PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 549 

Public Law 114–187 

114th Congress 

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. 

Puerto Rico 

Oversight, 

Management, 

and Economic 

Stability Act. 

48 USC 2101 

note. 

June 30, 2016 

[S. 2328] 


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130 STAT. 550 PUBLIC LAW 114–187—JUNE 30, 2016 

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 

Courts. 

48 USC 2102. 

Applicability. 

48 USC 2101. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 551 

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. 

48 USC 2104. 

48 USC 2103. 


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130 STAT. 552 PUBLIC LAW 114–187—JUNE 30, 2016 

(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. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 553 

(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. 

48 USC 2121. 

48 USC 2106. 

48 USC 2105. 


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130 STAT. 554 PUBLIC LAW 114–187—JUNE 30, 2016 

(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; 

President. 

President. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 555 

(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 

Deadline. 

Deadlines. 

Appointments. 

President. 

List. 

President. 

Lists. 


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130 STAT. 556 PUBLIC LAW 114–187—JUNE 30, 2016 

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 

Public 

information. 

Regulations. 

Procedures. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 557 

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. 

Appointment. 

Appointment. 

48 USC 2123. 

48 USC 2122. 


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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 

Definition. 

Public 

information. 

48 USC 2124. 


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(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, 

Determination. 

Public 

information. 

Deadline. 


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130 STAT. 560 PUBLIC LAW 114–187—JUNE 30, 2016 

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. 

Certification. 

Deadline. 


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(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 

48 USC 2125. 

Public 

information. 

Consultation. 

Determination. 


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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 

Deadline. 

48 USC 2127. 

Courts. 

48 USC 2126. 


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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, 

Notice. 

48 USC 2141. 

48 USC 2129. 

48 USC 2128. 

Determination. 


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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 

Recommendations. 

Analysis. 

Estimate. 

Consultation. 


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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. 

Notice. 

Recommendations. 

Determination. 


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130 STAT. 566 PUBLIC LAW 114–187—JUNE 30, 2016 

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 

Notice. 

Consultation. 

Determinations. 

Consultation. 

Notice. 

Certification. 

Time periods. 

Determination. 

48 USC 2142. 


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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 

Time period. 

Notice. 

Certification. 

Determination. 


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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— 

Determinations. 

48 USC 2143. 

Effective date. 

Effective date. 


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(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 


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(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 

Deadline. 

48 USC 2144. 

Contracts. 


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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 

Determination. 


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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 

Analysis. 

Time periods. 

Applicability. 


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(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 

48 USC 2145. 


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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 REC- OMMENDATIONS.—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 

Public 

information. 

Procedures. 

Determination. 

48 USC 2146. 

Deadline. 

Notice. 


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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 

Recommendations. 

48 USC 2148. 

48 USC 2147. 


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(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; 

Study. 

Time period. 

48 USC 2151. 

48 USC 2150. 

Certification. 

48 USC 2149. 


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(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. 

Time period. 

48 USC 2161. 

48 USC 2152. 

Review. 

Review. 


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(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. 

Courts. 


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(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 

Courts. 

48 USC 2164. 

48 USC 2163. 

48 USC 2162. 

Determination. 


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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 incomeproducing 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 

Courts. 

48 USC 2166. 

48 USC 2165. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 581 

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. 

Certification. 


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(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. 

48 USC 2168. 

Determination. 

48 USC 2167. 

Deadline. 

Determination. 


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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 

Plan. 

Courts. 

48 USC 2174. 

48 USC 2173. 

48 USC 2172. 

48 USC 2171. 

48 USC 2170. 

48 USC 2169. 


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(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; 

Courts. 

48 USC 2176. 

48 USC 2175. 


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(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). 

48 USC 2191. 

Time period. 

48 USC 2177. 


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130 STAT. 586 PUBLIC LAW 114–187—JUNE 30, 2016 

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 costof-living differences. 

(c) SENSE OF CONGRESS.—It is the sense of Congress that— 

Determination. 

Assessment. 

48 USC 2193. 

Applicability. 

Time period. 

48 USC 2192. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 587 

(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; 

48 USC 2194. 


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(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.— 

Determination. 

Certification. 

Deadline. 

Time periods. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 589 

(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 

Definition. 

Courts. 

Time periods. 

Notice. 

Courts. 


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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. 

Definition. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 591 

(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 longterm 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; 


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(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.’’. 

48 USC 2195. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 593 

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— 

Time period. 

48 USC 2196. 


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(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— 

48 USC 2198. 

48 USC 2197. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 595 

(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 

Deadlines. 

Reports. 

Deadline. 

Criteria. 

Guidance. 

Deadline. 

15 USC 632 note. 

Applicability. 

Time period. 

Definition. 

48 USC 2199. 


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130 STAT. 596 PUBLIC LAW 114–187—JUNE 30, 2016 

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 

48 USC 2211. 

48 USC 2200. 

Recommendations. 


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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. 

Deadline. 

48 USC 2212. 


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(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; 

48 USC 2213. 

Time period. 

Consultation. 

Deadline. 


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(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 

Deadlines. 

Deadline. 

Consultation. 


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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, 

Time period. 

Recommendations. 

Recommendation. 

Determination. 

Time period. 

Determination. 

Recommendations. 

Assessment. 

Consultation. 


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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 

Consultation. 

Deadline. 

Evaluation. 

48 USC 2214. 


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130 STAT. 602 PUBLIC LAW 114–187—JUNE 30, 2016 

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. 

48 USC 2216. 

Deadline. 

48 USC 2215. 

Public 

information. 

Deadline. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 603 

(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. 

48 USC 2231. 

48 USC 2217. 


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130 STAT. 604 PUBLIC LAW 114–187—JUNE 30, 2016 

(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 

Determination. 

Determination. 


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PUBLIC LAW 114–187—JUNE 30, 2016 130 STAT. 605 

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. 

Consultation. 


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130 STAT. 606 PUBLIC LAW 114–187—JUNE 30, 2016 

(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 

Plan. 

Certification. 


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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 

Consultation. 

Certification. 

Certification. 


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130 STAT. 608 PUBLIC LAW 114–187—JUNE 30, 2016 

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 nonwaivable, 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 

Certification. 


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(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. 

48 USC 2232. 


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130 STAT. 610 PUBLIC LAW 114–187—JUNE 30, 2016 

LEGISLATIVE HISTORY—S. 2328 (H.R. 5278): 

HOUSE REPORTS: No. 114–602, Pt. 1 (Comm. on Natural Resources) accompanying H.R. 5278. 

CONGRESSIONAL RECORD: 

Vol. 161 (2015): Nov. 19, considered and passed Senate. 

Vol. 162 (2016): June 9, considered and passed House, amended, in lieu of 

H.R. 5278. 

June 27, 29, Senate considered and concurred in House 

amendment. 

DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2016): 

June 30, Presidential remarks. 

Æ 

TITLE VII—SENSE OF CONGRESS REGARDING PERMANENT, PRO-GROWTH 

FISCAL REFORMS 

SEC. 701. SENSE OF CONGRESS REGARDING PERMANENT, PROGROWTH 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. 

Approved June 30, 2016. 

48 USC 2241. 


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