Puerto Rico’s House of Representatives is set to vote as soon as tomorrow on a $2.9 billion borrowing plan that would bolster the Government Development Bank and fund public transportation.
House members recessed until tomorrow after discussing amendments to a bill that would raise the junk-rated commonwealth’s petroleum tax to $15.50 per barrel, from $9.25, with some of the additional revenue going to back bonds.
Lawmakers are debating whether the increase would take effect at the same time as an anticipated tax overhaul in 2015 and how the steeper levy would be enforced, said Danny Hernandez, a spokesman for Jaime Perello Borras, the chamber’s president. Approval in the House would send the measure to the Senate, Hernandez said.
“Some of them are asking about when the tax reform is going to be implemented,” Hernandez said in a telephone interview from San Juan.
The bill would allow the Infrastructure Financing Authority to sell as much as $2.9 billion of debt backed by oil-tax revenue. Proceeds would repay $2.3 billion of Highways & Transportation Authority obligations, most of which is owed to the Government Development Bank, which handles debt sales for the U.S. territory.
The proposed tax increase would also support public buses and trains. Governor Alejandro Garcia Padilla had threatened to stop bus and rail service after lawmakers last month failed to pass the bill at the end of the regular legislative session. Last night, the governor called off the planned transit shutdown.
For Related News and Information: Puerto Rico Said to Pick Barclays to Lead $2.9 Billion Offer Puerto Rico Governor to Call Special Session on Bond Bill Puerto Rico Plans Infrastructure Agency Bonds by March 31
To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net
To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Mark Tannenbaum, Alan Goldstein
By Michelle Kaske
Puerto Rico House Plans Vote on $2.9 Billion Borrowing Plan
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