C  l i e n t  A l e r t
 
U.S. House Committee on Natural Resources 
Issues Discussion Draft of 
" Puerto Rico Oversight, Management and Economic Stability Act" (PROMESA)
On March 29, 2016, the House Committee on Natural Resources released a discussion draft bill on Puerto Rico's economic crisis. The draft legislation, which would be known as "Puerto Rico Oversight, Management and Economic Stability Act" (PROMESA), would create an Oversight Board of five (5) appointed members to address the island's financial crisis. Under the proposed Act, the Board will, among other things:

  • Audit the Government of Puerto Rico ("Government") and its corporations.
  • Review, approve and certify Fiscal Plans and Budgets.
  • Request reports describing the actual cash revenues, cash expenditures and cash flows of the Government, conduct a review to determine whether those expenses are in compliance with the applicable certified Budgets and if necessary, make appropriate reductions in non-debt expenditures to ensure that the actual quarterly revenues and expenses for the Government are in compliance with the applicable certified Budget. 
  • Ensure that each Act passed by the Legislature and the Governor, any contract or lease (other than with vendors) that is proposed to be entered into by the Government and any borrowing undertaken by the Government, are consistent with the applicable Fiscal Plan and approved Budget.
  • Submit recommendations on actions the Government or the Federal Government may take to ensure compliance by the Government with a Fiscal Plan and Budget or to otherwise promote the financial stability, management responsibility, and service delivery efficiency of the Government; require an explanation for the rejection of the recommendations, and in its discretion, vote to take the recommended actions.
  • Issue orders, rules or regulations, as it considers appropriate to carry out the purposes of the Act. Those orders, rules and regulations will be final and would not be subject to judicial review.
  • Issue bonds, notes or other obligations, at the request of the Governor, to borrow funds in the name of and for the use of the Government.
  • Facilitate a court supervised debt restructuring, by filling a petition in U.S District Court, when voluntaries agreements between the involved parties and creditors can't be reached. The District Court will have exclusive jurisdiction of all property, wherever located, of the debtor.
  • Ensure prompt enforcements of the Laws of Puerto Rico prohibiting public sector employees from participating in a strike or lockout.
We emphasize that the Board would be an entity within the government but not subject to the control of the Governor or the Legislative Assembly. Neither the Governor nor the Legislature may exercise any control, supervision, oversight, or review over the Oversight Board or its activities; or enact or implement any act, resolution, policy or rule with respect to the Oversight Board or its activities. Any action against the Board or any action arising out of the legislation would have to be brought in the United States District Court for the District of Columbia. No order of any court granting declaratory or injunctive relief against the Oversight Board, including relief permitting or requiring the obligation, borrowing, or expenditure of funds, will take effect during the pendency of the action before such court, during the time appeal may be taken, or, if appeal is taken, during the period before the court has entered its final order disposing of such action.

On the other hand, the proposed legislation would allow Puerto Rico to adjust minimum wage requirements for temporary workers established in Section 6(g)(4) of the Fair Labor Standards Act of 1938, up to the age of 25. The said Section states that any employer may pay any employee of such employer, during the first 90 consecutive calendar days after such employee is initially employed by such employer, a wage which is not less than $4.25 an hour.  Also, the legislation would prevent the U.S Department of Labor's proposed 113% increase in the individual salary threshold to qualify as exempt from federal overtime pay requirements from impacting Puerto Rico. Finally, the draft legislation proposes the "Puerto Rico Revitalization Act," which establishes a procedure for infrastructure rehabilitation projects.

It's important to note that the House Committee on Natural Resources released the draft legislation "to encourage feedback, so people can respond to the draft proposal, not a supposition of its contents."  - Chairman Rob Bishop. Thus, the discussion draft will change. Goldman Antonetti & Córdova, LLC will issue additional updates on any new developments regarding this matter. 

For further information you may contact any of the attorneys in the Labor & Employment Law Department.
Attorneys - Labor & Employment Law Department
Luis F. Antonetti-Zequeira
Vicente J. Antonetti-Zequeira
Angel Berberena-Feliciano
Lorena Cortés-Rivera
José J. Fas-Quiñones
Amelia Fortuño-Ruiz
Cenia M. Mercado-Santana
Luis D. Ortiz-Abreu
Howard Pravda
Francisco M. Ramírez-Rivera
Jorge Rodríguez-Micheo
Javier G. Vázquez-Segarra
787.759.4111
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787.759.4143
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lantonetti@gaclaw.com
vantonetti@gaclaw.com
aberberena@gaclaw.com
lcortes@gaclaw.com
jose.fas@gaclaw.com
afortuno@gaclaw.com
cmercado@gaclaw.com
lortiz@gaclaw.com
hpravda@gaclaw.com
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jrodriguez@gaclaw.com
jvazquez@gaclaw.com

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