Measure is now before U.S. Senate for consideration; other U.S. dependencies removed from legislation
House passes Puerto Rico restructuring and oversight bill; removes USVI
ST CROIX, USVI -- The US House of Representatives passed legislation on Thursday by a 297-127 vote to address Puerto Rico’s fiscal and economic crisis after several months of contentious debate. The bill, known as the Puerto Rico Oversight, Management, and Economic Stability Act, or “PROMESA” (HR 5278), would allow the US territory to restructure over $70 billion in currently un-payable public debt, subject to a newly-created and very powerful financial management and oversight board.
The original bill, as reported out of the House Committee on Natural Resources, would have authorized the establishment of a similar oversight board, with restructuring authority, for the US Virgin Islands and other small territories if the territory’s legislature adopts a resolution signed by the governor requesting its establishment.
USVI Governor Kenneth Mapp expressed concern that this provision could have a negative effect on the territory’s ability to access the capital markets, potentially increase its cost of borrowing, and possibly subject the territory to a federal oversight board that could override territorial budgets, statutes, and policies, including pension obligations.
The Mapp-Potter administration led the opposition to the provision, working with Delegate Stacey Plaskett and congressional allies, including Congressman Tom MacArthur of New Jersey.
The US Department of Treasury and the US Department of Justice originally opposed the governor’s position, based on stated concerns under the Uniformity Clause and the uniformity requirements of the Bankruptcy Clause of the US Constitution. However, those federal departments ultimately acceded to the governor’s position based on the strength of the arguments the Mapp-Potter Administration presented in a legal memorandum rebutting the Treasury and Justice Department concerns.
The House of Representatives adopted the governor’s proposed amendment language by a voice vote as part of a manager’s amendment offered by House Natural Resources Committee chairman Rob Bishop of Utah. The measure now goes to the US Senate for further consideration and action.
Mapp thanked MacArthur and Plaskett for their leadership in support of the US Virgin Islands amendment.
“The original language including the small territories in the oversight board provisions was neither requested nor supported by me or any of the other territorial governors. Nor did Treasury fully consider the potential impact of the original language on our respective abilities to access the US capital markets. I am grateful that the Treasury and Justice Departments were persuaded by our legal arguments that there was no constitutional impediment to remove the offending language,” Mapp said.
11 June 2016
Posted by Overseas Review at 8:26 AM