2023 Laws of Puerto Rico › TITLE THREE - Executive (§§ 1 — 9311) › Chapter 37D - Investment in Puerto Rican Industry (§§ 930 — 930k) › § 930 - Definitions

For purposes of this chapter, the following words and phrases shall have the meaning stated hereinbelow:
(a) Government of Puerto Rico or Government.— Means the Commonwealth of Puerto Rico, its departments, agencies, instrumentalities, dependencies, municipalities, public corporations and their subsidiaries.
(b) Board.— Means the Puerto Rican Industry Investment Board, created by this chapter.
(c) Articles.— Means goods, provisions, supplies, materials, services, equipment. In the field of computers and related products, “article” or “product” shall be classified as the integrated product, including the hardware as well as the software, if the latter us a part of the specifications established for the purchase by the department, agency, instrumentality, public corporation, municipality or dependency of the Government.
(d) Product of Puerto Rico.— Is that article extracted from or produced in Puerto Rico, after an operation that, in the opinion of the Board, deserves to be treated as a manufacturing process, due to its nature and complexity, directed toward the substantial transformation of raw materials into a completed final product, whose transformation can be carried out through the subcontracting of all or part of the manufacturing process in Puerto Rico, taking into consideration the private investment in machinery and equipment, the technology involved, the capabilities of intellectual skills, the packaging, the direct and indirect jobs generated, location, magnitude and that the added value in Puerto Rico is not less than thirty-five percent (35%), and any other benefit that the operation represents for the welfare of Puerto Rico. Furthermore, “products of Puerto Rico” shall be those articles produced by enterprises that maintain an average employment in Puerto Rico of one thousand (1,000) persons or more, with products manufactured by said enterprise or affiliates of the same, that manufacture in Puerto Rico in sufficient quantities, one (1) or more essential components, the final product of which, in the opinion of the Board, deserves to be considered as a “product of Puerto Rico”. The term “product of Puerto Rico” also includes all those products that are obtained through the practice of agriculture and the raising of cattle in all its branches in Puerto Rico, and all products derived from any of the said activities, whether just harvested or otherwise processed or conserved.
(e) Product assembled in Puerto Rico.— Means an article that, without constituting a product of Puerto Rico, a part of its composition has been manufactured or made in Puerto Rico and has been submitted to a process of assembly with a significant number of components that, in the judgment of the Board, and due to its nature, complexity, investment, technology involved, whose added value in Puerto Rico is less than thirty-five percent (35%), but more than ten percent (10%), its location and with ten (10) direct jobs generated in Puerto Rico, merits consideration as a product assembled in Puerto Rico.
(f) Product packaged in Puerto Rico.— Means that article that has been subject to a process in Puerto Rico of introducing a product in bulk, or unpackaged products into adequate containers, for their final distribution to clients, without taking any significant action that alters the product, which process would require the maintenance of an industrial unit, machinery and appropriate equipment in Puerto Rico for the placing in containers or packaging of the final product.
(g) Fuel.— Means the fuel used in Puerto Rico to generate electric power, such as residual and light distillate oil. Furthermore, the fuel used in the ships of the Maritime Shipping Authority, such as maritime diesel and other distillates that propel the movement of its ships. These shall not be considered for the benefits of this chapter.
(h) Purchase.— Is the means by which the Government acquires goods or services, whether by a formal auction, informal auction, open market, contract or special procedure.
(i) Substantial operations in Puerto Rico.— Means those operations that are carried out by an enterprise in Puerto Rico which, in the Board’s judgment, and on the basis of its nature, complexity, investment, and number of jobs generated in Puerto Rico, represent a substantial contribution to the economy of the Island. For the purpose of determining if an enterprise has substantial operations in Puerto Rico, the operations carried out in Puerto Rico by people related to said enterprise, as such term is defined in § 8615(a)(3) of Title 13, part of the Puerto Rico Internal Revenue Code of 1994, shall be taken into account.
(j) Research and development operations in Puerto Rico.— Means those operations carried out by an enterprise in Puerto Rico with the purpose of discovering, perfecting, developing or improving industrial or computer products or procedures which, in the Board’s judgment, based on their nature, complexity, investment and technology involved, deserve the granting of incentives through the concession of the investment parameter granted to articles manufactured in Puerto Rico under this chapter. Every activity that qualifies for the credit granted under Section 41 of the United States Internal Revenue Code, and that is performed in Puerto Rico, shall constitute a research and development operation in Puerto Rico. For the purpose of determining if an enterprise conducts research and development operations in Puerto Rico, operations of this type carried out in Puerto Rico by people related to said enterprise, as such term is defined in § 8615(a)(3) of Title 13, part of the Puerto Rico Internal Revenue Code of 1994, shall be taken into account.
(k) Agent established in Puerto Rico.— Means those operations or activities conducted by a natural or juridical person in Puerto Rico related to the distribution and sale of articles, including a considerable amount of inventory, administrative offices, and warehouse(s), but not limited to services, storage, promotion, repair of products with and without warranty, and any other activity for the welfare or benefit of Puerto Rico, provided that an average is maintained of not less than ten (10) persons directly employed in said activities during any years for which any preference is claimed under this chapter.
(l) Investment parameter.— Is the preference percent granted by the Board to articles distributed, packaged, assembled or manufactured in Puerto Rico, including services rendered in Puerto Rico.
(m) Added value.— Is the value of the production of an enterprise, minus the value of intermediate goods (including raw material) acquired from other enterprises. The added value includes payment of salaries, interests, rent, other costs (ex. electric power and water, insurance, etc.) and the profit of the entrepreneurial factor. That is to say, the added value includes all economic elements added to the raw materials and intermediate goods used in the production operation of an enterprise. The added value varies from enterprise to enterprise and from industry to industry.
(n) Services rendered in Puerto Rico.— Means those services applicable to the acquisition of goods, articles, and non-professional or specialized services that are necessary for the functioning of the regular operations of a government entity for the performance or functioning of a work or service, which do not require a profession or specialty. In determining that the services are rendered in Puerto Rico, the place in which the services are rendered, and also if the enterprise or partnership that renders the service has substantial operations in Puerto Rico as defined in subsection (i) of this section shall be taken into account.
(o) Blind person.— Means a person whose central visual acuity does not exceed twenty by two hundred (20/200) in the better eye with corrective lenses; or even in the better eye with corrective lenses has a visual acuity of less than twenty by two hundred (20/200), and the widest diameter of his/her visual field is less than twenty degrees (20).
(p) Person with a severe disability.— Means a person, other than a blind person, who has a severe physical, mental or sensorial disability of such a nature that limits his/her essential daily life activities and hinders or limits said person’s capacity to obtain a job.
(q) Non-profit organization that employs blind persons.— Means an entity organized pursuant to the laws of the Commonwealth of Puerto Rico for the purpose of employing blind persons and that fifty percent (50%) of its total workforce is composed of blind persons who, for seventy-five percent (75%) of the working hours, are engaged in packing, assembling, producing or manufacturing articles in said entity or in the rendering of services, and is certified by the Board to such effects; complies with labor laws in effect and their regulations; and whose net income does not result, in whole or in part, in the benefit of any stockholder or other individual with monetary interest.
(r) Non-profit organization that employs persons with severe disabilities.— Means an entity organized pursuant to the laws of the Commonwealth of Puerto Rico for the purpose of employing persons with severe disabilities other than blindness, and that not less than fifty percent (50%) of its total workforce is composed of persons with severe disabilities who, during seventy-five percent (75%) of the working hours, are engaged in packing, assembling, producing or manufacturing articles in said entity or in the rendering of services, and is certified by the Board to such effects; complies with labor laws in effect and their regulations; and whose net income does not result, in whole or in part, in the benefit of any stockholder or other individual with monetary interest.
(s) Correctional population.— Means any person under the jurisdiction of the Department of Corrections and Rehabilitation by law.
(t) Department of Corrections and Rehabilitation.— Means the Department of Corrections and Rehabilitation of the Commonwealth of Puerto Rico.
(u) Office furniture.— Means a group of furniture in an office or work place among which are: tables, chairs, desks, filing cabinets, blocks, and closets.
(v) Public corporation of Industries for the Blind, Mentally Impaired, and other Persons with Disabilities in Puerto Rico.— Means the public corporation of Industries for the Blind, Mentally Impaired, and other Persons with Disabilities of the Commonwealth of Puerto Rico.
(w) Person with special needs.— Means the blind, mentally impaired, and other persons with disabilities.”
(x) Uniforms.— All uniforms used by employees of the Government of Puerto Rico in their official duties defrayed from public funds.
(y) Nonprofit organization that employs blind persons or persons with severe disabilities.— Means an entity organized pursuant to the laws of the Government of Puerto Rico for the purpose of employing blind persons in no less than fifty percent (50%) of its total workforce and who work, at least, seventy-five percent (75%) of the working hours in the packing, assembling, producing, or manufacturing articles in said entity or in the rendering of services, and that is certified by the Board to such effects; complies with labor laws in effect and their regulations; and whose net income does not result, in whole or in part, in benefit of any stockholder or other individual with monetary interest.
History —Jan. 8, 2004, No. 14, § 4; Sept. 16, 2004, No. 371, § 1; Jan. 23, 2006, No. 20, § 1; Dec. 12, 2007, No. 184, § 2; July 17, 2008, No. 117, § 2; Aug. 13, 2009, No. 70, § 2; Jan. 18, 2012, No. 28, § 1.