2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 952 - Tax Credits for New Construction or Housing Rehabilitation (§§ 10621 — 10636) › § 10621 - Definitions

For the purposes of this chapter, the terms and phrases defined herein shall have the meanings stated below, unless otherwise construed from the text itself. The terms and phrases used in the singular form shall include the plural, and vice versa.
(a) Agency. — Means any department, administration, bureau, office, instrumentality or public corporation of the Commonwealth of Puerto Rico.
(b) ARPE. — Means the Puerto Rico Regulations and Permits Administration, created pursuant to the provisions of §§ 71 et seq. of Title 23, known as the “Puerto Rico Regulations and Permits Organic Act”.
(c) Authority. — Means the Puerto Rico Housing Finance Authority created according to §§ 924 et seq. of Title 7, or its successor.
(d) Bank. — Means the Government Development Bank for Puerto Rico, created according to the provisions of §§ 551 et seq. of Title 7, known as the “Government Development Bank for Puerto Rico Act”.
(e) Change of control. — Means the sale, encumbrance, conveyance, fusion, exchange, barter, or other transfer of ten percent (10%) or more of the stock, interest or shares in the capital of the corporation, partnership or entity, to a single person, or group of persons acting in concert, whether in one single, or several transactions with such purpose, or that results in the holding or control by any person or group of persons acting in concert, of ten percent (10%) or more of the stock, interest or equity in the capital of said corporation, partnership or entity.
(f) Credit certification. — Means the written concession issued pursuant to the provisions of this chapter, by means of which the Executive Director certifies that the credit is available to be claimed by the owner, and the terms and conditions imposed therein. The owner or acquirer of the credit must submit a copy of the credit certification along with the filing of the income tax return, in order to claim the credit.
(g) Qualification certificate. — Means the written communication issued pursuant to the provisions of this chapter, whereby the Executive Director notifies the owner that the eligible investment and the housing project have pre-qualified for the credits provided under this chapter, and the terms and conditions imposed in it. The qualification certificate shall indicate the amount of credit that shall be reserved for the owner for the term provided in this chapter, while he/she constructs and completes the construction or rehabilitation of the housing project that qualified for the credit, and obtains the final concession of the credit through the credit certification, as provided in this chapter.
(h) 1994 Internal Revenue Code. — Means the Puerto Rico Internal Revenue Code of 1994, created under the provisions of Act No. 120 of October 31, 1994.
(i) Credit. — Means the eligible investment tax credit for new construction or substantial rehabilitation of rental housing units to be rented to low or moderate income families, granted by the Authority with the endorsement of the Department of the Treasury, by means of a credit certification issued under this chapter.
(j) Department of the Treasury. — Means the Department of the Treasury of the Commonwealth of Puerto Rico, established by Section VI of Article 10 of the Constitution of the Commonwealth of Puerto Rico, and §§ 283 et seq. of Title 3, as amended, known as the “Government of Puerto Rico Accounting Act”.
(k) Executive Director. — Means the Executive Director of the Authority or the official [to] whom he/she delegates his/her powers and authority.
(l) Owner. — Means the person who is the owner in fee simple of a housing project for rent to low-income families or persons.
(m) Low or moderate income family. — Means any family or person who does not own a dwelling and whose annual income does not exceed that which is established for low or moderate income families by the affordable housing programs of the Government of the United States of America or the Commonwealth of Puerto Rico as established by the Secretary of Housing pursuant to the applicable regulations.
(n) Majority proprietary interest. — Means any person who owns or controls, or has entered into an agreement to own or control, directly or indirectly, at least ten percent (10%) of any class of shares of a corporation, of the capital stock of a partnership, or equity in an entity. For the purpose of determining the shares or equity in the capital stock of a partnership, or equity in an entity, the special rules of Section 1028 of the 1994 Internal Revenue Code shall apply.
(o) Eligible investment. — Means the sum of money invested to carry out a new construction project of housing units or the substantial rehabilitation of existing structures, in an abandoned state or serious deterioration, to be destined for rental housing units for low or moderate income families.
The Authority shall determine through regulations which items of the construction or substantial rehabilitation budget shall qualify for the credits and which sources from private funds shall qualify as eligible investments. For the purposes of this chapter, eligible investments shall not be deemed to be:
(1) The money used for the acquisition of land;
(2) the money that has been invested before the effective date of this act, and
(3) the money that has been invested prior to a pre-application conference with the officials designated by the Authority to discuss the merits of the housing project.
The Executive Director of the Authority may dispense including as eligible investments funds that have been invested prior to holding the pre-application conference if, in his/her discretion, the best interests of the Commonwealth of Puerto Rico so justify it.
(p) Planning Board. — Means the Puerto Rico Planning Board created pursuant to the provisions of §§ 62 et seq. of Title 23, as amended, known as the “Puerto Rico Planning Board Organic Act”.
(q) New construction. — Means any housing project that has not been previously occupied and whose construction begins after the date of approval of this act.
(r) Person. — Means every enterprise, corporation, partnership, company, mercantile partnership, special partnership, individual, or group of individuals; a trust, a succession, and any other natural or juridical person.
(s) Petitioner. — Means the owner-developer, promoter or authorized representative of a housing project that has requested credit under this chapter.
(t) Housing project. — Means the development plan of newly constructed housing units or the substantial rehabilitation of one or several existing physical facilities, to be devoted to rental housing units for low or moderate income families, for which the owner has requested credit pursuant to this chapter, and for which the owner has obtained the corresponding approvals, endorsements, and permits from the agencies concerned, as required by the applicable laws and regulations, and which will include housing projects such as urbanizations and multi-story housing structures. For the purposes of this chapter, the housing project shall have at least twelve (12) housing units to be used for rental to low or moderate-income families of which one (1) shall be prepared and furnished specifically for persons with disabilities. In the event that the housing project is developed in an urban center, it may have less than twelve (12) housing units, provided it has the approval of the Municipal Legislature and the mayor of said municipality.
(u) Substantial rehabilitation. — Means the qualification of the owner and of the housing project for the rehabilitation, renewal or substantial expansion of one or several existing physical facilities, for which matching funds have been invested for at least twenty-five percent (25%) of: (i) the value of the facility to be rehabilitated, renewed or expanded, according to the certified appraisal. The value of the substantial rehabilitation shall be determined according to the norms established by the Executive Director through regulations to such effects.
(v) Maximum rent. — Means the maximum rental rate for which an owner can rent those housing units covered under the provisions of this chapter, as established from time to time by the Executive Director through regulations to such effects. To determine the maximum rental rate, criteria that are similar to those provided in the Low Income Housing Tax Credit Program, set forth in the United States Internal Revenue Code § 42, may be used, provided, further, that the Executive Director shall take into consideration factors such as:
(1) The type and size of the housing unit;
(2) the location of the housing project, and
(3) the amount that will be needed for the owner to cover the administration and maintenance expenses of the housing units and receive a reasonable yield on his/her capital investment.
(w) Occupancy requirement. — Means the condition to maintain the housing units rented to and occupied by low or moderate income families qualified as such, on which credit is computed, for a term of not less than ten (10) consecutive years, as provided in § 10624(a) of this title, counted from the date that the Executive Director issues the corresponding certification of credit.
(x) Secretary of the Treasury. — Means the Secretary of the Department of the Treasury, or the official [to] whom he/she delegates his/her powers and prerogatives under the Organic Act of the Department of Housing.
(y) Secretary of Housing. — Means the Secretary of the Puerto Rico Department of Housing or the official [to] whom he/she delegates his/her powers or prerogatives under the Organic Act of the Department of Housing.
(z) Housing. — Means any building, structure, or part thereof that is used and occupied to be lived in by human beings, or is intended to be used for such purpose, and shall include any patio, garden, outbuildings and appurtenances thereof, or that are usually used as such.
(aa) Low-cost housing. — Means any dwelling whose price, if sold to a low-income family, shall not exceed the maximum established by §§ 891 et seq. of Title 17, as amended, known as the “Public and Private Sector Co-Partnership for New Housing Operation Act”, as said amount may vary from time to time.
(bb) Housing unit. — Means any structure that is fit for family cohabitation that meets the construction or rehabilitation requirements that apply to the Commonwealth or federal housing programs, and has all the endorsements, approvals, and permits required by the applicable laws and regulations.
(cc) Autonomous municipalities. — Means those municipalities that have acquired a fifth (5th) level of permit-granting autonomy pursuant to §§ 4001 et seq. of Title 21, as amended, known as the “Autonomous Municipalities Act of the Commonwealth of Puerto Rico of 1991”.
(dd) Acquirer. — Means every buyer or assignee of a credit who has acquired the same pursuant to a transaction where there has been onerous cause signed by the owner.
History —Oct. 4, 2001, No. 140, § 2; Aug. 13, 2008, No. 261, § 1.