P.R. Laws tit. 7, § 607g-1
After the effective date of this act, the Government Development Bank for Puerto Rico or any subsidiary thereof is hereby banned from granting loans to any government entity other than a Bank’s subsidiary, whose source of repayment, as determined by the Board of Directors of the Government Development Bank for Puerto Rico or the Board of Directors of any of the Bank’s subsidiaries, as applicable, is contingent on future increases in rates, or surcharges, or other increases in the cost of services rendered, or other source of income of said government entity, or on future bond issues whose feasibility, in the judgment of the Board of Directors of the Government Development Bank, is contingent on future increases in rates, changes or other source of income of such government entity, without having duly approved, in each one of the aforementioned situations, such increase or source of repayment, in accordance with its Organic Act, including the approval of the Board of Directors or governing body of the government entity, or of the Legislative Assembly of Puerto Rico, in the event said approval authorizing such increase or source of payment is required. However, the Bank may grant emergency loans in the event essential public services may be affected, as determined by the Board of Directors of the Government Development Bank for Puerto Rico. A government entity may obtain an emergency loan for up to an aggregate limit that shall not exceed ten percent (10%) of its total average gross income in the last two fiscal years preceding the date on which the loan was requested, up to an aggregate limit for emergency loans granted to a government entity of fifty million dollars ($50,000,000). The amount of each emergency loan granted by the Bank to a government entity shall be included in the aggregate limit of the total amount of emergency loans granted to said government entity once it repays such loans or a duly authorized source of repayment or source of income is approved therefor.
Notwithstanding the limitations set forth in the first paragraph of this section, the Government Development Bank for Puerto Rico is hereby authorized, in any case, to grant loans to any government entity of the Commonwealth of Puerto Rico that is unable to honor the payment of principal of or interest on its obligations to bondholders or financial entities, other than the Government Development Bank for Puerto Rico.
History —Dec. 17, 2001, No. 164, added as § 12 on Feb. 13, 2014, No. 24, § 6.