The Puerto Rico USA Foundation, a collection of firms that enjoy tax benifits because of their operations in the commonwealth, warned that a foreign tax reform bill introduced in the House of Representatives last week could erode the international competitiveness of U.S. companies.

The legislation, introduced by House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., and Rep. Willis Gradison, R-Ohio, would scale back tax credits under Section 936 of the Internal Revenue Code. Section 936 offers tax benefits to U.S. firms that have manufacturing operations in Puerto Rico.

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