I 

114TH CONGRESS 

2D SESSION H. R. 4900 

To establish an Oversight Board to assist the Government of Puerto Rico, 

including instrumentalities, in managing its public finances, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2016 

Mr. DUFFY introduced the following bill; which was referred to the Committee 

on Natural Resources, and in addition to the Committees on the Judiciary and Education and the Workforce, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To establish an Oversight Board to assist the Government 

of Puerto Rico, including instrumentalities, in managing 

its public finances, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Puerto Rico Oversight, Management, and Economic Sta6 bility Act’’ or ‘‘PROMESA’’. 

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

8 this Act is as follows: 


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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. Territory 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 the 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. 

TITLE III—ADJUSTMENTS OF DEBTS 

Sec. 301. Applicability of other laws; definitions. 

Sec. 302. Who may be a debtor. 

Sec. 303. Reservation of territorial power to control territory and territorial instrumentalities. 

Sec. 304. Petition and proceedings relating to petition. 

Sec. 305. Limitation on jurisdiction and powers of court. 

Sec. 306. Jurisdiction. 

Sec. 307. Venue. 

Sec. 308. Jurisdiction; removal; appeals. 

Sec. 309. Appellate review. 

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. 

TITLE IV—MISCELLANEOUS PROVISIONS 


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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. Land conveyance authority, Vieques National Wildlife Refuge, 

Vieques Island. 

Sec. 406. Automatic stay upon enactment. 

Sec. 407. Purchases by territory governments. 

Sec. 408. Intervention in litigation. 

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. 

1 SEC. 2. EFFECTIVE DATE. 

2 (a) IN GENERAL.—Except as provided in subsection 

3 (b), this Act shall take effect on the date of the enactment 

4 of this Act. 

5 (b) TITLE III.—Title III shall apply with respect 

6 to— 

7 (1) cases commenced under title III on or after 

8 the date of the enactment of this Act; and 

9 (2) debts, claims, and liens (as such terms are 

10 defined in section 101 of title 11, United States 

11 Code) created before, on, or after such date. 

12 SEC. 3. SEVERABILITY. 

13 If any provision of this Act or the application thereof 

14 to any person or circumstance is held invalid, the remain15 der of this Act, or the application of that provision to perVerDate Sep 11 2014 01:46 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 sons or circumstances other than those as to which it is 

2 held invalid, is not affected thereby, provided that title III 

3 is not severable from titles I or II, and titles I or II are 

4 not severable from title III. 

5 SEC. 4. SUPREMACY. 

6 The provisions of this Act shall prevail over any gen7 eral or specific provisions of territory law or regulation 

8 that is inconsistent with this Act. 

9 SEC. 5. DEFINITIONS. 

10 In this Act— 

11 (1) AGREED ACCOUNTING STANDARDS.—The 

12 term ‘‘agreed accounting standards’’ means modified 

13 accrual accounting standards or, for any period dur14 ing which the Board determines in its sole discretion 

15 that a territorial government is not reasonably capa16 ble of comprehensive reporting that complies with 

17 modified accrual accounting standards, such other 

18 accounting standards as proposed by the Board. 

19 (2) BOND.—The term ‘‘Bond’’ means a bond, 

20 loan, letter of credit, other borrowing title, obligation 

21 of insurance, or other indebtedness, including rights, 

22 entitlements, or obligations whether such rights, en23 titlements, or obligations arise from contract, stat24 ute, or any other source of law, in any case, related 

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1 rowing title, obligation of insurance, or other indebt2 edness in physical or dematerialized form, of 

3 which— 

4 (A) the issuer, obligor, or guarantor is the 

5 territorial government; and 

6 (B) the date of issuance or incurrence pre7 cedes the date of enactment of this Act. 

8 (3) BOND CLAIM.—The term ‘‘Bond Claim’’ 

9 means, as it relates to a Bond— 

10 (A) right to payment, whether or not such 

11 right is reduced to judgment, liquidated, unliq12 uidated, fixed, contingent, matured, unmatured, 

13 disputed, undisputed, legal, equitable, secured, 

14 or unsecured; or 

15 (B) right to an equitable remedy for 

16 breach of performance if such breach gives rise 

17 to a right to payment, whether or not such 

18 right to an equitable remedy is reduced to judg19 ment, fixed, contingent, matured, unmatured, 

20 disputed, undisputed, secured, or unsecured. 

21 (4) BUDGET.—The term ‘‘Budget’’ means the 

22 Territory Budget or an Instrumentality Budget, as 

23 applicable. 

24 (5) PUERTO RICO.—The term ‘‘Puerto Rico’’ 

25 means the Commonwealth of Puerto Rico. 


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1 (6) COMPLIANT BUDGET.—The term ‘‘compli2 ant budget’’ means a budget that is prepared in ac3 cordance with— 

4 (A) agreed accounting standards; and 

5 (B) the applicable Fiscal Plan. 

6 (7) COVERED TERRITORIAL INSTRUMEN7 TALITY.—The term ‘‘covered territorial instrumen8 tality’’ means a territorial instrumentality des9 ignated by the Board pursuant to section 101 to be 

10 subject to the requirements of this Act. 

11 (8) COVERED TERRITORY.—The term ‘‘covered 

12 territory’’ means a territory for which a Board has 

13 been established under section 101. 

14 (9) EXECUTIVE DIRECTOR.—The term ‘‘Execu15 tive Director’’ means an Executive Director ap16 pointed under section 103(a). 

17 (10) FISCAL PLAN.—The term ‘‘Fiscal Plan’’ 

18 means a Territory Fiscal Plan or an Instrumentality 

19 Fiscal Plan, as applicable. 

20 (11) GOVERNMENT OF PUERTO RICO.—The 

21 term ‘‘Government of Puerto Rico’’ means the gov22 ernment of the Commonwealth of Puerto Rico, in23 cluding all its territorial instrumentalities. 

24 (12) GOVERNOR.—The term ‘‘Governor’’ means 

25 the chief executive of a covered territory. 


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1 (13) INSTRUMENTALITY BUDGET.—The term 

2 ‘‘Instrumentality Budget’’ means a budget for a cov3 ered territorial instrumentality, designated by the 

4 Board in accordance with section 101, submitted, 

5 approved, and certified in accordance with section 

6 202. 

7 (14) INSTRUMENTALITY FISCAL PLAN.—The 

8 term ‘‘Instrumentality Fiscal Plan’’ means a fiscal 

9 plan for a covered territorial instrumentality, des10 ignated by the Board in accordance with section 

11 101, submitted, approved, and certified in accord12 ance with section 201. 

13 (15) LEGISLATURE.—The term ‘‘Legislature’’ 

14 means the legislative body responsible for enacting 

15 the laws of a covered territory. 

16 (16) MODIFIED ACCRUAL ACCOUNTING STAND17 ARDS.—The term ‘‘modified accrual accounting 

18 standards’’ means recognizing revenues as they be19 come available and measurable and recognizing ex20 penditures when liabilities are incurred, in each case 

21 as defined by the Governmental Accounting Stand22 ards Board, in accordance with generally accepted 

23 accounting principles. 

24 (17) OVERSIGHT BOARD.—The term ‘‘Oversight 

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1 ment Board established in accordance with section 

2 101. 

3 (18) TERRITORIAL GOVERNMENT.—The term 

4 ‘‘territorial government’’ means the government of a 

5 covered territory, including all covered territorial in6 strumentalities. 

7 (19) TERRITORIAL INSTRUMENTALITY.— 

8 (A) IN GENERAL.—The term ‘‘territorial 

9 instrumentality’’ means any political subdivi10 sion, public agency, instrumentality, or public 

11 corporation of a territory, and this term should 

12 be broadly construed to effectuate the purposes 

13 of this Act. 

14 (B) EXCLUSION.—The term ‘‘territorial in15 strumentality’’ does not include an Oversight 

16 Board. 

17 (20) TERRITORY.—The term ‘‘territory’’ 

18 means— 

19 (A) Puerto Rico; 

20 (B) Guam; 

21 (C) American Samoa; 

22 (D) the Commonwealth of the Northern 

23 Mariana Islands; or 

24 (E) the United States Virgin Islands. 


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1 (21) TERRITORY BUDGET.—The term ‘‘Terri2 tory Budget’’ means a budget for a territorial gov3 ernment submitted, approved, and certified in ac4 cordance with section 202. 

5 (22) TERRITORY FISCAL PLAN.—The term 

6 ‘‘Territory Fiscal Plan’’ means a fiscal plan for a 

7 territorial government submitted, approved, and cer8 tified in accordance with section 201. 

9 SEC. 6. PLACEMENT. 

10 The Law Revision Counsel is directed to place this 

11 Act in chapter 4 of title 48, United States Code, as sub12 chapter VIII. 

13 SEC. 7. COMPLIANCE WITH FEDERAL LAWS. 

14 Except as otherwise provided in this Act, nothing in 

15 this Act shall be construed as impairing or in any manner 

16 relieving a territorial government, or any territorial instru17 mentality thereof, from compliance with Federal laws or 

18 requirements protecting the health, safety, and environ19 ment of persons in such territory. 


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1 TITLE I—ESTABLISHMENT AND 

2 ORGANIZATION OF OVER3 SIGHT BOARD 

4 SEC. 101. TERRITORY FINANCIAL OVERSIGHT AND MAN5 AGEMENT BOARD. 

6 (a) PURPOSE.—The purpose of the Oversight Board 

7 is to provide a method to achieve fiscal responsibility and 

8 access to the capital markets. 

9 (b) ESTABLISHMENT.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), a Financial Oversight and Management 

12 Board for a territory is established in accordance 

13 with this section only if the Legislature of the terri14 tory adopts a resolution signed by the Governor re15 questing the establishment. 

16 (2) PUERTO RICO.—Notwithstanding paragraph 

17 (1), a Financial Oversight and Management Board 

18 is hereby established for Puerto Rico. 

19 (3) CONSTITUTIONAL BASIS.—The Congress en20 acts this subsection pursuant to article IV, section 

21 3 of the Constitution of the United States, which 

22 provides Congress the power to dispose of and make 

23 all needful rules and regulations for territories. 

24 (c) TREATMENT.—An Oversight Board established 

25 under this section— 


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1 (1) shall be created as an entity within the ter2 ritorial government for which it is established in ac3 cordance with this title; and 

4 (2) shall not be considered to be a department, 

5 agency, establishment, or instrumentality of the 

6 Federal Government. 

7 (d) OVERSIGHT OF TERRITORIAL INSTRUMENTAL8 ITIES.— 

9 (1) DESIGNATION.— 

10 (A) IN GENERAL.—An Oversight Board, in 

11 its sole discretion at such time as the Oversight 

12 Board determines to be appropriate, may des13 ignate any territorial instrumentality as a cov14 ered territorial instrumentality that is subject 

15 to the requirements of this Act. 

16 (B) BUDGETS AND REPORTS.—The Over17 sight Board may require in its sole discretion 

18 the Governor to submit to the Oversight Board 

19 such budgets and monthly or quarterly reports 

20 regarding a covered territorial instrumentality 

21 as the Oversight Board determines to be nec22 essary and may designate any covered terri23 torial instrumentality to be included in the Ter24 ritory Budget; except that the Oversight Board 

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1 mentality to be included in the Territory Budg2 et if applicable territory law does not require 

3 legislative approval of such covered territorial 

4 instrumentality’s budget. 

5 (C) SEPARATE INSTRUMENTALITY BUDG6 ETS AND REPORTS.—The Oversight Board in 

7 its sole discretion may or, if it requires a budg8 et from a covered territorial instrumentality 

9 whose budget does not require legislative ap10 proval under applicable territory law, must des11 ignate a covered territorial instrumentality to 

12 be the subject of an Instrumentality Budget 

13 separate from the applicable Territory Budget 

14 and require that the Governor develop such an 

15 Instrumentality Budget. 

16 (D) INCLUSION IN TERRITORY FISCAL

17 PLAN.—The Oversight Board may require in its 

18 sole discretion the Governor to include a cov19 ered territorial instrumentality in the applicable 

20 Territory Fiscal Plan. 

21 (E) SEPARATE INSTRUMENTALITY FISCAL

22 PLANS.—The Oversight Board may designate in 

23 its sole discretion a covered territorial instru24 mentality to be the subject of an Instrumen25 tality Fiscal Plan separate from the applicable 


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1 Territory Fiscal Plan and require that the Gov2 ernor develop such an Instrumentality Fiscal 

3 Plan. 

4 (2) EXCLUSION.— 

5 (A) IN GENERAL.—An Oversight Board, in 

6 its sole discretion, at such time as the Oversight 

7 Board determines to be appropriate, may ex8 clude any territorial instrumentality from the 

9 requirements of this Act. 

10 (B) TREATMENT.—A territorial instrumen11 tality excluded pursuant to this paragraph shall 

12 not be considered to be a covered territorial in13 strumentality. 

14 (e) MEMBERSHIP.— 

15 (1) IN GENERAL.—The Oversight Board shall 

16 consist of 7 members appointed by the President 

17 who meet the qualifications described in subsection 

18 (e), except that the Oversight Board may take any 

19 action under this Act (or any amendments made by 

20 this Act) at any time after the President has ap21 pointed 3 of its members. 

22 (2) APPOINTED MEMBERS.—The President 

23 shall appoint the individual members of the Over24 sight Board, of which two individuals should be se25 lected from a list of individuals submitted by the 


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1 Speaker of the House of Representatives; two should 

2 be selected from a list submitted by the Majority 

3 Leader of the Senate; one should be selected from 

4 a list submitted by the Minority Leader of the 

5 House of Representatives; and one should be se6 lected from a list submitted by the Minority Leader 

7 of the Senate. Of the two individuals to be selected 

8 from a list of individuals submitted by the Speaker 

9 of the House of Representatives, one shall maintain 

10 a primary residence in the territory or have a pri11 mary place of business in the territory. 

12 (3) EX OFFICIO MEMBERS.—The Governor, or 

13 the Governor’s designee, shall be an ex officio mem14 ber of the Oversight Board without voting rights. 

15 (4) CHAIR.—The voting members of the Over16 sight Board shall designate one of the voting mem17 bers of the Oversight Board as the Chair of the 

18 Oversight Board (referred to hereafter in this title 

19 as the ‘‘Chair’’). 

20 (5) TERM OF SERVICE.— 

21 (A) IN GENERAL.—Each appointed mem22 ber of the Oversight Board shall be appointed 

23 for a term of 3 years. 


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1 (B) REMOVAL.—The President may re2 move any member of the Oversight Board only 

3 for cause. 

4 (C) CONTINUATION OF SERVICE UNTIL

5 SUCCESSOR APPOINTED.—Upon the expiration 

6 of a term of office, a member of the Oversight 

7 Board may continue to serve until a successor 

8 has been appointed. 

9 (f) ELIGIBILITY FOR APPOINTMENTS.—An individual 

10 is eligible for appointment as a member of the Oversight 

11 Board only if the individual— 

12 (1) has knowledge and expertise in finance, mu13 nicipal bond markets, management, law, or the orga14 nization or operation of business or government; and 

15 (2) is not an officer, elected official, or em16 ployee of the territorial government or a candidate 

17 for elected office of the territorial government. 

18 (g) NO COMPENSATION FOR SERVICE.—Members of 

19 the Oversight Board shall serve without pay, but may re20 ceive reimbursement from the Oversight Board for any 

21 reasonable and necessary expenses incurred by reason of 

22 service on the Oversight Board. 

23 (h) ADOPTION OF BYLAWS FOR CONDUCTING BUSI24 NESS OF OVERSIGHT BOARD.— 


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1 (1) IN GENERAL.—As soon as practicable after 

2 the appointment of its members, the Oversight 

3 Board shall adopt bylaws, rules, and procedures gov4 erning its activities under this Act, including proce5 dures for hiring experts and consultants and conflict 

6 of interest rules. Such bylaws, rules, and procedures 

7 shall be public documents, and shall be submitted by 

8 the Oversight Board upon adoption to the Governor, 

9 the Legislature, the President, and Congress. The 

10 Oversight Board may hire professionals as it deter11 mines to be necessary to carry out this subsection. 

12 (2) ACTIVITIES REQUIRING APPROVAL OF MA13 JORITY OF MEMBERS.—Under the bylaws adopted 

14 pursuant to paragraph (1), the Oversight Board 

15 may conduct its operations under such procedures as 

16 it considers appropriate, except that an affirmative 

17 vote of a majority of the members of the Oversight 

18 Board’s full appointed membership shall be required 

19 in order for the Oversight Board to approve a Fiscal 

20 Plan under section 201, to approve a Budget under 

21 section 202, or to cause a legislative act not to be 

22 enforced under section 204. 

23 (3) ADOPTION OF RULES AND REGULATIONS OF

24 TERRITORIAL GOVERNMENT.—The Oversight Board 

25 may incorporate in its bylaws, rules, and procedures 


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1 under this subsection such rules and regulations of 

2 the territorial government as it considers appro3 priate to enable it to carry out its activities under 

4 this Act with the greatest degree of independence 

5 practicable. 

6 (4) EXECUTIVE SESSION.—Upon a majority 

7 vote of the Oversight Board’s full appointed mem8 bership, the Oversight Board may conduct its busi9 ness in an executive session that consists solely of 

10 the Oversight Board’s appointed members and is 

11 closed to the public, but only for the business items 

12 set forth as part of the vote to convene an executive 

13 session. 

14 SEC. 102. LOCATION OF OVERSIGHT BOARD. 

15 The Oversight Board shall have an office in the cov16 ered territory and additional offices as it sees fit. At any 

17 time, any department or agency of the United States may 

18 provide the Oversight Board use of Federal facilities and 

19 equipment, with partial or no reimbursement, and subject 

20 to such terms and conditions as the head of that depart21 ment or agency may establish. 

22 SEC. 103. EXECUTIVE DIRECTOR AND STAFF OF OVERSIGHT 

23 BOARD. 

24 (a) EXECUTIVE DIRECTOR.—The Oversight Board 

25 shall have an Executive Director who shall be appointed 


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1 by the Chair with the consent of the Oversight Board. The 

2 Executive Director shall be paid at a rate determined by 

3 the Oversight Board. 

4 (b) STAFF.—With the approval of the Chair, the Ex5 ecutive Director may appoint and fix the pay of additional 

6 personnel as the Executive Director considers appropriate, 

7 except that no individual appointed by the Executive Di8 rector may be paid at a rate greater than the rate of pay 

9 for the Executive Director unless the Oversight Board pro10 vides for otherwise. Such personnel may include private 

11 citizens, employees of the Federal Government, or employ12 ees of the territorial government. 

13 (c) INAPPLICABILITY OF CERTAIN EMPLOYMENT

14 AND PROCUREMENT LAWS.— 

15 (1) CIVIL SERVICE LAWS.—The Executive Di16 rector and staff of the Oversight Board may be ap17 pointed without regard to the provisions of title 5, 

18 United States Code, governing appointments in the 

19 competitive service, and paid without regard to the 

20 provisions of chapter 51 and subchapter III of chap21 ter 53 of that title relating to classification and Gen22 eral Schedule pay rates. 

23 (2) COVERED TERRITORY EMPLOYMENT AND

24 PROCUREMENT LAWS.—The Executive Director and 

25 staff of the Oversight Board may be appointed and 


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1 paid without regard to any provision of the laws of 

2 the covered territory governing appointments and 

3 salaries. Any provision of the laws of the covered 

4 territory governing procurement shall not apply to 

5 the Oversight Board. 

6 (d) STAFF OF FEDERAL AGENCIES.—Upon request 

7 of the Chair, the head of any Federal department or agen8 cy may detail, on a reimbursable or nonreimbursable basis, 

9 and in accordance with the Intergovernmental Personnel 

10 Act of 1970 (42 U.S.C. 4701 et seq.), any of the personnel 

11 of that department or agency to the Oversight Board to 

12 assist it in carrying out its duties under this Act. 

13 (e) STAFF OF TERRITORIAL GOVERNMENT.—Upon 

14 request of the Chair, the head of any department or agen15 cy of the covered territory may detail, on a reimbursable 

16 or nonreimbursable basis, any of the personnel of that de17 partment or agency to the Oversight Board to assist it 

18 in carrying out its duties under this Act. 

19 SEC. 104. POWERS OF OVERSIGHT BOARD. 

20 (a) HEARINGS AND SESSIONS.—The Oversight Board 

21 may, for the purpose of carrying out this Act, hold hear22 ings, sit and act at times and places, take testimony, and 

23 receive evidence as the Oversight Board considers appro24 priate. The Oversight Board may administer oaths or af25 firmations to witnesses appearing before it. 


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1 (b) POWERS OF MEMBERS AND AGENTS.—Any mem2 ber or agent of the Oversight Board may, if authorized 

3 by the Oversight Board, take any action that the Over4 sight Board is authorized to take by this section. 

5 (c) OBTAINING OFFICIAL DATA.— 

6 (1) FROM FEDERAL GOVERNMENT.—Notwith7 standing sections 552 (commonly known as the 

8 Freedom of Information Act), 552a (commonly 

9 known as the Privacy Act of 1974), and 552b (com10 monly known as the Government in the Sunshine 

11 Act) of title 5, United States Code, the Oversight 

12 Board may secure directly from any department or 

13 agency of the United States information necessary 

14 to enable it to carry out this Act, with the approval 

15 of the head of that department or agency. 

16 (2) FROM TERRITORIAL GOVERNMENT.—Not17 withstanding any other provision of law, the Over18 sight Board shall have the right to secure copies, 

19 whether written or electronic, of such records, docu20 ments, information, data, or metadata from the ter21 ritorial government necessary to enable the Over22 sight Board to carry out its responsibilities under 

23 this Act. At the request of the Oversight Board, the 

24 Oversight Board shall be granted direct access to 

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1 mation, or data as will enable the Oversight Board 

2 to carry out its responsibilities under this Act. The 

3 head of the entity of the territorial government re4 sponsible shall provide the Oversight Board with 

5 such information and assistance (including granting 

6 the Oversight Board direct access to automated or 

7 other information systems) as the Oversight Board 

8 requires under this paragraph. 

9 (d) GIFTS, BEQUESTS, AND DEVISES.—The Over10 sight Board may accept, use, and dispose of gifts, be11 quests, or devises of services or property, both real and 

12 personal, for the purpose of aiding or facilitating the work 

13 of the Oversight Board. Gifts, bequests, or devises of 

14 money and proceeds from sales of other property received 

15 as gifts, bequests, or devises shall be deposited in such 

16 account as the Oversight Board may establish and shall 

17 be available for disbursement upon order of the Chair, 

18 consistent with the Oversight Board’s bylaws, or rules and 

19 procedures. All gifts, bequests or devises and the identities 

20 of the donors shall be publicly disclosed by the Oversight 

21 Board within 30 days of receipt. 

22 (e) SUBPOENA POWER.— 

23 (1) IN GENERAL.—The Oversight Board may 

24 issue subpoenas requiring the attendance and testi25 mony of witnesses and the production of books, 


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1 records, correspondence, memoranda, papers, docu2 ments, electronic files, metadata, tapes, and mate3 rials of any nature relating to any matter under in4 vestigation by the Oversight Board. The attendance 

5 of witnesses and the production of such materials 

6 may be required from any place within the United 

7 States at any designated place of hearing within the 

8 United States. 

9 (2) FAILURE TO OBEY A SUBPOENA.—If a per10 son refuses to obey a subpoena issued under para11 graph (1), the Oversight Board may apply to the 

12 district court for the district for the covered terri13 tory or, for any territory that does not have a dis14 trict court, to the United States District Court for 

15 the District of Hawaii, for an order requiring that 

16 person to appear before the Oversight Board to give 

17 testimony, produce evidence, or both, relating to the 

18 matter under investigation. Any failure to obey the 

19 order of the court may be punished by the court as 

20 civil contempt. 

21 (3) SERVICE OF SUBPOENAS.—The subpoena of 

22 the Oversight Board shall be served in the manner 

23 provided for subpoenas issued by the district courts 

24 under the Federal Rules of Civil Procedure. 


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1 (f) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 

2 request of the Oversight Board, the Administrator of Gen3 eral Services shall promptly provide to the Oversight 

4 Board, on a reimbursable basis, the administrative sup5 port services necessary for the Oversight Board to carry 

6 out its responsibilities under this Act. 

7 (g) AUTHORITY TO ENTER INTO CONTRACTS.—The 

8 Executive Director may enter into such contracts as the 

9 Executive Director considers appropriate (subject to the 

10 approval of the Chair) consistent with the Oversight 

11 Board’s bylaws, rules, and regulations to carry out the 

12 Oversight Board’s responsibilities under this Act. 

13 (h) AUTHORITY TO ENFORCE CERTAIN LAWS OF

14 THE COVERED TERRITORY.—The Oversight Board shall 

15 ensure the purposes of this Act are met, including by en16 suring the prompt enforcement of any applicable laws of 

17 the covered territory prohibiting public sector employees 

18 from participating in a strike or lockout. In the application 

19 of this subsection, with respect to Puerto Rico, the term 

20 ‘‘applicable laws’’ refers to 3 L.P.R.A. 1451q and 3 

21 L.P.R.A. 1451r. 

22 (i) VOLUNTARY AGREEMENT CERTIFICATION.— 

23 (1) IN GENERAL.—If the Oversight Board de24 termines in its sole discretion that the covered terri25 tory or covered territorial instrumentality has sucVerDate Sep 11 2014 03:36 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 cessfully reached a voluntary agreement with holders 

2 of its debt to restructure such debt in a manner that 

3 provides for a sustainable level of debt for such cov4 ered territory or covered territorial instrumentality 

5 and is in conformance with the certified Fiscal Plan 

6 as applicable— 

7 (A) the Oversight Board shall issue a cer8 tification to the applicable covered territory or 

9 covered territorial instrumentality that the vol10 untary agreement provides for a sustainable 

11 level of debt and is in conformance with the ap12 plicable certified Fiscal Plan; and 

13 (B) the effectiveness of any such voluntary 

14 agreement must be conditioned on the Over15 sight Board delivering the certification de16 scribed in subparagraph (A). 

17 (2) PREEXISTING VOLUNTARY AGREEMENTS.— 

18 Any voluntary agreements that the territorial gov19 ernment has consummated with holders of its debts 

20 to restructure such debt for the territorial govern21 ment prior to the date of enactment of the Act shall 

22 be deemed to be in conformance with the require23 ments of this subsection. 

24 (j) RESTRUCTURING FILINGS.— 


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1 (1) IN GENERAL.—Subject to paragraph (3), 

2 before taking an action described in paragraph (2) 

3 on behalf of a debtor or potential debtor in a case 

4 under title III, the Oversight Board must certify the 

5 action. 

6 (2) ACTIONS DESCRIBED.—The actions referred 

7 to in paragraph (1) are— 

8 (A) the filing of a petition; or 

9 (B) the submission or modification of a 

10 plan of adjustment. 

11 (3) CONDITION FOR PLANS OF ADJUSTMENT.— 

12 The Oversight Board can only certify a plan of ad13 justment only if it is consistent with the applicable 

14 certified Fiscal Plan. 

15 (k) CIVIL ACTIONS TO ENFORCE POWERS.—The 

16 Oversight Board may seek judicial enforcement of its au17 thority to carry out its responsibilities under this Act. 

18 (l) PENALTIES.— 

19 (1) ACTS PROHIBITED.—Any officer or em20 ployee of the territorial government who prepares, 

21 presents, or certifies any information or report for 

22 the Oversight Board or any of its agents that is in23 tentionally false or misleading, or, upon learning 

24 that any such information is false or misleading, 

25 fails to immediately advise the Oversight Board or 


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1 its agents thereof in writing, shall be subject to 

2 prosecution and penalties under any laws of the ter3 ritory prohibiting the provision of false information 

4 to government officials, which in the case of Puerto 

5 Rico, shall include 33 L.P.R.A. 4889. 

6 (2) ADMINISTRATIVE DISCIPLINE.—In addition 

7 to any other applicable penalty, any officer or em8 ployee of the territorial government who knowingly 

9 and willfully violates paragraph (1) or takes any 

10 such action in violation of any valid order of the 

11 Oversight Board or fails or refuses to take any ac12 tion required by any such order, shall be subject to 

13 appropriate administrative discipline, including 

14 (when appropriate) suspension from duty without 

15 pay or removal from office, by order of the Gov16 ernor. 

17 (3) REPORT BY GOVERNOR ON DISCIPLINARY

18 ACTIONS TAKEN.—In the case of a violation of para19 graph (2) by an officer or employee of the territorial 

20 government, the Governor shall immediately report 

21 to the Oversight Board all pertinent facts together 

22 with a statement of the action taken thereon. 

23 SEC. 105. EXEMPTION FROM LIABILITY FOR CLAIMS. 

24 The Oversight Board, its members, and its employees 

25 may not be liable for any obligation of or claim against 


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1 the Oversight Board or its members or employees or the 

2 territorial government resulting from actions taken to 

3 carry out this Act. 

4 SEC. 106. TREATMENT OF ACTIONS ARISING FROM ACT. 

5 (a) JURISDICTION.—Except as provided in section 

6 104(e)(2) (relating to the issuance of an order enforcing 

7 a subpoena), and title III (relating to adjustments of 

8 debts), any action against the Oversight Board, and or 

9 any action otherwise arising out of this Act, in whole or 

10 in part, shall be brought in the United States district 

11 court for the covered territory or, for any covered territory 

12 that does not have a district court, in the United States 

13 District Court for the District of Hawaii. 

14 (b) APPEAL.—Notwithstanding any other provision 

15 of law, any order of the United States District Court that 

16 is issued pursuant to an action brought under subsection 

17 (a) shall be subject to review only pursuant to a notice 

18 of appeal to the applicable United States Court of Ap19 peals. 

20 (c) TIMING OF RELIEF.—Except with respect to any 

21 orders entered to remedy constitutional violations, no 

22 order of any court granting declaratory or injunctive relief 

23 against the Oversight Board, including relief permitting 

24 or requiring the obligation, borrowing, or expenditure of 

25 funds, shall take effect during the pendency of the action 


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1 before such court, during the time appeal may be taken, 

2 or (if appeal is taken) during the period before the court 

3 has entered its final order disposing of such action. 

4 (d) EXPEDITED CONSIDERATION.—It shall be the 

5 duty of the applicable United States District Court, the 

6 applicable United States Court of Appeals, and, as appli7 cable, the Supreme Court of the United States to advance 

8 on the docket and to expedite to the greatest possible ex9 tent the disposition of any matter brought under this Act. 

10 (e) REVIEW OF OVERSIGHT BOARD CERTIFI11 CATIONS.—There shall be no jurisdiction in any United 

12 States district court to review challenges to the Oversight 

13 Board’s certification determinations under this Act. 

14 SEC. 107. BUDGET AND FUNDING FOR OPERATION OF 

15 OVERSIGHT BOARD. 

16 (a) SUBMISSION OF BUDGET.—The Oversight Board 

17 shall submit a budget for each fiscal year during which 

18 the Oversight Board is in operation, to the President, the 

19 House of Representatives Committee on Natural Re20 sources and the Senate Committee on Energy and Natural 

21 Resources, the Governor, and the Legislature. 

22 (b) FUNDING.—The Oversight Board may use its 

23 powers with respect to the Territory Budget of the covered 

24 territory to ensure that sufficient funds are available to 


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1 cover all expenses of the Oversight Board. If the Oversight 

2 Board elects to do so— 

3 (1) the Oversight Board shall submit to the 

4 Governor and the Legislature the budget described 

5 in subsection (a); and 

6 (2) the territorial government shall designate a 

7 dedicated funding source, not subject to subsequent 

8 legislative appropriations, sufficient to support the 

9 annual expenses of the Oversight Board as deter10 mined in the Oversight Board’s sole and exclusive 

11 discretion. 

12 SEC. 108. AUTONOMY OF THE OVERSIGHT BOARD. 

13 (a) IN GENERAL.—Neither the Governor nor the 

14 Legislature may— 

15 (1) exercise any control, supervision, oversight, 

16 or review over the Oversight Board or its activities; 

17 or 

18 (2) enact, implement, or enforce any statute, 

19 resolution, policy, or rule with respect to the Over20 sight Board or its activities. 

21 (b) OVERSIGHT BOARD LEGAL REPRESENTATION.— 

22 In any action brought by or on behalf of the Oversight 

23 Board, and in any action brought by the Oversight Board, 

24 the Oversight Board shall be represented by such counsel 


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1 as it may hire or retain so long as no conflict of interest 

2 exists. 

3 SEC. 109. ETHICS. 

4 All members and staff of the Oversight Board shall 

5 be subject to— 

6 (1) the Federal conflict of interest requirements 

7 described in section 2018 of title 18, United States 

8 Code; and 

9 (2) the financial disclosure requirements under 

10 title I of the Ethics in Government Act of 1978 (5 

11 U.S.C. app.). 

12 TITLE II—RESPONSIBILITIES OF 

13 OVERSIGHT BOARD 

14 SEC. 201. APPROVAL OF FISCAL PLANS. 

15 (a) IN GENERAL.—As soon as practicable after at 

16 least 4 members have been appointed to the Oversight 

17 Board in accordance with section 101(e) in the fiscal year 

18 in which the Oversight Board is established, and in each 

19 fiscal year thereafter during which the Oversight Board 

20 is in operation, the Oversight Board shall deliver a notice 

21 to the Governor providing a schedule for the process of 

22 development, submission, approval, and certification of 

23 Fiscal Plans. The notice may also set forth a schedule for 

24 revisions to any Fiscal Plan that has already been cer25 tified, which revisions must be subject to subsequent apVerDate Sep 11 2014 01:46 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 proval and certification by the Oversight Board. The Over2 sight Board shall consult with the Governor in establishing 

3 a schedule, but the Oversight Board shall retain sole dis4 cretion to set or, by delivery of a subsequent notice to the 

5 Governor, change the dates of such schedule as it deems 

6 appropriate and reasonably feasible. 

7 (b) REQUIREMENTS.— 

8 (1) IN GENERAL.—A Fiscal Plan developed 

9 under this section shall, with respect to the terri10 torial government or covered territorial instrumen11 tality, endeavor to provide a method to achieve fiscal 

12 responsibility and access to the capital markets, 

13 and— 

14 (A) provide for estimates of revenues and 

15 expenditures in conformance with agreed ac16 counting standards and be based on— 

17 (i) applicable laws; or 

18 (ii) specific bills that require enact19 ment in order to reasonably achieve the 

20 projections of the Fiscal Plan; 

21 (B) ensure the funding of essential public 

22 services; 

23 (C) provide adequate funding for public 

24 pension systems; 


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1 (D) provide for the elimination of struc2 tural deficits; 

3 (E) for fiscal years covered by a Fiscal 

4 Plan in which a stay under titles III or IV is 

5 not effective, provide for a debt burden that is 

6 sustainable; 

7 (F) improve fiscal governance, account8 ability, and internal controls; 

9 (G) enable the achievement of fiscal tar10 gets; 

11 (H) create independent forecasts of rev12 enue for the period covered by the Fiscal Plan; 

13 (I) include a debt sustainability analysis; 

14 (J) provide for capital expenditures and in15 vestments necessary to promote economic 

16 growth; 

17 (K) to greatest extent feasible, adopt rec18 ommendations submitted to the territorial gov19 ernment by the Oversight Board under section 

20 205(a); and 

21 (L) include such additional information as 

22 the Oversight Board deems necessary. 

23 (2) TERM.—A Fiscal Plan developed under this 

24 section shall cover a period of fiscal years as deter25 mined by the Oversight Board in its sole discretion 


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1 but in any case a period of not less than 5 fiscal 

2 years from the fiscal year in which it is certified by 

3 the Oversight Board. 

4 (c) DEVELOPMENT, REVIEW, APPROVAL, AND CER5 TIFICATION OF FISCAL PLAN.— 

6 (1) TIMING REQUIREMENT.—The Governor 

7 may not submit to the Legislature a Territory Budg8 et under section 202 for a fiscal year unless the 

9 Oversight Board has certified the Fiscal Plan for 

10 that fiscal year in accordance with this subsection, 

11 unless the Oversight Board in its sole discretion 

12 waives this requirement. 

13 (2) FISCAL PLAN DEVELOPED BY GOVERNOR.— 

14 The Governor shall submit to the Oversight Board 

15 any proposed Fiscal Plan required by the Oversight 

16 Board by the time specified in the notice delivered 

17 under subsection (a). 

18 (3) REVIEW BY THE OVERSIGHT BOARD.—The 

19 Oversight Board shall review the proposed Fiscal 

20 Plan to determine whether it satisfies the require21 ments set forth in subsection (b) and, if the Over22 sight Board determines in its sole discretion that the 

23 proposed Fiscal Plan— 


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1 (A) satisfies such requirements, the Over2 sight Board shall approve the proposed Fiscal 

3 Plan; or 

4 (B) does not satisfy such requirements, the 

5 Oversight Board shall provide to the Gov6 ernor— 

7 (i) a notice of violation that includes 

8 recommendations for revisions to the appli9 cable Fiscal Plan; and 

10 (ii) an opportunity to correct the vio11 lation in accordance with subsection (d)(1). 

12 (d) REVISED FISCAL PLAN.— 

13 (1) IN GENERAL.—If the Governor receives a 

14 notice of violation under subsection (c)(3), the Gov15 ernor shall submit to the Oversight Board a revised 

16 proposed Fiscal Plan in accordance with subsection 

17 (b) by the time specified in the notice delivered 

18 under subsection (a). The Governor may submit as 

19 many revised Fiscal Plans to the Oversight Board as 

20 the schedule established in the notice delivered under 

21 subsection (a) permits. 

22 (2) DEVELOPMENT BY OVERSIGHT BOARD.—If 

23 the Governor fails to submit to the Oversight Board 

24 a Fiscal Plan that the Oversight Board determines 

25 in its sole discretion satisfies the requirements set 


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1 forth in subsection (b) by the time specified in the 

2 notice delivered under subsection (a), the Oversight 

3 Board shall develop and submit to the Governor and 

4 the Legislature a Fiscal Plan that satisfies the re5 quirements set forth in subsection (b). 

6 (e) APPROVAL AND CERTIFICATION.— 

7 (1) APPROVAL OF FISCAL PLAN DEVELOPED BY

8 GOVERNOR.—If the Oversight Board approves a Fis9 cal Plan under subsection (c)(3), it shall deliver a 

10 compliance certification for such Fiscal Plan to the 

11 Governor and the Legislature. 

12 (2) DEEMED APPROVAL OF FISCAL PLAN DE13 VELOPED BY OVERSIGHT BOARD.—If the Oversight 

14 Board approves a Fiscal Plan under subsection 

15 (d)(2), such Fiscal Plan shall be deemed approved 

16 by the Governor, and the Oversight Board shall 

17 issue a compliance certification for such Fiscal Plan 

18 to the Governor and the Legislature. 

19 (f) JOINT DEVELOPMENT OF FISCAL PLAN.—Not20 withstanding any other provision of this section, if the 

21 Governor and the Oversight Board jointly develop a Fiscal 

22 Plan for the fiscal year that meets the requirements under 

23 this section, and that the Governor and the Oversight 

24 Board certify that the fiscal plan reflects a consensus be25 tween the Governor and the Oversight Board, then such 


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1 Fiscal Plan shall serve as the Fiscal Plan for the territory 

2 or territorial instrumentality for that fiscal year. 

3 SEC. 202. APPROVAL OF BUDGETS. 

4 (a) REASONABLE SCHEDULE FOR DEVELOPMENT OF

5 BUDGETS.—As soon as practicable after at least 4 mem6 bers have been appointed to the Oversight Board in the 

7 fiscal year in which the Oversight Board is established, 

8 and in each fiscal year thereafter during which the Over9 sight Board is in operation, the Oversight Board shall de10 liver a notice to the Governor and the Legislature pro11 viding a schedule for developing, submitting, approving, 

12 and certifying Budgets for a period of fiscal years as de13 termined by the Oversight Board in its sole discretion but 

14 in any case a period of not less than one fiscal year fol15 lowing the fiscal year in which the notice is delivered. The 

16 notice may also set forth a schedule for revisions to Budg17 ets that have already been certified, which revisions must 

18 be subject to subsequent approval and certification by the 

19 Oversight Board. The Oversight Board shall consult with 

20 the Governor and the Legislature in establishing a sched21 ule, but the Oversight Board shall retain sole discretion 

22 to set or, by delivery of a subsequent notice to the Gov23 ernor and the Legislature, change the dates of such sched24 ule as it deems appropriate and reasonably feasible. 


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1 (b) REVENUE FORECAST.—The Oversight Board 

2 shall submit to the Governor and Legislature a forecast 

3 of revenues for the period covered by the Budgets by the 

4 time specified in the notice delivered under subsection (a), 

5 for use by the Governor in developing the Budget under 

6 subsection (c). 

7 (c) BUDGETS DEVELOPED BY GOVERNOR.— 

8 (1) GOVERNOR’S PROPOSED BUDGETS.—The 

9 Governor shall submit to the Oversight Board pro10 posed Budgets by the time specified in the notice de11 livered under subsection (a). In consultation with the 

12 Governor in accordance with the process specified in 

13 the notice delivered under subsection (a), the Over14 sight Board shall determine in its sole discretion 

15 whether each proposed Budget is compliant with the 

16 applicable Fiscal Plan and— 

17 (A) if a proposed Budget is a compliant 

18 budget, the Oversight Board shall— 

19 (i) approve the Budget; and 

20 (ii) if the Budget is a Territory Budg21 et, submit the Territory Budget to the 

22 Legislature; or 

23 (B) if the Oversight Board determines that 

24 the Budget is not a compliant budget, the Over25 sight Board shall provide to the Governor— 


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1 (i) a notice of violation that includes 

2 a description of any necessary corrective 

3 action; and 

4 (ii) an opportunity to correct the vio5 lation in accordance with paragraph (2). 

6 (2) GOVERNOR’S REVISIONS.—The Governor 

7 may correct any violations identified by the Over8 sight Board and submit a revised proposed Budget 

9 to the Oversight Board in accordance with para10 graph (1). The Governor may submit as many re11 vised Budgets to the Oversight Board as the sched12 ule established in the notice delivered under sub13 section (a) permits. If the Governor fails to develop 

14 a Budget that the Oversight Board determines is a 

15 compliant budget by the time specified in the notice 

16 delivered under subsection (a), the Oversight Board 

17 shall develop and submit to the Governor, in the 

18 case of an Instrumentality Budget, and to the Gov19 ernor and the Legislature, in the case of a Territory 

20 Budget, a revised compliant budget. 

21 (d) BUDGET APPROVAL BY LEGISLATURE.— 

22 (1) LEGISLATURE ADOPTED BUDGET.—The 

23 Legislature shall submit to the Oversight Board the 

24 Territory Budget adopted by the Legislature by the 

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1 section (a). The Oversight Board shall determine 

2 whether the adopted Territory Budget is a compliant 

3 budget and— 

4 (A) if the adopted Territory Budget is a 

5 compliant budget, the Oversight Board shall 

6 issue a compliance certification for such compli7 ant budget pursuant to subsection (e); and 

8 (B) if the adopted Territory Budget is not 

9 a compliant budget, the Oversight Board shall 

10 provide to the Legislature— 

11 (i) a notice of violation that includes 

12 a description of any necessary corrective 

13 action; and 

14 (ii) an opportunity to correct the vio15 lation in accordance with paragraph (2). 

16 (2) LEGISLATURE’S REVISIONS.—The Legisla17 ture may correct any violations identified by the 

18 Oversight Board and submit a revised Territory 

19 Budget to the Oversight Board in accordance with 

20 the process established under paragraph (1) and by 

21 the time specified in the notice delivered under sub22 section (a). The Legislature may submit as many re23 vised adopted Territory Budgets to the Oversight 

24 Board as the schedule established in the notice deliv25 ered under subsection (a) permits. If the Legislature 


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1 fails to adopt a Territory Budget that the Oversight 

2 Board determines is a compliant budget by the time 

3 specified in the notice delivered under subsection (a), 

4 the Oversight Board shall develop a revised Terri5 tory Budget that is a compliant budget and submit 

6 it to the Governor and the Legislature. 

7 (e) CERTIFICATION OF BUDGETS.— 

8 (1) CERTIFICATION OF DEVELOPED AND AP9 PROVED TERRITORY BUDGETS.—If the Governor and 

10 the Legislature develop and approve a Territory 

11 Budget that is a compliant budget by the day before 

12 the first day of the fiscal year for which the Terri13 tory Budget is being developed and in accordance 

14 with the process established under subsections (c) 

15 and (d), the Oversight Board shall issue a compli16 ance certification to the Governor and the Legisla17 ture for such Territory Budget. 

18 (2) CERTIFICATION OF DEVELOPED INSTRU19 MENTALITY BUDGETS.—If the Governor develops an 

20 Instrumentality Budget that is a compliant budget 

21 by the day before the first day of the fiscal year for 

22 which the Instrumentality Budget is being developed 

23 and in accordance with the process established under 

24 subsection (c), the Oversight Board shall issue a 


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1 compliance certification to the Governor for such In2 strumentality Budget. 

3 (3) DEEMED CERTIFICATION OF TERRITORY

4 BUDGETS.—If the Governor and the Legislature fail 

5 to develop and approve a Territory Budget that is 

6 a compliant budget by the day before the first day 

7 of the fiscal year for which the Territory Budget is 

8 being developed, the Oversight Board shall submit a 

9 Budget to the Governor and the Legislature (includ10 ing any revision to the Territory Budget made by 

11 the Oversight Board pursuant to that subsection) 

12 and such Budget shall be— 

13 (A) deemed to be approved by the Gov14 ernor and the Legislature; 

15 (B) the subject of a compliance certifi16 cation issued by the Oversight Board to the 

17 Governor and the Legislature; and 

18 (C) in full force and effect beginning on 

19 the first day of the applicable fiscal year. 

20 (4) DEEMED CERTIFICATION OF INSTRUMEN21 TALITY BUDGETS.—If the Governor fails to develop 

22 an Instrumentality Budget that is a compliant budg23 et by the day before the first day of the fiscal year 

24 for which the Instrumentality Budget is being devel25 oped, the Oversight Board shall submit an InstruVerDate Sep 11 2014 01:46 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 mentality Budget to the Governor (including any re2 vision to the Territory Budget made by the Over3 sight Board pursuant to that subsection) and such 

4 Budget shall be— 

5 (A) deemed to be approved by the Gov6 ernor; 

7 (B) the subject of a compliance certifi8 cation issued by the Oversight Board to the 

9 Governor; and 

10 (C) in full force and effect beginning on 

11 the first day of the applicable fiscal year. 

12 (f) JOINT DEVELOPMENT OF BUDGETS.—Notwith13 standing any other provision of this section, if, in the case 

14 of a Territory Budget, the Governor, the Legislature, and 

15 the Oversight Board, or in the case of an Instrumentality 

16 Budget, the Governor and the Oversight Board, jointly de17 velop such Budget for the fiscal year that meets the re18 quirements under this section, and that the relevant par19 ties certify reflects a consensus among them, then such 

20 Budget shall serve as the Budget for the territory or terri21 torial instrumentality for that fiscal year. 

22 SEC. 203. EFFECT OF FINDING OF NONCOMPLIANCE WITH 

23 BUDGET. 

24 (a) SUBMISSION OF REPORTS.—Not later than 15 

25 days after the last day of each quarter of a fiscal year 


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1 (beginning with the fiscal year determined by the Over2 sight Board), the Governor shall submit to the Oversight 

3 Board a report, in such form as the Oversight Board may 

4 require, describing— 

5 (1) the actual cash revenues, cash expenditures, 

6 and cash flows of the territorial government for the 

7 preceding quarter, as compared to the projected rev8 enues, expenditures, and cash flows contained in the 

9 certified Budget for such preceding quarter; and 

10 (2) any other information requested by the 

11 Oversight Board, which may include a balance sheet 

12 or a requirement that the Governor provide informa13 tion for each covered territorial instrumentality sep14 arately. 

15 (b) INITIAL ACTION BY OVERSIGHT BOARD.— 

16 (1) IN GENERAL.—If the Oversight Board de17 termines, based on reports submitted by the Gov18 ernor under subsection (a), independent audits, or 

19 such other information as the Oversight Board may 

20 obtain, that the actual quarterly revenues, expendi21 tures, or cash flows of the territorial government are 

22 not consistent with the projected revenues, expendi23 tures, or cash flows set forth in the certified Budget 

24 for such quarter, the Oversight Board shall— 


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1 (A) require the territorial government to 

2 provide such additional information as the 

3 Oversight Board determines to be necessary to 

4 explain the inconsistency; and 

5 (B) if the additional information provided 

6 under subparagraph (A) does not provide an ex7 planation for the inconsistency that the Over8 sight Board finds reasonable and appropriate, 

9 advise the territorial government to correct the 

10 inconsistency by implementing remedial action. 

11 (2) DEADLINES.—The Oversight Board shall 

12 establish the deadlines by which the territorial gov13 ernment shall meet the requirements of subpara14 graphs (A) and (B) of paragraph (1). 

15 (c) CERTIFICATION OF VARIANCE.— 

16 (1) VARIANCE.—If the territorial government 

17 fails to provide additional information under sub18 section (b)(1)(A), or fails to correct a variance under 

19 subsection (b)(1)(B), prior to the applicable deadline 

20 under subsection (b)(2), the Oversight Board shall 

21 certify to the President, the House of Representa22 tives Committee on Natural Resources, the Senate 

23 Committee on Energy and Natural Resources, the 

24 Governor, and the Legislature that the territorial 

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1 tified Budget, and shall describe the nature and 

2 amount of the variance. 

3 (2) CORRECTION OF VARIANCE.—If the Over4 sight Board determines that the territorial govern5 ment has initiated such measures as the Oversight 

6 Board considers sufficient to correct a variance cer7 tified under paragraph (1), the Oversight Board 

8 shall certify the correction to the President, the 

9 House of Representatives Committee on Natural Re10 sources, the Senate Committee on Energy and Nat11 ural Resources, the Governor, and the Legislature. 

12 (d) BUDGET REDUCTIONS BY OVERSIGHT BOARD.— 

13 If the Oversight Board determines that the Governor, in 

14 the case of any then-applicable certified Instrumentality 

15 Budgets, and the Governor and the Legislature, in the 

16 case of the then-applicable certified Territory Budget, 

17 have failed to correct a variance identified by the Over18 sight Board under subsection (c), the Oversight Board 

19 shall— 

20 (1) with respect to the territorial government, 

21 other than covered territorial instrumentalities, 

22 make appropriate reductions in nondebt expendi23 tures to ensure that the actual quarterly revenues 

24 and expenditures for the territorial government are 

25 in compliance with the applicable certified Territory 


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1 Budget or, in the case of the fiscal year in which the 

2 Oversight Board is established, the budget adopted 

3 by the Governor and the Legislature; and 

4 (2) with respect to covered territorial instru5 mentalities at the sole discretion of the Oversight 

6 Board— 

7 (A) make reductions in nondebt expendi8 tures to ensure that the actual quarterly reve9 nues and expenses for the covered territorial in10 strumentality are in compliance with the appli11 cable certified Budget or, in the case of the fis12 cal year in which the Oversight Board is estab13 lished, the budget adopted by the Governor and 

14 the Legislature or the covered territorial instru15 mentality, as applicable; or 

16 (B)(i) institute automatic hiring freezes at 

17 the covered territorial instrumentality; and 

18 (ii) prohibit the covered territorial instru19 mentality from entering into any contract in ex20 cess of $100,000, or engaging in any financial 

21 or other transactions, unless the contract or 

22 transaction was previously approved by the 

23 Oversight Board. 

24 (e) TERMINATION OF BUDGET REDUCTIONS.—The 

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1 section (d) if the Oversight Board determines that the ter2 ritorial government or covered territorial instrumentality, 

3 as applicable, has initiated appropriate measures to reduce 

4 expenditures or increase revenues to ensure that the terri5 torial government or covered territorial instrumentality is 

6 in compliance with the applicable certified Budget or, in 

7 the case of the fiscal year in which the Oversight Board 

8 is established, the budget adopted by the Governor and 

9 the Legislature. 

10 SEC. 204. REVIEW OF ACTIVITIES TO ENSURE COMPLIANCE 

11 WITH FISCAL PLAN. 

12 (a) SUBMISSION OF LEGISLATIVE ACTS TO OVER13 SIGHT BOARD.— 

14 (1) SUBMISSION OF ACTS.—Except to the ex15 tent that the Oversight Board may provide otherwise 

16 in its bylaws, rules, and procedures, not later than 

17 7 business days after a territorial government duly 

18 enacts any law during any fiscal year in which the 

19 Oversight Board is in operation, the Governor shall 

20 submit the law to the Oversight Board. 

21 (2) COST ESTIMATE; CERTIFICATION OF COM22 PLIANCE OR NONCOMPLIANCE.—The Governor shall 

23 include with each law submitted to the Oversight 

24 Board under paragraph (1) the following: 


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1 (A) A formal estimate prepared by an ap2 propriate entity of the territorial government 

3 with expertise in budgets and financial manage4 ment of the impact, if any, that the law will 

5 have on expenditures and revenues. 

6 (B) If the appropriate entity described in 

7 subparagraph (A) finds that the law is not sig8 nificantly inconsistent with the Fiscal Plan for 

9 the fiscal year, it shall issue a certification of 

10 such finding. 

11 (C) If the appropriate entity described in 

12 subparagraph (A) finds that the law is signifi13 cantly inconsistent with the Fiscal Plan for the 

14 fiscal year, it shall issue a certification of such 

15 finding, together with the entity’s reasons for 

16 such finding. 

17 (3) NOTIFICATION.—The Oversight Board shall 

18 send a notification to the Governor and the Legisla19 ture if— 

20 (A) the Governor submits a law to the 

21 Oversight Board under this subsection that is 

22 not accompanied by the estimate required under 

23 paragraph (2)(A); 

24 (B) the Governor submits a law to the 

25 Oversight Board under this subsection that is 


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1 not accompanied by either a certification de2 scribed in paragraph (2)(B) or (2)(C); or 

3 (C) the Governor submits a law to the 

4 Oversight Board under this subsection that is 

5 accompanied by a certification described in 

6 paragraph (2)(C) that the law is significantly 

7 inconsistent with the Fiscal Plan. 

8 (4) OPPORTUNITY TO RESPOND TO NOTIFICA9 TION.— 

10 (A) FAILURE TO PROVIDE ESTIMATE OR

11 CERTIFICATION.—After sending a notification 

12 to the Governor and the Legislature under 

13 paragraph (3)(A) or (3)(B) with respect to a 

14 law, the Oversight Board may direct the Gov15 ernor to provide the missing estimate or certifi16 cation (as the case may be), in accordance with 

17 such procedures as the Oversight Board may 

18 establish. 

19 (B) SUBMISSION OF CERTIFICATION OF

20 SIGNIFICANT INCONSISTENCY WITH FISCAL

21 PLAN AND BUDGET.—In accordance with such 

22 procedures as the Oversight Board may estab23 lish, after sending a notification to the Gov24 ernor and Legislature under subparagraph (C) 

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1 consistent with the Fiscal Plan, the Oversight 

2 Board shall direct the territorial government 

3 to— 

4 (i) correct the law to eliminate the in5 consistency; or 

6 (ii) provide an explanation for the in7 consistency that the Oversight Board finds 

8 reasonable and appropriate. 

9 (5) FAILURE TO COMPLY.—If the territorial 

10 government fails to comply with a direction given by 

11 the Oversight Board under paragraph (4) with re12 spect to a law, the Oversight Board may take such 

13 actions as it considers necessary, consistent with this 

14 Act, to ensure that the enactment or enforcement of 

15 the law will not adversely affect the territorial gov16 ernment’s compliance with the Fiscal Plan, including 

17 preventing the enforcement or application of the law. 

18 (6) PRELIMINARY REVIEW OF PROPOSED

19 ACTS.—At the request of the Legislature, the Over20 sight Board may conduct a preliminary review of 

21 proposed legislation before the Legislature to deter22 mine whether the legislation as proposed would be 

23 consistent with the applicable Fiscal Plan under this 

24 subtitle, except that any such preliminary review 

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1 viewing any law subsequently submitted under this 

2 subsection. 

3 (b) EFFECT OF APPROVED FISCAL PLAN ON CON4 TRACTS, RULES, AND REGULATIONS.— 

5 (1) TRANSPARENCY IN CONTRACTING.—The 

6 Oversight Board shall work with a covered terri7 tory’s office of the comptroller or any functionally 

8 equivalent entity to promote compliance with the ap9 plicable law of any covered territory that requires 

10 agencies and instrumentalities of the territorial gov11 ernment to maintain a registry of all contracts exe12 cuted, including amendments thereto, and to remit 

13 a copy to the office of the comptroller for inclusion 

14 in a comprehensive database available to the public; 

15 with respect to Puerto Rico, the term ‘‘applicable 

16 law’’ refers to 2 L.P.R.A. 97. 

17 (2) AUTHORITY TO REVIEW CERTAIN CON18 TRACTS.—The Oversight Board may establish poli19 cies to require prior Oversight Board approval of 

20 certain contracts, including leases, proposed to be 

21 executed by the territorial government, to ensure 

22 such proposed contracts are not inconsistent with 

23 the approved Fiscal Plan. 

24 (3) SENSE OF CONGRESS.—It is the sense of 

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1 sight Board pursuant to paragraph (2) should be de2 signed to make the government contracting process 

3 more effective, to increase the public’s faith in this 

4 process, to make appropriate use of the Oversight 

5 Board’s time and resources, and to avoid creating 

6 any additional bureaucratic obstacles to efficient 

7 contracting. 

8 (4) AUTHORITY TO REVIEW CERTAIN RULES

9 AND REGULATIONS.—The provisions of this para10 graph shall apply with respect to a rule or regulation 

11 proposed to be issued by the Governor (or the head 

12 of any department or agency of the territorial gov13 ernment) in the same manner as such provisions 

14 apply to a contract. 

15 (5) FAILURE TO COMPLY.—If a contract, rule, 

16 or regulation fails to comply with policies established 

17 by the Oversight Board under this subsection, the 

18 Oversight Board may take such actions as it con19 siders necessary to ensure that such contract, rule, 

20 or regulation will not adversely affect the territorial 

21 government’s compliance with the Fiscal Plan, in22 cluding by preventing the execution or enforcement 

23 of the contract, rule, or regulation. 

24 (c) RESTRICTIONS ON REPROGRAMMING OF

25 AMOUNTS IN BUDGET.— 


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1 (1) SUBMISSIONS OF REQUESTS TO OVERSIGHT

2 BOARD.—If the Governor submits a request to the 

3 Legislature for the reprogramming of any amounts 

4 provided in an approved Budget, the Governor shall 

5 submit such request to the Oversight Board, which 

6 shall analyze whether the proposed reprogramming 

7 is significantly inconsistent with the Budget, and 

8 submit its analysis to the Legislature as soon as 

9 practicable after receiving the request. 

10 (2) NO ACTION PERMITTED UNTIL ANALYSIS

11 RECEIVED.—The Legislature may not adopt a re12 programming, and no officer or employee of the ter13 ritorial government may carry out any reprogram14 ming, until the Oversight Board has provided the 

15 Legislature with an analysis that certifies such re16 programming will not be significantly inconsistent 

17 with the Fiscal Plan and Budget. 

18 (d) IMPLEMENTATION OF FEDERAL PROGRAMS.—In 

19 taking actions under this Act, the Oversight Board shall 

20 not exercise applicable authorities to impede territorial ac21 tions taken to— 

22 (1) comply with a court-issued consent decree 

23 with respect to Federal programs; 

24 (2) implement a federally authorized or feder25 ally delegated program; or 


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1 (3) implement territorial laws, which are con2 sistent with a certified fiscal plan, that execute Fed3 eral requirements and standards. 

4 SEC. 205. RECOMMENDATIONS ON FINANCIAL STABILITY 

5 AND MANAGEMENT RESPONSIBILITY. 

6 (a) IN GENERAL.—The Oversight Board may at any 

7 time submit recommendations to the Governor and the 

8 Legislature on actions the territorial government may take 

9 to ensure compliance with the Fiscal Plan, or to otherwise 

10 promote the financial stability, economic growth, manage11 ment responsibility, and service delivery efficiency of the 

12 territorial government, including recommendations relat13 ing to— 

14 (1) the management of the territorial govern15 ment’s financial affairs, including economic fore16 casting and multiyear fiscal forecasting capabilities, 

17 information technology, placing controls on expendi18 tures for personnel, reducing benefit costs, reforming 

19 procurement practices, and placing other controls on 

20 expenditures; 

21 (2) the structural relationship of departments, 

22 agencies, and independent agencies within the terri23 torial government; 


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1 (3) the modification of existing revenue struc2 tures, or the establishment of additional revenue 

3 structures; 

4 (4) the establishment of alternatives for meet5 ing obligations to pay for the pensions of former ter6 ritorial government employees; 

7 (5) modifications or transfers of the types of 

8 services that are the responsibility of, and are deliv9 ered, by the territorial government; 

10 (6) modifications of the types of services that 

11 are delivered by entities other than the territorial 

12 government under alternative service delivery mecha13 nisms (including privatization and commercializa14 tion); 

15 (7) the effects of the territory’s laws and court 

16 orders on the operations of the territorial govern17 ment; 

18 (8) the establishment of a personnel system for 

19 employees of the territorial government that is based 

20 upon employee performance standards; and 

21 (9) the improvement of personnel training and 

22 proficiency, the adjustment of staffing levels, and 

23 the improvement of training and performance of 

24 management and supervisory personnel. 


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1 (b) RESPONSE TO RECOMMENDATIONS BY THE TER2 RITORIAL GOVERNMENT.— 

3 (1) IN GENERAL.—In the case of any rec4 ommendations submitted under subsection (a) that 

5 are within the authority of the territorial govern6 ment to adopt, not later than 90 days after receiving 

7 the recommendations, the Governor or the Legisla8 ture (whichever has the authority to adopt the rec9 ommendation) shall submit a statement to the Over10 sight Board that provides notice as to whether the 

11 territorial government will adopt the recommenda12 tions. 

13 (2) IMPLEMENTATION PLAN REQUIRED FOR

14 ADOPTED RECOMMENDATIONS.—If the Governor or 

15 the Legislature (whichever is applicable) notifies the 

16 Oversight Board under paragraph (1) that the terri17 torial government will adopt any of the recommenda18 tions submitted under subsection (a), the Governor 

19 or the Legislature (whichever is applicable) shall in20 clude in the statement a written plan to implement 

21 the recommendation that includes— 

22 (A) specific performance measures to de23 termine the extent to which the territorial gov24 ernment has adopted the recommendation; and 


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1 (B) a clear and specific timetable pursuant 

2 to which the territorial government will imple3 ment the recommendation. 

4 (3) EXPLANATIONS REQUIRED FOR REC5 OMMENDATIONS NOT ADOPTED.—If the Governor or 

6 the Legislature (whichever is applicable) notifies the 

7 Oversight Board under paragraph (1) that the terri8 torial government will not adopt any recommenda9 tion submitted under subsection (a) that the terri10 torial government has authority to adopt, the Gov11 ernor or the Legislature shall include in the state12 ment explanations for the rejection of the rec13 ommendations, and the Governor or the Legislature 

14 shall submit such statement of explanations to the 

15 President and Congress. 

16 SEC. 206. OVERSIGHT BOARD DUTIES RELATED TO RE17 STRUCTURING. 

18 (a) REQUIREMENTS FOR RESTRUCTURING CERTIFI19 CATION.—The Oversight Board, prior to issuing a restruc20 turing certification regarding an entity, shall determine, 

21 in its sole discretion, that— 

22 (1) the territorial government completed the 

23 process set forth in title VI; 

24 (2) the entity has adopted procedures necessary 

25 to deliver timely audited financial statements and 


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1 draft financial statements and other information suf2 ficient for any interested person to perform due dili3 gence on the entity’s financial condition, which shall 

4 exist in the public domain; 

5 (3) the entity is either a covered territory that 

6 has adopted a fiscal plan certified by the Oversight 

7 Board, a covered territorial instrumentality that is 

8 subject to a territory Fiscal Plan certified by the 

9 Oversight Board, or a covered territorial instrumen10 tality that has adopted an instrumentality Fiscal 

11 Plan certified by the Oversight Board; 

12 (4) only if the entity does not receive, as deter13 mined in the Oversight Board’s sole discretion, 10 

14 percent or more of its revenues from the taxing 

15 power of the government of the covered territory, the 

16 entity is insolvent; and 

17 (5) such appropriate consideration is given to 

18 relative priority of claims as established by law so 

19 that no one group or class of creditors gains an ad20 vantage over any other class in which such advan21 tage did not exist prior to the Oversight Board’s de22 termination. 

23 (b) ISSUANCE OF RESTRUCTURING CERTIFI24 CATION.—The issuance of a restructuring certification 

25 under this section, which shall require no less than a vote 


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1 of 5 members of the Oversight Board in the affirmative, 

2 shall satisfy the requirement set forth in section 302(2) 

3 of this Act. 

4 SEC. 207. OVERSIGHT BOARD AUTHORITY RELATED TO 

5 DEBT ISSUANCE. 

6 For so long as the Oversight Board remains in oper7 ation, no territorial government may, without the prior ap8 proval of the Oversight Board, issue debt or guarantee, 

9 exchange, modify, repurchase, redeem, or enter into simi10 lar transactions with respect to its debt. 

11 SEC. 208. REQUIRED REPORTS. 

12 (a) ANNUAL REPORT.—Not later than 30 days after 

13 the last day of each fiscal year, the Oversight Board shall 

14 submit a report to the President, Congress, the Governor 

15 and the Legislature, describing— 

16 (1) the progress made by the territorial govern17 ment in meeting the objectives of this Act during the 

18 fiscal year; 

19 (2) the assistance provided by the Oversight 

20 Board to the territorial government in meeting the 

21 purposes of this Act during the fiscal year; 

22 (3) recommendations to the President and Con23 gress on changes to this Act or other Federal laws, 

24 or other actions of the Federal Government, that 


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1 would assist the territorial government in complying 

2 with the certified Fiscal Plan; 

3 (4) the precise manner in which funds allocated 

4 to the Oversight Board under section 107 and, as 

5 applicable, section 104(d) have been spent by the 

6 Oversight Board during the fiscal year; and 

7 (5) any other activities of the Oversight Board 

8 during the fiscal year. 

9 (b) REPORT ON DISCRETIONARY TAX ABATEMENT

10 AGREEMENTS.—Within six months of the establishment 

11 of the Oversight Board, the Governor shall submit a report 

12 to the Oversight Board documenting all existing discre13 tionary tax abatement or similar tax relief agreements to 

14 which the territorial government, or any territorial instru15 mentality, is a party, provided that— 

16 (1) nothing in this Act shall be interpreted to 

17 limit the power of the territorial government or any 

18 territorial instrumentality to execute or modify dis19 cretionary tax abatement or similar tax relief agree20 ments, or to enforce compliance with the terms and 

21 conditions of any discretionary tax abatement or 

22 similar tax relief agreement, to which the territorial 

23 government or any territorial instrumentality is a 

24 party; and 


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1 (2) the Members and Staff of the Oversight 

2 Board shall not disclose the contents of the report 

3 described in this subsection, and shall otherwise 

4 comply with all applicable territorial and Federal 

5 laws and regulations regarding the handling of con6 fidential taxpayer information. 

7 SEC. 209. TERMINATION OF OVERSIGHT BOARD. 

8 An Oversight Board shall terminate upon certifi9 cation by the Oversight Board that— 

10 (1) the applicable territorial government has 

11 adequate access to short-term and long-term credit 

12 markets at reasonable interest rates to meet the bor13 rowing needs of the territorial government; and 

14 (2) for at least 4 consecutive fiscal years— 

15 (A) the territorial government has devel16 oped its Budgets in accordance with modified 

17 accrual accounting standards; and 

18 (B) the expenditures made by the terri19 torial government during each fiscal year did 

20 not exceed the revenues of the territorial gov21 ernment during that year, as determined in ac22 cordance with modified accrual accounting 

23 standards. 


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1 SEC. 210. NO FULL FAITH AND CREDIT OF THE UNITED 

2 STATES. 

3 (a) IN GENERAL.—The full faith and credit of the 

4 United States is not pledged for the payment of any prin5 cipal of or interest on any bond, note, or other obligation 

6 issued by the Oversight Board. The United States is not 

7 responsible or liable for the payment of any principal of 

8 or interest on any bond, note, or other obligation issued 

9 by the Oversight Board. 

10 (b) SUBJECT TO APPROPRIATIONS.—Any claim to 

11 which the United States is determined to be liable shall 

12 be subject to appropriations. 

13 SEC. 211. ANALYSIS OF PENSIONS. 

14 (a) DETERMINATION.—If the Oversight Board deter15 mines, in its sole discretion, that a pension system of the 

16 territorial government is materially underfunded, the 

17 Oversight Board shall conduct an analysis prepared by an 

18 independent actuary of such pension system to assist the 

19 Oversight Board in evaluating the fiscal and economic im20 pact of the pension cash flows. 

21 (b) PROVISIONS OF ANALYSIS.—An analysis con22 ducted under subsection (a) shall include— 

23 (1) an actuarial study of the pension liabilities 

24 and funding strategy that includes a forward looking 

25 projection of payments of at least 30 years of benefit 


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1 payments and funding strategy to cover such pay2 ments; 

3 (2) sources of funding to cover such payments; 

4 (3) a review of the existing benefits and their 

5 sustainability; and 

6 (4) a review of the system’s legal structure and 

7 operational arrangements, and any other studies of 

8 the pension system the Oversight Board shall deem 

9 necessary. 

10 (c) SUPPLEMENTARY INFORMATION.—In any case, 

11 the analysis conducted under subsection (a) shall include 

12 information regarding the fair market value and liabilities 

13 using an appropriate discount rate as determined by the 

14 Oversight Board. 

15 TITLE III—ADJUSTMENTS OF 

16 DEBTS 

17 SEC. 301. APPLICABILITY OF OTHER LAWS; DEFINITIONS. 

18 (a) SECTIONS APPLICABLE TO CASES UNDER THIS

19 TITLE.—Sections 101 (except as otherwise provided in 

20 this section), 102, 104, 105, 106, 107, 108, 112, 333, 

21 344, 347(b), 349, 350(b), 351, 361, 362, 364(c), 364(d), 

22 364(e), 364(f), 365, 366, 501, 502, 503, 504, 506, 

23 507(a)(2), 509, 510, 524(a)(1), 524(a)(2), 544, 545, 546, 

24 547, 548, 549(a), 549(c), 549(d), 550, 551, 552, 553, 

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1 wise provided in this section), 922, 923, 924, 925, 926, 

2 927, 928, 942, 944, 945, 946, 1102, 1103, 1109, 1111(b), 

3 1122, 1123(a)(1), 1123(a)(2), 1123(a)(3), 1123(a)(4), 

4 1123(a)(5), 1123(b), 1123(d), 1124, 1125, 1126(a), 

5 1126(b), 1126(c), 1126(e), 1126(f), 1126(g), 1127(d), 

6 1128, 1129(a)(2), 1129(a)(3), 1129(a)(6), 1129(a)(8), 

7 1129(a)(10), 1129(b)(1), 1129(b)(2)(A), 1129(b)(2)(B), 

8 1142(b), 1143, 1144, 1145, and 1146(a) of title 11, 

9 United States Code, apply in a case under this title and 

10 section 930 of title 11, United States Code, applies in a 

11 case under this title; however, section 930 shall not apply 

12 in any case during the first 120 days after the date on 

13 which such case is commenced under this title. 

14 (b) MEANINGS OF TERMS.—A term used in a section 

15 of title 11, United States Code, made applicable in a case 

16 under this title by subsection (a), has the meaning given 

17 to the term for the purpose of the applicable section, un18 less the term is otherwise defined in this title. 

19 (c) DEFINITIONS.—In this title— 

20 (1) AFFILIATE.—The term ‘‘affiliate’’ means, in 

21 addition to the definition made applicable in a case 

22 under this title by subsection (a)— 

23 (A) for a territory, any territorial instru24 mentality; and 


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1 (B) for a territorial instrumentality, the 

2 governing territory and any of the other terri3 torial instrumentalities of the territory. 

4 (2) DEBTOR.—The term ‘‘debtor’’ means the 

5 territory or covered territorial instrumentality con6 cerning which a case under this title has been com7 menced. 

8 (3) PROPERTY OF THE ESTATE.—The term 

9 ‘‘property of the estate’’, when used in a section of 

10 title 11 or 28, United States Code, made applicable 

11 in a case under this title by subsection (a), means 

12 property of the debtor. 

13 (4) STATE.—The term ‘‘State’’ when used in a 

14 section of title 11, United States Code, made appli15 cable in a case under this title by section 301(a) 

16 means State or territory when used in reference to 

17 the relationship of a State to the municipality of the 

18 State or the territorial instrumentality of a territory, 

19 as applicable. 

20 (5) TRUSTEE.—The term ‘‘trustee’’, when used 

21 in a section of title 11, United States Code, made 

22 applicable in a case under this title by subsection 

23 (a), means the Oversight Board. 

24 (d) REFERENCE TO TITLE.—Solely for purposes of 

25 this title, a reference to ‘‘this title’’, ‘‘this chapter’’, or 


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1 words of similar import in a section of title 11, United 

2 States Code, made applicable in a case under this title 

3 by subsection (a) or to ‘‘this title’’, ‘‘title 11’’, ‘‘the Code’’, 

4 or words of similar import in a section of title 28, United 

5 States Code, made applicable in a case under this chapter 

6 by sections 306 or 309 or in the Federal Rules of Bank7 ruptcy Procedure made applicable in a case under this title 

8 by section 310 shall be deemed to be a reference to this 

9 title. 

10 (e) SUBSTANTIALLY SIMILAR.—In determining 

11 whether claims are ‘‘substantially similar’’ for the purpose 

12 of section 1122 of title 11, United States Code, made ap13 plicable in a case under this title by subsection (a), the 

14 Board shall consider whether such claims are secured and 

15 whether such claims have priority over other claims. 

16 (f) OPERATIVE CLAUSES.—A section made applicable 

17 in a case under this title by subsection (a) that is operative 

18 if the business of the debtor is authorized to be operated 

19 is operative in a case under this title. 

20 SEC. 302. WHO MAY BE A DEBTOR. 

21 An entity may be a debtor under this title if— 

22 (1) the entity is— 

23 (A) a territory that has requested the es24 tablishment of an Oversight Board or has had 

25 an Oversight Board established for it by the 


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1 United States Congress in accordance with sec2 tion 101 of this Act; or 

3 (B) a covered territorial instrumentality of 

4 a territory described in paragraph (1)(A); 

5 (2) the Oversight Board has issued a certifi6 cation under section 206(b) for such entity; and 

7 (3) the entity desires to effect a plan to adjust 

8 its debts. 

9 SEC. 303. RESERVATION OF TERRITORIAL POWER TO CON10 TROL TERRITORY AND TERRITORIAL INSTRU11 MENTALITIES. 

12 Subject to the limitations set forth in titles I and II 

13 of this Act, this title does not limit or impair the power 

14 of a territory to control, by legislation or otherwise, the 

15 territory or any territorial instrumentality thereof in the 

16 exercise of the political or governmental powers of the ter17 ritory or territorial instrumentality, including expendi18 tures for such exercise, but— 

19 (1) a territory law prescribing a method of com20 position or moratorium of indebtedness of the terri21 tory or any territorial instrumentality thereof may 

22 not bind any creditor that does not consent to the 

23 composition or moratorium; and 


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1 (2) a judgment entered under a law described 

2 in paragraph (1) may not bind a creditor that does 

3 not consent to the composition. 

4 SEC. 304. PETITION AND PROCEEDINGS RELATING TO PETI5 TION. 

6 (a) COMMENCEMENT OF CASE.—A voluntary case 

7 under this title is commenced by the filing with the district 

8 court of a petition by the Oversight Board pursuant to 

9 the determination under section 302, provided that an oth10 erwise eligible entity may not commence a case under this 

11 chapter after the Oversight Board applicable to such eligi12 ble entity has been terminated in accordance with section 

13 209. 

14 (b) OBJECTION TO PETITION.—After any objection 

15 to the petition, the court, after notice and a hearing, may 

16 dismiss the petition if the petition does not meet the re17 quirements of this title; however, this subsection shall not 

18 apply in any case during the first 120 days after the date 

19 on which such case is commenced under this title. 

20 (c) ORDER FOR RELIEF.—The commencement of a 

21 case under this title constitutes an order for relief. 

22 (d) APPEAL.—The court may not, on account of an 

23 appeal from an order for relief, delay any proceeding 

24 under this title in the case in which the appeal is being 


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1 taken, or order a stay of such proceeding pending such 

2 appeal. 

3 (e) VALIDITY OF DEBT.—The reversal on appeal of 

4 a finding of jurisdiction shall not affect the validity of any 

5 debt incurred that is authorized by the court under section 

6 364(c) or 364(d) of title 11, United States Code. 

7 SEC. 305. LIMITATION ON JURISDICTION AND POWERS OF 

8 COURT. 

9 (a) IN GENERAL.—Subject to the limitations set 

10 forth in titles I and II of this Act, notwithstanding any 

11 power of the court, unless the debtor consents or the plan 

12 so provides, the court may not, by any stay, order, or de13 cree, in the case or otherwise, interfere with— 

14 (1) any of the political or governmental powers 

15 of the debtor; 

16 (2) any of the property or revenues of the debt17 or; or 

18 (3) the use or enjoyment by the debtor of any 

19 income-producing property. 

20 SEC. 306. JURISDICTION. 

21 (a) The district courts shall have original and exclu22 sive jurisdiction of a case under this title. 

23 (b) Section 157 of title 28, United States Code, shall 

24 apply to a case under this title. 


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1 SEC. 307. VENUE. 

2 (a) IN GENERAL.—Venue shall be proper in— 

3 (1) with respect to a territory, the district court 

4 for the territory or, for any territory that does not 

5 have a district court, the United States District 

6 Court for the District of Hawaii; and 

7 (2) with respect to a covered territorial instru8 mentality, the district court for the territory in 

9 which the covered territorial instrumentality is lo10 cated or, for any territory that does not have a dis11 trict court, the United States District Court for the 

12 District of Hawaii. 

13 (b) ALTERNATIVE VENUE.—If the oversight Board 

14 determines that the venue under paragraph (a) will not 

15 adequately provide for proper case management, then 

16 venue shall be proper in the district court for the jurisdic17 tion in which the Oversight Board maintains an office that 

18 is located outside the territory. 

19 SEC. 308. JURISDICTION; REMOVAL; APPEALS. 

20 (a) FEDERAL SUBJECT MATTER JURISDICTION.— 

21 Except as provided in section 306 the district courts shall 

22 have— 

23 (1) except as provided in paragraph (2), the 

24 district court shall have original and exclusive juris25 diction of all cases under this title; 


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1 (2) except as provided in paragraph (3), and 

2 notwithstanding any Act of Congress that confers 

3 exclusive jurisdiction on a court or courts other than 

4 the district courts, the district courts shall have 

5 original but not exclusive jurisdiction of all civil pro6 ceedings arising under this title, or arising in or re7 lated to cases under this title; and 

8 (3) the district court in which a case under this 

9 title is commenced or is pending shall have exclusive 

10 jurisdiction of all property, wherever located, of the 

11 debtor as of the commencement of such case. 

12 (b) PERSONAL JURISDICTION.—The district court in 

13 which a case under this title is pending shall have personal 

14 jurisdiction over any person or entity to the fullest extent 

15 permitted under the Constitution of the United States. 

16 SEC. 309. APPELLATE REVIEW. 

17 Sections 158(a) and (d) of title 28, United States 

18 Code, shall apply to a case under this title. 

19 SEC. 310. APPLICABLE RULES OF PROCEDURE. 

20 The Federal Rules of Bankruptcy Procedure shall 

21 apply to a case under this title and to all civil proceedings 

22 arising in or related to cases under this title. 

23 SEC. 311. LEASES. 

24 A lease to a territory or territorial instrumentality 

25 shall not be treated as an executory contract or unexpired 


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1 lease for the purposes of section 365 or 502(b)(6) of title 

2 11, United States Code, solely by reason of the lease being 

3 subject to termination in the event the debtor fails to ap4 propriate rent. 

5 SEC. 312. FILING OF PLAN OF ADJUSTMENT. 

6 (a) EXCLUSIVITY.—Only the debtor, upon the 

7 issuance of a certification by the Oversight Board pursu8 ant to section 104(j), may file a plan of adjustment of 

9 the debts of the debtor. 

10 (b) DEADLINE FOR FILING PLAN.—If the debtor 

11 does not file a plan of adjustment with the petition, the 

12 debtor shall file a plan of adjustment at the time set by 

13 the court. 

14 SEC. 313. MODIFICATION OF PLAN. 

15 The debtor, upon the issuance of a certification by 

16 the Oversight Board pursuant to section 104(j), may mod17 ify the plan at any time before confirmation, but may not 

18 modify the plan so that the plan as modified fails to meet 

19 the requirements of this title. After the debtor files a 

20 modification, the plan as modified becomes the plan. 

21 SEC. 314. CONFIRMATION. 

22 (a) OBJECTION.—A special tax payer may object to 

23 confirmation of a plan. 

24 (b) CONFIRMATION.—The court shall confirm the 

25 plan if— 


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1 (1) the plan complies with the provisions of title 

2 11 of the United States Code, made applicable to a 

3 case under this title by section 301; 

4 (2) the plan complies with the provisions of this 

5 title; 

6 (3) the debtor is not prohibited by law from 

7 taking any action necessary to carry out the plan; 

8 (4) except to the extent that the holder of a 

9 particular claim has agreed to a different treatment 

10 of such claim, the plan provides that on the effective 

11 date of the plan each holder of a claim of a kind 

12 specified in 507(a)(2) of title 11, United States 

13 Code, will receive on account of such claim cash 

14 equal to the allowed amount of such claim; 

15 (5) any legislative, regulatory, or electoral ap16 proval necessary under applicable law in order to 

17 carry out any provision of the plan has been ob18 tained, or such provision is expressly conditioned on 

19 such approval; 

20 (6) the plan is in the best interests of creditors 

21 and is feasible; 

22 (7) the plan is consistent with the applicable 

23 Fiscal Plan certified by the Oversight Board under 

24 title II; and 


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1 (8) all amounts to be paid by the debtor or any 

2 person for services or expenses in the case or inci3 dent to the plan have been fully disclosed and are 

4 reasonable. 

5 SEC. 315. ROLE AND CAPACITY OF OVERSIGHT BOARD. 

6 (a) ACTIONS OF OVERSIGHT BOARD.—Subject to sec7 tions 303 and 307, for the purposes of this title, the Over8 sight Board may take any action necessary on behalf of 

9 the debtor to prosecute the case of the debtor, including— 

10 (1) filing a petition under section 304; 

11 (2) submitting or modifying a plan of adjust12 ment under sections 312 and 313; or 

13 (3) otherwise generally submitting filings in re14 lation to the case with the court. 

15 (b) REPRESENTATIVE OF DEBTOR.—The Oversight 

16 Board in a case under this title is the representative of 

17 the debtor. 

18 TITLE IV—MISCELLANEOUS 

19 PROVISIONS 

20 SEC. 401. RULES OF CONSTRUCTION. 

21 Nothing in this Act is intended, or may be con22 strued— 

23 (1) to limit the authority of Congress to exer24 cise ultimate legislative authority over the territories; 


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1 (2) to authorize the application of section 

2 103(e) of this Act (relating to issuance of sub3 poenas) to judicial officers or employees of territory 

4 courts; 

5 (3) to alter, amend, or abrogate any provision 

6 of the Covenant To Establish a Commonwealth of 

7 the Northern Mariana Islands in Political Union 

8 With the United States of America (48 U.S.C. 1801 

9 et seq.); or 

10 (4) to alter, amend, or abrogate the treaties of 

11 cession regarding certain islands of American Samoa 

12 (48 U.S.C. 1661). 

13 SEC. 402. RIGHT OF PUERTO RICO TO DETERMINE ITS FU14 TURE POLITICAL STATUS. 

15 Nothing in this Act shall be interpreted to restrict 

16 Puerto Rico’s right to determine its future political status, 

17 including by conducting the plebiscite as authorized by 

18 Public Law 113–76. 

19 SEC. 403. FIRST MINIMUM WAGE IN PUERTO RICO. 

20 Section 6(g) of the Fair Labor Standards Act of 

21 1938 (29 U.S.C. 206(g)) is amended— 

22 (1) in paragraph (1)— 

23 (A) by striking ‘‘subsection (a)(1), any em24 ployer’’ and inserting ‘‘subsection (a)(1)— 

25 ‘‘(A) any employer’’; 


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1 (B) by striking the period at the end and 

2 inserting ‘‘; and’’; and 

3 (C) by adding at the end the following: 

4 ‘‘(B) the Governor of Puerto Rico, subject 

5 to the approval of the Financial Oversight and 

6 Management Board established pursuant to sec7 tion 101 of the Puerto Rico Oversight, Manage8 ment, and Economic Stability Act, may des9 ignate a time period not to exceed five years 

10 during which employers in Puerto Rico may pay 

11 employees who are initially employed after the 

12 date of enactment of such Act a wage which is 

13 not less than $4.25 an hour.’’; and 

14 (2) in paragraph (4), by striking ‘‘years’’ and 

15 inserting ‘‘years, except in the case of the wage ap16 plicable in Puerto Rico, 25 years’’. 

17 SEC. 404. APPLICATION OF REGULATION TO PUERTO RICO. 

18 The regulations issued by the Secretary of Labor re19 lating to exemptions regarding the rates of pay for execu20 tive, administrative, professional, outside sales, and com21 puter employees, and published in the Federal Register 

22 on July 6, 2015, shall have no force or effect in the Com23 monwealth of Puerto Rico. 


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1 SEC. 405. LAND CONVEYANCE AUTHORITY, VIEQUES NA2 TIONAL WILDLIFE REFUGE, VIEQUES ISLAND. 

3 Section 1508(c) of the Floyd D. Spence National De4 fense Authorization Act for Fiscal Year 2001 (as enacted 

5 into law by Public Law 106–398; 114 Stat. 1654A–356) 

6 is amended— 

7 (1) by striking ‘‘The Secretary’’ and inserting 

8 the following: 

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), the Secretary’’; and 

11 (2) by adding at the end the following new 

12 paragraph: 

13 ‘‘(2) CONVEYANCE AUTHORITY.— 

14 ‘‘(A) CONVEYANCE AUTHORIZED.—Except 

15 as provided in subparagraph (B), the Secretary 

16 of the Interior is authorized to convey, without 

17 consideration, all or any portion of the Con18 servation Zones transferred to the Secretary 

19 under subsection (a) to the Commonwealth of 

20 Puerto Rico for the purpose specified in sub21 paragraph (B). The conveyance shall be subject 

22 to interests retained pursuant to section 1506 

23 of this Act. 

24 ‘‘(B) CERTAIN LANDS EXCLUDED.—The 

25 conveyance authority provided by this para26 graph does not include the land encompassing 


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1 Solid Waste Management Unit 4, as depicted 

2 on the map of former Naval Ammunition Sup3 port Detachment, Vieques, maintained by the 

4 Naval Facilities Engineering Command. 

5 ‘‘(C) INDEMNIFICATION.—The indem6 nification requirements and conditions specified 

7 in section 1502(e) of this Act shall apply with 

8 respect to the release or threatened release 

9 (after the conveyance is made under this para10 graph) of any hazardous substance or pollutant 

11 or contaminant as a result of Department of 

12 Defense activities on the conveyed property. 

13 ‘‘(D) RELATION TO COOPERATIVE AGREE14 MENT.—The cooperative agreement entered into 

15 under subsection (d)(1) shall no longer apply to 

16 any portion of the Conservation Zones conveyed 

17 by the Secretary of the Interior under this 

18 paragraph. 

19 ‘‘(E) RELATION TO OTHER LAWS.—Noth20 ing in this paragraph shall be construed to af21 fect the continued applicability of section 

22 120(h) of the Comprehensive Environmental 

23 Response, Compensation, and Liability Act of 

24 1980 (42 U.S.C. 9620(h)) and the Endangered 

25 Species Act of 1973 (16 U.S.C. 1531 et seq.) 


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1 to any portion of the Conservation Zones con2 veyed by the Secretary of the Interior under 

3 this paragraph.’’. 

4 SEC. 406. AUTOMATIC STAY UPON ENACTMENT. 

5 (a) DEFINITIONS.—In this section: 

6 (1) LIABILITY.—The term ‘‘Liability’’ means a 

7 bond, loan, letter of credit, other borrowing title, ob8 ligation of insurance, or other indebtedness, includ9 ing rights, entitlements, or obligations whether such 

10 rights, entitlements, or obligations arise from con11 tract, statute, or any other source of law, in any 

12 case, related to such a bond, loan, letter of credit, 

13 other borrowing title, obligation of insurance, or 

14 other indebtedness in physical or dematerialized 

15 form, of which— 

16 (A) the issuer, obligor, or guarantor is the 

17 Government of Puerto Rico; and 

18 (B) the date of issuance or incurrence pre19 cedes the date of enactment of this Act. 

20 (2) LIABILITY CLAIM.—The term ‘‘Liability 

21 Claim’’ means, as it relates to a Liability— 

22 (A) right to payment, whether or not such 

23 right is reduced to judgment, liquidated, unliq24 uidated, fixed, contingent, matured, unmatured, 


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1 disputed, undisputed, legal, equitable, secured, 

2 or unsecured; or 

3 (B) right to an equitable remedy for 

4 breach of performance if such breach gives rise 

5 to a right to payment, whether or not such 

6 right to an equitable remedy is reduced to judg7 ment, fixed, contingent, matured, unmatured, 

8 disputed, undisputed, secured, or unsecured. 

9 (b) IN GENERAL.—Except as provided in subsection 

10 (c) of this section, the establishment of an Oversight 

11 Board for the Commonwealth of Puerto Rico (i.e., the en12 actment of this Act) in accordance with section 101 oper13 ates with respect to a Liability as a stay, applicable to 

14 all entities (as such term is defined in section 101 of title 

15 11, United States Code), of— 

16 (1) the commencement or continuation, includ17 ing the issuance or employment of process, of a judi18 cial, administrative, or other action or proceeding 

19 against the Government of Puerto Rico that was or 

20 could have been commenced before the enactment of 

21 this Act, or to recover a Liability Claim against the 

22 Government of Puerto Rico that arose before the en23 actment of this Act; 

24 (2) the enforcement, against the Government of 

25 Puerto Rico or against property of the Government 


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1 of Puerto Rico, of a judgment obtained before the 

2 enactment of this Act; 

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

4 the Government of Puerto Rico or of property from 

5 the Government of Puerto Rico or to exercise control 

6 over property of the Government of Puerto Rico; 

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

8 lien against property of the Government of Puerto 

9 Rico; 

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

11 property of the Government of Puerto Rico any lien 

12 to the extent that such lien secures a Liability Claim 

13 that arose before the enactment of this Act; 

14 (6) any act to collect, assess, or recover a Li15 ability Claim against the Government of Puerto Rico 

16 that arose before the enactment of this Act; and 

17 (7) the setoff of any debt owing to the Govern18 ment of Puerto Rico that arose before the enactment 

19 of this Act against any Liability Claim against the 

20 Government of Puerto Rico. 

21 (c) STAY NOT OPERABLE.—The establishment of an 

22 Oversight Board for the Commonwealth of Puerto Rico 

23 in accordance with section 101 does not operate as a stay 

24 solely under subsection (b)(1) of this section, of the con25 tinuation of, including the issuance or employment of 


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1 process, of a judicial, administrative, or other action or 

2 proceeding against the Government of Puerto Rico that 

3 was commenced on or before December 18, 2015. 

4 (d) CONTINUATION OF STAY.—Except as provided in 

5 subsections (e), (f), and (g) the stay under subsection (b) 

6 continues until the earlier of— 

7 (1) February 15, 2017; or 

8 (2) with respect to the government of the Com9 monwealth of Puerto Rico or any of its territorial in10 strumentalities, the date on which a case is filed by 

11 or on behalf of the government of the Common12 wealth of Puerto Rico or any of its territorial instru13 mentalities, as applicable, under title III. 

14 (e) JURISDICTION.— 

15 (1) The United States District Court for the 

16 District of Puerto Rico shall have original and exclu17 sive jurisdiction of any civil actions arising under 

18 this section. 

19 (2) On motion of a party in interest and after 

20 notice and a hearing, the United States District 

21 Court for the District of Puerto Rico, for cause 

22 shown, shall grant relief from the stay provided 

23 under subsection (b) of this section. 

24 (f) TERMINATION OF STAY; HEARING.—Thirty days 

25 after a request under subsection (e) for relief from the 


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1 stay of any act against property of the Government of 

2 Puerto Rico under subsection (b), such stay is terminated 

3 with respect to the party in interest making such request, 

4 unless the court, after notice and a hearing, orders such 

5 stay continued in effect pending the conclusion of, or as 

6 a result of, a final hearing and determination under sub7 section (e). A hearing under this subsection may be a pre8 liminary hearing, or may be consolidated with the final 

9 hearing under subsection (e). The court shall order such 

10 stay continued in effect pending the conclusion of the final 

11 hearing under subsection (e) if there is a reasonable likeli12 hood that the party opposing relief from such stay will 

13 prevail at the conclusion of such final hearing. If the hear14 ing under this subsection is a preliminary hearing, then 

15 such final hearing shall be concluded not later than thirty 

16 days after the conclusion of such preliminary hearing, un17 less the 30-day period is extended with the consent of the 

18 parties in interest or for a specific time which the court 

19 finds is required by compelling circumstances. 

20 (g) RELIEF TO PREVENT IRREPARABLE DAMAGE.— 

21 Upon request of a party in interest, the court, with or 

22 without a hearing, shall grant such relief from the stay 

23 provided under subsection (b) as is necessary to prevent 

24 irreparable damage to the interest of an entity in property, 

25 if such interest will suffer such damage before there is 


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1 an opportunity for notice and a hearing under subsection 

2 (e) or (f). 

3 (h) NO FORCE OR EFFECT OF STAY IN VIOLA4 TION.—No order, judgment, or decree entered in violation 

5 of this section shall have any force or effect. 

6 (i) GOVERNMENT OF PUERTO RICO.—For purposes 

7 of this section, the term ‘‘Government of Puerto Rico’’, 

8 in addition to the definition set forth in section 5(11) of 

9 this Act, shall include— 

10 (1) the directors and officers of and employees 

11 acting in their official capacity on behalf of the Gov12 ernment of Puerto Rico; and 

13 (2) the Oversight Board, including the directors 

14 and officers of and employees acting in their official 

15 capacity on behalf of the Oversight Board. 

16 (j) NO DEFAULT UNDER EXISTING CONTRACTS.— 

17 (1) Notwithstanding any contractual provision 

18 or applicable law to the contrary and so long as a 

19 stay under this section is in effect, the holder of a 

20 Liability Claim or any other claim (as such term is 

21 defined in section 101 of title 11, United States 

22 Code) may not exercise or continue to exercise any 

23 remedy under a contract or applicable law— 

24 (A) that is conditioned upon the financial 

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1 turing, insolvency, bankruptcy, or other pro2 ceeding (or a similar or analogous process) by, 

3 the Government of Puerto Rico, including a de4 fault or an event of default thereunder; or 

5 (B) with respect to Liability Claims— 

6 (i) for the non-payment of principal or 

7 interest; or 

8 (ii) for the breach of any condition or 

9 covenant. 

10 (2) The term ‘‘remedy’’ as used in paragraph 

11 (1) shall be interpreted broadly, and shall include 

12 any right existing in law or contract, and any right 

13 to— 

14 (A) setoff; 

15 (B) apply or appropriate funds; 

16 (C) seek the appointment of a custodian; 

17 (D) seek to raise rates; or 

18 (E) exercise control over property of the 

19 Government of Puerto Rico. 

20 (3) Notwithstanding any contractual provision 

21 or applicable law to the contrary and so long as a 

22 stay under this section is in effect, a contract to 

23 which the Government of Puerto Rico is a party may 

24 not be terminated or modified, and any right or obli25 gation under such contract may not be terminated 


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1 or modified, solely because of a provision in such 

2 contract is conditioned on— 

3 (A) the insolvency or financial condition of 

4 the Government of Puerto Rico at any time 

5 prior to the effectiveness of the stay under this 

6 section; 

7 (B) the adoption of a resolution or estab8 lishment of an Oversight Board pursuant to 

9 section 101 of this Act; or 

10 (C) a default under a separate contract 

11 that is due to, triggered by, or a result of the 

12 occurrence of the events or matters in sub13 section (i)(1)(B). 

14 (4) Notwithstanding any contractual provision 

15 to the contrary and so long as a stay under this sec16 tion is in effect, a counterparty to a contract with 

17 the Government of Puerto Rico for the provision of 

18 goods and services shall, unless the Government of 

19 Puerto Rico advises to the contrary in writing, con20 tinue to perform all obligations under, and comply 

21 with the terms of, such contract so long as a stay 

22 under this section is in effect, provided that the Gov23 ernment of Puerto Rico is not in default under such 

24 contract other than as a result of a condition speci25 fied in paragraph (3). 


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1 (k) EFFECT.—This section does not discharge an ob2 ligation of the Government of Puerto Rico or release, in3 validate, or impair any security interest or lien securing 

4 such obligation. This section does not impair or affect the 

5 implementation of any restructuring support agreement 

6 executed by the Government of Puerto Rico to be imple7 mented pursuant to Puerto Rico law specifically enacted 

8 for that purpose prior to the enactment of this Act or the 

9 obligation of the Government of Puerto Rico to proceed 

10 in good faith as set forth in any such agreement. 

11 (l) FINDINGS.—Congress finds the following: 

12 (1) A combination of severe economic decline, 

13 accumulated operating deficits, lack of financial 

14 transparency, management inefficiencies, and exces15 sive borrowing has created a fiscal emergency in 

16 Puerto Rico. 

17 (2) As a result of its fiscal emergency, the Gov18 ernment of Puerto Rico has been unable to provide 

19 its citizens with effective services. 

20 (3) The current fiscal emergency has also af21 fected the long-term economic stability of Puerto 

22 Rico by contributing to the accelerated outmigration 

23 of residents and businesses. 

24 (4) A comprehensive approach to fiscal, man25 agement, and structural problems and adjustments 


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1 that exempts no part of the Government of Puerto 

2 Rico is necessary, involving independent oversight 

3 and a Federal statutory authority for the Govern4 ment of Puerto Rico to restructure debts in a fair 

5 and orderly process. 

6 (5) Additionally, an immediate—but tem7 porary—stay on litigation is essential to stabilize the 

8 region for the purposes of resolving this territorial 

9 crisis. 

10 (A) The stay advances the best interests 

11 common to all stakeholders, including but not 

12 limited to a functioning independent Oversight 

13 Board created pursuant to this Act to deter14 mine whether to appear or intervene on behalf 

15 of the Government of Puerto Rico in any litiga16 tion that may have been commenced prior to 

17 the effectiveness or upon expiration of the stay. 

18 (B) The stay is limited in nature and nar19 rowly tailored to achieve the purposes of this 

20 Act, including to ensure all creditors have a fair 

21 opportunity to consensually renegotiate terms of 

22 repayment based on accurate financial informa23 tion that is reviewed by an independent author24 ity or, at a minimum, receive a recovery from 

25 the Government of Puerto Rico equal to their 


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1 best possible outcome absent the provisions of 

2 this Act. 

3 (6) Finally, the ability of the Government of 

4 Puerto Rico to obtain funds from capital markets in 

5 the future will be severely diminished without con6 gressional action to restore its financial account7 ability and stability. 

8 (m) PURPOSES.—The purposes of this Act are to— 

9 (1) provide the Government of Puerto Rico with 

10 the resources and the tools it needs to address an 

11 immediate existing and imminent crisis; 

12 (2) allow the Government of Puerto Rico a lim13 ited period of time during which it can focus its re14 sources on negotiating a voluntary resolution with 

15 its creditors instead of defending numerous, costly 

16 creditor lawsuits; 

17 (3) provide an oversight mechanism to assist 

18 the Government of Puerto Rico in reforming its fis19 cal governance and support the implementation of 

20 potential debt restructuring; 

21 (4) make available a Federal restructuring au22 thority, if necessary, to allow for an orderly adjust23 ment of all of the Government of Puerto Rico’s li24 abilities; and 


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1 (5) benefit the lives of 3.5 million American 

2 citizens living in Puerto Rico by encouraging the 

3 Government of Puerto Rico to resolve its long4 standing fiscal governance issues and return to eco5 nomic growth. 

6 SEC. 407. PURCHASES BY TERRITORY GOVERNMENTS. 

7 The text of section 1469e of title 48, United States 

8 Code, is deleted in its entirety and replaced with ‘‘The 

9 Governments of Puerto Rico, Guam, American Samoa, the 

10 Commonwealth of the Northern Mariana Islands, and the 

11 United States Virgin Islands are authorized to make pur12 chases through the General Services Administration.’’. 

13 SEC. 408. INTERVENTION IN LITIGATION. 

14 (a) INTERVENTION.—The Oversight Board may in15 tervene in any litigation filed against the territorial gov16 ernment. 

17 (b) INJUNCTIVE RELIEF.— 

18 (1) IN GENERAL.—If the Oversight Board in19 tervenes in a litigation under subsection (a), the 

20 Oversight Board may seek injunctive relief, including 

21 a stay of litigation. 

22 (2) NO INDEPENDENT BASIS FOR RELIEF.— 

23 This section does not create an independent basis on 

24 which injunctive relief, including a stay of litigation, 

25 may be granted. 


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1 TITLE V—PUERTO RICO INFRA2 STRUCTURE REVITALIZATION 

3 SEC. 501. DEFINITIONS. 

4 In this title: 

5 (1) ACT 76.—The term ‘‘Act 76’’ means Puerto 

6 Rico Act 76–2000 (3 L.P.R.A. 1931 et seq.), ap7 proved on May 5, 2000, as amended. 

8 (2) CRITICAL PROJECT.—The term ‘‘Critical 

9 Project’’ means a project identified under the provi10 sions of this title and intimately related to address11 ing an emergency whose approval, consideration, 

12 permitting, and implementation shall be expedited 

13 and streamlined according to the statutory process 

14 provided by Act 76, or otherwise adopted pursuant 

15 to this title. 

16 (3) ENERGY COMMISSION OF PUERTO RICO.— 

17 The term ‘‘Energy Commission of Puerto Rico’’ 

18 means the Puerto Rico Energy Commission as es19 tablished by Subtitle B of Puerto Rico Act 57–2014. 

20 (4) ENERGY PROJECTS.—The term ‘‘Energy 

21 Projects’’ means those projects addressing the gen22 eration, distribution, or transmission of energy. 

23 (5) EMERGENCY.—The term ‘‘emergency’’ 

24 means any event or grave problem of deterioration 

25 in the physical infrastructure for the rendering of 


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1 essential services to the people, or that endangers 

2 the life, public health, or safety of the population or 

3 of a sensitive ecosystem, or as otherwise defined by 

4 section 1 of Act 76 (3 L.P.R.A. 1931). This shall in5 clude problems in the physical infrastructure for en6 ergy, water, sewer, solid waste, highways or roads, 

7 ports, telecommunications, and other similar infra8 structure. 

9 (6) ENVIRONMENTAL QUALITY BOARD.—The 

10 term ‘‘Environmental Quality Board’’ means the 

11 Puerto Rico Environmental Quality Board, a board 

12 within the executive branch of the Government of 

13 Puerto Rico as established by section 7 of the Puer14 to Rico Act 416–2004 (12 L.P.R.A. 8002a). 

15 (7) EXPEDITED PERMITTING PROCESS.—The 

16 term ‘‘Expedited Permitting Process’’ means a Puer17 to Rico Agency’s alternate procedures, conditions, 

18 and terms mirroring those established under Act 76 

19 (3 L.P.R.A. 1932) and pursuant to this title and 

20 shall not apply to any Federal law, statute, or re21 quirement. 

22 (8) GOVERNOR.—The term ‘‘Governor’’ means 

23 the Governor of Puerto Rico. 

24 (9) INTERAGENCY ENVIRONMENTAL SUB25 COMMITTEE.—The term ‘‘Interagency EnvironVerDate Sep 11 2014 01:46 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 mental Subcommittee’’ means the Interagency Sub2 committee on Expedited Environmental Regulations 

3 as further described by section 504, and adopted 

4 pursuant to this title. 

5 (10) LEGISLATURE.—The term ‘‘Legislature’’ 

6 means the Legislature of Puerto Rico. 

7 (11) PLANNING BOARD.—The term ‘‘Planning 

8 Board’’ means the Puerto Rico Planning Board, a 

9 board within the executive branch of the Govern10 ment of Puerto Rico established by Act 75–1975 (23 

11 L.P.R.A. 62 et seq.). 

12 (12) PUERTO RICO AGENCY OR AGENCIES.— 

13 The terms ‘‘Puerto Rico Agency’’ or ‘‘Puerto Rico 

14 Agencies’’ means any board, body, Board of exam15 iners, public corporation, commission, independent 

16 office, division, administration, bureau, department, 

17 authority, official, person, entity, municipality, or 

18 any instrumentality of the Commonwealth of Puerto 

19 Rico, or an administrative body authorized by law to 

20 perform duties of regulating, investigating, or that 

21 may issue a decision, or with the power to issue li22 censes, certificates, permits, concessions, accredita23 tions, privileges, franchises, except the Senate and 

24 the House of Representatives of the Legislature and 

25 the judicial branch. 


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1 (13) PUERTO RICO ELECTRIC POWER AUTHOR2 ITY.—The term ‘‘Puerto Rico Electric Power Au3 thority’’ means the Puerto Rico Electric Power Au4 thority established by Puerto Rico Act 83–1941. 

5 SEC. 502. POSITION OF REVITALIZATION COORDINATOR. 

6 (a) ESTABLISHMENT.—There is established, under 

7 the Oversight Board, the position of the Revitalization Co8 ordinator. 

9 (b) APPOINTMENT.— 

10 (1) IN GENERAL.—The Revitalization Coordi11 nator shall be appointed by the Governor as follows: 

12 (A) Prior to the appointment of the Revi13 talization Coordinator, the Oversight Board 

14 shall submit to the Governor no less than three 

15 nominees for appointment within 60 days of the 

16 appointment of at least 4 members to the Over17 sight Board. 

18 (B) In consultation with the Oversight 

19 Board, not later than 10 days after receiving 

20 the nominations under subparagraph (A), the 

21 Governor shall select one of the nominees as the 

22 Revitalization Coordinator. Such nomination 

23 shall be effective immediately. 

24 (C) If the Governor fails to select a Revi25 talization Coordinator, the Oversight Board 


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1 shall, by majority vote, select a Revitalization 

2 Coordinator from the list of nominees provided 

3 under paragraph (A). 

4 (2) QUALIFICATIONS.—In selecting nominees 

5 under paragraph (1)(A), the Oversight Board shall 

6 only nominate persons who— 

7 (A) have substantial knowledge and exper8 tise in the planning, predevelopment, financing 

9 and development of infrastructure projects, pro10 vided that stronger consideration shall be given 

11 to candidates who have experience with Energy 

12 Projects; 

13 (B) does not currently provide, or in the 

14 preceding 3 calendar years provided, goods or 

15 services to the government of Puerto Rico (and, 

16 as applicable, is not the spouse, parent, child, 

17 or sibling of an individual who provides or has 

18 provided goods and services to the government 

19 of Puerto Rico in the preceding 3 calendar 

20 years); and 

21 (C) shall not be an officer, employee of, or 

22 former officer or employee of the government of 

23 Puerto Rico in the preceding 3 calendar years. 

24 (3) COMPENSATION.—The Revitalization Coor25 dinator shall be compensated at an annual rate deVerDate Sep 11 2014 01:46 Apr 13, 2016 Jkt 059200 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\H4900.IH H4900

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1 termined by the Oversight Board sufficient in the 

2 judgment of the Oversight Board to obtain the serv3 ices of an individual with the skills and experience 

4 required to discharge the duties of the position, but 

5 such compensation shall not exceed the annual sal6 ary of the Executive Director’s. 

7 (c) ASSIGNMENT OF PERSONNEL.—The Executive 

8 Director of the Oversight Board may assign Oversight 

9 Board personnel to assist the Revitalization Coordinator. 

10 (d) REMOVAL.— 

11 (1) IN GENERAL.—The Revitalization Coordi12 nator may be removed for any reason, in the Over13 sight Board’s discretion. 

14 (2) TERMINATION OF POSITION.—Upon the ter15 mination of the Oversight Board, the position of the 

16 Revitalization Coordinator shall be terminated once 

17 all approved Critical Projects have been completed. 

18 SEC. 503. CRITICAL PROJECTS. 

19 (a) IDENTIFICATION OF PROJECTS.— 

20 (1) PROJECT SUBMISSION.—Any project spon21 sor may submit, so long as the Oversight Board is 

22 in operation, any existing, ongoing, or proposed 

23 project to the Revitalization Coordinator. The Revi24 talization Coordinator shall require such submission 

25 to include— 


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1 (A) the impact the project will have on an 

2 emergency; 

3 (B) the availability of immediate private 

4 capital or other funds, including, loan guaran5 tees, loans, or grants, to implement, operate, or 

6 maintain the project; 

7 (C) environmental and economic benefits 

8 provided by the project, including the number 

9 of jobs to be created; 

10 (D) the status of the project if it is exist11 ing or ongoing; and 

12 (E) in addition to the requirements found 

13 in subparagraphs (A) through (D), the Revital14 ization Coordinator may request an Energy 

15 Project proponent to address how the project 

16 will— 

17 (i) reduce reliance on oil for electric 

18 generation in Puerto Rico; 

19 (ii) improve performance of energy in20 frastructure and overall energy efficiency; 

21 (iii) expedite the diversification and 

22 conversion of fuel sources for electric gen23 eration from oil to natural gas, and renew24 ables in Puerto Rico; 


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1 (iv) promote the development and uti2 lization of energy sources found on Puerto 

3 Rico; 

4 (v) contribute to transitioning to 

5 privatized generation capacities in Puerto 

6 Rico; 

7 (vi) lower energy costs for rate payers 

8 and increase the availability of affordable 

9 energy; and 

10 (vii) achieve in whole or in part the 

11 recommendations of the study in section 

12 505(d) of this title. 

13 (2) IDENTIFICATION OF RELEVANT PUERTO

14 RICO AGENCIES.—Within 20 days of receiving a 

15 project submission under paragraph (1), the Revital16 ization Coordinator shall, in consultation with the 

17 Governor, identify all Puerto Rico Agencies that will 

18 have a role in the permitting, approval, authorizing, 

19 or other activity related to the development of such 

20 project submission. 

21 (3) CERTIFICATION OF EXPEDITED PERMIT22 TING PROCESS.— 

23 (A) Not later than 20 days after receiving 

24 a project submission, each Puerto Rico Agency 

25 identified in paragraph (1) shall submit to the 


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1 Revitalization Coordinator the Agency’s Expe2 dited Permitting Process. 

3 (B) FAILURE TO PROVIDE EXPEDITED

4 PERMITTING PROCESS.—If a Puerto Rico Agen5 cy fails to provide an Expedited Permitting 

6 Process within 20 days of receiving a project 

7 submission, the Revitalization Coordinator 

8 shall— 

9 (i) consult with the Governor to de10 velop within 20 days an Expedited Permit11 ting Process for the Agency; and 

12 (ii) require such Puerto Rico Agency 

13 to implement the Expedited Permitting 

14 Process developed under clause (i) for Crit15 ical Projects. 

16 (b) CRITICAL PROJECT REPORT.— 

17 (1) IN GENERAL.—For each submitted project, 

18 the Revitalization Coordinator in consultation with 

19 the Governor and relevant Puerto Rico Agencies 

20 identified in subsection (a)(2) shall develop a Crit21 ical Project Report within 60 days of the identifica22 tion of relevant Puerto Rico Agencies under sub23 section (a)(2), which shall include: 

24 (A) An assessment of how well the project 

25 meets the criteria in subsection (a)(1). 


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1 (B) A recommendation by the Governor on 

2 whether the project should be considered a Crit3 ical Project. If the Governor fails to provide a 

4 recommendation, the failure shall constitute a 

5 concurrence with the Revitalization Coordina6 tor’s recommendation in subparagraph (D). 

7 (C) In the case of an Energy Project that 

8 will connect with the Puerto Rico Electric 

9 Power Authority’s transmission or distribution 

10 facilities, a recommendation by the Energy 

11 Commission of Puerto Rico. If no such rec12 ommendation is provided, such failure shall con13 stitute a concurrence with the Revitalization 

14 Coordinator’s recommendation in subparagraph 

15 (D). 

16 (D) A recommendation by the Revitaliza17 tion Coordinator on whether the project should 

18 be considered a Critical Project. 

19 (2) SUBMISSION TO OVERSIGHT BOARD.—Not 

20 later than 5 days after finalizing a Critical Project 

21 Report, the Revitalization Coordinator shall submit 

22 it to the Oversight Board. 

23 (c) ACTION BY THE OVERSIGHT BOARD.—Not later 

24 than 30 days after receiving the Critical Project Report, 

25 the Oversight Board, by majority vote, shall approve or 


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1 disapprove the project as a Critical Project, if the Over2 sight Board— 

3 (1) approves the project, the project shall be 

4 deemed a Critical Project; 

5 (2) disapproves the project, the Oversight 

6 Board shall submit to the Revitalization Coordinator 

7 in writing the reasons for disapproval; and 

8 (3) fails to act and the Revitalization Coordi9 nator had recommended the project be deemed a 

10 Critical Project, then the project shall be deemed a 

11 Critical Project. 

12 SEC. 504. MISCELLANEOUS PROVISIONS. 

13 (a) CREATION OF INTERAGENCY ENVIRONMENTAL

14 SUBCOMMITTEE.— 

15 (1) ESTABLISHMENT.—Not later than 60 days 

16 after the date on which the Revitalization Coordi17 nator is appointed, the Interagency Environmental 

18 Subcommittee shall be established and shall evaluate 

19 environmental documents required under Puerto 

20 Rico law for any Critical Project within the Expe21 dited Permitting Process established by the Revital22 ization Coordinator under section 503(a)(2). 

23 (2) COMPOSITION.—The Interagency Environ24 mental Subcommittee shall consist of the Revitaliza25 tion Coordinator, and a representative selected by 


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1 the Governor in consultation with the Revitalization 

2 Coordinator representing each of the following agen3 cies: The Environmental Quality Board, the Plan4 ning Board, the Puerto Rico Department of Natural 

5 and Environmental Resources, and any other Puerto 

6 Rico Agency determined to be relevant by the Revi7 talization Coordinator. 

8 (b) REGULATIONS, ORDERS, AND CONTRACTS.—The 

9 Oversight Board shall approve or disapprove of any action 

10 taken by the Governor pursuant to or mirroring section 

11 11 of Act 76 (3 L.P.R.A. 1941) pursuant to section 

12 204(b). 

13 (c) LENGTH OF EXPEDITED PERMITTING PROC14 ESS.—With respect to a Puerto Rico Agency’s activities 

15 related to only a Critical Project, such Puerto Rico Agency 

16 shall operate as if the Governor has declared an emergency 

17 pursuant to section 2 of Act 76 (3 L.P.R.A. 1932). Sec18 tion 12 of Act 76 (3 L.P.R.A. 1942) shall not be applica19 ble to Critical Projects. Critical Projects shall be 

20 prioritized to the maximum extent possible in each Puerto 

21 Rico Agency. 

22 (d) EXPEDITED PERMITTING PROCESS COMPLI23 ANCE.— 

24 (1) WRITTEN NOTICE.—A Critical Project 

25 sponsor may in writing notify the Oversight Board 


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1 of a Puerto Rico Agency’s, or the Revitalization Co2 ordinator’s failure to adhere to the Expedited Per3 mitting Process. 

4 (2) FINDING OF FAILURE.—If the Oversight 

5 Board finds either the Puerto Rico Agency or Revi6 talization Coordinator has failed to adhere to the 

7 Expedited Permitting Process, the Oversight Board 

8 shall direct the offending party to comply with the 

9 Expedited Permitting Process. The Oversight Board 

10 may take such enforcement action as necessary as 

11 provided by section 104(k). 

12 (e) REVIEW OF LEGISLATURE ACTS.— 

13 (1) SUBMISSION OF ACTS TO OVERSIGHT

14 BOARD.—The Legislature shall notify and submit to 

15 the Revitalization Coordinator and Oversight Board 

16 any Act of the Legislature that may affect the Expe17 dited Permitting Process pursuant to section 204(a). 

18 (2) FINDING OF OVERSIGHT BOARD.—Upon re19 ceipt of an act from the Legislature under para20 graph (1), the Oversight Board shall promptly re21 view whether the proposed act would significantly 

22 impact the Expedited Permitting Process, and upon 

23 such a finding, the act shall be deemed to be signifi24 cantly inconsistent with the Fiscal Plan and Budget 

25 as identified by section 204(a). 


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1 (f) ESTABLISHMENT OF CERTAIN TERMS AND CON2 DITIONS.—No Puerto Rico Agency may include in any cer3 tificate, right-of-way, permit, lease, or other authorization 

4 issued for a Critical Project any term or condition that 

5 may be permitted, but is not required, by any applicable 

6 Puerto Rico law, if the Revitalization Coordinator deter7 mines the term or condition would prevent or impair the 

8 expeditious construction, operation, or expansion of the 

9 Critical Project. The Revitalization Coordinator may re10 quest a Puerto Rico Agency to include any certificate, 

11 right-of-way, permit, lease, or other authorization, term 

12 or condition, that may be permitted in accordance with 

13 applicable laws if the Revitalization Coordinator deter14 mines such inclusion would support the expeditious con15 struction, operation, or expansion of any Critical Project. 

16 (g) DISCLOSURE.—All Critical Project reports, and 

17 justifications for approval or rejection of Critical Project 

18 status shall be made publicly available online within 5 days 

19 of receipt or completion. 

20 SEC. 505. FEDERAL AGENCY REQUIREMENTS. 

21 (a) FEDERAL POINTS OF CONTACT.—At the request 

22 of the Revitalization Coordinator and within 30 days of 

23 receiving such a request, each Federal agency with juris24 diction over the permitting, or administrative or environ25 mental review of private or public projects on Puerto Rico, 


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1 shall name a Point of Contact who will serve as that agen2 cy’s liaison with the Revitalization Coordinator. 

3 (b) FEDERAL GRANTS AND LOANS.—For each Crit4 ical Project with a pending or potential Federal grant, 

5 loan, or loan guarantee application, the Revitalization Co6 ordinator and the relevant Point of Contact shall cooper7 ate with each other to ensure expeditious review of such 

8 application. 

9 (c) EXPEDITED REVIEWS AND ACTIONS OF FEDERAL

10 AGENCIES.—All reviews conducted and actions taken by 

11 any Federal agency relating to a Critical Project, shall be 

12 expedited in a manner consistent with completion of the 

13 necessary reviews and approvals by the deadlines under 

14 the Expedited Permitting Process, but in no way shall the 

15 deadlines established through the Expedited Permitting 

16 Process be binding on any Federal agency. 

17 (d) TRANSFER OF STUDY OF ELECTRIC RATES.— 

18 Section 9 of the Consolidated and Further Continuing Ap19 propriations Act, 2015 (48 U.S.C. 1492a) is amended— 

20 (1) in subsection (a)(5), by inserting ‘‘, except 

21 that, with respect to Puerto Rico, the term means, 

22 the Secretary of Energy’’ after ‘‘Secretary of the In23 terior’’; and 

24 (2) in subsection (b)— 


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1 (A) by inserting ‘‘(except in the case of 

2 Puerto Rico, in which case not later than 180 

3 days after the date of enactment of the Puerto 

4 Rico Oversight, Management, and Economic 

5 Stability Act)’’ after ‘‘of this Act’’; and 

6 (B) by inserting ‘‘(except in the case of 

7 Puerto Rico)’’ after ‘‘Empowering Insular Com8 munities activity’’. 

9 SEC. 506. JUDICIAL REVIEW. 

10 (a) DEADLINE FOR FILING OF A CLAIM.—A claim 

11 arising under this title must be brought no later than 30 

12 days after the date of the decision or action giving rise 

13 to the claim. 

14 (b) EXPEDITED CONSIDERATION.—The District 

15 Court for the District of Puerto Rico shall set any action 

16 brought under this title for expedited consideration, taking 

17 into account the interest of enhancing Puerto Rico’s infra18 structure for electricity, water and sewer services, roads 

19 and bridges, ports, and solid waste management to achieve 

20 compliance with local and Federal environmental laws, 

21 regulations, and policies while ensuring the continuity of 

22 adequate services to the people of Puerto Rico and Puerto 

23 Rico’s sustainable economic development. 


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1 SEC. 507. SAVINGS CLAUSE. 

2 Nothing in this title is intended to change or alter 

3 any Federal legal requirements or laws. 

4 TITLE VI—CREDITOR 

5 COLLECTIVE ACTION 

6 SEC. 601. CREDITOR COLLECTIVE ACTION. 

7 (a) DEFINITIONS.—In this title: 

8 (1) ADMINISTRATIVE SUPERVISOR.—The term 

9 ‘‘Administrative Supervisor’’ means the Oversight 

10 Board established under section 101. 

11 (2) AUTHORIZED TERRITORIAL INSTRUMEN12 TALITY.—The term ‘‘Authorized Territorial Instru13 mentality’’ means a covered territorial instrumen14 tality authorized in accordance with subsection (e). 

15 (3) CALCULATION AGENT.—The term ‘‘Calcula16 tion Agent’’ means a calculation agent appointed in 

17 accordance with subsection (j). 

18 (4) CAPITAL APPRECIATION BOND.—The term 

19 ‘‘Capital Appreciation Bond’’ means a Bond that 

20 does not pay interest on a current basis, but for 

21 which interest amounts are added to principal over 

22 time as specified in the relevant offering materials 

23 for such Bond, including that the accreted interest 

24 amount added to principal increases daily. 

25 (5) CONVERTIBLE CAPITAL APPRECIATION

26 BOND.—The term ‘‘Convertible Capital Appreciation 


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1 Bond’’ means a Bond that does not pay interest on 

2 a current basis, but for which interest amounts are 

3 added to principal over time as specified in the rel4 evant offering materials and which converts to a cur5 rent pay bond on a future date. 

6 (6) INFORMATION AGENT.—The term ‘‘Infor7 mation Agent’’ means an information agent ap8 pointed in accordance with subsection (k). 

9 (7) ISSUER.—The term ‘‘Issuer’’ means, as ap10 plicable, the Territory Government Issuer or an Au11 thorized Territorial Instrumentality that has issued 

12 or guaranteed at least one Bond that is Out13 standing. 

14 (8) MODIFICATION.—The term ‘‘Modification’’ 

15 means any modification, amendment, supplement or 

16 waiver affecting one or more series of Bonds, includ17 ing those effected by way of exchange, repurchase, 

18 conversion, or substitution. 

19 (9) OUTSTANDING.—The term ‘‘Outstanding,’’ 

20 in the context of the principal amount of Bonds, 

21 shall be determined in accordance with subsection 

22 (b). 

23 (10) OUTSTANDING PRINCIPAL.—The term 

24 ‘‘Outstanding Principal’’ means— 


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1 (A) for a Bond that is not a Capital Ap2 preciation Bond or a Convertible Capital Appre3 ciation Bond, the outstanding principal amount 

4 of such Bond; and 

5 (B) for a Bond that is a Capital Apprecia6 tion Bond or a Convertible Capital Appreciation 

7 Bond, the current accreted value of such Cap8 ital Appreciation Bond or a Convertible Capital 

9 Appreciation Bond, as applicable. 

10 (11) POOL.—The term ‘‘Pool’’ means a pool es11 tablished in accordance with subsection (d). 

12 (12) QUALIFYING MODIFICATION.—The term 

13 ‘‘Qualifying Modification’’ means a Modification pro14 posed in accordance with subsection (g). 

15 (13) SECURED POOL.—The term ‘‘Secured 

16 Pool’’ means a Pool established in accordance with 

17 subsection (d) consisting only of Bonds that are se18 cured by a lien on property. 

19 (14) TERRITORY GOVERNMENT ISSUER.—The 

20 term ‘‘Territory Government Issuer’’ means the gov21 ernment of the Commonwealth of Puerto Rico. 

22 (b) OUTSTANDING BONDS.—In determining whether 

23 holders of the requisite principal amount of Outstanding 

24 Bonds have voted in favor of, or consented to, a proposed 

25 Qualifying Modification, a Bond will be deemed not to be 


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1 outstanding, and may not be counted in a vote or consent 

2 solicitation for or against a proposed Qualifying Modifica3 tion, if on the record date for the proposed Qualifying 

4 Modification— 

5 (1) the Bond has previously been cancelled or 

6 delivered for cancellation or is held for reissuance 

7 but has not been reissued; 

8 (2) the Bond has previously been called for re9 demption in accordance with its terms or previously 

10 become due and payable at maturity or otherwise 

11 and the Issuer has previously satisfied its obligation 

12 to make, or provide for, all payments due in respect 

13 of the Bond in accordance with its terms; 

14 (3) the Bond has been substituted with a secu15 rity of another series; or 

16 (4) the Bond is held by the Issuer or by an Au17 thorized Territorial Instrumentality of the Territory 

18 Government Issuer or by a corporation, trust or 

19 other legal entity that is controlled by the Issuer or 

20 an Authorized Territorial Instrumentality of the 

21 Territory Government Issuer, as applicable. 

22 For purposes of this subsection, a corporation, trust or 

23 other legal entity is controlled by the Issuer or by an Au24 thorized Territorial Instrumentality of the Territory Gov25 ernment Issuer if the Issuer or an Authorized Territorial 


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1 Instrumentality of the Territory Government Issuer, as 

2 applicable, has the power, directly or indirectly, through 

3 the ownership of voting securities or other ownership in4 terests, by contract or otherwise, to direct the manage5 ment of or elect or appoint a majority of the board of di6 rectors or other persons performing similar functions in 

7 lieu of, or in addition to, the board of directors of that 

8 legal entity. 

9 (c) CERTIFICATION OF DISENFRANCHISED BONDS.— 

10 Prior to any vote on, or consent solicitation for, a Quali11 fying Modification, the Issuer shall deliver to the Calcula12 tion Agent a certificate signed by an authorized represent13 ative of the Issuer specifying any Bonds that are deemed 

14 not to be Outstanding for the purpose of subsection (b) 

15 above. 

16 (d) DETERMINATION OF POOLS FOR VOTING.—The 

17 Administrative Supervisor, in consultation with the Issuer, 

18 shall establish Pools in accordance with the following: 

19 (1) Not less than one Pool shall be established 

20 for each Issuer. 

21 (2) A Pool that contains one or more Secured 

22 Bonds shall be a Secured Pool. 

23 (3) The Administrative Supervisor shall estab24 lish Pools according to the following principles: 


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1 (A) For each Issuer that has issued mul2 tiple Bonds that are distinguished by specific 

3 provisions governing priority or security ar4 rangements, including Bonds that have been 

5 issued as general obligations of the Territory 

6 Government Issuer to which the Territory Gov7 ernment Issuer pledged the full or good faith, 

8 credit, and taxing power of the Territory Gov9 ernment Issuer, separate Pools shall be estab10 lished corresponding to the relative priority or 

11 security arrangements of each holder of Bonds 

12 against each Issuer, as applicable. 

13 (B) For each Issuer that has issued senior 

14 and subordinated Bonds, separate Pools shall 

15 be established for the senior and subordinated 

16 Bonds corresponding to the relative priority or 

17 security arrangements. 

18 (C) For each Issuer that has issued mul19 tiple Bonds, for at least some of which a guar20 antee of repayment has been provided by the 

21 Territory Government Issuer, separate Pools 

22 shall be established for guaranteed and non23 guaranteed Bonds. 

24 (D) Subject to the other requirements con25 tained in this section, for each Issuer that has 


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1 issued multiple Bonds, for at least some of 

2 which a dedicated revenue stream has been 

3 pledged for repayment, separate Pools for such 

4 Issuer shall be established as follows: 

5 (i) For each dedicated revenue stream 

6 that has been pledged for repayment, not 

7 less than one Secured Pool for Bonds for 

8 which such revenue stream has been 

9 pledged, and separate Secured Pools shall 

10 be established for Bonds of different pri11 ority. 

12 (ii) Not less than one Pool for all 

13 other Bonds issued by the Issuer for which 

14 a dedicated revenue stream has not been 

15 pledged for repayment. 

16 (E) The Administrative Supervisor shall 

17 not place into separate Pools Bonds of the same 

18 Issuer that have identical rights in security or 

19 priority. 

20 (e) AUTHORIZATION OF TERRITORY INSTRUMENTAL21 ITIES.—A covered territorial instrumentality is an Author22 ized Territorial Instrumentality if it has been specifically 

23 authorized to be eligible to avail itself of the procedures 

24 under this section by the Administrative Supervisor. 


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1 (f) INFORMATION DELIVERY REQUIREMENT.—Be2 fore a Qualifying Modification to solicit the consent or the 

3 vote of any holder for a Qualifying Modification is sub4 mitted, the Issuer shall— 

5 (1) provide to the Calculation Agent, the Infor6 mation Agent, and the Administrative Supervisor, 

7 the following information— 

8 (A) a description of the Issuer’s economic 

9 and financial circumstances which are, in the 

10 Issuer’s opinion, relevant to the request for the 

11 proposed Qualifying Modification, a description 

12 of the Issuer’s existing debts, a description of 

13 the impact of the proposed Qualifying Modifica14 tion on the Territory’s or its territorial instru15 mentalities’ public debt; 

16 (B) if the Issuer is seeking Modifications 

17 affecting any other Pools of Bonds of the Terri18 tory Government Issuer or its Authorized Terri19 torial Instrumentalities, a description of such 

20 other Modifications; and 

21 (C) the applicable Fiscal Plan certified in 

22 accordance with section 201; and 

23 (2) not propose the Modification to the holders 

24 of Bonds in the Pool for which the Modification is 

25 being proposed until it has received a certification 


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1 from the Administrative Supervisor that the Pool 

2 has been established in accordance with this section 

3 and that the proposed Modification is a Qualifying 

4 Modification. 

5 (g) QUALIFYING MODIFICATION.—A Modification 

6 will not be considered to be Qualifying Modification un7 less— 

8 (1) the Issuer proposing the Modification has 

9 consulted with holders of Bonds in the Pool for 

10 which the Modification is being proposed prior to so11 liciting a vote on such Modification; 

12 (2) each exchanging, repurchasing, converting, 

13 or substituting holder of Bonds of any series in a 

14 Pool affected by that Modification is offered the 

15 same amount of consideration per amount of prin16 cipal, the same amount of consideration per amount 

17 of interest accrued but unpaid and the same amount 

18 of consideration per amount of past due interest, re19 spectively, as that offered to each other exchanging, 

20 repurchasing, converting, or substituting holder of 

21 Bonds of any series in a Pool affected by that Modi22 fication (or, where a menu of instruments or other 

23 consideration is offered, each exchanging, repur24 chasing, converting, or substituting holder of Bonds 

25 of any series in a Pool affected by that Modification 


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1 is offered the same amount of consideration per 

2 amount of principal, the same amount of consider3 ation per amount of interest accrued but unpaid and 

4 the same amount of consideration per amount of 

5 past due interest, respectively, as that offered to 

6 each other exchanging, repurchasing, converting, or 

7 substituting holder of Bonds of any series in a Pool 

8 affected by that Modification electing the same op9 tion under such menu of instruments); 

10 (3) if the Modification relates to Bonds in a Se11 cured Pool, the holders of such Bonds retain the 

12 liens securing such Bonds and the Modification does 

13 not reduce the Outstanding Principal amount of 

14 such Bonds; and 

15 (4) the Modification is certified by the Adminis16 trative Supervisor as— 

17 (A) the plan is in the best interests of 

18 creditors and is feasible; and 

19 (B) being consistent with the applicable 

20 Fiscal Plan that has been certified under sec21 tion 201; or 

22 (C) if an applicable Fiscal Plan has not yet 

23 been certified by the Administrative Supervisor, 

24 being an appropriate Modification, in the Ad25 ministrative Supervisor’s sole discretion. 


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1 (h) SOLICITATION.— 

2 (1) Upon receipt of a certification from the Ad3 ministrative Supervisor under subsection (f)(2) that 

4 a proposed Modification is a Qualifying Modification, 

5 the Information Agent shall, if practical and except 

6 as provided in paragraph (2), submit to the holders 

7 of any Outstanding Bonds affected by such Quali8 fying Modification, including holders of the right to 

9 vote such Outstanding Bonds, the information sub10 mitted by the relevant issuer under subsection (f)(1) 

11 in order to solicit the vote or consent of such hold12 ers. 

13 (2) If the Information Agent is unable to iden14 tify the address of holders of any Outstanding 

15 Bonds affected by a Qualifying Modification, the In16 formation Agent may solicit the vote or consent of 

17 such holders by— 

18 (A) delivering the solicitation to the paying 

19 agent for any affected Outstanding Bonds or 

20 Depository Trust Corporation if it serves as the 

21 clearing system for any affected Outstanding 

22 Bonds; or 

23 (B) delivering or publishing the solicitation 

24 by whatever additional means the Information 

25 Agent, after consultation with the Issuer, deems 


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1 necessary and appropriate in order to make a 

2 reasonable effort to inform holders of any af3 fected Outstanding Bonds of the Qualifying 

4 Modification which may include, notice by mail, 

5 publication in electronic media, publication on a 

6 website of the Issuer, or publication in news7 papers of national circulation in the United 

8 States and in a newspaper of general circula9 tion in the Commonwealth of Puerto Rico. 

10 (i) VOTING.—For each Pool, any Qualifying Modi11 fication may be proposed only by the Issuer and made, 

12 and future compliance therewith may be waived, with the 

13 written consent of the Issuer and the affirmative vote or 

14 consent of holders of the right to vote the Outstanding 

15 Bonds of at least two-thirds of the aggregate Outstanding 

16 Principal amount of the Outstanding Bonds of all Bonds 

17 in the Pool. 

18 (j) CALCULATION AGENT.—For the purpose of calcu19 lating the principal amount of the Bonds of any series eli20 gible to participate in such a vote or consent solicitation 

21 and tabulating such votes or consents, the Territory Gov22 ernment Issuer may appoint a Calculation Agent for each 

23 Pool reasonably acceptable to the Administrative Super24 visor. 


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1 (k) INFORMATION AGENT.—For the purpose of ad2 ministering a vote of holders of Bonds, including the hold3 ers of the right to vote such Bonds, or seeking the consent 

4 of holder of Bonds, including the holders of the right to 

5 vote such Bonds, to a written action under this section, 

6 the Territory Government Issuer may appoint an Informa7 tion Agent for each Pool reasonably acceptable to the Ad8 ministrative Supervisor. 

9 (l) BINDING EFFECT.— 

10 (1) For each Pool, a Qualifying Modification 

11 will be conclusive and binding on all holders of the 

12 relevant series of Bonds or all holders of all series 

13 of Bonds whether or not they have given such con14 sent, and on all future holders of those Bonds 

15 whether or not notation of such Qualifying Modifica16 tion is made upon the Bonds, if— 

17 (A) the holders of the right to vote the 

18 Outstanding Bonds in such Pool pursuant to 

19 subsection (i) have consented to or approved the 

20 Qualifying Modification; 

21 (B) each holder who has not consented to 

22 or approved the Qualifying Modification will re23 ceive or retain under the Qualifying Modifica24 tion on account of their claims, property of a 

25 value, as of the effective date of the Qualifying 


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1 Modification, that is not less than the amount 

2 that such holders would so receive or retain if 

3 there were no Qualifying Modification; 

4 (C) the Administrative Supervisor certifies 

5 that— 

6 (i) the voting requirements of this sec7 tion have been satisfied; 

8 (ii) the Qualifying Modification is— 

9 (I) consistent with the applicable 

10 Fiscal Plan that has been certified 

11 under section 203; or 

12 (II) if an applicable Fiscal Plan 

13 has not yet been certified by the Ad14 ministrative Supervisor, an appro15 priate Qualifying Modification, in the 

16 Administrative Supervisor’s sole dis17 cretion; and 

18 (iii) any conditions on the effective19 ness of the Qualifying Modification have 

20 been satisfied or, in the Administrative Su21 pervisor’s sole discretion, satisfaction of 

22 such conditions has been waived by the Ad23 ministrative Supervisor; and 

24 (D) the United States District Court for 

25 the District of Puerto Rico has, after reviewing 


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1 an application submitted to it by the applicable 

2 Issuer for an order approving the Qualifying 

3 Modification, entered an order that the require4 ments of this section have been satisfied. 

5 (2) Upon the entry of an order under para6 graph (1)(C), the conclusive and binding Qualifying 

7 Modification shall satisfy, release, and discharge all 

8 Bond Claims affected by the Qualifying Modifica9 tion, and shall be binding on any person or entity 

10 asserting claims or other rights, including a bene11 ficial interest (directly or indirectly, as principal, 

12 agent, counterpart, subrogee, insurer or otherwise) 

13 in respect of Bonds subject to the Qualifying Modi14 fication, any trustee, any collateral agent, any inden15 ture trustee, any fiscal agent, and any bank that re16 ceives or holds funds related to such Bonds. The 

17 property that is the subject of the Qualifying Modi18 fication shall vest in the Issuer free and clear of all 

19 claims in respect of any Bonds of any Issuer. 

20 (m) JUDICIAL REVIEW.— 

21 (1) The United States District Court for the 

22 District of Puerto Rico shall have original and exclu23 sive jurisdiction over civil actions arising under this 

24 section. 


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1 (2) Notwithstanding section 106(e), there shall 

2 be a cause of action to challenge unlawful applica3 tion of this section. 

4 (3) The district court shall nullify a Modifica5 tion and any effects on the rights of the holders of 

6 Bonds resulting from such Modification if and only 

7 if the district court determines that such Modifica8 tion is manifestly inconsistent with this section. 

9 (n) COMPLETION REQUIRED.—Prior to any certifi10 cation pursuant to section 206 or the filing of any petition 

11 under title III, an offer for a Qualified Modification shall 

12 be made to each Pool established under subsection (d). 

13 (o) SAVINGS CLAUSE.—Nothing in this title shall ef14 fect the powers of the Oversight Board in titles I, II, and 

15 III. 

Æ 


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