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 941 - Agriculture Tax Incentives (§§ 10401 — 10410) › § 10401a - Governing principles for the granting of incentives

In the evaluation, analysis, consideration, award, renegotiation, and revision of any incentives or benefits granted under this chapter, the Department of Agriculture of Puerto Rico and the Secretary thereof shall be required to oversee and ensure compliance with the following governing principles as provided below:
(a) Jobs.— The incentivized activity and the agricultural business shall promote the creation of new jobs.
(b) Proof of sale of the agricultural harvest.— The incentivized activity and the agricultural business shall show, in the judgment of the Secretary of the Department of Agriculture that they sowed, harvested, fed, raised, processed, and took any other related actions, as the case may be, in accordance with the provisions of § 10402(b) of this title, and that they have sold the agricultural product that led to the granting of the incentive.
(c) Sound integration.— The conceptual design and planning of the incentivized activity and the agricultural business shall be carried out, first of all, taking into account environmental, geographical, and physical aspects, as well as the materials and goods that are abundantly available in the site where it is to be developed.
(d) Commitment to economic activity.— The incentivized activity and the agricultural business shall acquire raw materials and products manufactured in Puerto Rico for the construction, maintenance, renovation or expansion of the physical facilities thereof. If the purchase of said products is not financially justified when taking into account criteria such as quality, quantity, price, and availability of these products in Puerto Rico, the Secretary of Agriculture may issue a certificate attesting to such fact.
(e) Transfer of knowledge.— The incentivized activity and the agricultural business shall acquire services from professionals or companies with a presence in Puerto Rico. However, if this is not possible due to criteria such as availability, experience, specificity, or skill, or any other valid reason recognized by the Secretary of Agriculture, the agricultural business may acquire such services through an intermediary with a presence in Puerto Rico, which shall contract directly with the service provider chosen by the agricultural business, in order to receive the requested services.
The term “services” shall mean, but the list below shall not be construed as limiting the Secretary of Agriculture to include other services by regulations, the contracting of jobs related to:
(1) Surveying, the production of construction plans, as well as engineering and architectural designs, and related services;
(2) construction and all that pertains to this sector;
(3) financial, environmental, technological, scientific, management, marketing, human resources, information technology, and auditing consulting services;
(4) advertising, public relations, commercial art, and graphic design services; and
(5) security or facility maintenance.
(f) Financial commitment.— The incentivized activity and the agricultural business shall submit proof that they use the services of, and that they deposit a significant amount of the income derived from their economic activity in, banking and/or cooperative institutions with a presence in Puerto Rico. If the financial activity cannot be financially justified when taking into account criteria such as the availability or accessibility of these institutions in Puerto Rico, the Secretary of Agriculture may issue a certificate attesting to such fact.
The Secretary of Agriculture shall be the sole official responsible for verifying and ensuring that agricultural businesses meet the eligibility requirements established in this section and in this chapter.
If the agricultural business partially meets the requirements established in this section, the Secretary of Agriculture shall be required to establish a formula that allows for the quantification of the aforementioned factors, and for the subtraction of the requirement that has not been met from the total percentage of the specific credit, in order to obtain the exact percentage of the benefit in question.
The Secretary of Agriculture shall draft an annual report to be filed with the Governor and the Legislative Assembly, stating in detail with figures and statistics the oversight, impact, and compliance with the provisions of this section.
The governing principles established herein shall apply to every incentivized activity, agricultural business, bona fide farmers, and new farmers or agricultural entrepreneurs as established in § 10404a of this title that applies for any of the benefits granted under this chapter after December 1 st, 2015. However, the provisions of this section shall apply to any request for renegotiation made by any of the above mentioned agricultural businesses that has not been signed and completed prior to the aforementioned date.
History —Dec. 1, 1995, No. 225, added as § 2 -A on Nov. 17, 2015, No. 187, § 50.