Governor Alejandro Garcia Padilla of Puerto Rico has plans to call lawmakers back to work regarding a borrowing bill that would help finances of the Government Development Bank.
As a result of this measure, junk-related commonwealth’s petroleum tax would increase from $9.25 per barrel to $15.50. Issuing up to $2.9 billion of debt backed by additional revenue is the Infrastructure Financing Authority, which sells bonds for capital projects. Securities from commonwealth that have traded at low levels for the year have nationwide tax exemption.
The proceeds of the deal would help pay back the $2.3 billion obligations of the Highways & Transportation Authority. Most of these obligations are owed to the Government Development Bank, which handles transactions for the US territory’s capital markets.
The session will be convened by Governor Garcia Padilla in order of legislature to keep working on the bond bill. However, according to an email from Yanira Hernandez, the governor’s spokeswoman, no date has been established at this time.
As stated by Maria de Lourdes Martinez, spokeswoman for Senate President Eduardo Bhatia yesterday was the deadline for both chambers to consider new legislation in 2014. The next regular session will not start until January 12.
According to Rafael “Tatito” Hernandez, Assembly Representative, this week the bill was not passed by lawmakers because the majority wanted to add any increase in crude-oil taxes in a broader plan that would cut levies for both personal and corporate incomes. Hernandez who chairs the House Treasure Committee added that most of the legislators are eager to pass the bill with the new tax reform.
Roughly 21% of loans from the bank account for the funds extended by the Government Development Bank to the highway agency, which helps the commonwealth and its localities with cash-flow needs, as well economic development on the island.
As of October 24, the Government Development Bank had approximately $2 billion of net liquidity but without a planned bond sale, the amount of available cash would drop to $819 million by March 31, 2015, this according to the Moody’s Investors Service report.
New York-based spokesman for the Government Development Bank, Dave Miller, did not immediately respond on the plan to email and phone message requests.