Gov. Alejandro García-Padilla filed the “Jobs Now Act” bill Wednesday outlining his strategy to create 50,000 jobs in 18 months and the incentives companies will get in exchange for making opportunities available for out-of-work Puerto Rico residents.
The governor signed off on the bill before a roomful of private sector representatives, including some executives from 10 companies that have vowed to create 10,000 jobs — some which were already in the pipeline prior to the governor taking office two weeks ago.
“Today we’re taking the first step to start and set off our administration’s first priority, which is job creation,” García-Padilla said during a news conference following the “Puerto Rico Economic Development Summit” held at a hotel in Miramar. “This commitment responds to the need to reactivate the economy, to improve the island’s competitiveness and, most importantly, to offer an opportunity to develop and find professional growth to thousands of workers looking for a chance to get ahead.”
The governor explained that the new law provides for fast-tracking permits, as long as new businesses or expansions are in zones already identified as commercial or industrial and don’t require zoning checks that entail changing their original use.
“New companies that move into spaces previously occupied by similar companies will have their permit in 24 hours. Companies requiring Health Department certification will have their permit in five days,” the governor said.
The measure also includes an energy credit of up to $2,000 per new job created between Jan. 1, 2013 and June 2014. The money will come from the amount retained from a worker’s paycheck, which the employer will report to the Treasury Departement, but will be allowed to use to pay their energy bill.
While the potential cost of that clause could reach $100 million — if the 50,000 jobs are created within the eligible timeframe — García-Padilla insisted Wednesday the government will not feel the effect of the “fiscally net” proposition.
He explained that as new people are added to the employment ranks, they will generate economic activity that will circle back to the government’s coffers.
“These are people who will pay taxes, buy goods and services and be active in the economy,” the governor said. “My administration is clear on the fact that every action we take must be motivated and geared toward creating jobs. That pressing need for jobs must be addressed urgently for the well being of our people and our island.”
Senate President Eduardo Bhatia and House Speaker Jaime Perelló, who promised to act on the bill quickly, flanked García-Padilla during the news conference.
The “Jobs Now Act” bill also includes: a clause granting a two-year property tax exemption for new businesses setting up in a previously vacant facility; a clause granting companies that hire people laid off through the Law 7 of 2009 a 25 percent reimbursement of the basic salary paid; a clause granting new businesses the chance to write off net losses over the first two years and municipal tax exemptions for 18 months; and a clause allowing new businesses to phase into paying the mandatory Christmas bonus by letting them pay $200 the first year, $400 the second year and $600 the third year.
To keep track of the jobs created, the García-Padilla administration will establish a three-pronged system to validate activity that will go through the Labor Department, the Department of Economic Development and Commerce and the Puerto Rico Statistics Institute.
Companies step up to the plate
During the summit, Economic Development and Commerce Secretary Alberto Bacó read off a list of 10 companies that are willing to hire about 10,800 people — from highly skilled professionals to entry-level workers — in coming months. That number represents about 20 percent of the 50,000 jobs promise.
The roster includes: newcomer Pollos Campero, which will create 180 jobs when it opens its fast-food restaurants this year, Paciv (12), CapCorp (55), Wendco Puerto Rico (750 this year and 750 in 2014), San Fermín Solar Farm (6), FusionWorks (20), Plaza Internacional (2,000), Econo (2,000), the Puerto Rico Restaurant Association (5,000), and Caribe Tecno (92).
Likening each commitment to create jobs to “knocking one out of the park,” self-confessed baseball fan García-Padilla handed a bat signed by former Major Leagues third baseman Edgar Martínez to each company executive as a symbol of their pledge.
“Puerto Rico is ready to reactivate its economy, with optimism and the drive and collaboration of all our people,” Bacó said.
After his participation in the summit with the estimated 300 local executives, García-Padilla and Bacó met with a group of representatives of foreign companies to present to them the business opportunities, incentives and benefits available in exchange for investments.