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PS 826

“Para disponer que para los años contributivos del 2027-2028 y subsiguientes, la contribución sobre la propiedad del 1.03% establecida en el Artículo 7.026 de la Ley 107-2020, según enmendada, conocida como “Código Municipal de Puerto Rico” no será dirigida al Fondo General de Puerto Rico y que los recaudos por concepto de dicha contribución serán distribuidos a los municipios, tomando en consideración la fórmula de distribución establecida en el Artículo 405 de la Ley 53-2021, según enmendada y conocida como la “Ley para Ponerle Fin a la Quiebra de Puerto Rico”; y para otros fines relacionados.”

2025-2028 Session

Redirects Puerto Rico's 1.03% property tax contribution from the General Fund to municipalities starting in 2027-2028 and onward, using Article 405 of Law 53-2021 formula.

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Bill Summary · PS 826

Summary: Senate Bill PS 826

Overview

  • Bill number: PS 826
  • Title (translated): Requires that for tax years 2027-2028 and onward, the 1.03% property tax contribution established in Article 7.026 of Law 107-2020 (Puerto Rico Municipal Code) will not be directed to Puerto Rico’s General Fund. Instead, the receipts from this contribution would be distributed to municipalities using the distribution formula set forth in Article 405 of Law 53-2021 (as amended), known as the “Law to End Puerto Rico’s Bankruptcy,” along with other related purposes.
  • Classification: Senate bill
  • Introduced: October 20, 2025
  • Status: Refered to committees; appears in the Senate’s First Reading

What the bill would do

  • Redirect funding flow: Change the destination of the 1.03% property contribution from the General Fund to municipal governments.
  • Apply to future tax years: The reallocation would apply to tax years 2027-2028 and subsequent years.
  • Distribution method: Use the distribution formula described in Article 405 of Law 53-2021 (as amended) to allocate the funds to municipalities.
  • Broader scope: The bill notes “and for other related purposes,” indicating potential ancillary adjustments or implementations tied to this reallocation.

Key provisions (as described)

  • Source of funds: The 1.03% property tax contribution from Article 7.026 of Law 107-2020 (Puerto Rico Municipal Code).
  • New destination: Funds would no longer go to the General Fund.
  • Allocation mechanism: Distribution to municipalities follows the formula in Article 405 of Law 53-2021, as amended.
  • Effective period: Applicable to years beginning with 2027-2028 and continuing thereafter.

Affected parties and impacts

  • Municipalities: Likely to receive a more predictable or formula-based share of property tax contribution revenue, potentially increasing municipal fiscal autonomy and funding stability.
  • Puerto Rico General Fund: Expected to lose this source of revenue starting in 2027-2028, affecting its budget unless offset by other measures.
  • Taxpayers/property owners: Indirectly affected through potential changes in municipal services funding and local tax administration, contingent on how municipalities use the additional revenues.

Procedural and timing details

  • Legislative path: Senate bill; introduced on October 20, 2025; first reading on October 23, 2025; referred to one or more committees.
  • Next steps: Committee review and potential amendments; passage by the Senate would be needed before moving to House considerations and ultimate enactment (pending cross-branch actions).

Potential considerations

  • Fiscal impact: Shifts General Fund revenues to municipalities; overall effect depends on the size of the contribution, the distribution formula, and concurrent fiscal policies.
  • Administrative implementation: Requires coordination to ensure proper allocation under the Article 405 formula and consistency with amended law provisions.
  • Equity and adequacy: Municipal funding outcomes will depend on how the formula operates across diverse municipalities.

Related references

  • Article 7.026, Law 107-2020 (Código Municipal de Puerto Rico)
  • Article 405, Law 53-2021 (Ley para Ponerle Fin a la Quiebra de Puerto Rico)
  • Law texts and amendments referenced as part of the bill’s framework

If you’d like, I can add a concise comparison with the current funding flow or outline a potential fiscal impact scenario based on hypothetical revenue figures.

Compiled from official sources — confirm details with the bill’s official record.

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