P.R. Laws tit. 21, § 6752
“COFIM’s Redemption Fund” is hereby created, into which all future funds that under the provisions of this chapter are to be deposited in such Fund shall be covered. Notwithstanding the foregoing, not later than June 30, 2014, the municipalities shall have the option to withdraw all available balances accrued in the municipal funds created by virtue of §§ 32127 and 32128 of Title 13 corresponding to the Municipal Development Fund and the Municipal Redemption Fund, respectively.
All funds to be deposited in COFIM’s Redemption Fund under this chapter are hereby transferred and shall belong to COFIM on and after July 1, 2014. This transfer shall be made in exchange for and in consideration of COFIM’s commitment to pay or establish a payment mechanism to meet all or part of the existing obligations of the municipalities that have availed themselves of the provisions of § 6753 of this title that creates the Municipal Administration Fund, which obligations are payable from or backed by the municipal IVU and the interest thereon. It shall also be made, for all other purposes established in § 6751(b) of this title, with the net proceeds of COFIM’s bond issues or available funds and resources, and other valuable considerations.
Every fiscal year, COFIM’s Redemption Fund shall feed from the following sources, the product of which shall be directly covered into COFIM’s Redemption Fund at the time they are received and shall not be covered into the general funds of municipalities or the Commonwealth treasury, nor considered as available resources of the municipalities or the Commonwealth or available to be used by the municipalities or the Commonwealth.
(a) The first revenues of the one percent (1%) municipal sales and use tax, as provided in § 33344 of Title 13 (“IVU”), until the greater of the following amounts has been deposited in COFIM’s Redemption Fund (COFIM’s Deposit):
(1) The product of:
(A) The amount of the one percent (1%) municipal tax collected during the preceding fiscal year multiplied by
(B) a fraction whose numerator shall be zero point three percent (0.3%) and whose denominator shall be the Municipal IVU rate, or
(2) the applicable fixed income.
For purposes of clause (2) of this subsection, the fixed income for fiscal year 2014-2015 shall be sixty-five million five hundred forty-one thousand two hundred eighty-one dollars ($65,541,281) (“original fixed income”). The fixed income for each subsequent fiscal year shall be equal to the fixed income for the preceding fiscal year plus one point five percent (1.5%) of the fixed income. COFIM’s Deposit for any fiscal year shall originate from the portion corresponding to the first revenues of the municipal tax.
(b) For each fiscal year, beginning on Fiscal Year 2014-2015, the amounts of the Municipal IVU in excess of COFIM’s Deposit for said fiscal year shall be transferred to the municipalities (“municipal transfer”) according to the proportion of the total revenues that the portion collected by each municipality represents. At its discretion, any municipality that deems so convenient may transfer any portion of the municipal transfer corresponding to such municipality into its general fund in order to contribute such amount to its Municipal Redemption Fund in accordance with § 32128 of Title 13. It may thus increase its credit capacity and/or cover any deficiency in the Redemption Fund for servicing the municipal debt incurred, provided that such municipality covers at least ninety percent (90%) of its Municipal IVU into its general fund. Such transfer shall be made as provided in the regulations to be adopted by the Board of Directors of COFIM. Notwithstanding the foregoing, in the case of municipalities that, by means of agreement entered into prior to February 1, 2014, as provided in § 6743 of this title, have permanently waived the distribution from the Municipal Development Fund corresponding to them in accordance with § 32127 of Title 13, the distribution of the municipal transfer corresponding to these municipalities shall have priority over all other municipalities so that they may receive an amount equal to its total Municipal IVU (their one percent (1%)) in the following manner:
(1) Until their Municipal IVU (their one percent (1%)) accrued as of the date on which the municipal transfer begins is distributed, no portion of the municipal transfer shall be distributed to other municipalities, and
(2) after the Municipal IVU accrued as of the date on which the municipal transfer begins is distributed to the municipalities that availed themselves of the provisions of § 6743 of this title, the portion of the Municipal IVU corresponding to the current month shall be distributed on a monthly basis to such municipalities before the distribution corresponding to all other municipalities in accordance with this chapter is carried out.
In both cases, if there are any outstanding advances made by GDB in accordance with § 6756 of this title before distributing the municipal transfer to the general fund of each municipality, COFIM shall first reimburse such outstanding advances to the GDB and then distribute the remaining amount of the municipal transfer to the general funds of the municipalities, as appropriate.
History —Jan. 24, 2014, No. 19, § 3.