Governor signs increased film incentives into law
Gov. Pedro Pierluisi
By THE STAR STAFF
Despite opposition from the Financial Oversight and Management Board, Gov. Pedro Pierluisi Urrutia on Tuesday enacted legislation that would increase tax credits for the film industry from $38 million to $100 million.
The oversight board’s advisers in late December noted that the legislation goes against the commonwealth fiscal plan. They said the increased cap to $100 million created by Senate Bill (SB) 552 would not be revenue neutral. They noted that increased economic activity from the increased cap would be insufficient to offset the additional cost to the commonwealth of offering expanded incentives.
The new film incentives, which were proposed by La Fortaleza, were among four Senate bills signed into law.
Last year, the governor allocated $74 million in American Rescue Plan Act (ARPA) funds to promote film projects in Puerto Rico. The $74 million is divided into $37 million for fiscal 2023 and $37 million for fiscal 2024.
“The film industry has great potential on our island. We have seen it in action over the past few years through highly renowned and successful local and national productions,” Pierluisi said. “The film industry has generated thousands of jobs and positively impacted the island’s economy. I support this industry and have provided more incentives to increase film production in Puerto Rico, which in addition to having a positive effect on economic development, promotes tourism on our island.”
The new law will allow the Department of Economic Development and Commerce (DDEC by its Spanish acronym) to distribute $100 million among all eligible film projects. At least 10% of the total incentive is for local productions and documentaries.
Pierluisi, who participated last year in the announcement of the shooting of “The Plane,” a movie starring actor Gerard Butler, in Puerto Rico, said the film had an investment of $65.7 million and an approximate economic impact of $136 million with a hotel occupancy of 3,964 hotel rooms per night.
In addition, the film generated a payroll of $5.1 million, and more than 500 Puerto Rican workers participated. Meanwhile, in 2021, the filming of a reboot of the popular 1970s-80s television series “Fantasy Island” on the Fox television network had an economic impact of over $54.7 million and created 418 direct jobs. In addition, hotel occupancy was more than 2,000 quarters a night. Meanwhile, “Black Panther: Wakanda Forever” employed 423 people and left an economic investment of more than $8 million.
Likewise, SB 552 would include energy storage systems as an eligible activity to grant green energy incentives. The legislation also would promote the development of renewable energy sources and compliance with the public energy policy aimed at lowering costs and promoting the use of clean energy.
Pierluisi also signed SB 934, which amends the Incentives Code and directly benefits the police. The law would exempt from the payment of income tax the disbursements and contributions made to the active and retired members of the Police Bureau for bonuses granted under the Police Retirement Fund. The exemption will take effect in the current fiscal year. Therefore, the Treasury Department must establish, through regulations, administrative determination, memoranda or general information bulletin, the form and manner in which the exemptions will be applied.
The governor also signed SB 385, which amends the Pensions for Death in the Line of Duty Law. The purpose of the amendment is to increase to $200,000 the mortgage payment and total exemptions at the University of Puerto Rico (UPR) and in commonwealth and municipal post-secondary educational institutions to the surviving spouse, minor children and stepchildren of the deceased employee.
The exemption related to studies only applies to expenses for tuition, fees, books and other materials necessary to complete their university academic degree at the undergraduate, post-secondary technical-professional, graduate, and professional levels.
Another measure converted into law is SB 330, which places the Financial Education Institute under the jurisdiction of the Financial Education Division of the Office of the Commissioner of Financial Institutions.