Esta ley enmienda el Código de Rentas Internas de Puerto Rico para incluir a United Funds of Puerto Rico en la definición de "institución benéfica sin fines de lucro", eximiéndola del pago de ciertos impuestos. La ley reconoce la labor de United Funds al canalizar donaciones a otras entidades sin fines de lucro que brindan servicios directos a la población.
(Approved September 15, 2004)
To amend Section 2038, subsection
(h) of Chapter 3 of Act No. 20 of July 10, 1992, known as the Puerto Rico Internal Revenue Code, in order to include United Funds of Puerto Rico in the definition of "nonprofit charitable institution" and allow the same to be exempted from the payment of applicable taxes.
United Funds of Puerto Rico is a nonprofit organization incorporated pursuant to the laws of the Commonwealth of Puerto Rico whose main purpose is to provide technical and economic assistance, in the form of donations, to other nonprofit entities that render direct services to the people. To such ends, United Funds, for example, channels the monies collected for charitable purposes from the public servants of the Island. It has also developed important internal programs to deal with the real problems of the needy in Puerto Rico.
In spite of its well-known contribution during the past 37 years, United Funds has never been able to avail itself of the benefits of Chapter 3 of the Puerto Rico Internal Revenue Code concerning the exemption from the payment of taxes on goods. This is so because the law applies only to
nonprofit organizations that render direct services to the population, while the legislators have forgotten those organizations that make possible such services since they exist to provide the much needed economic assistance for such a purpose by channeling donations.
To grant said benefit to an organization such as United Funds shall allow the latter to generate economies that would be translated into greater availability of funds for the charitable institutions from the channeling of donations and thus result in an increase of more and better direct services to the population. This measure does not intend to open the door to the indiscriminate concession of the aforementioned benefit to any nonprofit organization that may be established to engage in the same purposes as those of United Funds, but to specifically include the latter since the quality and validity of its activities has been amply demonstrated.
Section 1.-Subsection
(h) of Section 2038 Chapter 3 of Act No. 20 of July 10, 1992, known as the Puerto Rico Internal Revenue Code is hereby amended to provide that:
(a) $\ldots$
(h) A "Nonprofit charitable institution" shall be understood to be any partnership, association, organization or entity that renders "social services" free of charge, at cost or at less than cost, or that if such services are offered at more that cost, that it invest the total amount of its assets in extending the physical facilities or the "social services", including the American Red Cross and United Funds of Puerto Rico. The Secretary may at any time in the future revoke its recognition of these institutions as exempted persons when it determines that the institution is not
qualified to be considered as a "nonprofit" charitable institution, on the basis of among other considerations, the following (1) $\quad \ldots$
Section 2.-This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 313 (S.B. 2690) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend Section 2038, subsection
(h) of Chapter 3 of Act No. 20 of July 10, 1992, known as the Puerto Rico Internal Revenue Code, in order to include United Funds of Puerto Rico in the definition of "nonprofit charitable institution" and allow the same to be exempted from the payment of applicable taxes, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $2^{ ext {nd }}$ of November of 2005.
Francisco J. Domenech Director