New Puerto Rico debt bill to be unveiled in U.S. Congress

Reuters News
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Posted: May 18, 2016 9:44 AM

By Richard Cowan

WASHINGTON (Reuters) - Long-awaited legislation will be introduced in the U.S. House of Representatives on Wednesday to address Puerto Rico's deepening debt crisis, according to the chairman of a committee overseeing the territory.

Speaking to reporters, House Natural Resources Committee Chairman Rob Bishop said, "There will be a bill today," but added that decisions still must be made on how to appoint members of a board that would oversee the restructuring of Puerto Rico's $70 billion debt.

Backers of legislation hope Congress finishes a bill that President Barack Obama could accept before July 1, when the island-territory faces a $1.9 billion debt payment.

It already has missed a May 1 debt payment of around $400 million to the Government Development Bank. On Wednesday, Puerto Rican Governor Alejandro Garcia Padilla declared a state of emergency at the U.S. territory's highway authority and directed that revenues be dedicated to operations and not debt payments.

In addition, Puerto Rico is reeling from a Zika virus outbreak that is hurting its tourism industry, while more residents have been relocating to the U.S. mainland, further hurting the territory's revenue stream.

Bishop said the new bill will closely resemble the previous version, which stalled in committee and has been criticized by some Republican senators as lacking adequate protections for some creditors.

He said the new bill will be like the previous draft that could have allowed Puerto Rico to cut repayments to creditors without their consent, known as a cramdown.

Bishop, a Republican, hesitated to say whether the Democratic Obama White House has signed off on the bill he intends to introduce.

"We are moving forward, there is a deal," Bishop said to reporters. But he said that the process for making board appointments was unresolved.

"There will be a solution that I think (the Obama administration) will find profitable," Bishop said.

It was unclear when the Natural Resources Committee would debate and vote on the legislation.

Bishop said amendments to his bill will be allowed to be debated both in committee and during debate in the full House.

(Reporting by Richard Cowan; Editing by Leslie Adler and David Gregorio)