The U.S. House of Representatives submitted late Wednesday H.R. 5278, the “Puerto Rico Oversight, Management, and Economic Stability Act,” which includes several revisions to the original bill proposing an oversight board and a debt-restructuring framework for the island.
“Years of disastrous policies have completely wrecked Puerto Rico’s economy. As a result, the island and its millions of American citizens face a humanitarian crisis. That’s why we must allow for a responsible restructuring for Puerto Rico’s debt, and do it without using Wisconsin taxpayer dollars for a bailout,” bill sponsor Rep. Sean Duffy (R-WI) said.
The revised bill keeps the terms of the oversight board, which “will provide guardrails for the Puerto Rican government, but will not supplant or replace the territory’s elected leaders, who will retain primary control over budgeting and fiscal policymaking,” according to the bill.
Among its duties, the proposed board will require the governor of Puerto Rico to develop a five-year fiscal plan that meets the standards of the law, which ensures funding of essential public services, provide adequate funding for public pensions systems, estimate revenues and expenditures in accordance with appropriate accounting standards, eliminate structural budget deficits, provide for a sustainable level of debt, improve fiscal governance, provide for capital expenditures that promote economic growth, and respect the relative priorities that different bondholders have vis-à-vis one another under Puerto Rico law.
Once the fiscal plan is in place, the board will oversee the drafting of an annual proposed budget that complies with the plan. Once the board approves the proposed budget, it will move on to the Legislature for approval, as it is done presently.
The proposed board will also oversee a federal court-supervised debt restructuring procedure for Puerto Rico’s debt-restructuring entities, which have a combined $70 billion in debt.
“Tonight we introduced legislation to responsibly address the crisis in Puerto Rico. The revised bill incorporates technical refinements and input from all stakeholders. Any future changes will be done in public committee meetings,” Committee on Natural Resources Chairman Rob Bishop (R-UT), said.
The bill introduced late Wednesday reworks H.R. 4900, presented in April but was shelved last month following opposition from different groups. Congressional leaders returned to the negotiating table, assisted by the experts at the U.S Department of Treasury, and worked to refine the legislation.
“The revised bill is not perfect. Like any product of bipartisan compromise, it contains provisions I oppose or view as extraneous, and it is my hope these provisions can be modified or removed as the legislative process moves forward,” said Puerto Rico’s Resident Commissioner in Washington, Pedro Pierluisi.
“However, the heart of the bill — the debt restructuring section and the oversight board section — now meets the stringent criteria I have established,” he said.
To access the full content of the bill, click HERE.