not be included in computing the limitation of $500,000, until six (6) months after the date of their issue.

(b) The bonds may be authorized by resolution or resolutions of the Board, and may be of such series, may bear such date or dates, may mature at such time or times not exceeding fifty (50) years from their respective dates, may bear interest at such rate or rates not exceeding six (6) per centum per annum, payable semiannually, may be in such denomination or denominations, may be in such form either coupon or registered, may carry such registration or conversion privileges, may be executed in such manner, may be payable in such medium of pavment and at such place or places, may be subject to such terms of redemption, with or without premium, may be declared or become due before the maturity date thereof, may provide for the replacement of mutilated, destroyed, stolen, or lost bonds, may be authenticated in such manner and upon compliance with such conditions, and may contain such other terms and covenants as such resolution or resolutions may provide. The bonds may be sold at public or private sale for such price or prices as the Authority shall determine; Provided, That refunding bonds may be exchanged for outstanding bonds of the Authority on such terms as the Board may deem to be in the best interests of the Authority. Notwithstanding the form and tenor thereof, and in the absence of an express recital on the face thereof that the bond is nonnegotiable, all bonds of the Authority shall at all times be, and shall be understood to be, negotiable instruments for all purposes.

(c) The bonds of the Authority bearing the signature of members of the Board or officers of the Authority in office on the date of the signing thereof, shall be valid and binding obligations, notwithstanding that before the delivery thereof and payment therefor any or all of the persons of the Board or officers of the Authority whose signatures or facsimile signatures appear thereon shall have ceased to be such members of the Board or such officers of the Authority. The validity of the authorization and issuance of the bonds shall not be dependent on or affected in any way by any proceedings relating to the construction, acquisition, extension, or improvement of the undertaking for which the bonds are issued, or by any contracts made in connection with such undertaking. Any resolution authorizing the bonds may provide that anv such bond may contain a recital that it is issued pursuant to this Act, and any bond containing such recital under authority of any such resolution shall be conclusively deemed to be valid and to have been issued in confermity with the provisions of this Act.

(d) Pending the execution and delivery of definitive bonds, temporary or interim bonds, receipts or certificates may be issued in such form and with such provisions, as may be provided in such resolution or resolutions.

(e) Any resolution or resolutions authorizing any bonds may contain provisions, which shall be a part of the contract with the holders of the bonds, as to

(1) 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;

(2) The rates for water and electric energy to be charged, and the application, use, and disposition of the amounts that may be raised by the collection of such rates and from other receipts of the Authority;

(3) Setting aside reserves for amortization funds, and the regulation and disposition thereof;

(4) Limitations on the right of the Authority to restrict and regulate the use of any undertaking or part thereof;

(5) Limitations on the purpose to which the proceeds of sale of any issue of bonds then or thereafter to be issued may be applied;

(6) Limitations on the issuance of additional bonds;

(7) The procedure by which the terms of any resolution authorizing bonds, or any other contract with the bondholders, may be amended or abrogated, and the amount of the bonds the holders of which must consent thereto, and the manner in which such consent may be given;

(8) The amount and kind of insurance to be maintained on the undertakings of the Authority, and the use and disposition of insurance moneys; (9) Covenanting 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;

(10) 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;

(11) The rights, liabilities, powers, and duties arising upon the breach by the Authority of any of its covenants, conditions, or obligations; (12) The vesting in a trustee or trustees 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 or trustees, and the limitation of 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 covenants made under this Act or duties imposed hereby; (13) The manner of collecting the rates, fees, rentals, or other charges for the services, facilities, or commodities of undertakings of the Authority, and the combining in one bill of the rates, fees, rentals, or other charges for the services, facilities, or commodities of any two or more of such undertakings;

(14) The discontinuance of the services, facilities, or commodities of any undertakings of the Authority, in the event that the rates, fees, rentals, or other charges for the services, facilities, or commodities of such undertaking are not paid; and

(15) Any other acts and things not inconsistent with this Act as may be necessary or convenient for the security of the bonds, or as may tend to make the bonds more marketable.

(f) Neither the members of the Board nor any person executing the bonds shall be liable personally on the bonds or be subject to any liability by reason of the issuance thereof.

(g) The Authority is authorized to purchase any of its outstanding bonds, with any funds available therefor, at a price not more than the principal amount or the current redemption price thereof and the accrued interest. All bonds so purchased shall be cancelled.

RIGHT TO RECEIVERSHIP UPON DEFAULT

Section 17.-(a) In the event that the Authority shall default in the payment of the principal of or interest on any of its bonds after the same shall become due, whether it be a default in the payment of principal and interest or in the payment of interest only at maturity or upon call for redemption, and such default shall continue for a period of thirty (30) days, or in the event that the Authority or the Board, officers, agents, or employees thereof shall default in any agreement made with the holders of the bonds, any holder or holders of the bonds (subject to any contractual limitation as to a specific percentage of such holders), or trustee therefor, shall have the right to apply in an appropriate judicial proceeding to any court of competent jurisdiction in Puerto Rico for the appointment of a receiver of the undertakings, or parts thereof, the income or revenues of which are pledged to the payment of the bonds so in default, whether or not all the bonds have been declared due and payable and whether or not such holder, or trustee therefor, is seeking or has sought to enforce any other right or to exercise any remedy in connection with such bonds. Upon such application the court may appoint, and if the application is made by the holders of twenty-five (25%) percentum in principal amount of such bonds then outstanding, or by any trustee for holders of bonds in such principal amount, shall appoint a receiver of such undertakings.

(b) The receiver so appointed shall forthwith, directly or by his agents and attorneys, enter into and upon and take possession of such undertakings and each and every part thereof, and may exclude the Authority, its Board, officers, agents, and employess and all persons claiming under them, wholly therefrom and shall have, hold, use, operate, manage, and control the same and each and every part thereof, and, in the name of the Authority or otherwise, as the receiver may deem best, shall exercise all the rights and powers of the Authority with respect to such undertakings as the Authority itself might do. Such receiver shall maintain, restore, insure, and keep insured, such undertakings and from time to time shall make all such necessary or proper repairs as such receiver may deem expedient, shall establish, levy, maintain, and collect such rates, fees, rentals, and other charges in connection with such undertakings as such receiver may deem necessary or proper and reasonable, and shall collect and receive all income and revenues and deposit the same in a separate account and apply the income and revenues so collected and received in such manner as the court shall direct.

(c) Whenever all that is due upon the bonds, and interest thereon, and upon any other notes, bonds, or other obligations, and interest thereon, having a charge, lien, or encumbrance on the revenues of such undertakings and under any of the terms of any covenants or agreements with bondholders shall have been paid or deposited as provided therein, and all defaults in consequence of which a receiver

may be appointed shall have been cured and made good, the court may, in its discretion and after such notice and hearing as it deems reasonable and proper, direct the receiver to surrender possession of such undertakings to the Authority the same right of the holders of the bonds to obtain the appointment of a receiver to exist upon any subsequent default as hereinabove provided.

(d) Such receiver shall act, in the performance of the powers hereinabove conferred upon him, under the direction and supervision of the court and shall at all times be subject to the orders and decrees of the court and may be removed thereby. Nothing herein contained shall limit or restrict the jurisdiction of the court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any functions specifically set forth herein.

(e) Notwithstanding anything in this section to the contrary, such receiver shall have no power to sell, assign, mortgage, or otherwise dispose of any assets of whatever kind or character belonging to the Authority and useful for such undertakings, but the powers of any such receiver shall be limited to the operation and maintenance of such undertakings, and the collection and application of the income and revenues therefrom, and the court shall not have jurisdiction to enter any order or decree requiring or permitting said receiver to sell, mortgage, or otherwise dispose of any such assets.

REMEDIES OF BONDHOLDERS

Section 18.-(a) Subject to any contractual limitations binding upon the holders of any issue of bonds, or trustees therefor, including but not limited to the restriction of the exercise of any remedy to a specified proportion or percentage of such holders, any holder of bonds, or trustee therefor, shall have the right and power, is for the equal benefit and protection of all holders of bonds similarly situated(1) By mandamus or other suit, action, or proceeding at law or in equity to enforce his rights against the Authority and its Board, officers, agents, or employees to perform and carry out its and their duties and obligations under this Act and its and their covenants and agreements with bondholders;

(2) By action or suit in equity to require the Authority and the Board thereof to account as if they were the trustee of an express trust;

(3) By action or suit in equity to enjoin any acts or things which may be unla ful or in violation of the rights of the bondholders; and

(4) To bring suit upon the bonds.

(b) No remedy conferred by this Act upon any holder of the bonds, or any trustee therefor, is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy, and may be exercised without exhausting and without regard to any other remedy conferred by this Act or by any other law. No waiver of any default or breach of duty or contract, whether by any holder of the bonds, or any trustee therefor, shall extend to or shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any bondholder or any trustee therefor to exercise any right or power accruing upon default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescense therein. Every substantive right and every remedy, conferred upon the holders of the bonds, may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action, or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, or shall be determined adversely to the holder of the bonds, or any trustee therefor, then and in every such case the Authority and such holder, or such trustee, shall be restored to their former positions and rights and remedies as if no such suit, action, or proceeding had been brought or taken.

REPORTS

Section 19.-The Authority shall submit to the Legislature and to the Governor of Puerto Rico, as soon as practicable after the close of each fiscal year of the Insular Government but prior to the end of the calendar year (1) a financial statement and complete report of the business of the Authority for the preceding fiscal year, and (2) a complete report on the status and progress of all its undertakings and activities since the creation of the Authority or the date of its last such report. The Authority shall also submit to the Legislature and to the Governor of Puerto Rico, at such other times as may be required, official reports of its business and activities under this Act.

THE PEOPLE OF PUERTO RICO AND ITS POLITICAL SUBDIVISIONS NOT LIABLE ON BONDS

Section 20.-The bonds and other cbligations issued by the Authority shall not be a debt of The People of Puerto Rico or any of its municipalities or other political subdivisions, and neither The People of Puerto Rico nor any such municipalities or other political subdivisions shall be liable thereon, nor shall they be payable out of any funds other than those of the Authority.

BONDS LEGAL Investments fOR FIDUCIARIEs and Security for Public DEPOSITS

Section 21. The bonds of the Authority shall be lawful investment, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority or control of the Government of Puerto Rico or any officer or officers thereof.

TAX EXEMPTIONS

Section 22. (a) It is hereby found and declared that the purposes for which the Authority is created are: the conservation of natural resources, the promotion of the general welfare, and the increase of commerce and prosperity, and are public purposes in all respects for the benefit of The People of Puerto Rico, and that therefore the Authority shall not be required to pay any taxes or assessments on any of the property acquired by it or under its jurisdiction, control, possession, or supervision, or on its activities in the operation and maintenance of any undertaking, or on the income derived from any of its undertakings and activities;

(b) Beginning in the year 1946, and annually thereafter, the Authority shall pay, on or before July 15, out of its net revenues, to the Insular Treasury a sum equal to five (5%) per centum of its gross revenues actually collected during the preceding fiscal year, the sum so paid to the Insular Treasury to constitute general revenues of the Insular Government. Whenever electricity shall be distributed by the Authority directly to the general public in the urban area of any municipality, the Authority shall pay annually on or before July 15, out of its net revenues to such municipality, by way of contribution in lieu of taxes, a sum equal to six (6%) per centum of all the gross revenues actually collected during the preceding fiscal year as a result of its sales of electricity made in the urban area and in the rural area of such municipality after this Act shall have become effective: Provided, That the Authority may withhold any such payment until such municipality shall have paid or made satisfactory arrangements for paying all sums at the time due and payable by it to the Authority. As used in this subsection, the term "urban area" shall mean that area of a municipality which shall have been declared urban area by the Municipal Government thereof prior to February 10, 1941, and in case any municipality shall have not declared its urban area prior to said date, then, for the purpose of this subsection only, the urban area of such municipality shall be that which will be so declared by the Executive Council upon request of either the municipality or the Authority. If the net revenues of the Authority for any fiscal year shall not be sufficient to permit the payments herein required, the payments shall be prorated to the extent of the available net revenues: Provided, That in the event such proration is made, the differences between the prorated amounts paid and the amounts which would have been paid had sufficient funds been available shall be canceled and shall not constitute a future charge against the net revenues of the Authority for the benefit of the Insular Treasury and the municipalities. As used in this subsection, the term "net revenues" shall mean the revenues of the Authority, for any fiscal year which may remain after provision has been made for the operation expenses of the undertakings of the Authority and for the payment of the principal of, and the interest on, its outstanding bonds, including necessary reserves.

(c) In order to facilitate the procurement of funds by the Authority to enable it to carry out its corporate purposes, the bonds issued by the Authority and the income therefrom shall be and remain at all times exempt from taxation by the Insular Government or by any municipality or political subdivision of The People of Puerto Rico.

DECLARATION OF PUBLIC UTILITY

Section 23. For the purposes of subdivision (h) of Section 6 hereof, and of this Act in general, all works, projects, realties and their accessories, which the Authority may deem necessary and convenient for carrying out the purposes expressed in this Act are hereby declared of public utility.

COORDINATION AND INTEGRATION OF PROJECTS AND ACTIVITIES

Section 24. (a) With a view to the coordination and integration of irrigation and/or hydro-electric projects and their activities, at present existing or that may be developed in the future, all powers, duties, functions, obligations, and responsibilities which prior to the enactment of this Act were vested in, conferred or imposed upon the Commissioner of the Interior and the Executive Council of Puerto Rico, or either of them under the Public Irrigation Law approved September 18, 1908, and laws amendatory thereof or supplementary thereto, heretofore or hereafter enacted by the Legislature of Puerto Rico, providing for the construction and operation of a public irrigation system, and under those provisions of Act No. 58, approved April 30, 1928, applicable to the Hydroelectric System of the Puerto Rico Irrigation Service, South Coast, are hereby transferred to and conferred and imposed upon the Authority. The Authority shall administer said laws in conformity with the provisions thereof and shall be governed by them in the operation, maintenance, repair, reconstruction, construction of extensions, improvements, and enlargements of the works or systems constructed and operated and maintained pursuant to those laws; and to the extent that the exercise of such power does not impair the obligations of any contract of The People of Puerto Rico, the Authority shall have power, subject to the prior approval of the Auditor of Puerto Rico, to fix the basis for allocating operating expenses to the several systems operated by the Authority, notwithstanding anything to the contrary in said Act No. 58.

(b) Upon authorization of the Legislature of Puerto Rico, the Authority, when it deems it advisable in the best interest of The People of Puerto Rico, may take over and operate any irrigation and/or hydro-electric project existing and owned, or that may be developed or acquired in the future, by The People of Puerto Rico.

AGREEMENT OF THE INSULAR GOVERNMENT

Section 25.-The Insular Government does hereby pledge to, and agree with, any person, firm or corporation, Federal agency or Insular or State agency, subscribing to or acquiring bonds of the Authority to finance in whole or in part any undertaking or any part thereof, that it will not limit or alter the rights or powers hereby vested in the Authority until all such bonds at any time issued, together with the interest thereon, are fully met and discharged. The Insular Government does further pledge to, and agree with, the United States and any other Federal agency that in the event that any Federal agency shall construct or contribute any funds for the construction, extension, improvement, or enlargement of any project for the development of the water resources in Puerto Rico or any portion thereof, the Insular Government will not alter or limit the rights or powers of the Authority in any manner which would be inconsistent with the continued maintenance and operation of the water resources development or the extensions, improvement, or enlargement thereof, or which would be inconsistent with the due performance of any agreements between the Authority and any such Federal agency; and the Authority shall continue to have and may exercise all rights and powers herein granted so long as the same shall be necessary or desirable for the carrying out of the purposes of this Act and the purpose of the United States or any other Federal agency in constructing, or contributing funds for the construction, extension, improvement or enlargement of, any water resources development or any portion thereof.

INJUNCTIONS CANNOT BE Granted

Section 26.-An injunction will not be granted to prevent the application of this Act or any part thereof.

INCONSISTENT PROVISIONS OF OTHER ACTS SUPERSEDED

Section 27.-Insofar as the provisions of this Act are inconsistent with the provisions of any other Act of the Legislature of Puerto Rico, the provisions of this Act shall be controlling.

SEPARABILITY OF PROVISIONS

Section 28.-If any provisions of this Act or the application of such provisions to any person or circumstance shall be held invalid, the remainder of the Act and the application of such provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.