April 29, 1927, act numbered 58, approved April 30, 1928, and act numbered 93, approved May 6, 1938, including the systems heretofore consolidated with or incorporated into said system.

(h) Words importing the singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations.

CREATION AND COMPOSITION OF AUTHORITY

SEC. 3. The Governor of Puerto Rico, the Attorney General of Puerto Rico, and the Commissioner of the Interior 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 witn the performance of their duties as may be authorized or approved by the Board.

GOVERNING BODY

SEC. 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

SEC. 5. The executive director shall be appointed by the Board exclusively upon the basis of merit as determined by technical skill, experience, and other qualifications best suited to carrying out the purposes of the Authority. The executive director shall be removable by the Board. 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

SEC. 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 be 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 condemnation laws of Puerto Rico, and to hold, maintain, and operate any undertaking or any part or parts thereof;

(i) 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 or lessee, 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 or desirable for carrying out the purposes of the Authority, and (subject to the limitations contained in this Act) to sell, lease as lessor, transfer, exchange, and otherwise dispose of 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 or any part thereof by pledge of or lien on all or any of its contracts, revenues, and income;

(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 the revenues of its hydroelectric system or of any undertaking forming a part of said system:

(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, 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 act of the Legislature of Puerto Rico, or by any other 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

SEC. 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 corresponding 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 hydroelectric 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 THE PROPERTY AND BUSINESS OF THE UTILIZATION OF THE WATER RESOURCES

SEC. 8. The Utilization of the Water Resources shall transfer and deliver all its businesses, funds, rights, franchises, privileges, and assets of every character and description and all its property, real, personal, and mixed, tangible and intangible, of whatsoever kind and wheresoever situated, to the Authority, and the Authority is authorized to accept, possess, use, and expend, subject to all obligations and encumbrances, legal or equitable, with which the same may be impressed, all such businesses, funds, rights, franchises, privileges, and assets and all such property, and the Authority shall have jurisdiction and control thereof.

TRANSFER OF RECORDS

SEC. 9. 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 IN SUCCESSION OF INTERESTS

SEC. 10. The Authority shall be deemed and held to constitute a continuation of the Utilization of the Water Resources for the purpose of succession or assumption of all the rights, powers, duties, and obligations of the Utilization of the Water Resources. The transfers authorized in sections 8 and 9 hereof shall take effect sixty days from the effective date of this Act.

OBLIGATIONS OF CONTRACTS NOT IMPAIRED

SEC. 11. From and after the effective date of the transfers authorized in sections 8 and 9 of this Act all contracts of the Utilization of the Water Resources and all contracts of any department, agency, or instrumentality of the people of Puerto Rico for or in the name of, or in behalf of, the Utilization of the Water Resources shall be binding and obligatory upon the Authority with the same force and effect as if such contracts had been expressly assigned to the Authority by the Utilization of the Water Resources or by such department, agency, or instrumentality, and assumed by the Authority. All such contracts shall inure to the benefit of the Authority.

APPROPRIATIONS AND ACTS CONFIRMED

SEC. 12. 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 reqlred 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 OF THE AUTHORITY

SEC. 13. 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 comingled 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 executive director or such other person or persons as the Board may authorize to make such requisitions. The auditor of Puerto Rico and his legally authorized representatives may 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 auditor may by law have jurisdiction.

ACQUISITION OF LANDS BY THE PEOPLE OF PUERTO RICO FOR THE AUTHORITY SEC. 14. Upon application of the Authority, the insular government shall have power to acquire by purchase, or by condemnation in the manner provided by the condemnation laws of Puerto Rico, 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 or restrict the power of the Authority itself to acquire real property by purchase or condem

nation.

GRANT OF LAND BY THE PEOPLE OF PUERTO RICO TO THE AUTHORITY

SEC. 15. (a) The Governor of Puerto Rico is authorized to assign and dedicate to the uses and purposes of the Authority, without consideration, any real property, or interests therein now or hereafter owned by the people of Puerto Rico, which he may deem necessary or convenient for the purposes of the Authority or for the development of the water resources of the people of Puerto Rico: Provided, That no such assignment or dedication shall be made except with the consent of the department or other agency of the insular government having jurisdiction and control over such property.

(b) 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 interests therein (including real property already devoted to public use), which the Board may deem necessary or convenient to effectuate the authorized 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

SEC. 16. 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 $1,000, 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 $1,000, 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 therfeor 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 construction; 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 repairs and maintenance service; and the time of delivery or performance offered. The Authority may prescribe rules and regulations for the submission of bids.

BONDS OF THE AUTHORITY

SEC. 17. (a) The Authority is authorized to issue from time to time its bonds, including refunding bonds.

(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 years from their respective dates, may bear interest at such rate or rates not exceeding 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 payment 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 Board 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 treated as, 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 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