing in this chapter prevents, or is to be construed to prevent, ordinary maintenance

or repair of any structure within the special economic development district; nor shall anything in

this chapter prevent, or be construed to prevent, the continuance of the use of any building or

improvement for any purpose to which the building or improvement was lawfully devoted at the

time of the adoption of a plan of development, or to prevent or be construed to prevent the erection,

construction, alteration, repair, or demolition of any structure under a permit issued by the inspector

of buildings prior to the adoption of a plan of development pursuant to this chapter.

sufficient to constitute a quorum for the transaction of business, and the act of a majority of the

commissioners present at any meeting at which there is a quorum is the act of the commission,

except as otherwise provided by law.

45-24.6-8. Variances, deviations, and special exceptions.

(a) Any commission that adopts or has adopted a plan conforming to this chapter has the

authority to grant variances, deviations, and special exceptions of any regulations adopted pursuant

to that plan, upon the application of an aggrieved property owner:

(1) Special exceptions to the terms of the regulations may be granted in those cases

specified in the regulations, and subject to those conditions and safeguards specified therein, where

the use granted by special exception is reasonably necessary for the convenience or welfare of the

public and does not substantially or permanently injure the value of neighboring property.

(2) Variances may be granted where, owing to special conditions, enforcement of the

regulations would result in unnecessary hardship, where the variance will not be contrary to the

public interest, and the spirit of the plan will be observed and substantial justice done.

(3) Deviations may be granted where the enforcement of the regulations relating to

setbacks, build-to lines, and other area and dimensional restrictions would preclude the full

enjoyment by the owner of a permitted use and amount to more than a mere inconvenience.

(b) The commission shall hold a hearing on the application within a reasonable time, and

give public notice and due notice of the hearing to the parties in interest and property owners within

two hundred feet (200') of the affected property. At any hearing any party may appear in person or

by agent or attorney.

supersede the jurisdiction of the commission regarding any area designated a special development

district pursuant to this chapter.

45-24.6-9. Appeals to superior court.

(a) Any person or persons jointly or severally aggrieved by a decision of the commission

may appeal to the superior court for the county in which the special economic development district

is situated by filing a complaint stating the reasons of appeal within twenty (20) days after the

decision has been filed in the office of the commission. The commission shall file the original

documents acted upon by it and constituting the record of the hearing appealed from, or certified

copies of the documents, together with any other facts that may be pertinent, with the clerk of the

court within ten (10) days after being served with a copy of the complaint. When the complaint is

filed by someone other than the original applicant or appellant, the original applicant or appellant

and the members of the commission shall be made parties to the proceedings. The appeal shall not

stay proceedings upon the decision being appealed, but the court may, in its discretion, grant a stay

on appropriate terms and make any other orders that it deems necessary for an equitable disposition

of the appeal.

(b) If, before the date set for hearing in the superior court, an application is made to the

court for leave to present additional evidence before the commission, and it is shown to the

satisfaction of the court that the additional evidence is material and that there were good reasons

for the failure to present it at the hearing before the commission, the court may order that the

additional evidence be taken before the commission upon conditions determined by the court. The

commission may modify its findings and decision by reason of the additional evidence and file that

evidence and any modifications, new findings, or decisions with the superior court.

consider the record of the hearing before the commission, and if it appears to the court that

additional evidence is necessary for the proper disposition of the matter, it may allow any party to

the appeal to present evidence in open court, which evidence, along with the record shall constitute

the record upon which the determination of the court is made.

(d) The court shall not substitute its judgment for that of the commission as to the weight

of the evidence on questions of fact. The court may affirm the decision of the commission or remand

the case for further proceedings, or may reverse or modify the decision if substantial rights of the

appellant have been prejudiced because of findings, inferences, conclusions, or decisions which

are:

(1) In violation of constitutional, statutory provisions;

(2) In excess of the authority granted to the commission by statute;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence of the

whole record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted

exercise of discretion.

45-24.6-10. Construction of chapter.

Whenever the context permits in this chapter, the use of the plural includes the singular,

the singular, the plural, and the use of any gender is deemed to include all genders.

45-24.6-11. Severability.

If any one or more sections, clauses, sentences, or parts of this chapter are for any reason

adjudged unconstitutional or invalid in any court, the judgment does not affect, impair, or invalidate

the remaining provisions of this chapter, but are confined in its operation to the specific provisions

so held unconstitutional or invalid, and the inapplicability or invalidity of any section, clause, or

provision of this chapter in any one or more instances or circumstances shall not be taken to affect

or prejudice in any way its applicability or validity in any other instance.

45-24.6-12. Applicability of other laws.

(a) Any special economic development district commission created pursuant to this chapter

will not be subject to the provisions of §§ 42-35-1 through 42-35-18. Any commission and its

members will be subject to the provisions of §§ 36-14-1 through 36-14-21, §§ 38-2-1 through 38-

2-16, and §§ 42-46-1 through 42-46-14.

(b) In the event of a conflict between the provisions of this chapter and any other provisions

of the general laws governing the powers of any other district commission created by or pursuant

to the general laws, including, but not limited to, the I-195 redevelopment district established

pursuant to chapter 64.14 of title 42, the provisions of this chapter shall prevail. The provisions of

this chapter shall also prevail over any district commissions established by legislation promulgated

after the effective date of this act, unless specifically exempted by that legislation.

SECTION 9. Sections 42-64.14-5, 42-64.14-8 and 42-64.14-18 of the General Laws in

Chapter 42-64.14 entitled "The I-195 Redevelopment Act of 2011" are hereby amended to read as

follows:

42-64.14-5. The I-195 redevelopment district created.

(a) The I-195 redevelopment district is hereby constituted as an independent public

instrumentality and body corporate and politic for the purposes set forth in this chapter with a

separate legal existence from the city of Providence and from the state and the exercise by the

commission of the powers conferred by this chapter shall be deemed and held to be the performance

of an essential public function. The boundaries of the district are established in § 37-5-8. However,

parcels P2 and P4, as delineated on that certain plan of land captioned "Improvements to Interstate

Route 195, Providence, Rhode Island, Proposed Development Parcel Plans 1 through 10, Scale: 1"

=20', May 2010, Bryant Associates, Inc., Engineers-Surveyors-Construction Managers, Lincoln,

RI, Maguire Group, Inc., Architects/Engineers/Planners, Providence, RI," shall be developed and

continued to be used as parks or park supporting activity; provided, however, the commission may,

from time to time, pursuant to action taken at a meeting of the commission in public session, adjust

the boundaries of parcel P4 provided that at all times parcel P4 shall contain no fewer than one

hundred eighty-six thousand one hundred eighty-six square feet (186,186 ft2) of land and provided,

further, that the city of Providence shall not be responsible for the upkeep of the parks unless a

memorandum of understanding is entered into between the commission or the state and the city of

Providence that grants full funding to the city for that purpose.

(b) The property owned by the district is designated as a special economic development

district pursuant to § 45-24.6-4 and constitutes state-owned land within the meaning of that section.

The I-195 redevelopment district commission established in this chapter shall oversee,

plan, implement, and administer the development of the areas within the district consistent with

and subject to the city of Providence comprehensive plan adopted by the city pursuant to § 45-22-

2.1 et seq. and the city of Providence zoning ordinances pursuant to § 45-24-27 et seq. as previously

enacted by the city of Providence, and as may be enacted and/or amended from time to time through

July 1, 2012, or enacted and/or amended thereafter with the consent of the commission.

(c)(d)(c) The city of Providence shall not be required to install or pay for the initial

installation of any public or private utility infrastructure within the district.

(d)(c)(d) It is the intent of the general assembly by the passage of this chapter to vest in

the commission all powers, authority, rights, privileges, and titles that may be necessary to enable

it to accomplish the purposes herein set forth, and this chapter and the powers granted hereby shall

be liberally construed in conformity with those purposes.

42-64.14-8. Additional general powers.

In addition to the powers of the commission otherwise provided herein, the commission

shall have the powers set forth below and shall be subject to the limitations herein set forth. Except

as may be expressly limited by action of the commission at a regular or special meeting, the

commission shall have the powers necessary to put into effect the powers of the commission as set

forth below and as herein limited.

(a) The commission is authorized and empowered to fix, revise, charge, collect, and abate

fees, rates, assessments, delinquency charges, and other charges for its services, and other services,

facilities, and commodities furnished or supplied by it, including penalties for violations of such

regulations as the commission may from time to time promulgate under this chapter. Fees, rates,

assessments, delinquency charges, and other charges of general application shall be adopted and

revised by the commission in accordance with procedures to be established by the commission for

assuring that interested persons are afforded notice and an opportunity to present data, views, and

arguments. The commission shall hold at least one public hearing on its schedule of fees, rates, and

charges or any revision thereof prior to adoption, notice of which shall be published in a newspaper

of substantial circulation in the district at least fifteen (15) days in advance of the hearing, and

notice of the hearing shall be provided to the city council of the city of Providence. No later than

the date of such publication the commission shall make available to the public the proposed

schedule of fees, rates, and charges. Fees, rates, rents, assessments, abatements, and other charges

established by the commission shall not be subject to supervision or regulation by any department,

division, district, board, bureau, or agency of the state or any of its political subdivisions. In order

to provide for the collection and enforcement of its fees, rates, rents, assessments, and other charges,

the commission is hereby granted all the powers and privileges with respect to such collection and

enforcement held by the city of liens for unpaid taxes. Provided however that the commission shall

be required to collect all project application fees, zoning fees and charges, building permit fees, fire

code compliance or other public safety permit fees or charges, planning fees, historic district fees

and charges, and other similar fees and charges that would otherwise be payable to the city of

Providence in connection with such projects located in the city of Providence and remit the greater

of one-half (1/2) of such fees collected by the commission to the city of Providence, or one-half

(1/2) of such fees the city of Providence would have received from the project under the city's

ordinances uniformly applied. The city of Providence shall continue to be entitled to collect all

other customary fees for development and maintenance within the district as uniformly applied

throughout the city of Providence, including, but not limited to, utility tie-in, connection fees,

maintenance fees and assessments.

(b) Notwithstanding any provision of law to the contrary, in order to provide for the

consolidated, coordinated, efficient, and effective exercise of public development powers affecting

or benefiting the city of Providence and the state within the boundaries of the district as defined in

§ 37-5-8, the commission shall have the powers of:

(i)(1) A special development district as provided for in chapter 45-24.4 24.4 of title 45;

(ii)(2) A redevelopment agency as provided for in chapters 45-31, 45-31.1, 45-31.2, 45-32,

and 45-33 31, 31.1, 31.2, 32, and 33 of title 45 within areas of the district which that are part of

an enterprise zone as provided for in chapter 42-64.3. Within the district, the term "blighted area

and substandard area" shall be deemed to include areas where the presence of hazardous materials,

as defined in § 23-19.14-2, impairs the use, reuse, or redevelopment of impacted sites.;

(iii)(3) A municipal public buildings authority as provided for in chapter 45-50 50 of title

45 .;

(iv)(4) A subsidiary of the Rhode Island commerce corporation and the enactment of this

chapter shall constitute the approval of the general assembly as required by § 42-64-7.1.;

(v)(5) The city planning board as established pursuant to chapter 45-23 23 23 of title 45.;

(vi)(6) The city zoning board as established pursuant to chapter 45-24 24 of title 45,

including, but not limited to, the granting of any use or dimensional variances or special use

permits.;

(vii)(7) The city historic district commission established pursuant to chapter 45-24.1 24.1

of title 45.;

(viii)(8) Any other city board existing or created that exercises any of the authorities of a

planning board, zoning board, design review board or historic district commission. Provided,

however, and notwithstanding the foregoing, the commission shall at all times ensure that all

projects and development subject to the jurisdiction of the commission are consistent with and

subject to the city of Providence comprehensive plan adopted by the city pursuant to § 45-22-2.1

et seq. and the city of Providence zoning ordinances pursuant to § 45-24-27 et seq. as previously

enacted by the city of Providence, and as may be enacted and/or amended from time to time through

July 1, 2012, or enacted and/or amended thereafter with the consent of the commission.;

(ix)(9) A special economic development district as provided for in chapter 24.6 of title 45.

(3)(c) For the benefit of the district, the commission shall have the power to enter into

agreements with the city of Providence for:

(i)(1) The exercise of powers for tax increment financing as provided for in chapter 45-

33.2 33.2 of title 45;

(ii)(2) The imposition of impact fees as provided for in chapter 45-22.4 22.4 of title 45 in

order to provide infrastructure capacity to or make physical improvements within the district; or

(iii)(3) Approval within the district of a district management authority as provided for in

chapter 45-59 59 of title 45, for purposes of undertaking activities consistent with the approved

plans for the district adopted pursuant to § 42-64.14-8 this section.

(4)(d) Title and survey adjustments. The commission is authorized to adjust boundary lines,

survey lines and property descriptions of the parcels of land comprising the I-195 surplus land as

may be necessary or appropriate to facilitate or enhance project design plans and for the location

and/or relocation of city streets, utility corridors, easements and rights-of-way.

(5)(e) The commission is authorized and empowered, in the name of and for the State state

of Rhode Island, to enter into contracts for the sale, transfer or conveyance, in fee simple, by lease

or otherwise of the any of the I-195 Surplus surplus lands identified in § 37-5-8 in order to achieve

the purposes of this chapter and customary terms for commercial real estate transactions of this

nature, and containing the following provisions:

(i) (1) The terms for each parcel shall be the fair market value of such parcel at the time of

conveyance as determined by the commission.

(ii) (2) As a condition to the sale, lease or other transfer of each parcel or any portion

thereof, any buyer, tenant or transferee that is a not-for-profit, organization or entity that is

otherwise exempt from municipal real estate taxes, including, without limitation, any independent

public instrumentality, governmental or quasi-governmental agency, body, division, or official, or

any affiliate or subsidiary thereof, shall have entered into an agreement for payments to the city in

accordance with § 42-64.14-14 relating to tax-exempt parcels, or such other things acceptable to

the city.

(iii) (3) Promptly after taking title to a parcel, the buyer shall cause such parcel to be

attractively landscaped and maintained for use as green space until such time as development of

the parcel in accordance with this section begins.

(iv) (4) Development of the parcels, as appropriate, shall be in accordance with the findings

set forth in this chapter and with the buyer's approved development plan for the identified parcels,

as the same may be amended from time to time with the approval of the commission.

(v) (5) As a condition to the contract for the sale, lease, transfer or conveyance an approved

development plan shall include a construction schedule that shall commence within twelve (12)

months from the effective date of the contract and all construction shall be complete within three

(3) years from the commencement of said construction unless otherwise amended and approved by

the commission at a duly posted public meeting of the commission.

(6) Notwithstanding any provision of this chapter 42-64.14 or any other law to the contrary,

the commission shall exercise all powers authorized by §§ 42-64.14-7 and 42-64.14-8 in a manner

consistent with and subject to the city of Providence comprehensive plan adopted by the city

pursuant to 45-22-2.1 et seq. and the city of Providence zoning ordinances pursuant to 45-24-27 et

seq. as previously enacted by the city of Providence, and as may be enacted and/or amended from

time to time through July 1, 2012, or enacted thereafter with the consent of the commission.

(7)(f) Under no circumstances shall the commission establish, authorize, zone, plan, or

permit in the district a so-called "casino" or any form of gambling, including but not limited to

those activities governed by title 41 of the Rhode Island general laws, so-called "video-gambling"

or any lotteries whatsoever except for the sale of lottery tickets pursuant to title 42, section 61

chapter 61 of this title 42 of the general laws. Furthermore, upon conveyance, but in any event

before approving any project, development, or redevelopment, the commission shall ensure that a

deed restriction, running to the benefit of the city of Providence and the state, is recorded against

the subject property effectuating and memorializing such restriction. The aforementioned

restriction shall run with the land and be binding upon all successors and assign. Any deed

restriction conveyed to the state pursuant to this subsection may be waived only by statute,

resolution or other action by the general assembly which that complies with the constitutional

requirements for the expansion of gambling.

42-64.14-18. Inconsistent laws or ordinance inoperative.

Except as otherwise provided herein, any provisions of any special law and part of any

special law and all ordinances and parts of ordinances pertaining to development within the district

which that are inconsistent with the provisions of this chapter shall be inoperative and cease to be

effective. The provisions of this chapter shall be deemed to provide an exclusive, additional,

alternative, and complete method for the doing of the things authorized hereby and shall be deemed

and construed to be supplemental and additional to, and not in derogation of, powers conferred

upon the commission by law and on the city by its charter; provided, however, that insofar as the

express provisions of this chapter are inconsistent with the provisions of any general or special law,

administrative order or regulation, or ordinance of the city, the provisions of this chapter shall be

controlling; provided, however, to the extent of any inconsistency or conflict between this chapter

and chapter 24.6 of title 45, the provisions of chapter 24.6 of title 45 shall be controlling.

SECTION 10. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 64.33

THE RHODE ISLAND SMALL BUSINESS DEVELOPMENT FUND

42-64.33-1. Short title.

This chapter shall be known and may be cited as the "Rhode Island Small Business

Development Fund."

42-64.33-2. Definitions.

(a) As used in this chapter:

(1) "Affiliate" means an entity that directly, or indirectly, through one or more

intermediaries, controls, or is controlled by, or is under common control with another entity. For

the purposes of this chapter, an entity is "controlled by" another entity if the controlling entity holds,

directly or indirectly, the majority voting or ownership interest in the controlled entity or has control

over the day-to-day operations of the controlled entity by contract or by law.

(2) "Applicable percentage" means zero percent (0%) for the first three (3) credit allowance

dates, and twenty-one and one-half percent (21.5%) for the fourth, fifth, and sixth credit allowance

dates.

(3) "Capital investment" means any equity or debt investment in a small business

development fund by a small business fund investor that:

(i) Is acquired after the effective date of this chapter at its original issuance solely in

exchange for cash;

(ii) Has one hundred percent (100%) of its cash purchase price used by the small business

development fund to make qualified investments in eligible businesses located in this state within

three (3) years of the initial credit allowance date; and

(iii) Is designated by the small business development fund as a capital investment under

this chapter and is certified by the Corporation corporation pursuant to § 42-64.33-4. This term

shall include any capital investment that does not meet the provisions of § 42-64.33-4(a) if the

investment was a capital investment in the hands of a prior holder.

(4) "Corporation" means the Rhode Island Commerce Corporation. commerce

corporation.

(5) "Credit allowance date" means the date on which a capital investment is made and each

of the five (5) anniversary dates of the date thereafter.

(6) "Eligible business" means a business that, at the time of the initial qualified investment

in the company:

(i) Has less than two hundred fifty (250) employees;

(ii) Has not more than fifteen million dollars ($15,000,000) in net income from the

preceding tax year;

(iii) Has its principal business operations in this state; and

(iv) Is engaged in industries related to clean energy, biomedical innovation, life sciences,

information technology, software, cyber physical systems, cybersecurity, data analytics, defense,

shipbuilding, maritime, composites, advanced business services, design, food, manufacturing,

transportation, distribution, logistics, arts, education, hospitality, tourism, or, if not engaged in the

industries, the Corporation corporation makes a determination that the investment will be

beneficial to the economic growth of the state.

(7) "Eligible distribution" means:

(i) A distribution of cash to one or more equity owners of a small business fund investor to

fully or partially offset a projected increase in the owner's federal or state tax liability, including

any penalties and interest, related to the owner's ownership, management, or operation of the small

business fund investor;

(ii) A distribution of cash as payment of interest and principal on the debt of the small

business fund investor or small business development fund; or

(iii) A distribution of cash related to the reasonable costs and expenses of forming,

syndicating, managing, and operating the small business fund investor or the small business

development fund, or a return of equity or debt to affiliates of a small business fund investor or

small business development fund. The distributions may include reasonable and necessary fees paid

for professional services, including legal and accounting services, related to the formation and

operation of the small business development fund.

(8) "Jobs created" means a newly created position of employment that was not previously

located in the state at the time of the qualified investment in the eligible business and requiring a

minimum of thirty five (35) hours worked each week, measured each year by subtracting the

number of full-time, thirty-five (35) hours-per-week (35) employment positions at the time of the

initial qualified investment in the eligible business from the monthly average of full-time, thirty-

five (35) hours-per-week (35) employment positions for the applicable year. The number shall not

be less than zero.

(9) "Jobs retained" means a position requiring a minimum of thirty five (35) hours worked

each week that existed prior to the initial qualified investment. Retained jobs shall be counted each

year based on the monthly average of full-time, thirty-five (35) hours-per-week (35) employment

positions for the applicable year. The number shall not exceed the initial amount of retained jobs

reported and shall be reduced each year if employment at the eligible business concern drops below

that number.

(10) "Minority business enterprise" means an eligible business which is certified by the

Rhode Island office of diversity, equity and opportunity as being a minority or women business

enterprise.

(11) "Principal business operations" means the location where at least sixty percent (60%)

of a business's employees work or where employees who are paid at least sixty percent (60%)

percent of the business's payroll work. A business that has agreed to relocate employees using the

proceeds of a qualified investment to establish its principal business operations in a new location

shall be deemed to have its principal business operations in the new location if it satisfies these

requirements no later than one hundred eighty (180) days after receiving a qualified investment.

(12) "Purchase price" means the amount paid to the small business development fund that

issues a capital investment which that shall not exceed the amount of capital investment authority

certified pursuant to § 42-64.33-4.

(13) "Qualified investment" means any investment in an eligible business or any loan to an

eligible business with a stated maturity date of at least one year after the date of issuance, excluding

revolving lines of credit and senior secured debt unless the eligible business has a credit refusal

letter or similar correspondence from a depository institution or a referral letter or similar

correspondence from a depository institution referring the business to a small business development

fund; provided that, with respect to any one eligible business, the maximum amount of investments

made in the business by one or more small business development funds, on a collective basis with

all of the businesses' affiliates, with the proceeds of capital investments shall be twenty percent

(20%) of the small business development fund's capital investment authority, exclusive of

investments made with repaid or redeemed investments or interest or profits realized thereon. An

eligible business, on a collective basis with all of the businesses' affiliates, is prohibited from

receiving more than four million dollars ($4,000,000) in investments from one or more small

business development funds with the proceeds of capital investments.

(14) "Small business development fund" means an entity certified by the Corporation

corporation under § 42-64.33-4.

(15) "Small business fund investor" means an entity that makes a capital investment in a

small business development fund.

(16) "State" means the state of Rhode Island and Providence Plantations.

(17) "State tax liability" means any liability incurred by any entity under § 44-17-1 et seq.

42-64.33-3. Tax credit established.

(a) Upon making a capital investment in a small business development fund, a small

business fund investor earns a vested right to a credit against the entity's state tax liability that may

be utilized on each credit allowance date of the capital investment in an amount equal to the

applicable percentage for the credit allowance date multiplied by the purchase price paid to the

small business development fund for the capital investment. The amount of the credit claimed by

any entity shall not exceed the amount of the entity's state tax liability for the tax year for which

the credit is claimed. Any amount of credit that an entity is prohibited from claiming in a taxable

year as a result of this section may be carried forward for a period of seven (7) years. It is the intent

of this chapter that an entity claiming a credit under this section is not required to pay any additional

tax that may arise as a result of claiming the credit.

(b) No credit claimed under this section shall be refundable or saleable on the open market.

Credits earned by or allocated to a partnership, limited liability company, or S- corporation may be

allocated to the partners, members, or shareholders of the entity for their direct use for state tax

liability as defined in this chapter in accordance with the provisions of any agreement among the

partners, members, or shareholders, and a small business development fund must notify the

Corporation corporation of the names of the entities that are eligible to utilize credits pursuant to

an allocation of credits or a change in allocation of credits or due to a transfer of a capital investment

upon the allocation, change, or transfer. The allocation shall be not considered a sale for purposes

of this section.

of taxation.

42-64.33-4. Application, approval and allocations.

(a) A small business development fund that seeks to have an equity or debt investment

certified as a capital investment and eligible for credits under this chapter shall apply to the

Corporation corporation. The Corporation corporation shall begin accepting applications within

ninety (90) days of the effective date of this chapter. The small business development fund shall

include the following:

(1) The amount of capital investment requested;

(2) A copy of the applicant's or an affiliate of the applicant's license as a rural business

investment company under 7 U.S.C. § 2009cc, or as a small business investment company under

15 U.S.C. § 681, and a certificate executed by an executive officer of the applicant attesting that

the license remains in effect and has not been revoked;

(3) Evidence that, as of the date the application is submitted, the applicant or affiliates of

the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic

companies;

(4) An estimate of the number of jobs that will be created or retained in this state as a result

of the applicant's qualified investments;

(5) A business plan that includes a strategy for reaching out to and investing in minority

business enterprises and a revenue impact assessment projecting state and local tax revenue to be

generated by the applicant's proposed qualified investment prepared by a nationally recognized,

third-party, independent economic forecasting firm using a dynamic economic forecasting model

that analyzes the applicant's business plan over the ten (10) years following the date the application

is submitted to the Corporation corporation; and

(6) A nonrefundable application fee of five thousand dollars ($5,000), payable to the

Corporation corporation.

(b) Within thirty (30) days after receipt of a completed application, the Corporation

corporation shall grant or deny the application in full or in part. The Corporation corporation

shall deny the application if:

(1) The applicant does not satisfy all of the criteria described in subsection (a) of this

section;

(2) The revenue impact assessment submitted with the application does not demonstrate

that the applicant's business plan will result in a positive economic impact on this state over a ten-

(10) year (10) period that exceeds the cumulative amount of tax credits that would be issued to the

applicant if the application were approved; or

(3) The Corporation corporation has already approved the maximum amount of capital

investment authority under subsection (g) of this section.

applicant of the grounds for the denial. If the applicant provides any additional information required

by the Corporation corporation or otherwise completes its application within fifteen (15) days of

the notice of denial, the application shall be considered completed as of the original date of

submission. If the applicant fails to provide the information or fails to complete its application

within the fifteen-(15) day (15) period, the application remains denied and must be resubmitted in

full with a new submission date.

(d) If the application is deemed to be complete and the applicant deemed to meet all of the

requirements of Section 42-64.33-4 subsections (a) and (b), the Corporation corporation shall

certify the proposed equity or debt investment as a capital investment that is eligible for credits

under this chapter, subject to the limitations contained in subsection (g) of this section. The

Corporation corporation shall provide written notice of the certification to the small business

development fund.

(e) The Corporation corporation shall certify capital investments in the order that the

applications were received by the Corporation corporation. Applications received on the same day

shall be deemed to have been received simultaneously.

(f) For applications that are complete and received on the same day, the Corporation

corporation shall certify applications in proportionate percentages based upon the ratio of the

amount of capital investments requested in an application to the total amount of capital investments

requested in all applications.

(g) The Corporation corporation shall certify sixty-five million dollars ($65,000,000) in

capital investments pursuant to this section; provided that not more than twenty million dollars

($20,000,000) may be allocated to any individual small business development fund certified under

this section.

(h) Within sixty (60) days of the applicant receiving notice of certification, the small

business development fund shall issue the capital investment to and receive cash in the amount of

the certified amount from a small business fund investor. At least forty-five percent (45%) of the

small business fund investor's capital investment shall be composed of capital raised by the small

business fund investor from sources, including directors, members, employees, officers, and

affiliates of the small business fund investor, other than the amount of capital invested by the

allocatee claiming the tax credits in exchange for the allocation of tax credits; provided that at least

ten percent (10%) of the capital investment shall be derived from the small business investment

fund's managers. The small business development fund shall provide the Corporation corporation

with evidence of the receipt of the cash investment within sixty-five (65) days of the applicant

receiving notice of certification. If the small business development fund does not receive the cash

investment and issue the capital investment within the time period following receipt of the

certification notice, the certification shall lapse and the small business development fund shall not

issue the capital investment without reapplying to the Corporation corporation for certification.

Lapsed certifications revert to the authority and shall be reissued pro rata to applicants whose

capital investment allocations were reduced pursuant to this chapter and then in accordance with

the application process.

42-64.33-5. Tax credit recapture and exit.

(a) The Corporation corporation, working in coordination with the division of taxation

Division of Taxation, may recapture, from any entity that claims a credit on a tax return, the credit

allowed under this chapter if:

(1) The small business development fund does not invest one hundred (100%) percent of

its capital investment authority in qualified investments in this state within three (3) years of the

first credit allowance date;

(2) The small business development fund, after satisfying subsection (a)(1) of this section,

fails to maintain qualified investments equal to one hundred (100%) percent of its capital

investment authority until the sixth anniversary of the initial credit allowance date. For the purposes

of this subsection, a qualified investment is considered maintained even if the qualified investment

was sold or repaid so long as the small business development fund reinvests an amount equal to the

capital returned or recovered by the small business development fund from the original investment,

exclusive of any profits realized, in other qualified investments in this state within twelve (12)

months of the receipt of the capital. Amounts received periodically by a small business

development fund shall be treated as continually invested in qualified investments if the amounts

are reinvested in one or more qualified investments by the end of the following calendar year. A

small business development fund shall not be required to reinvest capital returned from qualified

investments after the fifth anniversary of the initial credit allowance date, and the qualified

investments shall be considered held continuously by the small business development fund through

the sixth anniversary of the initial credit allowance date;

(3) The small business development fund, before exiting the program in accordance with

subsection (e) of this section, makes a distribution or payment that results in the small business

development fund having less than one hundred percent (100%) of its capital investment authority

invested in qualified investments in this state or available for investment in qualified investments

and held in cash and other marketable securities;

(4) The small business development fund, before exiting the program in accordance with

subsection (e) of this section, fails to make qualified investments in minority business enterprises

that when added together equal at least ten percent (10%) of the small business development fund's

capital investment authority; or

(5) The small business development fund violates subsection (d) of this section.

(b) Recaptured credits and the related capital investment authority revert to the Corporation

corporation and shall be reissued pro rata to applicants whose capital investment allocations were

reduced pursuant to § 42-64.33-4(f) of this section and then in accordance with the application

process.

be subject to a six-(6) month (6) cure period. No recapture shall occur until the small business

development fund has been given notice of noncompliance and afforded six (6) months from the

date of the notice to cure the noncompliance.

(d) No eligible business that receives a qualified investment under this chapter, or any

affiliates of the eligible business, may directly or indirectly:

(1) Own or have the right to acquire an ownership interest in a small business development

fund or member or affiliate of a small business development fund, including, but not limited to, a

holder of a capital investment issued by the small business development fund; or

(2) Loan to or invest in a small business development fund or member or affiliate of a small

business development fund, including, but not limited to, a holder of a capital investment issued by

a small business development fund, where the proceeds of the loan or investment are directly or

indirectly used to fund or refinance the purchase of a capital investment under this chapter.

(e) On or after the sixth anniversary of the initial credit allowance date, a small business

development fund may apply to the Corporation corporation to exit the program and no longer be

subject to regulation under this chapter. The Corporation corporation shall respond to the exit

application within thirty (30) days of receipt. In evaluating the exit application, the fact that no

credits have been recaptured and that the small business development fund has not received a notice

of recapture that has not been cured pursuant to subsection (c) of this section shall be sufficient

evidence to prove that the small business development fund is eligible for exit. The Corporation

corporation shall not unreasonably deny an exit application submitted under this subsection. If the

exit application is denied, the notice shall include the reasons for the determination.

(f) If the number of jobs created or retained by the eligible businesses that received

qualified investments from the small business development fund, calculated pursuant to reports

filed by the small business development fund pursuant to § 42-64.33-7, is:

(1) Less than sixty percent (60%) of the amount projected in the approved small business

development fund's business plan filed as part of its application for certification under § 42- 64.33-

4, then the state shall receive thirty percent (30%) of any distribution or payment to an equity or

debt holder in an approved small business development fund made after its exit from the program

in excess of eligible distributions; or

(2) Greater than sixty percent (60%) but less than one hundred percent (100%) of the

amount projected in the approved small business development fund's business plan filed as part of

its application for certification under § 42-64.33-4, then the state shall receive fifteen percent (15%)

of any distribution or payment to an equity or debt holder in an approved small business

development fund made after its exit from the program in excess of eligible distributions.

(g) At the time a small business development fund applies to the Corporation corporation

to exit the program, it shall calculate the aggregate internal rate of return of its qualified

investments. If the small business development fund's aggregate internal rate of return on its

qualified investments at exit exceeds ten percent (10%), then, after eligible distributions, the state

shall receive ten percent (10%) of any distribution or payment in excess of the aggregate ten percent

(10%) internal rate of return to an equity or debtholder in an approved small business development

fund.

(h) The Corporation corporation shall not revoke a tax credit certificate after the small

business development fund's exit from the program.

42-64.33-6. Request for determination.

A small business development fund, before making a qualified investment, may request

from the Corporation corporation a written opinion as to whether the business in which it is

proposed to invest is an eligible business. The Corporation corporation, not later than the fifteenth

business day after the date of receipt of the request, shall notify the small business development

fund of its determination. If the Corporation corporation fails to notify the small business

development fund by the fifteenth business day of its determination, the business in which the small

business development fund proposes to invest shall be considered an eligible business.

42-64.33-7. Reporting obligations.

(a) Each small business development fund shall submit a report to the Corporation

corporation on or before the fifth business day after the first, second, and third anniversaries of

the closing date. The report shall provide documentation as to the small business development

fund's qualified investments and include:

(1) A bank statement evidencing each qualified investment;

(2) The name, location, status as a minority business enterprise if applicable, and industry

of each business receiving a qualified investment, including either the determination letter set forth

in § 42-64.33-6 or evidence that the business qualified as an eligible business at the time the

investment was made;

(3) The number of employment positions created or retained as a result of the small

business development fund's qualified investments as of the last day of the preceding calendar year;

and

(4) Such other reasonable information as the corporation may require.

(b) On or before the last day of February of each year following the final year in which the

report required in subsection (a) of this section is due, the small business development fund shall

submit an annual report to the Corporation corporation including the following:

(1) The number of employment positions created or retained as a result of the small

business development fund's qualified investments as of the last day of the preceding calendar year;

(2) The number of minority business enterprises that have received qualified investments

and the amount of qualified investment that such minority business enterprises have received;

(3) The average annual salary of the positions described in subsection (b)(1) of this section;

(4) The follow-on capital investment that has occurred along with or after the small

business development fund's investment as of the last day of the preceding calendar year; and

(5) Such other reasonable information as the corporation may require.

speaker of the house, president of the senate, house finance chairperson, senate finance chairperson,

and the general treasurer.

(d) On or before each September 30, the corporation shall publish a report on the small

business development fund and provide such report to the speaker of the house of representatives,

president of the senate, house finance chair, senate finance chair, and the general treasurer. The

report shall contain information on the program implementation, investments made, fund

performance, and to the extent practicable, track the economic impact of the investments

completed.

42-64.33-8. Limitations.

The incentives provided under this chapter shall not be granted in combination with any

other job-specific benefit provided by the state, the commerce corporation, or any other state

agency, board, commission, quasi-public corporation, or similar entity without the express

authorization of the commerce corporation.

42-64.33-9. Rules and regulations.

The Corporation and Division of Taxation corporation and division of taxation may issue

reasonable rules and regulations, consistent with this chapter, as are necessary to carry out the intent

and purpose and implementation of the responsibilities under this chapter.

SECTION 11. Section 42-64.21-9 of the General Laws in Chapter 42-64.21 entitled

"Rhode Island Tax Increment Financing" is hereby amended to read as follows:

42-64.21-9. Sunset.

The commerce corporation shall enter into no agreement under this chapter after December

31, June 30, 2020.

SECTION 12. Section 42-64.22-15 of the General Laws in Chapter 42-64.22 entitled "Tax

Stabilization Incentive" is hereby amended to read as follows:

42-64.22-15. Sunset.

The commerce corporation shall enter into no agreement under this chapter after June 30,

December 31, 2020.

SECTION 13. Section 42-64.23-8 of the General Laws in Chapter 42-64.23 entitled "First

Wave Closing Fund" is hereby amended to read as follows:

42-64.23-8. Sunset.

No financing shall be authorized to be reserved pursuant to this chapter after June 30,

December 31, 2020.

SECTION 14. Section 42-64.24-8 of the General Laws in Chapter 42-64.24 entitled "I-195

Redevelopment Project Fund" is hereby amended to read as follows:

42-64.24-8. Sunset.

No funding, credits, or incentives shall be authorized or authorized to be reserved pursuant

to this chapter after June 30, December 31, 2020.

SECTION 15. Section 42-64.25-14 of the General Laws in Chapter 42-64.25 entitled

"Small Business Assistance Program" is hereby amended to read as follows:

42-64.25-14. Sunset.

No grants, funding, or incentives shall be authorized pursuant to this chapter after June 30,

December 31, 2020.

SECTION 16. Section 42-64.26-12 of the General Laws in Chapter 42-64.26 entitled "Stay

Invested in RI Wavemaker Fellowship" is hereby amended to read as follows:

42-64.26-12. Sunset.

No incentives or credits shall be authorized pursuant to this chapter after June 30,

December 31, 2020.

SECTION 17. Section 42-64.27-6 of the General Laws in Chapter 42-64.27 entitled "Main

Street Rhode Island Streetscape Improvement Fund" is hereby amended to read as follows:

42-64.27-6. Sunset.

No incentives shall be authorized pursuant to this chapter after June 30, December 31,

2020.

SECTION 18. Section 42-64.28-10 of the General Laws in Chapter 42-64.28 entitled

"Innovation Initiative" is hereby amended to read as follows:

42-64.28-10. Sunset.

No vouchers, grants, or incentives shall be authorized pursuant to this chapter after June

30, December 31, 2020.

SECTION 19. Section 42-64.29-8 of the General Laws in Chapter 42-64.29 entitled

"Industry Cluster Grants" is hereby amended to read as follows:

42-64.29-8. Sunset.

No grants or incentives shall be authorized to be reserved pursuant to this chapter after

June 30, December 31, 2020.

SECTION 20. Section 42-64.31-4 of the General Laws in Chapter 42-64.31 entitled "High

School, College, and Employer Partnerships" is hereby amended to read as follows:

42-64.31-4. Sunset.

No grants shall be authorized pursuant to this chapter after June 30, December 31, 2020.

SECTION 21. Section 42-64.32-6 of the General Laws in Chapter 42-64.32 entitled "Air

Service Development Fund" is hereby amended to read as follows:

42-64.32-6. Sunset.

No grants, credits, or incentives shall be authorized or authorized to be reserved pursuant

to this chapter after June 30, December 31, 2020.

SECTION 22. Section 44-48.3-14 of the General Laws in Chapter 44-48.3 entitled "Rhode

Island New Qualified Jobs Incentive Act 2015" is hereby amended to read as follows:

44-48.3-14. Sunset.

No credits shall be authorized to be reserved pursuant to this chapter after June 30,

December 31, 2020.

SECTION 23. This article shall take effect upon passage.