It is enacted by the General Assembly as follows

SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property Subject to Taxation" is hereby amended to read as follows:

44-3-3. Property exempt. -- The following property shall be exempt from taxation:

(1) Property belonging to the state except as provided in section 44-4-4.1;

(2) Lands ceded or belonging to the United States;

(3) The bonds and other securities issued and exempted from taxation by the government of the United States, or of this state;

(4) Real estate, used exclusively for military purposes, owned by chartered or incorporated organizations approved by the adjutant general, and composed members of the national guard, the naval militia, or the independent chartered military organizations;

(5) Buildings for free public schools, buildings for religious worship, and the land upon which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so far as the buildings and land are occupied and used exclusively for religious or educational purposes;

(6) Dwelling houses and the land on which they stand, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling house is located, whichever is the greater, owned by or held in trust for any religious organization and actually used by its officiating clergymen, to an amount not exceeding one hundred fifty thousand dollars ($150,000) for each house and land so owned and used except in Bristol where the property described above shall be exempt to an amount not exceeding five hundred thousand dollars ($500,000) provided also, dwelling houses and the land on which they stand in Bristol, not exceeding one (1) acre in size, or the minimum lot size for zone in which the dwelling house is located, whichever is the greater, owned by or held in trust for any religious organization and actually used as a convent or nunnery by its religious order, to an amount not exceeding five hundred thousand dollars ($500,000) for each house and land so owned and used;

(7) The intangible personal property owned by, or held in trust for, any religious or charitable organization, if the principal or income shall be used or appropriated for religious or charitable purposes;

(8) The buildings and personal estate owned by any corporation used for a school, academy, or seminary of learning, and of any incorporated public charitable institution, and the land upon which the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far as they are used exclusively for educational purposes, but no property or estate whatever shall hereafter be exempt from taxation in any case where any part of the income or profits thereof or of the business carried on thereon is divided among its owners or stockholders;

(9) The estates, persons, and families of the president and professors for the time being of Brown University for not more than ten thousand dollars ($10,000) for each officer, his estate, person, and family included{ADD , but only to the extent that any person had claimed and utilized the exemption prior to, and for a period ending either on or after December 31, 1996 ADD} ;

(10) Property especially exempt by charter unless the exemption shall have been waived in whole or in part;

(11) Lots of land used exclusively for burial grounds;

(12) The property, real and personal, held for or by an incorporated library, society, or any free public library, or any free public library society, so far as the property shall be held exclusively for library purposes, or for the aid or support of the aged poor, or for the aid or support of poor friendless children, or for the aid or support of the poor generally, or for a hospital for the sick or disabled;

(13) The real or personal estate belonging to or held in trust for the benefit of incorporated organizations of veterans of any war in which the United States has been engaged, the parent body of which has been incorporated by act of congress, to the extent of two hundred and fifty thousand dollars ($250,000) if actually used and occupied by the association; provided, however, that the city council of the city of Cranston may by ordinance exempt the real or personal estate as described above located within the city of Cranston to the extent of five hundred thousand dollars ($500,000.);

(14) The property real and personal, held for or by the fraternal corporation, association, or body created to build and maintain a building or buildings for its meetings or the meetings of the general assembly of its members, or subordinate bodies of the fraternity, and for the accommodation of other fraternal bodies or associations, the entire net income of which real and personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or asylums, a home or homes, a school or schools, for the free education or relief of the members of the fraternity, or the relief, support and care of worthy and indigent members of the fraternity, their wives, widows, or orphans, and any fund given or held for the purpose of public education, almshouses, and the land and buildings used in connection therewith;

(15) The real estate and personal property of any incorporated volunteer fire engine company in active service;

(16) The estate of any person who in the judgment of the assessors is unable from infirmity or poverty to pay the tax; any person claiming the exemption aggrieved by an adverse decision of an assessor shall appeal the decision to the local board of tax review, and thereafter according to the provisions of section 44-5-26;

(17) The household furniture and family stores of a housekeeper in the whole, including clothing, bedding, and other white goods, books, and all other tangible personal property items which are common to the normal household;

(18) The improvements made to any real property to provide a shelter and fall-out protection from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500) thereof; provided, that the improvements meet applicable standards for shelter construction established from time to time by the Rhode Island defense civil preparedness agency. The improvements shall be deemed to comply with the provisions of any building code or ordinance with respect to the materials or the methods of construction used therein and any shelter or the establishment thereof shall be deemed to comply with the provisions of any zoning code or ordinance;

(19) Aircraft for which the fee required by section 1-4-2 of the general laws has been paid to the tax administrator;

(20) Manufacturer's inventory;

(i) For the purposes of sections 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be a manufacturer within a city or town within this state if that person uses any premises, room, or place therein 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, and ornamenting; provided, however, that public utilities, building and construction contractors, warehousing operations including distribution bases or outlets of out-of-state manufacturers, fabricating processes incidental to warehousing or distribution of raw materials such as alteration of stock for the convenience of a customer, shall be excluded from this definition.

(ii) For the purpose of sections 44-3-3, 44-4-10, and 44-5-38, the term "manufacturer's inventory" or any similar term shall mean and include his or her raw materials, his or her work in process, and finished products which have been manufactured by the manufacturer in this state, and not sold, leased, or traded by the manufacturer or the title or right to possession thereof otherwise divested, provided, however, that the term shall not include any finished products which are held by the manufacturer in any retail store or other similar selling place operated by the manufacturer whether or not the retail establishment is located in the same building in which the manufacturer operates his or her manufacturing plant.

(iii) For the purpose of section 44-11-2, a manufacturer is a person whose principal business in this state consists of transforming raw materials into a finished product for trade through any or all of the operations described in subdivision (a) of this subdivision. A person will be deemed to be thus principally engaged if the gross receipts which that person derived from the manufacturing operations in this state during the calendar year or fiscal year mentioned in section 44-11-1 amounted to more than fifty percent (50%) of the total gross receipts which that person derived from all his or her business activities in which that person engaged in this state during the taxable year. For the purpose of computing the percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished products manufactured by the manufacturer in this state, even though his or her store or other selling place therein may be at a different location from the location of his or her manufacturing plant in this state, shall be deemed to have been derived from manufacturing.

(iv) Within the meaning of the preceding paragraphs of this subdivision, the term "manufacturer" shall also include persons who are principally engaged in any of the general activities respectively coded and listed as establishments engaged in manufacturing in the standard industrial classification manual prepared by the technical committee on industrial classification, office of statistical standards, executive office of the president, United States bureau of the budget, as revised from time to time, but eliminating as manufacturers those persons, who, because of their limited type of manufacturing activities, are classified in the manual as falling within a trade rather than an industrial classification of manufacturers. Among those thus eliminated, and accordingly also excluded as manufacturers within the meaning of this subdivision, are persons primarily engaged in selling, to the general public, products produced on the premises from which they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and custom tailors, except, however, that a person who manufactures bakery products for sale primarily for home delivery, or through one or more nonbaking retail outlets, and whether or not retail outlets are operated by the person, shall be a manufacturer within the meaning of this subdivision.

(v) The term "person" shall mean and include, as appropriate, a person, partnership, or corporation.

(vi) The department of administration shall provide to the local assessors such assistance as is necessary in determining the proper application of the foregoing definitions.

(21) Real and tangible personal property acquired to provide a treatment facility used primarily to control the pollution or contamination of the waters or the air of the state, as defined in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed, reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or standards for the control of water or air pollution or contamination, and certified as approved in an order entered by the director of environmental management. The property shall be exempt as long as it is operated properly in compliance with the order of approval of the director of environmental management, provided further, that any grant of the exemption by the director of environmental management in excess of ten (10) years shall be approved by the city or town in which the property is situated. This provision shall apply only to water and air pollution control properties and facilities installed for the treatment of waste waters and air contaminants resulting from industrial processing; furthermore, it shall apply only to water or air pollution control properties and facilities placed in operation for the first time after April 13, 1970;

(22) New manufacturing machinery and equipment acquired or used by a manufacturer and purchased after December 31, 1974. Manufacturing machinery and equipment is defined:

(i) As that machinery and equipment which is used exclusively in the actual manufacture or conversion of raw materials or goods in the process of manufacture by a manufacturer as set forth in subdivision (20) of this section, and machinery, fixtures, and equipment used exclusively by a manufacturer for research and development or for quality assurance of its manufactured products; and

(ii) As that machinery and equipment which is partially used in the actual manufacture or conversion of raw materials or goods in process of manufacture by a manufacturer as set forth in subdivision (20) of this section, and machinery, fixtures, and equipment used by a manufacturer for research and development or for quality assurance of its manufactured products, to the extent to which the machinery and equipment is used for the manufacturing processes, research, and development or quality assurance. In the instances where machinery and equipment is used in both manufacturing and/or research, and development, and/or quality assurance activities and nonmanufacturing activities, the assessment on machinery and equipment shall be prorated by applying the percentage of usage of the equipment for the manufacturing, research, and development and quality assurance activity to the value of the machinery and equipment for purposes of taxation, and the portion of the value used for manufacturing, research, and development, and quality assurance shall be exempt from taxation. The burden of demonstrating this percentage usage of machinery and equipment for manufacturing and for research, and development, and/or quality assurance of its manufactured products shall rest with manufacturer ; and

(iii) As that machinery and equipment described in sections 44-18-30(7) and 44-18-30(22) that was purchased after July 1, 1997 , provided that, the city council or the town council of the city or town in which such machinery and equipment is located adopts an ordinance exempting such machinery and equipment from taxation. For purposes of this subsection, city councils and town councils of any municipality may by ordinance wholly or partially exempt from taxation the machinery and equipment discussed in this subsection for the period of time set forth in such ordinance and may by ordinance establish the procedures for taxpayers to avail themselves of the benefit of any exemption permitted hereunder. Provided, however, that the ordinance shall not apply to any machinery or equipment of a business, subsidiary or any affiliated business which locates or relocates from a city or town in Rhode Island to another city or town in Rhode Island."

(23) Precious metal bullion, meaning thereby any elementary metal which has been put through a process of melting or refining, and which is in such state or condition that its value depends upon its content and not upon its form. The term does not include fabricated precious metal which has been processed or manufactured for some one or more specific and customary industrial, professional, or artistic uses;

(24) Hydroelectric power generation equipment, which includes but is not limited to, turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers, protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The hydroelectric power generation equipment must have been purchased after July 1, 1979 and acquired or used by a person or corporation who owns or leases a dam and utilizes the equipment to generate hydroelectric power;

(25) Subject to authorization by formal action of the council of any city or town, any real or personal property owned by, held in trust for, or leased to an organization incorporated under chapter 6 of title 7, as amended, or an organization meeting the definition of "charitable trust" set out in section 18-9-4, as amended, or an organization incorporated under the not for profits statutes of another state or the District of Columbia, the purpose of which is the conserving of open space, as that term is defined in title 45, chapter 36, as amended, provided the property is used exclusively for the purposes of the organization;

(26) Tangible personal property, the primary function of which is the recycling, reuse, or recovery of materials (other than precious metals, as defined in section 44-18-30 (Y) (1)) from or the treatment of "hazardous wastes", as defined in section 23-19.1-4, where the "hazardous wastes" are generated primarily by the same taxpayer and where the personal property is located at, in, or adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order from the director of the department of environmental management certifying that the tangible personal property has this function, which order shall effect a conclusive presumption that the tangible personal property qualifies for the exemption hereunder. If any information relating to secret processes or methods of manufacture, production, or treatment is disclosed to the department of environmental management only to procure an order and is a "trade secret" as defined in section 28-21-10(b), it shall not be open to public inspection or publicly disclosed unless disclosure is otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23.

(27) Motorboats as defined in section 46-22-2 for which the annual fee required in section 46-22-4 has been paid.

(28) The real and personal property of Providence Performing Arts Center, a Rhode Island non-business corporation as of December 31, 1986.

(29) The tangible personal property owned by, and used exclusively for the purposes of, any religious organization in the city of Cranston.

SECTION 2. This act shall take effect upon passage.