P.R. Laws tit. 21, § 6016
(a) The good faith, credit and the power of the municipality to levy unlimited taxes are hereby committed for the prompt payment of the principal and interest on all obligations evidenced by general obligations bonds or notes and the interest on obligations evidenced by notes in advance of municipal general obligation bonds which the municipality may incur.
(b) To make this guarantee effective, the Legislature shall provide through an ordinance, for the annual levying of an additional special tax, without limitation with regard to rate or amount, on all taxable property in the municipality, that is sufficient to pay principal and interest on all general municipal obligation bonds issued by the municipality, as such principal and interest mature, excluding, however, any interest that has been provided to be paid from the proceeds of the municipal general obligation bond issue. Before remitting to the municipalities any existing surplus in the Municipal Public Debt Redemption Fund, the Government Bank shall reserve such sum that will allow compliance with the maximum annual payment of principal and interest of all authorized and outstanding debt.
(c) In general terms, the first lien shall operate in the following manner: The Center shall collect the proceeds of the special surtax and any other taxes on the value of the property levied by the municipality. The Center shall deposit the proceeds of the special surtax in the account of the municipality in the Redemption Fund. If the Government Bank determines that the deposits in said account in the Redemption Fund are not sufficient to cover any payment of the principal or interest on any outstanding municipal general obligation bonds or notes or any payment of the interest on any outstanding note in advance of municipal general obligation bonds, the Government Bank shall notify the Center and the Center shall deposit in said account an amount proceeding from other income subject to the first lien established by this section that, together with the deposits in said fund, shall be sufficient to make said payment. The Government Bank, in consultation with the Center, shall establish, through regulations, the specific procedure for the operating of this first lien.
(d) The Government Bank, as trustee of the Redemption Fund, shall pay the principal and interest on municipal general obligation bonds or notes and the interest on all the notes in advance of the municipal general obligation bonds of the municipality from the resources deposited in the account of the municipality in the Redemption Fund. The Government Bank shall make those payments on behalf of the municipality and through its paying agents designated on said bonds or notes.
(e) Once the reserve or the portion equivalent to the payment for the subsequent twelve (12) months of principal and interest of the loan is assured, and once the payment of the municipal public debt is guaranteed, as determined by the Government Development Bank, in the event there is a surplus in the Municipal Public Debt Redemption Fund, the Government Development Bank shall be bound to place said surplus at the disposal of the municipality. The surplus can be requested once during each fiscal year.
The surplus in the Municipal Public Debt Redemption Fund shall be used, in the first place, for the payment of mature, liquid and exigible statutory debts, including debts with the Municipal Revenue Collection Center, or debts with any government entity or public corporation. In the event that the municipality has provided for the payment of such debts, it may use the surplus of the Redemption Fund for any obligation or activity that pursues a legitimate municipal purpose.
History —July 3, 1996, No. 64, § 17, renumbered as § 20 and amended on Aug. 12, 1997, No. 75, § 19; June 13, 2001, No. 44, § 1.