Esta ley enmienda la "Ley de Incentivos Contributivos de 1998" para extender los beneficios fiscales a las transmisiones de programas de televisión locales, siempre que cumplan con ciertos requisitos de producción y uso de talento local. Busca fomentar la industria televisiva local y la creación de empleo.
To amend Sections 2
(d) (8) and 2
(e) (22) of Act No. 135 of December 2, 1997, known as the "Tax Incentives Act of 1998," to clarify that the benefit granted by said Act is extended to broadcasts of local television programs."
By means of Senate Resolution No. 2135, the Committee on Government and Public Security was directed to conduct a comprehensive study on the local telecommunications industry. The investigation was to focus on the communications media with emphasis on television stations, the regulations that apply to this industry and the initiatives that could be implemented to promote the growth of the local industry. The current condition of this industry, the situations or events that have adversely impacted the same, as well as the alternatives or initiatives that would strengthen this industry's growth were examined as part of this study.
This Act is one of a series of tax incentives that based on the results of the investigation conducted. During the investigation, it was made evident that the importance of local production is not only limited to the creation of jobs, but also to information and entertainment broadcasts that reflect our needs and tastes as a people. It is the forum to which we resort to express our feelings as a people. However, the existence of our local television programs has been affected, with the passage of time, as a result of the influence of new concepts such as globalization, technology and the importation of foreign productions, phenomena that
specifically affect private enterprise and its way of doing business. Act No. 135 of December 2, 1997, as amended, known as the "Tax Incentives Act of 1998," grants a tax exemption on the income of certain businesses that conduct commercial activities described in said Act. Among the various eligible businesses listed in said Act are the filming, production, processing, dubbing and editing of short and feature films. To motivate local producers and television stations to continue on their path of excellence it is necessary to clarify that such provisions of law include broadcasts of television programs.
For all of the above, the Legislature of the Commonwealth of Puerto Rico deems it extremely worthy to enact this bill in order to assist the local television industry to continue growing.
Section 1.-Section 2(d), (8) of Act No. 135 of December 2, 1997, known as the "Tax Incentives Act of 1998," is hereby amended to read as follows: "Section 2.-Definitions For the purposes of this Act, the following terms, phrases and words shall have the meaning and scope stated below:
(a) ...
(d) Eligible Business: (1) ... (8) Filming and production of short and feature films, as well as the broadcast of television programs of which ninety (90) percent or more is produced using talent established in Puerto Rico, provided that the Secretary of State determines, with the recommendation of the Administrator and the agencies that issue reports on tax exemption decrees, that the activities that such filming and production entail, as well as the referred television broadcasts,
shall benefit the economy in general. The Secretary of State, with the recommendation of the Secretary of the Treasury and the Administrator, shall establish the terms and conditions in the decree, such as the limits on the term and percentage of the exemption, the taxes to be covered by the decree, the establishment of a fixed tax rate on the industrial development income higher than that provided in subsection
(a) of Section 3 of this Act, and the establishment of the job requirements that are necessary and convenient pursuant to the purposes of this Act."
Section 2.- Section 2(e)(22) of Act No. 135 of December 2, 1997, known as the "Tax Incentives Act of 1998," is hereby amended to read as follows: "(e) Designated Articles.-This term comprises the following manufacturing operations: (1) ... (22) Processing, dubbing and editing of short and feature films, as well as broadcasts of television programs, provided that the Secretary of State determines, with the recommendation of the Administrator and the agencies that issue reports on tax exemption decrees, that said activities shall benefit the economy in general. In the case of television stations, the condition that the television station shall broadcast a minimum of hours per week of programs filmed and produced in Puerto Rico equal to twenty-five (25) percent of the television program hours broadcast weekly by the television station shall be imposed. In addition, in the case of television stations, the fixed tax rate on the industrial development income provided in Section 3 of this Act for income tax purposes, shall only apply to the income obtained as a result of the television
broadcasts of programs produced and filmed in Puerto Rico using ninety (90) percent of local talent. The Secretary of State, with the recommendation of the Secretary of the Treasury and the Administrator, shall establish the terms and conditions in the decree, such as the limits on the term and percentage of the exemption, the taxes to be covered by the decree, the establishment of a fixed tax rate on the industrial development income higher than that provided in subsection
(a) of Section 3 of this Act, and the establishment of the job requirements that are necessary and convenient pursuant to the purposes of this Act."
Section 3.-This Act shall take effect immediately after its approval and shall remain in effect until June 30, 2007.
I hereby certify to the Secretary of State that the following Act No. 381 (H.B. 3848) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend Sections 2
(d) (8) and 2
(e) (22) of Act No. 135 of December 2, 1997, known as the "Tax Incentives Act of 1998," to clarify that the benefit granted by said Act is extended to broadcasts of local television programs," has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $16^{ ext {th }}$ of August of 2007.
Francisco J. Domenech Director