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) in-
troduced the following bill; which was referred to the Committee on Nat-
ural Resources, and in addition to the Committees on the Judiciary, Edu-
cation and the Workforce, and Small Business, for a period to be subse-
quently 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Puerto Rico Oversight, Management, and Economic Sta-
bility Act’’ or ‘‘PROMESA’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Effective date. 
Sec. 3. Severability. 
Sec. 4. Supremacy. 
Sec. 5. Definitions. 
Sec. 6. Placement. 
Sec. 7. Compliance with Federal laws. 
TITLE I—ESTABLISHMENT AND ORGANIZATION OF OVERSIGHT 
BOARD 
Sec. 101. 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 responsi-
bility. 
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 in-
strumentalities. 
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. 
SEC. 2. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as provided in subsection 
(b), this Act shall take effect on the date of the enactment 
of this Act. 
(b) TITLE III AND TITLE VI.— 
(1) Title III shall apply with respect to cases 
commenced under title III on or after the date of 
the enactment of this Act. 
(2) Titles III and VI shall apply with respect to 
debts, claims, and liens (as such terms are defined 
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in section 101 of title 11, United States Code) cre-
ated before, on, or after such date. 
SEC. 3. SEVERABILITY. 
If any provision of this Act or the application thereof 
to any person or circumstance is held invalid, the remain-
der of this Act, or the application of that provision to per-
sons or circumstances other than those as to which it is 
held invalid, is not affected thereby, provided that title III 
is not severable from titles I and II, and titles I and II 
are not severable from title III. 
SEC. 4. SUPREMACY. 
The provisions of this Act shall prevail over any gen-
eral or specific provisions of territory law, State law, or 
regulation that is inconsistent with this Act. 
SEC. 5. DEFINITIONS. 
In this Act— 
(1) AGREED
ACCOUNTING
STANDARDS.—The 
term ‘‘agreed accounting standards’’ means modified 
accrual accounting standards or, for any period dur-
ing which the Oversight Board determines in its sole 
discretion that a territorial government is not rea-
sonably capable of comprehensive reporting that 
complies with modified accrual accounting stand-
ards, such other accounting standards as proposed 
by the Oversight Board. 
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(2) BOND.—The term ‘‘Bond’’ means a bond, 
loan, letter of credit, other borrowing title, obligation 
of insurance, or other financial indebtedness, includ-
ing rights, entitlements, or obligations whether such 
rights, entitlements, or obligations arise from con-
tract, statute, or any other source of law, in any 
case, related to such a bond, loan, letter of credit, 
other borrowing title, obligation of insurance, or 
other financial indebtedness in physical or demate-
rialized form, of which— 
(A) the issuer, obligor, or guarantor is the 
territorial government; and 
(B) the date of issuance or incurrence pre-
cedes the date of enactment of this Act. 
(3) BOND
CLAIM.—The term ‘‘Bond Claim’’ 
means, as it relates to a Bond— 
(A) right to payment, whether or not such 
right is reduced to judgment, liquidated, unliq-
uidated, fixed, contingent, matured, unmatured, 
disputed, undisputed, legal, equitable, secured, 
or unsecured; or 
(B) right to an equitable remedy for 
breach of performance if such breach gives rise 
to a right to payment, whether or not such 
right to an equitable remedy is reduced to judg-
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ment, fixed, contingent, matured, unmatured, 
disputed, undisputed, secured, or unsecured. 
(4) BUDGET.—The term ‘‘Budget’’ means the 
Territory Budget or an Instrumentality Budget, as 
applicable. 
(5) PUERTO RICO.—The term ‘‘Puerto Rico’’ 
means the Commonwealth of Puerto Rico. 
(6) COMPLIANT BUDGET.—The term ‘‘compli-
ant budget’’ means a budget that is prepared in ac-
cordance with— 
(A) agreed accounting standards; and 
(B) the applicable Fiscal Plan. 
(7) 
COVERED
TERRITORIAL
INSTRUMEN-
TALITY.—The term ‘‘covered territorial instrumen-
tality’’ means a territorial instrumentality des-
ignated by the Oversight Board pursuant to section 
101 to be subject to the requirements of this Act. 
(8) COVERED TERRITORY.—The term ‘‘covered 
territory’’ means a territory for which an Oversight 
Board has been established under section 101. 
(9) EXECUTIVE DIRECTOR.—The term ‘‘Execu-
tive Director’’ means an Executive Director ap-
pointed under section 103(a). 
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(10) FISCAL PLAN.—The term ‘‘Fiscal Plan’’ 
means a Territory Fiscal Plan or an Instrumentality 
Fiscal Plan, as applicable. 
(11) GOVERNMENT
OF
PUERTO
RICO.—The 
term ‘‘Government of Puerto Rico’’ means the Com-
monwealth of Puerto Rico, including all its terri-
torial instrumentalities. 
(12) GOVERNOR.—The term ‘‘Governor’’ means 
the chief executive of a covered territory. 
(13) INSTRUMENTALITY
BUDGET.—The term 
‘‘Instrumentality Budget’’ means a budget for a cov-
ered territorial instrumentality, designated by the 
Oversight Board in accordance with section 101, 
submitted, approved, and certified in accordance 
with section 202. 
(14) INSTRUMENTALITY
FISCAL
PLAN.—The 
term ‘‘Instrumentality Fiscal Plan’’ means a fiscal 
plan for a covered territorial instrumentality, des-
ignated by the Oversight Board in accordance with 
section 101, submitted, approved, and certified in 
accordance with section 201. 
(15) LEGISLATURE.—The term ‘‘Legislature’’ 
means the legislative body responsible for enacting 
the laws of a covered territory. 
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(16) MODIFIED ACCRUAL ACCOUNTING STAND-
ARDS.—The term ‘‘modified accrual accounting 
standards’’ means recognizing revenues as they be-
come available and measurable and recognizing ex-
penditures when liabilities are incurred, in each case 
as defined by the Governmental Accounting Stand-
ards Board, in accordance with generally accepted 
accounting principles. 
(17) OVERSIGHT BOARD.—The term ‘‘Oversight 
Board’’ means a Financial Oversight and Manage-
ment Board established in accordance with section 
101. 
(18) TERRITORIAL
GOVERNMENT.—The term 
‘‘territorial government’’ means the government of a 
covered territory, including all covered territorial in-
strumentalities. 
(19) TERRITORIAL INSTRUMENTALITY.— 
(A) IN GENERAL.—The term ‘‘territorial 
instrumentality’’ means any political subdivi-
sion, public agency, instrumentality–including 
any instrumentality that is also a bank–or pub-
lic corporation of a territory, and this term 
should be broadly construed to effectuate the 
purposes of this Act. 
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(B) EXCLUSION.—The term ‘‘territorial in-
strumentality’’ does not include an Oversight 
Board. 
(20) 
TERRITORY.—The 
term 
‘‘territory’’ 
means— 
(A) Puerto Rico; 
(B) Guam; 
(C) American Samoa; 
(D) the Commonwealth of the Northern 
Mariana Islands; or 
(E) the United States Virgin Islands. 
(21) TERRITORY BUDGET.—The term ‘‘Terri-
tory Budget’’ means a budget for a territorial gov-
ernment submitted, approved, and certified in ac-
cordance with section 202. 
(22) TERRITORY
FISCAL
PLAN.—The term 
‘‘Territory Fiscal Plan’’ means a fiscal plan for a 
territorial government submitted, approved, and cer-
tified in accordance with section 201. 
SEC. 6. PLACEMENT. 
The Law Revision Counsel is directed to place this 
Act as chapter 20 of title 48, United States Code. 
SEC. 7. COMPLIANCE WITH FEDERAL LAWS. 
Except as otherwise provided in this Act, nothing in 
this Act shall be construed as impairing or in any manner 
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relieving a territorial government, or any territorial instru-
mentality thereof, from compliance with Federal laws or 
requirements or territorial laws and requirements imple-
menting a federally authorized or federally delegated pro-
gram, protecting the health, safety, and environment of 
persons in such territory. 
TITLE I—ESTABLISHMENT AND 
ORGANIZATION 
OF 
OVER-
SIGHT BOARD 
SEC. 101. TERRITORY FINANCIAL OVERSIGHT AND MAN-
AGEMENT BOARD. 
(a) PURPOSE.—The purpose of the Oversight Board 
is to provide a method for a covered territory to achieve 
fiscal responsibility and access to the capital markets. 
(b) ESTABLISHMENT.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), a Financial Oversight and Management 
Board for a territory is established in accordance 
with this section only if the Legislature of the terri-
tory adopts a resolution signed by the Governor re-
questing the establishment. 
(2) PUERTO RICO.—Notwithstanding paragraph 
(1), a Financial Oversight and Management Board 
is hereby established for Puerto Rico. 
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(3) CONSTITUTIONAL BASIS.—The Congress en-
acts this Act pursuant to article IV, section 3 of the 
Constitution of the United States, which provides 
Congress the power to dispose of and make all need-
ful rules and regulations for territories. 
(c) TREATMENT.—An Oversight Board established 
under this section— 
(1) shall be created as an entity within the ter-
ritorial government for which it is established in ac-
cordance with this title; and 
(2) shall not be considered to be a department, 
agency, establishment, or instrumentality of the 
Federal Government. 
(d) OVERSIGHT OF TERRITORIAL INSTRUMENTAL-
ITIES.— 
(1) DESIGNATION.— 
(A) IN GENERAL.—An Oversight Board, in 
its sole discretion at such time as the Oversight 
Board determines to be appropriate, may des-
ignate any territorial instrumentality as a cov-
ered territorial instrumentality that is subject 
to the requirements of this Act. 
(B) BUDGETS AND REPORTS.—The Over-
sight Board may require in its sole discretion 
the Governor to submit to the Oversight Board 
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ered territorial instrumentality in the applicable 
Territory Fiscal Plan. 
(E) SEPARATE INSTRUMENTALITY FISCAL 
PLANS.—The Oversight Board may designate in 
its sole discretion a covered territorial instru-
mentality to be the subject of an Instrumen-
tality Fiscal Plan separate from the applicable 
Territory Fiscal Plan and require that the Gov-
ernor develop such an Instrumentality Fiscal 
Plan. 
(2) EXCLUSION.— 
(A) IN GENERAL.—An Oversight Board, in 
its sole discretion, at such time as the Oversight 
Board determines to be appropriate, may ex-
clude any territorial instrumentality from the 
requirements of this Act. 
(B) TREATMENT.—A territorial instrumen-
tality excluded pursuant to this paragraph shall 
not be considered to be a covered territorial in-
strumentality. 
(e) MEMBERSHIP.— 
(1) IN GENERAL.— 
(A) The Oversight Board shall consist of 
seven members appointed by the President who 
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meet the qualifications described in subsection 
(f) and section 109(a). 
(B) The Board shall be comprised of one 
Category A member, one Category B member, 
two Category C members, one Category D 
member, one Category E member, and one Cat-
egory F member. 
(2) APPOINTED MEMBERS.— 
(A) The President shall appoint the indi-
vidual members of the Oversight Board, of 
which— 
(i) the Category A member should be 
selected from a list of individuals sub-
mitted by the Speaker of the House of 
Representatives; 
(ii) the Category B member should be 
selected from a separate list of individuals 
submitted by the Speaker of the House of 
Representatives; 
(iii) the Category C members should 
be selected from a list submitted by the 
Majority Leader of the Senate; 
(iv) the Category D member should be 
selected from a list submitted by the Mi-
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nority Leader of the House of Representa-
tives; 
(v) the Category E member should be 
selected from a list submitted by the Mi-
nority Leader of the Senate; and 
(vi) the Category F member may be 
selected in his sole discretion. 
(B) After the President’s selection of the 
Category F Board member, for purposes of sub-
paragraph (A) and within a timely manner— 
(i) the Speaker of the House of Rep-
resentatives shall submit two non-overlap-
ping lists of at least three, individuals to 
the President; one list shall include three 
individuals who maintain a primary resi-
dence in the territory or have a primary 
place of business in the territory; 
(ii) the Senate Majority Leader shall 
submit a list of at least four individuals to 
the President; 
(iii) the Minority Leader of the House 
of Representatives shall submit a list of at 
least three individuals to the President; 
and 
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(iv) the Minority Leader of the Senate 
shall submit a list of at least three individ-
uals to the President. 
(C) If the President does not select any of 
the names submitted under subparagraphs (A) 
and (B), then whoever submitted such list may 
supplement the lists provided in this subsection 
with additional names. 
(D) The Category A member shall main-
tain a primary residence in the territory or have 
a primary place of business in the territory. 
(E) With respect to the appointment of a 
Board member in Category A, B, C, D, or E, 
such an appointment shall be by and with the 
advice and consent of the Senate, unless the 
President appoints an individual from a list, as 
provided in this subsection, in which case no 
Senate confirmation is required. 
(F) 
For 
purposes 
of 
subparagraph 
101(e)(6), in the event of a vacancy of a Cat-
egory A, B, C, D, or E Board seat, the cor-
responding congressional leader referenced in 
subparagraph (A) shall submit a list pursuant 
to this subsection within a timely manner of the 
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Board member’s resignation or removal becom-
ing effective. 
(G) With respect to an Oversight Board 
for Puerto Rico, in the event any of the 7 mem-
bers have not been appointed by September 30, 
2016, then the President shall appoint an indi-
vidual from the list for the current vacant cat-
egory by December 1, 2016, provided that such 
list includes at least 2 individuals per vacancy 
who meet the requirements set forth in sub-
section (f) and section 109, and are willing to 
serve. 
(f) ELIGIBILITY FOR APPOINTMENTS.—An individual 
is eligible for appointment as a member of the Oversight 
Board only if the individual— 
(1) has knowledge and expertise in finance, mu-
nicipal bond markets, management, law, or the orga-
nization or operation of business or government; and 
(2) prior to appointment, an individual is not 
an officer, elected official, or employee of the terri-
torial government, a candidate for elected office of 
the territorial government, or a former elected offi-
cial of the territorial government. 
(g) NO COMPENSATION FOR SERVICE.—Members of 
the Oversight Board shall serve without pay, but may re-
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ceive reimbursement from the Oversight Board for any 
reasonable and necessary expenses incurred by reason of 
service on the Oversight Board. 
(h) ADOPTION OF BYLAWS FOR CONDUCTING BUSI-
NESS OF OVERSIGHT BOARD.— 
(1) IN GENERAL.—As soon as practicable after 
the appointment of all members and appointment of 
the Chair, the Oversight Board shall adopt bylaws, 
rules, and procedures governing its activities under 
this Act, including procedures for hiring experts and 
consultants. Such bylaws, rules, and procedures shall 
be public documents, and shall be submitted by the 
Oversight Board upon adoption to the Governor, the 
Legislature, the President, and Congress. The Over-
sight Board may hire professionals as it determines 
to be necessary to carry out this subsection. 
(2) ACTIVITIES REQUIRING APPROVAL OF MA-
JORITY OF MEMBERS.—Under the bylaws adopted 
pursuant to paragraph (1), the Oversight Board 
may conduct its operations under such procedures as 
it considers appropriate, except that an affirmative 
vote of a majority of the members of the Oversight 
Board’s full appointed membership shall be required 
in order for the Oversight Board to approve a Fiscal 
Plan under section 201, to approve a Budget under 
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section 202, to cause a legislative act not to be en-
forced under section 204, or to designate an infra-
structure project as a Critical Project under section 
503. 
(3) ADOPTION OF RULES AND REGULATIONS OF 
TERRITORIAL GOVERNMENT.—The Oversight Board 
may incorporate in its bylaws, rules, and procedures 
under this subsection such rules and regulations of 
the territorial government as it considers appro-
priate to enable it to carry out its activities under 
this Act with the greatest degree of independence 
practicable. 
(4) EXECUTIVE
SESSION.—Upon a majority 
vote of the Oversight Board’s full voting member-
ship, the Oversight Board may conduct its business 
in an executive session that consists solely of the 
Oversight Board’s voting members and is closed to 
the public, but only for the business items set forth 
as part of the vote to convene an executive session. 
SEC. 102. LOCATION OF OVERSIGHT BOARD. 
The Oversight Board shall have an office in the cov-
ered territory and additional offices as it deems necessary. 
At any time, any department or agency of the United 
States may provide the Oversight Board use of Federal 
facilities and equipment on a reimbursable or non-reim-
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bursable basis and subject to such terms and conditions 
as the head of that department or agency may establish. 
SEC. 103. EXECUTIVE DIRECTOR AND STAFF OF OVERSIGHT 
BOARD. 
(a) EXECUTIVE DIRECTOR.—The Oversight Board 
shall have an Executive Director who shall be appointed 
by the Chair with the consent of the Oversight Board. The 
Executive Director shall be paid at a rate determined by 
the Oversight Board. 
(b) STAFF.—With the approval of the Chair, the Ex-
ecutive Director may appoint and fix the pay of additional 
personnel as the Executive Director considers appropriate, 
except that no individual appointed by the Executive Di-
rector may be paid at a rate greater than the rate of pay 
for the Executive Director unless the Oversight Board pro-
vides for otherwise. The staff shall include a Revitalization 
Coordinator appointed pursuant to Title V of this Act. 
Any such personnel may include private citizens, employ-
ees of the Federal Government, or employees of the terri-
torial government, provided, however, that the Executive 
Director may not fix the pay of employees of the Federal 
Government or the territorial government. 
(c) INAPPLICABILITY
OF CERTAIN EMPLOYMENT 
AND PROCUREMENT LAWS.—The Executive Director and 
staff of the Oversight Board may be appointed and paid 
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without regard to any provision of the laws of the covered 
territory or the Federal Government governing appoint-
ments and salaries. Any provision of the laws of the cov-
ered territory governing procurement shall not apply to 
the Oversight Board. 
(d) STAFF OF FEDERAL AGENCIES.—Upon request 
of the Chair, the head of any Federal department or agen-
cy may detail, on a reimbursable or nonreimbursable basis, 
and in accordance with the Intergovernmental Personnel 
Act of 1970 (5 U.S.C. 3371–3375), any of the personnel 
of that department or agency to the Oversight Board to 
assist it in carrying out its duties under this Act. 
(e) STAFF OF TERRITORIAL GOVERNMENT.—Upon 
request of the Chair, the head of any department or agen-
cy of the covered territory may detail, on a reimbursable 
or nonreimbursable basis, any of the personnel of that de-
partment or agency to the Oversight Board to assist it 
in carrying out its duties under this Act. 
SEC. 104. POWERS OF OVERSIGHT BOARD. 
(a) HEARINGS AND SESSIONS.—The Oversight Board 
may, for the purpose of carrying out this Act, hold hear-
ings, sit and act at times and places, take testimony, and 
receive evidence as the Oversight Board considers appro-
priate. The Oversight Board may administer oaths or af-
firmations to witnesses appearing before it. 
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(b) POWERS OF MEMBERS AND AGENTS.—Any mem-
ber or agent of the Oversight Board may, if authorized 
by the Oversight Board, take any action that the Over-
sight Board is authorized to take by this section. 
(c) OBTAINING OFFICIAL DATA.— 
(1) FROM
FEDERAL
GOVERNMENT.—Notwith-
standing sections 552 (commonly known as the 
Freedom of Information Act), 552a (commonly 
known as the Privacy Act of 1974), and 552b (com-
monly known as the Government in the Sunshine 
Act) of title 5, United States Code, the Oversight 
Board may secure directly from any department or 
agency of the United States information necessary 
to enable it to carry out this Act, with the approval 
of the head of that department or agency. 
(2) FROM
TERRITORIAL
GOVERNMENT.—Not-
withstanding any other provision of law, the Over-
sight Board shall have the right to secure copies, 
whether written or electronic, of such records, docu-
ments, information, data, or metadata from the ter-
ritorial government necessary to enable the Over-
sight Board to carry out its responsibilities under 
this Act. At the request of the Oversight Board, the 
Oversight Board shall be granted direct access to 
such information systems, records, documents, infor-
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mation, or data as will enable the Oversight Board 
to carry out its responsibilities under this Act. The 
head of the entity of the territorial government re-
sponsible shall provide the Oversight Board with 
such information and assistance (including granting 
the Oversight Board direct access to automated or 
other information systems) as the Oversight Board 
requires under this paragraph. 
(d) OBTAINING CREDITOR INFORMATION.— 
(1) Upon request of the Oversight Board, each 
creditor or organized group of creditors of a covered 
territory or covered territorial instrumentality seek-
ing to participate in voluntary negotiations shall pro-
vide to the Oversight Board, and the Oversight 
Board shall make publicly available to any other 
participant, a statement setting forth— 
(A) the name and address of the creditor 
or of each member of an organized group of 
creditors; and 
(B) the nature and aggregate amount of 
claims or other economic interests held in rela-
tion to the issuer as of the later of— 
(i) the date the creditor acquired the 
claims or other economic interests or, in 
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the case of an organized group of credi-
tors, the date the group was formed; or 
(ii) the date the Oversight Board was 
formed. 
(2) For purposes of this subsection, an orga-
nized group shall mean multiple creditors that are— 
(A) acting in concert to advance their com-
mon interests, including, but not limited to, re-
taining legal counsel to represent such multiple 
entities; and 
(B) not composed entirely of affiliates or 
insiders of one another. 
(3) The Oversight Board may request supple-
mental statements to be filed by each creditor or or-
ganized group of creditors quarterly, or if any fact 
in the most recently filed statement has changed 
materially. 
(e) GIFTS, BEQUESTS, AND DEVISES.—The Over-
sight Board may accept, use, and dispose of gifts, be-
quests, or devises of services or property, both real and 
personal, for the purpose of aiding or facilitating the work 
of the Oversight Board. Gifts, bequests, or devises of 
money and proceeds from sales of other property received 
as gifts, bequests, or devises shall be deposited in such 
account as the Oversight Board may establish and shall 
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be available for disbursement upon order of the Chair, 
consistent with the Oversight Board’s bylaws, or rules and 
procedures. All gifts, bequests or devises and the identities 
of the donors shall be publicly disclosed by the Oversight 
Board within 30 days of receipt. 
(f) SUBPOENA POWER.— 
(1) IN GENERAL.—The Oversight Board may 
issue subpoenas requiring the attendance and testi-
mony of witnesses and the production of books, 
records, correspondence, memoranda, papers, docu-
ments, electronic files, metadata, tapes, and mate-
rials of any nature relating to any matter under in-
vestigation by the Oversight Board. Jurisdiction to 
compel the attendance of witnesses and the produc-
tion of such materials shall be governed by the stat-
ute setting forth the scope of personal jurisdiction 
exercised by the covered territory, or in the case of 
Puerto Rico, 32 L.P.R.A. App. III. R. 4. 7., as 
amended. 
(2) FAILURE TO OBEY A SUBPOENA.—If a per-
son refuses to obey a subpoena issued under para-
graph (1), the Oversight Board may apply to the 
court of first instance of the covered territory. Any 
failure to obey the order of the court may be pun-
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ished by the court in accordance with civil contempt 
laws of the covered territory. 
(3) SERVICE OF SUBPOENAS.—The subpoena of 
the Oversight Board shall be served in the manner 
provided by the rules of procedure for the courts of 
the covered territory, or in the case of Puerto Rico, 
the Rules of Civil Procedure of Puerto Rico, for sub-
poenas issued by the court of first instance of the 
covered territory. 
(g) AUTHORITY TO ENTER INTO CONTRACTS.—The 
Executive Director may enter into such contracts as the 
Executive Director considers appropriate (subject to the 
approval of the Chair) consistent with the Oversight 
Board’s bylaws, rules, and regulations to carry out the 
Oversight Board’s responsibilities under this Act. 
(h) AUTHORITY TO ENFORCE CERTAIN LAWS OF 
THE COVERED TERRITORY.—The Oversight Board shall 
ensure the purposes of this Act are met, including by en-
suring the prompt enforcement of any applicable laws of 
the covered territory prohibiting public sector employees 
from participating in a strike or lockout. In the application 
of this subsection, with respect to Puerto Rico, the term 
‘‘applicable laws’’ refers to 3 L.P.R.A. 1451q and 3 
L.P.R.A. 1451r, as amended. 
(i) VOLUNTARY AGREEMENT CERTIFICATION.— 
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(1) IN GENERAL.—The Oversight Board shall 
issue a certification to a covered territory or covered 
territorial instrumentality if the Oversight Board de-
termines, in its sole discretion, that such covered 
territory or covered territorial instrumentality, as 
applicable, has successfully reached a voluntary 
agreement with holders of its Bond Claims to re-
structure such Bond Claims— 
(A) except as provided in subparagraph 
(C), if an applicable Fiscal Plan has been cer-
tified, in a manner that provides for a sustain-
able level of debt for such covered territory or 
covered territorial instrumentality, as applica-
ble, and is in conformance with the applicable 
certified Fiscal Plan; 
(B) except as provided in subparagraph 
(C), if an applicable Fiscal Plan has not yet 
been certified, in a manner that provides, in the 
Oversight Board’s sole discretion, for a sustain-
able level of debt for such covered territory or 
covered territorial instrumentality; or 
(C) notwithstanding subparagraphs (A) 
and (B), if an applicable Fiscal Plan has not 
yet been certified and the voluntary agreement 
is limited solely to an extension of applicable 
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principal maturities and interest on Bonds 
issued by such covered territory or covered ter-
ritorial instrumentality, as applicable, for a pe-
riod of up to one year during which time no in-
terest will be paid on the Bond Claims affected 
by the voluntary agreement. 
(2) EFFECTIVENESS.—The effectiveness of any 
voluntary agreement referred to in paragraph (1) 
shall be conditioned on— 
(A) the Oversight Board delivering the cer-
tification described in paragraph (1); and 
(B) either— 
(i) the agreement of a majority in 
amount of the Bond Claims of a covered 
territory or covered territorial instrumen-
tality that is to be affected by such agree-
ment; or 
(ii) confirmation of a plan of adjust-
ment pursuant to section 314 of this Act 
or the entry of an order approving a Quali-
fying Modification pursuant to section 
601(m) of this Act. 
(3) PREEXISTING VOLUNTARY AGREEMENTS.— 
Any voluntary agreements that the territorial gov-
ernment or any covered territorial instrumentality 
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has executed with holders of its debts to restructure 
such debts prior to the date of enactment of the Act 
shall be deemed to be in conformance with the re-
quirements of this subsection, to the extent the re-
quirements of paragraph (2) have been satisfied. 
(j) RESTRUCTURING FILINGS.— 
(1) IN GENERAL.—Subject to paragraph (3), 
before taking an action described in paragraph (2) 
on behalf of a debtor or potential debtor in a case 
under title III, the Oversight Board must certify the 
action. 
(2) ACTIONS DESCRIBED.—The actions referred 
to in paragraph (1) are— 
(A) the filing of a petition; or 
(B) the submission or modification of a 
plan of adjustment. 
(3) CONDITION FOR PLANS OF ADJUSTMENT.— 
The Oversight Board may certify a plan of adjust-
ment only if it determines, in its sole discretion, that 
it is consistent with the applicable certified Fiscal 
Plan. 
(k) CIVIL ACTIONS TO ENFORCE POWERS.—The 
Oversight Board may seek judicial enforcement of its au-
thority to carry out its responsibilities under this Act. 
(l) PENALTIES.— 
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(1) ACTS
PROHIBITED.—Any officer or em-
ployee of the territorial government who prepares, 
presents, or certifies any information or report for 
the Oversight Board or any of its agents that is in-
tentionally false or misleading, or, upon learning 
that any such information is false or misleading, 
fails to immediately advise the Oversight Board or 
its agents thereof in writing, shall be subject to 
prosecution and penalties under any laws of the ter-
ritory prohibiting the provision of false information 
to government officials, which in the case of Puerto 
Rico shall include 33 L.P.R.A. 4889, as amended. 
(2) ADMINISTRATIVE DISCIPLINE.—In addition 
to any other applicable penalty, any officer or em-
ployee of the territorial government who knowingly 
and willfully violates paragraph (1) or takes any 
such action in violation of any valid order of the 
Oversight Board or fails or refuses to take any ac-
tion required by any such order, shall be subject to 
appropriate 
administrative 
discipline, 
including 
(when appropriate) suspension from duty without 
pay or removal from office, by order of the Gov-
ernor. 
(3) REPORT BY GOVERNOR ON DISCIPLINARY 
ACTIONS TAKEN.—In the case of a violation of para-
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graph (2) by an officer or employee of the territorial 
government, the Governor shall immediately report 
to the Oversight Board all pertinent facts together 
with a statement of the action taken thereon. 
(m) 
ELECTRONIC
REPORTING.—The 
Oversight 
Board may, in consultation with the Governor, ensure the 
prompt and efficient payment and administration of taxes 
through the adoption of electronic reporting, payment and 
auditing technologies. 
(n) ADMINISTRATIVE SUPPORT SERVICES.—Upon 
the request of the Oversight Board, the Administrator of 
General Services shall promptly provide to the Oversight 
Board, on a reimbursable or non-reimbursable basis, the 
administrative support services necessary for the Over-
sight Board to carry out its responsibilities under this Act. 
SEC. 105. EXEMPTION FROM LIABILITY FOR CLAIMS. 
The Oversight Board, its members, and its employees 
shall not be liable for any obligation of or claim against 
the Oversight Board or its members or employees or the 
territorial government resulting from actions taken to 
carry out this Act. 
SEC. 106. TREATMENT OF ACTIONS ARISING FROM ACT. 
(a) JURISDICTION.—Except as provided in section 
104(f)(2) (relating to the issuance of an order enforcing 
a subpoena), and title III (relating to adjustments of 
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debts), any action against the Oversight Board, and any 
action otherwise arising out of this Act, in whole or in 
part, shall be brought in a United States district court 
for the covered territory or, for any covered territory that 
does not have a district court, in the United States Dis-
trict Court for the District of Hawaii. 
(b) APPEAL.—Notwithstanding any other provision 
of law, any order of a United States district court that 
is issued pursuant to an action brought under subsection 
(a) shall be subject to review only pursuant to a notice 
of appeal to the applicable United States Court of Ap-
peals. 
(c) TIMING OF RELIEF.—Except with respect to any 
orders entered to remedy constitutional violations, no 
order of any court granting declaratory or injunctive relief 
against the Oversight Board, including relief permitting 
or requiring the obligation, borrowing, or expenditure of 
funds, shall take effect during the pendency of the action 
before such court, during the time appeal may be taken, 
or (if appeal is taken) during the period before the court 
has entered its final order disposing of such action. 
(d) EXPEDITED CONSIDERATION.—It shall be the 
duty of the applicable United States District Court, the 
applicable United States Court of Appeals, and, as appli-
cable, the Supreme Court of the United States to advance 
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on the docket and to expedite to the greatest possible ex-
tent the disposition of any matter brought under this Act. 
(e) REVIEW
OF
OVERSIGHT
BOARD
CERTIFI-
CATIONS.—There shall be no jurisdiction in any United 
States district court to review challenges to the Oversight 
Board’s certification determinations under this Act. 
SEC. 107. BUDGET AND FUNDING FOR OPERATION OF 
OVERSIGHT BOARD. 
(a) SUBMISSION OF BUDGET.—The Oversight Board 
shall submit a budget for each fiscal year during which 
the Oversight Board is in operation, to the President, the 
House of Representatives Committee on Natural Re-
sources and the Senate Committee on Energy and Natural 
Resources, the Governor, and the Legislature. 
(b) FUNDING.—The Oversight Board shall use its 
powers with respect to the Territory Budget of the covered 
territory to ensure that sufficient funds are available to 
cover all expenses of the Oversight Board. Within 30 days 
after the date of enactment of this Act, the territorial gov-
ernment shall designate a dedicated funding source, not 
subject to subsequent legislative appropriations, sufficient 
to support the annual expenses of the Oversight Board 
as determined in the Oversight Board’s sole and exclusive 
discretion. 
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SEC. 108. AUTONOMY OF OVERSIGHT BOARD. 
(a) IN GENERAL.—Neither the Governor nor the 
Legislature may— 
(1) exercise any control, supervision, oversight, 
or review over the Oversight Board or its activities; 
or 
(2) enact, implement, or enforce any statute, 
resolution, policy, or rule that would impair or de-
feat the purposes of this Act, as determined by the 
Oversight Board. 
(b) OVERSIGHT BOARD LEGAL REPRESENTATION.— 
In any action brought by or on behalf of the Oversight 
Board, the Oversight Board shall be represented by such 
counsel as it may hire or retain so long as no conflict of 
interest exists. 
SEC. 109. ETHICS. 
(a) CONFLICT OF INTEREST.—Notwithstanding any 
ethics provision governing employees of the covered terri-
tory, all members and staff of the Oversight Board shall 
be subject to the Federal conflict of interest requirements 
described in section 208 of title 18, United States Code. 
(b) FINANCIAL DISCLOSURE.—Notwithstanding any 
ethics provision governing employees of the covered terri-
tory, all members of the Oversight Board and staff des-
ignated by the Oversight Board shall be subject to disclo-
sure of their financial interests, the contents of which shall 
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conform to the same requirements set forth in section 102 
of the Ethics in Government Act of 1978 (5 U.S.C. app.). 
TITLE II—RESPONSIBILITIES OF 
OVERSIGHT BOARD 
SEC. 201. APPROVAL OF FISCAL PLANS. 
(a) IN GENERAL.—As soon as practicable after all 
of the members and the Chair have been appointed to the 
Oversight Board in accordance with section 101(e) in the 
fiscal year in which the Oversight Board is established, 
and in each fiscal year thereafter during which the Over-
sight Board is in operation, the Oversight Board shall de-
liver a notice to the Governor providing a schedule for the 
process of development, submission, approval, and certifi-
cation of Fiscal Plans. The notice may also set forth a 
schedule for revisions to any Fiscal Plan that has already 
been certified, which revisions must be subject to subse-
quent approval and certification by the Oversight Board. 
The Oversight Board shall consult with the Governor in 
establishing a schedule, but the Oversight Board shall re-
tain sole discretion to set or, by delivery of a subsequent 
notice to the Governor, change the dates of such schedule 
as it deems appropriate and reasonably feasible. 
(b) REQUIREMENTS.— 
(1) IN
GENERAL.—A Fiscal Plan developed 
under this section shall, with respect to the terri-
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torial government or covered territorial instrumen-
tality, provide a method to achieve fiscal responsi-
bility and access to the capital markets, and— 
(A) provide for estimates of revenues and 
expenditures in conformance with agreed ac-
counting standards and be based on— 
(i) applicable laws; or 
(ii) specific bills that require enact-
ment in order to reasonably achieve the 
projections of the Fiscal Plan; 
(B) ensure the funding of essential public 
services; 
(C) provide adequate funding for public 
pension systems; 
(D) provide for the elimination of struc-
tural deficits; 
(E) for fiscal years covered by a Fiscal 
Plan in which a stay under titles III or IV is 
not effective, provide for a debt burden that is 
sustainable; 
(F) improve fiscal governance, account-
ability, and internal controls; 
(G) enable the achievement of fiscal tar-
gets; 
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(H) create independent forecasts of rev-
enue for the period covered by the Fiscal Plan; 
(I) include a debt sustainability analysis; 
(J) provide for capital expenditures and in-
vestments necessary to promote economic 
growth; 
(K) adopt appropriate recommendations 
submitted by the Oversight Board under section 
205(a); 
(L) include such additional information as 
the Oversight Board deems necessary; 
(M) ensure that assets, funds, or resources 
of a territorial instrumentality are not loaned 
to, transferred to, or otherwise used for the 
benefit of a covered territory or another covered 
territorial instrumentality of a covered territory, 
unless permitted by the constitution of the ter-
ritory or agreed to by a certified voluntary 
agreement under section 104(i), an approved 
plan of adjustment under title III, or a Quali-
fying Modification approved under title VI; and 
(N) respect the relative lawful priorities or 
lawful liens, as may be applicable, in the con-
stitution, other laws, or agreements of a covered 
territory or covered territorial instrumentality 
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in effect prior to the date of enactment of this 
Act. 
(2) TERM.—A Fiscal Plan developed under this 
section shall cover a period of fiscal years as deter-
mined by the Oversight Board in its sole discretion 
but in any case a period of not less than 5 fiscal 
years from the fiscal year in which it is certified by 
the Oversight Board. 
(c) DEVELOPMENT, REVIEW, APPROVAL, AND CER-
TIFICATION OF FISCAL PLAN.— 
(1) TIMING
REQUIREMENT.—The Governor 
may not submit to the Legislature a Territory Budg-
et under section 202 for a fiscal year unless the 
Oversight Board has certified the Fiscal Plan for 
that fiscal year in accordance with this subsection, 
unless the Oversight Board in its sole discretion 
waives this requirement. 
(2) FISCAL PLAN DEVELOPED BY GOVERNOR.— 
The Governor shall submit to the Oversight Board 
any proposed Fiscal Plan required by the Oversight 
Board by the time specified in the notice delivered 
under subsection (a). 
(3) REVIEW BY THE OVERSIGHT BOARD.—The 
Oversight Board shall review the proposed Fiscal 
Plan to determine whether it satisfies the require-
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ments set forth in subsection (b) and, if the Over-
sight Board determines in its sole discretion that the 
proposed Fiscal Plan— 
(A) satisfies such requirements, the Over-
sight Board shall approve the proposed Fiscal 
Plan; or 
(B) does not satisfy such requirements, the 
Oversight Board shall provide to the Gov-
ernor— 
(i) a notice of violation that includes 
recommendations for revisions to the appli-
cable Fiscal Plan; and 
(ii) an opportunity to correct the vio-
lation in accordance with subsection (d)(1). 
(d) REVISED FISCAL PLAN.— 
(1) IN GENERAL.—If the Governor receives a 
notice of violation under subsection (c)(3), the Gov-
ernor shall submit to the Oversight Board a revised 
proposed Fiscal Plan in accordance with subsection 
(b) by the time specified in the notice delivered 
under subsection (a). The Governor may submit as 
many revised Fiscal Plans to the Oversight Board as 
the schedule established in the notice delivered under 
subsection (a) permits. 
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(2) DEVELOPMENT BY OVERSIGHT BOARD.—If 
the Governor fails to submit to the Oversight Board 
a Fiscal Plan that the Oversight Board determines 
in its sole discretion satisfies the requirements set 
forth in subsection (b) by the time specified in the 
notice delivered under subsection (a), the Oversight 
Board shall develop and submit to the Governor and 
the Legislature a Fiscal Plan that satisfies the re-
quirements set forth in subsection (b). 
(e) APPROVAL AND CERTIFICATION.— 
(1) APPROVAL OF FISCAL PLAN DEVELOPED BY 
GOVERNOR.—If the Oversight Board approves a Fis-
cal Plan under subsection (c)(3), it shall deliver a 
compliance certification for such Fiscal Plan to the 
Governor and the Legislature. 
(2) DEEMED APPROVAL OF FISCAL PLAN DE-
VELOPED BY OVERSIGHT BOARD.—If the Oversight 
Board develops a Fiscal Plan under subsection 
(d)(2), such Fiscal Plan shall be deemed approved 
by the Governor, and the Oversight Board shall 
issue a compliance certification for such Fiscal Plan 
to the Governor and the Legislature. 
(f) JOINT DEVELOPMENT OF FISCAL PLAN.—Not-
withstanding any other provision of this section, if the 
Governor and the Oversight Board jointly develop a Fiscal 
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Plan for the fiscal year that meets the requirements under 
this section, and that the Governor and the Oversight 
Board certify that the fiscal plan reflects a consensus be-
tween the Governor and the Oversight Board, then such 
Fiscal Plan shall serve as the Fiscal Plan for the territory 
or territorial instrumentality for that fiscal year. 
SEC. 202. APPROVAL OF BUDGETS. 
(a) REASONABLE SCHEDULE FOR DEVELOPMENT OF 
BUDGETS.—As soon as practicable after all of the mem-
bers and the Chair have been appointed to the Oversight 
Board in the fiscal year in which the Oversight Board is 
established, and in each fiscal year thereafter during 
which the Oversight Board is in operation, the Oversight 
Board shall deliver a notice to the Governor and the Legis-
lature providing a schedule for developing, submitting, ap-
proving, and certifying Budgets for a period of fiscal years 
as determined by the Oversight Board in its sole discretion 
but in any case a period of not less than one fiscal year 
following the fiscal year in which the notice is delivered. 
The notice may also set forth a schedule for revisions to 
Budgets that have already been certified, which revisions 
must be subject to subsequent approval and certification 
by the Oversight Board. The Oversight Board shall con-
sult with the Governor and the Legislature in establishing 
a schedule, but the Oversight Board shall retain sole dis-
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cretion to set or, by delivery of a subsequent notice to the 
Governor and the Legislature, change the dates of such 
schedule as it deems appropriate and reasonably feasible. 
(b) REVENUE FORECAST.—The Oversight Board 
shall submit to the Governor and Legislature a forecast 
of revenues for the period covered by the Budgets by the 
time specified in the notice delivered under subsection (a), 
for use by the Governor in developing the Budget under 
subsection (c). 
(c) BUDGETS DEVELOPED BY GOVERNOR.— 
(1) GOVERNOR’S
PROPOSED
BUDGETS.—The 
Governor shall submit to the Oversight Board pro-
posed Budgets by the time specified in the notice de-
livered under subsection (a). In consultation with the 
Governor in accordance with the process specified in 
the notice delivered under subsection (a), the Over-
sight Board shall determine in its sole discretion 
whether each proposed Budget is compliant with the 
applicable Fiscal Plan and— 
(A) if a proposed Budget is a compliant 
budget, the Oversight Board shall— 
(i) approve the Budget; and 
(ii) if the Budget is a Territory Budg-
et, submit the Territory Budget to the 
Legislature; or 
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(B) if the Oversight Board determines that 
the Budget is not a compliant budget, the Over-
sight Board shall provide to the Governor— 
(i) a notice of violation that includes 
a description of any necessary corrective 
action; and 
(ii) an opportunity to correct the vio-
lation in accordance with paragraph (2). 
(2) GOVERNOR’S
REVISIONS.—The Governor 
may correct any violations identified by the Over-
sight Board and submit a revised proposed Budget 
to the Oversight Board in accordance with para-
graph (1). The Governor may submit as many re-
vised Budgets to the Oversight Board as the sched-
ule established in the notice delivered under sub-
section (a) permits. If the Governor fails to develop 
a Budget that the Oversight Board determines is a 
compliant budget by the time specified in the notice 
delivered under subsection (a), the Oversight Board 
shall develop and submit to the Governor, in the 
case of an Instrumentality Budget, and to the Gov-
ernor and the Legislature, in the case of a Territory 
Budget, a revised compliant budget. 
(d) BUDGET APPROVAL BY LEGISLATURE.— 
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(1) LEGISLATURE
ADOPTED
BUDGET.—The 
Legislature shall submit to the Oversight Board the 
Territory Budget adopted by the Legislature by the 
time specified in the notice delivered under sub-
section (a). The Oversight Board shall determine 
whether the adopted Territory Budget is a compliant 
budget and— 
(A) if the adopted Territory Budget is a 
compliant budget, the Oversight Board shall 
issue a compliance certification for such compli-
ant budget pursuant to subsection (e); and 
(B) if the adopted Territory Budget is not 
a compliant budget, the Oversight Board shall 
provide to the Legislature— 
(i) a notice of violation that includes 
a description of any necessary corrective 
action; and 
(ii) an opportunity to correct the vio-
lation in accordance with paragraph (2). 
(2) LEGISLATURE’S REVISIONS.—The Legisla-
ture may correct any violations identified by the 
Oversight Board and submit a revised Territory 
Budget to the Oversight Board in accordance with 
the process established under paragraph (1) and by 
the time specified in the notice delivered under sub-
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section (a). The Legislature may submit as many re-
vised adopted Territory Budgets to the Oversight 
Board as the schedule established in the notice deliv-
ered under subsection (a) permits. If the Legislature 
fails to adopt a Territory Budget that the Oversight 
Board determines is a compliant budget by the time 
specified in the notice delivered under subsection (a), 
the Oversight Board shall develop a revised Terri-
tory Budget that is a compliant budget and submit 
it to the Governor and the Legislature. 
(e) CERTIFICATION OF BUDGETS.— 
(1) CERTIFICATION
OF
DEVELOPED
AND
AP-
PROVED TERRITORY BUDGETS.—If the Governor and 
the Legislature develop and approve a Territory 
Budget that is a compliant budget by the day before 
the first day of the fiscal year for which the Terri-
tory Budget is being developed and in accordance 
with the process established under subsections (c) 
and (d), the Oversight Board shall issue a compli-
ance certification to the Governor and the Legisla-
ture for such Territory Budget. 
(2) CERTIFICATION
OF
DEVELOPED
INSTRU-
MENTALITY BUDGETS.—If the Governor develops an 
Instrumentality Budget that is a compliant budget 
by the day before the first day of the fiscal year for 
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which the Instrumentality Budget is being developed 
and in accordance with the process established under 
subsection (c), the Oversight Board shall issue a 
compliance certification to the Governor for such In-
strumentality Budget. 
(3) DEEMED
CERTIFICATION
OF
TERRITORY 
BUDGETS.—If the Governor and the Legislature fail 
to develop and approve a Territory Budget that is 
a compliant budget by the day before the first day 
of the fiscal year for which the Territory Budget is 
being developed, the Oversight Board shall submit a 
Budget to the Governor and the Legislature (includ-
ing any revision to the Territory Budget made by 
the Oversight Board pursuant to subsection (d)(2)) 
and such Budget shall be— 
(A) deemed to be approved by the Gov-
ernor and the Legislature; 
(B) the subject of a compliance certifi-
cation issued by the Oversight Board to the 
Governor and the Legislature; and 
(C) in full force and effect beginning on 
the first day of the applicable fiscal year. 
(4) DEEMED CERTIFICATION OF INSTRUMEN-
TALITY BUDGETS.—If the Governor fails to develop 
an Instrumentality Budget that is a compliant budg-
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et by the day before the first day of the fiscal year 
for which the Instrumentality Budget is being devel-
oped, the Oversight Board shall submit an Instru-
mentality Budget to the Governor (including any re-
vision to the Territory Budget made by the Over-
sight Board pursuant to subsection (c)(2)) and such 
Budget shall be— 
(A) deemed to be approved by the Gov-
ernor; 
(B) the subject of a compliance certifi-
cation issued by the Oversight Board to the 
Governor; and 
(C) in full force and effect beginning on 
the first day of the applicable fiscal year. 
(f) JOINT DEVELOPMENT OF BUDGETS.—Notwith-
standing any other provision of this section, if, in the case 
of a Territory Budget, the Governor, the Legislature, and 
the Oversight Board, or in the case of an Instrumentality 
Budget, the Governor and the Oversight Board, jointly de-
velop such Budget for the fiscal year that meets the re-
quirements under this section, and that the relevant par-
ties certify that such budget reflects a consensus among 
them, then such Budget shall serve as the Budget for the 
territory or territorial instrumentality for that fiscal year. 
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SEC. 203. EFFECT OF FINDING OF NONCOMPLIANCE WITH 
BUDGET. 
(a) SUBMISSION OF REPORTS.—Not later than 15 
days after the last day of each quarter of a fiscal year 
(beginning with the fiscal year determined by the Over-
sight Board), the Governor shall submit to the Oversight 
Board a report, in such form as the Oversight Board may 
require, describing— 
(1) the actual cash revenues, cash expenditures, 
and cash flows of the territorial government for the 
preceding quarter, as compared to the projected rev-
enues, expenditures, and cash flows contained in the 
certified Budget for such preceding quarter; and 
(2) any other information requested by the 
Oversight Board, which may include a balance sheet 
or a requirement that the Governor provide informa-
tion for each covered territorial instrumentality sep-
arately. 
(b) INITIAL ACTION BY OVERSIGHT BOARD.— 
(1) IN GENERAL.—If the Oversight Board de-
termines, based on reports submitted by the Gov-
ernor under subsection (a), independent audits, or 
such other information as the Oversight Board may 
obtain, that the actual quarterly revenues, expendi-
tures, or cash flows of the territorial government are 
not consistent with the projected revenues, expendi-
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tures, or cash flows set forth in the certified Budget 
for such quarter, the Oversight Board shall— 
(A) require the territorial government to 
provide such additional information as the 
Oversight Board determines to be necessary to 
explain the inconsistency; and 
(B) if the additional information provided 
under subparagraph (A) does not provide an ex-
planation for the inconsistency that the Over-
sight Board finds reasonable and appropriate, 
advise the territorial government to correct the 
inconsistency by implementing remedial action. 
(2) DEADLINES.—The Oversight Board shall 
establish the deadlines by which the territorial gov-
ernment shall meet the requirements of subpara-
graphs (A) and (B) of paragraph (1). 
(c) CERTIFICATION OF VARIANCE.— 
(1) VARIANCE.—If the territorial government 
fails to provide additional information under sub-
section (b)(1)(A), or fails to correct a variance under 
subsection (b)(1)(B), prior to the applicable deadline 
under subsection (b)(2), the Oversight Board shall 
certify to the President, the House of Representa-
tives Committee on Natural Resources, the Senate 
Committee on Energy and Natural Resources, the 
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Governor, and the Legislature that the territorial 
government is at variance with the applicable cer-
tified Budget, and shall describe the nature and 
amount of the variance. 
(2) CORRECTION OF VARIANCE.—If the Over-
sight Board determines that the territorial govern-
ment has initiated such measures as the Oversight 
Board considers sufficient to correct a variance cer-
tified under paragraph (1), the Oversight Board 
shall certify the correction to the President, the 
House of Representatives Committee on Natural Re-
sources, the Senate Committee on Energy and Nat-
ural Resources, the Governor, and the Legislature. 
(d) BUDGET REDUCTIONS BY OVERSIGHT BOARD.— 
If the Oversight Board determines that the Governor, in 
the case of any then-applicable certified Instrumentality 
Budgets, and the Governor and the Legislature, in the 
case of the then-applicable certified Territory Budget, 
have failed to correct a variance identified by the Over-
sight Board under subsection (c), the Oversight Board 
shall— 
(1) with respect to the territorial government, 
other than covered territorial instrumentalities, 
make appropriate reductions in nondebt expendi-
tures to ensure that the actual quarterly revenues 
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and expenditures for the territorial government are 
in compliance with the applicable certified Territory 
Budget or, in the case of the fiscal year in which the 
Oversight Board is established, the budget adopted 
by the Governor and the Legislature; and 
(2) with respect to covered territorial instru-
mentalities at the sole discretion of the Oversight 
Board— 
(A) make reductions in nondebt expendi-
tures to ensure that the actual quarterly reve-
nues and expenses for the covered territorial in-
strumentality are in compliance with the appli-
cable certified Budget or, in the case of the fis-
cal year in which the Oversight Board is estab-
lished, the budget adopted by the Governor and 
the Legislature or the covered territorial instru-
mentality, as applicable; or 
(B)(i) institute automatic hiring freezes at 
the covered territorial instrumentality; and 
(ii) prohibit the covered territorial instru-
mentality from entering into any contract or en-
gaging in any financial or other transactions, 
unless the contract or transaction was pre-
viously approved by the Oversight Board. 
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(e) TERMINATION OF BUDGET REDUCTIONS.—The 
Oversight Board shall cancel the reductions under sub-
section (d) if the Oversight Board determines that the ter-
ritorial government or covered territorial instrumentality, 
as applicable, has initiated appropriate measures to reduce 
expenditures or increase revenues to ensure that the terri-
torial government or covered territorial instrumentality is 
in compliance with the applicable certified Budget or, in 
the case of the fiscal year in which the Oversight Board 
is established, the budget adopted by the Governor and 
the Legislature. 
SEC. 204. REVIEW OF ACTIVITIES TO ENSURE COMPLIANCE 
WITH FISCAL PLAN. 
(a) SUBMISSION OF LEGISLATIVE ACTS TO OVER-
SIGHT BOARD.— 
(1) SUBMISSION OF ACTS.—Except to the ex-
tent that the Oversight Board may provide otherwise 
in its bylaws, rules, and procedures, not later than 
7 business days after a territorial government duly 
enacts any law during any fiscal year in which the 
Oversight Board is in operation, the Governor shall 
submit the law to the Oversight Board. 
(2) COST ESTIMATE; CERTIFICATION OF COM-
PLIANCE OR NONCOMPLIANCE.—The Governor shall 
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include with each law submitted to the Oversight 
Board under paragraph (1) the following: 
(A) A formal estimate prepared by an ap-
propriate entity of the territorial government 
with expertise in budgets and financial manage-
ment of the impact, if any, that the law will 
have on expenditures and revenues. 
(B) If the appropriate entity described in 
subparagraph (A) finds that the law is not sig-
nificantly inconsistent with the Fiscal Plan for 
the fiscal year, it shall issue a certification of 
such finding. 
(C) If the appropriate entity described in 
subparagraph (A) finds that the law is signifi-
cantly inconsistent with the Fiscal Plan for the 
fiscal year, it shall issue a certification of such 
finding, together with the entity’s reasons for 
such finding. 
(3) NOTIFICATION.—The Oversight Board shall 
send a notification to the Governor and the Legisla-
ture if— 
(A) the Governor submits a law to the 
Oversight Board under this subsection that is 
not accompanied by the estimate required under 
paragraph (2)(A); 
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(B) the Governor submits a law to the 
Oversight Board under this subsection that is 
not accompanied by either a certification de-
scribed in paragraph (2)(B) or (2)(C); or 
(C) the Governor submits a law to the 
Oversight Board under this subsection that is 
accompanied by a certification described in 
paragraph (2)(C) that the law is significantly 
inconsistent with the Fiscal Plan. 
(4) OPPORTUNITY TO RESPOND TO NOTIFICA-
TION.— 
(A) FAILURE TO PROVIDE ESTIMATE OR 
CERTIFICATION.—After sending a notification 
to the Governor and the Legislature under 
paragraph (3)(A) or (3)(B) with respect to a 
law, the Oversight Board may direct the Gov-
ernor to provide the missing estimate or certifi-
cation (as the case may be), in accordance with 
such procedures as the Oversight Board may 
establish. 
(B) SUBMISSION
OF
CERTIFICATION
OF 
SIGNIFICANT
INCONSISTENCY
WITH
FISCAL 
PLAN AND BUDGET.—In accordance with such 
procedures as the Oversight Board may estab-
lish, after sending a notification to the Gov-
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ernor and Legislature under paragraph (3)(C) 
that a law is significantly inconsistent with the 
Fiscal Plan, the Oversight Board shall direct 
the territorial government to— 
(i) correct the law to eliminate the in-
consistency; or 
(ii) provide an explanation for the in-
consistency that the Oversight Board finds 
reasonable and appropriate. 
(5) FAILURE
TO
COMPLY.—If the territorial 
government fails to comply with a direction given by 
the Oversight Board under paragraph (4) with re-
spect to a law, the Oversight Board may take such 
actions as it considers necessary, consistent with this 
Act, to ensure that the enactment or enforcement of 
the law will not adversely affect the territorial gov-
ernment’s compliance with the Fiscal Plan, including 
preventing the enforcement or application of the law. 
(6) 
PRELIMINARY
REVIEW
OF
PROPOSED 
ACTS.—At the request of the Legislature, the Over-
sight Board may conduct a preliminary review of 
proposed legislation before the Legislature to deter-
mine whether the legislation as proposed would be 
consistent with the applicable Fiscal Plan under this 
subtitle, except that any such preliminary review 
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shall not be binding on the Oversight Board in re-
viewing any law subsequently submitted under this 
subsection. 
(b) EFFECT OF APPROVED FISCAL PLAN ON CON-
TRACTS, RULES, AND REGULATIONS.— 
(1) TRANSPARENCY
IN
CONTRACTING.—The 
Oversight Board shall work with a covered terri-
tory’s office of the comptroller or any functionally 
equivalent entity to promote compliance with the ap-
plicable law of any covered territory that requires 
agencies and instrumentalities of the territorial gov-
ernment to maintain a registry of all contracts exe-
cuted, including amendments thereto, and to remit 
a copy to the office of the comptroller for inclusion 
in a comprehensive database available to the public. 
With respect to Puerto Rico, the term ‘‘applicable 
law’’ refers to 2 L.P.R.A. 97. 
(2) AUTHORITY
TO
REVIEW
CERTAIN
CON-
TRACTS.—The Oversight Board may establish poli-
cies to require prior Oversight Board approval of 
certain contracts, including leases, proposed to be 
executed by the territorial government, to ensure 
such proposed contracts are not inconsistent with 
the approved Fiscal Plan. 
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(3) SENSE OF CONGRESS.—It is the sense of 
Congress that any policies established by the Over-
sight Board pursuant to paragraph (2) should be de-
signed to make the government contracting process 
more effective, to increase the public’s faith in this 
process, to make appropriate use of the Oversight 
Board’s time and resources, and to avoid creating 
any additional bureaucratic obstacles to efficient 
contracting. 
(4) AUTHORITY TO REVIEW CERTAIN RULES, 
REGULATIONS, AND EXECUTIVE ORDERS.—The pro-
visions of this paragraph shall apply with respect to 
a rule, regulation, or executive order proposed to be 
issued by the Governor (or the head of any depart-
ment or agency of the territorial government) in the 
same manner as such provisions apply to a contract. 
(5) FAILURE TO COMPLY.—If a contract, rule, 
regulation, or executive order fails to comply with 
policies established by the Oversight Board under 
this subsection, the Oversight Board may take such 
actions as it considers necessary to ensure that such 
contract, rule, executive order or regulation will not 
adversely affect the territorial government’s compli-
ance with the Fiscal Plan, including by preventing 
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the execution or enforcement of the contract, rule, 
executive order or regulation. 
(c) RESTRICTIONS ON BUDGETARY ADJUSTMENTS.— 
(1) SUBMISSIONS OF REQUESTS TO OVERSIGHT 
BOARD.—If the Governor submits a request to the 
Legislature for the reprogramming of any amounts 
provided in a certified Budget, the Governor shall 
submit such request to the Oversight Board, which 
shall analyze whether the proposed reprogramming 
is significantly inconsistent with the Budget, and 
submit its analysis to the Legislature as soon as 
practicable after receiving the request. 
(2) NO
ACTION
PERMITTED
UNTIL
ANALYSIS 
RECEIVED.—The Legislature shall not adopt a re-
programming, and no officer or employee of the ter-
ritorial government may carry out any reprogram-
ming, until the Oversight Board has provided the 
Legislature with an analysis that certifies such re-
programming will not be inconsistent with the Fiscal 
Plan and Budget. 
(3) PROHIBITION ON ACTION UNTIL OVERSIGHT 
BOARD IS APPOINTED.—During the period after a 
territory becomes a covered territory and prior to 
the appointment of all members and the Chair of the 
Oversight Board, such covered territory shall not 
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enact new laws that either permit the transfer of 
any funds or assets outside the ordinary course of 
business or that are inconsistent with the constitu-
tion or laws of the territory as of the date of enact-
ment of this Act, provided that any executive or leg-
islative action authorizing the movement of funds or 
assets during this time period may be subject to re-
view and reversal by the Oversight Board upon ap-
pointment of the Oversight Board’s full membership. 
(d) IMPLEMENTATION OF FEDERAL PROGRAMS.—In 
taking actions under this Act, the Oversight Board shall 
not exercise applicable authorities to impede territorial ac-
tions taken to— 
(1) comply with a court-issued consent decree 
or injunction, or an administrative order or settle-
ment with a Federal agency, with respect to Federal 
programs; 
(2) implement a federally authorized or feder-
ally delegated program; or 
(3) implement territorial laws, which are con-
sistent with a certified Fiscal Plan, that execute 
Federal requirements and standards. 
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SEC. 205. RECOMMENDATIONS ON FINANCIAL STABILITY 
AND MANAGEMENT RESPONSIBILITY. 
(a) IN GENERAL.—The Oversight Board may at any 
time submit recommendations to the Governor or the Leg-
islature on actions the territorial government may take to 
ensure compliance with the Fiscal Plan, or to otherwise 
promote the financial stability, economic growth, manage-
ment responsibility, and service delivery efficiency of the 
territorial government, including recommendations relat-
ing to— 
(1) the management of the territorial govern-
ment’s financial affairs, including economic fore-
casting and multiyear fiscal forecasting capabilities, 
information technology, placing controls on expendi-
tures for personnel, reducing benefit costs, reforming 
procurement practices, and placing other controls on 
expenditures; 
(2) the structural relationship of departments, 
agencies, and independent agencies within the terri-
torial government; 
(3) the modification of existing revenue struc-
tures, or the establishment of additional revenue 
structures; 
(4) the establishment of alternatives for meet-
ing obligations to pay for the pensions of former ter-
ritorial government employees; 
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(5) modifications or transfers of the types of 
services that are the responsibility of, and are deliv-
ered by the territorial government; 
(6) modifications of the types of services that 
are delivered by entities other than the territorial 
government under alternative service delivery mecha-
nisms; 
(7) the effects of the territory’s laws and court 
orders on the operations of the territorial govern-
ment; 
(8) the establishment of a personnel system for 
employees of the territorial government that is based 
upon employee performance standards; 
(9) the improvement of personnel training and 
proficiency, the adjustment of staffing levels, and 
the improvement of training and performance of 
management and supervisory personnel; and 
(10) the privatization and commercialization of 
entities within the territorial government. 
(b) RESPONSE TO RECOMMENDATIONS BY THE TER-
RITORIAL GOVERNMENT.— 
(1) IN
GENERAL.—In the case of any rec-
ommendations submitted under subsection (a) that 
are within the authority of the territorial govern-
ment to adopt, not later than 90 days after receiving 
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the recommendations, the Governor or the Legisla-
ture (whichever has the authority to adopt the rec-
ommendation) shall submit a statement to the Over-
sight Board that provides notice as to whether the 
territorial government will adopt the recommenda-
tions. 
(2) IMPLEMENTATION
PLAN
REQUIRED
FOR 
ADOPTED RECOMMENDATIONS.—If the Governor or 
the Legislature (whichever is applicable) notifies the 
Oversight Board under paragraph (1) that the terri-
torial government will adopt any of the recommenda-
tions submitted under subsection (a), the Governor 
or the Legislature (whichever is applicable) shall in-
clude in the statement a written plan to implement 
the recommendation that includes— 
(A) specific performance measures to de-
termine the extent to which the territorial gov-
ernment has adopted the recommendation; and 
(B) a clear and specific timetable pursuant 
to which the territorial government will imple-
ment the recommendation. 
(3) 
EXPLANATIONS
REQUIRED
FOR
REC-
OMMENDATIONS NOT ADOPTED.—If the Governor or 
the Legislature (whichever is applicable) notifies the 
Oversight Board under paragraph (1) that the terri-
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torial government will not adopt any recommenda-
tion submitted under subsection (a) that the terri-
torial government has authority to adopt, the Gov-
ernor or the Legislature shall include in the state-
ment explanations for the rejection of the rec-
ommendations, and the Governor or the Legislature 
shall submit such statement of explanations to the 
President and Congress. 
SEC. 206. OVERSIGHT BOARD DUTIES RELATED TO RE-
STRUCTURING. 
(a) REQUIREMENTS FOR RESTRUCTURING CERTIFI-
CATION.—The Oversight Board, prior to issuing a restruc-
turing certification regarding an entity (as such term is 
defined in section 101 of title 11, United States Code), 
shall determine, in its sole discretion, that— 
(1) the entity has made good-faith efforts to 
reach a consensual restructuring with creditors; 
(2) the entity has— 
(A) adopted procedures necessary to de-
liver timely audited financial statements; and 
(B) made public draft financial statements 
and other information sufficient for any inter-
ested person to make an informed decision with 
respect to a possible restructuring; 
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(3) the entity is either a covered territory that 
has adopted a Fiscal Plan certified by the Oversight 
Board, a covered territorial instrumentality that is 
subject to a Territory Fiscal Plan certified by the 
Oversight Board, or a covered territorial instrumen-
tality that has adopted an Instrumentality Fiscal 
Plan certified by the Oversight Board; and 
(4)(A) no order approving a Qualifying Modi-
fication under section 601 has been entered with re-
spect to such entity; or 
(B) if an order approving a Qualifying Modi-
fication has been entered with respect to such entity, 
the entity is unable to make its debt payments not-
withstanding the approved Qualifying Modification, 
in which case, all claims affected by the Qualifying 
Modification shall be subject to a title III case. 
(b) 
ISSUANCE
OF
RESTRUCTURING
CERTIFI-
CATION.—The issuance of a restructuring certification 
under this section requires a vote of no fewer than 5 mem-
bers of the Oversight Board in the affirmative, which shall 
satisfy the requirement set forth in section 302(2) of this 
Act. 
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SEC. 207. OVERSIGHT BOARD AUTHORITY RELATED TO 
DEBT ISSUANCE. 
For so long as the Oversight Board remains in oper-
ation, no territorial government may, without the prior ap-
proval of the Oversight Board, issue debt or guarantee, 
exchange, modify, repurchase, redeem, or enter into simi-
lar transactions with respect to its debt. 
SEC. 208. REQUIRED REPORTS. 
(a) ANNUAL REPORT.—Not later than 30 days after 
the last day of each fiscal year, the Oversight Board shall 
submit a report to the President, Congress, the Governor 
and the Legislature, describing— 
(1) the progress made by the territorial govern-
ment in meeting the objectives of this Act during the 
fiscal year; 
(2) the assistance provided by the Oversight 
Board to the territorial government in meeting the 
purposes of this Act during the fiscal year; 
(3) recommendations to the President and Con-
gress on changes to this Act or other Federal laws, 
or other actions of the Federal Government, that 
would assist the territorial government in complying 
with the certified Fiscal Plan; 
(4) the precise manner in which funds allocated 
to the Oversight Board under section 107 and, as 
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applicable, section 104(e) have been spent by the 
Oversight Board during the fiscal year; and 
(5) any other activities of the Oversight Board 
during the fiscal year. 
(b) REPORT ON DISCRETIONARY TAX ABATEMENT 
AGREEMENTS.—Within six months of the establishment 
of the Oversight Board, the Governor shall submit a report 
to the Oversight Board documenting all existing discre-
tionary tax abatement or similar tax relief agreements to 
which the territorial government, or any territorial instru-
mentality, is a party, provided that— 
(1) nothing in this Act shall be interpreted to 
limit the power of the territorial government or any 
territorial instrumentality to execute or modify dis-
cretionary tax abatement or similar tax relief agree-
ments, or to enforce compliance with the terms and 
conditions of any discretionary tax abatement or 
similar tax relief agreement, to which the territorial 
government or any territorial instrumentality is a 
party; and 
(2) the Members and Staff of the Oversight 
Board shall not disclose the contents of the report 
described in this subsection, and shall otherwise 
comply with all applicable territorial and Federal 
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laws and regulations regarding the handling of con-
fidential taxpayer information. 
(c) QUARTERLY REPORTS
OF CASH FLOW.—The 
Oversight Board, when feasible, shall report on the 
amount of cash flow available for the payment of debt 
service on all notes, bonds, debentures, credit agreements, 
or other instruments for money borrowed whose enforce-
ment is subject to a stay or moratorium hereunder, to-
gether with any variance from the amount set forth in the 
debt sustainability analysis of the Fiscal Plan under sec-
tion 201(b)(1)(I). 
SEC. 209. TERMINATION OF OVERSIGHT BOARD. 
An Oversight Board shall terminate upon certifi-
cation by the Oversight Board that— 
(1) the applicable territorial government has 
adequate access to short-term and long-term credit 
markets at reasonable interest rates to meet the bor-
rowing needs of the territorial government; and 
(2) for at least 4 consecutive fiscal years— 
(A) the territorial government has devel-
oped its Budgets in accordance with modified 
accrual accounting standards; and 
(B) the expenditures made by the terri-
torial government during each fiscal year did 
not exceed the revenues of the territorial gov-
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ernment during that year, as determined in ac-
cordance with modified accrual accounting 
standards. 
SEC. 210. NO FULL FAITH AND CREDIT OF THE UNITED 
STATES. 
(a) IN GENERAL.—The full faith and credit of the 
United States is not pledged for the payment of any prin-
cipal of or interest on any bond, note, or other obligation 
issued by a covered territory or covered territorial instru-
mentality. The United States is not responsible or liable 
for the payment of any principal of or interest on any 
bond, note, or other obligation issued by a covered terri-
tory or covered territorial instrumentality. 
(b) SUBJECT TO APPROPRIATIONS.—Any claim to 
which the United States is determined to be liable under 
this Act shall be subject to appropriations. 
SEC. 211. ANALYSIS OF PENSIONS. 
(a) DETERMINATION.—If the Oversight Board deter-
mines, in its sole discretion, that a pension system of the 
territorial government is materially underfunded, the 
Oversight Board shall conduct an analysis prepared by an 
independent actuary of such pension system to assist the 
Oversight Board in evaluating the fiscal and economic im-
pact of the pension cash flows. 
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(b) PROVISIONS
OF ANALYSIS.—An analysis con-
ducted under subsection (a) shall include— 
(1) an actuarial study of the pension liabilities 
and funding strategy that includes a forward looking 
projection of payments of at least 30 years of benefit 
payments and funding strategy to cover such pay-
ments; 
(2) sources of funding to cover such payments; 
(3) a review of the existing benefits and their 
sustainability; and 
(4) a review of the system’s legal structure and 
operational arrangements, and any other studies of 
the pension system the Oversight Board shall deem 
necessary. 
(c) SUPPLEMENTARY INFORMATION.—In any case, 
the analysis conducted under subsection (a) shall include 
information regarding the fair market value and liabilities 
using an appropriate discount rate as determined by the 
Oversight Board. 
SEC. 212. INTERVENTION IN LITIGATION. 
(a) INTERVENTION.—The Oversight Board may in-
tervene in any litigation filed against the territorial gov-
ernment. 
(b) INJUNCTIVE RELIEF.— 
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(1) IN GENERAL.—If the Oversight Board in-
tervenes in a litigation under subsection (a), the 
Oversight Board may seek injunctive relief, including 
a stay of litigation. 
(2) NO
INDEPENDENT
BASIS
FOR
RELIEF.— 
This section does not create an independent basis on 
which injunctive relief, including a stay of litigation, 
may be granted. 
TITLE III—ADJUSTMENTS OF 
DEBTS 
SEC. 301. APPLICABILITY OF OTHER LAWS; DEFINITIONS. 
(a) SECTIONS APPLICABLE TO CASES UNDER THIS 
TITLE.—Sections 101 (except as otherwise provided in 
this section), 102, 104, 105, 106, 107, 108, 112, 333, 
344, 347(b), 349, 350(b), 351, 361, 362, 364(c), 364(d), 
364(e), 364(f), 365, 366, 501, 502, 503, 504, 506, 
507(a)(2), 509, 510, 524(a)(1), 524(a)(2), 544, 545, 546, 
547, 548, 549(a), 549(c), 549(d), 550, 551, 552, 553, 
555, 556, 557, 559, 560, 561, 562, 902 (except as other-
wise provided in this section), 922, 923, 924, 925, 926, 
927, 928, 942, 944, 945, 946, 1102, 1103, 1109, 1111(b), 
1122, 1123(a)(1), 1123(a)(2), 1123(a)(3), 1123(a)(4), 
1123(a)(5), 1123(b), 1123(d), 1124, 1125, 1126(a), 
1126(b), 1126(c), 1126(e), 1126(f), 1126(g), 1127(d), 
1128, 1129(a)(2), 1129(a)(3), 1129(a)(6), 1129(a)(8), 
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1129(a)(10), 1129(b)(1), 1129(b)(2)(A), 1129(b)(2)(B), 
1142(b), 1143, 1144, 1145, and 1146(a) of title 11, 
United States Code, apply in a case under this title and 
section 930 of title 11, United States Code, applies in a 
case under this title; however, section 930 shall not apply 
in any case during the first 120 days after the date on 
which such case is commenced under this title. 
(b) MEANINGS OF TERMS.—A term used in a section 
of title 11, United States Code, made applicable in a case 
under this title by subsection (a), has the meaning given 
to the term for the purpose of the applicable section, un-
less the term is otherwise defined in this title. 
(c) DEFINITIONS.—In this title: 
(1) AFFILIATE.—The term ‘‘affiliate’’ means, in 
addition to the definition made applicable in a case 
under this title by subsection (a)— 
(A) for a territory, any territorial instru-
mentality; and 
(B) for a territorial instrumentality, the 
governing territory and any of the other terri-
torial instrumentalities of the territory. 
(2) DEBTOR.—The term ‘‘debtor’’ means the 
territory or covered territorial instrumentality con-
cerning which a case under this title has been com-
menced. 
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(3) HOLDER OF A CLAIM OR INTEREST.—The 
term ‘‘holder of a claim or interest’’, when used in 
section 1126 of title 11, United States Code, made 
applicable in a case under this title by subsection 
(a)— 
(A) shall exclude any Issuer or Authorized 
Instrumentality of the Territory Government 
Issuer or a corporation, trust or other legal en-
tity that is controlled by the Issuer or an Au-
thorized Territorial Instrumentality of the Ter-
ritory Government Issuer; and 
(B) with reference to Insured Bonds, shall 
mean the monoline insurer insuring such In-
sured Bond to the extent such insurer is grant-
ed the right to vote Insured Bonds for purposes 
of directing remedies or consenting to proposed 
amendments or modifications as provided in the 
applicable documents pursuant to which such 
Insured Bond was issued and insured. 
(4) 
INSURED
BOND.—The 
term 
‘‘Insured 
Bond’’ means a bond subject to a financial guar-
antee or similar insurance contract, policy and/or 
surety issued by a monoline insurer. 
(5) PROPERTY
OF
THE
ESTATE.—The term 
‘‘property of the estate’’, when used in a section of 
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title 11 or 28, United States Code, made applicable 
in a case under this title by subsection (a), means 
property of the debtor. 
(6) STATE.—The term ‘‘State’’ when used in a 
section of title 11, United States Code, made appli-
cable in a case under this title by section 301(a) of 
this Act means State or territory when used in ref-
erence to the relationship of a State to the munici-
pality of the State or the territorial instrumentality 
of a territory, as applicable. 
(7) TRUSTEE.—The term ‘‘trustee’’, when used 
in a section of title 11, United States Code, made 
applicable in a case under this title by subsection 
(a), means the Oversight Board, except as provided 
in section 926 of title 11, United States Code. 
(d) REFERENCE TO TITLE.—Solely for purposes of 
this title, a reference to ‘‘this title’’, ‘‘this chapter’’, or 
words of similar import in a section of title 11, United 
States Code, made applicable in a case under this title 
by subsection (a) or to ‘‘this title’’, ‘‘title 11’’, ‘‘Chapter 
9’’, ‘‘the Code’’, or words of similar import in a section 
of title 28, United States Code, made applicable in a case 
under this title or in the Federal Rules of Bankruptcy 
Procedure made applicable in a case under this title shall 
be deemed to be a reference to this title. 
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(e) 
SUBSTANTIALLY
SIMILAR.—In 
determining 
whether claims are ‘‘substantially similar’’ for the purpose 
of section 1122 of title 11, United States Code, made ap-
plicable in a case under this title by subsection (a), the 
Oversight Board shall consider whether such claims are 
secured and whether such claims have priority over other 
claims. 
(f) OPERATIVE CLAUSES.—A section made applicable 
in a case under this title by subsection (a) that is operative 
if the business of the debtor is authorized to be operated 
is operative in a case under this title. 
SEC. 302. WHO MAY BE A DEBTOR. 
An entity may be a debtor under this title if— 
(1) the entity is— 
(A) a territory that has requested the es-
tablishment of an Oversight Board or has had 
an Oversight Board established for it by the 
United States Congress in accordance with sec-
tion 101 of this Act; or 
(B) a covered territorial instrumentality of 
a territory described in paragraph (1)(A); 
(2) the Oversight Board has issued a certifi-
cation under section 206(b) of this Act for such enti-
ty; and 
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(3) the entity desires to effect a plan to adjust 
its debts. 
SEC. 303. RESERVATION OF TERRITORIAL POWER TO CON-
TROL TERRITORY AND TERRITORIAL INSTRU-
MENTALITIES. 
Subject to the limitations set forth in titles I and II 
of this Act, this title does not limit or impair the power 
of a covered territory to control, by legislation or other-
wise, the territory or any territorial instrumentality there-
of in the exercise of the political or governmental powers 
of the territory or territorial instrumentality, including ex-
penditures for such exercise, whether or not a case has 
been or can be commenced under this title, but— 
(1) a territory law prescribing a method of com-
position of indebtedness or a moratorium law, but 
solely to the extent that it prohibits the payment of 
principal or interest by an entity not described in 
section 109(b)(2) of title 11, United States Code, 
may not bind any creditor of a covered territory or 
any covered territorial instrumentality thereof that 
does not consent to the composition or moratorium; 
(2) a judgment entered under a law described 
in paragraph (1) may not bind a creditor that does 
not consent to the composition; and 
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(3) unlawful executive orders that alter, amend, 
or modify rights of holders of any debt of the terri-
tory or territorial instrumentality, or that divert 
funds from one territorial instrumentality to another 
or to the territory, shall be preempted by this Act. 
SEC. 304. PETITION AND PROCEEDINGS RELATING TO PETI-
TION. 
(a) COMMENCEMENT OF CASE.—A voluntary case 
under this title is commenced by the filing with the district 
court of a petition by the Oversight Board pursuant to 
the determination under section 206 of this Act, provided 
that an otherwise eligible entity may not commence a case 
under this title after the Oversight Board applicable to 
such eligible entity has been terminated in accordance with 
section 209 of this Act. 
(b) OBJECTION TO PETITION.—After any objection 
to the petition, the court, after notice and a hearing, may 
dismiss the petition if the petition does not meet the re-
quirements of this title; however, this subsection shall not 
apply in any case during the first 120 days after the date 
on which such case is commenced under this title. 
(c) ORDER FOR RELIEF.—The commencement of a 
case under this title constitutes an order for relief. 
(d) APPEAL.—The court may not, on account of an 
appeal from an order for relief, delay any case under this 
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title in the case in which the appeal is being taken, nor 
shall any court order a stay of such case pending such 
appeal. 
(e) VALIDITY OF DEBT.—The reversal on appeal of 
a finding of jurisdiction shall not affect the validity of any 
debt incurred that is authorized by the court under section 
364(c) or 364(d) of title 11, United States Code. 
(f) JOINT FILING OF PETITIONS AND PLANS PER-
MITTED.—The Oversight Board, on behalf of debtors, 
under this title may file petitions or submit or modify 
plans of adjustment jointly if the debtors are affiliates; 
provided, however, that nothing in this title shall be con-
strued as authorizing substantive consolidation of the 
cases of affiliated debtors. 
(g) 
JOINT
ADMINISTRATION
OF
AFFILIATED 
CASES.—If the Oversight Board, on behalf of a debtor and 
one or more affiliates, has filed separate cases and the 
Oversight Board, on behalf of the debtor or one of the 
affiliates, files a motion to administer the cases jointly, 
the court may order a joint administration of the cases. 
(h) PUBLIC SAFETY.—This Act may not be construed 
to permit the discharge of obligations arising under Fed-
eral police or regulatory laws, including laws relating to 
the environment, public health or safety, or territorial laws 
implementing such Federal legal provisions. This includes 
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compliance obligations, requirements under consent de-
crees or judicial orders, and obligations to pay associated 
administrative, civil, or other penalties. 
(i) VOTING
ON DEBT ADJUSTMENT PLANS NOT 
STAYED.—Notwithstanding any provision in this title to 
the contrary, including sections of title 11, United States 
Code, incorporated by reference, nothing in this section 
shall prevent the holder of a claim from voting on or con-
senting to a proposed modification of such claim under 
title VI of this Act. 
SEC. 305. LIMITATION ON JURISDICTION AND POWERS OF 
COURT. 
(a) IN GENERAL.—Subject to the limitations set 
forth in titles I and II of this Act, notwithstanding any 
power of the court, unless the Oversight Board consents 
or the plan so provides, the court may not, by any stay, 
order, or decree, in the case or otherwise, interfere with— 
(1) any of the political or governmental powers 
of the debtor; 
(2) any of the property or revenues of the debt-
or; or 
(3) the use or enjoyment by the debtor of any 
income-producing property. 
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SEC. 306. JURISDICTION. 
(a) FEDERAL SUBJECT MATTER JURISDICTION.— 
The district courts shall have— 
(1) except as provided in paragraph (2), origi-
nal and exclusive jurisdiction of all cases under this 
title; and 
(2) except as provided in subsection (b), and 
notwithstanding any Act of Congress that confers 
exclusive jurisdiction on a court or courts other than 
the district courts, original but not exclusive juris-
diction of all civil proceedings arising under this 
title, or arising in or related to cases under this title. 
(b) PROPERTY JURISDICTION.—The district court in 
which a case under this title is commenced or is pending 
shall have exclusive jurisdiction of all property, wherever 
located, of the debtor as of the commencement of the case. 
(c) PERSONAL JURISDICTION.—The district court in 
which a case under this title is pending shall have personal 
jurisdiction over any person or entity. 
(d) REMOVAL, REMAND, AND TRANSFER.— 
(1) REMOVAL.—A party may remove any claim 
or cause of action in a civil action, other than a pro-
ceeding before the United States Tax Court or a 
civil action by a governmental unit to enforce the po-
lice or regulatory power of the governmental unit, to 
the district court for the district in which the civil 
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action is pending, if the district court has jurisdic-
tion of the claim or cause of action under this sec-
tion. 
(2) REMAND.—The district court to which the 
claim or cause of action is removed under paragraph 
(1) may remand the claim or cause of action on any 
equitable ground. An order entered under this sub-
section remanding a claim or cause of action, or a 
decision not to remand, is not reviewable by appeal 
or otherwise by the court of appeals under section 
158(d), 1291 or 1292 of title 28, United States 
Code, or by the Supreme Court of the United States 
under section 1254 of title 28, United States Code. 
(3) TRANSFER.—A district court shall transfer 
any civil proceeding arising under this title, or aris-
ing in or related to a case under this title, to the dis-
trict in which the case under this title is pending. 
(e) APPEAL.— 
(1) An appeal shall be taken in the same man-
ner as appeals in civil proceedings generally are 
taken to the courts of appeals from the district 
court. 
(2) The court of appeals for the circuit in which 
a case under this title has venue pursuant to section 
307 of this title shall have jurisdiction of appeals 
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from all final decisions, judgments, orders and de-
crees entered under this title by the district court. 
(3) The court of appeals for the circuit in which 
a case under this title has venue pursuant to section 
307 of this title shall have jurisdiction to hear ap-
peals of interlocutory orders or decrees if— 
(A) the district court on its own motion or 
on the request of a party to the order or decree 
certifies that— 
(i) the order or decree involves a ques-
tion of law as to which there is no control-
ling decision of the court of appeals for the 
circuit or of the Supreme Court of the 
United States, or involves a matter of pub-
lic importance; 
(ii) the order or decree involves a 
question of law requiring the resolution of 
conflicting decisions; or 
(iii) an immediate appeal from the 
order or decree may materially advance the 
progress of the case or proceeding in which 
the appeal is taken; and 
(B) the court of appeals authorizes the di-
rect appeal of the order or decree. 
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(4) If the district court on its own motion or on 
the request of a party determines that a cir-
cumstance specified in clauses (A), (B), or (C) of 
paragraph (3) exists, then the district court shall 
make the certification described in paragraph (3). 
(5) The parties may supplement the certifi-
cation with a short statement of the basis for the 
certification. 
(6) Except as provided in section 304(d), an 
appeal of an interlocutory order or decree does not 
stay any proceeding of the district court from which 
the appeal is taken unless the district court, or the 
court of appeals in which the appeal is pending, 
issues a stay of such proceedings pending the ap-
peal. 
(7) Any request for a certification in respect to 
an interlocutory appeal of an order or decree shall 
be made not later than 60 days after the entry of 
the order or decree. 
(f) REALLOCATION
OF COURT STAFF.—Notwith-
standing any law to the contrary, the clerk of the court 
in which a case is pending shall reallocate as many staff 
and assistants as the clerk deems necessary to ensure that 
the court has adequate resources to provide for proper 
case management. 
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SEC. 307. VENUE. 
(a) IN GENERAL.—Venue shall be proper in— 
(1) with respect to a territory, the district court 
for the territory or, for any territory that does not 
have a district court, the United States District 
Court for the District of Hawaii; and 
(2) with respect to a covered territorial instru-
mentality, the district court for the territory in 
which the covered territorial instrumentality is lo-
cated or, for any territory that does not have a dis-
trict court, the United States District Court for the 
District of Hawaii. 
(b) ALTERNATIVE VENUE.—If the Oversight Board 
so determines in its sole discretion, then venue shall be 
proper in the district court for the jurisdiction in which 
the Oversight Board maintains an office that is located 
outside the territory. 
SEC. 308. SELECTION OF PRESIDING JUDGE. 
(a) For cases in which the debtor is a territory, the 
Chief Justice of the United States shall designate a dis-
trict court judge to sit by designation to conduct the case. 
(b) For cases in which the debtor is not a territory, 
and no motion for joint administration of the debtor’s case 
with the case of its affiliate territory has been filed or 
there is no case in which the affiliate territory is a debtor, 
the chief judge of the court of appeals for the circuit em-
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bracing the district in which the case is commenced shall 
designate a district court judge to conduct the case. 
SEC. 309. ABSTENTION. 
Nothing in this title prevents a district court in the 
interests of justice from abstaining from hearing a par-
ticular proceeding arising in or related to a case under 
this title. 
SEC. 310. APPLICABLE RULES OF PROCEDURE. 
The Federal Rules of Bankruptcy Procedure shall 
apply to a case under this title and to all civil proceedings 
arising in or related to cases under this title. 
SEC. 311. LEASES. 
A lease to a territory or territorial instrumentality 
shall not be treated as an executory contract or unexpired 
lease for the purposes of section 365 or 502(b)(6) of title 
11, United States Code, solely by reason of the lease being 
subject to termination in the event the debtor fails to ap-
propriate rent. 
SEC. 312. FILING OF PLAN OF ADJUSTMENT. 
(a) EXCLUSIVITY.—Only the Oversight Board, after 
the issuance of a certificate pursuant to section 104(j) of 
this Act, may file a plan of adjustment of the debts of 
the debtor. 
(b) DEADLINE FOR FILING PLAN.—If the Oversight 
Board does not file a plan of adjustment with the petition, 
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the Oversight Board shall file a plan of adjustment at the 
time set by the court. 
SEC. 313. MODIFICATION OF PLAN. 
The Oversight Board, after the issuance of a certifi-
cation pursuant to section 104(j) of this Act, may modify 
the plan at any time before confirmation, but may not 
modify the plan so that the plan as modified fails to meet 
the requirements of this title. After the Oversight Board 
files a modification, the plan as modified becomes the 
plan. 
SEC. 314. CONFIRMATION. 
(a) OBJECTION.—A special tax payer may object to 
confirmation of a plan. 
(b) CONFIRMATION.—The court shall confirm the 
plan if— 
(1) the plan complies with the provisions of title 
11 of the United States Code, made applicable to a 
case under this title by section 301 of this Act; 
(2) the plan complies with the provisions of this 
title; 
(3) the debtor is not prohibited by law from 
taking any action necessary to carry out the plan; 
(4) except to the extent that the holder of a 
particular claim has agreed to a different treatment 
of such claim, the plan provides that on the effective 
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date of the plan each holder of a claim of a kind 
specified in 507(a)(2) of title 11, United States 
Code, will receive on account of such claim cash 
equal to the allowed amount of such claim; 
(5) any legislative, regulatory, or electoral ap-
proval necessary under applicable law in order to 
carry out any provision of the plan has been ob-
tained, or such provision is expressly conditioned on 
such approval; 
(6) the plan is feasible and in the best interests 
of creditors, which shall require the court to consider 
whether available remedies under the non-bank-
ruptcy laws and constitution of the territory would 
result in a greater recovery for the creditors than is 
provided by such plan; and 
(7) the plan is consistent with the applicable 
Fiscal Plan certified by the Oversight Board under 
title II. 
(c) CONFIRMATION FOR DEBTORS WITH A SINGLE 
CLASS OF IMPAIRED CREDITORS.—If all of the require-
ments of section 1129(a) of title 11, United States Code, 
incorporated into this title by section 301 other than sec-
tion 1129(a)(8) are met with respect to a plan— 
(1) with respect to which all claims are substan-
tially similar under section 301(e); 
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(2) that includes only one class of impaired 
claims; and 
(3) that was not accepted by such impaired 
class, 
the court shall confirm the plan notwithstanding the re-
quirements of such section 1129(a)(8) if the plan is fair 
and equitable and does not discriminate unfairly with re-
spect to such impaired class. 
SEC. 315. ROLE AND CAPACITY OF OVERSIGHT BOARD. 
(a) ACTIONS OF OVERSIGHT BOARD.—For the pur-
poses of this title, the Oversight Board may take any ac-
tion necessary on behalf of the debtor to prosecute the 
case of the debtor, including— 
(1) filing a petition under section 304 of this 
Act; 
(2) submitting or modifying a plan of adjust-
ment under sections 312 and 313; or 
(3) otherwise generally submitting filings in re-
lation to the case with the court. 
(b) REPRESENTATIVE OF DEBTOR.—The Oversight 
Board in a case under this title is the representative of 
the debtor. 
SEC. 316. COMPENSATION OF PROFESSIONALS. 
(a) After notice to the parties in interest and the 
United States Trustee and a hearing, the court may award 
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to a professional person employed by the debtor (in the 
debtor’s sole discretion), the Oversight Board (in the 
Oversight Board’s sole discretion), a committee under sec-
tion 1103 of title 11, United States Code, or a trustee 
appointed by the court under section 926 of title 11, 
United States Code— 
(1) reasonable compensation for actual, nec-
essary services rendered by the professional person, 
or attorney and by any paraprofessional person em-
ployed by any such person; and 
(2) reimbursement for actual, necessary ex-
penses. 
(b) The court may, on its own motion or on the mo-
tion of the United States Trustee or any other party in 
interest, award compensation that is less than the amount 
of compensation that is requested. 
(c) In determining the amount of reasonable com-
pensation to be awarded to a professional person, the 
court shall consider the nature, the extent, and the value 
of such services, taking into account all relevant factors, 
including— 
(1) the time spent on such services; 
(2) the rates charged for such services; 
(3) whether the services were necessary to the 
administration of, or beneficial at the time at which 
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100 
for cause shown, shall grant relief from the stay pro-
vided under subsection (b) of this section. 
(f) TERMINATION OF STAY; HEARING.—Forty-five 
days after a request under subsection (e)(2) for relief from 
the stay of any act against property of the Government 
of Puerto Rico under subsection (b), such stay is termi-
nated with respect to the party in interest making such 
request, unless the court, after notice and a hearing, or-
ders such stay continued in effect pending the conclusion 
of, or as a result of, a final hearing and determination 
under subsection (e)(2). A hearing under this subsection 
may be a preliminary hearing, or may be consolidated with 
the final hearing under subsection (e)(2). The court shall 
order such stay continued in effect pending the conclusion 
of the final hearing under subsection (e)(2) if there is a 
reasonable likelihood that the party opposing relief from 
such stay will prevail at the conclusion of such final hear-
ing. If the hearing under this subsection is a preliminary 
hearing, then such final hearing shall be concluded not 
later than thirty days after the conclusion of such prelimi-
nary hearing, unless the thirty-day period is extended with 
the consent of the parties in interest or for a specific time 
which the court finds is required by compelling cir-
cumstances. 
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138 
issued multiple Bonds, for at least some of 
which a dedicated revenue stream has been 
pledged for repayment, separate Pools for such 
Issuer shall be established as follows— 
(i) for each dedicated revenue stream 
that has been pledged for repayment, not 
less than one Secured Pool for Bonds for 
which such revenue stream has been 
pledged, and separate Secured Pools shall 
be established for Bonds of different pri-
ority; and 
(ii) not less than one Pool for all 
other Bonds issued by the Issuer for which 
a dedicated revenue stream has not been 
pledged for repayment. 
(E) The Administrative Supervisor shall 
not place into separate Pools Bonds of the same 
Issuer that have identical rights in security or 
priority. 
(4) Notwithstanding the preceding provisions of 
this subsection, a preexisting voluntary agreement 
may classify Insured Bonds and uninsured bonds in 
different Pools and provide different treatment 
thereof so long as the preexisting voluntary agree-
ment has been agreed to by— 
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