Rules and Regulations for the Rebuild Rhode Island Tax Credit Program

Regulation Authority:

RIGL 42-64.20-1

Purpose and Reason:

The Rules and Regulations for the Rebuild Rhode Island Tax Credit Program have been adopted to implement the newly-enacted Rebuild Rhode Island Tax Credit, R.I. Gen. Laws § 42-64.20-1 et seq., and can provide up to $15 million in tax credits, to be allocated over five years, to a real estate development project. The statute also permits the Board of the Rhode Island Commerce Corporation to approve a sales tax exemption for personal property utilized directly in a project that is eligible for a tax credit. To qualify, a project must be at least $5 million in total size and the developer must have 20% equity in the project. If it is a commercial project, it must be at least 25,000 square feet and have at least 25 full-time jobs upon completion. If it is residential, it must be at least 20,000 square feet and have 20 units. The Corporation can relax the $5 million project cost threshold for projects in communities with the highest poverty rates (today, those “Hope Communities” are Providence, Pawtucket, Central Falls, Woonsocket, and West Warwick) or certain designated redevelopment areas. In all cases, the amount of the credit can never exceed 30% of the project cost and can never exceed the project’s financing gap. A financing gap is the amount of the total project cost that the developer cannot raise through normally available channels or the amount of money necessary to gain a competitive advantage over a viable out-of-state location for the project. The Rules address the eligibility requirements, application procedures, and other administrative aspects of the program. The text of Rule 3 has changed from the version published in the register to provide greater specificity to the board process described in that provision. The text of Rule 7(b)(4), Rule 8(a)(5), Rule 8(a)(17), and Rule 10(d)(2), have been changed to clarify parts of the application, provide enhanced guidance to applicants, and respond to comments received. The text of Rule 9 has also been changed from the version published in the register to clarify that an application fee will be mandatory in order to make clear that such charge will be levied.