P.R. Laws tit. 3, § 1914a
(a) A special, irrevocable and permanent public trust fund is hereby created within and under the control of the Authority, for the continued benefit of the people of Puerto Rico, to be known as the Infrastructure Development Fund. The Authority shall be empowered to make disbursements from said Development Fund according to the purposes of this chapter and the provisions of §§ 431 et seq. of Title 27 and of this section. The Authority may grant assistance according to the provisions of this section to any public corporation, government instrumentality, political subdivision or municipality authorized by law to provide infrastructure facilities related to the aqueduct and sewer systems, including all water supply, treatment and distribution systems and waste water treatment and disposal systems and improvements financed under the provisions of the Federal Clean Water Act and the Federal Drinking Water Act, or any other similar or related federal legislation or regulations.
The Authority shall create within the Development Fund, an account to be known as the Corpus Account, whose principal may be used as provided in subsections (j) and (k) of this section; Provided, That the proceeds (including interest income) from the investment of the money deposited in said account may be covered into any of the additional accounts, as defined in this chapter.
The Authority is also empowered to:
(1) Create within the Development Fund any other accounts needed to carry out the purposes of this chapter, henceforth to be known as the “Additional Accounts”, and segregate a portion of the moneys deposited to the credit of the Development Fund in said accounts.
(2) Grant loans or concessions or provide any other financial assistance, as provided in subsections (c)—(f) of this section.
(3) Issue, for the purpose of providing funds to cover all or part of the cost of any necessary infrastructure development project, bonds or other obligations of the Authority, under the same terms and conditions and with the same rights and benefits provided in other provisions of this chapter and with regard to the above.
(4) Pledge, with the same effect as provided in other sections of this chapter, all or part of the moneys segregated in any of the additional accounts thus created for the payment of the principal of and interest on such bonds or other obligations.
(5) Pledge, with the same effect as provided in other sections of this chapter, all or part of the moneys segregated in any of the additional accounts thus created for the payment (including the provision for payment until the expiration or resolution) or the refinancing of bonds or other obligations of the Authority or any other public corporation, municipality, political subdivision or government instrumentality, or
(6) use said moneys thus segregated in any of the additional accounts thus created, for any other legal purpose of the Authority.
Pending its use for the purposes of, and subject to, the conditions specified in this chapter, any amount of money deposited to the credit of the Development Fund up to one billion dollars, shall be invested in:
(1) Direct obligations of the United States, or
(2) obligations whose principal and interest are unconditionally secured by the United States, or
(3) certificates of deposit of any bank, national bang association or trust company organized and existing under the laws of Puerto Rico, the United States or any of its states and which are totally secured up to the amount not secured by federal deposit insurance for direct obligations of, or obligations whose principal and interest are unconditionally secured by the United States, or
(4) tax-exempt obligations of any state, instrumentality, agency or political subdivision of Puerto Rico or the United States, or
(5) investment contracts or agreements with the Government Development Bank for Puerto Rico or with any institution approved thereby. The moneys of the Development Fund may be invested in any obligation or instrument approved by the Government Development Bank pursuant to §§ 1261 et seq. of Title 7. Any amount of money deposited to the credit of the Development Fund in excess of one billion dollars shall be invested in the abovementioned financial instruments or in any other financial instruments (including, but not limited to, common or preferred stock quoted in the national or international stock markets); Provided, That the money deposited to the credit of the Development Fund may not be invested in any stock or transaction expressly prohibited by any investment guidelines applicable to the Authority, promulgated by the Government Development Bank pursuant to §§ 1261 et seq. of Title 7.
(b)
(1) The following shall be deposited to the credit of the Development Fund:
(A) The portion of the net product of the sale of the assets of the Puerto Rico Telephone Authority, which the Legislature of Puerto Rico authorizes for deposit to secure the permanent capital base of the Development Fund, which shall be deposited in the Corpus Account.
(B) All receipts, including principal and interest payments, of any loan agreement related to any loan made by the Authority with money deposited to the credit of the Development Fund, not belonging to the Corpus Account.
(C) The total product of the assets of any nature received by the Authority as a result of noncompliance or delinquency with regard to loan agreements related to loans made with moneys deposited to the credit of the Development Fund, including the product of the sale, disposal or lease of real estate or chattels which the Authority may receive as a result of said noncompliance or delinquency.
(D) Any appropriations of the Legislature of Puerto Rico or other appropriations, assignments, donations or contributions made by any person to the Development Fund.
(E) Any income (including income from interest) received from the investment of moneys covered into the Development Fund. However, any income of the Development Fund shall be used in the first place, to pay the principal, the premiums and the interest on any bonds issued or to be issued, as provided in subsection (a) of this section and that any surplus income which is not needed to cover the total amount of said payments be deposited in the Corpus Account up to the amount needed to preserve intact the capital base of the Corpus Account at its present value to the year 1999.
(2) Except for the provisions of clause (1)(A) of this subsection, the Authority, subject to any legal or contractual obligation in effect at the time, shall determine into which accounts of the Development Fund shall all or part of said deposits be made.
(c) The Authority is hereby authorized to grant loans or concessions to, or [on] behalf of any public corporation, municipality, political subdivision or government instrumentality for the purpose of financing or facilitating the financing of infrastructure development projects, including loans and concessions to, or [on] behalf of infrastructure development projects with the purpose of providing access to or reducing the financing costs of other sources of financing whether by borrowing money from diverse sources, obtaining credit backing, shares or subsidies to cover financing costs.
(d) The Authority is hereby authorized to grant interest subsidies to any public corporation, municipality, political subdivision or government instrumentality which has successfully requested the financing of loans for infrastructure development projects from other federal and Puerto Rican financing intermediaries and programs. The Authority shall only grant interest subsidies to, or [on] behalf of an infrastructure development project when it has been determined that the interest subsidy is justified to permit the total financing of the project.
(e) The Authority is hereby authorized to grant loans and credit backing concessions to any public corporation, municipality, political subdivision or government instrumentality. Loans and credit backing concessions may be granted to public intermediaries of infrastructure financing in order to acquire letters of credit and other forms of credit backing to allow the recipient to expand the financing resources or reduce the cost of financing, available to any public corporation, municipality, political subdivision or government instrumentality to finance the necessary infrastructure development projects.
(f) The Authority is hereby empowered to grant reserves of funds in order to facilitate the access to, and the financing of costs through funds available by means of other public intermediaries of infrastructure financing. Said concessions may be granted only to public intermediaries of infrastructure financing authorized to provide financing to any public corporation, municipality, political subdivision or government instrumentality for the necessary infrastructure development projects. The product of said concessions may only be used by public intermediaries of infrastructure financing to establish reserves of funds for losses whose intention is to diversify the access and financing of infrastructure costs. The reserves of funds for losses shall be established according to a trust agreement granted for such a purpose by the grantee financing intermediary. The trust agreement shall limit the uses of the reserve of funds to pay for the losses which occur in the infrastructure financing program of the public intermediary of infrastructure financing, as specified in the concession agreement and to pay the fees and other administrative costs of the reserve funds for losses trust.
(g) The application for funds shall be done in the form and manner prescribed by the Authority. The Authority is hereby authorized to promulgate the necessary regulations in the opinion of the Authority that are not inconsistent with any of the provisions of this chapter, to govern the application process and establish the criteria that the Authority deems necessary for each application to meet.
(h) The infrastructure loans and concessions granted by the Authority are subject to the following conditions:
(1) The financial assistance provided through loans and concessions must be used for the purposes specified in subsections (c)—(f) of this section.
(2) For infrastructure loans the Authority must determine the interest rates, if any, including interest rates below those of the loan market. The Authority shall fix the terms and conditions for paying the loans.
(3) The payment of the principal and interest on the loans made and any funds received by the Authority as a result of noncompliance of the terms and conditions of a loan shall be covered into the Development Fund.
(i) The Authority is hereby authorized to take any action that is necessary or appropriate to protect the interests of the Development Fund in case of default, execution, or noncompliance with the terms and conditions of the loans or concessions granted under this chapter, including the power to sell, dispose of or lease real property or chattels that the Authority may receive in said cases, under the terms and conditions the Authority deems appropriate.
(j) During the period comprising from the date of approval of this act to June 30, 2009, the Authority may make use of the assets deposited in the Corpus Account if the market value of said assets is higher than their par value. The net product of said sale, after the payment of the bonds backed by said assets, the expenses related to the sale and any other payment required by the Internal Revenue Service of the United States of America, shall be applied in the following manner: (i) $300 million [dollars] shall be deposited in the Corpus Account; (ii) two-thirds (⅔) of the remainder shall be transferred to the Secretary of the Treasury to be used to defray operating expenses of the Commonwealth of Puerto Rico related to the budget for Fiscal Year 2008-09; the balance, which represents one-third (⅓) of the remainder, shall be transferred to the Government Development Bank for Puerto Rico as a contribution of capital. When making use of the assets of the Corpus Account, the Authority shall be under the obligation to satisfy all obligations assumed with the holders of Authority bonds secured with the assets of the Corpus Account.
(k) During the period included between the date of approval of this act and December 31, 2012, the Authority shall dispose of the assets deposited in the Corpus Account as follows: (1) transfer the sum of $162.5 million from the funds currently deposited in the Corpus Account of the Infrastructure Development Fund created by virtue of §§ 1902 et seq. of this title, to the Retirement System, to be invested only in capital appreciation bonds issued by the Puerto Rico Sales Tax Financing Corporation (COFINA, Spanish acronym) with a maturity date of not less than thirty (30) years, but not more than forty (40) years at an interest rate of not less than seven percent (7%); and (2) the surplus shall remain in the Corpus Account and shall be used to purchase a capital appreciation bond issued by the Puerto Rico Sales Tax Financing Corporation with a maturity date of not less than thirty (30) years, but not more than forty (40) years at an interest rate of not less than seven percent (7%). The Retirement System of the Employees of the Commonwealth of Puerto Rico and the Puerto Rico Infrastructure Financing Authority may not voluntarily dispose of the bond of the Puerto Rico Sales Tax Financing Corporation, unless such disposal is authorized by the Government Development Bank for Puerto Rico, and in the case of the bond deposited in the Corpus account, unless it is approved by Joint Resolution of the Legislative Assembly.
History —June 21, 1988, No. 44, added as § 25-A on June 24, 1998, No. 92, § 17; Jan. 14, 2009, No. 3, § 2; June 16, 2011, No. 96, § 1.