[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2328 Enrolled Bill (ENR)]
S.2328
One Hundred Fourteenth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday,
the fourth day of January, two thousand and sixteen
An Act
To reauthorize and amend the National Sea Grant College Program Act, 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.
Sec. 411. Report on territorial debt.
Sec. 412. Expansion of HUBZones in Puerto Rico.
Sec. 413. Determination on debt.
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.
(a) In General.--Except as provided in subsection (b), 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.
(b) Uniformity.--If a court holds invalid any provision of this Act
or the application thereof on the ground that the provision fails to
treat similarly situated territories uniformly, then the court shall,
in granting a remedy, order that the provision of this Act or the
application thereof be extended to any other similarly situated
territory, provided that the legislature of that territory adopts a
resolution signed by the territory's governor requesting the
establishment and organization of a Financial Oversight and Management
Board pursuant to section 101.
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) Puerto rico.--A Financial Oversight and Management Board is
hereby established for Puerto Rico.
(2) 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 shall 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, non-overlapping 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 1, 2016, then the President shall appoint an
individual from the list for the current vacant category by
September 15, 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 Act.
(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 any professionals the
Oversight Board determines necessary 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 until an order approving the Qualifying
Modification has been entered pursuant to section 601(m)(1)(D)
of this Act.
(3) Preexisting voluntary agreements.--Any voluntary agreement
that the territorial government or any territorial instrumentality
has executed before May 18, 2016, with holders of a majority in
amount of Bond Claims that are to be affected by such agreement to
restructure such Bond Claims shall be deemed to be in conformance
with the requirements of this subsection.
(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 a covered territory 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.
(1) Permanent funding.--Within 30 days after the date of
enactment of this Act, the territorial government shall designate a
dedicated funding source, not subject to subsequent legislative
appropriations, sufficient to support the annual expenses of the
Oversight Board as determined in the Oversight Board's sole and
exclusive discretion.
(2)(A) Initial funding.--On the date of establishment of an
Oversight Board in accordance with section 101(b) and on the 5th
day of each month thereafter, the Governor of the covered territory
shall transfer or cause to be transferred the greater of $2,000,000
or such amount as shall be determined by the Oversight Board
pursuant to subsection (a) to a new account established by the
territorial government, which shall be available to and subject to
the exclusive control of the Oversight Board, without any
legislative appropriations of the territorial government.
(B) Termination.--The initial funding requirements under
subparagraph (A) shall terminate upon the territorial government
designating a dedicated funding source not subject to subsequent
legislative appropriations under paragraph (1).
(3) Remission of excess funds.--If the Oversight Board
determines in its sole discretion that any funds transferred under
this subsection exceed the amounts required for the Oversight
Board's operations as established pursuant to subsection (a), any
such excess funds shall be periodically remitted to the territorial
government.
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, on behalf of, or against the Oversight Board, the Oversight Board
shall be represented by such counsel as it may hire or retain so long
as the representation complies with the applicable professional rules
of conduct governing conflicts of interests.
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.--
(A) 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 rescission by the Oversight Board upon appointment
of the Oversight Board's full membership.
(B) Upon appointment of the Oversight Board's full membership,
the Oversight Board may review, and in its sole discretion,
rescind, any law that--
(i) was enacted during the period between, with respect to
Puerto Rico, May 4, 2016; or with respect to any other
territory, 45 days prior to the establishment of the Oversight
Board for such territory, and the date of appointment of all
members and the Chair of the Oversight Board; and
(ii) alters pre-existing priorities of creditors in a
manner outside the ordinary course of business or inconsistent
with the territory's constitution or the laws of the territory
as of, in the case of Puerto Rico, May 4, 2016, or with respect
to any other territory, 45 days prior to the establishment of
the Oversight Board for such territory;
but such rescission shall only be to the extent that the law alters
such priorities.
(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;
(3) implement territorial laws, which are consistent with a
certified Fiscal Plan, that execute Federal requirements and
standards; or
(4) preserve and maintain federally funded mass transportation
assets.
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
that, for each excluded trust or other legal entity, the court
shall, upon the request of any participant or beneficiary of
such trust or entity, at any time after the commencement of the
case, order the appointment of a separate committee of
creditors pursuant to section 1102(a)(2) of title 11, United
States Code; and
(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. The term
``trustee'' as described in this paragraph does not mean the U.S.
Trustee, an official of the United States Trustee Program, which is
a component of the United States Department of Justice.
(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'', ``Chapter 11'', ``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, but whether or not a case has
been or can be commenced under this title--
(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.--
(1) 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.
(2) With respect to paragraph (1), the Oversight Board may
consider, among other things--
(A) the resources of the district court to adjudicate a
case or proceeding; and
(B) the impact on witnesses who may be called in such a
case or proceeding.
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 Claims.--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 claims, which claims are
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 and does not discriminate
unfairly 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) (29 U.S.C. 215(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 one year 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, reduce child poverty, 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.
Not later than 18 months after the date of the enactment of this
Act, 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, which should
be analyzed, 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, or policies that
would not imperil America's homeland and national security, that
could be taken by Congress or the Administration to avert future
indebtedness of territories, while respecting sovereignty and
constitutional parameters.
SEC. 411. REPORT ON TERRITORIAL DEBT.
(a) Report Required.--Not later than one year after the date of the
enactment of this Act, and thereafter not less than once every two
years, the Comptroller General of the United States shall submit to
Congress a report on the public debt of each territory, including--
(1) the historical levels of each territory's public debt,
current amount and composition of each territory's public debt, and
future projections of each territory's public debt;
(2) the historical levels of each territory's revenue, current
amount and composition of each territory's revenue, and future
projections of each territory's revenue;
(3) the drivers and composition of each territory's public
debt;
(4) the effect of Federal laws, mandates, rules, and
regulations on each territory's public debt; and
(5) the ability of each territory to repay it's public debt.
(b) Materials.--The government of each territory shall make
available to the Comptroller General of the United States all materials
necessary to carry out this section.
SEC. 412. EXPANSION OF HUBZONES IN PUERTO RICO.
(a) In General.--
(1) Section 3(p)(4)(A) of the Small Business Act (15 U.S.C.
632(p)(4)(A)) is amended to read as follows:
``(A) Qualified census tract.--
``(i) In general.--The term `qualified census tract'
has the meaning given that term in section 42(d)(5)(B)(ii)
of the Internal Revenue Code of 1986.
``(ii) Exception.--For any metropolitan statistical
area in the Commonwealth of Puerto Rico, the term
`qualified census tract' has the meaning given that term in
section 42(d)(5)(B)(ii) of the Internal Revenue Code of
1986 as applied without regard to subclause (II) of such
section, except that this clause shall only apply--
``(I) 10 years after the date that the
Administrator implements this clause, or
``(II) the date on which the Financial Oversight
and Management Board for the Commonwealth of Puerto
Rico created by the Puerto Rico Oversight, Management,
and Economic Stability Act ceases to exist,
whichever event occurs first.''.
(2) Regulations.--The Administrator of the Small Business
Administration shall issue regulations to implement the amendment
made by paragraph (1) not later than 90 days after the date of the
enactment of this Act.
(b) Improving Oversight.--
(1) Guidance.--Not later than 270 days after the date of the
enactment of this Act, the Administrator of the Small Business
Administration shall develop and implement criteria and guidance on
using a risk-based approach to requesting and verifying information
from entities applying to be designated or recertified as qualified
HUBZone small business concerns (as defined in section 3(p)(5) of
the Small Business Act (15 U.S.C. 632(p)(5))).
(2) Assessment.--Not later 1 year after the date on which the
criteria and guidance described in paragraph (1) is implemented,
the Comptroller General of the United States shall begin an
assessment of such criteria and guidance. Not later than 6 months
after beginning such an assessment, the Comptroller General shall
submit a report to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small Business
of the House of Representatives that includes--
(A) an assessment of the criteria and guidance issued by
the Administrator of the Small Business Administration in
accordance with paragraph (1);
(B) an assessment of the implementation of the criteria and
guidance issued by issued by the Administrator of the Small
Business Administration in accordance with paragraph (1);
(C) an assessment as to whether these measures have
successfully ensured that only qualified HUBZone small business
concerns are participating in the HUBZone program under section
31 of the Small Business Act (15 U.S.C. 657a);
(D) an assessment as to whether the reforms made by the
criteria and guidance implemented under paragraph (1) have
resulted in job creation in the Commonwealth of Puerto Rico;
and
(E) recommendations on how to improve controls in the
HUBZone program.
SEC. 413. DETERMINATION ON DEBT.
Nothing in this Act shall be interpreted to restrict--
(1) the ability of the Puerto Rico Commission for the
Comprehensive Audit of the Public Credit to file its reports; or
(2) the review and consideration of the Puerto Rico
Commission's findings by Puerto Rico's government or an Oversight
Board for Puerto Rico established under section 101.
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 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, solely with respect to a preexisting voluntary
agreement as described in section 104(i)(3) of this Act, such
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 one of the following processes has occurred:
(1) Consultation process.--
(A) 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;
(B) 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); and
(C) 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.
(2) Voluntary agreement process.--The Administrative Supervisor
has issued a certification that--
(A) the requirements set forth in section 104(i)(2) and
section 601(g)(1)(B) 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.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.