The Puerto Rico Infrastructure Financing Authority was created in June 1988 to provide financial, administrative, consulting, technical, advisory, and other types of assistance to other public corporations, governmental instrumentalities, political subdivisions and municipalities (collectively, “Benefited Entities”) authorized to develop infrastructure facilities and to establish alternate means for financing infrastructure facilities.
The Authority is authorized to issue bonds and provide loans, grants and other financial assistance for the construction, acquisition, repair, maintenance and reconstruction of infrastructure projects by Benefited Entities.
The Authority’s enabling act also established the Puerto Rico Infrastructure Fund, funded with annual fixed amounts from the first proceeds of federal excise taxes imposed on rum and other articles produced in Puerto Rico and sold in the United States which are transferred to Puerto Rico pursuant to the United States Internal Revenue Code of 1986, as amended. Currently, this amount is $70 million, and it will increase to $90 million for fiscal years 2007 to 2052.
Rum is the only article currently produced in Puerto Rico subject to federal excise taxes, the proceeds of which are required to be returned to the Treasury. The Authority is using these amounts to provide financial support for various infrastructure and other projects.
As of March 31, 2006, the Authority’s total debt was $1.5 billion. The Authority has provided assistance to PRASA, among other Benefited Entities, with regards to the design and construction of various strategic regional water and sewer projects intended to provide improved services to targeted regions throughout the island; the implementation of an action plan to address a number of small water and sewer rehabilitation projects; the achievement of compliance with certain environmental laws; and the establishment of a prioritized capital program.
In June 1998, the Authority’s enabling act was amended to establish the Infrastructure Development Fund, a permanent trust fund to be utilized by the Authority for the purpose of financing infrastructure projects.
The Infrastructure Development Fund was initially funded in March 1999 with $1.2 billion of proceeds received by the Telephone Authority from the sale of a controlling interest in Puerto Rico Telephone Company. This initial amount will remain permanently deposited in a segregated, perpetual account, denominated the “corpus account,” and must be invested exclusively in U.S. government or U.S. government-backed obligations. The income from such investment may only be used to finance infrastructure projects related to the Commonwealth’s water and sewer systems. Other moneys in the Infrastructure Development Fund not attributable to the corpus account or the investment income thereon may be used for other infrastructure projects.
The Authority is the custodian and administrator of the Infrastructure Development Fund. In October 2000, the Authority issued $1.093 billion of bonds payable from and secured by a pledge of the interest received by the Authority from the investments of the Infrastructure Development Fund. The proceeds of this bond issue were used to finance certain aqueduct and sewer infrastructure development projects.
The Authority will invest approximately $405 million in new infrastructure projects in connection with the holding of the Central American and Caribbean Games in Mayagüez, Puerto Rico, in 2010.
Website
Contact Information
Arterial Hostos #235
Torre Norte, Floor 16
Capital Center Bldg., Hato Rey, PR 00918
Tel (787) 763-5757
Fax (787) 765-5712
Ing. Humberto Marrero-Recio
Executive Director
Tel (787) 763-5757 x-1656
Marc G. Roumain-Prieto, Esq., CPA
Deputy Executive Director
Tel (787) 763-5757 x-1640
Wilberto Torres-Irizarry, CPA
Chief Financial Officer
Tel (787) 763-5757 x-1643
Memphis Cabán-Rodríguez, PE
Engineering Director
Tel (787) 763-5757 x-1612
Sylvia Ugarte, Esq.
Legal Director
Tel (787) 763-5757 x-1550
Mara Resto-Vélez
Communications Director
Tel (787) 763-5757 x-1505
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Security
The Special Tax Revenue Bonds are payable from a specified amount of Federal excise taxes received by Puerto Rico from the United States. Such taxes, presently imposed solely on Puerto Rico rum, are subject to being applied first to Commonwealth general obligation and guaranteed debt if other Commonwealth revenues are insufficient thereof. If such taxes fall below these specified amounts, an appropriation shall be required to be included in the Commonwealth budget to cover such insufficiency. The Commonwealth Legislative Assembly, however, is not legally obligated to make the necessary appropriation.
Functions
The Authority is an affiliate of GDB which was created in 1988 to provide financial, administrative and other types of assistance to the Commonwealth of Puerto Rico, its public corporations and instrumentalities responsible for developing and operating infrastructure facilities.
Trustee Under the Trust Agreement:
US Bank and Trust National Association
Financial Statements audited by:
RSM ROC & Company