The Financial Oversight and Management Board (JSF) has asked FEMA Administrator Cameron Hamilton to clarify whether Puerto Rico municipalities may apply construction taxes to projects financed by the federal agency. The Board also asks whether FEMA will give specific instructions to the Central Office for Recovery, Reconstruction and Resiliency (COR3) and the Puerto Rico Electric Power Authority on the matter, and whether FEMA will address retroactively the taxes already collected by municipal governments.
For months, the Board has told municipalities they cannot charge taxes above the rates already established on projects funded with federal money; it is now raising its concern with FEMA. In a letter, the Board's executive director, Robert Mujica, tells Hamilton the Board needs "clarification and guidance" on the issue. The fiscal entity maintains that these higher taxes applied to government-funded projects make the works more expensive, and that 22 of the 78 municipalities do so.
Mujica stated: "We are not aware of jurisdictions that apply a different tax rate to projects depending on whether they are funded with private or government funds."