Puerto Rico lawmakers are working to exempt about 46% of the commonwealth's debt from the debt payment moratorium signed Wednesday.
Puerto Rico House Rep. Rafael Hernández Montañez
On Friday Hernández Montañez said he was confident his bill to amend the moratorium would pass. He said he had over 30 votes lined up and was seeking more. Because the Puerto Rico House has 51 seats, 26 votes would be enough to assure passage.
The bill would exempt the commonwealth's general obligation, guaranteed, and any securitized debt from eligibility for the payment moratorium. On Friday Hernández Montañez said this would mean that no moratorium could be placed on the debt of the Puerto Rico Sales Tax Finance Corp. (COFINA), COFIM, Municipal Finance Authority, Puerto Rico Electric Power Authority, and Puerto Rico Aqueduct and Sewer Authority.
Hernández Montañez is a member of the Popular Democratic Party with Puerto Rico Gov. Alejandro García Padilla. Hernández Montañez has been working with Jenniffer González Col-n, leader of the opposition New Progressive Party in the House, on his bill to protect certain classes of debt, he said. House President Jaime Perell- Borrás, a member of the PDP, is a cosponsor of the bill.
On Tuesday during the House consideration of the debt moratorium bill, Hernández Montañez proposed an amendment to it to exempt the commonwealth guaranteed debt and debt held in trusts like COFINA. However, it became apparent that the House wouldn't have passed the bill with Hernández Montañez's amendment. Hernández Montañez said he reached a deal with the governor to vote for the bill without the exemptions in order to assure its passage. In exchange, the governor promised to not veto his bill providing exemptions if the legislature passed it, he said.
When his own amendment came up for a vote on Tuesday, the representative was absent from the chamber, according to the El Vocero news web site.
A spokesperson for the governor couldn't be immediately reached to confirm Hernández Montañez's claim about the governor's promise.
The representative said he expected the House to vote on his bill on April 14, when it comes back into session.
On Friday González Col-n introduced a bill to repeal the debt moratorium measure, saying it introduced "Chavist and Castroist tendencies" in the government.
As the debt moratorium law now stands, it has certain exceptions including debt already held by trustees and the debt of the Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (AFICA, for the Spanish name). However, the law has language to allow the governor to declare an emergency and retract these exceptions, Hernández Montañez said.
Hernández Montañez said his bill would end this ability on the part of the governor.
AFICA debt isn't covered by a possible payment moratorium, because the obligors are in the private sector, he said. The authority is merely the conduit for the debt. A source in the Government Development Bank for Puerto Rico repeated this explanation.
As of late August 2015 AFICA had $959 million outstanding. The current debt moratorium law does make the Series 2000A Educational Facilities Bonds from AFICA eligible for the moratorium. As of late August these had about $66 million outstanding.
