Restructuring Puerto Rico’s finances has involved complex disputes among bondholders invested in different types of Puerto Rico’s public debt. This section outlines the structure of the island’s public debts. Since Puerto Rico lost access to credit markets in late 2014, its current debt structure has been largely unchanged, aside from the runoff of short-term notes, the 2018 wind-down of the GDB, and the 2019 restructuring of sales-tax-backed COFINA bonds (COFINA—an acronym for the Corporación del Fondo de Interés Apremiante—is also known as the Puerto Rico Sales Tax Financing Corporation). Figure 2 and Table A-1 show debt levels as of the end of July 2016.
In a major victory for America’s counties, the State and Local Coronavirus Fiscal Recovery Funds legislation, part of the American Rescue Plan Act was passed by the U.S. Senate on March 6. The bill, which now heads back to the U.S. House of Representatives for final consideration, includes $65.1 billion in direct, flexible aid to every county in America, as well as other crucial investments in local communities.
The Senate version amends the House-adopted bill in several important ways:
The U.S. Department of Treasury would still oversee and administer these payments to state and local governments, and every county would be eligible to receive a direct allocation from Treasury. States, municipalities, and counties would now receive funds in two tranches – both tranches would provide 50 percent of the entity’s total allocation. In cases where a state has a very high level of unemployed individuals, these states may receive both tranches at the same time.
In order to receive a payment either under the first or second tranche, local governments must provide the U.S. Treasury with a certification signed by an authorized officer. The U.S. Treasury is required to pay first tranche to counties not later than 60-days after enactment, and second payment no earlier than 12 months after the first payment.