Puerto Rico News Digest For July 1, 2015

'IVU' SALES TAX JUMPS TO 11.5% TODAY

The 'Impuesto sobre Ventas y Uso' sales tax, or 'IVU', increased to 11.5% at
midnight today. Long lines could be seen at stores all over the island yester-
day, as consumers rushed to purchase home improvement materials, school
supplies, tires and numerous other goods before the tax increase. Most non-
prepared food items are exempt from the tax, although prepared foods are
not. The tax increase, voted in recently by the legislature after some acrimo-
nious debate, has so far proved to be very unpopular among many sectors of
the population. The tax was passed into law with the aim of increasing reve-
nue for the financially desperate island government.

SPANISH LANGUAGE BILL DEFEATED 

From The San Juan Daily Star:

The legislation that would declare Spanish as the official language and English
the second official language was defeated in the Senate late last week. Senate
Bill 1177 would have required the use of Spanish in all three branches of gov-
ernment in detriment to the 22 percent of island residents whose first language
is English and may encounter roadblocks in their dealings with the government.
An amended version of the bill was passed in a voice vote but the bill was de-
feated after it got a vote of 12-10 with three abstentions, falling short of the 26
votes needed for approval. The legislation seeks to repeal a 1993 law that decla-
red Spanish and English as offi cial languages of the Government of Puerto Ri-
co, returning to the state of the law in 1902. The 1993 law had the effect that the
government can use either of the two languages in offi cial documents and ins-
criptions.

GOVERNMENT UPDATES FINANCIAL, DEFICIT INFO

From Caribbean Business:

The Puerto Rico government filed late Tuesday a supplement to its quarterly
report submitted May 7 that updates the financial condition of the common-
wealth amid recent developments that have affected the government’s overall
fiscal picture. Among the document’s disclosures, the Government Develop-
ment Bank (GDB) states that the most recent projections point to a fiscal year
2015 budget deficit of $705 million to $740 million, after taking into consi-
deration tax refunds paid “in excess of the reserve included in the budget for
fiscal year 2015.” The government bank had previously estimated to close this
fiscal year with a deficit amounting to about $191 million. The projected de-
ficit doesn’t include nearly $291 million in tax refunds that are currently pen-
ding payment. Moreover, the report adds this figure may be “significantly
higher,” if U.S. generally accepted accounting principles (GAAP) were used.

DEM CANDIDATE O'MALLEY CALLS FOR PR HELP

From PJ Media:

Democratic presidential candidate and former Maryland Gov. Martin O’Malley
wants the U.S. to step in and bail out Puerto Rico. ”As a nation we must help our
fellow U.S. citizens not only because it’s the right thing to do, but because our re-
gion’s economic stability depends on it,” O’Malley said in a statement today, ur-
ging President Obama and Congress to act. “Those who attempt to exploit this
situation to gain a financial or political advantage” would find that “Puerto Rico
will be united against you,” the governor warned creditors. “While Governor Gar-
cia Padilla has taken the courageous first steps to steer Puerto Rico through this
crisis, we must act now to avoid Puerto Rico’s economic collapse,” O’Malley said.

Puerto Rico News Digest For June 24, 2015

GDB CHAIR DAVID CHAFEY RESIGNS

From Caribbean Business:

"Government Development Bank (GDB) Chairman David Chafey Jr. has resigned 

from his post, effective June 30, Vice Chairwoman & President Melba Acosta con-

firmed Wednesday. His exit from the debt-ridden and cash-strapped government 

bank comes amid much discussion over the tough decisions it faces in the near fu-

ture as it maneuvers through the fiscal challenges affecting the commonwealth, par-

ticularly during fiscal year 2016, which begins July 1. Moreover, Senate Bill 1350, 

which aims to enhance oversight faculties and  immunity protections for GDB offi-

cials, secured legislative passage late Tuesday and now moves to the governor’s 

office for its enactment. The much-debated immunity language came amid reports 

that several GDB directors were threatening to leave the bank if they were not pro-

vided with the enhanced protections."

POLICE REPORT SMOOTH 'NOCHE DE SAN JUAN'

Puerto Rico Police have said that last night's traditional 'Noche De San Juan' festivi-

ties went relatively smoothly at beaches all over the island, and that no major inci-

dents were reported. There were no reported instances of drownings or violence, al-

though attendance at island beaches seemed to have been down compared to last 

year. Despite the fairly quiet night, Victor J. Vega Sterling (aka "Goliat"), one of 

Puerto Rico's most wanted criminals, was arrested at a Río Grande resort where he 

was celebrating Noche De San Juan. Sterling, who has been linked to a brutal San 

Juan drug gang, was wanted on murder and firearms charges. 

TREASURY 'READY' TO HANDLE LARGER IVU

From News Is My Business:

"The Puerto Rico Treasury Department is prepared to handle the change rate of the 

Sales and Use Tax to 11.5 percent, from the current 7 percent, when it goes into e-

ffect July 1, agency Secretary Juan Zaragoza said Tuesday.“At Treasury, we’re rea-

dy to work the applicability of the changes established by Act 72 that amended se-

veral sections of the Puerto Rico Internal Revenue Code of 2011. Monthly SUT fi-

ling and programming aspects in the Integrated Merchant Portal (known as PICO) 

have been reviewed,” he said.“I must emphasize that we will continue strengthe-

ning oversight efforts so that the level of SUT uptake continue to increase,” he 

said."

PREPA EXECUTIVE DIRECTOR RESIGNS

From ABC News: 

The executive director of Puerto Rico's heavily indebted public power company 

has stepped down. Juan Alicea Flores resigned Tuesday after spending two years 

overseeing the Electric Energy Authority.

Puerto Rico News Digest For June 5, 2015

FOOD TRUCK OWNER SHOOTS ROBBERS, KILLS ONE

As reported this morning by El Nuevo Dia, a would-be robber was shot
to death overnight by the owner of a food truck selling tripleta sand-
wiches and bakes potatoes in front of the Naguabo Municipal Cemetery.
According to police, two armed individuals arrived at the place at a-
round 12:50AM in a vehicle and announced the robbery immediately
after getting out of the car. The owner, a licensed firearms carrier, repe-
lled the attack by shooting at the assailants. One man was wounded and
attempted to run towards a drug store, but collapsed to the ground. He
was later declared dead at Ryder Hospital in Humacao. Police later arr-
ested two individuals linked to the robbery at a Gulf gas station in Las
Piedras, where the police also seized the vehicle that the food truck ow-
er had described. The suspects, who have yet to be identified by police,
are also linked to a recent robbery in Gurabo.

GOVERNOR BACKS PRIVATE POWER PRODUCTION

From ABC News:

Puerto Rico's governor said Wednesday that he supports privatizing electri-
city production in the U.S. territory as officials seek to restructure the is-
land's troubled public power company. Gov. Alejandro Garcia Padilla told
reporters that he is fine with the idea of privatization as long as there will be
no layoffs at the publicly owned Electric Energy Authority and if it will help
lower electricity bills. "These are measures that have never been ruled out,"
he said. "The authority's transformation has to be a profound one."

CUBAN MIGRANTS NABBED ON MONA

From Fox News Latino:

Eleven undocumented Cuban citizens were detained this week by U.S. autho-
rities when they landed on the tiny Puerto Rican islet of Mona located in the
strait between the Dominican Republic and Puerto Rico, authorities said in a
statement released Thursday. Customs and Border protection reported the de-
tention of the group consisting of eight men and three women.

IVU-FREE SCHOOL SHOPPING JULY 17-18

From The San Juan Daily Star:

Treasury Secretary Juan Zaragoza announced Wednesday the days during
July, as well as January 2016, when consumers will be able to make sales and
use tax-free purchases of school uniforms and materials.“The first of the two
periods, will begin at 12:01 a.m. July 17 and will conclude at midnight July 18
and the second will begin on January 8 at 12:01 a.m. until midnight January 9,
2016,” Zaragoza said. “Although both consumers and businesses are familiar
with how this works, we always call on everyone to verify the information and
the detailed list of IVU exempt articles.” To obtain more information, consu-
mers are urged to visit the Treasury Department’s website www.hacienda.pr.
gov and then click on the publications link under the Internal Revenue area and
tax policy area, where they will find circular letter 15-07 of June 1, 2015.

EX-BANKER TO ASSIST US TREASURY ON PR

From Bloomberg:

Former Lazard Ltd. investment banker Stephen Campbell is joining the U.S.
Treasury to work on domestic finance issues including Puerto Rico’s fiscal
crisis, a department spokesman said. Campbell began June 1 as a counselor
in the Treasury’s domestic finance office, working with Antonio Weiss, also
a former Lazard banker. Weiss serves as an adviser to Secretary Jacob J. Lew
after failing to win Senate confirmation to be undersecretary for domestic
finance. Weiss and other Treasury officials have traveled to Puerto Rico re-
cently as the commonwealth faces a potential cash crunch and struggles with
$72 billion in debt.

CARRAIZO RESERVOIR LEVELS FOR JUNE 5

From Autoridad de Acueductos y Alcantarillados:

Carraizo is on the far left, in yellow. AAA may be instituting 48-hour rationing
soon.

Puerto Rico News Digest For May 26, 2015

SENATE PASSES SALES TAX BILL

From Bloomberg:

Puerto Rico’s Senate approved a bill, with amendments, that increases
the cash-strapped island’s sales tax, potentially raising revenue that will
help balance the fiscal 2016 budget.The Senate passed the measure Mon-
day in a 14-12 vote, with an amendment to exempt certain processed foods.
The amended bill now goes back to the House of Representatives, which
narrowly approved the sales-tax hike last week. Governor Alejandro Gar-
cia Padilla and lawmakers from his ruling Popular Democratic Party agreed
on a framework for the tax boost May 14. The bill would raise the levy to
11.5 percent from 7 percent through March, after which it would transition
into a value-added tax.

SOCIAL PROGRAMS FACING CUTS

From The San Juan Daily Star:

The island government intends to cut over $55 million from non-profit
organizations, social programs and college scholarships as part of the
$674 million in cuts in the new budget. The cuts will affect more than
120 public and non-profit organizations and programs in Puerto Rico as
government allocations will be  reduced to about $75 million from about
$130 million. La Fortaleza Chief of Staff Víctor Suárez said many agen-
cies may engage the services of some of these entities.

PUERTO RICO COMIC CON A SUCCESS

From Caribbean Business:

The Puerto Rico Comic Con (PRCC), touted as the premier entertain-
ment and pop culture event in the Caribbean, filled the Puerto Rico
Convention Center during its latest edition held this past weekend,
along the way generating about $4 million in economic activity, acc-
ording to estimates. Ricardo Carrión, executive producer of the PRCC,
told local media outlets that at least 38,000 people attended the event
this year, which took place May 22-24. The annual event has steadily
drawn larger crowds since its inception in 2002. Part of the larger atten-
dance numbers stemmed from the organizers’ decision to extend the
event to three days, starting Friday; previous editions were held only
Saturday and Sunday. Carrión added that, on Friday alone, the event
drew in about 9,000 people.

PANEL TACKLES HIGH ENERGY COSTS

From News Is My Business:

In the United States, electricity costs 10¢ to 12¢ per kilowatt-hour
(kwh), while in Costa Rica, it’s 15¢ per kwh and higher in Honduras
and Nicaragua, Central America’s poorest countries. Yet a top State
Department official said the region is now in an ideal position to cut
costs by introducing alternative sources like natural gas and renewable
energy. “Things that five years ago were not even possible are availa-
ble today. Some methods of transporting containerized natural gas ha-
ve come down in cost considerably,” said Robin Dunnigan, deputy
U.S. assistant secretary for energy diplomacy. Dunnigan was one of
four officials who spoke at a May 7 conference hosted by Washing-
ton’s Inter-American Dialogue. Nearly 150 people attended the pa-
nel, “Ener-gy in Central America and the Caribbean,” including di-
plomats from 13 Washington-based embassies.

RESERVOIR LEVELS FOR TODAY

Carraizo is on the far left, in yellow. No significant rain is expected
over the area for several days.

Puerto Rico News Digest For May 22, 2015

HIGLER'S FAMILY IN PR FOR HEARING

L: Laurens Higler. R: Gerardo de La Paz.

Relatives of Laurens Higler, the Dutch globetrotter and sailor who was
killed in a hit and run car accident in  March, are in Puerto Rico to attend
a court hearing for 49-year-old Gerardo De La Paz, the man accused of
hitting Higler with his car by the side of the road in Guayama and fleeing
the scene. Mother Rianne Higler stated "It is unforgivable that he didn't
stop the car, that he didn't call 911 and that he didn't help my son", in re-
gards to De La Paz, as reported yesterday by El Nuevo Dia. Laurens
Higler would have turned 27 years old on May 20.

At the hearing, De La Paz -- who is free but wearing an ankle monitor --
opted to go directly to trial for the charges of negligent homicide and vio-
lating the recently amended Article 5.07 of Transit Law 22. He was also
driving with an expired driver's license. The judge set the trial date for
June 26. De La Paz could face prison time, but there is  also the possibility
that he might only get a suspended sentence. After the hearing, De La Paz
agreed to meet the late Higler's family in private, but after the brief encoun-
ter, De La Paz hurried out of the building accompanied by his lawyers.

HOUSE APPROVES 11.5%  'IVU' TAX

From Caribbean Business:

After much debate and opposition, the House of Representatives app-
roved Thursday the tax bill that calls for the implementation of an
11.5% sales tax at cash registers, up from the current 7% paid under
the sales & use tax (IVU by its Spanish acronym), after introducing
several amendments on the floor. The final vote count was 26 in favor
and 24 against, including two Popular Democratic Party (PDP) legisla-
tors, Reps. Carlos Vargas and Angel Matos, and the New Progressive
Party minority delegation. It now moves to the Senate, where discussi-
on on the amended bill is expected to take place Friday, with the upper
chamber's session slated to begin at 10 a.m.

ACOSTA BLASTS MOODY'S GDB DOWNGRADE

From News Is My Business:

Government Development Bank President Melba Acosta came down
hard on Moody’s Investors Service’s decision to downgrade the Co-
mmonwealth’s credit rating deeper into junk status by saying the move
shows “ratings agencies are totally out of tune with what’s happening”
in Puerto Rico. Reading off an email she said she received earlier in the
day from a banker who expressed to her that markets were reacting fa-
vorably to the proposed increase in the sales and use tax — up to 11.5
percent from 7 percent approved Thursday by the House — and about
the budget, Acosta called Moody’s decision “a bit ironic.”

BUS OWNERS INDICTED FOR BID-RIGGING

From FBI:

A federal grand jury in San Juan, Puerto Rico, returned an indictment
against five individuals for participating in bid rigging and fraud cons-
piracies at an auction for public school bus transportation contracts in
Puerto Rico’s Caguas municipality, the Department of Justice announ-
ced today. A seven-count felony indictment was filed yesterday in U.S.
District Court of the District of Puerto Rico in San Juan against five bus
transportation company owners: Gavino Rivera-Herrera, Luciano Vega-
Martínez, Alfonso Gonzales-Nevarez, José L. Arroyo-Quiñones and
René Garay-Rodríguez.

Count one charges the bus owners with participating in a conspiracy
to rig bids and allocate the market for public school bus transportation
services in the Caguas municipality. The second count charges the bus
owners with conspiracy to commit mail fraud and counts three through
seven charge the bus owners with committing mail fraud. According to
the indictment, the defendants and others defrauded, and conspired to
defraud, the Puerto Rico Department of Education and the Caguas mu-
nicipality, among others, in order to fraudulently obtain contracts for
school bus transportation services.

Puerto Rico News Digest For May 15, 2015

TRIPLE MURDER IN AGUAS BUENAS

As reported today by  El Nuevo Dia, two men and a woman, ranging
in age from 25 to 30, were murdered late last night on Road PR-792
in the Las Villas sector of Aguas Buenas. The crime occurred at
around 12:40 AM and was reported to the Police through an anony-
mous phone call. It is believed the deceased were taken to a dark and
solitary area specifically to be shot to death. The bodies were found
lying on the pavement. A loaded .40 caliber pistol was found at the
scene. The victims were not carrying identification and have not been
named.

GOVERNOR AND LEGISLATORS AGREE ON TAX

From Bloomberg:

Puerto Rico Governor Alejandro Garcia Padilla and lawmakers reached
an agreement on a proposal to raise the island’s sales tax, a move that
may help it sell debt and ease a cash crunch. The plan would boost the
levy to 11.5 percent from 7 percent for nine months, in a transition to
implementing a value-added tax, the governor and members of his Po-
pular Democratic Party told reporters late Thursday in San Juan. The
increase is expected to bring in $1.2 billion of revenue. Lawmakers
also agreed to recommend $500 million in spending cuts as part of a
$9.8 billion budget for fiscal 2016.

STUDENTS PROTEST UPR CUTS IN SAN JUAN

From UPI:

A massive demonstration protesting budget cuts to Puerto  Rico's
state university filled a Capitol plaza in San Juan. Thousands of peo-
ple enrolled or employed at Puerto Rico University (UPR) met at the
Capitol building and marched to the home of the U.S. commonwealth's
chief executive Wednesday. The government has threatened a 20 per-
cent budget cut to the university. Julio Muriente, leader of the pro-inde-
pendence Hostosian National Independence Movement, attended the
demonstration, saying, "We want people to know the importance of the
university for the country, the value of the UPR, and this event is proof
of what the institution is."

SLOTS OPERATORS OPPOSE VIDEO LOTTERY

From The San Juan Daily Star:

Puerto Rican Commercial Recreation Businesses Inc. (EMPRECOM by
its Spanish acronym) members have categorically rejected Gov. Alejandro
García Padilla’s plan to pass new regulations for the operation of  enter-
tainment machines without holding public hearings, which they say opens
the door for the “video lottery” business. “We have been charging that La
Fortaleza was working on a new Operational Regulation for the Additio-
nal Lottery, which is nothing more than ‘bringing the video lottery in
through the kitchen,’” EMPRECOM President Pablo Rivera said in a
written statement. “The governor has given instructions so that this action,
which allows for the elimination of all  entertainment machines that are
currently in operation on the island, and thus makes way for the ‘video
lottery,’ is not talked about.”

$59M IN PROPERTIES AT AUCTION 

From News Is My Business:

Los Angeles-based Premiere Estates Auction Company announced
Thursday a multi-property auction that includes sprawling beachfront
sites in Aguadilla and Cabo Rojo, with a combined listing price of $59
million. The portfolio includes a 507-acre master planned destination
resort property overlooking Boqueron Bay in Cabo Rojo with a listing
price of $50 million, that has been pre-approved for a 600-room resort
hotel, 18-hole golf course, a 200-slip marina, retail village, 1,150 residen-
tial villas and 222 home sites.

Puerto Rico News Digest For November 4, 2014

.

NPP CANDIDATE WOULD BEAT PADILLA

According to a new poll from El Nuevo Dia, either of the top two 

likely gubernatorial nominees from the pro-statehood New Progre-

ssive Party would defeat sitting PDP Governor Alejandro Garcia

Padilla, if the election were held today. In a hypothetical match-

up against Ricky Roselló, AGP would get 24% of the vote, with 

Roselló getting 43%, while current Resident  Commissioner Pedro

Pierluisi would garner 37% of the vote versus the Governor's 23%. 

In either scenario, PIP candidate Juan Dalmau would receive

about 6% of the vote.

PR JOINS GLOBAL TREND WITH IVA TAX

From The San Juan Daily Star:

"The value-added tax (IVA by its Spanish acronym) that 

the Puerto Rico government is slated to implement

hovers at around 14 percent, but with the repeal of 

income taxes for many taxpayers and exemptions that

will be part of the proposed tax reform, officials do 

not expect it to have a negative impact..."

VIOLENT WEEKEND LEFT 14 DEAD

From Fox News:

"Fourteen people were killed over the weekend in Puerto 

Rico, to make it the second most violent so far this year, the 

Caribbean island's police told Efe on Monday..."

PR MANUFACTURING INDEX SLIDES

From Caribbean Business:

"A gauge of Puerto Rico’s manufacturing industry backed 

off in September, posting a fifth drop in six months 

below the growth threshold. The Purchasing Managers Index 

(PMI) for Puerto Rico’s manufacturing sector slid to 48.4 

in September..."

PR TO HOST 96 CONVENTIONS THROUGH JAN.

From News Is My Business:

'Puerto Rico has been selected to host 96 events including, 

conferences, annual meetings and sports activities for 

this winter season. This represents an estimated 40,894 

room nights and a total direct spending of $23 million 

into the local economy, Meet Puerto Rico President Milton 

Segarra said Monday..."

Puerto Rico News Digest for October 2, 2014

Ebola Freakout Over Nigerian Ship At Gas Terminal 

Employees at the EcoElectrica Natural Gas Terminal in the southern

town of Peñuelas are reportedly very nervous over the recent docking
of a Nigerian ship at the facility, as the vessel was not checked

beforehand for signs of Ebola Virus Disease contagion among the crew.
Ebola has been ravaging West Africa for months, and a case recently
surfaced in the continental United States, upping the anxiety level in the
island  over the disease . Nigeria had recently registered several cases of

the hemorrhagic virus, but there are currently no active cases in that

country. According to El Nuevo Dia, several employees of EcoElectrica

had refused to board the ship due to fear of the virus. The island's Health
Department is belatedly sending personnel to the plant to investigate, but
the ship left the port for another destination two days ago.

Murder Record Broken in Cayey

El Vocero reports that the town of Cayey has now registered 18 murders

so far this year, seven more than had been counted at this time in 2013.

The latest victim was Jean Carlo Rodríguez Rodríguez, age 24, who was

gunned down while eating at a "tripleta" sandwich business.  Rodríguez 

lived in the Brisas de Cayey public housing project. Much of the recent 

violence is attributed to drug trafficking and a reduction in available 

police personnel in the area. 

U.S. Customs Finds $2 Million In Truck Headed For DR

From Yahoo News:

A truck driver attempting to leave Puerto Rico by ferry for the Dominican 

Republic has been detained with more than $2 million in cash. U.S. 

Customs and Border Protection agents detained the man and confiscated 

the cash as he was attempting to board the Caribbean Fantasy in San Juan. 

The agency says 22 bundles of cash were hidden in compartments inside 

the truck and was found Monday.

Sales Tax Collections Hits High For September

From Caribbean Business:

Sales & use tax (IVU) collections for September hit a  record high for the 

month on new revenues from the extension of the levy to cargo coming 

into Puerto Rico’s ports, the Treasury Department reported Wednesday.

Treasury netted $119.5 million from the IVU last month, which reflects 

transactions done in August.

IVU collections for the first quarter of fiscal 2015 (July-September) 

totaled $337.8 million, an increase of $17.3 million, or 5.4 percent, over 

the same three-month period last year.