FINANCIAL OVERSIGHT AND MANAGEMENT BOARD
FOR PUERTO RICO
Members
Andrew G. Biggs
Carlos M. García
Arthur J. González
José R. González
Ana J. Matosantos
David A. Skeel, Jr.
José B. Carrión III
Chair Natalie A. Jaresko
Executive Director
BY ELECTRONIC MAIL
March 11, 2020
The Honorable Wanda Vázquez Garced
Governor of Puerto Rico
The Honorable Thomas Rivera Schatz
President of the Senate of Puerto Rico
The Honorable Carlos J. Méndez Núñez
Speaker of the House of Representatives of Puerto Rico
Dear Governor Vázquez Garced, President Rivera Schatz, Speaker Méndez Núñez:
Best practices, as well as legal requirements, mandate that financial and budgetary analysis of
proposed legislation be performed when considering new legislation. Proposed legislative changes
must be adequately researched, debated, and documented, with input from all appropriate
stakeholders solicited.
Senate Joint Resolution 473 (“SJR 473”) was approved by the Puerto Rico Legislative Assembly
to order the Municipal Revenue Collection Center (“CRIM”, for its Spanish acronym) to create an
incentives program for the payment of outstanding amounts owed to CRIM related to personal and
property tax while releasing the payor from the payment of interest, surcharges and penalties
accrued on such amounts. The program also provides for repayment plans on these debts.
SJR 473’s Statement of Purpose provides that while there is too much debt associated with CRIM’s
tax collections, the Mayors of the municipalities of Puerto Rico have not reached an agreement on
whether an incentives program for the repayment of these debts should be adopted. Thus, SJR 473
provides for such an incentives program on a voluntary basis. However, as stated in CRIM’s
position paper, this kind of legislative measure does not help the municipalities of Puerto Rico in
the long term, as it only provides immediate, temporary economic relief for the residents, but does
not provide the fiscal stability and soundness that the municipalities need in order to achieve
permanent financial independence.
PO Box 192018 San Juan, PR 00919-2018; www.oversightboard.pr.gov; [email protected]
Honorable Wanda Vázquez Garced
Honorable Thomas Rivera Schatz
Honorable Carlos J. Méndez Núñez
March 11, 2020
Page 2 of 2
The imposition of interest, surcharges and penalties on unpaid tax obligations aims to prevent and
penalize negligent or criminal behavior. As a result, incentive programs, such as that proposed in
SJR 473, discourage responsible, law-abiding taxpayers who comply with their obligations on a
timely basis and negatively affect their trust in the tax system.
Furthermore, CRIM has a portfolio of accounts receivable with a value of approximately $881
million currently outstanding for the period of FY2013 to FY2017, including interest, penalties
and discounts. CRIM needs to collect as much as possible from said balance for the benefit of the
municipalities. Reducing the amount of funds that may otherwise be collected by CRIM works
only to the detriment of the municipalities and the people of Puerto Rico. Therefore, CRIM should
take proactive steps to collect as much as possible from this portfolio of accounts receivable.
For these reasons, as well as others stated in CRIM’s position statement, the Oversight Board
concurs with CRIM’s position against approval of SJR 473.
In view of the foregoing, and order to discharge its responsibilities under PROMESA, the
Oversight Board opposes the approval of this proposed joint resolution and reserves its rights under
PROMESA to take such actions as contemplated thereunder.
Sincerely,
Natalie A. Jaresko
CC: Mr. Antonio Pabón Batlle
Mr. Omar Marrero
Mr. Reinaldo Paniagua
Hon. Javier Carrasquillo
PO Box 192018 San Juan, PR 00919-2018; www.oversightboard.pr.gov; [email protected]
