The letter below requests a coordinated investigation into the municipal taxation of federally funded disaster recovery and energy projects in Puerto Rico.
As detailed in the letter, the municipalities of Humacao and Guayama (along with many other municipalities in Puerto Rico) are assessing, or are positioned to assess, construction excise taxes, license fees, penalties, and interest on projects funded by federal recovery dollars. These include projects supported by FEMA Public Assistance, HUD disaster recovery funds, and DOE-backed energy resilience programs, among others.
This raises a serious federal taxpayer concern: Funds appropriated by Congress to rebuild Puerto Rico’s power grid, water systems, housing, public facilities, and energy infrastructure are being diverted into municipal budgets through local taxes. This is a back door effort to fund these municipalities off the back of U.S. taxpayers.
We respectfully ask whether federal funds have been used, directly or indirectly, to pay these taxes, whether contractors are pricing them into federally funded work, and whether such costs are legal under federal law, including under PROMESA and the Fiscal Plan, and program guidelines.
