Esta ley establece un plan de incentivos para el pago de deudas de impuestos sobre la propiedad mueble e inmueble en Puerto Rico, vigente del 1 de marzo al 30 de abril de 2004. Otorga alivios contributivos mediante la exención de intereses, penalidades y recargos acumulados. Crea un fondo especial para distribuir los fondos recaudados entre el Centro de Recaudación de Ingresos Municipales (CRIM) y los municipios. También autoriza al CRIM a eliminar ciertas deudas antiguas de sus registros y lo exime temporalmente de cumplir con la Ley Electoral.
(H. B. 4306) (Conference) (Approved March 1, 2004)
To establish an incentives plan from March 1 to April 30, 2004, for the payment of personal property tax debt; to establish exceptions; to grant every taxpayer who from March 1 to April 30, 2004, pays the total amount of real property taxes owed to the Government of the Commonwealth of Puerto Rico and to the municipalities on the effective date of the law, a tax relief through a waiver of certain interests, penalties and surtaxes accrued or may be accrued on the said taxes; to create a special fund; to direct the Municipal Revenues Collection Center (CRIM, in Spanish) to delete the debts from its books, which require that a report be rendered to the Legislature; to exempt the CRIM from complying with the requirements of the Electoral Act until May 31, 2004, and to empower the Municipal Revenues Collection Center to adopt the needed regulations for the administration of this Act.
The Municipal Revenues Collection Center is the agency responsible for the implementation and control of the provisions of Act No. 83 of August 30, 1991, as amended, known as the "Municipal Property Tax Act of 1991." As part of this responsibility, is the levying and collection of property tax debts.
The fiscal health of the municipalities is intimately related to the amount of taxes they can collect through the imposition and collection of this tax. On the other hand, it is important to indicate that part of said tax
collections is used for the amortization and redemption of general obligations of the Commonwealth of Puerto Rico. In this sense, we must indicate that the public works and services that are rendered to our citizenry depend on the stability, and the amount of taxes that enter the coffers of the municipalities and the State Treasury. It is public knowledge that, for the past two years, the economy of Puerto Rico, as well as the United States, has undergone a period of deceleration that has been reflected at every level of our daily life, but very specially in the citizens consumer patterns and expenditures.
This Legislature understands that there are many taxpayers at present, who for reasons of an economic nature, have not been able to comply with their fiscal liability, although they have complied with their obligation to file their personal property tax returns. To such purposes, this Legislature deems that the incentives plan proposed in this measure for the payment of tax debt is a prudent and necessary option help these taxpayers to discharge their fiscal responsibility, taking into consideration the specific economic situation of each taxpayer. Unlike a tax amnesty, this incentive plan does not pretend to reward the evader, since it is not applicable to those taxpayers who have not complied with their obligation of filing their return and providing information about their property.
Likewise, this Legislature understands that real property taxpayers are affected by the impact of economic deceleration. There is a large number of taxpayers who have not met the fiscal responsibility of paying real property taxes. Since, in many cases, this tax affects the residence of these citizens, the Legislature deems it is peremptory to provide a mechanism for them to bring the payment of real property taxes up to date. Unlike the incentive plan proposed for personal tax debtors, the plan proposed for real property
tax debtors eliminates all interest and surtaxes accrued until the date of the payment.
Finally, we must indicate that the majority of the funds collected under the proposed incentives plan would be covered into the funds of the municipalities of the Commonwealth of Puerto Rico, and thus would be available to deal with the needs of our people and to be assigned to those areas that require greater attention.
The success of the incentives plan for the payment of tax debts adopted pursuant to the provisions of Act No. 119 of May 5, 2003, motivates us to propose this measure as an incentive for taxpayers that have met their tax obligations and, at the same time, accrue additional income to the municipalities.
Section 1.- Granting of Incentives Every taxpayer, or any person acting on his/her behalf, that pays the personal property tax debt owed to the Center within the term established in this Act, shall be entitled to a discount of the total amount owed as established in Section 2. For the purposes of this discount, the total amount owed includes the principal as well as interests, surtaxes and penalties imposed with regard thereto computed up to April 30, 2004.
Every taxpayer, or any person acting on his/her behalf, who makes an effort to pay on or before April 30, 2004, and is unable to take advantage of the benefits of this Incentive Plan, due to the inability of the Municipal Revenues Collection Center to furnish a statement to them with the debt as it appears in the books of CRIM, may avail themselves thereof once the information is furnished to them under the same parameters that apply in this Act.
The amount to be discounted from the personal property tax owed shall be according to the percent of the debt paid by the taxpayer, choosing any of the following options:
| Option | Percent of payment required on the total balance of debt | Percent of discount to be granted on the total balance of debt | Applicable Interest Rate on the total balance of the debt to be included in the payment plan |
|---|---|---|---|
| 1 | 70 | 30 | - |
| 2 | 50 | 25 | 3 |
| 3 | 30 | 15 | 4 |
| 4 | 25 | 10 | 2 |
Option 4 shall only apply with regard to those taxpayers who, as of December 31, 2003, have availed themselves of a payment plan, which is up to date at the time of requesting the incentive granted by this Act. Nevertheless, these taxpayers may choose any of the other options provided in this Section.
Those taxpayers who have availed themselves of payment plans in effect as of December 31, 2003, but who are not current at the time of requesting the incentive granted in this Act, shall only avail themselves of Options 1 to 3 .
In no case shall the payment to be made be less than the principal of the total personal property tax owed. The payment plans shall be made at the time of applying for the incentive. In the case of those taxpayers, in which the total amount owed does not exceed the sum of ten thousand $(10,000)$ dollars, the discount to be granted shall be the total amount of the interest,
surtaxes and penalties imposed on the principal of the debt. These taxpayers shall only pay the principal of the total amount owed and the options listed in Section 2 of this Act shall not apply to them.
Section 3.- Term for Applying for the Incentive Except as provided in Section 4, the incentive for the payment of the tax debt granted in this Act, shall be in effect until April 30, 2004.
Section 4.- Term Applicable in Certain Cases Taxpayers who have requested an administrative hearing or judicial review with regard to their tax liability, as determined by and agreed upon with the executive Director of the Center, shall only avail themselves of the incentive set forth in Option 1 of Section 2 of this Act.
Retailers with a volume of less than one hundred fifty thousand $(150,000)$ dollars and personal property that do not exceed fifty thousand $(50,000)$ dollars, who have not filed their personal property tax return, may avail themselves of the benefits of this Act, by filing their return in order to enjoy the benefit of the exoneration provided by Section 5.35 of Act No. 83 of August 30, 1991, as amended, known as the "Municipal Property Tax Act."
Section 5.- Conditions and Limitations The granting of the incentive provided in this Act is subject to the following conditions and limitations: (1) The taxpayer must be current in the payment of the personal property tax debts corresponding to the 2002 tax year (current year taxes). (2) To be able to qualify for the incentive, the taxpayer must include in the chosen option the total amount owed for taxes imposed by Act No. 83 of August 30, 1991, as amended, known as the "Municipal Property Tax Act of 1991," or any other act that precedes said Act.
(3) In the cases described in Options 2 to 4, the payment plan must be approved by the Executive Director of the Municipal Revenues Collection Center and accepted when availing themselves of the corresponding option. (4) After having received the notice concerning the personal and real property taxes owed, the taxpayer shall have the right to object to the same, except for challenged securities, exonerations and exemptions, provided the claim is filed within the established term of this Act. In those cases in which the Municipal Revenues Collection Center determines that the challenged tax is collectible and it is determined that the objection had the intention of benefiting from the provisions of this Act through fraud or forgery, the provisions of this Act shall not apply to the taxpayer that objected to them. (5) The taxpayers against whom a criminal procedure for any taxrelated crime has been initiated and is pending shall not avail themselves of these incentives. Neither shall it apply to those taxpayers who have been convicted for tax fraud. (6) No person may quality for the incentives granted by this Act with regard to movable property taxes for fiscal year 2001 or previous years, determined in any tax returns filed in the Center after May 15, 2003.
Section 6.- Elimination of Interest and Surtaxes on Real Property Every taxpayer who, from March 1 to April 30, 2004, pays taxes owed on one or more real properties to the Government of the Commonwealth of Puerto Rico and to the municipalities as of the effective date of this Act, shall be released from the payment of all interest and surtaxes accrued on the taxes so paid and up to the date of the payment thereof, except the accrued interest and surtaxes in cases of fraud, those debts pertaining to fiscal year 2003-04, and previous years whose debts have been notified after June 30,
No taxpayers against whom a criminal procedure for a tax related crime has been initiated and is pending, may avail themselves of this incentive. Neither shall those taxpayers whose noncompliance entails the intent to commit fraud or who have been convicted of tax fraud, be eligible to it.
Every taxpayer whose debts have been sold under the provisions of Act No. 21 of June 26, 1997, as amended, known as the Tax Debts Sale Act, who on or before May 31, 2004, pays the taxes owed on one or more real properties, shall be released from the payment of five (5) percent of the handling charges of the transaction imposed under Act 21, as well as the interest and surtaxes accrued after the date of the sale of said debts.
The Director of the Collection Center shall have the obligation to issue a negative certificate of indebtedness on or before sixty (60) days after the payment is made, pursuant to the provisions of this Act. He/she shall likewise be bound to delete the debt paid pursuant to this Act, from all data filing systems.
Section 7.- Elimination of Debts The Municipal Revenues Collection Center shall eliminate from the books those debts on which no collection efforts have been made, as follows:
Personal Property Debts - of more than ten (10) years, counting from the filing the date of the personal property tax return
Real Property Debts - of more than fifteen (15) years, counting from date of notification of the tax.
After May 31, 2004, the Municipal Revenues Collection Center shall not deliver Debt Certifications that include those debts that are eliminated pursuant to the above paragraphs.
Any debt for which a collection effort has been made, or is under a court procedure, may be settled by mutual agreement of both parties.
Section 8.- Definitions For the purposes of this Act, the following terms shall have the meaning stated below: (1) Taxpayer or person - shall have the same meaning that is established in Act No. 83 of August 30, 1991, as amended. (2) Center - refers to the Municipal Revenues Collection Center created by Act No. 80 of August 30, 1991, as amended.
Section 9.- Authorization The Executive Director of the Center, or his/her authorized representatives, are hereby authorized to contract with any person or entity for assistance in implementing such processes that are required in order to comply with the provisions of this Act.
Section 10.- Creation and Distribution of a Special Fund A Special Fund is hereby created, into which the funds collected by virtue of the provisions set forth in this Act shall be covered. The collections covered into this Special Fund shall be distributed as follows: (1) Up to five (5) percent of the funds collected shall be appropriated to the Center to be used to implement the provisions of this Act, and to strengthen the taxing process, the collection of taxes, and the control of tax evasion. (2) Ninety-five (95) percent of the funds collected shall be appropriated and distributed each month to the corresponding municipalities during the 2003-2004 fiscal year.
Section 11.- The responsibility of CRIM to issue a report to the Legislature on the results of the Incentives Plan as well as on the amnesty as
of September 1, 2004. (sic) Section 12.- If any Section of this Act, in whole or in part, were ruled unconstitutional, the rest of its provisions shall remain in effect.
Section 13.- Rules The Board of Governors of the Collection Center shall adopt and promulgate the necessary rules for the administration of this Act. The Collection Center shall also issue any circular letter or administrative determination that is needed to establish the guidelines or procedures that shall govern for the granting of the incentives set forth in this Act.
Section 14.- Compliance with the Electoral Act The Municipal Revenues Collection Center is hereby exempted from complying with the requirements of this (sic) Electoral Act during the term of approval of the Act and until May 31, 2004.
Section 15.- Effectiveness This Act shall take effect immediately after its approval to the effect of initiating the design and coordination needed for its implementation, and on March 1, 2004, until May 31, 2004, or until the Collection Center reaches its decision, with regard to the challenged debts, pursuant to Section 5 of this Act.
I hereby certify to the Secretary of State that the following Act No. 74 (H.B. 4306) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to establish an incentives plan from March 1 to April 30, 2004, for the payment of personal property tax debt; to establish exceptions; to grant every taxpayer who from March 1 to April 30, 2004, pays the total amount of real property taxes owed to the Government of the Commonwealth of Puerto Rico and to the municipalities on the effective date of the law, a tax relief through a waiver of certain interests, penalties and surtaxes accrued or may be accrued on the said taxes; to create a special fund; to direct the Municipal Revenues Collection Center (CRIM, in Spanish) to delete the debts from its books, which require that a report be rendered to the Legislature; etc., has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $17^{ ext {th }}$ of June of 2005.
Luis E. Fusté-Lacourt Director