Grijalva to Propose Changes to Puerto Rico Promesa Law

(Bloomberg) -- The chairman of the House Natural Resources Committee said he’ll propose substantial changes to a federal law that’s being used to guide restructuring of Puerto Rico’s debt.

Speaking in San Juan on Sunday at the end of a visit to the island, Democratic Representative Raul Grijalva of Arizona said that at a committee hearing in October, he’ll present a draft proposal regarding the 2016 law, known as Promesa, which created a financial oversight board that exercises considerable control over the commonwealth’s finances.

He said among the proposed changes will be the creation of a reconstruction coordinator to oversee the island’s recovery from 2017’s devastating Hurricane Maria; a public audit of the island’s debt; and federal funding for the oversight board, whose budget currently comes from Puerto Rico’s government.

“That’s substantive but it’s also symbolic,” Grijalva said in an interview. “Because of the federal funding, it gives Congress and its investigative processes many more entry points for checks and balances.”

Grijalva will also suggest that new language be added to define essential benefits, and that protections be added for education, health care and pension security.

Former Puerto Rico Governor Ricardo Rossello, who resigned in August following massive street protests against his government, sparred bitterly with the board over benefits cuts. The island’s Senate President Thomas Rivera Schatz has also been a vocal public foe of the board.

Puerto Rico’s governor, Wanda Vazquez, the second to hold the office since Rossello resigned, spent last week in Washington, DC, meeting with Democratic and Republican leaders and other government officials in an attempt to “restore the credibility” of the island’s government after Rossello’s ouster and a series of scandals. Hostility to the board was a main theme among the protesters who drove Rossello from office this past summer.

The National Resources panel has jurisdiction over “insular areas of the U.S.,” or territories that -- such as Puerto Rico and the U.S. Virgin Islands -- are neither states nor federal districts.

To contact the reporter on this story: Michael Deibert in San Juan at mdeibert@bloomberg.net

To contact the editors responsible for this story: Matthew Bristow at mbristow5@bloomberg.net, Ros Krasny, Mark Niquette

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