T his report provides a summary and analysis of H.R. 5278 , the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which Representative Duffy introduced on May 18, 2016. This bill is a revised version of H.R. 4900 , which Representative Duffy had introduced on April 12, 2016. The House Committee on Natural Resources had circulated two discussion drafts in late March 2016 similar in structure to H.R. 4900 and H.R. 5278 . The House Committee on Natural Resources marked up H.R. 5278 on May 25, 2016. Amendments agreed to include technical corrections and extensions of certain studies on the Puerto Rico government and economy, among others. The major provisions of the bill, however, were unaffected. Most sections are similar or identical. Many changes clarified or modified existing provisions, although some new provisions were added and other provisions were dropped. The measure is organized into seven titles, which are summarized below. The House Rules Committee issued a rule ( H.Res. 770 ) that made consideration of eight amendments in order. The House passed an amended version of H.R. 5278 on June 9, 2016, by a 297-127 vote. Seven amendments were agreed to, but a proposal to strike a minimum wage provision (§403) was not. According to that rule, the text of the measure was inserted into an unrelated Senate-passed bill ( S. 2328 ) upon House passage. The Senate then concurred with the House amendment to S. 2328 on June 29, 2016, by a 68-30 vote, thus approving PROMESA. The President signed the bill on June 30, 2016. A brief description of Puerto Rico, its relationship with the federal government, and its fiscal challenges is presented below. A short overview of the bill, along with a comparison with previous legislation involving control boards, follows. The body of the report provides a section-by-section description of H.R. 5278 . Appendix A also describes other measures introduced to address Puerto Rico's fiscal condition. Appendix A gives a background on Puerto Rico's fiscal situation and aspects relevant to H.R. 4900 . Appendix B contains a summary of provisions of the federal Bankruptcy Code cited in H.R. 5278 . The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; H.R. 5278 ) would create a structure for exercising federal oversight over the fiscal affairs of territories. PROMESA would establish an Oversight Board with broad powers of budgetary and financial control over Puerto Rico. PROMESA also would create procedures for adjusting debts accumulated by the Puerto Rico government and its instrumentalities. PROMESA would also expedite approvals of key energy projects and other "critical projects" in Puerto Rico. The current version of PROMESA ( H.R. 5278 ) differs from the previous version ( H.R. 4900 ) in several ways. The structure and appointment process for the board was modified to allow the President to select one board member at his sole discretion. The process for nominating and appointing board members was modified and specified in greater detail. The powers of the board were also modified in some ways. For example, H.R. 5278 specifies that the board could only begin to establish bylaws and take other major actions once all members were appointed. In H.R. 4900 , by contrast, the board could take certain actions, such as setting a schedule for formulation of Fiscal Plans, once four members were appointed (§201). Other changes would strengthen the independence of the board. The board was also empowered to investigate how Puerto Rico government bonds were sold to small investors. Other changes include a new provision that empowers the Chief Justice of the U.S. Supreme Court to appoint a presiding judge to conduct Title III debt adjustment cases in which the territory is a party. For cases involving only the instrumentalities of the territory, the chief judge of the applicable Court of Appeals would appoint the presiding judge (§308). The relationship between Title VI collective action procedures to reach debt modification agreements and the Title III debt adjustment process was also modified. A provision to allow a transfer of certain federally controlled parts of Vieques Island to Commonwealth control was dropped. The time limit on a provision to allow a training wage below the usual federal minimum wage was changed from five to four years, or until the Oversight Board terminated. A provision (§407) was added to bar inter-debtor transactions that would violate applicable law. H.R. 5278 also included provisions to study fiscal issues in federal territories. Mandates for a report from a congressional task force on economic growth in Puerto Rico and a report from the Government Accountability Office (GAO) on small business programs in Puerto Rico were added. A mandate for another GAO report on debt levels of territorial governments and of debt policy for subnational governments was added during the House Natural Resources Committee markup. Title VII, also added during that markup, expresses the sense of Congress that any solution to Puerto Rico's fiscal and economic crisis should include permanent, pro-growth fiscal reforms. Seven amendments were agreed to during House deliberations. An amendment offered by Representative Bishop, Chairman of the Committee on Natural Resources, made technical corrections; dropped a provision that would have allowed other territories to request establishment of an Oversight Board; accelerated deadlines for appointment of Oversight Board members; modified the provision of funding for the Oversight Board; modified treatment of certain preexisting agreements with creditors; and would empower the Oversight Board to rescind laws enacted by the Puerto Rico government from May 4, 2016, until all members of the board were appointed. The latter provision would allow the board to rescind the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act (PREMFRA; Act 21 of 2016). An amendment offered by Representative Graves stressed the need to "preserve and maintain federally funded mass transportation assets," such as San Juan's Tren Urbano. An amendment offered by Representative Byrne would require GAO to submit regular reports on debt levels and other fiscal information of territory governments. The Congressional Budget Office (CBO) judged that the Oversight Board that H.R. 5278 would establish should be considered part of the federal budget according to the "unified budget concept" set forth in the 1967 President's Commission on Budget Concepts. CBO estimated that operating the Oversight Board for Puerto Rico would cost $370 million over the period FY2017-FY2022. Section 107 of H.R. 5278 mandates that the territory's government designate a dedicated funding source for the board, which (under the unified budget concept) would increase federal revenues by an estimated $370 million. The net effect on the federal budget, therefore, is estimated to be zero. Title I of PROMESA would set up a Financial Management and Oversight Board with broad fiscal powers with seven voting members, along with the Puerto Rico governor (or designee) who would serve as an ex officio non-voting member. The President, as noted above, would appoint one member at his sole discretion. Congressional leaders would then each submit lists of candidates. The Speaker would submit two lists, with one restricted to candidates residing or doing business in Puerto Rico. The President would then choose members from those lists, although he could choose other candidates before September 1, 2016. Those candidates would be subject to Senate confirmation. Title II charges the Oversight Board with powers to approve, for territory governments or instrumentalities of those governments (such as public corporations or municipal governments): Fiscal Plans; Budgets; Voluntary agreements with bondholders; Debt restructuring plans; and Critical projects eligible for expedited permitting processes. The Oversight Board in some ways resembles the District of Columbia Financial Responsibility and Management Assistance Authority, more commonly known as the DC Control Board. The Oversight Board that PROMESA would establish, however, differs in many important aspects from the structure and responsibilities of the DC Control Board, which are spelled out in detail in the section-by-section analysis. Title III of PROMESA would set up a process for adjustment of debts by a territorial government or an instrumentality of a territorial government. Eligibility for the restructuring process would first require approval of at least five of the seven voting members of the Oversight Board to issue a "restructuring certificate." Under terms of H.R. 5278 , the Oversight Board would take the place of a debtor government or instrumentality in the proceedings to adjust debts. Thus, the roles of filing the petition and proposing a plan would be taken by the Oversight Board, not the debtor. The debt restructuring process, in general, is set up to ensure fair and equitable treatment of creditors. The treatment of public sector pensions is not addressed explicitly, although pensions are typically included when governments undergo debt restructuring processes. The Oversight Board may order a study of pension systems if it determines that they are underfunded. Title VI would create a process for creditor collective actions, which resemble collective actions clauses (CACs) that are a common feature of sovereign debt contracts. CACs typically allow some subset of creditors holding a supermajority of the face value of a given debt category to enter into an agreement that would bind remaining creditors within that category. Title VI would require the Oversight Board, in consultation with the Puerto Rico government and its subunits that have outstanding debts, to set up voting pools for the CAC process. Separate pools, in general, would correspond to the relative priority or security arrangements of bondholders. Triggering the Title VI CAC provision for a voting pool would require a two-thirds vote (by value of eligible debt), in which holders of at least half of the eligible debt participated. Creditors in those voting pools not assenting to a modification agreement would retain certain rights, which might be affected by a subsequent Title III debt restructuring.