(H. B. 1182) (No. 54-2013) (Approved July 5, 2013) AN ACT To amend subsections (b) and (f) of Section 1.3; amend Section 4.2; add a subsection (f) to Section 4.4; amend subsection (d) of Section 4.6; add a new Section 4.7; and renumber remaining Sections of Act No. 1-2013, known as the Jobs Now Act, in order to broaden Eligible Business eligibility criteria under the Act and the scope of some of the incentives provided thereunder. STATEMENT OF MOTIVES A few months after Act No. 1-2013, known as the Jobs Now Act, (hereinafter, the JNA) took effect, there have been identified several provisions of the law that prevent many interested businesses from availing themselves of the same. The purpose of the amendments contained in this Act is to address said situation, thus rendering the JNA into a more effective tool for the plan to create 50,000 jobs in 18 months. Firstly, the current definition of the term Eligible Business to avail oneself of the benefits and incentives provided under the JNA excludes, as a general rule, business whose main operations are covered under any incentives law. At present, there are many incentive and decree laws in effect in Puerto Rico that cover a large number of trades and businesspersons interested in availing themselves of the JNA, but that are excluded for that same reason. This measure amends the JNA to broaden the definition of the term Eligible Business. Specifically, the phrase Incentive Law or Laws should only refer to the incentive laws that are expressly listed under the JNA. Furthermore, these amendments clarify that, in order to be an Eligible Business under the JNA, a business that already is receiving benefits under
2 any incentive law listed under the JNA, cannot receive benefits for the creation of jobs under said Act. That is to say, if a business qualifies for the incentives provided by the laws listed but it has not avail itself of the same, such business may qualify for the incentives provided under the JNA. These amendments shall allow more business to be certified as Eligible Business, and in turn, prevent the duplication of benefits under the JNA, in relation to the incentives received by business under the incentive laws listed under the JNA. Secondly, the availability of shipping costs is extended to Expanding Businesses. Currently, the JNA provides for the reimbursement of the shipping costs incurred by Developing Business in the export of products manufactured in Puerto Rico. Up to one hundred percent (100%) of the shipping costs incurred in the export of agricultural products and up to twenty-five percent (25%) of the shipping costs incurred in the export of other products may be reimbursed. However, business with greater interests and a better financial position to avail themselves of this benefit are Expanding Business because, in some cases, the projected expansion entails precisely the export of products. Therefore, under this Bill, Expanding Business may be reimbursed up to thirty percent (30%) of the costs incurred in the export of agricultural products and up to twenty percent (20%) for other products manufactured in Puerto Rico for 18 months. Thirdly, the eligibility criteria to obtain wage subsidies is hereby extended in relation to employees who are younger than 25 years and women. Reimbursements on account of wage subsidies have been restrictive for business whose principal reason for availing themselves of the JNA is precisely said subsidies. There is a high unemployment rate among the Island s youth and, in this manner, the hiring of this sector of the population is thus encouraged. Hence, the partial wage reimbursement for hiring low-income individuals under the age of 25 is hereby extended to every Eligible Business and not to New Business under the JNA alone,
3 as the Act currently provides. The fifty percent (50%) and twenty percent (20%) reimbursement provided in this Bill shall remain the same for New Business and for all other Eligible Business, respectively, as currently provided by the JNA. Fourthly, according to the business sector, another restrictive incentive is the 25%-partial reimbursement for hiring women over 56 years of age. There is consensus that the great majority of women who are heads of households seeking employment are considerably younger than 56 years. For such reason, this Bill amends the eligibility age to include the hiring of women over 40 years in any type of Eligible Business. Lowering the age bracket to 40 years or older enables the protection against age discrimination in the workplace under applicable laws. Lastly, the term provided under the JNA to enter into Special Job Creation Agreements is hereby extended. On February 28, 2013, the Trade and Export Company issued a Public Notice on the JNA, providing that under the JNA, any interested party shall have up to nine months as of said date to execute a Special Job Creation Agreement, that is, through November 30, 2013. The extension included in this Bill extends such term for two additional months, that is, through January 31 st, 2014. Said additional term shall provide businesses interested in availing themselves of the JNA and moved by these amendments with the opportunity to submit their applications and enter into agreements promptly. BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF PUERTO RICO: Section 1.- Subsections (b) and (f) of Section 1.3 of Act No. 1-2013, are hereby amended to read as follows: Section 1.3-Definitions.- For purposes of this Act, the following terms, phrases, and words shall have the meaning and scope stated below:
4 (a) (b) Eligible Business Any natural or juridical person, including corporations, partnerships, limited liability companies, or any other entity or organization doing, or seeking to do business in Puerto Rico, regardless of its place of organization, whose main operations are not covered (receiving benefits) under any other Incentives Law, as defined in this Act. Furthermore, such Eligible Businesses shall have a local capital investment of at least fifteen percent (15%), or shall deposit and keep one percent (1%), of its monthly gross sales generated in Puerto Rico every month in local banks and/or cooperative banks for a period of at least three (3) years. The term Eligible Business includes New Businesses, Expansions of Existing Businesses, and Developing Businesses. (c) (d) (e) (f) Incentive Law or Laws includes the following laws, as amended: the Tax Incentives Act of 1998, Act No. 135-1997; the Economic Incentives Act for the Development of Puerto Rico, Act No. 73-2008; the Puerto Rico Tourism Development Act of 2010, Act No. 74-2010; the Puerto Rico Film Industry Economic Incentives Act, Act No. 27-2011; the Green Energy Incentives Act, Act No. 83-2010; the Act to Promote the Export of Services, Act No. 20-2012; and Act No. 168 of June 30, 1968. (g) (h) (i) (j) (k)
5 Section 2.- Section 4.2 of Act No. 1-2013, is hereby amended to read as follows: Section 4.2. Term to Enter into Special Job Creation Agreements. The Company shall issue a notice to the public stating the procedure to enter into Special Job Creation Agreements within thirty (30) days after the approval of this Act. Eligible Businesses shall have eleven (11) months after the date of the notice to execute the Special Agreement with the Company. However, Agreements executed within such eleven (11)-month term shall continue in effect as provided in this Act and such Agreements. Section 3.- Subsection (e) is hereby amended and a new subsection (f) is hereby added to Section 4.4 of Act No. 1-2013, to read as follows: Section 4.4. Incentives Applicable to Every Eligible Business that is a New, Expanding, or Developing Business and Enters into an Agreement. An Eligible Business that is a New, Expanding, or Developing Business and has entered into a Special Job Creation Agreement shall enjoy the benefits listed below, provided that it meets the requirements of such Agreement and this Act, which have been established generally with respect to a specific incentive: (a) (b) (c) (d) (e) A wage subsidy of up to twenty-five percent (25%) for eighteen (18) months as of the effective date of the Agreement shall be granted to Businesses covered under this Act for hiring women 40 years of age or older. Funds available under Act No. 52-1991 shall be reallocated for such purposes. The wage reimbursement established in Section 4.6(d) of this Act for hiring women 40 years of age or older shall also apply to Developing Businesses.
6 (f) Wage Reimbursement for Hiring Certain Employees.- Twenty percent (20%) of the Federal minimum wage paid to Eligible Employees, who are lowincome individuals and as of the hiring date are twenty-five (25) years old or younger shall be reimbursed; provided, that it is an Eligible Incremental Job covered under an Agreement. The incentive shall be obtained through the Job Promotion Bureau of the Department of Labor and Human Resources as provided under Act No. 52-1991, as amended. In addition, funds shall also be available for employee training under the Workforce Investment Act of 1998. Section 4.- Subsection (d) of Section 4.6 of Act No. 1-2013, is hereby amended read as follows: Section 4.6. Additional Incentives Applicable to Developing Businesses. (a) (b) (c) (d) A wage subsidy of up to forty percent (40%) shall be granted to the Businesses covered under this Act for eighteen (18) months after the effective date of the Agreement for hiring women 40 years of age or older. Funds available under Act No. 52-1991 shall be reallocated for such purposes. Section 5.- A new Section 4.7 is hereby added to Act No. 1-2013, to read as follows: Section 4.7.-Additional Incentive for Expanding Businesses.- Reimbursement of the Costs of Exporting Products Manufactured in Puerto Rico.- If an Expanding Business intends to export products manufactured in Puerto Rico, the Agreement shall grant a twenty percent (20%) reimbursement of the shipping costs incurred in the export of such products during the first eighteen (18) months of effectiveness of the Agreement. If the Expanding Business incurs in combined shipping costs to export products manufactured and products not
7 manufactured in Puerto Rico it shall agree upon a reasonable formula with the Executive Director, which shall be defined in the Agreement, to determine the shipping costs corresponding to the export of products manufactured in Puerto Rico. The Expanding Business shall provide the Company with evidence of the shipping costs to be reimbursed prior to receiving a reimbursement under this subsection. Up to thirty percent (30%) of the shipping costs incurred in exporting agricultural products of Puerto Rico may be reimbursed. Reimbursements provided herein shall be paid after the first year and not later than the compliance date on the second year after the execution of the Agreement, and shall be covered from special funds appropriated to the Company for the administration of this Act. Section 6.- Subsections 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, and 4.13 are hereby renumbered as Sections 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, and 4.14 of Act No. 1-2013. Section 7.- Effectiveness This Act shall take effect immediately after its approval.
8 CERTIFICATION I hereby certify to the Secretary of State that the following Act No. 54-2013 (H. B. 1182) of the 1 st Regular Session of the 17 th Legislative Assembly of Puerto Rico: AN ACT to amend subsections (b) and (f) of Section 1.3; amend Section 4.2; add a subsection (f) to Section 4.4; amend subsection (d) of Section 4.6; add a new Section 4.7; and renumber remaining Sections of Act No. 1-2013, known as the Jobs Now Act, in order to broaden Eligible Business eligibility criteria under the Act and the scope of some of the incentives provided thereunder. has been translated from Spanish to English and that the English version is correct. In San Juan, Puerto Rico, on this 10 th day of June, 2016. Juan Luis Martínez Martínez Director