A project to reconfigure the distribution of income from slot licenses in Puerto Rico approved

Chamber Project 1119 stipulates that 60% of the income from the collection of licenses for these machines would support the Police Retirement Trust. The original version of the measure provided that 95% of the income would go to the trust.

35% of the income will be used to create what will be known as the Municipal Reengineering Fund. However, the use of the money in said fund is not defined in the project. This money was previously used to pay the responsibility of the municipalities for Plan Vital. It is established how the Municipal Reengineering Fund will be distributed and a complicated formula is created that takes into account the total number of people benefited by the Nutritional Assistance Program per capita, the functional budget per capita of each municipality, the appraised value of the property taxable per capita of each municipality and the population of the municipality per square mile.

House Bill 1119 was filed in December 2021 by popular representatives José "Cheíto" Rivera Madera and Orlando Aponte Rosario. Despite the fact that the Fiscal Oversight Board (JSF) has defended the language of the Debt Adjustment Plan in the context of the withdrawal of the Police, assuring that some $850 million would be allocated for its financing for the withdrawal and $700 million to cover medical expenses, Rivera Madera maintains that doubts have arisen among police union leaders in the sense that this money will not give.

Currently the money generated by the gaming machines is not reaching the Police retirement trust. The current formula is 50% for that purpose.

The current rule of law provides that 45% of the collections will be used to cover the contribution of the municipalities to the Health Insurance Administration (Vital Plan). Now the project reduces that item to zero.

The other 5% will go towards the administration expenses of the Gaming Commission.

PC 1119 maintains the circulation limit of up to 45,000 machines, but with an amendment to the law it provides that, in order to reach that figure between 35,000 and 45,000, not only will the Gaming Commission have to carry out a study that justifies it, but also that study has to be evaluated by the Legislature.

The measure impacts collections by reducing the cost of the license per machine from $1,500 to $500. With an amendment in the room it would be avoided that owners of machines have to replace the current ones with new ones that supposedly the past leadership of the Gaming Commission wanted to promote in Puerto Rico. With another amendment, it is provided that the income product of the machines cannot be more than 50% of the turnover of the business.

The reduction in the cost of the licenses has been objected to by the alternate spokesman penepé Gabriel Rodríguez Aguiló, who warned that the result of this change would adversely impact the municipal governments and the withdrawal of the police.

“There is a dramatic fiscal impact. Each machine in Puerto Rico has to pay $1,500 for labels for rights or licenses... includes the renewal”, Rodríguez Aguiló recently warned in a legislative session.