Governor Says He Will Sign Oil Tax Hike to Support the GDB and PRHTA

Puerto Rico Governor Alejandro García Padilla announced that he will sign a bill to increase oil taxes to support the commonwealth's Government Development Bank for Puerto Rico and the Highway and Transportation Authority.

The bill will provide liquidity to the GDB. The bill specifies that the Puerto Rico Infrastructure and Finance Authority will sell a bond and use the proceeds to, among other things, pay off the HTA's $2.2 billion debt to the GDB.

PRIFA will sell a bond up to $2.9 billion in size.

The bill specifies that the bond will have a coupon no higher than 8.5% and a price no lower than 93 cents per a dollar. The Puerto Rico Senate added these provisions. The Senate also removed a provision from the Puerto Rico House version that would have adjusted the oil taxes upward in future years to adjust for inflation.

On Tuesday GDB President Melba Acosta Febo and Chairman David Chafey praised the bill as a step forward but also said they had reservations about it.

In a written statement the governor's chief of staff Víctor Suárez said, "The governor will remain in continuous dialogue with our legislative team to refine this legislation and promptly achieve the filing and approval of the necessary tax reform."

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Transportation industry Puerto Rico
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