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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 1553 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
H. RES. 1553

   Expressing the sense that the House of Representatives must take 
responsible and timely action to address the Federal tax loophole that 
      allows Act 22 decree holders to legally evade Federal taxes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 25, 2024

Mrs. Ramirez (for herself, Ms. Velazquez, Ms. Ocasio-Cortez, Ms. Bush, 
 Mr. Khanna, Mr. Grijalva, Mr. Goldman of New York, Mr. Espaillat, Ms. 
Tlaib, Ms. Lee of California, Mr. McGovern, and Mr. Garcia of Illinois) 
submitted the following resolution; which was referred to the Committee 
                           on Ways and Means

_______________________________________________________________________

                               RESOLUTION

 
   Expressing the sense that the House of Representatives must take 
responsible and timely action to address the Federal tax loophole that 
      allows Act 22 decree holders to legally evade Federal taxes.

Whereas Puerto Rico is currently facing a crisis of displacement, tax evasion, 
        and a lack of housing affordability, exacerbated by wealthy Americans 
        gentrifying the island;
Whereas the population of Puerto Rico decreased by 11.8 percent from 2010 to 
        2020, during which time wealthy Americans relocated to the island to 
        take advantage of tax breaks, fueling displacement;
Whereas the influx of wealthy Americans seeking tax breaks has oversaturated the 
        housing market, driving up housing prices and reducing availability for 
        long-term residents, as evidenced by the fact that the average 2-bedroom 
        condo could be listed for $130,000 more in 2022 than in 2017;
Whereas gentrification, defined as a demographic and economic shift that 
        displaces established working-class communities and communities of color 
        in favor of wealthier newcomers and real estate development companies, 
        is occurring on the island;
Whereas American tax evaders, including but not limited to investors, are 
        contributing to the displacement of Puerto Ricans, and worsening the 
        shortage of housing inventory on the island;
Whereas Act 22 and Federal tax loopholes have made Puerto Rico the only place 
        where a wealthy American with no ties to the island can move and evade 
        paying Federal taxes;
Whereas Act 22 provisions, part of the broader ``Puerto Rico Incentives Code'', 
        allow individuals who did not reside in Puerto Rico between 2006 and 
        2012 to request a variety of exemptions from the territorial government, 
        including--

    (1) a 100 percent exemption from income tax on all income, dividends, 
and interest; and

    (2) a 100 percent exemption from income and capital gains taxes;

Whereas the requirements for an individual to qualify for Act 22 are minimal, 
        including--

    (1) not residing in Puerto Rico during the period from 2006 to 2012;

    (2) residing in Puerto Rico for at least 6 months before requesting a 
decree;

    (3) not having a tax domicile outside of Puerto Rico;

    (4) buying a house in Puerto Rico within 2 years of obtaining a decree; 
and

    (5) making an annual $10,000 contribution to 1 or more local nonprofit 
organizations;

Whereas Act 22 does not require wealthy individuals to invest in the Puerto 
        Rican economy, resulting in no positive outcome for Puerto Rican 
        residents and merely enabling wealthy Americans to evade taxes;
Whereas there have been instances of Act 22 beneficiaries creating their own 
        nonprofit organizations to direct their annual $10,000 contribution, 
        demonstrating dubious behavior and apathy towards the Puerto Rican 
        people;
Whereas Americans seeking a tax shelter in Puerto Rico contributed to a 600-
        percent increase in rent prices from July 2022 to September 2023, are 
        privatizing lands that belong to the people, and are furthering the 
        second-largest migration the island has seen;
Whereas it seems that the number of Stateside residents moving to Puerto Rico to 
        receive Act 22 benefits have grown significantly, with total 
        beneficiaries increasing from 3,146 in late 2020, to 5,010 in early 
        2023, a nearly 60-percent increase;
Whereas Puerto Rico and its people should be empowered to exercise their right 
        to self-determination, including the authority to create policies that 
        protect and preserve their culture and the island itself; and
Whereas Puerto Rico and the Puerto Rican community deserve accessible housing, 
        an economy that works for them, and oversight of their own affairs, 
        without tax incentives working against the prosperity of the island and 
        its people: Now, therefore, be it
    Resolved, That the House of Representatives shall act swiftly to 
minimize the revenue losses to the Federal, State, and territorial 
governments, and the illicit use of the parallel Federal and Puerto 
Rico tax regimes to avoid United States taxation.
                                 <all>
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