I 

114TH CONGRESS 

2D SESSION H. R. 5278 

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 

MAY 18, 2016 

Mr. DUFFY (for himself, Mr. BISHOP of Utah, and Mr. SENSENBRENNER) introduced the following bill; which was referred to the Committee on Natural Resources, and in addition to the Committees on the Judiciary, Education and the Workforce, and Small Business, 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’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Effective date. 

Sec. 3. Severability. 

Sec. 4. Supremacy. 

Sec. 5. Definitions. 

Sec. 6. Placement. 

Sec. 7. Compliance with Federal laws. 

TITLE I—ESTABLISHMENT AND ORGANIZATION OF OVERSIGHT 

BOARD 

Sec. 101. 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 Oversight Board. 

Sec. 109. Ethics. 

TITLE II—RESPONSIBILITIES OF OVERSIGHT BOARD 

Sec. 201. Approval of fiscal plans. 

Sec. 202. Approval of budgets. 

Sec. 203. Effect of finding of noncompliance with budget. 

Sec. 204. Review of activities to ensure compliance with fiscal plan. 

Sec. 205. Recommendations on financial stability and management responsibility. 

Sec. 206. Oversight Board duties related to restructuring. 

Sec. 207. Oversight Board authority related to debt issuance. 

Sec. 208. Required reports. 

Sec. 209. Termination of Oversight Board. 

Sec. 210. No full faith and credit of the United States. 

Sec. 211. Analysis of pensions. 

Sec. 212. Intervention in litigation. 

TITLE III—ADJUSTMENTS OF DEBTS 

Sec. 301. Applicability of other laws; definitions. 

Sec. 302. Who may be a debtor. 

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

Sec. 304. Petition and proceedings relating to petition. 

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

Sec. 306. Jurisdiction. 

Sec. 307. Venue. 

Sec. 308. Selection of presiding judge. 

Sec. 309. Abstention. 

Sec. 310. Applicable rules of procedure. 

Sec. 311. Leases. 

Sec. 312. Filing of plan of adjustment. 


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Sec. 313. Modification of plan. 

Sec. 314. Confirmation. 

Sec. 315. Role and capacity of Oversight Board. 

Sec. 316. Compensation of professionals. 

Sec. 317. Interim compensation. 

TITLE IV—MISCELLANEOUS PROVISIONS 

Sec. 401. Rules of construction. 

Sec. 402. Right of Puerto Rico to determine its future political status. 

Sec. 403. First minimum wage in Puerto Rico. 

Sec. 404. Application of regulation to Puerto Rico. 

Sec. 405. Automatic stay upon enactment. 

Sec. 406. Purchases by territory governments. 

Sec. 407. Protection from inter-debtor transfers. 

Sec. 408. GAO report on Small Business Administration programs in Puerto 

Rico. 

Sec. 409. Congressional Task Force on Economic Growth in Puerto Rico. 

TITLE V—PUERTO RICO INFRASTRUCTURE REVITALIZATION 

Sec. 501. Definitions. 

Sec. 502. Position of revitalization coordinator. 

Sec. 503. Critical projects. 

Sec. 504. Miscellaneous provisions. 

Sec. 505. Federal agency requirements. 

Sec. 506. Judicial review. 

Sec. 507. Savings clause. 

TITLE VI—CREDITOR COLLECTIVE ACTION 

Sec. 601. Creditor Collective action. 

Sec. 602. Applicable law. 

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 AND TITLE VI.— 

6 (1) Title III shall apply with respect to cases 

7 commenced under title III on or after the date of 

8 the enactment of this Act. 

9 (2) Titles III and VI shall apply with respect to 

10 debts, claims, and liens (as such terms are defined 


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1 in section 101 of title 11, United States Code) cre2 ated before, on, or after such date. 

3 SEC. 3. SEVERABILITY. 

4 If any provision of this Act or the application thereof 

5 to any person or circumstance is held invalid, the remain6 der of this Act, or the application of that provision to per7 sons or circumstances other than those as to which it is 

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

9 is not severable from titles I and II, and titles I and II 

10 are not severable from title III. 

11 SEC. 4. SUPREMACY. 

12 The provisions of this Act shall prevail over any gen13 eral or specific provisions of territory law, State law, or 

14 regulation that is inconsistent with this Act. 

15 SEC. 5. DEFINITIONS. 

16 In this Act— 

17 (1) AGREED ACCOUNTING STANDARDS.—The 

18 term ‘‘agreed accounting standards’’ means modified 

19 accrual accounting standards or, for any period dur20 ing which the Oversight Board determines in its sole 

21 discretion that a territorial government is not rea22 sonably capable of comprehensive reporting that 

23 complies with modified accrual accounting stand24 ards, such other accounting standards as proposed 

25 by the Oversight Board. 


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

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

3 of insurance, or other financial indebtedness, includ4 ing rights, entitlements, or obligations whether such 

5 rights, entitlements, or obligations arise from con6 tract, statute, or any other source of law, in any 

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

8 other borrowing title, obligation of insurance, or 

9 other financial indebtedness in physical or demate10 rialized form, of which— 

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

12 territorial government; and 

13 (B) the date of issuance or incurrence pre14 cedes the date of enactment of this Act. 

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

16 means, as it relates to a Bond— 

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

18 right is reduced to judgment, liquidated, unliq19 uidated, fixed, contingent, matured, unmatured, 

20 disputed, undisputed, legal, equitable, secured, 

21 or unsecured; or 

22 (B) right to an equitable remedy for 

23 breach of performance if such breach gives rise 

24 to a right to payment, whether or not such 

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1 ment, fixed, contingent, matured, unmatured, 

2 disputed, undisputed, secured, or unsecured. 

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

4 Territory Budget or an Instrumentality Budget, as 

5 applicable. 

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

7 means the Commonwealth of Puerto Rico. 

8 (6) COMPLIANT BUDGET.—The term ‘‘compli9 ant budget’’ means a budget that is prepared in ac10 cordance with— 

11 (A) agreed accounting standards; and 

12 (B) the applicable Fiscal Plan. 

13 (7) COVERED TERRITORIAL INSTRUMEN14 TALITY.—The term ‘‘covered territorial instrumen15 tality’’ means a territorial instrumentality des16 ignated by the Oversight Board pursuant to section 

17 101 to be subject to the requirements of this Act. 

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

19 territory’’ means a territory for which an Oversight 

20 Board has been established under section 101. 

21 (9) EXECUTIVE DIRECTOR.—The term ‘‘Execu22 tive Director’’ means an Executive Director ap23 pointed under section 103(a). 


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

2 means a Territory Fiscal Plan or an Instrumentality 

3 Fiscal Plan, as applicable. 

4 (11) GOVERNMENT OF PUERTO RICO.—The 

5 term ‘‘Government of Puerto Rico’’ means the Com6 monwealth of Puerto Rico, including all its terri7 torial instrumentalities. 

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

9 the chief executive of a covered territory. 

10 (13) INSTRUMENTALITY BUDGET.—The term 

11 ‘‘Instrumentality Budget’’ means a budget for a cov12 ered territorial instrumentality, designated by the 

13 Oversight Board in accordance with section 101, 

14 submitted, approved, and certified in accordance 

15 with section 202. 

16 (14) INSTRUMENTALITY FISCAL PLAN.—The 

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

18 plan for a covered territorial instrumentality, des19 ignated by the Oversight Board in accordance with 

20 section 101, submitted, approved, and certified in 

21 accordance with section 201. 

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

23 means the legislative body responsible for enacting 

24 the laws of a covered territory. 


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1 (16) MODIFIED ACCRUAL ACCOUNTING STAND2 ARDS.—The term ‘‘modified accrual accounting 

3 standards’’ means recognizing revenues as they be4 come available and measurable and recognizing ex5 penditures when liabilities are incurred, in each case 

6 as defined by the Governmental Accounting Stand7 ards Board, in accordance with generally accepted 

8 accounting principles. 

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

10 Board’’ means a Financial Oversight and Manage11 ment Board established in accordance with section 

12 101. 

13 (18) TERRITORIAL GOVERNMENT.—The term 

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

15 covered territory, including all covered territorial in16 strumentalities. 

17 (19) TERRITORIAL INSTRUMENTALITY.— 

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

19 instrumentality’’ means any political subdivi20 sion, public agency, instrumentality–including 

21 any instrumentality that is also a bank–or pub22 lic corporation of a territory, and this term 

23 should be broadly construed to effectuate the 

24 purposes of this Act. 


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1 (B) EXCLUSION.—The term ‘‘territorial in2 strumentality’’ does not include an Oversight 

3 Board. 

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

5 means— 

6 (A) Puerto Rico; 

7 (B) Guam; 

8 (C) American Samoa; 

9 (D) the Commonwealth of the Northern 

10 Mariana Islands; or 

11 (E) the United States Virgin Islands. 

12 (21) TERRITORY BUDGET.—The term ‘‘Terri13 tory Budget’’ means a budget for a territorial gov14 ernment submitted, approved, and certified in ac15 cordance with section 202. 

16 (22) TERRITORY FISCAL PLAN.—The term 

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

18 territorial government submitted, approved, and cer19 tified in accordance with section 201. 

20 SEC. 6. PLACEMENT. 

21 The Law Revision Counsel is directed to place this 

22 Act as chapter 20 of title 48, United States Code. 

23 SEC. 7. COMPLIANCE WITH FEDERAL LAWS. 

24 Except as otherwise provided in this Act, nothing in 

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


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1 relieving a territorial government, or any territorial instru2 mentality thereof, from compliance with Federal laws or 

3 requirements or territorial laws and requirements imple4 menting a federally authorized or federally delegated pro5 gram, protecting the health, safety, and environment of 

6 persons in such territory. 

7 TITLE I—ESTABLISHMENT AND 

8 ORGANIZATION OF OVER9 SIGHT BOARD 

10 SEC. 101. TERRITORY FINANCIAL OVERSIGHT AND MAN11 AGEMENT BOARD. 

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

13 is to provide a method for a covered territory to achieve 

14 fiscal responsibility and access to the capital markets. 

15 (b) ESTABLISHMENT.— 

16 (1) IN GENERAL.—Except as provided in para17 graph (2), a Financial Oversight and Management 

18 Board for a territory is established in accordance 

19 with this section only if the Legislature of the terri20 tory adopts a resolution signed by the Governor re21 questing the establishment. 

22 (2) PUERTO RICO.—Notwithstanding paragraph 

23 (1), a Financial Oversight and Management Board 

24 is hereby established for Puerto Rico. 


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1 (3) CONSTITUTIONAL BASIS.—The Congress en2 acts this Act pursuant to article IV, section 3 of the 

3 Constitution of the United States, which provides 

4 Congress the power to dispose of and make all need5 ful rules and regulations for territories. 

6 (c) TREATMENT.—An Oversight Board established 

7 under this section— 

8 (1) shall be created as an entity within the ter9 ritorial government for which it is established in ac10 cordance with this title; and 

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

12 agency, establishment, or instrumentality of the 

13 Federal Government. 

14 (d) OVERSIGHT OF TERRITORIAL INSTRUMENTAL15 ITIES.— 

16 (1) DESIGNATION.— 

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

18 its sole discretion at such time as the Oversight 

19 Board determines to be appropriate, may des20 ignate any territorial instrumentality as a cov21 ered territorial instrumentality that is subject 

22 to the requirements of this Act. 

23 (B) BUDGETS AND REPORTS.—The Over24 sight Board may require in its sole discretion 

25 the Governor to submit to the Oversight Board 


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1 such budgets and monthly or quarterly reports 

2 regarding a covered territorial instrumentality 

3 as the Oversight Board determines to be nec4 essary and may designate any covered terri5 torial instrumentality to be included in the Ter6 ritory Budget; except that the Oversight Board 

7 may not designate a covered territorial instru8 mentality to be included in the Territory Budg9 et if applicable territory law does not require 

10 legislative approval of such covered territorial 

11 instrumentality’s budget. 

12 (C) SEPARATE INSTRUMENTALITY BUDG13 ETS AND REPORTS.—The Oversight Board in 

14 its sole discretion may or, if it requires a budg15 et from a covered territorial instrumentality 

16 whose budget does not require legislative ap17 proval under applicable territory law, shall des18 ignate a covered territorial instrumentality to 

19 be the subject of an Instrumentality Budget 

20 separate from the applicable Territory Budget 

21 and require that the Governor develop such an 

22 Instrumentality Budget. 

23 (D) INCLUSION IN TERRITORY FISCAL

24 PLAN.—The Oversight Board may require in its 

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1 ered territorial instrumentality in the applicable 

2 Territory Fiscal Plan. 

3 (E) SEPARATE INSTRUMENTALITY FISCAL

4 PLANS.—The Oversight Board may designate in 

5 its sole discretion a covered territorial instru6 mentality to be the subject of an Instrumen7 tality Fiscal Plan separate from the applicable 

8 Territory Fiscal Plan and require that the Gov9 ernor develop such an Instrumentality Fiscal 

10 Plan. 

11 (2) EXCLUSION.— 

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

13 its sole discretion, at such time as the Oversight 

14 Board determines to be appropriate, may ex15 clude any territorial instrumentality from the 

16 requirements of this Act. 

17 (B) TREATMENT.—A territorial instrumen18 tality excluded pursuant to this paragraph shall 

19 not be considered to be a covered territorial in20 strumentality. 

21 (e) MEMBERSHIP.— 

22 (1) IN GENERAL.— 

23 (A) The Oversight Board shall consist of 

24 seven members appointed by the President who 


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1 meet the qualifications described in subsection 

2 (f) and section 109(a). 

3 (B) The Board shall be comprised of one 

4 Category A member, one Category B member, 

5 two Category C members, one Category D 

6 member, one Category E member, and one Cat7 egory F member. 

8 (2) APPOINTED MEMBERS.— 

9 (A) The President shall appoint the indi10 vidual members of the Oversight Board, of 

11 which— 

12 (i) the Category A member should be 

13 selected from a list of individuals sub14 mitted by the Speaker of the House of 

15 Representatives; 

16 (ii) the Category B member should be 

17 selected from a separate list of individuals 

18 submitted by the Speaker of the House of 

19 Representatives; 

20 (iii) the Category C members should 

21 be selected from a list submitted by the 

22 Majority Leader of the Senate; 

23 (iv) the Category D member should be 

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1 nority Leader of the House of Representa2 tives; 

3 (v) the Category E member should be 

4 selected from a list submitted by the Mi5 nority Leader of the Senate; and 

6 (vi) the Category F member may be 

7 selected in his sole discretion. 

8 (B) After the President’s selection of the 

9 Category F Board member, for purposes of sub10 paragraph (A) and within a timely manner— 

11 (i) the Speaker of the House of Rep12 resentatives shall submit two non-overlap13 ping lists of at least three, individuals to 

14 the President; one list shall include three 

15 individuals who maintain a primary resi16 dence in the territory or have a primary 

17 place of business in the territory; 

18 (ii) the Senate Majority Leader shall 

19 submit a list of at least four individuals to 

20 the President; 

21 (iii) the Minority Leader of the House 

22 of Representatives shall submit a list of at 

23 least three individuals to the President; 

24 and 


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1 (iv) the Minority Leader of the Senate 

2 shall submit a list of at least three individ3 uals to the President. 

4 (C) If the President does not select any of 

5 the names submitted under subparagraphs (A) 

6 and (B), then whoever submitted such list may 

7 supplement the lists provided in this subsection 

8 with additional names. 

9 (D) The Category A member shall main10 tain a primary residence in the territory or have 

11 a primary place of business in the territory. 

12 (E) With respect to the appointment of a 

13 Board member in Category A, B, C, D, or E, 

14 such an appointment shall be by and with the 

15 advice and consent of the Senate, unless the 

16 President appoints an individual from a list, as 

17 provided in this subsection, in which case no 

18 Senate confirmation is required. 

19 (F) For purposes of subparagraph 

20 101(e)(6), in the event of a vacancy of a Cat21 egory A, B, C, D, or E Board seat, the cor22 responding congressional leader referenced in 

23 subparagraph (A) shall submit a list pursuant 

24 to this subsection within a timely manner of the 


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1 Board member’s resignation or removal becom2 ing effective. 

3 (G) With respect to an Oversight Board 

4 for Puerto Rico, in the event any of the 7 mem5 bers have not been appointed by September 30, 

6 2016, then the President shall appoint an indi7 vidual from the list for the current vacant cat8 egory by December 1, 2016, provided that such 

9 list includes at least 2 individuals per vacancy 

10 who meet the requirements set forth in sub11 section (f) and section 109, and are willing to 

12 serve. 

13 (f) ELIGIBILITY FOR APPOINTMENTS.—An individual 

14 is eligible for appointment as a member of the Oversight 

15 Board only if the individual— 

16 (1) has knowledge and expertise in finance, mu17 nicipal bond markets, management, law, or the orga18 nization or operation of business or government; and 

19 (2) prior to appointment, an individual is not 

20 an officer, elected official, or employee of the terri21 torial government, a candidate for elected office of 

22 the territorial government, or a former elected offi23 cial of the territorial government. 

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

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1 ceive reimbursement from the Oversight Board for any 

2 reasonable and necessary expenses incurred by reason of 

3 service on the Oversight Board. 

4 (h) ADOPTION OF BYLAWS FOR CONDUCTING BUSI5 NESS OF OVERSIGHT BOARD.— 

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

7 the appointment of all members and appointment of 

8 the Chair, the Oversight Board shall adopt bylaws, 

9 rules, and procedures governing its activities under 

10 this Act, including procedures for hiring experts and 

11 consultants. Such bylaws, rules, and procedures shall 

12 be public documents, and shall be submitted by the 

13 Oversight Board upon adoption to the Governor, the 

14 Legislature, the President, and Congress. The Over15 sight Board may hire professionals as it determines 

16 to be necessary to carry out this subsection. 

17 (2) ACTIVITIES REQUIRING APPROVAL OF MA18 JORITY OF MEMBERS.—Under the bylaws adopted 

19 pursuant to paragraph (1), the Oversight Board 

20 may conduct its operations under such procedures as 

21 it considers appropriate, except that an affirmative 

22 vote of a majority of the members of the Oversight 

23 Board’s full appointed membership shall be required 

24 in order for the Oversight Board to approve a Fiscal 

25 Plan under section 201, to approve a Budget under 


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1 section 202, to cause a legislative act not to be en2 forced under section 204, or to designate an infra3 structure project as a Critical Project under section 

4 503. 

5 (3) ADOPTION OF RULES AND REGULATIONS OF

6 TERRITORIAL GOVERNMENT.—The Oversight Board 

7 may incorporate in its bylaws, rules, and procedures 

8 under this subsection such rules and regulations of 

9 the territorial government as it considers appro10 priate to enable it to carry out its activities under 

11 this Act with the greatest degree of independence 

12 practicable. 

13 (4) EXECUTIVE SESSION.—Upon a majority 

14 vote of the Oversight Board’s full voting member15 ship, the Oversight Board may conduct its business 

16 in an executive session that consists solely of the 

17 Oversight Board’s voting members and is closed to 

18 the public, but only for the business items set forth 

19 as part of the vote to convene an executive session. 

20 SEC. 102. LOCATION OF OVERSIGHT BOARD. 

21 The Oversight Board shall have an office in the cov22 ered territory and additional offices as it deems necessary. 

23 At any time, any department or agency of the United 

24 States may provide the Oversight Board use of Federal 

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1 bursable basis and subject to such terms and conditions 

2 as the head of that department or agency may establish. 

3 SEC. 103. EXECUTIVE DIRECTOR AND STAFF OF OVERSIGHT 

4 BOARD. 

5 (a) EXECUTIVE DIRECTOR.—The Oversight Board 

6 shall have an Executive Director who shall be appointed 

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

8 Executive Director shall be paid at a rate determined by 

9 the Oversight Board. 

10 (b) STAFF.—With the approval of the Chair, the Ex11 ecutive Director may appoint and fix the pay of additional 

12 personnel as the Executive Director considers appropriate, 

13 except that no individual appointed by the Executive Di14 rector may be paid at a rate greater than the rate of pay 

15 for the Executive Director unless the Oversight Board pro16 vides for otherwise. The staff shall include a Revitalization 

17 Coordinator appointed pursuant to Title V of this Act. 

18 Any such personnel may include private citizens, employ19 ees of the Federal Government, or employees of the terri20 torial government, provided, however, that the Executive 

21 Director may not fix the pay of employees of the Federal 

22 Government or the territorial government. 

23 (c) INAPPLICABILITY OF CERTAIN EMPLOYMENT

24 AND PROCUREMENT LAWS.—The Executive Director and 

25 staff of the Oversight Board may be appointed and paid 


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1 without regard to any provision of the laws of the covered 

2 territory or the Federal Government governing appoint3 ments and salaries. Any provision of the laws of the cov4 ered 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 (5 U.S.C. 3371–3375), 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) OBTAINING CREDITOR INFORMATION.— 

10 (1) Upon request of the Oversight Board, each 

11 creditor or organized group of creditors of a covered 

12 territory or covered territorial instrumentality seek13 ing to participate in voluntary negotiations shall pro14 vide to the Oversight Board, and the Oversight 

15 Board shall make publicly available to any other 

16 participant, a statement setting forth— 

17 (A) the name and address of the creditor 

18 or of each member of an organized group of 

19 creditors; and 

20 (B) the nature and aggregate amount of 

21 claims or other economic interests held in rela22 tion to the issuer as of the later of— 

23 (i) the date the creditor acquired the 

24 claims or other economic interests or, in 


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1 the case of an organized group of credi2 tors, the date the group was formed; or 

3 (ii) the date the Oversight Board was 

4 formed. 

5 (2) For purposes of this subsection, an orga6 nized group shall mean multiple creditors that are— 

7 (A) acting in concert to advance their com8 mon interests, including, but not limited to, re9 taining legal counsel to represent such multiple 

10 entities; and 

11 (B) not composed entirely of affiliates or 

12 insiders of one another. 

13 (3) The Oversight Board may request supple14 mental statements to be filed by each creditor or or15 ganized group of creditors quarterly, or if any fact 

16 in the most recently filed statement has changed 

17 materially. 

18 (e) GIFTS, BEQUESTS, AND DEVISES.—The Over19 sight Board may accept, use, and dispose of gifts, be20 quests, or devises of services or property, both real and 

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

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

23 money and proceeds from sales of other property received 

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

25 account as the Oversight Board may establish and shall 


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1 be available for disbursement upon order of the Chair, 

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

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

4 of the donors shall be publicly disclosed by the Oversight 

5 Board within 30 days of receipt. 

6 (f) SUBPOENA POWER.— 

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

8 issue subpoenas requiring the attendance and testi9 mony of witnesses and the production of books, 

10 records, correspondence, memoranda, papers, docu11 ments, electronic files, metadata, tapes, and mate12 rials of any nature relating to any matter under in13 vestigation by the Oversight Board. Jurisdiction to 

14 compel the attendance of witnesses and the produc15 tion of such materials shall be governed by the stat16 ute setting forth the scope of personal jurisdiction 

17 exercised by the covered territory, or in the case of 

18 Puerto Rico, 32 L.P.R.A. App. III. R. 4. 7., as 

19 amended. 

20 (2) FAILURE TO OBEY A SUBPOENA.—If a per21 son refuses to obey a subpoena issued under para22 graph (1), the Oversight Board may apply to the 

23 court of first instance of the covered territory. Any 

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1 ished by the court in accordance with civil contempt 

2 laws of the covered territory. 

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

4 the Oversight Board shall be served in the manner 

5 provided by the rules of procedure for the courts of 

6 the covered territory, or in the case of Puerto Rico, 

7 the Rules of Civil Procedure of Puerto Rico, for sub8 poenas issued by the court of first instance of the 

9 covered territory. 

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

11 Executive Director may enter into such contracts as the 

12 Executive Director considers appropriate (subject to the 

13 approval of the Chair) consistent with the Oversight 

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

15 Oversight Board’s responsibilities under this Act. 

16 (h) AUTHORITY TO ENFORCE CERTAIN LAWS OF

17 THE COVERED TERRITORY.—The Oversight Board shall 

18 ensure the purposes of this Act are met, including by en19 suring the prompt enforcement of any applicable laws of 

20 the covered territory prohibiting public sector employees 

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

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

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

24 L.P.R.A. 1451r, as amended. 

25 (i) VOLUNTARY AGREEMENT CERTIFICATION.— 


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

2 issue a certification to a covered territory or covered 

3 territorial instrumentality if the Oversight Board de4 termines, in its sole discretion, that such covered 

5 territory or covered territorial instrumentality, as 

6 applicable, has successfully reached a voluntary 

7 agreement with holders of its Bond Claims to re8 structure such Bond Claims— 

9 (A) except as provided in subparagraph 

10 (C), if an applicable Fiscal Plan has been cer11 tified, in a manner that provides for a sustain12 able level of debt for such covered territory or 

13 covered territorial instrumentality, as applica14 ble, and is in conformance with the applicable 

15 certified Fiscal Plan; 

16 (B) except as provided in subparagraph 

17 (C), if an applicable Fiscal Plan has not yet 

18 been certified, in a manner that provides, in the 

19 Oversight Board’s sole discretion, for a sustain20 able level of debt for such covered territory or 

21 covered territorial instrumentality; or 

22 (C) notwithstanding subparagraphs (A) 

23 and (B), if an applicable Fiscal Plan has not 

24 yet been certified and the voluntary agreement 

25 is limited solely to an extension of applicable 


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1 principal maturities and interest on Bonds 

2 issued by such covered territory or covered ter3 ritorial instrumentality, as applicable, for a pe4 riod of up to one year during which time no in5 terest will be paid on the Bond Claims affected 

6 by the voluntary agreement. 

7 (2) EFFECTIVENESS.—The effectiveness of any 

8 voluntary agreement referred to in paragraph (1) 

9 shall be conditioned on— 

10 (A) the Oversight Board delivering the cer11 tification described in paragraph (1); and 

12 (B) either— 

13 (i) the agreement of a majority in 

14 amount of the Bond Claims of a covered 

15 territory or covered territorial instrumen16 tality that is to be affected by such agree17 ment; or 

18 (ii) confirmation of a plan of adjust19 ment pursuant to section 314 of this Act 

20 or the entry of an order approving a Quali21 fying Modification pursuant to section 

22 601(m) of this Act. 

23 (3) PREEXISTING VOLUNTARY AGREEMENTS.— 

24 Any voluntary agreements that the territorial gov25 ernment or any covered territorial instrumentality 


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1 has executed with holders of its debts to restructure 

2 such debts prior to the date of enactment of the Act 

3 shall be deemed to be in conformance with the re4 quirements of this subsection, to the extent the re5 quirements of paragraph (2) have been satisfied. 

6 (j) RESTRUCTURING FILINGS.— 

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

8 before taking an action described in paragraph (2) 

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

10 under title III, the Oversight Board must certify the 

11 action. 

12 (2) ACTIONS DESCRIBED.—The actions referred 

13 to in paragraph (1) are— 

14 (A) the filing of a petition; or 

15 (B) the submission or modification of a 

16 plan of adjustment. 

17 (3) CONDITION FOR PLANS OF ADJUSTMENT.— 

18 The Oversight Board may certify a plan of adjust19 ment only if it determines, in its sole discretion, that 

20 it is consistent with the applicable certified Fiscal 

21 Plan. 

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

23 Oversight Board may seek judicial enforcement of its au24 thority to carry out its responsibilities under this Act. 

25 (l) PENALTIES.— 


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1 (1) ACTS PROHIBITED.—Any officer or em2 ployee of the territorial government who prepares, 

3 presents, or certifies any information or report for 

4 the Oversight Board or any of its agents that is in5 tentionally false or misleading, or, upon learning 

6 that any such information is false or misleading, 

7 fails to immediately advise the Oversight Board or 

8 its agents thereof in writing, shall be subject to 

9 prosecution and penalties under any laws of the ter10 ritory prohibiting the provision of false information 

11 to government officials, which in the case of Puerto 

12 Rico shall include 33 L.P.R.A. 4889, as amended. 

13 (2) ADMINISTRATIVE DISCIPLINE.—In addition 

14 to any other applicable penalty, any officer or em15 ployee of the territorial government who knowingly 

16 and willfully violates paragraph (1) or takes any 

17 such action in violation of any valid order of the 

18 Oversight Board or fails or refuses to take any ac19 tion required by any such order, shall be subject to 

20 appropriate administrative discipline, including 

21 (when appropriate) suspension from duty without 

22 pay or removal from office, by order of the Gov23 ernor. 

24 (3) REPORT BY GOVERNOR ON DISCIPLINARY

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1 graph (2) by an officer or employee of the territorial 

2 government, the Governor shall immediately report 

3 to the Oversight Board all pertinent facts together 

4 with a statement of the action taken thereon. 

5 (m) ELECTRONIC REPORTING.—The Oversight 

6 Board may, in consultation with the Governor, ensure the 

7 prompt and efficient payment and administration of taxes 

8 through the adoption of electronic reporting, payment and 

9 auditing technologies. 

10 (n) ADMINISTRATIVE SUPPORT SERVICES.—Upon 

11 the request of the Oversight Board, the Administrator of 

12 General Services shall promptly provide to the Oversight 

13 Board, on a reimbursable or non-reimbursable basis, the 

14 administrative support services necessary for the Over15 sight Board to carry out its responsibilities under this Act. 

16 SEC. 105. EXEMPTION FROM LIABILITY FOR CLAIMS. 

17 The Oversight Board, its members, and its employees 

18 shall not be liable for any obligation of or claim against 

19 the Oversight Board or its members or employees or the 

20 territorial government resulting from actions taken to 

21 carry out this Act. 

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

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

24 104(f)(2) (relating to the issuance of an order enforcing 

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


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1 debts), any action against the Oversight Board, and any 

2 action otherwise arising out of this Act, in whole or in 

3 part, shall be brought in a United States district court 

4 for the covered territory or, for any covered territory that 

5 does not have a district court, in the United States Dis6 trict Court for the District of Hawaii. 

7 (b) APPEAL.—Notwithstanding any other provision 

8 of law, any order of a United States district court that 

9 is issued pursuant to an action brought under subsection 

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

11 of appeal to the applicable United States Court of Ap12 peals. 

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

14 orders entered to remedy constitutional violations, no 

15 order of any court granting declaratory or injunctive relief 

16 against the Oversight Board, including relief permitting 

17 or requiring the obligation, borrowing, or expenditure of 

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

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

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

21 has entered its final order disposing of such action. 

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

23 duty of the applicable United States District Court, the 

24 applicable United States Court of Appeals, and, as appli25 cable, the Supreme Court of the United States to advance 


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1 on the docket and to expedite to the greatest possible ex2 tent the disposition of any matter brought under this Act. 

3 (e) REVIEW OF OVERSIGHT BOARD CERTIFI4 CATIONS.—There shall be no jurisdiction in any United 

5 States district court to review challenges to the Oversight 

6 Board’s certification determinations under this Act. 

7 SEC. 107. BUDGET AND FUNDING FOR OPERATION OF 

8 OVERSIGHT BOARD. 

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

10 shall submit a budget for each fiscal year during which 

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

12 House of Representatives Committee on Natural Re13 sources and the Senate Committee on Energy and Natural 

14 Resources, the Governor, and the Legislature. 

15 (b) FUNDING.—The Oversight Board shall use its 

16 powers with respect to the Territory Budget of the covered 

17 territory to ensure that sufficient funds are available to 

18 cover all expenses of the Oversight Board. Within 30 days 

19 after the date of enactment of this Act, the territorial gov20 ernment shall designate a dedicated funding source, not 

21 subject to subsequent legislative appropriations, sufficient 

22 to support the annual expenses of the Oversight Board 

23 as determined in the Oversight Board’s sole and exclusive 

24 discretion. 


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1 SEC. 108. AUTONOMY OF OVERSIGHT BOARD. 

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

3 Legislature may— 

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

5 or review over the Oversight Board or its activities; 

6 or 

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

8 resolution, policy, or rule that would impair or de9 feat the purposes of this Act, as determined by the 

10 Oversight Board. 

11 (b) OVERSIGHT BOARD LEGAL REPRESENTATION.— 

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

13 Board, the Oversight Board shall be represented by such 

14 counsel as it may hire or retain so long as no conflict of 

15 interest exists. 

16 SEC. 109. ETHICS. 

17 (a) CONFLICT OF INTEREST.—Notwithstanding any 

18 ethics provision governing employees of the covered terri19 tory, all members and staff of the Oversight Board shall 

20 be subject to the Federal conflict of interest requirements 

21 described in section 208 of title 18, United States Code. 

22 (b) FINANCIAL DISCLOSURE.—Notwithstanding any 

23 ethics provision governing employees of the covered terri24 tory, all members of the Oversight Board and staff des25 ignated by the Oversight Board shall be subject to disclo26 sure of their financial interests, the contents of which shall 


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1 conform to the same requirements set forth in section 102 

2 of the Ethics in Government Act of 1978 (5 U.S.C. app.). 

3 TITLE II—RESPONSIBILITIES OF 

4 OVERSIGHT BOARD 

5 SEC. 201. APPROVAL OF FISCAL PLANS. 

6 (a) IN GENERAL.—As soon as practicable after all 

7 of the members and the Chair have been appointed to the 

8 Oversight Board in accordance with section 101(e) in the 

9 fiscal year in which the Oversight Board is established, 

10 and in each fiscal year thereafter during which the Over11 sight Board is in operation, the Oversight Board shall de12 liver a notice to the Governor providing a schedule for the 

13 process of development, submission, approval, and certifi14 cation of Fiscal Plans. The notice may also set forth a 

15 schedule for revisions to any Fiscal Plan that has already 

16 been certified, which revisions must be subject to subse17 quent approval and certification by the Oversight Board. 

18 The Oversight Board shall consult with the Governor in 

19 establishing a schedule, but the Oversight Board shall re20 tain sole discretion to set or, by delivery of a subsequent 

21 notice to the Governor, change the dates of such schedule 

22 as it deems appropriate and reasonably feasible. 

23 (b) REQUIREMENTS.— 

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

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1 torial government or covered territorial instrumen2 tality, provide a method to achieve fiscal responsi3 bility and access to the capital markets, and— 

4 (A) provide for estimates of revenues and 

5 expenditures in conformance with agreed ac6 counting standards and be based on— 

7 (i) applicable laws; or 

8 (ii) specific bills that require enact9 ment in order to reasonably achieve the 

10 projections of the Fiscal Plan; 

11 (B) ensure the funding of essential public 

12 services; 

13 (C) provide adequate funding for public 

14 pension systems; 

15 (D) provide for the elimination of struc16 tural deficits; 

17 (E) for fiscal years covered by a Fiscal 

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

19 not effective, provide for a debt burden that is 

20 sustainable; 

21 (F) improve fiscal governance, account22 ability, and internal controls; 

23 (G) enable the achievement of fiscal tar24 gets; 


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1 (H) create independent forecasts of rev2 enue for the period covered by the Fiscal Plan; 

3 (I) include a debt sustainability analysis; 

4 (J) provide for capital expenditures and in5 vestments necessary to promote economic 

6 growth; 

7 (K) adopt appropriate recommendations 

8 submitted by the Oversight Board under section 

9 205(a); 

10 (L) include such additional information as 

11 the Oversight Board deems necessary; 

12 (M) ensure that assets, funds, or resources 

13 of a territorial instrumentality are not loaned 

14 to, transferred to, or otherwise used for the 

15 benefit of a covered territory or another covered 

16 territorial instrumentality of a covered territory, 

17 unless permitted by the constitution of the ter18 ritory or agreed to by a certified voluntary 

19 agreement under section 104(i), an approved 

20 plan of adjustment under title III, or a Quali21 fying Modification approved under title VI; and 

22 (N) respect the relative lawful priorities or 

23 lawful liens, as may be applicable, in the con24 stitution, other laws, or agreements of a covered 

25 territory or covered territorial instrumentality 


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1 in effect prior to the date of enactment of this 

2 Act. 

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

4 section shall cover a period of fiscal years as deter5 mined by the Oversight Board in its sole discretion 

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

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

8 the Oversight Board. 

9 (c) DEVELOPMENT, REVIEW, APPROVAL, AND CER10 TIFICATION OF FISCAL PLAN.— 

11 (1) TIMING REQUIREMENT.—The Governor 

12 may not submit to the Legislature a Territory Budg13 et under section 202 for a fiscal year unless the 

14 Oversight Board has certified the Fiscal Plan for 

15 that fiscal year in accordance with this subsection, 

16 unless the Oversight Board in its sole discretion 

17 waives this requirement. 

18 (2) FISCAL PLAN DEVELOPED BY GOVERNOR.— 

19 The Governor shall submit to the Oversight Board 

20 any proposed Fiscal Plan required by the Oversight 

21 Board by the time specified in the notice delivered 

22 under subsection (a). 

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

24 Oversight Board shall review the proposed Fiscal 

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1 ments set forth in subsection (b) and, if the Over2 sight Board determines in its sole discretion that the 

3 proposed Fiscal Plan— 

4 (A) satisfies such requirements, the Over5 sight Board shall approve the proposed Fiscal 

6 Plan; or 

7 (B) does not satisfy such requirements, the 

8 Oversight Board shall provide to the Gov9 ernor— 

10 (i) a notice of violation that includes 

11 recommendations for revisions to the appli12 cable Fiscal Plan; and 

13 (ii) an opportunity to correct the vio14 lation in accordance with subsection (d)(1). 

15 (d) REVISED FISCAL PLAN.— 

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

17 notice of violation under subsection (c)(3), the Gov18 ernor shall submit to the Oversight Board a revised 

19 proposed Fiscal Plan in accordance with subsection 

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

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

22 many revised Fiscal Plans to the Oversight Board as 

23 the schedule established in the notice delivered under 

24 subsection (a) permits. 


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1 (2) DEVELOPMENT BY OVERSIGHT BOARD.—If 

2 the Governor fails to submit to the Oversight Board 

3 a Fiscal Plan that the Oversight Board determines 

4 in its sole discretion satisfies the requirements set 

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

6 notice delivered under subsection (a), the Oversight 

7 Board shall develop and submit to the Governor and 

8 the Legislature a Fiscal Plan that satisfies the re9 quirements set forth in subsection (b). 

10 (e) APPROVAL AND CERTIFICATION.— 

11 (1) APPROVAL OF FISCAL PLAN DEVELOPED BY

12 GOVERNOR.—If the Oversight Board approves a Fis13 cal Plan under subsection (c)(3), it shall deliver a 

14 compliance certification for such Fiscal Plan to the 

15 Governor and the Legislature. 

16 (2) DEEMED APPROVAL OF FISCAL PLAN DE17 VELOPED BY OVERSIGHT BOARD.—If the Oversight 

18 Board develops a Fiscal Plan under subsection 

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

20 by the Governor, and the Oversight Board shall 

21 issue a compliance certification for such Fiscal Plan 

22 to the Governor and the Legislature. 

23 (f) JOINT DEVELOPMENT OF FISCAL PLAN.—Not24 withstanding any other provision of this section, if the 

25 Governor and the Oversight Board jointly develop a Fiscal 


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1 Plan for the fiscal year that meets the requirements under 

2 this section, and that the Governor and the Oversight 

3 Board certify that the fiscal plan reflects a consensus be4 tween the Governor and the Oversight Board, then such 

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

6 or territorial instrumentality for that fiscal year. 

7 SEC. 202. APPROVAL OF BUDGETS. 

8 (a) REASONABLE SCHEDULE FOR DEVELOPMENT OF

9 BUDGETS.—As soon as practicable after all of the mem10 bers and the Chair have been appointed to the Oversight 

11 Board in the fiscal year in which the Oversight Board is 

12 established, and in each fiscal year thereafter during 

13 which the Oversight Board is in operation, the Oversight 

14 Board shall deliver a notice to the Governor and the Legis15 lature providing a schedule for developing, submitting, ap16 proving, and certifying Budgets for a period of fiscal years 

17 as determined by the Oversight Board in its sole discretion 

18 but in any case a period of not less than one fiscal year 

19 following the fiscal year in which the notice is delivered. 

20 The notice may also set forth a schedule for revisions to 

21 Budgets that have already been certified, which revisions 

22 must be subject to subsequent approval and certification 

23 by the Oversight Board. The Oversight Board shall con24 sult with the Governor and the Legislature in establishing 

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1 cretion to set or, by delivery of a subsequent notice to the 

2 Governor and the Legislature, change the dates of such 

3 schedule as it deems appropriate and reasonably feasible. 

4 (b) REVENUE FORECAST.—The Oversight Board 

5 shall submit to the Governor and Legislature a forecast 

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

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

8 for use by the Governor in developing the Budget under 

9 subsection (c). 

10 (c) BUDGETS DEVELOPED BY GOVERNOR.— 

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

12 Governor shall submit to the Oversight Board pro13 posed Budgets by the time specified in the notice de14 livered under subsection (a). In consultation with the 

15 Governor in accordance with the process specified in 

16 the notice delivered under subsection (a), the Over17 sight Board shall determine in its sole discretion 

18 whether each proposed Budget is compliant with the 

19 applicable Fiscal Plan and— 

20 (A) if a proposed Budget is a compliant 

21 budget, the Oversight Board shall— 

22 (i) approve the Budget; and 

23 (ii) if the Budget is a Territory Budg24 et, submit the Territory Budget to the 

25 Legislature; or 


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1 (B) if the Oversight Board determines that 

2 the Budget is not a compliant budget, the Over3 sight Board shall provide to the Governor— 

4 (i) a notice of violation that includes 

5 a description of any necessary corrective 

6 action; and 

7 (ii) an opportunity to correct the vio8 lation in accordance with paragraph (2). 

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

10 may correct any violations identified by the Over11 sight Board and submit a revised proposed Budget 

12 to the Oversight Board in accordance with para13 graph (1). The Governor may submit as many re14 vised Budgets to the Oversight Board as the sched15 ule established in the notice delivered under sub16 section (a) permits. If the Governor fails to develop 

17 a Budget that the Oversight Board determines is a 

18 compliant budget by the time specified in the notice 

19 delivered under subsection (a), the Oversight Board 

20 shall develop and submit to the Governor, in the 

21 case of an Instrumentality Budget, and to the Gov22 ernor and the Legislature, in the case of a Territory 

23 Budget, a revised compliant budget. 

24 (d) BUDGET APPROVAL BY LEGISLATURE.— 


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1 (1) LEGISLATURE ADOPTED BUDGET.—The 

2 Legislature shall submit to the Oversight Board the 

3 Territory Budget adopted by the Legislature by the 

4 time specified in the notice delivered under sub5 section (a). The Oversight Board shall determine 

6 whether the adopted Territory Budget is a compliant 

7 budget and— 

8 (A) if the adopted Territory Budget is a 

9 compliant budget, the Oversight Board shall 

10 issue a compliance certification for such compli11 ant budget pursuant to subsection (e); and 

12 (B) if the adopted Territory Budget is not 

13 a compliant budget, the Oversight Board shall 

14 provide to the Legislature— 

15 (i) a notice of violation that includes 

16 a description of any necessary corrective 

17 action; and 

18 (ii) an opportunity to correct the vio19 lation in accordance with paragraph (2). 

20 (2) LEGISLATURE’S REVISIONS.—The Legisla21 ture may correct any violations identified by the 

22 Oversight Board and submit a revised Territory 

23 Budget to the Oversight Board in accordance with 

24 the process established under paragraph (1) and by 

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1 section (a). The Legislature may submit as many re2 vised adopted Territory Budgets to the Oversight 

3 Board as the schedule established in the notice deliv4 ered under subsection (a) permits. If the Legislature 

5 fails to adopt a Territory Budget that the Oversight 

6 Board determines is a compliant budget by the time 

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

8 the Oversight Board shall develop a revised Terri9 tory Budget that is a compliant budget and submit 

10 it to the Governor and the Legislature. 

11 (e) CERTIFICATION OF BUDGETS.— 

12 (1) CERTIFICATION OF DEVELOPED AND AP13 PROVED TERRITORY BUDGETS.—If the Governor and 

14 the Legislature develop and approve a Territory 

15 Budget that is a compliant budget by the day before 

16 the first day of the fiscal year for which the Terri17 tory Budget is being developed and in accordance 

18 with the process established under subsections (c) 

19 and (d), the Oversight Board shall issue a compli20 ance certification to the Governor and the Legisla21 ture for such Territory Budget. 

22 (2) CERTIFICATION OF DEVELOPED INSTRU23 MENTALITY BUDGETS.—If the Governor develops an 

24 Instrumentality Budget that is a compliant budget 

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


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1 which the Instrumentality Budget is being developed 

2 and in accordance with the process established under 

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

4 compliance certification to the Governor for such In5 strumentality Budget. 

6 (3) DEEMED CERTIFICATION OF TERRITORY

7 BUDGETS.—If the Governor and the Legislature fail 

8 to develop and approve a Territory Budget that is 

9 a compliant budget by the day before the first day 

10 of the fiscal year for which the Territory Budget is 

11 being developed, the Oversight Board shall submit a 

12 Budget to the Governor and the Legislature (includ13 ing any revision to the Territory Budget made by 

14 the Oversight Board pursuant to subsection (d)(2)) 

15 and such Budget shall be— 

16 (A) deemed to be approved by the Gov17 ernor and the Legislature; 

18 (B) the subject of a compliance certifi19 cation issued by the Oversight Board to the 

20 Governor and the Legislature; and 

21 (C) in full force and effect beginning on 

22 the first day of the applicable fiscal year. 

23 (4) DEEMED CERTIFICATION OF INSTRUMEN24 TALITY BUDGETS.—If the Governor fails to develop 

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1 et by the day before the first day of the fiscal year 

2 for which the Instrumentality Budget is being devel3 oped, the Oversight Board shall submit an Instru4 mentality Budget to the Governor (including any re5 vision to the Territory Budget made by the Over6 sight Board pursuant to subsection (c)(2)) and such 

7 Budget shall be— 

8 (A) deemed to be approved by the Gov9 ernor; 

10 (B) the subject of a compliance certifi11 cation issued by the Oversight Board to the 

12 Governor; and 

13 (C) in full force and effect beginning on 

14 the first day of the applicable fiscal year. 

15 (f) JOINT DEVELOPMENT OF BUDGETS.—Notwith16 standing any other provision of this section, if, in the case 

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

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

19 Budget, the Governor and the Oversight Board, jointly de20 velop such Budget for the fiscal year that meets the re21 quirements under this section, and that the relevant par22 ties certify that such budget reflects a consensus among 

23 them, then such Budget shall serve as the Budget for the 

24 territory or territorial instrumentality for that fiscal year. 


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1 SEC. 203. EFFECT OF FINDING OF NONCOMPLIANCE WITH 

2 BUDGET. 

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

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

5 (beginning with the fiscal year determined by the Over6 sight Board), the Governor shall submit to the Oversight 

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

8 require, describing— 

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

10 and cash flows of the territorial government for the 

11 preceding quarter, as compared to the projected rev12 enues, expenditures, and cash flows contained in the 

13 certified Budget for such preceding quarter; and 

14 (2) any other information requested by the 

15 Oversight Board, which may include a balance sheet 

16 or a requirement that the Governor provide informa17 tion for each covered territorial instrumentality sep18 arately. 

19 (b) INITIAL ACTION BY OVERSIGHT BOARD.— 

20 (1) IN GENERAL.—If the Oversight Board de21 termines, based on reports submitted by the Gov22 ernor under subsection (a), independent audits, or 

23 such other information as the Oversight Board may 

24 obtain, that the actual quarterly revenues, expendi25 tures, or cash flows of the territorial government are 

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1 tures, or cash flows set forth in the certified Budget 

2 for such quarter, the Oversight Board shall— 

3 (A) require the territorial government to 

4 provide such additional information as the 

5 Oversight Board determines to be necessary to 

6 explain the inconsistency; and 

7 (B) if the additional information provided 

8 under subparagraph (A) does not provide an ex9 planation for the inconsistency that the Over10 sight Board finds reasonable and appropriate, 

11 advise the territorial government to correct the 

12 inconsistency by implementing remedial action. 

13 (2) DEADLINES.—The Oversight Board shall 

14 establish the deadlines by which the territorial gov15 ernment shall meet the requirements of subpara16 graphs (A) and (B) of paragraph (1). 

17 (c) CERTIFICATION OF VARIANCE.— 

18 (1) VARIANCE.—If the territorial government 

19 fails to provide additional information under sub20 section (b)(1)(A), or fails to correct a variance under 

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

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

23 certify to the President, the House of Representa24 tives Committee on Natural Resources, the Senate 

25 Committee on Energy and Natural Resources, the 


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1 Governor, and the Legislature that the territorial 

2 government is at variance with the applicable cer3 tified Budget, and shall describe the nature and 

4 amount of the variance. 

5 (2) CORRECTION OF VARIANCE.—If the Over6 sight Board determines that the territorial govern7 ment has initiated such measures as the Oversight 

8 Board considers sufficient to correct a variance cer9 tified under paragraph (1), the Oversight Board 

10 shall certify the correction to the President, the 

11 House of Representatives Committee on Natural Re12 sources, the Senate Committee on Energy and Nat13 ural Resources, the Governor, and the Legislature. 

14 (d) BUDGET REDUCTIONS BY OVERSIGHT BOARD.— 

15 If the Oversight Board determines that the Governor, in 

16 the case of any then-applicable certified Instrumentality 

17 Budgets, and the Governor and the Legislature, in the 

18 case of the then-applicable certified Territory Budget, 

19 have failed to correct a variance identified by the Over20 sight Board under subsection (c), the Oversight Board 

21 shall— 

22 (1) with respect to the territorial government, 

23 other than covered territorial instrumentalities, 

24 make appropriate reductions in nondebt expendi25 tures to ensure that the actual quarterly revenues 


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1 and expenditures for the territorial government are 

2 in compliance with the applicable certified Territory 

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

4 Oversight Board is established, the budget adopted 

5 by the Governor and the Legislature; and 

6 (2) with respect to covered territorial instru7 mentalities at the sole discretion of the Oversight 

8 Board— 

9 (A) make reductions in nondebt expendi10 tures to ensure that the actual quarterly reve11 nues and expenses for the covered territorial in12 strumentality are in compliance with the appli13 cable certified Budget or, in the case of the fis14 cal year in which the Oversight Board is estab15 lished, the budget adopted by the Governor and 

16 the Legislature or the covered territorial instru17 mentality, as applicable; or 

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

19 the covered territorial instrumentality; and 

20 (ii) prohibit the covered territorial instru21 mentality from entering into any contract or en22 gaging in any financial or other transactions, 

23 unless the contract or transaction was pre24 viously approved by the Oversight Board. 


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1 (e) TERMINATION OF BUDGET REDUCTIONS.—The 

2 Oversight Board shall cancel the reductions under sub3 section (d) if the Oversight Board determines that the ter4 ritorial government or covered territorial instrumentality, 

5 as applicable, has initiated appropriate measures to reduce 

6 expenditures or increase revenues to ensure that the terri7 torial government or covered territorial instrumentality is 

8 in compliance with the applicable certified Budget or, in 

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

10 is established, the budget adopted by the Governor and 

11 the Legislature. 

12 SEC. 204. REVIEW OF ACTIVITIES TO ENSURE COMPLIANCE 

13 WITH FISCAL PLAN. 

14 (a) SUBMISSION OF LEGISLATIVE ACTS TO OVER15 SIGHT BOARD.— 

16 (1) SUBMISSION OF ACTS.—Except to the ex17 tent that the Oversight Board may provide otherwise 

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

19 7 business days after a territorial government duly 

20 enacts any law during any fiscal year in which the 

21 Oversight Board is in operation, the Governor shall 

22 submit the law to the Oversight Board. 

23 (2) COST ESTIMATE; CERTIFICATION OF COM24 PLIANCE OR NONCOMPLIANCE.—The Governor shall 


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1 include with each law submitted to the Oversight 

2 Board under paragraph (1) the following: 

3 (A) A formal estimate prepared by an ap4 propriate entity of the territorial government 

5 with expertise in budgets and financial manage6 ment of the impact, if any, that the law will 

7 have on expenditures and revenues. 

8 (B) If the appropriate entity described in 

9 subparagraph (A) finds that the law is not sig10 nificantly inconsistent with the Fiscal Plan for 

11 the fiscal year, it shall issue a certification of 

12 such finding. 

13 (C) If the appropriate entity described in 

14 subparagraph (A) finds that the law is signifi15 cantly inconsistent with the Fiscal Plan for the 

16 fiscal year, it shall issue a certification of such 

17 finding, together with the entity’s reasons for 

18 such finding. 

19 (3) NOTIFICATION.—The Oversight Board shall 

20 send a notification to the Governor and the Legisla21 ture if— 

22 (A) the Governor submits a law to the 

23 Oversight Board under this subsection that is 

24 not accompanied by the estimate required under 

25 paragraph (2)(A); 


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1 (B) the Governor submits a law to the 

2 Oversight Board under this subsection that is 

3 not accompanied by either a certification de4 scribed in paragraph (2)(B) or (2)(C); or 

5 (C) the Governor submits a law to the 

6 Oversight Board under this subsection that is 

7 accompanied by a certification described in 

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

9 inconsistent with the Fiscal Plan. 

10 (4) OPPORTUNITY TO RESPOND TO NOTIFICA11 TION.— 

12 (A) FAILURE TO PROVIDE ESTIMATE OR

13 CERTIFICATION.—After sending a notification 

14 to the Governor and the Legislature under 

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

16 law, the Oversight Board may direct the Gov17 ernor to provide the missing estimate or certifi18 cation (as the case may be), in accordance with 

19 such procedures as the Oversight Board may 

20 establish. 

21 (B) SUBMISSION OF CERTIFICATION OF

22 SIGNIFICANT INCONSISTENCY WITH FISCAL

23 PLAN AND BUDGET.—In accordance with such 

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1 ernor and Legislature under paragraph (3)(C) 

2 that a law is significantly inconsistent with the 

3 Fiscal Plan, the Oversight Board shall direct 

4 the territorial government to— 

5 (i) correct the law to eliminate the in6 consistency; or 

7 (ii) provide an explanation for the in8 consistency that the Oversight Board finds 

9 reasonable and appropriate. 

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

11 government fails to comply with a direction given by 

12 the Oversight Board under paragraph (4) with re13 spect to a law, the Oversight Board may take such 

14 actions as it considers necessary, consistent with this 

15 Act, to ensure that the enactment or enforcement of 

16 the law will not adversely affect the territorial gov17 ernment’s compliance with the Fiscal Plan, including 

18 preventing the enforcement or application of the law. 

19 (6) PRELIMINARY REVIEW OF PROPOSED

20 ACTS.—At the request of the Legislature, the Over21 sight Board may conduct a preliminary review of 

22 proposed legislation before the Legislature to deter23 mine whether the legislation as proposed would be 

24 consistent with the applicable Fiscal Plan under this 

25 subtitle, except that any such preliminary review 


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1 shall not be binding on the Oversight Board in re2 viewing any law subsequently submitted under this 

3 subsection. 

4 (b) EFFECT OF APPROVED FISCAL PLAN ON CON5 TRACTS, RULES, AND REGULATIONS.— 

6 (1) TRANSPARENCY IN CONTRACTING.—The 

7 Oversight Board shall work with a covered terri8 tory’s office of the comptroller or any functionally 

9 equivalent entity to promote compliance with the ap10 plicable law of any covered territory that requires 

11 agencies and instrumentalities of the territorial gov12 ernment to maintain a registry of all contracts exe13 cuted, including amendments thereto, and to remit 

14 a copy to the office of the comptroller for inclusion 

15 in a comprehensive database available to the public. 

16 With respect to Puerto Rico, the term ‘‘applicable 

17 law’’ refers to 2 L.P.R.A. 97. 

18 (2) AUTHORITY TO REVIEW CERTAIN CON19 TRACTS.—The Oversight Board may establish poli20 cies to require prior Oversight Board approval of 

21 certain contracts, including leases, proposed to be 

22 executed by the territorial government, to ensure 

23 such proposed contracts are not inconsistent with 

24 the approved Fiscal Plan. 


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

2 Congress that any policies established by the Over3 sight Board pursuant to paragraph (2) should be de4 signed to make the government contracting process 

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

6 process, to make appropriate use of the Oversight 

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

8 any additional bureaucratic obstacles to efficient 

9 contracting. 

10 (4) AUTHORITY TO REVIEW CERTAIN RULES, 

11 REGULATIONS, AND EXECUTIVE ORDERS.—The pro12 visions of this paragraph shall apply with respect to 

13 a rule, regulation, or executive order proposed to be 

14 issued by the Governor (or the head of any depart15 ment or agency of the territorial government) in the 

16 same manner as such provisions apply to a contract. 

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

18 regulation, or executive order fails to comply with 

19 policies established by the Oversight Board under 

20 this subsection, the Oversight Board may take such 

21 actions as it considers necessary to ensure that such 

22 contract, rule, executive order or regulation will not 

23 adversely affect the territorial government’s compli24 ance with the Fiscal Plan, including by preventing 


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1 the execution or enforcement of the contract, rule, 

2 executive order or regulation. 

3 (c) RESTRICTIONS ON BUDGETARY ADJUSTMENTS.— 

4 (1) SUBMISSIONS OF REQUESTS TO OVERSIGHT

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

6 Legislature for the reprogramming of any amounts 

7 provided in a certified Budget, the Governor shall 

8 submit such request to the Oversight Board, which 

9 shall analyze whether the proposed reprogramming 

10 is significantly inconsistent with the Budget, and 

11 submit its analysis to the Legislature as soon as 

12 practicable after receiving the request. 

13 (2) NO ACTION PERMITTED UNTIL ANALYSIS

14 RECEIVED.—The Legislature shall not adopt a re15 programming, and no officer or employee of the ter16 ritorial government may carry out any reprogram17 ming, until the Oversight Board has provided the 

18 Legislature with an analysis that certifies such re19 programming will not be inconsistent with the Fiscal 

20 Plan and Budget. 

21 (3) PROHIBITION ON ACTION UNTIL OVERSIGHT

22 BOARD IS APPOINTED.—During the period after a 

23 territory becomes a covered territory and prior to 

24 the appointment of all members and the Chair of the 

25 Oversight Board, such covered territory shall not 


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1 enact new laws that either permit the transfer of 

2 any funds or assets outside the ordinary course of 

3 business or that are inconsistent with the constitu4 tion or laws of the territory as of the date of enact5 ment of this Act, provided that any executive or leg6 islative action authorizing the movement of funds or 

7 assets during this time period may be subject to re8 view and reversal by the Oversight Board upon ap9 pointment of the Oversight Board’s full membership. 

10 (d) IMPLEMENTATION OF FEDERAL PROGRAMS.—In 

11 taking actions under this Act, the Oversight Board shall 

12 not exercise applicable authorities to impede territorial ac13 tions taken to— 

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

15 or injunction, or an administrative order or settle16 ment with a Federal agency, with respect to Federal 

17 programs; 

18 (2) implement a federally authorized or feder19 ally delegated program; or 

20 (3) implement territorial laws, which are con21 sistent with a certified Fiscal Plan, that execute 

22 Federal requirements and standards. 


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1 SEC. 205. RECOMMENDATIONS ON FINANCIAL STABILITY 

2 AND MANAGEMENT RESPONSIBILITY. 

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

4 time submit recommendations to the Governor or the Leg5 islature on actions the territorial government may take to 

6 ensure compliance with the Fiscal Plan, or to otherwise 

7 promote the financial stability, economic growth, manage8 ment responsibility, and service delivery efficiency of the 

9 territorial government, including recommendations relat10 ing to— 

11 (1) the management of the territorial govern12 ment’s financial affairs, including economic fore13 casting and multiyear fiscal forecasting capabilities, 

14 information technology, placing controls on expendi15 tures for personnel, reducing benefit costs, reforming 

16 procurement practices, and placing other controls on 

17 expenditures; 

18 (2) the structural relationship of departments, 

19 agencies, and independent agencies within the terri20 torial government; 

21 (3) the modification of existing revenue struc22 tures, or the establishment of additional revenue 

23 structures; 

24 (4) the establishment of alternatives for meet25 ing obligations to pay for the pensions of former ter26 ritorial government employees; 


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1 (5) modifications or transfers of the types of 

2 services that are the responsibility of, and are deliv3 ered by the territorial government; 

4 (6) modifications of the types of services that 

5 are delivered by entities other than the territorial 

6 government under alternative service delivery mecha7 nisms; 

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

9 orders on the operations of the territorial govern10 ment; 

11 (8) the establishment of a personnel system for 

12 employees of the territorial government that is based 

13 upon employee performance standards; 

14 (9) the improvement of personnel training and 

15 proficiency, the adjustment of staffing levels, and 

16 the improvement of training and performance of 

17 management and supervisory personnel; and 

18 (10) the privatization and commercialization of 

19 entities within the territorial government. 

20 (b) RESPONSE TO RECOMMENDATIONS BY THE TER21 RITORIAL GOVERNMENT.— 

22 (1) IN GENERAL.—In the case of any rec23 ommendations submitted under subsection (a) that 

24 are within the authority of the territorial govern25 ment to adopt, not later than 90 days after receiving 


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1 the recommendations, the Governor or the Legisla2 ture (whichever has the authority to adopt the rec3 ommendation) shall submit a statement to the Over4 sight Board that provides notice as to whether the 

5 territorial government will adopt the recommenda6 tions. 

7 (2) IMPLEMENTATION PLAN REQUIRED FOR

8 ADOPTED RECOMMENDATIONS.—If the Governor or 

9 the Legislature (whichever is applicable) notifies the 

10 Oversight Board under paragraph (1) that the terri11 torial government will adopt any of the recommenda12 tions submitted under subsection (a), the Governor 

13 or the Legislature (whichever is applicable) shall in14 clude in the statement a written plan to implement 

15 the recommendation that includes— 

16 (A) specific performance measures to de17 termine the extent to which the territorial gov18 ernment has adopted the recommendation; and 

19 (B) a clear and specific timetable pursuant 

20 to which the territorial government will imple21 ment the recommendation. 

22 (3) EXPLANATIONS REQUIRED FOR REC23 OMMENDATIONS NOT ADOPTED.—If the Governor or 

24 the Legislature (whichever is applicable) notifies the 

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1 torial government will not adopt any recommenda2 tion submitted under subsection (a) that the terri3 torial government has authority to adopt, the Gov4 ernor or the Legislature shall include in the state5 ment explanations for the rejection of the rec6 ommendations, and the Governor or the Legislature 

7 shall submit such statement of explanations to the 

8 President and Congress. 

9 SEC. 206. OVERSIGHT BOARD DUTIES RELATED TO RE10 STRUCTURING. 

11 (a) REQUIREMENTS FOR RESTRUCTURING CERTIFI12 CATION.—The Oversight Board, prior to issuing a restruc13 turing certification regarding an entity (as such term is 

14 defined in section 101 of title 11, United States Code), 

15 shall determine, in its sole discretion, that— 

16 (1) the entity has made good-faith efforts to 

17 reach a consensual restructuring with creditors; 

18 (2) the entity has— 

19 (A) adopted procedures necessary to de20 liver timely audited financial statements; and 

21 (B) made public draft financial statements 

22 and other information sufficient for any inter23 ested person to make an informed decision with 

24 respect to a possible restructuring; 


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

2 has adopted a Fiscal Plan certified by the Oversight 

3 Board, a covered territorial instrumentality that is 

4 subject to a Territory Fiscal Plan certified by the 

5 Oversight Board, or a covered territorial instrumen6 tality that has adopted an Instrumentality Fiscal 

7 Plan certified by the Oversight Board; and 

8 (4)(A) no order approving a Qualifying Modi9 fication under section 601 has been entered with re10 spect to such entity; or 

11 (B) if an order approving a Qualifying Modi12 fication has been entered with respect to such entity, 

13 the entity is unable to make its debt payments not14 withstanding the approved Qualifying Modification, 

15 in which case, all claims affected by the Qualifying 

16 Modification shall be subject to a title III case. 

17 (b) ISSUANCE OF RESTRUCTURING CERTIFI18 CATION.—The issuance of a restructuring certification 

19 under this section requires a vote of no fewer than 5 mem20 bers of the Oversight Board in the affirmative, which shall 

21 satisfy the requirement set forth in section 302(2) of this 

22 Act. 


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1 SEC. 207. OVERSIGHT BOARD AUTHORITY RELATED TO 

2 DEBT ISSUANCE. 

3 For so long as the Oversight Board remains in oper4 ation, no territorial government may, without the prior ap5 proval of the Oversight Board, issue debt or guarantee, 

6 exchange, modify, repurchase, redeem, or enter into simi7 lar transactions with respect to its debt. 

8 SEC. 208. REQUIRED REPORTS. 

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

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

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

12 and the Legislature, describing— 

13 (1) the progress made by the territorial govern14 ment in meeting the objectives of this Act during the 

15 fiscal year; 

16 (2) the assistance provided by the Oversight 

17 Board to the territorial government in meeting the 

18 purposes of this Act during the fiscal year; 

19 (3) recommendations to the President and Con20 gress on changes to this Act or other Federal laws, 

21 or other actions of the Federal Government, that 

22 would assist the territorial government in complying 

23 with the certified Fiscal Plan; 

24 (4) the precise manner in which funds allocated 

25 to the Oversight Board under section 107 and, as 


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1 applicable, section 104(e) have been spent by the 

2 Oversight Board during the fiscal year; and 

3 (5) any other activities of the Oversight Board 

4 during the fiscal year. 

5 (b) REPORT ON DISCRETIONARY TAX ABATEMENT

6 AGREEMENTS.—Within six months of the establishment 

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

8 to the Oversight Board documenting all existing discre9 tionary tax abatement or similar tax relief agreements to 

10 which the territorial government, or any territorial instru11 mentality, is a party, provided that— 

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

13 limit the power of the territorial government or any 

14 territorial instrumentality to execute or modify dis15 cretionary tax abatement or similar tax relief agree16 ments, or to enforce compliance with the terms and 

17 conditions of any discretionary tax abatement or 

18 similar tax relief agreement, to which the territorial 

19 government or any territorial instrumentality is a 

20 party; and 

21 (2) the Members and Staff of the Oversight 

22 Board shall not disclose the contents of the report 

23 described in this subsection, and shall otherwise 

24 comply with all applicable territorial and Federal 


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1 laws and regulations regarding the handling of con2 fidential taxpayer information. 

3 (c) QUARTERLY REPORTS OF CASH FLOW.—The 

4 Oversight Board, when feasible, shall report on the 

5 amount of cash flow available for the payment of debt 

6 service on all notes, bonds, debentures, credit agreements, 

7 or other instruments for money borrowed whose enforce8 ment is subject to a stay or moratorium hereunder, to9 gether with any variance from the amount set forth in the 

10 debt sustainability analysis of the Fiscal Plan under sec11 tion 201(b)(1)(I). 

12 SEC. 209. TERMINATION OF OVERSIGHT BOARD. 

13 An Oversight Board shall terminate upon certifi14 cation by the Oversight Board that— 

15 (1) the applicable territorial government has 

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

17 markets at reasonable interest rates to meet the bor18 rowing needs of the territorial government; and 

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

20 (A) the territorial government has devel21 oped its Budgets in accordance with modified 

22 accrual accounting standards; and 

23 (B) the expenditures made by the terri24 torial government during each fiscal year did 

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1 ernment during that year, as determined in ac2 cordance with modified accrual accounting 

3 standards. 

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

5 STATES. 

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

7 United States is not pledged for the payment of any prin8 cipal of or interest on any bond, note, or other obligation 

9 issued by a covered territory or covered territorial instru10 mentality. The United States is not responsible or liable 

11 for the payment of any principal of or interest on any 

12 bond, note, or other obligation issued by a covered terri13 tory or covered territorial instrumentality. 

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

15 which the United States is determined to be liable under 

16 this Act shall be subject to appropriations. 

17 SEC. 211. ANALYSIS OF PENSIONS. 

18 (a) DETERMINATION.—If the Oversight Board deter19 mines, in its sole discretion, that a pension system of the 

20 territorial government is materially underfunded, the 

21 Oversight Board shall conduct an analysis prepared by an 

22 independent actuary of such pension system to assist the 

23 Oversight Board in evaluating the fiscal and economic im24 pact of the pension cash flows. 


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1 (b) PROVISIONS OF ANALYSIS.—An analysis con2 ducted under subsection (a) shall include— 

3 (1) an actuarial study of the pension liabilities 

4 and funding strategy that includes a forward looking 

5 projection of payments of at least 30 years of benefit 

6 payments and funding strategy to cover such pay7 ments; 

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

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

10 sustainability; and 

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

12 operational arrangements, and any other studies of 

13 the pension system the Oversight Board shall deem 

14 necessary. 

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

16 the analysis conducted under subsection (a) shall include 

17 information regarding the fair market value and liabilities 

18 using an appropriate discount rate as determined by the 

19 Oversight Board. 

20 SEC. 212. INTERVENTION IN LITIGATION. 

21 (a) INTERVENTION.—The Oversight Board may in22 tervene in any litigation filed against the territorial gov23 ernment. 

24 (b) INJUNCTIVE RELIEF.— 


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1 (1) IN GENERAL.—If the Oversight Board in2 tervenes in a litigation under subsection (a), the 

3 Oversight Board may seek injunctive relief, including 

4 a stay of litigation. 

5 (2) NO INDEPENDENT BASIS FOR RELIEF.— 

6 This section does not create an independent basis on 

7 which injunctive relief, including a stay of litigation, 

8 may be granted. 

9 TITLE III—ADJUSTMENTS OF 

10 DEBTS 

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

12 (a) SECTIONS APPLICABLE TO CASES UNDER THIS

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

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

15 344, 347(b), 349, 350(b), 351, 361, 362, 364(c), 364(d), 

16 364(e), 364(f), 365, 366, 501, 502, 503, 504, 506, 

17 507(a)(2), 509, 510, 524(a)(1), 524(a)(2), 544, 545, 546, 

18 547, 548, 549(a), 549(c), 549(d), 550, 551, 552, 553, 

19 555, 556, 557, 559, 560, 561, 562, 902 (except as other20 wise provided in this section), 922, 923, 924, 925, 926, 

21 927, 928, 942, 944, 945, 946, 1102, 1103, 1109, 1111(b), 

22 1122, 1123(a)(1), 1123(a)(2), 1123(a)(3), 1123(a)(4), 

23 1123(a)(5), 1123(b), 1123(d), 1124, 1125, 1126(a), 

24 1126(b), 1126(c), 1126(e), 1126(f), 1126(g), 1127(d), 

25 1128, 1129(a)(2), 1129(a)(3), 1129(a)(6), 1129(a)(8), 


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

2 1142(b), 1143, 1144, 1145, and 1146(a) of title 11, 

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

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

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

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

7 which such case is commenced under this title. 

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

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

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

11 to the term for the purpose of the applicable section, un12 less the term is otherwise defined in this title. 

13 (c) DEFINITIONS.—In this title: 

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

15 addition to the definition made applicable in a case 

16 under this title by subsection (a)— 

17 (A) for a territory, any territorial instru18 mentality; and 

19 (B) for a territorial instrumentality, the 

20 governing territory and any of the other terri21 torial instrumentalities of the territory. 

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

23 territory or covered territorial instrumentality con24 cerning which a case under this title has been com25 menced. 


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1 (3) HOLDER OF A CLAIM OR INTEREST.—The 

2 term ‘‘holder of a claim or interest’’, when used in 

3 section 1126 of title 11, United States Code, made 

4 applicable in a case under this title by subsection 

5 (a)— 

6 (A) shall exclude any Issuer or Authorized 

7 Instrumentality of the Territory Government 

8 Issuer or a corporation, trust or other legal en9 tity that is controlled by the Issuer or an Au10 thorized Territorial Instrumentality of the Ter11 ritory Government Issuer; and 

12 (B) with reference to Insured Bonds, shall 

13 mean the monoline insurer insuring such In14 sured Bond to the extent such insurer is grant15 ed the right to vote Insured Bonds for purposes 

16 of directing remedies or consenting to proposed 

17 amendments or modifications as provided in the 

18 applicable documents pursuant to which such 

19 Insured Bond was issued and insured. 

20 (4) INSURED BOND.—The term ‘‘Insured 

21 Bond’’ means a bond subject to a financial guar22 antee or similar insurance contract, policy and/or 

23 surety issued by a monoline insurer. 

24 (5) PROPERTY OF THE ESTATE.—The term 

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


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

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

3 property of the debtor. 

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

5 section of title 11, United States Code, made appli6 cable in a case under this title by section 301(a) of 

7 this Act means State or territory when used in ref8 erence to the relationship of a State to the munici9 pality of the State or the territorial instrumentality 

10 of a territory, as applicable. 

11 (7) TRUSTEE.—The term ‘‘trustee’’, when used 

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

13 applicable in a case under this title by subsection 

14 (a), means the Oversight Board, except as provided 

15 in section 926 of title 11, United States Code. 

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

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

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

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

20 by subsection (a) or to ‘‘this title’’, ‘‘title 11’’, ‘‘Chapter 

21 9’’, ‘‘the Code’’, or words of similar import in a section 

22 of title 28, United States Code, made applicable in a case 

23 under this title or in the Federal Rules of Bankruptcy 

24 Procedure made applicable in a case under this title shall 

25 be deemed to be a reference to this title. 


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1 (e) SUBSTANTIALLY SIMILAR.—In determining 

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

3 of section 1122 of title 11, United States Code, made ap4 plicable in a case under this title by subsection (a), the 

5 Oversight Board shall consider whether such claims are 

6 secured and whether such claims have priority over other 

7 claims. 

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

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

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

11 is operative in a case under this title. 

12 SEC. 302. WHO MAY BE A DEBTOR. 

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

14 (1) the entity is— 

15 (A) a territory that has requested the es16 tablishment of an Oversight Board or has had 

17 an Oversight Board established for it by the 

18 United States Congress in accordance with sec19 tion 101 of this Act; or 

20 (B) a covered territorial instrumentality of 

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

22 (2) the Oversight Board has issued a certifi23 cation under section 206(b) of this Act for such enti24 ty; and 


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

2 its debts. 

3 SEC. 303. RESERVATION OF TERRITORIAL POWER TO CON4 TROL TERRITORY AND TERRITORIAL INSTRU5 MENTALITIES. 

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

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

8 of a covered territory to control, by legislation or other9 wise, the territory or any territorial instrumentality there10 of in the exercise of the political or governmental powers 

11 of the territory or territorial instrumentality, including ex12 penditures for such exercise, whether or not a case has 

13 been or can be commenced under this title, but— 

14 (1) a territory law prescribing a method of com15 position of indebtedness or a moratorium law, but 

16 solely to the extent that it prohibits the payment of 

17 principal or interest by an entity not described in 

18 section 109(b)(2) of title 11, United States Code, 

19 may not bind any creditor of a covered territory or 

20 any covered territorial instrumentality thereof that 

21 does not consent to the composition or moratorium; 

22 (2) a judgment entered under a law described 

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

24 not consent to the composition; and 


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1 (3) unlawful executive orders that alter, amend, 

2 or modify rights of holders of any debt of the terri3 tory or territorial instrumentality, or that divert 

4 funds from one territorial instrumentality to another 

5 or to the territory, shall be preempted by this Act. 

6 SEC. 304. PETITION AND PROCEEDINGS RELATING TO PETI7 TION. 

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

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

10 court of a petition by the Oversight Board pursuant to 

11 the determination under section 206 of this Act, provided 

12 that an otherwise eligible entity may not commence a case 

13 under this title after the Oversight Board applicable to 

14 such eligible entity has been terminated in accordance with 

15 section 209 of this Act. 

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

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

18 dismiss the petition if the petition does not meet the re19 quirements of this title; however, this subsection shall not 

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

21 on which such case is commenced under this title. 

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

23 case under this title constitutes an order for relief. 

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

25 appeal from an order for relief, delay any case under this 


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1 title in the case in which the appeal is being taken, nor 

2 shall any court order a stay of such case pending such 

3 appeal. 

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

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

6 debt incurred that is authorized by the court under section 

7 364(c) or 364(d) of title 11, United States Code. 

8 (f) JOINT FILING OF PETITIONS AND PLANS PER9 MITTED.—The Oversight Board, on behalf of debtors, 

10 under this title may file petitions or submit or modify 

11 plans of adjustment jointly if the debtors are affiliates; 

12 provided, however, that nothing in this title shall be con13 strued as authorizing substantive consolidation of the 

14 cases of affiliated debtors. 

15 (g) JOINT ADMINISTRATION OF AFFILIATED

16 CASES.—If the Oversight Board, on behalf of a debtor and 

17 one or more affiliates, has filed separate cases and the 

18 Oversight Board, on behalf of the debtor or one of the 

19 affiliates, files a motion to administer the cases jointly, 

20 the court may order a joint administration of the cases. 

21 (h) PUBLIC SAFETY.—This Act may not be construed 

22 to permit the discharge of obligations arising under Fed23 eral police or regulatory laws, including laws relating to 

24 the environment, public health or safety, or territorial laws 

25 implementing such Federal legal provisions. This includes 


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1 compliance obligations, requirements under consent de2 crees or judicial orders, and obligations to pay associated 

3 administrative, civil, or other penalties. 

4 (i) VOTING ON DEBT ADJUSTMENT PLANS NOT

5 STAYED.—Notwithstanding any provision in this title to 

6 the contrary, including sections of title 11, United States 

7 Code, incorporated by reference, nothing in this section 

8 shall prevent the holder of a claim from voting on or con9 senting to a proposed modification of such claim under 

10 title VI of this Act. 

11 SEC. 305. LIMITATION ON JURISDICTION AND POWERS OF 

12 COURT. 

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

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

15 power of the court, unless the Oversight Board consents 

16 or the plan so provides, the court may not, by any stay, 

17 order, or decree, in the case or otherwise, interfere with— 

18 (1) any of the political or governmental powers 

19 of the debtor; 

20 (2) any of the property or revenues of the debt21 or; or 

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

23 income-producing property. 


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1 SEC. 306. JURISDICTION. 

2 (a) FEDERAL SUBJECT MATTER JURISDICTION.— 

3 The district courts shall have— 

4 (1) except as provided in paragraph (2), origi5 nal and exclusive jurisdiction of all cases under this 

6 title; and 

7 (2) except as provided in subsection (b), and 

8 notwithstanding any Act of Congress that confers 

9 exclusive jurisdiction on a court or courts other than 

10 the district courts, original but not exclusive juris11 diction of all civil proceedings arising under this 

12 title, or arising in or related to cases under this title. 

13 (b) PROPERTY JURISDICTION.—The district court in 

14 which a case under this title is commenced or is pending 

15 shall have exclusive jurisdiction of all property, wherever 

16 located, of the debtor as of the commencement of the case. 

17 (c) PERSONAL JURISDICTION.—The district court in 

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

19 jurisdiction over any person or entity. 

20 (d) REMOVAL, REMAND, AND TRANSFER.— 

21 (1) REMOVAL.—A party may remove any claim 

22 or cause of action in a civil action, other than a pro23 ceeding before the United States Tax Court or a 

24 civil action by a governmental unit to enforce the po25 lice or regulatory power of the governmental unit, to 

26 the district court for the district in which the civil 


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1 action is pending, if the district court has jurisdic2 tion of the claim or cause of action under this sec3 tion. 

4 (2) REMAND.—The district court to which the 

5 claim or cause of action is removed under paragraph 

6 (1) may remand the claim or cause of action on any 

7 equitable ground. An order entered under this sub8 section remanding a claim or cause of action, or a 

9 decision not to remand, is not reviewable by appeal 

10 or otherwise by the court of appeals under section 

11 158(d), 1291 or 1292 of title 28, United States 

12 Code, or by the Supreme Court of the United States 

13 under section 1254 of title 28, United States Code. 

14 (3) TRANSFER.—A district court shall transfer 

15 any civil proceeding arising under this title, or aris16 ing in or related to a case under this title, to the dis17 trict in which the case under this title is pending. 

18 (e) APPEAL.— 

19 (1) An appeal shall be taken in the same man20 ner as appeals in civil proceedings generally are 

21 taken to the courts of appeals from the district 

22 court. 

23 (2) The court of appeals for the circuit in which 

24 a case under this title has venue pursuant to section 

25 307 of this title shall have jurisdiction of appeals 


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1 from all final decisions, judgments, orders and de2 crees entered under this title by the district court. 

3 (3) The court of appeals for the circuit in which 

4 a case under this title has venue pursuant to section 

5 307 of this title shall have jurisdiction to hear ap6 peals of interlocutory orders or decrees if— 

7 (A) the district court on its own motion or 

8 on the request of a party to the order or decree 

9 certifies that— 

10 (i) the order or decree involves a ques11 tion of law as to which there is no control12 ling decision of the court of appeals for the 

13 circuit or of the Supreme Court of the 

14 United States, or involves a matter of pub15 lic importance; 

16 (ii) the order or decree involves a 

17 question of law requiring the resolution of 

18 conflicting decisions; or 

19 (iii) an immediate appeal from the 

20 order or decree may materially advance the 

21 progress of the case or proceeding in which 

22 the appeal is taken; and 

23 (B) the court of appeals authorizes the di24 rect appeal of the order or decree. 


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1 (4) If the district court on its own motion or on 

2 the request of a party determines that a cir3 cumstance specified in clauses (A), (B), or (C) of 

4 paragraph (3) exists, then the district court shall 

5 make the certification described in paragraph (3). 

6 (5) The parties may supplement the certifi7 cation with a short statement of the basis for the 

8 certification. 

9 (6) Except as provided in section 304(d), an 

10 appeal of an interlocutory order or decree does not 

11 stay any proceeding of the district court from which 

12 the appeal is taken unless the district court, or the 

13 court of appeals in which the appeal is pending, 

14 issues a stay of such proceedings pending the ap15 peal. 

16 (7) Any request for a certification in respect to 

17 an interlocutory appeal of an order or decree shall 

18 be made not later than 60 days after the entry of 

19 the order or decree. 

20 (f) REALLOCATION OF COURT STAFF.—Notwith21 standing any law to the contrary, the clerk of the court 

22 in which a case is pending shall reallocate as many staff 

23 and assistants as the clerk deems necessary to ensure that 

24 the court has adequate resources to provide for proper 

25 case management. 


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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 so determines in its sole discretion, then venue shall be 

15 proper in the district court for the jurisdiction in which 

16 the Oversight Board maintains an office that is located 

17 outside the territory. 

18 SEC. 308. SELECTION OF PRESIDING JUDGE. 

19 (a) For cases in which the debtor is a territory, the 

20 Chief Justice of the United States shall designate a dis21 trict court judge to sit by designation to conduct the case. 

22 (b) For cases in which the debtor is not a territory, 

23 and no motion for joint administration of the debtor’s case 

24 with the case of its affiliate territory has been filed or 

25 there is no case in which the affiliate territory is a debtor, 

26 the chief judge of the court of appeals for the circuit emVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 bracing the district in which the case is commenced shall 

2 designate a district court judge to conduct the case. 

3 SEC. 309. ABSTENTION. 

4 Nothing in this title prevents a district court in the 

5 interests of justice from abstaining from hearing a par6 ticular proceeding arising in or related to a case under 

7 this title. 

8 SEC. 310. APPLICABLE RULES OF PROCEDURE. 

9 The Federal Rules of Bankruptcy Procedure shall 

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

11 arising in or related to cases under this title. 

12 SEC. 311. LEASES. 

13 A lease to a territory or territorial instrumentality 

14 shall not be treated as an executory contract or unexpired 

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

16 11, United States Code, solely by reason of the lease being 

17 subject to termination in the event the debtor fails to ap18 propriate rent. 

19 SEC. 312. FILING OF PLAN OF ADJUSTMENT. 

20 (a) EXCLUSIVITY.—Only the Oversight Board, after 

21 the issuance of a certificate pursuant to section 104(j) of 

22 this Act, may file a plan of adjustment of the debts of 

23 the debtor. 

24 (b) DEADLINE FOR FILING PLAN.—If the Oversight 

25 Board does not file a plan of adjustment with the petition, 


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1 the Oversight Board shall file a plan of adjustment at the 

2 time set by the court. 

3 SEC. 313. MODIFICATION OF PLAN. 

4 The Oversight Board, after the issuance of a certifi5 cation pursuant to section 104(j) of this Act, may modify 

6 the plan at any time before confirmation, but may not 

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

8 the requirements of this title. After the Oversight Board 

9 files a modification, the plan as modified becomes the 

10 plan. 

11 SEC. 314. CONFIRMATION. 

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

13 confirmation of a plan. 

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

15 plan if— 

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

17 11 of the United States Code, made applicable to a 

18 case under this title by section 301 of this Act; 

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

20 title; 

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

22 taking any action necessary to carry out the plan; 

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

24 particular claim has agreed to a different treatment 

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


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

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

3 Code, will receive on account of such claim cash 

4 equal to the allowed amount of such claim; 

5 (5) any legislative, regulatory, or electoral ap6 proval necessary under applicable law in order to 

7 carry out any provision of the plan has been ob8 tained, or such provision is expressly conditioned on 

9 such approval; 

10 (6) the plan is feasible and in the best interests 

11 of creditors, which shall require the court to consider 

12 whether available remedies under the non-bank13 ruptcy laws and constitution of the territory would 

14 result in a greater recovery for the creditors than is 

15 provided by such plan; and 

16 (7) the plan is consistent with the applicable 

17 Fiscal Plan certified by the Oversight Board under 

18 title II. 

19 (c) CONFIRMATION FOR DEBTORS WITH A SINGLE

20 CLASS OF IMPAIRED CREDITORS.—If all of the require21 ments of section 1129(a) of title 11, United States Code, 

22 incorporated into this title by section 301 other than sec23 tion 1129(a)(8) are met with respect to a plan— 

24 (1) with respect to which all claims are substan25 tially similar under section 301(e); 


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1 (2) that includes only one class of impaired 

2 claims; and 

3 (3) that was not accepted by such impaired 

4 class, 

5 the court shall confirm the plan notwithstanding the re6 quirements of such section 1129(a)(8) if the plan is fair 

7 and equitable and does not discriminate unfairly with re8 spect to such impaired class. 

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

10 (a) ACTIONS OF OVERSIGHT BOARD.—For the pur11 poses of this title, the Oversight Board may take any ac12 tion necessary on behalf of the debtor to prosecute the 

13 case of the debtor, including— 

14 (1) filing a petition under section 304 of this 

15 Act; 

16 (2) submitting or modifying a plan of adjust17 ment under sections 312 and 313; or 

18 (3) otherwise generally submitting filings in re19 lation to the case with the court. 

20 (b) REPRESENTATIVE OF DEBTOR.—The Oversight 

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

22 the debtor. 

23 SEC. 316. COMPENSATION OF PROFESSIONALS. 

24 (a) After notice to the parties in interest and the 

25 United States Trustee and a hearing, the court may award 


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1 to a professional person employed by the debtor (in the 

2 debtor’s sole discretion), the Oversight Board (in the 

3 Oversight Board’s sole discretion), a committee under sec4 tion 1103 of title 11, United States Code, or a trustee 

5 appointed by the court under section 926 of title 11, 

6 United States Code— 

7 (1) reasonable compensation for actual, nec8 essary services rendered by the professional person, 

9 or attorney and by any paraprofessional person em10 ployed by any such person; and 

11 (2) reimbursement for actual, necessary ex12 penses. 

13 (b) The court may, on its own motion or on the mo14 tion of the United States Trustee or any other party in 

15 interest, award compensation that is less than the amount 

16 of compensation that is requested. 

17 (c) In determining the amount of reasonable com18 pensation to be awarded to a professional person, the 

19 court shall consider the nature, the extent, and the value 

20 of such services, taking into account all relevant factors, 

21 including— 

22 (1) the time spent on such services; 

23 (2) the rates charged for such services; 

24 (3) whether the services were necessary to the 

25 administration of, or beneficial at the time at which 


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1 the service was rendered toward the completion of, 

2 a case under this chapter; 

3 (4) whether the services were performed within 

4 a reasonable amount of time commensurate with the 

5 complexity, importance, and nature of the problem, 

6 issue, or task addressed; 

7 (5) with respect to a professional person, 

8 whether the person is board certified or otherwise 

9 has demonstrated skill and experience in the restruc10 turing field; and 

11 (6) whether the compensation is reasonable 

12 based on the customary compensation charged by 

13 comparably skilled practitioners in cases other than 

14 cases under this title or title 11, United States 

15 Code. 

16 (d) The court shall not allow compensation for— 

17 (1) unnecessary duplication of services; or 

18 (2) services that were not— 

19 (A) reasonably likely to benefit the debtor; 

20 or 

21 (B) necessary to the administration of the 

22 case. 

23 (e) The court shall reduce the amount of compensa24 tion awarded under this section by the amount of any in25 terim compensation awarded under section 317, and, if the 


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1 amount of such interim compensation exceeds the amount 

2 of compensation awarded under this section, may order 

3 the return of the excess to the debtor. 

4 (f) Any compensation awarded for the preparation of 

5 a fee application shall be based on the level and skill rea6 sonably required to prepare the application. 

7 SEC. 317. INTERIM COMPENSATION. 

8 A debtor’s attorney, or any professional person em9 ployed by the debtor (in the debtor’s sole discretion), the 

10 Oversight Board (in the Oversight Board’s sole discre11 tion), a committee under section 1103 of title 11, United 

12 States Code, or a trustee appointed by the court under 

13 section 926 of title 11, United States Code, may apply 

14 to the court not more than once every 120 days after an 

15 order for relief in a case under this chapter, or more often 

16 if the court permits, for such compensation for services 

17 rendered before the date of such an application or reim18 bursement for expenses incurred before such date as is 

19 provided under section 316. 

20 TITLE IV—MISCELLANEOUS 

21 PROVISIONS 

22 SEC. 401. RULES OF CONSTRUCTION. 

23 Nothing in this Act is intended, or may be con24 strued— 


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1 (1) to limit the authority of Congress to exer2 cise legislative authority over the territories pursu3 ant to Article IV, section 3 of the Constitution of 

4 the United States; 

5 (2) to authorize the application of section 

6 104(e) of this Act (relating to issuance of sub7 poenas) to judicial officers or employees of territory 

8 courts; 

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

10 of the Covenant To Establish a Commonwealth of 

11 the Northern Mariana Islands in Political Union 

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

13 et seq.); or 

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

15 cession regarding certain islands of American Samoa 

16 (48 U.S.C. 1661). 

17 SEC. 402. RIGHT OF PUERTO RICO TO DETERMINE ITS FU18 TURE POLITICAL STATUS. 

19 Nothing in this Act shall be interpreted to restrict 

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

21 including by conducting the plebiscite as authorized by 

22 Public Law 113–76. 


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

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

3 1938 (29 U.S.C. 206(g)) is amended by striking para4 graphs (2) through (4) and inserting the following: 

5 ‘‘(2) In lieu of the rate prescribed by subsection 

6 (a)(1), the Governor of Puerto Rico, subject to the 

7 approval of the Financial Oversight and Manage8 ment Board established pursuant to section 101 of 

9 the Puerto Rico Oversight, Management, and Eco10 nomic Stability Act, may designate a time period not 

11 to exceed four years during which employers in 

12 Puerto Rico may pay employees who are initially em13 ployed after the date of enactment of such Act a 

14 wage which is not less than the wage described in 

15 paragraph (1). Notwithstanding the time period des16 ignated, such wage shall not continue in effect after 

17 such Board terminates in accordance with section 

18 209 of such Act. 

19 ‘‘(3) No employer may take any action to dis20 place employees (including partial displacements 

21 such as reduction in hours, wages, or employment 

22 benefits) for purposes of hiring individuals at the 

23 wage authorized in paragraph (1) or (2). 

24 ‘‘(4) Any employer who violates this subsection 

25 shall be considered to have violated section 15(a)(3). 


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1 ‘‘(5) This subsection shall only apply to an em2 ployee who has not attained the age of 20 years, ex3 cept in the case of the wage applicable in Puerto 

4 Rico, 25 years, until such time as the Board de5 scribed in paragraph (2) terminates in accordance 

6 with section 209 of the Act described in such para7 graph.’’. 

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

9 (a) SPECIAL RULE.—The regulations proposed by the 

10 Secretary of Labor relating to exemptions regarding the 

11 rates of pay for executive, administrative, professional, 

12 outside sales, and computer employees, and published in 

13 a notice in the Federal Register on July 6, 2015, and any 

14 final regulations issued related to such notice, shall have 

15 no force or effect in the Commonwealth of Puerto Rico 

16 until— 

17 (1) the Comptroller General of the United 

18 States completes the assessment and transmits the 

19 report required under subsection (b); and 

20 (2) the Secretary of Labor, taking into account 

21 the assessment and report of the Comptroller Gen22 eral, provides a written determination to Congress 

23 that applying such rule to Puerto Rico would not 

24 have a negative impact on the economy of Puerto 

25 Rico. 


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1 (b) ASSESSMENT AND REPORT.—Not later than two 

2 years after the date of enactment of this Act, the Comp3 troller General shall examine the economic conditions in 

4 Puerto Rico and shall transmit a report to Congress as5 sessing the impact of applying the regulations described 

6 in subsection (a) to Puerto Rico, taking into consideration 

7 regional, metropolitan, and non-metropolitan salary and 

8 cost-of-living differences. 

9 (c) SENSE OF CONGRESS.—It is the sense of Con10 gress that— 

11 (1) the Bureau of the Census should conduct a 

12 study to determine the feasibility of expanding data 

13 collection to include Puerto Rico and the other 

14 United States territories in the Current Population 

15 Survey, which is jointly administered by the Bureau 

16 of the Census and the Bureau of Labor Statistics, 

17 and which is the primary source of labor force sta18 tistics for the population of the United States; and 

19 (2) if necessary, the Bureau of the Census 

20 should request the funding required to conduct this 

21 feasibility study as part of its budget submission to 

22 Congress for fiscal year 2018. 

23 SEC. 405. AUTOMATIC STAY UPON ENACTMENT. 

24 (a) DEFINITIONS.—In this section: 


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

2 bond, loan, letter of credit, other borrowing title, ob3 ligation of insurance, or other financial indebtedness, 

4 including rights, entitlements, or obligations whether 

5 such rights, entitlements, or obligations arise from 

6 contract, statute, or any other source of law related 

7 to such a bond, loan, letter of credit, other bor8 rowing title, obligation of insurance, or other finan9 cial indebtedness in physical or dematerialized form, 

10 of which— 

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

12 Government of Puerto Rico; and 

13 (B) the date of issuance or incurrence pre14 cedes the date of enactment of this Act. 

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

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

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

18 right is reduced to judgment, liquidated, unliq19 uidated, fixed, contingent, matured, unmatured, 

20 disputed, undisputed, legal, equitable, secured, 

21 or unsecured; or 

22 (B) right to an equitable remedy for 

23 breach of performance if such breach gives rise 

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1 ment, fixed, contingent, matured, unmatured, 

2 disputed, undisputed, secured, or unsecured. 

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

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

5 Board for Puerto Rico (i.e., the enactment of this Act) 

6 in accordance with section 101 operates with respect to 

7 a Liability as a stay, applicable to all entities (as such 

8 term is defined in section 101 of title 11, United States 

9 Code), of— 

10 (1) the commencement or continuation, includ11 ing the issuance or employment of process, of a judi12 cial, administrative, or other action or proceeding 

13 against the Government of Puerto Rico that was or 

14 could have been commenced before the enactment of 

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

16 Government of Puerto Rico that arose before the en17 actment of this Act; 

18 (2) the enforcement, against the Government of 

19 Puerto Rico or against property of the Government 

20 of Puerto Rico, of a judgment obtained before the 

21 enactment of this Act; 

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

23 the Government of Puerto Rico or of property from 

24 the Government of Puerto Rico or to exercise control 

25 over property of the Government of Puerto Rico; 


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

2 lien against property of the Government of Puerto 

3 Rico; 

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

5 property of the Government of Puerto Rico any lien 

6 to the extent that such lien secures a Liability Claim 

7 that arose before the enactment of this Act; 

8 (6) any act to collect, assess, or recover a Li9 ability Claim against the Government of Puerto Rico 

10 that arose before the enactment of this Act; and 

11 (7) the setoff of any debt owing to the Govern12 ment of Puerto Rico that arose before the enactment 

13 of this Act against any Liability Claim against the 

14 Government of Puerto Rico. 

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

16 Oversight Board for Puerto Rico in accordance with sec17 tion 101 does not operate as a stay— 

18 (1) solely under subsection (b)(1) of this sec19 tion, of the continuation of, including the issuance or 

20 employment of process, of a judicial, administrative, 

21 or other action or proceeding against the Govern22 ment of Puerto Rico that was commenced on or be23 fore December 18, 2015; or 

24 (2) of the commencement or continuation of an 

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1 force such governmental unit’s or organization’s po2 lice and regulatory power, including the enforcement 

3 of a judgment other than a money judgment, ob4 tained in an action or proceeding by the govern5 mental unit to enforce such governmental unit’s or 

6 organization’s police or regulatory power. 

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

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

9 continues until the earlier of— 

10 (1) the later of— 

11 (A) the later of— 

12 (i) February 15, 2017; or 

13 (ii) six months after the establishment 

14 of an Oversight Board for Puerto Rico as 

15 established by section 101(b); 

16 (B) the date that is 75 days after the date 

17 in subparagraph (A) if the Oversight Board de18 livers a certification to the Governor that, in 

19 the Oversight Board’s sole discretion, an addi20 tional 75 days are needed to seek to complete 

21 a voluntary process under title VI of this Act 

22 with respect to the government of the Common23 wealth of Puerto Rico or any of its territorial 

24 instrumentalities; or 


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1 (C) the date that is 60 days after the date 

2 in subparagraph (A) if the district court to 

3 which an application has been submitted under 

4 subparagraph 601(l)(1)(D) determines, in the 

5 exercise of the court’s equitable powers, that an 

6 additional 60 days are needed to complete a vol7 untary process under title VI of this Act with 

8 respect to the government of the Common9 wealth of Puerto Rico or any of its territorial 

10 instrumentalities; or 

11 (2) with respect to the government of the Com12 monwealth of Puerto Rico or any of its territorial in13 strumentalities, the date on which a case is filed by 

14 or on behalf of the government of the Common15 wealth of Puerto Rico or any of its territorial instru16 mentalities, as applicable, under title III. 

17 (e) JURISDICTION, RELIEF FROM STAY.— 

18 (1) The United States District Court for the 

19 District of Puerto Rico shall have original and exclu20 sive jurisdiction of any civil actions arising under or 

21 related to this section. 

22 (2) On motion of or action filed by a party in 

23 interest and after notice and a hearing, the United 

24 States District Court for the District of Puerto Rico, 


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1 for cause shown, shall grant relief from the stay pro2 vided under subsection (b) of this section. 

3 (f) TERMINATION OF STAY; HEARING.—Forty-five 

4 days after a request under subsection (e)(2) for relief from 

5 the stay of any act against property of the Government 

6 of Puerto Rico under subsection (b), such stay is termi7 nated with respect to the party in interest making such 

8 request, unless the court, after notice and a hearing, or9 ders such stay continued in effect pending the conclusion 

10 of, or as a result of, a final hearing and determination 

11 under subsection (e)(2). A hearing under this subsection 

12 may be a preliminary hearing, or may be consolidated with 

13 the final hearing under subsection (e)(2). The court shall 

14 order such stay continued in effect pending the conclusion 

15 of the final hearing under subsection (e)(2) if there is a 

16 reasonable likelihood that the party opposing relief from 

17 such stay will prevail at the conclusion of such final hear18 ing. If the hearing under this subsection is a preliminary 

19 hearing, then such final hearing shall be concluded not 

20 later than thirty days after the conclusion of such prelimi21 nary hearing, unless the thirty-day period is extended with 

22 the consent of the parties in interest or for a specific time 

23 which the court finds is required by compelling cir24 cumstances. 


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1 (g) RELIEF TO PREVENT IRREPARABLE DAMAGE.— 

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

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

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

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

6 if such interest will suffer such damage before there is 

7 an opportunity for notice and a hearing under subsection 

8 (e) or (f). 

9 (h) ACT IN VIOLATION OF STAY IS VOID.—Any 

10 order, judgment, or decree entered in violation of this sec11 tion and any act taken in violation of this section is void, 

12 and shall have no force or effect, and any person found 

13 to violate this section may be liable for damages, costs, 

14 and attorneys’ fees incurred in defending any action taken 

15 in violation of this section, and the Oversight Board or 

16 the Government of Puerto Rico may seek an order from 

17 the court enforcing the provisions of this section. 

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

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

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

21 this Act, shall include— 

22 (1) the individuals, including elected and ap23 pointed officials, directors, officers of and employees 

24 acting in their official capacity on behalf of the Gov25 ernment of Puerto Rico; and 


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1 (2) the Oversight Board, including the directors 

2 and officers of and employees acting in their official 

3 capacity on behalf of the Oversight Board. 

4 (j) NO DEFAULT UNDER EXISTING CONTRACTS.— 

5 (1) Notwithstanding any contractual provision 

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

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

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

9 defined in section 101 of title 11, United States 

10 Code) may not exercise or continue to exercise any 

11 remedy under a contract or applicable law in respect 

12 to the Government of Puerto Rico or any of its prop13 erty— 

14 (A) that is conditioned upon the financial 

15 condition of, or the commencement of a restruc16 turing, insolvency, bankruptcy, or other pro17 ceeding (or a similar or analogous process) by, 

18 the Government of Puerto Rico, including a de19 fault or an event of default thereunder; or 

20 (B) with respect to Liability Claims— 

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

22 interest; or 

23 (ii) for the breach of any condition or 

24 covenant. 


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

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

3 any right existing in law or contract, including any 

4 right to— 

5 (A) setoff; 

6 (B) apply or appropriate funds; 

7 (C) seek the appointment of a custodian 

8 (as such term is defined in section 101(11) of 

9 title 11, United States Code); 

10 (D) seek to raise rates; or 

11 (E) exercise control over property of the 

12 Government of Puerto Rico. 

13 (3) Notwithstanding any contractual provision 

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

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

16 which the Government of Puerto Rico is a party may 

17 not be terminated or modified, and any right or obli18 gation under such contract may not be terminated 

19 or modified, solely because of a provision in such 

20 contract is conditioned on— 

21 (A) the insolvency or financial condition of 

22 the Government of Puerto Rico at any time 

23 prior to the enactment of this Act; 


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1 (B) the adoption of a resolution or estab2 lishment of an Oversight Board pursuant to 

3 section 101 of this Act; or 

4 (C) a default under a separate contract 

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

6 occurrence of the events or matters in sub7 section (j)(1)(B). 

8 (4) Notwithstanding any contractual provision 

9 to the contrary and so long as a stay under this sec10 tion is in effect, a counterparty to a contract with 

11 the Government of Puerto Rico for the provision of 

12 goods and services shall, unless the Government of 

13 Puerto Rico agrees to the contrary in writing, con14 tinue to perform all obligations under, and comply 

15 with the terms of, such contract, provided that the 

16 Government of Puerto Rico is not in default under 

17 such contract other than as a result of a condition 

18 specified in paragraph (3). 

19 (k) EFFECT.—This section does not discharge an ob20 ligation of the Government of Puerto Rico or release, in21 validate, or impair any security interest or lien securing 

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

23 implementation of any restructuring support agreement 

24 executed by the Government of Puerto Rico to be imple25 mented pursuant to Puerto Rico law specifically enacted 


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

2 obligation of the Government of Puerto Rico to proceed 

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

4 (l) INTEREST PAYMENTS.—To the extent the Over5 sight Board, in its sole discretion, determines it is feasible, 

6 the Government of Puerto Rico shall make interest pay7 ments on outstanding indebtedness when such payments 

8 become due during the length of the stay. 

9 (m) FINDINGS.—Congress finds the following: 

10 (1) A combination of severe economic decline, 

11 and, at times, accumulated operating deficits, lack of 

12 financial transparency, management inefficiencies, 

13 and excessive borrowing has created a fiscal emer14 gency in Puerto Rico. 

15 (2) As a result of its fiscal emergency, the Gov16 ernment of Puerto Rico has been unable to provide 

17 its citizens with effective services. 

18 (3) The current fiscal emergency has also af19 fected the long-term economic stability of Puerto 

20 Rico by contributing to the accelerated outmigration 

21 of residents and businesses. 

22 (4) A comprehensive approach to fiscal, man23 agement, and structural problems and adjustments 

24 that exempts no part of the Government of Puerto 

25 Rico is necessary, involving independent oversight 


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1 and a Federal statutory authority for the Govern2 ment of Puerto Rico to restructure debts in a fair 

3 and orderly process. 

4 (5) Additionally, an immediate—but tem5 porary—stay is essential to stabilize the region for 

6 the purposes of resolving this territorial crisis. 

7 (A) The stay advances the best interests 

8 common to all stakeholders, including but not 

9 limited to a functioning independent Oversight 

10 Board created pursuant to this Act to deter11 mine whether to appear or intervene on behalf 

12 of the Government of Puerto Rico in any litiga13 tion that may have been commenced prior to 

14 the effectiveness or upon expiration of the stay. 

15 (B) The stay is limited in nature and nar16 rowly tailored to achieve the purposes of this 

17 Act, including to ensure all creditors have a fair 

18 opportunity to consensually renegotiate terms of 

19 repayment based on accurate financial informa20 tion that is reviewed by an independent author21 ity or, at a minimum, receive a recovery from 

22 the Government of Puerto Rico equal to their 

23 best possible outcome absent the provisions of 

24 this Act. 


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

2 Puerto Rico to obtain funds from capital markets in 

3 the future will be severely diminished without con4 gressional action to restore its financial account5 ability and stability. 

6 (n) PURPOSES.—The purposes of this section are 

7 to— 

8 (1) provide the Government of Puerto Rico with 

9 the resources and the tools it needs to address an 

10 immediate existing and imminent crisis; 

11 (2) allow the Government of Puerto Rico a lim12 ited period of time during which it can focus its re13 sources on negotiating a voluntary resolution with 

14 its creditors instead of defending numerous, costly 

15 creditor lawsuits; 

16 (3) provide an oversight mechanism to assist 

17 the Government of Puerto Rico in reforming its fis18 cal governance and support the implementation of 

19 potential debt restructuring; 

20 (4) make available a Federal restructuring au21 thority, if necessary, to allow for an orderly adjust22 ment of all of the Government of Puerto Rico’s li23 abilities; and 

24 (5) benefit the lives of 3.5 million American 

25 citizens living in Puerto Rico by encouraging the 


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1 Government of Puerto Rico to resolve its long2 standing fiscal governance issues and return to eco3 nomic growth. 

4 (o) VOTING ON VOLUNTARY AGREEMENTS NOT

5 STAYED.—Notwithstanding any provision in this section 

6 to the contrary, nothing in this section shall prevent the 

7 holder of a Liability Claim from voting on or consenting 

8 to a proposed modification of such Liability Claim under 

9 title VI of this Act. 

10 SEC. 406. PURCHASES BY TERRITORY GOVERNMENTS. 

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

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

13 Governments of the Commonwealth of Puerto Rico, Guam, 

14 American Samoa, the Commonwealth of the Northern 

15 Mariana Islands, and the United States Virgin Islands are 

16 authorized to make purchases through the General Serv17 ices Administration.’’. 

18 SEC. 407. PROTECTION FROM INTER-DEBTOR TRANSFERS. 

19 (a) PROTECTION OF CREDITORS.—While an Over20 sight Board for Puerto Rico is in existence, if any property 

21 of any territorial instrumentality of Puerto Rico is trans22 ferred in violation of applicable law under which any cred23 itor has a valid pledge of, security interest in, or lien on 

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1 suring the transfer of such property to such territorial in2 strumentality for the benefit of its creditors, then the 

3 transferee shall be liable for the value of such property. 

4 (b) ENFORCEABILITY.—A creditor may enforce 

5 rights under this section by bringing an action in the 

6 United States District Court for the District of Puerto 

7 Rico after the expiration or lifting of the stay of section 

8 405. 

9 SEC. 408. GAO REPORT ON SMALL BUSINESS ADMINISTRA10 TION PROGRAMS IN PUERTO RICO. 

11 Section 15 of the Small Business Act (15 U.S.C. 644) 

12 is amended by adding at the end the following new sub13 section: 

14 ‘‘(t) GAO REPORT ON SMALL BUSINESS ADMINIS15 TRATION PROGRAMS IN PUERTO RICO.—Not later than 

16 180 days after the date of enactment of this subsection, 

17 the Comptroller General of the United States shall submit 

18 to the Committee on Small Business of the House of Rep19 resentatives and the Committee on Small Business and 

20 Entrepreneurship of the Senate a report on the application 

21 and utilization of contracting activities of the Administra22 tion (including contracting activities relating to HUBZone 

23 small business concerns) in Puerto Rico. The report shall 

24 also identify any provisions of Federal law that may create 


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1 an obstacle to the efficient implementation of such con2 tracting activities.’’. 

3 SEC. 409. CONGRESSIONAL TASK FORCE ON ECONOMIC 

4 GROWTH IN PUERTO RICO. 

5 (a) ESTABLISHMENT.—There is established within 

6 the legislative branch a Congressional Task Force on Eco7 nomic Growth in Puerto Rico (hereinafter referred to as 

8 the ‘‘Task Force’’). 

9 (b) MEMBERSHIP.—The Task Force shall be com10 posed of eight members as follows: 

11 (1) Two members of the House of Representa12 tives, who shall be appointed by the Speaker of the 

13 House of Representatives, in coordination with the 

14 Chairman of the Committee on Natural Resources of 

15 the House of Representatives. 

16 (2) Two members of the House of Representa17 tives, who shall be appointed by the Minority Leader 

18 of the House of Representatives, in coordination 

19 with the ranking minority member of the Committee 

20 on Natural Resources of the House of Representa21 tives. 

22 (3) Two members of the Senate, who shall be 

23 appointed by the Majority Leader of the Senate, in 

24 coordination with the Chairman of the Committee on 

25 Energy and Natural Resources of the Senate. 


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1 (4) Two members of the Senate, who shall be 

2 appointed by the Minority Leader of the Senate, in 

3 coordination with the ranking minority member of 

4 the Committee on Energy and Natural Resources of 

5 the Senate. 

6 (c) DEADLINE FOR APPOINTMENT.—All appoint7 ments to the Task Force shall be made not later than 30 

8 days after the date of enactment of this Act. 

9 (d) CHAIR.—The Speaker shall designate one Mem10 ber to serve as chair of the Task Force. 

11 (e) VACANCIES.—Any vacancy in the Task Force 

12 shall be filled in the same manner as the original appoint13 ment. 

14 (f) REPORT.—Not later than December 31, 2016, the 

15 Task Force shall issue a report of its findings to the 

16 House and Senate regarding— 

17 (1) impediments in current Federal law and 

18 programs to economic growth in Puerto Rico; 

19 (2) recommended changes to Federal law and 

20 programs that, if adopted, would serve to spur sus21 tainable long-term economic growth, job creation 

22 and attract investment in Puerto Rico; and 

23 (3) additional information the Task Force 

24 deems appropriate. 


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1 (g) CONSENSUS VIEWS.—To the greatest extent 

2 practicable, the report issued under subsection (f) shall 

3 reflect the shared views of all eight Members, except that 

4 the report may contain dissenting views. 

5 (h) HEARINGS AND SESSIONS.—The Task Force 

6 may, for the purpose of carrying out this section, hold 

7 hearings, sit and act at times and places, take testimony, 

8 and receive evidence as the Task Force considers appro9 priate. 

10 (i) STAKEHOLDER PARTICIPATION.—In carrying out 

11 its duties, the Task Force shall consult with the Puerto 

12 Rico Legislative Assembly, the Puerto Rico Department 

13 of Economic Development and Commerce, and the private 

14 sector of Puerto Rico. 

15 (j) RESOURCES.—The Task Force shall carry out its 

16 duties by utilizing existing facilities, services, and staff of 

17 the House of Representatives and Senate, except that no 

18 additional funds are authorized to be appropriated to 

19 carry out this section. 

20 (k) TERMINATION.—The Task Force shall terminate 

21 upon issuing the report required under subsection (f). 

22 TITLE V—PUERTO RICO INFRA23 STRUCTURE REVITALIZATION 

24 SEC. 501. DEFINITIONS. 

25 In this title: 


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

2 Rico Act 76–2000 (3 L.P.R.A. 1931 et seq.), ap3 proved on May 5, 2000, as amended. 

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

5 Project’’ means a project identified under the provi6 sions of this title and intimately related to address7 ing an emergency whose approval, consideration, 

8 permitting, and implementation shall be expedited 

9 and streamlined according to the statutory process 

10 provided by Act 76, or otherwise adopted pursuant 

11 to this title. 

12 (3) ENERGY COMMISSION OF PUERTO RICO.— 

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

14 means the Puerto Rico Energy Commission as es15 tablished by Subtitle B of Puerto Rico Act 57–2014. 

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

17 Projects’’ means those projects addressing the gen18 eration, distribution, or transmission of energy. 

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

20 means any event or grave problem of deterioration 

21 in the physical infrastructure for the rendering of 

22 essential services to the people, or that endangers 

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

24 of a sensitive ecosystem, or as otherwise defined by 

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1 clude problems in the physical infrastructure for en2 ergy, water, sewer, solid waste, highways or roads, 

3 ports, telecommunications, and other similar infra4 structure. 

5 (6) ENVIRONMENTAL QUALITY BOARD.—The 

6 term ‘‘Environmental Quality Board’’ means the 

7 Puerto Rico Environmental Quality Board, a board 

8 within the executive branch of the Government of 

9 Puerto Rico as established by section 7 of Puerto 

10 Rico Act 416–2004 (12 L.P.R.A. 8002a). 

11 (7) EXPEDITED PERMITTING PROCESS.—The 

12 term ‘‘Expedited Permitting Process’’ means a Puer13 to Rico Agency’s alternate procedures, conditions, 

14 and terms mirroring those established under Act 76 

15 (3 L.P.R.A. 1932) and pursuant to this title shall 

16 not apply to any Federal law, statute, or require17 ment. 

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

19 the Governor of Puerto Rico. 

20 (9) INTERAGENCY ENVIRONMENTAL SUB21 COMMITTEE.—The term ‘‘Interagency Environ22 mental Subcommittee’’ means the Interagency Sub23 committee on Expedited Environmental Regulations 

24 as further described by section 504. 


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

2 means the Legislature of Puerto Rico. 

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

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

5 board within the executive branch of the Govern6 ment of Puerto Rico established by Puerto Rico Act 

7 75–1975 (23 L.P.R.A. 62 et seq.). 

8 (12) PROJECT SPONSOR.—The term ‘‘Project 

9 Sponsor’’ means a Puerto Rico Agency or private 

10 party proposing the development of an existing, on11 going, or new infrastructure project or Energy 

12 Project. 

13 (13) PUERTO RICO AGENCY OR AGENCIES.— 

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

15 Agencies’’ means any board, body, board of exam16 iners, public corporation, commission, independent 

17 office, division, administration, bureau, department, 

18 authority, official, person, entity, municipality, or 

19 any instrumentality of Puerto Rico, or an adminis20 trative body authorized by law to perform duties of 

21 regulating, investigating, or that may issue a deci22 sion, or with the power to issue licenses, certificates, 

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1 resentatives of the Legislature and the judicial 

2 branch. 

3 (14) PUERTO RICO ELECTRIC POWER AUTHOR4 ITY.—The term ‘‘Puerto Rico Electric Power Au5 thority’’ means the Puerto Rico Electric Power Au6 thority established by Puerto Rico Act 83–1941. 

7 SEC. 502. POSITION OF REVITALIZATION COORDINATOR. 

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

9 the Oversight Board, the position of the Revitalization Co10 ordinator. 

11 (b) APPOINTMENT.— 

12 (1) IN GENERAL.—The Revitalization Coordi13 nator shall be appointed by the Governor as follows: 

14 (A) Prior to the appointment of the Revi15 talization Coordinator and within 60 days of 

16 the appointment of the full membership of the 

17 Oversight Board, the Oversight Board shall 

18 submit to the Governor no less than three 

19 nominees for appointment. 

20 (B) In consultation with the Oversight 

21 Board, not later than 10 days after receiving 

22 the nominations under subparagraph (A), the 

23 Governor shall select one of the nominees as the 

24 Revitalization Coordinator. Such nomination 

25 shall be effective immediately. 


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1 (C) If the Governor fails to select a Revi2 talization Coordinator, the Oversight Board 

3 shall, by majority vote, select a Revitalization 

4 Coordinator from the list of nominees provided 

5 under paragraph (A). 

6 (2) QUALIFICATIONS.—In selecting nominees 

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

8 only nominate persons who— 

9 (A) have substantial knowledge and exper10 tise in the planning, predevelopment, financing, 

11 development, operations, engineering, or market 

12 participation of infrastructure projects, pro13 vided that stronger consideration shall be given 

14 to candidates who have experience with Energy 

15 Projects and the laws and regulations of Puerto 

16 Rico whose implementation could be affected by 

17 an Expedited Permitting Process; 

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

19 preceding 3 calendar years provided, goods or 

20 services to the government of Puerto Rico (and, 

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

22 or sibling of a person who provides or has pro23 vided goods and services to the government of 

24 Puerto Rico in the preceding 3 calendar years); 

25 and 


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

2 former officer or employee of the government of 

3 Puerto Rico in the preceding 3 calendar years. 

4 (3) COMPENSATION.—The Revitalization Coor5 dinator shall be compensated at an annual rate de6 termined by the Oversight Board sufficient in the 

7 judgment of the Oversight Board to obtain the serv8 ices of a person with the skills and experience re9 quired to discharge the duties of the position, but 

10 such compensation shall not exceed the annual sal11 ary of the Executive Director. 

12 (c) ASSIGNMENT OF PERSONNEL.—The Executive 

13 Director of the Oversight Board may assign Oversight 

14 Board personnel to assist the Revitalization Coordinator. 

15 (d) REMOVAL.— 

16 (1) IN GENERAL.—The Revitalization Coordi17 nator may be removed for any reason, in the Over18 sight Board’s discretion. 

19 (2) TERMINATION OF POSITION.—Upon the ter20 mination of the Oversight Board pursuant to section 

21 209 of this Act, the position of the Revitalization 

22 Coordinator shall terminate. 

23 SEC. 503. CRITICAL PROJECTS. 

24 (a) IDENTIFICATION OF PROJECTS.— 


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1 (1) PROJECT SUBMISSION.—Any Project Spon2 sor may submit, so long as the Oversight Board is 

3 in operation, any existing, ongoing, or proposed 

4 project to the Revitalization Coordinator. The Revi5 talization Coordinator shall require such submission 

6 to include— 

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

8 emergency; 

9 (B) the availability of immediate private 

10 capital or other funds, including loan guaran11 tees, loans, or grants to implement, operate, or 

12 maintain the project; 

13 (C) the cost of the project and amount of 

14 Puerto Rico government funds, if any, nec15 essary to complete and maintain the project; 

16 (D) the environmental and economic bene17 fits provided by the project, including the num18 ber of jobs to be created that will be held by 

19 residents of Puerto Rico and the expected eco20 nomic impact, including the impact on rate21 payers, if applicable; 

22 (E) the status of the project if it is exist23 ing or ongoing; and 

24 (F) in addition to the requirements found 

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1 ization Coordinator may require such submis2 sion to include any or all of the following cri3 teria that assess how the project will— 

4 (i) reduce reliance on oil for electric 

5 generation in Puerto Rico; 

6 (ii) improve performance of energy in7 frastructure and overall energy efficiency; 

8 (iii) expedite the diversification and 

9 conversion of fuel sources for electric gen10 eration from oil to natural gas and renew11 ables in Puerto Rico as defined under ap12 plicable Puerto Rico laws; 

13 (iv) promote the development and uti14 lization of energy sources found on Puerto 

15 Rico; 

16 (v) contribute to transitioning to 

17 privatized generation capacities in Puerto 

18 Rico; 

19 (vi) support the Energy Commission 

20 of Puerto Rico in achievement of its goal 

21 of reducing energy costs and ensuring af22 fordable energy rates for consumers and 

23 business; or 

24 (vii) achieve in whole or in part the 

25 recommendations, if feasible, of the study 


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1 in section 505(d) of this title to the extent 

2 such study is completed and not incon3 sistent with studies or plans otherwise re4 quired under Puerto Rico laws or the vol5 untary agreement negotiated between the 

6 Puerto Rico Electric Power Authority and 

7 its creditors. 

8 (2) IDENTIFICATION OF RELEVANT PUERTO

9 RICO AGENCIES.—Within 20 days of receiving a 

10 project submission under paragraph (1), the Revital11 ization Coordinator shall, in consultation with the 

12 Governor, identify all Puerto Rico Agencies that will 

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

14 or other activity related to the development of such 

15 project submission. 

16 (3) CERTIFICATION OF EXPEDITED PERMIT17 TING PROCESS.— 

18 (A) Not later than 20 days after receiving 

19 a project submission, each Puerto Rico Agency 

20 identified in paragraph (1) shall submit to the 

21 Revitalization Coordinator the Agency’s Expe22 dited Permitting Process. 

23 (B) FAILURE TO PROVIDE EXPEDITED

24 PERMITTING PROCESS.—If a Puerto Rico Agen25 cy fails to provide an Expedited Permitting 


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1 Process within 20 days of receiving a project 

2 submission, the Revitalization Coordinator 

3 shall— 

4 (i) consult with the Governor to de5 velop within 20 days an Expedited Permit6 ting Process for the Agency; and 

7 (ii) require such Puerto Rico Agency 

8 to implement the Expedited Permitting 

9 Process developed under clause (i) for Crit10 ical Projects. 

11 (C) EFFECTS OF CERTIFICATION.—Critical 

12 Projects shall be prioritized to the maximum ex13 tent possible in each Puerto Rico Agency re14 gardless of any agreements transferring or dele15 gating permitting authority to any other Terri16 torial Instrumentality or municipality. 

17 (b) CRITICAL PROJECT REPORT.— 

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

19 the Revitalization Coordinator in consultation with 

20 the Governor and relevant Puerto Rico Agencies 

21 identified in subsection (a)(2) shall develop a Crit22 ical Project Report within 60 days of the project 

23 submission, 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 during the development of the 

5 Critical Project Report, the failure shall con6 stitute a concurrence with the Revitalization 

7 Coordinator’s recommendation in subparagraph 

8 (D). 

9 (C) In the case of a project that may affect 

10 the implementation of Land-Use Plans, as de11 fined by Puerto Rico Act 550–2004, a deter12 mination by the Planning Board will be re13 quired within the 60-day timeframe. If the 

14 Planning Board determines such project will be 

15 inconsistent with relevant Land-Use Plans, then 

16 the project will be deemed ineligible for Critical 

17 Project designation. 

18 (D) In the case of an Energy Project that 

19 will connect with the Puerto Rico Electric 

20 Power Authority’s transmission or distribution 

21 facilities, a recommendation by the Energy 

22 Commission of Puerto Rico, if the Energy Com23 mission determines such Energy Project will af24 fect an approved Integrated Resource Plan, as 

25 defined under Puerto Rico Act 54–2014. If the 


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1 Energy Commission determines the Energy 

2 Project will adversely affect an approved Inte3 grated Resource Plan, then the Energy Com4 mission shall provide the reasons for such de5 termination and the Energy Project shall be in6 eligible for Critical Project designation, pro7 vided that such determination must be made 

8 during the 60-day timeframe for the develop9 ment of the Critical Project Report. 

10 (E) A recommendation by the Revitaliza11 tion Coordinator on whether the project should 

12 be considered a Critical Project. 

13 (2) PUBLIC INVOLVEMENT.—Immediately fol14 lowing the completion of the Critical Project Report, 

15 the Revitalization Coordinator shall make such Crit16 ical Project Report public and allow a period of 30 

17 days for the submission of comments by residents of 

18 Puerto Rico. The Revitalization Coordinator shall re19 spond to the comments within 30 days of closing the 

20 coming period and make the responses publicly 

21 available. 

22 (3) SUBMISSION TO OVERSIGHT BOARD.—Not 

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1 mit the Critical Project Report to the Oversight 

2 Board. 

3 (c) ACTION BY THE OVERSIGHT BOARD.—Not later 

4 than 30 days after receiving the Critical Project Report, 

5 the Oversight Board, by majority vote, shall approve or 

6 disapprove the project as a Critical Project, if the Over7 sight Board— 

8 (1) approves the project, the project shall be 

9 deemed a Critical Project; and 

10 (2) disapproves the project, the Oversight 

11 Board shall submit to the Revitalization Coordinator 

12 in writing the reasons for disapproval. 

13 SEC. 504. MISCELLANEOUS PROVISIONS. 

14 (a) CREATION OF INTERAGENCY ENVIRONMENTAL

15 SUBCOMMITTEE.— 

16 (1) ESTABLISHMENT.—Not later than 60 days 

17 after the date on which the Revitalization Coordi18 nator is appointed, the Interagency Environmental 

19 Subcommittee shall be established and shall evaluate 

20 environmental documents required under Puerto 

21 Rico law for any Critical Project within the Expe22 dited Permitting Process established by the Revital23 ization Coordinator under section 503(a)(3). 

24 (2) COMPOSITION.—The Interagency Environ25 mental Subcommittee shall consist of the RevitalizaVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00125 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 tion Coordinator, and a representative selected by 

2 the Governor in consultation with the Revitalization 

3 Coordinator representing each of the following agen4 cies: The Environmental Quality Board, the Plan5 ning Board, the Puerto Rico Department of Natural 

6 and Environmental Resources, and any other Puerto 

7 Rico Agency determined to be relevant by the Revi8 talization Coordinator. 

9 (b) LENGTH OF EXPEDITED PERMITTING PROC10 ESS.—With respect to a Puerto Rico Agency’s activities 

11 related only to a Critical Project, such Puerto Rico Agency 

12 shall operate as if the Governor has declared an emergency 

13 pursuant to section 2 of Act 76 (3 L.P.R.A. 1932). Sec14 tion 12 of Act 76 (3 L.P.R.A. 1942) shall not be applica15 ble to Critical Projects. Furthermore, any transactions, 

16 processes, projects, works, or programs essential to the 

17 completion of a Critical Project shall continue to be proc18 essed and completed under such Expedited Permitting 

19 Process regardless of the termination of the Oversight 

20 Board under section 209. 

21 (c) EXPEDITED PERMITTING PROCESS COMPLI22 ANCE.— 

23 (1) WRITTEN NOTICE.—A Critical Project 

24 Sponsor may in writing notify the Oversight Board 

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1 talization Coordinator to adhere to the Expedited 

2 Permitting Process. 

3 (2) FINDING OF FAILURE.—If the Oversight 

4 Board finds either the Puerto Rico Agency or Revi5 talization Coordinator has failed to adhere to the 

6 Expedited Permitting Process, the Oversight Board 

7 shall direct the offending party to comply with the 

8 Expedited Permitting Process. The Oversight Board 

9 may take such enforcement action as necessary as 

10 provided by section 104(l). 

11 (d) REVIEW OF LEGISLATURE ACTS.— 

12 (1) SUBMISSION OF ACTS TO OVERSIGHT

13 BOARD.—Pursuant to section 204(a), the Governor 

14 shall submit to the Oversight Board any law duly 

15 enacted during any fiscal year in which the Over16 sight Board is in operation that may affect the Ex17 pedited Permitting Process. 

18 (2) FINDING OF OVERSIGHT BOARD.—Upon re19 ceipt of a law under paragraph (1), the Oversight 

20 Board shall promptly review whether the law would 

21 adversely impact the Expedited Permitting Process 

22 and, upon such a finding, the Oversight Board may 

23 deem such law to be significantly inconsistent with 

24 the applicable Fiscal Plan. 


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1 (e) 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 in any certificate, 

11 right-of-way, permit, lease, or other authorization, a term 

12 or condition that may be permitted in accordance with ap13 plicable laws if the Revitalization Coordinator determines 

14 such inclusion would support the expeditious construction, 

15 operation, or expansion of any Critical Project. 

16 (f) 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 

19 days 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 in 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 270 

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) INSURED BOND.—The term ‘‘Insured 

10 Bond’’ means a bond subject to a financial guar11 antee or similar insurance contract, policy or surety 

12 issued by a monoline insurer. 

13 (8) ISSUER.—The term ‘‘Issuer’’ means, as ap14 plicable, the Territory Government Issuer or an Au15 thorized Territorial Instrumentality that has issued 

16 or guaranteed at least one Bond that is Out17 standing. 

18 (9) MODIFICATION.—The term ‘‘Modification’’ 

19 means any modification, amendment, supplement or 

20 waiver affecting one or more series of Bonds, includ21 ing those effected by way of exchange, repurchase, 

22 conversion, or substitution. 

23 (10) OUTSTANDING.—The term ‘‘Outstanding,’’ 

24 in the context of the principal amount of Bonds, 


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1 shall be determined in accordance with subsection 

2 (b). 

3 (11) OUTSTANDING PRINCIPAL.—The term 

4 ‘‘Outstanding Principal’’ means— 

5 (A) for a Bond that is not a Capital Ap6 preciation Bond or a Convertible Capital Appre7 ciation Bond, the outstanding principal amount 

8 of such Bond; and 

9 (B) for a Bond that is a Capital Apprecia10 tion Bond or a Convertible Capital Appreciation 

11 Bond, the current accreted value of such Cap12 ital Appreciation Bond or a Convertible Capital 

13 Appreciation Bond, as applicable. 

14 (12) POOL.—The term ‘‘Pool’’ means a pool es15 tablished in accordance with subsection (d). 

16 (13) QUALIFYING MODIFICATION.—The term 

17 ‘‘Qualifying Modification’’ means a Modification pro18 posed in accordance with subsection (g). 

19 (14) SECURED POOL.—The term ‘‘Secured 

20 Pool’’ means a Pool established in accordance with 

21 subsection (d) consisting only of Bonds that are se22 cured by a lien on property, provided that the inclu23 sion of a Bond Claim in such Pool shall not in any 

24 way limit or prejudice the right of the Issuer, the 

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1 characterize or challenge such Bond Claim, or any 

2 purported lien securing such Bond Claim, in any 

3 other manner in any subsequent proceeding in the 

4 event a proposed Qualifying Modification is not con5 summated. 

6 (15) SENIOR CLAIMS.—The term ‘‘Senior 

7 Claims’’ means claims that are senior in right of 

8 payment to other claims, or are prior in right of 

9 payment from any collateral, pledged revenue, or 

10 other interest of the issuer in property, under any 

11 agreement, law or constitution, other than a right to 

12 prior payment based solely on an earlier scheduled 

13 maturity date or amortization. 

14 (16) TERRITORY GOVERNMENT ISSUER.—The 

15 term ‘‘Territory Government Issuer’’ means the Gov16 ernment of Puerto Rico or such covered territory for 

17 which an Oversight Board has been established pur18 suant to section 101. 

19 (b) OUTSTANDING BONDS.—In determining whether 

20 holders of the requisite principal amount of Outstanding 

21 Bonds have voted in favor of, or consented to, a proposed 

22 Qualifying Modification, a Bond will be deemed not to be 

23 outstanding, and may not be counted in a vote or consent 

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1 tion, if on the record date for the proposed Qualifying 

2 Modification— 

3 (1) the Bond has previously been cancelled or 

4 delivered for cancellation or is held for reissuance 

5 but has not been reissued; 

6 (2) the Bond has previously been called for re7 demption in accordance with its terms or previously 

8 become due and payable at maturity or otherwise 

9 and the Issuer has previously satisfied its obligation 

10 to make, or provide for, all payments due in respect 

11 of the Bond in accordance with its terms; 

12 (3) the Bond has been substituted with a secu13 rity of another series; or 

14 (4) the Bond is held by the Issuer or by an Au15 thorized Territorial Instrumentality of the Territory 

16 Government Issuer or by a corporation, trust or 

17 other legal entity that is controlled by the Issuer or 

18 an Authorized Territorial Instrumentality of the 

19 Territory Government Issuer, as applicable. 

20 For purposes of this subsection, a corporation, trust or 

21 other legal entity is controlled by the Issuer or by an Au22 thorized Territorial Instrumentality of the Territory Gov23 ernment Issuer if the Issuer or an Authorized Territorial 

24 Instrumentality of the Territory Government Issuer, as 

25 applicable, has the power, directly or indirectly, through 


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1 the ownership of voting securities or other ownership in2 terests, by contract or otherwise, to direct the manage3 ment of or elect or appoint a majority of the board of di4 rectors or other persons performing similar functions in 

5 lieu of, or in addition to, the board of directors of that 

6 legal entity. 

7 (c) CERTIFICATION OF DISENFRANCHISED BONDS.— 

8 Prior to any vote on, or consent solicitation for, a Quali9 fying Modification, the Issuer shall deliver to the Calcula10 tion Agent a certificate signed by an authorized represent11 ative of the Issuer specifying any Bonds that are deemed 

12 not to be Outstanding for the purpose of subsection (b) 

13 above. 

14 (d) DETERMINATION OF POOLS FOR VOTING.—The 

15 Administrative Supervisor, in consultation with the Issuer, 

16 shall establish Pools in accordance with the following: 

17 (1) Not less than one Pool shall be established 

18 for each Issuer. 

19 (2) A Pool that contains one or more Secured 

20 Bonds shall be a Secured Pool. 

21 (3) The Administrative Supervisor shall estab22 lish Pools according to the following principles: 

23 (A) For each Issuer that has issued mul24 tiple Bonds that are distinguished by specific 

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1 rangements, including Bonds that have been 

2 issued as general obligations of the Territory 

3 Government Issuer to which the Territory Gov4 ernment Issuer pledged the full or good faith, 

5 credit, and taxing power of the Territory Gov6 ernment Issuer, separate Pools shall be estab7 lished corresponding to the relative priority or 

8 security arrangements of each holder of Bonds 

9 against each Issuer, as applicable, provided, 

10 however, that the term ‘‘priority’’ as used in 

11 this section shall not be understood to mean 

12 differing payment or maturity dates. 

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 such guaranteed and 

23 non-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; and 

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 (4) Notwithstanding the preceding provisions of 

21 this subsection, a preexisting voluntary agreement 

22 may classify Insured Bonds and uninsured bonds in 

23 different Pools and provide different treatment 

24 thereof so long as the preexisting voluntary agree25 ment has been agreed to by— 


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1 (A) holders of a majority in amount of all 

2 uninsured bonds outstanding in the modified 

3 Pool; and 

4 (B) holders (including insurers with power 

5 to vote) of a majority in amount of all Insured 

6 Bonds. 

7 (e) AUTHORIZATION OF TERRITORY INSTRUMENTAL8 ITIES.—A covered territorial instrumentality is an Author9 ized Territorial Instrumentality if it has been specifically 

10 authorized to be eligible to avail itself of the procedures 

11 under this section by the Administrative Supervisor. 

12 (f) INFORMATION DELIVERY REQUIREMENT.—Be13 fore solicitation of acceptance or rejection of a Modifica14 tion under subsection (h), the Issuer shall provide to the 

15 Calculation Agent, the Information Agent, and the Admin16 istrative Supervisor, the following information— 

17 (1) a description of the Issuer’s economic and 

18 financial circumstances which are, in the Issuer’s 

19 opinion, relevant to the request for the proposed 

20 Qualifying Modification, a description of the Issuer’s 

21 existing debts, a description of the impact of the 

22 proposed Qualifying Modification on the Territory’s 

23 or its territorial instrumentalities’ public debt; 

24 (2) if the Issuer is seeking Modifications affect25 ing any other Pools of Bonds of the Territory GovVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00139 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 ernment Issuer or its Authorized Territorial Instru2 mentalities, a description of such other Modifica3 tions; 

4 (3) if a Fiscal Plan with respect to such Issuer 

5 has been certified, the applicable Fiscal Plan cer6 tified in accordance with section 201; and 

7 (4) such other information as may be required 

8 under applicable securities laws. 

9 (g) QUALIFYING MODIFICATION.—A Modification is 

10 a Qualifying Modification if— 

11 (1) the Issuer proposing the Modification has 

12 consulted with holders of Bonds in each Pool of such 

13 Issuer prior to soliciting a vote on such Modification; 

14 (2) each exchanging, repurchasing, converting, 

15 or substituting holder of Bonds of any series in a 

16 Pool affected by that Modification is offered the 

17 same amount of consideration per amount of prin18 cipal, the same amount of consideration per amount 

19 of interest accrued but unpaid and the same amount 

20 of consideration per amount of past due interest, re21 spectively, as that offered to each other exchanging, 

22 repurchasing, converting, or substituting holder of 

23 Bonds of any series in a Pool affected by that Modi24 fication (or, where a menu of instruments or other 

25 consideration is offered, each exchanging, repurVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00140 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 chasing, converting, or substituting holder of Bonds 

2 of any series in a Pool affected by that Modification 

3 is offered the same amount of consideration per 

4 amount of principal, the same amount of consider5 ation per amount of interest accrued but unpaid and 

6 the same amount of consideration per amount of 

7 past due interest, respectively, as that offered to 

8 each other exchanging, repurchasing, converting, or 

9 substituting holder of Bonds of any series in a Pool 

10 affected by that Modification electing the same op11 tion under such menu of instruments); 

12 (3) the Modification is certified by the Adminis13 trative Supervisor as being consistent with the re14 quirements set forth in section 104(i)(1) and is in 

15 the best interests of the creditors and is feasible; or 

16 (4) notwithstanding paragraphs (1) through 

17 (3), the Administrative Supervisor has issued a cer18 tification that— 

19 (A) the requirements set forth in section 

20 104(i)(2) have been satisfied; or 

21 (B) the Modification is consistent with a 

22 restructuring support or similar agreement to 

23 be implemented pursuant to the law of the cov24 ered territory executed by the Issuer prior to 

25 the establishment. 


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1 (h) SOLICITATION.— 

2 (1) Upon receipt of a certification from the Ad3 ministrative Supervisor under subsection (g), the In4 formation Agent shall, if practical and except as pro5 vided in paragraph (2), submit to the holders of any 

6 Outstanding Bonds of the relevant Issuer, including 

7 holders of the right to vote such Outstanding Bonds, 

8 the information submitted by the relevant Issuer 

9 under subsection (f)(1) in order to solicit the vote of 

10 such holders to approve or reject the Qualifying 

11 Modification. 

12 (2) If the Information Agent is unable to iden13 tify the address of holders of any Outstanding 

14 Bonds of the relevant Issuer, the Information Agent 

15 may solicit the vote or consent of such holders by— 

16 (A) delivering the solicitation to the paying 

17 agent for any such Issuer or Depository Trust 

18 Corporation if it serves as the clearing system 

19 for any of the Issuer’s Outstanding Bonds; or 

20 (B) delivering or publishing the solicitation 

21 by whatever additional means the Information 

22 Agent, after consultation with the Issuer, deems 

23 necessary and appropriate in order to make a 

24 reasonable effort to inform holders of any Out25 standing Bonds of the Issuer which may inVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00142 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 clude, notice by mail, publication in electronic 

2 media, publication on a website of the Issuer, or 

3 publication in newspapers of national circula4 tion in the United States and in a newspaper 

5 of general circulation in the territory. 

6 (i) WHO MAY PROPOSE A MODIFICATION.—For each 

7 Issuer, a Modification may be proposed to the Administra8 tive Supervisor by the Issuer or by one or more holders 

9 of the right to vote the Issuer’s Outstanding Bonds. To 

10 the extent a Modification proposed by one or more holders 

11 of the right to vote Outstanding Bonds otherwise complies 

12 with the requirements of this title, the Administrative Su13 pervisor may accept such Modification on behalf of the 

14 Issuer, in which case the Administrative Supervisor will 

15 instruct the Issuer to provide the information required in 

16 subsection (f). 

17 (j) VOTING.—For each Issuer, any Qualifying Modi18 fication may be made with the affirmative vote of the hold19 ers of the right to vote at least two-thirds of the Out20 standing Principal amount of the Outstanding Bonds in 

21 each Pool that have voted to approve or reject the Quali22 fying Modification, provided that holders of the right to 

23 vote not less than a majority of the aggregate Outstanding 

24 Principal amount of all the Outstanding Bonds in each 

25 Pool have voted to approve the Qualifying Modification. 


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1 The holder of the right to vote the Outstanding Bonds 

2 that are Insured Bonds shall be the monoline insurer in3 suring such Insured Bond to the extent such insurer is 

4 granted the right to vote Insured Bonds for purposes of 

5 directing remedies or consenting to proposed amendments 

6 or modifications as provided in the applicable documents 

7 pursuant to which such Insured Bond was issued and in8 sured. 

9 (k) CALCULATION AGENT.—For the purpose of cal10 culating the principal amount of the Bonds of any series 

11 eligible to participate in such a vote or consent solicitation 

12 and tabulating such votes or consents, the Territory Gov13 ernment Issuer may appoint a Calculation Agent for each 

14 Pool reasonably acceptable to the Administrative Super15 visor. 

16 (l) INFORMATION AGENT.—For the purpose of ad17 ministering a vote of holders of Bonds, including the hold18 ers of the right to vote such Bonds, or seeking the consent 

19 of holder of Bonds, including the holders of the right to 

20 vote such Bonds, to a written action under this section, 

21 the Territory Government Issuer may appoint an Informa22 tion Agent for each Pool reasonably acceptable to the Ad23 ministrative Supervisor. 

24 (m) BINDING EFFECT.— 


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1 (1) A Qualifying Modification will be conclusive 

2 and binding on all holders of Bonds whether or not 

3 they have given such consent, and on all future hold4 ers of those Bonds whether or not notation of such 

5 Qualifying Modification is made upon the Bonds, 

6 if— 

7 (A) the holders of the right to vote the 

8 Outstanding Bonds in each Pool of the Issuer 

9 pursuant to subsection (j) have consented to or 

10 approved the Qualifying Modification; 

11 (B) the Administrative Supervisor certifies 

12 that— 

13 (i) the voting requirements of this sec14 tion have been satisfied; 

15 (ii) the Qualifying Modification com16 plies with the requirements set forth in 

17 section 104(i)(1); and 

18 (iii) except for such conditions that 

19 have been identified in the Qualifying 

20 Modification as being non-waivable, any 

21 conditions on the effectiveness of the 

22 Qualifying Modification have been satisfied 

23 or, in the Administrative Supervisor’s sole 

24 discretion, satisfaction of such conditions 

25 has been waived; 


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1 (C) with respect to a Bond Claim that is 

2 secured by a lien on property and with respect 

3 to which the holder of such Bond Claim has re4 jected or not consented to the Qualifying Modi5 fication, the holder of such Bond— 

6 (i) retains the lien securing such Bond 

7 Claims; or 

8 (ii) receives on account of such Bond 

9 Claim, through deferred cash payments, 

10 substitute collateral, or otherwise, at least 

11 the equivalent value of the lesser of the 

12 amount of the Bond Claim or of the collat13 eral securing such Bond Claim; and 

14 (D) the district court for the territory or, 

15 for any territory that does not have a district 

16 court, the United States District Court for the 

17 District of Hawaii, has, after reviewing an ap18 plication submitted to it by the applicable 

19 Issuer for an order approving the Qualifying 

20 Modification, entered an order that the require21 ments of this section have been satisfied. 

22 (2) Upon the entry of an order under para23 graph (1)(D), the conclusive and binding Qualifying 

24 Modification shall be valid and binding on any per25 son or entity asserting claims or other rights, includVerDate Sep 11 2014 03:09 May 19, 2016 Jkt 059200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 E:\BILLS\H5278.IH H5278

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1 ing a beneficial interest (directly or indirectly, as 

2 principal, agent, counterpart, subrogee, insurer or 

3 otherwise) in respect of Bonds subject to the Quali4 fying Modification, any trustee, any collateral agent, 

5 any indenture trustee, any fiscal agent, and any 

6 bank that receives or holds funds related to such 

7 Bonds. All property of an Issuer for which an order 

8 has been entered under paragraph (1)(D) shall vest 

9 in the Issuer free and clear of all claims in respect 

10 of any Bonds of any other Issuer. Such Qualifying 

11 Modification will be full, final, complete, binding, 

12 and conclusive as to the territorial government 

13 Issuer, other territorial instrumentalities of the terri14 torial government Issuer, and any creditors of such 

15 entities, and should not be subject to any collateral 

16 attack or other challenge by any such entities in any 

17 court or other forum. Notwithstanding anything 

18 herein to the contrary, the foregoing shall not preju19 dice the rights and claims of any party that insured 

20 the Bonds, including the right to assert claims under 

21 the Bonds as modified following any payment under 

22 the insurance policy, and no claim or right that may 

23 be asserted by any party in a capacity other than 

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1 fication shall be satisfied, released, discharged, or 

2 enjoined by this provision. 

3 (n) JUDICIAL REVIEW.— 

4 (1) The district court for the territory or, for 

5 any territory that does not have a district court, the 

6 United States District Court for the District of Ha7 waii shall have original and exclusive jurisdiction 

8 over civil actions arising under this section. 

9 (2) Notwithstanding section 106(e), there shall 

10 be a cause of action to challenge unlawful applica11 tion of this section. 

12 (3) The district court shall nullify a Modifica13 tion and any effects on the rights of the holders of 

14 Bonds resulting from such Modification if and only 

15 if the district court determines that such Modifica16 tion is manifestly inconsistent with this section. 

17 SEC. 602. APPLICABLE LAW. 

18 In any judicial proceeding regarding this title, Fed19 eral, State, or territorial laws of the United States, as ap20 plicable, shall govern and be applied without regard or ref21 erence to any law of any international or foreign jurisdic22 tion. 

Æ 


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