As Puerto Rico’s financial oversight board works to restructure the territory’s debt of approximately $70 billion, a new brief by Rep. Rob Bishop reminds it not to overlook the best interests of the island’s creditors.
The Utah Republican, who chairs the House Natural Resources Committee, filed a “friend of the court” brief last Friday with the U.S. Court of Appeals for the 1st Circuit, cautioning in part that Puerto Rico would struggle to return to the capital markets if the oversight board did not “deal fairly with its existing creditors and respect their rights.”
An aide to the Natural Resources panel said that for time reasons, Bishop filed the brief individually and not as part of the entire committee, which has jurisdiction over Puerto Rico.
President Barack Obama signed the Puerto Rico Oversight Management and Economic Stability Act , or PROMESA, into law in June 2016, two days before the territory had a debt payment of $2 billion due. That allowed Puerto Rico’s governor at the time to suspend payments.
PROMESA also created the seven-member, federally appointed Financial Oversight and Management Board to assess the annual budget and create a fiscal plan, while also serving as mediators in discussions between the Puerto Rican government and its creditors about restructuring its debt.
Bishop’s brief, which was requested by the court, calls on the board to keep the creditors’ interests central in the debt negotiations. He reminded the board that “nonconsensual restructuring” was “only available as a last resort” under PROMESA.
The Natural Resources aide said a majority of creditors would be unhappy over the route the oversight board has taken in negotiations, and that would slow the island’s progress.
“It’s just going to prolong litigation, and that just frustrates Puerto Rico’s, first of all, recovery from the hurricane, and also the recovery from the debt crisis,” the aide said.
Bishop is also among 36 co-sponsors of legislation, known as the Admission Act, that lays out a path to statehood for Puerto Rico and calls for a change in the commonwealth’s status by Jan. 1, 2021. Puerto Rico Republican Jenniffer González-Colón, the territory’s nonvoting resident commissioner, introduced the measure last Thursday, her second pro-statehood bill since entering office last year.
“Statehood is nothing else than Equality; and this Admission Act provides the means to put into effect the values of Democracy and Respect upon which our Nation is built,” the Republican lawmaker said in a press release.
The bill would not establish Puerto Rico as a state but rather as an incorporated territory, El Nuevo Dia reported. The change in status would mean residents would have to pay federal income taxes in addition to the federal payroll taxes they are already subject to. But Puerto Rico would still not have voting representation in Congress, nor would residents be able to vote in presidential general elections.
The bill would also create a task force to study the changes required to make Puerto Rico a state.
“I look forward to the day 51 is a reality,” Bishop told NBC news last week.
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