P.R. Laws tit. 22, § 1098
The proceeds of the bond issue shall be used only to pay or fund upfront financing costs. The remaining proceeds, if any, shall be contributed to or on behalf of the Authority or otherwise applied to approved financing costs, as provided in the financing resolution; Provided, That from the proceeds of the first Bond issue priority shall be given to: (1) the refinancing of lines of credit or other short-term debt instruments, such as notes, bonds, promissory notes or other type of interim financing issued or incurred by the Authority in anticipation of the issuance of Bonds of the Authority or Bond Anticipation Notes or BANs issued to achieve the purposes of this chapter and applied in the order set forth herein for the use of the proceeds of the bonds, in the event that the Authority had not already requested lines of credit or other short-term debt instruments to fulfill the purposes of this chapter; (2) the payment of the debt accumulated and outstanding, as of the date of approval of this act, with the suppliers of goods and services in connection with the implementation of the Capital Improvement Program; (3) costs related to legitimate labor negations of debt pending payment by the Authority; (4) the completion of the projects of the Capital Improvement Program which began but were not completed as of the date of approval of this act; and (5) refund to the Authority any amounts paid in advance from its operating funds for the Capital Improvement Program. Bonds may also be issued without the need for the proceeds thereof to be sufficient to remove, cancel (defease), or refinance a portion of the outstanding debt of the Authority.
Upon payment or defeasance of all bonds and all related financing costs, all amounts held or receivable by the Corporation or any financing entity shall be used to refund or credit customers on the same basis that revitalization charges were imposed, to the extent that such refund or credit is practical. Any failure by any person to apply the proceeds of the bonds in a reasonable, prudent, and appropriate manner or otherwise to comply with any of the provisions of this chapter (including any financing resolution or applicable trust agreement or any agreement between the Corporation and the Authority) shall not invalidate, impair, or affect any financing property, revitalization charge, or bonds. Bond proceeds and any net savings that this transactions may generate for the Authority under no circumstances shall be allocated for capital improvement projects other than those related to works, investments, or improvements of water and/or sanitary sewer services and areas where services are rendered directly to the Customers, nor for any type of construction or improvements to the Authority’s management offices or headquarters, except for such constructions, investments, or improvements that are strictly necessary to meet the requirements of a health, safety, and compliance entity and/or those that generate efficiencies or savings as a result of technological improvements or information systems.
History —July 12, 2016, No. 68, § 2.8.