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House passes bill clarifying tax exemption for Section 8 rental properties to protect municipal finances
Summary
Project 219 clarifies application of a recently passed law (Law 37-2024) to avoid retroactive refunds that municipalities and the CRIM warned could harm local budgets; the House approved the measure unanimously (49–0).
The Puerto Rico House approved Project of the House 219 on Feb. 25 to clarify tax-exemption language affecting properties used for the federal Section 8 rental-assistance program. The bill passed by a recorded vote of 49–0.
Representative Pérez Ortiz, president of the Commission on Municipal Affairs, presented the measure and said it was designed to correct drafting omissions and avoid unintended retroactive fiscal effects on municipalities and the Centro de Recaudación de Ingresos Municipales (CRIM). "Hoy presentamos el proyecto de la cámara dos diecinueve, una medida esencial para clarificar las disposiciones de la Ley treinta y siete," he said on the floor.
What it does: the measure restores or clarifies the property tax exemption for properties dedicated to Section 8 (rental assistance) that had applied under earlier law, and aims to prevent a requirement that municipalities return property taxes collected between Aug. 13, 2020 (the approval of the Municipal Code) and Jan. 18, 2024 (the approval of Law 37-2024).
Why it matters: witnesses and institutional respondents including the CRIM and the Federation of Mayors told the committee that returning already-collected taxes would cause significant fiscal stress for municipalities because property taxes are a primary local revenue source. The committee report noted CRIM executive director Reinaldo J. Paniagua Latimer supported the bill in a submitted memorial; the Federation of Mayors also endorsed the clarification in writing.
Floor debate emphasized balancing support for housing affordability with municipal fiscal stability. Pérez Ortiz said the bill “no altera el espíritu de la legislación original, sino que garantiza su aplicación de manera efectiva,” and argued the change encourages private owners to participate in Section 8 projects. Members voted to approve the bill.
Outcome: Project 219 approved by recorded vote (49–0). The measure was reported out of committee with supporting memorials from CRIM and municipal associations and was adopted on the House floor as amended.
