P.R. Laws tit. 22, § 1103
Notwithstanding any provision of this chapter or any other law of the Commonwealth of Puerto Rico, prior to the date that is one (1) year and one (1) day after the Corporation no longer has any bonds outstanding or any ancillary agreement with payment obligations that have or may become due thereunder, the Corporation shall have no authority to file a petition for relief as a debtor under any chapter of the Federal Bankruptcy Code or any other bankruptcy, insolvency, debt composition, moratorium, receiver, or similar federal laws or any bankruptcy, moratorium, debt adjustment, composition or similar laws permitting the stay or delay of payment or the discharge or reduction in amount owed on any bonds as may, from time to time, be in effect, and no public official, organization, entity, or other person shall authorize the Corporation to be or become a debtor under Chapter 9 of the Federal Bankruptcy Code, or similar federal law, or under any such law of the Commonwealth of Puerto Rico, during such period. The Commonwealth of Puerto Rico hereby covenants with the holders of bonds and the parties to any ancillary agreements that the Commonwealth of Puerto Rico shall not limit or alter the denial of authority under this section during the period referred to in the preceding sentence. The Corporation shall include, acting as agent of the Commonwealth of Puerto Rico this covenant as an agreement of the Commonwealth in any contract entered into with the holders of the bonds or parties to such ancillary agreement.
The Commonwealth of Puerto Rico further covenants, pledges, and agrees with the holders of any bonds and with those persons that enter into contracts with the Corporation, including parties to any ancillary agreement, pursuant to the provisions of this chapter, that after the issuance of bonds, the Commonwealth of Puerto Rico shall not authorize the issuance of debt by any public corporation and government instrumentality of the Commonwealth of Puerto Rico or any other person whose debt is secured by financing property or any other rights and interests in rates, charges, taxes, or assessments that are separate from rates and charges of the Authority and that are imposed on customers to recover the ongoing financing costs of such debt, if upon the issuance of such debt, the security for any bonds or such ancillary agreements shall be materially impaired. It shall be assumed that such security shall not be materially impaired if upon the issuance of such debt, the credit ratings for the then outstanding bonds (without regard to any third-party credit enhancement) shall not have been reduced or withdrawn. The Corporation is hereby authorized and directed as agent of the Commonwealth to include this covenant as an agreement of the Commonwealth of Puerto Rico in any contract entered into with the holders of the bonds or such persons.
The Commonwealth of Puerto Rico further covenants, pledges, and agrees with the holders of any bonds issued under this chapter and with those persons that enter into contracts with the Corporation, including parties to any ancillary agreement, pursuant to the provisions of this chapter, that it shall not limit, alter, impair, postpone, or terminate the rights conferred in this chapter, any financing resolution and related agreements, including the requirements in § 1094(b)(3) and § 1097(h) of this title, until such bonds and the interest thereon are paid or legally cancelled (defeased) in accordance with their terms, and such other contracts are fully carried out by the Corporation. The Corporation shall include, as agent of the Commonwealth of Puerto Rico, this covenant as an agreement of the Commonwealth of Puerto Rico in any contract entered into with the holders of bonds.
The Commonwealth of Puerto Rico also covenants, pledges, and agrees with the holders of any bonds issued under this chapter and with those persons that enter into other contracts with the Corporation, pursuant to the provisions of this chapter, that after the issuance of bonds, neither the Commonwealth of Puerto Rico nor any agency, public corporation, municipality, or other instrumentality thereof shall take or permit any action to be taken to limit, alter, reduce, impair, postpone, or terminate the rights conferred in any financing resolution, including those related to revitalization charges and the related adjustment mechanism, as the same may be adjusted from time to time pursuant to the applicable financing resolution, in a manner that impairs the rights or remedies of the corporation or the holders of the bonds, parties to any ancillary agreement or any financing entity or the security for the bonds or ancillary agreements, or that impairs the financing property or the billing or collection of revitalization charge revenues. Neither shall the amount of revenues earned from financing property be subject in any way to limitation, alteration, reduction, impairment, postponement, or termination by the Commonwealth of Puerto Rico or any agency, public corporation, municipality, or other instrumentality thereof (except as contemplated by the adjustment mechanism). The Corporation shall include, as agent of the Commonwealth of Puerto Rico, this covenant as an agreement of the Commonwealth of Puerto Rico in any contract entered into with the holders of the bonds or parties to such ancillary agreement.
History —July 12, 2016, No. 68, § 2.13.