P.R. Laws tit. 22, § 1074
(a) A special-purpose public corporation and government instrumentality of the Commonwealth of Puerto Rico is hereby created to be known as the “Puerto Rico Electric Power Authority Revitalization Corporation”, which shall exercise essential governmental and public powers. The Corporation shall not be created, organized, or operated for profit. No director, official, or any other private Person shall derive any benefit from or receive a distribution related to the revenues or assets of the Corporation, except as herein provided as reasonable compensation for services rendered.
(b)
(1) The Corporation shall be governed by a Board consisting of three (3) directors. Until the Governor appoints the official directors in accordance with clause (2) of this subsection, the President of the Government Development Bank for Puerto Rico, the Secretary of the Department of the Treasury of the Commonwealth of Puerto Rico, and the Secretary of State of the Commonwealth of Puerto Rico shall serve as ex officio directors whose terms shall expire on the date the Governor makes the appointments from the list referred to below in clause (2) of this subsection.
(2) The official appointment of the directors shall be made by the Governor with the advice and consent of the Senate. Official directors shall be appointed and begin to discharge their duties on or before July 1st, 2016. Directors so appointed by the Governor shall be selected from a list of at least ten (10) candidates to be prepared by a recognized executive search firm, according to objective criteria that take into account the professional and educational backgrounds of the candidates. The Governor, in his/her discretion, shall evaluate the list of recommended candidates and choose three (3) individuals from said list. If the Governor fails to appoint three (3) directors from such list within twenty (20) days after such list is submitted to the Governor, the aforementioned search firm shall submit another list within thirty (30) days. The candidate selection process developed by a recognized executive search firm shall remain in effect for fifteen (15) years, subject to the laws applicable to the preservation of the tax exemption or preferential tax treatment of the interests on any restructuring bonds. The Governor may remove a director only for cause.
(3) Ex officio acting directors shall hold their respective director position as long as they hold their current offices. Of the official directors originally appointed by the Governor, one (1) shall serve a term of four (4) years from the date of appointment, one (1) shall serve a term of five (5) years from the date of appointment, and one (1) shall serve a term of six (6) years from the date of appointment. Each director shall continue to hold office until his/her successor is appointed and qualified. Except for ex officio acting directors, all Board members shall be required to meet the director independence requirement under the New York Stock Exchange Corporate Governance Standards (NYSE Independent Director Rules). Nothing in this chapter shall preclude a customer from becoming a director solely because such person is a customer. Ex officio acting directors shall not receive compensation for services rendered as directors. Official directors shall receive a market-based compensation comparable to that received by board members of local institutions of similar size, complexity, and risks. Said compensation shall never exceed fifty thousand dollars ($50,000) annually.
(4) In the event of vacancy in the position of an official director, the Governor shall appoint the person who shall fill such vacancy for the remainder of the unexpired term of the original appointment following the appointment process of the original official appointments and subject to the laws applicable to the preservation of the tax exemption or preferential tax treatment of the interest on any restructuring bonds.
(5) In addition to the requirements established in this section, no person may become an official director if he/she:
(A) is an employee, retiree, or has any direct or indirect substantial interest in any private company with which the Corporation or the Authority has entered into any contracts or with whom it engages in transactions of any kind, other than the purchase of electric service under generally applicable rates and tariffs;
(B) within two (2) years before holding office, has had a business relationship with or any interest in any private company with which the Corporation, the Authority, the Government Development Bank for Puerto Rico, or the Commonwealth of Puerto Rico has entered into any contracts or with whom it engages in transactions of any kind, other than the purchase of electric service under generally applicable rates and tariffs;
(C) has been a member of a local or central directing body of a political party registered in the Commonwealth of Puerto Rico during his/her appointment;
(D) is an employee, member, advisor, or contractor of the Authority’s labor unions; or (E) has failed to provide the certification of having filed income tax returns during the five (5) preceding taxable years issued by the Department of the Treasury, a certification of having no debts outstanding with the Authority, a Certificate of Criminal Record issued by the Puerto Rico Police Department, as well as negative certifications of the Child Support Administration (ASUME, Spanish acronym) and the Municipal Revenues Collection Center (CRIM, Spanish acronym).
(6) Except for ex officio directors, no director shall be considered a public employee under the terms of § 1858 of Title 3, known as the “Puerto Rico Government Ethics Act”
(7) Each director shall have a fiduciary duty to act in the best interests of the Corporation, including the holders of the restructuring bonds and its other creditors, and such other duties as may be specified in the organizational documents or other agreements of the Corporation.
(8) A majority of the directors at the time serving shall constitute a quorum to make decisions or exercise of any power or function of the Corporation. The Board of the Corporation may delegate to one or more of its directors, or officers, agents and employees, such powers and duties as the Board of the Corporation may deem appropriate.
(c) Without impairing the rights granted under Chapter IV of this Act, the Board and the officials, agents, and employees of the Corporation shall not be held civilly liable for any actions taken in good faith in the discharge of their duties and responsibilities under this chapter; unless it is established, that they engaged in conduct constituting an offense, breach of fiduciary duty, or gross negligence, and shall be indemnified for any costs incurred in connection with any claim for which they enjoy immunity as provided herein. The Board of the Corporation, its directors, as well as any officials, agents, or employees of the Corporation shall also be fully indemnified for any civil liability adjudicated under the laws of the United States of America. The Governing Board and each director, official, agent, and employee of any Servicer shall be entitled to immunity from personal liability as provided by law and, in absence thereof, to the immunity from personal liability provided in this section.
History —Feb. 16, 2016, No. 4, § 32.