
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 48USC745]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
                         CHAPTER 4--PUERTO RICO
 
                    SUBCHAPTER I--GENERAL PROVISIONS
 
Sec. 745. Tax exempt bonds

    All bonds issued by the Government of Puerto Rico, or by its 
authority, shall be exempt from taxation by the Government of the United 
States, or by the Government of Puerto Rico or of any political or 
municipal subdivision thereof, or by any State, Territory, or 
possession, or by any county, municipality, or other municipal 
subdivision of any State, Territory, or possession of the United States, 
or by the District of Columbia.

(Mar. 2, 1917, ch. 145, Sec. 3, 39 Stat. 953; Feb. 3, 1921, ch. 34, 
Sec. 2, 41 Stat. 1096; Mar. 4, 1927, ch. 503, Sec. 1, 44 Stat. 1418; 
Aug. 26, 1937, ch. 831, 50 Stat. 844; Aug. 17, 1950, ch. 731, 64 Stat. 
458; Pub. L. 87-121, Sec. 1, Aug. 3, 1961, 75 Stat. 245.)

                          Codification

    Section is comprised of second part of section 3 of act Mar. 2, 
1917, commencing with proviso clause. The first and last parts of 
section 3 are classified to sections 741 and 741a, respectively, of this 
title.


                            Prior Provisions

    Provisions similar to those in this section were contained in act 
Apr. 12, 1900, ch. 191, Sec. 38, 31 Stat. 86.


                               Amendments

    1961--Pub. L. 87-121 struck out ``no public indebtedness of Puerto 
Rico and the municipalities of San Juan, Ponce, Arecibo, Rio Pledras, 
and Mayaguez shall be allowed in excess of 10 per centum of the 
aggregate tax valuation of its property, and no public indebtedness of 
any other subdivision or municipality of Puerto Rico shall hereafter be 
allowed in excess of 5 per centum of the aggregate tax valuation of the 
property in any such subdivision or municipality,'' before ``All bonds 
issued'' and also struck out ``In computing the indebtedness of the 
people of Puerto Rico, municipal bonds for the payment of interest and 
principal of which the good faith of the people of Puerto Rico has 
heretofore been pledged and bonds issued by the people of Puerto Rico 
secured by bonds to an equivalent amount of bonds of municipal 
corporations or school boards of Puerto Rico shall not be counted but 
all bonds hereafter issued by any municipality or subdivision within the 
5 per centum hereby authorized for which the good faith of the people of 
Puerto Rico is pledged shall be counted'' after ``District of 
Columbia''.
    1950--Act Aug. 17, 1950, made section applicable to municipalities 
of Arecibo and Rio Piedras.
    1937--Act Aug. 26, 1937, made section applicable to municipality of 
Mayaguez and substituted ``August 26, 1937'' for ``March 4, 1927'' 
wherever appearing.
    1927--Act Mar. 4, 1927, made section applicable to municipalities of 
San Juan and Ponce, limited public indebtedness of other subdivisions or 
municipalities of Puerto Rico to 5 per centum, and inserted in last 
sentence two clauses, the first relating to the non-inclusion of 
municipal bonds for the payment of interest and principal, and the 
second reading ``but all bonds after August 26, 1937, issued by any 
municipality or subdivision within the 5 per centum authorized for which 
the good faith of the people of Porto Rico is pledged shall be 
counted.''
    1921--Act Feb. 3, 1921, increased allowable public indebtedness from 
7 to 10 per centum of aggregate tax valuation of property.


                    Effective Date of 1961 Amendment

    Section 2 of Pub. L. 87-121 provided that: ``Section 1 of this Act 
[amending this section] shall take effect upon a majority of the 
qualified electors of Puerto Rico having voted in a referendum pursuant 
to section 1 of article VII of the constitution of the Commonwealth of 
Puerto Rico, to include provisions in the Commonwealth constitution, in 
lieu of the provisions of section 3 of the Puerto Rican Federal 
Relations Act [this section] specified herein, limiting the debt-
incurring capacity of the Commonwealth and of its municipalities (as 
proposed in the concurrent resolution of the legislative assembly of the 
Commonwealth).''
    [Referendum held Dec. 10, 1961, and debt limitation amendment to 
Article VI, Sec. 2, of Constitution of Commonwealth of Puerto Rico 
ratified by a majority of voters.]

                  Section Referred to in Other Sections

    This section is referred to in sections 745a, 745b of this title.
