§ 44-18-30.C - Exemption from or stabilization of sales and use taxes for municipal economic development zones – West Warwick.
SECTION 44-18-30.C
§ 44-18-30.C Exemption from orstabilization of sales and use taxes for municipal economic development zones– West Warwick. – (a) Findings. The general assembly makes the following findings of fact:
(1) Various sections of several towns in the state,including, but not limited to, the town of West Warwick, are deteriorated,blighted areas which have created very difficult challenges to economicdevelopment;
(2) Several areas of the state are in a distressed financialcondition as defined by § 45-13-12(b) and cannot finance economicdevelopment projects on its own without the participation of private enterprise;
(3) The general assembly has found that it is nearlyimpossible for private enterprise alone to meet these challenges;
(4) In certain sections of financially distressedcommunities, the serious challenges of economic development and/orredevelopment have not been met by private enterprise alone and the impact isbeing felt throughout the community;
(5) Legislation enacted to encourage redevelopment of thedeteriorated, blighted areas through the formation of local redevelopmentagencies has had very limited success;
(6) Various states, such as New Jersey, Pennsylvania andMichigan have had a great deal of success in generating economic development byexercising the authority to exempt and/or stabilize taxes;
(7) The state of Rhode Island has generated economic growthby redirecting and/or exempting certain commercial and retail activity from theimposition of sales, use and income taxes with recent examples being theProvidence Place Mall, the Arts Districts in the cities of Providence,Pawtucket and Westerly, and financial services and acquaculture industries;
(8) Most recently, municipalities in our state have had greatsuccess in attracting large commercial development, including financialservices, manufacturing, and major energy facilities, due in large part to theauthority to exempt and/or stabilize property, tangible and/or inventory taxes;
(9) Attracting large non-residential developments orencouraging expansion of existing commercial entities can be extremelyimportant to municipalities, where the quality of public education is largelydependent on the local tax base, thereby expanding the commercial tax base andreducing reliance upon the residential tax base;
(10) The ability to attract this development and increase thenon-residential tax base, in turn, improves municipalities' ability to financeschool systems, municipal services and infrastructure, thereby improving thequality of life;
(11) In addition to increasing the local non-residential taxbase, this development creates construction jobs, permanent jobs, and spursadditional investment by private enterprises; and
(12) Providing authority to offer tax exemptions from, or tostabilize, the imposition of sales and use taxes will attract and assist inexpanding, revitalizing and redeveloping the tax base in our municipalities,thereby providing long-term economic benefits and development.
(1) In order to attract new construction and development in amunicipal economic development zone (MED) as provided in this section, upon thedesignation of such a zone as set forth in subsection (c) of this section, allbusinesses engaging in qualifying sales and located in new construction in aMED zone (a MED zone business) shall be exempt from the requirement to chargeand collect fifty percent (50%) of the current sales and use tax pursuant to§§ 44-18-18 and 44-18-20 for a period of ten (10) years. Sales anduse taxes collected in a MED zone shall be returned to the same MED zone inaccordance with the provisions of this section. The ten (10) year exemptionperiod for all MED zone businesses shall begin to run from the latest to occurof: (i) the date that is three (3) years from the effective date of the Januarysession 2003 amendments [July 17, 2003]; or (ii) the date that is two(2) years from the date upon which the city or town council designates the MEDzone for its municipality; or (iii) the date the first MED zone businessobtains a certification of exemption as set forth in subdivision (c)(6) of thissection.
(2) For purposes of this section, "qualifying sales" for aMED zone business shall not include gambling activities, or the retail sales ofmotor vehicles, furniture, home furnishings including mattresses and orientalrugs, tobacco products, or packaged alcoholic beverages.
(3) "Qualifying sales" shall be sales at which the point ofsale is located within the same MED zone and point of delivery is locatedwithin the same MED zone.
(1) The city or town council of a financially distressedcommunity may designate in accordance with the provisions of this section oneMED zone in the municipality, provided that the municipality is:
(i) A financially distressed community as defined by §45-13-12(b), using the criteria set forth in § 45-13-12(b)(1) through (4);
(ii) Has a population less than fifty thousand (50,000)persons; and
(iii) The MED zone shall be a parcel of or contiguous parcelsof land consisting in total of not less than ten (10) acres, but not more thanthirty (30) acres in the area served by adequate utilities and transportationfacilities.
(2) The city or town council of any financially distressedcity or town, as set forth in subdivision (1) of this subsection, in creating aMED zone, shall have the power and authority of a redevelopment agency, asprovided in chapter 32 of title 45, to undertake the redevelopment of a MEDzone.
(3) The city or town council, in designating a MED zone,shall after public notice, hearing and vote as provided by § 45-32-4,comply with the plan requirements of § 45-32-8 and shall be responsiblefor carrying on the plan. The city or town council in implementing the MED zoneplan shall have the power of eminent domain as set forth in § 45-32-24,and the provisions of §§ 45-32-25 – 45-32-41 shall apply to allsuch condemnations.
(4) All sales and use taxes collected within a MED zone shallbe reimbursed to the municipality in which the MED zone is located, and may beexpended by the municipality to implement the capital improvement component ofthe MED zone plan for MED zone property or for property located within one mileof the MED zone or for such other capital improvements as the municipality maydetermine are required to mitigate MED zone impacts.
(5) West Warwick. The following area or portions ofthem of the town of West Warwick may be designated as the town's municipaleconomic development zone by the town council of the town of West Warwick afterpublic notice, hearing and vote as provided in § 45-32-4:
The area bounded generally by the East Coast Bike Path in theeast, Archambault and Gardner Avenue in the north, Payan Street to CursonStreet, Curson Street to McNiff, McNiff to Barnes Street, Barnes Street toNowicki Street to East Street, East Street to Blanchard Street, BlanchardStreet to West Street in the west, West Street to Washington Street, WashingtonStreet to Nolan Street, Nolan Street to the East Coast Bike Path in the south,all as more particularly described on the West Warwick municipal economicdevelopment zone map on file with the town clerk.
(6) The tax administrator shall issue a certification ofexemption to the MED zone business at the time the business applies for itspermit to make sales at retail and provides the tax administrator with a MEDzone business certificate issued by the town clerk stating that the business islocated in new construction in the MED zone. The duration of the certificateshall be determined in accordance with subdivision (b)(1) of this section.
(7) No business shall be permitted to become a MED zonebusiness or to receive a certificate of exemption pursuant to subdivision (6)of this subsection by relocating from any area within the state of Rhode Islandbut outside the MED zone to new construction within the MED zone, unless therelocation results in the creation of new permanent employment positions thatincrease the total employment of the business by not less than fifty percent(50%) of its average total employment for the two (2) year period immediatelypreceding the year in which it applies for its certificate of exemption. Anybusiness that expands its operations by adding a new location within the MEDzone and then ceases to operate any of its locations within the state of RhodeIsland that existed prior to the establishment of the MED zone location shallimmediately have its certificate of exemption for the MED zone location revoked.