P.R. Laws tit. 21, § 6003
Municipalities are hereby authorized to incur obligations evidenced by bonds, notes, or other instruments, for the purposes provided below:
(a) Municipal general obligation bonds or notes to provide funds to pay for the cost of acquiring any equipment, developing or constructing any public work, or any other project that the municipality is legally authorized to undertake; and in special circumstances, for the refinancing of operating debts. The Government Bank shall establish, through regulations, the criteria for the approval of an obligation evidenced by municipal general obligation bonds and notes for refinancing operating debts.
(b) Revenue bonds to provide funds to pay the cost of acquiring, developing or constructing any revenue generating project.
(c) Special obligation bonds, notes or instruments to provide funds to: pay for the cost of acquiring any equipment, developing or constructing any public work or improvement or revenue generating project, or any other project that the municipality is legally authorized to undertake; pay the operating expenses budgeted in any fiscal year and the refinancing of operating debts, including accrued budget deficits. The Government Bank shall establish, through regulations, the criteria for the approval of an obligation evidenced by special obligation bonds, notes or instruments for the payment of budgeted operating expenses and the refinancing of operating and/or budgetary debts.
(d) Refinancing bonds, notes or instruments to provide funds for the payment, on or before maturity, of the principal of any current bonds, notes or instruments, and for the payment of any premiums for the early redemption of said bonds, notes or instruments, any interest accrued or to be accrued on the date of payment or early redemption of said bonds, notes or instruments; any expenses related to the sale and issue of the refinancing bonds, notes or instruments, and the maintenance of the reserves required by such refinancing bonds, notes or instruments. Unless otherwise provided by the Government Bank through regulations, the municipalities may not authorize refinancing bonds, notes or instruments, unless the present value of the aggregate principal and interest on the current bonds, notes or instruments is less than the present aggregate value of the principal and interest on the current bonds, notes or instruments to be refinanced. The Government Bank shall establish the method of computing the present value, though regulations.
(e) Notes in advance of bonds for any of the purposes for which bonds can be authorized.
(f) Notes or instruments in advance of taxes and revenues so as to be able to meet the budget appropriations of the municipality’s current fiscal year without having to wait to receive the product of the taxes and other operating income corresponding to said fiscal year.
(h) Through June 30th, 2012, municipalities are authorized to borrow money from the Government Development Bank by means of municipal general obligation bonds or notes for the purpose of obtaining funds to defray any operating expenses budgeted in any fiscal year, including accumulated budgetary deficits. After June 30th, 2012, the municipalities shall be able to continue to borrow money from the Government Development Bank by means of general municipal obligation bonds or notes to defray operating expenses budgeted in fiscal years prior to the current fiscal year, including accrued budget deficits and debt, and debt incurred or payment agreements entered into during any fiscal year with agencies, entities, and public corporations of the State and Federal Government, and the payment of judgments.
History —July 3, 1996, No. 64, § 4, renumbered as § 5 and amended on Aug. 12, 1997, No. 75, § 4; Mar. 9, 2009, No. 7, § 66; Nov. 21, 2011, No. 227, § 1.