P.R. Laws tit. 21, § 6756
(a) To prevent a deficit in the cash flow of the municipalities during each fiscal year until the municipal transfer begins to nourish the general funds of municipalities, any municipality, except for those who have availed themselves of the option provided in § 6743 of this title, may request an advance to the GDB on a monthly basis, to be distributed during the first ten (10) days of each month, in an amount equal to the difference between:
(1) The revenues of the one percent (1%) municipal IVU collected by such municipality in the corresponding month of the immediately preceding year (such amount shall be increased by advances from the Municipal Development Fund and the Redemption Fund, insofar as such additional amount does not exceed the amount corresponding to such municipality based on the same month of the immediately preceding year) and
(2) The funds covered into the general fund of such municipality during the calendar month preceding the advance in question, and which originate from the municipal IVU provided in § 33344 of Title 13. The GDB is hereby required and authorized to make such advances in accordance with this section.
(b) As for municipalities that avail themselves of the option provided in § 6743 of this title, the GDB shall make an advance to be distributed during the first ten (10) days of July (corresponding to the July-December period) and January (corresponding to the January-June period) of fiscal year 2014-2015. Subsequent fiscal years shall receive the same treatment, in an amount equal to the revenues from the one percent (1%) municipal IVU collected by such municipality for the corresponding periods of the preceding year (July to December and January to June). The GDB is hereby required and authorized to make such advances in accordance with this section.
(c) If the GDB determines that, as a result of the advances made to municipalities as provided in subsections (a) and (b) of this section, the aggregate amount of advances made to any municipality exceeds the maximum amount corresponding to such municipality from:
(1) The municipal transfer, in accordance with this chapter; and
(2) The Municipal Administration Fund Act,
such excess shall be ratably deducted, upon previous notice, from advances available for the next fiscal year and from the amount available to such municipality during the subsequent fiscal year out of: (i) the municipal transfer in accordance with this chapter, and (ii) the Municipal Administration Fund Act.
(d) In the event that the GDB fails to meet its obligation to disburse such advances within a term of ten (10) days, the GDB shall be required to pay a penalty equal to ten percent (10%) of the corresponding payment. If this noncompliance persists for more than one month, such penalty shall increase by ten percent (10%) every month up to a maximum of fifty percent (50%) of the corresponding payment.
(e) If a municipality is not interested in receiving advances from the GDB, it may use the funds corresponding to it from: (1) the Municipal Transfer in accordance with this chapter, and (2) the Municipal Administration Fund Act. The municipality may use said funds to take money on loan in any financial institutions under the same conditions and limitations contained in this section, insofar as the financing terms offered by private financial institutions are better than those offered by the GDB. The loans thus obtained from private financial institutions shall not be subject to the limitations on credit capacity contained in §§ 6001 et seq. of this title, known as the “Puerto Rico Municipal Financing Act of 1996”. All instruments issued under this subsection and interests accrued thereon, shall be exempt from any tax imposed by the Commonwealth.
(f) The financing costs of the advances or loans granted under this section shall be defrayed by the Commonwealth, which shall reimburse such costs by means of an appropriation to be set aside in the expense budget corresponding to the following fiscal year. Solely for GDB accounting purposes, advances shall be treated as loans whose source of repayment shall be the budget appropriation herein prescribed.
History —Jan. 24, 2014, No. 19, § 12.