§ 42-64-20 - Exemption from taxation.
SECTION 42-64-20
§ 42-64-20 Exemption from taxation. –(a) The exercise of the powers granted by this chapter will be in all respectsfor the benefit of the people of this state, the increase of their commerce,welfare, and prosperity and for the improvement of their health and livingconditions and will constitute the performance of an essential governmentalfunction and the corporation shall not be required to pay any taxes orassessments upon or in respect of any project or of any property or moneys ofthe Rhode Island economic development corporation, levied by any municipalityor political subdivision of the state; provided, that the corporation shallmake payments in lieu of real property taxes and assessments to municipalitiesand political subdivisions with respect to projects of the corporation locatedin the municipalities and political subdivisions during those times that thecorporation derives revenue from the lease or operation of the projects.Payments in lieu of taxes shall be in amounts agreed upon by the corporationand the affected municipalities and political subdivisions. Failing theagreement, the amounts of payments in lieu of taxes shall be determined by thecorporation using a formula that shall reasonably ensure that the amountsapproximate the average amount of real property taxes due throughout the statewith respect to facilities of a similar nature and size. Any municipality orpolitical subdivision is empowered to accept at its option an amount ofpayments in lieu of taxes less than that determined by the corporation. If,pursuant to § 42-64-13(f), the corporation shall have agreed with amunicipality or political subdivision that it shall not provide all of thespecified services, the payments in lieu of taxes shall be reduced by the costincurred by the corporation or any other person in providing the services notprovided by the municipality or political subdivision.
(b) The corporation shall not be required to pay state taxesof any kind, and the corporation, its projects, property, and moneys and,except for estate, inheritance, and gift taxes, any bonds or notes issued underthe provisions of this chapter and the income (including gain from sale orexchange) from these shall at all times be free from taxation of every kind bythe state and by the municipalities and all political subdivisions of thestate. The corporation shall not be required to pay any transfer tax of anykind on account of instruments recorded by it or on its behalf.
(c) For purposes of the exemption from taxes and assessmentsupon or in respect of any project under subsections (a) or (b) of this section,the corporation shall not be required to hold legal title to any real orpersonal property, including any fixtures, furnishings or equipment which areacquired and used in the construction and development of the project, but thelegal title may be held in the name of a lessee (including sublessees) from thecorporation. This property, which shall not include any goods or inventory usedin the project after completion of construction, shall be exempt from taxationto the same extent as if legal title of the property were in the name of thecorporation; provided that the board of directors of the corporation adopts aresolution confirming use of the tax exemption for the project by the lessee.Such resolution shall not take effect until thirty (30) days from passage. Theresolution shall include findings that: (1) the project is a project of thecorporation under § 42-64-3(20), and (2) it is in the interest of thecorporation and of the project that legal title be held by the lessee from thecorporation. In adopting the resolution, the board of directors may considerany factors it deems relevant to the interests of the corporation or theproject including, for example, but without limitation, reduction in potentialliability or costs to the corporation or designation of the project as a"Project of Critical Economic Concern" pursuant to Chapter 117 of this title.
(d) For purposes of the exemption from taxes and assessmentsfor any project of the corporation held by a lessee of the corporation undersubsection (c) of this section, any such project shall be subject to thefollowing additional requirements:
(1) The total sales tax exemption benefit to the lessee willbe implemented through a reimbursement process as determined by the division oftaxation rather than an up-front purchase exemption;
(2) The sales tax benefits granted pursuant to RIGL42-64-20(c) shall: (i) only apply to materials used in the construction,reconstruction or rehabilitation of the project and to the acquisition offurniture, fixtures and equipment, except automobiles, trucks or other motorvehicles, or materials that otherwise are depreciable and have a useful life ofone year or more, for the project for a period not to exceed six (6) monthsafter receipt of a certificate of occupancy for any given phase of the projectfor which sales tax benefits are utilized; and (ii) not exceed an amount equalto the income tax revenue received by the state from the new full-time jobswith benefits excluding project construction jobs, generated by the projectwithin a period of three (3) years from after the receipt of a certificate ofoccupancy for any given phase of the project. "Full- time jobs with benefits"means jobs that require working a minimum of thirty (30) hours per week withinthe state, with a median wage that exceeds by five percent (5%) the medianannual wage for the preceding year for full-time jobs in Rhode Island, ascertified by the department of labor and training with a benefit package thatis typical of companies within the lessee's industry.
(3) The corporation shall transmit the analysis required byRIGL 42-64-10(a)(2) to the house and senate fiscal committee chairs, thedepartment of labor and training and the division of taxation promptly uponcompletion. Annually thereafter, the department of labor and training shallcertify to the house and senate fiscal committee chairs, the house and senatefiscal advisors, the corporation and the division of taxation the actual numberof new full-time jobs with benefits created by the project, in addition toconstruction jobs, and whether such new jobs are on target to meet or exceedthe estimated number of new jobs identified in the analysis above. Thiscertification shall no longer be required when the total amount of new incometax revenue received by the state exceeds the amount of the sales tax exemptionbenefit granted above. For purposes of this section.
(4) The department of labor and training shall certify to thehouse and senate fiscal committee chairs and the division of taxation that jobscreated by the project are "new jobs" in the state of Rhode Island, meaningthat the employees of the project are in addition to, and without a reductionof, those employees of the lessee currently employed in Rhode Island, are notrelocated from another facility of the lessee's in Rhode Island or areemployees assumed by the lessee as the result of a merger or acquisition of acompany already located in Rhode Island. Additionally, the corporation, withthe assistance of the lessee, the department of labor and training, thedepartment of human services and the division of taxation shall provideannually an analysis of whether any of the employees of the project qualify forRIte Care or RIte Share benefits and the impact such benefits or assistance mayhave on the state budget.
(5) Notwithstanding any other provision of law, the divisionof taxation, the department of labor and training and the department of humanservices are authorized to present, review and discuss lessee specific tax oremployment information or data with the corporation, the house and senatefiscal committee chairs, and/or the house and senate fiscal advisors for thepurpose of verification and compliance with this resolution; and
(6) The corporation and the project lessee shall agree that,if at any time prior to the state recouping the amount of the sales taxexemption through new income tax collections from the project, not includingconstruction job income taxes, the lessee will be unable to continue theproject, or otherwise defaults on its obligations to the corporation, thelessee shall be liable to the state for all the sales tax benefits granted tothe project plus interest, as determined in RIGL 44-1- 7, calculated from thedate the lessee received the sales tax benefits.