Opportunity Zone Magazine Volume 1, Issue 3 - Page 74

74 OPPORTUNITY ZONE MAGAZINE | VOLUME 1 • ISSUE 3
THE CBDG-DR FUNDS
The Second Amendment to the Puerto Rico Disaster
Recovery Action Plan for the use of CBDG-DR funds in
response to 2017 hurricanes Irma and Maria, with effective
date of Aug. 23, 2019, 8 shows that the estimated amount of
funds to be received by Puerto Rico for the recovery efforts
is $19.9 billion. Around $9.2 billion have been already
allocated to Puerto Rico with 42% directed to housing. The
plan details that the expected deployment of the first $1.5
billion of funds will extend until year 2025. 9 These funds
will be administered by the Puerto Rico Department of
Housing in close collaboration with the Central Office of
Recovery, Reconstruction and Resilience 10 and allocated to
27 programs 11 in the following sectors:
• Planning
• Housing: home repair, reconstruction, or relocation, social
interest housing, rental assistance, among others
• Economic recovery: small businesses programs, workforce
training, businesses loans among others
• Infrastructure: FEMA coordination, critical infrastructure
resilience, community resilience centers
• Multi sector: city revitalization program and Puerto Rico
by Design
THE PUERTO RICO OZs DEVELOPMENT FRAMEWORK
The action plan acknowledges that the OZ program provides
“a viable means to leverage federal funding to help facilitate
recovery and economic development, as permitted.” 12 Also,
the action plan recognizes that the OZs “represent a critical
opportunity in the rebirth and revitalization of the Island…”
Consistent with the applicable requirements, such support
could range from discrete, stand-alone projects to broader
facilitation of economic development initiatives, including
job creation, blight removal, and infrastructure initiatives.” 13
In order to effectively compete for the investment funds to
be generated by the OZ program in the United States and to
provide similar benefits to local investors that are not subject
to federal income tax on their capital gains, the Puerto Rico
legislature approved and the Governor signed into law, Act
21 of May 14, 2019. The provisions of Act 21 were later
incorporated into the Puerto Rico Incentives Code previously
discussed. Act 21 provides the following:
• conforming provisions to Sections 1400Z-1 and 1400Z-2,
• a new incentive program for priority projects that do not
qualify for any other tax incentive program, and
• an expedite permit process for priority projects.
A seven-member committee is required to publish the list of
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