Ley 146 del 2001
Resumen
Esta ley autoriza al Centro de Recaudación de Ingresos Municipales (CRIM) a obtener préstamos para prepagar emisiones de bonos relacionadas con la venta de deudas contributivas municipales y para refinanciar la deuda del proyecto de digitalización del catastro. Establece mecanismos de pago utilizando subsidios del Fondo General, recuperaciones de deudas vendidas y fondos operacionales municipales. También permite la reestructuración de préstamos municipales existentes.
Contenido
| (No. 146) | |
|---|---|
| (October 11, 2001) |
AN ACT
To authorize the Municipal Revenue Collection Center (MRCC) to obtain a loan to pay in advance the bond issue made for the transaction of the sale of the tax debts pending collection by the municipalities, and to provide so that, pursuant to certain order of payment, the point fortyeight (.48) percent that results from the increase in the General Fund subsidy to the municipalities, as provided in Section 16 of Act No. 80 of August 30, 1991, as amended, plus the recoveries of the debts sold, be also appropriated to reduce the balance; to authorize the payment of any deficiency with municipal operational funds; and to provide that those municipalities that have obtained a loan under Act No. 42 of January 26, 2000, and which also avail themselves of the provisions of this Act, shall have the option to extend their term pursuant to what is established in this Act. The MRCC is also authorized to obtain another loan to refinance the payment of the debt contracted by said body in relation to the implantation and design of the cadastre digitalization project (Land Information Management System - LIMS). The loan authorized for these purposes by this Act shall be formalized for a minimum term of ten years and the payments to amortize said debt shall be made with the amounts withheld by the MRCC from municipal revenues for the payment of the contract for the LIMS Project, by adjusting said withholdings to the terms of the new loan.
STATEMENT OF MOTIVES
Act No. 21 of June 26, 1997, as amended, authorized the sale by the Municipal Revenue Collection Center (the MRCC) of the tax debts corresponding to fiscal years 1974-75 and thereafter. To facilitate the sale, the Public Financing Corporation, a subsidiary of the Government
Development Bank for Puerto Rico, bought the delinquent debts from the MRCC and paid the purchase price with a bond issue. Said delinquent debts serve as collateral for the bonds. The MRCC assumed the obligation of substituting those debts that are defective by surrendering one or various valid debts or with cash in an amount equal to the delinquent debt plus interest. The defective debt accumulated totals a very high amount, the substitution of which would be burdensome for the municipalities.
The Public Financing Corporation intends to pay in advance the bond debt with a line of credit issued by the Government Development Bank in favor of the MRCC. This line of credit shall be paid by the Central Government and the debtor municipalities in proportion to the balance owed by each one and thus, they shall cancel the delinquent debt sale transaction and its service contract, and pay for incidental expenses.
As part of the efforts conducted by the MRCC administration during the past eight (8) years preceding the change in Government occurred in Puerto Rico after the elections of November 2000, a contract was formalized for the sum of fifty-six million dollars ( $56 million) for the digitalization and implementation of the cadastre. This decision was made without taking into account and without having obtained the approval of the municipalities despite the fact that these are the ones responsible for paying the cost of the abovementioned contract. The MRCC withholds from the municipal revenues the sum necessary to pay for the debt contracted on account thereof, whose present term is seven (7) years. The loan authorized by this Act is convenient for the municipalities, because the term would be extended for up to ten (10) years and at an interest rate lower than that settled on in the agreements in effect, which in turn benefits the flow of funds and the municipal financial operations.
This Act responds to the petition of Mayors to solve the problem that the sale of delinquent debts has brought about to each municipality and has the purpose of allowing the MRCC to incur a debt for the line of credit to be provided by the Bank to pay in advance the bond debt and incidental expenses, and to provide the mechanism of payment for debtor municipalities.
BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO:
Section 1.-The Municipal Revenue Collection Center (MRCC) is hereby empowered to procure and obtain, in representation of the municipalities that so accept pursuant to the provisions of this Act, a special loan in the form of a line of credit (the loan) with the Government Development Bank for Puerto Rico (the Bank) to pay in advance the amount necessary to cancel the bond issue made to transact the sale of the tax debts pending collection by the municipalities. The point forty-eight (.48) percent increase that results from the net increase in the General Fund subsidy to municipalities, as provided for in Section 16 of Act No. 80 of August 30, 1991, as amended, shall be appropriated for the payment of interest on this loan for the first five (5) years by those municipalities participating in the financing, at the end of which term the balance owed on leveled payments of principal and interest for twenty-five (25) years until paid up in full; provided, that any deficiency that may arise shall be paid from the operational funds of each municipality and the appropriation of the net increment in the General Fund subsidy shall take into account the appropriations made by the municipalities to pay the loan authorized by Act No. 42 of January 26, 2000. Those municipalities that do not participate as debtors in the loans referred to shall benefit from the raise in subsidy pursuant to the provisions of Act No. 80, supra. Provided also, that during
the first five (5) years of the loan, the recoveries of the tax debts related with the transaction of the cancelled debt, shall be applied to the principal of the loan to reduce the responsibility of each encumbered municipality.
Section 2.-The amount to be financed as finally determined shall be presented by the MRCC Executive Director for the consideration and approval of the MRCC Governing Board. Said presentation shall include the pertinent information in terms of the proportion from the total loan that corresponds to each municipality affected by the obligation of paying in advance the balance of the debt incurred in the bond issue for the transaction of the sale of tax debts, pursuant to the provisions of Section 1 of this Act.
Section 3.-During the first twenty (20) work days following the date of approval of the loan by the MRCC Governing Board, the MRCC Executive Director shall notify the Mayor of each municipality the proportion of the loan of the corresponding proportion to be paid, pursuant to the provisions of Section 2. The Mayor and the Municipal Assembly of each municipality thus affected shall have twenty (20) days as of the date of receipt of the notice issued by the MRCC Executive Director, to accept and approve by Resolution its participation in the financing authorized by this Act. Upon approval of the financing, the Mayor shall formalize the financing according to the terms and conditions authorized by this Act. In those cases in which the Mayor and the Municipal Assembly do not accept to participate in the loan, the obligations of the municipality incurred as a result of the sale of delinquent debts.
Section 4.-The MRCC Governing Board is hereby authorized to negotiate and formalize the loan contract with the Bank authorized by this Act on those grounds relative to Act No. 21 of June 26, 1997, which
authorized the sale by the MRCC of tax debts and Act No. 42 of January 26, 2000, under the following terms and conditions:
(a) The loan term shall not exceed thirty (30) years, divided as stated in Section 1 of this Act; provided, that said term could be granted for a lesser period if the fiscal situation of the municipalities so allow or in those cases in which the eligible municipalities with sufficient payment capacity so request.
(b) The payments of principal and interest for amortizing the loan, pursuant to the provided structures, up to its final payment, are the responsibility of the affected municipalities that have agreed to avail themselves to the loan provided for in this Act. Said payments shall be proportional to the amount of the loan corresponding to each municipality.
(c) The interest rate yielded by the loan shall be determined by the Bank pursuant to its fiscal criteria and attune with this Act.
(d) The debenture to be subscribed shall be formalized between the MRCC Executive Director and the President of the Government Development Bank, with the attachments whose formalization is necessary, to evince the debt financed, accepted and approve by each municipality.
Section 5.-The MRCC Governing Board is hereby empowered, through its Executive Director, to negotiate a loan contract with a financing entity, authorized under the following terms and conditions:
(a) The loan's principal shall not exceed the sum of sixty-nine (69) dollars and its yield shall be used to pay for the balance of the debt contracted by the MRCC and to return to the
municipalities any amounts unduly withheld during the last three and a half ( $31 / 2$ ).
(b) The loan shall have a minimum term of ten (10) years.
(c) The payments of principal and interest to amortize the loan up to its final payment are the responsibility of the municipalities. The portion corresponding each municipality in terms of payment shall be determined by the MRCC Executive Director by following the basic criteria governing the loan in effect.
(d) The interest rate to be yielded by the loan shall be determined by the financial entity, subject to its fiscal criteria and pursuant to this Act.
(e) The debenture to be subscribed shall be formalized between the MRCC Executive Director and a duly authorized official of the financial entity with any attachments whose formalization is necessary to evince the financed, accepted and approved debt.
Section 6.-The guarantee of payment contracted by the MRCC pursuant to what is established above shall constitute a legal obligation of this body with the Bank and shall be guaranteed with the payment flow agreed to with the corresponding municipalities. Thus shall it be recorded on the financing documents to be formalized in order for the loan to be granted.
Section 7.-Payments for the loan to be granted under this Act shall not be taken into account when calculating the five (5)-percent maximum for servicing of debt established in subsection
(c) of Section 16 of Act No. 64 of July 3, 1996, as amended, known as the "Puerto Rico Municipal Financing
Act." In the event that a municipality that avails itself of the terms of this Act has also obtained a loan under the terms of Act No. 42 of January 26, 2000, the latter may be restructured along with the current debt at the term provided for in subsection
(a) of Section 4.
Section 8.-The MRCC Executive Director is hereby authorized to deduct from the monthly transfers to the corresponding municipalities, an amount equal to the payment of principal and interest of the debt authorized by this Act and to remit it to the Government Development Bank. He/she is also authorized to withhold from the monthly transfers the amount owed resulting from the sale of delinquent debts to those municipalities that do not avail themselves of the financing provided for in this Act.
Section 9.-The Government Development Bank is hereby authorized to negotiate, sell, post as guarantee or pledge the loan authorized by this Act.
Section 10.-This Act shall begin to take effect immediately after its approval.
CERTIFICATION
I hereby certify to the Secretary of State that the following Act No. 146 (H.B. 1527) of the $1^{ ext {st }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to authorize the Municipal Revenue Collection Center (MRCC) to obtain a loan to pay in advance the bond issue made for the transaction of the sale of the tax debts pending collection by the municipalities, and to provide so that, pursuant to certain order of payment, the point forty-eight (.48) percent that results from the increase in the General Fund subsidy to the municipalities, as provided in Section 16 of Act No. 80 of August 30, 1991, as amended, plus the recoveries of the debts sold, be also appropriated to reduce the balance; to authorize the payment of any deficiency with municipal operational funds; and to provide that those municipalities that have obtained a loan under Act No. 42 of January 26, 2000, and which also avail themselves of the provisions of this Act, shall have the option to extend their term pursuant to what is established in this Act, etc., has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $20^{ ext {th }}$ of January of 2005.
Marialma Alfau-Alemán Acting Director