I 115th CONGRESS 2d Session H. R. 6827 IN THE HOUSE OF REPRESENTATIVES September 13, 2018 Ms. Velázquez (for herself, Mr. Cicilline , Ms. Clarke of New York , Ms. DeLauro , Mr. Espaillat , Mr. Gallego , Mr. Grijalva , Mr. Gutiérrez , Ms. Jayapal , Mr. Johnson of Georgia , Mr. Khanna , Mr. McGovern , Ms. Schakowsky , Mr. Serrano , Mr. Sires , Mr. Soto , Mr. Thompson of Mississippi , Ms. Maxine Waters of California , and Mr. Welch ) introduced the following bill; which was referred to the Committee on Natural Resources , and in addition to the Committees on the Judiciary , and the Budget , 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 provide the option of discharging certain unsecured financial obligations of self-governing territories of the United States.

1. Short title; table of contents (a) Short title This Act may be cited as the United States Territorial Relief Act of 2018 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Findings. TITLE I—Territorial Relief Sec. 101. Relief through exercise of the power to regulate commerce, the bankruptcy power, and the territorial power. Sec. 102. Effect of discharge. Sec. 103. Actions relating to the status of financial obligations. Sec. 104. Notice of discharge. Sec. 105. Effective date. TITLE II—Puerto Rico Debt Restructuring Compensation Fund Sec. 201. Purpose. Sec. 202. Definitions. Sec. 203. Administration. Sec. 204. Determination of eligibility for compensation. Sec. 205. Puerto Rico Debt Restructuring Compensation Fund. Sec. 206. Regulations. Sec. 207. Sunset. TITLE III—Puerto Rico Public Credit Comprehensive Audit Commission Sec. 301. Definitions. Sec. 302. Establishment; dissolution. Sec. 303. Reports. Sec. 304. Duties. Sec. 305. Authority of the Commission. Sec. 306. Membership. Sec. 307. Powers and responsibilities. Sec. 308. Provision of requested information. Sec. 309. Access to information. Sec. 310. Funding. TITLE IV—Severability Sec. 401. Severability. 2. Definitions In this Act: (1) Attachment The term attachment means the time at which a security interest becomes enforceable against a debtor with respect to collateral. (2) Collateral The term collateral means property subject to a security interest. (3) Financial guaranty insurance The term financial guaranty insurance means a surety bond, an insurance policy, an indemnity contract, or any similar guaranty, under which loss is payable on proof of a financial loss to an insured claimant, an obligee, or an indemnitee as a result of the failure of any obligor on or issuer of any debt instrument or other monetary obligation to pay, when due, principal, interest, or any other amount due or payable with respect to that instrument or obligation, if that failure to pay is the result of a financial default, a financial insolvency, or a discharge in bankruptcy. (4) Financial guaranty insurer The term financial guaranty insurer means a party that is obligated as a surety, insurer, or indemnitor under a financial guaranty insurance contract. (5) Financial obligation The term financial obligation — (A) means an obligation validly owed as of the effective date of this Act by a qualifying territory or an instrumentality of a qualifying territory thereof that arises from any— (i) security issued by a qualifying territory or instrumentality of a qualifying territory; (ii) loan taken out by a qualifying territory or instrumentality of a qualifying territory; (iii) repurchase or swap or other derivative contract entered into by a qualifying territory or instrumentality of a qualifying territory; or (iv) 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 (B) 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. (6) 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. (7) Per capita debt of a 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) the Federal debt; or (ii) the unfunded liabilities of a pension system of the government of the qualifying territory or its instrumentalities for the payment of pension and other retirement benefits, or health care benefits of any kind, to current or former employees of a qualifying territory or its instrumentalities of a qualifying territory that is 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). (8) Proceeds The term proceeds means— (A) whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral; or (B) whatever is collected on, or distributed on account of, collateral. (9) Qualifying territory The term qualifying territory means a territory that meets not less than two 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 101. (B) The territory has 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 101. (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). (10) Security agreement The term security agreement means an agreement or resolution that creates or provides for a security interest. (11) 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 an 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 101, 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 101, unless the property constitutes the proceeds of collateral to which the security interest has attached as of the date of the discharge. (12) Security interest The term security interest — (A) means an interest in property, including a lien or other pledge of property, that secures a payment or the performance of an obligation; and (B) does not include a pledge of the full faith and credit of a qualifying territory or its instrumentality, even in the case that such pledge includes a promise of all available resources of the qualifying territory or its instrumentality. (13) Territory The term territory — (A) means any self-governing Federal territory; and (B) includes— (i) the Commonwealth of Puerto Rico; (ii) Guam; (iii) the Commonwealth of the Northern Mariana Islands; (iv) the United States Virgin Islands; and (v) American Samoa. (14) Unsecured financial obligation The term unsecured financial obligation means any financial obligation to the extent the financial obligation is not a secured financial obligation. 3. Findings Congress finds that— (1) millions of citizens of the United States reside in territories of the United States; (2) the Federal Government owes a special duty of care and stewardship to the citizens of territories of the United States because— (A) historically, Federal administration of these territories was often wanting and many residents of the territories faced discriminatory treatment by the Federal Government; (B) the economies of these territories face special constraints, including diminishment of property tax bases because of large, untaxed, Federal land holdings; and (C) these territories lack the benefits of many Federal programs, such as Supplemental Security Income, the Earned Income Tax Credit, and full access to Medicaid; (3) prolonged economic downturns, declines in population, and natural disasters have resulted in some territories of the United States and the instrumentalities of those territories having unsupportable debt burdens on financial obligations, which cannot realistically be repaid without imposing undue hardship on the citizens and residents of those territories; (4) disaster recovery funds that are provided by the Federal Government should be used for disaster recovery and not for direct or indirect debt payments; (5) unsecured creditors of financially distressed territories and instrumentalities of those territories have little prospect of recovery upon default because of— (A) the severe indebtedness of those territories; and (B) the lack of effective remedies for unsecured creditors against those territories and the instrumentalities of those territories; and (6) the people of the Commonwealth of Puerto Rico deserve to know about the social, political, and legal factors associated with the amount of the public debt of the Commonwealth of Puerto Rico accrued over the past 5 decades, and the Federal Government has a responsibility to support efforts to obtain those answers, including public or private efforts to conduct a comprehensive audit of the public debt of the Commonwealth of Puerto Rico. I Territorial relief 101. 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, 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 1/2 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 2/3 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, and such discharge shall prohibit the qualifying territory from discharging, adjusting, or impairing, in any manner or degree including in a proceeding under title III of PROMESA ( 48 U.S.C. 2161 et seq.), a debt described in section 2(5)(B)(ii). (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 Act shall not be stayed, avoided, or otherwise limited by operation of any provision of law or by order of a court, oversight board, or administrative agency in any proceeding. (d) Secured financial obligations unaffected (1) In general Except as provided in paragraphs (3) and (4) of section 102, 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 Act shall be construed to operate as a stay of a pending case brought under title III of PROMESA ( 48 U.S.C. 2161 et seq.), or of any act of an oversight board appointed under that Act, or to reinstate financial obligations discharged under this Act through any procedure under PROMESA ( 48 U.S.C. 2101 et seq.). 102. Effect of discharge A discharge under section 101 shall— (1) except in regard to actions brought under section 103, operate as a permanent stay, applicable to all entities and enforceable by the qualifying territory or an instrumentality thereof in any court with jurisdiction over an action described in section 103(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 instrumentality thereof to the extent that such judgment is a determination of liability of the qualifying territory or instrumentality; (3) if prior to the date of the discharge under section 101, 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 thereof after the date of the discharge under section 101, 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. 103. Actions relating 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 101. (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 101 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 Amendment of 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 in— (1) for a case filed under subsection (a)(1)(A), the appropriate territorial court of the qualifying territory; or (2) for a case filed under subsection (a)(1)(B), 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 101; 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 101 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 chapter 7 of title 11, United States Code; 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 instrumentality of a qualifying territory not later than 2 years after the date of a discharge under section 101; and (B) filed in— (i) an appropriate territorial court of the qualifying territory; or (ii) a district court of the United States in 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 101, regardless of whether those proceeds, products, offspring, or profits of the collateral would become collateral subject to a security interest after the date of a discharge under section 101. (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 101, 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 101. 104. Notice of discharge (a) In general (1) Responsibilities of a qualifying territory or instrumentality of a qualifying territory After a discharge under section 101, 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 103 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 103 in— (i) not less than 1 newspaper of general circulation of each governmental language published in the qualifying territory; and (ii) not less than 2 daily newspapers that each have a national circulation 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 103. (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 101 if, during the 180-day period beginning on the date of a discharge under section 101, a qualifying territory provides actual notice of the discharge and of the right to bring an action under section 103 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 101 if, during the 180-day period beginning on the date of a discharge under section 101, the financial guaranty insurer receives actual notice of the discharge and of the right to bring an action under section 103. 105. Effective date This title shall take effect on the date that is 60 days after the date of enactment of this Act. II Puerto Rico Debt Restructuring Compensation Fund 201. Purpose Pursuant to clause 1, section 8 of article I and clause 2, section 3 of article IV of the Constitution of the United States, the purpose of this title is to provide compensation to certain entities and natural persons that suffer economic losses due to a discharge under section 101 of financial obligations owed to those entities and natural persons by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico. 202. Definitions In this title— (1) the term collateral source compensation — (A) means, on the date of a determination under section 204(b)(2)(A), compensation that a claimant has received or is entitled to receive, from a source other than the Fund, as a result of the discharge of the debt of the Commonwealth of Puerto Rico and the instrumentalities of the Commonwealth of Puerto Rico under section 101; and (B) includes financial guaranty insurance; (2) the term Fund means the Puerto Rico Debt Restructuring Compensation Fund established under section 205(a); (3) the term ineligible investment company means an investment company, as defined in section 3 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3 ), that was not registered under section 8 of that Act ( 15 U.S.C. 80a–8 ) on the date on which the investment company made an investment in a financial obligation of the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico; (4) the term Puerto Rico public pension plan means a pension system of the government of the Commonwealth of Puerto Rico; and (5) the term Special Master means the Special Master appointed under section 203(a). 203. Administration (a) Special Master (1) Appointment (A) In general Not later than 60 days after the date of a discharge of the debt of the Commonwealth of Puerto Rico and the instrumentalities of the Commonwealth of Puerto Rico under section 101, the Chief Justice of the Supreme Court of the Commonwealth of Puerto Rico shall appoint a Special Master to administer the compensation program established under this title. (B) Disqualification A Special Master may not have a relationship to a party, attorney, action, or court that would require the disqualification of a judge under section 455 of title 28, United States Code, unless, after the date on which the Special Master discloses any potential ground for disqualification, the party, attorney, action, or court with which the Special Master has a relationship, with the approval of the Chief Justice of the Supreme Court of the Commonwealth of Puerto Rico, consents to the appointment of the Special Master. (2) Status The Special Master shall be considered to be an official of the Commonwealth of Puerto Rico. (3) Vacancy (A) In general In the event of the death, resignation, incapacity, or other vacancy in the position of the Special Master, the position shall be filled in the manner described in paragraph (1). (B) Federal Vacancies Reform Act Sections 3345 through 3349d of title 5, United States Code, (commonly known as the Federal Vacancies Reform Act of 1998 ) shall not apply to vacancies in the position of Special Master. (b) Authorization of appropriations There are authorized to be appropriated such sums as may be necessary to pay the administrative and support costs for the Special Master in carrying out this title. 204. Determination of eligibility for compensation (a) Filing of claim (1) In general A claimant may file a claim for compensation under this title with the Special Master. The claim shall— (A) be on the form developed under paragraph (2); (B) state the factual basis, as certified by the claimant, for eligibility for compensation and the amount of compensation sought; and (C) provide evidence that corroborates the eligibility of the claimant for compensation and the amount of compensation sought. (2) Claim form (A) In general The Special Master shall develop a claim form that claimants shall use when submitting claims under paragraph (1). The Special Master shall ensure that such form can be filed electronically. (B) Contents The form developed under subparagraph (A) shall request information including information regarding— (i) economic loss that the claimant suffered as a result of the discharge of the debt of the Commonwealth of Puerto Rico and the instrumentalities of the Commonwealth of Puerto Rico under section 101; (ii) collateral source compensation the claimant has received or is entitled to receive as a result of the discharge described in clause (i); and (iii) availability of financial guaranty insurance coverage to indemnify the claimant. (C) Penalty A claim submitted on the form developed under subparagraph (A) shall— (i) be submitted under penalty of perjury; and (ii) include an attestation by the claimant that the claimant has not willfully attempted to evade or defeat the eligibility restrictions described in subsection (c). (b) Review and determination (1) Review The Special Master shall review a claim submitted under subsection (a) and determine— (A) whether the claimant is an eligible person under subsection (c); and (B) with respect to a claimant determined to be an eligible person under subsections (c)(2)(A) and (c)(3)— (i) the extent of the economic loss to the claimant; and (ii) the amount of compensation to which the claimant is entitled based on the economic losses to the claimant, the facts of the claim, and the individual circumstances of the claimant, including— (I) the strength of the ties to the Commonwealth of Puerto Rico, as defined in regulations promulgated under section 206, of the claimant; (II) the financial need, as defined in regulations promulgated under section 206, of the claimant; (III) the price at which the claimant obtained that claim against the Commonwealth of Puerto Rico or the instrumentality of the Commonwealth of Puerto Rico; and (IV) the date on which the claimant obtained the claim against the Commonwealth of Puerto Rico or the instrumentality of the Commonwealth of Puerto Rico; and (C) with respect to a claimant determined to be an eligible person under subsection (c)(2)(B) and (c)(3)— (i) the extent of the economic loss to the claimant; and (ii) the amount of compensation to which the claimant is entitled based on the economic loss to the claimant, the facts of the claim, and the individual circumstances of the claimant, including— (I) the financial need, as defined in regulations promulgated under section 206, of the claimant; (II) the price at which the claimant obtained that claim against the Commonwealth of Puerto Rico or the instrumentality of the Commonwealth of Puerto Rico; and (III) the date on which the claimant obtained the claim against the Commonwealth of Puerto Rico or the instrumentality of the Commonwealth of Puerto Rico. (2) Determination (A) In general Not later than 120 days after that date on which a claim is determined to be substantially complete by the Special Master, the Special Master shall complete a review, make a determination, and provide written notice to the claimant, with respect to the matters that were the subject of the claim under review. Such a determination shall be final and not subject to judicial review. (B) Rights of claimants (i) Hearings Before the date on which a determination described in subparagraph (A) is made, a claimant in a review under paragraph (1) shall have the right to an in-person hearing conducted by the Special Master. (ii) Waiver A claimant in a review under paragraph (1) may waive the right to a hearing described in clause (i). (3) Collateral source compensation The Special Master shall reduce the amount of compensation determined under paragraph (2) by the amount of collateral source compensation. (c) Eligibility (1) In general A claimant shall be determined to be an eligible person for purposes of this subsection if the Special Master determines that such claimant— (A) is a person described in paragraph (2); and (B) meets the requirements of paragraph (3). (2) Eligible persons (A) Eligible persons in the Commonwealth of Puerto Rico (i) In general A claimant is a person described in this subparagraph if the claimant is— (I) a natural person who— (aa) was domiciled in the Commonwealth of Puerto Rico and was a citizen or lawful permanent resident of the United States on September 20, 2017, regardless of whether that natural person was physically present in the Commonwealth of Puerto Rico at that time; (bb) is a beneficial owner of a security issued by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico; and (cc) became a beneficial owner of the security described in item (bb) not later than September 20, 2017; (II) a bank or credit union that did business solely in the Commonwealth of Puerto Rico on September 20, 2017; (III) a worker association or workplace association in the Commonwealth of Puerto Rico; (IV) a Puerto Rico public pension plan; (V) a business, of which the principal place of business was in the Commonwealth of Puerto Rico on September 20, 2017; or (VI) subject to clause (ii), any other person that the Special Master determines is an eligible person. (ii) Exclusions A claimant is not a person described in this subparagraph if the claimant is— (I) an ineligible investment company; (II) a financial guaranty insurer; (III) as defined in section 101 of title 11, United States Code— (aa) a party to a master netting agreement; (bb) a party to a repurchase agreement; or (cc) a party to a swap agreement; (IV) any other financial institution with total consolidated assets greater than $2,000,000,000; (V) a person that owns a share in an unregistered investment fund that owns a security issued by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico; (VI) a person that acquired a claim against the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico during the period beginning on the date that is 180 days before the date of a discharge under section 101, unless that claim was acquired through devise, descent, or a divorce settlement; (VII) the Special Master; or (VIII) any other person that the Special Master determines is not an eligible person. (B) Eligible persons not in Puerto Rico (i) In general A claimant is a person described in this subparagraph if the claimant was not domiciled in the Commonwealth of Puerto Rico on September 20, 2017, and the claimant is— (I) a worker association or workplace association; (II) a pension plan; (III) a natural person who— (aa) is a beneficial owner of a security issued by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico; and (bb) became a beneficial owner of that security not later than September 20, 2017; (IV) subject to clause (iii), an open-end mutual fund; or (V) subject to clause (ii), any other person that the Special Master determines is an eligible person. (ii) Exclusions A claimant is not a person described in this subparagraph if the claimant was not domiciled in the Commonwealth of Puerto Rico on September 20, 2017, and the claimant is— (I) an ineligible investment company; (II) a closed-end company, as defined in section 5 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–5 ); (III) a financial guaranty insurer; (IV) as defined in section 101 of title 11, United States Code— (aa) a party to a master netting agreement; (bb) a party to a repurchase agreement; or (cc) a party to a swap agreement; (V) any other financial institution with total consolidated assets greater than $2,000,000,000; (VI) a person that owns a share in an unregistered investment fund that owns a security issued by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico; (VII) a person that acquired a claim against the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico during the period beginning on the date that is 180 days before the date of a discharge under section 101, unless that claim was acquired through devise, descent, or a divorce settlement; (VIII) the Special Master; or (IX) any other person that the Special Master determines is not an eligible person. (iii) Eligibility of open-end mutual funds A claimant that is an open-end mutual fund is not an eligible person described in this subparagraph unless the manager of that open-end mutual fund pledges to waive the fee of that manager for any compensation the open-end mutual fund receives under this title. (3) Requirements for beneficial owners of securities A person that is a beneficial owner of a security issued by the Commonwealth of Puerto Rico or an instrumentality of the Commonwealth of Puerto Rico may file a claim under subsection (a) if the person, as of the date on which the claim is filed— (A) has continuously held that security during the period beginning on September 19, 2017, and ending on the date on which the claim is filed; and (B) the claim is submitted not later than 180 days after the date of a discharge of the debt of the Commonwealth of Puerto Rico and the instrumentalities of the Commonwealth of Puerto Rico under section 101. (d) Compensation (1) In general A claimant may not receive compensation under this title if that claimant is not determined to be an eligible person under this subsection. (2) Limitations (A) In general A claimant may not receive compensation under this title that exceeds the amount of the claim filed by the claimant under subsection (a), or seek or receive compensation for a debt described in section 2(5)(B)(ii), which— (i) shall not be discharged; and (ii) shall be repaid in full as provided by section 101(b). (B) Assigned claims In the case of a claim that was assigned to a claimant, the claimant may not receive compensation under this title for that claim that exceeds the amount paid by the claimant for the assignment of that claim. 205. Puerto Rico Debt Restructuring Compensation Fund (a) In general On the date of a discharge of the debt of the Commonwealth of Puerto Rico and the instrumentalities of the Commonwealth of Puerto Rico under section 101, there is established in the Treasury of the United States a fund to be known as the Puerto Rico Debt Restructuring Compensation Fund , consisting of amounts appropriated into the Fund under subsection (b). (b) Appropriation (1) In general There is appropriated to the Fund, out of any funds in the Treasury of the United States not otherwise appropriated, $15,000,000,000, which shall be available without further appropriation to the Special Master to provide compensation for claims of eligible persons under this title. (2) Emergency designation (A) In general The amount necessary to carry out this Act is designated by Congress as being for emergency requirements pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 901(b)(2)(A)(i) ). (B) PAYGO (i) In general This Act is designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) ). (ii) Designation in Senate In the Senate, this Act is designated as an emergency requirement pursuant to section 403(a) of S. Con. Res. 13 (111th Congress), the concurrent resolution on the budget for fiscal year 2010. (c) Distribution (1) In general Of the amounts appropriated into the Fund under subsection (b)— (A) 50 percent shall be made available to pay claims of eligible persons described in section 204(c)(2)(A); and (B) 50 percent shall be made available to pay claims of eligible persons described in section 204(c)(2)(B). (2) Claims exceeding appropriated amounts If the claims of eligible persons described in section 204(c)(2)(A) or of eligible persons described in section 204(c)(2)(B) exceed the amounts appropriated to pay those respective claims under paragraph (1), any claim of an eligible person within that respective category shall be reduced on a pro rata basis. (3) Date of distribution For the purpose of reducing claims under paragraph (2), the Special Master shall determine a date on which all claims of eligible persons shall be paid. (d) Unobligated funds Any amounts made available under subsection (b) that are not obligated by the Special Master as of the date that is 36 months after the date of enactment of this Act shall be returned to the Treasury of the United States. 206. Regulations (a) In general The Special Master shall promulgate regulations, through notice and comment rulemaking in compliance with section 553 of title 5, United States Code, to carry out this title. (b) Notice of proposed rulemaking Not later than 60 days after the date on which the Special Master is appointed under section 203(a), the Special Master shall publish a notice of proposed rulemaking in the Federal Register. (c) Final rule Not later than 60 days after the date on which the notice of proposed rulemaking described in subsection (b) is published, the Special Master shall promulgate final regulations to carry out this title. (d) Vacancy in the position of Special Master If promulgation of regulations under this section is completed before the date on which a Special Master is appointed under section 203(a)(3)(A), that Special Master is not required to promulgate new regulations under this section. 207. Sunset The provisions of this title shall be effective for the period beginning on the date of enactment of this Act and ending on the date that is 36 months after the date of enactment of this Act. III Puerto Rico Public Credit Comprehensive Audit Commission 301. Definitions In this title— (1) the term comprehensive audit means a supervisory action taken to examine and evaluate the public debt contracting, refinancing, or renegotiation process, the source and intended use of resources, and the implementation of programs and projects financed with domestic or foreign debt, in order to determine the legitimacy, lawfulness, transparency, quality, efficacy, and efficiency thereof, considering legal and financial aspects, and the economic, social, gender, regional, ecological, national, and municipal impact thereof; (2) the term Commission means the Puerto Rico Public Credit Comprehensive Audit Commission established under section 302; and (3) the term credit request means request or application for credit by the Commonwealth of Puerto Rico, or any instrumentality of the Commonwealth of Puerto Rico, to obtain credit from a government or a banking or multilateral financial system in the domestic or foreign private sector, including any agreement, contract, or other form or method relating to that request or application. 302. Establishment; dissolution (a) Establishment There is established an independent commission to be known as the Puerto Rico Public Credit Comprehensive Audit Commission. (b) Dissolution The Commission shall only be dissolved after the Commission completes or fulfills each duty of the Commission under section 304 and issues the final report of the Commission under section 303(b). 303. Reports (a) In general Not later than 1 year after the date of enactment of this Act, and not later than every 180 days thereafter, the Commission shall make publicly available a report describing the progress of the Commission in carrying out the duties of the Commission under section 304 as of the date on which the report is released. (b) Final report Upon completing the duties of the Commission under section 304, the Commission shall make publicly available and submit to the Legislative Assembly of the Commonwealth of Puerto Rico and the Governor of the Commonwealth of Puerto Rico the final report of the Commission, which shall state in detail the findings, conclusions, and recommendations of the Commission relating to the duties of the Commission carried out under section 304. 304. Duties (a) In general The Commission shall carry out the duties described in subsections (b) and (c). (b) Comprehensive audit (1) In general The Commission shall conduct a comprehensive audit of all public debt of the Commonwealth of Puerto Rico issued during the period beginning on the first day of fiscal year 1972 and ending on the date of enactment of this Act, which shall include an audit of agreements, contracts, and other forms or methods employed by the Commonwealth of Puerto Rico and any instrumentality thereof to obtain credit from governments, banking or multilateral financial system institutions, and the domestic or foreign private sector. (2) Criteria In order to conduct the comprehensive audit under paragraph (1), the Commission shall establish criteria to be used in evaluating each credit request that shall include, with respect to each credit request— (A) any precedent, study, technical, economic, financial, or social viability score, or other supporting document that supported the credit request at the time the credit request was made; (B) the amount of the credit requested in the credit request; (C) the currency unit in which the credit was obtained through the credit request; (D) the total amount of any subsequent increase or extension of credit from the original amount of credit obtained through the credit request; (E) the economic, financial, and business conditions agreed upon under the credit request; (F) the economic, financial, and business conditions effectively applied under the credit request; (G) any condition contained in the credit request; (H) the intended and actual use of any resources funded by the credit request; (I) the total impact of any project funded by the credit request; (J) the name of each individual who, on behalf of any party to the credit request, transacted or executed the credit request; (K) each method or mechanism used to meet any obligation agreed to under the credit request; and (L) any other circumstance or information determined by the Commission to be pertinent in determining the legitimacy, lawfulness, transparency, quality, efficacy, and efficiency of each credit request, considering— (i) the legal and financial aspects of the credit request; and (ii) the economic, social, gender, regional, ecological, national, and municipal impact of the credit request. (c) Data transparency database The Commission shall establish and maintain a publicly available data transparency database that shall contain any information relating to any public, private, domestic, or foreign debt held by a public institution of the Commonwealth of Puerto Rico collected through the comprehensive audit under subsection (b). 305. Authority of the Commission In order to carry out the duties described in section 304, the Commission— (1) may audit, and ensure the transparency of, the indebtedness process of the Commonwealth of Puerto Rico and each instrumentality of the Commonwealth of Puerto Rico; and (2) 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 paragraph (1). 306. Membership (a) In general The Commission shall be composed of— (1) the Executive Director of the Puerto Rico Institute of Statistics, or the designee of the Executive Director; and (2) the following individuals, who shall be appointed not later than 180 days after the date of enactment of this Act by the Governor of the Commonwealth of Puerto Rico to serve on the Commission: (A) One representative of each parliamentary majority in the Legislative Assembly. (B) One representative of each parliamentary minority in the Legislative Assembly. (C) One professor of economics from any public higher education institution located in the Commonwealth of Puerto Rico. (D) One professor of finance from any public higher education institution located in the Commonwealth of Puerto Rico. (E) One professor of accounting from any public higher education institution located in the Commonwealth of Puerto Rico. (F) One professor of statistics from any public higher education institution located in the Commonwealth of Puerto Rico. (G) One professor of law from any public higher education institution located in the Commonwealth of Puerto Rico. (H) One representative of the labor union sector in the Commonwealth of Puerto Rico. (I) One representative of the business community in the Commonwealth of Puerto Rico, with preference given to a representative from a small- or medium-sized business located in the Commonwealth of Puerto Rico. (J) One representative of the cooperative sector in the Commonwealth of Puerto Rico. (K) One professor of sociology from any public higher education institution who has published work in one or more peer-reviewed journals that indicates expertise in data relating to Puerto Rico. (L) One individual who is a translator or interpreter of English and Spanish. (b) Chairperson (1) In general After each of the members of the Commission are appointed under subsection (a), the members of the Commission shall elect from among the members of the Commission 1 individual to serve as the Chairperson of the Commission. (2) Duties The Chairperson of the Commission shall— (A) call and preside over meetings of the Commission; and (B) be the legal representative of the Commission. (3) Tie vote In the case of a tie vote among the members of the Commission, the vote of the Chairperson shall be determinative. (c) Period of appointment Members of the Commission shall be appointed for the life of the Commission. (d) Vacancies Any vacancy in the Commission shall not affect the powers of the Commission but shall be filled in the same manner as the original appointment or election. (e) Executive Director of the Puerto Rico Institute of Statistics If, on the date of enactment of this Act, the Puerto Rico Institute of Statistics has been disbanded or reorganized to be a part of another government department of the Commonwealth of Puerto Rico, the individual who was the Executive Director of the Puerto Rico Institute of Statistics on the day before the date of such disbanding or reorganization shall be named to the Commission. (f) Failure To appoint Commission members If the Governor of the Commonwealth of Puerto Rico fails to appoint any member of the Commission described under subsection (a)(2) during the period described in that subsection, not later than 180 days after the expiration of that period, the President of the Senate of the Commonwealth of Puerto Rico and the Speaker of the House of Representatives of the Commonwealth of Puerto Rico shall jointly appoint any member that has not been appointed. 307. Powers and responsibilities To carry out the duties of the Commission under section 304, the Commission shall— (1) adopt internal bylaws as appropriate for the proper operations and fulfillment of the objectives of the Commission; (2) define and propose to the Department of the Treasury the hiring of staff to conduct audits in accordance with the rules and administrative procedures set forth by the laws of the Commonwealth of Puerto Rico relating to technical audits; (3) designate and hire a minimum number of regular personnel required to carry out the duties and fulfill the objectives of the Commission; (4) read reports relating to the audit processes and other studies that have been entrusted to commissions and technical units relating to audits of public debt; (5) review and approve the annual budget and operational plan of the Commission based on those devised by the Director of the Office of Management and Budget; (6) as appropriate, request technical support from any public institution, including by, as necessary, through the request for the transfer, on a temporary assignment, of any technical personnel required to carry out a specific program of the Commission after stating the length of the period for which the transfer will be required; (7) hold— (A) a regular meeting not less than twice each month; and (B) a special meeting upon the request of not less than 3 of the members of the Commission; (8) access the information necessary to discharge the duties of the Commission; (9) file with the Legislative Assembly of the Commonwealth of Puerto Rico and the Governor of the Commonwealth of Puerto Rico periodic reports stating achievements of the Commission in carrying out the duties of the Commission under section 304, which shall include any recommendation or suggestion that the Commission determines to be pertinent, including any relevant recommendation of the Commission relating to the commencement of any appropriate administrative, civil, or criminal action relating to the findings of the Commission; and (10) propose rules and policies relating to strengthening the procedures relating to audits of public debt as a permanent duty of the Commonwealth of Puerto Rico. 308. Provision of requested information (a) In general Each entity, official, or former official of the Commonwealth of Puerto Rico shall provide any information requested by the Commission in carrying out the duties of the Commission under section 304 by summons or as required by law. (b) Order To comply Any entity, official, or former official described in subsection (a) that does not obey a summons or request of the Commission for information required by the Commission to carry out the duties of the Commission under section 304, the appropriate district court of the Commonwealth of Puerto Rico shall, on the request of the Commission, issue an order compelling that entity, official, or former official to produce the requested information, as appropriate. (c) Contempt Any entity, official, or former official described in subsection (a) that does not comply with an order of the court under subsection (b) shall be held in contempt for failing to obey that order. 309. Access to information (a) Public documents (1) In general Any document, record, or information relating to the public debt of the Commonwealth of Puerto Rico, 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 of the Commonwealth of Puerto Rico, shall be— (A) classified as a public document; and (B) made accessible to any interested party. (2) Confidentiality Any claim of confidentiality relating to information described in paragraph (1) by any person, including any entity, official, or former official of the Commonwealth of Puerto Rico, shall be construed narrowly and in favor of promoting transparency and the right of the public to that information. (b) Confidential information (1) In general The Commission shall have the authority to obtain confidential information necessary to carry out the duties of the Commission under section 304. (2) Confidentiality The Commission shall keep any information described under subsection (a) confidential as required under the Constitution of the Commonwealth of Puerto Rico. (c) Rule of construction Nothing in this title shall be construed to grant any special power to the Commission to conceal information from the public based on any rule relating to confidentiality. This title shall be interpreted broadly to favor the right of the public to information relating to the activities of the Commission. 310. Funding The Legislative Assembly of the Commonwealth of Puerto Rico shall provide the Commission with sufficient funds to carry out the duties of the Commission under section 304, including funds to pay fair compensation to members and staff of the Commission, based on the annual budget prepared for the Commission by the Office of Management and Budget, which shall be included in the general budget of the Commonwealth of Puerto Rico. IV Severability 401. Severability If any provision of this Act or the application of such provision to any person or circumstance is held to be invalid or unconstitutional, the remainder of this Act and the application of the provisions of this Act to any person or circumstance shall remain and shall not be affected thereby.