Three weeks after announcing plans to submit legislation to spur job creation in Puerto Rico, Gov. Alejandro García-Padilla signed Sunday the “Jobs Now Act,” the tool his administration will rely on to create the 50,000 jobs he promised to promote during the first 18 months of his tenure.
The House and Senate approved the measure late last week.
“Today we create an instrument that along with other initiatives will enable us to do justice to our people by creating thousands of jobs,” García-Padilla said during a news conference at La Fortaleza. “My commitment to Puerto Rico is to use the government to promote economic development and to provide jobs to our people.
“Today, I sign the ‘Jobs Now Act’ confident that I will fulfill my commitment. Today the government, Puerto Rico’s business communities, and companies from other countries that come to our island to be part of our economic life come together with one goal. Jobs, jobs, jobs,” the governor said, flanked by lawmakers and business leaders.
The final bill signed into law incorporates amendments proposed by a variety of business sectors, namely banking, manufacturing, co-ops, as well as small and mid-sized industries. This latter group publicly expressed its concerns last week over the fast-track legislation, saying they would be mindful of whether the incentives would benefit local enterprises.
The statute provides incentives to employers who hire workers dismissed by Law 7 — passed by the former Gov. Luis Fortuño administration in 2009 that called for thousands lay-offs in government — and who are still jobless.
It also establishes an energy credit for companies that hire new staff. This credit will be given in different ways: for those with more than $20,000 in income, the credit will be proportional to the salary scale and will depend on the tax liability. For those earning less than $20,000, the credit will be based on an estimate of what the individual pays in taxes through the Sales and Use Tax, which has been set at $750 annually. The benefit will be given after 12 months of being employed.
Foreign companies may qualify for incentives, provided they have at least 15 percent of their investment is local capital or they deposit at least 1 percent of their gross sales in local banks or cooperatives for the next three years.
All eligible businesses will also receive a two-year exemption on property taxes, a partial reimbursement of 20 percent of the salary paid to laid-off public workers, a 25 percent reimbursement for salaries paid to women 56 and older, subsidies on commercial property leases and a special deduction for expenses related to those leased properties.