Title: Amendments to PROMESA Act of 2020
Policy area: Government Operations and Politics

Summary:
Amendments to PROMESA Act of 2020
This bill makes changes to the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), including with respect to conflicts of interest by the Puerto Rico Oversight Board, funding, and public access to information regarding public debt of Puerto Rico.
Specifically, the bill, among other things
The Government Accountability Office shall report on expenditures and operation of the oversight board.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6975 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 6975

To amend the Puerto Rico Oversight, Management, and Economic Stability 
              Act or ``PROMESA'', and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 22, 2020

 Mr. Grijalva (for himself, Ms. Velazquez, Mr. Serrano, Mr. Soto, and 
Ms. Ocasio-Cortez) introduced the following bill; which was referred to 
the Committee on Natural Resources, and in addition to the Committee on 
   the Judiciary, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Puerto Rico Oversight, Management, and Economic Stability 
              Act or ``PROMESA'', and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Amendments to PROMESA Act of 2020''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Preventing conflicts of interest by oversight board.
Sec. 4. Federal funding for operation of oversight board and title III 
                            proceedings.
Sec. 5. Funding for essential public services.
Sec. 6. Funding to promote economic growth.
Sec. 7. Funding for operation of the University of Puerto Rico.
Sec. 8. Disclosure by professional persons employed by court order.
Sec. 9. Disclosure by professional persons employed by debtor.
Sec. 10. Access to information.
Sec. 11. GAO report on expenditures and operation of oversight board.
Sec. 12. Puerto Rico Infrastructure Revitalization repealed.
Sec. 13. Territorial relief for unsecured public debt.
Sec. 14. Puerto Rico Public Credit Comprehensive Audit Commission.
Sec. 15. Severability clause.

SEC. 3. PREVENTING CONFLICTS OF INTEREST BY OVERSIGHT BOARD.

    (a) Eligibility for Appointments.--Section 101(f)(2) of the Puerto 
Rico Oversight, Management, and Economic Stability Act (48 U.S.C. 
2121(f)(2)) is amended to read as follows:
            ``(2) is not an officer, elected official, or employee of 
        the territorial government, a candidate for elected office of 
        the territorial government, a former elected official of the 
        territorial government, has never served in any official 
        capacity in the territorial government or in any of the 
        municipal governments or public corporations of the territorial 
        government, or financial institutions owned by the territorial 
        government, and has never been an employee or director of any 
        corporation, company, or institution that sold, purchased, or 
        insured financial assets to or from the territorial 
        government.''.
    (b) Executive Director and Staff Oversight Board.--Section 103 of 
the Puerto Rico Oversight, Management, and Economic Stability Act (48 
U.S.C. 2123) is amended--
            (1) in subsection (a), by inserting after the period at the 
        end the following: ``An individual may not serve as Executive 
        Director if that individual has served in an official capacity 
        in the territorial government, in a municipal government or 
        public corporation of the territorial government, or in a 
        financial institution owned by the territorial government, or 
        has been an employee or director of a corporation, company, or 
        institution that has sold financial assets to, purchased 
        financial assets from, or insured financial assets of the 
        territorial government.''; and
            (2) by amending subsection (c) to read as follows:
    ``(c) Ethics Board.--Not later than 30 days after the date of the 
enactment of the Amendments to PROMESA Act of 2020, in the case of the 
Oversight Board for Puerto Rico, or 30 days after the formation of an 
Oversight Board, for an Oversight Board formed after the date of the 
enactment of this Act, the Oversight Board shall designate an ethics 
board comprised of 3 nonexecutive board members. The ethics board shall 
meet as needed, but not less than once every 6 months, to consider the 
compliance of members, the Executive Director, employees, contractors, 
and subcontractors of the Oversight Board with all applicable Federal 
laws regulating the conduct of the Oversight Board, including conflict 
of interest, financial disclosure, and open government laws.''.
    (c) Authority To Enter Into Contracts.--Section 104(g) of the 
Puerto Rico Oversight, Management, and Economic Stability Act (48 
U.S.C. 2124(g)) is amended by inserting ``The total cost of contracts 
entered into under this subparagraph for any fiscal year may not exceed 
5 percent of the total operating budget of an Oversight Board for that 
fiscal year.'' after the period at the end.
    (d) Ethics.--Section 109 of the Puerto Rico Oversight, Management, 
and Economic Stability Act (48 U.S.C. 2129) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and staff'' after ``all members'' 
                and inserting ``, employees, contractors, and sub-
                contractors'';
                    (B) by inserting ``, without exception'' after 
                ``United States Code''; and
                    (C) after the period at the end, by inserting ``An 
                individual may not serve on an Oversight Board if that 
                individual is in violation of section 208 of title 18, 
                United States Code.''; and
            (2) by adding at the end the following:
    ``(c) Formal Written Statement.--An individual, including an 
individual under consideration for appointment or serving as a member 
of an Oversight Board on the date of the enactment of this subsection, 
may not serve as a member of an Oversight Board or as an Executive 
Director unless the individual--
            ``(1) has issued a formal statement regarding that 
        individual's past and present compliance, and intent of future 
        compliance with all applicable Federal laws regulating the 
        individual's conduct, including conflict of interest, financial 
        disclosure, and open government laws; and
            ``(2) has committed in writing to strictly abide by section 
        208 of title 18, United States Code, and other applicable 
        Federal laws regulating their conduct, including conflict of 
        interest, financial disclosure, and open government laws.
    ``(d) Federal Lobbying.--Section 1913 of title 18, United States 
Code, shall apply to all funds made available to members and staff of 
an Oversight Board without regard to the source of such funds.
    ``(e) Annual Ethics Report.--Not later than May 15 each year, the 
Executive Director and each member of an Oversight Board shall file a 
report with the ethics board. Such annual reports shall--
            ``(1) be posted by the ethics board on the public 
        electronic website of an Oversight Board not later than June 
        1st of each year;
            ``(2) be filed in accordance with--
                    ``(A) the Ethics in Government Act of 1978; and
                    ``(B) the Stop Trading on Congressional Knowledge 
                Act of 2012; and
            ``(3) include information detailing the following with 
        regard to the individual during the year for which the report 
        is filed:
                    ``(A) Income of the individual.
                    ``(B) Honoraria given to the individual.
                    ``(C) Assets held by the individual.
                    ``(D) Financial transactions by the individual.
                    ``(E) Financial liabilities of the individual.
                    ``(F) Positions held by the individual.
                    ``(G) Agreements to which the individual is a part.
                    ``(H) Travel taken by the individual.
                    ``(I) Gifts received by the individual.
                    ``(J) Other details required pursuant to paragraph 
                (2).''.
    (e) Required Reports.--Section 208 of the Puerto Rico Oversight, 
Management, and Economic Stability Act (48 U.S.C. 2148) is amended by 
adding at the end the following:
    ``(d) Annual Ethics Report.--
            ``(1) Annual report required.--Not later than June 30th of 
        each year, the ethics board shall submit a report detailing 
        compliance by members, employees, contractors, and 
        subcontractors of an Oversight Board with section 109 directly 
        to--
                    ``(A) the President;
                    ``(B) the House of Representatives Committee on 
                Natural Resources; and
                    ``(C) the Senate Committee on Energy and Natural 
                Resources.
            ``(2) Confidentiality requirement.--Members, employees, 
        contractors, or subcontractors of an Oversight Board may not--
                    ``(A) view any part of a report compiled or being 
                compiled to comply with this subsection before that 
                report is submitted under paragraph (1);
                    ``(B) delay submission of the report compiled or 
                being compiled to comply with this subsection; and
                    ``(C) attempt to influence the ethics board to make 
                any change to the content of a report compiled or being 
                compiled to comply with this subsection.''.

SEC. 4. FEDERAL FUNDING FOR OPERATION OF OVERSIGHT BOARD AND TITLE III 
              PROCEEDINGS.

    Section 107 of the Puerto Rico Oversight, Management, and Economic 
Stability Act (48 U.S.C. 2127) is amended--
            (1) by striking subsection (b); and
            (2) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Funding.--There is authorized to be appropriated such sums as 
may be necessary to carry out the operations and proceedings of an 
Oversight Board under title III.
    ``(c) Remission of Excess Funds.--If an Oversight Board determines, 
in its sole discretion, that funds made available to an Oversight Board 
for the operations and proceedings of an Oversight Board under title 
III exceed the amount required for those operations and proceedings 
during a fiscal year, the excess funds shall be remitted by the 
Executive Director to the Department of the Treasury not later than 30 
days after the end of the fiscal year.''.

SEC. 5. FUNDING FOR ESSENTIAL PUBLIC SERVICES.

    Section 201(b)(1)(B) of the Puerto Rico Oversight, Management, and 
Economic Stability Act (48 U.S.C. 2141(b)(1)(B)) is amended--
            (1) by inserting ``full'' before ``funding''; and
            (2) by inserting ``, including public education, public 
        safety, health care, and pensions'' before the semicolon.

SEC. 6. FUNDING TO PROMOTE ECONOMIC GROWTH.

    Section 201(b)(1)(J) of the Puerto Rico Oversight, Management, and 
Economic Stability Act (48 U.S.C. 2141(b)(1)(J)) is amended by 
inserting ``, including investments and expenditures to increase the 
creation of new jobs, reduce income inequality, increase gross national 
product and gross domestic product, expand workforce development 
programs, transition informal economic activity to the formal sector, 
increase the median household income, and reduce the number of 
residents living under the poverty level'' before the semicolon.

SEC. 7. FUNDING FOR OPERATION OF THE UNIVERSITY OF PUERTO RICO.

    (a) Amendment.--Title II of the Puerto Rico Oversight, Management, 
and Economic Stability Act (48 U.S.C. 2101 et seq.) is amended by 
adding at the end the following:

``SEC. 213. FUNDING FOR OPERATION OF THE UNIVERSITY OF PUERTO RICO.

    ``Until the termination of the Oversight Board for Puerto Rico 
pursuant to section 209, the Fiscal Plan for the Commonwealth of Puerto 
Rico and the Fiscal Plan for the University of Puerto Rico, developed 
under section 201, shall include an annual allocation of public funds 
to the University of Puerto Rico in an amount calculated under the 
funding formula of Law 2-1966 or $800,000,000, whichever is greater, to 
allow the University of Puerto Rico to fulfill its major role as an 
essential public service and to comply effectively with its obligations 
and accreditation requirements.''.
    (b) Clerical Amendment.--The table of contents of the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the item relating to section 212 
the following:

``Sec. 213. Funding for Operation of the University of Puerto Rico.''.

SEC. 8. DISCLOSURE BY PROFESSIONAL PERSONS EMPLOYED BY COURT ORDER.

    (a) Amendments.--Title III of the Puerto Rico Oversight, 
Management, and Economic Stability Act (48 U.S.C. 2101 et seq.) is 
amended by adding at the end the following:

``SEC. 318. DISCLOSURE BY PROFESSIONAL PERSONS EMPLOYED BY COURT ORDER.

    ``(a) Required Disclosure.--In a voluntary case commenced under 
section 304, an attorney, accountant, appraiser, auctioneer, agent, 
consultant, or other professional person may not be compensated under 
section 316 unless, before making a request for compensation, such a 
professional person submitted a verified statement conforming to the 
disclosure requirements of rule 2014(a) of the Federal Rules of 
Bankruptcy Procedure setting forth the professional person's 
connections with--
            ``(1) the debt, creditors, any other parties in interest;
            ``(2) the attorneys and accountants of any person or entity 
        listed pursuant to paragraph (1);
            ``(3) an Oversight Board;
            ``(4) any person employed by an Oversight Board; and
            ``(5) information on the identity of each entity or person 
        with whom such professional person has a connection.
    ``(b) Supplement.--A professional person referred to in subsection 
(a) shall be required to--
            ``(1) supplement such verified statement as additional 
        relevant information becomes known to such person; and
            ``(2) annually file a notice confirming the accuracy of 
        such statement.
    ``(c) Review.--
            ``(1) Trustee.--The United States Trustee--
                    ``(A) shall review each verified statement 
                submitted pursuant to subsection (a);
                    ``(B) may file with the court comments on such 
                verified statements before the professionals filing 
                such statements seek compensation under section 316; 
                and
                    ``(C) may object to any compensation application 
                filed under section 316 that fails to satisfy the 
                requirements of subsection (d).
            ``(2) Standing.--A person having standing under section 
        1109 of title 11, United States Code, shall also have standing 
        under this section. The district court shall have jurisdiction 
        to adjudicate all matters arising under this section.
    ``(d) Retroactivity.--If, on the date of the enactment of this 
section, a court has entered orders approving compensation under cases 
commenced under section 304, each professional person previously 
awarded compensation shall file a verified statement in accordance with 
subsection (a) not later than 30 days after such person's first request 
for compensation under section 316 occurring after the date of the 
enactment of this section. The court may not delay any proceeding in 
connection with a case commenced under section 304 pending the filing 
of a verified statement under this subsection.
    ``(e) Limitation on Compensation.--In a voluntary case commenced 
under section 304, in connection with the review and approval of 
professional compensation under section 316, the court may deny 
allowance of compensation for services and reimbursement of expenses 
accruing after the date of the enactment of this section to a 
professional person if such professional person--
            ``(1) failed to file statements of connections required by 
        subsection (a) or filed inadequate statements of connections;
            ``(2) is at any time during such professional person's 
        employment in such case not a disinterested person as defined 
        in section 101(14) of title 11, United States Code; or
            ``(3) represents, or holds an interest adverse to, the 
        interest of the estate with respect to the matter on which such 
        professional person is employed, except that the qualification 
        standards for committee professionals shall be those set forth 
        in section 1103(b) of title 11, United States Code.''.
    (b) Clerical Amendment.--The table of contents of the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the item relating to section 317 
the following:

``Sec. 318. Disclosure by professional persons employed by court 
                            order.''.

SEC. 9. DISCLOSURE BY PROFESSIONAL PERSONS EMPLOYED BY DEBTOR.

    (a) Requirements.--Title III of the Puerto Rico Oversight, 
Management, and Economic Stability Act (48 U.S.C. 2101 et seq.) is 
amended--
            (1) in section 301(a)--
                    (A) by inserting ``327,'' after ``112,''; and
                    (B) by inserting ``328, 329,'' before ``333,'';
            (2) in section 316(a) by inserting ``and subject to 
        sections 328 and 329 of title 11, United States Code,'' after 
        ``hearing,''; and
            (3) by adding at the end the following:

``SEC. 319. DISCLOSURE BY PROFESSIONAL PERSONS EMPLOYED BY THE DEBTOR.

    ``(a) Required Disclosure.--
            ``(1) Disclosure required.--An order approving the 
        employment of attorneys, accountants, appraisers, auctioneers, 
        agents, or other professional persons pursuant to section 327 
        of title 11, United States Code (as incorporated into this 
        title by section 301 of this Act), shall be accompanied by a 
        verified statement of the professional person to be employed 
        setting forth the professional person's individual connections 
        (if any) with--
                    ``(A) the debtor, creditors, any other party in 
                interest;
                    ``(B) the attorneys and accountants of any person 
                or entity listed pursuant to paragraph (1);
                    ``(C) an Oversight Board; and
                    ``(D) any person employed by an Oversight Board.
            ``(2) Additional information.--Such statement shall include 
        information on the identify of each entity or person listed in 
        the statement required under paragraph (1).
    ``(b) Prohibition.--No claim of privilege, or of contractual or 
legal confidentiality, shall be allowed relating to any disclosure 
required by subsection (a) or by Rule 2014(a) of the Federal Rules of 
Bankruptcy Procedure.''.
    (b) Clerical Amendment.--The table of contents of Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the item relating to section 318 
the following:

``Sec. 319. Disclosure by professional persons employed by the 
                            debtor.''.
    (c) Effective Date; Application of Amendments.--
            (1) Effective date.--Except as provided in paragraph (2), 
        this section and the amendments made by this section shall take 
        effect on June 30, 2016.
            (2) Special application.--The amendments made by paragraphs 
        (1)(A) and (2) of subsection (a) shall take effect 30 days 
        after the date of the enactment of this section.

SEC. 10. ACCESS TO INFORMATION.

    (a) Amendment.--Title III of the Puerto Rico Oversight, Management, 
and Economic Stability Act (48 U.S.C. 2101 et seq.) is amended by 
adding after section 319 (as added by section 9 of this Act), the 
following:

``SEC. 320. ACCESS TO INFORMATION RELATING TO PUBLIC DEBT OF PUERTO 
              RICO.

    ``(a) Public Documents.--Any document, record, or information 
relating to the public debt of Puerto Rico or any of its territorial 
instrumentalities, including any document relating to any public 
offering, contract, agreement, order, or report detailing how funds 
obtained are spent, or contract or agreements with a creditor, shall 
be--
            ``(1) classified as a public document; and
            ``(2) made accessible to any interested person.
    ``(b) Confidentiality.--Any claim of confidentiality relating to 
information described in subsection (a) by any person, including any 
entity, current or past official of Puerto Rico, or current or past 
official of the Oversight Board for Puerto Rico shall be construed 
narrowly in favor of promoting transparency and the right of the public 
to that information.
    ``(c) Enforcement.--On complaint, the United States District Court 
for the district of Puerto Rico shall have jurisdiction to enjoin the 
Oversight Board for Puerto Rico or any local agency from withholding 
agency records and to order the production of any agency records 
improperly withheld from the complainant. In such a case, the District 
Court shall determine the matter de novo and may examine the contents 
of such agency records in camera to determine whether the records, in 
whole or in part, should be withheld under any exemption set forth in 
section 552(b) of title 5, United States Code (commonly known as the 
`Freedom of Information Act'). The Oversight Board for Puerto Rico or a 
local agency shall bear the burden of proving that an exemption 
applies. The District Court's jurisdiction over these matters shall be 
nonexclusive and without prejudice to any remedies provided under local 
law.
    ``(d) Attorney Fees.--The United States District Court for the 
district of Puerto Rico may assess against the Oversight Board of 
Puerto Rico or a relevant local agency reasonable attorney fees and 
other costs reasonably incurred in any case under this section in which 
the complainant obtained any relief through either--
            ``(1) a judicial order or an enforceable written agreement 
        or consent decree; or
            ``(2) a voluntary or unilateral change in position by the 
        agency, if the complainant's claim is not insubstantial.''.
    (b) Clerical Amendment.--The table of contents of the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the item relating to section 319 
the following:

``Sec. 320. Access to information relating to public debt of Puerto 
                            Rico.''.

SEC. 11. GAO REPORT ON EXPENDITURES AND OPERATION OF OVERSIGHT BOARD.

    (a) Amendment.--Title I of the Puerto Rico Oversight, Management, 
and Economic Stability Act (48 U.S.C. 2101 et seq.) is amended by 
adding at the end the following:

``SEC. 110. REPORT ON OVERSIGHT BOARD.

    ``Not later than 30 days after the last day of each fiscal year, 
the Comptroller General of the United States shall report to the 
President, the House of Representatives Committee on Natural Resources 
and the Senate Committee on Energy and Natural Resources the results of 
an audit completed for the calendar year before the report containing--
            ``(1) details of all matters related to the receipt, 
        disbursement, and use of Federal funds authorized under section 
        4;
            ``(2) an analysis of the expenditures and estimate of the 
        cost to the United States of the operation of an Oversight 
        Board;
            ``(3) the compliance or noncompliance of an Oversight Board 
        with this Act and all other applicable laws; and
            ``(4) recommendations for improving the operations of an 
        Oversight Board.''.
    (b) Clerical Amendment.--The table of contents of the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the item relating to section 109 
the following:

``Sec. 110. Report on Oversight Board.''.

SEC. 12. PUERTO RICO INFRASTRUCTURE REVITALIZATION REPEALED.

    Title V of the Puerto Rico Oversight, Management, and Economic 
Stability Act (48 U.S.C. 2211 et seq.) (relating to Puerto Rico 
Infrastructure Revitalization) is repealed.

SEC. 13. TERRITORIAL RELIEF FOR UNSECURED PUBLIC DEBT.

    (a) In General.--The Puerto Rico Oversight, Management, and 
Economic Stability Act (48 U.S.C. 2101 et seq.) is amended by adding 
after title VII, the following:

                    ``TITLE VIII--TERRITORIAL RELIEF

``SEC. 801. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Collateral.--The term `collateral' means property 
        subject to a security interest.
            ``(2) Financial obligation.--The term `financial 
        obligation' means an obligation validly owed as of the 
        effective date of this title by a qualifying territory or an 
        instrumentality of a qualifying territory that arises from 
        any--
                    ``(A) security issued by a qualifying territory or 
                instrumentality of a qualifying territory;
                    ``(B) loan taken out by a qualifying territory or 
                instrumentality of a qualifying territory;
                    ``(C) repurchase or swap or other derivative 
                contract entered into by a qualifying territory or 
                instrumentality of a qualifying territory; or
                    ``(D) guaranty of any security or loan or 
                repurchase or swap or other derivative contract by a 
                qualifying territory or instrumentality of a qualifying 
                territory; and does not include any--
                            ``(i) claim made by a vendor or service 
                        provider that is owed payment by a qualifying 
                        territory or an instrumentality of a qualifying 
                        territory for a good or service rendered in the 
                        ordinary course of business;
                            ``(ii) claim made by or on behalf of a 
                        current or former employee of a qualifying 
                        territory or an instrumentality of a qualifying 
                        territory that is owed payment for a pension or 
                        other retirement benefit, or for a health care 
                        benefit of any kind; or
                            ``(iii) claim against a qualifying 
                        territory or an instrumentality of a qualifying 
                        territory for a pending tax refund or tax 
                        credit.
            ``(3) Instrumentality.--The term `instrumentality' 
        includes--
                    ``(A) a political subdivision of a qualifying 
                territory;
                    ``(B) a public agency of a qualifying territory;
                    ``(C) a public corporation of a qualifying 
                territory; and
                    ``(D) a banking corporation of a qualifying 
                territory.
            ``(4) Per capita debt of the territory.--The term `per 
        capita debt of a territory' means the quotient obtained by 
        dividing--
                    ``(A) the aggregate amount of the financial 
                obligations of a territory and the instrumentalities of 
                the territory, which shall not include--
                            ``(i) Federal debt; and
                            ``(ii) the unfunded liabilities of a 
                        pension system of the government of the 
                        qualifying territory or any instrumentality of 
                        a qualifying territory for the payment of 
                        pension and other retirement benefits, or 
                        health care benefits of any kind, to current or 
                        former employees of the qualifying territory or 
                        the instrumentality of the qualifying territory 
                        that are owed payment for a pension or other 
                        retirement benefit, or for a health care 
                        benefit of any kind; by
                    ``(B) the population of the territory (based on the 
                most recent data available from the Bureau of the 
                Census).
            ``(5) Proceeds.--The term `proceeds' means amounts--
                    ``(A) acquired from the sale, lease, license, 
                exchange, or other disposition of collateral; and
                    ``(B) collected from, or distributed on account of, 
                collateral.
            ``(6) Qualifying territory.--The term `qualifying 
        territory' means a territory that meets two or more of the 
        following qualifications:
                    ``(A) The population of the territory, based on the 
                most recent data available from the Bureau of the 
                Census, has decreased by more than 5 percent during the 
                10-year period ending on the date of a discharge under 
                section 802.
                    ``(B) The territory received major disaster 
                assistance under the Robert T. Stafford Disaster Relief 
                and Emergency Assistance Act (42 U.S.C. 5121 et seq.) 
                during the 5-year period ending on the date of a 
                discharge under section 802.
                    ``(C) The per capita debt of the territory is 
                greater than $15,000 (as adjusted annually to reflect 
                the percentage change in the Consumer Price Index for 
                all Urban Consumers published by the Bureau of Labor 
                Statistics of the Department of Labor).
            ``(7) Secured financial obligation.--The term `secured 
        financial obligation' means any financial obligation to the 
        extent of the value of any collateral pledged by a qualifying 
        territory or any instrumentality of a qualifying territory to 
        secure the repayment of the financial obligation pursuant to a 
        valid and perfected security interest under applicable 
        territorial law, not including--
                    ``(A) any property acquired or anticipated to be 
                acquired by a qualifying territory or an 
                instrumentality of a qualifying territory after the 
                date of a discharge under section 802, even if that 
                property, when acquired, would have become collateral 
                subject to a security interest; or
                    ``(B) any proceeds, products, offspring, or profits 
                of the collateral not in existence on the date of a 
                discharge under section 802, unless the property 
                constitutes the proceeds of a collateral to which the 
                security interest has attached as of the date of the 
                discharge.
            ``(8) Territory.--The term `territory' has the meaning 
        given such term in section 5(20) excluding subparagraph (E) of 
        such section.
            ``(9) Unsecured financial obligation.--The term `unsecured 
        financial obligation' means any financial obligation to the 
        extent the financial obligation is not a secured financial 
        obligation.

``SEC. 802. RELIEF THROUGH EXERCISE OF THE POWER TO REGULATE COMMERCE, 
              THE BANKRUPTCY POWER, AND THE TERRITORIAL POWER.

    ``(a) In General.--Pursuant to clauses 3 and 4 of section 8 of 
article I and clause 2 of section 3 of article IV of the Constitution 
of the United States, any unsecured financial obligation of a 
qualifying territory or an instrumentality of a qualifying territory 
that is outstanding is discharged on the date on which a resolution 
stating that the qualifying territory wishes to discharge the unsecured 
financial obligations of the qualifying territory and the 
instrumentalities of the qualifying territory--
            ``(1) is adopted by an affirmative vote of more than 50 
        percent of the members of each house of the legislature of that 
        qualifying territory and is signed by the chief executive of 
        the qualifying territory; or
            ``(2) is adopted by an affirmative vote of not less than 
        two-thirds of the members of each house of the legislature of 
        that qualifying territory.
    ``(b) Limitation.--A qualifying territory may discharge unsecured 
financial obligations of the qualifying territory and the 
instrumentalities of the qualifying territory under this title not more 
frequently than once during any 7-year period. Such discharge shall 
prohibit the qualifying territory from discharging, adjusting, or 
impairing, in any manner or degree including in a proceeding under 
title III, a claim made by a vendor or service provider that is owed 
payment by a qualifying territory or an instrumentality of a qualifying 
territory that is owed payment for a pension or other retirement 
benefit, or for a health care benefit of any kind.
    ``(c) No Stay of Actions by Qualifying Territory To Obtain a 
Discharge.--Notwithstanding any other provision of Federal, State, or 
territorial law, the ability of a qualifying territory to obtain a 
discharge under this title shall not be stayed, avoided, or otherwise 
limited by operation of any provision of law or by order of a court, an 
Oversight Board, or an administrative agency in any proceeding.
    ``(d) Secured Financial Obligations Unaffected.--
            ``(1) In general.--Except as provided in paragraph (3) of 
        section 803, nothing in subsection (a) shall affect the 
        validity and enforceability of any financial obligation of a 
        qualifying territory or an instrumentality of a qualifying 
        territory to the extent that the obligation is a secured 
        financial obligation.
            ``(2) Voidability.--Notwithstanding paragraph (1), a 
        secured financial obligation of a qualifying territory or an 
        instrumentality of a qualifying territory may be voidable or 
        otherwise impaired under any other applicable law.
    ``(e) Rule of Construction.--Nothing in this title shall be 
construed to operate as a stay of a pending case brought under title 
III, or of any act of an Oversight Board appointed under this Act, or 
to reinstate financial obligations discharged under this title through 
any procedure under this Act.

``SEC. 803. EFFECT OF DISCHARGE.

    ``A discharge under section 802 shall--
            ``(1) except with regard to actions brought under section 
        804, operate as a permanent stay, applicable to all entities 
        and enforceable by the qualifying territory or an 
        instrumentality of the qualifying territory in any court with 
        jurisdiction over an action described in section 804(a), 
        against the commencement or continuation of an action, the 
        employment of process, or an act to collect, recover, or offset 
        any outstanding financial obligation to the extent that the 
        financial obligation is not a secured financial obligation as 
        of the date of the discharge, regardless of whether discharge 
        of that unsecured financial obligation is waived by the 
        qualifying territory;
            ``(2) void any outstanding judgment entered on an unsecured 
        financial obligation of the qualifying territory or an 
        instrumentality of the qualifying territory to the extent that 
        such judgment is a determination of liability of the qualifying 
        territory or instrumentality; and
            ``(3) if prior to the date of the discharge under section 
        802, the qualifying territory or an instrumentality of the 
        qualifying territory entered into a security agreement securing 
        a financial obligation, prevent the security interest created 
        by the security agreement from attaching to any property 
        acquired by the qualifying territory or an instrumentality of a 
        qualifying territory after the date of the discharge under 
        section 802, except to the extent that such property 
        constitutes the proceeds of collateral to which the security 
        interest had attached as of the date of the discharge.

``SEC. 804. ACTIONS RELATED TO THE STATUS OF FINANCIAL OBLIGATIONS.

    ``(a) In General.--Any financial obligation is conclusively deemed 
to be an unsecured financial obligation except to the extent that the 
holder of that obligation proves that the financial obligation is a 
secured financial obligation in an action for a declaratory judgment 
that is filed--
            ``(1) in--
                    ``(A) an appropriate territorial court of the 
                qualifying territory; or
                    ``(B) a district court of the United States in the 
                qualifying territory; and
            ``(2) not later than 180 days after the date of a discharge 
        under section 802.
    ``(b) Burden of Proof.--In an action described in subsection (a), 
the holder of an obligation shall be required to prove by clear and 
convincing evidence that--
            ``(1) the obligation is a secured financial obligation; and
            ``(2) any revenues generated after a discharge under 
        section 802 are the proceeds of the collateral securing the 
        secured financial obligation.
    ``(c) Exclusive Jurisdiction.--Notwithstanding title 28, United 
States Code, a court described in subsection (a)(1) shall have 
exclusive jurisdiction over an action involving, arising from, or 
related to the status of a financial obligation as a secured or an 
unsecured financial obligation under subsection (a), including--
            ``(1) any action asserting a taking under the fifth article 
        of amendment to the Constitution of the United States; and
            ``(2) any action for declaratory judgment.
    ``(d) Appeals.--Any appeal from an action under this section shall 
be heard solely--
            ``(1) for a case filed under subsection (a)(1)(A), in the 
        appropriate territorial court of the qualifying territory; or
            ``(2) for a case filed under subsection (a)(1)(B), in the 
        appropriate court of appeals of the United States for the 
        qualifying territory.
    ``(e) Costs.--All parties shall bear their own costs in an action 
under this section.
    ``(f) Estoppel.--Any party to an action under this section shall be 
estopped in other actions from claiming that the party has been 
deprived of the property of that party by virtue of--
            ``(1) a discharge under section 802; or
            ``(2) a final ruling in an action described in subsection 
        (a) that a financial obligation of a party is an unsecured 
        financial obligation.
    ``(g) Bar on Avoidance Actions by Creditors.--Notwithstanding any 
other provision of law, a creditor of a qualifying territory or an 
instrumentality of a qualifying territory that has received a discharge 
under this title may not avoid or bring an action to avoid, directly or 
derivatively, any transfer of property made by the qualifying territory 
or instrumentality.
    ``(h) Avoidance of Security Interests by Qualifying Territories and 
Instrumentalities of Qualifying Territories.--
            ``(1) In general.--In addition to the relief provided 
        elsewhere in this Act, a qualifying territory or an 
        instrumentality of a qualifying territory, in a civil action 
        described in paragraph (2), may avoid any security interest--
                    ``(A) securing a financial obligation that would be 
                avoidable by a trustee in a case under chapter 7 of 
                title 11, United States Code, filed on the date of the 
                discharge under section 802 if, notwithstanding 
                sections 101(41) and 109(a) of title 11, United States 
                Code, or any statute of limitations under that title, 
                the qualifying territory or the instrumentality of the 
                qualifying territory were deemed an eligible debtor 
                under such chapter 7; or
                    ``(B) securing a financial obligation to the extent 
                that the amount owed on the financial obligation 
                exceeds the value of any collateral, subject to 
                restrictions under paragraph (3), securing the 
                financial obligation.
            ``(2) Civil actions.--A civil action described in this 
        paragraph shall be--
                    ``(A) brought by a qualifying territory, an 
                instrumentality of a qualifying territory, or a relator 
                on behalf of a qualifying territory or an 
                instrumentality of a qualifying territory not later 
                than 2 years after the date of a discharge under 
                section 802; and
                    ``(B) filed in--
                            ``(i) an appropriate territorial court of 
                        the qualifying territory; or
                            ``(ii) a district court of the United 
                        States for the qualifying territory.
            ``(3) Value of collateral.--For the purpose of determining 
        the value of collateral under paragraph (1)(B), the following 
        shall not be included:
                    ``(A) Any proceeds, products, offspring, or profits 
                of the collateral not in existence on the date of a 
                discharge under section 802, regardless of whether 
                those proceeds, products, off-spring, or profits of the 
                collateral would become collateral subject to a 
                security interest after the date of a discharge under 
                section 802.
                    ``(B) Any property acquired or anticipated to be 
                acquired by a qualifying territory or an 
                instrumentality of a qualifying territory after the 
                date of a discharge under section 802, regardless of 
                whether that property, when acquired, would have become 
                collateral subject to a security interest.
                    ``(C) Any contract right to tax revenues that arise 
                after the date of a discharge under section 802.

``SEC. 805. NOTICE OF DISCHARGE.

    ``(a) In General.--
            ``(1) Responsibilities of a qualifying territory or an 
        instrumentality of a qualifying territory.--After a discharge 
        under section 802, the qualifying territory shall promptly--
                    ``(A) notify the Secretary of the Treasury of the 
                discharge;
                    ``(B) provide actual notice of the discharge and of 
                the right to bring an action under section 804 to--
                            ``(i) any known holder of a financial 
                        obligation as of the date of the discharge;
                            ``(ii) any known indenture trustee for a 
                        financial obligation as of the date of the 
                        discharge;
                            ``(iii) any known agent bank for the loan, 
                        swap, repurchase agreement, or other derivative 
                        of the holder of a financial obligation as of 
                        the date of the discharge; and
                            ``(iv) any known financial guaranty insurer 
                        of a financial obligation as of the date of the 
                        discharge;
                    ``(C) publish a general notice, in each of the 
                governmental languages of the qualifying territory, of 
                the discharge and of the right to bring an action under 
                section 804 in--
                            ``(i) not less than 1 newspaper of general 
                        circulation of each governmental language 
                        published in the qualifying territory; and
                            ``(ii) not fewer than 2 daily newspapers 
                        that each have a national circulation in the 
                        United States and a general audience; and
                    ``(D) publish the general notice described in 
                subparagraph (C) in the newspapers described in 
                subparagraph (C) not less than once each week during 
                the 3-week period beginning on the date on which that 
                general notice is first published.
            ``(2) Notice in the federal register.--On the date on which 
        the Secretary of the Treasury receives the notice described in 
        paragraph (1)(A), the Secretary of the Treasury shall promptly 
        cause to be published in the Federal Register a notice of that 
        discharge and of the right to bring an action under section 
        804.
    ``(b) Adequate Notice.--
            ``(1) Holders of financial obligations.--
                    ``(A) In general.--A holder of a financial 
                obligation shall be presumed to have received adequate 
                notice of a discharge under section 802 if, during the 
                180-day period beginning on the date of a discharge 
                under section 802, a qualifying territory provides 
                actual notice of the discharge and of the right to 
                bring an action under section 804 to--
                            ``(i) the holder of the financial 
                        obligation as of the date of the discharge;
                            ``(ii) an indenture trustee for the 
                        security of the holder as of the date of the 
                        discharge; or
                            ``(iii) an agent bank for the loan, swap, 
                        repurchase agreement, or other derivative of 
                        the holder of a financial obligation as of the 
                        date of the discharge.
                    ``(B) Rebuttable presumption.--The presumption 
                described in subparagraph (A) may be rebutted by clear 
                and convincing evidence that the holder of the 
                financial obligation did not receive adequate evidence.
            ``(2) Notice to a financial guaranty insurer.--A financial 
        guaranty insurer shall be conclusively deemed to have received 
        adequate notice of a discharge under section 802 if, during the 
        180-day beginning on the date of a discharge under section 802, 
        the financial guaranty insurer receives actual notice of the 
        discharge and of the right to bring an action under section 
        804.

``SEC. 806. APPLICABILITY.

    ``This title shall not apply to American Samoa, the Commonwealth of 
the Northern Mariana Islands, Guam, or the Virgin Islands of the United 
States.

``SEC. 807. EFFECTIVE DATE.

    ``This title shall take effect 60 days after the date of the 
enactment of the Amendments to PROMESA Act of 2020.''.
    (b) Clerical Amendment.--The table of contents of the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) is amended by inserting after the items relating to title VII the 
following:

                    ``TITLE VIII--TERRITORIAL RELIEF

``Sec. 801. Definitions.
``Sec. 802. Relief through exercise of the power to regulate commerce, 
                            the bankruptcy power, and the territorial 
                            power.
``Sec. 803. Effect of discharge.
``Sec. 804. Actions related to the status of financial obligations.
``Sec. 805. Notice of discharge.
``Sec. 806. Applicability.
``Sec. 807. Effective date.''.

SEC. 14. PUERTO RICO PUBLIC CREDIT COMPREHENSIVE AUDIT COMMISSION.

    (a) In General.--The Puerto Rico Oversight, Management, and 
Economic Stability Act (48 U.S.C. 2101 note et seq.) (as amended by 
section 13 of this Act) is further amended by adding at the end the 
following:

             ``TITLE IX--PUBLIC CREDIT COMPREHENSIVE AUDIT

``SEC. 901. PUERTO RICO PUBLIC CREDIT COMPREHENSIVE AUDIT COMMISSION.

    ``(a) Definitions.--In this title, the following definitions apply:
            ``(1) Audit actions.--The term `audit actions' means--
                    ``(A) the public debt contracting, refinancing, or 
                renegotiation process;
                    ``(B) the source and intended use of resources; and
                    ``(C) the implementation of programs and projects 
                financed with domestic or foreign debt.
            ``(2) Commission.--The term `Commission' means the Puerto 
        Rico Public Credit Comprehensive Audit Commission.
            ``(3) Comprehensive audit.--The term `comprehensive audit' 
        means a supervisory action taken to--
                    ``(A) examine and evaluate audit actions;
                    ``(B) consider legal and financial aspects, and the 
                economic, social, ecological, national, and municipal 
                impacts of audit actions; and
                    ``(C) using the information obtained after 
                completing the requirements under paragraphs (1) and 
                (2), determine the legitimacy, lawfulness, 
                transparency, quality, efficacy, and efficiency of the 
                audit actions.
            ``(4) Cooperative sector.--The term `cooperative sector' 
        means autonomous associations of persons united voluntarily to 
        meet their common needs and aspirations through a jointly owned 
        and democratically-controlled enterprise.
    ``(b) Establishment; Dissolution.--There is established an 
independent commission to be known as the `Puerto Rico Public Credit 
Comprehensive Audit Commission'. The Commission--
            ``(1) shall be created as an independent entity within the 
        territorial government;
            ``(2) shall not be a department, agency, establishment, or 
        instrumentality of the Federal Government; and
            ``(3) shall dissolve after the Commission completes or 
        fulfills each duty of the Commission under subsection (c) and 
        issues the final report of the Commission under subsection (g).
    ``(c) Duties.--The Commission shall--
            ``(1) order a comprehensive audit of all public debt of 
        Puerto Rico and its instrumentalities, in conformity with the 
        Government Accountability Office's Generally Accepted 
        Government Auditing Standards (also known as the `Yellow 
        Book'); and
            ``(2) audit all public debt issued during the period 
        beginning on the first day of fiscal year 1972 and ending on 
        the date of enactment of this section, including--
                    ``(A) a current and complete accounting as to the 
                amount of outstanding indebtedness as of the date of 
                the enactment of this section;
                    ``(B) an analysis of the sustainability of 
                outstanding debts;
                    ``(C) an assessment of how rules, policies, and 
                controls over the use of debt can be improved upon to 
                ensure that in the future Puerto Rico's debt load is 
                sustainable and issued in a manner that effectively 
                protects the legal and financial interests of the 
                Government of Puerto Rico; and
                    ``(D) an investigation into any irregularities, 
                apparent or alleged, wherein probable cause of 
                malfeasance or misfeasance is found.
    ``(d) Organizational Responsibilities.--The Commission shall--
            ``(1) adopt internal bylaws as appropriate for the proper 
        operations and fulfillment of the objectives of the Commission;
            ``(2) designate and hire a minimum number of regular 
        personnel required to carry out the duties and fulfill the 
        objectives of the Commission;
            ``(3) start its examination of the debt from the most 
        recently issued bonds and review issuances in reverse 
        chronological order; and
            ``(4) hold a regular meeting not less than once each month.
    ``(e) Authority.--
            ``(1) In general.--To carry out its duties under this 
        section (c), the Commission--
                    ``(A) may audit, and ensure the transparency of, 
                the indebtedness process of Puerto Rico and each 
                instrumentality of the Commonwealth of Puerto Rico; and
                    ``(B) shall have primary jurisdiction to intervene, 
                have knowledge of, and conduct, on the initiative of 
                the Commission, any investigation on any matter or 
                dispute relating to any indebtedness process described 
                in subparagraph (A).
            ``(2) Subpoena power.--
                    ``(A) In general.--The Commission may issue 
                subpoenas requiring the attendance and testimony of 
                witnesses and the production of books, records, 
                correspondence, memoranda, papers, documents, 
                electronic files, metadata, tapes, and materials of any 
                nature relating to any matter under investigation by 
                the Commission. Jurisdiction to compel the attendance 
                of witnesses and the production of such materials shall 
                be governed by 32 L.P.R.A. App. III. R. 4. 7., as 
                amended.
                    ``(B) Failure to obey a subpoena.--If a person 
                refuses to obey a subpoena issued under subparagraph 
                (A), the Commission may apply to the court of first 
                instance of Puerto Rico. Any failure to obey the order 
                of the court may be punished by the court in accordance 
                with civil contempt laws of Puerto Rico.
                    ``(C) Service of subpoenas.--The subpoena of the 
                Commission shall be served in the manner provided by 
                the rules of procedure for the courts of Puerto Rico, 
                the Rules of Civil Procedure of Puerto Rico.
    ``(f) Appointment of Members.--
            ``(1) In general.--Not later than 180 days after the date 
        of the enactment of this section, the Governor of Puerto Rico 
        shall appoint the following individuals to serve on the 
        Commission:
                    ``(A) One professor of economics from any public 
                higher education institution located in Puerto Rico.
                    ``(B) One professor of finance from any public 
                higher education institution located in Puerto Rico.
                    ``(C) One professor of accounting from any public 
                higher education institution located in Puerto Rico.
                    ``(D) One professor of statistics from any public 
                higher education institution located in Puerto Rico.
                    ``(E) One professor of law from any public higher 
                education institution located in Puerto Rico.
                    ``(F) One professor of sociology from any public 
                higher education institution located in Puerto Rico.
                    ``(G) One representative of the labor union sector 
                in Puerto Rico.
                    ``(H) One representative of the business community 
                in Puerto Rico, with preference given to a 
                representative from a small- or medium-sized business 
                located in Puerto Rico.
                    ``(I) One representative of the cooperative sector 
                in Puerto Rico.
                    ``(J) One individual who is a certified translator 
                or interpreter of English and Spanish.
            ``(2) Failure to appoint members.--If the Governor of 
        Puerto Rico fails to appoint any member of the Commission in 
        accordance with paragraph (1), not later than 360 days after 
        the date of the enactment of the Amendments to PROMESA Act of 
        2020, the President of the Senate of Puerto Rico and the 
        Speaker of the House of Representatives of Puerto Rico shall 
        jointly appoint any member who has not been appointed.
    ``(g) Chairperson.--
            ``(1) In general.--After the members of the Commission are 
        appointed under subsection (f), the members shall elect one 
        member to serve as the Chairperson of the Commission.
            ``(2) Duties.--The Chairperson shall--
                    ``(A) call and preside over meetings of the 
                Commission;
                    ``(B) serve as the legal representative of the 
                Commission; and
                    ``(C) have the determinative vote in the case of a 
                tie vote of the Commission.
    ``(h) Term.--Members of the Commission shall be appointed for the 
life of the Commission.
    ``(i) Vacancies.--Any vacancy in the Commission shall not affect 
the powers of the Commission and shall be filled in the same manner as 
the original appointment or election.
    ``(j) Reports.--Not later than 180 days after the date of enactment 
of this section, and not later than every 180 days thereafter, the 
Commission shall file with the President, the Committee on Natural 
Resources of the House of Representatives, the Committee on Energy and 
Natural Resources of the Senate, the Governor of Puerto Rico, and the 
legislature of Puerto Rico, and make publicly available, a report 
describing the progress of the Commission in carrying out the duties of 
the Commission under subsection (c).
    ``(k) Funding.--There is authorized to be appropriated such sums as 
may be necessary to carry out this title.''.
    (b) Clerical Amendment.--The table of contents for the Puerto Rico 
Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 
seq.) (as amended by this Act) is further amended by adding at the end 
the following:

             ``TITLE IX--PUBLIC CREDIT COMPREHENSIVE AUDIT

``Sec. 901. Puerto Rico Public Credit Comprehensive Audit 
                            Commission.''.

SEC. 15. SEVERABILITY CLAUSE.

    If any provision of this Act or an amendment made by this Act, or 
the application of a provision or amendment to any person or 
circumstance, is held to be invalid for any reason in any court of 
competent jurisdiction, the remainder of this Act and amendments made 
by this Act, and the application of the provisions and amendment to any 
other person or circumstance, shall not be affected.
                                 <all>