REGULATION FOR THE PROMOTION AND DEVELOPMENT OF THE
CRUISE SHIP INDUSTRY IN PUERTO RICO
C E R T I F I C A T I O N
In compliance with the provisions of Section 2.13 of Act No. 170 of August 12, 1988, as amended, I hereby certify that, in order to further stimulate the cruise ship industry and the tourism industry in Puerto Rico, the public interest requires that this Regulation for the Promotion and Development of the Cruise Ship Industry in Puerto Rico become effective immediately without delay, as requried by Sections 2.1, 2.2, 2.3 and 2.8 of the aforementioned Act No. 170. Thus, I hereby grant this Regulation immediate effectiveness upon its inscription with the Office of the Secretary of the Department of State.
In San Juan, Puerto Rico on October ___, 2012.
_____________________________ Luis G. Fortuño Burset
GOVERNMENT OF PUERTO RICO TOURISM COMPANY
REGULATION FOR THE PROMOTION AND DEVELOPMENT OF THE CRUISE SHIP INDUSTRY IN PUERTO RICO
CHAPTER 1 – GENERAL PROVISIONS
Section 1.1 – Legal Authority
This Regulation is promulgated by the Board of Directors of the Puerto Rico Tourism Company pursuant to Act No. 113 of July 4, 2011, known as the Act for the Promotion and Development of the Cruise Ship Industry in Puerto Rico; Act No. 10 of June 18, 1970, as amended, known as the Act of the Puerto Rico Tourism Company; and pursuant to Act No. 170 of August 12, 1988, as amended, known as the Uniform Administrative Proceedings Act.
Section 1.2- Short Title
This Regulation shall be known as the “Regulation for the Promotion and Development of the Cruise Ship Industry in Puerto Rico.”
Section 1.3 – Definitions
The following terms shall have the meanings that are attributed to them below, except where expressly stated, or unless the context clearly indicates otherwise:
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1. Act – shall refer to Act No. 113 of July 4, 2011, known as the Act for the Promotion and Development of the Cruise Ship Industry in Puerto Rico.
2. Agricultural Products – shall refer to such raw products grown or farmed in Puerto Rico according to those definitions and certifications provided by the Puerto Rico Department of Agriculture.
3. Bilateral Marketing Program – shall refer to each of the programs created jointly between the Company and a Cruise Owner for the marketing of the cruise line and the Puerto Rico Tourist Destination pursuant to Chapter 2 of this Regulation.
4. Certified Local Supplier (CLS) – shall mean local suppliers certified by the Puerto Rico Trade and Export Company, registered at Merchants’ Registry of the Government of Puerto Rico Department of the Treasury and which will be listed by the Puerto Rico Tourism Company every year during the term of this Regulation as eligible providers for purposes of the Provisioning Incentive.
5. Company – refers to the Puerto Rico Tourism Company, a public corporation organized and existing under the Government of Puerto Rico’s Act No. 10 of June 18, 1970, as amended.
6. Company Fund – refers to the Tourism Company Fund for Incentives to the Cruise Ship Industry created pursuant to Article 4 of the Act.
7. Cruise or Passenger Ship – shall mean any ship engaged in the transportation of passengers, with capacity for at least twelve (12) passengers, cabins for the lodging of such passengers, that offers cruise or tour services, and does not carry cargo.
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8. Cruise Owner – shall be a cruise line or legally organized entity that owns, represents or operates one or more Cruise Ships or cruise lines that visit any of the Ports of Puerto Rico as one of their destinations, including such cruise lines’ affiliates, subsidiaries, and their operating brands that operate one of more Cruise Ships and that together may be considered a single Cruise Owner.
9. Excursion Agreement – shall refer to the agreements entered into by and between Cruise Owners and Excursion Providers whereby the Cruise Owner agrees to purchase a certain amount of Excursions from Excursion Providers and resell such Excursions to its passengers.
10. Excursionist - shall mean any natural person or entity authorized by the Company, according to Act 282 of December 19, 2002, to provide excursion services and is licensed to pick-up passengers in the Ports of Puerto Rico.
11. Goods Manufactured in Puerto Rico – shall refer to such products developed, manufactured or finished in Puerto Rico according to those definitions and certifications provided by the Puerto Rico Industrial Development Company and the Puerto Rico Department of Agriculture.
12. Passenger – shall mean any natural person who travels aboard a Cruise or Passenger Ship which sets sail from or visits the Ports of Puerto Rico. This definition shall not apply to Cruise Ship personnel or crew that may from time to time use the port facilities in Puerto Rico, except those Cruise Owner employees traveling aboard the vessel for leisure or, otherwise not directly employed in the operation of the vessel.
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13. Provisioning Incentive – shall mean such discounts to be granted to the Cruise Owner of cruise ships docking at any port in the jurisdiction of Puerto Rico for local purchases from Certified Local Suppliers as set forth herein. Additional discounts shall be considered for such goods manufactured in Puerto Rico as set forth herein below.
14. Ports of Puerto Rico – shall mean the harbor and public marine facilities that handle ocean-going vessels and provide port related services to tourists and passengers, including the Port of San Juan, the Port of the Americas in Ponce and the Mayagüez Maritime Port.
15. Service Provider – shall mean any person with technical or specialized skills registered as a Certified Local Supplier that is contracted by the Cruise Owner to provide maintenance or repair services for a cruise ship and excludes any service that is required at each port when docking including, but not limited to: waste disposal, recycling, stevedoring, regulated maintenance.
Section 1.4 – General Purposes
This Regulation is promulgated with the purpose of establishing all the rules and norms related to the incentives to be funded by the Company Fund pursuant to Articles 5(a)(3), 5(a)(5), 6 and 7 of the Act.
The main purposes pursued by the Government of Puerto Rico through the adoption of incentives for the cruise ship industry are the following:
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a. To increase the number of passengers in cruise ships that visit the Ports of Puerto Rico;
b. To increase the number of passengers that embark on a cruise in Puerto Rico;
c. To increase cruise ship’s purchases of products in Puerto Rico;
d. To stimulate the cruise ship purchase of locally produced or manufactured products;
e. To promote tourist consumption and investment in Puerto Rico’s economy; f. To increase contracted services in Puerto Rico;
g. To promote the development of new excursions and increase the number of excursions sold by the cruise lines;
h. To generate and increase benefits to be received by the different economic sectors of Puerto Rico; and
i. Offer equal incentives to all Cruise Ship operators in order to maximize the promotion of the Puerto Rico Tourist Destination.
Section 1.5 – Scope and Applicability
This regulation shall apply to all the procedures for requesting and granting incentives to be funded by the Company Fund pursuant to Articles 5(a)(3), 5(a)(5), 6 and 7.
CHAPTER 2 – BILATERAL MARKETING PROGRAM
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Each Cruise Owner originating trips from any of the Ports of Puerto Rico may apply for the creation of a Bilateral Marketing Program by and between the Company and said Cruise Owner with the objective of promoting the Ports of Puerto Rico and to increase demand. Each Bilateral Marketing Program shall have a term of one year. Extensions thereto shall be subject to approval from the Company and availability of funds.
Section 2.2 – Company Fund Contributions
The Company Fund shall contribute to each Bilateral Marketing Program one dollar ($1.00) per homeport passenger per trip originating from any of the Ports of Puerto Rico to the Program provided Cruise Owner complies with all requirements set forth in the Act and this Regulation.
Section 2.3 – Cruise Owner Contributions
Cruise Owner must contribute at least twenty five cents ($ 0.25) for each dollar contributed by the Company. The Cruise Owner’s contribution may be in the form of cash or in kind, and may consist of:
1. free or discounted tickets for special events or promotions;
2. the value associated with using the Cruise Owner’s selling channels such as the internet.
3. other such initiatives as the Cruise Owner proposes.
Section 2.4 – Cruise Owner Obligations under the Marketing Efforts
The disbursement of funds from each Bilateral Marketing Program shall be subject to approval from the Company and shall be subject to the following:
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a. Funds may only be used to cover the costs of the marketing plan or strategy as previously approved by the Company and the corresponding Cruise Owner that will run for a fiscal year to increase homeport cruises from Puerto Rico and cruise yields.
b. The marketing campaign is subject to modification based on the Company’s and the Cruise Owner’s objectives, following evaluation and mutual agreement.
c. The total qualifying incentive amount for the Marketing Campaign will be extensive to efforts outside of Puerto Rico.
d. The Company’s promotional campaign logo must be incorporated and headlined in all campaigns funded by the program, in a size equal to or greater than the Cruise Owner logo. The Puerto Rico Does it Better logo must not be altered in any way, shape or form.
e. Advertisements published as part of each Bilateral Marketing Program must prominently feature Puerto Rico. The Puerto Rico Tourist Destination shall always be emphasized.
f. All promotional materials, advertising, and media schedules shall be provided to the Company for approval in a format that includes the name of the activity and/or the publication, a brief description (i.e., size and color), dates scheduled, including week and month, the frequency or number of insertions and cost of each.
g. The Cruise Owner shall allow Company representatives to verify the use given to the funds disbursed, at any time. The Company shall have the
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right to scrutinize Cruise Owner billings and records related to the use of the funds for a period of up to one (1) year after disbursement.
h. The Cruise Owner shall submit a written final report to the Company, within forty-five (45) days after completion of the marketing plan, which provides a detailed account of all Company and Cruise Owner contributions, including contributions in kind, and also sets forth the achievements, expenses incurred, and describes the use given to the funds, supplemented by original documentation that corroborates expenditures and evidences that all required contributions were made, and the funds utilized, in accordance with the terms and conditions of the Act and this Regulation. If the Cruise Owner requires additional time to provide the report or documentation, the Cruise Owner shall promptly notify the Company and request an extension in writing expressing just cause for the delay.
Section 2.5 - Request for incentives grants under the Marketing Efforts
a. Any Cruise Owner interested in creating a Bilateral Marketing Program pursuant to the Article 5(a)(3) of the Act and this Regulation shall file an application with the Company’s Chief Marketing Officer at least thirty (30) days prior to the launching of the proposed marketing plan. The Company shall in turn reply, and proceed with the disbursement of funds, within thirty (30) calendar days of the receipt of the complete application proposal.
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b. The application must include the following information:
1. Name under which the Cruise Owner is commercially known and name under which the Cruise Owner is legally organized;
2. Copy of the certificate of incorporation filed in the Puerto Rico Department of State, certificate of organization filed in the Puerto Rico Department of State or partnership agreement, if applicable. For entities organized under the laws of any state or country other than Puerto Rico, copy of the certificate of authorization to do business in Puerto Rico issued by the Puerto Rico Department of State.
3. Certificate of filing of annual reports issued by the Puerto Rico Department of State (“Good Standing”), if applicable.
4. Certificate of Filing of Tax Returns for the five (5) previous years issued by the Department of the Treasury.
5. Certificate of no debt issued by the Department of the Treasury.
6. Certificate of no debt issued by the Department of Labor and Human Resources regarding all employee contributions, in accordance with the Puerto Rico Employment Security Act (unemployment, temporary disability or sickness, or Chauffeur’s Social Security); or proof that it is paying such contribution by way of an installment plan and in full compliance with its terms.
7. Certificate of no debt regarding personal and real property taxes issued by the Municipal Revenues Collection Center.
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8. Sworn statement wherein the Cruise Owner certifies that it has not been convicted of or pleaded guilty to of any of the crimes listed in Act No. 458 of December 29, 2000, as amended.
9. Schedule for the following year identifying the dates in which the vessels shall depart from the Ports of Puerto Rico, the passenger capacity for each vessel, and the other destinations to be visited in each trip;
10. Marketing plan and strategy for the approval of the Company including a detailed list of expenses for the implementation of such plan;
11. Detailed description of the Cruise Owner’s proposed contribution. Contributions in kind must provide an in detail description of the items to be contributed and approximate cost of such items in the current local market.
b. All applications must be submitted within ninety (90) days after the effective date of this Regulation (the “Deadline”).
The Executive Director of the Company or its designee shall evaluate all applications submitted by Cruise Owners under this Section 2.2 and shall approve or deny the same in accordance with the terms of the Act and this Regulation, subject to availability of funds. The approval will apply exclusively to the specified marketing plan or strategy.
CHAPTER 3 – INCENTIVE FOR PROVISIONS AND SERVICES
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The Company will reimburse the Cruise Owner ten percent (10%) of purchases from Certified Local Suppliers (“CLS”) and an additional five percent (5%) for purchases of Goods Manufactured in Puerto Rico as set forth herein, made by each cruise ship during its docking at any port in the jurisdiction of Puerto Rico.
Section 3.2 Contracted Services Incentive
The Company will reimburse the Cruise Owner ten percent (10%) of the overall cost of labor of the services rendered by the Service Provider registered as a Certified Local Supplier, excluding cost of equipment.
Section 3.3 Request for incentives grants under the Provisions and Services Incentive
1. Any Cruise Owner interested in obtaining the Provisioning Incentive or the Contracted Services Incentive shall designate an authorized official that will act on behalf of the Cruise Owner to request, coordinate and foresee the proper application of this Regulation.
2. The Cruise Owner shall file an initial application with the Company through said authorized official on or before May 31st of every fiscal year for which the incentives will be requested.
3. The form of such initial application will be produced by the Company and must include the following information:
a. Name under which the Cruise Owner is commercially known and name under which the Cruise Owner is legally organized;
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b. Copy of the certificate of incorporation filed in the Puerto Rico Department of State, certificate of organization filed in the Puerto Rico Department of State or partnership agreement, if applicable. For entities organized under the laws of any state or country other than Puerto Rico, copy of the certificate of authorization to do business in Puerto Rico issued by the Puerto Rico Department of State.
c. Certificate of filing of annual reports issued by the Puerto Rico Department of State (“Good Standing”), if applicable.
d. Certificate of Filing of Tax Returns for the five (5) previous years issued by the Department of the Treasury.
e. Certificate of no debt issued by the Department of the Treasury.
f. Certificate of no debt issued by the Department of Labor and Human Resources regarding all employee contributions, in accordance with the Puerto Rico Employment Security Act (unemployment, temporary disability or sickness, or Chauffeur Social Security); or is paying such contribution by an installment plan in full compliance with its terms.
g. Certificate of no debt regarding personal and real property taxes issued by the Municipal Revenues Collection Center.
h. Sworn statement wherein the Cruise Owner certifies that it has not been convicted or pleaded guilty of any of the crimes listed in Act No. 458 of December 29, 2000, as amended.
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i. In this case, the Cruise Owner is not registered in Puerto Rico, the Cruise Owner must submit a Sworn Statement to that effect with the requirements established by the Company in its Sworn Statement Model. 4. In order to properly produce all the disbursements provided for in this Regulation, the request for any incentive grant shall be submitted by the Cruise Owner to the Company by an original invoice requesting the payment with the supporting documentation required by this Regulation. Such invoices shall be certified and signed in original by the authorized official of the Cruise Owner and shall be furnished at the Company no later than thirty (30) days after the end of the fiscal year of the invoicing period.
5. The Executive Director of the Company or its authorized representative shall evaluate any invoice and supporting documentation submitted by the Cruise Owner and shall approve the same for payment within thirty (30) days from the date of approval upon the terms of this Regulation.
CHAPTER 4 – INCENTIVE FOR LAND TOURISM TRANSPORTATION AT PORTS
Section 4.1 - Request for incentives grants
a. The Excursionist interested in receiving an incentive pursuant to Article 7 of the Act and this Regulation shall file an annual application with the Company’s Chief Marketing Officer within thirty (30) days after the Excursionist signs an agreement with the cruise line to provide the excursions on board. The Company shall in turn reply within thirty (30) calendar days of the receipt of the application proposal.
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b. The application must include the following information:
1. Name under which the entity is commercially known and name under which the entity is legally organized;
2. Copy of the certificate of incorporation filed in the Puerto Rico Department of State, certificate of organization filed in the Puerto Rico Department of State or partnership agreement, if applicable. For entities organized under the laws of any state or country other than Puerto Rico, copy of the certificate of authorization to do business in Puerto Rico issued by the Puerto Rico Department of State;
3. Certificate of filing of annual reports issued by the Puerto Rico Department of State (“Good Standing”), if applicable;
4. Certificate of filing of tax returns for the previous five (5) years issued by the Department of the Treasury;
5. Certificate of no debt issued by the Department of the Treasury;
6. Certificate of no debt issued by the Department of Labor and Human Resources regarding all employee contributions, in accordance with the Puerto Rico Employment Security Act (unemployment, temporary disability or sickness, or Chauffeurs Social Security); or proof that it is paying such contribution by way of an installment plan and in full compliance with its terms;
7. Certificate of no debt regarding personal and real property taxes issued by the Municipal Revenues Collection Center.
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9. Copy of agreement executed by and between the Cruise Owner and the Excursion Provider including the excursions contracted in the agreement, and excluding any pricing information or other privileged information regarding the specific terms of the agreement. If there is a new additional excursion contracted throughout the Fiscal Year and not included in the agreement, the Excursionist may notify the Company in writing of this new excursion and must include a certification from the Cruise Owner.
c. The Excursionist shall invoice the Company four times per Fiscal Year (September 30th, December 31st, March 31st. June 30th). The invoice shall include a copy of the final report that the Cruise Owner provides the Excursionist, with the final count of passengers that bought the excursion on board, the date, time and a description of the excursion that was sold. The final report shall also be certified by the Excursionist.
d. The Company shall pay the Excursionist an amount of one dollar ($1) per cruise passenger that bought the excursion on board during a period of 45 days after the invoice is received, subject to availability of funds which are set at a maximum of $500,000.00.
e. The Company’s promotional campaign (Puerto Rico Does it Better) logo, or any other logo approved by the Company, must be incorporated and headlined in all campaigns funded by the program, in a size equal to or greater than the Cruise Owner logo. The Puerto Rico Does it Better logo,
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or any other logo approved by the Company, must not be altered in any way, shape or form.
The Executive Director of the Company or designated official shall evaluate all applications submitted by Excursion Providers under this Section 4.1 and shall approve or deny said application in accordance with the terms of this Regulation. The approval will apply exclusively to the specified Excursions covered by the Excursion Agreement.
CHAPTER 6 – FINAL PROVISIONS
Section 6.1 Adjudicative Proceedings
Any complaint or dispute regarding provisions of law, regulations or public policy, in accordance with this regulation, shall be governed by the provisions of the Uniform Administrative Procedure Rules of the Puerto Rico Tourism Company.
Section 6.2 Notices
All notices pertaining to this regulation shall be in writing and shall be transmitted either personal hand delivery or through the United States Postal Service.
Section 6.3 Interpretation Rules
The provision of this regulation shall be interpreted liberally to allow the Company to perform its duties and to ensure that achieve all the objectives of the Act for the Promotion and Development of the Cruise Ship Industry in Puerto Rico.
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If any incentive is obtained or disbursed, in violation of any provision of this Regulation,
the Company shall be entitled to demand the return of such incentive. Any amount
recovered under this Section will be returned to the fund created by the Act.
The Company will be entitled to demand the return of any incentive grant obtained or disbursed in violation of the provisions of this Regulation.
Section 6.5 Severability
If any article, provision, part or section of this Regulation, or any of its applications, are declared by a court of competent jurisdiction to be valid, void or unconstitutional, all other remaining articles, provisions, parts or sections of this Regulation, and their applications, shall continue to be valid and in full force and effect.
CHAPTER 7 – EFFECTIVENESS
This Regulation shall become effective immediately upon approval by the Board of Directors and the Executive Director of the Puerto Rico Tourism Company, and the Governor of Puerto Rico pursuant to Act No. 10 of June 18, 1970, as amended, the Act for the Puerto Rico Tourism Company, and upon compliance with the proceedings established in Chapter II of Act No. 170 of August 12, 1988, as amended, known as the Puerto Rico Uniform Proceedings Act.
Approved by the Board of Directors of the Puerto Rico Tourism Company, and by the Secretary of Economic Development and Commerce, in San Juan, Puerto Rico, on _________________, 2012.
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APPROVED BY THE BOARD OF DIRECTORS AND THE EXECUTIVE DIRECTOR OF THE PUERTO RICO TOURISM COMPANY IN SAN JUAN, PUERTO RICO, ON OCTOBER __, 2012.
Name:
President of the Board of Directors Puerto Rico Tourism Company
Name: Luis G. Rivera Marín Executive Director
Puerto Rico Tourism Company
APPROVED BY THE GOVERNOR OF PUERTO RICO IN SAN JUAN, PUERTO RICO, ON OCTOBER __, 2012.
Luis G. Fortuño Burset Governor
