Rules and Regulations for the Rhode Island Tax Increment Financing Act

Regulation Authority:

RIGL 42-64.21-1

Purpose and Reason:

The Rules and Regulations for the Rhode Island Tax Increment Financing Act have been adopted to implement the Rhode Island Tax Increment Financing Act, RIGL § 42-64.21, which permits the Corporation to enter into tax increment financing (“TIF”) agreements with project developers whereby a developer can receive up to 75% of the incremental increase in tax revenue in a qualifying TIF area generated by the developer’s project. Increases in state corporate income taxes, sales and use taxes, hotel taxes and personal income taxes are eligible for inclusion in the TIF agreement with the developer. The total amount of the incentive the developer receives over the life of the agreement cannot exceed 30% of the total project costs and is limited to the demonstrable project financing gap – i.e. 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. However, the Corporation can waive the 30% cap for projects involving public infrastructure improvements, utility improvements, or a project involving a municipally owned stadium of 10,000 seats or more. Depending on the nature of the project, the TIF incentive can take the form of payments from state funds or an exemption from state taxes. 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 10 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. And the text of Rule 11 has been changed to provide enhanced guidance to applicants.