(g) The term "System of the Utilization of the Water Resources" shall mean all the works and property forming the water resources development and electric system belonging to The People of Puerto Rico, constructed or acquired, or in process of being constructed or acquired, under the provisions of Act No. 60, approved July 28, 1925, Joint Resolution No. 36, approved April 29, 1927, Act No. 36, approved April 25, 1930, Act No. 93, approved May 6, 1938, Act No. 7, approved April 6, 1931, Joint Resolution No. 5, approved April 8, 1931, Act No. 8, approved July 12, 1932, Joint Resolution No. 7, approved March 29, 1935, Joint Resolution No. 27, approved April 17, 1935, Act No. 41, approved August 6, 1935, Act No. 1, approved September 22, 1936, Act No. 94, approved May 6, 1938, and Act No. 21, approved June 17, 1939, all of such Acts and Joint Resolutions being acts and joint resolutions of the Legislature of Puerto Rico. (h) The term "Utilization of the Water Resources" shall mean the organization established pursuant to law by the Commissioner of the Interior of Puerto Rico for the purpose of handling the activities provided for by Act No. 60, approved July 28, 1925, Joint Resolution No. 36, approved April 29, 1927, Act No. 36, approved April 25, 1930, Act No. 93, approved May 6, 1938, under which organization there were also placed by the Commissioner of the Interior of Puerto Rico, in accordance with the provisions of Act No. 58, approved April 30, 1928, all matters relative to the operation, including surveys and technical direction of new constructions, extensions and improvements, of the "Hydroelectric System of the Puerto Rico Irrigation Service, South Coast." (i) The term "Hydro-electric System of the Puerto Rico Irrigation Service, South Coast," shall mean the hydro-electric works and transmission and distribution lines and all facilities forming the electric system constructed or acquired pursuant to the provisions of the Public Irrigation Law, approved September 18, 1908, and laws amendatory thereof or supplementary thereto. (j) Words importing the singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms, partnerships of all kinds and corporations. CREATION AND COMPOSITION OF THE AUTHORITY Section 3.-The Governor of Puerto Rico, the Commissioner of the Interior of Puerto Rico, and the Commissioner of Agriculture and Commerce of Puerto Rico are hereby created a body corporate and politic constituting a public corporation and governmental instrumentality or agency of The People of Puerto Rico by the name of the "Puerto Rico Water Resources Authority." Said members of the Authority shall be entitled to no compensation for their services as members but shall be entitled to reimbursement for such necessary travel and other expenses in connection with the performance of their duties as may be authorized or approved by the Board. GOVERNING BODY Section 4.-(a) The powers of the Authority shall be exercised by a governing body consisting of the members of the Authority acting as a board. The Governor shall be the chairman of the Board and the Commissioner of the Interior shall be vice chairman. Within sixty days after this Act becomes effective, the Board shall meet and organize and shall at that time appoint an executive director of the Authority and a secretary, neither of whom shall be a member of the Authority. The executive director shall be authorized to attend all meetings of the Board but shall not be entitled to vote. (b) Two members shall constitute a quorum of the Board for the purpose of organizing the Authority and conducting the business thereof and for all other purposes, and all action shall be taken only by a vote of a majority of the members of the Authority, unless in any case the bylaws require a larger number. The bylaws of the Authority may provide for the delegation to its executive director or its other officers, agents, or employees of such of the administrative powers and duties of the Authority as the Board may deem proper. EXECUTIVE DIRECTOR Section 5.-The executive director shall be appointed by the Board exclusively upon the basis of merit as determined by technical training, skill, experience, and other qualifications best suited to carrying out the purposes of the Authority. The executive director shall be removable by the Board but only for cause and after he has been given notice and an opportunity to be heard. The executive director may be appointed and his salary may be determined and changed by the Board without regard to the rules and classifications of the Puerto Rico Civil Service Commission, and he shall be entitled to reimbursement for such necessary travel and other expenses in connection with the performance of his official duties as may be authorized or approved by the Board." POWERS OF THE AUTHORITY Section 6.-The Authority is created for the purpose of conserving, developing, and utilizing, and aiding in the conservation, development, and utilization of the water resources of Puerto Rico, and for the purpose of making available to The People of Puerto Rico, in the widest economic manner, the benefits thereof; and the Authority is granted and shall have and may exercise all rights and powers necessary or convenient for the carrying out of the aforesaid purposes, including, but without limiting the generality of the foregoing, the following: (a) To have perpetual existence as a corporation; (b) To adopt, alter, and use a corporate seal which shall be judicially noticed; (c) To prescribe, adopt, amend, and repeal bylaws governing the manner in which its general business may by conducted and the powers and duties granted to, and imposed upon, it by law may be exercised and performed; (d) To have complete control and supervision of any undertaking constructed or acquired by it, and to prescribe, adopt, amend, and repeal such rules and regulations as may be necessary or proper for the exercise and performance of its powers and duties, or to govern the rendering of service, or sale or exchange of water or electric energy; (e) To sue and be sued, implead and be impleaded, complain and defend in all courts; (f) To make contracts and to execute all instruments necessary or convenient in the exercise of any of its powers; (g) To prepare, or cause to be prepared, plans, designs, and estimates of costs for the construction, reconstruction, extension, improvement, enlargement, or repair of any undertaking or any part or parts thereof, and from time to time to modify such plans, designs, or estimates; (h) To acquire by purchase, lease, devise, gift, or by the exercise of the power of eminent domain in the manner provided by the laws of Puerto Rico, and to hold, maintain, and operate any undertaking or any part or parts thereof; (1) To acquire by purchase or otherwise, produce, impound, develop, manufacture, treat, hold, conserve, use, transmit, distribute, exchange, sell and otherwise dispose of, water or electric energy; Provided, That in disposing at wholesale of electric energy the Authority shall give preference and priority as to supply to public bodies and cooperatives; (j) To purchase, lease as lesssee, or otherwise acquire and to hold and use any property, real, personal, or mixed, tangible or intangible, or any interest therein, deemed by it to be necessary and desirable for carrying out the purposes of the Authority, and (subject to the limitations contained in this Act) to lease as lessor, or exchange, any property or interest therein at any time acquired by it; (k) To construct or reconstruct any undertaking or any part or parts thereof, and any additions, improvements, and extensions to any undertaking of the Authority by contract or contracts, or under, through, or by means of its own officers, agents, and employees; (1) To determine, fix, alter, charge, and collect reasonable rates, fees, rentals, and other charges for the use of the facilities of the Authority, or for the services, electric energy, or other commodities sold, rendered, or furnished by it, which shall be sufficient for the payment of the expenses of the Authority incurred in the conservation, development, improvement, extension, repair, maintenance, and operation of its facilities and properties, for the payment of the principal of and interest on its bonds, and for fulfilling the terms and provisions of such covenants as may be made with or for the benefit of the purchasers or holders of any bonds of the Authority; Provided, That, in fixing rates, fees, rentals, and other charges for electric energy, the Authority shall have in view the encouragement of the widest economically possible diversified use of electric energy; (m) To appoint such officers, agents, and employees and vest them with such powers and duties, and to fix, change, and pay such compensation for their services as the Board may determine; (n) To borrow money, make and issue bonds of the Authority for any of its corporate purposes, and to secure payment of its bonds and of any and all other obligations by pledge of or lien on all or any of its contracts, revenues, and income only; (o) To make and issue bonds for the purpose of funding, refunding, paying, or discharging any of its outstanding or assumed bonds or obligations, or any bonds or obligations the principal or interest of which is payable in whole or in part from its revenues; (p) To accept grants from, and enter into contracts, leases, agreements, or other transactions with, any Federal agency, the People of Puerto Rico, or political subdivisions of The People of Puerto Rico, and to expend the proceeds of any such grants for any corporate purposes; (q) To sell or otherwise dispose of any property of any kind, real, personal, or mixed, or any interest therein, as in the judgment of the Board is no longer necessary for carrying on the business of the Authority or for effectuating the purposes of this Act; (r) To enter on any lands, waters, or premises, after notifying the owners or holders thereof, or their representatives, for the purpose of making surveys, soundings, or examinations; (s) To do all acts or things necessary or convenient to carry out the powers granted to it by this Act or by any other Act of the Legislature of Puerto Rico, or by any Act of the Congress of the United States; Provided, however, That the authority shall have no power at any time or in any manner to pledge the credit or taxing power of The People of Puerto Rico or any of its political subdivisions, nor shall The People of Puerto Rico or any of its political subdivisions be liable for the payment of the principal of or interest on any bonds issued by the Authority. OFFICERS AND EMPLOYEES Section 7.-(a) Officers and employees of any board, commission, agency, or department of The People of Puerto Rico shall be eligible for transfer and appointment by the Authority without examination, to analogous offices and positions in the Authority. Any such officers and employees transferred to the Authority, who are members or beneficiaries of any existing pension or retirement system, shall continue to have after transfer the rights, privileges, obligations, and status with respect to such system or systems, as are now prescribed by law; and all such employees, who have been appointed to positions in the service of The People of Puerto Rico under the rules and classifications of the Puerto Rico Civil Service Commission, shall have the same status with respect thereto after transfer to the Authority as they had under their original appointments. The appointment and promotion of all employees of the Authority shall be made in accordance with the provisions of the Puerto Rico civil-service laws, and all laws governing the retirement and pensioning of Insular Government employees shall apply to employees of the Authority; Provided, That when the Authority deems it to be necessary in the interest of efficient administration, it may, without regard to the Puerto Rico civil-service laws, employ and fix and change the compensation of, such officers, attorneys, engineers, special assistants, special consultants, and experts as it may deem necessary to carry out the functions and duties of the Authority. (b) No person shall hold office as a member of the Board or as an officer or employee of the Authority who has a direct or indirect financial interest in any privately owned public utility in Puerto Rico engaged in the production, distribution, or sale of electric energy, or in any entity in or outside of Puerto Rico affiliated with or having any interest in any such public utility in Puerto Rico; or who has a direct or indirect financial interest in any industrial or commercial enterprise engaged in the production, distribution, or sale of any commodity or service of a character commercially opposed to, or in competition in Puerto Rico with, the production, distribution, or sale of electric energy produced by hydro-electric means: Provided, That where such incompatibility affects a member of the Board, the position of such member shall become vacant, and the vacancy so created shall be filled for the time that said incompatibility exists, by the appointment by the Governor of Puerto Rico of the head of any other department of the Insular Government. TRANSFER OF SYSTEM OF THE UTILIZATION OF THE WATER RESOURCES Section 8.-There is hereby transferred and delivered to the Authority all the property, real, personal, and mixed, tangible and intangible, of whatsoever kind and wheresoever situated, constituting the "System of the Utilization of the Water Resources" including all the funds, rights, franchises, privileges and assets of every character and description pertaining thereto, subject to all obligations and encumbrances, legal or equitable, with which the same may be burdened. 88301-44-8 TRANSFER OF RECORDS Section 9.-The transfers provided by Section 8 hereof shall take effect ninety (90) days after this Act becomes effective. As soon as possible thereafter, the Utilization of the Water Resources and the Department of the Interior of Puerto Rico shall transfer and deliver to the Authority all contracts, books, maps, plans, papers, books of account, and records of whatever description relating to the operation, maintenance, designing, or construction of any existing or contemplated undertaking, and the Authority is authorized to take possession for its uses and purposes of all such contracts, books, maps, plans, papers, books of account, and records. CONTINUITY OF OBLIGATIONS Section 10.-The Authority shall not take any action which shall have the effect of impairing the obligation of any contractual duties imposed upon or assumed by The People of Puerto Rico under authority of existing law. From and after the effective date of the transfers provided by Section 8 of this Act, the Authority shall assume all contracts and obligations of any department, agency, or instrumentality of The People of Puerto Rico which may have been entered into or incurred for, or in the name of, or on befalf of the Utilization of the Water Resources; and all such contracts and obligations shall inure to the benefit and credit of the Authority. APPROPRIATIONS AND ACTS CONFIRMED Section 11.-All appropriations by the Legislature of Puerto Rico, whether by Act or by joint resolution, to or for the benefit of the Utilization of the Water Resources or for the purpose of the development of the water resources of Puerto Rico, are hereby approved, confirmed, and ratified, and all sums so appropriated and all sums set aside or required to be set aside to or for the Utilization of the Water Resources or for the development of the water resources of Puerto Rico, except only appropriations to or for the benefit of public irrigation systems built and operated by the Insular Government pursuant to special laws and all sums set aside or required to be set aside for said systems, shall be available to the Authority for the purposes for which they were so appropriated and set aside. MONEYS AND ACCOUNTS OF AUTHORITY Section 12. All moneys of the Authority shall be paid into the Treasury of Puerto Rico and may be deposited in qualified depositories for funds of the Insular Government, but they shall be kept in a separate account or accounts and shall not be commingled with any other moneys in the Treasury. Moneys of the Authority shall be disbursed, in the manner and on warrants according to law, pursuant to requisitions of the Board or of such other person or persons as the Board may authorize to make such requisitions. The Auditor of Puerto Rico shall, upon consultation with the Board, establish the accounting system required for the proper control and statistical record of all expenses and income belonging to or managed or controlled by the Authority. The said Auditor shall require that the accounts of the Authority be kept in such manner as appropriately to segregate, insofar as advisable, the accounts in respect of the different classes of operations, projects, undertakings, and activities of the Authority, and he shall consider the advisability of requiring the Authority to adopt in whole or in part the system of accounts from time to time prescribed by the Federal Power Commission, or other Federal Authority, for public utilities owning properties and engaged in business similar to the properties and business of the Authority, and the necessity of keeping in accordance with such system of accounts, complete accounts of costs of generation, transmission, and distribution of electric energy and of the total cost of generation, transmission, and distribution facilities constructed or otherwise acquired by the Authority and a description of the major components of said costs, together with records of such other physical data and operating statistics as may be helpful in determining the actual cost and value of the services and practices, the methods, facilities, equipment, appliances, and the standards and sizes, types, location, and geographical and economic integration of the plants, and systems under the control of the Authority which may be best suited to promote the public interest, the efficiency, and the wider and more economical use of electric energy; Provided, also, That the said Auditor or his representative shall, from time to time, examine the accounts and books of the Authority, including its receipts, disbursements, contracts, leases, sinking funds, investments, and any other matters which relate to its financial standing or over which the said Auditor may by law have jurisdiction. ACQUISITION OF LANDS BY THE PEOPLE OF PUERTO RICO FOE THE AUTHORITY Section 13.-Upon application of the Authority, the Insular Government shall have power to acquire by purchase, or by condemnation in the manner provided by condemnation laws, title in the name of the Authority, to any real property or interest therein, which may be needed or convenient for the purposes of the Authority, and payment for all such real property shall be made by the Authority. The power hereby conferred shall not limit nor restrict the power of the Authority itself to acquire real property by purchase or condemnation. GRANT OF LAND BY MUNICIPALITIES AND POLITICAL SUBDIVISIONS TO THE AUTHORITY Section 14.-All municipalities and political subdivisions of Puerto Rico, notwithstanding any contrary provision of law, are authorized to grant and convey to the Authority, upon its request and upon reasonable terms and conditions, any real property or interest therein (including real property already devoted to public use) which the Board may deem necessary or convenient to effectuate the purposes of the Authority. The Authority shall have the right and power to construct or place any part or parts of any of its undertakings across, in, over, under, or through or along any street, public highway, or any lands which are now or may hereafter be property of the Insular Government or any municipality or political subdivision thereof, without obtaining any franchise or other permit therefor. The Authority shall restore any such street, highway, or lands to their former condition or state as nearly as may be, and shall not use the same in a manner to impair unnecessarily their usefulness. CONSTRUCTION AND PURCHASE CONTRACTS Section 15.-The Authority shall procure materials, supplies, equipment, or services (other than personal) in connection with any of its undertakings only pursuant to a contract or contracts; Provided, That where the estimated expense in connection therewith does not exceed one thousand (1,000) dollars, the same may be incurred either without contract or by contract entered into without advertisement for bids. Such contracts involving an expense in excess of one thousand (1,000) dollars, including contracts for the construction of undertakings of the Authority, shall be made after advertisement for bids in such manner and at such times, sufficiently in advance of opening bids, as the Board may deem adequate to insure appropriate notice and opportunity for competition. Advertisement for bids shall not be required, however, when (1) an emergency requires immediate delivery of the materials, supplies, equipment, or performance of the services; or (2) repair parts, accessories, or supplemental equipment or services are required for supplies or services previously furnished or contracted for; or (3) professional or expert services or work are required and the Board shall deem it best in the interest of good administration that contracts therefor be made without such advertisement; in any such case the purchase of such materials, supplies, or equipment, or procurement of such services, may be made in the open market in the manner common among businessmen. In the comparison of bids and the making of awards, due consideration shall be given to such factors (in addition to whether the bidder has complied with the specifications) as the bidder's ability to perform construction work of the kind involved in the construction contract under consideration; the relative quality and adaptability of materials, supplies, equipment, or services; the bidder's financial responsibility, skill, experience, record of integrity in dealing, and ability to furnish repair and maintenance services; and the time of delivery or performance offered. The Authority may prescribe rules and regulations for the submission of bids. BONDS OF TH Section 16.-(a) The Authority is authorized to issue from time to time its bonds, including refunding bonds, and to have outstanding at any one time, exclusive of bonds issued solely for the purpose of exchanging the same in return for the cancellation of bonds either issued by the Authority or assumed by it, not in excess of five hundred thousand (500,000) dollars, in aggregate principal amount of its bonds, unless the Legislature of Puerto Rico shall have authorized the issuance of bonds in excess of such amount; Provided, however, That refunding bonds of the Authority issued solely for the purpose of applying the proceeds thereof to the payment of bonds issued by the Authority or assumed by it, shall |