UPDATE 1-Puerto Rico debt relief bill advancing in U.S. House

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WASHINGTON, June 6 (Reuters) - Legislation to help Puerto Rico restructure its $70 billion in debt is likely to be debated by the U.S. House of Representatives beginning on Thursday, a Republican leadership aide said on Monday.

The House Rules Committee is scheduled on Wednesday to decide which amendments, if any, to the bill would be allowed to be considered during debate by the full House and before a vote on passage.

By a vote of 29-10, the House Natural Resources Committee on May 25 approved the “Puerto Rico Oversight, Management and Economic Stability Act,” which would create a federal oversight board to negotiate with investors and decide what they would recover from the roughly $70 billion they have loaned the U.S. territory.

On May 1, Puerto Rico defaulted for a third time on some of its debt and is faced with a $1.9 billion payment on July 1 that it might not be able to fulfill.

Backers of the House bill, which was the result of months of negotiations between Congress and the Obama administration, are hoping legislation is delivered to President Barack Obama by the end of this month.

Any bill that passes the House still would have to be approved by the Senate and some prominent Senate Democrats have said they want to see some significant changes.

It also is not clear whether any Senate Republicans could stand in the way of quick passage.

The House bill would not involve the use of taxpayer funds to bail out Puerto Rico, a U.S. island-territory that suffers from a shrinking economy, a 45 percent poverty rate and a heavy flow of residents moving to the U.S. mainland.

Reporting by Richard Cowan; Editing by Peter Cooney and Tom Brown