[Congressional Record Volume 162, Number 91 (Thursday, June 9, 2016)]
[House]
[Pages H3600-H3635]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PUERTO RICO OVERSIGHT, MANAGEMENT, AND ECONOMIC STABILITY ACT
General Leave
Mr. BISHOP of Utah. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and to insert extraneous material on H.R. 5278.
The SPEAKER pro tempore (Mr. LaMalfa). Is there objection to the
request of the gentleman from Utah?
There was no objection.
The SPEAKER pro tempore. Pursuant to House Resolution 770 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 5278.
The Chair appoints the gentleman from Idaho (Mr. Simpson) to preside
over the Committee of the Whole.
{time} 1543
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 5278) to establish an Oversight Board to assist the Government of
Puerto Rico, including instrumentalities, in managing its public
finances, and for other purposes, with Mr. Simpson in the chair.
The Clerk read the title of the bill.
The CHAIR. Pursuant to the rule, the bill is considered read the
first time.
The gentleman from Utah (Mr. Bishop) and the gentleman from Arizona
(Mr. Grijalva) each will control 30 minutes.
The Chair recognizes the gentleman from Utah.
Mr. BISHOP of Utah. Mr. Chair, I yield myself such time as I may
consume to say that to date, this is one of the most significant bills
that has come to the floor in a long time, and it is going to be an
excellent solution to a very, very difficult problem.
I yield 5 minutes to the gentleman from Wisconsin (Mr. Duffy), the
sponsor of the bill, for its introduction.
{time} 1545
Mr. DUFFY. Mr. Chair, I thank Congressman Bishop and the whole
Natural Resources Committee for all of the hard work they put into this
bill.
This has been a months-long process of working with Democrats and
Republicans, the administration, Treasury, Puerto Rican elected
officials, all coming together to negotiate, to discuss, to
philosophize and then eventually come up with what I think is an
excellent resolution to the burning crisis in Puerto Rico. I want to
take a moment to talk about what is actually happening on the island.
Puerto Rico is $73 billion in debt. That is over 100 percent of GNP.
They have almost $2 billion of unpaid bills to their vendors. So what
does that mean? That means schools are closing down because we don't
have fuel for energy in the schools or for school buses. Hospital wings
are closing. Emergency vehicles aren't being run because the island
doesn't have money to pay its bills. This is a true economic crisis. It
is a true humanitarian crisis that is taking place in Puerto Rico.
So the question becomes: Does this institution act to help Puerto
Rico, or do we continue to negotiate and refine and tweak a bill that
will never come to the floor, that will never make it to the Senate,
that will never gain the President's signature? Do we let perfect be
the enemy of the good?
I think this is a great bill that is going to actually get Puerto
Rico on a path to prosperity, opportunity, and economic growth; that is
going to help the people in Puerto Rico who have a dream of living in
Puerto Rico stay in Puerto Rico with their families in their
communities on the island that they love.
Right now, there is despair. We have thousands of people leaving
Puerto Rico every month to come to the mainland because there is no
opportunity. This is what debt does to economies. It absolutely crushes
them, and it crushes people.
So what do we do? Well, we have a two-pronged approach. Number one,
the elected officials in Puerto Rico have known that this issue has
been coming for years, and they haven't been able to get their hands
around it, haven't had the political will to fix the burning problem.
So we are going to put into effect an oversight board to actually work
with the island government to get its finances and its budgets under
control.
That oversight board is going to have an opportunity to work on debt
restructuring, which is the second prong of this bill. $73 billion in
debt, they can't pay it. People might want to wish that all the
bondholders could be paid. They might dream about all the bondholders
being paid, but the bottom line is Puerto Rico doesn't have enough
income to pay its bondholders. They can't pay their vendors, let alone
their bondholders.
So we set up a system where the island and the bondholders have a
forum in which to negotiate a settlement, a resolution to this massive
debt. And if they can't come up with a resolution or a solution to the
debt, they can access the court system, and the courts can help them
resolve the disputes in regard to this massive debt. It is that system
that is going to allow for debt restructuring and an oversight board
that is going to bring Puerto Rico to a place of economic health. When
you can get to a place of economic health, you can start to have a
conversation about economic growth; and when you have economic growth,
you actually help people, you help families, and you help communities.
Now, there are some who have said that this bill is a bailout. Let me
tell you what. I have the definition of a bailout, and a bailout
happens when this institution sends taxpayer monies to somewhere else
or to somebody else. The bottom line is this bill doesn't spend any
taxpayer money bailing anybody out. There is no taxpayer money that is
involved.
What we do here is say: Hey, listen. If you invested in Puerto Rican
bonds and you might have gotten a great upside, a great return on your
bonds that you maybe bought at 50 or 60 cents on the dollar, you took
that risk; and if there is a loss, you, the bondholder, are going to
bear the loss on that bond, but the taxpayers aren't going to bear that
loss for you.
So I think this is a great compromise, a great package that is going
to bring economic health and growth back to Puerto Rico.
I want to thank Mr. Pierluisi for all of the insight that he has
given to both sides of the aisle on what needs to be done to make this
work, and the elected politicians, the Speaker of the Puerto Rican
House, who has been so gracious with his insight into how we structure
a package that is going to grow Puerto Rico.
Mr. GRIJALVA. Mr. Chair, I yield myself 5 minutes.
The United States flag has flown over Puerto Rico for more than a
century. Those born on the island are American citizens, and more than
200,000 have served in the United States military, including roughly
10,000 serving today. Millions more live on the U.S. mainland but
consider Puerto Rico their home.
Mr. Chairman, we are here today because our fellow Americans are
suffering, and it is our constitutional responsibility to help them.
They are suffering from the effects of a debt crisis more than a decade
in the making.
A devastating combination of mismanagement, unfair Federal policies,
opportunistic hedge funds, and desperate budget cuts have destroyed the
economy on the island. The monstrous burden of Puerto Rico's $70
billion debt is swallowing the funds needed to provide health care,
education, transportation, and public safety for the Commonwealth's
families.
Almost 100,000 people have left the Commonwealth last year to look
for
[[Page H3601]]
better economic opportunities, which only makes the situation on the
island worse. About 80 percent of children in Puerto Rico live in high-
poverty areas, compared to about 11 percent of children on the
mainland. The island's poverty rate is about 44 percent, and
unemployment is 13 percent.
If Congress fails to act, the island and its people face another
decade of further economic and social collapse. Our fellow citizens of
Puerto Rico should not have to endure this coming humanitarian crisis.
Our colleague, Nydia Velazquez, has described the status quo as a
``recipe to lose an entire generation to forced migration to the
mainland.''
After 6 months of difficult bipartisan negotiations, four hearings,
and a series of draft bills, we are here today to consider H.R. 5278.
H.R. 5278 will provide the tools necessary to get the economy of Puerto
Rico on a more stable footing and allow the Commonwealth to regain
access to credit markets.
The bill would allow restructuring of all outstanding debt without
favoring any particular creditor; require transparent audits, combined
with annual fiscal plans and budgets; and temporarily pause the ongoing
flurry of litigation to allow the oversight board to begin its work and
create a space for voluntary negotiations.
As I have said throughout this process, this is not a bill that I or
Democrats would have written. The oversight board is too powerful and
is yet another infringement of the sovereignty of the people of Puerto
Rico, and they have a right to find it offensive. The provisions
undermining minimum wage and overtime rules don't belong in the bill.
What is worse, they threaten the effectiveness of the overall
legislation.
Provisions that should be included--like full pension protections, an
earned income tax credit, equal funding for Medicaid, and a Zika
response--are missing. But the reality is that this is the only bill
that would attract enough support from my colleagues across the aisle
to pass in a Congress which they control. There is no other avenue
available to address the crisis. This compromise is the bill we can and
should pass.
When measured against a perfect bill, this legislation is inadequate.
When measured against the worsening crisis in Puerto Rico, this
legislation is vitally necessary.
I urge my colleagues to support H.R. 5278.
I would like to take a moment to clarify for the record a number of
inaccurate and misleading statements in the Committee Report on H.R.
5278. It appears that the Committee Report on H.R. 5278 was prepared
based on earlier non-public drafts of the bill--not the version
considered by the Committee. Several references plainly do not reflect
the current language in H.R. 5278 as introduced or as voted on by the
House Committee on Natural Resources during its markup hearing.
The following statement on page 40 of the Committee Report
oversimplifies a complex problem facing Puerto Rico and, in my view,
mischaracterizes the nature of the territory government's action: It
says, ``Puerto Rico's local politicians have accelerated the crisis on
the island through the passage of harmful legislation, including the
imposition of a moratorium on the payment of debt.'' Puerto Rico's
passage of a moratorium law was a local response to attempt to address
its fiscal and debt emergency in the absence of necessary Congressional
action. It is misleading and unreasonable to characterize the passage
of a local moratorium law as accelerating the crisis.
The Committee Report's summary of section 101 provides that:
``[additionally, this section provides for the appointment of seven
individuals to the Oversight Board through a process that ensures that
a majority of its members are effectively chosen by Republican
congressional leaders on an expedited timeframe, while upholding the
President's constitutional role in making appointments.'' Let's be very
clear: The President appoints all seven members of this Puerto Rico
Board. To be sure, members of Congress may make suggestions to the
President, but the power to appoint members of this territorial entity
remains with the President.
The Committee Report's summary of section 201 is inaccurate in a
number of respects. The report states, on page 45, that
``[i]mportantly, Fiscal Plans ensure the protection of the lawful
priorities and liens as guaranteed by the territorial constitution and
applicable laws, and prevent unlawful inter-debtor transfers of
funds.'' This interpretation is misleading and does not reflect the
language of the bill or the evolution of the language throughout the
legislative process. Section 201(b)(1)(N) provides that a Fiscal Plan
certified by the Oversight Board must ``respect'' the relative lawful
priorities or lawful liens under territory laws, not ``ensure the
protection'' of such priorities or liens. The verb ``respect'' was
specifically chosen by the drafters of the bill and carefully
considered by the Committee. For instance, at the Committee markup,
Representative Fleming twice offered amendments that would have changed
the ``respect'' language in section 201(b)(1)(N) to ``comply with.''
The Committee twice rejected those amendments--the first time on a
voice vote and the second time on a roll call vote, 16 yeas to 23 nays.
The Committee recognized that the verb ``comply with'' was unduly
restrictive and that the Oversight Board needed the flexibility
afforded by the verb ``respect,'' which is more open-ended. For that
reason, it is inaccurate for the Committee Report to state--contrary to
the current legislative text and the Committee's intent--that Fiscal
Plans ensure the protection of lawful priorities and liens.
In addition, the summary of section 201 explains that ``[w]hile this
language seeks to provide an adequate level of funding for pension
systems, it does not allow for pensions to be unduly favored over other
indebtedness in a restructuring.'' But Section 201(b)(1)(C) has nothing
to do with relative priorities among various creditors; the provision
requires the Board to provide for adequate funding of pensions, which
relates to the Fiscal Plan and the manner by which annual budgets
comply with the Fiscal Plan. Of course, any restructuring under Title
III must be consistent with the Fiscal Plan under Section 314 of the
bill, but the Committee Report is inaccurate in suggesting that this
provision relates to relative priorities.
The following statement on page 48 summarizing section 303 is missing
a critical adjective: ``nor may an executive order divert funds from
one instrumentality to another or to the territory.'' Certain executive
orders that divert funds from one territorial instrumentality to
another or to the territory may be lawful under applicable territory
laws. The only types of executive orders that are preempted by section
303(3) of this Act are ``unlawful'' executive orders, as the text of
section 303(3) makes abundantly clear. For instance, if an executive
order is permitted by the territory's constitution or its laws, it is
not an unlawful executive order and is not preempted by section 303.
The drafters intended section 303(3) to make clear that PROMESA
preempts and renders void any executive orders issued beyond the scope
of what would have been authorized by its local laws; lawful exercises
of executive authority are unaffected.
In summarizing section 314 on page 50, the report states: ``[b]y
incorporating consistency with the Fiscal Plan into the requirements of
confirmation of a plan of adjustment, the Committee has ensured lawful
priorities and liens, as provided for by the territory's constitution,
laws, and agreements, will be respected in any debt restructuring that
occurs.'' This summary suffers from the same problem that the summary
of the provisions of section 201 suffered: It refers to language that
has never existed in a public version of the bill; rather, it reflects
staff-level draft text that was ultimately rejected. Section 201
clarifies that Fiscal Plans must ``respect'' lawful priorities and
lawful liens. The Committee carefully considered this language and
twice rejected amendments proposed to change it to ``comply with'' such
priorities and liens.
The summary of section 407 on page 52 explains that: ``[t]his section
grants creditors the right to sue upon the conclusion of the stay, if
the government of Puerto Rico transfers property between
instrumentalities during the tenure of the Oversight Board in violation
of any agreement, or applicable law that a creditor has or would have a
pledge of, security interest in, or lien on such property.'' Section
407, as drafted and passed through Committee establishes a federal
remedy for Puerto Rico's creditors in certain circumstances. But the
addition of the language ``or would have'' in the Committee Report,
again, reflects staff-level text that was not ultimately included in
the version approved by the Committee. The current text provides a
cause of action for creditors that--at the time of the alleged unlawful
transfer--in fact have ``a pledge of, security interest in, or lien
on'' the transferred property. Contrary to the suggestion of the
Committee Report, the provision does not permit such a cause of action
if the plaintiff only ``would have'' in some future circumstance such
an interest.
Indeed, the fact that the addition of words like ``or would have''
were discussed but not ultimately included in the text is strong
evidence that Congress did not intend for such prospective, contingent
rights to be within the scope of this provision. It would have been
extraordinary to provide certain creditors an argument that federal law
establishes for them a property interest where no such property
interest existed under the terms of the agreements
[[Page H3602]]
they negotiated. The Committee rightly declined to do so.
I reserve the balance of my time.
Mr. BISHOP of Utah. Mr. Chairman, I yield 2 minutes to one of the
senior members of our committee, a senior member of his delegation, and
someone who happens to be celebrating today not only his anniversary,
but also his birthday; and what better way of giving a birthday present
to the Representative from Alaska than to allow him to speak on the
floor on the subject of Puerto Rico.
I yield 2 minutes to the gentleman from Alaska (Mr. Young).
Mr. YOUNG of Alaska. Mr. Chair, I rise today in support of H.R. 5278.
May I commend Chairman Bishop for his kindness in recognizing my
birthday and my anniversary. I am quite proud of that. I am 83 years
old. I want a lot of you to remember the fact I still can kick tails
and take names, so just keep that in mind.
This is a bill that I do support. It has been worked together with
the Puerto Ricans. It has been worked together with Representatives
Grijalva and Pierluisi. I would say most all of the people involved in
this recognize this is not everything we would want, but it is the
bill, I think, that can help Puerto Rico today and now.
It is not a bailout. That is for some people who keep saying it is a
bailout. It does not allow taxpayer dollars to be used for paying down
the Puerto Rican debt.
I held a hearing in February on the oversight board concept, and it
was clear that it was needed and it was testified in favor of. I
understand some reluctance in Puerto Rico, but let's get this ship
righted. Once we get it righted, restaffed, and the sails full of wind,
then Puerto Rico will have a chance.
I do support the multiple-step process. The bill combats the
immediate crisis. It will help out Puerto Rico's ability to take and
get credit. We need more long-term solutions, though, about the
economic zones in Puerto Rico and how we improve the economy there so
they can continue to grow.
I want to compliment Mr. Duffy's amendment, and I will support Mr.
Duffy and his work on this legislation. I do believe a HUBZone is very
necessary in the contracting program.
As I mentioned, I have been worked passionately on Puerto Rican
issues on the floor of the House. Fifteen years ago, we had a vote
about statehood. I passed it by one vote. I am a big supporter of
statehood and always have been. It didn't occur. We didn't allow it.
Right now, this problem has to be addressed.
I again do compliment Mr. Bishop, Mr. Duffy, and members on that side
of the aisle. Let's take our American people and Puerto Rico and give
them the recognition that is necessary. Let's take and help them now so
we can go forth.
Mr. GRIJALVA. Mr. Chairman, I yield 5 minutes to the gentlewoman from
New York (Ms. Velazquez).
Ms. VELAZQUEZ. Mr. Chairman, I want to take this opportunity to
really thank Ranking Member Grijalva for the important role that he has
played throughout this process.
Mr. Chairman, I rise in support of the bill. When I was elected to
Congress, I understood there would be tough votes. For me, PROMESA is
one of those votes. For those of us with ties to Puerto Rico, this a
profoundly personal issue.
There is plenty of blame to go around for this situation. San Juan
has played a role, but Washington and Wall Street have equally
contributed to this crisis. It is a crisis that is already harming
working families that call the island home and, if left unaddressed, it
will grow immeasurably worse.
So today we stand at a fork in the road: one path--the bill before
us--empowers Puerto Rico to restructure 100 percent of its debt; the
only other route sends Puerto Rico to the courthouse, where it will be
at the mercy of creditors that will inflict further suffering on the
island.
Now, some would suggest that if we oppose this bill, somehow a third
option will magically appear before us. That is nonsense. The stark
reality we now face is that, other than PROMESA, there are simply no
other politically feasible options left.
That does not mean that this is a perfect bill. It is not even close.
It makes no sense that this bill includes an attempt to pay Puerto
Rican workers less than those on the mainland. It is offensive that
Puerto Rico must foot a $370 million price tag for an oversight board
its residents do not want. And the bill does not address economic
growth incentives and healthcare parity, issues at the core of Puerto
Rico's crisis.
Despite these shortcomings, I see no alternative. If we do not act,
Puerto Rico will unravel further. Basic services are being cut, and
these cuts will deepen. More schools will close. More police and
firefighters will be terminated. And those who will pay the price are
Puerto Rico's most vulnerable: its children, its seniors, and its
working families.
We have a profound responsibility to prevent this catastrophe from
worsening. Those suffering on the island are my brothers and sisters,
my fellow Puerto Ricans.
{time} 1600
But, my friends, they are also your fellow citizens. 200,000 Puerto
Ricans have fought--and shed blood--in every military conflict since
World War I. Now these citizens need our help. This is a responsibility
we cannot ignore. You see, when the United States took Puerto Rico--and
remember we seized it by force--we did not just obtain a pretty island.
We also took on a responsibility to care for the people who live there.
Now, let me say this: Living up to that responsibility does not end
with this vote on this bill today. Decisions made by Washington over
decades have corroded Puerto Rico's economy. Addressing those problems
will require more work by Congress. Until we end the colonial
conditions that have subjugated and exploited the island, there will be
no long-term recovery.
So this bill alone is not enough. We must pass additional
legislation, in the next 6 months, addressing Puerto Rico's deep-seated
economic challenges and ongoing healthcare crisis. If we do not, then,
Washington, we have failed the people of Puerto Rico once more.
Mr. Chairman, this is not the legislation I would have written, but
it is the only way we can extend a lifeline to Puerto Rico right now.
In many ways, the easy path for me would be to vote ``no.'' Certainly,
I have heard the case made by some in the Puerto Rican community.
The CHAIR. The time of the gentlewoman has expired.
Mr. GRIJALVA. Mr. Chair, I yield an additional 1 minute to the
gentlewoman.
Ms. VELAZQUEZ. I thank the gentleman.
Mr. Chair, at the end of the day, I know that if this bill does not
pass, people I care about and love on the island I grew up on will
suffer greatly. At least with this legislation, Puerto Rico can begin
restructuring its debts and start down a new path toward a brighter
future. I urge my colleagues to vote ``yes'' on the bill. Then please
join me in working to address the other long-term challenges
confronting Puerto Rico.
In closing, let me thank all those who worked on this legislation,
especially Leader Pelosi, Speaker Ryan, and Whip Hoyer. Let me also
thank Ranking Member Grijalva and Chairman Bishop for their efforts as
well as my fellow Puerto Rican Members of Congress. And, of course, our
thanks to the staff who dedicated countless hours crafting this
compromise.
Mr. BISHOP of Utah. Mr. Chair, I yield 2 minutes to the gentleman
from Florida (Mr. Curbelo). He is from the southern tip of Florida, as
close to Puerto Rico as you can get on the mainland.
Mr. CURBELO of Florida. Mr. Chairman, today I rise in support of H.R.
5278, the Puerto Rico Oversight, Management, and Economic Stability
Act, or PROMESA. I want to thank Chairman Bishop and Representative
Duffy, who have shown steadfast leadership in finding practical
solutions to address the fiscal crisis in Puerto Rico.
The situation in Puerto Rico is urgent and so is the need for a
responsible reform agenda. Hundreds of thousands of citizens have left
the island--many have come to Florida--to find better opportunities as
a result of the deteriorating economic conditions.
Our friends in Puerto Rico, our fellow American citizens deserve a
better future, one that gives them the chance to
[[Page H3603]]
achieve prosperity on the island. This legislation is an important step
forward in helping the island mitigate the existing humanitarian and
economic emergency in a responsible way.
The bill also allows the congressional task force to look at
impediments to economic growth and poverty reduction, including
equitable access to Federal healthcare programs for the island's
residents. Serious challenges remain in the healthcare sector--like the
impending Medicaid cliff--that could have a detrimental impact on the
future of the island.
I also urge my colleagues to vote in favor of my amendment with Mr.
Jolly which will guarantee that addressing the nearly 60 percent of
children living in poverty on the island is a top priority. As we work
to achieve economic stability on the island, we must also ensure that
the mechanisms in this bill benefit the extremely vulnerable child
population.
Congress has an important interest in ensuring that Puerto Rico not
only survives the current crisis, Mr. Chairman, but that it is able to
build a better and more sustainable future. Again, I am very supportive
of the bipartisan solutions in H.R. 5278, and I urge my colleagues to
vote in favor of the bill and of my amendment which addresses child
poverty on the island.
Mr. GRIJALVA. Mr. Chairman, I yield 3 minutes to the gentleman from
Maryland (Mr. Hoyer), our whip.
Mr. HOYER. Mr. Chairman, at the outset, rarely do we see the
political courage and intellectual integrity that we have seen in the
gentlewoman from New York (Ms. Velazquez). I have worked with her for
months now trying to get to a solution fair to Puerto Rico and fair to
the 3.5 million American citizens who live in Puerto Rico.
I also want to thank my friend Jose Serrano, also from New York, also
Puerto Rican, also having thought about this extraordinarily
thoughtfully, and it has been difficult. I want to congratulate both of
them for coming to the decision that is a terribly difficult one for
them that this is, at this juncture, the only alternative to the pain
and the suffering of which Ms. Velazquez spoke.
I am sure the citizens of Puerto Rico are watching this debate, and
they understand this is not a perfect bill. It is not the bill I or Mr.
Pierluisi--who lost an election, in my view, because of his fidelity to
what he believes is in the island's best interest--would have written.
It forces Puerto Rico to take some bitter medicine, accept an
oversight board with broad powers that is unacceptable to many living
on the island, and it does not provide additional assistance to the
island that is critically needed and ought to be done. Hopefully we can
address that.
It is a compromise, and it will enable the Commonwealth of Puerto
Rico to restructure its debt and prevent economic catastrophe. I can
assure both sides of the aisle in this Chamber and in the Senate that
it is a compromise forged out of a serious consideration of all
possible alternatives that could result in bipartisan agreement.
We must not risk the cost of further inaction by this Congress, which
should have acted months ago; but it is not too late to do the right
thing. Congress must act before Puerto Rico's next interest payment is
due on July 1.
According to The New York Times Editorial Board: This bill ``has
flaws . . . ''.
I think both sides would agree to that.
The New York Times went on: `` . . . but at this late hour, it offers
the island its best chance of survival.''
It is, therefore, Mr. Chairman, my advice and urging to our Members
that we vote for this bill. We need to come together and pass this bill
without any controversial riders.
Again, I want to thank Representatives Velazquez and Serrano and
Resident Commissioner Pierluisi for their leadership, their courage,
and their integrity.
Mr. Chairman, we need to pass this bill for the American citizens
living on Puerto Rico and to meet the responsibility of which Ms.
Velazquez spoke so eloquently.
Mr. BISHOP of Utah. Mr. Chairman, I yield 2 minutes to the gentleman
from Arkansas (Mr. Westerman), one of the premier members of our
committee.
Mr. WESTERMAN. Mr. Chairman, I rise today in support of H.R. 5278. I
thank the gentleman from Wisconsin, Congressman Duffy, and Chairman
Bishop for their work in crafting this bipartisan legislation.
H.R. 5278 is a compromise bill designed to save Puerto Rico from
economic calamity and prevent a taxpayer bailout. Mr. Chairman, I
suggest that the admission from both sides of the aisle that this bill
isn't perfect is a testament that this bill is the best solution.
Puerto Rico is in a crisis. The territory has already missed payments
on its debt, and more and larger missed payments are on the near
horizon. The fiscal and economic conditions of Puerto Rico are
unsustainable. Based on the constitutionally delegated power of
Congress ``to dispose of and make all needful rules and regulations
respecting the territory or other property belonging to the United
States,'' we have a responsibility to take action on this matter.
This unsustainable debt burden brought on by poor decisions,
unfulfilled promises, and bad investments has crippled their economy.
Their unemployment rate is 12.2 percent, and since Puerto Ricans are
American citizens, thousands of young people come to the mainland each
year to find work. Puerto Rico is spiraling out of control, and it is
our constitutional responsibility to put our territory on a different
path and change the economic trajectory.
H.R. 5278 establishes a 7-member oversight board that will have the
authority to establish budgets for the territory, require the scoring
of legislation so the people of Puerto Rico know the true costs of
government programs, and the power to veto contracts and executive
orders.
Once again, I would like to thank Congressman Duffy and Chairman
Bishop for their hard work in crafting a bill to get Puerto Rico on the
right track without a taxpayer bailout. I urge my colleagues to support
H.R. 5278 to stop Puerto Rico's economic death spiral and to lay a
foundation for a brighter future in Puerto Rico without spending
taxpayer dollars.
Mr. GRIJALVA. Mr. Chairman, I yield 3 minutes to the gentleman from
New York (Mr. Serrano).
Mr. SERRANO. Mr. Chairman, when we started these negotiations, with
both sides wanting to do something, with both leaderships in the House
wanting to do something, I knew that at the end of the day I would be
voting for a bill. I knew I had to do that for a very simple reason.
Inactivity, inaction was not an option. The only option was to do a
bill.
What that bill would look like was my question. What that bill would
look like was my challenge and my dilemma. The bill changed. The
original bill had some provisions that no one could really defend on
either side. We have made a bill now that does have some hard pills to
swallow, but then over $70 billion in debt with no signs of being able
to pay is even more of a bitter pill to swallow. The territory is
hurting. The people are hurting.
In fact, if anything comes out of this that is positive, it is the
fact that the U.S. Congress is paying attention to Puerto Rico in a way
that it hasn't in a long, long time, if at all. We are paying
attention, and we want to do something about the situation at hand.
We are not supposed to direct our comments to the gallery or to the
TV cameras, so I won't do that. But there are people watching this, and
they need to have faith in the fact that both parties have come
together to come together with a plan that will help us, a plan that
will bring Puerto Rico back out of this debt situation. And, most
importantly, I believe there is a commitment on both sides to work on
economic development projects for the future to help Puerto Rico and
its economy.
But I couldn't get off this podium today without addressing my most
important issue, and that is that the problem with Puerto Rico
continues to be the status. As long as Puerto Rico is a colony, a
territory of the United States, these issues will come back and other
issues will come back.
I once, some months ago, either sarcastically or very profoundly,
said that all we were doing if we didn't deal with the status was
putting a Band-Aid on a bigger problem. Well, there is a bigger
problem, and I think it is time Congress came together with the people
of
[[Page H3604]]
Puerto Rico and decided to end the colonial status. But ending the
colonial status does not mean tweaking the colony to make it a little
better or washing the face of the colony to make it a little more
presentable. It means getting rid of the colony and either becoming the
51st State or an independent nation. There is no other solution.
{time} 1615
And for us, as the people who promote--and rightfully so--democracy
throughout the world, to have a colony for 118 years is wrong. And
remember, Puerto Rico didn't do this by itself. The indifference and
inequality created this problem, as much as everything else.
Mr. BISHOP of Utah. Mr. Chairman, I yield 2 minutes to the gentleman
from Idaho (Mr. Labrador), my good friend, who has done a whole lot of
work on this particular bill.
Mr. LABRADOR. I thank the chairman and Mr. Duffy for the work they
and their staffs have done on this critical piece of legislation. I
especially want to thank my staffer, Aaron Calkins, for his work to
make this a better bill. We have worked countless hours to improve this
bill, and I am proud of the work that we have done.
Mr. Chairman, I rise today as a member of the Natural Resources
Committee and as a Representative of Idaho's First Congressional
District to support H.R. 5278.
The debt crisis in Puerto Rico is a result of years of liberal
policies where the government carelessly borrowed and overspent, while
simultaneously encouraging mismanagement and inefficiency. We cannot
view Puerto Rico's situation in a vacuum. If left unresolved, the
financial crisis in Puerto Rico will impact the rest of our Nation.
The bill imposes fiscal reforms without spending a single dollar of
U.S. taxpayer money to relieve Puerto Rico's debt. The bill protects
taxpayers from bailing out a government that spent recklessly and
avoids setting a horrible precedent that could tempt free-spending
States to walk away from their obligations.
Specifically, H.R. 5278 establishes a strong oversight board to
require Puerto Rico to balance its budget and achieve fiscal
responsibility. The bill includes language that ensures that the fiscal
plans and any potential restructuring must honor lawful priorities and
liens as guaranteed by Puerto Rico's constitution and laws.
Every State and municipality in this country relies on bond markets
to provide funding for government operations. H.R. 5278 creates the
balance that will effectively address the needs of Puerto Rico, while
ensuring access to these markets for States and municipalities
nationwide.
In conclusion, as a person who was born and raised in Puerto Rico and
somebody who is very proud of his Puerto Rican heritage, I love the
people, I love the island, and I hope that this bill sets them on the
path to fiscal responsibility and a brighter future.
The House must pass this bill to establish the necessary framework to
help Puerto Rico put its fiscal house in order, while also protecting
the interests of every American.
Mr. GRIJALVA. Mr. Chairman, I yield 5 minutes to the gentleman from
Puerto Rico (Mr. Pierluisi), who, at great risk politically, continued
to push for this compromised bill we have before us; and for that, we
are grateful.
Mr. PIERLUISI. Mr. Chairman, I represent Puerto Rico in Congress, and
I rise in support of PROMESA.
Puerto Rico is at a crossroads. Since 1898, it has been a territory
of the United States, subject to the broad powers of Congress under the
Territory Clause.
In 1917, Congress conferred U.S. citizenship on individuals born in
Puerto Rico. In the 1950s, Congress authorized and approved a
constitution for Puerto Rico, which provides the island with a
republican form of government consisting of three branches.
Because Puerto Rico is a territory, my constituents have never been
treated equally relative to their fellow U.S. citizens in the States in
terms of either democratic rights or economic opportunities. In large
part, to compensate for the lack of fair treatment at the Federal
level, the Puerto Rican Government has spent beyond its means at the
local level, leading to excessive deficits and debt.
This lack of discipline is regrettable but understandable, since the
Puerto Rican Government is seeking to provide a quality of life to
island residents comparable to the quality of life in the States. Bear
in mind that my constituents can hop on a plane any time, any day, and
move to Florida or Texas.
The bill we consider today, PROMESA, is a bipartisan compromise
intended to deal with the territory's unprecedented fiscal crisis,
which is severe and immediate. The bill will enable Puerto Rico to
restructure its public debt in a fair and orderly manner, while
establishing an independent and temporary oversight board to ensure
that Puerto Rico has a viable, long-term fiscal plan and balanced
budgets and that it sticks to both.
In an emergency, the first step is to stabilize the situation, and I
believe PROMESA can accomplish this objective. Without this
legislation, the Puerto Rican Government is likely to collapse,
participants in public pension plans will be terribly harmed, and many
bondholders could lose their investments.
PROMESA is in the interest of all stakeholders, and the most likely
alternative is chaos, litigation, a rapidly deteriorating quality of
life in Puerto Rico, and even greater migration to the States. However,
let me be plain. This bill is an essential first step, but it is not an
enduring solution.
The Federal Government and, indeed, the Puerto Rican Government must
come to terms with a fundamental fact: so long as my constituents are
treated like second-class citizens, Puerto Rico will never have a
first-class economy.
Puerto Rico must become a full and equal member of the American
family as a State, which is the just and logical next step, or Puerto
Rico must join the community of nations as a sovereign country.
Puerto Rico deserves true democracy and true dignity--nothing less--
yet first things come first. We have to deal with this immediate
crisis. We have to save the house in Puerto Rico. Vote ``yes'' on H.R.
5278.
Mr. BISHOP of Utah. Mr. Chairman, I, too, would like to express my
appreciation and sincere gratitude to the Resident Commissioner of
Puerto Rico for his hard work.
I may be known as the historian of this body, but the gentleman from
Oklahoma will give a historical perspective.
Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr.
Lucas).
Mr. LUCAS. Mr. Chairman, I rise today to note that there are only a
handful of my colleagues on the floor or in the body who were here when
the precedent for this process was set in 1995.
Some of my colleagues on this side of the room argue that we are
setting a new precedent. We are not. Some of you remember 1994, when I
came as a new Member in a special election. Some of you remember the
economic chaos, the near collapse of the District of Columbia and the
city of Washington. Some of you remember how we were told in those days
that you can't go into certain parts of town because it is not safe.
Some remember the stories about how a high percentage--if not almost
half--the police cars wouldn't run at any one time.
I remember waking up one July night and looking out the fifth-floor
window of the apartment building I was in as the firemen were hosing
down a spot not many paces from the corner of First and D Streets where
someone had been killed, literally within hundreds of feet of the
Federal campus. Washington, D.C., the District of Columbia, was about
to collapse into chaos--1994.
So what did we do in 1995? We passed a bill very similar to this. We
set up a supervisory board that took control of the finances to help
right the ship.
For 2 years, there were tremendously painful decisions made here in
Washington, D.C., at the municipal level; but after those 2 years, we
had 4 years of balanced budgets, and the Control Act, as it was called,
was suspended. It was successful. And the renaissance this town, this
community has gone through all started with that bill in 1995.
Now, I am voting for this piece of legislation because I believe my
fellow American citizens who live in Puerto
[[Page H3605]]
Rico deserve the right to have a renaissance, deserve the right to move
forward. But we are all Members of elected bodies and we know how tough
these decisions and situations are.
Pass this bill; create the supervisory board; give the good citizens
of Puerto Rico, the Commonwealth, our fellow Americans, a chance to
benefit, just as Washington, D.C., did. They deserve the chance.
Mr. GRIJALVA. Mr. Chairman, I yield 3 minutes to the gentleman from
Illinois (Mr. Gutierrez).
Mr. GUTIERREZ. Mr. Chairman, I rise in opposition to this
legislation. The people of the enchanted island deserve better. It is
my duty to my heritage and to the land where I intend to return some
day and where someday--hopefully, not soon--I intend to be buried.
As President Obama said so profoundly when he visited the land of his
father's birth, Kenya, a nation with one of the richest histories of
the struggle for freedom against the colonial power, I, too, Luis
Gutierrez, am deeply and profoundly connected to my father's
birthplace.
I cannot add my vote to this bill and go back to Puerto Rico or to
the Puerto Rican people in my congressional district in Illinois with
my head held high. I cannot and will not, not when I know that the
majority of votes that will pass this legislation if it passes today
will come from the Democratic Party, a party that, for all its flaws,
is a party I expect a lot more from in times like this.
At a moment in American history when Latinos are quite literally
being dragged through the mud by the other party and maligned for being
Latinos and distrusted and disrespected because of where their parents
or grandparents were born, I expect my fellow Democrats to stand up
tall when the lives and destinies of so many citizens--the entire
island and its people--are held in the hands of the U.S. Congress.
By law, they do not have a vote here. By law, they need others to
vote on their behalf. By law, Puerto Rico belongs to, is property of
but not part of, the United States. By law, this Congress owns Puerto
Rico and must treat that ownership as stewardship, as a caring and
respectful seat of power over the powerless.
And because it is the Democratic Party that will supply so many folks
to enact this bill, I expect my colleagues to demand more. I expect us
not to support a sub-minimum wage. I expect us not to waive overtime
rules that pay people for the work they do.
I expect my fellow Democrats to stand up for equity and equality for
Puerto Ricans in our Tax Code, in Medicare and health care, so that
they don't have to flee Puerto Rico to go to Orlando, Newark, or
Chicago.
I expect Democrats to join me in opposing the same type of unelected
control board that has no accountability to the people that it is
controlling--the type of control board focused on austerity without
consequences of action for the people; the kind of control board that
made decisions in Flint, Michigan, and that poisoned the people that
did not elect them, that acted slowly to remedy the situation until
other governments and other elected leaders accountable to the people
they govern have to step up and begin addressing.
Let me say, I am going to offer a translation in Spanish.
(English translation of the statement made in Spanish is as follows:)
This is not my promise. My promise is that the people of Puerto Rico
be respected, that we don't treat them as if they were colonized
slaves. I reject this bill. Let me tell you that my promise is clear:
to continue my work to defend Puerto Rico. As it is said by the Puerto
Rican people: precious, it does not matter what tyrant treats you with
bad intentions, precious you'll be.
Esta no es mi promesa; mi promesa es que el pueblo de Puerto Rico se
respete y que no se trate como si fueran colonizados esclavos. Yo
rechazo esta propuesta, y les digo que mi promesa es clara; de trabajar
para defender. Porque como se dice pueblo de Puerto Rico preciosa, no
importa el tirano te trate con negra maldad.
The Acting CHAIR (Mr. Collins of Georgia). The gentleman from
Illinois will provide the Clerk a translation of his remarks.
Mr. BISHOP of Utah. Mr. Chairman, I yield 2 minutes to the gentleman
from Wisconsin (Mr. Sensenbrenner), one of the cosponsors of this bill.
Mr. SENSENBRENNER. Mr. Chairman, I went to Puerto Rico in March. I
have been involved in negotiating this, at the request of the Speaker,
literally since the first of this year.
This is difficult. This is something that nobody is happy with. This
is something where everybody is going to take a haircut because the
depth of the problem is so bad.
What we heard right after this Congress began its session this year
was: Why don't we just give them a super chapter 9 bankruptcy? That
would have been bad for the future of Puerto Rico, because super
chapter 9 would have dumped the $72 billion of debt and had it wiped
out. And there is no way that Puerto Rico, having stiffed $72 billion
worth of bondholders, would ever have been able to access the bond
market again.
{time} 1630
Bond market access is essential to any type of State or municipal
financing.
So what do we have? A choice of doing nothing, and we have heard
about the severe consequences if we do nothing, or going with something
that worked in the District of Columbia, which is the oversight board.
Now, sure, they are unelected. One of them has to be from Puerto
Rico. But the Puerto Rican Government, which has been elected, is the
one that caused this problem to begin with. They have increased just
about every function of spending on the Island except debt service, and
they have borrowed more and more and more and more, and they don't have
the money, or wouldn't appropriate the money to service the debt.
That is why we are here today, and that is what has got to be fixed.
It should be fixed with an oversight board working in conjunction with
the Puerto Rican Government, not by a court, or simply by not doing
anything. It can be fixed, and Puerto Rico can have a renaissance
because this is about the only practical way out of the mess.
Mr. GRIJALVA. Mr. Chairman, I yield 2 minutes to the gentlewoman from
New York (Mrs. Carolyn B. Maloney).
(Mrs. CAROLYN B. MALONEY of New York asked and was given permission
to revise and extend her remarks.)
Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I rise in strong
support of H.R. 5278. This bill is not a perfect bill, but it is a true
bipartisan compromise, and it is the only option on the table to
address the crisis in Puerto Rico, which is the home to 3.5 million
American citizens.
The solution that this bill adopts is simple: It will allow Puerto
Rico to restructure its debt in an orderly, court-supervised process
and, in exchange, a temporary, temporary Federal oversight board will
help Puerto Rico make the structural reforms necessary to get its
finances in order and set it on the path of economic growth.
I would like to truly thank all parties for their hard work on this
bill, especially Mr. Pierluisi; my good friends from New York, my
colleagues Representatives Velazquez and Serrano; Ranking Member
Grijalva; Chairman Bishop; Leader Pelosi; and Antonio Weiss, at the
Treasury Department.
New York City, which I represent, has some experience with control
boards. When we faced a fiscal crisis back in the 1970s, the State
established two control boards. And while that was a tough pill to
swallow, in the long run, it made our city better and stronger.
I would like to emphasize that the solution to New York City's fiscal
crisis involved a control board, a debt restructuring, and a $2.3
billion loan from the Federal Government. Puerto Rico isn't getting any
Federal money at all, so a debt restructuring law is really the least
we can do to help them.
Finally, while some opponents of this bill claim on this floor that
debt restructuring is unnecessary because Congress solved D.C.'s fiscal
crisis in the nineties with just a control board, this is fundamentally
untrue.
The only reason the D.C. Control Board was able to balance D.C.'s
budget so quickly was because Treasury assumed the District's $4
billion in pension obligations the year after the Control Board was
created.
[[Page H3606]]
So a control board by itself is not enough. We need to do more. But I
urge my colleagues to support this bill.
Mr. BISHOP of Utah. Mr. Chairman, I yield 3 minutes to the gentleman
from New Jersey (Mr. MacArthur), who is another Member who has worked
hard on this particular bill.
Mr. MacARTHUR. Mr. Chairman, we all know about the crisis in Puerto
Rico involving 3\1/2\ million U.S. citizens, and we know the causes,
fiscal mismanagement over decades, resulting in nearly $120 billion of
bonds and unfunded pension liabilities. Unemployment is two times what
it is here on the mainland, and people are fleeing Puerto Rico in
droves, especially young people. It is not sustainable.
Mr. Chairman, we decided, as a society, hundreds of years ago, that
we were not going to throw debtors into prison, but we were going to
allow for the orderly reorganization of debts. And yet, Puerto Rico
does not have the basic laws that allow that to take place in this
situation. This bill fixes that.
This bill puts equal pressure on bondholders, on the island of Puerto
Rico. The bill will require them to work together or there will be
consequences. And the bill brings an oversight board to help that
happen, to even require that to happen. We have to do this.
But, Mr. Chairman, fixing the debt crisis alone is not going to fix
Puerto Rico's future. We need growth initiatives. This island will not
enjoy an enduring prosperity until this Congress also thinks about how
to help Puerto Rico grow.
That is why I introduced a title to this bill; it is just a sense of
Congress, but it puts a flag in the ground saying that we have more
work to do on growth, and I am really pleased to see a Growth
Commission included in the bill.
Mr. Chairman, I have spent a lifetime in business. I have had the
privilege of creating thousands of jobs. That doesn't happen when you
have uncertain conditions.
In 1996, we changed the Tax Code in Puerto Rico that treats the
return of earnings from that island to the mainland like it is coming
from a foreign country, and you can watch the growth rate of Puerto
Rico plummet ever since. Ever since 2006--my date was wrong--2006, you
can see the growth rate plummet over 10 years.
Manufacturing is still half of the island's economy and yet, it is
reduced by half over the last 20 years. We have to do things that make
Puerto Rico an attractive business environment.
We all are worried about offshoring. This is an opportunity for near-
shoring in a U.S. territory. It is an opportunity to demonstrate pro-
growth principles in action; to allow Puerto Rico, an island paradise,
to become an economic miracle.
This is the opportunity that I see. I am proud of the bill. Like any
bill, it is not perfect. But let's not let the perfect become the enemy
of the good. It is a good bill that deserves our support. I urge my
colleagues to vote ``yes.''
Mr. GRIJALVA. Mr. Chairman, I yield 1 minute to the gentlewoman from
California (Ms. Pelosi). Her time and commitment to the people of
Puerto Rico and to working on a compromise in a bipartisan bill have
been the primary drivers to this point on the bill that we have before
us.
Ms. PELOSI. Mr. Chairman, I rise and commend the leadership of
Chairman Bishop. I thank the gentleman for bringing us here today, as
well as our ranking member, Mr. Grijalva, for bringing this compromise
legislation to the floor.
It is with the deepest of pride that I join my colleagues,
Congresswoman Nydia Velazquez and Congressman Jose Serrano, in support
of this legislation. Although we have concerns about some elements of
it, we support it on balance.
I can't help but mention to my colleagues here that in April, many of
you were there when Congress bestowed the Congressional Gold Medal on
the legendary 65th Infantry Regiment, a largely Puerto Rican regiment
that served with valor since World War I.
Honor et Fidelitas, honor and fidelity, so rings the motto of this
courageous regiment of Americans. With honor and fidelity, the 65th
Regiment overcame prejudice and bigotry and wrote a new chapter of
heroism in our shared American story.
In the Panama Canal Zone in World War I, on the doorsteps of Nazi
Germany, in the defining crucible of the Korean War, and beyond, the
Borinqueneers protected freedom abroad and advanced dignity at home.
Their daring on the battlefield helped break down the discrimination
facing Puerto Rican and Latino Americans across our country. They
enriched our Nation with the strength of their service, through the
excellence of their example, and the power of their bravery. Their
valor under fire is nothing short of legendary. The heroic service of
the Borinqueneers is one of the true great American stories.
I bring this to mind because on that day in Emancipation Hall, which
was crowded with people, and the presentations were led by the
bipartisan, bicameral House and Senate, Democrat and Republican
leadership who had representatives of our military to salute the
bravery of these people of Puerto Rico in defense of our country.
Now we have nearly 100,000 veterans in Puerto Rico who will be
affected, harmed, unless we act today. Today, more than 3 million of
our fellow American citizens in Puerto Rico are facing a fiscal and
public debt emergency that threatens their economy, their communities,
and their families. Only Congress can provide Puerto Rico with the
tools it needs to emerge from this crisis.
After long bipartisan negotiations, we achieved a restructuring
process that meets the test of workability. Does it work? Will it
happen?
This is not a bailout. Some people are trying to describe it as such
for some other purposes. I know that my colleague from Puerto Rico,
Pedro Pierluisi, has explained to us the urgency of this. I know that
we would have, perhaps, had a bill that didn't have some of the
provisions in it that are in it, and we would have preferred to add
some better things to the bill, but that is not the choice before us.
As legislators, we have to make a choice: will the bill alleviate the
challenge that the people of Puerto Rico are facing? Our Resident
Commissioner, Pedro Pierluisi, thinks that this bill does achieve that,
and I thank him for his courageous leadership on all of this.
Again, this can be a very passionate discussion. It is an emotional
one because it involves the lives of people that some of us know and
are part of the families of our Members, as Jose Serrano and Nydia
Velazquez mentioned. But we have to be dispassionate in how we make a
judgment about how we can solve the problem, and we have that
opportunity today.
The oversight board that President Obama will appoint is one that
will have the opportunity to implement the restructuring as described
in this legislation. On a bipartisan basis, we will be submitting names
to the President promptly so that he can appoint the oversight board.
It would be my commitment to make sure that the commitment from the
House Democrats is for there to be one from Puerto Rico representing
the people of Puerto Rico on that board.
In addition to the oversight board, this legislation also contains a
task force, a Members' task force whose task it is to look at
impediments in Federal law to Puerto Rico's economic growth. I would
hope that that task force would afford us the opportunity to see other
ways that we can help the economic growth of Puerto Rico, for the
citizens, our fellow citizens in Puerto Rico.
We can talk about parity in relationship to Medicare, Medicaid, and
the rest. We can talk about the earned income tax credit, which we
enjoy in the United States, and having that be more available in Puerto
Rico. We can talk about ways to use the Tax Code to give more
opportunity there.
So I urge my colleagues to support the legislation. Even though it is
not the bill that either one side would have written, it is a
compromise. But it will provide the people of Puerto Rico the tools to
overcome the crisis and move forward, hundreds of millions of dollars,
maybe $1 billion a year. It will alleviate Puerto Rico from having to
commit, because of the restructuring, and will enable it to meet the
needs of the people of Puerto Rico as it gets back on its feet.
Puerto Rico's economic success is important to the United States. Our
[[Page H3607]]
economic growth and job creation plans must include our fellow citizens
in Puerto Rico. I would hope, with the task force; I would hope with
future legislation, as we go forward, we will recognize how close our
connection is, how important it is for Puerto Rico to survive, and
express our gratitude to the people of Puerto Rico for the vitality
they bring to the United States of America, and for the security that
so many Puerto Ricans risk their lives to protect our country.
With that, I urge our colleagues to pray over it and conclude, as our
three colleagues, Congresswoman Velazquez, Congressman Serrano,
Congressman Pierluisi have concluded, that, on balance, we must move
forward for the benefit of the veterans, for the people, for their
children, for the citizens of Puerto Rico.
I urge an ``aye'' vote.
Mr. BISHOP of Utah. Mr. Chairman, I yield myself 4 minutes.
I appreciate the comments that have been made so far on a bill that I
want to think actually has a lot of good in it.
{time} 1645
Article 4, section 3 of the Constitution provides Congress not only
the power, but also the responsibility to do what is needful dealing
with the territories.
As a matter of fact, Mr. Chairman, just this morning, the Supreme
Court ruled on a case concerning the territory and a question of double
jeopardy. By a 6-2 decision, the Court held that Puerto Rico is not a
separate sovereignty because the ultimate source of its power and its
constitution is the United States Congress. So, indeed, this reminds us
all here today of our duty to assist in the territorial issues.
Now, there are seven titles to this particular piece of legislation.
The first two deal with the oversight board that will bring fiscal
plans and a budget to the island. Titles III and VI deal with
restructuring of the debt if certain criteria are met in the oversight
board's discretion that it include good-faith debt negotiations with
its creditors.
Title V is something I think we sometimes overlook because it gives
fast-track authority for vital infrastructure projects to be moved by
the government of Puerto Rico, especially in the area of energy
generation and distribution systems. One of the problems of Puerto Rico
is the high energy costs that have caused them to lose jobs. What we
are attempting to do is trying to find a way of changing that problem
and reducing Puerto Rico's reliance on diesel fuel to generate their
electricity. That is one of the parts of this bill that is extremely
important and I think is overlooked sometimes. The final title I am
happy about because that has pro-growth portions and reforms in it.
But let it be very clear: this is a conservative bill that is rooted
in the Constitution that does not cost the American taxpayers a dime.
It is not a bailout. It does not expand the size or scope of the
Federal Government, and it does not encroach on State authority.
In fact, I think we have done a pretty good job in trying to solve
some problems in a way that can move everyone forward.
At this point, I also want to thank the chairmen of the Committee on
Education and the Workforce and the Committee on the Judiciary and
Small Business Committee for their help with this particular bill, so
especially Chairman Kline, Chairman Goodlatte, and Chairman Chabot. I
do appreciate their help on this particular bill.
Mr. Chairman, I reserve the balance of my time.
House of Representatives,
Committee on Natural Resources,
Washington, DC, May 25, 2016.
Hon. Steve Chabot,
Chairman, Committee on Small Business,
Washington, DC.
Dear Mr. Chairman: On May 25, 2016, the Committee on
Natural Resources ordered favorably reported as amended H.R.
5278, the Puerto Rico Oversight, Management, and Economic
Stability Act. The bill was referred primarily to the
Committee on Natural Resources, with an additional referral
to the Committee on Small Business, among other committees.
I ask that you allow the Committee on Small Business to be
discharged from further consideration of the bill so that it
may be scheduled by the Majority Leader. This discharge in no
way affects your jurisdiction over the subject matter of the
bill, and it will not serve as precedent for future
referrals. In addition, should a conference on the bill be
necessary, I would support your request to have the Committee
on Small Business represented on the conference committee.
Finally, I would be pleased to include this letter and any
response in the bill report filed by the Committee on Natural
Resources to memorialize our understanding, as well as in the
Congressional Record.
Thank you for your consideration of my request, and I look
forward to further opportunities to work with you this
Congress.
Sincerely,
Rob Bishop,
Chairman.
____
House of Representatives,
Committee on Small Business,
Washington, DC, May 25, 2016.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources, Washington, DC.
Dear Mr. Chairman: I am writing regarding H.R. 5278, the
Puerto Rico Oversight, Management and Economic Stability Act.
The bill contains a provision that is within the jurisdiction
of the Committee on Small Business.
I recognize and appreciate your desire to bring this bill
before the House of Representatives in an expeditious manner.
Accordingly, I will agree that the Committee on Small
Business be discharged from further consideration of the
bill. I do so with the understanding that this action does
not affect the jurisdiction of the Committee on Small
Business, and that the Committee expressly reserves the right
to seek conferees on any provision within its jurisdiction
during any House-Senate conference that may be convened on
this or any similar legislation. I would ask that you support
any such request.
I also ask that a copy of this letter be included in the
Congressional Record during the consideration of H.R. 5278 on
the House floor.
Thank you for your consideration and for your work on this
legislation.
Sincerely,
Steve Chabot,
Chairman.
____
House of Representatives,
Committee on Natural Resources,
Washington, DC, May 31, 2016.
Hon. John Kline,
Chairman, Committee on Education and the Workforce,
Washington, DC.
Dear Mr. Chairman: On May 25, 2016, the Committee on
Natural Resources ordered favorably reported as amended H.R.
5278, the Puerto Rico Oversight, Management, and Economic
Stability Act. The bill was referred primarily to the
Committee on Natural Resources, with an additional referral
to the Committee on Education and the Workforce, among
others.
I ask that you allow the Committee on Education and the
Workforce to be discharged from further consideration of the
bill so that it may be scheduled by the Majority Leader. This
discharge in no way affects your jurisdiction over the
subject matter of the bill, and it will not serve as
precedent for future referrals. In addition, should a
conference on the bill be necessary, I would support your
request to have the Committee on Education and the Workforce
represented on the conference committee. Finally, I would be
pleased to include this letter and any response in the bill
report filed by the Committee on Natural Resources to
memorialize our understanding, as well as in the
Congressional Record.
Thank you for your consideration of my request, and I look
forward to further opportunities to work with you this
Congress.
Sincerely,
Rob Bishop,
Chairman.
____
Committee on Education
and the Workforce,
Washington, DC, May 31, 2016.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources, Washington, DC.
Dear Mr. Chairman: I am writing to confirm our mutual
understanding with respect to H.R. 5278, the Puerto Rico
Oversight. Management, and Economic Stability Act. Thank you
for consulting with the Committee on Education and the
Workforce with regard to H.R. 5278 on those matters within
the Committee's jurisdiction.
In the interest of expediting the House's consideration of
H.R. 5278, the Committee on Education and the Workforce will
forgo further consideration of this bill. However, I do so
only with the understanding this procedural route will not be
construed to prejudice my Committee's jurisdictional interest
and prerogatives on this bill or any other similar
legislation and will not be considered as precedent for
consideration of matters of jurisdictional interest to my
Committee in the future. Additionally, I appreciate your
committee's assistance with any additional improvements to
the bill within the jurisdiction of the Education and the
Workforce Committee.
I respectfully request your support for the appointment of
outside conferees from the Committee on Education and the
Workforce should this bill or a similar bill be considered in
a conference with the Senate. I also request you include our
exchange of letters on this matter in the Committee Report on
H.R. 5278 and in the Congressional Record during
consideration of this bill on the
[[Page H3608]]
House Floor. Thank you for your attention to these matters.
Sincerely,
John Kline,
Chairman.
____
House of Representatives,
Committee on Natural Resources,
Washington, DC, May 31, 2016.
Hon. Bob Goodlatte,
Chairman, Committee on the Judiciary, Washington, DC.
Dear Mr. Chairman: On May 25, 2016, the Committee on
Natural Resources ordered favorably reported as amended H.R.
5278, the Puerto Rico Oversight, Management, and Economic
Stability Act. The bill was referred primarily to the
Committee on Natural Resources, with an additional referral
to the Committee on the Judiciary, among others.
I ask that you allow the Committee on the Judiciary to be
discharged from further consideration of the bill so that it
may be scheduled by the Majority Leader. This discharge in no
way affects your jurisdiction over the subject matter of the
bill, and it will not serve as precedent for future
referrals. In addition, should a conference on the bill be
necessary, I would support your request to have the Committee
on the Judiciary represented on the conference committee.
Finally, I would be pleased to include this letter and any
response in the bill report filed by the Committee on Natural
Resources to memorialize our understanding, as well as in the
Congressional Record.
Thank you for your consideration of my request, and I look
forward to further opportunities to work with you this
Congress.
Sincerely,
Rob Bishop,
Chairman.
____
House of Representatives,
Committee on the Judiciary,
Washington, DC, June 2, 2016.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources, Washington, DC.
Dear Chairman Bishop: I am writing with respect to H.R.
5278, the ``Puerto Rico Oversight, Management, and Economic
Stability Act,'' which was referred to the Committee on
Natural Resources and in addition to the Committee on the
Judiciary among other committees. As a result of your having
consulted with us on provisions in H.R. 5278 that fall within
the Rule X jurisdiction of the Committee on the Judiciary, I
agree to discharge our committee from further consideration
of this bill so that it may proceed expeditiously to the
House floor for consideration.
The Judiciary Committee takes this action with our mutual
understanding that by foregoing consideration of H.R. 5278 at
this time, we do not waive any jurisdiction over subject
matter contained in this or similar legislation and that our
committee will be appropriately consulted and involved as
this bill or similar legislation moves forward so that we may
address any remaining issues in our jurisdiction. Our
committee also reserves the right to seek appointment of an
appropriate number of conferees to any House-Senate
conference involving this or similar legislation and asks
that you support any such request.
I appreciate your May 31, 2016, letter confirming this
understanding with respect to H.R. 5278 and would ask that a
copy of our exchange of letters on this matter be included in
your committee report and in the Congressional Record during
Floor consideration of H.R. 5278.
Sincerely,
Bob Goodlatte,
Chairman.
Mr. GRIJALVA. I yield myself the balance of my time, and thank Leader
Pelosi and my colleague, Chairman Bishop, his staff, and certainly
staff on our side of the aisle for their hard work.
It is a bill that is indeed a compromise, and we shouldn't be ashamed
of that. It is a compromise that I wish was more tilted on our side and
the things that we wanted. But, Mr. Chairman, those are not the
dynamics or the numbers in this House.
The reality is that the urgency of Puerto Rico, the humanitarian
demands and needs of the island make us look at this bill not with an
eye towards perfection, but with an eye toward what is doable and what
can provide some immediate relief and begin the process of stability
for the island and for its people, and begin the process of an economic
renewal for the island itself.
I want to also acknowledge my colleagues, Mr. Pierluisi, Ms.
Velazquez, and Mr. Serrano. I know how difficult this vote was and how
difficult it is to vote on a compromise that does not fully empower and
fully acknowledge the self-governance of the Puerto Rican people. I
know that. But your endorsement of this bill is very meaningful in that
it ties us to a heritage of representation by the Puerto Rican people
in this body and to insisting and demanding that the needs of the
people of Puerto Rico be recognized fully by this Congress. We
recognize them today, as Mr. Serrano said, but there is much, much more
to do.
This vote, by the way, as I close, is not about heritage. More
importantly, it is not about selling out one's heritage. It is about
future generations and the opportunities they will have on the island.
It is about stability for children, families, and the elderly with a
fiscally stable economy and an accountable fiscal system within the
island.
While I can understand the political expediency of voting ``no,'' I
think the demands and the urgency to deal with this question compel
me--and I hope all my colleagues in this body--to vote ``yes.''
Mr. Chairman, I yield back the balance of my time.
Mr. BISHOP of Utah. I yield 4\1/2\ minutes to the gentleman from
Louisiana (Mr. Graves), another member of our committee.
Mr. GRAVES of Louisiana. Mr. Chairman, I first want to thank Chairman
Bishop, Ranking Member Grijalva, Congressmen Labrador, Duffy, and
Pierluisi, and many others who worked tirelessly on this legislation.
Mr. Chairman, the island of Puerto Rico with a population of under 4
million people has a debt of, by some measure, $100 billion. That is a
population less than the State of Louisiana, but a debt of nearly $100
billion.
We have three options: We can do nothing and continue to allow this
island territory to continue spiraling downward in a financial and
humanitarian crisis. We can provide financial oversight. We can relieve
regulation, help to reignite the economy, and allow for a negotiation
between the creditors and the debtor. Or we can pay off their debt and
add to the already $19 trillion irresponsible debt of the American
Government today. Those are the options that are out there.
I will tell you, I also struggled with what the right conservative
solution was in this case.
Ultimately, there is just one right answer. Doing nothing will simply
worsen the financial condition, will probably put more burden on us to
actually bail out the Nation on Congress and on the White House to do
that. I oppose a bailout, and I oppose putting taxpayer dollars on the
hook to pay off nearly a dozen years of irresponsible spending of the
Puerto Rican Government.
So establishing a financial oversight board similar to what was done
in Washington, D.C. and providing conditions to negotiate a solution is
the right answer. It is the conservative solution.
During committee consideration of the bill, I included an amendment
to ensure that Federal taxpayers are not put on the hook for this
liability.
Section 210 says: ``No Federal funds shall be authorized by this act
for the payment of any liability of the territory or territorial
instrumentality.''
The Acting CHAIR. The time of the gentleman has expired.
Mr. BISHOP of Utah. Mr. Chairman, I yield the gentleman an additional
30 seconds.
Mr. GRAVES of Louisiana. Mr. Chairman, this amendment makes it clear:
as affirmed by the Supreme Court today and mentioned by the committee
chairman, Puerto Rico is different from a State, and the Supreme Court
affirmed that today. It is not a State. It is a territory of the U.S.,
and we have a constitutional obligation to prevent a worsening
disaster.
This bill does not set a precedent for States and municipalities. It
respects the priority of debt by general obligation bondholders and
others. It prevents higher cost of borrowing by States and
municipalities by controlling the situation. Most importantly, Mr.
Chairman, it doesn't bail out Puerto Rico. It creates a path for
financial stability.
Mr. Chairman, I urge support for H.R. 5278.
Mr. BISHOP of Utah. Mr. Chairman, I yield 1 minute to the gentleman
from New Jersey (Mr. Garrett).
Mr. GARRETT. Mr. Chairman, I come before the House today to support
an important piece of legislation that will allow the people of Puerto
Rico a path towards economic stability, growth, and prosperity.
Beholden to out-of-control tax-and-spend policies, the Puerto Rican
people are experiencing the harsh realities of fiscal irresponsibility
and unaccountable government. That is why I strongly support this bill.
[[Page H3609]]
We have a moral and constitutional responsibility to address this
fiscal crisis which will only get worse if we don't act. That is why I
support this bill and what we must learn from this experience.
Congress and Presidents of both parties have let our national debt
reach an unsustainable $19 trillion. That is only because the U.S.
Government has something that Puerto Rico doesn't have: the ability to
print money and borrow endlessly. So that is why I support the fiscal
reforms in this bill which do not spend a single dollar in U.S.
taxpayer money to relieve Puerto Rico of its debt.
I have long opposed taxpayer bailouts. Fortunately, this bill
prevents the taxpayers from bailing out a government that spent
recklessly and provides a conservative solution to force Puerto Rico to
spend now responsibly. The bill also avoids setting a horrible
precedent that could tempt free-spending States to walk away from their
obligations by behaving irresponsibly.
The Acting CHAIR. The time of the gentleman has expired.
Mr. BISHOP of Utah. Mr. Chairman, I yield the gentleman an additional
30 seconds.
Mr. GARRETT. Most importantly, the bill creates a seven-member
oversight board to oversee their debt restructuring and to conduct
financial audits. What would this board do? It would require
commonsense actions like sustainable government programs to establish
fiscal plans to achieve needed reform and so on. This bipartisan bill
is the first step to return Puerto Rico to solvency and stability.
Americans, each and every day, balance their own checkbooks and live
within their own means. Politicians and government bureaucrats should
behave no differently. I therefore support the underlying legislation.
Mr. BISHOP of Utah. Mr. Chairman, I yield 1\1/2\ minutes to the
gentlewoman from Wyoming (Mrs. Lummis). She is the vice-chair of the
committee.
Mrs. LUMMIS. Mr. Chairman, we saw a bunch of ads on TV about this
bill and about what it would do to the bondholders. So I did some
research.
I rise in support of this bill as one of the more conservative
members of the Republican wing of this House. The reason I support it
is the research I did showed me that it wasn't this widow that bought
these bonds, it was large institutional investors. It was investors who
knew what they were buying because they read the disclosure documents.
It was investors who buy billions of dollars worth of bonds, and they
are trying to diversify those portfolios, so they have some high-risk,
high-return investments and some low-risk, low-return investments. They
have different maturity dates. They come from different jurisdictions.
They are trying to have a balanced portfolio. Those portfolios were
purchased recognizing that some of these bonds might have a higher risk
and a higher return. That higher return comes at a discounted price. So
they paid a discount in hopes that they would get the higher return and
that these bonds would hold up.
Quite frankly, those bondholders knew what they were getting because
it was even disclosed in the bond documents that Congress might be here
today debating this very problem of the island's inability to repay
everything.
Not all general obligation bonds are created equal. The bond
purchasers knew what they were getting. This bill is going to allow for
the relative-to-each-other agreement among the bondholders about how to
treat the bonds.
Mr. Chairman, I fully support the bill.
Mr. BISHOP of Utah. Mr. Chairman, I yield 1 minute to the gentleman
from Wisconsin (Mr. Ryan). He also has the title of Speaker of the
House.
Mr. RYAN of Wisconsin. Mr. Chairman, it is vital that we pass this
bill. Let me tell you why. Puerto Rico is in trouble, and we need to
act now before that trouble threatens taxpayers.
Let me explain why. Puerto Rico's government owes $118 billion in
bonds and in unfunded pension liabilities. It has already defaulted on
much of it. Things are only going to get worse.
Now the island is shutting down. You can see it in the news--closed
schools, and hospitals are beginning to close. That is today. Tomorrow
it could be policemen without cars. It could be blackouts at hospitals.
This is a humanitarian disaster in the making. What is worse, if we do
nothing, it could be a manmade humanitarian disaster.
I know this goes without saying, but it is worth repeating: the
Puerto Rican people are our fellow Americans. They pay our taxes. They
fight in our wars. We cannot allow this to happen.
I should also say that if we do nothing, the contagion will simply
spread. About 15 percent of Puerto Rico's debt is already held by
middle class Americans, and if the government can't meet its
obligations, these families will pay the price--or even worse,
taxpayers could be asked to bail it out.
{time} 1700
That is simply unacceptable. That is why we are taking action now, to
prevent a bailout and to help the Puerto Rican people.
What this bill will do is allow Puerto Rico to restructure its debts
and set up an oversight board that will oversee this process. Congress
and the President will appoint the members of this board. It will audit
Puerto Rico's books and make sure the restructuring is open and fair.
It will also make sure the restructuring honors the agreements. It will
make sure the government changes its ways so we don't have to do this
again.
Let me set a few things straight. Some people say this will set a bad
precedent. Some people say this will encourage reckless spending by the
States. No, absolutely not. The bill applies only to territories and
not to States.
I also want to point one other thing out. The Puerto Rican Government
is not getting off scot-free here. Not at all. It has not served the
Puerto Rican people well. It has spent money recklessly for decades.
This legislation will make sure that the government balances its
budget. It will make sure that they pass reforms that will grow the
Puerto Rican economy. It gives flexibility on the youth minimum wage so
businesses will hire more young people.
I also hear people say that this is a bailout. That is absolutely,
categorically, undeniably false. This bill won't add a single dollar to
the deficit. All you have to do is look at the Congressional Budget
Office. Not a single taxpayer dollar added to the deficit.
This bill prevents a bailout. That is the entire point. Let me tell
you this: if we do not pass this bill, then there is much more likely
going to be a bailout because there will be no other choice. But if we
pass this bill, Puerto Rico will get a handle on its debt. Its economy
will begin to grow. The people in Puerto Rico will see that help is on
the way and there is a reason to stay because they are finally getting
their act together. Taxpayers will be safe.
I am telling all Members right now, the best chance to get this right
is to pass this bill. The best chance for creditors to get what they
are owed is this bill. This is our responsibility. The Constitution is
really clear. The Constitution gives Congress the duty to oversee
legislation for all U.S. territories. Now it is time that we do our
constitutional duty.
A lot of people have spent so much time on this legislation. Here is
what we are doing. If we see a problem among our fellow citizens and it
is in a territory where we have a constitutional responsibility, we
have to address this problem, and we have to address this problem in a
smart way so that we prevent the taxpayer from getting involved, we
have to address this problem in a smart way so that we prevent any
contagion from occurring in the bond markets, and we have to address
this problem in a smart way so that Puerto Rico can get back on its
feet again, so that the future for the people in Puerto Rico is a
brighter future.
There are so many people who have poured their hearts into this. I
want to thank Rob Bishop from Utah, the chairman of the committee; I
want to thank Sean Duffy from Wisconsin; I want to thank Raul Labrador
from Idaho; I want to thank Jim Sensenbrenner from Wisconsin; I want to
thank Pedro Pierluisi from Puerto Rico; and I want to thank the Members
from the other side of the aisle who put so much time into this.
This is a bipartisan bill. This is the best solution in a deepening
crisis. This
[[Page H3610]]
bill has my full support. I urge all of my colleagues in the House to
give it their full support as well.
Mr. BISHOP of Utah. Mr. Chairman, I yield myself the balance of my
time.
Six months ago, our committee began the effort to try to solve this
problem. We had four hearings, countless stakeholder meetings, and got
input from expert testimony. Interested parties from all over the place
were able to get their input in various drafts of this bill. It was an
exhaustive effort, but what happened is at the end of this time we had
a good bill. That is the way this process is supposed to work.
It is a bill that is rooted in the Constitution, it doesn't cost the
taxpayers, it provides Puerto Rico with the tools to impose discipline
over its finances, and led towards an element of prosperity.
In Spanish, I am told that the phrase promesa means promise. This
bill is a promise for Puerto Rico for a better life. It is the way we
go forward.
I urge everyone's adoption of a great piece of legislation.
I yield back the balance of my time.
Mr. HINOJOSA. Mr. Chair, today I rise in support of H.R. 5278, the
``Puerto Rico Oversight, Management, and Economic Stability Act''
(PROMESA)--a bipartisan bill providing short-term relief to respond to
the humanitarian crisis facing the people of Puerto Rico.
Mr. Chair, Puerto Rico's faltering economy and the well-being of its
more than 3.4 million people are of great concern to may colleagues and
me. The island's $70 billion debt has made it extremely difficult for
the Commonwealth to provide adequate health care, education and public
safety for the people of Puerto Rico.
As a result, its people are struggling to access basic public
services--as schools and hospitals face daily electricity and water
shortages. I am deeply concerned that the island's health care systems
have been adversely affected by Puerto Rico's debt crisis, making it
increasingly difficult to handle a Zika outbreak or other health
crises.
As a senior member of the Financial Services Committee, I support
giving Puerto Rico all the tools necessary to restore its access to
credit markets and restructuring its outstanding debt. These critically
important measures will help restore its financial footing.
I do not support certain provisions in the bill, including sections
undermining a minimum wage and protections for pension benefits.
However, it is my hope that this bill on balance will help Puerto Rico
stave off catastrophe by restoring basic services, with the hope of
putting Puerto Rico back on the path toward improving the quality of
life of its people.
In closing, Mr. Chair, I urge my colleagues on both sides of the
aisle to support H.R. 5278. This bill is not perfect, but it takes a
step in the right direction.
Ms. BORDALLO. Mr. Chair, I am disappointed that two amendments I
offered yesterday at the Rules Committee were not made in order for
debate on H.R. 5278, the Puerto Rico Oversight, Management, and
Economic Stability Act (PROMESA). These amendments, along with
amendments offered by Rep. Kilili Sablan of the Northern Mariana
Islands on the Earned Income Tax Credit and Rep. Amata Radewagen of
American Samoa on the Child Tax Credit, would have addressed underlying
issues that are experienced in all the territories and that contributed
to Puerto Rico's debt crisis. We had a chance to address legacy policy
issues that unduly put a significant financial strain on our local
treasuries, yet we were denied an opportunity to more fully debate
these issues and be afforded an up or down vote.
My first amendment would have granted the government of Guam
flexibility to extend Social Security to all new government hires. The
Government of Guam's (GovGuam) current retirement plan will leave many
without sufficient means when they retire. As you know, the pension
shortfall in Puerto Rico was a key contributor to its current fiscal
crisis and local leaders in Guam are working proactively to enact
legislation to prevent a similar situation in Guam. Part of their
efforts is contingent on enrolling employees in Social Security, and my
amendment would give GovGuam flexibility to enroll new hires in Social
Security as it works to address retirement shortfalls for its current
workforce. The Social Security Actuaries and the CBO have indicated
that the amendment would have a net positive increase on federal
revenues. I offered a practical, common sense solution that is
supported by many on Guam. It was a proactive attempt to provide
GovGuam with the tools it needs to address this systemic issue.
My second amendment would have granted equitable treatment to the
U.S. territories in carrying out the Medicaid program. The amendment
would have eliminated the Medicaid caps on the territories and provide
parity with the federal medical assistance percentage in force in the
territories. The inequitable treatment of the territories in Medicaid
has caused significant financial strain on our local governments and
has forced us to contribute a disproportionate share of local dollars
when compared to the 50 states and DC. This was a bipartisan amendment
supported by all representatives of the territories, and it would have
put our constituents, who are all Americans, on equal footing with
those who reside in the States. The cost of providing health care in
our jurisdictions, particularly on Guam, inhibits our economies from
truly developing. Further, this amendment was modeled off a request
contained in President Obama's Fiscal Year 2017 budget request which
would have eliminated the caps and put the territories on a path to
improving their FMAP. This budget proposal is a critical component of
solving the crisis we see in Puerto Rico yet we have been denied a
chance to address this matter on the floor. We have an opportunity to
address this inequity, and I feel it is critical that we act with
purpose on this matter.
I also want to underscore my disappointment that amendments submitted
by my colleagues, Mr. Sablan and Ms. Radewagen were also not made in
order. We firmly believe that Puerto Rico's debt crisis cannot be
resolved through debt restructuring alone. This debt crisis was caused
by underlying issues which have been impacted by the unequal treatment
of the territories in certain federal programs. Again, like with
Medicaid, addressing these issues for Puerto Rico and the other
territories would help lift a burden and allow our local governments to
focus more on economic development and improving infrastructure to
support those new economies.
Together our amendments addressed disparities in Medicaid and the
application of the Earned Income Tax Credit and the Child Tax Credit,
and would have fixed critical issues that contributed to Puerto Rico's
debt crisis. We offered these amendments because while Guam's and the
other territories' fiscal situations are nowhere near the crisis in
Puerto Rico, we had an opportunity to be proactive and eliminate
federal policies and programs that are not treating the territories
with equity. Put more simply, we could have been proactive in
addressing federal law to ensure our other territories are put in a
better shape financially.
We simply do not believe that extending the authorities proposed in
PROMESA without addressing continued systemic challenges will resolve
Puerto Rico's problems, nor will it provide a more secure financial
footing in all the territories. I recognize the political challenges
that have been undertaken to get this bill to the point that we are at
right now. However, we need to find the political will to address the
systemic challenges now, before they become crises later. We are doing
all we can to be proactive so that what is happening to Puerto Rico
does not happen to the rest of us. I hope this Congress will address
these issues so that we can bring parity to the millions of Americans
living in the territories and enable the territories' local governments
to focus on programs that will enhance their economies.
Mr. SMITH of Texas. Mr. Chair, House Resolution 5278 creates a board
of managers to address the fiscal condition of Puerto Rico.
However, Puerto Rican officials still have not been held accountable
or accepted responsibility for their policies that caused the financial
crisis. In fact, just the opposite: the Puerto Rican government ignored
its fiscal obligations when it recently voted to approve a moratorium
on repaying any of its debt.
But it is Puerto Rico and not Congress who should take the first
steps to adopt reform measures.
There is no certainty that a financial oversight board would
implement any economic growth measures to improve the Island's fiscal
condition.
The board has no mandate from Congress to address the bloated
government workforce, high taxes, an insolvent pension system,
limitations on trade under the Jones Act, and excessive welfare
benefits, all of which helped cause the fiscal crisis.
This legislation rewards bad behavior and represents a missed
opportunity for Congress to insist on fiscally responsible reforms.
Mr. CONYERS. Mr. Chair, I rise today because Puerto Rico is
confronting a catastrophe. The spiral of recession, emigration, debt,
and austerity has left the island in dire straits. Puerto Rico faces
immediate default on a large portion of its debt and the island might
have to halt emergency services if it cannot obtain further credit.
This crisis has been developing for a long time, but the problem has
grown increasingly unworkable over the past year while this Congress
has done nothing. The potential humanitarian consequences of continuing
to do nothing have convinced me that despite my grave concerns about
what I consider a mere half-measure, I must support PROMESA, the Puerto
Rico Oversight, Management, and Economic Stability Act (H.R. 5278).
[[Page H3611]]
Puerto Rico's problems go beyond short-term debt service. Federal
changes to their unique tax structure have helped push the territory
into recession for a decade, which in turn has driven massive
emigration elsewhere, which harms their ability to attract investment
and fair financing, which has only further imperiled the Island's
fiscal situation. It is the very definition of an austerity driven
destructive cycle.
Correcting its course is no easy task, but Puerto Rico can succeed if
they receive two necessary things: time and support.
First, an immediate stay on debt collection and payments that would
allow time to develop a negotiated resolution, or absent that a
bankruptcy process that treats creditors equitably. All creditors
should expect to shoulder some of the pain, but nobody should take
unfair losses--least of all the pensioners who can least afford an
unequal burden.
Second, an economic development plan that reflects Puerto Rico's
unique challenges, like emigration to the mainland, which hinder the
island's ability to rebuild its tax base and attract new investment.
Alternative energy programs and tax incentives should be supported to
encourage a more self-sufficient economy. Public health efforts should
be directed to the island in order to evaluate growing problems that
disproportionately affect Puerto Rico, such as Zika.
PROMESA, while well intentioned, simply may not fully address the
magnitude of Puerto Rico's problems. Without an adequate commitment to
improving economic stability on the island, talented residents will
continue emigrating elsewhere, industry will further wither because of
substandard public services, and local fiscal problems will likely
escalate. Further, the ridiculous riders that potentially undercut wage
and overtime protections--as well as environmental regulations--
represent a cynical effort to take advantage of the Island's desperate
situation. It is a shameful reminder that many in this body see Puerto
Rico as a colony unworthy of the privileges we enjoy on the mainland.
I am voting for PROMESA despite my serious concerns because I hope
against hope that it will be improved in the Senate. A real recovery
strategy--one that gives residents, workers, and pensioners a viable
future--is what Puerto Rico needs and deserves.
Ms. JACKSON LEE. Mr. Chair, I stand before you today to discuss H.R.
5278--Puerto Rico Oversight, Management, and Economic Stability Act
(PROMESA).
Our consideration of PROMESA must be a very thoughtful analysis of an
outcome where the people of Puerto Rico will be empowered and be on a
path towards progress where working families, their children and
pensioners can be on a pathway towards a better future.
PROEMSA is a bipartisan measure and effort to assist the Commonwealth
of Puerto Rico in restructuring $70 billion in currently unpayable
debt, an amount that exceeds the size of its entire economy.
There are a total of 3.548 million people living on the island of
Puerto Rico.
Since 2006, Puerto Rico's economy has shrunk by more than 10 percent
and shed more than 250,000 jobs.
More than 45 percent of the Commonwealth's residents live in
poverty--the highest poverty rate of any state or territory.
Furthermore, its 11.6 percent unemployment rate is more than twice
the national level.
The challenges facing the people of Puerto Rico have ignited the
largest wave of outmigration since the 1950's, and the pace continues
to accelerate.
More than 300,000 people have left Puerto Rico in the past decade
with a record of 84,000 people leaving in 2014.
Puerto Ricans suffer from high rates of forced migration due to the
better opportunities offered in the United States compared to in the
commonwealth.
The gap between emigrants and immigrants has been continuously
widening.
Indeed, this increase in emigrants caused a population decline, the
first in its history, and the stateside Puerto Rican population grew
quickly.
The median age of male Puerto Ricans is of working age from the ages
of 25-49 and similarly for women from the ages of 25-59.
Most of the homes are family-led.
There are about 1,133,600 people in the civilian labor force but only
43 percent of them are employed.
In addition, most of those working work in minimum wage jobs.
Over 27 percent of the people in the Commonwealth are on welfare.
The median income in Puerto Rico is only half that of the poorest
U.S. state, Mississippi, but welfare benefits are about the same in
Puerto Rico as in Mississippi.
Swift action is needed in order to alleviate the pain and suffering
of the people of Puerto Rico.
There is no time to waste.
H.R. 5278 appears to be an emergency default for Puerto Rico, an
American territory where 3.5 million American citizens reside and
continue to live in fear for their finances, their families and their
future.
On July 1, Puerto Rico will face nearly $2 billion worth of bond
payments.
Already, businesses have closed, public worker benefits are in
jeopardy, hospital care is restricted and basic governmental functions
are at risk.
Should the Puerto Rican government default in early July, it faces
certain litigation by its creditors, further erosion of its economy,
and an inability to provide basic services to its people.
This measure creates a process for the Commonwealth to restructure
their bond debts, avoiding a default that could lead to a humanitarian
catastrophe and instead allowing Puerto Rico to return to economic
growth and fiscal balance.
It would allow for the creation of a seven-member Financial Oversight
and Management board which will approve annual budgets and fiscal
plans.
This fiscal plan must be designed in a way that provides adequate
funding for pension obligations.
Also, I have serious concerns about the minimum wage provision of the
measure.
Specifically, regarding minimum wage and overtime, H.R. 5278 would
extend the application of the existing federal subminimum wage of $4.25
an hour to those under the age of 25 in Puerto Rico for as long as four
years, while all other federal jurisdictions pay the subminimum wage to
those under the age of 20 for only up to the first ninety days of
employment.
We need to continue to work on ways to improve this measure to
ascertain that American citizens in Puerto Rico are not languishing in
poverty.
Indeed, the measure contains a provision that provides for a delay on
the new Department of Labor overtime pay regulation until a Government
Accountability Office (GAO) study is completed and the Department of
Labor determines whether the rule could negatively impact the economy
of Puerto Rico.
Additionally, the measure would create a ``Revitalization
Coordinator'' that works closely with the Oversight Board to determine
which energy and other infrastructure projects will be able to bypass
local environmental, public health, and consumer protection laws.
Let me underscore again that I have serious concerns about the
provisions in this measure, not the least of which is the expansion of
the subminimum wage, the exemption from the new overtime Rule, and the
exclusion of protections for pension benefits.
I commend my Democratic colleagues in their efforts of protecting the
environment and wildlife refuge in the Commonwealth.
I look forward to working with my Democratic colleagues and our
Republican colleagues across the aisle in continuing to improve the
provisions of the measure for the betterment of fellow American
citizens in Puerto Rico.
Let me conclude by highlighting that H.R. 5278 is not perfect but so
long as we continue to work on a bipartisan basis in good faith, we can
work towards our efforts of ensuring that Puerto Rico does not become a
humanitarian crisis.
We must continue to work together to be our brother's and sister's
keepers.
It is essential that we stand with the people of Puerto Rico and take
action.
It is essential that we continue to work towards an orderly process
that promotes the livelihood of U.S. citizens in Puerto Rico and
alleviates the crisis.
The Acting CHAIR. All time for general debate has expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule.
In lieu of the amendment in the nature of a substitute recommended by
the Committee on Natural Resources, printed in the bill, it shall be in
order to consider as an original bill for the purpose of amendment
under the 5-minute rule, an amendment in the nature of a substitute
consisting of the text of Rules Committee Print 114-57. That amendment
in the nature of a substitute shall be considered as read.
The text of the amendment in the nature of a substitute is as
follows:
H.R. 5278
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Puerto
Rico Oversight, Management, and Economic Stability Act'' or
``PROMESA''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Effective date.
Sec. 3. Severability.
Sec. 4. Supremacy.
Sec. 5. Definitions.
Sec. 6. Placement.
Sec. 7. Compliance with Federal laws.
TITLE I--ESTABLISHMENT AND ORGANIZATION OF OVERSIGHT BOARD
Sec. 101. Financial Oversight and Management Board.
[[Page H3612]]
Sec. 102. Location of Oversight Board.
Sec. 103. Executive Director and staff of Oversight Board.
Sec. 104. Powers of Oversight Board.
Sec. 105. Exemption from liability for claims.
Sec. 106. Treatment of actions arising from Act.
Sec. 107. Budget and funding for operation of Oversight Board.
Sec. 108. Autonomy of Oversight Board.
Sec. 109. Ethics.
TITLE II--RESPONSIBILITIES OF OVERSIGHT BOARD
Sec. 201. Approval of fiscal plans.
Sec. 202. Approval of budgets.
Sec. 203. Effect of finding of noncompliance with budget.
Sec. 204. Review of activities to ensure compliance with fiscal plan.
Sec. 205. Recommendations on financial stability and management
responsibility.
Sec. 206. Oversight Board duties related to restructuring.
Sec. 207. Oversight Board authority related to debt issuance.
Sec. 208. Required reports.
Sec. 209. Termination of Oversight Board.
Sec. 210. No full faith and credit of the United States.
Sec. 211. Analysis of pensions.
Sec. 212. Intervention in litigation.
TITLE III--ADJUSTMENTS OF DEBTS
Sec. 301. Applicability of other laws; definitions.
Sec. 302. Who may be a debtor.
Sec. 303. Reservation of territorial power to control territory and
territorial instrumentalities.
Sec. 304. Petition and proceedings relating to petition.
Sec. 305. Limitation on jurisdiction and powers of court.
Sec. 306. Jurisdiction.
Sec. 307. Venue.
Sec. 308. Selection of presiding judge.
Sec. 309. Abstention.
Sec. 310. Applicable rules of procedure.
Sec. 311. Leases.
Sec. 312. Filing of plan of adjustment.
Sec. 313. Modification of plan.
Sec. 314. Confirmation.
Sec. 315. Role and capacity of Oversight Board.
Sec. 316. Compensation of professionals.
Sec. 317. Interim compensation.
TITLE IV--MISCELLANEOUS PROVISIONS
Sec. 401. Rules of construction.
Sec. 402. Right of Puerto Rico to determine its future political
status.
Sec. 403. First minimum wage in Puerto Rico.
Sec. 404. Application of regulation to Puerto Rico.
Sec. 405. Automatic stay upon enactment.
Sec. 406. Purchases by territory governments.
Sec. 407. Protection from inter-debtor transfers.
Sec. 408. GAO report on Small Business Administration programs in
Puerto Rico.
Sec. 409. Congressional Task Force on Economic Growth in Puerto Rico.
Sec. 410. Report.
TITLE V--PUERTO RICO INFRASTRUCTURE REVITALIZATION
Sec. 501. Definitions.
Sec. 502. Position of Revitalization Coordinator.
Sec. 503. Critical projects.
Sec. 504. Miscellaneous provisions.
Sec. 505. Federal agency requirements.
Sec. 506. Judicial review.
Sec. 507. Savings clause.
TITLE VI--CREDITOR COLLECTIVE ACTION
Sec. 601. Creditor Collective action.
Sec. 602. Applicable law.
TITLE VII--SENSE OF CONGRESS REGARDING PERMANENT, PRO-GROWTH FISCAL
REFORMS
Sec. 701. Sense of Congress regarding permanent, pro-growth fiscal
reforms.
SEC. 2. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this
Act shall take effect on the date of the enactment of this
Act.
(b) Title III and Title VI.--
(1) Title III shall apply with respect to cases commenced
under title III on or after the date of the enactment of this
Act.
(2) Titles III and VI shall apply with respect to debts,
claims, and liens (as such terms are defined in section 101
of title 11, United States Code) created before, on, or after
such date.
SEC. 3. SEVERABILITY.
If any provision of this Act or the application thereof to
any person or circumstance is held invalid, the remainder of
this Act, or the application of that provision to persons or
circumstances other than those as to which it is held
invalid, is not affected thereby, provided that title III is
not severable from titles I and II, and titles I and II are
not severable from title III.
SEC. 4. SUPREMACY.
The provisions of this Act shall prevail over any general
or specific provisions of territory law, State law, or
regulation that is inconsistent with this Act.
SEC. 5. DEFINITIONS.
In this Act--
(1) Agreed accounting standards.--The term ``agreed
accounting standards'' means modified accrual accounting
standards or, for any period during which the Oversight Board
determines in its sole discretion that a territorial
government is not reasonably capable of comprehensive
reporting that complies with modified accrual accounting
standards, such other accounting standards as proposed by the
Oversight Board.
(2) Bond.--The term ``Bond'' means a bond, loan, letter of
credit, other borrowing title, obligation of insurance, or
other financial indebtedness for borrowed money, including
rights, entitlements, or obligations whether such rights,
entitlements, or obligations arise from contract, statute, or
any other source of law, in any case, related to such a bond,
loan, letter of credit, other borrowing title, obligation of
insurance, or other financial indebtedness in physical or
dematerialized form of which the issuer, obligor, or
guarantor is the territorial government.
(3) Bond claim.--The term ``Bond Claim'' means, as it
relates to a Bond--
(A) right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured; or
(B) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured.
(4) Budget.--The term ``Budget'' means the Territory Budget
or an Instrumentality Budget, as applicable.
(5) Puerto rico.--The term ``Puerto Rico'' means the
Commonwealth of Puerto Rico.
(6) Compliant budget.--The term ``compliant budget'' means
a budget that is prepared in accordance with--
(A) agreed accounting standards; and
(B) the applicable Fiscal Plan.
(7) Covered territorial instrumentality.--The term
``covered territorial instrumentality'' means a territorial
instrumentality designated by the Oversight Board pursuant to
section 101 to be subject to the requirements of this Act.
(8) Covered territory.--The term ``covered territory''
means a territory for which an Oversight Board has been
established under section 101.
(9) Executive director.--The term ``Executive Director''
means an Executive Director appointed under section 103(a).
(10) Fiscal plan.--The term ``Fiscal Plan'' means a
Territory Fiscal Plan or an Instrumentality Fiscal Plan, as
applicable.
(11) Government of puerto rico.--The term ``Government of
Puerto Rico'' means the Commonwealth of Puerto Rico,
including all its territorial instrumentalities.
(12) Governor.--The term ``Governor'' means the chief
executive of a covered territory.
(13) Instrumentality budget.--The term ``Instrumentality
Budget'' means a budget for a covered territorial
instrumentality, designated by the Oversight Board in
accordance with section 101, submitted, approved, and
certified in accordance with section 202.
(14) Instrumentality fiscal plan.--The term
``Instrumentality Fiscal Plan'' means a fiscal plan for a
covered territorial instrumentality, designated by the
Oversight Board in accordance with section 101, submitted,
approved, and certified in accordance with section 201.
(15) Legislature.--The term ``Legislature'' means the
legislative body responsible for enacting the laws of a
covered territory.
(16) Modified accrual accounting standards.--The term
``modified accrual accounting standards'' means recognizing
revenues as they become available and measurable and
recognizing expenditures when liabilities are incurred, in
each case as defined by the Governmental Accounting Standards
Board, in accordance with generally accepted accounting
principles.
(17) Oversight board.--The term ``Oversight Board'' means a
Financial Oversight and Management Board established in
accordance with section 101.
(18) Territorial government.--The term ``territorial
government'' means the government of a covered territory,
including all covered territorial instrumentalities.
(19) Territorial instrumentality.--
(A) In general.--The term ``territorial instrumentality''
means any political subdivision, public agency,
instrumentality-including any instrumentality that is also a
bank-or public corporation of a territory, and this term
should be broadly construed to effectuate the purposes of
this Act.
(B) Exclusion.--The term ``territorial instrumentality''
does not include an Oversight Board.
(20) Territory.--The term ``territory'' means--
(A) Puerto Rico;
(B) Guam;
(C) American Samoa;
(D) the Commonwealth of the Northern Mariana Islands; or
(E) the United States Virgin Islands.
(21) Territory budget.--The term ``Territory Budget'' means
a budget for a territorial government submitted, approved,
and certified in accordance with section 202.
(22) Territory fiscal plan.--The term ``Territory Fiscal
Plan'' means a fiscal plan for a territorial government
submitted, approved, and certified in accordance with section
201.
SEC. 6. PLACEMENT.
The Law Revision Counsel is directed to place this Act as
chapter 20 of title 48, United States Code.
SEC. 7. COMPLIANCE WITH FEDERAL LAWS.
Except as otherwise provided in this Act, nothing in this
Act shall be construed as impairing or in any manner
relieving a territorial government, or any territorial
instrumentality thereof, from compliance with Federal laws or
requirements or territorial laws and requirements
implementing a federally authorized or federally delegated
program protecting the health, safety, and environment of
persons in such territory.
[[Page H3613]]
TITLE I--ESTABLISHMENT AND ORGANIZATION OF OVERSIGHT BOARD
SEC. 101. FINANCIAL OVERSIGHT AND MANAGEMENT BOARD.
(a) Purpose.--The purpose of the Oversight Board is to
provide a method for a covered territory to achieve fiscal
responsibility and access to the capital markets.
(b) Establishment.--
(1) In general.--Except as provided in paragraph (2), a
Financial Oversight and Management Board for a territory is
established in accordance with this section only if the
Legislature of the territory adopts a resolution signed by
the Governor requesting the establishment.
(2) Puerto rico.--Notwithstanding paragraph (1), a
Financial Oversight and Management Board is hereby
established for Puerto Rico.
(3) Constitutional basis.--The Congress enacts this Act
pursuant to article IV, section 3 of the Constitution of the
United States, which provides Congress the power to dispose
of and make all needful rules and regulations for
territories.
(c) Treatment.--An Oversight Board established under this
section--
(1) shall be created as an entity within the territorial
government for which it is established in accordance with
this title; and
(2) shall not be considered to be a department, agency,
establishment, or instrumentality of the Federal Government.
(d) Oversight of Territorial Instrumentalities.--
(1) Designation.--
(A) In general.--An Oversight Board, in its sole discretion
at such time as the Oversight Board determines to be
appropriate, may designate any territorial instrumentality as
a covered territorial instrumentality that is subject to the
requirements of this Act.
(B) Budgets and reports.--The Oversight Board may require,
in its sole discretion, the Governor to submit to the
Oversight Board such budgets and monthly or quarterly reports
regarding a covered territorial instrumentality as the
Oversight Board determines to be necessary and may designate
any covered territorial instrumentality to be included in the
Territory Budget; except that the Oversight Board may not
designate a covered territorial instrumentality to be
included in the Territory Budget if applicable territory law
does not require legislative approval of such covered
territorial instrumentality's budget.
(C) Separate instrumentality budgets and reports.--The
Oversight Board in its sole discretion may or, if it requires
a budget from a covered territorial instrumentality whose
budget does not require legislative approval under applicable
territory law, shall designate a covered territorial
instrumentality to be the subject of an Instrumentality
Budget separate from the applicable Territory Budget and
require that the Governor develop such an Instrumentality
Budget.
(D) Inclusion in territory fiscal plan.--The Oversight
Board may require, in its sole discretion, the Governor to
include a covered territorial instrumentality in the
applicable Territory Fiscal Plan. Any covered territorial
instrumentality submitting a separate Instrumentality Fiscal
Plan must also submit a separate Instrumentality Budget.
(E) Separate instrumentality fiscal plans.--The Oversight
Board may designate, in its sole discretion, a covered
territorial instrumentality to be the subject of an
Instrumentality Fiscal Plan separate from the applicable
Territory Fiscal Plan and require that the Governor develop
such an Instrumentality Fiscal Plan. Any covered territorial
instrumentality submitting a separate Instrumentality Fiscal
Plan must also submit a separate Instrumentality Budget.
(2) Exclusion.--
(A) In general.--An Oversight Board, in its sole
discretion, at such time as the Oversight Board determines to
be appropriate, may exclude any territorial instrumentality
from the requirements of this Act.
(B) Treatment.--A territorial instrumentality excluded
pursuant to this paragraph shall not be considered to be a
covered territorial instrumentality.
(e) Membership.--
(1) In general.--
(A) The Oversight Board shall consist of seven members
appointed by the President who meet the qualifications
described in subsection (f) and section 109(a).
(B) The Board shall be comprised of one Category A member,
one Category B member, two Category C members, one Category D
member, one Category E member, and one Category F member.
(2) Appointed members.--
(A) The President shall appoint the individual members of
the Oversight Board, of which--
(i) the Category A member should be selected from a list of
individuals submitted by the Speaker of the House of
Representatives;
(ii) the Category B member should be selected from a
separate list of individuals submitted by the Speaker of the
House of Representatives;
(iii) the Category C members should be selected from a list
submitted by the Majority Leader of the Senate;
(iv) the Category D member should be selected from a list
submitted by the Minority Leader of the House of
Representatives;
(v) the Category E member should be selected from a list
submitted by the Minority Leader of the Senate; and
(vi) the Category F member may be selected in the
President's sole discretion.
(B) After the President's selection of the Category F Board
member, for purposes of subparagraph (A) and within a timely
manner--
(i) the Speaker of the House of Representatives shall
submit two non-overlapping lists of at least three
individuals to the President; one list shall include three
individuals who maintain a primary residence in the territory
or have a primary place of business in the territory;
(ii) the Senate Majority Leader shall submit a list of at
least four individuals to the President;
(iii) the Minority Leader of the House of Representatives
shall submit a list of at least three individuals to the
President; and
(iv) the Minority Leader of the Senate shall submit a list
of at least three individuals to the President.
(C) If the President does not select any of the names
submitted under subparagraphs (A) and (B), then whoever
submitted such list may supplement the lists provided in this
subsection with additional names.
(D) The Category A member shall maintain a primary
residence in the territory or have a primary place of
business in the territory.
(E) With respect to the appointment of a Board member in
Category A, B, C, D, or E, such an appointment shall be by
and with the advice and consent of the Senate, unless the
President appoints an individual from a list, as provided in
this subsection, in which case no Senate confirmation is
required.
(F) In the event of a vacancy of a Category A, B, C, D, or
E Board seat, the corresponding congressional leader
referenced in subparagraph (A) shall submit a list pursuant
to this subsection within a timely manner of the Board
member's resignation or removal becoming effective.
(G) With respect to an Oversight Board for Puerto Rico, in
the event any of the 7 members have not been appointed by
September 30, 2016, then the President shall appoint an
individual from the list for the current vacant category by
December 1, 2016, provided that such list includes at least 2
individuals per vacancy who meet the requirements set forth
in subsection (f) and section 109, and are willing to serve.
(3) Ex officio member.--The Governor, or the Governor's
designee, shall be an ex officio member of the Oversight
Board without voting rights.
(4) Chair.--The voting members of the Oversight Board shall
designate one of the voting members of the Oversight Board as
the Chair of the Oversight Board (referred to hereafter in
this Act as the ``Chair'') within 30 days of the full
appointment of the Oversight Board.
(5) Term of service.--
(A) In general.--Each appointed member of the Oversight
Board shall be appointed for a term of 3 years.
(B) Removal.--The President may remove any member of the
Oversight Board only for cause.
(C) Continuation of service until successor appointed.--
Upon the expiration of a term of office, a member of the
Oversight Board may continue to serve until a successor has
been appointed.
(D) Reappointment.--An individual may serve consecutive
terms as an appointed member, provided that such
reappointment occurs in compliance with paragraph (6).
(6) Vacancies.--A vacancy on the Oversight Board shall be
filled in the same manner in which the original member was
appointed.
(f) Eligibility for Appointments.--An individual is
eligible for appointment as a member of the Oversight Board
only if the individual--
(1) has knowledge and expertise in finance, municipal bond
markets, management, law, or the organization or operation of
business or government; and
(2) prior to appointment, an individual is not an officer,
elected official, or employee of the territorial government,
a candidate for elected office of the territorial government,
or a former elected official of the territorial government.
(g) No Compensation for Service.--Members of the Oversight
Board shall serve without pay, but may receive reimbursement
from the Oversight Board for any reasonable and necessary
expenses incurred by reason of service on the Oversight
Board.
(h) Adoption of Bylaws for Conducting Business of Oversight
Board.--
(1) In general.--As soon as practicable after the
appointment of all members and appointment of the Chair, the
Oversight Board shall adopt bylaws, rules, and procedures
governing its activities under this Act, including procedures
for hiring experts and consultants. Such bylaws, rules, and
procedures shall be public documents, and shall be submitted
by the Oversight Board upon adoption to the Governor, the
Legislature, the President, and Congress. The Oversight Board
may hire professionals as it determines to be necessary to
carry out this subsection.
(2) Activities requiring approval of majority of members.--
Under the bylaws adopted pursuant to paragraph (1), the
Oversight Board may conduct its operations under such
procedures as it considers appropriate, except that an
affirmative vote of a majority of the members of the
Oversight Board's full appointed membership shall be required
in order for the Oversight Board to approve a Fiscal Plan
under section 201, to approve a Budget under section 202, to
cause a legislative act not to be enforced under section 204,
or to approve or disapprove an infrastructure project as a
Critical Project under section 503.
(3) Adoption of rules and regulations of territorial
government.--The Oversight Board may incorporate in its
bylaws, rules, and procedures under this subsection such
rules and regulations of the territorial government as it
considers appropriate to enable it to carry out its
activities under this Act with the greatest degree of
independence practicable.
(4) Executive session.--Upon a majority vote of the
Oversight Board's full voting membership, the Oversight Board
may conduct its business in an executive session that
consists solely of the
[[Page H3614]]
Oversight Board's voting members and is closed to the public,
but only for the business items set forth as part of the vote
to convene an executive session.
SEC. 102. LOCATION OF OVERSIGHT BOARD.
The Oversight Board shall have an office in the covered
territory and additional offices as it deems necessary. At
any time, any department or agency of the United States may
provide the Oversight Board use of Federal facilities and
equipment on a reimbursable or non-reimbursable basis and
subject to such terms and conditions as the head of that
department or agency may establish.
SEC. 103. EXECUTIVE DIRECTOR AND STAFF OF OVERSIGHT BOARD.
(a) Executive Director.--The Oversight Board shall have an
Executive Director who shall be appointed by the Chair with
the consent of the Oversight Board. The Executive Director
shall be paid at a rate determined by the Oversight Board.
(b) Staff.--With the approval of the Chair, the Executive
Director may appoint and fix the pay of additional personnel
as the Executive Director considers appropriate, except that
no individual appointed by the Executive Director may be paid
at a rate greater than the rate of pay for the Executive
Director unless the Oversight Board provides for otherwise.
The staff shall include a Revitalization Coordinator
appointed pursuant to Title V of this Act. Any such personnel
may include private citizens, employees of the Federal
Government, or employees of the territorial government,
provided, however, that the Executive Director may not fix
the pay of employees of the Federal Government or the
territorial government.
(c) Inapplicability of Certain Employment and Procurement
Laws.--The Executive Director and staff of the Oversight
Board may be appointed and paid without regard to any
provision of the laws of the covered territory or the Federal
Government governing appointments and salaries. Any provision
of the laws of the covered territory governing procurement
shall not apply to the Oversight Board.
(d) Staff of Federal Agencies.--Upon request of the Chair,
the head of any Federal department or agency may detail, on a
reimbursable or nonreimbursable basis, and in accordance with
the Intergovernmental Personnel Act of 1970 (5 U.S.C. 3371-
3375), any of the personnel of that department or agency to
the Oversight Board to assist it in carrying out its duties
under this Act.
(e) Staff of Territorial Government.--Upon request of the
Chair, the head of any department or agency of the covered
territory may detail, on a reimbursable or nonreimbursable
basis, any of the personnel of that department or agency to
the Oversight Board to assist it in carrying out its duties
under this Act.
SEC. 104. POWERS OF OVERSIGHT BOARD.
(a) Hearings and Sessions.--The Oversight Board may, for
the purpose of carrying out this Act, hold hearings, sit and
act at times and places, take testimony, and receive evidence
as the Oversight Board considers appropriate. The Oversight
Board may administer oaths or affirmations to witnesses
appearing before it.
(b) Powers of Members and Agents.--Any member or agent of
the Oversight Board may, if authorized by the Oversight
Board, take any action that the Oversight Board is authorized
to take by this section.
(c) Obtaining Official Data.--
(1) From federal government.--Notwithstanding sections 552
(commonly known as the Freedom of Information Act), 552a
(commonly known as the Privacy Act of 1974), and 552b
(commonly known as the Government in the Sunshine Act) of
title 5, United States Code, the Oversight Board may secure
directly from any department or agency of the United States
information necessary to enable it to carry out this Act,
with the approval of the head of that department or agency.
(2) From territorial government.--Notwithstanding any other
provision of law, the Oversight Board shall have the right to
secure copies, whether written or electronic, of such
records, documents, information, data, or metadata from the
territorial government necessary to enable the Oversight
Board to carry out its responsibilities under this Act. At
the request of the Oversight Board, the Oversight Board shall
be granted direct access to such information systems,
records, documents, information, or data as will enable the
Oversight Board to carry out its responsibilities under this
Act. The head of the entity of the territorial government
responsible shall provide the Oversight Board with such
information and assistance (including granting the Oversight
Board direct access to automated or other information
systems) as the Oversight Board requires under this
paragraph.
(d) Obtaining Creditor Information.--
(1) Upon request of the Oversight Board, each creditor or
organized group of creditors of a covered territory or
covered territorial instrumentality seeking to participate in
voluntary negotiations shall provide to the Oversight Board,
and the Oversight Board shall make publicly available to any
other participant, a statement setting forth--
(A) the name and address of the creditor or of each member
of an organized group of creditors; and
(B) the nature and aggregate amount of claims or other
economic interests held in relation to the issuer as of the
later of--
(i) the date the creditor acquired the claims or other
economic interests or, in the case of an organized group of
creditors, the date the group was formed; or
(ii) the date the Oversight Board was formed.
(2) For purposes of this subsection, an organized group
shall mean multiple creditors that are--
(A) acting in concert to advance their common interests,
including, but not limited to, retaining legal counsel to
represent such multiple entities; and
(B) not composed entirely of affiliates or insiders of one
another.
(3) The Oversight Board may request supplemental statements
to be filed by each creditor or organized group of creditors
quarterly, or if any fact in the most recently filed
statement has changed materially.
(e) Gifts, Bequests, and Devises.--The Oversight Board may
accept, use, and dispose of gifts, bequests, or devises of
services or property, both real and personal, for the purpose
of aiding or facilitating the work of the Oversight Board.
Gifts, bequests, or devises of money and proceeds from sales
of other property received as gifts, bequests, or devises
shall be deposited in such account as the Oversight Board may
establish and shall be available for disbursement upon order
of the Chair, consistent with the Oversight Board's bylaws,
or rules and procedures. All gifts, bequests or devises and
the identities of the donors shall be publicly disclosed by
the Oversight Board within 30 days of receipt.
(f) Subpoena Power.--
(1) In general.--The Oversight Board may issue subpoenas
requiring the attendance and testimony of witnesses and the
production of books, records, correspondence, memoranda,
papers, documents, electronic files, metadata, tapes, and
materials of any nature relating to any matter under
investigation by the Oversight Board. Jurisdiction to compel
the attendance of witnesses and the production of such
materials shall be governed by the statute setting forth the
scope of personal jurisdiction exercised by the covered
territory, or in the case of Puerto Rico, 32 L.P.R.A. App.
III. R. 4. 7., as amended.
(2) Failure to obey a subpoena.--If a person refuses to
obey a subpoena issued under paragraph (1), the Oversight
Board may apply to the court of first instance of the covered
territory. Any failure to obey the order of the court may be
punished by the court in accordance with civil contempt laws
of the covered territory.
(3) Service of subpoenas.--The subpoena of the Oversight
Board shall be served in the manner provided by the rules of
procedure for the courts of the covered territory, or in the
case of Puerto Rico, the Rules of Civil Procedure of Puerto
Rico, for subpoenas issued by the court of first instance of
the covered territory.
(g) Authority To Enter Into Contracts.--The Executive
Director may enter into such contracts as the Executive
Director considers appropriate (subject to the approval of
the Chair) consistent with the Oversight Board's bylaws,
rules, and regulations to carry out the Oversight Board's
responsibilities under this Act.
(h) Authority To Enforce Certain Laws of the Covered
Territory.--The Oversight Board shall ensure the purposes of
this Act are met, including by ensuring the prompt
enforcement of any applicable laws of the covered territory
prohibiting public sector employees from participating in a
strike or lockout. In the application of this subsection,
with respect to Puerto Rico, the term ``applicable laws''
refers to 3 L.P.R.A. 1451q and 3 L.P.R.A. 1451r, as amended.
(i) Voluntary Agreement Certification.--
(1) In general.--The Oversight Board shall issue a
certification to a covered territory or covered territorial
instrumentality if the Oversight Board determines, in its
sole discretion, that such covered territory or covered
territorial instrumentality, as applicable, has successfully
reached a voluntary agreement with holders of its Bond Claims
to restructure such Bond Claims--
(A) except as provided in subparagraph (C), if an
applicable Fiscal Plan has been certified, in a manner that
provides for a sustainable level of debt for such covered
territory or covered territorial instrumentality, as
applicable, and is in conformance with the applicable
certified Fiscal Plan;
(B) except as provided in subparagraph (C), if an
applicable Fiscal Plan has not yet been certified, in a
manner that provides, in the Oversight Board's sole
discretion, for a sustainable level of debt for such covered
territory or covered territorial instrumentality; or
(C) notwithstanding subparagraphs (A) and (B), if an
applicable Fiscal Plan has not yet been certified and the
voluntary agreement is limited solely to an extension of
applicable principal maturities and interest on Bonds issued
by such covered territory or covered territorial
instrumentality, as applicable, for a period of up to one
year during which time no interest will be paid on the Bond
Claims affected by the voluntary agreement.
(2) Effectiveness.--The effectiveness of any voluntary
agreement referred to in paragraph (1) shall be conditioned
on--
(A) the Oversight Board delivering the certification
described in paragraph (1); and
(B) the agreement of a majority in amount of the Bond
Claims of a covered territory or a covered territorial
instrumentality that are to be affected by such agreement,
provided, however, that such agreement is solely for purposes
of serving as a Qualifying Modification pursuant to
subsection 601(g) of this Act and shall not alter existing
legal rights of holders of Bond Claims against such covered
territory or covered territorial instrumentality that have
not assented to such agreement.
(3) Preexisting voluntary agreements.--Any voluntary
agreements that the territorial government or any covered
territorial instrumentality has executed with holders of its
debts to restructure such debts prior to the date of
enactment of the Act shall be deemed to be in conformance
with the requirements of this subsection, to the extent the
requirements of paragraph (2)(B)(i) have been satisfied.
(j) Restructuring Filings.--
(1) In general.--Subject to paragraph (3), before taking an
action described in paragraph (2)
[[Page H3615]]
on behalf of a debtor or potential debtor in a case under
title III, the Oversight Board must certify the action.
(2) Actions described.--The actions referred to in
paragraph (1) are--
(A) the filing of a petition; or
(B) the submission or modification of a plan of adjustment.
(3) Condition for plans of adjustment.--The Oversight Board
may certify a plan of adjustment only if it determines, in
its sole discretion, that it is consistent with the
applicable certified Fiscal Plan.
(k) Civil Actions To Enforce Powers.--The Oversight Board
may seek judicial enforcement of its authority to carry out
its responsibilities under this Act.
(l) Penalties.--
(1) Acts prohibited.--Any officer or employee of the
territorial government who prepares, presents, or certifies
any information or report for the Oversight Board or any of
its agents that is intentionally false or misleading, or,
upon learning that any such information is false or
misleading, fails to immediately advise the Oversight Board
or its agents thereof in writing, shall be subject to
prosecution and penalties under any laws of the territory
prohibiting the provision of false information to government
officials, which in the case of Puerto Rico shall include 33
L.P.R.A. 4889, as amended.
(2) Administrative discipline.--In addition to any other
applicable penalty, any officer or employee of the
territorial government who knowingly and willfully violates
paragraph (1) or takes any such action in violation of any
valid order of the Oversight Board or fails or refuses to
take any action required by any such order, shall be subject
to appropriate administrative discipline, including (when
appropriate) suspension from duty without pay or removal from
office, by order of the Governor.
(3) Report by governor on disciplinary actions taken.--In
the case of a violation of paragraph (2) by an officer or
employee of the territorial government, the Governor shall
immediately report to the Oversight Board all pertinent facts
together with a statement of the action taken thereon.
(m) Electronic Reporting.--The Oversight Board may, in
consultation with the Governor, ensure the prompt and
efficient payment and administration of taxes through the
adoption of electronic reporting, payment and auditing
technologies.
(n) Administrative Support Services.--Upon the request of
the Oversight Board, the Administrator of General Services or
other appropriate Federal agencies shall promptly provide to
the Oversight Board, on a reimbursable or non-reimbursable
basis, the administrative support services necessary for the
Oversight Board to carry out its responsibilities under this
Act.
(o) Investigation of Disclosure and Selling Practices.--The
Oversight Board may investigate the disclosure and selling
practices in connection with the purchase of bonds issued by
the Government of Puerto Rico for or on behalf of any retail
investors including any underrepresentation of risk for such
investors and any relationships or conflicts of interest
maintained by such broker, dealer, or investment adviser is
as provided in applicable laws and regulations.
(p) Findings of Any Investigation.--The Oversight Board
shall make public the findings of any investigation
referenced in subsection (o).
SEC. 105. EXEMPTION FROM LIABILITY FOR CLAIMS.
The Oversight Board, its members, and its employees shall
not be liable for any obligation of or claim against the
Oversight Board or its members or employees or the
territorial government resulting from actions taken to carry
out this Act.
SEC. 106. TREATMENT OF ACTIONS ARISING FROM ACT.
(a) Jurisdiction.--Except as provided in section 104(f)(2)
(relating to the issuance of an order enforcing a subpoena),
and title III (relating to adjustments of debts), any action
against the Oversight Board, and any action otherwise arising
out of this Act, in whole or in part, shall be brought in a
United States district court for the covered territory or,
for any covered territory that does not have a district
court, in the United States District Court for the District
of Hawaii.
(b) Appeal.--Notwithstanding any other provision of law,
any order of a United States district court that is issued
pursuant to an action brought under subsection (a) shall be
subject to review only pursuant to a notice of appeal to the
applicable United States Court of Appeals.
(c) Timing of Relief.--Except with respect to any orders
entered to remedy constitutional violations, no order of any
court granting declaratory or injunctive relief against the
Oversight Board, including relief permitting or requiring the
obligation, borrowing, or expenditure of funds, shall take
effect during the pendency of the action before such court,
during the time appeal may be taken, or (if appeal is taken)
during the period before the court has entered its final
order disposing of such action.
(d) Expedited Consideration.--It shall be the duty of the
applicable United States District Court, the applicable
United States Court of Appeals, and, as applicable, the
Supreme Court of the United States to advance on the docket
and to expedite to the greatest possible extent the
disposition of any matter brought under this Act.
(e) Review of Oversight Board Certifications.--There shall
be no jurisdiction in any United States district court to
review challenges to the Oversight Board's certification
determinations under this Act.
SEC. 107. BUDGET AND FUNDING FOR OPERATION OF OVERSIGHT
BOARD.
(a) Submission of Budget.--The Oversight Board shall submit
a budget for each fiscal year during which the Oversight
Board is in operation, to the President, the House of
Representatives Committee on Natural Resources and the Senate
Committee on Energy and Natural Resources, the Governor, and
the Legislature.
(b) Funding.--The Oversight Board shall use its powers with
respect to the Territory Budget of the covered territory to
ensure that sufficient funds are available to cover all
expenses of the Oversight Board. Within 30 days after the
date of enactment of this Act, the territorial government
shall designate a dedicated funding source, not subject to
subsequent legislative appropriations, sufficient to support
the annual expenses of the Oversight Board as determined in
the Oversight Board's sole and exclusive discretion.
SEC. 108. AUTONOMY OF OVERSIGHT BOARD.
(a) In General.--Neither the Governor nor the Legislature
may--
(1) exercise any control, supervision, oversight, or review
over the Oversight Board or its activities; or
(2) enact, implement, or enforce any statute, resolution,
policy, or rule that would impair or defeat the purposes of
this Act, as determined by the Oversight Board.
(b) Oversight Board Legal Representation.--In any action
brought by or on behalf of the Oversight Board, the Oversight
Board shall be represented by such counsel as it may hire or
retain so long as no conflict of interest exists.
SEC. 109. ETHICS.
(a) Conflict of Interest.--Notwithstanding any ethics
provision governing employees of the covered territory, all
members and staff of the Oversight Board shall be subject to
the Federal conflict of interest requirements described in
section 208 of title 18, United States Code.
(b) Financial Disclosure.--Notwithstanding any ethics
provision governing employees of the covered territory, all
members of the Oversight Board and staff designated by the
Oversight Board shall be subject to disclosure of their
financial interests, the contents of which shall conform to
the same requirements set forth in section 102 of the Ethics
in Government Act of 1978 (5 U.S.C. app.).
TITLE II--RESPONSIBILITIES OF OVERSIGHT BOARD
SEC. 201. APPROVAL OF FISCAL PLANS.
(a) In General.--As soon as practicable after all of the
members and the Chair have been appointed to the Oversight
Board in accordance with section 101(e) in the fiscal year in
which the Oversight Board is established, and in each fiscal
year thereafter during which the Oversight Board is in
operation, the Oversight Board shall deliver a notice to the
Governor providing a schedule for the process of development,
submission, approval, and certification of Fiscal Plans. The
notice may also set forth a schedule for revisions to any
Fiscal Plan that has already been certified, which revisions
must be subject to subsequent approval and certification by
the Oversight Board. The Oversight Board shall consult with
the Governor in establishing a schedule, but the Oversight
Board shall retain sole discretion to set or, by delivery of
a subsequent notice to the Governor, change the dates of such
schedule as it deems appropriate and reasonably feasible.
(b) Requirements.--
(1) In general.--A Fiscal Plan developed under this section
shall, with respect to the territorial government or covered
territorial instrumentality, provide a method to achieve
fiscal responsibility and access to the capital markets,
and--
(A) provide for estimates of revenues and expenditures in
conformance with agreed accounting standards and be based
on--
(i) applicable laws; or
(ii) specific bills that require enactment in order to
reasonably achieve the projections of the Fiscal Plan;
(B) ensure the funding of essential public services;
(C) provide adequate funding for public pension systems;
(D) provide for the elimination of structural deficits;
(E) for fiscal years covered by a Fiscal Plan in which a
stay under titles III or IV is not effective, provide for a
debt burden that is sustainable;
(F) improve fiscal governance, accountability, and internal
controls;
(G) enable the achievement of fiscal targets;
(H) create independent forecasts of revenue for the period
covered by the Fiscal Plan;
(I) include a debt sustainability analysis;
(J) provide for capital expenditures and investments
necessary to promote economic growth;
(K) adopt appropriate recommendations submitted by the
Oversight Board under section 205(a);
(L) include such additional information as the Oversight
Board deems necessary;
(M) ensure that assets, funds, or resources of a
territorial instrumentality are not loaned to, transferred
to, or otherwise used for the benefit of a covered territory
or another covered territorial instrumentality of a covered
territory, unless permitted by the constitution of the
territory, an approved plan of adjustment under title III, or
a Qualifying Modification approved under title VI; and
(N) respect the relative lawful priorities or lawful liens,
as may be applicable, in the constitution, other laws, or
agreements of a covered territory or covered territorial
instrumentality in effect prior to the date of enactment of
this Act.
(2) Term.--A Fiscal Plan developed under this section shall
cover a period of fiscal years as determined by the Oversight
Board in its sole discretion but in any case a period of not
less than
[[Page H3616]]
5 fiscal years from the fiscal year in which it is certified
by the Oversight Board.
(c) Development, Review, Approval, and Certification of
Fiscal Plans.--
(1) Timing requirement.--The Governor may not submit to the
Legislature a Territory Budget under section 202 for a fiscal
year unless the Oversight Board has certified the Territory
Fiscal Plan for that fiscal year in accordance with this
subsection, unless the Oversight Board in its sole discretion
waives this requirement.
(2) Fiscal plan developed by governor.--The Governor shall
submit to the Oversight Board any proposed Fiscal Plan
required by the Oversight Board by the time specified in the
notice delivered under subsection (a).
(3) Review by the oversight board.--The Oversight Board
shall review any proposed Fiscal Plan to determine whether it
satisfies the requirements set forth in subsection (b) and,
if the Oversight Board determines in its sole discretion that
the proposed Fiscal Plan--
(A) satisfies such requirements, the Oversight Board shall
approve the proposed Fiscal Plan; or
(B) does not satisfy such requirements, the Oversight Board
shall provide to the Governor--
(i) a notice of violation that includes recommendations for
revisions to the applicable Fiscal Plan; and
(ii) an opportunity to correct the violation in accordance
with subsection (d)(1).
(d) Revised Fiscal Plan.--
(1) In general.--If the Governor receives a notice of
violation under subsection (c)(3), the Governor shall submit
to the Oversight Board a revised proposed Fiscal Plan in
accordance with subsection (b) by the time specified in the
notice delivered under subsection (a). The Governor may
submit as many revised Fiscal Plans to the Oversight Board as
the schedule established in the notice delivered under
subsection (a) permits.
(2) Development by oversight board.--If the Governor fails
to submit to the Oversight Board a Fiscal Plan that the
Oversight Board determines in its sole discretion satisfies
the requirements set forth in subsection (b) by the time
specified in the notice delivered under subsection (a), the
Oversight Board shall develop and submit to the Governor and
the Legislature a Fiscal Plan that satisfies the requirements
set forth in subsection (b).
(e) Approval and Certification.--
(1) Approval of fiscal plan developed by governor.--If the
Oversight Board approves a Fiscal Plan under subsection
(c)(3), it shall deliver a compliance certification for such
Fiscal Plan to the Governor and the Legislature.
(2) Deemed approval of fiscal plan developed by oversight
board.--If the Oversight Board develops a Fiscal Plan under
subsection (d)(2), such Fiscal Plan shall be deemed approved
by the Governor, and the Oversight Board shall issue a
compliance certification for such Fiscal Plan to the Governor
and the Legislature.
(f) Joint Development of Fiscal Plan.--Notwithstanding any
other provision of this section, if the Governor and the
Oversight Board jointly develop a Fiscal Plan for the fiscal
year that meets the requirements under this section, and that
the Governor and the Oversight Board certify that the fiscal
plan reflects a consensus between the Governor and the
Oversight Board, then such Fiscal Plan shall serve as the
Fiscal Plan for the territory or territorial instrumentality
for that fiscal year.
SEC. 202. APPROVAL OF BUDGETS.
(a) Reasonable Schedule for Development of Budgets.--As
soon as practicable after all of the members and the Chair
have been appointed to the Oversight Board in the fiscal year
in which the Oversight Board is established, and in each
fiscal year thereafter during which the Oversight Board is in
operation, the Oversight Board shall deliver a notice to the
Governor and the Legislature providing a schedule for
developing, submitting, approving, and certifying Budgets for
a period of fiscal years as determined by the Oversight Board
in its sole discretion but in any case a period of not less
than one fiscal year following the fiscal year in which the
notice is delivered. The notice may also set forth a schedule
for revisions to Budgets that have already been certified,
which revisions must be subject to subsequent approval and
certification by the Oversight Board. The Oversight Board
shall consult with the Governor and the Legislature in
establishing a schedule, but the Oversight Board shall retain
sole discretion to set or, by delivery of a subsequent notice
to the Governor and the Legislature, change the dates of such
schedule as it deems appropriate and reasonably feasible.
(b) Revenue Forecast.--The Oversight Board shall submit to
the Governor and Legislature a forecast of revenues for the
period covered by the Budgets by the time specified in the
notice delivered under subsection (a), for use by the
Governor in developing the Budget under subsection (c).
(c) Budgets Developed by Governor.--
(1) Governor's proposed budgets.--The Governor shall submit
to the Oversight Board proposed Budgets by the time specified
in the notice delivered under subsection (a). In consultation
with the Governor in accordance with the process specified in
the notice delivered under subsection (a), the Oversight
Board shall determine in its sole discretion whether each
proposed Budget is compliant with the applicable Fiscal Plan
and--
(A) if a proposed Budget is a compliant budget, the
Oversight Board shall--
(i) approve the Budget; and
(ii) if the Budget is a Territory Budget, submit the
Territory Budget to the Legislature; or
(B) if the Oversight Board determines that the Budget is
not a compliant budget, the Oversight Board shall provide to
the Governor--
(i) a notice of violation that includes a description of
any necessary corrective action; and
(ii) an opportunity to correct the violation in accordance
with paragraph (2).
(2) Governor's revisions.--The Governor may correct any
violations identified by the Oversight Board and submit a
revised proposed Budget to the Oversight Board in accordance
with paragraph (1). The Governor may submit as many revised
Budgets to the Oversight Board as the schedule established in
the notice delivered under subsection (a) permits. If the
Governor fails to develop a Budget that the Oversight Board
determines is a compliant budget by the time specified in the
notice delivered under subsection (a), the Oversight Board
shall develop and submit to the Governor, in the case of an
Instrumentality Budget, and to the Governor and the
Legislature, in the case of a Territory Budget, a revised
compliant budget.
(d) Budget Approval by Legislature.--
(1) Legislature adopted budget.--The Legislature shall
submit to the Oversight Board the Territory Budget adopted by
the Legislature by the time specified in the notice delivered
under subsection (a). The Oversight Board shall determine
whether the adopted Territory Budget is a compliant budget
and--
(A) if the adopted Territory Budget is a compliant budget,
the Oversight Board shall issue a compliance certification
for such compliant budget pursuant to subsection (e); and
(B) if the adopted Territory Budget is not a compliant
budget, the Oversight Board shall provide to the
Legislature--
(i) a notice of violation that includes a description of
any necessary corrective action; and
(ii) an opportunity to correct the violation in accordance
with paragraph (2).
(2) Legislature's revisions.--The Legislature may correct
any violations identified by the Oversight Board and submit a
revised Territory Budget to the Oversight Board in accordance
with the process established under paragraph (1) and by the
time specified in the notice delivered under subsection (a).
The Legislature may submit as many revised adopted Territory
Budgets to the Oversight Board as the schedule established in
the notice delivered under subsection (a) permits. If the
Legislature fails to adopt a Territory Budget that the
Oversight Board determines is a compliant budget by the time
specified in the notice delivered under subsection (a), the
Oversight Board shall develop a revised Territory Budget that
is a compliant budget and submit it to the Governor and the
Legislature.
(e) Certification of Budgets.--
(1) Certification of developed and approved territory
budgets.--If the Governor and the Legislature develop and
approve a Territory Budget that is a compliant budget by the
day before the first day of the fiscal year for which the
Territory Budget is being developed and in accordance with
the process established under subsections (c) and (d), the
Oversight Board shall issue a compliance certification to the
Governor and the Legislature for such Territory Budget.
(2) Certification of developed instrumentality budgets.--If
the Governor develops an Instrumentality Budget that is a
compliant budget by the day before the first day of the
fiscal year for which the Instrumentality Budget is being
developed and in accordance with the process established
under subsection (c), the Oversight Board shall issue a
compliance certification to the Governor for such
Instrumentality Budget.
(3) Deemed certification of territory budgets.--If the
Governor and the Legislature fail to develop and approve a
Territory Budget that is a compliant budget by the day before
the first day of the fiscal year for which the Territory
Budget is being developed, the Oversight Board shall submit a
Budget to the Governor and the Legislature (including any
revision to the Territory Budget made by the Oversight Board
pursuant to subsection (d)(2)) and such Budget shall be--
(A) deemed to be approved by the Governor and the
Legislature;
(B) the subject of a compliance certification issued by the
Oversight Board to the Governor and the Legislature; and
(C) in full force and effect beginning on the first day of
the applicable fiscal year.
(4) Deemed certification of instrumentality budgets.--If
the Governor fails to develop an Instrumentality Budget that
is a compliant budget by the day before the first day of the
fiscal year for which the Instrumentality Budget is being
developed, the Oversight Board shall submit an
Instrumentality Budget to the Governor (including any
revision to the Instrumentality Budget made by the Oversight
Board pursuant to subsection (c)(2)) and such Budget shall
be--
(A) deemed to be approved by the Governor;
(B) the subject of a compliance certification issued by the
Oversight Board to the Governor; and
(C) in full force and effect beginning on the first day of
the applicable fiscal year.
(f) Joint Development of Budgets.--Notwithstanding any
other provision of this section, if, in the case of a
Territory Budget, the Governor, the Legislature, and the
Oversight Board, or in the case of an Instrumentality Budget,
the Governor and the Oversight Board, jointly develop such
Budget for the fiscal year that meets the requirements under
this section, and that the relevant parties certify that such
budget reflects a consensus among them, then such Budget
shall serve as the Budget for the territory or territorial
instrumentality for that fiscal year.
SEC. 203. EFFECT OF FINDING OF NONCOMPLIANCE WITH BUDGET.
(a) Submission of Reports.--Not later than 15 days after
the last day of each quarter of a fiscal year (beginning with
the fiscal year determined by the Oversight Board), the
Governor
[[Page H3617]]
shall submit to the Oversight Board a report, in such form as
the Oversight Board may require, describing--
(1) the actual cash revenues, cash expenditures, and cash
flows of the territorial government for the preceding
quarter, as compared to the projected revenues, expenditures,
and cash flows contained in the certified Budget for such
preceding quarter; and
(2) any other information requested by the Oversight Board,
which may include a balance sheet or a requirement that the
Governor provide information for each covered territorial
instrumentality separately.
(b) Initial Action by Oversight Board.--
(1) In general.--If the Oversight Board determines, based
on reports submitted by the Governor under subsection (a),
independent audits, or such other information as the
Oversight Board may obtain, that the actual quarterly
revenues, expenditures, or cash flows of the territorial
government are not consistent with the projected revenues,
expenditures, or cash flows set forth in the certified Budget
for such quarter, the Oversight Board shall--
(A) require the territorial government to provide such
additional information as the Oversight Board determines to
be necessary to explain the inconsistency; and
(B) if the additional information provided under
subparagraph (A) does not provide an explanation for the
inconsistency that the Oversight Board finds reasonable and
appropriate, advise the territorial government to correct the
inconsistency by implementing remedial action.
(2) Deadlines.--The Oversight Board shall establish the
deadlines by which the territorial government shall meet the
requirements of subparagraphs (A) and (B) of paragraph (1).
(c) Certification.--
(1) Inconsistency.--If the territorial government fails to
provide additional information under subsection (b)(1)(A), or
fails to correct an inconsistency under subsection (b)(1)(B),
prior to the applicable deadline under subsection (b)(2), the
Oversight Board shall certify to the President, the House of
Representatives Committee on Natural Resources, the Senate
Committee on Energy and Natural Resources, the Governor, and
the Legislature that the territorial government is
inconsistent with the applicable certified Budget, and shall
describe the nature and amount of the inconsistency.
(2) Correction.--If the Oversight Board determines that the
territorial government has initiated such measures as the
Oversight Board considers sufficient to correct an
inconsistency certified under paragraph (1), the Oversight
Board shall certify the correction to the President, the
House of Representatives Committee on Natural Resources, the
Senate Committee on Energy and Natural Resources, the
Governor, and the Legislature.
(d) Budget Reductions by Oversight Board.--If the Oversight
Board determines that the Governor, in the case of any then-
applicable certified Instrumentality Budgets, and the
Governor and the Legislature, in the case of the then-
applicable certified Territory Budget, have failed to correct
an inconsistency identified by the Oversight Board under
subsection (c), the Oversight Board shall--
(1) with respect to the territorial government, other than
covered territorial instrumentalities, make appropriate
reductions in nondebt expenditures to ensure that the actual
quarterly revenues and expenditures for the territorial
government are in compliance with the applicable certified
Territory Budget or, in the case of the fiscal year in which
the Oversight Board is established, the budget adopted by the
Governor and the Legislature; and
(2) with respect to covered territorial instrumentalities
at the sole discretion of the Oversight Board--
(A) make reductions in nondebt expenditures to ensure that
the actual quarterly revenues and expenses for the covered
territorial instrumentality are in compliance with the
applicable certified Budget or, in the case of the fiscal
year in which the Oversight Board is established, the budget
adopted by the Governor and the Legislature or the covered
territorial instrumentality, as applicable; or
(B)(i) institute automatic hiring freezes at the covered
territorial instrumentality; and
(ii) prohibit the covered territorial instrumentality from
entering into any contract or engaging in any financial or
other transactions, unless the contract or transaction was
previously approved by the Oversight Board.
(e) Termination of Budget Reductions.--The Oversight Board
shall cancel the reductions, hiring freezes, or prohibition
on contracts and financial transactions under subsection (d)
if the Oversight Board determines that the territorial
government or covered territorial instrumentality, as
applicable, has initiated appropriate measures to reduce
expenditures or increase revenues to ensure that the
territorial government or covered territorial instrumentality
is in compliance with the applicable certified Budget or, in
the case of the fiscal year in which the Oversight Board is
established, the budget adopted by the Governor and the
Legislature.
SEC. 204. REVIEW OF ACTIVITIES TO ENSURE COMPLIANCE WITH
FISCAL PLAN.
(a) Submission of Legislative Acts to Oversight Board.--
(1) Submission of acts.--Except to the extent that the
Oversight Board may provide otherwise in its bylaws, rules,
and procedures, not later than 7 business days after a
territorial government duly enacts any law during any fiscal
year in which the Oversight Board is in operation, the
Governor shall submit the law to the Oversight Board.
(2) Cost estimate; certification of compliance or
noncompliance.--The Governor shall include with each law
submitted to the Oversight Board under paragraph (1) the
following:
(A) 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.
(B) If the appropriate entity described in subparagraph (A)
finds that the law is not significantly inconsistent with the
Fiscal Plan for the fiscal year, it shall issue a
certification of such finding.
(C) If the appropriate entity described in subparagraph (A)
finds that the law is significantly inconsistent with the
Fiscal Plan for the fiscal year, it shall issue a
certification of such finding, together with the entity's
reasons for such finding.
(3) Notification.--The Oversight Board shall send a
notification to the Governor and the Legislature if--
(A) the Governor submits a law to the Oversight Board under
this subsection that is not accompanied by the estimate
required under paragraph (2)(A);
(B) the Governor submits a law to the Oversight Board under
this subsection that is not accompanied by either a
certification described in paragraph (2)(B) or (2)(C); or
(C) the Governor submits a law to the Oversight Board under
this subsection that is accompanied by a certification
described in paragraph (2)(C) that the law is significantly
inconsistent with the Fiscal Plan.
(4) Opportunity to respond to notification.--
(A) Failure to provide estimate or certification.--After
sending a notification to the Governor and the Legislature
under paragraph (3)(A) or (3)(B) with respect to a law, the
Oversight Board may direct the Governor to provide the
missing estimate or certification (as the case may be), in
accordance with such procedures as the Oversight Board may
establish.
(B) Submission of certification of significant
inconsistency with fiscal plan and budget.--In accordance
with such procedures as the Oversight Board may establish,
after sending a notification to the Governor and Legislature
under paragraph (3)(C) that a law is significantly
inconsistent with the Fiscal Plan, the Oversight Board shall
direct the territorial government to--
(i) correct the law to eliminate the inconsistency; or
(ii) provide an explanation for the inconsistency that the
Oversight Board finds reasonable and appropriate.
(5) Failure to comply.--If the territorial government fails
to comply with a direction given by the Oversight Board under
paragraph (4) with respect to a law, the Oversight Board may
take such actions as it considers necessary, consistent with
this Act, to ensure that the enactment or enforcement of the
law will not adversely affect the territorial government's
compliance with the Fiscal Plan, including preventing the
enforcement or application of the law.
(6) Preliminary review of proposed acts.--At the request of
the Legislature, the Oversight Board may conduct a
preliminary review of proposed legislation before the
Legislature to determine whether the legislation as proposed
would be consistent with the applicable Fiscal Plan under
this subtitle, except that any such preliminary review shall
not be binding on the Oversight Board in reviewing any law
subsequently submitted under this subsection.
(b) Effect of Approved Fiscal Plan on Contracts, Rules, and
Regulations.--
(1) Transparency in contracting.--The Oversight Board shall
work with a covered territory's office of the comptroller or
any functionally equivalent entity to promote compliance with
the applicable law of any covered territory that requires
agencies and instrumentalities of the territorial government
to maintain a registry of all contracts executed, including
amendments thereto, and to remit a copy to the office of the
comptroller for inclusion in a comprehensive database
available to the public. With respect to Puerto Rico, the
term ``applicable law'' refers to 2 L.P.R.A. 97, as amended.
(2) Authority to review certain contracts.--The Oversight
Board may establish policies to require prior Oversight Board
approval of certain contracts, including leases and contracts
to a governmental entity or government-owned corporations
rather than private enterprises that are proposed to be
executed by the territorial government, to ensure such
proposed contracts promote market competition and are not
inconsistent with the approved Fiscal Plan.
(3) Sense of congress.--It is the sense of Congress that
any policies established by the Oversight Board pursuant to
paragraph (2) should be designed to make the government
contracting process more effective, to increase the public's
faith in this process, to make appropriate use of the
Oversight Board's time and resources, to make the territorial
government a facilitator and not a competitor to private
enterprise, and to avoid creating any additional bureaucratic
obstacles to efficient contracting.
(4) Authority to review certain rules, regulations, and
executive orders.--The provisions of this paragraph shall
apply with respect to a rule, regulation, or executive order
proposed to be issued by the Governor (or the head of any
department or agency of the territorial government) in the
same manner as such provisions apply to a contract.
(5) Failure to comply.--If a contract, rule, regulation, or
executive order fails to comply with policies established by
the Oversight Board under this subsection, the Oversight
Board may take such actions as it considers necessary to
ensure that such contract, rule, executive order or
regulation will not adversely affect the territorial
government's compliance with the Fiscal Plan, including by
preventing the execution or enforcement of the contract,
rule, executive order or regulation.
[[Page H3618]]
(c) Restrictions on Budgetary Adjustments.--
(1) Submissions of requests to oversight board.--If the
Governor submits a request to the Legislature for the
reprogramming of any amounts provided in a certified Budget,
the Governor shall submit such request to the Oversight
Board, which shall analyze whether the proposed reprogramming
is significantly inconsistent with the Budget, and submit its
analysis to the Legislature as soon as practicable after
receiving the request.
(2) No action permitted until analysis received.--The
Legislature shall not adopt a reprogramming, and no officer
or employee of the territorial government may carry out any
reprogramming, until the Oversight Board has provided the
Legislature with an analysis that certifies such
reprogramming will not be inconsistent with the Fiscal Plan
and Budget.
(3) Prohibition on action until oversight board is
appointed.--During the period after a territory becomes a
covered territory and prior to the appointment of all members
and the Chair of the Oversight Board, such covered territory
shall not enact new laws that either permit the transfer of
any funds or assets outside the ordinary course of business
or that are inconsistent with the constitution or laws of the
territory as of the date of enactment of this Act, provided
that any executive or legislative action authorizing the
movement of funds or assets during this time period may be
subject to review and reversal by the Oversight Board upon
appointment of the Oversight Board's full membership.
(d) Implementation of Federal Programs.--In taking actions
under this Act, the Oversight Board shall not exercise
applicable authorities to impede territorial actions taken
to--
(1) comply with a court-issued consent decree or
injunction, or an administrative order or settlement with a
Federal agency, with respect to Federal programs;
(2) implement a federally authorized or federally delegated
program; or
(3) implement territorial laws, which are consistent with a
certified Fiscal Plan, that execute Federal requirements and
standards.
SEC. 205. RECOMMENDATIONS ON FINANCIAL STABILITY AND
MANAGEMENT RESPONSIBILITY.
(a) In General.--The Oversight Board may at any time submit
recommendations to the Governor or the Legislature on actions
the territorial government may take to ensure compliance with
the Fiscal Plan, or to otherwise promote the financial
stability, economic growth, management responsibility, and
service delivery efficiency of the territorial government,
including recommendations relating to--
(1) the management of the territorial government's
financial affairs, including economic forecasting and
multiyear fiscal forecasting capabilities, information
technology, placing controls on expenditures for personnel,
reducing benefit costs, reforming procurement practices, and
placing other controls on expenditures;
(2) the structural relationship of departments, agencies,
and independent agencies within the territorial government;
(3) the modification of existing revenue structures, or the
establishment of additional revenue structures;
(4) the establishment of alternatives for meeting
obligations to pay for the pensions of territorial government
employees;
(5) modifications or transfers of the types of services
that are the responsibility of, and are delivered by the
territorial government;
(6) modifications of the types of services that are
delivered by entities other than the territorial government
under alternative service delivery mechanisms;
(7) the effects of the territory's laws and court orders on
the operations of the territorial government;
(8) the establishment of a personnel system for employees
of the territorial government that is based upon employee
performance standards;
(9) the improvement of personnel training and proficiency,
the adjustment of staffing levels, and the improvement of
training and performance of management and supervisory
personnel; and
(10) the privatization and commercialization of entities
within the territorial government.
(b) Response to Recommendations by the Territorial
Government.--
(1) In general.--In the case of any recommendations
submitted under subsection (a) that are within the authority
of the territorial government to adopt, not later than 90
days after receiving the recommendations, the Governor or the
Legislature (whichever has the authority to adopt the
recommendation) shall submit a statement to the Oversight
Board that provides notice as to whether the territorial
government will adopt the recommendations.
(2) Implementation plan required for adopted
recommendations.--If the Governor or the Legislature
(whichever is applicable) notifies the Oversight Board under
paragraph (1) that the territorial government will adopt any
of the recommendations submitted under subsection (a), the
Governor or the Legislature (whichever is applicable) shall
include in the statement a written plan to implement the
recommendation that includes--
(A) specific performance measures to determine the extent
to which the territorial government has adopted the
recommendation; and
(B) a clear and specific timetable pursuant to which the
territorial government will implement the recommendation.
(3) Explanations required for recommendations not
adopted.--If the Governor or the Legislature (whichever is
applicable) notifies the Oversight Board under paragraph (1)
that the territorial government will not adopt any
recommendation submitted under subsection (a) that the
territorial government has authority to adopt, the Governor
or the Legislature shall include in the statement
explanations for the rejection of the recommendations, and
the Governor or the Legislature shall submit such statement
of explanations to the President and Congress.
SEC. 206. OVERSIGHT BOARD DUTIES RELATED TO RESTRUCTURING.
(a) Requirements for Restructuring Certification.--The
Oversight Board, prior to issuing a restructuring
certification regarding an entity (as such term is defined in
section 101 of title 11, United States Code), shall
determine, in its sole discretion, that--
(1) the entity has made good-faith efforts to reach a
consensual restructuring with creditors;
(2) the entity has--
(A) adopted procedures necessary to deliver timely audited
financial statements; and
(B) made public draft financial statements and other
information sufficient for any interested person to make an
informed decision with respect to a possible restructuring;
(3) the entity is either a covered territory that has
adopted a Fiscal Plan certified by the Oversight Board, a
covered territorial instrumentality that is subject to a
Territory Fiscal Plan certified by the Oversight Board, or a
covered territorial instrumentality that has adopted an
Instrumentality Fiscal Plan certified by the Oversight Board;
and
(4)(A) no order approving a Qualifying Modification under
section 601 has been entered with respect to such entity; or
(B) if an order approving a Qualifying Modification has
been entered with respect to such entity, the entity is
unable to make its debt payments notwithstanding the approved
Qualifying Modification, in which case, all claims affected
by the Qualifying Modification shall be subject to a title
III case.
(b) Issuance of Restructuring Certification.--The issuance
of a restructuring certification under this section requires
a vote of no fewer than 5 members of the Oversight Board in
the affirmative, which shall satisfy the requirement set
forth in section 302(2) of this Act.
SEC. 207. OVERSIGHT BOARD AUTHORITY RELATED TO DEBT ISSUANCE.
For so long as the Oversight Board remains in operation, no
territorial government may, without the prior approval of the
Oversight Board, issue debt or guarantee, exchange, modify,
repurchase, redeem, or enter into similar transactions with
respect to its debt.
SEC. 208. REQUIRED REPORTS.
(a) Annual Report.--Not later than 30 days after the last
day of each fiscal year, the Oversight Board shall submit a
report to the President, Congress, the Governor and the
Legislature, describing--
(1) the progress made by the territorial government in
meeting the objectives of this Act during the fiscal year;
(2) the assistance provided by the Oversight Board to the
territorial government in meeting the purposes of this Act
during the fiscal year;
(3) recommendations to the President and Congress on
changes to this Act or other Federal laws, or other actions
of the Federal Government, that would assist the territorial
government in complying with any certified Fiscal Plan;
(4) the precise manner in which funds allocated to the
Oversight Board under section 107 and, as applicable, section
104(e) have been spent by the Oversight Board during the
fiscal year; and
(5) any other activities of the Oversight Board during the
fiscal year.
(b) Report on Discretionary Tax Abatement Agreements.--
Within six months of the establishment of the Oversight
Board, the Governor shall submit a report to the Oversight
Board documenting all existing discretionary tax abatement or
similar tax relief agreements to which the territorial
government, or any territorial instrumentality, is a party,
provided that--
(1) nothing in this Act shall be interpreted to limit the
power of the territorial government or any territorial
instrumentality to execute or modify discretionary tax
abatement or similar tax relief agreements, or to enforce
compliance with the terms and conditions of any discretionary
tax abatement or similar tax relief agreement, to which the
territorial government or any territorial instrumentality is
a party; and
(2) the members and staff of the Oversight Board shall not
disclose the contents of the report described in this
subsection, and shall otherwise comply with all applicable
territorial and Federal laws and regulations regarding the
handling of confidential taxpayer information.
(c) Quarterly Reports of Cash Flow.--The Oversight Board,
when feasible, shall report on the amount of cash flow
available for the payment of debt service on all notes,
bonds, debentures, credit agreements, or other instruments
for money borrowed whose enforcement is subject to a stay or
moratorium hereunder, together with any variance from the
amount set forth in the debt sustainability analysis of the
Fiscal Plan under section 201(b)(1)(I).
SEC. 209. TERMINATION OF OVERSIGHT BOARD.
An Oversight Board shall terminate upon certification by
the Oversight Board that--
(1) the applicable territorial government has adequate
access to short-term and long-term credit markets at
reasonable interest rates to meet the borrowing needs of the
territorial government; and
(2) for at least 4 consecutive fiscal years--
(A) the territorial government has developed its Budgets in
accordance with modified accrual accounting standards; and
(B) the expenditures made by the territorial government
during each fiscal year did not exceed the revenues of the
territorial government during that year, as determined in
accordance with modified accrual accounting standards.
[[Page H3619]]
SEC. 210. NO FULL FAITH AND CREDIT OF THE UNITED STATES.
(a) In General.--The full faith and credit of the United
States is not pledged for the payment of any principal of or
interest on any bond, note, or other obligation issued by a
covered territory or covered territorial instrumentality. The
United States is not responsible or liable for the payment of
any principal of or interest on any bond, note, or other
obligation issued by a covered territory or covered
territorial instrumentality.
(b) Subject to Appropriations.--Any claim to which the
United States is determined to be liable under this Act shall
be subject to appropriations.
(c) Funding.--No Federal funds shall be authorized by this
Act for the payment of any liability of the territory or
territorial instrumentality.
SEC. 211. ANALYSIS OF PENSIONS.
(a) Determination.--If the Oversight Board determines, in
its sole discretion, that a pension system of the territorial
government is materially underfunded, the Oversight Board
shall conduct an analysis prepared by an independent actuary
of such pension system to assist the Oversight Board in
evaluating the fiscal and economic impact of the pension cash
flows.
(b) Provisions of Analysis.--An analysis conducted under
subsection (a) shall include--
(1) an actuarial study of the pension liabilities and
funding strategy that includes a forward looking projection
of payments of at least 30 years of benefit payments and
funding strategy to cover such payments;
(2) sources of funding to cover such payments;
(3) a review of the existing benefits and their
sustainability; and
(4) a review of the system's legal structure and
operational arrangements, and any other studies of the
pension system the Oversight Board shall deem necessary.
(c) Supplementary Information.--In any case, the analysis
conducted under subsection (a) shall include information
regarding the fair market value and liabilities using an
appropriate discount rate as determined by the Oversight
Board.
SEC. 212. INTERVENTION IN LITIGATION.
(a) Intervention.--The Oversight Board may intervene in any
litigation filed against the territorial government.
(b) Injunctive Relief.--
(1) In general.--If the Oversight Board intervenes in a
litigation under subsection (a), the Oversight Board may seek
injunctive relief, including a stay of litigation.
(2) No independent basis for relief.--This section does not
create an independent basis on which injunctive relief,
including a stay of litigation, may be granted.
TITLE III--ADJUSTMENTS OF DEBTS
SEC. 301. APPLICABILITY OF OTHER LAWS; DEFINITIONS.
(a) Sections Applicable to Cases Under This Title.--
Sections 101 (except as otherwise provided in this section),
102, 104, 105, 106, 107, 108, 112, 333, 344, 347(b), 349,
350(b), 351, 361, 362, 364(c), 364(d), 364(e), 364(f), 365,
366, 501, 502, 503, 504, 506, 507(a)(2), 509, 510, 524(a)(1),
524(a)(2), 544, 545, 546, 547, 548, 549(a), 549(c), 549(d),
550, 551, 552, 553, 555, 556, 557, 559, 560, 561, 562, 902
(except as otherwise provided in this section), 922, 923,
924, 925, 926, 927, 928, 942, 944, 945, 946, 1102, 1103,
1109, 1111(b), 1122, 1123(a)(1), 1123(a)(2), 1123(a)(3),
1123(a)(4), 1123(a)(5), 1123(b), 1123(d), 1124, 1125,
1126(a), 1126(b), 1126(c), 1126(e), 1126(f), 1126(g),
1127(d), 1128, 1129(a)(2), 1129(a)(3), 1129(a)(6),
1129(a)(8), 1129(a)(10), 1129(b)(1), 1129(b)(2)(A),
1129(b)(2)(B), 1142(b), 1143, 1144, 1145, and 1146(a) of
title 11, United States Code, apply in a case under this
title and section 930 of title 11, United States Code,
applies in a case under this title; however, section 930
shall not apply in any case during the first 120 days after
the date on which such case is commenced under this title.
(b) Meanings of Terms.--A term used in a section of title
11, United States Code, made applicable in a case under this
title by subsection (a), has the meaning given to the term
for the purpose of the applicable section, unless the term is
otherwise defined in this title.
(c) Definitions.--In this title:
(1) Affiliate.--The term ``affiliate'' means, in addition
to the definition made applicable in a case under this title
by subsection (a)--
(A) for a territory, any territorial instrumentality; and
(B) for a territorial instrumentality, the governing
territory and any of the other territorial instrumentalities
of the territory.
(2) Debtor.--The term ``debtor'' means the territory or
covered territorial instrumentality concerning which a case
under this title has been commenced.
(3) Holder of a claim or interest.--The term ``holder of a
claim or interest'', when used in section 1126 of title 11,
United States Code, made applicable in a case under this
title by subsection (a)--
(A) shall exclude any Issuer or Authorized Instrumentality
of the Territory Government Issuer (as defined under Title VI
of this Act) or a corporation, trust or other legal entity
that is controlled by the Issuer or an Authorized Territorial
Instrumentality of the Territory Government Issuer, provided
that the beneficiaries of such claims, to the extent they are
not referenced in this subparagraph, shall not be excluded;
and
(B) with reference to Insured Bonds, shall mean the
monoline insurer insuring such Insured Bond to the extent
such insurer is granted the right to vote Insured Bonds for
purposes of directing remedies or consenting to proposed
amendments or modifications as provided in the applicable
documents pursuant to which such Insured Bond was issued and
insured.
(4) Insured bond.--The term ``Insured Bond'' means a bond
subject to a financial guarantee or similar insurance
contract, policy and/or surety issued by a monoline insurer.
(5) Property of the estate.--The term ``property of the
estate'', when used in a section of title 11, United States
Code, made applicable in a case under this title by
subsection (a), means property of the debtor.
(6) State.--The term ``State'' when used in a section of
title 11, United States Code, made applicable in a case under
this title by subsection (a) means State or territory when
used in reference to the relationship of a State to the
municipality of the State or the territorial instrumentality
of a territory, as applicable.
(7) Trustee.--The term ``trustee'', when used in a section
of title 11, United States Code, made applicable in a case
under this title by subsection (a), means the Oversight
Board, except as provided in section 926 of title 11, United
States Code.
(d) Reference to Title.--Solely for purposes of this title,
a reference to ``this title'', ``this chapter'', or words of
similar import in a section of title 11, United States Code,
made applicable in a case under this title by subsection (a)
or to ``this title'', ``title 11'', ``Chapter 9'', ``the
Code'', or words of similar import in the Federal Rules of
Bankruptcy Procedure made applicable in a case under this
title shall be deemed to be a reference to this title.
(e) Substantially Similar.--In determining whether claims
are ``substantially similar'' for the purpose of section 1122
of title 11, United States Code, made applicable in a case
under this title by subsection (a), the Oversight Board shall
consider whether such claims are secured and whether such
claims have priority over other claims.
(f) Operative Clauses.--A section made applicable in a case
under this title by subsection (a) that is operative if the
business of the debtor is authorized to be operated is
operative in a case under this title.
SEC. 302. WHO MAY BE A DEBTOR.
An entity may be a debtor under this title if--
(1) the entity is--
(A) a territory that has requested the establishment of an
Oversight Board or has had an Oversight Board established for
it by the United States Congress in accordance with section
101 of this Act; or
(B) a covered territorial instrumentality of a territory
described in paragraph (1)(A);
(2) the Oversight Board has issued a certification under
section 206(b) of this Act for such entity; and
(3) the entity desires to effect a plan to adjust its
debts.
SEC. 303. RESERVATION OF TERRITORIAL POWER TO CONTROL
TERRITORY AND TERRITORIAL INSTRUMENTALITIES.
Subject to the limitations set forth in titles I and II of
this Act, this title does not limit or impair the power of a
covered territory to control, by legislation or otherwise,
the territory or any territorial instrumentality thereof in
the exercise of the political or governmental powers of the
territory or territorial instrumentality, including
expenditures for such exercise, whether or not a case has
been or can be commenced under this title, but--
(1) a territory law prescribing a method of composition of
indebtedness or a moratorium law, but solely to the extent
that it prohibits the payment of principal or interest by an
entity not described in section 109(b)(2) of title 11, United
States Code, may not bind any creditor of a covered territory
or any covered territorial instrumentality thereof that does
not consent to the composition or moratorium;
(2) a judgment entered under a law described in paragraph
(1) may not bind a creditor that does not consent to the
composition; and
(3) unlawful executive orders that alter, amend, or modify
rights of holders of any debt of the territory or territorial
instrumentality, or that divert funds from one territorial
instrumentality to another or to the territory, shall be
preempted by this Act.
SEC. 304. PETITION AND PROCEEDINGS RELATING TO PETITION.
(a) Commencement of Case.--A voluntary case under this
title is commenced by the filing with the district court of a
petition by the Oversight Board pursuant to the determination
under section 206 of this Act.
(b) Objection to Petition.--After any objection to the
petition, the court, after notice and a hearing, may dismiss
the petition if the petition does not meet the requirements
of this title; however, this subsection shall not apply in
any case during the first 120 days after the date on which
such case is commenced under this title.
(c) Order for Relief.--The commencement of a case under
this title constitutes an order for relief.
(d) Appeal.--The court may not, on account of an appeal
from an order for relief, delay any proceeding under this
title in the case in which the appeal is being taken, nor
shall any court order a stay of such proceeding pending such
appeal.
(e) Validity of Debt.--The reversal on appeal of a finding
of jurisdiction shall not affect the validity of any debt
incurred that is authorized by the court under section 364(c)
or 364(d) of title 11, United States Code.
(f) Joint Filing of Petitions and Plans Permitted.--The
Oversight Board, on behalf of debtors under this title, may
file petitions or submit or modify plans of adjustment
jointly if the debtors are affiliates; provided, however,
that nothing in this title shall be construed as authorizing
substantive consolidation of the cases of affiliated debtors.
(g) Joint Administration of Affiliated Cases.--If the
Oversight Board, on behalf of a debtor and one or more
affiliates, has filed separate cases and the Oversight Board,
on behalf of the debtor or one of the affiliates, files a
motion to administer the cases jointly, the court may order a
joint administration of the cases.
(h) Public Safety.--This Act may not be construed to permit
the discharge of obligations
[[Page H3620]]
arising under Federal police or regulatory laws, including
laws relating to the environment, public health or safety, or
territorial laws implementing such Federal legal provisions.
This includes compliance obligations, requirements under
consent decrees or judicial orders, and obligations to pay
associated administrative, civil, or other penalties.
(i) Voting on Debt Adjustment Plans Not Stayed.--
Notwithstanding any provision in this title to the contrary,
including sections of title 11, United States Code,
incorporated by reference, nothing in this section shall
prevent the holder of a claim from voting on or consenting to
a proposed modification of such claim under title VI of this
Act.
SEC. 305. LIMITATION ON JURISDICTION AND POWERS OF COURT.
Subject to the limitations set forth in titles I and II of
this Act, notwithstanding any power of the court, unless the
Oversight Board consents or the plan so provides, the court
may not, by any stay, order, or decree, in the case or
otherwise, interfere with--
(1) any of the political or governmental powers of the
debtor;
(2) any of the property or revenues of the debtor; or
(3) the use or enjoyment by the debtor of any income-
producing property.
SEC. 306. JURISDICTION.
(a) Federal Subject Matter Jurisdiction.--The district
courts shall have--
(1) except as provided in paragraph (2), original and
exclusive jurisdiction of all cases under this title; and
(2) except as provided in subsection (b), and
notwithstanding any Act of Congress that confers exclusive
jurisdiction on a court or courts other than the district
courts, original but not exclusive jurisdiction of all civil
proceedings arising under this title, or arising in or
related to cases under this title.
(b) Property Jurisdiction.--The district court in which a
case under this title is commenced or is pending shall have
exclusive jurisdiction of all property, wherever located, of
the debtor as of the commencement of the case.
(c) Personal Jurisdiction.--The district court in which a
case under this title is pending shall have personal
jurisdiction over any person or entity.
(d) Removal, Remand, and Transfer.--
(1) Removal.--A party may remove any claim or cause of
action in a civil action, other than a proceeding before the
United States Tax Court or a civil action by a governmental
unit to enforce the police or regulatory power of the
governmental unit, to the district court for the district in
which the civil action is pending, if the district court has
jurisdiction of the claim or cause of action under this
section.
(2) Remand.--The district court to which the claim or cause
of action is removed under paragraph (1) may remand the claim
or cause of action on any equitable ground. An order entered
under this subsection remanding a claim or cause of action,
or a decision not to remand, is not reviewable by appeal or
otherwise by the court of appeals under section 158(d), 1291
or 1292 of title 28, United States Code, or by the Supreme
Court of the United States under section 1254 of title 28,
United States Code.
(3) Transfer.--A district court shall transfer any civil
proceeding arising under this title, or arising in or related
to a case under this title, to the district court in which
the case under this title is pending.
(e) Appeal.--
(1) An appeal shall be taken in the same manner as appeals
in civil proceedings generally are taken to the courts of
appeals from the district court.
(2) The court of appeals for the circuit in which a case
under this title has venue pursuant to section 307 of this
title shall have jurisdiction of appeals from all final
decisions, judgments, orders and decrees entered under this
title by the district court.
(3) The court of appeals for the circuit in which a case
under this title has venue pursuant to section 307 of this
title shall have jurisdiction to hear appeals of
interlocutory orders or decrees if--
(A) the district court on its own motion or on the request
of a party to the order or decree certifies that--
(i) the order or decree involves a question of law as to
which there is no controlling decision of the court of
appeals for the circuit or of the Supreme Court of the United
States, or involves a matter of public importance;
(ii) the order or decree involves a question of law
requiring the resolution of conflicting decisions; or
(iii) an immediate appeal from the order or decree may
materially advance the progress of the case or proceeding in
which the appeal is taken; and
(B) the court of appeals authorizes the direct appeal of
the order or decree.
(4) If the district court on its own motion or on the
request of a party determines that a circumstance specified
in clauses (i), (ii), or (iii) of paragraph (3)(A) exists,
then the district court shall make the certification
described in paragraph (3).
(5) The parties may supplement the certification with a
short statement of the basis for the certification issued by
the district court under paragraph (3)(A).
(6) Except as provided in section 304(d), an appeal of an
interlocutory order or decree does not stay any proceeding of
the district court from which the appeal is taken unless the
district court, or the court of appeals in which the appeal
is pending, issues a stay of such proceedings pending the
appeal.
(7) Any request for a certification in respect to an
interlocutory appeal of an order or decree shall be made not
later than 60 days after the entry of the order or decree.
(f) Reallocation of Court Staff.--Notwithstanding any law
to the contrary, the clerk of the court in which a case is
pending shall reallocate as many staff and assistants as the
clerk deems necessary to ensure that the court has adequate
resources to provide for proper case management.
SEC. 307. VENUE.
(a) In General.--Venue shall be proper in--
(1) with respect to a territory, the district court for the
territory or, for any territory that does not have a district
court, the United States District Court for the District of
Hawaii; and
(2) with respect to a covered territorial instrumentality,
the district court for the territory in which the covered
territorial instrumentality is located or, for any territory
that does not have a district court, the United States
District Court for the District of Hawaii.
(b) Alternative Venue.--If the Oversight Board so
determines in its sole discretion, then venue shall be proper
in the district court for the jurisdiction in which the
Oversight Board maintains an office that is located outside
the territory.
SEC. 308. SELECTION OF PRESIDING JUDGE.
(a) For cases in which the debtor is a territory, the Chief
Justice of the United States shall designate a district court
judge to sit by designation to conduct the case.
(b) For cases in which the debtor is not a territory, and
no motion for joint administration of the debtor's case with
the case of its affiliate territory has been filed or there
is no case in which the affiliate territory is a debtor, the
chief judge of the court of appeals for the circuit embracing
the district in which the case is commenced shall designate a
district court judge to conduct the case.
SEC. 309. ABSTENTION.
Nothing in this title prevents a district court in the
interests of justice from abstaining from hearing a
particular proceeding arising in or related to a case under
this title.
SEC. 310. APPLICABLE RULES OF PROCEDURE.
The Federal Rules of Bankruptcy Procedure shall apply to a
case under this title and to all civil proceedings arising in
or related to cases under this title.
SEC. 311. LEASES.
A lease to a territory or territorial instrumentality shall
not be treated as an executory contract or unexpired lease
for the purposes of section 365 or 502(b)(6) of title 11,
United States Code, solely by reason of the lease being
subject to termination in the event the debtor fails to
appropriate rent.
SEC. 312. FILING OF PLAN OF ADJUSTMENT.
(a) Exclusivity.--Only the Oversight Board, after the
issuance of a certificate pursuant to section 104(j) of this
Act, may file a plan of adjustment of the debts of the
debtor.
(b) Deadline for Filing Plan.--If the Oversight Board does
not file a plan of adjustment with the petition, the
Oversight Board shall file a plan of adjustment at the time
set by the court.
SEC. 313. MODIFICATION OF PLAN.
The Oversight Board, after the issuance of a certification
pursuant to section 104(j) of this Act, may modify the plan
at any time before confirmation, but may not modify the plan
so that the plan as modified fails to meet the requirements
of this title. After the Oversight Board files a
modification, the plan as modified becomes the plan.
SEC. 314. CONFIRMATION.
(a) Objection.--A special tax payer may object to
confirmation of a plan.
(b) Confirmation.--The court shall confirm the plan if--
(1) the plan complies with the provisions of title 11 of
the United States Code, made applicable to a case under this
title by section 301 of this Act;
(2) the plan complies with the provisions of this title;
(3) the debtor is not prohibited by law from taking any
action necessary to carry out the plan;
(4) except to the extent that the holder of a particular
claim has agreed to a different treatment of such claim, the
plan provides that on the effective date of the plan each
holder of a claim of a kind specified in 507(a)(2) of title
11, United States Code, will receive on account of such claim
cash equal to the allowed amount of such claim;
(5) any legislative, regulatory, or electoral approval
necessary under applicable law in order to carry out any
provision of the plan has been obtained, or such provision is
expressly conditioned on such approval;
(6) the plan is feasible and in the best interests of
creditors, which shall require the court to consider whether
available remedies under the non-bankruptcy laws and
constitution of the territory would result in a greater
recovery for the creditors than is provided by such plan; and
(7) the plan is consistent with the applicable Fiscal Plan
certified by the Oversight Board under title II.
(c) Confirmation for Debtors With a Single Class of
Impaired Creditors.--If all of the requirements of section
314(b) of this title and section 1129(a) of title 11, United
States Code, incorporated into this title by section 301
other than sections 1129(a)(8) and 1129(a)(10) are met with
respect to a plan--
(1) with respect to which all claims are substantially
similar under section 301(e) of this title;
(2) that includes only one class of impaired claims; and
(3) that was not accepted by such impaired class,
the court shall confirm the plan notwithstanding the
requirements of such sections
[[Page H3621]]
1129(a)(8) and 1129(a)(10) of title 11, United States Code if
the plan is fair and equitable with respect to such impaired
class.
SEC. 315. ROLE AND CAPACITY OF OVERSIGHT BOARD.
(a) Actions of Oversight Board.--For the purposes of this
title, the Oversight Board may take any action necessary on
behalf of the debtor to prosecute the case of the debtor,
including--
(1) filing a petition under section 304 of this Act;
(2) submitting or modifying a plan of adjustment under
sections 312 and 313; or
(3) otherwise generally submitting filings in relation to
the case with the court.
(b) Representative of Debtor.--The Oversight Board in a
case under this title is the representative of the debtor.
SEC. 316. COMPENSATION OF PROFESSIONALS.
(a) After notice to the parties in interest and the United
States Trustee and a hearing, the court may award to a
professional person employed by the debtor (in the debtor's
sole discretion), the Oversight Board (in the Oversight
Board's sole discretion), a committee under section 1103 of
title 11, United States Code, or a trustee appointed by the
court under section 926 of title 11, United States Code--
(1) reasonable compensation for actual, necessary services
rendered by the professional person, or attorney and by any
paraprofessional person employed by any such person; and
(2) reimbursement for actual, necessary expenses.
(b) The court may, on its own motion or on the motion of
the United States Trustee or any other party in interest,
award compensation that is less than the amount of
compensation that is requested.
(c) In determining the amount of reasonable compensation to
be awarded to a professional person, the court shall consider
the nature, the extent, and the value of such services,
taking into account all relevant factors, including--
(1) the time spent on such services;
(2) the rates charged for such services;
(3) whether the services were necessary to the
administration of, or beneficial at the time at which the
service was rendered toward the completion of, a case under
this chapter;
(4) whether the services were performed within a reasonable
amount of time commensurate with the complexity, importance,
and nature of the problem, issue, or task addressed;
(5) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill
and experience in the restructuring field; and
(6) whether the compensation is reasonable based on the
customary compensation charged by comparably skilled
practitioners in cases other than cases under this title or
title 11, United States Code.
(d) The court shall not allow compensation for--
(1) unnecessary duplication of services; or
(2) services that were not--
(A) reasonably likely to benefit the debtor; or
(B) necessary to the administration of the case.
(e) The court shall reduce the amount of compensation
awarded under this section by the amount of any interim
compensation awarded under section 317 of this title, and, if
the amount of such interim compensation exceeds the amount of
compensation awarded under this section, may order the return
of the excess to the debtor.
(f) Any compensation awarded for the preparation of a fee
application shall be based on the level and skill reasonably
required to prepare the application.
SEC. 317. INTERIM COMPENSATION.
A debtor's attorney, or any professional person employed by
the debtor (in the debtor's sole discretion), the Oversight
Board (in the Oversight Board's sole discretion), a committee
under section 1103 of title 11, United States Code, or a
trustee appointed by the court under section 926 of title 11,
United States Code, may apply to the court not more than once
every 120 days after an order for relief in a case under this
title, or more often if the court permits, for such
compensation for services rendered before the date of such an
application or reimbursement for expenses incurred before
such date as is provided under section 316 of this title.
TITLE IV--MISCELLANEOUS PROVISIONS
SEC. 401. RULES OF CONSTRUCTION.
Nothing in this Act is intended, or may be construed--
(1) to limit the authority of Congress to exercise
legislative authority over the territories pursuant to
Article IV, section 3 of the Constitution of the United
States;
(2) to authorize the application of section 104(f) of this
Act (relating to issuance of subpoenas) to judicial officers
or employees of territory courts;
(3) to alter, amend, or abrogate any provision of the
Covenant To Establish a Commonwealth of the Northern Mariana
Islands in Political Union With the United States of America
(48 U.S.C. 1801 et seq.); or
(4) to alter, amend, or abrogate the treaties of cession
regarding certain islands of American Samoa (48 U.S.C. 1661).
SEC. 402. RIGHT OF PUERTO RICO TO DETERMINE ITS FUTURE
POLITICAL STATUS.
Nothing in this Act shall be interpreted to restrict Puerto
Rico's right to determine its future political status,
including by conducting the plebiscite as authorized by
Public Law 113-76.
SEC. 403. FIRST MINIMUM WAGE IN PUERTO RICO.
Section 6(g) of the Fair Labor Standards Act of 1938 (29
U.S.C. 206(g)) is amended by striking paragraphs (2) through
(4) and inserting the following:
``(2) In lieu of the rate prescribed by subsection (a)(1),
the Governor of Puerto Rico, subject to the approval of the
Financial Oversight and Management Board established pursuant
to section 101 of the Puerto Rico Oversight, Management, and
Economic Stability Act, may designate a time period not to
exceed four years during which employers in Puerto Rico may
pay employees who are initially employed after the date of
enactment of such Act a wage which is not less than the wage
described in paragraph (1). Notwithstanding the time period
designated, such wage shall not continue in effect after such
Board terminates in accordance with section 209 of such Act.
``(3) No employer may take any action to displace employees
(including partial displacements such as reduction in hours,
wages, or employment benefits) for purposes of hiring
individuals at the wage authorized in paragraph (1) or (2).
``(4) Any employer who violates this subsection shall be
considered to have violated section 15(a)(3).
``(5) This subsection shall only apply to an employee who
has not attained the age of 20 years, except in the case of
the wage applicable in Puerto Rico, 25 years, until such time
as the Board described in paragraph (2) terminates in
accordance with section 209 of the Act described in such
paragraph.''.
SEC. 404. APPLICATION OF REGULATION TO PUERTO RICO.
(a) Special Rule.--The regulations proposed by the
Secretary of Labor relating to exemptions regarding the rates
of pay for executive, administrative, professional, outside
sales, and computer employees, and published in a notice in
the Federal Register on July 6, 2015, and any final
regulations issued related to such notice, shall have no
force or effect in the Commonwealth of Puerto Rico until--
(1) the Comptroller General of the United States completes
the assessment and transmits the report required under
subsection (b); and
(2) the Secretary of Labor, taking into account the
assessment and report of the Comptroller General, provides a
written determination to Congress that applying such rule to
Puerto Rico would not have a negative impact on the economy
of Puerto Rico.
(b) Assessment and Report.--Not later than two years after
the date of enactment of this Act, the Comptroller General
shall examine the economic conditions in Puerto Rico and
shall transmit a report to Congress assessing the impact of
applying the regulations described in subsection (a) to
Puerto Rico, taking into consideration regional,
metropolitan, and non-metropolitan salary and cost-of-living
differences.
(c) Sense of Congress.--It is the sense of Congress that--
(1) the Bureau of the Census should conduct a study to
determine the feasibility of expanding data collection to
include Puerto Rico and the other United States territories
in the Current Population Survey, which is jointly
administered by the Bureau of the Census and the Bureau of
Labor Statistics, and which is the primary source of labor
force statistics for the population of the United States; and
(2) if necessary, the Bureau of the Census should request
the funding required to conduct this feasibility study as
part of its budget submission to Congress for fiscal year
2018.
SEC. 405. AUTOMATIC STAY UPON ENACTMENT.
(a) Definitions.--In this section:
(1) Liability.--The term ``Liability'' means a bond, loan,
letter of credit, other borrowing title, obligation of
insurance, or other financial indebtedness for borrowed
money, including rights, entitlements, or obligations whether
such rights, entitlements, or obligations arise from
contract, statute, or any other source of law related to such
a bond, loan, letter of credit, other borrowing title,
obligation of insurance, or other financial indebtedness in
physical or dematerialized form, of which--
(A) the issuer, obligor, or guarantor is the Government of
Puerto Rico; and
(B) the date of issuance or incurrence precedes the date of
enactment of this Act.
(2) Liability claim.--The term ``Liability Claim'' means,
as it relates to a Liability--
(A) right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured; or
(B) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured.
(b) In General.--Except as provided in subsection (c) of
this section, the establishment of an Oversight Board for
Puerto Rico (i.e., the enactment of this Act) in accordance
with section 101 operates with respect to a Liability as a
stay, applicable to all entities (as such term is defined in
section 101 of title 11, United States Code), of--
(1) the commencement or continuation, including the
issuance or employment of process, of a judicial,
administrative, or other action or proceeding against the
Government of Puerto Rico that was or could have been
commenced before the enactment of this Act, or to recover a
Liability Claim against the Government of Puerto Rico that
arose before the enactment of this Act;
(2) the enforcement, against the Government of Puerto Rico
or against property of the Government of Puerto Rico, of a
judgment obtained before the enactment of this Act;
(3) any act to obtain possession of property of the
Government of Puerto Rico or of property from the Government
of Puerto Rico or to exercise control over property of the
Government of Puerto Rico;
(4) any act to create, perfect, or enforce any lien against
property of the Government of Puerto Rico;
[[Page H3622]]
(5) any act to create, perfect, or enforce against property
of the Government of Puerto Rico any lien to the extent that
such lien secures a Liability Claim that arose before the
enactment of this Act;
(6) any act to collect, assess, or recover a Liability
Claim against the Government of Puerto Rico that arose before
the enactment of this Act; and
(7) the setoff of any debt owing to the Government of
Puerto Rico that arose before the enactment of this Act
against any Liability Claim against the Government of Puerto
Rico.
(c) Stay Not Operable.--The establishment of an Oversight
Board for Puerto Rico in accordance with section 101 does not
operate as a stay--
(1) solely under subsection (b)(1) of this section, of the
continuation of, including the issuance or employment of
process, of a judicial, administrative, or other action or
proceeding against the Government of Puerto Rico that was
commenced on or before December 18, 2015; or
(2) of the commencement or continuation of an action or
proceeding by a governmental unit to enforce such
governmental unit's or organization's police and regulatory
power, including the enforcement of a judgment other than a
money judgment, obtained in an action or proceeding by the
governmental unit to enforce such governmental unit's or
organization's police or regulatory power.
(d) Continuation of Stay.--Except as provided in
subsections (e), (f), and (g) the stay under subsection (b)
continues until the earlier of--
(1) the later of--
(A) the later of--
(i) February 15, 2017; or
(ii) six months after the establishment of an Oversight
Board for Puerto Rico as established by section 101(b);
(B) the date that is 75 days after the date in subparagraph
(A) if the Oversight Board delivers a certification to the
Governor that, in the Oversight Board's sole discretion, an
additional 75 days are needed to seek to complete a voluntary
process under title VI of this Act with respect to the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities; or
(C) the date that is 60 days after the date in subparagraph
(A) if the district court to which an application has been
submitted under subparagraph 601(m)(1)(D) of this Act
determines, in the exercise of the court's equitable powers,
that an additional 60 days are needed to complete a voluntary
process under title VI of this Act with respect to the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities; or
(2) with respect to the government of the Commonwealth of
Puerto Rico or any of its territorial instrumentalities, the
date on which a case is filed by or on behalf of the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities, as applicable, under title
III.
(e) Jurisdiction, Relief From Stay.--
(1) The United States District Court for the District of
Puerto Rico shall have original and exclusive jurisdiction of
any civil actions arising under or related to this section.
(2) On motion of or action filed by a party in interest and
after notice and a hearing, the United States District Court
for the District of Puerto Rico, for cause shown, shall grant
relief from the stay provided under subsection (b) of this
section.
(f) Termination of Stay; Hearing.--Forty-five days after a
request under subsection (e)(2) for relief from the stay of
any act against property of the Government of Puerto Rico
under subsection (b), such stay is terminated with respect to
the party in interest making such request, unless the court,
after notice and a hearing, orders such stay continued in
effect pending the conclusion of, or as a result of, a final
hearing and determination under subsection (e)(2). A hearing
under this subsection may be a preliminary hearing, or may be
consolidated with the final hearing under subsection (e)(2).
The court shall order such stay continued in effect pending
the conclusion of the final hearing under subsection (e)(2)
if there is a reasonable likelihood that the party opposing
relief from such stay will prevail at the conclusion of such
final hearing. If the hearing under this subsection is a
preliminary hearing, then such final hearing shall be
concluded not later than thirty days after the conclusion of
such preliminary hearing, unless the thirty-day period is
extended with the consent of the parties in interest or for a
specific time which the court finds is required by compelling
circumstances.
(g) Relief To Prevent Irreparable Damage.--Upon request of
a party in interest, the court, with or without a hearing,
shall grant such relief from the stay provided under
subsection (b) as is necessary to prevent irreparable damage
to the interest of an entity in property, if such interest
will suffer such damage before there is an opportunity for
notice and a hearing under subsection (e) or (f).
(h) Act in Violation of Stay Is Void.--Any order, judgment,
or decree entered in violation of this section and any act
taken in violation of this section is void, and shall have no
force or effect, and any person found to violate this section
may be liable for damages, costs, and attorneys' fees
incurred in defending any action taken in violation of this
section, and the Oversight Board or the Government of Puerto
Rico may seek an order from the court enforcing the
provisions of this section.
(i) Government of Puerto Rico.--For purposes of this
section, the term ``Government of Puerto Rico'', in addition
to the definition set forth in section 5(11) of this Act,
shall include--
(1) the individuals, including elected and appointed
officials, directors, officers of and employees acting in
their official capacity on behalf of the Government of Puerto
Rico; and
(2) the Oversight Board, including the directors and
officers of and employees acting in their official capacity
on behalf of the Oversight Board.
(j) No Default Under Existing Contracts.--
(1) Notwithstanding any contractual provision or applicable
law to the contrary and so long as a stay under this section
is in effect, the holder of a Liability Claim or any other
claim (as such term is defined in section 101 of title 11,
United States Code) may not exercise or continue to exercise
any remedy under a contract or applicable law in respect to
the Government of Puerto Rico or any of its property--
(A) that is conditioned upon the financial condition of, or
the commencement of a restructuring, insolvency, bankruptcy,
or other proceeding (or a similar or analogous process) by,
the Government of Puerto Rico, including a default or an
event of default thereunder; or
(B) with respect to Liability Claims--
(i) for the non-payment of principal or interest; or
(ii) for the breach of any condition or covenant.
(2) The term ``remedy'' as used in paragraph (1) shall be
interpreted broadly, and shall include any right existing in
law or contract, including any right to--
(A) setoff;
(B) apply or appropriate funds;
(C) seek the appointment of a custodian (as such term is
defined in section 101(11) of title 11, United States Code);
(D) seek to raise rates; or
(E) exercise control over property of the Government of
Puerto Rico.
(3) Notwithstanding any contractual provision or applicable
law to the contrary and so long as a stay under this section
is in effect, a contract to which the Government of Puerto
Rico is a party may not be terminated or modified, and any
right or obligation under such contract may not be terminated
or modified, solely because of a provision in such contract
is conditioned on--
(A) the insolvency or financial condition of the Government
of Puerto Rico at any time prior to the enactment of this
Act;
(B) the adoption of a resolution or establishment of an
Oversight Board pursuant to section 101 of this Act; or
(C) a default under a separate contract that is due to,
triggered by, or a result of the occurrence of the events or
matters in paragraph (1)(B).
(4) Notwithstanding any contractual provision to the
contrary and so long as a stay under this section is in
effect, a counterparty to a contract with the Government of
Puerto Rico for the provision of goods and services shall,
unless the Government of Puerto Rico agrees to the contrary
in writing, continue to perform all obligations under, and
comply with the terms of, such contract, provided that the
Government of Puerto Rico is not in default under such
contract other than as a result of a condition specified in
paragraph (3).
(k) Effect.--This section does not discharge an obligation
of the Government of Puerto Rico or release, invalidate, or
impair any security interest or lien securing such
obligation. This section does not impair or affect the
implementation of any restructuring support agreement
executed by the Government of Puerto Rico to be implemented
pursuant to Puerto Rico law specifically enacted for that
purpose prior to the enactment of this Act or the obligation
of the Government of Puerto Rico to proceed in good faith as
set forth in any such agreement.
(l) Payments on Liabilities.--Nothing in this section shall
be construed to prohibit the Government of Puerto Rico from
making any payment on any Liability when such payment becomes
due during the term of the stay, and to the extent the
Oversight Board, in its sole discretion, determines it is
feasible, the Government of Puerto Rico shall make interest
payments on outstanding indebtedness when such payments
become due during the length of the stay.
(m) Findings.--Congress finds the following:
(1) A combination of severe economic decline, and, at
times, accumulated operating deficits, lack of financial
transparency, management inefficiencies, and excessive
borrowing has created a fiscal emergency in Puerto Rico.
(2) As a result of its fiscal emergency, the Government of
Puerto Rico has been unable to provide its citizens with
effective services.
(3) The current fiscal emergency has also affected the
long-term economic stability of Puerto Rico by contributing
to the accelerated outmigration of residents and businesses.
(4) A comprehensive approach to fiscal, management, and
structural problems and adjustments that exempts no part of
the Government of Puerto Rico is necessary, involving
independent oversight and a Federal statutory authority for
the Government of Puerto Rico to restructure debts in a fair
and orderly process.
(5) Additionally, an immediate--but temporary--stay is
essential to stabilize the region for the purposes of
resolving this territorial crisis.
(A) The stay advances the best interests common to all
stakeholders, including but not limited to a functioning
independent Oversight Board created pursuant to this Act to
determine whether to appear or intervene on behalf of the
Government of Puerto Rico in any litigation that may have
been commenced prior to the effectiveness or upon expiration
of the stay.
(B) The stay is limited in nature and narrowly tailored to
achieve the purposes of this Act, including to ensure all
creditors have a fair opportunity to consensually renegotiate
terms of repayment based on accurate financial information
that is reviewed by an independent authority or, at a
minimum, receive a recovery from the Government of Puerto
Rico equal to their best
[[Page H3623]]
possible outcome absent the provisions of this Act.
(6) Finally, the ability of the Government of Puerto Rico
to obtain funds from capital markets in the future will be
severely diminished without congressional action to restore
its financial accountability and stability.
(n) Purposes.--The purposes of this section are to--
(1) provide the Government of Puerto Rico with the
resources and the tools it needs to address an immediate
existing and imminent crisis;
(2) allow the Government of Puerto Rico a limited period of
time during which it can focus its resources on negotiating a
voluntary resolution with its creditors instead of defending
numerous, costly creditor lawsuits;
(3) provide an oversight mechanism to assist the Government
of Puerto Rico in reforming its fiscal governance and support
the implementation of potential debt restructuring;
(4) make available a Federal restructuring authority, if
necessary, to allow for an orderly adjustment of all of the
Government of Puerto Rico's liabilities; and
(5) benefit the lives of 3.5 million American citizens
living in Puerto Rico by encouraging the Government of Puerto
Rico to resolve its longstanding fiscal governance issues and
return to economic growth.
(o) Voting on Voluntary Agreements Not Stayed.--
Notwithstanding any provision in this section to the
contrary, nothing in this section shall prevent the holder of
a Liability Claim from voting on or consenting to a proposed
modification of such Liability Claim under title VI of this
Act.
SEC. 406. PURCHASES BY TERRITORY GOVERNMENTS.
The text of section 302 of the Omnibus Insular Areas Act of
1992 (48 U.S.C. 1469e), is amended to read as follows: ``The
Governments of the Commonwealth of Puerto Rico, Guam,
American Samoa, the Commonwealth of the Northern Mariana
Islands, and the United States Virgin Islands are authorized
to make purchases through the General Services
Administration.''.
SEC. 407. PROTECTION FROM INTER-DEBTOR TRANSFERS.
(a) Protection of Creditors.--While an Oversight Board for
Puerto Rico is in existence, if any property of any
territorial instrumentality of Puerto Rico is transferred in
violation of applicable law under which any creditor has a
valid pledge of, security interest in, or lien on such
property, or which deprives any such territorial
instrumentality of property in violation of applicable law
assuring the transfer of such property to such territorial
instrumentality for the benefit of its creditors, then the
transferee shall be liable for the value of such property.
(b) Enforceability.--A creditor may enforce rights under
this section by bringing an action in the United States
District Court for the District of Puerto Rico after the
expiration or lifting of the stay of section 405, unless a
stay under title III is in effect.
SEC. 408. GAO REPORT ON SMALL BUSINESS ADMINISTRATION
PROGRAMS IN PUERTO RICO.
Section 15 of the Small Business Act (15 U.S.C. 644) is
amended by adding at the end the following new subsection:
``(t) GAO Report on Small Business Administration Programs
in Puerto Rico.--Not later than 180 days after the date of
enactment of this subsection, the Comptroller General of the
United States shall submit to the Committee on Small Business
of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report on the
application and utilization of contracting activities of the
Administration (including contracting activities relating to
HUBZone small business concerns) in Puerto Rico. The report
shall also identify any provisions of Federal law that may
create an obstacle to the efficient implementation of such
contracting activities.''.
SEC. 409. CONGRESSIONAL TASK FORCE ON ECONOMIC GROWTH IN
PUERTO RICO.
(a) Establishment.--There is established within the
legislative branch a Congressional Task Force on Economic
Growth in Puerto Rico (hereinafter referred to as the ``Task
Force'').
(b) Membership.--The Task Force shall be composed of eight
members as follows:
(1) One member of the House of Representatives, who shall
be appointed by the Speaker of the House of Representatives,
in coordination with the Chairman of the Committee on Natural
Resources of the House of Representatives.
(2) One member of the House of Representatives, who shall
be appointed by the Speaker of the House of Representatives,
in coordination with the Chairman of the Committee on Ways
and Means of the House of Representatives.
(3) One member of the House of Representatives, who shall
be appointed by the Minority Leader of the House of
Representatives, in coordination with the ranking minority
member of the Committee on Natural Resources of the House of
Representatives.
(4) One member of the House of Representatives, who shall
be appointed by the Minority Leader of the House of
Representatives, in coordination with the ranking minority
member of the Committee on Ways and Means of the House of
Representatives.
(5) One member of the Senate, who shall be appointed by the
Majority Leader of the Senate, in coordination with the
Chairman of the Committee on Energy and Natural Resources of
the Senate.
(6) One member of the Senate, who shall be appointed by the
Majority Leader of the Senate, in coordination with the
Chairman of the Committee on Finance of the Senate.
(7) One member of the Senate, who shall be appointed by the
Minority Leader of the Senate, in coordination with the
ranking minority member of the Committee on Energy and
Natural Resources of the Senate.
(8) One member of the Senate, who shall be appointed by the
Minority Leader of the Senate, in coordination with the
ranking minority member of the Committee on Finance of the
Senate.
(c) Deadline for Appointment.--All appointments to the Task
Force shall be made not later than 15 days after the date of
enactment of this Act.
(d) Chair.--The Speaker shall designate one Member to serve
as chair of the Task Force.
(e) Vacancies.--Any vacancy in the Task Force shall be
filled in the same manner as the original appointment.
(f) Status Update.--Between September 1, 2016, and
September 15, 2016, the Task Force shall provide a status
update to the House and Senate that includes--
(1) information the Task Force has collected; and
(2) a discussion on matters the chairman of the Task Force
deems urgent for consideration by Congress.
(g) Report.--Not later than December 31, 2016, the Task
Force shall issue a report of its findings to the House and
Senate regarding--
(1) impediments in current Federal law and programs to
economic growth in Puerto Rico including equitable access to
Federal health care programs;
(2) recommended changes to Federal law and programs that,
if adopted, would serve to spur sustainable long-term
economic growth, job creation and attract investment in
Puerto Rico;
(3) the economic effect of Administrative Order No. 346 of
the Department of Health of the Commonwealth of Puerto Rico
(relating to natural products, natural supplements, and
dietary supplements) or any successor or substantially
similar order, rule, or guidance of the Commonwealth of
Puerto Rico; and
(4) additional information the Task Force deems
appropriate.
(h) Consensus Views.--To the greatest extent practicable,
the report issued under subsection (f) shall reflect the
shared views of all eight Members, except that the report may
contain dissenting views.
(i) Hearings and Sessions.--The Task Force may, for the
purpose of carrying out this section, hold hearings, sit and
act at times and places, take testimony, and receive evidence
as the Task Force considers appropriate. If the Task Force
holds hearings, at least one such hearing must be held in
Puerto Rico.
(j) Stakeholder Participation.--In carrying out its duties,
the Task Force shall consult with the Puerto Rico Legislative
Assembly, the Puerto Rico Department of Economic Development
and Commerce, and the private sector of Puerto Rico.
(k) Resources.--The Task Force shall carry out its duties
by utilizing existing facilities, services, and staff of the
House of Representatives and Senate, except that no
additional funds are authorized to be appropriated to carry
out this section.
(l) Termination.--The Task Force shall terminate upon
issuing the report required under subsection (f).
SEC. 410. REPORT.
The Comptroller General shall submit a report to the
Committee on Natural Resources of the House of
Representatives and the Committee on Energy and Natural
Resources of the Senate describing--
(1) the conditions which led to the level of debt per
capita and based upon overall economic activity;
(2) how actions of the territorial government improved or
impaired the territory's financial conditions; and
(3) recommendations on non-fiscal actions, nor policies
that would imperil America's homeland and national security,
that could be taken by Congress or the Administration to
avert future indebtedness of territories, States or local
units of government while respecting sovereignty and
constitutional parameters.
TITLE V--PUERTO RICO INFRASTRUCTURE REVITALIZATION
SEC. 501. DEFINITIONS.
In this title:
(1) Act 76.--The term ``Act 76'' means Puerto Rico Act 76-
2000 (3 L.P.R.A. 1931 et seq.), approved on May 5, 2000, as
amended.
(2) Critical project.--The term ``Critical Project'' means
a project identified under the provisions of this title and
intimately related to addressing an emergency whose approval,
consideration, permitting, and implementation shall be
expedited and streamlined according to the statutory process
provided by Act 76, or otherwise adopted pursuant to this
title.
(3) Energy commission of puerto rico.--The term ``Energy
Commission of Puerto Rico'' means the Puerto Rico Energy
Commission as established by Subtitle B of Puerto Rico Act
57-2014.
(4) Energy projects.--The term ``Energy Projects'' means
those projects addressing the generation, distribution, or
transmission of energy.
(5) Emergency.--The term ``emergency'' means any event or
grave problem of deterioration in the physical infrastructure
for the rendering of essential services to the people, or
that endangers the life, public health, or safety of the
population or of a sensitive ecosystem, or as otherwise
defined by section 1 of Act 76 (3 L.P.R.A. 1931). This shall
include problems in the physical infrastructure for energy,
water, sewer, solid waste, highways or roads, ports,
telecommunications, and other similar infrastructure.
(6) Environmental quality board.--The term ``Environmental
Quality Board'' means the Puerto Rico Environmental Quality
Board, a board within the executive branch of the Government
of Puerto Rico as established by section 7 of Puerto Rico Act
416-2004 (12 L.P.R.A. 8002a).
[[Page H3624]]
(7) Expedited permitting process.--The term ``Expedited
Permitting Process'' means a Puerto Rico Agency's alternate
procedures, conditions, and terms mirroring those established
under Act 76 (3 L.P.R.A. 1932) and pursuant to this title
shall not apply to any Federal law, statute, or requirement.
(8) Governor.--The term ``Governor'' means the Governor of
Puerto Rico.
(9) Interagency environmental subcommittee.--The term
``Interagency Environmental Subcommittee'' means the
Interagency Subcommittee on Expedited Environmental
Regulations as further described by section 504.
(10) Legislature.--The term ``Legislature'' means the
Legislature of Puerto Rico.
(11) Planning board.--The term ``Planning Board'' means the
Puerto Rico Planning Board, a board within the executive
branch of the Government of Puerto Rico established by Puerto
Rico Act 75-1975 (23 L.P.R.A. 62 et seq.).
(12) Project sponsor.--The term ``Project Sponsor'' means a
Puerto Rico Agency or private party proposing the development
of an existing, ongoing, or new infrastructure project or
Energy Project.
(13) Puerto rico agency or agencies.--The terms ``Puerto
Rico Agency'' or ``Puerto Rico Agencies'' means any board,
body, board of examiners, public corporation, commission,
independent office, division, administration, bureau,
department, authority, official, person, entity,
municipality, or any instrumentality of Puerto Rico, or an
administrative body authorized by law to perform duties of
regulating, investigating, or that may issue a decision, or
with the power to issue licenses, certificates, permits,
concessions, accreditations, privileges, franchises, except
the Senate and the House of Representatives of the
Legislature and the judicial branch.
(14) Puerto rico electric power authority.--The term
``Puerto Rico Electric Power Authority'' means the Puerto
Rico Electric Power Authority established by Puerto Rico Act
83-1941.
SEC. 502. POSITION OF REVITALIZATION COORDINATOR.
(a) Establishment.--There is established, under the
Oversight Board, the position of the Revitalization
Coordinator.
(b) Appointment.--
(1) In general.--The Revitalization Coordinator shall be
appointed by the Governor as follows:
(A) Prior to the appointment of the Revitalization
Coordinator and within 60 days of the appointment of the full
membership of the Oversight Board, the Oversight Board shall
submit to the Governor no less than three nominees for
appointment.
(B) In consultation with the Oversight Board, not later
than 10 days after receiving the nominations under
subparagraph (A), the Governor shall appoint one of the
nominees as the Revitalization Coordinator. Such appointment
shall be effective immediately.
(C) If the Governor fails to select a Revitalization
Coordinator, the Oversight Board shall, by majority vote,
appoint a Revitalization Coordinator from the list of
nominees provided under paragraph (A).
(2) Qualifications.--In selecting nominees under paragraph
(1)(A), the Oversight Board shall only nominate persons who--
(A) have substantial knowledge and expertise in the
planning, predevelopment, financing, development, operations,
engineering, or market participation of infrastructure
projects, provided that stronger consideration may be given
to candidates who have experience with Energy Projects and
the laws and regulations of Puerto Rico that may be subject
to an Expedited Permitting Process;
(B) does not currently provide, or in the preceding 3
calendar years provided, goods or services to the government
of Puerto Rico (and, as applicable, is not the spouse,
parent, child, or sibling of a person who provides or has
provided goods and services to the government of Puerto Rico
in the preceding 3 calendar years); and
(C) shall not be an officer, employee of, or former officer
or employee of the government of Puerto Rico in the preceding
3 calendar years.
(3) Compensation.--The Revitalization Coordinator shall be
compensated at an annual rate determined by the Oversight
Board sufficient in the judgment of the Oversight Board to
obtain the services of a person with the skills and
experience required to discharge the duties of the position,
but such compensation shall not exceed the annual salary of
the Executive Director.
(c) Assignment of Personnel.--The Executive Director of the
Oversight Board may assign Oversight Board personnel to
assist the Revitalization Coordinator.
(d) Removal.--
(1) In general.--The Revitalization Coordinator may be
removed for any reason, in the Oversight Board's discretion.
(2) Termination of position.--Upon the termination of the
Oversight Board pursuant to section 209 of this Act, the
position of the Revitalization Coordinator shall terminate.
SEC. 503. CRITICAL PROJECTS.
(a) Identification of Projects.--
(1) Project submission.--Any Project Sponsor may submit, so
long as the Oversight Board is in operation, any existing,
ongoing, or proposed project to the Revitalization
Coordinator. The Revitalization Coordinator shall require
such submission to include--
(A) the impact the project will have on an emergency;
(B) the availability of immediate private capital or other
funds, including loan guarantees, loans, or grants to
implement, operate, or maintain the project;
(C) the cost of the project and amount of Puerto Rico
government funds, if any, necessary to complete and maintain
the project;
(D) the environmental and economic benefits provided by the
project, including the number of jobs to be created that will
be held by residents of Puerto Rico and the expected economic
impact, including the impact on ratepayers, if applicable;
(E) the status of the project if it is existing or ongoing;
and
(F) in addition to the requirements found in subparagraphs
(A) through (E), the Revitalization Coordinator may require
such submission to include any or all of the following
criteria that assess how the project will--
(i) reduce reliance on oil for electric generation in
Puerto Rico;
(ii) improve performance of energy infrastructure and
overall energy efficiency;
(iii) expedite the diversification and conversion of fuel
sources for electric generation from oil to natural gas and
renewables in Puerto Rico as defined under applicable Puerto
Rico laws;
(iv) promote the development and utilization of energy
sources found on Puerto Rico;
(v) contribute to transitioning to privatized generation
capacities in Puerto Rico;
(vi) support the Energy Commission of Puerto Rico in
achievement of its goal of reducing energy costs and ensuring
affordable energy rates for consumers and business; or
(vii) achieve in whole or in part the recommendations, if
feasible, of the study in section 505(d) of this title to the
extent such study is completed and not inconsistent with
studies or plans otherwise required under Puerto Rico laws.
(2) Identification of relevant puerto rico agencies.--
Within 20 days of receiving a project submission under
paragraph (1), the Revitalization Coordinator shall, in
consultation with the Governor, identify all Puerto Rico
Agencies that will have a role in the permitting, approval,
authorizing, or other activity related to the development of
such project submission.
(3) Expedited permitting process.--
(A) Submission of expedited permitting process.--Not later
than 20 days after receiving a project submission, each
Puerto Rico Agency identified in paragraph (1) shall submit
to the Revitalization Coordinator the Agency's Expedited
Permitting Process.
(B) Failure to provide expedited permitting process.--If a
Puerto Rico Agency fails to provide an Expedited Permitting
Process within 20 days of receiving a project submission, the
Revitalization Coordinator shall consult with the Governor to
develop within 20 days an Expedited Permitting Process for
the Agency.
(C) Implementation and prioritization.--The Revitalization
Coordinator shall require Puerto Rico Agencies to implement
the Expedited Permitting Process for Critical Projects.
Critical Projects shall be prioritized to the maximum extent
possible in each Puerto Rico Agency regardless of any
agreements transferring or delegating permitting authority to
any other Territorial Instrumentality or municipality.
(b) Critical Project Report.--
(1) In general.--For each submitted project, the
Revitalization Coordinator in consultation with the Governor
and relevant Puerto Rico Agencies identified in subsection
(a)(2) shall develop a Critical Project Report within 60 days
of the project submission, which shall include:
(A) An assessment of how well the project meets the
criteria in subsection (a)(1).
(B) A recommendation by the Governor whether the project
should be considered a Critical Project. If the Governor
fails to provide a recommendation during the development of
the Critical Project Report, the failure shall constitute a
concurrence with the Revitalization Coordinator's
recommendation in subparagraph (E).
(C) In the case of a project that may affect the
implementation of Land-Use Plans, as defined by Puerto Rico
Act 550-2004, a determination by the Planning Board will be
required within the 60-day timeframe. If the Planning Board
determines such project will be inconsistent with relevant
Land-Use Plans, then the project will be deemed ineligible
for Critical Project designation.
(D) In the case of an Energy Project that will connect with
the Puerto Rico Electric Power Authority's transmission or
distribution facilities, a recommendation by the Energy
Commission of Puerto Rico, if the Energy Commission
determines such Energy Project will affect an approved
Integrated Resource Plan, as defined under Puerto Rico Act
54-2014. If the Energy Commission determines the Energy
Project will adversely affect an approved Integrated Resource
Plan, then the Energy Commission shall provide the reasons
for such determination and the Energy Project shall be
ineligible for Critical Project designation, provided that
such determination must be made during the 60-day timeframe
for the development of the Critical Project Report.
(E) A recommendation by the Revitalization Coordinator
whether the project should be considered a Critical Project.
(2) Public involvement.--Immediately following the
completion of the Critical Project Report, the Revitalization
Coordinator shall make such Critical Project Report public
and allow a period of 30 days for the submission of comments
by residents of Puerto Rico specifically on matters relating
to the designation of a project as a Critical Project. The
Revitalization Coordinator shall respond to the comments
within 30 days of closing the coming period and make the
responses publicly available.
(3) Submission to oversight board.--Not later than 5 days
after the Revitalization Coordinator has responded to the
comments under paragraph (2), the Revitalization Coordinator
shall submit the Critical Project Report to the Oversight
Board.
(c) Action by the Oversight Board.--Not later than 30 days
after receiving the Critical
[[Page H3625]]
Project Report, the Oversight Board, by majority vote, shall
approve or disapprove the project as a Critical Project, if
the Oversight Board--
(1) approves the project, the project shall be deemed a
Critical Project; and
(2) disapproves the project, the Oversight Board shall
submit to the Revitalization Coordinator in writing the
reasons for disapproval.
SEC. 504. MISCELLANEOUS PROVISIONS.
(a) Creation of Interagency Environmental Subcommittee.--
(1) Establishment.--Not later than 60 days after the date
on which the Revitalization Coordinator is appointed, the
Interagency Environmental Subcommittee shall be established
and shall evaluate environmental documents required under
Puerto Rico law for any Critical Project within the Expedited
Permitting Process established by the Revitalization
Coordinator under section 503(a)(3).
(2) Composition.--The Interagency Environmental
Subcommittee shall consist of the Revitalization Coordinator,
and a representative selected by the Governor in consultation
with the Revitalization Coordinator representing each of the
following agencies: The Environmental Quality Board, the
Planning Board, the Puerto Rico Department of Natural and
Environmental Resources, and any other Puerto Rico Agency
determined to be relevant by the Revitalization Coordinator.
(b) Length of Expedited Permitting Process.--With respect
to a Puerto Rico Agency's activities related only to a
Critical Project, such Puerto Rico Agency shall operate as if
the Governor has declared an emergency pursuant to section 2
of Act 76 (3 L.P.R.A. 1932). Section 12 of Act 76 (3 L.P.R.A.
1942) shall not be applicable to Critical Projects.
Furthermore, any transactions, processes, projects, works, or
programs essential to the completion of a Critical Project
shall continue to be processed and completed under such
Expedited Permitting Process regardless of the termination of
the Oversight Board under section 209.
(c) Expedited Permitting Process Compliance.--
(1) Written notice.--A Critical Project Sponsor may in
writing notify the Oversight Board of the failure of a Puerto
Rico Agency or the Revitalization Coordinator to adhere to
the Expedited Permitting Process.
(2) Finding of failure.--If the Oversight Board finds
either the Puerto Rico Agency or Revitalization Coordinator
has failed to adhere to the Expedited Permitting Process, the
Oversight Board shall direct the offending party to comply
with the Expedited Permitting Process. The Oversight Board
may take such enforcement action as necessary as provided by
section 104(l).
(d) Review of Legislature Acts.--
(1) Submission of acts to oversight board.--Pursuant to
section 204(a), the Governor shall submit to the Oversight
Board any law duly enacted during any fiscal year in which
the Oversight Board is in operation that may affect the
Expedited Permitting Process.
(2) Finding of oversight board.--Upon receipt of a law
under paragraph (1), the Oversight Board shall promptly
review whether the law would adversely impact the Expedited
Permitting Process and, upon such a finding, the Oversight
Board may deem such law to be significantly inconsistent with
the applicable Fiscal Plan.
(e) Establishment of Certain Terms and Conditions.--No
Puerto Rico Agency may include in any certificate, right-of-
way, permit, lease, or other authorization issued for a
Critical Project any term or condition that may be permitted,
but is not required, by any applicable Puerto Rico law, if
the Revitalization Coordinator determines the term or
condition would prevent or impair the expeditious
construction, operation, or expansion of the Critical
Project. The Revitalization Coordinator may request a Puerto
Rico Agency to include in any certificate, right-of-way,
permit, lease, or other authorization, a term or condition
that may be permitted in accordance with applicable laws if
the Revitalization Coordinator determines such inclusion
would support the expeditious construction, operation, or
expansion of any Critical Project.
(f) Disclosure.--All Critical Project reports, and
justifications for approval or rejection of Critical Project
status, shall be made publicly available online within 5 days
of receipt or completion.
SEC. 505. FEDERAL AGENCY REQUIREMENTS.
(a) Federal Points of Contact.--At the request of the
Revitalization Coordinator and within 30 days of receiving
such a request, each Federal agency with jurisdiction over
the permitting, or administrative or environmental review of
private or public projects in Puerto Rico, shall name a Point
of Contact who will serve as that agency's liaison with the
Revitalization Coordinator.
(b) Federal Grants and Loans.--For each Critical Project
with a pending or potential Federal grant, loan, or loan
guarantee application, the Revitalization Coordinator and the
relevant Point of Contact shall cooperate with each other to
ensure expeditious review of such application.
(c) Expedited Reviews and Actions of Federal Agencies.--All
reviews conducted and actions taken by any Federal agency
relating to a Critical Project shall be expedited in a manner
consistent with completion of the necessary reviews and
approvals by the deadlines under the Expedited Permitting
Process, but in no way shall the deadlines established
through the Expedited Permitting Process be binding on any
Federal agency.
(d) Transfer of Study of Electric Rates.--Section 9 of the
Consolidated and Further Continuing Appropriations Act, 2015
(48 U.S.C. 1492a) is amended--
(1) in subsection (a)(5), by inserting ``, except that,
with respect to Puerto Rico, the term means, the Secretary of
Energy'' after ``Secretary of the Interior''; and
(2) in subsection (b)--
(A) by inserting ``(except in the case of Puerto Rico, in
which case not later than 270 days after the date of
enactment of the Puerto Rico Oversight, Management, and
Economic Stability Act)'' after ``of this Act''; and
(B) by inserting ``(except in the case of Puerto Rico)''
after ``Empowering Insular Communities activity''.
SEC. 506. JUDICIAL REVIEW.
(a) Deadline for Filing of a Claim.--A claim arising under
this title must be brought no later than 30 days after the
date of the decision or action giving rise to the claim.
(b) Expedited Consideration.--The District Court for the
District of Puerto Rico shall set any action brought under
this title for expedited consideration, taking into account
the interest of enhancing Puerto Rico's infrastructure for
electricity, water and sewer services, roads and bridges,
ports, and solid waste management to achieve compliance with
local and Federal environmental laws, regulations, and
policies while ensuring the continuity of adequate services
to the people of Puerto Rico and Puerto Rico's sustainable
economic development.
SEC. 507. SAVINGS CLAUSE.
Nothing in this title is intended to change or alter any
Federal legal requirements or laws.
TITLE VI--CREDITOR COLLECTIVE ACTION
SEC. 601. CREDITOR COLLECTIVE ACTION.
(a) Definitions.--In this title:
(1) Administrative supervisor.--The term ``Administrative
Supervisor'' means the Oversight Board established under
section 101.
(2) Authorized territorial instrumentality.--The term
``Authorized Territorial Instrumentality'' means a covered
territorial instrumentality authorized in accordance with
subsection (e).
(3) Calculation agent.--The term ``Calculation Agent''
means a calculation agent appointed in accordance with
subsection (k).
(4) Capital appreciation bond.--The term ``Capital
Appreciation Bond'' means a Bond that does not pay interest
on a current basis, but for which interest amounts are added
to principal over time as specified in the relevant offering
materials for such Bond, including that the accreted interest
amount added to principal increases daily.
(5) Convertible capital appreciation bond.--The term
``Convertible Capital Appreciation Bond'' means a Bond that
does not pay interest on a current basis, but for which
interest amounts are added to principal over time as
specified in the relevant offering materials and which
converts to a current pay bond on a future date.
(6) Information agent.--The term ``Information Agent''
means an information agent appointed in accordance with
subsection (l).
(7) Insured bond.--The term ``Insured Bond'' means a bond
subject to a financial guarantee or similar insurance
contract, policy or surety issued by a monoline insurer.
(8) Issuer.--The term ``Issuer'' means, as applicable, the
Territory Government Issuer or an Authorized Territorial
Instrumentality that has issued or guaranteed at least one
Bond that is Outstanding.
(9) Modification.--The term ``Modification'' means any
modification, amendment, supplement or waiver affecting one
or more series of Bonds, including those effected by way of
exchange, repurchase, conversion, or substitution.
(10) Outstanding.--The term ``Outstanding,'' in the context
of the principal amount of Bonds, shall be determined in
accordance with subsection (b).
(11) Outstanding principal.--The term ``Outstanding
Principal'' means--
(A) for a Bond that is not a Capital Appreciation Bond or a
Convertible Capital Appreciation Bond, the outstanding
principal amount of such Bond; and
(B) for a Bond that is a Capital Appreciation Bond or a
Convertible Capital Appreciation Bond, the current accreted
value of such Capital Appreciation Bond or a Convertible
Capital Appreciation Bond, as applicable.
(12) Pool.--The term ``Pool'' means a pool established in
accordance with subsection (d).
(13) Qualifying modification.--The term ``Qualifying
Modification'' means a Modification proposed in accordance
with subsection (g).
(14) Secured pool.--The term ``Secured Pool'' means a Pool
established in accordance with subsection (d) consisting only
of Bonds that are secured by a lien on property, provided
that the inclusion of a Bond Claim in such Pool shall not in
any way limit or prejudice the right of the Issuer, the
Administrative Supervisor, or any creditor to recharacterize
or challenge such Bond Claim, or any purported lien securing
such Bond Claim, in any other manner in any subsequent
proceeding in the event a proposed Qualifying Modification is
not consummated.
(15) Territory government issuer.--The term ``Territory
Government Issuer'' means the Government of Puerto Rico or
such covered territory for which an Oversight Board has been
established pursuant to section 101.
(b) Outstanding Bonds.--In determining whether holders of
the requisite principal amount of Outstanding Bonds have
voted in favor of, or consented to, a proposed Qualifying
Modification, a Bond will be deemed not to be outstanding,
and may not be counted in a vote or consent solicitation for
or against a proposed Qualifying Modification, if on the
record date for the proposed Qualifying Modification--
(1) the Bond has previously been cancelled or delivered for
cancellation or is held for reissuance but has not been
reissued;
[[Page H3626]]
(2) the Bond has previously been called for redemption in
accordance with its terms or previously become due and
payable at maturity or otherwise and the Issuer has
previously satisfied its obligation to make, or provide for,
all payments due in respect of the Bond in accordance with
its terms;
(3) the Bond has been substituted with a security of
another series; or
(4) the Bond is held by the Issuer or by an Authorized
Territorial Instrumentality of the Territory Government
Issuer or by a corporation, trust or other legal entity that
is controlled by the Issuer or an Authorized Territorial
Instrumentality of the Territory Government Issuer, as
applicable.
For purposes of this subsection, a corporation, trust or
other legal entity is controlled by the Issuer or by an
Authorized Territorial Instrumentality of the Territory
Government Issuer if the Issuer or an Authorized Territorial
Instrumentality of the Territory Government Issuer, as
applicable, has the power, directly or indirectly, through
the ownership of voting securities or other ownership
interests, by contract or otherwise, to direct the management
of or elect or appoint a majority of the board of directors
or other persons performing similar functions in lieu of, or
in addition to, the board of directors of that legal entity.
(c) Certification of Disenfranchised Bonds.--Prior to any
vote on, or consent solicitation for, a Qualifying
Modification, the Issuer shall deliver to the Calculation
Agent a certificate signed by an authorized representative of
the Issuer specifying any Bonds that are deemed not to be
Outstanding for the purpose of subsection (b) above.
(d) Determination of Pools for Voting.--The Administrative
Supervisor, in consultation with the Issuer, shall establish
Pools in accordance with the following:
(1) Not less than one Pool shall be established for each
Issuer.
(2) A Pool that contains one or more Bonds that are secured
by a lien on property shall be a Secured Pool.
(3) The Administrative Supervisor shall establish Pools
according to the following principles:
(A) For each Issuer that has issued multiple Bonds that are
distinguished by specific provisions governing priority or
security arrangements, including Bonds that have been issued
as general obligations of the Territory Government Issuer to
which the Territory Government Issuer pledged the full or
good faith, credit, and taxing power of the Territory
Government Issuer, separate Pools shall be established
corresponding to the relative priority or security
arrangements of each holder of Bonds against each Issuer, as
applicable, provided, however, that the term ``priority'' as
used in this section shall not be understood to mean
differing payment or maturity dates.
(B) For each Issuer that has issued senior and subordinated
Bonds, separate Pools shall be established for the senior and
subordinated Bonds corresponding to the relative priority or
security arrangements.
(C) For each Issuer that has issued multiple Bonds, for at
least some of which a guarantee of repayment has been
provided by the Territory Government Issuer, separate Pools
shall be established for such guaranteed and non-guaranteed
Bonds.
(D) Subject to the other requirements contained in this
section, for each Issuer that has issued multiple Bonds, for
at least some of which a dedicated revenue stream has been
pledged for repayment, separate Pools for such Issuer shall
be established as follows--
(i) for each dedicated revenue stream that has been pledged
for repayment, not less than one Secured Pool for Bonds for
which such revenue stream has been pledged, and separate
Secured Pools shall be established for Bonds of different
priority; and
(ii) not less than one Pool for all other Bonds issued by
the Issuer for which a dedicated revenue stream has not been
pledged for repayment.
(E) The Administrative Supervisor shall not place into
separate Pools Bonds of the same Issuer that have identical
rights in security or priority.
(4) Notwithstanding the preceding provisions of this
subsection, a preexisting voluntary agreement may classify
Insured Bonds and uninsured bonds in different Pools and
provide different treatment thereof so long as the
preexisting voluntary agreement has been agreed to by--
(A) holders of a majority in amount of all uninsured bonds
outstanding in the modified Pool; and
(B) holders (including insurers with power to vote) of a
majority in amount of all Insured Bonds.
(e) Authorization of Territory Instrumentalities.--A
covered territorial instrumentality is an Authorized
Territorial Instrumentality if it has been specifically
authorized to be eligible to avail itself of the procedures
under this section by the Administrative Supervisor.
(f) Information Delivery Requirement.--Before solicitation
of acceptance or rejection of a Modification under subsection
(h), the Issuer shall provide to the Calculation Agent, the
Information Agent, and the Administrative Supervisor, the
following information--
(1) a description of the Issuer's economic and financial
circumstances which are, in the Issuer's opinion, relevant to
the request for the proposed Qualifying Modification, a
description of the Issuer's existing debts, a description of
the impact of the proposed Qualifying Modification on the
territory's or its territorial instrumentalities' public
debt;
(2) if the Issuer is seeking Modifications affecting any
other Pools of Bonds of the Territory Government Issuer or
its Authorized Territorial Instrumentalities, a description
of such other Modifications;
(3) if a Fiscal Plan with respect to such Issuer has been
certified, the applicable Fiscal Plan certified in accordance
with section 201; and
(4) such other information as may be required under
applicable securities laws.
(g) Qualifying Modification.--A Modification is a
Qualifying Modification if--
(1) the Issuer proposing the Modification has consulted
with holders of Bonds in each Pool of such Issuer prior to
soliciting a vote on such Modification;
(2) each exchanging, repurchasing, converting, or
substituting holder of Bonds of any series in a Pool affected
by that Modification is offered the same amount of
consideration per amount of principal, the same amount of
consideration per amount of interest accrued but unpaid and
the same amount of consideration per amount of past due
interest, respectively, as that offered to each other
exchanging, repurchasing, converting, or substituting holder
of Bonds of any series in a Pool affected by that
Modification (or, where a menu of instruments or other
consideration is offered, each exchanging, repurchasing,
converting, or substituting holder of Bonds of any series in
a Pool affected by that Modification is offered the same
amount of consideration per amount of principal, the same
amount of consideration per amount of interest accrued but
unpaid and the same amount of consideration per amount of
past due interest, respectively, as that offered to each
other exchanging, repurchasing, converting, or substituting
holder of Bonds of any series in a Pool affected by that
Modification electing the same option under such menu of
instruments);
(3) the Modification is certified by the Administrative
Supervisor as being consistent with the requirements set
forth in section 104(i)(1) and is in the best interests of
the creditors and is feasible; or
(4) notwithstanding paragraphs (1) through (3), the
Administrative Supervisor has issued a certification that--
(A) the requirements set forth in section 104(i)(2) have
been satisfied; or
(B) the Modification is consistent with a restructuring
support or similar agreement to be implemented pursuant to
the law of the covered territory executed by the Issuer prior
to the establishment of an Oversight Board for the relevant
territory.
(h) Solicitation.--
(1) Upon receipt of a certification from the Administrative
Supervisor under subsection (g), the Information Agent shall,
if practical and except as provided in paragraph (2), submit
to the holders of any Outstanding Bonds of the relevant
Issuer, including holders of the right to vote such
Outstanding Bonds, the information submitted by the relevant
Issuer under subsection (f)(1) in order to solicit the vote
of such holders to approve or reject the Qualifying
Modification.
(2) If the Information Agent is unable to identify the
address of holders of any Outstanding Bonds of the relevant
Issuer, the Information Agent may solicit the vote or consent
of such holders by--
(A) delivering the solicitation to the paying agent for any
such Issuer or Depository Trust Corporation if it serves as
the clearing system for any of the Issuer's Outstanding
Bonds; or
(B) delivering or publishing the solicitation by whatever
additional means the Information Agent, after consultation
with the Issuer, deems necessary and appropriate in order to
make a reasonable effort to inform holders of any Outstanding
Bonds of the Issuer which may include, notice by mail,
publication in electronic media, publication on a website of
the Issuer, or publication in newspapers of national
circulation in the United States and in a newspaper of
general circulation in the territory.
(i) Who May Propose a Modification.--For each Issuer, a
Modification may be proposed to the Administrative Supervisor
by the Issuer or by one or more holders of the right to vote
the Issuer's Outstanding Bonds. To the extent a Modification
proposed by one or more holders of the right to vote
Outstanding Bonds otherwise complies with the requirements of
this title, the Administrative Supervisor may accept such
Modification on behalf of the Issuer, in which case the
Administrative Supervisor will instruct the Issuer to provide
the information required in subsection (f).
(j) Voting.--For each Issuer, any Qualifying Modification
may be made with the affirmative vote of the holders of the
right to vote at least two-thirds of the Outstanding
Principal amount of the Outstanding Bonds in each Pool that
have voted to approve or reject the Qualifying Modification,
provided that holders of the right to vote not less than a
majority of the aggregate Outstanding Principal amount of all
the Outstanding Bonds in each Pool have voted to approve the
Qualifying Modification. The holder of the right to vote the
Outstanding Bonds that are Insured Bonds shall be the
monoline insurer insuring such Insured Bond to the extent
such insurer is granted the right to vote Insured Bonds for
purposes of directing remedies or consenting to proposed
amendments or modifications as provided in the applicable
documents pursuant to which such Insured Bond was issued and
insured.
(k) Calculation Agent.--For the purpose of calculating the
principal amount of the Bonds of any series eligible to
participate in such a vote or consent solicitation and
tabulating such votes or consents, the Territory Government
Issuer may appoint a Calculation Agent for each Pool
reasonably acceptable to the Administrative Supervisor.
(l) Information Agent.--For the purpose of administering a
vote of holders of Bonds, including the holders of the right
to vote such Bonds, or seeking the consent of holder of
[[Page H3627]]
Bonds, including the holders of the right to vote such Bonds,
to a written action under this section, the Territory
Government Issuer may appoint an Information Agent for each
Pool reasonably acceptable to the Administrative Supervisor.
(m) Binding Effect.--
(1) A Qualifying Modification will be conclusive and
binding on all holders of Bonds whether or not they have
given such consent, and on all future holders of those Bonds
whether or not notation of such Qualifying Modification is
made upon the Bonds, if--
(A) the holders of the right to vote the Outstanding Bonds
in every Pool of the Issuer pursuant to subsection (j) have
consented to or approved the Qualifying Modification;
(B) the Administrative Supervisor certifies that--
(i) the voting requirements of this section have been
satisfied;
(ii) the Qualifying Modification complies with the
requirements set forth in section 104(i)(1); and
(iii) except for such conditions that have been identified
in the Qualifying Modification as being non-waivable, any
conditions on the effectiveness of the Qualifying
Modification have been satisfied or, in the Administrative
Supervisor's sole discretion, satisfaction of such conditions
has been waived;
(C) with respect to a Bond Claim that is secured by a lien
on property and with respect to which the holder of such Bond
Claim has rejected or not consented to the Qualifying
Modification, the holder of such Bond--
(i) retains the lien securing such Bond Claims; or
(ii) receives on account of such Bond Claim, through
deferred cash payments, substitute collateral, or otherwise,
at least the equivalent value of the lesser of the amount of
the Bond Claim or of the collateral securing such Bond Claim;
and
(D) the district court for the territory or, for any
territory that does not have a district court, the United
States District Court for the District of Hawaii, has, after
reviewing an application submitted to it by the applicable
Issuer for an order approving the Qualifying Modification,
entered an order that the requirements of this section have
been satisfied.
(2) Upon the entry of an order under paragraph (1)(D), the
conclusive and binding Qualifying Modification shall be valid
and binding on any person or entity asserting claims or other
rights, including a beneficial interest (directly or
indirectly, as principal, agent, counterpart, subrogee,
insurer or otherwise) in respect of Bonds subject to the
Qualifying Modification, any trustee, any collateral agent,
any indenture trustee, any fiscal agent, and any bank that
receives or holds funds related to such Bonds. All property
of an Issuer for which an order has been entered under
paragraph (1)(D) shall vest in the Issuer free and clear of
all claims in respect of any Bonds of any other Issuer. Such
Qualifying Modification will be full, final, complete,
binding, and conclusive as to the territorial government
Issuer, other territorial instrumentalities of the
territorial government Issuer, and any creditors of such
entities, and should not be subject to any collateral attack
or other challenge by any such entities in any court or other
forum. Other than as provided herein, the foregoing shall not
prejudice the rights and claims of any party that insured the
Bonds, including the right to assert claims under the Bonds
as modified following any payment under the insurance policy,
and no claim or right that may be asserted by any party in a
capacity other than holder of a Bond affected by the
Qualifying Modification shall be satisfied, released,
discharged, or enjoined by this provision.
(n) Judicial Review.--
(1) The district court for the territory or, for any
territory that does not have a district court, the United
States District Court for the District of Hawaii shall have
original and exclusive jurisdiction over civil actions
arising under this section.
(2) Notwithstanding section 106(e), there shall be a cause
of action to challenge unlawful application of this section.
(3) The district court shall nullify a Modification and any
effects on the rights of the holders of Bonds resulting from
such Modification if and only if the district court
determines that such Modification is manifestly inconsistent
with this section.
SEC. 602. APPLICABLE LAW.
In any judicial proceeding regarding this title, Federal,
State, or territorial laws of the United States, as
applicable, shall govern and be applied without regard or
reference to any law of any international or foreign
jurisdiction.
TITLE VII--SENSE OF CONGRESS REGARDING PERMANENT, PRO-GROWTH FISCAL
REFORMS
SEC. 701. SENSE OF CONGRESS REGARDING PERMANENT, PRO-GROWTH
FISCAL REFORMS.
It is the sense of the Congress that any durable solution
for Puerto Rico's fiscal and economic crisis should include
permanent, pro-growth fiscal reforms that feature, among
other elements, a free flow of capital between possessions of
the United States and the rest of the United States.
The Acting CHAIR. No amendment to that amendment in the nature of a
substitute shall be in order except those printed in House Report 114-
610. Each such amendment may be offered only in the order printed in
the report, by a Member designated in the report, shall be considered
as read, shall be debatable for the time specified in the report
equally divided and controlled by the proponent and an opponent, shall
not be subject to amendment, and shall not be subject to a demand for
division of the question.
Amendment No. 1 Offered by Mr. Bishop of Utah
The Acting CHAIR. It is now in order to consider amendment No. 1
printed in House Report 114-610.
Mr. BISHOP of Utah. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 3, line 14, strike ``If'' and insert ``(a) In
General.--Except as provided in subsection (b), if''.
Page 3, after line 20, insert the following:
(b) Uniformity.--If a court holds invalid any provision of
this Act or the application thereof on the ground that the
provision fails to treat similarly situated territories
uniformly, then the court shall, in granting a remedy, order
that the provision of this Act or the application thereof be
extended to any other similarly situated territory, provided
that the legislature of that territory adopts a resolution
signed by the territory's governor requesting the
establishment and organization of a Financial Oversight and
Management Board pursuant to section 101.
Page 9, strike lines 24 and 25.
Page 10 strike lines 1 through 7, and insert the following:
(1) Puerto rico.--A Financial Oversight and Management
Board is hereby established for Puerto Rico.
Page 10, line 8, strike ``(3)'' and insert ``(2)''.
Page 12, line 22, strike ``must'' and insert ``shall''.
Page 14, line 6, insert ``, non-overlapping'' after ``from
a separate''.
Page 16, lines 15 through 16, strike ``September 30, 2016''
and insert ``September 1, 2016''.
Page 16, line 18, strike ``December 1, 2016'' and insert
``September 15, 2016''.
Page 19, line 4, strike ``subsection'' and insert ``Act''.
Page 20, line 5, insert ``and any professionals the
Oversight Board determines necessary'' after ``voting
members''.
Page 29, line 9, insert ``until an order approving the
Qualifying Modification has been entered pursuant to section
601(m)(1)(D) of this Act'' after ``such agreement''.
Page 29, strike lines 10 through 18 and insert the
following:
(3) Preexisting voluntary agreements.--Any voluntary
agreement that the territorial government or any territorial
instrumentality has executed before May 18, 2016, with
holders of a majority in amount of Bond Claims that are to be
affected by such agreement to restructure such Bond Claims
shall be deemed to be in conformance with the requirements of
this subsection.
Page 32, line 11, strike ``the Government of Puerto Rico''
and insert ``a covered territory''.
Page 34, strike line 19 through page 35, line 3 and insert
the following:
(b) Funding.--The Oversight Board shall use its powers with
respect to the Territory Budget of the covered territory to
ensure that sufficient funds are available to cover all
expenses of the Oversight Board.
(1) Permanent funding.--Within 30 days after the date of
enactment of this Act, the territorial government shall
designate a dedicated funding source, not subject to
subsequent legislative appropriations, sufficient to support
the annual expenses of the Oversight Board as determined in
the Oversight Board's sole and exclusive discretion.
(2)(A) Initial funding.--On the date of establishment of an
Oversight Board in accordance with section 101(b) and on the
5th day of each month thereafter, the Governor of the covered
territory shall transfer or cause to be transferred the
greater of $2,000,000 or such amount as shall be determined
by the Oversight Board pursuant to subsection (a) to a new
account established by the territorial government, which
shall be available to and subject to the exclusive control of
the Oversight Board, without any legislative appropriations
of the territorial government.
(B) Termination.--The initial funding requirements under
subparagraph (A) shall terminate upon the territorial
government designating a dedicated funding source not subject
to subsequent legislative appropriations under paragraph (1).
(3) Remission of excess funds.--If the Oversight Board
determines in its sole discretion that any funds transferred
under this subsection exceed the amounts required for the
Oversight Board's operations as established pursuant to
subsection (a), any such excess funds shall be periodically
remitted to the territorial government.
Page 35, line 15, strike ``or on'' and insert ``, on''.
Page 35, line 15, insert ``, or against'' after ``behalf
of''.
Page 35, line 17 and 18, strike ``no conflict of interest
exists'' and insert ``the representation complies with the
applicable professional rules of conduct governing conflicts
of interests''.
Page 60, line 7, insert ``(A)'' before ``During the
period''.
Page 60, line 18, strike ``reversal'' and insert
``rescission''.
Page 60, line 19, insert at the end the following:
(B) Upon appointment of the Oversight Board's full
membership, the Oversight
[[Page H3628]]
Board may review, and in its sole discretion, rescind, any
law that--
(i) was enacted during the period between, with respect to
Puerto Rico, May 4, 2016; or with respect to any other
territory, 45 days prior to the establishment of the
Oversight Board for such territory, and the date of
appointment of all members and the Chair of the Oversight
Board; and
(ii) alters pre-existing priorities of creditors in a
manner outside the ordinary course of business or
inconsistent with the territory's constitution or the laws of
the territory as of, in the case of Puerto Rico, May 4, 2016,
or with respect to any other territory, 45 days prior to the
establishment of the Oversight Board for such territory;
but such rescission shall only be to the extent that the law
alters such priorities.
Page 73, strike line 22, and insert ``be excluded, and
that, for each excluded trust or other legal entity, the
court shall, upon the request of any participant or
beneficiary of such trust or entity, at any time after the
commencement of the case, order the appointment of a separate
committee of creditors pursuant to section 1102(a)(2) of
title 11, United States Code; and''.
Page 75, line 2, insert at the end the following: ``The
term `trustee' as described in this paragraph does not mean
the U.S. Trustee, an official of the United States Trustee
Program, which is a component of the United States Department
of Justice.''.
Page 75, line 8, insert `` `Chapter 11,' '' after ``
`Chapter 9' ''.
Page 76, line 22, insert ``but'' after ``for such
exercise,''.
Page 76, line 23, strike ``, but''.
Page 84, line 23, insert ``(1)'' before ``If the Oversight
Board''.
Page 85, after line 2, insert the following:
(2) With respect to paragraph (1), the Oversight Board may
consider, among other things--
(A) the resources of the district court to adjudicate a
case or proceeding; and
(B) the impact on witnesses who may be called in such a
case or proceeding.
Page 88, line 7, strike ``Impaired Creditors''and insert
``Claims''.
Page 88, line 14, insert ``claims, which claims are'' after
``only one class of''.
Page 88, line 21, insert ``and does not discriminate
unfairly'' after ``table''.
Page 94, line 10, insert ``(29 U.S.C. 215(a)(3))'' after
``section 15(a)(3)''.
Page 111, line 1, strike ``180 days'' and insert ``one
year''.
Page 115, line 24, insert ``, which should be analyzed,''
after ``level of debt''.
Page 116, lines 4 and 5, strike ``nor policies that would''
and insert ``or policies that would not''.
Page 116, line 8, strike ``States or local units of
government''.
Page 121, lines 7 and 8, strike ``, or in the preceding 3
calendar years provided,''.
Page 142, line 2, strike ``a preexisting voluntary
agreement'' and insert ``solely with respect to a preexisting
voluntary agreement as described in section 104(i)(3) of this
Act, such voluntary agreement''.
Page 143, line 16, strike ``if--'' and insert ``if one of
the following processes has occurred:''.
Page 143, line 17, strike ``the Issuer'' and insert
``Consultation process.--(A) The Issuer''.
Page 143, line 20, strike ``(2)'' and insert ``(B)''.
Page 144, line 17, insert ``and'' after the semicolon.
Page 144, line 18, strike ``(3)'' and insert ``(C)''.
Page 144, line 21, strike ``; or'' and insert a period.
Page 144, lines 22 through 23, strike ``(4) notwithstanding
paragraphs (1) through (3), the'' and insert the following:
(2) Voluntary agreement process.--The
Page 145, line 2, insert ``and section 601(g)(1)(B)'' after
``104(i)(2)''.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Utah (Mr. Bishop) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Utah.
Mr. BISHOP of Utah. Mr. Chairman, this is the proverbial manager's
amendment. It does have four significant elements that I think people
ought to be aware of in this particular amendment.
Thanks to a lot of work from Mr. MacArthur and some others, we have
an opt-in provision in this piece of legislation for the other
territories. However, if a court finding removes the opt-in provision
and finds it to be unconstitutional, it then does have a reverse
severability clause that would reinstate the opt-in for other
territories so there would not be a constitutional issue.
We do have a funding mechanism in this bill to make sure that the
oversight board is up and running properly as we begin. It also has the
ability for the oversight board to give them the authority to review
and rescind any laws passed by the territory between May 4 and the date
of its full appointment of membership if those actions alter the
priorities of repayment and move things around in a controversial way.
Finally, and probably most important, the amendment also includes a
moving up of the timetable for appointment to the board. This simply
says the President will have the appointment of the board up and
running by September 15 of this year, and no later than that.
This, I think, has some other technical amendments that truly are
technical, but those are four substantive amendments in the manager's
amendment that help make this what we intend it to be and get us up and
running very quickly.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Utah (Mr. Bishop).
The amendment was agreed to.
Amendment No. 2 Offered by Mr. Graves of Missouri
The Acting CHAIR. It is now in order to consider amendment No. 2
printed in House Report 114-610.
Mr. GRAVES of Missouri. Mr. Chairman, I have an amendment at the
desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 61, line 4, strike ``or''.
Page 61, line 7, strike the period and insert ``; or''.
Page 61, after line 7, insert:
(4) preserve and maintain federally funded mass
transportation assets.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Missouri (Mr. Graves) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Missouri.
Mr. GRAVES of Missouri. Mr. Chairman, I rise today in support of my
amendment which ensures federally funded public transportation systems
are considered an essential service as Puerto Rico works to address its
debt crisis.
Mr. Chairman, public transportation services in Puerto Rico are
provided by a fully automated rapid rail line known as Tren Urbano. The
system serves 8.5 million customers each year, providing access to
three universities, the main medical center in Puerto Rico, and major
financial centers in its capital.
Construction of Tren Urbano was funded by the United States
Government through a Federal Transit Administration grant. In fact, of
the total $2.2 billion price tag, over $800 million came from Federal
grants, and another $300 million came from a TIFIA loan. These are
taxpayer investments we cannot let go to waste, and this amendment is
simply a fiscally responsible way to make sure that that doesn't
happen.
Failure to maintain Puerto Rico's mass transit system would cause
Tren Urbano to fall into disrepair. We have seen just how disruptive
those problems can be right here in our Nation's Capital. As the
chairman of the House Subcommittee on Highways and Transit, I recently
held a hearing on the safety and reliability of the Metro system here
in D.C. Repairs to the Metro have added to congestion problems in this
city, and it has caused an untold amount in lost worker productivity.
We do not want to see the same problems in Puerto Rico. We want to make
sure that that doesn't happen. We don't want to see those same
problems, especially given the economic situation they are facing.
Over the last several years, the Government of Puerto Rico has
struggled to pay for Tren Urbano's operations. At times, outstanding
debt for operations has exceeded $20 million. Nevertheless, with the
aid of FTA preventive maintenance grants, revenues from passenger
fares, and funds from the Puerto Rican Highway and Transportation
Authority, Tren Urbano has been able to continue serving the residents
of Puerto Rico. It is critical we ensure Tren Urbano is treated as an
essential service so that we can protect the hundreds of millions of
taxpayer dollars that are already invested in the system.
Mr. Chairman, this doesn't prioritize anything. It doesn't put
anything at the top of the list. It just simply says that it is going
to be a part of this process, so we do not lose that investment.
Mr. CAPUANO. Will the gentleman yield?
Mr. GRAVES of Missouri. I yield to the gentleman from Massachusetts.
Mr. CAPUANO. Mr. Chairman, I thank the gentleman for yielding.
[[Page H3629]]
I want to step up and basically add my name to this and my support
and say it is a good amendment. It should pass.
Mr. BISHOP of Utah. Will the gentleman yield?
Mr. GRAVES of Missouri. I yield to the gentleman from Utah.
Mr. BISHOP of Utah. Mr. Chairman, I also want to support this
amendment. Everything is fine with me too.
Mr. GRAVES of Missouri. Mr. Chairman, I yield back the balance of my
time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Missouri (Mr. Graves).
The amendment was agreed to.
Amendment No. 3 Offered by Mr. Jolly
The Acting CHAIR. It is now in order to consider amendment No. 3
printed in House Report 114-610.
Mr. JOLLY. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 114, line 11, insert ``, reduce child poverty,''
before ``and attract''.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Florida (Mr. Jolly) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. JOLLY. Mr. Chairman, section 409 of this very important
legislation creates a congressional task force on economic growth in
Puerto Rico. The intent of the task force is to study barriers to
economic growth, report back to Congress on changes in Federal law that
would spur long-term, sustainable economic growth, job creation, and
also attract investment in Puerto Rico. However, in my opinion, the
section could be improved by also studying the impact and recommended
changes on child poverty on the island of Puerto Rico.
Nearly 60 percent of children under 18 live below the poverty level
in Puerto Rico, and roughly 80 percent live in high poverty areas. That
is in comparison to only 11 percent who live in high poverty areas here
in the continental United States.
This very simple amendment would add to the requirements of the
congressional task force that they report back on recommended changes
to address and reduce child poverty in the territory.
This amendment has been endorsed by an organization of roughly 600
national and local religious bodies, including the U.S. Conference of
Catholic Bishops, the United Methodist Church, the Presbyterian Church
U.S.A., Catholic Charities, the Union for Reform Judaism.
Additionally, on Tuesday of this week, San Juan Archbishop Roberto
Gonzalez Nieves called on Congress to specifically address child
poverty in this bill.
Much of the debate has centered around balancing the interests and
needs of bondholders and lenders with those of pensioners. I would ask
that this body also consider the impact on the least among us. We are
all called to serve each other.
This is an opportunity for this body to reflect not just the vision
of our Founders, but the calling of our Creator in doing so. These
children are American citizens. Their plight deserves our explicit
attention.
I urge my colleagues to support this amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. GRIJALVA. Mr. Chairman, I ask unanimous consent to claim the time
in opposition to this amendment, although I am not opposed to the
amendment.
The Acting CHAIR. Is there objection to the request of the gentleman
from Arizona?
There was no objection.
The Acting CHAIR. The gentleman from Arizona is recognized for 5
minutes.
Mr. GRIJALVA. Mr. Chairman, I yield 2 minutes to the gentleman from
Puerto Rico (Mr. Pierluisi), the commissioner from Puerto Rico.
Mr. PIERLUISI. Mr. Chairman, I thank Congressman Grijalva.
I rise to support this thoughtful amendment and to thank its authors,
Congressman Jolly and Congressman Curbelo, both from Florida.
Florida is home to over 1 million individuals of Puerto Rican birth
or descent, and will soon pass New York as the State with the largest
Puerto Rican population. Many of the Puerto Rican families in Florida
are recent arrivals, having relocated from Puerto Rico to the Sunshine
State in search of the equality and economic opportunity that they lack
on the island.
{time} 1715
I also want to thank the organization Jubilee USA, which has been a
constructive player in the debate over PROMESA.
This amendment requires the Congressional Task Force on Economic
Growth in Puerto Rico, created by section 409 of the bill, to report on
recommended changes to Federal policy that would reduce child poverty
in Puerto Rico.
I do not want to prejudge the work of the task force, so I will
simply say this: poverty in Puerto Rico, including child poverty, is
far higher than in any State in the Nation, and it has been far higher
for as long as statistics have been available. This demonstrates that
the problem is structural in nature. It is rooted in the unequal
treatment that Puerto Rico receives under key Federal antipoverty
programs, which is only permissible because Puerto Rico is a territory
rather than a State. To reduce poverty, we must end unequal treatment,
and to end unequal treatment, Puerto Rico must discard its territory
status in favor of statehood or nationhood.
Mr. JOLLY. Mr. Chair, I reserve the balance of my time.
Mr. GRIJALVA. Mr. Chair, I yield 1 minute to the gentleman from New
York (Mr. Serrano).
Mr. SERRANO. Mr. Chair, I was not planning to speak, but when I heard
Bishop Gonzalez' name mentioned, I had to say something because he was
my parish priest at two different parishes in the Bronx. I know of his
work, and if he wants this discussed, then it is something I should
rise to and support. He always cared about child poverty in the Bronx
when he was my parish priest. Now, as I tell him he is a big shot in
Puerto Rico, he is still doing the right thing by God's work.
Mr. JOLLY. Mr. Chair, I reserve the balance of my time.
Mr. GRIJALVA. Mr. Chair, in closing, let me thank and commend the
gentleman from Florida for this very good amendment. I think it
dovetails with the rest of the legislation very well as the gentleman
addresses some of the indices in Puerto Rico that require attention--
the challenges around poverty that the Puerto Rican people are facing.
It is not often in this Chamber that we talk about poverty. The
gentleman is to be commended, and I support the amendment.
Mr. Chair, I yield back the balance of my time.
Mr. JOLLY. Mr. Chair, in closing, I urge my colleagues to support
this very important amendment.
Do the right thing for the very least among us--those children on the
island who are facing significant challenges of poverty--so that we, as
a body, might respond better to the right policies that address their
very real needs. I urge the passage of this amendment.
Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Jolly).
The amendment was agreed to.
Amendment No. 4 Offered by Mr. Byrne
The Acting CHAIR. It is now in order to consider amendment No. 4
printed in House Report 114-610.
Mr. BYRNE. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 115, line 20, strike ``The'' and insert ``Not later
than 18 months after the date of the enactment of this Act,
the''.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Alabama (Mr. Byrne) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Alabama.
Mr. BYRNE. Mr. Chair, I thank Chairman Bishop for his leadership on
this issue. This has not been an easy task, but he has provided great
leadership, and I appreciate it.
[[Page H3630]]
I also thank Mr. Graves of Louisiana and Mr. Polis for their
amendment at the committee level, which requires a report from the
Government Accountability Office that outlines how Puerto Rico reached
this point of fiscal insolvency.
My amendment is very straightforward. It would simply set a deadline
for the GAO to submit this report within 18 months of the enactment of
this bill. Mr. Graves and Mr. Polis are cosponsors of my amendment, and
they agree that setting a deadline is important.
We must figure out how Puerto Rico got to this point in order to
avoid another territory's finding itself in a similar position at some
point down the road. I believe having this report and receiving it in a
timely manner will, hopefully, go a long way towards preventing a
similar situation in the future. This amendment is about
accountability, and I urge its adoption.
Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Alabama (Mr. Byrne).
The amendment was agreed to.
Amendment No. 5 Offered by Mr. Byrne
The Acting CHAIR. It is now in order to consider amendment No. 5
printed in House Report 114-610.
Mr. BYRNE. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 116, after line 10, insert the following:
SEC. 411. REPORT ON TERRITORIAL DEBT.
(a) Report Required.--Not later than one year after the
date of the enactment of this Act, and thereafter not less
than once every two years, the Comptroller General of the
United States shall submit to Congress a report on the public
debt of each territory, including--
(1) the historical levels of each territory's public debt,
current amount and composition of each territory's public
debt, and future projections of each territory's public debt;
(2) the historical levels of each territory's revenue,
current amount and composition of each territory's revenue,
and future projections of each territory's revenue;
(3) the drivers and composition of each territory's public
debt;
(4) the effect of Federal laws, mandates, rules, and
regulations on each territory's public debt; and
(5) the ability of each territory to repay it's public
debt.
(b) Materials.--The government of each territory shall make
available to the Comptroller General of the United States all
materials necessary to carry out this section.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Alabama (Mr. Byrne) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Alabama.
Mr. BYRNE. Mr. Chair, as we have heard over and over again today,
this Congress has plenary authority over our territories. Over the
course of the last century, this body has rightly delegated this power
to provide for home rule for our territories. However, it is abundantly
clear that this delegation of power has resulted in no oversight by the
Federal Government over the debts that our territories are running up.
In this particular case, out of the blue, we have been told by the
United States Treasury that it is our constitutional responsibility to
do something to save a territory from years of its own fiscal
irresponsibility. For years, the entire Federal Government was,
essentially, asleep at the wheel as one of our territories ran up huge,
unsustainable debts until the day arose when the territory could no
longer pay.
Mr. Chair, I have absolutely no interest in interfering with the home
rule of our territories. However, delegated authority can be abused. If
we have a constitutional responsibility to intervene to prevent
territorial insolvency, we certainly should exercise at least minimal
oversight into the large debts that some of our territories are running
up.
My amendment is simple. It requires a biennial report to Congress on
the debt of each territory, the drivers of each territory's debt, the
effect of Federal policy on each territory's debt, and the ability of
each territory to repay its debt. This will help us provide that
minimal oversight.
Unfortunately, Mr. Chair, the very agency that is coming to Congress
and asking us to help Puerto Rico--the United States Treasury--has
refused to provide this report to Congress, claiming it lacks
resources. Let's be clear. The Department of the Treasury was
appropriated $11.9 billion for this fiscal year, and they claim a lack
of resources to put together a simple report on five tiny territories.
That is astonishing. It is also irresponsible.
In response to the Department of the Treasury, I offered a
compromise. I would take one Treasury report on territorial debt if the
Treasury would simply agree to monitor and advise us of what is going
on with these territorial governments and what we should do to prevent
insolvency.
According to the Treasury, this was even worse. It would represent an
unprecedented expansion into the finances and solvency of a U.S.
subsovereign. Apparently, this administration doesn't like the
Territories Clause of the Constitution unless it is being used at the
very last minute to save Puerto Rico.
I don't blame Puerto Rico for this. I blame the United States
Treasury for this. If the United States Treasury is unwilling to do its
job, I have changed the text of my amendment to require the GAO to put
together this biennial report, and I look forward to seeing its
results.
Last night, Mr. Chair, in the Rules Committee meeting, we heard
testimony from the representatives of two other territories, who told
us that they are concerned that their territories are sliding in the
same direction as Puerto Rico's while the Treasury Department sleeps.
Since the Treasury Department won't take responsibility and do its job,
we are going to do our job through the GAO.
I hope my colleagues will join me in doing something to fix this
problem before another crisis is upon us. Perhaps, then, we can even
get the Treasury and the rest of the Federal Government to wake up. If
they don't, I will have a lot less sympathy the next time they come
asking for our help.
Mr. Chair, I reserve the balance of my time.
Mr. GRIJALVA. Mr. Chair, I rise in opposition to this amendment.
The Acting CHAIR. The gentleman from Arizona is recognized for 5
minutes.
Mr. GRIJALVA. Mr. Chair, this amendment requires the GAO to submit
reports every 2 years to the Congress about the public debt and about
the ability to pay that debt of all U.S. territories. While the debt
crisis in Puerto Rico is, indeed, serious and real, there is no
indication that any other territory faces a similar crisis.
The base bill already includes reporting requirements. Requiring more
reporting to cover the territories is unwarranted as well as being a
waste of the GAO's limited time to provide more important reports to
Congress.
A number of States and localities on the mainland face much more
precarious budget situations than do the other territories. We don't
need any more focus on U.S. territories when there is no reason to
believe such onerous reporting is really required or justified.
Mr. Chair, I reserve the balance of my time.
Mr. BYRNE. Mr. Chair, I yield 2 minutes to the gentleman from Utah
(Mr. Bishop).
Mr. BISHOP of Utah. Mr. Chair, there is an old line from the play
``1776,'' when Stephen Hopkins says:
Mr. Chair, I have never seen, heard, or smelled an issue so dangerous
it couldn't be talked about. Hell, yes. I am for debating anything.
This is one of those situations in which you have never seen, heard,
or smelled anything that shouldn't be studied. The information could be
vital, and it could be helpful. For that, I endorse and support this
amendment.
Mr. GRIJALVA. Mr. Chair, I reserve the balance of my time.
Mr. BYRNE. Mr. Chair, I listened to the gentleman's comments, and I
have to tell you, if there is enough in this bill for the reporting,
why did the Treasury not say that to us? They didn't say that to us
because they know there needs to be a report done. They just don't want
to take the responsibility for doing it.
I think this amendment is definitely necessary for us to make sure we
are doing our job in exercising our constitutional responsibility.
I reserve the balance of my time.
[[Page H3631]]
Mr. GRIJALVA. Mr. Chair, I reserve the balance of my time.
Mr. BYRNE. Mr. Chair, I didn't know anything about this, and the vast
majority of the Members didn't know anything about this problem before
it was thrust upon us over the last several weeks.
The irresponsibility of the Treasury Department in not giving this
information to us months ago when they knew it was happening or when
they should have known it was happening underscores the need for this.
I am putting it on the GAO in this particular amendment, but in the
years to come, we need to expect the Treasury to do its job, because it
has failed to do so in this circumstance.
I ask the House to adopt my amendment.
Mr. Chair, I yield back the balance of my time.
Mr. GRIJALVA. Mr. Chair, a recent report from the U.S. Public
Interest Research Group Education Fund rated all 50 States on whether
they made transparent budget and spending information available to the
public. My own State of Arizona received a grade of a B, so we have
some work to do there. The State of Alabama, however, received the
grade of a D, placing it fourth from the bottom of all States.
From that, it seems clear, if our goal is budget and spending
transparency, perhaps our focus should be on our States on the mainland
and not on the territories, because that seems to be where there is a
verifiable problem.
This amendment is unwarranted, and it does not need to be included in
the legislation.
Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Alabama (Mr. Byrne).
The amendment was agreed to.
Amendment No. 6 Offered by Mr. Duffy
The Acting CHAIR. It is now in order to consider amendment No. 6
printed in House Report 114-610.
Mr. DUFFY. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 116, after line 10, insert the following:
SEC. 411. EXPANSION OF HUBZONES IN PUERTO RICO.
(a) In General.--
(1) Section 3(p)(4)(A) of the Small Business Act (15 U.S.C.
632(p)(4)(A)) is amended to read as follows:
``(A) Qualified census tract.--
``(i) In general.--The term `qualified census tract' has
the meaning given that term in section 42(d)(5)(B)(ii) of the
Internal Revenue Code of 1986.
``(ii) Exception.--For any metropolitan statistical area in
the Commonwealth of Puerto Rico, the term `qualified census
tract' has the meaning given that term in section
42(d)(5)(B)(ii) of the Internal Revenue Code of 1986 as
applied without regard to subclause (II) of such section,
except that this clause shall only apply--
``(I) 10 years after the date that the Administrator
implements this clause, or
``(II) the date on which the Financial Oversight and
Management Board for the Commonwealth of Puerto Rico created
by the Puerto Rico Oversight, Management, and Economic
Stability Act ceases to exist,
whichever event occurs first.''.
(2) Regulations.--The Administrator of the Small Business
Administration shall issue regulations to implement the
amendment made by paragraph (1) not later than 90 days after
the date of the enactment of this Act.
(b) Improving Oversight.--
(1) Guidance.--Not later than 270 days after the date of
the enactment of this Act, the Administrator of the Small
Business Administration shall develop and implement criteria
and guidance on using a risk-based approach to requesting and
verifying information from entities applying to be designated
or recertified as qualified HUBZone small business concerns
(as defined in section 3(p)(5) of the Small Business Act (15
U.S.C. 632(p)(5))).
(2) Assessment.--Not later 1 year after the date on which
the criteria and guidance described in paragraph (1) is
implemented, the Comptroller General of the United States
shall begin an assessment of such criteria and guidance. Not
later than 6 months after beginning such an assessment, the
Comptroller General shall submit a report to the Committee on
Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives
that includes--
(A) an assessment of the criteria and guidance issued by
the Administrator of the Small Business Administration in
accordance with paragraph (1);
(B) an assessment of the implementation of the criteria and
guidance issued by issued by the Administrator of the Small
Business Administration in accordance with paragraph (1);
(C) an assessment as to whether these measures have
successfully ensured that only qualified HUBZone small
business concerns are participating in the HUBZone program
under section 31 of the Small Business Act (15 U.S.C. 657a);
(D) an assessment as to whether the reforms made by the
criteria and guidance implemented under paragraph (1) have
resulted in job creation in the Commonwealth of Puerto Rico;
and
(E) recommendations on how to improve controls in the
HUBZone program.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from Wisconsin (Mr. Duffy) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Wisconsin.
Mr. DUFFY. Mr. Chair, the Puerto Rico unemployment rate is double the
national average. Nearly one in every two residents lives below the
poverty line. Economic growth is in the negative. We have heard about
that all day today. Now, PROMESA will stop the bleeding, but there
isn't an easy solution to jump-start the economy. We have a down
payment in a commission, but this is, I think, a real step in the
direction of trying to kick-start economic growth.
My amendment, with my colleague from Puerto Rico (Mr. Pierluisi),
will provide modest assistance to Puerto Rico by removing an impediment
to the Small Business Administration's HUBZone program that limits the
number of businesses on the island that are eligible for the program.
This idea was brought to me by my friend Jaime Perello, the speaker
of the Legislative Assembly of Puerto Rico, and it is a good one. What
does it do? The HUBZone program is a small business, Federal
contracting assistance program, whose primary objective is job creation
and increasing capital investment in distressed communities.
{time} 1730
Now, there is a 20 percent cap. So that 20 percent cap for this
program might not affect Minneapolis or Chicago or Milwaukee because
you don't even have 20 percent of the communities that are distressed.
However, in Puerto Rico you have far more than 20 percent of the
communities that are distressed. You have 80 percent of them that are
distressed. So by removing this cap, you have a larger part of the
community that qualifies to access this program.
This is, I think, a very good solution and downpayment on economic
growth and investment in Puerto Rico. Not only that, but there have
been some noted problems with the program. GAO has made some
recommendations. We have solidified those recommendations in this bill
not just for Puerto Rico, but for the Nation as a whole to make sure
there are better checks and balances in the HUBZone program.
I reserve the balance of my time.
Mr. CHABOT. Mr. Chair, I claim time in opposition.
The Acting CHAIR. The gentleman from Ohio is recognized for 5
minutes.
Mr. CHABOT. Mr. Chairman, I rise reluctantly in opposition to the
amendment offered by the gentleman from Wisconsin (Mr. Duffy).
The House Small Business Committee that I happen to chair has
jurisdiction over the SBA's HUBZone program. Our committee has not yet
had the opportunity to have oversight hearings on the program during
this session, and I don't believe it would be prudent to adopt this
amendment until the committee has had the opportunity to perform its
due diligence.
In discussions with interested parties during the development of this
legislation, I suggested language that would require the GAO to issue a
report on Small Business Administration programs in Puerto Rico,
including contract activities relating to HUBZone small businesses
concerns. That language is contained in the underlying text. That
report, coupled with committee oversight work, I believe, will ensure
that what Congress ultimately does will, in fact, help Puerto Rico's
small businesses.
I reserve the balance of my time.
Mr. DUFFY. Mr. Chair, I yield 2\1/2\ minutes to the gentleman from
Puerto Rico (Mr. Pierluisi).
Mr. PIERLUISI. Mr. Chairman, I want to begin by thanking Congressman
Duffy for his outstanding work on this bill and on this particular
[[Page H3632]]
amendment. I also want to thank Congressman Don Young, a steadfast
champion for fair treatment for Puerto Rico who is also a cosponsor of
this amendment.
The primary purpose of this amendment is to increase small business
activity and promote job creation in Puerto Rico.
The HUBZone program supports economically distressed communities
throughout the Nation. If the poverty rate or median income in a census
tract meets a certain threshold, it is designated as a qualified census
tract. Small businesses located in a qualified census tract can compete
for Federal contracts with preference, assuming they meet all other
criteria established by law.
However, there is a statutory cap which prevents the combined
population of the qualified census tracts within a metropolitan
statistical area from exceeding 20 percent of the total population of
that area. Although the cap applies nationwide, it has a uniquely
negative impact in Puerto Rico. Small firms located in over 60
municipalities in Puerto Rico cannot take advantage of the HUBZone
program solely because of the cap. No other U.S. State or territory
comes anywhere close to being as adversely affected by the cap as
Puerto Rico.
To promote economic development in Puerto Rico, which is absolutely
essential if the territory is going to prosper, our amendment would
remove the cap for Puerto Rico for 10 years or until the independent
oversight board established by the legislation terminates, whichever
occurs first. Based on the best available statistics, this amendment
ensures that small firms located in over 80 percent of the census
tracts in Puerto Rico may be eligible to compete with preference for
Federal contracts, which should create additional employment
opportunities on the island. The amendment will only extend the HUBZone
programs to those census tracts in Puerto Rico that would have
qualified for the program in the absence of the cap. So it does not
constitute an unwarranted expansion of the HUBZone program.
I urge my colleagues to vote ``yes'' on this amendment.
Mr. DUFFY. Mr. Chair, who has the right to close?
The Acting CHAIR. The gentleman from Ohio has the right to close.
Mr. DUFFY. Mr. Chair, I appreciate the comments by Chairman Chabot,
and I would just note that I know his committee hasn't had oversight
hearings on this issue. The GAO has done extensive studies, and the
Small Business Administration has not implemented those
recommendations. I think the most salient recommendations made by the
GAO have been included in this bill and go a long way to improving the
program, but if we are going to fix Puerto Rico, debt restructuring is
imperative.
This oversight board is key, but we need economic growth. And I think
this is the right downpayment to help kick-start some economic growth
on the island, that the people in Puerto Rico know that we understand
that. And we are taking one small step today to show that we are going
to help them get from that 20 percent cap to allow 80 percent of the
island to access this HUBZone program because we care about growth, we
care about opportunity, and we care about jobs on the island.
Mr. Chair, I yield back the balance of my time.
Mr. CHABOT. Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Wisconsin (Mr. Duffy).
The amendment was agreed to.
Amendment No. 7 Offered by Mr. Serrano
The Acting CHAIR. It is now in order to consider amendment No. 7
printed in House Report 114-610.
Mr. SERRANO. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
At the end of title IV, insert the following:
SEC. 411. DETERMINATION ON DEBT.
Nothing in this Act shall be interpreted to restrict--
(1) the ability of the Puerto Rico Commission for the
Comprehensive Audit of the Public Credit to file its reports;
or
(2) the review and consideration of the Puerto Rico
Commission's findings by Puerto Rico's government or an
Oversight Board for Puerto Rico established under section
101.
The Acting CHAIR. Pursuant to House Resolution 770, the gentleman
from New York (Mr. Serrano) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from New York.
Mr. SERRANO. Mr. Chairman, this amendment offered by Ms. Velazquez
and myself would help clarify that this legislation would not impact
the work being done by the Puerto Rico Commission for the Comprehensive
Audit of the Public Credit.
This entity, set up by Puerto Rico's Government, is in the process of
examining the massive debt that has been accrued by the territory. In a
preliminary report, the commission recently found that a small portion
of the debt may have been illegally issued by the government of Puerto
Rico, and they need to further examine the issue and its implications.
This amendment simply preserves the ability of this commission to
continue their work and for either the government or the oversight
board to review and consider any findings that the commission might
have. The work being done by the commission could significantly assist
both the oversight board and the Puerto Rican Government as the island
tries to get back on its feet.
I reserve the balance of my time.
Mr. BISHOP of Utah. Mr. Chair, I claim time in opposition, even
though I am not opposed to this particular amendment.
The Acting CHAIR. Without objection, the gentleman is recognized for
5 minutes.
There was no objection.
Mr. BISHOP of Utah. Mr. Chair, I want to make it very clear that this
particular amendment does not override the authority of the oversight
board. But because of that, I do support the amendment, and I urge its
adoption.
I yield back the balance of my time.
Mr. SERRANO. Mr. Chair, I yield 3 minutes to the gentlewoman from New
York (Ms. Velazquez), my sister from Yabucoa, Puerto Rico.
Ms. VELAZQUEZ. Mr. Chair, I represent New York's Seventh
Congressional District.
I rise in strong support of the Serrano-Velazquez amendment.
Throughout the course of this entire saga, it has become increasingly
clear that Puerto Rico's debt is not fully understood. The island has
issued 18 different classes of debt--from general obligation to COFINA,
to GDB, to utility bonds. Various local and State laws are involved,
and the result is a web of confusion.
To address this, the Puerto Rico Commission for the Comprehensive
Audit of the Public Credit was created to examine all of the island's
debt, something that is very much needed. The audit will not only
inform the people of Puerto Rico, but also, in many ways, will assist
the oversight board in carrying out its mission. Analyzing and
assessing all of the island's $70 billion in debt is long overdue.
Recently, the commission released a preliminary report finding that a
small, yet significant, amount of the debt may have violated the
island's constitution. Such a finding is meaningful and could have
ramifications for this legislation's implementation.
Our amendment ensures that the underlying bill will not prevent the
commission from finishing its important work while also allowing the
local government and the oversight board to consider these findings if
they so chose.
In summary, this amendment would allow for much-needed sunlight to be
shown on the island's financial situation.
I urge Members to support this amendment.
Mr. SERRANO. Mr. Chair, I urge everyone to vote for the amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from New York (Mr. Serrano).
The amendment was agreed to.
Amendment No. 8 Offered by Mrs. Torres
The Acting CHAIR. It is now in order to consider amendment No. 8
printed in House Report 114-610.
Mrs. TORRES. Mr. Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
[[Page H3633]]
The text of the amendment is as follows:
Strike section 403 (and redesignate succeeding sections and
conform the table of contents accordingly).
The Acting CHAIR. Pursuant to House Resolution 770, the gentlewoman
from California (Mrs. Torres) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from California.
Mrs. TORRES. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, the bill, as it is currently written, allows the
minimum wage for workers 25 years and under to be lowered to abysmal
$4.25 for 4 years for as long as the oversight board is in place. It
also fails to specify whether this reduction is limited to one 4-year
period or if the request can be made over and over again, essentially
keeping the lower wage indefinitely.
My amendment would strip this provision from the bill. In today's
dollars, American workers haven't had a minimum wage this low since the
1940s. The young men and women of Puerto Rico are American citizens,
and they don't deserve to be treated like second-class workers.
These aren't high school students with summer jobs. They are young
people setting off on their careers, many of them struggling to pay off
student loan debt and become self-sufficient. Lowering the wage only
adds insult to injury and sends the wrong statement about whether we
value Puerto Ricans as equal Americans.
The island is already experiencing a mass exodus of young people.
Lowering wages will only make more young people want to leave, having a
detrimental impact on Puerto Rico's current and future workforce, its
tax base, and its ability to pay off its debt, ultimately digging them
into a deeper hole.
If we want to help Puerto Rico overcome this current crisis, we need
to make sure the island is a place where young people can see a future
for themselves, start a family, and work to grow a business, not a
place that devalues their work and their contributions.
The minimum wage provision in this bill is bad for these young
workers and is bad for Puerto Rico.
I urge my colleagues to support my amendment.
I reserve the balance of my time.
Mr. ROE of Tennessee. Mr. Speaker, I claim time in opposition.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. ROE of Tennessee. Mr. Chair, I respectfully rise in opposition to
the amendment by my colleague from California because this is exactly
the kind of thinking that led Puerto Rico into the fiscal situation in
which they now find themselves.
As we all know, one thing that would help address Puerto Rico's
fiscal crisis is a stronger, more vibrant local economy. That is why
this legislation includes a number of provisions aimed at helping local
businesses expand and hire new workers. This amendment would strike an
entire provision from the bill, a provision that is pro-growth and
aimed at revitalizing local businesses and the Puerto Rican economy as
a whole.
Section 403 is a provision that will make it easier for young workers
to find jobs and start their careers. The legislation gives the
Governor of Puerto Rico the authority, subject to the approval of the
oversight board, to adjust the minimum wage for new workers under the
age of 25. Current law already allows employers to offer what is known
as a youth opportunity wage for up to 90 days. This legislation simply
extends the time period in Puerto Rico to 4 years, an idea that was
first recommended in 2012 by the Federal Reserve Bank of New York,
which noted then that younger workers were ``in danger of becoming
disconnected from the labor market.''
This recommended change will support economic growth and provide more
job opportunities for the local workforce, particularly younger workers
and workers with fewer skills. These are commonsense policies that will
help address Puerto Rico's fiscal crisis by supporting a stronger, more
prosperous local economy.
For these reasons, I urge my colleagues to oppose this amendment and
support the underlying legislation.
I yield back the balance of my time.
Mrs. TORRES. Mr. Chairman, I yield 1 minute to the gentleman from
Florida (Mr. Grayson).
{time} 1745
Mr. GRAYSON. Mr. Chairman, we are talking about a minimum wage of
$4.25 an hour. That is less than $700 per month. Tell me how anybody
can survive anywhere on the island of Puerto Rico on less than $700 a
month. It simply isn't possible. The cost of living in San Juan is no
lower than it is in Orlando, or much of the mainland for that matter.
I don't know where you can even find a one-bedroom apartment for $700
a month that would be worth living in. I don't know how you can pay for
lunch and dinner and breakfast for $700 a month. I don't know how you
can find health coverage for $700 a month. I don't know how you can
find transportation to get to that job for $700 a month. I just don't
get it. Any one of these things would be enough to break the budget and
put you into bankruptcy if you are only making $700 a month, and that
is before you even have to pay taxes.
What we are doing is we are taking a Spanish-speaking population, 3.5
million of them, and we are condemning them to low wages to the point
where 45-year-old men will lose their jobs to 20-year-old sons because
the 20-year-old sons are forced to work for only $4.25.
The Acting CHAIR. The time of the gentleman has expired.
Mrs. TORRES. Mr. Chairman, I yield an additional 30 seconds to the
gentleman.
Mr. GRAYSON. This is the lesson that we are teaching those young men
and women who we are supposedly trying to help. The lesson is this: hop
on an airplane from San Juan to my district in Orlando for $168, and
you can get a 70 percent increase in your wages because that is what
the difference is already under current law between what you are
talking about, a $4.25 hourly wage and $7.25 that you can earn
legally--it is actually more than that under State law--in Orlando.
That is not teaching people how to work. It is teaching people to
disrespect work.
Mrs. TORRES. Mr. Chairman, how much time do I have remaining?
The Acting CHAIR. The gentlewoman has 1\1/2\ minutes remaining.
Mrs. TORRES. Mr. Chairman, someone living in Puerto Rico needs to
make $9.25 an hour to afford a one-bedroom apartment. If the wage is
lowered to $4.25, not even two earners could afford to live there.
Mr. Chairman, there is no question that Puerto Rico will need to make
sacrifices, but it can't do so on the backs of its young workforce,
American citizens. This provision does not fix Puerto Rico's problems,
and in the long run, it makes them worse.
I urge my colleagues to support my amendment so that Puerto Rico's
recovery doesn't come at the expense of young, hardworking Americans.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from California (Mrs. Torres).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Recorded Vote
Mrs. TORRES. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 196,
noes 225, not voting 13, as follows:
[Roll No. 287]
AYES--196
Adams
Aguilar
Ashford
Bass
Beatty
Becerra
Bera
Beyer
Bishop (GA)
Blumenauer
Bonamici
Bost
Boyle, Brendan F.
Brady (PA)
Brown (FL)
Brownley (CA)
Bustos
Butterfield
Capps
Capuano
Cardenas
Carney
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Costa
Costello (PA)
Courtney
Crowley
Cuellar
Cummings
Davis (CA)
Davis, Danny
DeFazio
DeGette
Delaney
DeLauro
DelBene
DeSaulnier
Deutch
Dingell
Doggett
Dold
Donovan
Doyle, Michael F.
Duckworth
Edwards
Ellison
Engel
Eshoo
Esty
Fattah
Fitzpatrick
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Gibson
Graham
Grayson
[[Page H3634]]
Green, Al
Green, Gene
Grijalva
Gutierrez
Hahn
Hanna
Hastings
Heck (WA)
Higgins
Himes
Honda
Hoyer
Huffman
Israel
Jackson Lee
Jeffries
Johnson (GA)
Johnson, E. B.
Jolly
Joyce
Kaptur
Katko
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
Kirkpatrick
Kuster
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee
Levin
Lewis
Lipinski
LoBiondo
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lynch
Maloney, Carolyn
Maloney, Sean
Matsui
McCollum
McDermott
McGovern
McNerney
Meehan
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Napolitano
Neal
Nolan
Norcross
O'Rourke
Pallone
Pascrell
Pelosi
Perlmutter
Peters
Peterson
Pingree
Pocan
Polis
Price (NC)
Quigley
Rangel
Reed
Rice (NY)
Richmond
Ros-Lehtinen
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Sherman
Sinema
Slaughter
Smith (NJ)
Smith (WA)
Speier
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Van Hollen
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
NOES--225
Abraham
Aderholt
Allen
Amash
Amodei
Babin
Barr
Barton
Benishek
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Boustany
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Chaffetz
Clawson (FL)
Coffman
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Cook
Cramer
Crawford
Crenshaw
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Duffy
Duncan (SC)
Duncan (TN)
Ellmers (NC)
Emmer (MN)
Farenthold
Fleischmann
Fleming
Flores
Forbes
Fortenberry
Foxx
Frelinghuysen
Garrett
Gibbs
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Griffith
Grothman
Guinta
Guthrie
Harper
Harris
Hartzler
Heck (NV)
Hensarling
Hice, Jody B.
Hill
Holding
Hudson
Huelskamp
Huizenga (MI)
Hultgren
Hunter
Hurd (TX)
Hurt (VA)
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (OH)
Johnson, Sam
Jones
Jordan
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger (IL)
Kline
Knight
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Long
Loudermilk
Love
Lucas
Lummis
MacArthur
Marchant
Marino
Massie
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meadows
Messer
Mica
Miller (FL)
Miller (MI)
Moolenaar
Mooney (WV)
Mullin
Mulvaney
Murphy (PA)
Neugebauer
Newhouse
Noem
Nugent
Nunes
Olson
Palazzo
Palmer
Paulsen
Pearce
Perry
Pittenger
Pitts
Poe (TX)
Poliquin
Pompeo
Posey
Price, Tom
Ratcliffe
Reichert
Renacci
Ribble
Rice (SC)
Rigell
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney (FL)
Roskam
Ross
Rothfus
Rouzer
Royce
Russell
Salmon
Sanford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (TX)
Stefanik
Stewart
Stivers
Stutzman
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Westmoreland
Whitfield
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Young (IN)
Zeldin
Zinke
NOT VOTING--13
Barletta
Clay
Farr
Fincher
Franks (AZ)
Hardy
Herrera Beutler
Hinojosa
Lieu, Ted
Luetkemeyer
Payne
Sires
Takai
{time} 1811
Messrs. AUSTIN SCOTT of Georgia, NUGENT, and Ms. GRANGER changed
their vote from ``aye'' to ``no.''
Mr. NOLAN changed his vote from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
The Acting CHAIR. The question is on the amendment in the nature of
the substitute, as amended.
The amendment was agreed to.
The Acting CHAIR. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Dold) having assumed the chair, Mr. Collins of Georgia, Acting Chair of
the Committee of the Whole House on the state of the Union, reported
that that Committee, having had under consideration the bill (H.R.
5278) to establish an Oversight Board to assist the Government of
Puerto Rico, including instrumentalities, in managing its public
finances, and for other purposes, and, pursuant to House Resolution
770, he reported the bill back to the House with an amendment adopted
in the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment to the amendment
reported from the Committee of the Whole? If not, the question is on
adoption of the amendment in the nature of a substitute, as amended.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. BISHOP of Utah. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 5-
minute vote on passage will be followed by a 5-minute vote on agreeing
to the Speaker's approval of the Journal, if ordered.
The vote was taken by electronic device, and there were--ayes 297,
noes 127, not voting 11, as follows:
[Roll No. 288]
AYES--297
Adams
Aguilar
Amodei
Barton
Bass
Beatty
Benishek
Bera
Beyer
Bishop (GA)
Bishop (MI)
Bishop (UT)
Blumenauer
Bonamici
Bost
Brady (TX)
Brooks (IN)
Brown (FL)
Brownley (CA)
Buchanan
Bucshon
Bustos
Butterfield
Byrne
Calvert
Capps
Capuano
Cardenas
Carney
Carson (IN)
Carter (GA)
Cartwright
Castor (FL)
Castro (TX)
Chabot
Chaffetz
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Coffman
Cohen
Cole
Collins (GA)
Collins (NY)
Comstock
Conaway
Connolly
Conyers
Cooper
Costa
Costello (PA)
Courtney
Cramer
Crenshaw
Crowley
Cuellar
Culberson
Cummings
Curbelo (FL)
Davis (CA)
DeFazio
DeGette
Delaney
DeLauro
DelBene
Denham
Dent
DeSaulnier
Deutch
Diaz-Balart
Dingell
Doggett
Dold
Donovan
Doyle, Michael F.
Duckworth
Duffy
Duncan (TN)
Edwards
Ellison
Engel
Eshoo
Esty
Fitzpatrick
Fortenberry
Foster
Foxx
Frankel (FL)
Frelinghuysen
Gabbard
Gallego
Garamendi
Garrett
Gibbs
Graham
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Grayson
Green, Al
Green, Gene
Griffith
Grijalva
Grothman
Guthrie
Hahn
Hanna
Harper
Harris
Heck (WA)
Hensarling
Higgins
Hill
Himes
Honda
Hoyer
Huffman
Huizenga (MI)
Hunter
Hurd (TX)
Hurt (VA)
Israel
Jackson Lee
Jeffries
Jenkins (KS)
Johnson (GA)
Johnson (OH)
Johnson, E. B.
Jolly
Kaptur
Katko
Keating
Kelly (IL)
Kennedy
Kildee
Kilmer
Kind
King (NY)
Kinzinger (IL)
Kirkpatrick
Kline
Kuster
Labrador
LaHood
LaMalfa
Langevin
Larsen (WA)
Larson (CT)
Latta
Lawrence
Lee
Levin
Lewis
Lipinski
Loebsack
Lofgren
Loudermilk
Love
Lowenthal
Lowey
Lucas
Lujan Grisham (NM)
Lujan, Ben Ray (NM)
Lummis
MacArthur
Maloney, Carolyn
Maloney, Sean
Marchant
Matsui
McCarthy
McCaul
McCollum
McDermott
McGovern
McHenry
McKinley
McNerney
McSally
Meeks
Meng
Moolenaar
Moore
Moulton
Murphy (FL)
Murphy (PA)
Nadler
Napolitano
Neal
Noem
Nugent
Nunes
O'Rourke
Pallone
Pascrell
Paulsen
Pelosi
Perlmutter
Peters
Pingree
Pittenger
Pitts
Pocan
Polis
Posey
Price (NC)
Price, Tom
Quigley
Rangel
Reichert
Ribble
Rice (NY)
Rice (SC)
Roby
Roe (TN)
Rogers (KY)
Rokita
Ros-Lehtinen
Roskam
Ross
Rothfus
Roybal-Allard
Royce
Ruiz
Ruppersberger
Russell
Ryan (WI)
Salmon
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Scalise
Schiff
Schrader
Schweikert
Scott (VA)
Scott, Austin
Scott, David
Sensenbrenner
Serrano
[[Page H3635]]
Sessions
Sewell (AL)
Sherman
Shimkus
Simpson
Sinema
Slaughter
Smith (NE)
Smith (NJ)
Smith (WA)
Stefanik
Stewart
Stivers
Stutzman
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Thompson (PA)
Thornberry
Tipton
Titus
Tonko
Trott
Tsongas
Turner
Upton
Valadao
Van Hollen
Veasey
Velazquez
Visclosky
Wagner
Walden
Walker
Walorski
Walters, Mimi
Watson Coleman
Webster (FL)
Welch
Wenstrup
Westerman
Whitfield
Williams
Wilson (FL)
Wilson (SC)
Womack
Woodall
Yarmuth
Young (AK)
Young (IA)
Young (IN)
Zinke
NOES--127
Abraham
Aderholt
Allen
Amash
Ashford
Babin
Barr
Becerra
Bilirakis
Black
Blackburn
Blum
Boustany
Boyle, Brendan F.
Brady (PA)
Brat
Bridenstine
Brooks (AL)
Buck
Burgess
Carter (TX)
Clawson (FL)
Cook
Crawford
Davidson
Davis, Danny
Davis, Rodney
DeSantis
DesJarlais
Duncan (SC)
Ellmers (NC)
Emmer (MN)
Farenthold
Fattah
Fleischmann
Fleming
Flores
Forbes
Franks (AZ)
Fudge
Gibson
Gohmert
Goodlatte
Gosar
Gowdy
Guinta
Gutierrez
Hartzler
Hastings
Heck (NV)
Hice, Jody B.
Holding
Hudson
Huelskamp
Hultgren
Issa
Jenkins (WV)
Johnson, Sam
Jones
Jordan
Joyce
Kelly (MS)
Kelly (PA)
King (IA)
Knight
Lamborn
Lance
LoBiondo
Long
Lynch
Marino
Massie
McClintock
McMorris Rodgers
Meadows
Meehan
Messer
Mica
Miller (FL)
Miller (MI)
Mooney (WV)
Mullin
Mulvaney
Neugebauer
Newhouse
Nolan
Norcross
Olson
Palazzo
Palmer
Pearce
Perry
Peterson
Poe (TX)
Poliquin
Pompeo
Ratcliffe
Reed
Renacci
Richmond
Rigell
Rogers (AL)
Rohrabacher
Rooney (FL)
Rouzer
Rush
Ryan (OH)
Sanford
Schakowsky
Shuster
Smith (MO)
Smith (TX)
Speier
Tiberi
Torres
Vargas
Vela
Walberg
Walz
Wasserman Schultz
Waters, Maxine
Weber (TX)
Westmoreland
Wittman
Yoder
Yoho
Zeldin
NOT VOTING--11
Barletta
Farr
Fincher
Hardy
Herrera Beutler
Hinojosa
Lieu, Ted
Luetkemeyer
Payne
Sires
Takai
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). There are 2 minutes
remaining.
{time} 1820
Mr. ASHFORD changed his vote from ``aye'' to ``no.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
PERSONAL EXPLANATION
Mr. HARDY. Mr. Speaker, on rollcall No. 283--I would have voted
``yes.'' Rollcall No. 284--I would have voted ``yes.'' Rollcall No.
285--I would have voted ``yes.'' Rollcall No. 286--I would have voted
``yes.'' Rollcall No. 287--I would have voted ``no.'' Rollcall No.
288--I would have voted ``no.''
____________________