Control board best way to help Puerto Rico fiscal reform

Puerto Rico's top legal official urged the U.S. commonwealth's legislature on Monday to adopt a bill proposing a control board to oversee the government's finances, calling it the best way to show creditors a commitment to resolve its fiscal problems.

Testifying at a joint hearing of Puerto Rico's House Judiciary and Treasury Committees, Justice Secretary Cesar Miranda said the board, which is part of a broad economic turnaround plan by Governor Alejandro Garcia Padilla, would show the island was serious about fiscal responsibility.

"This measure is necessary to communicate to constituents and our creditors that Puerto Rico is committed to maintaining responsible management of its finances," Miranda said in written testimony ahead of his remarks, translated from Spanish.

The board would "boost the economic development of the island while ensuring the well-being of the general citizenship," and would not infringe on the island's constitution or the powers of its legislature, he said.



The board is part of a bill Garcia Padilla introduced earlier this month to turn around Puerto Rico's economy, which is struggling to service $72 billion of debt.

Miranda was part of a task force Garcia Padilla created in June to draft the proposal.



The proposal also includes spending reforms and reduced payouts to bondholders. Many facets of the plan would need legislative approval, and the testimony on Monday addressed only the fiscal control board.

Garcia Padilla will also introduce legislation this week to improve the finances at PREPA, Puerto Rico's heavily indebted power utility, Jesus Manuel Ortiz, Puerto Rico's government affairs secretary, said on Monday.



PREPA (Puerto Rico Electric Power Authority), with more than $8 billion in debt, is trying to hash out restructuring agreements with creditors, who have demanded reforms at the agency.

Separately on Monday, the city of San Juan, Puerto Rico's capital, struck a deal with the U.S. Department of Justice and the U.S. Environmental Protection Agency to invest $180 million to upgrade its storm sewer systems.

The settlement, subject to approval by a federal court in Puerto Rico, resolves litigation over San Juan's discharges of raw sewage and other pollutants into the San Juan Bay Estuary, the Martin Pena Canal and other water bodies, the Justice Department said. (Reporting by a contributor in San Juan; Writing by Nick Brown in San Juan; Editing by Daniel Bases and Richard Chang)

Control board best way to help Puerto Rico fiscal reform

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