Rep. Tom MacArthur (R-NJ) has introduced HR 2429, the Puerto Rico Task Force Economic Empowerment Act, in the House of Representatives. The comprehensive bill includes measures designed to “support businesses in Puerto Rico, improve health funding for Puerto Rico, and promote security in Puerto Rico.”
An important part of the proposal is a set of measures designed to increase access to business capital for small business owners in Puerto Rico. The legislation would reduce or waive Small Business Administration fees for small business loans, provide incentives for microloans from third parties, and fund grants for small businesses.
Like a similar bill introduced by Rep. Nydia Velazquez, which MacArthur co-sponsored, HR 2429 also includes measures to give preference to Puerto Rico-based businesses in federal contracts, and establish a Veteran Business Outreach Center on the Island. This Center would provide services for veterans who own or plan to launch a small business.
The pair of bills introduced last week have become the first pieces of bipartisan legislation based on recommendations from the December 2016 report by the Congressional Task Force on Economic Growth in Puerto Rico
The bill also includes communicable diseases like the Zika virus in the definition of “disasters” for the purpose of disaster loan financing in Puerto Rico. Diseases that lead to a travel warning would, under this bill, trigger opportunities for loans.
There are also some requirements in the bill for better reporting for Puerto Rico, including new reporting requirements for the Island’s SBA representatives and a study of the feasibility of including Puerto Rico in Bureau of Labor Statistics indices which do not currently include the territory.
The section on health centers around the following claim:
It is the sense of Congress that—
(1) the territories of the United States should receive more equitable and sustainable treatment under Federal health policies and programs, including the Medicare and Medicaid programs, in a fiscally responsible manner; and
(2) the treatment of the territories of the United States under Federal health programs, with appropriate Federal oversight, should aim to—
(A) improve patient outcomes and strengthen health care systems in the territories;
(B) mitigate against migration from the territories to the States and the costs to the State and Federal governments which are associated with such migration; and
(C) stabilize and strengthen the fiscal condition of the governments of the territories.
The security provisions of the bill call for a Caribbean Border Counternarcotics Strategy, which should be “substantially equivalent” to the existing Southwest Border Counternarcotics Strategy and the Northern Border Counternarcotics Strategy. Puerto Rico has historically received less support for counternarcotics efforts.
The bill is supported by Resident Commissioner Jenniffer Gonzalez and by labor organizations in Puerto Rico. It is cosponsored by Rep. Sean Duffy R-WI) and Rep. Nydia Velazquez (D-NY) as well as the Resident Commissioner.
This and other recent bills aimed at improving Puerto Rico’s economic growth stand in contrast to efforts to revitalize Section 936 of the tax code, which rewarded large corporations based in the States for technically diverting funds through Puerto Rico with the stated – yet unrealized – goal of substantial job creation in Puerto Rico. Research has found that the Section 936 tax break cost the U.S. government and taxpayers much more than Puerto Rico benefited.
Small businesses, according to the Small Business Administration, are a more reliable source of new jobs. Puerto Rico’s unemployment rate is 12.4%, more than double the U.S. overall rate of 4.7%. The new bills focus on bringing working capital directly to Puerto Rico.