Puerto Rico Senate bill would keep the 2018 Opportunity Zone map for local tax breaks as the federal cap drops to 178 tracts

The bill. P. del S. 1514 (PDF, in Spanish) was filed October 13, 2026 by Senate President Thomas Rivera Schatz and referred to the Senate's Committee on Innovation, Reform and Appointments (Comisión de Innovación, Reforma y Nombramientos). It amends four sections of Act 60-2019, the Puerto Rico Incentives Code. Its central change rewrites the Code's definition of Opportunity Zones as the zones on the list Treasury published July 9, 2018 through IRS Notice 2018-48, and adds that, for purposes of the Code, that list stays in force “independientemente de cualquier enmienda, expiración, revocación o nueva designación” under federal law (regardless of any later federal amendment, expiration, revocation or new zone list). If passed, it takes effect immediately, and the Secretary of Economic Development and Commerce would have 90 days to update DDEC's rules.

Why it was filed. The bill's statement of motives says about 98% of Puerto Rico's territory sits in an Opportunity Zone today, because the federal rule treated every low-income census tract on the island as a zone. That rule, former section 1400Z-1(b)(3) of the Internal Revenue Code, was struck by section 70421(a)(3) of the One Big Beautiful Bill Act (Public Law 119-21), effective December 31, 2026. The bill says that from then on Puerto Rico can nominate only 25% of its eligible tracts, so “gran parte del territorio” that has zone status now would stop qualifying, affecting investor planning and projects under way.

What changes for funds. Today the Code ties Puerto Rico's local incentives to the federal tests in section 1400Z-2(d). Under the bill, a “Fondo” would instead be an entity organized to invest in an Opportunity Zone as the Code defines it (the 2018 map), that keeps 90% of its assets in property located in such a zone, and that meets requirements DDEC sets by regulation or circular letter. The bill strikes the federal cross-references in the Code's definitions of eligible investment and eligible business and in its rule on sales or exchanges of assets. An eligible zone would be an area on the 2018 Treasury map that a local committee has also named eligible by regulation or other administrative action. The statement of motives says the change does not exclude funds organized under the federal rules; it gives an alternative to funds that would stop qualifying under the new federal map.

The local incentives at stake. According to the bill, Act 60-2019 gives Opportunity Zone businesses and investors an 18.5% preferential income tax rate, a 25% exemption from personal and real property taxes, a 25% exemption from municipal license taxes, a 100% exemption on dividend distributions, and a transferable tax credit of 5% to 25% of eligible investment. DDEC's OZ 2.0 nomination notice describes the same decree benefits and says that on September 11, 2025 it certified $1.4 billion of eligible investment in priority projects in 13 municipalities. The bill also adds a public-policy goal favoring affordable housing for the working middle class and young professionals as priority projects; it sets no income limits or price caps.

The federal side. IRS Rev. Proc. 2026-14 confirms the change: section 2.02(3)(d) says that once the repeal takes effect, the Governor of Puerto Rico may nominate low-income tracts “subject to the 25-percent limitation,” starting with the July 1, 2026 determination date, and section 2.02(2)(c)(ii) says Puerto Rico's existing zones end December 31, 2027, a year earlier than the December 31, 2028 end date for the states' 2018 zones. Treasury's September 23, 2026 eligibility data flags 712 Puerto Rico tracts as eligible, 243 of them rural, the same 712 as the Rev. Proc. 2026-14 appendix; 25% of 712, rounded up, is 178. The eligible tracts are spread across all 78 municipios, led by San Juan (84), Bayamón (44) and Ponce (35). The CDFI Fund's 2018 list has 863 Puerto Rico tracts, though it uses 2010 census tract boundaries, so the two lists do not match tract for tract.

Where Puerto Rico's nominations stand. DDEC's OZ 2.0 notice asked developers, investors and municipalities to email proposed tracts by May 30, 2026, and says DDEC and the Puerto Rico Federal Affairs Administration are advising Gov. Jenniffer González on the nominations. As of October 19, DDEC has not published a nominated-tract list, and we have found no official announcement that Puerto Rico has filed with Treasury. Rev. Proc. 2026-14 sets October 28, 2026 as the latest filing date with the single 30-day extension. Treasury then reviews and certifies nominations, and certified zones take effect January 1, 2027 (see our explainer on Treasury's review window). Filing status for the states and the U.S. Virgin Islands, which nominated all 18 of its eligible tracts, is on our OZ 2.0 tracker.

For investors. A Puerto Rico law cannot change federal Opportunity Zone status. Even if P. del S. 1514 passes, the federal deferral, basis step-up and 10-year exclusion under section 1400Z-2 apply only in tracts Treasury certifies for 2027 onward, and the bill would govern only Puerto Rico's own incentives under Act 60-2019. For how the 25% cap works, see our guide to OZ 2.0 eligible tracts and state caps; for the fund rules, see qualified opportunity funds and investing in Opportunity Zones starting January 1, 2027; and to model a deferred gain, use the OZ calculator.