P.R. Laws tit. 3, § 1923
(a) The following terms as used in this section shall have the meaning stated below:
(1) Refinancing bonds.— Means the bonds issued by the Authority for the purpose of repaying, in whole or in part, the transferred debt.
(2) Transferred debt.— Shall mean the debt of the Highways and Transportation Authority and the Metropolitan Bus Authority incurred on or before June 30, 2015, and designated by the Authority as the “transferred debt”.
(3) Pledged revenues.— Means the excise taxes, fees, and taxes allocated to the Authority under the provisions of § 31751a of Title 13.
(4) Collateralized debt obligation.— Means any bond, note, or other obligation of the Authority payable from or backed by the pledged revenues, including refinancing bonds.
(b) A special fund is hereby created, which shall be a fund to be held in trust, denominated as the “Infrastructure Financing Authority Special Economic Assistance Fund”. The special fund may consist of one or more bank accounts held in trust. The monies deposited in said Special Fund, including pledged revenues, shall be used by the Authority to (1) repay (A) the Transferred Debt, (B) Refinancing Bonds, (C) any Collateralized Debt Obligation, and (D) any other debt incurred by the Authority to refinance the Transferred Debt; and (2) any other purpose authorized by this chapter or § 31751a of Title 13.
(c) Notwithstanding any other legal provision, including Act No. 24-2014, but subject to the provisions of Section 8 of Article VI of the Constitution of the Commonwealth of Puerto Rico, the Special Fund created under subsection (b) above and the pledged revenues shall belong to the Authority. The pledged revenues shall be deposited, by the Department of the Treasury of Puerto Rico, its authorized agent, or any other government instrumentality of the Commonwealth of Puerto Rico, (i) prior to the issue of refinancing bonds and any collateralized debt obligations, in the Special Fund with a financial institution which shall hold said funds in trust to be used by the Authority in accordance with the provisions of this chapter; (ii) once the refinancing bonds are issued, with a financial institution acting as the trustee or representative of holders of said bonds, in an account in favor of the holders of said bonds (and other bonds issued under the same agreement with said trustee or representative) up to the amount needed to make the annual payments and deposits required under the trust agreement or any terms agreed upon with the holders of said bonds, (iii) after the obligations mentioned in paragraph (ii) above are met, or in the event that such bonds are not issued but other collateralized debt obligations are issued, with the financial institution acting as the trustee or representative of any other collateralized debt obligation up to the amount needed to make the annual payments and deposits required under the trust agreement or any terms agreed upon with the holders of said obligations; or (iv) after the obligations mentioned in paragraph (iii) above are met, in the Special Fund with a financial institution which shall hold said funds in trust to be used by the Authority in accordance with the provisions of this chapter. Insofar as the Government Development Bank of Puerto Rico or any other government instrumentality of the Commonwealth of Puerto Rico becomes the holder any of the pledged revenues before such bonds or obligations are paid in full, the Government Development Bank of Puerto Rico or such other government instrumentality shall hold such amounts in trust and shall transfer such pledge revenues, (i) to the Special Fund in the financial institution designated by the Authority or (ii) if so agreed by the Authority, to the trustee or representative of the holders of refinancing bonds or any other collateralized debt obligations, if said pledged revenues have been pledged to secure the issue of said debt of the Authority, in any case, free from any lien or compensation fee of the Government Development Bank of Puerto Rico or of such other government instrumentality, and said amounts shall be used solely as provided in this Act and § 31751a of Title 13.
(d) Pledged revenues are hereby pledged to secure the payment of (i) the Transferred Debt, (ii) Refinancing Bonds, and (iii) any other Collateralized Debt Obligations. Said pledge shall constitute a lien valid and enforceable by bondholders and bond insurers, if any, without the need to execute any additional document whatsoever, or to file a financing statement or other document, under the Commercial Transactions Act or any other law, with the Department of State or other government office. Pledged revenues, including those received after the issue of refinancing bonds, or any other collateralized debt obligation, shall be subject to said lien automatically without the need for those pledge revenues to be held by a trustee or representative of the holders of bonds or any other collateralized debt. Said lien shall be subject to the provisions of Section 8 of Article VI of the Constitution of the Commonwealth of Puerto Rico and, subject to said provisions, said lien shall be valid as against any other party or entity having claims in tort, contract, or otherwise, against the Infrastructure Financing Authority, the Highways and Transportation Authority, or any other person or entity, irrespective of whether such party or entity have notice thereof.. Notwithstanding the foregoing, pledged revenues received by the Authority before the effective date of the lien (as such term is defined in § 2012a of Title 9) shall be used by the Authority only to cover debts, obligations, and/or operating expenses of the Highways and Transportation Authority or to pay the interests on or the principal of the Authority’s BANs (as such term is defined in § 2012a of Title 9), or interests on and principal of any other obligation of the Authority whose proceeds are used to repay, refinance, or replace the Authority’s BANs (as such term is defined in § 2012a of Title 9); Provided, That neither the Commonwealth of Puerto Rico nor the Authority shall be required to use pledged revenues to cover any debts, obligations, and/or operating expenses of the Highways and Transportation Authority or to pay interest on and principal of the Authority’s BANs (as such term is defined in § 2012a of Title 9) after September 30, 2015.
(e) Pledged revenues and other monies deposited or to be deposited in said Special Fund shall only be used for the payment of interest and amortization of the public debt, as provided in Section 8 of Article VI of the Constitution of the Commonwealth of Puerto Rico, insofar as all other available resources mentioned in said Section are insufficient for such purposes.
(f) Notwithstanding any other provision of law, including §§ 3491-3500 of Title 31, the allocation of pledged revenues to the Authority may not be revoked or rescinded until the refinancing bonds or any collateralized debt obligation, or any other bonds, notes or other obligations of said Authority secured by said pledged revenues have been paid in full, and no person may bring an action claiming said revocation or rescindment.
(g) The Commonwealth of Puerto Rico hereby agrees and reasserts its commitment to any person or any agency of the United States of America or of any state or of the Government of Puerto Rico, that executes, acquires, or insures the refinancing bonds or any other collateralized debt obligation of the Authority for the payment of which pledged revenues have been encumbered, not to reduce or eliminate the rate of the excise tax on crude oil, partially finished and finished oil by-products, and any other hydrocarbon blend imposed in § 31627a of Title 13; Provided, That this commitment shall not preclude the Commonwealth of Puerto Rico, through an amendment to this Act, from substituting the pledged revenues for other revenues in an equal or higher amount and of equal or better quality as source of repayment for the refinancing bonds or other collateralized debt obligations, provided, further, that such substitution meets the requirements set forth in the documents of such the refinancing bonds or other collateralized debt obligations.
(h) The Commonwealth of Puerto Rico hereby guarantees the payment of the principal of and interest on refinancing bonds and any collateralized debt obligations to be issued from time to time only when the aggregate par value does not exceed two billion nine hundred fifty million dollars ($2.950); the maximum average nominal interest rate of such bonds does not exceed 8.5%; and the maturity date thereof is not later than thirty (30) years after the date or dates of issue. The Government Development Bank for Puerto Rico shall resort to every reasonable alternative to ensure that the cost of this transaction for the Commonwealth of Puerto Rico and the Authority is the lowest possible. refinancing bonds and collateralized debt obligations secured by this guarantee of the Commonwealth of Puerto Rico shall be those specified by the Secretary of the Treasury and the Government Development Bank for Puerto Rico, and such refinancing bonds and collateralized debt obligations, shall bear on their face a statement of the Commonwealth’s guarantee. The Secretary of the Treasury, with the advice of the Government Development Bank for Puerto Rico, is hereby authorized to establish the terms and conditions under which the holder of refinancing bonds and collateralized debt obligations guaranteed herein shall be entitled to make a claim under the guarantee of the Commonwealth of Puerto Rico. If the Secretary of the Treasury prescribes such terms and conditions, the same shall be included in a guarantee executed by the Secretary of the Treasury. Subject to the terms and conditions, if any, negotiated by the Secretary of the Treasury in relation to the guarantee of the Commonwealth of Puerto Rico that are included in the guarantee executed by the Secretary of the Treasury, if at any time revenues thus pledged are insufficient to pay such principal and interest as the same shall become due, the Secretary of the Treasury shall withdraw from funds available in the Treasury of Puerto Rico such sums as may be necessary for making up the deficiency in the amount required for the payment of such principal and interest, and shall direct that the sums so withdrawn be applied to such payment. The full faith and credit of the Commonwealth of Puerto Rico are hereby pledged to such payment.
(i) The Secretary of the Treasury is hereby authorized to include in any contract, purchase agreement, or other financing agreement related to the refinancing bonds and other collateralized debt obligations, including any guarantee of the Commonwealth of Puerto Rico, if any, those other terms and conditions he/she may deem necessary and convenient for the sale by the Authority of such refinancing bonds and other collateralized debt obligations, including to consent on behalf of the Commonwealth of Puerto Rico with the written consent of the Secretary of Justice, to (i) that any contract, purchase agreement, or other financing agreement related to the refinancing bonds and other collateralized debt obligations, including any guarantee of the Commonwealth of Puerto Rico, if any, be subject to the laws of New York, (ii) be under the jurisdiction of any state or federal court located in the New York County (Manhattan), New York City, in the event that a lawsuit may arise in connection with refinancing bonds and collateralized debt obligations or any other agreement in connection therewith, including said guarantee, if any, and (iii) waive the sovereign immunity of the Commonwealth of Puerto in any lawsuit or other legal proceeding related thereto. Notwithstanding the foregoing, the Commonwealth of Puerto Rico may not waive its sovereign immunity from execution or attachment of public property located in the Commonwealth of Puerto Rico. Any waiver to its sovereign immunity with respect to the refinancing bonds and collateralized debt obligations shall be expressly limited to legal proceedings related to such refinancing bonds and collateralized debt obligations or any other agreement in connection therewith and, under no circumstances, such waiver shall constitute (i) a general waiver of the Commonwealth of Puerto Rico to its sovereign immunity, or (ii) a waiver of its sovereign immunity with respect to legal proceedings not related to the refinancing bonds and collateralized debt obligations issued under the provisions of this chapter or any other agreement in connection therewith.
(j) Reports to the Legislative Assembly.—
(1) On or before the fifth day following any issue related to refinancing bonds and collateralized debt obligations, the Secretary of the Treasury and the President of the Government Development Bank for Puerto Rico shall file a joint report with the Secretary of the Senate and the Clerk of the House of Representatives stating in detail the transactions conducted and the specific use to be given to the proceeds from the sale of such bonds. Likewise, said report shall include the balance of the funds and the amounts collected as a result of the taxes imposed herein. Any modification contemplated with regard to a matter stated in said report shall be notified before carrying out the same by filing an amended report by the Secretary of the Treasury and the President of the Government Development Bank for Puerto Rico.
(2) On or before September 30 th of every Fiscal Year, beginning in Fiscal Year 2016-2017, the Secretary of the Treasury and the Executive Director of the Infrastructure Financing Authority shall file an annual report with the Secretary of the Senate and the Clerk of the House of Representatives on the amounts collected from the excise taxes imposed under §§ 31627 and 31627a of Title 13, and on the status of the repayment of any refinancing bonds, and collateralized debt obligations that have been issued at the time of the report.
History —June 21, 1988, No. 44, added as § 34 on Jan. 15, 2015, No. 1, § 2.02; Jan. 15, 2015, No. 2, § 1; Mar. 13, 2015, No. 29, § 2.