Editor’s note: A shorter version of this story was published in the August 5, 2020 edition of The Weekly Journal.
Less than three months left for the November 3 general election in Puerto Rico, the proposals and financial stances of the main candidates for resident commissioner could be just as important as the gubernatorial candidates’ at a time when the island relies heavily on federal funding for its natural disaster recovery processes and to mitigate the financial burden exacerbated by the coronavirus (COVID-19) pandemic.
A resident commissioner is, essentially, Puerto Rico’s representative in the U.S. Congress. Concerns from the island are channeled through this congressperson, who in turn proposes legislations that are beneficial to the Commonwealth’s residents and to its economic development.
Present Resident Commissioner Jenniffer González Colón (R-PR) aims to retain her seat in Washington, D.C. under the New Progressive Party (NPP), Puerto Rico’s pro-statehood collective and the current party in power in the central government. As president of the Puerto Rico Republican Party and chair of the group “Latinos for Trump,” she maintains what she deems a “phenomenal” relationship with both U.S. President Donald J. Trump and fellow Republicans in Congress, even though Govtrack.us ranked her in 2019 as the 13th most liberal representative compared to House Republicans.
Meanwhile, former Gov. Aníbal Acevedo Vilá (2005-2009) - who also served as resident commissioner from 2001 to 2005 - is challenging González under the Popular Democratic Party (PDP), the island’s pro-Commonwealth faction. Contrary to González, he is aligned with the Democrats, even joining the Democratic Governors Association and endorsing the candidacy of former President Barack H. Obama. Between his tenures as governor and resident commissioner, he has maintained relations with Democrats in the U.S. mainland.
Invest Puerto Rico is pushing forward with its agenda of highlighting the island’s commitmen…
Despite these subtle but decisive differences, which could gain or lose relevance depending on the outcome of the U.S. general elections and which federal party controls the bicameral legislature, the congressional candidates have similar views in attracting investment to the island, with slight disagreements concerning incentives offered to investors.
For instance, both González and Acevedo have echoed economists in Puerto Rico and stateside in the need for the U.S. to bring biopharmaceutical manufacturing to its jurisdictions. As has been debated in major local economic circles, both candidates have pleaded to incentivize manufacturing of this kind in Puerto Rico as a means to boost the local economy, reduce dependency on China for medical ingredients and products, and avoid a shortage in these items—particularly with the threat of scarce drug manufacturing experienced throughout the pandemic.
In April 2020, González introduced along with five representatives a bipartite legislation to grant fiscal incentives under the federal Internal Revenue Code to attract biopharmaceuticals to U.S. jurisdictions, including Puerto Rico. In a missive, González informed that H.R. 6443, to create the ‘Securing the National Supply Chain Act of 2020,’ would secure the supply chain nationwide by providing incentives to economically depressed areas, also known as distressed zones, in the nation’s states and territories.
"This legislation would prevent shortages of supplies for future events, while at the same time contributing to the economic development of the neediest U.S. jurisdictions," she stated.
In the face of recent weather disturbances, FEMA along with Puerto Rico's Central Office for…
For his part, Acevedo issued in March 2020 a letter to U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA), urging the adoption of a new federal incentive to promote investment in Puerto Rico. In the missive, which he also shared on Twitter, the former governor recommended approving a reduction for companies that operate on the island under the Global Intangible Low Tax Income (GILTI), which was included in the American Jobs Creation Act (AJCA).
“There is no manufacturing jurisdiction under the U.S. flag better poised to ramp up pharmaceutical and medical device production than Puerto Rico… By turning on Puerto Rico's mighty manufacturing engine, we can solve two critical problems at once—we can provide a secure and reliable source of critical drugs and medical devices under the U.S. flag, and solve in great part Puerto Rico’s socio-economic crisis,” Acevedo said in the letter to Sen. Grassley.
Congressman @RepChipRoy, thanks for making Puerto Rico part of the solution to the problem of pharmaceutical control chain. This is an issue I have been working intensely. Here is a link to a letter I sent Chairman Grassley last week on this topic. https://t.co/2P1sbE6P7K— Aníbal Acevedo Vilá (@anibalacevedo) March 24, 2020
Under GILTI regulations, U.S.-owned companies established in Puerto Rico are subject to a 10.5 percent corporate tax rate. In May 2020, Acevedo sponsored H.R. 6648, introduced by Delegate Stacey Plaskett (D-USVI), which would exempt Puerto Rico and other U.S. territories from the GILTI, which currently places them in the same category as foreign nations.
Apart from manufacturing, González has been a prominent sponsor of the Opportunity Zones (OZs) program included in the U.S. Tax Cuts and Jobs Act of 2017. The program allows for tax benefits to stimulate investment in distressed communities. When approved, roughly 94 percent of Puerto Rico was deemed a qualified opportunity zone for investment.
Last year, González and the former executive director of the Puerto Rico Federal Affairs Administration (PRFAA), Carlos Mercader, joined efforts to add the Roosevelt Roads area in the municipality of Ceiba in the OZs program, given that the U.S. Census Bureau excluded it because there were no residents living there.
The company sets gaze on the former Roosevelt Roads Naval Station
Since then, LoopLand announced in July 2020 that it will invest nearly $200 million in a hole project in that area as part of a $1 billion tourism development plan.
Furthermore, González introduced in the first week of July H.R. 7492 to designate all of Puerto Rico as a qualified opportunity zone. The amendment made by this section would apply to taxable years beginning after December 31, 2019.
Regarding the Export Services Act and the Individual Investors Act of 2012 (Acts 20/22), González has participated in forums highlighting their benefits to boost Puerto Rico’s economy, such as an August 2018 forum hosted by the Puerto Rico Society of CPAs (CCPAPR by its Spanish initials) on “Exporting Products and Services.”
By contrast, Acevedo has openly expressed dissatisfaction with the original provisions contained in these local laws designed to incentivize investment. The PDP candidate argued that Acts 20/22 offer more benefits to foreign investors than they provide to residents.
“In Puerto Rico, we have seen in the past years a dangerous tendency, especially after the approval of Acts 20 and 22 during the [Luis] Fortuño administration, designed to promote wealthy Americans to move to Puerto Rico in exchange of them paying low taxes. To date, most [Americans] who have come here have shared little interest in incorporating socially and culturally to our society. What they have showed interest in is in buying our best properties at [low prices],” he wrote in an April 2017 column criticizing statehood and gentrification.
González has outlined her vision for the island’s economy via blog posts at www.jenniffer.com. Meanwhile, Acevedo runs a blog where he discusses local and economic affairs at www.acevedovila.net and a podcast, “Sobre La Mesa Con Aníbal Acevedo Vilá” (Radio Isla).