2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART I - Industrial Incentives (§§ 10001 — 10052) › Chapter 903 - Industrial Incentive Act of 1978 (§§ 10024 — 10037) › § 10033 - Administration; tax exemption concessions

(a) Industrial Tax Exemption Office. — The Industrial Tax Exemption Office is hereby established, which was previously created and named as an agency directly responsible to the Governor, under §§ 221—238, §§ 10001—10011 and §§ 10012—10023 of this title. This Office shall be directed and administered by a Director, who shall be appointed by the Governor, with the advice and consent of the Senate. The Director shall exercise the powers and carry out the duties and fulfill the obligations imposed on him by this chapter and shall appoint the personnel needed to carry out the provisions of the same.
(b) Sworn statements required by the Office. — The Industrial Tax Exemption Office shall require every applicant for tax exemption to present such sworn statements as shall be necessary concerning the facts required or appropriate to determine if the operations, or proposed operations of the applicant, qualify under the provisions of this chapter.
(c) Hearings. — The Director of the Industrial Tax Exemption Office may hold such public and/or administrative hearings as he may deem necessary and shall require the applicants for tax exemption to present such evidence that will justify the exemption applied for.
The Director, or any Special Examiner of the Office so designated by the Governor:
(1) May receive the evidence presented in relation to any application for tax exemption, and
(2) shall have the power:
(A) To summon witnesses and take their statements regarding the facts alleged or in any way related to the tax exemption applied for;
(B) to administer an oath to any person testifying before him, and
(C) to make a report to the Governor regarding the evidence adduced, together with his recommendations on the matter.
(d) Penalties. — Any person who shall commit, or attempts to commit, on his own behalf or in behalf of any other person, any false or fraudulent representation regarding any tax exemption application or concession or any violation of the provisions regarding predecessor or successor exempted businesses shall be deemed guilty of a felony and, upon conviction, shall be punished by a fine of not more than ten thousand (10,000) dollars, or imprisonment for not more than five (5) years, or both penalties, together with the costs, at the discretion of the court.
(e) Applications for tax exemptions. — Any person who has established or proposes to establish an eligible business in Puerto Rico may apply to the Governor for the benefits provided in this chapter by filing the corresponding application under oath with the Industrial Tax Exemption Office.
(1) The tax exemption concessions under this chapter shall be considered in the nature of a contract between the recipient and the Commonwealth of Puerto Rico.
(2) The Governor may include in the tax exemption concessions such terms and conditions as are consistent with the purpose and provisions of this chapter, and that in his judgment promote the economic and social development of the People of Puerto Rico.
(3) Every exempted business shall carry out its exempted operations substantially as represented in its tax exemption application, except for those amendments that at the request of the recipient the Governor authorizes to the exempted business, in accordance with this chapter.
(4) The exempted business shall commence operations on a commercial scale within the year following the date the tax exemption concession is signed, which term may be extended by the Governor at the request of the exempted business for just cause, but no extensions that extend the date of commencement of operations for a period greater than four (4) years from the date the tax exemption concession is signed shall be granted.
(f) Regulations under this chapter. — The Director of the Industrial Tax Exemption Office (Director) shall draft, in consultation with the Secretary of the Treasury and the Economic Development Administrator, such regulations as may be necessary to implement the provisions and purposes of this chapter. Such regulations shall be submitted jointly by said officials to the Governor through the Director. Such regulations shall also be subject to the provisions of §§ 2101 et seq. of Title 3.
(g) Interagency consideration of application(s). — When the Industrial Tax Exemption Office receives any application under the provisions of this chapter, the Director shall send a copy of the same to the Economic Development Administrator or to the Executive Director of Tourism, in case the application involves any tourist facility, so that such officials may render an eligibility report indicating the eligibility of the manufactured product, designated service, or tourist facility, as the case may be, and other facts regarding the application, and shall submit their recommendations to the Governor through the Director of the Industrial Tax Exemption Office.
(1) The Director shall also send a copy of the applications filed with the Industrial Tax Exemption Office to the Secretary of the Treasury, to the Secretary of Labor and Human Resources and to such commonwealth agencies that in the judgment of the Governor should have copies of the same so that such officials may submit comments on any phase of the application that in their judgment may require consideration at this stage of the processing of the application.
(2) When the corresponding eligibility report is received, the Director shall prepare a draft of the decree which shall be circulated among the agencies that report on the application, so that they may submit recommendations on said draft of the decree. The Director shall also send an informational copy of the draft of the decree to the Secretary of Justice. In case any report is not submitted by any of said government officials, the Governor may dispense with the same and may act upon the exemption application.
(3) When the reports on the draft of the decree have been received, the Director shall submit the application and his report and recommendations to the Governor for his consideration.
(4) The Director may rely on the recommendations and findings of facts furnished by the agencies that submit reports and may request them to supplement the same. In case the Director’s recommendation to the Governor differs from that of any of the agencies that submit reports, the Director shall send a copy of his conclusions and recommendations to the head of the agency involved.
(5) The Governor may delegate to the Director the administrative duties that in his judgment he deems convenient in order to facilitate the administration of this chapter, except for the duty of approving or denying tax exemption concessions under the same. This delegation may be made by regulations, executive order or by express provision in the tax exemption decree in any particular case.
History —June 2, 1978, No. 26, p. 55, § 10; July 20, 1979, No. 176, p. 460, § 8.