SECTION 1. Sections 44-25-1 and44-25-2 of the GeneralLaws in Chapter 44-25 entitled "Real Estate Conveyance Tax"are hereby amended to read as follows:
44-25-1. Tax imposed – Payment – Burden.
(a) There is imposed, on eachdeed,instrument, or writing by which any lands, tenements, or other realty sold is granted, assigned, transferred,or conveyed to, or vestedin, the purchaser or purchasers, or any other person or persons, by his or her or their direction, or on any grant, assignment,transfer,orconveyanceorsuchvesting, by suchpersonswhichhastheeffectofmaking any realestate companyanacquired realestate company, whenthe consideration paid exceeds one hundred dollars ($100), a tax at therate of (1) two dollars and thirtycents ($2.30) for eachfive hundred dollars ($500) or fractional partof it of the first five hundred thousand dollars ($500,000) of the consideration paid, and (2) at the rate of four dollars and sixty cents ($4.60) for eachfive hundred dollars ($500), or fractional part of it, of the consideration paid in excess of five hundred thousand dollars ($500,000) which that is paid for the purchase of property or the interest in an acquired realestate company (inclusive of the value of any lien or encumbrance remaining atthe time of the sale, grant, assignment, transfer or conveyance or vesting occurs, or in the case of aninterest in an acquiredrealestatecompany, a percentage of the value of suchlien or encumbrance equivalent to the percentage interest in the acquired real estate company being granted, assigned, transferred, conveyed or vested), which. The tax is payable at the time of making, the execution, delivery, acceptance or presentation for recording of any instrument affecting such transfer grant, assignment, transfer,conveyance or vesting. In the absence of anagreementtothe contrary,the tax shall be paid by the grantor, assignor, transferor or person making the conveyance or vesting.
(b) In the event no consideration is actually paid for the lands, tenements, or realty, the instrument or interest in an acquired realestate company of conveyance shall contain a statement to the effect that the consideration is such that no documentary stamps are required.
(c) The tax administrator shall contribute The tax shall be distributed as follows:
(i) With respectto the portion of the tax assessedagainst the first five hundred thousand dollars ($500,000) of the consideration paid: the tax administrator shall contribute to the distressed community relief program the sum of thirty cents ($.30) per two dollars andthirty cents ($2.30) of the face value of the stamps to be distributed pursuant to § 45-13-12, and to the housing resources commission restrictedreceipts accountthe sum of thirty cents ($.30) per twodollars andthirty cents ($2.30) of the face value of the stamps. Funds will be administered by the office of housing and community development, through the housing resources commission. The state shall retain sixty cents ($.60) for state use. The balance of the tax shallbe retained by the municipality collecting the tax.
(ii) With respecttothe portion of the taxassessedagainstthe consideration paid in excess of five hundred thousand dollars ($500,000): the taxadministrator shall contribute to the distressed community relief program the sum of thirty cents ($.30) per four dollars and sixty cents ($4.60) of the face value of the stamps to be distributed pursuant to § 45-13-12, to the housing resources commission restrictedreceiptaccountthe sum of thirty cents ($.30) per four dollars andsixty cents ($4.60) of the face value of the stamps, andto the housing production fund established pursuant to § 42-128-10(b) the sum of two dollars and thirty cents ($2.30) per four dollars and sixty cents ($4.60) of the face value of the stamps. The state shall retain sixty cents ($.60) for state use. The balance of the tax shallbe retained by the municipality collecting the tax.
(iii) Notwithstanding the above, in the case of the taxon the grant, transfer,assignment or conveyance or vesting with respectto an acquired real estate company, the tax shall be collected by the taxadministrator andshall be distributed to the municipality where the realestate ownedby the acquired realestate companyis located provided, however,in the case of anysuchtaxcollected by the tax administrator, if the acquired real estate company owns property located in more than one municipality, the proceeds of the tax shall be allocated amongst said municipalities in the proportion the assessedvalue of said realestate in eachsuch municipality bears to the total of the assessedvalues of allof the realestate ownedbythe acquiredrealestate companyin Rhode Island. Provided, however, in fiscal years 2004 and 2005, from the proceeds of this tax, the tax administrator shall deposit as generalrevenues the sum of ninety cents ($.90) per two dollars and
LC001610 - Page 2of 7 thirty cents ($2.30) of the face value of the stamps. The balance of the tax on the purchase of property shall be retained by the municipality collecting the tax. The balance of the tax on the transfer with respecttoanacquired realestate company, shallbe collected by the tax administrator and shall be distributed to the municipality where the property for which interest is sold is physically located. Provided, however,that in the case of anytaxcollected by the tax administrator with respect to an acquired real estate company where the acquired real estate company owns property located in more than one municipality, the proceeds of the tax shall be allocated amongst the municipalities in proportion that the assessed value in any such municipality bears to the assessedvalues of allof the realestate ownedbythe acquiredrealestate companyin Rhode Island. With respectto the revenue collected by the division of taxation on behalf of eachmunicipality in this section, before distributing said revenue to the municipalities, a two percent (2%) administrative fee shallbe deducted therefrom and transferred to the generalfund.
(d)For purposes of this section, the term"acquired realestatecompany"meansa realestate company that has undergone a change in ownership interest if (i) such change does not affectthe continuity of the operations of the company; and (ii) the change, whether alone or together with priorchangeshastheeffectofgranting,transferring,assigning or conveying or vesting,transferring directly or indirectly, 50% or more of the total ownership in the company within a period of three (3) years. For purposes of the foregoing subsection (ii) hereof, a grant, transfer, assignment or conveyance or vesting, shall be deemed to have occurred within a period of three (3) years of another grant(s), transfer(s),assignment(s) or conveyance(s) or vesting(s) if during the period the granting,transferring,assigning or conveying or partyprovidesthereceivingpartyalegallybinding document granting, transferring, assigning or conveying or vesting said realty or a commitment or option enforceable at a future date to execute the grant, transfer, assignment or conveyance or vesting.
(e) A realestatecompany is a corporation,limitedliabilitycompany,partnership or other legal entity which meets any of the following:
(i) Is primarilyengagedin the business of holding, sellingor leasingrealestate,where90% or more of the ownership of said real estate is held by 35 or fewer persons and which company either (a) derives 60% or more of its annualgross receipts from the ownership or disposition of real estate;or (b) owns realestate the value of which comprises 90% or more of the value of the entity's entiretangible assetholdings exclusive oftangible assetswhicharefairlytransferrable andactively traded on an established market; or
(ii) 90% or more of the ownership interest in such entity is held by 35 or fewer persons and the entity owns as 90% or more of the fair market value of its assets a direct or indirect interest in
LC001610 - Page 3of 7 a real estate company. An indirect ownership interest is an interest in an entity 90% or more of which is held by 35 or fewer persons andthe purpose of the entity is the ownership of a realestate company.
(f) In the case of a grant, assignment, transfer or conveyance or vesting which results in a realestate companybecoming anacquired realestate company, the grantor, assignor, transferor,or personmaking the conveyanceor causing the vesting, shallfile or causetobefiled with the division of taxation, at leastfive (5) days prior to the grant, transfer, assignment or conveyance or vesting,notification of the proposedgrant,transfer,assignment, or conveyance or vesting, the price, terms and conditions of thereof, andthe character andlocation of all of the realestate assets heldby real estate company and shall remit the tax imposed and owed pursuant to subsection (a) hereof. Any such grant, transfer, assignment or conveyance or vesting which results in a real estate company becoming an acquired realestate company shall be fraudulent and void as against the state unless the entity notifies the tax administrator in writing of the grant, transfer,assignment or conveyance or vesting as herein required in subsection (f) hereof and has paid the tax as required in subsection (a) hereof. Upon the payment of the tax by the transferor, the tax administrator shall issue a certificate of the payment of the tax which certificate shall be recordable in the land evidence records in eachmunicipality in which such realestate company owns real estate. Where the real estate company has assets other than interests in real estate located in Rhode Island, the tax shall be basedupon the assessedvalueof eachparcelof property locatedin eachmunicipality in the state of Rhode Island.
(a) The tax imposed by this chapter does not apply to any instrument or writing given to secure a debt.
(b) The tax imposed by this chapter does not apply to any deed, instrument, or writing wherein the United States, the state of Rhode Island, or its political subdivisions are designatedthe grantor.
(c) The tax imposed by this chapter does not apply to any deed,instrument, or writing that has or shall be executed, delivered, accepted, or presented for recording in furtherance of, or pursuant to, that certain master property conveyance contract dated December 29, 1982, and recordedin the land evidence records of the city of Providence on January 27, 1983, at 1:30 p.m. in book 1241 at page 849, and relating to the capitalcenter project in the city of Providence.
(d) The qualified sale of a mobile or manufactured home community to a resident-owned organization as defined in § 31-44-1 is exempt from the realestate conveyance taximposed under this chapter.
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(e) No transfer tax or fee shall be imposed by a land trust or municipality upon the acquisition of realestate by the state of Rhode Island or any of its political subdivisions.
(f) Nothing in § 44-25-1(a) shall be construedto impose a tax upon any grant, assignment, transfer, conveyance or vesting of any interest, direct or indirect, among owners, members or partners in any realestate company with respect to an affordable housing development where:
(i) The housingdevelopment hasbeenfinancedinwhole or in partwithfederallow-income tax credits pursuant to §42 of the InternalRevenue Code; or
(ii) At least one of the owners, members or partners of the company is a Rhode Island nonprofit corporation or anentity exempt fromtaxunder §501(c)(3) of the InternalRevenue Code, or is owned by a Rhode Island nonprofit corporation or an entity that is exempt from tax under § 501(c)(3) of the InternalRevenue Code, andthe housing development is subjectto a recordeddeed restriction or declaration of land use restrictive covenants in favor of the Rhode Island housing and mortgage finance corporation, the state of Rhode Island housing resources commission, the federal home loan bankor anyof its members,or anyother stateor local government instrumentalityunder an affordable housing program. No such real estate company shall be an acquired real estate company under this section.
SECTION 2. Section 42-128-10 of the General Laws in Chapter 42-128 entitled "Rhode Island Housing Resources Act of 1998"is hereby amended to read as follows:
(a) The generalassembly shall annually appropriate any sums it may deem necessaryto enable the commission tocarryout its assigned purposes;and the state controller is authorized and directed to draw his or her orders upon the general treasurer for the payment of any sums appropriated or somuch asmaybe from time to time required, upon receipt byhim or her of proper vouchers approved by the chairperson or the executive director.
(b) There is hereby established a restricted receipt account within the general fund of the state,to be known as the "housing production fund". Funds from this account shallbe administered by theRhode Island housing andmortgage finance corporation, subjecttoall programandreporting guidelines adopted by the housing resources commission, for housing production initiatives, including:
(1) Financial assistance by loan, grant, or otherwise, for the planning, production, or preservation of housing opportunities in Rhode Island, including housing affordable to workersand located near major workforce centers; or
(2) Technical and financial assistance for cities and towns to support increased local housing production, including by reducing regulatory barriers.
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SECTION 3. Chapter 42-128 of the General Laws entitled "Rhode Island Housing Resources Act of 1998"is hereby amended by adding thereto the following section:
42-128-10.1. Restrictions on the use of the Housing Production Fund.
(a) Notwithstanding any laws to the contrary, any project funded in total or in partunder § 42-128-10(b)(1) shall include a requirement that any contractor and subcontractor working on the project shall haveanapprenticeship program asdefined herein for all apprenticeable craftsthatwill be employed on the project at the time of bid. The provisions of the section shall only apply to contractors and subcontractors with five (5) or more employees. For purposes of this section, an apprenticeship programis one thatis registeredwith andapproved bythe United StatesDepartment of Labor in conformance with 29 C.F.R. 29 and 29 C.F.R. 30; and
(1) The departmentof labor andtraining must provide information andtechnical assistance to affected governmental, quasi-governmental agencies, and any contractors awarded projects relative to their obligations under this statute.
(2) The department of labor and training may also impose a penalty of up to five hundred dollars ($500) for each calendar day of noncompliance with this section, as determined by the director of labor and training. Mere errors and/or omissions shall not be grounds for imposing a penalty under this subsection.
(3) Any penalties assessed under this statute shallbe paid to the housing production fund.
(4) To the extent that any of the provisions contained in § 37-13-3.2 conflict with the requirements for federalaid contracts, federallaw and regulations shall control.
(b) Projects funded under § 42-128-10(b)(1) with total costs valued atfive-million dollars ($5,000,000) or more shall be deemedpublic works and be subjectto requirements setforth in §37- 13.
(c) In administering the housing production fund, RI housing shall fund new housing construction projects and rentalassistance in roughly equal proportion.
SECTION 4. This act shalltake effect upon passage.
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BY THE LEGISLATIVE COUNCIL
A N A C T
RELATING TO TAXATION – REAL ESTATE CONVEYANCE TAX
This actwould provide that a portion of the realestate conveyance taxbe apportioned toa newly established restricted receipt account known as the housing production fund.
This act would take effect upon passage. ======== LC001610 ========
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House or Senate Journal from the day of the vote.