[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5278 Reported in House (RH)]
<DOC>
Union Calendar No. 468
114th CONGRESS
2d Session
H. R. 5278
[Report No. 114-602, Part I]
To establish an Oversight Board to assist the Government of Puerto
Rico, including instrumentalities, in managing its public finances, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 18, 2016
Mr. Duffy (for himself, Mr. Bishop of Utah, and Mr. Sensenbrenner)
introduced the following bill; which was referred to the Committee on
Natural Resources, and in addition to the Committees on the Judiciary,
Education and the Workforce, and Small Business, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
June 3, 2016
Reported from the Committee on Natural Resources with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
June 3, 2016
The Committees on the Judiciary, Education and the Workforce, and Small
Business discharged; committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 18,
2016]
_______________________________________________________________________
A BILL
To establish an Oversight Board to assist the Government of Puerto
Rico, including instrumentalities, in managing its public finances, and
for other purposes.
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.
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.
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 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) 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 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 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.
(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.
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 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 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;
(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 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).
(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 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;
(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 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.
Union Calendar No. 468
114th CONGRESS
2d Session
H. R. 5278
[Report No. 114-602, Part I]
_______________________________________________________________________
A BILL
To establish an Oversight Board to assist the Government of Puerto
Rico, including instrumentalities, in managing its public finances, and
for other purposes.
_______________________________________________________________________
June 3, 2016
Reported from the Committee on Natural Resources with an amendment
June 3, 2016
The Committees on the Judiciary, Education and the Workforce, and Small
Business discharged; committed to the Committee of the Whole House on
the State of the Union and ordered to be printed