P.R. Laws tit. 23, § 262c
Interest earned from obligations or bonds issued by any community economic development entity and its subsidiaries sponsored by Titles II and VII of the Federal Economic Opportunities Act and by special employee-owned corporations and their subsidiaries, for the development of their goals and purposes shall not be included in the income or gross income and shall be tax exempt. In the case of obligations and bonds issued by the special employee-owned corporations, the tax exemption shall be granted for each obligation or bond for a term of not more than fifteen (15) years.
Interest earned on obligations or bonds issued by the special employee-owned corporations whose payment of principal and interest is guaranteed by obligations or bonds of corporations or partnerships that, in turn, have been acquired by the special employee-owned corporation shall also be excluded from gross income and tax exempt, as long as:
(1) The net income resulting from the difference in price, payment coupon, or interest rate of the issued obligations or bonds or from the acquired obligations or bonds is used by the special employee-owned corporations or their subsidiaries for:
(a) The phases of development and construction of the facilities in which they operate or shall operate on land whose use has been ceded or leased by the state or by any nonprofit institution duly acknowledged by the Department of the Treasury, and
(b) the expenses pertaining to the issuing of the obligations or bonds.
(2) There is a contractual obligation setting forth that at the termination of the leasing contract or when the special employee-owned corporation ceases operations in said land, it shall transfer the proprietorship of said infrastructure to the Commonwealth of Puerto Rico or to a charity or educational organization duly acknowledged by the Secretary of the Treasury.
(3) The Secretary of the Treasury approves the issuing of the obligations or bonds of the special employee-owned corporation and the amount of said issuing.
This exemption shall be granted for each obligation or bond for a term of not more than fifteen (15) years.
History —Apr. 20, 1979, No. 37, p. 90, § 4; Sept. 11, 1979, No. 5, p. 996; June 26, 1992, No. 15, § 14; Aug. 28, 2003, No. 223, § 1.