Sept 16 (Reuters) - A U.S. House of Representatives committee will take up a proposal next month to amend a 2016 federal law that created a financial oversight board for Puerto Rico with changes aimed at the board's funding and spending priorities in the island's budget, a congressional staff member said on Monday. Congressman Raul Grijalva, a Democrat who chairs the House Natural Resources Committee, is seeking to move the board's funding from the bankrupt U.S. commonwealth to the U.S. government, as well as to define essential services and order an audit of the island's debt as part of the PROMESA Act, according to Margarita Varela-Rosa, a staff member in the committee's Office of Insular Affairs.
The committee, which oversees U.S. territories, will discuss a draft of the proposed amendments on Oct. 22, she said.
Besides creating a seven-member oversight board, the act also allowed Puerto Rico to file a form of bankruptcy in 2017 to restructure about $120 billion of debt and pension obligations.
The board and the bankruptcy have both been controversial in Puerto Rico, where former Governor Ricardo Rossello battled with the board over spending priorities and potential pension cuts.
Varela-Rosa said one proposed amendment would designate pensions, along with education, healthcare and public safety as essential services. As for funding, the board's fiscal 2019 budget totaled $64.75 million.
Rossello, who resigned from office last month, was eventually replaced by Wanda Vazquez, who met with Grijalva at her San Juan office on Monday.
Grijalva also wants to legislatively address reconstruction efforts on the island in the wake of massive destruction caused by Hurricane Maria in 2017, according to Varela-Rosa. After hearing from residents during his latest trip to Puerto Rico, Grijalva is considering community-based oversight of federal and local efforts, she added.
(Reporting by Karen Pierog in Chicago Additional reporting by Luis Valentin Ortiz in San Juan Editing by Matthew Lewis)