House Natural Resources Committee to Take up Puerto Rico Fix
Sharon Edmondson, Washington Legislative Team Member | February 02, 2016
Legislation to address Puerto Rico's fiscal crisis will move through the House Natural Resources Committee, rather than the House Judiciary Committee, multiple House Republican sources have confirmed.
The decision by the House leadership means that a fiscal control board, not Chapter 9 bankruptcy, will likely be the primary solution to the crisis to come out of the House of Representatives.
Though no bill has yet been drafted by the House Natural Resources Committee, the approach is similar to legislation put forward by Sens. Orrin Hatch, Chuck Grassley and Lisa Murkowski. Their bill establishes a "financial responsibility and management assistance authority" to be led by Puerto Rico's chief financial officer. That legislation does not extend the Chapter 9 bankruptcy authority that the territory's government-and the Treasury Department-have pushed for.
Because the Natural Resources Committee has no jurisdiction over bankruptcy law, it's also unlikely that such rights will be a centerpiece of any new legislation to advance from that committee. However, it's possible Chapter 9 authority for municipal agencies like Puerto Rico's electrical authority -- which is $9 billion-in-the-hole - could be added by the House Judiciary Committee or in a conference committee between House and Senate.
Also, the Puerto Rican government has submitted a proposal to its creditors which includes the government restructuring $49.2 billion of debt in exchange for giving creditors $26.5 billion of base bonds and $22.7 billion in growth bonds.