Esta ley enmienda la "Ley Especial para la Rehabilitación de Santurce" (Ley Núm. 148 de 4 de agosto de 1988) para extender los incentivos fiscales y de desarrollo urbano con el fin de continuar la rehabilitación de Santurce. Modifica secciones relacionadas con exenciones de impuestos sobre la propiedad, condonación de intereses y recargos, promoción de financiamiento, incentivos para la creación de empleos y otros incentivos para negocios e industrias.
(Approved April 17, 2003)
To amend Sections 5 and 6, the first paragraph of Sections 8 and 10; to amend Section 11, to repeal Section 7 and to renumber Sections 8 though 17 as 7 to 16, respectively, of Act No. 148 of August 4, 1988, as amended, known as the "Special Act for the Rehabilitation of Santurce", in order to extend the incentives offered by the law, and to continue the development of said sector.
Our Island has a public policy addressed to develop orderly, attractive and well-cared for cities; however, it has not been rigorously implemented. At present, urban growth is dispersed and scattered, of poor aesthetic quality, and which does not propitiate high human quality. The sprawling urban growth is contrary to all economic development efforts, and hinders the offering and the maintenance of infrastructure.
The Government of the Commonwealth of Puerto Rico deems it is necessary to make use of urban development, and human and technical resources to direct and provoke the rebirth of urban centers, making them more orderly, functional and easily accessible to cultural and civic amenities, as well as placing greater emphasis on the creation and enjoyment of public spaces with better interaction of citizens and commercial activity.
On August 4, 1988, Act No. 148, known as the "Special Act for the Rehabilitation of Santurce", was approved with the purpose of achieving the
integrated rehabilitation and development of the largest suburb of San Juan, the capital city. This Act creates a consulting or support group and directs the Planning Board to create an Integral Development Plan for such special planning zone.
In order to achieve the objectives set forth in said Act, the Act itself establishes a series of incentives such as a tax exemption for eligible properties and certain deductions for the creation of jobs. Nevertheless, the development of Santurce has stopped, since the terms to further its rehabilitation have expired. According to Act No. 148, supra, the rehabilitation and development projects can only receive the incentives provided if they begin on, or before five (5) years after the designation of the zone.
The Legislature of Puerto Rico understands the need and convenience for the development of Santurce. Therefore, it deems it is necessary to amend Act No. 148, supra, in order to eliminate the five (5)-year term of effectiveness, and extend it until a true rehabilitation of the Santurce suburb is achieved. Thus, the development of Santurce is again given incentives which, in turn, furthers the socio-economic growth of San Juan, while achieving a better quality of life in a sector of great historic and economic importance.
Section 1.- Sections 5 and 6 of Act No. 148 of August 4, 1988, as amended, are hereby amended to read as follows: "Section 5.- Tax Exemption for Eligible Substantially Rehabilitated or Newly-Constructed Property.
Those eligible properties, as defined in Section 14 of this Act, which are newly-constructed, substantially rehabilitated or subject to improvements
in a special planning zone in Santurce shall have the right to a real estate tax exemption. This exemption shall be of one hundred (100) percent of the property tax imposed, and shall be for a term of ten (10) years. The exemption shall become effective as of January 1, after the year that the property is constructed, is subject to improvements, or is substantially rehabilitated. The Municipal Revenues Collection Center shall establish the procedure for petitioning this exemption through regulations. "Section 6.- Condoning of Interest, Surcharges and Penalties for Real Property Taxes Owed for Eligible Property, as defined in Section 14 of this Act.
All interest or surcharges and penalties that have been imposed in relation to real property taxes prior to the date the exemption is granted, as provided in this Act, on eligible properties located in the Santurce suburb that have not been productively used for one year or more, shall be condoned for the period that corresponds to the time that the property was not productively used, if the eligible property is substantially rehabilitated after the approval of this Act and to the designation of the special planning zone in which it is located.
Section 2.- Section 7 is hereby repealed, and Sections 8 through 17 are re-numbered as 7 to 16 , respectively, of Act No. 148 of August 4, 1988, as amended.
Section 3.- The first paragraph of Section 8, and the first paragraph of Section 10 and Section 11 of Act No. 148 of August 4, 1988, as amended, are hereby amended to read as follows: "Section 7.- To Promote Financing The Economic Development Bank of Puerto Rico, at its discretion, may grant financing for eligible projects involving substantial rehabilitation,
improvements or new construction to be developed in Santurce, upon request. The Economic Development Bank may insure the financing granted by means of insurance. The funds to increase the insurance shall be provided from the collection of a fee of five (5%) percent of the value of the commercial financing secured by mortgages, granted in Santurce, and financed by the Economic Development Bank. The Economic Development Bank shall submit a special annual report to the Legislature, to the Governor, the Mayor and the Municipal Assembly of San Juan, with an evaluation of its role in the granting of the financing authorized by this Section, including an account of the applications received, as well as its findings regarding the same." "Section 9.- Incentives for the Creation of Jobs in Businesses and Industries.
Every business or industry established or to be established in Santurce, as defined in this Act, shall be entitled to an additional deduction for the purpose of computing its income tax, equivalent to five percent (5%) of the applicable minimum wage of each new job created. This deduction shall be in addition to any other one granted by any act, and shall be for a term of five (5) years. To be entitled to this deduction, it shall be necessary that the new job created:
(a) Does not eliminate or replace a job existing prior to the approval of this Act;
(b) is on a full-time basis of forty (40) hours per week;
(c) is continuously held by the same person for a period of not less than six (6) months of a taxable year.
Also eligible shall be those types of employment determined through regulations by the Department of Labor and Human Resources and the
Department of Treasury, as proposed by the Special Inter-Agency Task Force for Santurce." "Section 10.- Other Incentives for Businesses and Industries
(a) Every business or industry that is established in a special planning zone in the Santurce suburb shall be entitled to a special deduction for income tax purposes, of ten percent ( $10 %$ ) of the rent paid, for a term of ten (10) years. This deduction shall be in addition to any other granted by any act. This deduction shall be unavailable for subsequent businesses.
(b) One half of the net income obtained from the sale of tickets for artistic and cultural performances held in Santurce, is hereby exempted in establishments located in structures that are newlyconstructed, substantially rehabilitated, or subject to improvements for a period of five (5) years as of the date that the construction, substantial rehabilitation or improvement is completed. The Department of the Treasury shall establish the procedure to take advantage of this exemption through regulations.
Section 4.- Any statutory provision or regulation that is incompatible with the provisions of this Act is hereby repealed, solely with regard to where the incompatibility rests.
Section 5.- In the event that any Section, paragraph, subparagraph, norm or provision of this Act is repealed or amended or declared null or unconstitutional, the other provisions and parts shall remain in effect and shall be applicable to the extent possible. If their application to any person or circumstances were found to be null, the nullity shall not effect other provisions of the Act that may remain in force without resorting to the annulled provision.
Section 6.- This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 110 (H.B. 1503) of the $5^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend Sections 5 and 6, the first paragraph of Sections 8 and 10, to amend Section 11, to repeal Section 7 and to renumber Sections 8 though 17 as 7 to 16, respectively, of Act No. 148 of August 4, 1988, as amended, known as the "Special Act for the Rehabilitation of Santurce," in order to extend the incentives offered by the law, and to continue the development of said sector, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $6^{ ext {th }}$ of August of 2004.
Elba Rosa Rodríguez-Fuentes Director