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 OPPORTUNITYZONE.COM