Section 870-RICR-30-00-3.5 - DefinitionsA. 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 eithera. listed individually on the national register of historic places;b. listed individually in the state register of historic places; orc. 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; orc. 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, orb. 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; orb. 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.870 R.I. Code R. 870-RICR-30-00-3.5
Amended effective 12/19/2018