§ 42-64.11-2. Definitions.
As used in this chapter, unless the context clearly indicates otherwise:
(a) “Average annual current employment” means, for any test period, the average daily number of full-time equivalent active employees employed within the state by an eligible company and its affiliated entities.
(b) “Affiliated entity” of an eligible company means any partnership, limited liability company, trust or corporation having employees in the state: (i) if the eligible corporation owns at least fifty percent (50%) of the value of the ownership interests therein; (ii) that owns at least fifty percent (50%) of the value of the interests in the eligible company; or (iii) that is under common ownership (at the fifty percent (50%) level) with the eligible company. For this purpose, direct, indirect, beneficial or constructive ownership shall be considered ownership.
(c) “Average compensation of all employees in the state” for any test period means the sum of the average quarter wages for total private and government as published by the labor market information division of the department of labor and training for the four (4) quarters ending with the second quarter of the calendar year ending one year before the end of the test period.
(d) “Base employment” means the average daily number of full-time active employees employed within the state by an eligible company and its affiliated entities for the calendar year preceding the calendar year in which the eligible company makes an initial application to be a certified company as provided in § 42-64.11-3.
(e) “Certified company” means a provisionally-certified company or a fully certified company.
(f) “Compensation” means any income, capital gain or preference items realized by an employee in connection with the employee’s service for an eligible company or affiliated entity provided that such compensation would (but for the modification provided by § 42-64.11-4) be includible in gross income or alternative minimum income for purposes of the Rhode Island personal income tax.
(g) “Credit year” means any calendar year for which an eligible company has been certified under § 42-64.11-3.
(h) “De minimis services” means services performed by an employee in the state which does not aggregate more than two percent (2%) of the total services (based on hours or days of employment) performed by the employee for an eligible company and all of its affiliated entities during a calendar year or shorter relevant period.
(i) “Eligible company” means any corporation, state bank, federal savings bank, trust company, national banking association, bank holding company, loan and investment company, mutual savings bank, credit union, building and loan association, insurance company, investment company, broker-dealer company, manufacturing company, telecommunications company or surety company or an affiliated entity of any of the foregoing. An eligible company does not have to be in existence, be qualified to do business in the state or have any employees in this state at the time its base employment is determined.
(j) “Eligible employee” means any full-time active employee having compensation at least equal to one hundred twenty-five percent (125%) of the average compensation of all employees in the state first performing services in the state for an eligible company or an affiliate entity after the date the eligible company files its initial application for certification; provided, however, that for any eligible company filing its initial application in 2005, “eligible employee” means any full-time active employee having compensation at least equal to one hundred-twenty five percent (125%) of the average compensation of all employees in the state first performing services in the state after June 1, 2005. An employee shall be considered as first performing services in the state on a date but only if the employee performs services in the state on such date, but did not previously during that calendar year or the immediately preceding calendar-year perform services (other than de minimis services) in the state as an employee of the eligible company or any affiliated entity. A fully certified company may elect to treat as eligible employees all employees in the state without regard to the date they first performed services in the state.
(k) “Full-time active employee” means any employee of an eligible company or an affiliate entity who works a minimum of thirty (30) hours per week within the state, with benefits typical to the industry of the employer.
(l) “Fully-certified company” means an eligible company that has been certified by the Rhode Island economic development corporation as meeting the criteria set forth in subsection 42-64.11-3(e) for not less than three (3) consecutive years.
(m) “New employment” for each test period (for an eligible company seeking qualification as a provisionally-certified company) or credit year (for a fully-certified company) means the amount of average annual current employment for the test period or credit year (as the case may be) minus the amount of base employment, but in no event less than zero; provided, however, no eligible company is permitted to transfer, assign or hire employees who are already employed within the state by such eligible company from itself or any affiliated entity or utilize any other artifice or device for the purpose of artificially creating eligible employees in order to become a certified company.
(n) “New employment payroll” means the total compensation paid by an employer that is a certified company and its affiliated entities times a fraction, the numerator of which is its new employment and the denominator is its total number of full-time active employees.
(o) “Performance-based compensation” means any compensation paid by a certified company to an eligible employee in consideration of the achievement of individual or company performance-based goals, including, for example, but without limitation, bonuses, and income derived from employer-granted stock options. Performance-based compensation does not include regular fixed periodic compensation, overtime pay, and fringe benefits (including distributions from qualified retirement plans) or other compensation paid on the basis of time or longevity and without regard to goal-based performance.
(p) “Provisionally-certified company” means any company that has been certified under § 42-64.11-3 for fewer than three (3) consecutive years.
(q) “State” means the State of Rhode Island.
(r) “Test period” means, at the election of an eligible company as indicated in an updated application under subsection 42-64.11-3(b), either the calendar-year period last ending before the filing of that updated application or the two (2) calendar-year period last ending before the filing of that updated application.
History of Section.
P.L. 2005, ch. 53, § 1; P.L. 2005, ch. 54, § 1.