Recently it was reported incorrectly that the expat organization I am the President of, The 20/22 Act Society, was suing the Government of Puerto Rico for a recent law change called Act 40 sponsored by House Representative Tony Soto, that raised the charity requirement for 22 Act recipients (now called Act 60) from $5k -$10k and that we were against alleviating child poverty on the island.

While we are supportive of raising the charitable requirement, and it is true we are against forcing donors who previously had a choice to donate to any approved 1101 charity to now be restricted, we do not believe the donations should be mandated to a special legislative list controlled by a few key politicians. 

The same ones that enacted the law (that only approved four new charities for the legislative list since the law was approved out of over 5,000 legally valid charities) on the island, and previously could receive the money whose cause was selected by the donor exclusively, is a poor legislative decision with suspect motives.

While that issue is of critical importance to Act 22 recipients who feel it is unfair and their charity money was hijacked, it did not retroactively apply to current Act 22 recipients but only future (now called Act 60) applicants.

This issue has nothing to do with the more acute recent issue of another tax bill also sponsored by Representative Soto recently signed into law, that changed the annual filing fee, which by law requires what was previously $300 to accompany an annual report (that takes an hour to complete) to an astounding $5,000 per recipient, essentially hijacking almost $15 million a year which are new taxes that are disguised in the name of a “fee”, even though the law does not allow the Department of Economic Development (that was against the increase) to use any of the money beyond the previously $300 they formally received.

They are now just a conduit for what is akin to a bank robbery. The reason the 20/22 program as it is called has created 40,000 jobs, provided up to $250 million annually to Hacienda in tax receipts, brought in a couple billion in direct investment on the island, and almost exclusively was responsible for increasing GDP to its highest point since Congress repealed section 936 of the IRS code, killing Big Pharma on the island, is because of one belief. 

The belief and assurance by the government that the grants and the contracts we sign are sacred and immutable and thus cannot be changed directly or indirectly. Yet the end run via a simple filing fee codified by law which the head of Economic Development Secretary Laboy (who has been exceptional and balanced in policy) has no discretion to remove, proves that is not correct, and politicians will continue to try and interfere with existing agreements to redistribute wealth as they see fit.

They will learn regardless we all can vote with our dollars, literal votes, and have other methods of recourse. The program has had new applicants drop perhaps as much as 75% since the laws were enacted, effectively killing the program, and existing recipients are now starting to leave the island because it is not economically viable to stay and they no longer trust the government.

So, as it was accurately reported later last week, if our only viable recourse to protect recipients is to sue the government to enforce an existing contract, that is what will be done.