Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0940 Compare Versions

Only one version of the bill is available at this time.

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5	5	2025 -- S 0940
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7	7	LC001980
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO TAXATION -- HISTORIC PRESERVATION TAX CREDITS 2013
16	16	Introduced By: Senators Bissaillon, Lawson, Tikoian, DiPalma, Ciccone, Thompson,
17	17	Britto, Patalano, Urso, and Dimitri
18	18	Date Introduced: April 04, 2025
19	19	Referred To: Senate Finance
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Sections 44-33.6-2, 44-33.6-3, 44-33.6-4, 44-33.6-9 and 44-33.6-11 of the 1
24	24	General Laws in Chapter 44-33.6 entitled "Historic Preservation Tax Credits 2013" are hereby 2
25	25	amended to read as follows: 3
26	26	44-33.6-2. Definitions. 4
27	27	As used in this chapter: 5
28	28	(1) “Certified historic structure” means a property which is located in the state of Rhode 6
29	29	Island and is: 7
30	30	(i) Listed individually on the national register of historic places; or 8
31	31	(ii) Listed individually in the state register of historic places; or 9
32	32	(iii) Located in a registered historic district and certified by either the commission or 10
33	33	Secretary of the Interior as being of historic significance to the district. 11
34	34	(2) “Certified rehabilitation” means any rehabilitation of a certified historic structure 12
35	35	consistent with the historic character of such property or the district in which the property is located 13
36	36	as determined by the commission guidelines. 14
37	37	(3) “Commission” means the Rhode Island historical preservation and heritage commission 15
38	38	created pursuant to § 42-45-2. 16
39	39	(4) “Construction worker” means any laborer, mechanic, or machine operator employed 17
40	40	by a contractor or subcontractor in connection with the construction, alteration, repair, demolition, 18
41	41	reconstruction, or other improvements to real property. 19
42	42
43	43
44	44	LC001980 - Page 2 of 16
45	45	(5) “Exempt from real property tax” means, with respect to any certified historic structure, 1
46	46	that the structure is exempt from taxation pursuant to § 44-3-3. 2
47	47	(6) “Hard construction costs” means the direct contractor costs for labor, material, 3
48	48	equipment, and services associated with an approved project, contractor’s overhead and profit, and 4
49	49	other direct construction costs. 5
50	50	(7) “Holding period” means twenty-four (24) months after the commission issues a 6
51	51	certificate of completed work to the owner. In the case of a rehabilitation which may reasonably be 7
52	52	expected to be completed in phases as described in subdivision (15) of this section, “holding 8
53	53	period” shall be extended to include a period of time beginning on the date of issuance of a 9
54	54	certificate of completed work for the first phase or phases for which a certificate of completed work 10
55	55	is issued and continuing until the expiration of twenty-four (24) months after the certificate of 11
56	56	completed work issued for the last phase. 12
57	57	(8) “Part 2 application” means the Historic Preservation Certification Application Part 2—13
58	58	Description of Rehabilitation. 14
59	59	(9) “Placed in service” means that substantial rehabilitation work has been completed 15
60	60	which would allow for occupancy of the entire structure or some identifiable portion of the 16
61	61	structure, as established in the Part 2 application. 17
62	62	(10) “Principal residence” means the principal residence of the owner within the meaning 18
63	63	of section 121 of the Internal Revenue Code [26 U.S.C. § 121] or any successor provision. 19
64	64	(11) “Qualified rehabilitation expenditures” means any amounts the amounts applied for 20
65	65	and presented to the division of taxation in the cost certification prepared by an independent 21
66	66	certified public accountant for calculation of allowable tax credits under this chapter based on the 22
67	67	formula set forth herein, which amounts were expended in the rehabilitation of a certified historic 23
68	68	structure properly capitalized to the building and either: 24
69	69	(i) Depreciable under the Internal Revenue Code, 26 U.S.C. § 1 et seq.; or 25
70	70	(ii) Made with respect to property (other than the principal residence of the owner) held for 26
71	71	sale by the owner. Fees paid pursuant to this chapter are not qualified rehabilitation expenditures. 27
72	72	Notwithstanding the foregoing, except in the case of a nonprofit corporation, there will be deducted 28
73	73	from qualified rehabilitation expenditures for the purposes of calculating the tax credit any funds 29
74	74	made available to the person (including any entity specified in § 44-33.5-3(a)) incurring the 30
75	75	qualified rehabilitation expenditures in the form of a direct grant from a federal, state, or local 31
76	76	governmental entity or agency or instrumentality of government. 32
77	77	(12) “Registered historic district” means any district listed in the National Register of 33
78	78	Historic Places or the state register of historic places. 34
79	79
80	80
81	81	LC001980 - Page 3 of 16
82	82	(13) “Remain idle” means that substantial work has ceased at the subject project; work 1
83	83	crews have been reduced by more than twenty-five percent (25%) for reasons unrelated to 2
84	84	scheduled completion of work in accordance with the project schedule, reasonably unanticipated 3
85	85	physical conditions, or force majeure; or the project schedule that was originally submitted by the 4
86	86	taxpayer to the commission has been extended by more than twelve (12) months for reasons other 5
87	87	than reasonably unanticipated physical conditions or an event of force majeure (by way of example, 6
88	88	and not in limitation, any delays, work stoppage, or workforce reduction caused by issues with 7
89	89	project funding, finances, disputes, or violation of laws shall be deemed to cause a project to remain 8
90	90	idle). 9
91	91	(14) “Scattered site development” means a development project for which the developer 10
92	92	seeks unified financing to rehabilitate dwelling units in two (2) or more buildings located in an area 11
93	93	that is defined by a neighborhood revitalization plan and is not more than one mile in diameter. 12
94	94	(15) “Social club” means a corporation or other entity and/or its affiliate that offers its 13
95	95	facilities primarily to members for social or recreational purposes and the majority source of its 14
96	96	revenue is from funds and/or dues paid by its members and/or an entity defined as a social club 15
97	97	pursuant to the Internal Revenue Code section 501(c)(7). 16
98	98	(16) “Substantial construction” means that: (i) The owner of a certified historic structure 17
99	99	has entered into a contract with the division of taxation and paid the processing fee; (ii) The 18
100	100	commission has certified that the certified historic structure’s rehabilitation will be consistent with 19
101	101	the standards set forth in this chapter; and (iii) The owner has expended ten percent (10%) of its 20
102	102	qualified rehabilitation expenditures, estimated in the contract entered into with the division of 21
103	103	taxation for the project or its first phase of a phased project. 22
104	104	(17) “Substantial rehabilitation” means, with respect to a certified historic structure, that 23
105	105	the qualified rehabilitation expenses of the building during the twenty-four-month (24) period 24
106	106	selected by the taxpayer ending with or within the taxable year exceed the adjusted basis in such 25
107	107	building and its structural components as of the beginning of such period. In the case of any 26
108	108	rehabilitation, which may reasonably be expected to be completed in phases set forth in 27
109	109	architectural plans and specifications completed before the rehabilitation begins, the above 28
110	110	definition shall be applied by substituting “sixty-month (60) period” for “twenty-four-month (24) 29
111	111	period.” 30
112	112	(18) “Trade or business” means an activity that is carried on for the production of income 31
113	113	from the sale or manufacture of goods or performance of services, excluding residential rental 32
114	114	activity. 33
115	115	44-33.6-3. Tax credit. 34
116	116
117	117
118	118	LC001980 - Page 4 of 16
119	119	(a) Subject to the maximum credit provisions set forth in subsections (c) and (d) below, 1
120	120	any person, firm, partnership, trust, estate, limited liability company, corporation (whether for 2
121	121	profit or nonprofit) or other business entity that incurs qualified rehabilitation expenditures for the 3
122	122	substantial rehabilitation of a certified historic structure, provided the rehabilitation meets standards 4
123	123	consistent with the standards of the Secretary of the United States Department of the Interior for 5
124	124	rehabilitation as certified by the commission and said person, firm, partnership, trust, estate, limited 6
125	125	liability company, corporation or other business entity is not a social club as defined in § 44-33.6-7
126	126	2, shall be entitled to a credit against the taxes imposed on such person or entity pursuant to chapter 8
127	127	11, 12, 13, 14, 17, or 30 of this title in an amount equal to the following: 9
128	128	(1) Twenty percent (20%) Thirty percent (30%) of the qualified rehabilitation expenditures 10
129	129	provided that at least eighty percent (80%) of the total rental area of the certified historic structure 11
130	130	will be made available for multi-family housing; or 12
131	131	(2) Twenty-five percent (25%) of the qualified rehabilitation expenditures provided that 13
132	132	either for all other projects: 14
133	133	(i) At least twenty-five percent (25%) of the total rentable area of the certified historic 15
134	134	structure will be made available for a trade or business; or 16
135	135	(ii) The entire rentable area located on the first floor of the certified historic structure will 17
136	136	be made available for a trade or business. 18
137	137	(b) Tax credits allowed pursuant to this chapter shall be allowed for the taxable year in 19
138	138	which such certified historic structure or an identifiable portion of the structure is placed in service 20
139	139	provided that the substantial rehabilitation test is met for such year. 21
140	140	(c) Maximum project credit. The credit allowed pursuant to this chapter shall not exceed 22
141	141	five million dollars ($5,000,000) eight million dollars ($8,000,000) for any certified rehabilitation 23
142	142	project under this chapter. No building to be completed in phases or in multiple projects shall 24
143	143	exceed the maximum project credit of five million dollars ($5,000,000) eight million dollars 25
144	144	($8,000,000) for all phases or projects involved in the rehabilitation of such building. 26
145	145	(d) Maximum aggregate credits. The aggregate credits authorized to be reserved pursuant 27
146	146	to this chapter shall not exceed sums estimated to be available in the historic preservation tax credit 28
147	147	trust fund pursuant to this chapter. 29
148	148	(e) Subject to the exception provided in subsection (g) of this section, if the amount of the 30
149	149	tax credit exceeds the taxpayer’s total tax liability for the year in which the substantially 31
150	150	rehabilitated property is placed in service, the amount that exceeds the taxpayer’s tax liability may 32
151	151	be carried forward for credit against the taxes imposed for the succeeding ten (10) years, or until 33
152	152	the full credit is used, whichever occurs first for the tax credits. Credits allowed to a partnership, a 34
153	153
154	154
155	155	LC001980 - Page 5 of 16
156	156	limited liability company taxed as a partnership, or multiple owners of property shall be passed 1
157	157	through to the persons designated as partners, members, or owners respectively pro rata or pursuant 2
158	158	to an executed agreement among such persons designated as partners, members, or owners 3
159	159	documenting an alternate distribution method without regard to their sharing of other tax or 4
160	160	economic attributes of such entity. Credits may be allocated to partners, members, or owners that 5
161	161	are exempt from taxation under section 501(c)(3), section (c)(4) or section 501(c)(6) of the U.S. 6
162	162	Code and these partners, members, or owners must be treated as taxpayers for purposes of this 7
163	163	section. 8
164	164	(f) If the taxpayer person, firm, partnership, trust, estate, limited liability company, 9
165	165	corporation (whether for profit or nonprofit) or other business entity that incurs qualified 10
166	166	rehabilitation expenditures for the substantial rehabilitation of a certified historic structure, or the 11
167	167	taxpayer that received an allocation of the tax credits, has not claimed the tax credits in whole or 12
168	168	part, taxpayers eligible for the tax credits such person or entity may assign, transfer, or convey the 13
169	169	credits, in whole or in part, by sale or otherwise to any individual or entity, including, but not 14
170	170	limited to, condominium owners in the event the certified historic structure is converted into 15
171	171	condominiums and assignees of the credits that have not claimed the tax credits in whole or part 16
172	172	may assign, transfer, or convey the credits, in whole or in part, by sale or otherwise to any individual 17
173	173	or entity. The assignee of the tax credits may use acquired credits to offset up to one hundred 18
174	174	percent (100%) of the tax liabilities otherwise imposed pursuant to chapter 11, 12, 13 (other than 19
175	175	the tax imposed under § 44-13-13), 14, 17, or 30 of this title. The assignee may apply the tax credit 20
176	176	against taxes imposed on the assignee until the end of the tenth calendar year after the year in which 21
177	177	the substantially rehabilitated property is placed in service or until the full credit assigned is used, 22
178	178	whichever occurs first. Fiscal year assignees may claim the credit until the expiration of the fiscal 23
179	179	year that ends within the tenth year after the year in which the substantially rehabilitated property 24
180	180	is placed in service. The assignor shall perfect the transfer by notifying the state of Rhode Island 25
181	181	division of taxation, in writing, within thirty (30) calendar days following the effective date of the 26
182	182	transfer and shall provide any information as may be required by the division of taxation to 27
183	183	administer and carry out the provisions of this section. 28
184	184	For purposes of this chapter, any assignment or sales proceeds received by the taxpayer for 29
185	185	its assignment or sale of the tax credits allowed pursuant to this section shall be exempt from this 30
186	186	title. If a tax credit is subsequently recaptured under this chapter, revoked, or adjusted, the seller’s 31
187	187	tax calculation for the year of revocation, recapture, or adjustment shall be increased by the total 32
188	188	amount of the sales proceeds, without proration, as a modification under chapter 30 of this title. In 33
189	189	the event that the seller is not a natural person, the seller’s tax calculation under chapter 11, 12, 13 34
190	190
191	191
192	192	LC001980 - Page 6 of 16
193	193	(other than with respect to the tax imposed under § 44-13-13), 14, 17, or 30 of this title, as 1
194	194	applicable, for the year of revocation, recapture, or adjustment, shall be increased by including the 2
195	195	total amount of the sales proceeds without proration. 3
196	196	(g) Credits allowed to partners, members, or owners that are exempt from taxation under 4
197	197	section 501(c)(3), section (c)(4) or section 501(c)(6) of the U.S. Code, and only said credits, shall 5
198	198	be fully refundable. 6
199	199	(h) Substantial rehabilitation of property that either: 7
200	200	(1) Is exempt from real property tax; 8
201	201	(2) Is a social club; or 9
202	202	(3) Consists of a single-family home or a property that contains less than three (3) 10
203	203	residential apartments or condominiums shall be ineligible for the tax credits authorized under this 11
204	204	chapter; provided, however, a scattered site development with five (5) or more residential units in 12
205	205	the aggregate (which may include single-family homes) shall be eligible for tax credit. In the event 13
206	206	a certified historic structure undergoes a substantial rehabilitation pursuant to this chapter and 14
207	207	within twenty-four (24) months after issuance of a certificate of completed work the property 15
208	208	becomes exempt from real property tax, the taxpayer’s tax for the year shall be increased by the 16
209	209	total amount of credit actually used against the tax. 17
210	210	(i) In the case of a corporation, this credit is only allowed against the tax of a corporation 18
211	211	included in a consolidated return that qualifies for the credit and not against the tax of other 19
212	212	corporations that may join in the filing of a consolidated tax return. 20
213	213	(j) For construction projects with a budget of direct hard costs in excess of ten million 21
214	214	dollars ($10,000,000) twenty million dollars ($20,000,000), all construction workers shall be paid 22
215	215	in accordance with the wages and benefits required pursuant to chapter 13 of title 37 and all 23
216	216	contractors and subcontractors shall file certified payrolls on a monthly basis for all work 24
217	217	completed in the preceding month on a uniform form prescribed by the director of labor and training 25
218	218	("prevailing wage requirements"). Failure to follow the prevailing wage requirements imposed 26
219	219	hereunder and pursuant to chapter 13 of title 37 shall constitute a material violation and a material 27
220	220	breach of the agreement with the state. The tax administrator, in consultation with the director of 28
221	221	labor and training, shall promulgate such rules and regulations as are necessary to implement the 29
222	222	enforcement of this subsection. 30
223	223	(k) No tax credits shall be awarded under this chapter unless the division of taxation 31
224	224	receives confirmation from the department of labor and training that there has been compliance 32
225	225	with the prevailing wage requirements set forth in subsection (j) of this section. Failure to follow 33
226	226	the prevailing wage requirements imposed hereunder and pursuant to chapter 13 of title 37 shall 34
227	227
228	228
229	229	LC001980 - Page 7 of 16
230	230	constitute a material violation and a material breach of the agreement with the state and shall require 1
231	231	the pending tax credits to be revoked. 2
232	232	44-33.6-4. Administration. 3
233	233	(a) To claim the tax credit authorized in this chapter, taxpayers shall apply: 4
234	234	(1) To the commission prior to the certified historic structure being placed in service for a 5
235	235	certification that the certified historic structure’s rehabilitation will be consistent with the standards 6
236	236	of the Secretary of the United States Department of the Interior for rehabilitation; 7
237	237	(2) To the commission after completion of the rehabilitation work of the certified historic 8
238	238	structure for a certification that the rehabilitation is consistent with the standards of the Secretary 9
239	239	of the United States Department of the Interior for rehabilitation; and 10
240	240	(3) To the division of taxation after completion of the rehabilitation work of the certified 11
241	241	historic structure for a certification as to the amount of tax credit for which the rehabilitation 12
242	242	qualifies. The commission and the division of taxation may rely on the facts represented in the 13
243	243	application without independent investigation and, with respect to the amount of tax credit for 14
244	244	which the rehabilitation qualifies, upon the certification of a certified public accountant licensed in 15
245	245	the state of Rhode Island. The applications shall be developed by the commission and the division 16
246	246	of taxation and may be amended from time to time. 17
247	247	(b) Within thirty (30) days after the commission’s and division of taxation’s receipt of the 18
248	248	taxpayer’s application requesting certification for the completed rehabilitation work: 19
249	249	(1) The commission shall issue the taxpayer a written determination either denying or 20
250	250	certifying the rehabilitation; and 21
251	251	(2) Division of taxation shall issue a certification of the amount of credit for which the 22
252	252	rehabilitation qualifies. To claim the tax credit, the division of taxation’s certification as to the 23
253	253	amount of the tax credit shall be attached to all state tax returns on which the credit is claimed. 24
254	254	(c) No taxpayer may benefit from the provisions of this chapter unless the owner of the 25
255	255	certified historic structure grants a restrictive covenant to the commission, agreeing that during the 26
256	256	holding period no material alterations to the certified historic structure will be made without the 27
257	257	commission’s prior approval and agreeing that such shall be done in a manner consistent with the 28
258	258	standards of the Secretary of the United States Department of the Interior; and, in the event the 29
259	259	owner applies for the twenty-five percent (25%) thirty percent (30%) tax credit, that either: 30
260	260	(1) At at least twenty-five percent (25%) thirty percent (30%) of the total rentable rental 31
261	261	area of the certified historic structure will be made available for a trade or business; or 32
262	262	(2) The entire rentable area located on the first floor of the certified historic structure will 33
263	263	be made available for a trade or business, in either case, for a period of sixty (60) months after the 34
264	264
265	265
266	266	LC001980 - Page 8 of 16
267	267	placed in service date of the certified historic structure or identifiable portion thereof multifamily 1
268	268	housing. 2
269	269	(d) The division of taxation shall charge a fee equal to three percent (3%) one percent (1%) 3
270	270	of qualified rehabilitation expenditures. The fee shall be payable upon submission of the Part 2 4
271	271	application. The fee shall be non-refundable refundable upon receipt of a certificate of occupancy 5
272	272	for the project. 6
273	273	(e) Notwithstanding any provisions of the general laws or regulations adopted thereunder 7
274	274	to the contrary, including, but not limited to, the provisions of chapter 2 of title 37, the division of 8
275	275	taxation is hereby expressly authorized and empowered to enter into contracts with persons, firms, 9
276	276	partnerships, trusts, estates, limited liability companies, corporations (whether for profit or 10
277	277	nonprofit) or other business entities that incur qualified rehabilitation expenditures for the 11
278	278	substantial rehabilitation of certified historic structures or some identifiable portion of a structure. 12
279	279	Upon payment of the portion of the fee set forth in subdivision (d) above, the division of taxation 13
280	280	and the applicant shall enter into a contract for tax credits consistent with the terms and provisions 14
281	281	of this chapter. 15
282	282	(f) Upon satisfaction of the requirements set forth herein and the payment of the fees as set 16
283	283	forth in subdivision (d) above, the division of taxation shall, on behalf of the State of Rhode Island, 17
284	284	guarantee the delivery of one hundred percent (100%) of the tax credit and use of one hundred 18
285	285	percent (100%) of the tax credit in the tax year a certified historic structure is placed in service 19
286	286	through a contract with persons, firms, partnerships, trusts, estates, limited liability companies, 20
287	287	corporations (whether for profit or nonprofit) or other business entities that will incur qualified 21
288	288	rehabilitation expenditures for the substantial rehabilitation of a certified historic structure or some 22
289	289	identifiable portion of a structure. 23
290	290	(g) Any contract executed pursuant to this chapter by a person, firm, partnership, trust, 24
291	291	estate, limited liability company, corporation (whether for profit or nonprofit) or other business 25
292	292	entity shall be assignable to: 26
293	293	(1) An affiliate thereof without any consent from the division of taxation; 27
294	294	(2) A banking institution as defined by § 44-14-2(2) or credit union as defined in § 44-15-28
295	295	1.1(1) without any consent from the division of taxation; or 29
296	296	(3) A person, firm, partnership, trust, estate, limited liability company, corporation 30
297	297	(whether for profit or nonprofit) or other business entity that incurs qualified rehabilitation 31
298	298	expenditures for the substantial rehabilitation of certified historic structures or some identifiable 32
299	299	portion of a structure, with such assignment to be approved by the division of taxation, which 33
300	300	approval shall not be unreasonably withheld or conditioned. For purposes of this subsection, 34
301	301
302	302
303	303	LC001980 - Page 9 of 16
304	304	“affiliate” shall be defined as any entity controlling, controlled by or under common control with 1
305	305	such person, firm, partnership, trust, estate, limited liability company, corporation (whether for 2
306	306	profit or nonprofit) or other business entity. 3
307	307	(h) If information comes to the attention of the commission or division of taxation at any 4
308	308	time up to and including the last day of the holding period that is materially inconsistent with 5
309	309	representations made in an application, the commission may deny the requested certification or 6
310	310	revoke a certification previously given, and in either instance all fees paid by the applicant shall be 7
311	311	deemed forfeited. In the event that tax credits or a portion of tax credits are subject to recapture for 8
312	312	ineligible costs and such tax credits have been transferred, assigned and/or allocated, the state will 9
313	313	pursue its recapture remedies and rights against the applicant of the tax credits, and all fees paid by 10
314	314	the applicant shall be deemed forfeited. No redress shall be sought against assignees, transferees or 11
315	315	allocates of such credits provided they acquired the tax credits by way of an arms-length 12
316	316	transaction, for value, and without notice of violation, fraud or misrepresentation. 13
317	317	(i) The commission, in consultation with the division of taxation, shall promulgate such 14
318	318	rules and regulations as are necessary to carry out the intent and purpose of this chapter. 15
319	319	44-33.6-9. Reporting requirements. 16
320	320	(a) Each taxpayer requesting certification of a completed rehabilitation shall report to the 17
321	321	commission and the division of taxation the following information: 18
322	322	(1) The number of total jobs created; 19
323	323	(2) The number of Rhode Island businesses retained for work; 20
324	324	(3) The total amount of qualified rehabilitation expenditures upon which tax credits were 21
325	325	calculated and awarded; 22
326	326	(4) The total cost of materials or products purchased from Rhode Island businesses; 23
327	327	(5) Such other information deemed necessary by the tax administrator. 24
328	328	(b) Any agreements or contracts entered into under this chapter by the division, the 25
329	329	commission, or the commerce corporation and the taxpayer shall be sent to the division of taxation 26
330	330	and be available to the public for inspection by any person and shall be published by the tax 27
331	331	administrator on the tax division website. 28
332	332	(c) By August 15th of each year the division of taxation shall report the name, address, and 29
333	333	amount of tax credit received for each credit recipient during the previous state fiscal year to the 30
334	334	governor, the chairpersons of the house and senate finance committees, the house and senate fiscal 31
335	335	advisors, and the department of labor and training. This report shall be available to the public for 32
336	336	inspection by any person and shall be published by the tax administrator on the tax division website. 33
337	337	(d) By September 1st of each year the division of taxation shall report in the aggregate the 34
338	338
339	339
340	340	LC001980 - Page 10 of 16
341	341	information required under subsection (a) of this section. This report shall be available to the public 1
342	342	for inspection by any person and shall be published by the tax administrator on the tax division 2
343	343	website. 3
344	344	(e) By September 1, 2018, and biennially thereafter the division of taxation shall report in 4
345	345	the aggregate the total number of approved projects, project costs, and associated amount of 5
346	346	approved tax credits. 6
347	347	(f) By September 1 of each year the division of taxation shall report on: 7
348	348	(1) The projects that have received conditional awards of tax credits from the queue, for 8
349	349	which the owner of a certified historic structure has entered into a contract with the division of 9
350	350	taxation and paid the processing fee, with such information to include the project owner name, 10
351	351	property address, amount of reserved award and queue number; and 11
352	352	(2) The applicants in queue, with such information to include the project owner name, 12
353	353	property address, amount of requested award and queue number. Any applicant that refuses the 13
354	354	tax credit award or fails to meet the requirements to preserve the award shall be removed from the 14
355	355	report. This report shall be available to the public for inspection by any person and shall be 15
356	356	published by the tax administrator on the tax division website. 16
357	357	(g) No tax credits shall be awarded under this chapter until the department of labor and 17
358	358	training certifies that the project is in compliance with the prevailing wage requirements set forth 18
359	359	in this chapter. 19
360	360	44-33.6-11. Sunset. 20
361	361	No credits shall be authorized to be reserved pursuant to this chapter on or after June 30, 21
362	362	2026 2030, or upon the exhaustion of the maximum aggregate credits, whichever comes first. 22
363	363	SECTION 2. Section 42-64.20-5 of the General Laws in Chapter 42-64.20 entitled 23
364	364	"Rebuild Rhode Island Tax Credit" is hereby amended to read as follows: 24
365	365	42-64.20-5. Tax credits. 25
366	366	(a) An applicant meeting the requirements of this chapter may be allowed a credit as set 26
367	367	forth hereinafter against taxes imposed upon such person under applicable provisions of title 44 of 27
368	368	the general laws for a qualified development project. 28
369	369	(b) To be eligible as a qualified development project entitled to tax credits, an applicant’s 29
370	370	chief executive officer or equivalent officer shall demonstrate to the commerce corporation, at the 30
371	371	time of application, that: 31
372	372	(1) The applicant has committed a capital investment or owner equity of not less than 32
373	373	twenty percent (20%) of the total project cost; 33
374	374	(2) There is a project financing gap in which after taking into account all available private 34
375	375
376	376
377	377	LC001980 - Page 11 of 16
378	378	and public funding sources, the project is not likely to be accomplished by private enterprise 1
379	379	without the tax credits described in this chapter; and 2
380	380	(3) The project fulfills the state’s policy and planning objectives and priorities in that: 3
381	381	(i) The applicant will, at the discretion of the commerce corporation, obtain a tax 4
382	382	stabilization agreement from the municipality in which the real estate project is located on such 5
383	383	terms as the commerce corporation deems acceptable; 6
384	384	(ii) It (A) Is a commercial development consisting of at least 25,000 square feet occupied 7
385	385	by at least one business employing at least 25 full-time employees after construction or such 8
386	386	additional full-time employees as the commerce corporation may determine; (B) Is a multi-family 9
387	387	residential development in a new, adaptive reuse, certified historic structure, or recognized 10
388	388	historical structure consisting of at least 20,000 square feet and having at least 20 residential units 11
389	389	in a hope community; or (C) Is a mixed-use development in a new, adaptive reuse, certified historic 12
390	390	structure, or recognized historical structure consisting of at least 25,000 square feet occupied by at 13
391	391	least one business, subject to further definition through rules and regulations promulgated by the 14
392	392	commerce corporation; and 15
393	393	(iii) Involves a total project cost of not less than $5,000,000, except for a qualified 16
394	394	development project located in a hope community or redevelopment area designated under § 45-17
395	395	32-4 in which event the commerce corporation shall have the discretion to modify the minimum 18
396	396	project cost requirement. 19
397	397	(4) For construction projects with a budget of direct hard costs in excess of twenty million 20
398	398	dollars ($20,000,000), as set forth in the incentive agreement, all construction workers shall be paid 21
399	399	in accordance with the wages and benefits required pursuant to chapter 13 of title 37 with all 22
400	400	contractors and subcontractors required to file certified payrolls on a monthly basis for all work 23
401	401	completed in the preceding month on a uniform form prescribed by the director of labor and training 24
402	402	(“prevailing wage requirements”). Failure to follow the prevailing wage requirements imposed 25
403	403	hereunder and pursuant to chapter 13 of title 37 shall constitute a material violation and a material 26
404	404	breach of the agreement with the state and shall require any pending tax credits to be revoked. 27
405	405	(c) The commerce corporation shall develop separate, streamlined application processes 28
406	406	for the issuance of rebuild RI tax credits for each of the following: 29
407	407	(1) Qualified development projects that involve certified historic structures; 30
408	408	(2) Qualified development projects that involve recognized historical structures; 31
409	409	(3) Qualified development projects that involve at least one manufacturer; and 32
410	410	(4) Qualified development projects that include affordable housing or workforce housing. 33
411	411	(d) Applications made for a historic structure or recognized historic structure tax credit 34
412	412
413	413
414	414	LC001980 - Page 12 of 16
415	415	under chapter 33.6 of title 44 shall be considered for tax credits under this chapter. The division of 1
416	416	taxation, at the expense of the commerce corporation, shall provide communications from the 2
417	417	commerce corporation to those who have applied for and are in the queue awaiting the offer of tax 3
418	418	credits pursuant to chapter 33.6 of title 44 regarding their potential eligibility for the rebuild RI tax 4
419	419	credit program. 5
420	420	(e) Applicants (1) Who have received the notice referenced in subsection (d) above and 6
421	421	who may be eligible for a tax credit pursuant to chapter 33.6 of title 44; (2) Whose application 7
422	422	involves a certified historic structure or recognized historical structure; or (3) Whose project is 8
423	423	occupied by at least one manufacturer shall be exempt from the requirements of subsections 9
424	424	(b)(3)(ii) and (b)(3)(iii). The following procedure shall apply to such applicants: 10
425	425	(i) The division of taxation shall remain responsible for determining the eligibility of an 11
426	426	applicant for tax credits awarded under chapter 33.6 of title 44; 12
427	427	(ii) The commerce corporation shall retain sole authority for determining the eligibility of 13
428	428	an applicant for tax credits awarded under this chapter; and 14
429	429	(iii) The commerce corporation shall not award in excess of fifteen percent (15%) of the 15
430	430	annual amount authorized in any fiscal year to applicants seeking tax credits pursuant to this 16
431	431	subsection (e).; and 17
432	432	(iv) No tax credits shall be awarded under this chapter unless the commerce corporation 18
433	433	receives confirmation from the department of labor and training that there has been compliance 19
434	434	with the prevailing wage requirements set forth in subsection (b)(4) of this section. 20
435	435	(f) Maximum project credit. 21
436	436	(1) For qualified development projects, the maximum tax credit allowed under this chapter 22
437	437	shall be the lesser of (i) Thirty percent (30%) of the total project cost; or (ii) The amount needed to 23
438	438	close a project financing gap (after taking into account all other private and public funding sources 24
439	439	available to the project), as determined by the commerce corporation. 25
440	440	(2) The credit allowed pursuant to this chapter, inclusive of any sales and use tax 26
441	441	exemptions allowed pursuant to this chapter, shall not exceed fifteen million dollars ($15,000,000) 27
442	442	for any qualified development project under this chapter; except as provided in subsection (f)(3) of 28
443	443	this section; provided however, any qualified development project that exceeds the project cap upon 29
444	444	passage of this act shall be deemed not to exceed the cap, shall not be reduced, nor shall it be further 30
445	445	increased. No building or qualified development project to be completed in phases or in multiple 31
446	446	projects shall exceed the maximum project credit of fifteen million dollars ($15,000,000) for all 32
447	447	phases or projects involved in the rehabilitation of the building. Provided, however, that for 33
448	448	purposes of this subsection and no more than once in a given fiscal year, the commerce corporation 34
449	449
450	450
451	451	LC001980 - Page 13 of 16
452	452	may consider the development of land and buildings by a developer on the “I-195 land” as defined 1
453	453	in § 42-64.24-3(6) as a separate, qualified development project from a qualified development 2
454	454	project by a tenant or owner of a commercial condominium or similar legal interest including 3
455	455	leasehold improvement, fit out, and capital investment. Such qualified development project by a 4
456	456	tenant or owner of a commercial condominium or similar legal interest on the I-195 land may be 5
457	457	exempted from subsection (f)(1)(i) of this section. 6
458	458	(3) The credit allowed pursuant to this chapter, inclusive of any sales and use tax 7
459	459	exemptions allowed pursuant to this chapter, shall not exceed twenty-five million dollars 8
460	460	($25,000,000) for the project for which the I-195 redevelopment district was authorized to enter 9
461	461	into a purchase and sale agreement for parcels 42 and P4 on December 19, 2018, provided that 10
462	462	project is approved for credits pursuant to this chapter by the commerce corporation. 11
463	463	(g) Credits available under this chapter shall not exceed twenty percent (20%) of the project 12
464	464	cost, provided, however, that the applicant shall be eligible for additional tax credits of not more 13
465	465	than ten percent (10%) of the project cost, if the qualified development project meets any of the 14
466	466	following criteria or other additional criteria determined by the commerce corporation from time 15
467	467	to time in response to evolving economic or market conditions: 16
468	468	(1) The project includes adaptive reuse or development of a recognized historical structure; 17
469	469	(2) The project is undertaken by or for a targeted industry; 18
470	470	(3) The project is located in a transit-oriented development area; 19
471	471	(4) The project includes residential development of which at least twenty percent (20%) of 20
472	472	the residential units are designated as affordable housing or workforce housing; 21
473	473	(5) The project includes the adaptive reuse of property subject to the requirements of the 22
474	474	industrial property remediation and reuse act, § 23-19.14-1 et seq.; or 23
475	475	(6) The project includes commercial facilities constructed in accordance with the minimum 24
476	476	environmental and sustainability standards, as certified by the commerce corporation pursuant to 25
477	477	Leadership in Energy and Environmental Design or other equivalent standards. 26
478	478	(h) Maximum aggregate credits. The aggregate sum authorized pursuant to this chapter, 27
479	479	inclusive of any sales and use tax exemptions allowed pursuant to this chapter, shall not exceed 28
480	480	two hundred twenty-five million dollars ($225,000,000), excluding any tax credits allowed 29
481	481	pursuant to subsection (f)(3) of this section. 30
482	482	(i) Tax credits shall not be allowed under this chapter prior to the taxable year in which the 31
483	483	project is placed in service. 32
484	484	(j) The amount of a tax credit allowed under this chapter shall be allowable to the taxpayer 33
485	485	in up to five, annual increments; no more than thirty percent (30%) and no less than fifteen percent 34
486	486
487	487
488	488	LC001980 - Page 14 of 16
489	489	(15%) of the total credits allowed to a taxpayer under this chapter may be allowable for any taxable 1
490	490	year. 2
491	491	(k) If the portion of the tax credit allowed under this chapter exceeds the taxpayer’s total 3
492	492	tax liability for the year in which the relevant portion of the credit is allowed, the amount that 4
493	493	exceeds the taxpayer’s tax liability may be carried forward for credit against the taxes imposed for 5
494	494	the succeeding four (4) years, or until the full credit is used, whichever occurs first. Credits allowed 6
495	495	to a partnership, a limited liability company taxed as a partnership, or multiple owners of property 7
496	496	shall be passed through to the persons designated as partners, members, or owners respectively pro 8
497	497	rata or pursuant to an executed agreement among persons designated as partners, members, or 9
498	498	owners documenting an alternate distribution method without regard to their sharing of other tax 10
499	499	or economic attributes of such entity. 11
500	500	(l) The commerce corporation, in consultation with the division of taxation, shall establish, 12
501	501	by regulation, the process for the assignment, transfer, or conveyance of tax credits. 13
502	502	(m) For purposes of this chapter, any assignment or sales proceeds received by the taxpayer 14
503	503	for its assignment or sale of the tax credits allowed pursuant to this section shall be exempt from 15
504	504	taxation under title 44. If a tax credit is subsequently revoked or adjusted, the seller’s tax calculation 16
505	505	for the year of revocation or adjustment shall be increased by the total amount of the sales proceeds, 17
506	506	without proration, as a modification under chapter 30 of title 44. In the event that the seller is not a 18
507	507	natural person, the seller’s tax calculation under chapter 11, 13, 14, or 17 of title 44, as applicable, 19
508	508	for the year of revocation, or adjustment, shall be increased by including the total amount of the 20
509	509	sales proceeds without proration. 21
510	510	(n) The tax credit allowed under this chapter may be used as a credit against corporate 22
511	511	income taxes imposed under chapter 11, 13, 14, or 17 of title 44, or may be used as a credit against 23
512	512	personal income taxes imposed under chapter 30 of title 44 for owners of pass-through entities such 24
513	513	as a partnership, a limited liability company taxed as a partnership, or multiple owners of property. 25
514	514	(o) In the case of a corporation, this credit is only allowed against the tax of a corporation 26
515	515	included in a consolidated return that qualifies for the credit and not against the tax of other 27
516	516	corporations that may join in the filing of a consolidated tax return. 28
517	517	(p) Upon request of a taxpayer and subject to annual appropriation, the state shall redeem 29
518	518	this credit, in whole or in part, for ninety percent (90%) of the value of the tax credit. The division 30
519	519	of taxation, in consultation with the commerce corporation, shall establish by regulation a 31
520	520	redemption process for tax credits. 32
521	521	(q) Projects eligible to receive a tax credit under this chapter may, at the discretion of the 33
522	522	commerce corporation, be exempt from sales and use taxes imposed on the purchase of the 34
523	523
524	524
525	525	LC001980 - Page 15 of 16
526	526	following classes of personal property only to the extent utilized directly and exclusively in the 1
527	527	project: (1) Furniture, fixtures, and equipment, except automobiles, trucks, or other motor vehicles; 2
528	528	or (2) Other materials, including construction materials and supplies, that are depreciable and have 3
529	529	a useful life of one year or more and are essential to the project. 4
530	530	(r) The commerce corporation shall promulgate rules and regulations for the administration 5
531	531	and certification of additional tax credit under subsection (g), including criteria for the eligibility, 6
532	532	evaluation, prioritization, and approval of projects that qualify for such additional tax credit. 7
533	533	(s) The commerce corporation shall not have any obligation to make any award or grant 8
534	534	any benefits under this chapter. 9
535	535	(t) No tax credits shall be awarded under this chapter until the department of labor and 10
536	536	training certifies that the project is in compliance with the prevailing wage requirements set forth 11
537	537	in subsection (b)(4) of this section. 12
538	538	SECTION 3. This act shall take effect upon passage. 13
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540	540	LC001980
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542	542
543	543
544	544	LC001980 - Page 16 of 16
545	545	EXPLANATION
546	546	BY THE LEGISLATIVE COUNCIL
547	547	OF
548	548	A N A C T
549	549	RELATING TO TAXATION -- HISTORIC PRESERVATION TAX CREDITS 2013
550	550	***
551	551	This act would amend sections of law relative to historic tax credits including increasing 1
552	552	the maximum project credit and implementing requirements relative to following prevailing wage 2
553	553	requirements. 3
554	554	This act would take effect upon passage. 4
555	555	========
556	556	LC001980
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558	558