Rhode Island Code of Regulations › Title 870 - Rhode Island Commerce Corporation › Chapter 30 - Tax Credits and Exemptions › Subchapter 00 - N/A › Part 3 - Rules and Regulations for the Rebuild Rhode Island Tax Credit Program › Section 870-RICR-30-00-3.5 - Definitions

Current through June 14, 2024
A. The following words and terms, when used
							in these Rules, shall have the following meanings, unless the context clearly
							indicates otherwise.
1. "Act" means R.I. Gen.
							Laws Chapter 42-64.20 known as the Rebuild Rhode Island Tax Credit
							Act.
2. "Adaptive reuse" means the
							conversion of an existing structure from the use for which it was constructed
							to a new use by maintaining elements of the structure and adapting such
							elements to a new use.
3.
							"Affiliate" means an entity that directly or indirectly controls, is under
							common control with, or is controlled by an Applicant that is a Business.
							Control exists in all cases in which the entity is a member of a controlled
							group of corporations as defined pursuant to section 1563 of the Internal
							Revenue Code of 1986 (26 U.S.C. §
												1563) or the entity is an organization in a
							group of organizations under common control as defined pursuant to subsection
							(b) or (c) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. §
												414(b) or (c)). A taxpayer
							may establish by clear and convincing evidence, as determined by the tax
							administrator, that control exists in situations involving lesser percentages
							of ownership than required by those statutes. An Affiliate of an Applicant that
							is a Business may contribute to meeting either the Capital Investment or
							Full-time Employee requirements of a Business that applies for a Tax Credit
							under the Act and these Rules.
4.
							"Affordable housing" means housing for sale or rent with combined rental costs
							or combined mortgage loan debt service, property taxes, and required insurance
							that do not exceed thirty percent (30%) of the gross annual income of a
							household earning up to eighty percent (80%) of the area median income, as
							defined annually by the United States Department of Housing and Urban
							Development.
5. "Allocation
							agreement" means an executed agreement among all Participants of a Pass-Through
							Entity, or among all Owners of a Project, setting forth the method for
							allocation of the Tax Credit agreed upon among the Participants or Co-owners.
							An Allocation Agreement may include, without limitation, a partnership
							agreement, an operating agreement of a limited liability company, a
							shareholder's agreement, or any other instrument executed by all Participants
							or Co-owners.
6. "Applicant" means
							a Developer applying for a Tax Credit under the Act and these Rules.
7. "Application" means the application,
							promulgated by the Corporation, which must be completed and submitted by an
							Applicant pursuant to the requirements of the Act and these Rules.
8. "Assignee" means a Person to whom a Tax
							Credit Certificate is assigned pursuant to this regulation.
9. "Assignor" means a holder of a Tax Credit
							Certificate who assigns such Tax Credit Certificate to an Assignee.
10. "Board" means the board of directors of
							the Corporation.
11. "Business"
							means a corporation as defined in R.I. Gen. Laws §
											44-11-1(4),
							or a partnership, an S corporation, a non-profit corporation, a sole
							proprietorship, or a limited liability corporation. A Business shall include an
							Affiliate of the Business if that Business applies for a Tax Credit based upon
							any Capital Investment made by an Affiliate.
12. "Capital investment" in a Project means
							expenses by a Developer, after submission of an Application, for: site
							preparation and construction, repair, renovation, improvement, equipping, or
							furnishing on real property or of a building, structure, facility, or
							improvement to real property, including reasonable associated soft costs and
							the reasonable costs of relocating any former tenants; obtaining and installing
							furnishings and machinery, apparatus, or equipment, including as permitted in
							the sole discretion of the Corporation, but not limited to, material goods for
							the operation of a business on real property or in a building, structure,
							facility, or improvement to real property; site-related utility and
							transportation infrastructure improvements including on- and off-site utility,
							road, pier, wharf, bulkhead or sidewalk construction or repair; plantings or
							other environmental components required to attain the level of silver rating or
							above in the Leadership in Energy and Environmental Design (LEED) Green
							Building Rating System; and environmental remediation of the Project site.
a. In addition to the foregoing, if a
							Developer acquires or leases a Qualified Development Project, the capital
							investment made or acquired by the seller or owner, as the case may be, if
							pertaining primarily to the premises of the Qualified Development Project,
							shall be considered a capital investment by the Developer and, if pertaining
							generally to the Qualified Development Project being acquired or leased, shall
							be allocated to the premises of the Qualified Development Project on the basis
							of the gross leasable area of the premises occupied by the Developer in
							relation to the total gross leasable area in the Qualified Development
							Project.
13.
							"Certification" means the document issued to an Applicant by the Corporation
							certifying to the Tax Division the amount of the Tax Credit and taxable year in
							which such Tax Credit may be claimed, and such other information deemed
							appropriate by the Corporation.
14.
							"Certified historic structure" means a property which is located in the State
							and is either
a. listed individually on the
							national register of historic places;
b. listed individually in the state register
							of historic places; or
c. located
							in a registered historic district and certified by either the Rhode Island
							Historical Preservation & Heritage Commission created pursuant to R.I. Gen.
							Laws §
												42-45-2 or the Secretary of the Interior as being of historic significance to the
							district.
15.
							"Corporation" means the Rhode Island Commerce Corporation established pursuant
							to R.I. Gen. Laws Chapter 42-64.
16. "Commercial" means non-residential
							development.
17. "Developer" means
							a person, firm, business, partnership, association, political subdivision, or
							other entity that proposes to divide, divides, or causes to be divided real
							property into a subdivision or proposes to build, or builds a building or
							buildings or otherwise improves land or existing structures, which division,
							building, or improvement qualifies for benefits under these Rules.
18. "Eligibility period" means the period in
							which a Developer may claim a tax credit under the Act, beginning with the tax
							period in which the Corporation accepts certification from the Developer that
							it has met the requirements of the Act and extending thereafter for a term of
							five (5) years.
19. "Equity" means
							cash and Capital Investment, and can include, at the sole discretion of the
							Corporation, any other investment in the Project, including, but not limited
							to, federal or local grants, or federal tax credits; property value less
							encumbrances; or costs for Project feasibility incurred within a reasonable
							time period prior to Application. Property value within the meaning of this
							definition shall be the purchase price for property purchased in an arm's
							length transaction within a reasonable time period prior to the date of
							Application or the value as determined by a current appraisal acceptable to the
							Corporation.
20. "Full-time
							employee" means a natural person who is employed by a Business for
							consideration for a minimum of at least 35 hours per week, or who renders any
							other standard of service generally accepted by custom or practice as full-time
							employment, or who is employed by a professional employer organization pursuant
							to an employee leasing agreement between the business and the professional
							employer organization for a minimum of 35 hours per week, or who renders any
							other standard of service generally accepted by custom or practice as full-time
							employment, and whose wages are subject to withholding.
21. "Gross leasable area" means the rentable
							area of a Qualified Project as calculated pursuant to the measuring standards
							of the Project. This standard will be defined in the lease for tenant
							applicants. The rentable area measures the tenant's pro rata portion of the
							entire office floor, including public corridors, restrooms, janitor closets,
							utility closets and machine rooms used in common with other tenants, but
							excluding elements of the building that penetrate through the floor to areas
							below. The rentable area of a floor is fixed for the life of a building and is
							not affected by changes in corridor sizes or configuration.
22. "Hope community" means a municipality for
							which the five (5) year average percentage of families with income below the
							federal poverty level exceeds the state five (5) year average percentage, both
							as most recently reported by the U.S. Department of Commerce, Bureau of the
							Census.
23. "Incentive agreement"
							means an agreement between the Corporation and an Applicant for an approved
							Qualified Development Project setting forth the terms and conditions of the
							award of incentives.
24. "Initial
							certificate holder" means an Owner or Participant named by the Owner to receive
							the Tax Credit Certificate.
25.
							"Letter of good standing" means a letter from the Division of Taxation
							certifying that the taxpayer is in good standing for purposes of these Rules;
a taxpayer shall be entitled to a letter of
							good standing so long as a. the taxpayer is current on all outstanding filings
							and declared tax liabilities subject to audit;
b. the taxpayer and the Division of Taxation
							have a workout payment agreement or other settlement with respect to any known
							delinquent tax liability and the taxpayer is current on that workout payment
							agreement or settlement; or
c. the
							taxpayer has timely commenced or is engaged in an administrative or judicial
							proceeding concerning a tax liability the status of which would otherwise
							preclude the issuance of a letter of good standing.
26. "Mixed use" means a development
							comprising both Commercial and Residential components.
27. "Notification of assignment" means the
							notification filed with the Tax Division of the assignment of all or a portion
							of the Tax Credit.
28. "Owner"
							means a Person or Persons who qualifies for a Tax Credit in relation to a
							Project approved by the Commerce Corporation pursuant to the Act.
29. "Participant" means a partner in a
							partnership, member of limited liability company, shareholder of an
							S-corporation, beneficial owner of a trust, or any other Person having an
							interest in a Pass-through Entity.
30. "Partnership" means an entity classified
							as a partnership for federal income tax purposes.
31. "Pass-through entity" means a
							partnership, limited liability company, S-corporation, association, nominee
							trust, or any other entity, the tax attributes of which are passed through to
							the Participants in such entity.
32. "Percentage interest" means the
							percentage interest in the Tax Credit allocated to an Owner, a Participant, a
							co-Owner of a multiple-Owner building or identifiable portion thereof, or
							another Person pursuant to the terms of the applicable Allocation
							Agreement.
33. "Person" means any
							natural person, partnership, firm, corporation, (including both business and
							non-profit corporations), limited liability company, trust, estate,
							association, or other business entity.
34. "Placed in service" means the earlier of
a. substantial construction or rehabilitation
							work has been completed which would allow for occupancy of an entire structure
							or some identifiable portion of a structure, as established by the Board,
							or
b. receipt by the Developer of a
							certificate, permit or other authorization allowing for occupancy of the
							Qualified Development Project or some identifiable portion of the Qualified
							Development Project by the municipal or state authority having
							jurisdiction.
35.
							"Project" means a specific construction project or improvement, including
							lands, buildings, improvements, real and personal property or any interest
							therein, including lands under water, riparian rights, space rights and air
							rights, acquired, owned, leased, developed or redeveloped, constructed,
							reconstructed, rehabilitated or improved, undertaken by a Developer, owner or
							tenant, or both, within a Project Area as set forth in an Application to be
							made to the Corporation.
36.
							"Project area" means land or lands under common ownership or control in which a
							Qualified Development Project is located.
37. "Project cost" means costs incurred in
							connection with the Qualified Development Project by the Applicant until the
							issuance of a permanent certificate of occupancy, or until such other time
							specified by the Corporation, including, but not limited to, lands, buildings,
							improvements, real and personal property or any interest therein, including the
							site, space or air rights, acquired, owned, developed or redeveloped,
							constructed, reconstructed, rehabilitated or improved, and any environmental
							remediation costs, plus reasonable soft costs as determined by the Corporation,
							and ancillary infrastructure projects and infrastructure improvements, as
							permitted in the sole discretion of the Corporation.
38. "Project financing gap" means
a. The part of the total Project Cost that
							remains to be financed after all other sources of capital have been accounted
							for, including, but not limited to, Applicant's Equity, a reasonable assumption
							of debt on the Project, and any other capital source that is reasonably
							available given the nature of the Project; or
b. The amount of funds that the State may
							invest in a Qualified Development Project to gain a competitive advantage over
							a viable comparable location in another state by means described in the Act and
							Rules.
39. "Qualified
							development project" means any Project meeting the requirements of the Act and
							these Rules.
40. "Rebuild Rhode
							Island tax credit fund" means the fund established pursuant to R.I. Gen. Laws
							§
											42-64.20-7.
41. "Recognized historical structure" means a
							property which is located in the State and is commonly considered to be of
							historic or cultural significance as determined by the Corporation in
							consultation with the State Historic Preservation Officer.
42. "Residential" means a development of
							residential dwelling units.
43.
							"State" means the State of Rhode Island and Providence Plantations.
44. "Targeted industry" means any advanced,
							promising or otherwise prioritized industry identified in the economic
							development vision and policy promulgated pursuant R.I. Gen. Laws §
											42-64.17-1 or, until such time as any such economic development vision and policy is
							promulgated, as identified by the Corporation from time to time and published
							on the Corporation's website.
45.
							"Tax credit" means the tax credit permitted under the Act.
46. "Tax credit certificate" or "Certificate"
							means a certificate issued by the Tax Division to the Owner of a Project who
							has received a Certification from the Commerce Corporation substantiating
							compliance with an Incentive Agreement and entitlement to the issuance of Tax
							Credits under the Act. If the Owner is a Pass-Through Entity, a Tax Credit
							Certificate may be issued to each Participant in the Pass-Through Entity. The
							Certificate shall specify the amount of the Tax Credit allocable to such
							Participant, determined pursuant to these Rules.
47. "Tax division" means the Rhode Island
							Division of Taxation.
48.
							"Transit-oriented development area" means either of:
a. an area that the Corporation, after
							consultation with the Rhode Island Department of Transportation and the Rhode
							Island Public Transit Authority, designates as a Transit Oriented Development
							Area because it supports, or has the potential to support, development that is
							in close proximity to, compatible with, and supportive of public transit; such
							discretionary designation can occur in response to an Application for an
							incentive under the Act or in a request submitted by a municipality to the
							Corporation in a form prescribed by the Corporation on its website; or
b. an area with ready access to
							freight rail, air, and/or marine transportation where manufacturing,
							warehousing, distribution, and freight forwarding operations are or could be
							located.
49. "Workforce
							housing" means housing for sale or rent with combined annual rental costs or
							combined annual mortgage loan debt service, property taxes, and required
							insurance that do not exceed thirty percent (30%) of the gross annual income of
							a household earning between eighty percent (80%) and one hundred and forty
							percent (140%) of the area median income, as defined annually by the United
							States Department of Housing and Urban Development.