Red Alert: Governor Garcia Padilla’s Special Session May Violate PROMESA

As you have no doubt already seen, Governor Garcia Padilla has called a special session for the purpose of passing over 100 bills and appointing 88 nominees to various government positions in a bid to cement his legacy before leaving office.

While details around the many bills are still surfacing, it is already clear that many of them will disburse government funds in spite of the debt crisis. In fact, eleven new government entities will reportedly be created, and other bills are designed to redirect hundreds of millions to various government retirement systems.

This, of course, could be in violation of section 204 PROMESA, which requires the control board to approve a cost-benefit analysis of any bill that disburses government funds. Incoming Senate President Thomas Rivera Schatz has already raised this issue in a letter to the governor, telling him, “As this is about binding and current federal legislation, I request you in fulfillment of your ministerial duty, to include a certification concerning the fiscal impact of each one of the appointments and legislation that you intend to submit for consideration before this Legislative Assembly during the Extraordinary Session.”

Although the bills have yet to be approved, once the bills become law, section 204(a)(2)(A) of PROMESA requires that within 7 days of its approval the Governor send the law to the Board with a “formal estimate prepared by an appropriate entity of the territorial government with expertise in budgets and financial management of the impact, if any, that the law will have on expenditures and revenues.”

With a control board meeting in Fajardo tomorrow, it remains to be seen what will happen.