P.R. Laws tit. 13, § 141e
(a) Proceeds (including any premium but excluding accrued interest) derived from the sale of each issue of refinancing bonds shall be applied, together with any other moneys legally available therefor, including other moneys, if any, deposited in the Special Fund for the Amortization and Redemption of General Obligations Evidenced by Bonds and Notes, to the payment of the principal and redemption premium, if any, and interest accrued on the outstanding bonds to be refinanced by the refinancing bonds, and to the payment of the expenses authorized by this chapter or, to the extent not then required for such payment, shall be deposited in trust with the Secretary of the Treasury together with any other moneys legally available therefor, to be held separate from all other funds of the Commonwealth of Puerto Rico or, by order of the Secretary of the Treasury, in trust with one (1) or more trustees or escrow agents, which shall be trust companies or national or state banks or banks organized under the laws of the Commonwealth of Puerto Rico, having powers to act as trustees, located either within or without the Commonwealth of Puerto Rico. Proceeds of the bonds or moneys deposited in trust with the Secretary of the Treasury or with one or more trustees or escrow agents shall be applied solely to the payment of the principal when mature and the redemption premium, if any, and interest on the balance of the bonds to be refinanced. Proceeds of the bonds, or moneys thus held by the Secretary of the Treasury or deposited with trustees or escrow agents may be invested in Government obligations which are not subject to redemption prior to their maturity, except at the option of their holder. Except as provided in subsection (b) of this section, neither the Government obligations nor moneys thus deposited with the Secretary of the Treasury or with trustees or escrow agents shall be withdrawn or used for any purpose other than the payment of the principal and the redemption premium, if any, and interest on the balance of the bonds to be refinanced by the refinancing bonds, and shall be held in trust for such purposes, except that any moneys received from principal or interest payments on Government obligations deposited with the Secretary of the Treasury or with trustees or escrow agents:
(1) To the extent that such moneys will not be required at any time for such purpose, shall be paid to the Commonwealth of Puerto Rico as received, and
(2) to the extent such moneys will be required for such purpose at a future date, to the extent practicable and legally permissible, shall be reinvested in Government obligations maturing on such dates and in amounts sufficient to pay the principal and redemption premium if any, when due, and interest on the balance of the outstanding bonds, and investment income from such reinvestments, to the extent not required for the payment of the outstanding bonds, shall be paid to the Commonwealth of Puerto Rico as received.
(b) Notwithstanding any provision to the contrary contained in this section:
(1) The Secretary of the Treasury may, and the trustees or escrow agents shall, if so directed by the Secretary of the Treasury, apply moneys on deposit pursuant to the provisions of this section and redeem or sell the Government obligations so deposited, and apply the proceeds thereof to: (i) the purchase of the outstanding bonds which were refinanced by such moneys and Government obligations on deposit, and immediately thereafter cancel all the outstanding bonds so purchased, or (ii) the purchase of other Government obligations; except that the moneys and Government obligations on deposit after the purchase and cancellation of the refinanced bonds and the purchase of other Government obligations shall be sufficient to pay the principal and redemption premium if any, when due, and interest on all the other outstanding bonds for the payment of which such moneys and Government obligations were deposited, and
(2) if on any date, as a result of the purchase and cancellation of outstanding bonds or the purchase of other Government obligations as provided in this subsection, the total amount of moneys and Government obligations remaining in deposit exceeds the total amount required to pay the principal and redemption premium if any, when due, and interest on such remaining outstanding bonds, the Secretary of the Treasury may pay and the trustees or escrow agents shall pay, if so directed by the Secretary of the Treasury, the amount of such excess to the Commonwealth of Puerto Rico.
(c) Any amounts held by the Secretary of the Treasury in a separate fund for the payment of the principal and redemption premium, if any, and interest on outstanding bonds to be refinanced, as provided in this section, may be transferred by the Secretary of the Treasury to be deposited with one or more trustees or escrow agents, as provided in this section, or held by the Secretary of the Treasury, as provided in this section, which shall be separate and apart from all other funds of the Commonwealth of Puerto Rico to be applied to the payment of the principal and redemption premium if any, when due, and interest to become due on such outstanding bonds, as provided in this section, or be applied by the Secretary of the Treasury to the payment of the principal and the redemption premium when due, and interest on refinancing bonds issued under the provisions of this chapter to refinance such outstanding bonds.
(d) The Secretary of the Treasury is hereby authorized to enter into contracts with one or more trust companies or national, state banks or banks organized under the laws of the Commonwealth of Puerto Rico, within or without the Commonwealth of Puerto Rico, to act as trustees or escrow agents as provided in this section, under the terms and conditions as shall be approved by the Secretary of the Treasury.
History —Oct. 10, 1985, No. 2, p. 848, § 6.