Ley 59 del 2007

(No. 59)

(Approved July 10, 2007)

AN ACT

To amend clause (7) of subsection 4 of Act No. 147 of June 18, 1980, as amended, and Section 2 of Act No. 286 of December 20, 2002, in order to clarify the provisions of said Act regarding the formula to compute the budget of the Judicial Branch.

STATEMENT OF MOTIVES

Act No. 286 of December 20, 2002, granted full budgetary autonomy to the Judicial Branch through the designation of a fixed percentage to applied the total amount of the annual revenue of the Treasury for its regular operating and functioning expenses. With this, the legislative intent of effectively implementing the fundamental principle of the separation of powers set forth in our Constitution is enabled, so that it may, as an equal and independent Branch, develop its programs and fully achieve its objectives and constitutional tasks. The statute referred to herein makes feasible the efforts directed toward the rendering of judicial services of excellence and true reforms in the administration of justice are implemented according to the resources of the Commonwealth in a specific year.

At the time of the approval of Act No. 286, the Sales and Use Tax (hereafter IVU, Spanish Acronym) recently established by Act No. 117 of July 4, 2006, known as the "Taxpayers Justice Act," did not exist. This situation has provoked conflicting interpretations as to whether or not the revenues obtained on this account based on revenues used to calculate the budgetary formula set forth in Act No. 286, above.

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Notwithstanding the foregoing, it is necessary to consider the provisions of Joint Resolution No. 321 of November 21, 2005, known as "Resolution to Establish the Objectives, Principles and Parameters that shall Frame and Govern the Evaluation and Approval of a Tax Reform and a Fiscal Reform of 2006." The same establishes as the first parameter that the Tax Reform shall "substitute the general excise tax on articles of use and consumption with a broad-based tax on the retail sale of said articles to capture revenues from the informal or underground economy, and impose the tax burden in a fair and equitable manner."

For the purposes of the Tax Reform and of the strengthening of judicial independence, this Legislature deems it convenient to specifically provide in Act No. 286, that the revenues derived from the collections of the IVU, except for the portions of said tax presently destined to the municipalities, as well as any other revenues covered into the Treasury to be subsequently approved, shall be considered within the base applicable to the formula recognized by Law for the computation of the budget of the Judicial Branch.

BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO:

Section 1.- Clause 7 of subsection

(a) of Section 4 of Act No. 147 of June 18, 1980, is hereby amended to read as follows: "Section 4.- Duties and Powers of the Governor with regard to the Budget. "(a) ... The Budget shall contain the following information in the form, extent or detail that the Governor deems convenient: (1) ...

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(7) The recommended or proposed appropriations and expenses to be charged to all the projected resources, after due consideration of the Puerto Rico Integrated Development Plan, the Four Year Investment Program and the land-use plans prepared by the Planning Board for the following fiscal year, except the Legislature and the Office of the Comptroller of the Commonwealth of Puerto Rico, which shall be exempted from submitting budgetary petitions, which the Governor shall include in the proposed Budget, a budget for their regular operating expenses equal to the one in effect. The Office of the Comptroller shall submit its own petition for funds for regular operating expenses directly to the Legislature, on or before November 30 of the year before the year for which the petition is made, and shall furnish a copy to the Office of all the information it submits to the Legislature, so that said Office may advise the Legislature regarding the petitions for funds for the regular operating expenses of said body. Beginning with the 2003-2004 fiscal year, the Judicial Branch shall be appropriated a sum equal to three point three percent (3.3%) of the average of the total amount of the annual revenues obtained pursuant to the provisions of the laws of the Commonwealth of Puerto Rico, and which have been covered into the General Fund of the Treasury of Puerto Rico in the two (2) fiscal years preceding the present year, and that covered into the Dedicated Sales Tax Fund, created by Act No. 91 of May 13, 2006, as amended, and into any other special fund created by law after July 1, 2007, nourished from resources generated by taxation and non-taxation revenues. Provided, that in the event that the average of the total amount of annual revenues is less than that of the preceding year, the basic amount shall be equal to the last annual appropriation received by

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the Judicial Branch. Said three point three percent (3.3%) shall be increased for the 2004-2005 fiscal year by one tenth (0.1) of one percent ( 1% ), and by a two tenths ( 0.2 ) of one percent ( 1% ) for the following three (3) fiscal years, until it reaches a maximum of four percent (4%) of the revenues of the General Fund of the Treasury of Puerto Rico for the 2007-2008 fiscal year. These resources shall be used for the operating expenses of the Judicial Branch. In the event the Judicial Branch should require additional sums to those appropriated pursuant to this Act for the development, construction, and extension of its physical structure or for any other purpose, it shall submit the necessary budgetary petition with its pertinent justifications directly to the Legislature. In the submitted budget, the recommendations and petitions for appropriations of lump sums in the general budget bill for each government body shall be backed by detailed calculations, expense items and by programs or activities."

Section 2.- Section 2 of Act No. 286 of December 20, 2002, is hereby amended to read as follows: "Section 2.- For the purposes described in Section 1 of this Act, it shall be understood that the General Fund comprises all revenues received from income taxes, gift and estate taxes, excise taxes on alcoholic beverages, sales and use tax, except for the portions of said tax presently destined to the municipalities and any other new revenue covered into the General Fund established after the budgetary formula provided by this Act takes effect and other articles, licenses and nontaxable income."

Section 3.- This Act shall take effect immediately after its approval, however, its provisions shall be retroactive to the effective date of Act No.

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117 of July 4, 2006. It is hereby established that the sums corresponding to the Judicial Branch for Fiscal Year 2007-2008, by virtue of the provisions of this Act that are not appropriated through the Joint Resolutions on the Budget of said year shall be consigned in equal parts, in the budget of Fiscal Years 2008-2009 and 2009-2010, and shall be in addition to the amount corresponding to the Judicial Branch for the operation of the budgetary formula established by Law for the referred to fiscal years.

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CERTIFICATION

I hereby certify to the Secretary of State that the following Act No. 59 (H.B. 3662) of the $5^{ ext {th }}$ Session of the $15^{ ext {th }}$ Legislature of Puerto Rico:

AN ACT to amend clause (7) of subsection 4 of Act No. 147 of June 18, 1980, as amended, and Section 2 of Act No. 286 of December 20, 2002, in order to clarify the provisions of said Act regarding the formula to compute the budget of the Judicial Branch, has been translated from Spanish to English and that the English version is correct.

In San Juan, Puerto Rico, today $30^{ ext {th }}$ of June of 2008.

Francisco J. Domenech Director