2023 Laws of Puerto Rico › TITLE TWENTY-ONE - Municipalities (§§ 1-4 — 6756) › Subtitle 6 - Autonomous Municipalities (§§ 4001 — 4990-4990j) › Chapter 201 - Preliminary Provisions (§§ 4001 — 4008) › § 4004 - The municipality—General principles

(a) The juridical, economic and administrative autonomy of each municipality is hereby recognized. Their autonomy is subordinated and shall be exercised in accordance with the Constitution of the Commonwealth of Puerto Rico and to this subtitle.
Municipal autonomy shall essentially comprise the election of local authorities by the direct vote of the qualified electors of the municipality, the free administration of its property and issues of its competence or jurisdiction, and the disposition of its revenues and the manner of collecting and investing the same.
(1) The funds under the control of a municipality, or in custody of a trustee by virtue of the trust contract executed by the Municipal Revenue Collection Center, shall not be seized.
(2) The municipal ordinances, resolutions and regulations shall not be suspended nor rendered ineffective except by order of a competent court.
(3) Municipalities shall not be prevented from executing works, physical development plans or services that have been duly approved, authorized and financed according to the applicable laws.
(4) The members of legislature, the mayors and other municipal officials and employees shall not be impeached, separated or dismissed from office except for the causes and pursuant to the provisions of this subtitle.
(5) No public agency or entity of the Government of the Commonwealth of Puerto Rico shall take over any real or personal property of a municipality, unless it complies with the procedure established by law.
(6) No natural or juridical person shall be exempted from the payment of taxes, municipal license fees and municipal imposts, in whole or in part, unless such exemption is expressly authorized by law.
(7) The fiscal system of the Commonwealth and, especially, that which fixes taxes, shall grant participation in the collections at the municipal government level, to ensure resources and fiscal stability to the same.
(b) The public policy of the Commonwealth of Puerto Rico of promoting the autonomy of the municipal governments maintaining a fair and equal balance between the appropriation of fiscal resources and the imposition of economic obligations is hereby reaffirmed.
To ensure compliance with the public policy set forth in this subsection:
(1) The Municipal Revenues Collection Center and the Office of the Commissioner of Municipal Affairs, upon prior invitation or summons to such effects from any of the Legislative Bodies or any of their committees, shall issue their opinion with respect to the economic impact that any proposed legislation may have on the finances of the municipal governments. Such opinion shall be contained in a report to be entitled “Municipal Fiscal Impact” which shall be part of the text of the proposed legislation or of the report rendered to such effects by any legislative committee with jurisdiction.
(2) Every legislative committee that files a report to propose the approval of a measure shall include in the same a provision entitled “Municipal Fiscal Impact” which shall certify the estimated fiscal impact of the measure on the budgets of the municipal governments, if any shared measure be approved. Said report shall define specific recommendations to make up for any negative impact which may result from the approval of a legislative measure.
(3) Any legislative measure intended for approval that imposes economic obligations or that affects the fiscal revenues of the municipal governments shall identify and appropriate the resources to be used by the affected municipalities in order to attend such obligations. The finance directors of the municipalities shall include as evidence, among others, at least the single audit financial statements for the last two (2) fiscal years issued pursuant to the provisions of Federal Public Law 98-502 (Single Audit) prior to the approval of the measure; the bank reconciliations certified by the corresponding banking institution; the budgetary account statements certified by the corresponding banking institution; and the budget account statements certified by the external auditor of the municipality.
(4) Provided, That municipal autonomy entails fiscal autonomy, reason for which the Central Government Fiscal System shall adapt to a fiscal system for the municipalities. The municipalities, in turn, are hereby vested with authority to impose taxes on matters in which there is no preemption by the Central Government, pursuant to § 4052 of this title. The Central Government shall adopt a tax system according to the municipal tax system.
(5) The proposed legislative measure shall establish that when the report from the corresponding legislative committees has estimated that the approval of said measure has no significant fiscal impact on the municipal governments, it shall be interpreted that the legislative intent in such case is to not create additional obligations in excess of the revenues available to the municipal governments.
(c) Notwithstanding the above, in compliance with municipal purposes, the Central Government shall have the duty to:
(1) Oversee to the correct and efficient municipal administration.
(2) Address the consultations and petitions for opinions, advice or technical assistance remitted by the municipalities to any public agency for the best performance of their functions.
(3) Request the Office of the Comptroller of Puerto Rico to conduct an audit of the activities, transactions or operations of a municipality at any time.
(4) Report any action that could constitute an administrative fault or public crime to the competent authorities.
History —Aug. 30, 1991, No. 81, § 1.006; Oct. 29, 1992, No. 84, § 3; Sept. 7, 2004, No. 258, § 5.