In its first annual report to the President of the United States, Congress, and the Puerto Rican government, the Fiscal Control Board (FCB) requested that no amendments be made to PROMESA and asked the federal government for help in areas such as infrastructure, labor, digital services, and manufacturing. However, they did not ask for help in debt-related issues or creditor negotiations.

In a20-page document, the organism created by Promesaoutlined the efforts made during its first 'productive and promising' year, adding that 'any amendments to Promesawould distract and detract from the Government of Puerto Rico and the Oversight Board doing the hard work of balancing the Commonwealth's budget, restructuring the Commonwealth's obligations, and turning around the island's economy.'

The FCB alsoconfirmed that many negotiations are either in progress or in the preparation phase, including negotiations to address the debt held by the University of Puerto Rico (UPR) and thePuerto RicanAqueduct and Sewer Authority (PRASA). They also negotiated a forbearance agreement for fines owed by PRASA to several federal agencies. Other debts to be addressed include the Puerto Rico Infrastructure Financing Authority, the Puerto Rico Industrial Development Company, the Convention Center District Authority, and the Puerto Rico Metropolitan Bus Authority, whose negotiations are already in 'advanced stages'.

The report also discloses that the government is preparing legislation to implement a fiscal plan ofthe Public Corporation for the Supervision and Insurance of Cooperatives of Puerto Rico (Cossec, by its Spanish acronym), after completing the stress testing process for credit unions. In this case, neither the government nor the Board havemade official statements about their plans for the credit unions.

Other undisclosed issues between the Board and the government include a report on tax credits and a 50-year economic projection that was used as basis for the Fiscal Plan and 'is being used in creditor negotiations to size the realistic debt capacity of the Government.'

As for the government's audited financial statements, the report says that the government should have the 2015, 2016, and 2017 reports ready during the current fiscal year.

Recommendations to the Federal Government

The Board requested to meet with the leaders of the Legislative and Executive branches in the US to have the following recommendations approved:

Infrastructure and Transportation

Waivers for the Jones Act and Century of Aviation Reauthorization Act, and eliminating the Electronic Export Information filing requirement for goods shipped between the United States and Puerto Rico.

Support infrastructure projects through a reduction in bureaucracy, investments, and increased access to credit, and 'to keep Puerto Rico top-of-mind for infrastructure funding and improvements.'

Encourage the US Army Corps of Engineers to finalize the project partnership agreement with ENLACE for the Caño Martín Peña dredging project.

Benefits Reform

Grant Puerto Rico waivers to convert welfare funding for SNAP, TANF, and Section 8 housing to an Earned Income Tax Credit (EITC), 'to better incentivize workforce participation, while maintaining a responsible safety net for children, people with disabilities, and seniors.' This means that the beneficiaries will have to work in the formal economy to receive part or the totalityof benefits, which they currently receive without formal employment or while being illicitly employed.

Also, directingthe US Department of Health to use the Puerto Rico Community Survey when allocating funds to the island under the Maternal and Infant Program.

Education/Employment

Ask the Department of Labor to collaborate with the government in a pilot plan to expand apprenticeship programs that will 'link education with marketable skills'.

Encourage the Department of Homeland Security to establish a lower required investment for the EB-5 visas used by investors to settle in Puerto Rico.

Avoid decommissioning the Arecibo Observatory and increase science and education-focused government operations in the island.

Manufacturing

Establish a Manufacturing USA institute in Puerto Rico to preserve the island as a pharmaceutical manufacturing center and to 'become a global biotech innovation hub.'

Tourism

Appoint at least one member who 'has special expertise on tourism in Puerto Rico' to the United States Travel and Tourism Advisory Board.

Financial Institutions

Request the Community Development Financial Institutions Fund to update its website with maps that visually represent Puerto Rico's eligibility, to increase the number of Community Development Financial Institutions in the island, to educate banks about the Bank Enterprise Award program, and to appoint an individual with expertise on Puerto Rico to the Community Development Advisory Board.

Technical Assistance

Dedicate Federal Digital Service personnel to co-create a platform to centralize the government's digital services to citizens.

Provide technical assistance from the Internal Revenue Services to Hacienda to improve tax enforcement.

Provide technical assistance from the National Credit Union Association to COSSEC 'to strengthen credit unions in Puerto Rico.'

They also request assistance for the Puerto Rico Electric Power Authority and the Energy Commission, for business in the island through General Services Administration contracts, and for exports made through the International Trade Administration.

Statistics

The Board asked the Census and the federal government authorities in charge of education, employment, criminal justice, health, substance abuse, mental health, and economy statistics to integrate Puerto Rico's statistics in their reports and analyses to the greatest extent possible.

Visit our special section to see our entire coverage of the Fiscal Control Board.

Click on the links below for the full report and annex.

Fiscal Control Board's Annual Report_26425

Annex_26426