P.R. Laws tit. 21, § 971i
(a) The trust may negotiate and execute with any person, contracts, notes in evidence of debt, and all those other instruments, agreements and obligations of any nature, that are necessary or convenient to exercise the powers and functions conferred to the trust. The trust may also mortgage or pledge all or part of the income it receives.
(b) The trust is hereby authorized to issue bonds from time to time for those amounts that are needed to provide sufficient funds for any of its purposes.
(c) The bonds issued by the trust may be made payable from, and may be secured through the pledge or constitution of another lien on the totality or part of the gross or net income of the Trust which may include, subject to the provisions of Section 8 of Art. VI of the Constitution of the Commonwealth of Puerto Rico, those funds that are made available to the trust by the Commonwealth of Puerto Rico, all as provided in the trust contract or the resolution under which the bonds are issued. The income thus encumbered, including those which the trust receives subsequently, shall be immediately subject to said lien without the need of their having to be physically delivered or of any other act, and said lien shall be valid and obligatory and shall prevail against any third party that may have any kind of claim of any type on damages, breach of contract or any other reason against the trust, regardless of whether said third party has not been notified to such request. Neither the trust contract or the resolution, nor any collateral contract through which the rights of the trust on any income may be pledged or ceded, shall have to be presented or registered to perfect the lien thereupon against any third party.
(d) The resolution or resolutions authorizing the issue of bonds or the trust contract guaranteeing the same may contain provisions, which would be part of the contract with the holders of the bonds issued under said resolution or resolutions or under said trust contract, regarding: the disposition of the totality of the gross or net income and present and future income of the Trust; the guarantee and creation of a lien on the income and assets of the trust; the creation and maintenance of redemption and reserve funds; the limitations regarding the purposes for which the product of said bonds or bonds to be issued in the future may be used; the limitations as to the issue of additional bonds; limitations as to the introduction of amendments or supplements to the resolution or resolutions or to the trust contract; the procedure through which the terms of any resolution authorizing bonds, or any other contract with the bond holders may be amended or repealed; and as to the total amount of the bonds whose holders must give their consent to that effect, as well as the manner that said consent must be given, the class and amount of the insurance which the trust must maintain on its properties and the use and disposition of the insurance money; the commitment to not pledge the revenues of the trust, in whole or in part according to the right it may then have as well as the right that may arise in the future; the granting of rights, faculties and privileges and the imposition of obligations and liabilities to the trustee under any trust contract or resolution; the cases of noncompliance and the terms and conditions whereby any or all the bonds may mature or may be declared as due before their maturity date; and regarding the terms and conditions whereby said declaration and its consequences may be waived; the rights, powers, obligations and liabilities that may arise in the event of noncompliance of any obligation under said resolution or resolutions or under said trust contract; any rights, powers or privileges conferred on the bond holders as security thereof in order to increase the marketability of the bonds; and other matters not contrary to the provisions of this chapter, that may be necessary or convenient to secure the bonds or that tend to make the bonds more negotiable.
(e) The bonds may be authorized through a resolution or resolutions of the Board and may be in series; bear the date or dates authorized by the Board; come due in an installment or installments that do not exceed fifty (50) years from their respective dates of issue; accrue interest at the rate or rates that do not exceed the maximum rate then permitted by law; be of the denomination or denominations authorized by the Board, and as bonds with coupons or registered; have registration or conversion privileges; be payable through the means of payment and in the place or places and; be granted in the manner authorized by the Board; be subject to the terms of redemption, with or without premium; be declared due or become due on the date prior to their due date; provide for the replacement of mutilated, destroyed, stolen or lost bonds; be authenticated in such a manner once the conditions have been met, and contain all other terms and stipulations provided by said resolution or resolutions approved by the Board. The bonds may be sold publicly or privately at the price or prices determined by the Trust; Provided, That convertible bonds may be exchanged for trust bonds in circulation according to the terms the Board may deem beneficial to the best interests of the trust. Their form and text notwithstanding, and the lack of an express statement on the bond indicating that it is not negotiable, all trust bonds shall be and shall be understood to be at all times negotiable documents for all purposes.
(f) At the discretion of the trust any bonds issued under the provisions of this chapter may be secured by a trust contract executed by and between the trust and any bank or trust company described in subsection (g) of this section, which may be a bank or trust company in or outside of the Commonwealth of Puerto Rico. Not withstanding any provision of law to the contrary, said trust contract shall not have to be executed through a public deed for it to constitute a valid trust under the laws of the Commonwealth of Puerto Rico. The trust contract may contain all those provisions deemed by the trust to be reasonable and appropriate for the security of the bond holders.
(g) It shall be legal for any bank or trust company incorporated under the laws of the Commonwealth of Puerto Rico, the United States of America or any state of the United States of America to act as depositary of the product of the bonds, revenues or other moneys to grant those indemnity bonds or pledge those securities that are required by the trust.
(h) The trust bonds that bear the signatures of the trust officials in office on the date these were signed shall be valid and shall constitute unavoidable obligations even when prior to the delivery and payment of said bonds any or all the officials whose signatures or facsimile thereof appear on said bonds, have ceased to hold office as officials of the trust. The validity of the authorization and issue of bonds shall not depend or be affected in any way by any procedure related to the construction, acquisition, extension or improvement of the installations for which the bonds are issued or by any contract executed in relation to said facilities. Any resolution authorizing the issue of bonds may provide for said bonds to contain a statement indicating that they are issued pursuant to this chapter and any bond containing that statement, authorized by such a resolution, shall be conclusively deemed valid and as issued according to the provisions of this chapter.
(i) Provisional or interim bonds, receipts or certificates may be issued in the form and with the provisions provided in the resolution or resolutions authorizing said bonds, while the definitive bonds are granted and delivered.
(j) Neither the members of the Board nor any person who grants the bonds shall be personally liable for the same.
(k) The trust is hereby authorized to purchase, with any funds available to such effect, any circulating bonds issued or assumed by the trust, at a price that does not exceed the total amount of the principal or their current redemption value plus the interest accrued, or at those prices that have been negotiated and contracted as established in the agreement for the purchase of the bonds.
(l) The trust is hereby authorized to issue refinancing trust bonds for the purpose of refinancing those bonds that are in force and effect and in circulation at that time and that have been issued under the provisions of this chapter, including the payment of any redemption premium with regard to the same and any interest accrued or that may be accrued on the date of redemption or maturity of said bonds, should the Board deem it advisable, for any of the purposes for which the Board may issue bonds. The issue of said bonds, their maturity and other details regarding the same, the rights of the bond holders, and the rights, duties and obligations of the trust with regard to the same shall be governed by the provisions of this chapter that are related to the issue of bonds inasmuch as said provisions may be applicable.
(m) The refinancing bonds issued under this section may be sold or exchanged for bonds in force and effect issued under this chapter and if sold, the product of said sale may be destined, in addition to any authorized purpose, to purchase, redemption or payment of said bonds in force and effect and in circulation and may be invested pending said application. The refinancing bonds may be issued, at the discretion of the trust, at any time on or before their due date or dates or on the date selected for the redemption of the bonds that are being refinanced.
(n) The bonds and other obligations issued by the trust shall not constitute a debt of the Commonwealth of Puerto Rico nor of any of its municipalities or other political subdivisions, and neither the Commonwealth of Puerto Rico nor any of its municipalities or other political subdivisions shall be liable for the same nor shall the bonds or other obligations be payable from funds other than those of the trust or with funds specifically appropriated to the trust. The trust shall not at any time nor in any manner have any power whatsoever to pledge the credit or to levy taxes of the Commonwealth of Puerto Rico or of any of its political subdivisions.
(o) The trust bonds shall constitute lawful investments and may be accepted as security for any trust fund, be it special or public, and whose investment or deposit is under the authority or the control of the Government of the Commonwealth of Puerto Rico or of any official or officials thereof.
History —Nov. 21, 2002, No. 271, § 11.