P.R. Laws tit. 22, § 1093
The following words or terms shall have the meaning expressed below when used in this chapter, unless the context clearly indicates otherwise:
(1) System Assets.— Means the Commonwealth Aqueduct System and/or the Commonwealth Sewer System, as defined in § 141 et seq. of this title. It also includes any parts of the system, whether now existing or hereafter acquired, owned by the Authority as of the effective date of this act or thereafter acquired for use by the Authority, including any successor utility, to provide water and/or sewer service to customers.
(2) Authority.— Means the Puerto Rico Aqueduct and Sewer Authority, a public corporation and government instrumentality established and existing by virtue of §§ 141 et seq. of this title, and any successor or successors thereto, including successors referred to in § 1097 of this title.
(3) Puerto Rico Financial Advisory and Fiscal Agency Authority (PRFAFAA).— Means the entity created under §§ 9281 et seq. of Title 3, known as “Puerto Rico Emergency Moratorium and Financial Rehabilitation Act”, to act as fiscal agent, financial advisor, and reporting agent of the Commonwealth of Puerto Rico and its instrumentalities, including public corporations, which shall be responsible for the review and final approval of the financing resolution in accordance with the procedure established in this chapter or the successor entity of the Government Development Bank designated to act as fiscal agent of the Commonwealth of Puerto Rico.
(4) Bonds.— Means the bonds, or other evidences of long-term indebtedness issued by the Corporation pursuant to this chapter, any financing resolution and the trust agreement related thereto: (a) the proceeds of which are used, directly or indirectly, to finance or refinance approved financing costs; (b) which are directly or indirectly secured by, or payable from, financing property; and (c) which term does not exceed thirty-five (35) years.
(5) Cause.— Means, with respect to a director of the Corporation: (a) actions or omissions of such director that constitute recklessness, bad faith or gross negligence with respect to the duties of such director pursuant to this chapter and other organizational documents of the Corporation; (b) that such director has been involved in, or accused of, or convicted of, fraud or other actions constituting an offense under any law applicable to such director; (c) such director’s inability to perform his duties as director due to death or disability; (d) such director’s failure to meet the requirements of this chapter; or (e) any other action or omission as set forth in this chapter.
(6) Cancellation (Defeasance).— Mans with respect to any debt, the legal or economic defeasance of such debt. “Cancel” (Defease) has a meaning correlative thereto.
(7) Revitalization charges.— Means those rates and charges that are separate from the rates and charges of the Authority and that are imposed on customers by the Corporation in accordance with a financing resolution to recover the ongoing financing costs, and shall include a pro rata share of any late payment fee imposed with respect to any past due bill for water and/or sewer service, which includes therein an amount for revitalization charges.
(8) Customer.— Means any person that is connected to or takes or receives water and/or sewer services within the Commonwealth of Puerto Rico, through the facilities that constitute part of System Assets. The Authority shall not be considered a customer.
(9) Ancillary agreement.— Means any bond insurance policy, letter of credit, reserve account, surety bond, swap agreement, hedging agreement, liquidity or credit support annex or other agreement intended to promote the credit quality and marketability of the bonds or to mitigate the risk of a change in interest rates.
(10) Trust agreement.— Means a trust agreement, trust indenture, master agreement of trust or similar contract or agreement entered into by the Corporation and the Trustee establishing the rights and responsibilities of the Corporation and of the holders of the bonds issued thereunder and secured thereby. None of the provisions of the trust agreement entered into prior to the approval of this act shall be deemed to be binding upon or create obligations between the customers or the Commonwealth of Puerto Rico and the creditors of the Corporation and the Authority.
(11) Servicing contract.— Means the contract or contracts between the Corporation and the servicer providing for the administration and servicing of financing property, as the same may be amended from time to time by the parties thereto in a manner not prohibited by this chapter.
(12) Corporation.— Means the Puerto Rico Aqueduct and Sewer Authority Revitalization Corporation, a special-purpose public corporation and a government instrumentality of the Commonwealth of Puerto Rico, created pursuant to § 1094 of this title.
(13) Financing costs.— Means the costs to issue, service, repay, or refinance the bonds, whether incurred upon issuance of such bonds or over the life of the bonds, the recovery of which is authorized in a financing resolution. Without limitation, “financing costs” may include, as the case may be, any of the following:
(a) The principal of, interest on, and redemption premiums payable on, the bonds;
(b) any payment required under the terms of an ancillary agreement and any amount required to fund or replenish (or to reimburse a third party for replenishing) a debt service reserve fund or account, operating reserve fund or account, or other fund or account established in accordance with a trust agreement, any ancillary agreement, resolution or other financing document related to the bonds;
(c) any federal or state taxes or charges, including federal or state payments or contributions in lieu of taxes, franchise fees or license fees imposed on revitalization charge revenues (but excluding any Commonwealth or local taxes, fees or contributions or payments in lieu of taxes);
(d) any cost related to administering the Corporation, the bonds or the financing property, including the costs of implementing the adjustment mechanism, of the trustee (and other similar fiduciary), legal, accounting and other consultants, depository, calculation agent, manager, credit rating agency fees and expenses, and servicing fees and expenses, in each case, subject to the provisions of this chapter;
(e) any cost related to protecting the status of financing property and collecting revitalization charges, including any cost related to any judicial or similar proceedings that the Corporation or the trustee or any owner of all or a portion of financing property deems necessary to demand the payment of or collect revitalization charge revenues, or protect the financing property or any other costs referred to in § 1100 of this title, in each case, subject to the provisions of this chapter; and
(f) any other cost related to issuing the bonds, or administering and servicing the financing property and the bonds, including the costs of calculating adjustments to the revitalization charges, servicing fees and expenses, trustee’s (or similar fiduciary) fees and expenses, legal fees and expenses, accounting fees and expenses, administration fees and expenses, placement fees and expenses, underwriting fees and expenses, printing and marketing fees, filing or listing fees, fees and expenses of the Corporation’s other consultants, if any, rating agency fees, and any other cost approved by the Board of the Corporation as necessary or desirable to achieve the purposes of this chapter.
(14) Upfront financing costs.— Means the financing costs related to the costs of structuring, marketing, and issuing the bonds, except to the extent that the Corporation determines to pay said costs as ongoing financing costs payable from revitalization charge revenues. Upfront financing costs include, without limitation, trustee’s (or similar fiduciary) fees and expenses, legal fees and expenses, accounting fees and expenses, servicer set-up rates or expenses, calculation agent, depository or other manager or fiduciary placement fees and expenses, underwriting fees and expenses, printing and marketing fees, filing or listing and compliance fees, fees and expenses of the Corporation’s other consultants, if any, credit rating agency fees, fees and expenses of the guarantor, and any other cost approved by the Board of the Corporation as necessary or desirable to achieve the purposes of this chapter, and shall include reimbursement to any person of amounts paid in advance to cover such costs. Within the costs related to the Capital Improvement Program, only costs related to the works and improvements of water and/or sanitary sewer services and facilities providing direct services to customers shall be included as approved financing costs; no type of construction or improvements to the Authority’s management offices or headquarters shall be included, except those constructions, investments or improvements that are strictly necessary to meet the requirements of a health, safety or compliance organization and/or those that generate efficiencies or savings as a result of technological improvements or information systems.
(15) Approved financing costs.— Means any or all of the following costs approved under a financing resolution: (a) exclusively the capital costs related to the Authority’s Capital Improvement Program for a period of up to three (3) years after the date of issuance, including those projects of the Capital Improvement Program that have been initiated but not completed before the approval of this act, even though the Corporation has borrowing capacity to issue a larger amount of debt, as provided in Resolution No. 2984 adopted by the Governing Board of the Authority on June 3, 2016; including all projects that were postponed, halted, or stopped due to the lack of funds of the Authority; (b) the payments applicable to the Authority’s accumulated debt, as of the approval of this act, related to the accounts payable of the Capital Improvement Program, including the reimbursement to the Authority of any advances made, if any, from its operating funds to the Capital Improvement Program, as well as the payment of any amount owed to the providers of goods or services related to the implementation of the Capital Improvement Program that are pending payment; (c) the refinancing of lines of credit or other short-term debt instruments, such as notes, bonds, promissory notes or other type of interim financing issued or incurred by the Authority in anticipation of the issuance of bonds of the Authority or Bond Anticipation Notes or BANs issued to achieve the purposes of this chapter; (d) the costs of retiring, canceling (defeasing), or refinancing all or part of the Authority’s debt obligations or Bonds; (e) rebate, yield reduction payments and any other amounts payable to the United States of America to preserve or protect the federal tax exemption on outstanding debt obligations of the Authority or the Corporation; (f) deposits from proceeds of the issuance of bonds made to a capitalized interest fund or account, a debt service reserve fund or account, or an operating reserve fund or account established in connection with such bonds; (g) costs related to legitimate labor negotiations of debt pending payment by the Authority; and (h) subject to any limitations provided in this chapter, the financing costs. The operating expenses of the Authority or the costs, if any, of financing said operating expenses shall not be deemed to be approved financing costs under this chapter.
(16) Ongoing financing costs.— Means financing costs other than upfront financing costs and any excess of upfront financing costs incurred over the Corporation’s estimate of upfront financing costs that are payable from the proceeds of the issuance of the bonds.
(17) Financing entity.— Means any servicer, trustee (or similar fiduciary), collateral or escrow agent, or other person acting for the benefit of the holders of the bonds or the Corporation that may own financing property or is entitled to receive proceeds of the bonds.
(18) Trustee.— Means the trustee party to a trust agreement that represents the holders of the bonds issued and secured thereunder.
(19) Non-bypassable.— Means that revitalization charges shall be paid by all customers, even if after the date of approval of this act, the customers opt to partially disconnect from the Authority’s water and/or sewer systems for the purpose of being supplied with drinking water produced or distributed through an alternative provider of services similar to the Authority, or dispose of sewage or wastewater by an alternative provider of services similar to the Authority. “Non-bypassability” shall have the same meaning.
(20) Revitalization charge revenues.— Means any money and other property received or to be received, directly or indirectly, on account of the revitalization charges, and all proceeds of the investment thereof.
(21) Board.— Means the board of directors of the Corporation established pursuant to § 1094 of this title.
(22) Servicer.— Means the Authority, to the extent permitted by this chapter, and if the Authority is replaced as servicer pursuant to a servicing contract, it means the person or persons authorized and required, by contract or otherwise, to impose, bill, or collect revitalization charges, to prepare periodic reports on the billings and collections of revitalization charges, to remit collections by or on behalf of the Corporation or the assignees or creditors thereof, including a financing entity, and to render other related services to the Corporation, which may include the calculation of periodic adjustments to the revitalization charges or the rendering of other services related to the financing property; and it shall be understood to include any subservicer, backup servicer (including if it becomes a servicer under a servicing contract), replacement servicer, or the successors of any of the foregoing, authorized to act as such under a financing resolution.
(23) Adjustment mechanism.— Means the formulaic adjustment mechanism by formula contained and approved in a financing resolution, to be applied by the Corporation periodically, and at least semi-annually, to adjust the revitalization charges and ensure the collection of revitalization charge revenues sufficient to provide for the timely payment of ongoing financing costs. The establishment and adjustment of the revitalization charges by the Corporation in relation to the adjustment mechanism shall not be subject to legislative or any other government review or approval, except as provided in § 1096 of this title, regarding the correction of mathematical errors, and in § 1097 of this title regarding the approval of the adjustment mechanism.
(24) Person.— Means any natural or juridical person, including any local agency, or any individual, firm, partnership, joint venture, trust, corporation of individuals, association, public or private corporation, municipality, organized and existing under the laws of the Commonwealth of Puerto Rico, the United States of America, or any state, any agency or instrumentality of the United States of America, or any combination of the above.
(25) Interested person.— Means (a) the trustee representing the holders of the Authority’s outstanding bonds, (b) the securities depository, if any, where any of such bonds shall be deposited; (c) any holder of the Authority’s outstanding debt obligations or any person providing credit or liquidity support, including financial guaranty insurance, to any or all of such obligations; (d) any financial institution to which the Authority is indebted (other than through the securities depository) or otherwise obligated; (e) the Secretary of Justice of the Commonwealth of Puerto Rico; (f) any customer; (g) any of the Authority’s providers of goods and services other than a customer of the Authority, as defined in this chapter; (h) any person that has filed with the secretary of the Board of the Corporation or with the Authority a request to receive the notice set forth in § 1097(c)(2) of this title; (i) any person that would otherwise be entitled to receive notice or information about the adjustment of the Authority’s rates and charges; and (j) any other person interested in the matters raised in the proceedings provided for in § 1097(c) of this title.
(26) Capital Improvement Program.— Means the plan of investments in infrastructure and other capital assets prepared annually by the Authority and updated, from time to time, stating in detail the projects to be developed by the Authority within the next ten (10) years, and certified by an expert independent consultant in water and sewer systems. It also includes the substitution or periodic replacement of customer’s meters.
(27) Financing property.— Means a financing resolution and the property rights and interests created thereby, including the right, title and interest in: (a) the right to create and receive revitalization charges; (b) the revitalization charges, as adjusted from time to time in accordance with the adjustment mechanism, including any rights under a servicing contract assigned pursuant to the corresponding trust agreement or other security agreement; (c) all revenues, collections, claims, payments, money, or proceeds from the revitalization charges or constituting revitalization charges, regardless of whether such revenues, collections, claims, payments, money, or proceeds are billed, received, collected or maintained by the Authority or by the Corporation together with or commingled with other revenues, collections, claims, payments, money, or proceeds; (d) all rights to obtain adjustments to the revitalization charges pursuant to the terms of the financing resolution related thereto; and (e) all reserves established in connection with the bonds or the financing property. Upon the issuance of the bonds, the financing property shall constitute a vested and existing property right in the assets of the Corporation, as initial owner, subject to § 1098 of this title and any pledge of financing property pursuant to this chapter, notwithstanding the fact that the value of the property right shall depend on further actions that have not yet occurred, including customers remaining or becoming connected to the System Assets and taking or receiving water and sewer service, the imposition and billing of revitalization charges, or the rendering of services by the Authority. The term “financing property” shall not include the Authority’s real property or the property rights created thereon.
(28) Financing resolution.— Means a resolution of the Board of the Corporation adopted in accordance with this chapter, whereby the financing property is created and the imposition and collection of revitalization charges, as well as the approved financing costs, are approved through the issuance of bonds, which resolution contains the adjustment mechanism, as provided in § 1096 of this title.
(29) Servicing fee.— Means the periodic amount paid to a Servicer for its services required in connection with the issuance of bonds and the administration and servicing of financing property.
(30) Third-party biller.— Means any person authorized to bill or collect revitalization charges other than the Corporation, the Authority, or a servicer, if different from the Authority.
(31) Court.— Shall have the meaning provided in § 1097(c)(1) of this title.
History —July 12, 2016, No. 68, § 2.3.