Esta ley enmienda la "Puerto Rican Industry Investment Act" (Ley Núm. 14 de 8 de enero de 2004) para aumentar el porcentaje de preferencia para artículos producidos, ensamblados o empacados en los municipios de Vieques y Culebra, y para corregir errores técnicos. Define "Producto de Puerto Rico" y "Valor Añadido", establece las facultades de la Junta de Inversión, clasifica productos y servicios con parámetros de inversión preferenciales, y detalla los límites máximos de preferencia para artículos de Vieques y Culebra. También establece la obligación de los delegados de compras de informar mensualmente sobre las licitaciones y compras realizadas bajo esta ley.
(Approved September 16, 2004)
To amend Sections 4, 6, 8 and 11 of Act No. 14 of January 8, 2004, known as the "Puerto Rican Industry Investment Act" in order to raise the percent of preference for articles produced, assembled or packaged in the Municipalities of Vieques and Culebra, and to correct technical errors.
Act No. 14 of January 8, 2004 created the "Puerto Rican Industry Investment Act" in the Puerto Rico Industrial Development Company. It likewise repealed Act No. 42 of 1989, as amended, known as the "Preference Procurement Policy Act of the Government of Puerto Rico."
After said Act was approved, and while in the process of organizing the new Investment Board, it has been determined that it is necessary to clarify and adjust certain provisions that would enable this new juridical entity to operate effectively in favor of products manufactured in Puerto Rico.
The amendments contained herein correct technical errors and at the same time incorporate amendments which had been incorporated in the year 2003 to Act No. 42, supra, which should also be included in the provisions of this Act, since they are geared to strengthening the purchase of products manufactured, assembled, distributed or packaged in Puerto Rico by agencies or instrumentalities of the Government.
Section 1.- Subsection
(d) of Section 4 is hereby amended and subsections
(l) and
(m) are hereby added to Section 4 to Act No. 14 of January 8, 2004 to read as follows: "Section 4.- Definitions:
(a) $\ldots$
(b) $\ldots$
(c) $\ldots$
(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, the transformation of raw materials into commercial articles, which can be carried out through the subcontracting of all or part of the manufacturing process in Puerto Rico, when the investment, extent, technology involved, direct jobs generated, location, added value in Puerto Rico is not less than thirty-five (35) percent, 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, or those products manufactured by said enterprise or affiliates and contractors to the same, that manufacture in Puerto Rico in sufficient quantities, one or more essential components, the final product of which, in the opinion of the Board, deserve to be considered as a "product of Puerto Rico."
(e) ...
(f) ...
(g) ...
(h) ...
(i) ...
(j) ...
(k) ... (I) Investment parameter is the preference percent granted by the Board to articles distributed, packaged, assembled or manufactured in Puerto Rico.
(m) Added values 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."
Section 2.- Subsections
(c) and
(h) of Section 6 are hereby amended and subsections
(j) and
(k) are hereby added to Section 6 of Act No. 14 of January 8, 2004, to read as follows: "Section 6.- Powers of the Board. $\qquad$
(a) ...
(b) ...
(c) Prepare the specifications of marketing models, provisions, supplies, materials, equipment and services produced, assembled or packaged in Puerto Rico, or those distributed in Puerto Rico by enterprises with operations in Puerto Rico or by agents established in Puerto Rico, that in its opinion meet the necessary criteria for the use thereof by the Government.
(d) $\ldots$
(e) $\ldots$
(f) $\ldots$
(g) $\ldots$
(h) Review the investment parameters to be produced by the Board, and if necessary, recommend to the governor new parameters to be presented to the Legislature.
(i) $\ldots$
(j) Prepare and offer training, application and learning seminars on this Act, to the members of the bidding boards of the agencies, municipalities, departments, instrumentalities, public corporations and dependencies.
(k) Apply the provisions on procedure materials for public works and buildings in accordance with Act No. 109 of July 12, 1985, as amended."
Section 3.- Section 8 of Act No. 14 of January 8, 2004 is hereby amended to read as follows: "Section 8.- Classification of Products and Services The Board shall classify the articles extracted, produced, assembled or packaged in Puerto Rico, or distributed in Puerto Rico by enterprises with substantial operations in Puerto Rico, or by agents established in Puerto
Rico, taking into consideration, when assigning the corresponding investment parameter, among other factors, the value added in Puerto Rico, the number of jobs, the local payroll, the research and development operations in Puerto Rico, and the country of origin of the materials used. Provided, that the Board shall assign the corresponding investment parameter within the following items: (1) Articles distributed by agents established in Puerto Rico, up to two (2) percent. (2) Articles packaged in Puerto Rico, up to three (3) percent. (3) Articles assembled in Puerto Rico, up to four (4) percent. (2) Articles that constitute Products of Puerto Rico, up to ten (10) percent.
It is further provided that the Board shall have discretion to grant an additional five (5) percent in extraordinary cases, and for agricultural products.
However, with respect to the maximum limits established in the preceding subsection (1) thru (4), in the case of articles produced, assembled or manufactured in the municipalities of Vieques and Culebra, the following maximum limits shall be assigned:
(a) For articles packaged in Vieques and Culebra, up to nine (9) percent;
(b) For articles assembled in Vieques and Culebra, up to twelve (12) percent;
(c) For articles produced or manufactured in Vieques and Culebra, up to thirty (30) percent; The Board shall maintain a list of said articles, duly classified, consigning their class, origin, trademark, form, dimensions, properties,
samples, catalogs and any other information it deems convenient to expedite their selection in the purchases of the Government.
Provided however, that in all Government subdivisions, the purchasing delegate or the purchasing manager shall be bound to furnish on a monthly basis the information concerning bids and purchases made under this Act to the Board.
Section 4.- Section 11 of Act No. 14 of January 8, 2004 is hereby amended to read as follows:
Section 11.- Compliance with the Act Any purchase made under the provisions of this Act shall be subject to strict supervision and follow-up with regard to what has been received, which shall ensure the most faithful compliance of the representations, terms and conditions of the purchase.
The Board may revoke ..." Section 5.- This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 371 (H.B. 4556) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend Sections 4, 6, 8 and 11 of Act No. 14 of January 8, 2004, known as the "Puerto Rican Industry Investment Act" in order to raise the percent of preference for articles produced, assembled or packaged in the Municipalities of Vieques and Culebra, and to correct technical errors, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $16^{ ext {th }}$ of December of 2005.
Francisco J. Domenech Director