Puerto Rico won't set aside money to pay general obligation debt and will set up an emergency spending fund, under bills signed by Gov. Alejandro García Padilla.
He didn't sign a bill providing for the payment of debt service to bond holders, so that measure may expire at the end of Saturday, according to a government source. He hasn't said whether he will sign the bill that allocates $450 million for bond payments in the current fiscal year.
The current fiscal year started on July 1, one day after President Obama signed the Puerto Rico Oversight, Management and Economic Stability Act to help the territory restructure debt the governor has said was unpayable under current economic conditions.
García Padilla signed House Bill 2962 allowing the government to continue to skip setting aside money for payment of the general obligation debt, the governor's office announced Tuesday night. The law also allows commonwealth government entities and the Government Development Bank for Puerto Rico to alter the terms on the debt owed by the entities to the GDB.
The governor signed House Bill 2960 to contribute at least 1% of government revenues to an emergency fund. This fund will be accessible if revenues fall short of projections and the government needs additional money for operations. Though the law is supposed to require at least 1% of revenue be set aside, the governor's press office said that $20 million will be contributed to the fund this year, which would be about 0.22% of revenue.
He signed House Bill 2961 to allow the government to alter spending on certain budgeted measures if needed adjust to shortfalls in revenues.
Finally, he signed Senate Bill 1577 to promote the industrial sector on the island dedicated to maintaining, repairing, and refurbishing marine vessels. The government has had some success in attracting companies dedicated to repairing and refurbishing aircraft.
