II 114th CONGRESS 1st Session S. 2436 IN THE SENATE OF THE UNITED STATES December 18, 2015 Ms. Warren (for herself, Mr. Reid , Mr. Blumenthal , and Mr. Schumer ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To provide for certain assistance and reforms relating to the territories, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Puerto Rico Emergency Financial Stability Act of 2015 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings and purposes. Sec. 3. Effective date. Sec. 4. Severability. Sec. 5. Definitions. Sec. 6. Automatic stay. 2. Findings and purposes (a) Findings Congress finds the following: (1) The Commonwealth Government is confronted with a dire fiscal emergency and liquidity crisis that imminently threatens the welfare of the people of the Commonwealth, affecting the provision of essential public services including public safety, health care, and education that are needed both to sustain the welfare of the people and the economic ability of the Commonwealth to address any future resolution of debts and legal obligations. (2) A temporary stay on litigation with respect to debt holders for the Commonwealth is essential to provide breathing space to the Commonwealth, creditors, and the Congress to determine an orderly process for the Commonwealth to address any future resolution of legal obligations and to provide the Commonwealth a path to sustainable growth; and thereby, protect the lives of more than 3,500,000 citizens of the United States living in the Commonwealth. (3) The Commonwealth is in a state of fiscal emergency brought on by, among other things, a combination of accumulated operating deficits, cash shortages, management inefficiencies, and excessive borrowing. (4) The Commonwealth Government’s debt is unusually complex, with 18 different but inter-related issuers. (A) There is an even larger number of creditor groups, each of which may have divergent interests. (B) The debt’s unusual complexity will substantially complicate any potential consensual restructuring in the absence of Federal legislation to facilitate the negotiations. (5) This legislation, which includes a stay on litigation by debt holders, can protect essential government services and help the Commonwealth address its liabilities in an orderly fashion, benefitting all stakeholders. (A) A temporary stay on litigation is essential to facilitate an orderly process for stabilizing, evaluating, and comprehensively resolving the Commonwealth’s fiscal crisis. (B) Avoiding a disorderly race to the courthouse will benefit creditors as well as other stakeholders. (C) Furthermore, the stay is only temporary. (b) Purposes The purposes of this Act are to— (1) provide a limited period of time to permit Congress to enact comprehensive relief for the Commonwealth, providing it the necessary tools to address its economic and fiscal crisis; and (2) provide the Commonwealth Government with a tool it needs to address an immediate and imminent crisis that is unprecedented in the history of the United States. 3. Effective date This Act shall take effect on December 18, 2015. 4. Severability If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of this Act, or the application of that provision to persons or circumstances other than those as to which it is held invalid, is not affected thereby. 5. Definitions In this Act: (1) Bond The term Bond means a bond, loan, line of credit, note, or other borrowing title, in physical or dematerialized form, of which— (A) the issuer, borrower, or guarantor is the Commonwealth Government; and (B) the date of issuance or incurrence of debt precedes the date of enactment of this Act. (2) Commonwealth The term Commonwealth means the Commonwealth of Puerto Rico. (3) Commonwealth government The term Commonwealth Government means the government of the Commonwealth, including all its political subdivisions, public agencies, instrumentalities, and public corporations. (4) Court The term court means the United States District Court for the District of Puerto Rico. (5) Other terms Any other term that is used in section 6 and is defined in title 11, United States Code, has the meaning given that term under title 11, United States Code. 6. Automatic stay (a) Except as otherwise provided in this section, the enactment of this Act operates with respect to any claim, debt, or cause of action related to a Bond as a stay, applicable to all entities (as such term is defined in section 101 of title 11, United States Code), of— (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the Commonwealth Government or to recover a claim against the Commonwealth Government; (2) the enforcement, against the Commonwealth Government or against property of the Commonwealth Government, of a judgment; (3) any act to obtain possession of property of the Commonwealth Government or of property from the Commonwealth Government or to exercise control over property of the Commonwealth Government; (4) any act to create, perfect, or enforce any lien against property of the Commonwealth Government; (5) any act to create, perfect, or enforce against property of the Commonwealth Government any lien to the extent that such lien secures a claim; (6) any act to collect, assess, or recover a claim against the Commonwealth Government; and (7) the setoff of any debt owing to the Commonwealth Government against any claim against the Commonwealth Government. (b) The enactment of this Act does not operate as a stay under subsection (a) of this section of the continuation of, including the issuance or employment of process, a judicial, administrative, or other action or proceeding against the Commonwealth Government that was commenced on or before the date of enactment of this Act. (c) Except as provided in subsection (d), (e), or (f), a stay of an act under subsection (a) shall cease to have effect as of April 1, 2016. (d) On motion of a party in interest and after notice and a hearing, the court may grant relief from a stay under subsection (a)— (1) for cause, including the lack of adequate protection of a security interest in property of such party in interest; or (2) with respect to a stay of an act against property under subsection (a), if— (A) the debtor does not have an equity in such property; and (B) such property is not necessary for the Commonwealth to provide essential services. (e) Thirty days after a request under subsection (d) of this section for relief from the stay of any act against property of the Commonwealth Government under subsection (a) of this section, such stay is terminated with respect to the party in interest making such request, unless the court, after notice and a hearing, orders such stay continued in effect pending the conclusion of, or as a result of, a final hearing and determination under subsection (d) of this section. A hearing under this subsection may be a preliminary hearing, or may be consolidated with the final hearing under subsection (d) of this section. The court shall order such stay continued in effect pending the conclusion of the final hearing under subsection (d) of this section if there is a reasonable likelihood that the party opposing relief from such stay will prevail at the conclusion of such final hearing. If the hearing under this subsection is a preliminary hearing, then such final hearing shall be concluded not later than 30 days after the conclusion of such preliminary hearing, unless the 30-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 circumstances. (f) Upon request of a party in interest, the court, with or without a hearing, shall grant such relief from the stay provided under subsection (a) of this section as is necessary to prevent irreparable damage to the secured interest of an entity in property, if such interest will suffer such damage before there is an opportunity for notice and a hearing under subsection (d) or (e) of this section. (g) No order, judgment, or decree entered in violation of this section shall have any force or effect. (h) In any hearing under subsection (d) or (e) concerning relief from a stay— (1) the party requesting such relief has the burden of proof on the issue of the debtor’s equity in property; and (2) the party opposing such relief has the burden of proof on all other issues.