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) › § 10651 - Industrial development zones

(a) In general. — The Secretary of the Department of Economic Development and Commerce of Puerto Rico, pursuant to the procedure established in subsection (b) of this section, shall classify the various regions or municipalities of Puerto Rico under one of the following industrial development zones:
(1) High Industrial Development Zone.
(2) Medium Industrial Development Zone.
(3) Low Industrial Development Zone.
Provided, however, That the Municipalities of Vieques and Culebra shall constitute a Special Industrial Development Zone, different from the zones provided for herein.
(b) Procedure and criteria. —
(1) As of July 1st, 2008, the Secretary of Development shall make the classification as provided for in subsection (a) of this section through an Administrative Order, in consultation with the Executive Director, the Chairperson of the Planning Board and the Secretary of the Treasury. This classification shall be based on the employment level of the municipality or region and on the need for establishing industrial operations for that area in particular. In addition, it shall take into account the nature of the area, the availability of manpower, the existing infrastructure and any other factors which affect the economic and social development of the municipality or region to be classified. The Secretary of Development shall append to the Administrative Order provided for in this subsection, a report which states in detail the specific criteria used to make such classifications.
(2) The Secretary of Development shall make a general revision of the classifications made under subsection (a) of this section every five (5) years, to be counted as of the date of the initial classification made under this section.
(c) Special designation. — The provisions of subsection (b) of this section notwithstanding, the Secretary of Development may, through an Administrative Order and in consultation with the officials referred to in subsection (b) of this section, reclassify any municipality or geographical area from one zone to another, prior to the general revision required under subsection (b)(2) of this section, when the factors that justified the inclusion of the municipality or region into the preceding zone have varied substantially. Provided, further, That the Administrative Order through which the special classification provided for in this subsection is made shall indicate the specific criteria which motivated the change in classification.
(d) Special rules. — The reclassification of a municipality or geographical area from one zone to another shall not affect the exemption of tax-exempt businesses already established in said municipality or region. However, a business which has applied for a tax exemption decree in order to establish said business in a specific municipality or region, but which has not yet been established, or which has obtained the same before the date on which that municipality or area had been reclassified from one zone to another, which, as a consequence of the change in designation, renders the business eligible for lesser benefits than those it would have under the former classification, shall be entitled to enjoy the exemption benefits in effect prior to the reclassification if the business is established therein within one (1) year as of the date on which the area was reclassified. For the purposes of this chapter, the date of the first payroll for training or production shall be deemed to be the date of the establishment of the business.
(e) Transitory provisions. — Until the Secretary of Development makes the initial classification of municipalities and regions in the industrial development zones provided for in this section, those in effect as of the date of effectiveness of this act, as established by the provisions of §§ 10101 et seq. of this title, shall apply to exemptions granted under this chapter. Provided, however, That during said transitory period, municipalities and regions shall keep their current designations as low, medium or high industrial development zones.
History —May 28, 2008, No. 73, art. 1, § 11, eff. July 1, 2008.