Bill 120.

Summary.

The bill assigns the Municipality of Panama (Municipio de Panamá) and the Ministry of Culture (Ministerio de Cultura) the task of identifying areas of architectural interest in El Chorrillo, Santa Ana, Calidonia and Curundú through a partial plan and establishing an urban renewal and recovery plan. For the bill’s purposes, it excludes the corregimiento (district) of San Felipe from the homogeneous territorial zone described in Municipal Agreement 61 of March 30, 2021, under which the Panama Municipal Council (Consejo Municipal de Panamá) approved the district’s first local land use plan. The plan would cover buildings featuring vernacular, colonial, neoclassical and modern architecture, among other styles. Its stated purposes include harmonious coexistence, economic activity, public and private investment, the urban landscape, quality of life and affordable housing. The bill defines forms of intervention, persons connected with properties, and the land use planning instruments it employs.

Banks and financial institutions, along with owners and investors undertaking reconstruction, rehabilitation, recovery or demolition works in those corregimientos, would qualify for the benefits under Law 136 of 2013 concerning the Historic Monumental Complex of the Old Quarter of Panama City. Tenants holding duly executed leases who are affected by those works could also qualify for its incentives.

The Ministry of Housing and Land Use Planning (Ministerio de Vivienda y Ordenamiento Territorial) would relocate non-owner occupants of buildings classified as ruined, uninhabitable or unsafe for habitation by the National Civil Protection System (Sistema Nacional de Protección Civil) or the ministry itself, where the owners claim the benefits and undertake the works within the year following entry into force. Occupants would have to establish that they occupied the property immediately before it was considered for the works. Tenants with leases and current payments would have six months to vacate, counted from notification after the municipality approves the preliminary project plans.

Where recovery or rehabilitation does not require occupants to vacate, the owner would have to notify tenants whose rent is current of a rent increase. The increase would take effect six (6) months after completion, could not exceed 25% of the prior rent, and would remain fixed for the following 3 years. A tenant unable to pay it would have up to one year to relocate. Older persons would have priority to remain, subject to their health, or would be relocated by the ministry; those over 75 years old who are current on payments could retain the previous rent for life, without that benefit passing to relatives. These measures would apply to properties in which the investment is made within the year following entry into force.

Use of a preferential mortgage loan for purposes unrelated to the works would incur a fine equal to the benefit obtained. The same penalty would apply to a beneficiary who starts a project using tax incentives and then abandons it or leaves it unfinished. If the work is not resumed six (6) months after the fine for reasons attributable to the owner or investor, the benefits received would have to be repaid to the National Treasury (Tesoro Nacional), with interest. The Municipality of Panama, through the Directorate of Works and Construction (Dirección de Obras y Construcciones), and the Ministry of Culture would investigate the facts and notify the affected party so it can respond. The resulting decision could be challenged through reconsideration and appeal to the mayor.

Finally, the bill amends Article 30 of Law 136 of 2013: it allows fifteen (15) years to carry out the activities qualifying for incentives, provides for a five (5) year extension, and makes the provision retroactive to projects begun 4 years before entry into force. It assigns implementing regulations to the Executive Branch and provides for entry into force on the day following promulgation. Its provisions could be relevant to the housing, construction, rental, finance and architectural conservation sectors.