Title 45
Towns and Cities

Chapter 33.2
Municipal Tax Increment Financing Act

§ 45-33.2-3. Definitions.

As used in §§ 45-33.2-3 through 45-33.2-21 in this chapter, excepting § 45-33.2-3.1, or as otherwise specified with respect to other sections, unless a different meaning clearly appears from the context, the following words have the following meanings:

(1) “Base date” means the last assessment date next preceding the adoption of the project plan.

(2) “Capital project” means a project to purchase, upgrade, improve, or extend the useful life of property infrastructure or equipment with a useful life of more than one year.

(3) “Project” means the undertaking of one or more of the following activities in accordance with a project plan:

(i) The acquisition of land and improvements on it, if any, within the project area, and the assembly and clearance of the land so acquired,

(ii) The development, redevelopment, revitalization, or conservation of the project area through the construction or rehabilitation of buildings or other improvements or through acquisition by gift, purchase, or eminent domain of land and any improvements of the area, and demolition, removal, or rehabilitation of those improvements, whenever these activities are necessary to provide land for and the development of needed municipal and other public facilities or industrial or commercial development or revitalization, or to eliminate unhealthful, unsanitary, or unsafe conditions or lessen density, mitigate or eliminate traffic congestion, reduce traffic hazards, eliminate obsolete or other uses detrimental to the public welfare or otherwise remove or prevent the spread of blight or deterioration,

(iii) The provision of grants, loans, security or other assistance from project revenues or other revenues and other funds in connection with (A) home and neighborhood improvement programs, (B) programs to acquire, renovate or transfer abandoned or fully or partially vacated houses, and (C) programs to acquire land, demolish buildings and other structures and clear and rehabilitate sites for the purpose of reducing building density or promoting new housing construction, or

(iv) The provision of grants, loans, security or other assistance from project revenues or other revenues and other funds to combat poverty, improve municipal and neighborhood living conditions and enhance educational and employment opportunities, including, without limiting the generality of the foregoing, by means of job training and retraining programs, literacy programs, apprenticeship programs, programs to provide postsecondary school educational grants or other assistance to students meeting eligibility criteria established in the project plan, programs to improve the performance of public schools, pilot projects to provide special or enhanced municipal services and commercial and industrial revitalization and development.

(v) A project may involve a combination of the previously mentioned activities. A project may include the provision of financial and other assistance in the relocation of persons and organizations displaced thereby, and the planning and construction, reconstruction, or rehabilitation of public facilities.

(4) “Project area” except as set forth in this subdivision, means all or any portion of a “redevelopment area,” as that term is defined in § 45-31-8(15), in which the project is to be carried out; provided, that the following projects are not required to be in a “redevelopment area”: (i) The acquisition and clearance of land and the construction on it of a municipal or other public facility under the definition of “project,” paragraphs (3)(i) or (3)(ii); or (ii) A project described in paragraphs (3)(iii) or (3)(iv) of the definition of “project.” The project area may consist of one or more parcels or lots of land, whether or not contiguous, or one or more buildings or structures, whether or not adjacent, on one or more parcels of land. The project area may, but need not, be within the tax increment area. All or any portion of a project area may be amended as provided in § 45-33.2-4. A project for which a designated beneficiary class or classes is established on the basis of income and/or some other generally applicable criteria in the project plan may have, but is not required to have, a project area.

(5)(i) “Project plan” means a plan, which, except as set forth in this subdivision, is part of a “redevelopment plan,” as that term is defined in § 45-31-8(16), adopted by a city or town in the manner provided in § 45-33.2-4, for a project, provided, that a project plan for the following projects is not required to be a part of a “redevelopment plan”: (A) the acquisition and clearance of land and the construction on it of a municipal or other public facility under paragraphs (3)(i) or (3)(ii) of the definition of “project”; or (B) a project under subdivision (2). The project plan shall present an estimate of project costs and the amounts and sources of funds to be used to defray those costs and shall include provisions for tax increment funding and/or financing of project costs in whole or in part. The tax increment financing provisions of the project plan shall state the estimated amount of indebtedness to be incurred pursuant to this chapter, an estimate of the tax increment to be generated as a result of the project, the method of calculating the tax increment, together with any provisions for adjustment of the method of calculation, and shall designate the board or officer of the city or town responsible for calculating the tax increment. Funds may be provided to carry out the plan from any lawful source, including the direct use of all or any portion of the tax increment therefore or the issuance of bonds under this chapter, but may not be provided by the issuance of general obligation bonds for any purpose for which general obligation bonds could not be issued in the absence of this chapter. The plan may include any other provisions that may be deemed necessary in order to carry out the tax increment funding and/or financing of the project. The project plan shall not be inconsistent with the comprehensive plan for the city or town as is then applicable, shall be sufficiently complete to indicate the nature of any designated beneficiary class, as described in this subdivision, the location and boundaries of any project area and of the tax increment area, and land acquisition, demolition, removal and rehabilitation of structures and development, redevelopment, and general public improvements that are proposed to be carried out within the project area, and to the extent applicable the plan shall indicate the proposed method for relocation of persons or organizations that may be displaced as a result of carrying out the project.

(ii) Once adopted by the legislative body of a city or town, a project plan may be amended to add additional projects, to increase the estimated amount of indebtedness to be incurred pursuant to this chapter or to amend all or any portion of a project area or the designation of a beneficiary class relating to any project contained in the project plan, in the manner provided in § 45-33.2-4. Each project contained in a project plan shall either have a project area designated in the project plan or there shall be established in the project plan a designated beneficiary class or classes (from whose members the actual beneficiaries shall be chosen) on the basis of income (with provision for revision of income limits due to inflation and other external economic factors) or some other generally applicable criteria; provided, that a project may have both a project area and a designated beneficiary class or classes.

(6) “Project revenues” means any receipts of a city or town with respect to a project or the tax increment area or tax increment district, as defined in § 45-33.2-3.1(11), relating to it including, without limiting the generality of the foregoing, tax increments, repayments of loans, including loans made under § 45-33.2-5(13), investment earnings, proceeds of insurance, or disposition of property, and proceeds of borrowing under this chapter.

(7) “Tax increment,” for the purposes of §§ 45-33.2-3 through 45-33.2-21, means the tax levied on the real and personal property situated in or otherwise assignable for the purposes of property taxation to a tax increment area, to the extent that the tax is attributable to an excess of the aggregate taxable valuation of the property over its aggregate taxable valuation as of the base date. The portion of the tax levy attributable to the increased valuation after the base date shall be calculated using the same classification factors as were used as of the base date, or without classification factors if property was not classified for tax purposes as of the base date. In calculating the tax increment there shall be excluded from the tax the portion levied for the purpose of paying the principal of or interest on bonds, notes, and other evidences of indebtedness which are general obligations of the city or town. Prior to the actual use of any portion of a tax increment to support or secure a project or portion of one, unused tax increment may be deposited upon receipt into the general fund of the city or town, to be used in accordance with generally applicable law. Once the city or town has used any portion of the tax increment to support or secure one or more projects or portions of them, only the excess of tax increment may be deposited into the general fund of the city or town, to be used in accordance with generally applicable law, after satisfaction of: (i) the payment of the principal of or interest on any special obligation bonds issued under the provisions of § 45-33.2-6, as principal and interest shall then be due and owing; (ii) any requirement to fund any reserve or other account or satisfy any other financial requirement which must be satisfied in connection with the issuance of bonds or any other indebtedness or obligation incurred in connection with any project or portion of one; and (iii) any payments made to directly fund any project or portion of one as provided in the project plan therefor.

(8) “Tax increment area” means a tax increment area designated in a project plan adopted pursuant to § 45-33.2-4. The tax increment area may consist of one or more parcels or lots of land, whether or not contiguous, on one or more buildings or structures, whether or not adjacent, or on one or more parcels of land; provided, that upon adoption of the project plan the aggregate taxable valuation of the property within all tax increment areas within the city or town does not exceed twenty-five percent (25%) of the taxable valuation of all property subject to taxation within the city or town.