P.R. Laws tit. 22, § 152
(1) The Authority is hereby authorized to provide by resolution, from time to time, for the issuance of revenue bonds of the Authority for any of its corporate purposes including, but not limited to, the following purposes:
(a) To pay all or any part of the cost, as herein defined, of improvements to the Commonwealth Water System, to the Commonwealth Sewer System, or to both such systems.
(b) To pay all or any part of the cost, as herein defined, of improvements to the Commonwealth Water System and the Commonwealth Sewer System combined by the Authority as a single system for operating and financing purposes; and the Authority is hereby authorized and empowered to combine such systems for such purposes.
(c) To provide funds for refunding any bonds (including refunding bonds) heretofore issued and outstanding under the provisions of §§ 141—161 of this title, including the payment of any premium and any interest accrued on the bonds to be refunded to the date of such refunding.
Such revenue bonds shall be payable solely from the revenues of the Authority as herein provided.
(2) The bonds of each issue shall be dated, shall bear interest at such rate or rates not exceeding five per centum (5%) per annum, shall mature in such period or periods of time not exceeding forty (40) years from their respective date or dates, as may be determined by the Authority, and may be made redeemable before maturity, at the option of the Authority, as such price or prices and under such terms and conditions as may be fixed by the Authority prior to the issuance of the bonds. The Authority shall determine the form of the bonds, including any interest coupons attached thereto, the manner of execution of the bonds, and shall fix the denominations of the bonds and the place or places of payment of principal and interest, which may be at any bank or trust company within or without Puerto Rico. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall have ceased to be such officer before the delivery of such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. All bonds issued under the provisions of §§ 141—161 of this title shall have and are hereby declared to have all the qualities and incidents of negotiable instruments under the Uniform Negotiable Instruments Act of Puerto Rico, §§ 401 et seq. of Title 19. The bonds may be issued in coupon or in registered form, or both, as the Authority may determine, and provision may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest, and for the reconversion into coupon bonds of any bonds registered as to both principal and interest. The issuance of such bonds shall not be subject to any limitations or conditions contained in any other law, and the Authority may sell such bonds in such manner, either at public or at private sale, and for such price, as it may determine to be for the best interest of the Commonwealth of Puerto Rico, but no such sale shall be made at a price so low as to require the payment of interest on the money received therefor at a rate of more than five per centum (5%) per annum, computed with relation to the absolute maturity of the bonds in accordance with standard tables of bond values, excluding however from such computations the amount of any premium to be paid on redemption of any bonds prior to maturity. Prior to the preparation of definitive bonds, the Authority may, under like restrictions, issue or cause to be issued interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when such bonds have been executed and are available for delivery. The Authority may also provide for the replacement of any bonds mutilated, destroyed, stolen, or lost.
The proceeds of the sale of such bonds shall be used solely for the purpose or purposes for which such bonds shall have been authorized, and shall be disbursed in such manner and under such restrictions, if any, as the Authority may provide in the resolution authorizing the issuance of such bonds or in the trust agreement hereinafter mentioned securing the same. If the proceeds of such bonds, by error of estimates or otherwise, shall be insufficient for such purpose, additional bonds may in like manner be issued to provide the amount of such deficit and unless otherwise provided in the resolution authorizing such bonds, or in the trust agreement securing the same, said bonds shall be deemed to be of the same issue and shall be entitled to payment from the same fund without preference or priority as the bonds first issued for the same purpose. If the proceeds of the bonds of any issue shall exceed the amount required for the purpose for which such bonds shall have been issued, the surplus shall be paid into the fund provided under the provisions of §§ 141—161 of this title or provided by said resolution or trust agreement, for the payment of the principal of and the interest on such bonds.
Bonds may be issued under the provisions of §§ 141—161 of this title without any other proceedings or the compliance with any other conditions of the happening of any other things than those proceedings, conditions, or things which are specifically required by §§ 141—161 of this title.
(3) Any resolution or resolutions authorizing the issuance of revenue bonds, or the trust agreement securing such bonds, may contain provisions, which shall be a part of the contract with the holders of the bonds authorized by such resolution or secured by such trust agreement.
(a) 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;
(b) as to the rates to be charged for the services rendered by the facilities of the Authority and the application, use and disposition of the amounts that may be received by the collection of such rates and from other receipts of the Authority;
(c) as to the setting aside of reserves for amortization funds and the regulation and disposition thereof;
(d) as to limitations on the right of the Authority to restrict and regulate the use of its properties or any part thereof;
(e) as to limitations on the purposes to which the proceeds of the sale of any issue of bonds then or thereafter to be issued may be applied;
(f) as to limitations on the issuance of additional bonds;
(g) as to the procedure by which the terms of any resolution authorizing bonds or any trust agreement may be amended or abrogated, and as to the amount of the bonds the holders of which must consent thereto, and the manner in which such consent may be given;
(h) as to the amount and kind of insurance to be maintained on the properties of the Authority and the use and disposition of insurance moneys;
(i) as to convenanting 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;
(j) 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;
(k) as to the rights, liabilities, powers and duties arising upon the breach by the authority of any of its covenants, conditions or obligations;
(l) as to the vesting in the trustee under the terms of any trust agreement the right to enforce any covenants made to secure, to pay, or in relation to the bonds; as to the powers and duties of such trustee, and the limitation of the liabilities thereof; and as to the terms and conditions upon which the holders of the bonds or any proportion or percentage of them may enforce any covenant made under §§ 141—161 of this title or duties imposed hereby;
(m) as to the manner of collecting the rates, fees, rentals or other charges for the services, facilities or commodities of the Authority and the combining in one bill of the rates, fees, rentals or other charges for the different services, facilities or commodities of the Authority; as to the right of the Authority to discontinue furnishing water to any premises and to disconnect such premises from the Commonwealth Water System in the event bills rendered for water consumed on such premises shall not be paid; and as to the right of the Authority to disconnect premises from the Commonwealth Water System in the event bills for services furnished to such premises by the Commonwealth Sewer System shall not be paid;
(n) as to the discontinuance of service, in the event that the rates, fees, rentals or other charges for the services of the Authority are not paid, and
(o) as to any other acts and things not inconsistent with §§ 141—161 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.
In the discretion of the Authority any bonds issued under the provisions of §§ 141—161 of this title may be secured by a trust agreement by and between the Authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within the United States or Puerto Rico. Such trust agreement may pledge or assign the revenues to be received, but shall not convey or mortgage the property of the Authority, or any part thereof. Such trust agreement or resolution providing for the issuance of such bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of laws; including covenants setting forth the duties of the Authority in relation to the acquisition of property and the construction, reconstruction, improvement, maintenance, repair, operation and insurance of its properties in connection with which such bonds shall have been authorized, and the custody, safeguarding and application of all moneys, and provisions for the employment of consulting engineers in connection with such construction, reconstruction, improvement, maintenance or operation. It shall be permissible for any bank or trust company incorporated under the laws of the United States or of any State of the United States or of Puerto Rico which may act as depositary of the proceeds of bonds or of revenues to furnish such indemnity bonds or to pledge such securities as may be required by law. Any such trust agreement may set forth the rights and remedies of the bondholders and of the trustee, and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds and debentures of corporations. In addition to the foregoing, any such trust agreement may contain such other provisions as the Authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement may be treated as a part of the cost of the operations of the Authority.
The bonds of the Authority shall be lawful investment, and may be accepted as security, in accordance with the laws regulating investments and sureties, for all fiduciary, trust and public funds the investment or deposit of which shall be under the control of the Commonwealth of Puerto Rico or any officer or officers thereof.
History —May 1, 1945, No. 40, p. 138, § 13, renumbered as § 12 and amended on May 3, 1949, No. 163, § 1.