Resident Commissioner Pedro Pierluisi introduced Thursday the Puerto Rico Investment Promotion Act, which seeks an amendment to the U.S. Internal Revenue Code to open the door for job creation and strengthening the island’s economy.
Pierluisi filed the bill to amend section 933 of the tax code to add subsection A provide special treatment to certain corporations established on the island. If approved, controlled foreign corporations (CFCs) incorporated in Puerto Rico would be treated as domestic when they repatriate their dividends if they generate 50 percent or more of their income on the island.
The amendment could generate thousands of jobs and shore up millions for the local economy as well as federal coffers, bill proponents representing the island’s public and private sectors have said.
“Now that I have filed the bill, the formal process of consideration by Congress will begin,” said Pierluisi. The original, bipartisan cosponsors of the measure are Representatives Don Young (R-Alaska) and José Serrano (D-New York).
“I was pleased by the initial reaction I received from my colleagues prior to the bill’s introduction,” Pierluisi said, adding that he and Gov. Luis Fortuño “have already briefed key Congressional leaders of both political parties, since their support is essential to achieving passage of this bill.”
Among the members of Congress that the Governor and Resident Commissioner have spoken with are House Majority Leader Eric Cantor (R-Virginia) and the lead Democrat on the House Committee on Ways and Means, Sandy Levin (D-Michigan), as well as “Super Committee” members Dave Camp (R-Michigan), Xavier Becerra (D-California), James Clyburn (D-South Carolina), and Chris Van Hollen (D-Maryland).
The Super Committee, which is composed of six Republicans and six Democrats from both the House and the Senate, must vote by Nov. 23 on a plan to reduce the federal deficit, Pierluisi explained.
“In the coming weeks, our strategy will be aimed at inserting the language of PRIPA in any legislative vehicle that moves forward as a result of the Super Committee’s work. Our measure could be considered as a new source of revenue for the federal government if the U.S. Congress’s Joint Committee on Taxation so confirms,” explained the Resident Commissioner.
Pierluisi said that his bill should appeal to members of both political parties.
“On the one hand, the Republican leadership has been advocating for tax relief proposals designed to generate more economic activity in the United States, and our legislation reduces the federal tax rate that applies to earnings repatriated from companies in the U.S. territory of Puerto Rico to their parent companies in the 50 states. On the other hand, my Democratic colleagues are united in looking for ways to increase job-creating investment in U.S. jurisdictions, and that is precisely what our bill seek to do,” he said.
The Resident Commissioner urged all interested parties to coordinate their lobbying efforts with his office because it is important that Puerto Rico speaks with a single voice before Congress.
“We have a great opportunity and, if we remain united and committed, together we can achieve our goal,” he said.
To read the full text of the Puerto Rico Investment Promotion Act, click here.