II 

116TH CONGRESS 

1ST SESSION S. 1312 

To provide the option of discharging certain unsecured financial obligations 

of self-governing territories of the United States. 

IN THE SENATE OF THE UNITED STATES 

MAY 2, 2019 

Ms. WARREN (for herself, Mr. SANDERS, Ms. HARRIS, Mr. MARKEY, and Mrs. 

GILLIBRAND) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To provide the option of discharging certain unsecured financial obligations of self-governing territories of the United 

States. 

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 ‘‘United States Territorial Relief Act of 2019’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Findings. 


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TITLE I—TERRITORIAL RELIEF 

Sec. 101. Relief through exercise of the power to regulate commerce, the bankruptcy power, and the territorial power. 

Sec. 102. Effect of discharge. 

Sec. 103. Actions relating to the status of financial obligations. 

Sec. 104. Notice of discharge. 

Sec. 105. Effective date. 

TITLE II—PUERTO RICO DEBT RESTRUCTURING COMPENSATION 

FUND 

Sec. 201. Purpose. 

Sec. 202. Definitions. 

Sec. 203. Administration. 

Sec. 204. Determination of eligibility for compensation. 

Sec. 205. Puerto Rico Debt Restructuring Compensation Fund. 

Sec. 206. Regulations. 

Sec. 207. Sunset. 

TITLE III—PUERTO RICO PUBLIC CREDIT COMPREHENSIVE 

AUDIT COMMISSION 

Sec. 301. Definitions. 

Sec. 302. Establishment; dissolution. 

Sec. 303. Reports. 

Sec. 304. Duties. 

Sec. 305. Authority of the Commission. 

Sec. 306. Membership. 

Sec. 307. Powers and responsibilities. 

Sec. 308. Provision of requested information. 

Sec. 309. Access to information. 

Sec. 310. Funding. 

TITLE IV—SEVERABILITY 

Sec. 401. Severability. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) ATTACHMENT.—The term ‘‘attachment’’ 

4 means the time at which a security interest becomes 

5 enforceable against a debtor with respect to collat6 eral. 

7 (2) COLLATERAL.—The term ‘‘collateral’’ 

8 means property subject to a security interest. 


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1 (3) FINANCIAL GUARANTY INSURANCE.—The 

2 term ‘‘financial guaranty insurance’’ means a surety 

3 bond, an insurance policy, an indemnity contract, or 

4 any similar guaranty, under which loss is payable on 

5 proof of a financial loss to an insured claimant, an 

6 obligee, or an indemnitee as a result of the failure 

7 of any obligor on or issuer of any debt instrument 

8 or other monetary obligation to pay, when due, prin9 cipal, interest, or any other amount due or payable 

10 with respect to that instrument or obligation, if that 

11 failure to pay is the result of a financial default, a 

12 financial insolvency, or a discharge in bankruptcy. 

13 (4) FINANCIAL GUARANTY INSURER.—The term 

14 ‘‘financial guaranty insurer’’ means a party that is 

15 obligated as a surety, insurer, or indemnitor under 

16 a financial guaranty insurance contract. 

17 (5) FINANCIAL OBLIGATION.—The term ‘‘finan18 cial obligation’’— 

19 (A) means an obligation validly owed as of 

20 the effective date of this Act by a qualifying 

21 territory or an instrumentality of a qualifying 

22 territory thereof that arises from any— 

23 (i) security issued by a qualifying ter24 ritory or instrumentality of a qualifying 

25 territory; 


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1 (ii) loan taken out by a qualifying ter2 ritory or instrumentality of a qualifying 

3 territory; 

4 (iii) repurchase or swap or other de5 rivative contract entered into by a quali6 fying territory or instrumentality of a 

7 qualifying territory; or 

8 (iv) guaranty of any security or loan 

9 or repurchase or swap or other derivative 

10 contract by a qualifying territory or instru11 mentality of a qualifying territory; and 

12 (B) does not include any— 

13 (i) claim made by a vendor or service 

14 provider that is owed payment by a quali15 fying territory or an instrumentality of a 

16 qualifying territory for a good or service 

17 rendered in the ordinary course of busi18 ness; 

19 (ii) claim made by or on behalf of a 

20 current or former employee of a qualifying 

21 territory or an instrumentality of a quali22 fying territory that is owed payment for a 

23 pension or other retirement benefit, or for 

24 a health care benefit of any kind; or 


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1 (iii) claim against a qualifying terri2 tory or an instrumentality of a qualifying 

3 territory for a pending tax refund or tax 

4 credit. 

5 (6) INSTRUMENTALITY.—The term ‘‘instrumen6 tality’’ includes— 

7 (A) a political subdivision of a qualifying 

8 territory; 

9 (B) a public agency of a qualifying terri10 tory; 

11 (C) a public corporation of a qualifying 

12 territory; and 

13 (D) a banking corporation of a qualifying 

14 territory. 

15 (7) PER CAPITA DEBT OF A TERRITORY.—The 

16 term ‘‘per capita debt of a territory’’ means the 

17 quotient obtained by dividing— 

18 (A) the aggregate amount of the financial 

19 obligations of a territory and the instrumental20 ities of the territory, which shall not include— 

21 (i) the Federal debt; or 

22 (ii) the unfunded liabilities of a pen23 sion system of the government of the quali24 fying territory or any instrumentality of a 

25 qualifying territory for the payment of 


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1 pension and other retirement benefits, or 

2 health care benefits of any kind, to current 

3 or former employees of the qualifying terri4 tory or the instrumentality of the quali5 fying territory that are owed payment for 

6 a pension or other retirement benefit, or 

7 for a health care benefit of any kind; by 

8 (B) the population of the territory (based 

9 on the most recent data available from the Bu10 reau of the Census). 

11 (8) PROCEEDS.—The term ‘‘proceeds’’ means— 

12 (A) whatever is acquired upon the sale, 

13 lease, license, exchange, or other disposition of 

14 collateral; or 

15 (B) whatever is collected on, or distributed 

16 on account of, collateral. 

17 (9) QUALIFYING TERRITORY.—The term ‘‘quali18 fying territory’’ means a territory that meets not 

19 less than 2 of the following qualifications: 

20 (A) The population of the territory, based 

21 on the most recent data available from the Bu22 reau of the Census, has decreased by more than 

23 5 percent during the 10-year period ending on 

24 the date of a discharge under section 101. 


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1 (B) The territory has received major dis2 aster assistance under the Robert T. Stafford 

3 Disaster Relief and Emergency Assistance Act 

4 (42 U.S.C. 5121 et seq.) during the 5-year pe5 riod ending on the date of a discharge under 

6 section 101. 

7 (C) The per capita debt of the territory is 

8 greater than $15,000 (as adjusted annually to 

9 reflect the percentage change in the Consumer 

10 Price Index for All Urban Consumers published 

11 by the Bureau of Labor Statistics of the De12 partment of Labor). 

13 (10) SECURITY AGREEMENT.—The term ‘‘secu14 rity agreement’’ means an agreement or resolution 

15 that creates or provides for a security interest. 

16 (11) SECURED FINANCIAL OBLIGATION.—The 

17 term ‘‘secured financial obligation’’ means any fi18 nancial obligation to the extent of the value of any 

19 collateral pledged by a qualifying territory or an in20 strumentality of a qualifying territory to secure the 

21 repayment of the financial obligation pursuant to a 

22 valid and perfected security interest under applicable 

23 territorial law, not including— 

24 (A) any property acquired or anticipated to 

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1 strumentality of a qualifying territory after the 

2 date of a discharge under section 101, even if 

3 that property, when acquired, would have be4 come collateral subject to a security interest; or 

5 (B) any proceeds, products, offspring, or 

6 profits of the collateral not in existence on the 

7 date of a discharge under section 101, unless 

8 the property constitutes the proceeds of collat9 eral to which the security interest has attached 

10 as of the date of the discharge. 

11 (12) SECURITY INTEREST.—The term ‘‘security 

12 interest’’— 

13 (A) means an interest in property, includ14 ing a lien or other pledge of property, that se15 cures a payment or the performance of an obli16 gation; and 

17 (B) does not include a pledge of the full 

18 faith and credit of a qualifying territory or its 

19 instrumentality, even in the case that such 

20 pledge includes a promise of all available re21 sources of the qualifying territory or its instru22 mentality. 

23 (13) TERRITORY.—The term ‘‘territory’’— 

24 (A) means any self-governing Federal ter25 ritory; and 


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1 (B) includes— 

2 (i) the Commonwealth of Puerto Rico; 

3 (ii) Guam; 

4 (iii) the Commonwealth of the North5 ern Mariana Islands; 

6 (iv) the United States Virgin Islands; 

7 and 

8 (v) American Samoa. 

9 (14) UNSECURED FINANCIAL OBLIGATION.— 

10 The term ‘‘unsecured financial obligation’’ means 

11 any financial obligation to the extent the financial 

12 obligation is not a secured financial obligation. 

13 SEC. 3. FINDINGS. 

14 Congress finds that— 

15 (1) millions of citizens of the United States re16 side in territories of the United States; 

17 (2) the Federal Government owes a special duty 

18 of care and stewardship to the citizens of territories 

19 of the United States because— 

20 (A) historically, Federal administration of 

21 these territories was often wanting and many 

22 residents of the territories faced discriminatory 

23 treatment by the Federal Government; 

24 (B) the economies of these territories face 

25 special constraints, including diminishment of 


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1 property tax bases because of large, untaxed, 

2 Federal land holdings; and 

3 (C) these territories lack the benefits of 

4 many Federal programs, such as Supplemental 

5 Security Income, the Earned Income Tax Cred6 it, and full access to Medicaid; 

7 (3) prolonged economic downturns, declines in 

8 population, and natural disasters have resulted in 

9 some territories of the United States and the instru10 mentalities of those territories having unsupportable 

11 debt burdens on financial obligations, which cannot 

12 realistically be repaid without imposing undue hard13 ship on the citizens and residents of those terri14 tories; 

15 (4) disaster recovery funds that are provided by 

16 the Federal Government should be used for disaster 

17 recovery and not for direct or indirect debt pay18 ments; 

19 (5) unsecured creditors of financially distressed 

20 territories and instrumentalities of those territories 

21 have little prospect of recovery upon default because 

22 of— 

23 (A) the severe indebtedness of those terri24 tories; and 


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1 (B) the lack of effective remedies for unse2 cured creditors against those territories and the 

3 instrumentalities of those territories; and 

4 (6) the people of the Commonwealth of Puerto 

5 Rico deserve to know about the social, political, and 

6 legal factors associated with the amount of the pub7 lic debt of the Commonwealth of Puerto Rico ac8 crued over the past 5 decades, and the Federal Gov9 ernment has a responsibility to support efforts to ob10 tain those answers, including public or private ef11 forts to conduct a comprehensive audit of the public 

12 debt of the Commonwealth of Puerto Rico. 

13 TITLE I—TERRITORIAL RELIEF 

14 SEC. 101. RELIEF THROUGH EXERCISE OF THE POWER TO 

15 REGULATE COMMERCE, THE BANKRUPTCY 

16 POWER, AND THE TERRITORIAL POWER. 

17 (a) IN GENERAL.—Pursuant to clauses 3 and 4 of 

18 section 8 of article I and clause 2, section 3 of article IV 

19 of the Constitution of the United States, any unsecured 

20 financial obligation of a qualifying territory or an instru21 mentality of a qualifying territory that is outstanding is 

22 discharged on the date on which a resolution stating that 

23 the qualifying territory wishes to discharge the unsecured 

24 financial obligations of the qualifying territory and the in25 strumentalities of the qualifying territory— 


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1 (1) is adopted by an affirmative vote of more 

than 1 2 ⁄2 of the members of each house of the legisla3 ture of that qualifying territory and is signed by the 

4 chief executive of the qualifying territory; or 

5 (2) is adopted by an affirmative vote of not less 

than 2 6 ⁄3 of the members of each house of the legisla7 ture of that qualifying territory. 

8 (b) LIMITATION.—A qualifying territory may dis9 charge unsecured financial obligations of the qualifying 

10 territory and the instrumentalities of the qualifying terri11 tory under this title not more frequently than once during 

12 any 7-year period, and such discharge shall prohibit the 

13 qualifying territory from discharging, adjusting, or im14 pairing, in any manner or degree including in a proceeding 

15 under title III of PROMESA (48 U.S.C. 2161 et seq.), 

16 a debt described in section 2(5)(B)(ii). 

17 (c) NO STAY OF ACTIONS BY QUALIFYING TERRI18 TORY TO OBTAIN A DISCHARGE.—Notwithstanding any 

19 other provision of Federal, State, or territorial law, the 

20 ability of a qualifying territory to obtain a discharge under 

21 this Act shall not be stayed, avoided, or otherwise limited 

22 by operation of any provision of law or by order of a court, 

23 oversight board, or administrative agency in any pro24 ceeding. 


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1 (d) SECURED FINANCIAL OBLIGATIONS UNAF2 FECTED.— 

3 (1) IN GENERAL.—Except as provided in para4 graphs (1) and (3) of section 102, nothing in sub5 section (a) shall affect the validity and enforceability 

6 of any financial obligation of a qualifying territory 

7 or an instrumentality of a qualifying territory to the 

8 extent that the obligation is a secured financial obli9 gation. 

10 (2) VOIDABILITY.—Notwithstanding paragraph 

11 (1), a secured financial obligation of a qualifying 

12 territory or an instrumentality of a qualifying terri13 tory may be voidable or otherwise impaired under 

14 any other applicable law. 

15 (e) RULE OF CONSTRUCTION.—Nothing in this Act 

16 shall be construed to operate as a stay of a pending case 

17 brought under title III of PROMESA (48 U.S.C. 2161 

18 et seq.), or of any act of an oversight board appointed 

19 under that Act, or to reinstate any financial obligation dis20 charged under this Act through any procedure under 

21 PROMESA (48 U.S.C. 2101 et seq.). 

22 SEC. 102. EFFECT OF DISCHARGE. 

23 A discharge under section 101 shall— 

24 (1) except in regard to actions brought under 

25 section 103, operate as a permanent stay, applicable 


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1 to all entities and enforceable by the qualifying terri2 tory or an instrumentality of the qualifying territory 

3 in any court with jurisdiction over an action de4 scribed in section 103(a), against the commencement 

5 or continuation of an action, the employment of 

6 process, or an act to collect, recover, or offset any 

7 outstanding financial obligation to the extent that 

8 the financial obligation is not a secured financial ob9 ligation as of the date of the discharge, regardless 

10 of whether discharge of that unsecured financial ob11 ligation is waived by the qualifying territory; 

12 (2) void any outstanding judgment entered on 

13 an unsecured financial obligation of the qualifying 

14 territory or an instrumentality of the qualifying ter15 ritory to the extent that such judgment is a deter16 mination of liability of the qualifying territory or in17 strumentality; and 

18 (3) if prior to the date of the discharge under 

19 section 101, the qualifying territory or an instru20 mentality of the qualifying territory entered into a 

21 security agreement securing a financial obligation, 

22 prevent the security interest created by the security 

23 agreement from attaching to any property acquired 

24 by the qualifying territory or an instrumentality 

25 thereof after the date of the discharge under section 


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1 101, except to the extent that such property con2 stitutes the proceeds of collateral to which the secu3 rity interest had attached as of the date of the dis4 charge. 

5 SEC. 103. ACTIONS RELATING TO THE STATUS OF FINAN6 CIAL OBLIGATIONS. 

7 (a) IN GENERAL.—Any financial obligation is conclu8 sively deemed to be an unsecured financial obligation ex9 cept to the extent that the holder of that obligation proves 

10 that the financial obligation is a secured financial obliga11 tion in an action for a declaratory judgment that is filed— 

12 (1) in— 

13 (A) an appropriate territorial court of the 

14 qualifying territory; or 

15 (B) a district court of the United States in 

16 the qualifying territory; and 

17 (2) not later than 180 days after the date of a 

18 discharge under section 101. 

19 (b) BURDEN OF PROOF.—In an action described in 

20 subsection (a), the holder of an obligation shall be required 

21 to prove by clear and convincing evidence that— 

22 (1) the obligation is a secured financial obliga23 tion; and 


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1 (2) any revenues generated after a discharge 

2 under section 101 are the proceeds of the collateral 

3 securing the secured financial obligation. 

4 (c) EXCLUSIVE JURISDICTION.—Notwithstanding 

5 title 28, United States Code, a court described in sub6 section (a)(1) shall have exclusive jurisdiction over an ac7 tion involving, arising from, or related to the status of a 

8 financial obligation as a secured or an unsecured financial 

9 obligation under subsection (a), including— 

10 (1) any action asserting a taking under the 

11 Fifth Amendment of the Constitution of the United 

12 States; and 

13 (2) any action for declaratory judgment. 

14 (d) APPEALS.—Any appeal from an action under this 

15 section shall be heard solely in— 

16 (1) for a case filed under subsection (a)(1)(A), 

17 the appropriate territorial court of the qualifying 

18 territory; or 

19 (2) for a case filed under subsection (a)(1)(B), 

20 the appropriate court of appeals of the United 

21 States for the qualifying territory. 

22 (e) COSTS.—All parties shall bear their own costs in 

23 an action under this section. 

24 (f) ESTOPPEL.—Any party to an action under this 

25 section shall be estopped in other actions from claiming 


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1 that the party has been deprived of the property of that 

2 party by virtue of— 

3 (1) a discharge under section 101; or 

4 (2) a final ruling in an action described in sub5 section (a) that a financial obligation of a party is 

6 an unsecured financial obligation. 

7 (g) BAR ON AVOIDANCE ACTIONS BY CREDITORS.— 

8 Notwithstanding any other provision of law, a creditor of 

9 a qualifying territory or an instrumentality of a qualifying 

10 territory that has received a discharge under this title may 

11 not avoid or bring an action to avoid, directly or deriva12 tively, any transfer of property made by the qualifying ter13 ritory or instrumentality. 

14 (h) AVOIDANCE OF SECURITY INTERESTS BY QUALI15 FYING TERRITORIES AND INSTRUMENTALITIES OF QUALI16 FYING TERRITORIES.— 

17 (1) IN GENERAL.—In addition to the relief pro18 vided elsewhere in this Act, a qualifying territory or 

19 an instrumentality of a qualifying territory, in a civil 

20 action described in paragraph (2), may avoid any se21 curity interest— 

22 (A) securing a financial obligation that 

23 would be avoidable by a trustee in a case under 

24 chapter 7 of title 11, United States Code, filed 

25 on the date of the discharge under section 101 


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1 if, notwithstanding sections 101(41) and 109(a) 

2 of title 11, United States Code, or any statute 

3 of limitations under that title, the qualifying 

4 territory or the instrumentality of the qualifying 

5 territory were deemed an eligible debtor under 

6 chapter 7 of title 11, United States Code; or 

7 (B) securing a financial obligation to the 

8 extent that the amount owed on the financial 

9 obligation exceeds the value of any collateral, 

10 subject to restrictions under paragraph (3), se11 curing the financial obligation. 

12 (2) CIVIL ACTIONS.—A civil action described in 

13 this paragraph shall be— 

14 (A) brought by a qualifying territory, an 

15 instrumentality of a qualifying territory, or a 

16 relator on behalf of a qualifying territory or an 

17 instrumentality of a qualifying territory not 

18 later than 2 years after the date of a discharge 

19 under section 101; and 

20 (B) filed in— 

21 (i) an appropriate territorial court of 

22 the qualifying territory; or 

23 (ii) a district court of the United 

24 States in the qualifying territory. 


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1 (3) VALUE OF COLLATERAL.—For the purpose 

2 of determining the value of collateral under para3 graph (1)(B), the following shall not be included: 

4 (A) Any proceeds, products, offspring, or 

5 profits of the collateral not in existence on the 

6 date of a discharge under section 101, regard7 less of whether those proceeds, products, off8 spring, or profits of the collateral would become 

9 collateral subject to a security interest after the 

10 date of a discharge under section 101. 

11 (B) Any property acquired or anticipated 

12 to be acquired by a qualifying territory or an 

13 instrumentality of a qualifying territory after 

14 the date of a discharge under section 101, re15 gardless of whether that property, when ac16 quired, would have become collateral subject to 

17 a security interest. 

18 (C) Any contract right to tax revenues that 

19 arise after the date of a discharge under section 

20 101. 

21 SEC. 104. NOTICE OF DISCHARGE. 

22 (a) IN GENERAL.— 

23 (1) RESPONSIBILITIES OF A QUALIFYING TER24 RITORY OR AN INSTRUMENTALITY OF A QUALIFYING


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1 TERRITORY.—After a discharge under section 101, 

2 the qualifying territory shall promptly— 

3 (A) notify the Secretary of the Treasury of 

4 the discharge; 

5 (B) provide actual notice of the discharge 

6 and of the right to bring an action under sec7 tion 103 to— 

8 (i) any known holder of a financial ob9 ligation as of the date of the discharge; 

10 (ii) any known indenture trustee for a 

11 financial obligation as of the date of the 

12 discharge; 

13 (iii) any known agent bank for the 

14 loan, swap, repurchase agreement, or other 

15 derivative of the holder of a financial obli16 gation as of the date of the discharge; and 

17 (iv) any known financial guaranty in18 surer of a financial obligation as of the 

19 date of the discharge; 

20 (C) publish a general notice, in each of the 

21 governmental languages of the qualifying terri22 tory, of the discharge and of the right to bring 

23 an action under section 103 in— 

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1 guage published in the qualifying territory; 

2 and 

3 (ii) not less than 2 daily newspapers 

4 that each have a national circulation and a 

5 general audience; and 

6 (D) publish the general notice described in 

7 subparagraph (C) in the newspapers described 

8 in subparagraph (C) not less than once each 

9 week during the 3-week period beginning on the 

10 date on which that general notice is first pub11 lished. 

12 (2) NOTICE IN THE FEDERAL REGISTER.—On 

13 the date on which the Secretary of the Treasury re14 ceives the notice described in paragraph (1)(A), the 

15 Secretary of the Treasury shall promptly cause to be 

16 published in the Federal Register a notice of that 

17 discharge and of the right to bring an action under 

18 section 103. 

19 (b) ADEQUATE NOTICE.— 

20 (1) HOLDERS OF FINANCIAL OBLIGATIONS.— 

21 (A) IN GENERAL.—A holder of a financial 

22 obligation shall be presumed to have received 

23 adequate notice of a discharge under section 

24 101 if, during the 180-day period beginning on 

25 the date of a discharge under section 101, a 


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1 qualifying territory provides actual notice of the 

2 discharge and of the right to bring an action 

3 under section 103 to— 

4 (i) the holder of the financial obliga5 tion as of the date of the discharge; 

6 (ii) an indenture trustee for the secu7 rity of the holder as of the date of the dis8 charge; or 

9 (iii) an agent bank for the loan, swap, 

10 repurchase agreement, or other derivative 

11 of the holder of a financial obligation as of 

12 the date of the discharge. 

13 (B) REBUTTABLE PRESUMPTION.—The 

14 presumption described in subparagraph (A) 

15 may be rebutted by clear and convincing evi16 dence that the holder of the financial obligation 

17 did not receive adequate evidence. 

18 (2) NOTICE TO A FINANCIAL GUARANTY IN19 SURER.—A financial guaranty insurer shall be con20 clusively deemed to have received adequate notice of 

21 a discharge under section 101 if, during the 180-day 

22 period beginning on the date of a discharge under 

23 section 101, the financial guaranty insurer receives 

24 actual notice of the discharge and of the right to 

25 bring an action under section 103. 


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1 SEC. 105. EFFECTIVE DATE. 

2 This title shall take effect on the date that is 60 days 

3 after the date of enactment of this Act. 

4 TITLE II—PUERTO RICO DEBT 

5 RESTRUCTURING COMPENSA6 TION FUND 

7 SEC. 201. PURPOSE. 

8 Pursuant to clause 1, section 8 of article I and clause 

9 2, section 3 of article IV of the Constitution of the United 

10 States, the purpose of this title is to provide compensation 

11 to certain entities and natural persons that suffer eco12 nomic losses due to a discharge under section 101 of fi13 nancial obligations owed to those entities and natural per14 sons by the Commonwealth of Puerto Rico or an instru15 mentality of the Commonwealth of Puerto Rico. 

16 SEC. 202. DEFINITIONS. 

17 In this title— 

18 (1) the term ‘‘collateral source compensa19 tion’’— 

20 (A) means, on the date of a determination 

21 under section 204(b)(2)(A), compensation that 

22 a claimant has received or is entitled to receive, 

23 from a source other than the Fund, as a result 

24 of the discharge of the debt of the Common25 wealth of Puerto Rico and the instrumentalities 


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1 of the Commonwealth of Puerto Rico under sec2 tion 101; and 

3 (B) includes financial guaranty insurance; 

4 (2) the term ‘‘Fund’’ means the Puerto Rico 

5 Debt Restructuring Compensation Fund established 

6 under section 205(a); 

7 (3) the term ‘‘ineligible investment company’’ 

8 means an investment company, as defined in section 

9 3 of the Investment Company Act of 1940 (15 

10 U.S.C. 80a–3), that was not registered under section 

11 8 of that Act (15 U.S.C. 80a–8) on the date on 

12 which the investment company made an investment 

13 in a financial obligation of the Commonwealth of 

14 Puerto Rico or an instrumentality of the Common15 wealth of Puerto Rico; 

16 (4) the term ‘‘Puerto Rico public pension plan’’ 

17 means a pension system of the government of the 

18 Commonwealth of Puerto Rico; and 

19 (5) the term ‘‘Special Master’’ means the Spe20 cial Master appointed under section 203(a). 

21 SEC. 203. ADMINISTRATION. 

22 (a) SPECIAL MASTER.— 

23 (1) APPOINTMENT.— 

24 (A) IN GENERAL.—Not later than 60 days 

25 after the date of a discharge of the debt of the 


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1 Commonwealth of Puerto Rico and the instru2 mentalities of the Commonwealth of Puerto 

3 Rico under section 101, the Chief Justice of the 

4 Supreme Court of the Commonwealth of Puerto 

5 Rico shall appoint a Special Master to admin6 ister the compensation program established 

7 under this title. 

8 (B) DISQUALIFICATION.—A Special Mas9 ter may not have a relationship to a party, at10 torney, action, or court that would require the 

11 disqualification of a judge under section 455 of 

12 title 28, United States Code, unless, after the 

13 date on which the Special Master discloses any 

14 potential ground for disqualification, the party, 

15 attorney, action, or court with which the Special 

16 Master has a relationship, with the approval of 

17 the Chief Justice of the Supreme Court of the 

18 Commonwealth of Puerto Rico, consents to the 

19 appointment of the Special Master. 

20 (2) STATUS.—The Special Master shall be con21 sidered to be an official of the Commonwealth of 

22 Puerto Rico. 

23 (3) VACANCY.— 

24 (A) IN GENERAL.—In the event of the 

25 death, resignation, incapacity, or other vacancy 


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1 in the position of the Special Master, the posi2 tion shall be filled in the manner described in 

3 paragraph (1). 

4 (B) FEDERAL VACANCIES REFORM ACT.— 

5 Sections 3345 through 3349d of title 5, United 

6 States Code, (commonly known as the ‘‘Federal 

7 Vacancies Reform Act of 1998’’) shall not apply 

8 to vacancies in the position of Special Master. 

9 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated such sums as may be 

11 necessary to pay the administrative and support costs for 

12 the Special Master in carrying out this title. 

13 SEC. 204. DETERMINATION OF ELIGIBILITY FOR COM14 PENSATION. 

15 (a) FILING OF CLAIM.— 

16 (1) IN GENERAL.—A claimant may file a claim 

17 for compensation under this title with the Special 

18 Master. The claim shall— 

19 (A) be on the form developed under para20 graph (2); 

21 (B) state the factual basis, as certified by 

22 the claimant, for eligibility for compensation 

23 and the amount of compensation sought; and 


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1 (C) provide evidence that corroborates the 

2 eligibility of the claimant for compensation and 

3 the amount of compensation sought. 

4 (2) CLAIM FORM.— 

5 (A) IN GENERAL.—The Special Master 

6 shall— 

7 (i) develop a claim form that claim8 ants shall use when submitting claims 

9 under paragraph (1); and 

10 (ii) ensure that the form developed 

11 under clause (i) can be filed electronically. 

12 (B) CONTENTS.—The form developed 

13 under subparagraph (A) shall request informa14 tion relating to the claim of the claimant, in15 cluding information relating to— 

16 (i) economic loss that the claimant 

17 suffered as a result of the discharge under 

18 section 101 of the debt of the Common19 wealth of Puerto Rico and the instrumen20 talities of the Commonwealth of Puerto 

21 Rico; 

22 (ii) collateral source compensation the 

23 claimant has received, or is entitled to re24 ceive, as a result of the discharge described 

25 in clause (i); and 


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1 (iii) availability of financial guaranty 

2 insurance coverage to indemnify the claim3 ant. 

4 (C) PENALTY.—A claim submitted on the 

5 form developed under subparagraph (A) shall— 

6 (i) be submitted under penalty of per7 jury; and 

8 (ii) include an attestation by the 

9 claimant that the claimant has not willfully 

10 attempted to evade or defeat the eligibility 

11 restrictions described in subsection (c). 

12 (b) REVIEW AND DETERMINATION.— 

13 (1) REVIEW.—The Special Master shall review 

14 a claim submitted under subsection (a) and deter15 mine— 

16 (A) whether the claimant is an eligible per17 son under subsection (c); and 

18 (B) with respect to a claimant determined 

19 to be an eligible person under subsections 

20 (c)(2)(A) and (c)(3)— 

21 (i) the extent of the economic loss to 

22 the claimant; and 

23 (ii) the amount of compensation to 

24 which the claimant is entitled based on the 

25 economic losses to the claimant, the facts 


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1 of the claim, and the individual cir2 cumstances of the claimant, including— 

3 (I) the strength of the ties to the 

4 Commonwealth of Puerto Rico, as de5 fined in regulations promulgated 

6 under section 206, of the claimant; 

7 (II) the financial need, as defined 

8 in regulations promulgated under sec9 tion 206, of the claimant; 

10 (III) the price at which the 

11 claimant obtained that claim against 

12 the Commonwealth of Puerto Rico or 

13 the instrumentality of the Common14 wealth of Puerto Rico; and 

15 (IV) the date on which the claim16 ant obtained the claim against the 

17 Commonwealth of Puerto Rico or the 

18 instrumentality of the Commonwealth 

19 of Puerto Rico; and 

20 (C) with respect to a claimant determined 

21 to be an eligible person under subsection 

22 (c)(2)(B) and (c)(3)— 

23 (i) the extent of the economic loss to 

24 the claimant; and 


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1 (ii) the amount of compensation to 

2 which the claimant is entitled based on the 

3 economic loss to the claimant, the facts of 

4 the claim, and the individual circumstances 

5 of the claimant, including— 

6 (I) the financial need, as defined 

7 in regulations promulgated under sec8 tion 206, of the claimant; 

9 (II) the price at which the claim10 ant obtained that claim against the 

11 Commonwealth of Puerto Rico or the 

12 instrumentality of the Commonwealth 

13 of Puerto Rico; and 

14 (III) the date on which the claim15 ant obtained the claim against the 

16 Commonwealth of Puerto Rico or the 

17 instrumentality of the Commonwealth 

18 of Puerto Rico. 

19 (2) DETERMINATION.— 

20 (A) IN GENERAL.—Not later than 120 

21 days after the date on which a claim is deter22 mined to be substantially complete by the Spe23 cial Master, the Special Master shall complete 

24 a review, make a determination, and provide 

25 written notice to the claimant, with respect to 


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1 the matters that were the subject of the claim 

2 under review. Such a determination shall be 

3 final and not subject to judicial review. 

4 (B) RIGHTS OF CLAIMANTS.— 

5 (i) HEARINGS.—Before the date on 

6 which a determination described in sub7 paragraph (A) is made, a claimant in a re8 view under paragraph (1) shall have the 

9 right to an in-person hearing conducted by 

10 the Special Master. 

11 (ii) WAIVER.—A claimant in a review 

12 under paragraph (1) may waive the right 

13 to a hearing described in clause (i). 

14 (3) COLLATERAL SOURCE COMPENSATION.— 

15 The Special Master shall reduce the amount of com16 pensation determined under paragraph (2) by the 

17 amount of collateral source compensation. 

18 (c) ELIGIBILITY.— 

19 (1) IN GENERAL.—A claimant shall be deter20 mined to be an eligible person for purposes of this 

21 subsection if the Special Master determines that 

22 such claimant— 

23 (A) is a person described in paragraph (2); 

24 and 


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1 (B) meets the requirements of paragraph 

2 (3). 

3 (2) ELIGIBLE PERSONS.— 

4 (A) ELIGIBLE PERSONS IN THE COMMON5 WEALTH OF PUERTO RICO.— 

6 (i) IN GENERAL.—A claimant is a 

7 person described in this subparagraph if 

8 the claimant is— 

9 (I) a natural person who— 

10 (aa) was domiciled in the 

11 Commonwealth of Puerto Rico 

12 and was a citizen or lawful per13 manent resident of the United 

14 States on September 20, 2017, 

15 regardless of whether that nat16 ural person was physically 

17 present in the Commonwealth of 

18 Puerto Rico at that time; 

19 (bb) is a beneficial owner of 

20 a security issued by the Com21 monwealth of Puerto Rico or an 

22 instrumentality of the Common23 wealth of Puerto Rico; and 

24 (cc) became a beneficial 

25 owner of the security described in 


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1 item (bb) not later than Sep2 tember 20, 2017; 

3 (II) a bank or credit union that 

4 did business solely in the Common5 wealth of Puerto Rico on September 

6 20, 2017; 

7 (III) a worker association or 

8 workplace association in the Common9 wealth of Puerto Rico; 

10 (IV) a Puerto Rico public pen11 sion plan; 

12 (V) a business, of which the prin13 cipal place of business was in the 

14 Commonwealth of Puerto Rico on 

15 September 20, 2017; or 

16 (VI) subject to clause (ii), any 

17 other person that the Special Master 

18 determines is an eligible person. 

19 (ii) EXCLUSIONS.—A claimant is not 

20 a person described in this subparagraph if 

21 the claimant is— 

22 (I) an ineligible investment com23 pany; 

24 (II) a financial guaranty insurer; 


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1 (III) as defined in section 101 of 

2 title 11, United States Code— 

3 (aa) a party to a master net4 ting agreement; 

5 (bb) a party to a repurchase 

6 agreement; or 

7 (cc) a party to a swap agree8 ment; 

9 (IV) any other financial institu10 tion with total consolidated assets 

11 greater than $2,000,000,000; 

12 (V) a person that owns a share 

13 in an unregistered investment fund 

14 that owns a security issued by the 

15 Commonwealth of Puerto Rico or an 

16 instrumentality of the Commonwealth 

17 of Puerto Rico; 

18 (VI) a person that acquired a 

19 claim against the Commonwealth of 

20 Puerto Rico or an instrumentality of 

21 the Commonwealth of Puerto Rico 

22 during the period beginning on the 

23 date that is 180 days before the date 

24 of a discharge under section 101, un25 less that claim was acquired through 


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1 devise, descent, or a divorce settle2 ment; 

3 (VII) the Special Master; or 

4 (VIII) any other person that the 

5 Special Master determines is not an 

6 eligible person. 

7 (B) ELIGIBLE PERSONS NOT IN PUERTO

8 RICO.— 

9 (i) IN GENERAL.—A claimant is a 

10 person described in this subparagraph if 

11 the claimant was not domiciled in the 

12 Commonwealth of Puerto Rico on Sep13 tember 20, 2017, and the claimant is— 

14 (I) a worker association or work15 place association; 

16 (II) a pension plan; 

17 (III) a natural person who— 

18 (aa) is a beneficial owner of 

19 a security issued by the Com20 monwealth of Puerto Rico or an 

21 instrumentality of the Common22 wealth of Puerto Rico; and 

23 (bb) became a beneficial 

24 owner of that security not later 

25 than September 20, 2017; 


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1 (IV) subject to clause (iii), an 

2 open-end mutual fund; or 

3 (V) subject to clause (ii), any 

4 other person that the Special Master 

5 determines is an eligible person. 

6 (ii) EXCLUSIONS.—A claimant is not 

7 a person described in this subparagraph if 

8 the claimant was not domiciled in the 

9 Commonwealth of Puerto Rico on Sep10 tember 20, 2017, and the claimant is— 

11 (I) an ineligible investment com12 pany; 

13 (II) a closed-end company, as de14 fined in section 5 of the Investment 

15 Company Act of 1940 (15 U.S.C. 

16 80a–5); 

17 (III) a financial guaranty in18 surer; 

19 (IV) as defined in section 101 of 

20 title 11, United States Code— 

21 (aa) a party to a master net22 ting agreement; 

23 (bb) a party to a repurchase 

24 agreement; or 


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•S 1312 IS

1 (cc) a party to a swap agree2 ment; 

3 (V) any other financial institu4 tion with total consolidated assets 

5 greater than $2,000,000,000; 

6 (VI) a person that owns a share 

7 in an unregistered investment fund 

8 that owns a security issued by the 

9 Commonwealth of Puerto Rico or an 

10 instrumentality of the Commonwealth 

11 of Puerto Rico; 

12 (VII) a person that acquired a 

13 claim against the Commonwealth of 

14 Puerto Rico or an instrumentality of 

15 the Commonwealth of Puerto Rico 

16 during the period beginning on the 

17 date that is 180 days before the date 

18 of a discharge under section 101, un19 less that claim was acquired through 

20 devise, descent, or a divorce settle21 ment; 

22 (VIII) the Special Master; or 

23 (IX) any other person that the 

24 Special Master determines is not an 

25 eligible person. 


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1 (iii) ELIGIBILITY OF OPEN-END MU2 TUAL FUNDS.—A claimant that is an open3 end mutual fund is not an eligible person 

4 described in this subparagraph unless the 

5 manager of that open-end mutual fund 

6 pledges to waive the fee of that manager 

7 for any compensation the open-end mutual 

8 fund receives under this title. 

9 (3) REQUIREMENTS FOR BENEFICIAL OWNERS

10 OF SECURITIES.—A person that is a beneficial owner 

11 of a security issued by the Commonwealth of Puerto 

12 Rico or an instrumentality of the Commonwealth of 

13 Puerto Rico may file a claim under subsection (a) if 

14 the person, as of the date on which the claim is 

15 filed— 

16 (A) has continuously held that security 

17 during the period beginning on September 19, 

18 2017, and ending on the date on which the 

19 claim is filed; and 

20 (B) the claim is submitted not later than 

21 180 days after the date of a discharge of the 

22 debt of the Commonwealth of Puerto Rico and 

23 the instrumentalities of the Commonwealth of 

24 Puerto Rico under section 101. 

25 (d) COMPENSATION.— 


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1 (1) IN GENERAL.—A claimant may not receive 

2 compensation under this title if that claimant is not 

3 determined to be an eligible person under this sub4 section. 

5 (2) LIMITATIONS.— 

6 (A) IN GENERAL.—A claimant may not re7 ceive compensation under this title that exceeds 

8 the amount of the claim filed by the claimant 

9 under subsection (a), or seek or receive com10 pensation for a debt described in section 

11 2(5)(B)(ii), which— 

12 (i) shall not be discharged; and 

13 (ii) shall be repaid in full as provided 

14 by section 101(b). 

15 (B) ASSIGNED CLAIMS.—In the case of a 

16 claim that was assigned to a claimant, the 

17 claimant may not receive compensation under 

18 this title for that claim that exceeds the amount 

19 paid by the claimant for the assignment of that 

20 claim. 

21 SEC. 205. PUERTO RICO DEBT RESTRUCTURING COM22 PENSATION FUND. 

23 (a) IN GENERAL.—On the date of a discharge of the 

24 debt of the Commonwealth of Puerto Rico and the instru25 mentalities of the Commonwealth of Puerto Rico under 


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•S 1312 IS

1 section 101, there is established in the Treasury of the 

2 United States a fund to be known as the ‘‘Puerto Rico 

3 Debt Restructuring Compensation Fund’’, consisting of 

4 amounts appropriated into the Fund under subsection (b). 

5 (b) APPROPRIATION.— 

6 (1) IN GENERAL.—There is appropriated to the 

7 Fund, out of any funds in the Treasury of the 

8 United States not otherwise appropriated, 

9 $15,000,000,000, which shall be available without 

10 further appropriation to the Special Master to pro11 vide compensation for claims of eligible persons 

12 under this title. 

13 (2) EMERGENCY DESIGNATION.— 

14 (A) IN GENERAL.—The amount necessary 

15 to carry out this Act is designated by Congress 

16 as being for emergency requirements pursuant 

17 to section 251(b)(2)(A)(i) of the Balanced 

18 Budget and Emergency Deficit Control Act of 

19 1985 (2 U.S.C. 901(b)(2)(A)(i)). 

20 (B) PAYGO.— 

21 (i) IN GENERAL.—This Act is des22 ignated as an emergency requirement pur23 suant to section 4(g) of the Statutory Pay24 As-You-Go Act of 2010 (2 U.S.C. 933(g)). 


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•S 1312 IS

1 (ii) DESIGNATION IN SENATE.—In the 

2 Senate, this Act is designated as an emer3 gency requirement pursuant to section 

4 403(a) of Senate Concurrent Resolution 

5 13, 111th Congress, agreed to April 29, 

6 2009. 

7 (c) DISTRIBUTION.— 

8 (1) IN GENERAL.—Of the amounts appro9 priated into the Fund under subsection (b)— 

10 (A) 50 percent shall be made available to 

11 pay claims of eligible persons described in sec12 tion 204(c)(2)(A); and 

13 (B) 50 percent shall be made available to 

14 pay claims of eligible persons described in sec15 tion 204(c)(2)(B). 

16 (2) CLAIMS EXCEEDING APPROPRIATED

17 AMOUNTS.—If the claims of eligible persons de18 scribed in section 204(c)(2)(A) or of eligible persons 

19 described in section 204(c)(2)(B) exceed the 

20 amounts appropriated to pay those respective claims 

21 under paragraph (1), any claim of an eligible person 

22 within that respective category shall be reduced on 

23 a pro rata basis. 

24 (3) DATE OF DISTRIBUTION.—For the purpose 

25 of reducing claims under paragraph (2), the Special 


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•S 1312 IS

1 Master shall determine a date on which all claims of 

2 eligible persons shall be paid. 

3 (d) UNOBLIGATED FUNDS.—Any amounts made 

4 available under subsection (b) that are not obligated by 

5 the Special Master as of the date that is 36 months after 

6 the date of enactment of this Act shall be returned to the 

7 Treasury of the United States. 

8 SEC. 206. REGULATIONS. 

9 (a) IN GENERAL.—The Special Master shall promul10 gate regulations, through notice and comment rulemaking 

11 in compliance with section 553 of title 5, United States 

12 Code, to carry out this title. 

13 (b) NOTICE OF PROPOSED RULEMAKING.—Not later 

14 than 60 days after the date on which the Special Master 

15 is appointed under section 203(a), the Special Master 

16 shall publish a notice of proposed rulemaking in the Fed17 eral Register. 

18 (c) FINAL RULE.—Not later than 60 days after the 

19 date on which the notice of proposed rulemaking described 

20 in subsection (b) is published, the Special Master shall 

21 promulgate final regulations to carry out this title. 

22 (d) VACANCY IN THE POSITION OF SPECIAL MAS23 TER.—If promulgation of regulations under this section 

24 is completed before the date on which a Special Master 

25 is appointed under section 203(a)(3)(A), that Special 


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•S 1312 IS

1 Master is not required to promulgate new regulations 

2 under this section. 

3 SEC. 207. SUNSET. 

4 The provisions of this title shall be effective for the 

5 period beginning on the date of enactment of this Act and 

6 ending on the date that is 36 months after the date of 

7 enactment of this Act. 

8 TITLE III—PUERTO RICO PUBLIC 

9 CREDIT COMPREHENSIVE 

10 AUDIT COMMISSION 

11 SEC. 301. DEFINITIONS. 

12 In this title— 

13 (1) the term ‘‘comprehensive audit’’ means a 

14 supervisory action taken to examine and evaluate the 

15 public debt contracting, refinancing, or renegotiation 

16 process, the source and intended use of resources, 

17 and the implementation of programs and projects fi18 nanced with domestic or foreign debt, in order to de19 termine the legitimacy, lawfulness, transparency, 

20 quality, efficacy, and efficiency thereof, considering 

21 legal and financial aspects, and the economic, social, 

22 gender, regional, ecological, national, and municipal 

23 impact thereof; 


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•S 1312 IS

1 (2) the term ‘‘Commission’’ means the Puerto 

2 Rico Public Credit Comprehensive Audit Commission 

3 established under section 302; and 

4 (3) the term ‘‘credit request’’ means request or 

5 application for credit by the Commonwealth of Puer6 to Rico, or any instrumentality of the Common7 wealth of Puerto Rico, to obtain credit from a gov8 ernment or a banking or multilateral financial sys9 tem in the domestic or foreign private sector, includ10 ing any agreement, contract, or other form or meth11 od relating to that request or application. 

12 SEC. 302. ESTABLISHMENT; DISSOLUTION. 

13 (a) ESTABLISHMENT.—There is established an inde14 pendent commission to be known as the Puerto Rico Pub15 lic Credit Comprehensive Audit Commission. 

16 (b) DISSOLUTION.—The Commission shall only be 

17 dissolved after the Commission completes or fulfills each 

18 duty of the Commission under section 304 and issues the 

19 final report of the Commission under section 303(b). 

20 SEC. 303. REPORTS. 

21 (a) IN GENERAL.—Not later than 1 year after the 

22 date of enactment of this Act, and not later than every 

23 180 days thereafter, the Commission shall make publicly 

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•S 1312 IS

1 sion in carrying out the duties of the Commission under 

2 section 304 as of the date on which the report is released. 

3 (b) FINAL REPORT.—Upon completing the duties of 

4 the Commission under section 304, the Commission shall 

5 make publicly available and submit to the Legislative As6 sembly of the Commonwealth of Puerto Rico and the Gov7 ernor of the Commonwealth of Puerto Rico the final report 

8 of the Commission, which shall state in detail the findings, 

9 conclusions, and recommendations of the Commission re10 lating to the duties of the Commission carried out under 

11 section 304. 

12 SEC. 304. DUTIES. 

13 (a) IN GENERAL.—The Commission shall carry out 

14 the duties described in subsections (b) and (c). 

15 (b) COMPREHENSIVE AUDIT.— 

16 (1) IN GENERAL.—The Commission shall con17 duct a comprehensive audit of all public debt of the 

18 Commonwealth of Puerto Rico issued during the pe19 riod beginning on the first day of fiscal year 1972 

20 and ending on the date of enactment of this Act, 

21 which shall include an audit of agreements, con22 tracts, and other forms or methods employed by the 

23 Commonwealth of Puerto Rico and any instrumen24 tality thereof to obtain credit from governments, 


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•S 1312 IS

1 banking or multilateral financial system institutions, 

2 and the domestic or foreign private sector. 

3 (2) CRITERIA.—In order to conduct the com4 prehensive audit under paragraph (1), the Commis5 sion shall establish criteria to be used in evaluating 

6 each credit request that shall include, with respect 

7 to each credit request— 

8 (A) any precedent, study, technical, eco9 nomic, financial, or social viability score, or 

10 other supporting document that supported the 

11 credit request at the time the credit request was 

12 made; 

13 (B) the amount of the credit requested in 

14 the credit request; 

15 (C) the currency unit in which the credit 

16 was obtained through the credit request; 

17 (D) the total amount of any subsequent in18 crease or extension of credit from the original 

19 amount of credit obtained through the credit re20 quest; 

21 (E) the economic, financial, and business 

22 conditions agreed upon under the credit re23 quest; 


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•S 1312 IS

1 (F) the economic, financial, and business 

2 conditions effectively applied under the credit 

3 request; 

4 (G) any condition contained in the credit 

5 request; 

6 (H) the intended and actual use of any re7 sources funded by the credit request; 

8 (I) the total impact of any project funded 

9 by the credit request; 

10 (J) the name of each individual who, on 

11 behalf of any party to the credit request, trans12 acted or executed the credit request; 

13 (K) each method or mechanism used to 

14 meet any obligation agreed to under the credit 

15 request; and 

16 (L) any other circumstance or information 

17 determined by the Commission to be pertinent 

18 in determining the legitimacy, lawfulness, trans19 parency, quality, efficacy, and efficiency of each 

20 credit request, considering— 

21 (i) the legal and financial aspects of 

22 the credit request; and 

23 (ii) the economic, social, gender, re24 gional, ecological, national, and municipal 

25 impact of the credit request. 


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•S 1312 IS

1 (c) DATA TRANSPARENCY DATABASE.—The Com2 mission shall establish and maintain a publicly available 

3 data transparency database that shall contain any infor4 mation relating to any public, private, domestic, or foreign 

5 debt held by a public institution of the Commonwealth of 

6 Puerto Rico collected through the comprehensive audit 

7 under subsection (b). 

8 SEC. 305. AUTHORITY OF THE COMMISSION. 

9 In order to carry out the duties described in section 

10 304, the Commission— 

11 (1) may audit, and ensure the transparency of, 

12 the indebtedness process of the Commonwealth of 

13 Puerto Rico and each instrumentality of the Com14 monwealth of Puerto Rico; and 

15 (2) shall have primary jurisdiction to intervene, 

16 have knowledge of, and conduct, on the initiative of 

17 the Commission, any investigation on any matter or 

18 dispute relating to any indebtedness process de19 scribed in paragraph (1). 

20 SEC. 306. MEMBERSHIP. 

21 (a) IN GENERAL.—The Commission shall be com22 posed of— 

23 (1) an individual who— 

24 (A) not later than 180 days after the date 

25 of enactment of this Act, except as provided in 


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•S 1312 IS

1 subsection (e), shall be selected by the board of 

2 directors of the Puerto Rico Institute of Statis3 tics from a list of candidates submitted to the 

4 board of directors by scientific associations and 

5 other relevant professional groups in the Com6 monwealth of Puerto Rico; 

7 (B) has demonstrated expertise and ad8 vanced academic preparation in— 

9 (i) statistics; 

10 (ii) economics; or 

11 (iii) government planning; and 

12 (C)(i) during the 5-year period ending on 

13 the date on which the individual is selected 

14 under subparagraph (A), has not— 

15 (I) held an elected pubic office in the 

16 Commonwealth of Puerto Rico; or 

17 (II) made any financial contribution 

18 to, or participated in, any political cam19 paign relating to the Commonwealth of 

20 Puerto Rico; and 

21 (ii) does not have any other direct political 

22 connection to the government of the Common23 wealth of Puerto Rico; and 

24 (2) the following individuals, who shall be ap25 pointed not later than 180 days after the date of enVerDate Sep 11 2014 04:18 May 07, 2019 Jkt 089200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S1312.IS S1312

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•S 1312 IS

1 actment of this Act by the Governor of the Common2 wealth of Puerto Rico to serve on the Commission: 

3 (A) One representative of each parliamen4 tary majority in the Legislative Assembly. 

5 (B) One representative of each parliamen6 tary minority in the Legislative Assembly. 

7 (C) One professor of economics from any 

8 public higher education institution located in 

9 the Commonwealth of Puerto Rico. 

10 (D) One professor of finance from any 

11 public higher education institution located in 

12 the Commonwealth of Puerto Rico. 

13 (E) One professor of accounting from any 

14 public higher education institution located in 

15 the Commonwealth of Puerto Rico. 

16 (F) One professor of statistics from any 

17 public higher education institution located in 

18 the Commonwealth of Puerto Rico. 

19 (G) One professor of law from any public 

20 higher education institution located in the Com21 monwealth of Puerto Rico. 

22 (H) One representative of the labor union 

23 sector in the Commonwealth of Puerto Rico. 

24 (I) One representative of the business com25 munity in the Commonwealth of Puerto Rico, 


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•S 1312 IS

1 with preference given to a representative from 

2 a small- or medium-sized business located in 

3 the Commonwealth of Puerto Rico. 

4 (J) One representative of the cooperative 

5 sector in the Commonwealth of Puerto Rico. 

6 (K) One professor of sociology from any 

7 public higher education institution who has 

8 published work in 1 or more peer-reviewed jour9 nals that indicates expertise in data relating to 

10 Puerto Rico. 

11 (L) One individual who is a translator or 

12 interpreter of English and Spanish. 

13 (b) CHAIRPERSON.— 

14 (1) IN GENERAL.—After each of the members 

15 of the Commission are appointed under subsection 

16 (a), the members of the Commission shall elect from 

17 among the members of the Commission 1 individual 

18 to serve as the Chairperson of the Commission. 

19 (2) DUTIES.—The Chairperson of the Commis20 sion shall— 

21 (A) call and preside over meetings of the 

22 Commission; and 

23 (B) be the legal representative of the Com24 mission. 


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•S 1312 IS

1 (3) TIE VOTE.—In the case of a tie vote among 

2 the members of the Commission, the vote of the 

3 Chairperson shall be determinative. 

4 (c) PERIOD OF APPOINTMENT.—Members of the 

5 Commission shall be appointed for the life of the Commis6 sion. 

7 (d) VACANCIES.—Any vacancy in the Commission 

8 shall not affect the powers of the Commission but shall 

9 be filled in the same manner as the original appointment 

10 or election. 

11 (e) MEMBER OF THE COMMISSION SELECTED BY

12 THE PUERTO RICO INSTITUTE OF STATISTICS.—If, on the 

13 date of enactment of this Act, the Puerto Rico Institute 

14 of Statistics has been disbanded or reorganized to be a 

15 part of another government department of the Common16 wealth of Puerto Rico, the individual described in sub17 section (a)(1) shall be selected by the President of the 

18 Senate of the Commonwealth of Puerto Rico and the 

19 Speaker of the House of Representatives of Puerto Rico. 

20 (f) FAILURE TO APPOINT COMMISSION MEMBERS.— 

21 If the Governor of the Commonwealth of Puerto Rico fails 

22 to appoint any member of the Commission described under 

23 subsection (a)(2) during the period described in that sub24 section, not later than 180 days after the expiration of 

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1 wealth of Puerto Rico and the Speaker of the House of 

2 Representatives of the Commonwealth of Puerto Rico shall 

3 jointly appoint any member that has not been appointed. 

4 SEC. 307. POWERS AND RESPONSIBILITIES. 

5 To carry out the duties of the Commission under sec6 tion 304, the Commission shall— 

7 (1) adopt internal bylaws as appropriate for the 

8 proper operations and fulfillment of the objectives of 

9 the Commission; 

10 (2) define and propose to the Secretary of the 

11 Treasury the hiring of staff to conduct audits in ac12 cordance with the rules and administrative proce13 dures set forth by the laws of the Commonwealth of 

14 Puerto Rico relating to technical audits; 

15 (3) designate and hire a minimum number of 

16 regular personnel required to carry out the duties 

17 and fulfill the objectives of the Commission; 

18 (4) read reports relating to the audit processes 

19 and other studies that have been entrusted to com20 missions and technical units relating to audits of 

21 public debt; 

22 (5) review and approve the annual budget and 

23 operational plan of the Commission based on those 

24 devised by the Director of the Office of Management 

25 and Budget; 


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1 (6) as appropriate, request technical support 

2 from any public institution, including by, as nec3 essary, through the request for the transfer, on a 

4 temporary assignment, of any technical personnel re5 quired to carry out a specific program of the Com6 mission after stating the length of the period for 

7 which the transfer will be required; 

8 (7) hold— 

9 (A) a regular meeting not less than twice 

10 each month; and 

11 (B) a special meeting upon the request of 

12 not less than 3 of the members of the Commis13 sion; 

14 (8) access the information necessary to dis15 charge the duties of the Commission; 

16 (9) file with the Legislative Assembly of the 

17 Commonwealth of Puerto Rico and the Governor of 

18 the Commonwealth of Puerto Rico periodic reports 

19 stating achievements of the Commission in carrying 

20 out the duties of the Commission under section 304, 

21 which shall include any recommendation or sugges22 tion that the Commission determines to be pertinent, 

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1 priate administrative, civil, or criminal action relat2 ing to the findings of the Commission; and 

3 (10) propose rules and policies relating to 

4 strengthening the procedures relating to audits of 

5 public debt as a permanent duty of the Common6 wealth of Puerto Rico. 

7 SEC. 308. PROVISION OF REQUESTED INFORMATION. 

8 (a) IN GENERAL.—Each entity, official, or former of9 ficial of the Commonwealth of Puerto Rico shall provide 

10 any information requested by the Commission in carrying 

11 out the duties of the Commission under section 304 by 

12 summons or as required by law. 

13 (b) ORDER TO COMPLY.—Any entity, official, or 

14 former official described in subsection (a) that does not 

15 obey a summons or request of the Commission for infor16 mation required by the Commission to carry out the duties 

17 of the Commission under section 304, the appropriate dis18 trict court of the Commonwealth of Puerto Rico shall, on 

19 the request of the Commission, issue an order compelling 

20 that entity, official, or former official to produce the re21 quested information, as appropriate. 

22 (c) CONTEMPT.—Any entity, official, or former offi23 cial described in subsection (a) that does not comply with 

24 an order of the court under subsection (b) shall be held 

25 in contempt for failing to obey that order. 


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1 SEC. 309. ACCESS TO INFORMATION. 

2 (a) PUBLIC DOCUMENTS.— 

3 (1) IN GENERAL.—Any document, record, or in4 formation relating to the public debt of the Com5 monwealth of Puerto Rico, including any document 

6 relating to any public offering, contract, agreement, 

7 order, or report detailing how funds obtained are 

8 spent, or contract or agreements with a creditor of 

9 the Commonwealth of Puerto Rico, shall be— 

10 (A) classified as a public document; and 

11 (B) made accessible to any interested 

12 party. 

13 (2) CONFIDENTIALITY.—Any claim of confiden14 tiality relating to information described in paragraph 

15 (1) by any person, including any entity, official, or 

16 former official of the Commonwealth of Puerto Rico, 

17 shall be construed narrowly and in favor of pro18 moting transparency and the right of the public to 

19 that information. 

20 (b) CONFIDENTIAL INFORMATION.— 

21 (1) IN GENERAL.—The Commission shall have 

22 the authority to obtain confidential information nec23 essary to carry out the duties of the Commission 

24 under section 304. 

25 (2) CONFIDENTIALITY.—The Commission shall 

26 keep any information described under subsection (a) 


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1 confidential as required under the Constitution of 

2 the Commonwealth of Puerto Rico. 

3 (c) RULE OF CONSTRUCTION.—Nothing in this title 

4 shall be construed to grant any special power to the Com5 mission to conceal information from the public based on 

6 any rule relating to confidentiality. This title shall be in7 terpreted broadly to favor the right of the public to infor8 mation relating to the activities of the Commission. 

9 SEC. 310. FUNDING. 

10 The Legislative Assembly of the Commonwealth of 

11 Puerto Rico shall provide the Commission with sufficient 

12 funds to carry out the duties of the Commission under 

13 section 304, including funds to pay fair compensation to 

14 members and staff of the Commission, based on the an15 nual budget prepared for the Commission by the Office 

16 of Management and Budget, which shall be included in 

17 the general budget of the Commonwealth of Puerto Rico. 

18 TITLE IV—SEVERABILITY 

19 SEC. 401. SEVERABILITY. 

20 If any provision of this Act or the application of such 

21 provision to any person or circumstance is held to be in22 valid or unconstitutional, the remainder of this Act and 

23 the application of the provisions of this Act to any person 


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1 or circumstance shall remain and shall not be affected 

2 thereby. 

Æ 


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