I 

114TH CONGRESS 

1ST SESSION H. R. 4290 

To provide for certain assistance and reforms relating to the territories, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 18, 2015 

Ms. PELOSI introduced the following bill; which was referred to the Committee 

on the Judiciary 

A BILL 

To provide for certain assistance and reforms relating to 

the territories, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Puerto Rico Emergency Financial Stability Act of 

6 2015’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Effective date. 

Sec. 4. Severability. 


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Sec. 5. Definitions. 

Sec. 6. Automatic stay. 

1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) FINDINGS.—Congress finds the following— 

3 (1) The Commonwealth Government is con4 fronted with a dire fiscal emergency and liquidity 

5 crisis that imminently threatens the welfare of the 

6 people of the Commonwealth, affecting the provision 

7 of essential public services including public safety, 

8 health care, and education that are needed both to 

9 sustain the welfare of the people and the economic 

10 ability of the Commonwealth to address any future 

11 resolution of debts and legal obligations. 

12 (2) A temporary stay on litigation with respect 

13 to debt holders for the Commonwealth is essential to 

14 provide breathing space to the Commonwealth, credi15 tors, and the Congress to determine an orderly proc16 ess for the Commonwealth to address any future res17 olution of legal obligations and to provide the Com18 monwealth a path to sustainable growth; and there19 by, protect the lives of more than 3.5 million Amer20 ican citizens living in the Commonwealth. 

21 (3) The Commonwealth is in a state of fiscal 

22 emergency brought on by, among other things, a 

23 combination of accumulated operating deficits, cash 


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1 shortages, management inefficiencies, and excessive 

2 borrowing. 

3 (4) The Commonwealth Government’s debt is 

4 unusually complex, with eighteen different but inter5 related issuers. 

6 (A) There is an even larger number of 

7 creditor groups, each of which may have diver8 gent interests. 

9 (B) The debt’s unusual complexity will 

10 substantially complicate any potential consen11 sual restructuring in the absence of Federal leg12 islation to facilitate the negotiations. 

13 (5) This legislation, which includes a stay on 

14 litigation by debt holders, can protect essential gov15 ernment services and help the Commonwealth ad16 dress its liabilities in an orderly fashion, benefitting 

17 all stakeholders. 

18 (A) A temporary stay on litigation is es19 sential to facilitate an orderly process for stabi20 lizing, evaluating, and comprehensively resolv21 ing the Commonwealth’s fiscal crisis. 

22 (B) Avoiding a disorderly race to the 

23 courthouse will benefit creditors as well as other 

24 stakeholders. 


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1 (C) Furthermore, the stay is only tem2 porary. 

3 (b) PURPOSES.—The purposes of this Act are to— 

4 (1) provide a limited period of time to permit 

5 Congress to enact comprehensive relief for the Com6 monwealth, providing it the necessary tools to ad7 dress its economic and fiscal crisis; and 

8 (2) provide the Commonwealth Government 

9 with a tool it needs to address an immediate and im10 minent crisis that is unprecedented in the history of 

11 the United States. 

12 SEC. 3. EFFECTIVE DATE. 

13 This Act shall take effect on the date of the enact14 ment of this Act. 

15 SEC. 4. SEVERABILITY. 

16 If any provision of this Act or the application thereof 

17 to any person or circumstance is held invalid, the remain18 der of this Act, or the application of that provision to per19 sons or circumstances other than those as to which it is 

20 held invalid, is not affected thereby. 

21 SEC. 5. DEFINITIONS. 

22 In this Act: 

23 (1) BOND.—The term ‘‘Bond’’ means a bond, 

24 loan, line of credit, note, or other borrowing title, in 

25 physical or dematerialized form, of which— 


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1 (A) the issuer, borrower, or guarantor is 

2 the Commonwealth Government; and 

3 (B) the date of issuance or incurrence of 

4 debt precedes the date of enactment of this Act. 

5 (2) COMMONWEALTH.—The term ‘‘Common6 wealth’’ means the Commonwealth of Puerto Rico. 

7 (3) COMMONWEALTH GOVERNMENT.—The term 

8 ‘‘Commonwealth Government’’ means the govern9 ment of the Commonwealth of Puerto Rico, includ10 ing all its political subdivisions, public agencies, in11 strumentalities, and public corporations. 

12 (4) COURT.—The term ‘‘court’’ means the 

13 United States District Court for the District of 

14 Puerto Rico. 

15 (5) OTHER TERMS.—Any other term that is 

16 used in section 6 and is defined in title 11, United 

17 States Code, has the same meaning in section 6. 

18 SEC. 6. AUTOMATIC STAY. 

19 (a) Except as otherwise provided in this section, the 

20 enactment of this Act operates with respect to any claim, 

21 debt, or cause of action related to a Bond as a stay, appli22 cable to all entities (as such term is defined in section 101 

23 of title 11, United States Code), of— 

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1 cial, administrative, or other action or proceeding 

2 against the Commonwealth Government or to re3 cover a claim against the Commonwealth Govern4 ment; 

5 (2) the enforcement, against the Commonwealth 

6 Government or against property of the Common7 wealth Government, of a judgment; 

8 (3) any act to obtain possession of property of 

9 the Commonwealth Government or of property from 

10 the Commonwealth Government or to exercise con11 trol over property of the Commonwealth Govern12 ment; 

13 (4) any act to create, perfect, or enforce any 

14 lien against property of the Commonwealth Govern15 ment; 

16 (5) any act to create, perfect, or enforce against 

17 property of the Commonwealth Government any lien 

18 to the extent that such lien secures a claim; 

19 (6) any act to collect, assess, or recover a claim 

20 against the Commonwealth Government; and 

21 (7) the setoff of any debt owing to the Com22 monwealth Government against any claim against 

23 the Commonwealth Government. 

24 (b) The enactment of this Act does not operate as 

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1 ation of, including the issuance or employment of process, 

2 a judicial, administrative, or other action or proceeding 

3 against the Commonwealth Government that was com4 menced on or before the date of enactment of this Act. 

5 (c) Except as provided in subsection (d), (e), or (f), 

6 a stay of an act under subsection (a) shall cease to have 

7 effect as of April 1, 2016. 

8 (d) On motion of a party in interest and after notice 

9 and a hearing, the court may grant relief from a stay 

10 under subsection (a)— 

11 (1) for cause, including the lack of adequate 

12 protection of a security interest in property of such 

13 party in interest; or 

14 (2) with respect to a stay of an act against 

15 property under subsection (a), if— 

16 (A) the debtor does not have an equity in 

17 such property; and 

18 (B) such property is not necessary for the 

19 Commonwealth to provide essential services; 

20 (e) Thirty days after a request under subsection (d) 

21 of this section for relief from the stay of any act against 

22 property of the Commonwealth Government under sub23 section (a) of this section, such stay is terminated with 

24 respect to the party in interest making such request, un25 less the court, after notice and a hearing, orders such stay 


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1 continued in effect pending the conclusion of, or as a re2 sult of, a final hearing and determination under subsection 

3 (d) of this section. A hearing under this subsection may 

4 be a preliminary hearing, or may be consolidated with the 

5 final hearing under subsection (d) of this section. The 

6 court shall order such stay continued in effect pending the 

7 conclusion of the final hearing under subsection (d) of this 

8 section if there is a reasonable likelihood that the party 

9 opposing relief from such stay will prevail at the conclu10 sion of such final hearing. If the hearing under this sub11 section is a preliminary hearing, then such final hearing 

12 shall be concluded not later than 30 days after the conclu13 sion of such preliminary hearing, unless the 30-day period 

14 is extended with the consent of the parties in interest or 

15 for a specific time which the court finds is required by 

16 compelling circumstances. 

17 (f) Upon request of a party in interest, the court, 

18 with or without a hearing, shall grant such relief from the 

19 stay provided under subsection (a) of this section as is 

20 necessary to prevent irreparable damage to the secured in21 terest of an entity in property, if such interest will suffer 

22 such damage before there is an opportunity for notice and 

23 a hearing under subsection (d) or (e) of this section. 

24 (g) No order, judgment, or decree entered in violation 

25 of this section will have any force or effect. 


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1 (h) In any hearing under subsection (d) or (e) con2 cerning relief from a stay— 

3 (1) the party requesting such relief has the bur4 den of proof on the issue of the debtor’s equity in 

5 property; and 

6 (2) the party opposing such relief has the bur7 den of proof on all other issues. 

Æ 


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