P.R. Laws tit. 13, § 354l
(a) In the event that the Department of the Treasury, in consultation with the Government Development Bank, should determine that a transaction for the sale, assignment, exchange, negotiation, transfer, disposition or conveyance, jointly or severally, of tax receivables or the right to receive payments on account of tax receivables or any interest thereon does not serve the best interests of the Commonwealth of Puerto Rico when compared to an issue of special obligations as described henceforth in this section, the Department of the Treasury shall file a detailed report with the Legislature in relation to such a determination.
(b) Once the Department of the Treasury files the report referred to in subsection (a) above, the Secretary of the Treasury may issue and sell, all at once or from time to time, special obligation bonds of the Commonwealth of Puerto Rico in a principal amount not to exceed one billion (1,000,000,000) dollars, with the purpose of providing the General Fund with liquidity, given the high incidence of delinquent taxpayers, which has not allowed the General Fund to collect funds in cash from taxpayers who are in debt to the public treasury, and the costs of the sale thereof.
(c) The bonds to be issued from time to time under the provisions of this chapter, as well as any other details in relation thereto, shall be authorized through a resolution or resolutions to be adopted by the Secretary of the Treasury and approved by the Governor. Said bonds shall be designated as “Bonds in Advance of the Collection of Tax Receivables of the Commonwealth of Puerto Rico”.
(d) The bonds whose issue is authorized under the provisions of this chapter, shall be dated and mature at a date or dates not to exceed ten (10) years from their date or dates, shall earn interest at a rate or rates not to exceed the legally authorized rates at the time of issue of such bonds. At the option of the Secretary of the Treasury, these may be redeemable before maturity, may be sold with or without premium, shall be of the denomination and in such a form, with interest coupons or registered or both, shall have those registration and conversion privileges, shall be executed in such a manner, shall be payable at those locations within or without the Commonwealth of Puerto Rico, and shall contain those other terms and conditions as the authorizing resolution or authorizing resolutions may provide.
(e) The bonds authorized by this chapter may be sold all at once or from time to time, in public or private sale, and for such a price or prices not to be lesser than the price legally established at the time of issue thereof, as the Secretary of the Treasury may determine with the approval of the Governor, to be most convenient to serve the best interests of the Commonwealth of Puerto Rico.
(f) When any officer whose signature or facsimile appears on any bond or coupon authorized by this chapter should cease in office before the delivery of such bonds, such a signature or facsimile shall, nevertheless, be valid and sufficient, being it deemed for all purposes as if such an officer had remained in office until such a delivery. Furthermore, any bond or coupon may bear the signature or facsimile of those persons who at the time of executing such a bond are the officers proper to sign the same, but which persons, as of the date of the bonds, were no longer holding office.
(g) The bonds issued pursuant to the provisions of this chapter shall be deemed to be negotiable instruments under the laws of the Commonwealth of Puerto Rico.
(h) The bonds authorized by this chapter may be issued in the form of coupons or in registered form, or both, as may be determined under the authorizing act or authorizing acts, and it may be provided for the register for any bonds or coupons in terms of principal only and also in terms of principal plus interest, and for the reconversion of coupon bonds from any registered bonds in terms of principal plus interest.
(i) The Secretary of the Treasury, with the approval of the Governor, is hereby authorized to negotiate and execute with any bank, investment firm or other financial institution, those loan contracts, purchase agreements or other financing agreements as may be necessary for the sale of the bonds whose issue is authorized under the provisions of this section, under those terms and conditions that the Secretary of the Treasury may determine to be the most convenient to serve the best interests of the Commonwealth of Puerto Rico.
(j) The bonds whose issue is authorized under the provisions of this section shall constitute special obligations of the Commonwealth of Puerto Rico, whereby the good faith and the taxing power of the Commonwealth of Puerto Rico are not pledged for the payment of the principal plus the interest on the bonds issued under the provisions of this chapter. The bonds whose issue is authorized under the provisions of this section shall be payable solely: (i) from the proceeds of the collection of tax receivables; (ii) from any surety agreement, insurance, letter of credit or similar instrument as the Secretary of the Treasury may believe necessary to improve the credit of such bonds. Tax receivables may serve as collateral for bonds issued under the provisions of this section.
(k) That amount which may be necessary is hereby appropriated from the proceeds of the sale of the bonds issued under the provisions of this section, to be applied to the payment of expenses incurred in relation to the issue and sale of such bonds, including expenses relative to insurance, letters of credit or other instruments used to reduce financing costs.
(l) The Secretary of the Treasury may use any of the powers or mechanisms established by this chapter in benefit of bondholders, to expedite the collection of tax receivables.
(m) Any public instrumentality of the Commonwealth of Puerto Rico is hereby authorized to buy or otherwise acquire the bonds issued under the provisions of this section.
(n) All bonds issued under the provisions of this section, as well as the interest earned by them, shall be exempted from the payment of all taxes levied by the Commonwealth of Puerto Rico and its instrumentalities.
(ñ) The issue of bonds authorized by this section shall not be deemed to be a violation of §§ 8751 et seq. of Title 3, better known as the “Fiscal Reform Act of the Government of the Commonwealth of Puerto Rico of 2006”.
History —July 20, 2008, No. 125, § 15.