P.R. Laws tit. 12, § 1262
(a) The Authority is hereby authorized to issue bonds from time to time in such principal amounts, as, in the opinion of the Authority, may be necessary to provide sufficient funds for the total or partial payment of the cost of any project or projects, to grant loans to financial institutions so that said institutions may grant loans to users for the total or partial payment of the cost of one or more projects and to attain any of its other corporate purposes, including the payment of interest on the bonds of the Authority, for such period as the Authority may determine, the establishment of reserves to secure such bonds, and to pay such other expenditures of the Authority, including the costs of any project or projects, which are incidental, necessary or convenient to carry out its corporate purposes or powers.
The bonds issued by the Authority shall be payable out of all or part of the gross or net revenues and other income derived by the Authority under the clauses of one or more financing agreements, all as provided in the trust agreement under which the bond issue is authorized. The principal and interest on bonds issued by the Authority may be secured by a lien of all or part of any revenues of the Authority and may be secured by the assignment of one or more financing agreements. The resolution or resolutions authorizing the bond issue or the trust agreement securing the bonds may contain provisions which shall be part of the contract with the holders of the bonds issued under said resolution or resolutions, regarding the pledge and creation of a lien on the Authority’s revenues and assets, the establishment and maintenance of sinking funds and reserves, limitations of the purpose for which bond proceeds may be applied, limitations as to the issue of additional bonds, limitations as to the introduction of amendments or supplements to such resolution or resolutions, or to the trust agreement, the vesting of rights, powers and privileges and the imposition of obligations and liabilities upon the trustee under any trust agreement, the operation and maintenance of projects, the fixing of fees, rents and other charges for the use and occupancy of any project, the acquisition of insurance with respect to any project or its operation, the rights, powers, obligations and liabilities that shall arise in the event of a default of any obligation under such resolution or resolutions or the trust agreement, or in connection with any rights, powers or privileges vested in the bondholders as security for the bonds in order to enhance their marketability.
(b) The bonds may be authorized by resolution or resolutions of the Board of Directors of the Authority. They may be of such series, bear such date or dates, mature at such time or times not to exceed fifty (50) years from their respective dates of issue and bear interest at such rate or rates not exceeding the maximum rate then permitted by law.
The bonds may be payable in such place or places, whether within or without the Commonwealth, they may be of such denomination or denominations, and in the form of coupons or registered; they may have registration or conversion privileges; may be executed in such manner, may be payable in such medium of payment, and be subject to such redemption terms, with or without premium; they may provide for the replacement of mutilated, destroyed, stolen or lost bonds; may be authenticated in such manner, comply with such conditions, and contain such terms and conditions, as may be provided in the resolution or resolutions. The bonds may be sold at public or private sale for such price or prices as the Authority may determine; Provided, however, That refunding bonds may be sold or exchanged for outstanding bonds of the Authority on such terms as the Authority may deem to be in the best interest thereof. Notwithstanding the form and tenor thereof, and in the absence of an express statement on the face thereof that the bond is not negotiable, all bonds of the Authority, including any coupons appertaining thereto, shall at all times have, and shall be understood to have, all the qualities and incidents (including negotiability) of negotiable instruments under the laws of the Commonwealth of Puerto Rico.
(c) The proceeds from the sale of each bond issue shall be used solely for the payment of the cost of the project or projects, or portion or portions thereof for which such bonds have been issued, and shall be disbursed in such manner and under such restrictions, if any, as the Authority may provide in the trust agreement securing such bonds. If the proceeds from any bond issue, by reason of increased construction costs or error in estimates or other reason, should be less than the cost, additional bonds may be issued in the same way to cover the amount of such deficiency, and, unless otherwise provided in the trust agreement, said bonds shall be deemed to be of the same issue and shall be paid from the same fund without preference or priority for the bonds issued initially.
(d) Bonds may be issued, under the provisions of this chapter, without obtaining the consent of any department, division, commission, body, bureau or agency of the Commonwealth, and without any other procedure, condition or thing, than those procedures, conditions, or things specifically required by this chapter and the provisions of the resolution authorizing the bond issue or the trust agreement securing the same; Provided, however, That the provisions of §§ 581–595 of Title 7 shall be applicable.
(e) The bonds of the Authority bearing the signatures of the officers thereof who were in office on the date said bonds were signed shall be valid and binding obligations, even though before the delivery and payment thereof, any or all the officers whose signatures or facsimile signatures’ appear thereon have ceased as such officers of the Authority. The validity of the authorization and issuance of the bonds shall not depend on or be affected in any way by any proceeding relative to the construction, acquisition, extension, or improvement of the project for which the bonds are issued, or by any contract made in connection with such project. Any trust agreement securing the bonds may provide that any such bonds may contain a statement to the effect that it was issued pursuant to the provisions of this chapter, and any bond containing such statement under the authority of any such trust agreement shall be conclusively deemed to be valid and to have been issued pursuant to the provisions of this chapter. Neither the members of the Board of Directors of the Authority nor any person executing the bonds shall be personally liable, nor shall they be subject to any civil liability for the issuance of said bonds. The Authority is hereby empowered to purchase any outstanding bonds issued or assumed by it with any funds available therefor.
History —June 27, 1977, No. 121, p. 310, § 11, renumbered as § 12 and amended on June 12, 1978, No. 48, p. 162, § 12; Aug. 12, 1995, No. 195, § 3.