P.R. Laws tit. 22, § 206
(a) By authority of the Government of Puerto Rico, which is hereby granted, the Puerto Rico Electric Power Authority may issue and sell its own bonds from time to time and have outstanding at any one time, exclusive of bonds issued solely for the purpose of exchanging the same in return for the cancellation of bonds either issued by the Authority or assumed by it, bonds not in excess of five million (5,000,000) dollars, in aggregate principal amount of its bonds, in addition to all sums that the Legislature of Puerto Rico has authorized or may authorize separately for particular purposes; Provided, however, That refunding bonds of the Authority issued solely for the purpose of applying the proceeds thereof to the payment for, or purchase of, bonds issued by the Authority or assumed by it, shall not be included in computing any such limitation until six (6) months after their sale.
(b) The bonds may be authorized by resolution or resolutions of the Board, and may be of such series, may bear such date or dates, may mature at such time or times not exceeding fifty (50) years from their respective dates, may bear interest at such rate or rates not exceeding the maximum rate allowed by law at the time; may be in such denomination or denominations, may be in such form either coupon or registered bonds, may carry such registration or conversion privileges; may be executed in such manner; may be payable in such medium of payment and at such place or places; may be subject to such terms of redemption, with or without premiums; may be declared or become due at such time before the maturity date thereof; may provide for the replacement of mutilated, destroyed, stolen or lost bonds; may be authenticated in such manner and upon compliance with such conditions, and may contain such other terms and covenants as such resolution or resolutions may provide. The bonds may be sold at public or private sale for such price or prices as the Authority shall determine; Provided, That refunding bonds may be exchanged for outstanding bonds of the Authority on such terms as the Board may deem to be in the best interests of the Authority. Notwithstanding the form and tenor thereof, and in the absence of an express recital on the face thereof that the bond is nonnegotiable, all bonds of the Authority shall at all times be, and shall be understood to be, negotiable instruments for all purposes.
(c) The bonds of the Authority bearing the signature of members of the Board or officers of the Authority in office on the date of the signing thereof, shall be valid and binding obligations notwithstanding that before the delivery thereof and payment therefor any or all of the members of the Board or officers of the Authority whose signatures or facsimile signatures appear thereon shall have ceased to be such members of the Board or such officers of the Authority. The validity of the authorization and issuance of the bonds shall not be dependent on or affected in any way by any proceedings relating to the construction, acquisition, extension, or improvement of the undertaking for which the bonds are issued, or by any contracts made in connection with such undertaking. Any resolution authorizing the bonds may provide that any such bond may contain a recital that it is issued pursuant to §§ 191—217 of this title, and any bond containing such recital under authority of any such resolution shall be conclusively deemed to be valid and to have been issued in conformity with the provisions of §§ 191—217 of this title.
(d) Pending the execution and delivery of definitive bonds, temporary or interim bonds, receipts or certificates may be issued in such form and with such provisions, as may be provided in such resolution or resolutions.
(e) Any resolution or resolutions authorizing any bonds may contain provisions, which shall be a part of the contract with the holders of the bonds:
(1) As to the disposition of the entire gross or net revenues and present or future income of the Authority, including the pledging of all or any part thereof to secure payment of the bonds;
(2) as to the rates to be charged for water and electric energy, and the application, use, and disposition of the amounts that may be raised by the collection of such rates and from other receipts of the Authority;
(3) as to the setting aside of reserves for amortization funds, and the regulation and disposition thereof;
(4) as to limitations on the right of the Authority to restrict and regulate the use of any undertaking or part thereof;
(5) as to limitations on the purpose to which the proceeds of sale of any issue of bonds then or thereafter to be issued may be applied;
(6) as to limitations on the issuance of additional bonds;
(7) as to the procedure by which the terms of any resolution authorizing bonds or any other contract with the bondholders may be amended or abrogated, and the amount of the bonds the holders of which must consent thereto, and the manner in which such consent may be given;
(8) as to the amount and kind of insurance to be maintained on the undertakings of the Authority; and the use and disposition of insurance moneys;
(9) as to covenanting against pledging all or any part of the revenues and income of the Authority to which its right then exists or the right to which may thereafter come into existence;
(10) as to events of default and terms and conditions upon which any or all of the bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
(11) as to the rights, liabilities, powers, and duties arising upon the breach by the Authority of any of its covenants, conditions, or obligations;
(12) as to the vesting in a trustee or trustees the right to enforce any covenants made to secure, to pay, or in relation to the bonds; as to the powers and duties of each trustee or trustees, and the limitation of the liabilities thereof; and as to the terms and conditions upon which the holders of the bonds or any proportion of percentage of them may enforce any covenants made under §§ 191—217 of this title or duties imposed hereby;
(13) as to the manner of collecting the rates, fees, rentals, or other charges for the services, facilities, or commodities of undertaking of the Authority, and the combining in one bill of the rates, fees, rentals, or other charges for the services, facilities, or commodities of any two or more of such undertakings;
(14) as to the discontinuance of the services, facilities, or commodities of any undertakings of the Authority, in the event that the rates, fees, rentals, or other charges for the services, facilities, or commodities of such undertaking are not paid, and
(15) as to any other acts and things not inconsistent with §§ 191—217 of this title that may be necessary or convenient for the security of the bonds, or as may tend to make the bonds more marketable.
(f) Neither the members of the Board nor any person executing the bonds shall be liable personally on [for] the bonds or be subject to any liability by reason of the issuance thereof.
(g) The Authority is authorized to purchase any outstanding bonds issued or assumed by it with any funds available therefor, at a price not more than the principal amount or the current redemption price thereof and the accrued interest. All bonds so purchased shall be cancelled.
History —May 2, 1941, No. 83, p. 684, § 16; Apr. 8, 1942, No. 19, p. 330, § 1; July 26, 1991, No. 29, § 1.