Puerto Rico Emergency Financial Stability Act of 2015

Summary: Puerto Rico Emergency Financial Stability Act of 2015 This bill grants a temporary stay (until April 1, 2016, with specified exceptions) of any litigation, liens, or other collection actions to recover debts owed by the government of the Commonwealth of Puerto Rico and allows relief from such stay only in limited circumstances.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Puerto Rico 
Emergency Financial Stability Act of 2015''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Effective date.
Sec. 4. Severability.
Sec. 5. Definitions.
Sec. 6. Automatic stay.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following--
            (1) The Commonwealth Government is confronted with a dire 
        fiscal emergency and liquidity crisis that imminently threatens 
        the welfare of the people of the Commonwealth, affecting the 
        provision of essential public services including public safety, 
        health care, and education that are needed both to sustain the 
        welfare of the people and the economic ability of the 
        Commonwealth to address any future resolution of debts and 
        legal obligations.
            (2) A temporary stay on litigation with respect to debt 
        holders for the Commonwealth is essential to provide breathing 
        space to the Commonwealth, creditors, and the Congress to 
        determine an orderly process for the Commonwealth to address 
        any future resolution of legal obligations and to provide the 
        Commonwealth a path to sustainable growth; and thereby, protect 
        the lives of more than 3.5 million American citizens living in 
        the Commonwealth.
            (3) The Commonwealth is in a state of fiscal emergency 
        brought on by, among other things, a combination of accumulated 
        operating deficits, cash shortages, management inefficiencies, 
        and excessive borrowing.
            (4) The Commonwealth Government's debt is unusually 
        complex, with eighteen different but inter-related issuers.
                    (A) There is an even larger number of creditor 
                groups, each of which may have divergent interests.
                    (B) The debt's unusual complexity will 
                substantially complicate any potential consensual 
                restructuring in the absence of Federal legislation to 
                facilitate the negotiations.
            (5) This legislation, which includes a stay on litigation 
        by debt holders, can protect essential government services and 
        help the Commonwealth address its liabilities in an orderly 
        fashion, benefitting all stakeholders.
                    (A) A temporary stay on litigation is essential to 
                facilitate an orderly process for stabilizing, 
                evaluating, and comprehensively resolving the 
                Commonwealth's fiscal crisis.
                    (B) Avoiding a disorderly race to the courthouse 
                will benefit creditors as well as other stakeholders.
                    (C) Furthermore, the stay is only temporary.
    (b) Purposes.--The purposes of this Act are to--
            (1) provide a limited period of time to permit Congress to 
        enact comprehensive relief for the Commonwealth, providing it 
        the necessary tools to address its economic and fiscal crisis; 
        and
            (2) provide the Commonwealth Government with a tool it 
        needs to address an immediate and imminent crisis that is 
        unprecedented in the history of the United States.

SEC. 3. EFFECTIVE DATE.

    This Act shall take effect on the date of the enactment of this 
Act.

SEC. 4. SEVERABILITY.

    If any provision of this Act or the application thereof to any 
person or circumstance is held invalid, the remainder of this Act, or 
the application of that provision to persons or circumstances other 
than those as to which it is held invalid, is not affected thereby.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Bond.--The term ``Bond'' means a bond, loan, line of 
        credit, note, or other borrowing title, in physical or 
        dematerialized form, of which--
                    (A) the issuer, borrower, or guarantor is the 
                Commonwealth Government; and
                    (B) the date of issuance or incurrence of debt 
                precedes the date of enactment of this Act.
            (2) Commonwealth.--The term ``Commonwealth'' means the 
        Commonwealth of Puerto Rico.
            (3) Commonwealth government.--The term ``Commonwealth 
        Government'' means the government of the Commonwealth of Puerto 
        Rico, including all its political subdivisions, public 
        agencies, instrumentalities, and public corporations.
            (4) Court.--The term ``court'' means the United States 
        District Court for the District of Puerto Rico.
            (5) Other terms.--Any other term that is used in section 6 
        and is defined in title 11, United States Code, has the same 
        meaning in section 6.

SEC. 6. AUTOMATIC STAY.

    (a) Except as otherwise provided in this section, the enactment of 
this Act operates with respect to any claim, debt, or cause of action 
related to a Bond 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 
        Commonwealth Government or to recover a claim against the 
        Commonwealth Government;
            (2) the enforcement, against the Commonwealth Government or 
        against property of the Commonwealth Government, of a judgment;
            (3) any act to obtain possession of property of the 
        Commonwealth Government or of property from the Commonwealth 
        Government or to exercise control over property of the 
        Commonwealth Government;
            (4) any act to create, perfect, or enforce any lien against 
        property of the Commonwealth Government;
            (5) any act to create, perfect, or enforce against property 
        of the Commonwealth Government any lien to the extent that such 
        lien secures a claim;
            (6) any act to collect, assess, or recover a claim against 
        the Commonwealth Government; and
            (7) the setoff of any debt owing to the Commonwealth 
        Government against any claim against the Commonwealth 
        Government.
    (b) The enactment of this Act does not operate as a stay under 
subsection (a) of this section, of the continuation of, including the 
issuance or employment of process, a judicial, administrative, or other 
action or proceeding against the Commonwealth Government that was 
commenced on or before the date of enactment of this Act.
    (c) Except as provided in subsection (d), (e), or (f), a stay of an 
act under subsection (a) shall cease to have effect as of April 1, 
2016.
    (d) On motion of a party in interest and after notice and a 
hearing, the court may grant relief from a stay under subsection (a)--
            (1) for cause, including the lack of adequate protection of 
        a security interest in property of such party in interest; or
            (2) with respect to a stay of an act against property under 
        subsection (a), if--
                    (A) the debtor does not have an equity in such 
                property; and
                    (B) such property is not necessary for the 
                Commonwealth to provide essential services;
    (e) Thirty days after a request under subsection (d) of this 
section for relief from the stay of any act against property of the 
Commonwealth Government under subsection (a) of this section, 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 (d) of this section. A 
hearing under this subsection may be a preliminary hearing, or may be 
consolidated with the final hearing under subsection (d) of this 
section. The court shall order such stay continued in effect pending 
the conclusion of the final hearing under subsection (d) of this 
section 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 30 days after 
the conclusion of such preliminary hearing, unless the 30-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.
    (f) Upon request of a party in interest, the court, with or without 
a hearing, shall grant such relief from the stay provided under 
subsection (a) of this section as is necessary to prevent irreparable 
damage to the secured 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 (d) or (e) of this section.
    (g) No order, judgment, or decree entered in violation of this 
section will have any force or effect.
    (h) In any hearing under subsection (d) or (e) concerning relief 
from a stay--
            (1) the party requesting such relief has the burden of 
        proof on the issue of the debtor's equity in property; and
            (2) the party opposing such relief has the burden of proof 
        on all other issues.