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Commonwealth of Puerto Rico
J /}(, Government Development Bank for Puerto Rico San Juan,Puerto Rico
Ki;.S!-:7a 1 iS
VICTOR M. LABIOSA Executive Director
Governing Board FRANCISCO LIZARDI, Chairman Secretary of Public Works JORGE FONT SALDANA
Secretary of the Treasury MIGUEL HERNANDEZ AGOSTO Secretary of Agriculture RAMON GARCIA SANTIAGO
President of the Planning Board JAIME SERRANO DAVILA Mayor of Gurabo
Principal Officers VICTOR M. LABIOSA
DATE DUE
Executive Director
T
GILBERTO LUGO TORRES Assistant Executive Director
HECTOR JIMENEZ JUARBE Special Assistant
HUMBERTO CUEBAS
625.7
Banco Gubeinamental
B213S 1968
de Fomento para P.R. A special report on P.R, Highway Autho-
Controller
EUGENIO CHINEA BONILLA Treasurer DATE
ANGEL LUIS ALLENDE
ISSUED TO
Design Officer
{ 1
ROBERTO LUGO TORRES 1
Construction Officer benjamin JIMENEZ AHORRIO Acting Director—Administration Office
i
PEDRO HERNANDEZ, JR. Public Relations Officer
Consulting Staff Wilbur Smith and Associates,
Traffic Engineers Auditors
Peat Marwick, Mitchell and Co.
!
j
625,7
Banco Gubernamenta|;de
B213S
Fomento para P,R,
| 1968
A special report on P."R, Highway Authority.
ON THE COVER 7 and PR-2 interchange uan hdeiropolitati Area.
/ / COMMONWEALTH OF PUERTO RICO
HIGHWAY AUTHORITY
Puerto Rico
Highway Authority
The Authority has broad powers under the Puerto Rico Highway Authority Act, including among other things: to have perpetual existence as a corporation; to have complete control and supervision of any traffic facUities owned, operated, constructed or ac
quired by it; to have complete control and super vision over the character of and necessity for all of
its expenditures; to sue and be sued; to make con tracts and to execute all instruments necessary or
The Puerto Rico Highway Authority, a body cor
porate and politic constituting a public corporation and governmental instrumentality of the Common wealth of Puerto Rico, was created by Act No. 74
of the Legislature of Puerto Rico, approved June
incidental in the exercise of any of its powers; to
determine, fix, impose, alter and collect tolls or
ferriage, rentals, assessments and other reasonable charges for the use of the traffic facilities owned,
operated, contructed, acquired or financed by the
Prior to this time, the construction of roads and
Authority or for the services rendered thereby; to borrow money for any of its corporate purposes, and
highways had been the responsibility of the Depart
to issue bonds, notes or other obligations of the
23, 1965.
ment of Public Works. The highway program was,
therefore, dependent on annual appropriations from
the Legislature, and was only one of many functions carried out by this department. As the rate of economic development rose steadily
Authority in evidence of such indebtedness and to secure payment thereon by pledge, or other lien on, all of its properties, revenues or other income and,
subject to the provisions of Section 8 of Article VI of the Constitution of the Commonwealth, to pledge
sulted in a sharp increase in automobile ownership.
for the payment of said bonds and interest thereon, the proceeds of any tax or other funds which may
The increase in economic activity and in the number
be made available to the Authority by the Common
and dispersal of manufacturing plants required vastly improved transportation facilities, especially if in dustry was to spread throughout the Island, and not
refunding, purchasing, paying or discharging any of
in the decade 1956-1965, higher income levels re
be concentrated around the San Juan and Ponce harbor areas.
The Authority was created, therefore, to provide
a separate public agency, whose sole responsibility was directed towards improving vehicular trans
portation facilities. The Authority would have a specific, allocated source of revenues which could be pledged to secure bonds and as a result, financial and long range construction programs could be es tablished.
wealth; to issue bonds for the purpose of funding, its outstanding bonds or obligations; and to do all acts or things necessary or desirable to the carrying out of the powers granted to the Authority by the Act or by any other act of the Legislature of Puerto Rico; provided, however, that neither the Common wealth of Puerto Rico nor any political subdivision thereof shall be liable for the payment of the principal of or interest on any bonds issued by the Authority
and such principal and interest shall be payable only from the funds of the Authority pledged for such payment under the Act. 1
Cloverleaf interchange of Las Americas Freeway and Finero Avenue at the center of San Juan Metropolitan Area.
The Secretary of Public Works is authorized to enter into agreements with the Authority for the study, design, construction, repair, maintenance, ac
highways and public housing development roads serving localized traffic of an intra-regional nature. The Commonwealth Highway System, prior to the
quisition of properties and easements, and any other
creation of the Authority, has been financed by an nual appropriations from the Commonwealth Gen
matters necessary to carry out the purposes of the Act. The Authority may also enter into agreements
under which the Secretary of Public Works agrees to pay, totally or partially, and with funds of the Commonwealth covered into the Public Treasury,
the repair, maintenance and operation costs of any traffic facilities financed under the provisions of
eral Fund and by Commonwealth bond issues which have included among various purposes, funds for highways and streets. During the eleven-year period 1956-1966 some $291,800,000 has been appropri ated from the General Fund and at the end of 1966 out of total Commonwealth bonds outstanding, ap
the Act.
proximately $121,000,000 of these bonds had been issued for highway and street improvements. These
Existing Commonwealth Highway System The present Puerto Rico Highway System totals 5,800 miles, consisting of 3,700 miles of Common wealth Highway System primary, secondary and municipal highways and public housing develop ment roads, and 2,100 miles of municipal system local city streets and vicinal roads. In the Common wealth Highway System there are 500 miles of primary system highways comprising the more im
bonds consist of a number of issues dating back to
portant routes in terms of inter-regional traffic, 1,200
tion as main arteries over which the industrial, com
miles of secondary system highways serving the needs of intra-regional traffic and 2,000 miles of municipal
mercial and agricultural products of the Common
1950, and constitute an obligation of the Common
wealth payable from General Fund revenues.
Importance of Commonwealth Highway System The Commonwealth Highway System is a vital factor to the well being and economic progress of the Commonwealth. The highways provide for the
intercity movement of persons and goods and func wealth move to market. Most of Puerto Rico s people
highway system. An improved highway system is also important to the movement of tourist traffic to
approved June 23, 1965, increasing the gasoline tax from 8^; to 11 and allocating the revenues from 6/ llths of the net receipts from this tax to the Authority for highway construction or to finance
the resort areas and beaches of the Island. It is
construction.
therefore imperative that the System keep pace with the economic growth of the Island and be sufficient not only to sustain the normal growth but be ade
In 1968 further legislative action was taken to give additional security for monies borrowed by the Authority. Act No. 50 approved May 22, 1968, pro vides that if the proceeds of the gasoline tax presently or in the future allocated to the Authority, are insuffi cient to pay the principal of and interest on the bonds of the Authority and the reserve fund of the Authority is applied to cover any such deficiency,
in their daily commuting, shopping and normal travel will use and benefit from an extended and improved
quate to induce a further expanded growth. As a result of the growing awareness of the vital necessity of accelerating the highway construction program, the Authority was created and revenues were provided to implement the construction needs.
the amounts used from such reserve fund shall be
reimbursed to the Authority, subject to the provi
Resources Available to the Authority Gasoline Tax. At the same time that the Authority was created, funds were provided for it under Act No. 75, which was passed by the Legislature and
sions of Section 8 of Article VI of the Puerto Rican
Constitution, from the first amounts received by the Commonwealth in the next fiscal year or following
A jour lane divided arterial highway under construction in Metropolitan San Juan. ..
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years which originate from (i) any other taxes which may then be in effect on any other fuel or propellant which is used among other purposes, to propel high way vehicles and (ii) any remaining portion of the total tax which may then be imposed on gasoline.
that it may do so from time to time as may be deemed to be appropriate, on divided, multi-lane, limited access highways as they are constructed, and where existing toll-free roads are adequate to serve
It should be noted that both Act No. 75 of 1965 and Act No. 50 of 1968 are amendments to Article
to enter into any covenants to maintain any toll charges if imposed for any period of time, or at any particular level of rates. It will retain the right to change or to eliminate any such tolls, if imposed, at its discretion, in the best interests of the economy of Puerto Rico. However, any such tolls as may be
83 of Law No. 2, approved January 20, 1956, known as the Excise Law of Puerto Rico, and therefor are part of the basic tax structure of the Commonwealth.
Right-of-way. In the past the Legislature has appropriated certain amounts annually for rightof-way acquisition and appropriation of additional amounts for this purpose will be requested in the
local traffic needs. The Authority does not propose
collected on traffic facilities in and under the Bond
Resolution will be pledged to the payment of any bonds issued thereunder.
future, under the procedure outlined in the following paragraph. Such appropriations totaled $9.25 mil lion, $7.90 million and $6.0 million for the fiscal
years 1965-66, 1966-67 and 1967-68, respectively,
Present Highway User Taxes and Fees In addition to the gasoline tax, highway user taxes
and $9 million has been budgeted for 1968-69. In the Bond Resolution the Authority covenants that on or before October 1 of each year it will sub
cellaneous motor vehicle fees (such as duplicate licenses, transfers, titling fees, etc.) and various ex
mit to the Planning Board, the Director of the Bureau
cise taxes.
of the Budget, the Secretary of the Treasury, the Fiscal Agent and the Traffic Engineers, a statement
Revenues from registration fees and related charges totaled $15,316,000 and operators'licenses $650,000
setting forth (i) a brief description of the program
for 1966-67. Annual excise tax collections on motor
of traffic facilities to be carried out during the next fiscal year, (ii) its estimate of the total construction
vehicles, parts and accessories have averaged about $27,000,000 for the five years ending June 30, 1967.
cost of such program, (iii) a description of the rightof-way which will be needed to carry out such pro
All revenues from these sources are credited to the General Fund of the Commonwealth, except that in
gram and the respective dates by which they will be needed, and (iv) the estimated costs of such right-of-
each year since 1956 $300,000 has been allocated from registration fees to the municipalities.
way and the amount of general funds of the Com
As stated heretofore, the gasoline tax was in creased in 1965 to ll^z^ from 8^, the tax in effect
monwealth which the Legislature is requested to appropriate for such purpose. The Authority cov
consist of registration fees, operators' licenses, mis
since 1947. The retail price of gasoline is subject
enants that it will, pursuant to Section 14 of the
to control by the Economic Stabilization Administra
Puerto Rico Highway Authority Act, file a copy of such statement with the Legislature prior to its next
tion and is related to the current cost to the retail
regular session.
Federal Aid. The Authority also benefits from
Federal Aid funds for highways on the Federal Aid primary, secondary and urban systems which are distributed to Puerto Rico on the same basis as these funds are apportioned to the States. These funds
must be matched equally by Puerto Rico. Apportion ments have approximated $6,627,000 annually in
dealer. It presently averages 33^ per gallon, tax in cluded, and the price of premium gasoline, which is not subject to control, averages 38^ per gallon, tax also included.
Commonwealth Highway System Needs
The Authority retained the firm of Wilbur Smith and Associates, Traffic Engineers, to conduct a study of the highway needs of the Commonwealth System, to
recent years and are estimated for projection pur poses to average the same amount in future years. Tolls. The Authority is authorized to levy tolls
recommend a construction program and to estimate revenues available for its implementation.
on facilities constructed by it, and it is expected
a five-year priority improvement program, estimated
4
In the report of the Engineers dated March, 1968,
to require an expenditure of $394,500,000, was recommended. This priority program, which is part
of a present backlog of highway needs estimated at $707,800,000, includes those projects believed by the Engineers and the Authority to represent the most critical needs and those required to bring the
greatest economic benefit to highway users and to the general economy of the Commonwealth. The reasons for the need for highway improve
ments were identified by the Engineers as:
1. The population of Puerto Rico has increased substantially in the past and is expected to grow
rapidly in the future. In 1960 the population totaled 2.3 million and in 1967 was estimated at
2.7 million, an increase of over 17%, compared to an increase of 11% for the United States. By
1986 the population is expected to total 4.1 million
persons, an increase of 51.9% over 1967. 2. The number of motor vehicles has been in
creasing at a relatively faster rate than population. In 1960, there were 172,000 registered motor vehicles and in 1967 403,000 were registered, an
A four lane bridge over Manati River under construction on Route PR-2, which will replace a truss bridge btiilt in 1928.
increase of approximately 134% since 1960. By 1986 it is estimated that there will be slightly over
one million registered motor vehicles, more than 2Vi times the 1967 total. Density of motor vehicle
of Puerto Rico and will alleviate traffic congestion,
ownership, which changed from 38.7 persons per
reduce the number and severity of accidents, reduce travel time, and, in general, benefit both the highway
vehicle in 1950 to 6.7 persons in 1967, is expected to become 4.0 persons per vehicle by 1986.
users and the general economy of the Common wealth.
3. Highway travel, which increased by 243% between 1950 and 1960, is expected to total 8.1 billion vehicle-miles by 1986, an increase of
Authority's Operations Since Creation
94.3% over the 4.3 billion for 1967. These indicators of intensified highway use —
The Authority in its first year of existence, 1965-
population, number of vehicles, and travel — clearly
of $35,772,000; in the fiscal year 1966-1967, 116.7
demonstrate the present and future need for an adequate Commonwealth Highway System. The five-year priority program includes: those
miles were constructed at a cost of $47,968,000; and in 1967-1968, based on eight months actual and four months estimated, 156.3 miles at a cost of
projects which are presently under construction, projects which are presently planned by the Author ity, and projects which are under study for early improvement as determined from the analysis eon-
$51,600,000.
ducted. The various projects included in the priority
program were selected from the primary, secondary and urban systems. In addition the total program costs include costs for the municipal system, for re construction, and for right-of-way acquisition. It is believed that this program represents an ex
cellent approach toward satisfying the highway needs
1966, constructed 128.2 miles of highways at a cost
The construction costs to date have been provided
from (xf of the gasoline tax receipts. Commonwealth
appropriations. Federal Aid appropriations and bor rowings under its line of credit with The Chase Manhattan Bank, N. A.
In June, 1968, the Authority proposes to sell
$40,000,000 bonds for the purpose of liquidating current bank borrowings and continuing the con
struction program. The bonds are being issued to
provide funds for the construction of highways and.
subject to Section 8 of Article VI of the Constitu
tion of Puerto Rico, will be secured by a pledge of 6/llths of the net receipts of the gasoline tax im posed by the Commonwealth of Puerto Rico, which have been allocated to the Authority, together with the proceeds of any other taxes, fees or charges which the Legislature of Puerto Rico may allocate to the Authority and authorize the Authority to pledge to the payment of the principal of and interest
on bonds issued by the Authority, and by a pledge of the proceeds of any tolls or other charges which may hereafter be imposed by the Authority for the use of any of its traffic facilities financed by bonds of the Authority issued under the Bond Resolution. Neither the credit of the Commonwealth of Puerto
Rico nor the credit of any of its political subdivisions is pledged for the payment of the bonds. In their report the Engineers point out that the projected revenues from currently available sources fall far short of meeting the total cost of this priority program and recommend that: 1. General Fund appropriations be increased
from their proposed $10 million future annual projection to a level sufl&cient for all right-of-way acquisition costs. 2. Bonds be issued in amounts needed for
financing the program to the extent funds are not otherwise provided. 3. By 1971, an additional of gasoline tax revenues be made available to the Authority. They conclude that the adoption of these recom mendations would ensure the successful implementa tion of the highway improvement program which is so vital to the continued economic growth of the Commonwealth. They further point out that the program represents a substantial undertaking of right-of-way acquisition, design and construction in a relatively short period of time and during the early phases problems associated with accelerated rate of highway construction may present difficulties which might reduce the magnitude of their recommended program. However, the need for highways is great, and every effort should be directed toward even accelerating the program if at all possible.
AUTHORITY'S FUTURE PROGRAM
The Engineers have established a recommended five-year priority construction program costs and estimated available revenue for its implementation, as set forth below:
with estimated annual
Fiscal Year
Item
1968-69
1969-70
1970-71
1971-72
1972-73
Total
(thousands of dollars) Total Costs
$329,400
Construction
$54,800
$62,500
$68,800
$70,500
$72,800
Right-of-way
11,700
12,700
13,300
13,700
13,700
65,100
$66,500
$75,200
$82,100
$84,200
$86,500
$394,500
1,000
1,300
2,300
1,300
49,000 329,400
Subtotal
Less Appropriations of Commonwealth Funds for right-of-way Current-
Proposed Net Funds Required Construction Right-of-way Total Federal Aid Balance to be provided from gasoline tax
revenues and borrowings
5,900
10,000
10,000
10,000
10,000
54,800 1,700 $56,500 6,627
62,500 1,400 $63,900 6,627
68,800 1,000 $69,800 6,627
70,500 2,400 $72,900 6,627
72,800 3,700 $76,500 6,627
$339,600 33,135
$49,873
$57,273
$63,173
$66.273
$69,873
$306,465
9,000--
10,200
While $23,150,000 has been appropriated from 1965-66 to 1967-68, $5,900,000 has been allocated to right-of- way acquisitions for projects to be constructed in fiscal years 1968-69 to 1971-72. Budgeted 6
Historic and Projected Trends of Gasoline Tax Revenues
Set forth below are actual and projected gasoline tax
revenues and the Authority's allocation as contained in the report of the Engineers. Authority Allocation
From 6/llths Fiscal Years
Total Net
of Net
Ending
Gasoline
Gasoline
June 30
Tax Revenue
Tax Revenue
..
$14,773,000 17,811,000 20,142,000 22,358,000 31,861,000 34,500,000
$17,388,000
18,822,000
Projected
1969
36,190,000 38,977,000
1970
41,420,000
197 1
43,650,000 45,870,000
1968
1972
19,740,000 21,260,000
22,593,000 23,809,000 25,020,000 26,264,000 27,436,000
1974
48,151,000 50,300,000
1975
52,448,000
28,608,000
1976
54,596,000 56,744,000 58,893,000 61,041,000 63,189,000
29,780,000 30,951,000
1973
1977 1978
1979 1980
65,337,000 67,486,000
32,123,000 33,295,000
Pavement construction operation of a section of Route FR-30 Freeway,
linking Caguas and Humacao.
A major arterial expressway on the South Coast serving the petrochemical development located between Tallaboa and CuavaniUa.
34,467,000 35,638,000 36,810,000
69,634,000 71,782,000
37,982,000
73,930,000
40,325,000
76,078,000
41,497,000 42,669,000
78,226,000 80,374,000
m
39,154,000
43,840,000
82,522.000
45,012,000
84,670,000 86,818,000
46,184,000 47,355,000
88,966,000 91,114,000
48,527,000
93,262,000 95,410,000 97,558,000 99,706,000 101,854,000
50,870,000
49,698,000 52,042,000 53,213,000 54,385,000 55,557,000
(1) Gasoline tax 8r per gallon.
(2) Gasoline tax increased to llf, effective July 1, 1965.
'4
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The longest bridge in Puerto Rico is located at the eastern part of Arecibo on Route PR-2. It is the main access to the city.
Maintenance
Maintenance of the Commonwealth Highway System is the responsibility of the Department of Public Works. The Puerto Rico Highway Authority Act provides that the Authority may enter into agree ments under which the Secretary of Public Works
agrees to pay, totally or partially, the cost of repairs, maintenance, and operation of any traffic facilities financed under the provisions of that Act with funds
MOTOR VEHICLE REGISTRATIONS PERSONS PER VEHICLE PUERTO RICO 1950-1967 (PROJECTED TO 1985)
PERSONS PER VEHICLE
from the Commonwealth General Fund covered into
the public treasury. Pursuant to that provision the Authority has entered into an agreement with the Secretary of Public Works by which he has agreed to pay the costs of maintaining, repairing and operating all traffic
•VEHICLE REGISTRATIONS-
facilities which are constructed by the Authority and financed in whole or in part by the issuance of bonds of the Authority out of appropriations received from
-
the General Fund of the Commonwealth which are
c,i
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made available for such purposes. To provide further assurance with respect to maintenance, the Authority covenants in the Bond Resolution that it will cause
an annual general evaluation to be made by the Traffic Engineers of the level of maintenance of such Traffic Facilities and that such evaluation will be
filed with the Secretary of Public Works and the Secretary of the Treasury. Moreover, the Authority covenants that if and to the extent that maintenance
65
70
75
80
of the highway system is not adequate as set forth in the annual survey to be made by the Engineers, in accordance with the provisions of the Bond Reso lution, the Authority will provide such maintenance costs from unencumbered funds then on deposit in
THE COMMONWEALTH OF PUERTO RICO General
Puerto Rico is the fourth largest of the islands in the Caribbean area. It is about 100 miles long and 35
the Construction Fund or from the revenues there
miles wide, having an area of 3,423 square miles
after deposited to the credit of the Construction
and a population of approximately 2,708,000. The topography is characterized by a fertile coastal plain rising to interior mountains which run mostly
Fund.
The level of required maintenance expenditures over the next ten years is estimated to be approxi mately as follows:
8--6 91
from east to west. San Juan, Capital of Puerto Rico lies some 1,690 miles southeast of New York, 314
hours by jet plane, and 1,000 miles southeast of
1968-69. .
$ 7,000,000
1973-74..
1969-70..
7,600,000
1974-75..
10,200,000
Under its compact with the United States, the
1970-71..
8,100,000
1975-76..
10,800,000
1971-72..
8,700,000
1976-77..
11,600,000
Commonwealth of Puerto Rico exercises virtually the same control over its internal affairs, and with
1972-73..
9,000,000
1977-78..
12,400,000
the same general procedures, as do the fifty federated
$ 9,600,000
Miami, 214 hours by jet plane.
States over theirs. It differs from the States primarily
in its relationship to the Federal Government. In brief, residents of Puerto Rico do not vote in the national elections and are represented in Congress
only by a Resident Commissioner who has a voice MOTOR VEHICLE TRAVEL
but no vote in the House of Representatives. On the other hand. Federal taxes do not apply in Puerto
AND
ANNUAL TRAVEL PER VEHICLE
Rico except by mutual consent, such as social security
PUERTO RICO
taxes. No Federal income tax is collected from Puerto Rican residents on income earned in Puerto Rico and Federal excise taxes collected on exported Puerto
1950-1967(PROJECTED TO 1986)
1
1
1
TOT/!iL ANNIUAL TR AVEL
Rican products, such as rum and tobacco, are re turned to the Commonwealth Treasury. This rela
(ALL VEHICLES) 1
1 1
1
tionship with the Federal Government is defined through the medium of the compact entered into by Congress and the People of Puerto Rico, and is
1
L.-* 1
further described hereinafter. 20
1
1
1
Government History
A NNUAL TRAVE L (PER VEIHICLE)
Puerto Rico came under United States sovereignty
by the Treaty of Paris on December 10, 1898. The Congress of the United States provided for a civil
1
government for the Island in 1900 and provided
1
I***.
for a Governor, a Cabinet, a Senate and a Supreme Court Judiciary, all appointed by the President of
1
lO
1
1
1
1950
55
.65
1990
the United States; only a House of Delegates was elected by the People of Puerto Rico. Over succeeding years strong feeling developed for a more autonomous form of government and in favor of United States citizenship. The original Act was superseded in 1917 by the Organic Act or Jones 9
Act, which granted United States citizenship to Puerto Ricans, as well as unrestricted suffrage for local purposes. It also provided that members of both Senate and House were to be elected by the people, but the Executive and Judieial branches re mained under control of Washington through ap pointment by the President. No further change occurred until 1946 when the President for the first time appointed a Puerto Rican
shall be thereafter known as the Puerto Rican Federal
Relations Act. It also authorized the people of
Puerto Rico to draft and approve their own con stitution. The Constitution was drafted by a freely
elected eonstitutional convention, overwhelmingly ap
proved in a speeial referendum, and approved by Congress and the President. It became effective upon
proclamation of the Governor of Puerto Rico on July 25, 1952.
as Governor. In 1947 the Jones Act was amended
to permit Puerto Ricans to elect their own Governor,
The Commonwealth Government
who in turn was empowered to appoint his cabinet and members of the Supreme Court. The next advance toward complete local govern
The Constitution recognizes and assures a separa
tion of powers among the executive, legislative, and judieial branches as in the Federal Constitution, and
ment occurred in 1950 when, in accordance with the
as in those of the States. Both the Governor and the
wishes of the People of Puerto Rico, the 81st Con gress enacted Public Law 600, approved July 3, 1950. This law, which is "in the nature of a compact," became effective upon its acceptance by the elec torate of Puerto Rico. It provides that those sections
bicameral legislature are subject to regular election every four years. The Legislature operates under
of the Organic Act which define the political, eco nomic and fiscal relationship between Puerto Rico
taken to the United States Court of Appeals for the First Circuit and to the Supreme Court of the United
and the United States shall remain in full force and
States and writs of error and appeals from judgments
standard parliamentary and legislative rules. Writs of error and appeals from judgments of the District Court of the United States for Puerto Rico may be
Loiza Freeway and the 65th Infantry Ref-iment Expressway interchange in the eastern part of the San Juan Metropolitan Area, serving Puerto Rico International Airport and adjacent industrial and residential developments.
same manner and under the same terms and condi
governor for a four-year term through 1968, and thereby indicated their conviction that the present Commonwealth political status is in the best and
tions as writs of error and appeals may be taken from
enduring interest of both Puerto Rico and the entire
other Federal and State courts.
United States. The smooth transition to a new ad ministration which occurred permitted continuity of
of the Supreme Court of Puerto Rico may be taken to the Supreme Court of the United States, in the
Governmental responsibilities assumed by the Commonwealth are greater than those normally as
the same basic policies under the leadership of the
sumed by a State government. Municipalities which
Popular Democratic Party.
combine both rural and urban areas are the only
There were three other parties represented in the 1964 elections. The Statehood Republican Party,
local political subdivisions and are comparable to counties in scope. The only units of government with the right to levy ad valorem taxes are the Commonwealth Government and the municipalities.
which favors early attainment of Federated Statehood, received 34.7% of the votes. The Christian Action
Party polled 3.1% and the Independence Party drew
There is, therefore, no other overlapping taxation or bonded indebtedness payable from taxes. The
2.7% of the votes cast.
Commonwealth Government assumes responsibilities for a number of important functions normally per formed by local governments in the Continental United States. Among these are police and fire pro tection, education, all major street construction, and public health programs. In addition, the Common wealth Government supervises municipal fiscal af fairs to a very substantial extent. Commonwealth and municipal governments are relieved of most of the responsibility for construct ing and financing electric, water and sewer systems by the Water Resources Authority and the Aqueduct and Sewer Authority. Air and seaport facilities are administered by the Ports Authority and major high way construction is financed by the Highway Au thority. The bonded debts of these public corpora tions, with the exception of the Highway Authority, are supported entirely by revenues derived from their operations. Bonds issued by the Highway Authority will be supported by a portion of the
Rico are worthy of mention. There is strong public interest in government affairs and a high degree of
gasoline tax.
Election Procedures The elections of 1964 were another outstanding
milestone in the progress and stability of Puerto
Three factors pertaining to elections in Puerto
voter participation in elections. In the 1964 elec tions, 84% of those eligible to do so registered, and 83.5% of those registered actually voted.
Second, in order to reduce pressure from special interests, Puerto Rican law limits political contribu tions from any one person or corporation to $300
in any one year. Yet, recognizing the need for funds to bring issues to the attention of, and to mform the voters, each recognized political party receives
from the Commonwealth Treasury a contribution of funds to carry out its political campaign. This
contribution is according to a formula based pri
marily on the party's percentage of votes cast in the most recent election.
t
n
And third, Puerto Rican law provides that if a
minority party receives a substantial vote, but fails to elect candidates to the Legislature, then that body is increased in size by formula to
representation. The Municipal Law (Act No-J 2
approved July 21, I960) also assures niinonty representation in the Municipal Assemblies sine least three members of each of these bodies have to be elected from the minority parties.
Rico.
Former Governor Luis Munoz Marin, the first
elected Governor, who had been re-elected three times as Chief Executive, decided not to run again
for the governorship. Instead he was returned to the Puerto Rican Senate where he had served earlier
in his public career. By an overwhelming majority, 59.5% of the voters elected Roberto Sanchez Vilella,
formerly Secretary of State of Puerto Rico, as their
1967 Plebiscite
In a special plebiscite held July 23, 1967 the peo
ple of Puerto Rico strongly reaffirmed their desire to continue their present Commonwealth form of government permanently associated with the United States. Almost two-thirds (66.3%) of all re^stered
voters participated and a clear expression of the will 11
Major interchange in the northern part of Caguas, connecting highways PR-l, PR-30 and PR-189.
of the majority of the people is shown in the results
status formulas of Commonwealth, Statehood, and
below:
Independence. In response to the petition, the Con gress approved a bill in 1964 providing for the
425,132 (60.4%) voted to continue Commonwealth Status
establishment of a United States-Puerto Rico com
274,312 (39.0%) voted to request Statehood 4,248 ( 0.6%) voted to attain Independence The results of the plebiscite demonstrate two sig nificant factors concerning the political status of
mission to study all the factors involved. The mem bership of this commission consisted of three persons appointed by the President of the United States, two each selected by the Senate and the House of Repre
Puerto Rico.
sentatives, and six appointed by the Governor of
(1) With Commonwealth attaining 60-40 mar
gin over Statehood there can be no question about the continuation of the favorable climate which has
stimulated strong and consistent economic growth. (2) With only 4,248 votes in favor of Inde
Puerto Rico. The Commission concluded that the
people of Puerto Rico should decide which status they preferred and, in December, 1966, the Puerto
Rican Legislature passed an act providing for the holding of the plebiscite. Any subsequent plebiscites
pendence out of over 700,000 votes cast, there can not be the slightest doubt that Puerto Rico is an
on the political status of Puerto Rico can be au
integral part of the United States with permanent
Rican Legislature.
thorized only by act of Congress or of the Puerto
American citizenship for Puerto Ricans.
The recent plebiscite had its origin in 1962 in a petition to the Congress of the United States by the
Political stability, one of the prime requisites of
Puerto Rican Legislature requesting a settlement of
a sound, attractive investment climate, is outstand
the future political status of Puerto Rico and pro posing the submission to the vote of the people the
ingly demonstrated in Puerto Rico. Only a declining, and now insignificant, minority party favors inde-
pendence. Both major parties hold maintenance of permanent ties with the United States as a basic principle, and differ only as to the form which that future political relationship should take.
Expansion and Diversification of the Puerto Rican Economy
For seventeen years, economic growth in Puerto Rico has been rapid, continuous and accelerating. Com monwealth gross product has increased over four times, from $755 million in 1950 to $3,360 million in 1967. The net income of Puerto Rico has more
than kept pace. During the same period it rose from $614 million to $2,775 million, registering a 10%
increase in 1967. Net income per capita, after ad justment for price changes, increased at an annual average rate of 4.9% in the decade ending June 30, 1960 and at a 6.4% rate in the seven year period ending June 30, 1967. This growth of the Common wealth's economy places it among the fastest grow ing in the world.
Shipments of goods to the United States and foreign countries have multiplied almost six times
Cloverleaf interchange in the central area of metropolitan San Juan showing Las America's Park and shopping center.
from $235 million in 1950 to $1,321 million in
1967. External purchases—nearly all from the con
and, in 1967, provided $678 million, or 24%, of
tinental United States—have risen from $345 million
Commonwealth net income. Only a very small part of this share came from sugar products; about two-
to $1,799 million.
Puerto Rico occupies first place among Latin
thirds came from new types of manufactured goods.
American customers of the continental United States
The extraordinary growth of the manufacturing sector is due in large part to the industrial develop
and fifth place among worldwide customers. Diversification of the Commonwealth's economy
ment program initiated in the late 1940s. A major objective of this program is to further industrialize
has been equally impressive, both over-all and with in individual sectors. In 1950, agriculture generated
the Commonwealth by encouraging manufacturers
$149 million or 24% of net income, about half of
in the continental United States to expand and loeate
which came from sugar cane alone. Only $89 million
their new plants in Puerto Rico. Incentives include
or 14% came from manufacturing, and a third of
initial income and property tax exemption, assistance
that was from sugar. Sugar constituted nearly twothirds of exports; other manufactured products, little
in locating and training workers, technical advice and loans. In addition, the Puerto Rico Industrial Development Company constructs, sells, finances,
more than one-fourth. Industrial establishments con
sisted typically of small needlework shops or proces sors of farm products. By 1967, however, although net income from agriculture had increased to $183 million, this sector of the economy accounted for
and leases industrial buildings.
but 6.6% of Commonwealth net income. Of agri culture's share, sugar, still an important crop, pro vided about a third; of exports, less than a tenth. Manufacturing, having expanded over seven times sinee 1950, now surpasses agriculture in importance
over 16.6% of total net income, employing 87,000
As the direct result of promotions undei this
program by June 1967 about 1,400 new factories were operating in the Commonwealth contributing
persons, and producing petroleum products, apparel,
petrochemicals, electronic products, appliances, air craft parts, abrasives, plastic products and numerous
other items. Shipments of goods from these factories.
mostly to the continental United States, have risen from $33 million in 1950 to $926 million in 1967. Another 261 factories were established under this
program during fiscal year 1967.
Many of the plants are set up by such firms as solidated Cigar, General Phelps Dodge, Daystrom,
branches or subsidiaries General Electric, Con Cigar, American Can, Carborundum, Sprague Electric, Van Camp Sea Food, General Foods, Van Raalte, Hooker Chemical, B.V.D., Bell & Howell, International Shoe, National Cash Register, Hercules Powder, Stanley Works, Pepsico, W. R. Grace, Ford Motor Co., Phillips Petroleum, Babcock and Wilcox, Cutler-Hammer, Endicott Johnson, Jonathan Logan,
Motorola, RCA and Westinghouse. Large, heavily capitalized manufacturing operations have shown a
significant increase in recent years as compared to those labor-intensive operations promoted during the early part of the industrialization program. These in clude the Union Carbide & Chemical Corp., which
operates a $53 million glycol plant and has recently constructed a $22 million plant to produce alcohol intermediates. Petrochemicals are of greatly increas ing importance to the economy of the Common wealth, a recent development being the addition of a $41 million aromatic plant to Commonwealth Oil
Refining Company's $105 million refinery. A $55 million Corco-Pittsburgh Plate Glass Company olefins plant is scheduled for completion in mid-1969. Phillips Puerto Rico Core Inc. has already inaugu rated its Guayama plant at a cost of $58 million.
Food processing has also been a significant growth area in recent years. Four large tuna canneries are now in operation. The Island has become one of the leading suppliers of canned fish in the United States
market. A subsidiary of Libby, McNeill and Libby has established a plant for the canning of tomato sauce and juice produced from local crops and Standard Brands, through one of its subsidiaries, has established a plant for the manufacturing of dessert preparations and baking powder. Also, Union Car
bide Food Products Incorporated, a subsidiary of Union Carbide Corporation, will build a $15 million plant at Barceloneta, Puerto Rico for the production of food casings. A section of Route PR-I49 between Jtiana Ditiz tind VilUilhn, inclncleil in the secondnry hif-hwtiy system, and providin/> service to the agriciiltnrai and industrial areas in the central repittn of Puerto Rico.
Although accounting for a relatively moderate per centage of net income, tourist activity has been ex
panding very rapidly. Some 810,000 persons visited the Commonwealth during 1967 and spent $161.8 million. In this regard, it should be noted that Puerto
Rico has excellent hotels and guest houses, many located in the San Juan Metropolitan Area and others in various municipalities on the Island. With the
completion of San Juan Darlington Hotel, Howard Johnson's and Cecilia's Place hotels, and the enlarg ing of others, the total number of rooms available for
tourists had increased to about 8,000 by June 1967. The substantial progress registered in the principal sectors of the economy has been matched by cor
responding achievements in the supporting sectors
Interchange of Las Americas Freeway (FR-IS) and Route PR-I in Rio Piedras. This important facility was
recently completed at a cost of $11,000,000.
such as construction, trade, public utilities, finance,
transportation and other services. A network of hardsurfaced roads, including concrete four-lane divided
highways, covers the entire Island. The city of San Juan, Capital of the Common wealth, is located on an excellent natural harbor on
the northeastern coast. The present population in the San Juan Metropolitan Area, which includes six ad
joining municipalities, is estimated at about 848,000. San Juan is the center of education, commerce,
finance, industry and sea and air transportation. Industrial development in San Juan, as well as in
other leading cities including Ponce, Mayaguez, Bayamon, Caguas and Arecibo, has advanced rapidly. These cities produce, among others, such products as sugar, cement, metallic products, rum, food products and wearing apparel. Important oil refinery and chemical operations have been established near
Philadelphia and Baltimore. The modern Interna tional Airport at Isla Verde, with its 10,000 foot
runway accommodating jet flights, is among the finest of its size in the world. In 1967 it handled
approximately 3,827,000 passengers, compared with 307,000 handled by the old airport in 1950. Another 8,000 foot runway is presently under construction to take care of the expected increase in flights in the coming years.
The Puerto Rican people have benefited signifi
cantly from the substantial economic expansion already achieved. The proportion of compensation of employees to Commonwealth net income has in
Ponce, on the south coast, and near San Juan and
creased from 63% in 1950 to 72% in 1967. Personal income for the average family has multipled more than three times, rising from $1,500 m 1950 to
Arecibo, on the north coast.
$4,816 in 1967.
Ramey Air Force Base, the most important air defense installation of the United States in the Carib
bean, is located near the city of Aguadilla, on the western coast.
Ten steamship companies operate regularly sched uled services to the Atlantic, Pacific and Gulf ports of the United States. Nineteen lines regularly sail for Canada, the Caribbean area, Latin America, Europe and Africa. All major Puerto Rican harbors are being improved. Puerto Rico is served today by ten regularly scheduled airlines connecting the main cities of the Island with all parts of the world. Among others, direct flights are available to New York, Chicago,
.
As a consequence of economic growth and im
provements in medical science and services the gen eral level of health has risen sharply. The death rate has declined from 10.5 per thousand to 6.1 per
thousand between 1950 and 1967, with a coiTespond
in.r increase in life expectancy from 61 to 70 years. The birth rate has declined to 26.9 per thousand m 1967 compared with 39.6 per thousand m 1950. Education has been greatly expanded. Public and
private day school enrollment has increased from 431 000 in 1950 to 733,000 in 1967. University and
college enrollment has grown to 48,000 compared with less than 13,000 in 1950.
It is significant that the Commonwealth Govern-
ment has in recent years directed almost half of its expenditures into education and health. Puerto Rico's economic growth has been stimulated
by a comprehensive development program sponsored by the Commonwealth Government, affecting all phases of the economy and looking far into the future. While the most important part of this pro gram has been the industrial development program, investment by both continental and local business men has been encouraged in many fields. As a result, annual direct investment in Puerto Rico from external sources has increased from $10.7 million in 1950 to $205 million in 1967. The cumulative total of such investment in the Common
encouraged with the consequence that continental
investors hold about $921 million in long term obligations of Puerto Rico governmental units and around $930 million in private and public housing obligations. Other investments total approximately $796 million. Total external investments in the Com monwealth were valued at $4,365 million at June 30, 1967.
Stimulated by the accelerating capital inflow, the rate of fixed investment has greatly increased in the Commonwealth during the last decade. Annual in vestment in fixed capital goods such as new construc
wealth as of June 30, 1967 was estimated at $1,718
tion, machinery and equipment has risen from $111 million or 15% of gross product in 1950 to $884 million or 26.3% of gross product in 1967, a level
million. Other types of investments have also been
surpassed by few countries in the world.
STATISTICAL DATA CONCERNING THE ECONOMY OF
THE
COMMONWEALTH OF PUERTO RICO Fiscal Years Ending June 30
Population
1950
1955
2,211,000 2,240,000 2,350,000
Gross product—$ millions ... Net income—$ millions Exports—$ millions
755 614 235
1,142 960 353
1 686 1 355 522*
33 319 128
132 418 217
380 835 450
270
323
562
51
77
152
28
32
63
14
21
459 1,500
Exports by new factoriesf—
$ millions Bank debits—$ millions Bank loans—$ millions
1963
2,513,000
1964
1966
1965
2,572,000
2,253* 1,912*
2,475* 2,085*
845
918
2,626,000 2,721 2,289 974
1967
2,661,000* 2,713,000 3,038 2,525 1,155
3,360 2,775 1,321
531
580
640
804
926
1,170
1,417
666
844
1,661 1,010
1,893 1,210
2,187 1,220
946
1,133
1,207
1,349
1,556
260
282
298
304
346
90
108
127
141
162
32
33
36
40
44
48
982 2,200
1,643 2,874
2,211 3,675
2,341 3,972
2,503 4,198
2,828 4,494
3,150 4,816
61,000
105,000
180,000
251,000
286,000
319,000
380,000*
421,000
408,000
529,000
573,000
598,000
608,000
626,000
641,000
651,000
36
55
132
174
208
226
240
228
Bank deposits (including govern
mental)—$ millions Private savings accounts—
$ millions Income tax collections—
$ millions Property tax collectionsJ— $ millions Assessed valuation** (real & personal property)—
$ millions Average family income—$ ... Motor vehicles—number
registered Enrollment in public day
schools Estimated value of building
permits issued—$ millions . Electricity generated §—millions of kilowatt-hours
Hydro
199
253
200
189
254
163
238
194
Thermal
340
710
1,822
2,745
3,149
3,656
4,192
4,847
* Revised.
** As of January 1 of preceding fiscal year,
t Promoted by the Economic Development Administration. Does not include exports of other new factories. t Commonwealth and Municipal.
§ Includes purchased power. Source: Puerto Rico Planning Board.
16
PROJECTED
HIGHWAY AUTHORITY REVENUES 1968 TO 1998
m
h► ...i •
1968
1978
1988
1998
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SEBASTIAN
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ENSENAD
PUERTO RICO HK
HIGHWAY IMPRO
196!
Wilbur Smith and Associates
CONSTRUCTION _
PROGRAM
UNDER CONSTRUCTION AND F.Y. 1967- 68 F.Y. 1968-69
F.Y. 1969-70 F.Y. 1970- 71
F.Y. 1972- 73 SAN
JUAN
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LUQUILLO
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In CULEBRA
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?-1973
VIEQUES
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