House Panel Chairman Seeks to Revive Puerto Rico Bankruptcy Bill

U.S. Representative Tom Marino, chairman of a House subcommittee considering legislation that would allow Puerto Rico’s government agencies to seek bankruptcy protection, said he’s pushing for the measure to advance.

The bill, which was the subject of a February hearing by Marino’s House Judiciary subcommittee, hasn’t moved forward as lawmakers have raised objections and the island falls deeper into a fiscal crisis. Marino said discussions among House members are continuing over the legislation, introduced by Pedro Pierluisi, Puerto Rico’s non-voting delegate to Congress.

“Every time I try to move it out of committee, somebody raises another issue,” said Marino, a Pennsylvania Republican, in a Tuesday interview. “But it’s far from dead.”

White House press secretary Josh Earnest said Monday Congress should consider legislation allowing Puerto Rico’s government agencies to file for Chapter 9 bankruptcy protection.

Barring help from lawmakers, debt-burdened Puerto Rico agencies must continue piecemeal negotiations with creditors, a process that could lead to chaos if discussions break down and investors end up suing the agencies and each other to reclaim what they’re owed.

Puerto Rico securities have dropped in price after Governor Alejandro Garcia Padilla last month said he would move toward restructuring the island’s debt.

Commonwealth general obligations maturing in July 2035 traded Tuesday at an average price of about 70.4 cents on the dollar, after falling to a record low of 66.6 cents June 30, according to data compiled by Bloomberg.