Rep. Torres Introduces New Bipartisan Legislation To Disband Puerto Rico’s Financial Oversight & Management Board

For Immediate Release: Thursday, April 7, 2022

Joined By Reps. Gonzalez-Colon, Velázquez, Soto and Grijalva, Legislation Would End Control of Undemocratic Body Over Puerto Rico’s Finances & Future

Washington, D.C.- Today, Rep. Ritchie Torres (NY-15) was joined by Rep. Jenniffer González-Colón (PR-At-Large), Rep. Nydia Velázquez (NY-07), Rep. Darren Soto (FL-09), and Natural Resources Committee Chair Rep. Raúl Grijalva (AZ-03) in introducing new bipartisan legislation to provide a process for the dissolution of the Financial Oversight and Management Board of Puerto Rico.

The “TRUST for Puerto Rico Act of 2022” (HR 7409) would terminate the Oversight Board no later than 90 days after the certification of 2 balanced budgets and transfers all duties and responsibilities to the Government of Puerto Rico after the Oversight Board is terminated. If the bill is passed by Congress and signed into law by President Biden, it could lead to the Oversight Board leaving Puerto Rico as soon as late 2023 or early 2024, if the balanced budgets are certified. The bill was assigned to the House Natural Resources Committee and the House Judiciary Committee and is expected to receive a hearing in Spring 2022.

“The Financial Oversight and Management Board represents a cardinal sin against the sovereignty and self-determination of Puerto Rico. It is the single most egregious example of modern-day colonialism in Puerto Rico and must be disbanded. The undemocratic, unelected Oversight Board has driven the island into fiscal mismanagement and has prevented Puerto Ricans from taking control over of their own destiny. I’m proud to introduce the TRUST for Puerto Rico Act, along with my colleagues, to finally provide a path for the dissolution of the Oversight Board and return control and power to the island’s residents and government,” said Rep. Ritchie Torres (NY-15).

“Now that Puerto Rico has exited bankruptcy, we are ready for another chapter without an Oversight Board. I’m proud to work alongside my colleague Rep. Ritchie Torres on this bill to outline a way forward, renew access credit to markets, and establish a clear transition of assets managements duties back to the government of Puerto Rico. I look forward to seeing that happen,” said Rep. Jenniffer González-Colón (PR-At-Large).

“This bipartisan bill takes meaningful steps to phase out the role of the Oversight Board in statute,” said Rep. Nydia M. Velázquez (NY-07). “As I have said before, it is time to have a conversation about how the government of Puerto Rico can move to best represent the interests of the people without the presence of the Board. By setting the parameters for that transition, this bill is an important step. I encourage both the House and the Senate to move quickly to pass it into law.”

“The PROMESA board’s austerity cuts have gone on for long enough. We must ensure that the island’s budget is managed in a fiscally responsible way that doesn’t cut social programs and other vital services. I believe that our brothers and sisters in Puerto Rico deserve better, and this bill is a step in the right direction towards returning power to the people,” said Rep. Darren Soto (FL-09).

“Now that Puerto Rico has embarked on a path towards resolving its bankruptcy, it is time to start talking about terminating the Financial Oversight and Management Board and returning control back into the hands of Puerto Rico’s elected government officials. I’m proud to cosponsor this bill and want to thank Rep. Torres for his leadership in making this happen,” said Rep. Raúl Grijalva (AZ-03), Chair of the House Natural Resources Committee.

The Board’s tenure has been characterized by controversy over the fiscal measures required for the debt settlement and their impact on areas such as pensions and worker benefits. The labor sector in the Island has opposed the budgetary and regulatory measures; economic analysts have questioned the cost and benefit balance of the debt renegotiation; and figures across the political spectrum have expressed dissatisfaction with the limiting of the powers of the elected government.

The “TRUST for Puerto Rico Act” addresses the following:

1. Eliminates the requirement of access to credit markets and reduces the required number of balanced budgets from 4 to 2 consecutive fiscal years without regard to whether the applicable budget provides for the payment of debt service. 

2. Establishes that the Oversight Board shall be terminated no later than 90 days after certification of the 2 balanced budgets and clarifies that any balanced budget before the enactment of this bill should be taken into account.  

3. Enables the Legislative Assembly and Governor of Puerto Rico to adopt a resolution after the certification of 2 balanced budgets to set forth the transfer of functions. The Fiscal Oversight Board shall transfer all funds, assets, and records to the Government of Puerto Rico and provide a copy of all records to Congress. 

4. Transfer all duties and responsibilities under Title III and Title VI to the Government of Puerto Rico after the Oversight Board terminates, respect to any pending action.   

“Congressman Ritchie Torres’ bill is targeted and reasonable, and it has my full support. After putting an end to our central government’s bankruptcy process, it is time to begin the transition towards returning the public policy decision-making responsibilities back to Puerto Rico’s elected leaders who represent our people. It is also necessary to have a clear and agile process for the Oversight Board’s exit. The time has come to look towards a future of progress and fiscal responsibility for Puerto Rico without the Board,” said Puerto Rico Governor Pedro R. Pierluisi.

“Over the past 5 years, the Fiscal Oversight Management Board (FOMB) has been negotiating lopsided debt agreements with bondholders that have made hedge funds rich while putting the weight of the debt crisis on the people of Puerto Rico. This undemocratic board – riddled with conflicts of interest – has pushed austerity measures that have driven hundreds of thousands of people to leave the island, while those of us who have stayed are faced with rising costs of living, crumbling infrastructure and another default in less than 10 years. Today an important step was taken by Congress to address one of the biggest failures of PROMESA. By taking steps to abolish the FOMB, Congress recognizes that the board has failed and that the people of Puerto Rico can and should be at the driver’s seat of their own recovery,” said Julio López Varona, Center for Popular Democracy’s Campaign Director.

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