NEW YORK, Oct 6 (Reuters) - A bill to allow Puerto Rico’s distressed public agencies to access Chapter 9 bankruptcy laws has drawn several Democratic co-sponsors but is not a partisan move, the U.S. commonwealth’s representative in Congress said on Tuesday.
Puerto Rico, with $72 billion debt and in recession for nearly a decade, is trying to renegotiate its debt. The U.S. territory defaulted in August by paying only a fraction of what was due on some bonds.
Puerto Rico’s representative in Congress, Pedro Pierluisi, introduced the bill - to allow public agencies and municipalities access to Chapter 9 - in February, in the U.S. House of Representatives. Democrats in the U.S. Senate introduced a companion bill in July.
Neither bill has attracted support of Republicans, who control both the House of Representatives and the Senate.
Chapter 9 is the bankruptcy statute governing municipal filings and gives a framework for creditors and debtors to work out their differences. It was used for the city of Detroit.
Among the more than dozen legislators added as co-sponsors to the House bill were: Nancy Pelosi, House of Representatives Democratic leader; Xavier Becerra, chairman of the House Democratic Caucus; John Conyers, the top Democrat on the House Judiciary Committee; and Hank Johnson, the top Democrat on the House Judiciary Subcommittee, Pierluisi said in a press release. Several other democrats also co-sponsored the bill.
“It is important to emphasize that this legislation is not, and should never be regarded as, partisan,” Pierluisi said in the statement. He said the legislation had been endorsed by at least 90 organizations and individuals, including numerous conservative individuals and organizations.
Iowa Senator Chuck Grassley, Republican chairman of the Senate Judiciary Committee, which has jurisdiction over the Chapter 9 bill in the Senate, said last week that he was skeptical of allowing Chapter 9 bankruptcy, as it alone would not solve Puerto Rico’s problems. Senate Finance Committee Chairman Orrin Hatch, a Republican, also expressed skepticism regarding Chapter 9 for the island.
Reporting by Megan Davies; Editing by Dan Grebler