The Office of the Comptroller of Puerto Rico investigated a complaint received from the Municipal Legislature of San Juan in October 2013 about the Transfer of Development Rights (TDD) Program of the Municipality of San Juan and issues four recommendations as a result of the investigation.
The Report reveals that the Municipality of San Juan, since 2004, imposed an additional charge on construction works for TDD Program Rights. Even though the tax is presumed valid after having been established as part of the 2008 Territorial Ordinance Regulation, it did not have the express authorization of the Legislative Assembly. Act 81-1991 of Autonomous Municipalities did not give the municipalities the authority to charge for the Transfer of Development Rights competency. Nevertheless, the levy on construction works is presumed valid until a competent court declares otherwise.
The investigation shows that the TDD Revenue Analysis from 2006 to 2010 prepared by the Municipality, does not include 100 collections totaling $1.3 million. The lack of competent financial information makes it impossible to know exactly the collections in the Municipality for this concept.
The Report indicates that the TDD Program was not instituted in accordance with how Act 81-1991 established it and Planning Regulation No. 21 has not been updated in accordance with the legislation under which it was approved.
Act 81-1991 authorizes municipalities to provide, administer or require the transfer of development rights (TDD) mechanism when it has been established in an ordinance plan and according to various situations (see diagram on page 3 that summarizes how TDDs should be carried out).
See Audit Report M-18-41.
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