(No. 108) (Approved August 7, 2002) AN ACT

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1 (S. B. 1139) (No. 108) (Approved August 7, 2002) AN ACT To authorize the Secretary of the Department of the Treasury to remit to the Puerto Rico Conservation Trust, a sixth (1/6) part of the increment over ten dollars and fifty cents ($10.50) and up to thirteen dollars and twenty-five cents ($13.25), from the sums the United States Government shall return to the Treasury of Puerto Rico as of January 1, 2002, for the tax on rum transported from Puerto Rico to the United States; to direct the Secretary of the Treasury to transfer every corresponding sum to the Conservation Trust within thirty (30) days following the receipt by the Treasury of Puerto Rico of the increment in the sums that the United States Government shall return to the Treasury of Puerto Rico for the tax on rum; with the exception, that if any sum from the United States Government has been received by the Treasury of Puerto Rico prior to the approval of this Joint Resolution, and pursuant to the provisions of Public law, the corresponding transfer shall be made within the five (5) days following the effective date thereof; and for other purposes. STATEMENT OF MOTIVES On July 1, 1999, Public Law No took effect, which provided in its Section 512, an increase from ten dollars and fifty cents ($10.50) to thirteen dollars and twenty-five cents ($13.25), in federal taxes on rum from Puerto Rico shipped to the United States to be sold to consumers in the United States. Its effectiveness would be from July 1, 1999 to December 31, According to the legislative history of said increase in the United States Senate, it was approved with the understanding that a sixth (1/6) part of said

2 2 increase would be transferred to the Puerto Rico Conservation Trust for the purposes of preserving the natural resources of Puerto Rico. The Puerto Rico Conservation Trust is an initiative of the United States Department of the Interior. It was established in 1968 through a Memorandum of Agreement signed by Stewart L. Udall, Secretary of the Department of the Interior; Roberto Sánchez-Vilella, Governor of Puerto Rico, and Sergio Camero, Puerto Rico Economic Development Administrator. It was constituted by public deed on January 23, The sole beneficiary of the Trust is the People of Puerto Rico. The Trust was created to carry out a joint plan between the Department of the Interior and Puerto Rico for the protection and enhancement of the natural beauties and resources of the Island. The Trust is classified by the Department of the Treasury of the Commonwealth of Puerto Rico as a nonprofit institution, and by the Internal Revenue Service of the United States under sections 501(c) (3) and 509(a)(3); as an "institution organized and operated to conduct functions of the United States and Puerto Rico in the area of conservation." The Trust is administered by a Board of Trustees with the advice of a Conservation Advisory Council. The three trustees are appointed by mutual agreement of the Governor and the Secretary of the Interior for terms of three years. The Council advises the Trustees on programs, projects and budgets. Three of its members are appointed by the Governor, the Secretary of the Interior, the Trustees of the University of Puerto Rico, respectively. The Trustees, in turn, appoint the number of members that they deem are necessary. They manage the operations, programs, projects and investments on a daily basis.

3 3 The Executive Director is the person in charge of executing the resolutions of policy and directives of the Trustees. The Trustees decided to attain the purposes of the Trust through the acquisition of land to be conserved, and through education programs, as a complement. The initial financing proceeded from taxes levied by the Department of the Interior on oil refineries and petrochemical companies operating on the Island. At present, the Trust generates income from financial transactions with eligible funds from companies classified under Section 936 of the Federal Internal Revenue Code. Approximately 45% of the income is derived from financial transactions with these companies. Due to the efforts of the Secretary of the Interior, the United States Congress, the Governor and the Legislature of the Commonwealth, the impact of the loss of income from Section 936 has been reduced by Public Law which authorizes an increase to Puerto Rico in the tax on rum, from which the Trust would receive a percent. This measure will be in effect for a 30-month period from July The Trustees invest the funds in a conservation endowment fund, acquisition of land, management of property and education and reforesting programs. This implies certain costs in these areas. For example, the management costs of Hacienda Buena Vista, Las Cabezas de San Juan Natural Reserve, Hacienda La Esperanza and others, were of 2.5 million dollars from a budget of $5.2 million, in the year There is an education program that consists of the adoption of schools, the drafting and designing of a curriculum on nature and its conservation, summer camps, use of the properties as live laboratories, lectures in schools,

4 4 and technical assistance to the general public, industries and communities. For example there are 737 public and private schools involved in any one of the phases of this program. This program was initiated after the passing of Hurricane Hugo in 1989, to provide trees for individuals, organizations, communities, schools and municipal and commonwealth agencies. To date, the production amounts to 970,000 trees. Amigos is the citizen support program of the Conservation Trust. It consists of five categories: Individual, Family, Corporate, School and Universities. There 12,118 Amigos. Activities and special events are held such as nature hikes in the properties, lectures and seminars in the nurseries that expose 98,000 persons each year to the message on the protection of nature. These numbers include the 84,700 persons who visit the natural reserves of the institution each year. On July 1, 1999, Public Law No took effect, and provided in its Section 512, for an increase from ten dollars and fifty cents ($10.50) to thirteen dollars and twenty-five cents ($13.25) in federal taxes on Puerto Rico rum shipped to the United States to be sold to consumers in the United States. Its effectiveness is from July 1, 1999, to end January 1, The legislative history of Section 512 of Public Law No establishes that a sixth (1/6) part of the increase of the taxes on rum imported from Puerto Rico would be returned to the Government of Puerto Rico for the conservation of the natural resources of Puerto Rico. The Federal Senate provided that these funds at state level would be delivered to the Puerto Rico Conservation Trust.

5 5 The purpose of this measure is to amend J. R. Number 183 of April 27, 2000, in order to extend its effectiveness until the year 2004, so that the laudable purposes of the Puerto Rico Conservation trust can be financed. BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO: Section 1.- The Secretary of the Department of the Treasury is hereby authorized to remit to the Puerto Rico Conservation Trust, a sixth (1/6) part of the increment received by the Treasury of Puerto Rico from ten dollars and fifty cents ($10.50) and up to thirteen dollars and twenty-five cents ($13.25), from the sums the United States Government returns to the Treasury of Puerto Rico for the tax on rum shipped from Puerto Rico to the United States and sold to consumers in the United States. The Secretary of the Treasury shall remit the corresponding sum to the Conservation Trust within thirty (30) days following the receipt by the Treasury of Puerto Rico of the increment in the sums that the United States Government returns to the Treasury of Puerto Rico for the tax on rum; with the exception that if any sum from the United States Government has been received by the Treasury of Puerto Rico prior to the approval of this Joint Resolution, and pursuant to the provisions of Public Law, the corresponding transfer shall be made within the five (5) days following the effective date thereof. Section 2.- This Act shall take effect immediately after its approval.

6 6 CERTIFICATION I hereby certify to the Secretary of State that the following Act No. 108 (S.B. 1139) of the 3 rd Session of the 14 th Legislature of Puerto Rico: AN ACT to authorize the Secretary of the Department of the Treasury to remit to the Puerto Rico Conservation Trust, a sixth (1/6) part of the increment over ten dollars and fifty cents ($10.50) and to thirteen dollars and twenty-five cents ($13.25), from the sums the United States Government shall return to the Treasury of Puerto Rico as of January 1, 2002, for the tax on rum transported from Puerto Rico to the United States; to direct the Secretary of the Treasury to transfer every corresponding sum to the Conservation Trust within thirty (30) days following the receipt by the Treasury of Puerto Rico of the increment in the sums that the United States Government shall return to the Treasury of Puerto Rico for the tax on rum; etc., has been translated from Spanish to English and that the English version is correct. In San Juan, Puerto Rico, today 14 th of October of Elba Rosa Rodríguez-Fuentes Director

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