P.R. Laws tit. 21, § 5824
Once the requirements established in §§ 5821 and 5822 of this title have been seen to, the Board of Directors of the Center through its Executive Director, is empowered to negotiate and enter into a loan contract with the President of the Government Development Bank or the financial institution selected by the Center, under the following clauses and general conditions:
(a) The term of the loan shall not exceed ten (10) years; Provided, That said term may be granted for a lesser term if the fiscal status of the municipalities allows it, or in those cases in which the eligible municipalities that have sufficient capacity to pay, do so request it.
(b) Payments of principal and interest to amortize the loan until its final settlement, shall be on account of the municipalities thus affected that have agreed to avail themselves of the loan provided in §§ 5821–5831 of this title. Said payments shall be in proportion to the amount of the loan that corresponds to each municipality.
(c) In the evaluation of the application for the loan made by the Government Development Bank or the financial institution selected by the Center, the fiscal and financial criteria of each municipality shall be taken into account, so that the periodic payments of principal and interest do not constitute an unreasonable lien on the municipalities thus affected; Provided, That the payments of principal and interest to be granted under the conditions of §§ 5821–5831 of this title, shall not be taken into account in calculating the maximum five percent (5%) debt service established in subsection (c) of Section 16 of Act No. 64 of July 3, 1996, as amended, known as the “Puerto Rico Municipal Financing Act”.
(d) The interest rate earned by the loan shall be equal to the prevailing interest rate in the financial market for this type of financing.
(e) The Center shall determine, in coordination with the Government Development Bank or the financial institution chosen by the Center, which legal documents are needed to execute the loan.
(f) The debenture to be subscribed shall be executed between the Executive Director of the Center and the President of the Government Development Bank or the financial institution chosen by the Center, with those attachments whose execution may be needed to evince the financed, accepted and approved debt by each municipality.
History —Jan. 26, 2000, No. 42, § 4.