The Puerto Rico Senate has changed a proposed fiscal control board into a fiscal oversight board.
In early September the Puerto Rico Working Group for the Fiscal and Economic Recovery of Puerto Rico proposed a local control board as part of its Fiscal and Economic Growth Plan. Gov. Alejandro García Padilla proposed a control board following this recommendation.
On Wednesday the Senate approved Senate Bill 1513 to create an economic recuperation and fiscal oversight board. The Puerto Rico House of Representatives has until the end of Thursday to approve the bill. If this does not happen, either the bill will fail in the current legislative year or the governor may call a special legislative session to consider this and his energy legislation.
"What is being passed here today is not a fiscal control board," Senate President Eduardo Bhatia Gautier said in a written statement released to the press. "This board does not control anything. This board will not decide anything; the legislative assembly will make decisions."
In the Senate legislators stripped the proposed bill of a clause giving supremacy to the proposed Economic Revitalization and Fiscal Responsibility Law supremacy over other local laws. They also removed the board's power to approve the budgets for Puerto Rico's government agencies.
Further, the Senators removed a proposed $1 million monthly budget for the board. When the legislature creates the commonwealth's budget each year, it will determine the board's allocation.
The board will review and validate data and monitor tax processes, according to a Senate press statement. It will monitor and evaluate the actions of the governor and the legislature.
Bhatia said, "Puerto Rico has a serious credibility problem in all the markets" so that the board's principal role will be to build trust and credibility, according to the Senate statement.
Puerto Rico hasn't been able to place its usual tax and revenue anticipation note this fall. Because of this lack of market access Puerto Rico's government has stated it faces a potential financial shortfall in the next few weeks. The governor has said the government will default on its debt. Puerto Rico chief financial officer Melba Acosta Febo said Tuesday that payment of the December and January debt payments would get priority for payments.
The vote on the bill was 17 to 9. The Popular Democratic Party senators voted in favor except for one who voted against. The New Progressive Party senators and the one Independence Party senator voted against. One New Progressive Party senator was absent.
