P.R. Laws tit. 21, § 6753
(a) COFIM’s Deposit shall be made directly to COFIM’s Redemption Fund and be used exclusively to directly or indirectly, pay or refinance COFIM’s obligations, either in whole or in part, in order to attain the purposes of § 6751 of this title. COFIM is hereby authorized to pledge or otherwise encumber COFIM’s deposit in whole or in part only for the payment of: (1) the principal of, interests, and redemption premiums of, if any, such bonds, and (2) other obligations incurred in connection with such bonds for the purposes set forth in this chapter and the payment of obligations incurred under any kind of financial, security-based, or swap agreement entered into in relation to such bonds or other obligations incurred by COFIM. Such pledge shall be valid and binding from the time the pledge is made, without any public or notarized document. The COFIM deposit thus pledged, including those subsequently received by COFIM, shall immediately be subject to such lien without any physical delivery thereof or further act, and the lien shall be valid and binding and prevail over third parties having claims of any kind in tort, breach of contract, or otherwise against COFIM, without regard to whether such parties have notice thereof. Neither the agreement, trust indenture, resolution, nor other security instruments by which the rights of COFIM over COFIM’s deposit or any revenues are pledged or assigned is required to be filed or recorded in order to establish and perfect a lien thereon against third parties, except in the records of COFIM.
(b) In addition to the distributions made in accordance with § 6752(b) of this title, the amounts deposited in COFIM’s Redemption Fund in excess of the amounts necessary to pay the principal of and interests on COFIM bonds per municipality, meet obligations incurred under bond issue documents, or to make any other payment in relation to any other obligation incurred by COFIM, including payments under swap agreements in connection with money taken on loan or bonds issued by COFIM for the payment of which “COFIM’s Deposit” has been pledged, the excess per municipality shall be deposited in and distributed to the general fund of each municipality or the Municipal Redemption Fund thereof established in § 32128 of Title 13, but excluding from such distribution the municipalities that avail themselves of the option provided in § 6743 of this title, which shall not be entitled to a share of such excess. Notwithstanding the foregoing, if there are outstanding advances made by the GDB to a municipality, in accordance with § 6756 of this title, before distributing the excess to the general fund of such municipality, COFIM shall reimburse the GDB said outstanding advances first, and then, distribute the remainder to the general fund of the municipality, as appropriate.
(c) COFIM bonds and other obligations shall not constitute an obligation or debt of the Commonwealth or its instrumentalities. The Commonwealth or its instrumentalities shall neither be liable for the payment of such bonds or obligations which shall not be backed by the full faith and credit and taxing power of the Commonwealth.
History —Jan. 24, 2014, No. 19, § 4.