.svg) | |
| Other short titles | PROMESA |
|---|---|
| Long title | To establish an Oversight Board to assist the Government of Puerto Rico, including instrumentalities, in managing its public finances, and for other purposes. |
| Enacted by | the 114th United States Congress |
| Citations | |
| Public law | Pub. L. 114–187 (text) (PDF) |
| Legislative history | |
| |
| United States Supreme Court cases | |
The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) is a U.S. federal law enacted in 2016 that serves as a custom-made Bankruptcy law for Puerto Rico. It establishes a process for restructuring debt, and expedited procedures for approving critical infrastructure projects in order to combat the Puerto Rican government-debt crisis.[1][2][3][4] Through PROMESA, the US Congress established a Financial Oversight and Management Board, known colloquially in Puerto Rico as "la junta," to oversee the debt restructuring.[2][3][4] With this protection the then-governor of Puerto Rico, Alejandro García Padilla, suspended payments due on July 1, 2016.[4] The FCB's approved fiscal austerity plan for 2017-2026 cut deeply into Puerto Rico's public service budget, including cuts to health care, pensions, and education, in order to repay creditors.[5] By May 2017, with $123 billion in debt owed by the Puerto Rican government and its corporations, the FCB requested the "immediate" appointment of a federal judge to resolve the "largest bankruptcy case in the history of the American public bond market."[6]
In response to legal challenges by creditors trying to reverse the debt recovery actions, the Supreme Court ruled in June 2020 that the Board's appointment, performed by the President only, was consistent with the Appointments Clause.[7]
The Foraker Act of 1900 prevented the government of Puerto Rico and all of its municipalities from entering into debt in excess of seven percent of the aggregate tax value of its property.[8][9]
- ^ Lin, Tom C.W., Americans, Almost and Forgotten, 107 California Law Review (2019)
- ^ a b Pub. L. 114–187 (text) (PDF)
- ^ a b DeBonis, Mike (June 9, 2016). "House passes Puerto Rico fiscal rescue bill ahead of July cliff". The Washington Post.
- ^ a b c Brown, Nick (June 30, 2016). "Puerto Rico authorizes debt payment suspension; Obama signs rescue bill". Reuters.
- ^ Lopez, Anamaria (September 12, 2017), "Puerto Rico is Getting Squeezed, and it will Cost All of Us", Institute for New Economic Thinking (INET), retrieved October 6, 2017
- ^ González, Juan (May 9, 2017). "Puerto Rico's $123 Billion Bankruptcy Is the Cost of U.S. Colonialism". The Intercept. Retrieved October 6, 2017.
- ^ "Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC". SCOTUSblog. Retrieved May 12, 2020.
- ^ "U.S.C. Title 48 - TERRITORIES AND INSULAR POSSESSIONS". www.govinfo.gov. Retrieved November 9, 2020.
- ^ "Foraker Act (Organic Act of 1900) - The World of 1898: The Spanish-American War (Hispanic Division, Library of Congress)". www.loc.gov. Retrieved November 9, 2020.