2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 953 - Economic Incentives Act For The Development Of Puerto Rico (§§ 10641 — 10673) › Subchapter I - Economic Incentives (§§ 10641 — 10661) › § 10657 - Special Economic Development Fund

(a) In general.— The Secretary of the Treasury shall establish a special fund, to be denominated “Special Economic Development Fund”, into which five percent (5%) of the amounts collected from the income tax paid by businesses exempted under this chapter or under preceding tax incentives laws in relation to industrial development income, as well as the amounts collected from the payment of withheld taxes concerning royalties relative to operations exempted under this chapter or under preceding tax incentives laws, shall be covered during the first four (4) years of effectiveness of this act. Starting on the fifth (5 th ) year of effectiveness of this act, seven point five percent (7.5%) of the items provided for above in lieu of five percent (5%) provided for the initial four (4)-year period. Provided, as an exception, that for Fiscal Year 2015-2016, four percent (4%) of the items provided for above shall be covered into the fund and three point five percent (3.5%) shall be transferred to the 2015-2016 Legal Liability Fund. If the total amount of this last transfer does not exceed fourteen million, two hundred and sixty-three thousand, two hundred dollars ($14,263,200), the Director of the Office of Management and Budget shall make the corresponding adjustments in the appropriations to be payable from the 2015-2016 Legal Liability Fund. If said sum exceeds fourteen million, two hundred and sixty-three thousand, two hundred dollars ($14,263,200), such excess shall be covered into the General Fund. Provided, further, That for Fiscal Year 2016-2017, the sum of one million dollars ($1,000,000) in account number 278-166-779-2014 of the Department of the Treasury’s accounting system shall be transferred from this Fund to the “Special Education Students Service and Therapy Fund”, created by Act No. 73-2014. Furthermore, for Fiscal Year 2016-2017, it is hereby directed that, of the percentage of revenues that nurture this Fund, the sum of three million, six hundred and fifty-nine thousand four hundred and eighteen dollars ($3,659,418) be allocated, firstly, to the “Elections Support Fund”. Provided, further, That starting on the ninth (9 th ) year of the effectiveness of this act, ten percent (10%) of the items provided for above shall be covered into the fund, in lieu of seven point five percent (7.5%) provided above.
The monies of the Special Fund established herein shall be administered by the Executive Director and shall be used exclusively for the following purposes:
(1) Special incentives for scientific and technical research and the development of new products and industrial processes, which may be carried out, among others, directly or in agreement with government agencies or public and private universities or with any natural or juridical person with knowledge and experience; as well as for the Industrial Incentives Program, administered by the Puerto Rico Industrial Development Company, in support of its industrial promotion efforts, including the improvement and development of industrial properties.
(2) The development and implementation of special self-employment and microbusiness programs directed to countering the problem of persons or families who, for reason of chronic unemployment or any other considerations, are financially lagging or marginalized and whose rehabilitation requires government action beyond the traditional services of the Executive Branch, in order to integrate them into the modern mainstream of socioeconomic development.
(3) To provide special incentives for the establishment in Puerto Rico of industries with strategic importance for the Government, including the investment of venture capital funds that promote this kind of industry, with the previous authorization of the Economic Development Bank.
(4) To provide special incentives for the acquisition of tax-exempt businesses by their management.
(5) To provide special incentives for the establishment of programs that incentivize and promote investment, technology and skill-building for small and medium businesses.
(6) To provide financial support to community enterprises, as this term is defined in § 10642(r) of this title.
(7) To provide special incentives for the establishment and development of strategic projects under this chapter.
(8) To provide special incentives for research and development, directed toward bioscience, information technology, biomedicine, and aeronautic engineering.
(9) Twenty percent (20%) of the monies covered into the Special Fund shall be destined to the Science, Technology and Research Trust, created by §§ 695a—695i of Title 23, of which not less than forty percent (40%) shall be used for research projects conducted in nonprofit private higher-education institutions.
(10) To provide support to entities or programs devoted to furthering the following initiatives:
(A) The establishment of public-accessible Internet networks and other initiatives directed toward bridging the digital divide in Puerto Rico.
(B) The rendering of advisory services in the field of information systems for small and medium businesses.
(C) The establishment of business incubator centers that provide a support structure and an appropriate framework for the establishment and development of new businesses through specialized resources.
(D) The establishment of information system and communications training centers and programs for unemployed persons throughout the Island.
(E) The establishment of educational programs of all levels with an emphasis on languages, science and mathematics.
(11) To support regional initiatives, as defined in § 10642(v) of this title, or to other entities, for the purpose of furthering the development of businesses, research and development, construction, and business incubator operations, and other purposes set forth in this section.
The Executive Director shall have discretion as necessary and sufficient concerning the use of the monies of the Special Fund, provided such a use leads to the achievement of the objectives set forth above. Likewise, he/she shall establish through regulations, in consultation with the Secretary of Development, the criteria to be used for the disbursement of the monies of the Special Economic Development Fund established herein. All appropriations of monies from the Special Fund shall be approved by the Board of Directors of the Industrial Development Company.
(b) The Secretary of the Treasury may require that the returns or forms relative to income taxes, to income taxes on the payment of royalties, or to any other in connection with this chapter, be filed with two payments (by check, electronic transfer, or others) segregating the part to be covered into the Special Fund as described in this section and the part corresponding to the General Fund.
History —May 28, 2008, No. 73, art. 1, § 17, eff. July 1, 2008; July 2, 2015, No. 105, § 23; Nov. 17, 2015, No. 187, § 87; July 22, 2016, No. 81, § 11.