Puerto Rico House members continue to discuss a measure that would cut the island's annual general obligation bond bill by $175 million to $250 million.
Legislators in the lower chamber are reviewing a bill that would require the administration to use available revenue instead of bond proceeds to pay the Government Development Bank for Puerto Rico, the island's financial adviser, a yearly payment of $175 million for loans the bank gave the commonwealth to help balance previous annual budgets.
The House could vote on the measure as early as Thursday and pass it on to the Senate, according to Angel Perez, head of the House Budget Committee.
Leaders in both chambers are confident that the bill will pass the Legislature, which is controlled by the New Progressive Party. The question remains whether Gov. Anibal Acevedo Vila, a member of the Popular Democratic Party, will sign the initiative. His administration has said it would like to use $240 million in revenue available from a one-time tax on retirement fund withdrawals to help balance the fiscal 2008 budget instead of diverting $175 million of it to pay the GDB.
If the measure to divert the funds to the GDB is enacted, the commonwealth would not need to borrow $175 million to help meet the obligation. That would decrease Puerto Rico's fiscal 2008 GO bill to $250 million.
Meanwhile, the House Friday evening in a 39-to-11 vote passed the island's tax incentive bill, with the Senate now taking up the initiative. The new law would give businesses that invest in energy, technology, or research and development a corporate income tax rate of 4%, down from 8%. The island's current tax benefit law expires on June 30.