Esta ley crea el Fideicomiso Perpetuo de Comunidades Especiales, adscrito al Banco Gubernamental de Fomento para Puerto Rico. Su propósito es promover el desarrollo integral de las comunidades especiales de la Isla, abordando problemas socioeconómicos, psicológicos y de salud. La ley establece la estructura del fideicomiso, sus funciones, poderes y facultades, incluyendo la capacidad de recibir fondos, otorgar financiamiento para proyectos de infraestructura, vivienda y desarrollo económico, y emitir bonos. También se detallan aspectos como la composición de la Junta de Directores, la exención contributiva del fideicomiso y la presentación de informes anuales.
To create the Special Communities Perpetual Trust; to attach said Trust to the Government Development Bank for Puerto Rico; establish its purpose, functions, powers and faculties; and for other purposes.
The Commonwealth of Puerto Rico is interested in promoting conditions that would enable it to attend to the serious problem of disenfranchisement that affects the special communities of the Island. The isolation and solitude in which these communities exist has serious socioeconomic, psychological and health concerns.
Though a great deal has been achieved for many, we cannot ignore the fact that even now at the beginning of the $21^{ ext {st }}$ century two Puerto Ricos coexist side by side and that we live in two distinct and separate realities. A Puerto Rico which has been left by the wayside, very often in a state of isolation, where its people live in unacceptable conditions. In developed countries such as ours, and even in the United States, great inequalities exist in the rural areas and cities which are socially and economically questionable. It is truly disturbing that in countries with very high consumerism there are still disenfranchised communities under conditions of extreme poverty.
Poverty means to feel helpless in a world that offers apparently endless opportunities to some and are absolutely denied to others. In view of these inequities the citizens have the responsibility of organizing and working to achieving a single Puerto Rico. A Puerto Rico where the opportunities and hopes for a better future may be shared by all our citizens. Our Special Communities hope to achieve success through teamwork, that is, through the joint efforts of the Government and the private sector, as graphically demonstrated by the miraculous transformation of the Cantera Peninsula.
As an additional measure of the present Administration to help solve this problem a substantial investment shall be made to improve the infrastructure of the Special Communities through the construction and rehabilitation of dwellings, aqueducts and sewers, paving of streets and sidewalks, recreational and electric power facilities as well as to foster initiatives and efforts for the economic self sufficiency of the residents of said communities, among others. This program shall be developed and implemented in phases.
To such ends, the present Administration passed the Act for the Integral Development of the Special Communities of Puerto Rico, Act No. 1 of March 1, 2001, as amended, and creates, through the present legislation, the "Special Communities Perpetual Trust", which shall complement the purposes and means provided by the first legislation.
Some 200 Special Communities shall feel the impact of an investment of over $560 million for the rehabilitation and construction of 20,000 housing units, $130 million for new works and facilities, and another $310 million for the remaining 486 communities, for a total of $1,000 million for additional projects and works for all the Special Communities of Puerto Rico. This investment will allow the addition of rooms, installation of
electric power and water facilities, and drains, gutters, parks, roads and plazas will be build. Trees shall be planted and the communities shall be located pleasant surroundings for their residents. The Trust shall also allow the financing of economic development activities and other local projects that generate jobs.
The initial contributions for the Trust shall proceed from the Government Development Bank for Puerto Rico and the Treasury of the Commonwealth of Puerto Rico. The Trust may be initially and from time to time be nourished through Federal funds and reinvestments, bank investments and contributions (through loans, investments or services) that qualify under the Community Reinvestment Act of 1977, through private contributions and investments and contributions from the Legislature. The Government Development Bank for Puerto Rico, as fiscal agent and financial advisor of the Government of Puerto Rico, shall be the depository of the Trust funds. This same legislation also creates a permanent financing mechanism for the development, transformation and improvement of the Special Communities.
It is through initiative such as this that we, the people of Puerto Rico, deal with overwhelming poverty. It is thus that we hope to achieve greater justice and equal opportunities for our citizens.
Section 1.-Title of the Act.- This Act shall be known as the "Special Communities Perpetual Trust Act".
Section 2.-Creation of the Trust.- An irrevocable and permanent Public Trust Fund is hereby created to be known as the "Special Communities Perpetual Trust", and a nonprofit public corporate body hereby constituted irrevocably and in perpetuity with independent legal capacity. The Trust shall be attached to the Government Development Bank for Puerto Rico. The Trust funds shall be deposited and kept in the Bank, separately and independent from other public funds in custody of the Bank. The Trust funds shall be used for the purposes specified in Section 9 of this Act.
Section 3.-Definitions.- The following terms, wherever they are used in this Act, shall have the meaning stated below, except when the context clearly indicates otherwise:
(a) "Authority" - the Housing Financing Authority.
(b) "Bank" - the Government Development Bank for Puerto Rico, created by virtue of Act No. 17 of September 23, 1948, as amended.
(c) "Special Communities" - the special communities as identified under provisions of the Special Communities Act.
(d) "Community Reinvestment Act of 1977" - Public Law 95-128, as amended, approved by the Congress of the United States on October 12, 1977.
(e) "Executive Director" - the Executive Director of the Trust.
(f) "Benefited Entity" - natural or juridical person, including the Government, to whom funds are delegated or is contracted for services of any type pursuant to the provisions of this Act and the regulations adopted thereunder.
(g) "Trust" - the Special Communities Perpetual Trust created by this Act.
(h) "Government" - the Commonwealth of Puerto Rico, including all its subdivisions, public corporations and municipalities.
(i) "Board" or "Board of Directors" - the Board of Directors of the Trust.
(j) "Special Communities Act" - the Act for the Integral Development of the Special Communities of Puerto Rico, Act No. 1 of March 1, 2001, as amended.
(k) "Person" - any natural or juridical person.
(l) "Trust Projects" - those initiatives of the Government or of any other Benefited Entity which the Board of Director determines that it promotes the economic and social development of the Special Communities and that qualify under to this Act.
Section 4.-Board of Directors of the Trust.- The powers of the Trust shall be exercised by a Board of Directors which shall be constituted by seven (7) members; to wit, the Secretary of Housing, the Secretary of Transportation and Public Works, the General Coordinator for the Socioeconomic Financing and Self Sufficiency of the Special Communities, one (1) Mayor, one (1) Community Leader resident of a special community who is not a member of the Advisory Council for the Development of the Special Communities and two (2) private citizens representing the public interest. The Governor shall appoint the Chairperson of the Board from among its members. The Mayor and the Community Leader shall be designated by the Governor for a term of four (4) years and until their successors are appointed. The two (2) private citizens who represent the public interest on the Board shall be appointed by the Governor for staggered terms of five (5) and six (6) years each, until their successors are appointed. Said citizens may be removed from office by the Governor at
any time. In the event any member of the Board should resign, his or her successor shall be designated for the remaining period of the original term of the outgoing director. The members of the Board of Directors shall not receive any compensation whatsoever for their services as such; however, those who are not public officials shall be entitled to receive the basic per diem established for the members of the Legislature, pursuant to Act No. 97 of June 19, 1968, as amended.
Section 5.-Quorum.- A majority of the members of the Board shall constitute quorum for all purposes and the agreements shall be adopted with the affirmative vote of the majority of those present. No absence or vacancy of any of the members of the Board shall present the latter, once quorum is achieved, from exercising all its rights and performing all its duties. Except when the regulations of the Trust so prohibits or restricts it, any necessary or permitted action during any meeting of the Board or of any committee designated by the Board pursuant to the faculties this Act confers to it shall be authorized without the need of a meeting, provided all the members of the Board or the committee of the Board, as the case may be, give their written consent to said action. In that case, the written document shall be included in the minutes of the Board or the committee of the Board, as the case may be. Except when the regulations of the Trust provide otherwise, the members of the Board or of any committee of the Board, may participate in any meeting of the Board of any committee of the latter, respectively, through telephone conference or other means of communication through which all persons participating in the meeting may be heard simultaneously. The participation of any member of the Board or of any committee thereof in the form described, above shall constitute attendance to said meeting. Provided, that
said meeting shall be subject to a call issued at least twenty-four hours prior to said meeting.
Section 6.-Rights, Powers, Faculties and Functions of the Board.- The Board of Directors shall have the following rights, powers, faculties and functions:
(a) Act as the governing body of the Trust.
(b) Draft, adopt, amend and repeal operating rules and regulations to govern its activities and those of the Trust.
(c) Determine the eligibility of the proponents of the projects to be financed with the Trust funds.
(d) Authorize the accounting and disbursement of the funds and other administrative operations of the Trust.
(e) Implement the public policy and the objectives of the Trust in tune with this Act.
(f) Determine the programmatic areas and priorities of the Trust and approve the working plans drafted accordingly.
(g) Appoint an Executive Director, fix his/her remuneration and delegate on him or her the responsibilities deemed to be necessary and proper in order to achieve the purposes established in this Act.
(h) Determine the powers, duties and obligations of the Executive Director of the Trust in harmony with the precepts of this Act.
(i) Delegate on any committee of the Board or on the Executive Director, any of the powers and prerogatives of the Board under the provisions of this Act.
(j) Delegate on the Authority and/or on any other pertinent Government Agency, the execution of the measures, plans and projects of the Trust, etc., approved by the Board of Directors pursuant to this Act.
(k) Exercise all powers conferred and those that are incidental, necessary or convenient to attain the purposes of this Act.
Section 7.-Employees.- The human resources that will support the Trust shall be provided by the Bank and/or its subsidiary, the Authority. Bank or Authority employees may be temporarily assigned to the Trust.
Section 8.-Civil Liability.- The Board, its members, its officials, agents and employees of the Trust shall not incur any civil liability for any action taken in good faith in the performance of their duties and responsibilities pursuant to the provisions of this Act. The Commonwealth of Puerto Rico shall provide legal counsel and assume the payment of any claim or judgment that may be exigible on the Board or any of its members, officials, agents and employees in their personal or official capacity, who may be sued for damages in the performance of their duties when the cause of the action is based on negligence, or alleged violations of the civil rights of the defendant due to acts or omissions incurred in good faith during the course of their work and within the frame of their functions.
Section 9.-Powers of the Trust.- The Trust shall have and may exercise all the rights and powers that are necessary and convenient to achieve its purposes, including the following:
(a) Have perpetual continuity as a corporation.
(b) Adopt an official seal and alter the same at its convenience.
(c) Sue and be sued under its own name, and charge and be charged.
(d) Draft, adopt, amend and repeal statutes for the administration of its affairs and those standards, rules and regulations that may be necessary or pertinent to exercise and carry out its functions, powers and duties.
(e) Acquire real and movable property by any legitimate means, including concessions, gifts, purchases, legacies or donations and to possess and exercise all property rights over the same, as well as to dispose of said property.
(f) Obtain monies through loans and issue bonds of the Trust in order to provide funds to pay the cost of acquiring any property for the Trust or to achieve any of its purposes or in order to refinance, pay or redeem any of its outstanding bonds or obligations and may to guarantee the payment of its bonds and all and any of its obligations through assignment, pignoration, or mortgaging or any other lien on all or any of its contracts, revenues, income or properties.
(g) Grant financing, through the delegation of funds, service contracts or donations of any other kind to individual or juridical persons that provide handling, support and technical assistance for the development of works and projects in the Special Communities, as established through regulations.
(h) Provide financial or any other kind of assistance to Government agencies and instrumentalities in order to foster and pay for the development of the Special Communities infrastructure.
(i) Grant personal or mortgage secured loans to the residents of the Special Communities for the purchase, construction or rehabilitation of the home of said residents of the Special Communities, provided said loans are evinced by notes or certified documents which acknowledge said debt.
(j) Grant the residents of the Special Communities, personal loans or mortgage-secured loans for them to develop economic projects located in said Special Communities, provided said loans are backed by notes or certified documents which acknowledge said debt. An economic project shall be understood to be any self executive financial initiative.
(k) Receive managerial, technical and administrative assistance and contract for such purpose. (1) Invest its funds, as authorized through a resolution of the Board and subject to any restriction and limitation pursuant to Act No. 113 of August 3, 1995, as amended.
(m) Negotiate and execute, with any person, including any Federal or Commonwealth government agency, any type of contract and all those instruments and agreements necessary or convenient to exercise the powers and functions conferred to the Trust by this Act.
(n) Exercise all powers inherent to the functions, prerogatives and responsibilities conferred by this Act, exercise those other powers conferred by any other applicable law, as well as take any action or carry out any activity that is necessary or convenient for its purposes.
Section 10.-Capitalization of the Trust; Trust Fund; Investment of Funds.-
(a) The trust shall be initially nourished from a contribution of five hundred million $(500,000,000)$ dollars from the Bank, and contributions of the Commonwealth Treasury of the Commonwealth of Puerto Rico, authorized by law.
(b) The Trust shall also be nourished, from time to time, by
(i) investments, reinvestments and contributions from private banking institutions, including mortgage banks, whether through loans, investments,
or services, and in the case of commercial banks, from those loans, investments or services that are granted with priority in compliance with the Community Reinvestment Act, pursuant to the requirements and authorizations that said Act provides; (ii) contributions and any other type of assistance from the Federal government for which it qualifies; (iii) contributions and investments from private or public, local, national or international persons and entities; (iv) contributions from the Legislature. Provided, that the administrative and operating expenses shall be defrayed from the resources of the Trust. In this regard, the Board of Directors of the Trust shall approve, by a majority of the votes, the operating budget of the Trust prior to the beginning of each fiscal year.
(c) A Fund in public trust, irrevocable and permanent, which shall be known as the Special Communities Trust Fund, is hereby created within and under the control and custody of the Bank
(d) The Bank, with the approval of the Board of Directors, may create any accounts within said Fund that are deemed necessary to achieve the purposes of this Act.
(e) All contributions received by the Trust and the total product of the investments made with the monies deposited in the Trust Fund shall be deposited to the credit of the Trust Fund, in those accounts within the Trust Fund to be determined by the Board of Directors.
(f) The funds deposited in the Trust Fund may be invested in any obligation or instrument approved by the Bank pursuant to Act No. 113 of August 3, 1995, as amended. The Bank shall be vigilant that the investments authorized by this Act produce the maximum yield that the market conditions allow, while at the same time protecting the principal
invested, and shall render a report of its activities to the Board of Directors each year.
(g) The disbursements of the Trust funds shall be made pursuant to this Act and to the regulations and budgets approved by the Board of Directors of the Trust.
Section 11.-Financing Powers.-
(a) The Trust may negotiate and execute with any person, contracts, notes in evidence of debt, and all those other instruments, agreements and obligations of any nature, that are necessary or convenient to exercise the powers and functions conferred to the Trust. The Trust may also mortgage or pledge all or part of the income it receives.
(b) The Trust is hereby authorized to issue bonds from time to time for those amounts that are needed to provide sufficient funds for any of its purposes.
(c) The bonds issued by the Trust may be made payable from, and may be secured through the pledge or constitution of another lien on the totality or part of the gross or net income of the Trust which may include, subject to the provisions of Section 8 of Article VI of the Constitution of the Commonwealth of Puerto Rico, those funds that are made available to the Trust by the Commonwealth of Puerto Rico, all as provided in the Trust contract or the resolution under which the bonds are issued. The income thus encumbered, including those which the Trust receives subsequently, shall be immediately subject to said lien without the need of their having to be physically delivered or of any other act, and said lien shall be valid and obligatory and shall prevail against any third party that may have any kind of claim of any type on damages, breach of contract or any other reason against the Trust, regardless of whether said third party has not been notified to such
request. Neither the Trust contract or the resolution, nor any collateral contract through which the rights of the Trust on any income may be pledged or ceded, shall have to be presented or registered to perfect the lien thereupon against any third party.
(d) The resolution or resolutions authorizing the issue of bonds or the Trust contract guaranteeing the same may contain provisions, which would be part of the contract with the holders of the bonds issued under said resolution or resolutions or under said Trust contract, regarding: the disposition of the totality of the gross or net income and present and future income of the Trust; the guarantee and creation of a lien on the income and assets of the Trust; the creation and maintenance of redemption and reserve funds; the limitations regarding the purposes for which the product of said bonds or bonds to be issued in the future may be used; the limitations as to the issue of additional bonds; limitations as to the introduction of amendments or supplements to the resolution or resolutions or to the Trust contract; the procedure through which the terms of any resolution authorizing bonds, or any other contract with the bond holders may be amended or repealed; and as to the total amount of the bonds whose holders must give their consent to that effect, as well as the manner that said consent must be given, the class and amount of the insurance which the Trust must maintain on its properties and the use and disposition of the insurance money; the commitment to not pledge the revenues of the Trust, in whole or in part according to the right it may then have as well as the right that may arise in the future; the granting of rights, faculties and privileges and the imposition of obligations and liabilities to the trustee under any trust contract or resolution; the cases of non-compliance and the terms and conditions whereby any or all the bonds may mature or may be declared as due before
their maturity date; and regarding the terms and conditions whereby said declaration and its consequences may be waived; the rights, powers, obligations and liabilities that may arise in the event of non-compliance of any obligation under said resolution or resolutions or under said Trust contract; any rights, powers or privileges conferred on the bond holders as security thereof in order to increase the marketability of the bonds; and other matters not contrary to the provisions of this Act, that may be necessary or convenient to secure the bonds or that tend to make the bonds more negotiable.
(e) The bonds may be: authorized through a resolution or resolutions of the Board and may be in series; bear the date or dates authorized by the Board; come due in an installment or installments that do not exceed fifty (50) years from their respective dates of issue; accrue interest at the rate or rates that do not exceed the maximum rate then permitted by law; be of the denomination or denominations authorized by the Board, and as bonds with coupons or registered; have registration or conversion privileges; be payable through the means of payment and in the place or places and; be granted in the manner authorized by the Board; be subject to the terms of redemption, with or without premium; be declared due or become due on the date prior to their due date; provide for the replacement of mutilated, destroyed, stolen or lost bonds; be authenticated in such a manner once the conditions have been met, and contain all other terms and stipulations provided by said resolution or resolutions approved by the Board. The bonds may be sold publicly or privately at the price or prices determined by the Trust; provided, that convertible bonds may be exchanged for Trust bonds in circulation according to the terms the Board may deem beneficial to the best interests of the Trust. Their form and text
notwithstanding, and the lack of an express statement on the bond indicating that it is not negotiable, all Trust bonds shall be and shall be understood to be at all times negotiable documents for all purposes.
(f) At the discretion of the Trust any bonds issued under the provisions of this Act may be secured by a trust contract executed by and between the Trust and any bank or trust company described in the next paragraph, which may be a bank or trust company in or outside of the Commonwealth of Puerto Rico. Not withstanding any provision of law to the contrary, said trust contract shall not have to be executed through a public deed for it to constitute a valid trust under the laws of the Commonwealth of Puerto Rico. The trust contract may contain all those provisions deemed by the Trust to be reasonable and appropriate for the security of the bond holders.
(g) It shall be legal for any bank or trust company incorporated under the laws of the Commonwealth of Puerto Rico, the United States of America or any state of the United States of America to act as depositary of the product of the bonds, revenues or other moneys to grant those indemnity bonds or pledge those securities that are required by the Trust.
(h) The Trust bonds that bear the signatures of the Trust officials in office on the date these were signed shall be valid and shall constitute unavoidable obligations even when prior to the delivery and payment of said bonds any or all the officials whose signatures or facsimile thereof appear on said bonds, have ceased to hold office as officials of the Trust. The validity of the authorization and issue of bonds shall not depend or be affected in any way by any procedure related to the construction, acquisition, extension or improvement of the installations for which the bonds are issued or by any contract executed in relation to said facilities. Any resolution authorizing
the issue of bonds may provide for said bonds to contain a statement indicating that they are issued pursuant to this Act and any bond containing that statement, authorized by such a resolution, shall be conclusively deemed valid and as issued according to the provisions of this Act.
(i) Provisional or interim bonds, receipts or certificates may be issued in the form and with the provisions provided in the resolution or resolutions authorizing said bonds, while the definitive bonds are granted and delivered.
(j) Neither the members of the Board nor any person who grants the bonds shall be personally liable for the same.
(k) The Trust is hereby authorized to purchase, with any funds available to such effect, any circulating bonds issued or assumed by the Trust, at a price that does not exceed the total amount of the principal or their current redemption value plus the interest accrued, or at those prices that have been negotiated and contracted as established in the agreement for the purchase of the bonds. (1) The Trust is hereby authorized to issue refinancing Trust bonds for the purpose of refinancing those bonds that are in force and effect and in circulation at that time and that have been issued under the provisions of this chapter of this Act, including the payment of any redemption premium with regard to the same and any interest accrued or that may be accrued on the date of redemption or maturity of said Bonds, should the Board deem it advisable, for any of the purposes for which the Board may issue bonds. The issue of said bonds, their maturity and other details regarding the same, the rights of the bond holders, and the rights, duties and obligations of the Trust with regard to the same shall be governed by the provisions of this Act
that are related to the issue of bonds inasmuch as said provisions may be applicable.
(m) The refinancing bonds issued under this Section may be sold or exchanged for bonds in force and effect issued under this Act and if sold, the product of said sale may be destined, in addition to any authorized purpose, to purchase, redemption or payment of said bonds in force and effect and in circulation and may be invested pending said application. The refinancing bonds may be issued, at the discretion of the Trust, at any time on or before their due date or dates or on the date selected for the redemption of the bonds that are being refinanced.
(n) The bonds and other obligations issued by the Trust shall not constitute a debt of the Commonwealth of Puerto Rico nor of any of its municipalities or other political subdivisions, and neither the Commonwealth of Puerto Rico nor any of its municipalities or other political subdivisions shall be liable for the same nor shall the bonds or other obligations be payable from funds other than those of the Trust or with funds specifically appropriated to the Trust. The Trust shall not at any time nor in any manner have any power whatsoever to pledge the credit or to levy taxes of the Commonwealth of Puerto Rico or of any of its political subdivisions.
(o) The Trust bonds shall constitute lawful investments and may be accepted as security for any trust fund, be it special or public, and whose investment or deposit is under the authority or the control of the Government of the Commonwealth of Puerto Rico or of any official or officials thereof.
Section 12.-Tax Exemption.-
(a) It is hereby resolved and declared that the purposes for which the Trust is created and for which it shall exercise its powers are public purposes for the benefit of the people of Puerto Rico and that the exercise of
the powers conferred under this Act constitute compliance of essential government functions. The Trust shall be exclusively exempted from the payment of all taxes, fees, charges or licensed imposed by the Government of Puerto Rico or any of its municipalities.
Section 13.-Exclusion.- The projects undertaken by the Trust in the Special Communities shall be exempted from having to comply with the requirements of Act No. 9 of June 18, 1970, known as the "Environmental Public Policy Act", as amended, since they provide for the rehabilitation, replacement, reconstruction and construction of housing and public works and/or the already established service infrastructure whereby the environment and the natural resources have already been impacted. They are also exempted since the proposed projects shall not only improve the quality of life of the residents of these communities but shall also eliminate pollution by sewerage, waste in the bodies of water, mosquito breeding grounds, surface water pollution and other conditions harmful to natural resources.
No housing replacement or construction project, nor any public works, or service infrastructure projects located outside of the already existing special community or inside any area within the community where the environment has not been impacted, shall participate of said exemption.
Section 14.-Annual Report.- Every year, within 120 days following the close of the fiscal year, the Board of Directors of the Trust shall submit a report to the Governor as well as to the President and the Speaker of both legislative bodies, who shall decide to which committee or committees said report shall be forwarded. Said report shall include the following:
(a) A financial statement audited by a well-known firm and a full report of the activities of the Trust for the preceding fiscal year.
(b) A full and detailed description of all its contracts and transactions during the fiscal year corresponding to the report.
(c) Complete information on the present condition and progress of its financings and activities up to the date of its last report.
Section 15.-Severability.- Should any provision, word, sentence, subsection or section of this Act is challenged for any reason before a court and declared unconstitutional or null, said judgment shall not affect, impair or invalidate the remaining provisions of this Act.
Section 16.-Effectiveness.- This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 271 (S.B. 1707) of the $4^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to create the Special Communities Perpetual Trust; to attach said Trust to the Government Development Bank for Puerto Rico; establish its purpose, functions, powers and faculties; and for other purposes, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $4^{ ext {th }}$ of March of 2003.
Elba Rosa Rodríguez-Fuentes Director