Bill 682.

Summary.

The bill proposes incorporating housing cooperatives as a preferred instrument of the National Housing Policy. It would apply to associations formed for housing purposes, registered with the Panamanian Autonomous Cooperative Institute (Instituto Panameño Autónomo Cooperativo), that develop social interest housing projects. The Ministry of Housing and Land Management (Ministerio de Vivienda y Ordenamiento Territorial) would classify those projects and grant priority access to property in its holdings, including property transferred to it following the closure or liquidation of the National Mortgage Bank (Banco Hipotecario Nacional). Land could be granted to a cooperative under a use concession by a reasoned resolution, while the state retains title. Qualified cooperatives would also gain access to technical assistance and credit lines from the state entity responsible for social mortgage banking. Cooperative registration, supervision and internal governance would remain with the Panamanian Autonomous Cooperative Institute.

To qualify, a cooperative would have to promote and carry out the construction of new homes on identified land, keep the units under collective use or ownership, and organize construction through mutual aid, organized self-construction or collective contracting. The bill creates a free program, administered by the Ministry of Housing and Land Management, to assist with design, project management and construction supervision. Under the mutual aid model, members’ unpaid work would be measured in labor hours using a valuation table approved by that ministry. Its value would count as cooperative capital and as an initial contribution for mortgage financing.

Cooperatives receiving state land would administer it collectively for at least twenty years from delivery. Each member would have exclusive use and occupancy of a unit, subject to restrictions on selling it, mortgaging it individually or transferring it for payment; the cooperative could not transfer the land use concession. After that period, its assembly could approve individual allocation of the units by an absolute majority, subject to ministerial authorization and verification that the land had served social housing purposes. A dedicated credit line would accept project improvements and members’ contributions as security, recognize labor hours as a down payment and receive state guarantee coverage.

The bill exempts the first allocation of units connected with a qualified project from real estate transfer tax, upon certification submitted to the General Directorate of Revenue (Dirección General de Ingresos). A state mechanism would cover all or part of the security gap created by continued state ownership of the land. It would be administered by the Ministry of Housing and Land Management, the Directorate of the Social Housing Fund (Dirección del Fondo de Vivienda Social), or another office designated by the Executive Branch (Órgano Ejecutivo). Rules on coverage and recovery would be coordinated with the Ministry of Economy and Finance (Ministerio de Economía y Finanzas). A payment under the guarantee would leave the cooperative’s obligation in place, with the state subrogated to the claim. Funding would depend on Executive Branch spending initiatives and the General State Budget. The bill gives the proposed law special status, requires implementing regulations within ninety days and provides for commencement on the day after promulgation.

The subject matter would concern these public bodies, housing cooperatives and their members, social housing construction, and mortgage financing.