[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2381 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
1st Session
S. 2381
To provide assistance and support to the Commonwealth of Puerto Rico.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 9, 2015
Mr. Hatch (for himself, Ms. Murkowski, and Mr. Grassley) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To provide assistance and support to the Commonwealth of Puerto Rico.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Puerto Rico
Assistance Act of 2015''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title.
TITLE I--TAXES
Sec. 101. Temporary employee payroll tax cut for residents of United
States possessions.
TITLE II--PUBLIC PENSIONS
Sec. 201. Study of Puerto Rico public pension debt.
Sec. 202. Reporting requirements generally applicable to State and
local government pension plans.
Sec. 203. Annuity accumulation retirement plans of employees of State
and local governments.
TITLE III--PUERTO RICO FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
Sec. 301. Purposes.
Sec. 302. Definitions.
Subtitle A--Establishment and Organization of Authority
Sec. 311. Commonwealth Financial Responsibility and Management
Assistance Authority.
Sec. 312. Executive Director and staff.
Sec. 313. Powers of Authority.
Sec. 314. Exemption from liability for claims.
Sec. 315. Treatment of actions.
Sec. 316. Funding for operation of Authority.
Sec. 317. Suspension of activities.
Sec. 318. Application of laws of Commonwealth to Authority.
Subtitle B--Responsibilities of Authority
Part I--Control Period
Sec. 321. Early opt-in authority.
Sec. 322. Certifications by Authority.
Sec. 323. Financial plan and budget for public corporations during
control period.
Sec. 324. Financial plan and budget for the Commonwealth during a
control period.
Sec. 325. Review to ensure compliance.
Sec. 326. Restrictions on borrowing.
Sec. 327. Finding of noncompliance.
Sec. 328. Recommendations regarding financial stability and management
responsibility.
Part II--Issuance of Bonds
Sec. 331. Authority to issue bonds.
Sec. 332. Pledge of security interest in revenues of Commonwealth
government.
Sec. 333. Establishment of debt service reserve fund.
Sec. 334. Other requirements for issuance of bonds.
Sec. 335. No full faith and credit of the United States.
Part III--Other Duties of Authority
Sec. 341. Duties of Authority during year other than control year.
Sec. 342. General assistance in achieving financial stability and
management efficiency.
Sec. 343. Obtaining reports.
Sec. 344. Reports and comments.
Subtitle C--Chief Financial Officer
Sec. 351. Establishment of office.
Sec. 352. Appointment; removal.
Sec. 353. Functions of Chief Financial Officer.
Subtitle D--Effect
Sec. 361. Effect.
Sec. 362. Preemption.
TITLE IV--ADDITIONAL REPORTS AND STUDIES
Sec. 401. Report on exclusion of territories from exchanges.
Sec. 402. Study of Puerto Rico public pension debt.
Sec. 403. Health and human services report.
TITLE V--TRANSITION ASSISTANCE
Sec. 501. Assistance by the Authority, if necessary, to assist
transition to stability.
Sec. 502. Offset for transition assistance and Prevention and Public
Health Fund.
TITLE VI--TECHNICAL ASSISTANCE
Sec. 601. Technical assistance to improve accounting, disclosure, and
economic measurement practices in the
territories.
TITLE I--TAXES
SEC. 101. TEMPORARY EMPLOYEE PAYROLL TAX CUT FOR RESIDENTS OF UNITED
STATES POSSESSIONS.
(a) In General.--Notwithstanding any other provision of law, in the
case of a qualified resident of a United States possession--
(1) there shall be allowed a credit against the tax imposed
by section 1401(a) of the Internal Revenue Code of 1986 for any
taxable year which begins in the payroll tax holiday period an
amount equal to 3.1 percent of the lesser of--
(A) the self-employment income (as defined in
section 1402(b) of such Code) derived from sources
within a United States possession (as determined under
section 937(b) of such Code) for the taxable year, or
(B) the net earnings from self-employment (as
defined in section 1402(a) of such Code) for the
taxable year, and
(2) with respect to remuneration received during the
payroll tax holiday period for services performed as an
employee within a United States possession (except amounts
received for services performed as an employee of the United
States or any agency thereof), the rate of tax under 3101(a) of
such Code shall be 3.1 percent (including for purposes of
determining the applicable percentage under sections 3201(a)
and 3211(a)(1) of such Code).
(b) Special Rules.--
(1) Application of rule for special refunds.--In the case
of an qualified resident of a United States possession to whom
subsection (a)(2) applies, the first sentence of section
6413(c)(1) of the Internal Revenue Code of 1986 shall be
applied by substituting for ``exceeds the tax with respect to
the amount of such wages received in such year which is equal
to such contribution and benefit base'' the following:
``exceeds the sum of--
``(1) 3.1 percent of the lesser of--
``(A) the wages received in such year to which
section 101(a)(2) of the Puerto Rico Assistance Act of
2015 applies, or
``(B) the contribution and benefit base, plus
``(2) 6.2 percent of the lesser of--
``(A) the wages received in such year to which such
section does not apply, or
``(B) the contribution and benefits base reduced
(but not below zero) by the amount of wages taken into
account under paragraph (1).''.
(2) Employer liability.--An employer who receives an
attestation from an employee, in such form and manner as
directed by the Secretary of the Treasury (or the Secretary's
delegate), that such employee is a qualified resident of a
United States possession shall not be liable under section 3102
or 3202 of the Internal Revenue Code of 1986 for any failure to
collect taxes in excess of the rate which applies under this
section unless a reasonable person would determine that such
attestation is not true and correct.
(3) De minimis services.--For purposes of subsection
(a)(2), services performed as an employee outside of a United
States possession shall not be taken into account if such
services are de minimis.
(c) Definitions.--
(1) Qualified resident.--The term ``qualified resident''
means, with respect to any calendar year, any individual--
(A) who was present in a United States possession
for at least 183 days during the preceding calendar
year, and
(B) who, as of the first day of the calendar year,
does not have a tax home (determined under the
principles of section 911(d)(3) of the Internal Revenue
Code of 1986 without regard to the second sentence
thereof) outside of a United States possession and does
not have a closer connection (determined under the
principles of section 7701(b)(3)(B)(ii) of such Code)
to the United States or a foreign country than to a
United States possession.
For purposes of subparagraph (A), the determination of whether
a person is present for any day shall be made under the
principles of section 7701(b) of such Code.
(2) United states possession.--The term ``United States
possession'' means Puerto Rico, American Samoa, Guam, the
Northern Mariana Islands, and the Virgin Islands.
(3) Payroll tax holiday period.--The term ``payroll tax
holiday period'' means the period beginning after December 31,
2015, and ending before January 1, 2021.
(d) Reduced Rate for 2020.--In the case of the period beginning
after December 31, 2019, and ending before January 1, 2021, this
section shall be applied--
(1) by substituting ``1.55 percent'' for ``3.1 percent'' in
subsection (a)(1), and
(2) by substituting ``4.65 percent'' for ``3.1 percent''
each place it appears in subsections (a)(2) and (b).
(e) Employer Notification.--The Secretary of the Treasury shall
notify employers of the payroll tax holiday period in any manner the
Secretary deems appropriate.
(f) Transfers of Funds.--
(1) Transfers to federal old-age and survivors insurance
trust fund.--There are hereby appropriated to the Federal Old-
Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201 of the
Social Security Act (42 U.S.C. 401) amounts equal to the
reduction in revenues to the Treasury by reason of the
application of subsection (a). Amounts appropriated by the
preceding sentence shall be transferred from the general fund
at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Trust
Fund had such amendments not been enacted.
(2) Transfers to social security equivalent benefit
account.--There are hereby appropriated to the Social Security
Equivalent Benefit Account established under section 15A(a) of
the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a))
amounts equal to the reduction in revenues to the Treasury by
reason of the application of subsection (a)(2). Amounts
appropriated by the preceding sentence shall be transferred
from the general fund at such times and in such manner as to
replicate to the extent possible the transfers which would have
occurred to such Account had such amendments not been enacted.
(3) Coordination with other laws.--For purposes of applying
any provision of law other than the provisions of the Internal
Revenue Code of 1986, the rate of tax in effect under section
3101(a) of such Code shall be determined without regard to the
reduction in such rate under this section.
TITLE II--PUBLIC PENSIONS
SEC. 201. STUDY OF PUERTO RICO PUBLIC PENSION DEBT.
(a) In General.--Not later than 6 months after the establishment of
the Puerto Rico Financial Responsibility and Management Assistance
Authority under title III of this Act, the Joint Board for the
Enrollment of Actuaries established under section 3041 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1241) shall report to
such Authority and the Office of Domestic Finance of the Department of
the Treasury on the following with respect to the Puerto Rico public
pension plans:
(1) Recommendations on actions that would be necessary to
ensure that such plans can be sustainably maintained and funded
by the government of Puerto Rico for the next 20 years.
(2) Whether a freeze of future benefit accruals under such
plans is necessary or advisable.
(3) The extent to which benefit reductions, such as have
been made in previous municipal bankruptcy proceedings, would
be necessary or advisable to attain sustainability for such
plans or create parity with payment reductions applicable to
retired individuals who are, directly or indirectly, Puerto
Rico bondholders.
The Joint Board may, in its discretion, seek assistance from the
Advisory Committee on Actuarial Examinations of the Joint Board, and
may expand the size of such committee as appropriate to accomplish the
requirements of this subsection in a timely manner.
(b) Puerto Rico Public Pension Plan.--For purposes of this section,
the term ``Puerto Rico public pension plan'' means any of the following
maintained by the government of Puerto Rico:
(1) The Employees Retirement System (ERS).
(2) The Teachers Retirement System (TRS).
(3) The Judiciary Retirement System (JRS).
SEC. 202. REPORTING REQUIREMENTS GENERALLY APPLICABLE TO STATE AND
LOCAL GOVERNMENT PENSION PLANS.
(a) In General.--The plan sponsor of a State or local government
employee pension benefit plan shall file with the Secretary of the
Treasury, in such form and manner as shall be prescribed by such
Secretary, a report for each plan year beginning on or after January 1,
2017, setting forth the following information with respect to the plan,
as determined by the plan sponsor as of the end of such plan year:
(1) A schedule of funding status, which shall include a
statement as to the current liability of the plan, the amount
of plan assets available to meet that liability, the amount of
the net unfunded liability (if any), and the funding percentage
of the plan.
(2) A schedule of contributions by the plan sponsor and
each contributing employer for the plan year, indicating which
are or are not taken into account under paragraph (1).
(3) Alternative projections which shall be specified in
regulations of the Secretary for each of the next 20 plan years
following the plan year relating to the amount of annual
contributions, the fair market value of plan assets, current
liability, the funding percentage, and such other matters as
the Secretary may specify in such regulations, together with a
statement of the assumptions and methods used in connection
with such projections, including assumptions related to funding
policy, plan changes, future workforce projections, future
investment returns, and such other matters as the Secretary may
specify in such regulations. The Secretary shall specify in
such regulations the projection assumptions and methods to be
used as necessary to achieve comparability across plans.
(4) A statement of the actuarial assumptions used for the
plan year, including the rate of return on investment of plan
assets and assumptions as to such other matters as the
Secretary may prescribe by regulation.
(5) A statement of the number of participants who are each
of the following--
(A) those who are retired or separated from service
and are receiving benefits;
(B) those who are retired or separated and are
entitled to future benefits; and
(C) those who are active under the plan.
(6) A statement of the plan's investment returns, including
the rate of return, for the plan year and the 5 preceding plan
years.
(7) A statement of the degree to which, and manner in
which, the plan sponsor expects to eliminate any unfunded
current liability that may exist for the plan year and the
extent to which the plan sponsor has followed the plan's
funding policy for each of the preceding 5 plan years. The
Secretary shall prescribe by regulation the specific criteria
to be used for meeting the requirements of this paragraph.
(8) A statement of the amount of pension obligation bonds
outstanding.
(b) Timing of Report.--The plan sponsor of a State or local
government employee pension benefit plan shall make the filing required
under subsection (a) for each plan year not later than 210 days after
the end of such plan year (or within such time as may be required by
regulations prescribed by the Secretary in order to reduce duplicative
filing).
(c) Additional Reporting Requirements.--
(1) Supplementary reports.--In any case in which, in
determining the information filed in the annual report for a
plan year under subsection (a)--
(A) the value of plan assets is determined using a
standard other than fair market value, or
(B) the interest rate or rates used to determine
the value of liabilities or as the discount value for
liabilities are not the interest rates described in
paragraph (3),
the plan sponsor shall include in the annual report filed for such plan
year pursuant to subsection (a) the supplementary report for such plan
year described in paragraph (2).
(2) Use of prescribed valuation method and interest
rates.--A supplementary report filed for a plan year pursuant
to this subsection shall include the information specified as
required in the annual report under paragraphs (1), (3), (6),
and (7) of subsection (a), determined as of the end of such
plan year by valuing plan assets at fair market value and by
using the interest rates described in paragraph (3) to value
liabilities and as the discount value for liabilities.
(3) Interest rates based on u.s. treasury obligation yield
curve rate.--
(A) In general.--The interest rates described in
this paragraph are--
(i) in the case of benefits reasonably
determined to be payable during the 5-year
period beginning on the first day of the plan
year, the first segment rate with respect to
the applicable month,
(ii) in the case of benefits reasonably
determined to be payable during the 15-year
period beginning at the end of the period
described in clause (i), the second segment
rate with respect to the applicable month, and
(iii) in the case of benefits reasonably
determined to be payable after the period
described in clause (ii), the third segment
rate with respect to the applicable month.
(B) Segment rates.--For purposes of this
paragraph--
(i) First segment rate.--The term ``first
segment rate'' means, with respect to any
month, the single rate of interest which shall
be determined by the Secretary for such month
on the basis of the U.S. Treasury obligation
yield curve for such month, taking into account
only that portion of such yield curve which is
based on obligations maturing during the 5-year
period commencing with such month.
(ii) Second segment rate.--The term
``second segment rate'' means, with respect to
any month, the single rate of interest which
shall be determined by the Secretary for such
month on the basis of the U.S. Treasury
obligation yield curve for such month, taking
into account only that portion of such yield
curve which is based on obligations maturing
during the 15-year period beginning at the end
of the period described in clause (i).
(iii) Third segment rate.--The term ``third
segment rate'' means, with respect to any
month, the single rate of interest which shall
be determined by the Secretary for such month
on the basis of the U.S. Treasury obligation
yield curve for such month, taking into account
only that portion of such yield curve which is
based on obligations maturing during periods
beginning after the period described in clause
(ii).
(C) U.S. treasury obligation yield curve.--For
purposes of this paragraph, the term ``U.S. Treasury
obligation yield curve'' means, with respect to any
month, a yield curve which shall be prescribed by the
Secretary for such month and which reflects the
average, for the 24-month period ending with the month
preceding such month, of monthly yields on interest-
bearing obligations of the United States.
(d) Definitions.--For purposes of this section--
(1) State or local government employee pension benefit
plan.--Except as provided in section 203, the terms ``State or
local government employee pension benefit plan'' and ``plan''
mean any plan, fund, or program, other than a defined
contribution plan (within the meaning of section 414(i) of the
Internal Revenue Code of 1986), which was heretofore or is
hereafter established or maintained, in whole or in part, by a
State, a political subdivision of a State, or any agency or
instrumentality of a State or political subdivision of a State,
to the extent that by its express terms or as a result of
surrounding circumstances such plan, fund, or program--
(A) provides retirement income to employees, or
(B) results in a deferral of income by employees
for periods extending to the termination of covered
employment or beyond, regardless of the method of
calculating the contributions made to the plan, the
method of calculating the benefits under the plan, or
the method of distributing benefits from the plan.
(2) Funding percentage.--The term ``funding percentage''
for a plan year means the ratio (expressed as a percentage)
which--
(A) the value of plan assets as of the end of the
plan year, bears to
(B) the current liability of the plan for the plan
year.
(3) Current liability.--The term ``current liability'' of a
plan for a plan year means the present value of all benefits
accrued or earned under the plan as of the end of the plan
year.
(4) Plan sponsor.--The term ``plan sponsor'' means, in
connection with a State or local government employee pension
benefit plan, the State, political subdivision of a State, or
agency or instrumentality of a State or a political subdivision
of a State which establishes or maintains the plan.
(5) Contributing employer.--The term ``contributing
employer'' means any employer that contributes to or
participates in a plan on behalf of its employees (including a
plan sponsor that contributes to the plan).
(6) Participant.--
(A) In general.--The term ``participant'' means, in
connection with a State or local government employee
pension benefit plan, an individual--
(i) who is an employee or former employee
of a State, political subdivision of a State,
or agency or instrumentality of a State or a
political subdivision of a State which is the
plan sponsor of such plan, and
(ii) who is or may become eligible to
receive a benefit of any type from such plan or
whose beneficiaries may be eligible to receive
any such benefit.
(B) Beneficiary.--The term ``beneficiary'' means a
person designated by a participant, or by the terms of
the plan, who is or may become entitled to a benefit
thereunder.
(7) Plan year.--The term ``plan year'' means, in connection
with a plan, the calendar or fiscal year on which the records
of the plan are kept.
(8) State.--The term ``State'' includes any State of the
United States, the District of Columbia, and any possession or
territory of the United States, including a possession
described in section 7701(d) of the Internal Revenue Code of
1986.
(9) Fair market value.--The term ``fair market value'' has
the meaning given such term under section 430(g)(3)(A) of the
Internal Revenue Code of 1986 (without regard to section
430(g)(3)(B) thereof).
(10) Other terms.--Any other term used in this section
which is also used in the Internal Revenue Code of 1986 shall
have the same meaning as when used in such Code.
(e) Model Reporting Statement.--The Secretary shall develop model
reporting statements for purposes of subsections (a) and (c). Plan
sponsors of State or local government employee pension plans may elect,
in such form and manner as shall be prescribed by the Secretary, to
utilize the applicable model reporting statement for purposes of
complying with requirements of such subsections.
(f) Transparency of Information Filed.--The Secretary shall create
and maintain a public website, with searchable capabilities, for
purposes of posting the information received by the Secretary pursuant
to subsections (a) and (c). Any such information received by the
Secretary (including any updates to such information received by the
Secretary) shall be posted on the website not later than 60 days after
receipt and shall not be treated as return information for purposes of
the Internal Revenue Code of 1986.
SEC. 203. ANNUITY ACCUMULATION RETIREMENT PLANS OF EMPLOYEES OF STATE
AND LOCAL GOVERNMENTS.
(a) In General.--Part I of subchapter D of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after subpart E
the following new subpart:
``Subpart F--Annuity Accumulation Retirement Plans for State and Local
Government Employees
``Sec. 420A. Annuity accumulation retirement plans.
``SEC. 420A. ANNUITY ACCUMULATION RETIREMENT PLANS.
``(a) Annuity Accumulation Retirement Plans.--For purposes of this
subpart--
``(1) In general.--The term `annuity accumulation
retirement plan' means a State or local governmental retirement
plan--
``(A) which provides for the purchase, not less
frequently than annually, of a qualified individual
deferred fixed income annuity contract for each
participant which provides benefits based solely on the
contributions by an employer to an annuity provider and
the actuarial assumptions specified in the annuity
contract, and
``(B) which provides that--
``(i) no contributions may be made under
the plan other than contributions described in
subsection (c),
``(ii) contributions pursuant to the plan
on behalf of any eligible employee for any plan
year, whether made annually or more frequently,
are required to be paid not later than 90 days
after the close of the plan year to an annuity
provider to purchase a qualified individual
deferred fixed income annuity contract for the
employee, and
``(iii) no benefits are provided by the
employer under the plan other than the purchase
of qualified individual deferred fixed income
annuity contracts for eligible employees.
Subject to the provisions of subsection (d)(3), nothing in
subparagraph (B)(iii) shall prohibit an employer from
establishing or maintaining a defined contribution plan or
defined benefit plan or providing any form of employee welfare
benefit separately from the plan.
``(2) Plan structure.--A plan will not be treated as an
annuity accumulation retirement plan unless--
``(A) except as provided in subsection (e)(1),
benefits under the plan are limited to a monthly
payment for the life of the participant, commencing at
the applicable age under subsection (b)(1)(B), as
provided under the qualified individual deferred fixed
income annuity contract purchased with the employer
contributions described in subsection (c) and issued to
the participant, and
``(B) the plan does not accumulate assets in trust
or otherwise, and the employer has no ownership
interest in any qualified individual deferred fixed
income annuity contract issued to a participant.
``(3) Requirements for annuity contract purchasing
process.--
``(A) In general.--A plan will not be treated as an
annuity accumulation retirement plan unless the plan
provides that individual deferred fixed income annuity
contracts will be purchased through a process by which,
with respect to each purchase under paragraph (1)(A),
the plan administrator--
``(i) obtains competitive bids, not less
frequently than every 5 years, pursuant to a
formal, public procurement process authorized
under State law which requires institutional
pricing on a group contract basis from multiple
annuity providers verified by the applicable
State insurance regulator as properly licensed
to meet the specifications in the procurement
request, and
``(ii) selects 1 or more annuity providers
pursuant to a process that includes an
objective, thorough, and analytical search to
identify and select providers and the
evaluation of an annuity provider's claims
paying ability and creditworthiness.
``(B) Prohibition on providing benefit in exchange
for selection.--An annuity provider shall not be
treated as meeting the competitive bid requirements of
subparagraph (A)(i) if such provider, or any related
party to (within the meaning of such term as applied by
the State guaranty association) or agent of such
provider, on their own or on another's behalf, provides
anything of value to any employee of a State or local
government entity, or agency or instrumentality
thereof, or to a plan administrator, in connection with
the bidding process or the annuity purchase process
described in subparagraph (A).
``(C) Compliance safe harbor.--A plan shall be
deemed to meet the requirements of subparagraph (A) if
the plan administrator obtains a determination in
writing from the Office of Domestic Finance, Department
of the Treasury, that such plan meets such
requirements. Authority to issue such a determination
shall not be delegated to any entity outside of the
Office of Domestic Finance.
``(4) General exemption from pension plan requirements.--
Notwithstanding any other provision of this subchapter--
``(A) except as provided in this section, no
requirement of this subchapter otherwise applicable to
a State or local governmental retirement plan shall
apply to an annuity accumulation retirement plan, and
``(B) for purposes of this title other than any
such requirements, an annuity accumulation retirement
plan shall be treated as a defined benefit plan which
meets the requirements of section 401(a).
``(b) Qualified Individual Deferred Fixed Income Annuity
Contract.--For purposes of this subpart, the term `qualified individual
deferred fixed income annuity contract' means, with respect to an
employee for any plan year, an annuity contract issued by an annuity
provider--
``(1) which is--
``(A) an individual annuity contract, or
``(B) an individual certificate of benefits issued
to the employee under a group annuity contract,
``(2) except as provided in subsection (e), under the terms
of which--
``(A) the monthly annuity payments during the
period described in subparagraph (B) are in equal
installments and are fixed at the time of purchase, and
``(B) the entire interest of the employee in the
contract will be distributed in the form of monthly
annuity payments under a single life annuity, beginning
on the later of--
``(i) the date the employee attains age--
``(I) 50 (or a later date specified
by the State), in the case of a public
safety employee, and
``(II) 62 (or a later date
specified by the State), in the case of
any other employee, or
``(ii) in the case of a contract purchased
after the date the employee attains such age,
the 1st day of the 1st calendar year beginning
after the calendar year in which such contract
was purchased,
``(3) the purchase price of which is equal to the
contributions described in subsection (c) with respect to the
employee for the plan year in which it is purchased,
``(4) under which the employee's rights are nonforfeitable,
``(5) under which no loan may be made with respect to any
portion of any interest in the contract, and
``(6) except as provided in subsection (e)(2), no portion
of any interest in the contract may be assigned, alienated, or
pledged as collateral.
In the case of a certificate described in paragraph (1)(B), any
reference in this section (other than paragraph (1)) to an annuity
contract shall be treated as a reference to the portion of the group
annuity contract to which such certificate relates.
``(c) Contribution Requirements and Limitations.--For purposes of
subsection (a)(1)(B)--
``(1) In general.--The plan must provide that the only
contributions which may be made pursuant to the plan for any
plan year are nonelective contributions (within the meaning of
section 401(k)(11)(B)(ii)) made by the employer for the
purchase of qualified individual deferred fixed income annuity
contracts which are--
``(A) made on behalf of each eligible employee for
the plan year, and
``(B) equal to a percentage of the employee's
compensation which (except as provided in this
paragraph) is determined not later than the start of
the plan year.
An employer shall not be treated as failing to meet the
requirements of this paragraph merely because the plan allows
the employer to elect to reduce the percentage under
subparagraph (B), or not to make any contributions pursuant to
the plan, for any period for all employees, and the employer so
elects not later than the start of the plan year.
``(2) Limits based on compensation.--
``(A) Limitation.--
``(i) In general.--The compensation taken
into account under paragraph (1)(B) with
respect to an employee for any year shall not
exceed the limitation in effect for such year
under section 401(a)(17).
``(ii) Compensation.--For purposes of this
subparagraph, the term `compensation' means
includible compensation as defined in section
403(b)(3), including any amount paid by an
employer on behalf of the employee for a
qualified deferred fixed income annuity
contract.
``(B) Percentage limitation.--
``(i) In general.--The percentage under
paragraph (1)(B) for any period shall not
exceed--
``(I) 30 percent in the case of a
public safety employee, or
``(II) 20 percent in the case of
any other employee.
``(ii) Election of higher percentage for
certain employees.--A plan may elect to provide
a higher percentage under paragraph (1)(B) than
that specified under clause (i)--
``(I) in the case of any of the
first 10 plan years after adoption of
the plan, for all employees who have
attained age 40 before the beginning of
such plan year, and
``(II) in the case of any
subsequent plan year, for all employees
who have attained age 50 (age 40 in the
case of a public safety employee)
before the beginning of such plan year,
except that in no case may such percentage
exceed 25 percent (35 percent in the case of a
public safety employee).
``(C) Aggregation rule.--All plans of an employer
treated as a single plan for purposes of section 415
shall be treated as a single plan for purposes of this
paragraph.
``(d) Tax Treatment of Annuity Accumulation Retirement Plans.--
``(1) Taxation of eligible employee.--The amount actually
paid to a distributee under a qualified individual deferred
fixed income annuity contract shall be taxable to the
distributee under section 72.
``(2) Treatment of employer contributions.--Contributions
made by an employer for the purchase of a qualified individual
deferred fixed income annuity contract under an annuity
accumulation retirement plan shall be excluded from the gross
income of the employee.
``(3) Inclusion in income of excess contributions or
contributions for participants in another defined benefit plan
of an employer.--
``(A) Excess contributions.--Except as provided in
subparagraph (B), if--
``(i) contributions are made for any plan
year by an employer on behalf of an employee in
excess of the limit determined after
application of subsection (c)(2), the employee
shall include in gross income an amount equal
to such excess, or
``(ii) an employee for whom such
contributions are made for any plan year
accrues benefits (for any period of service for
which such contributions were made) under any
other defined benefit plan of the employer
which is not an annuity accumulation retirement
plan, the employee shall include in gross
income an amount equal to such contributions.
``(B) Exception for premiums refunded.--
Subparagraph (A) shall not apply with respect to
contributions on behalf of an employee for any plan
year if, not later than 6 months after the last day of
the plan year, the contributions described in
subparagraph (A) used to purchase a qualified
individual deferred fixed income annuity contract for
the employee are refunded to the employer.
``(C) Taxable year of inclusion.--Any amount under
subparagraph (A) shall be includible in gross income of
the employee for the taxable year which includes the
date which is 6 months after the last day of the plan
year.
``(D) Investment in the contract.--Any amount
included in gross income shall not be treated as
investment in the contract for purposes of section 72.
``(e) Special Rules.--
``(1) Employer option to provide alternative benefit
forms.--At the option of an employer, a qualified individual
deferred fixed income annuity contract may provide 1 or more of
the following optional benefits:
``(A) Distribution under a joint and survivor
annuity.
``(B) An annual adjustment in the amount of benefit
payments based on a fixed percentage not to exceed 3
percent.
``(C) A 10-year period certain and life payment
option.
If an employer provides for 1 or more of such optional
benefits, the contract shall provide that an employee may elect
any of the options provided at the time payments commence under
the contract.
``(2) Certain judgments and settlements.--Paragraphs (2)(B)
and (5) of subsection (b) shall not apply to any offset of an
employee's benefits payable under an annuity contract--
``(A) pursuant to--
``(i) the enforcement of a levy under
section 6331 or the collection by the United
States of a judgment resulting from an unpaid
tax assessment, or
``(ii) the enforcement of a fine imposed as
part of a criminal sentence under subchapter C
of chapter 227 of title 18, United States Code,
or an order of restitution made pursuant to
such title, or
``(B) to the extent required under any State tax,
criminal, or domestic relations law.
``(f) Definitions.--For purposes of this section--
``(1) State or local governmental retirement plan.--The
term `State or local governmental retirement plan' means a
governmental plan providing for the deferral of compensation
which is established and maintained for its employees by a
State, a political subdivision of a State, or an agency or
instrumentality of any such entity. The term `State' includes
any possession or territory of the United States, including a
possession described in section 7701(d).
``(2) General definitions.--
``(A) Eligible employee.--The term `eligible
employee' means, with respect to any State or local
governmental retirement plan, any officer or employee
(other than a contractor) eligible to participate in
the plan.
``(B) Annuity provider.--The term `annuity
provider' means any company which is licensed to do
business as a life insurance company under the laws of
the State in which a qualified individual deferred
fixed income annuity contract to which this subchapter
applies is to be issued.
``(C) Public safety employee.--The term `public
safety employee' means any employee of a State or
political subdivision of a State who provides police
protection, firefighting services, or emergency medical
services for any area within the jurisdiction of such
State or political subdivision.''.
(b) FICA Exemption.--Paragraph (5) of section 3121(a) of the
Internal Revenue Code of 1986 is amended by striking ``or'' at the end
of subparagraph (H), by striking the semicolon at the end of
subparagraph (I) and inserting ``, or'', and by adding at the end the
following new subparagraph:
``(J) under an annuity accumulation retirement plan
for the purchase of annuity contracts under section
420A;''.
(c) Inclusion of Amount for the Purchase of Annuity Contracts on W-
2.--Subsection (a) of section 6051 of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (13), by
striking the period at the end of paragraph (14)(B) and inserting ``,
and'', and by inserting after paragraph (14) the following new
paragraph:
``(15) the total amount contributed under an annuity
accumulation retirement plan for the purchase of annuity
contracts under section 420A.''.
(d) Clerical Amendment.--The table of subparts for part I of
subchapter D of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to subpart E the following
new item:
``subpart f--annuity accumulation retirement plans for state and local
government employees''.
(e) Effective Date.--Except as provided in subsection (b), the
amendments made by this section shall apply to years beginning after
December 31, 2015.
TITLE III--PUERTO RICO FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY
SEC. 301. PURPOSES.
(a) Purposes.--The purposes of this title are--
(1) to eliminate budget deficits and cash shortages of
Puerto Rico through visionary financial planning, sound
budgeting, accurate revenue forecasts, and careful spending;
(2) to ensure the most efficient and effective delivery of
services, including public safety services, by the Commonwealth
government during a period of fiscal emergency;
(3) to conduct necessary investigations and studies to
determine the fiscal status and operational efficiency of the
Commonwealth government;
(4) to assist the Commonwealth government in--
(A) restructuring the organization and workforce of
the Commonwealth government to ensure that the
residents of Puerto Rico are served by a government
that is efficient and effective;
(B) ensuring the appropriate and efficient delivery
of services; and
(C) modernizing the budget, accounting, personnel,
procurement, information technology, and management
systems to ensure the maximum financial and performance
accountability of the Commonwealth government and
officers and employees of the Commonwealth government;
(5) to enhance the access of the Commonwealth government to
the capital markets;
(6) to ensure the continued orderly payment of the debt
service obligations of the Commonwealth government;
(7) to ensure the long-term financial, fiscal, and economic
vitality and operational efficiency of Puerto Rico; and
(8) to provide for the review of the financial impact of
activities of the Commonwealth government before the activities
are implemented or submitted for congressional review.
SEC. 302. DEFINITIONS.
In this title:
(1) Authority.--The term ``Authority'' means the Puerto
Rico Financial Responsibility and Management Assistance
Authority established by section 311(a).
(2) Chief financial officer.--The term ``Chief Financial
Officer'' means the Chief Financial Officer of Puerto Rico
appointed under section 352(a).
(3) Commonwealth.--The term ``Commonwealth'' means the
Commonwealth of Puerto Rico.
(4) Commonwealth government.--
(A) In general.--The term ``Commonwealth
government'' means--
(i) the government of the Commonwealth
(including any department, agency, or
instrumentality of the government of the
Commonwealth);
(ii) an independent agency of the
Commonwealth or any other agency, board, or
commission established by the Governor or the
Legislative Assembly;
(iii) the courts of the Commonwealth;
(iv) the Legislative Assembly; and
(v) any other agency, public authority,
pension fund, or public benefit corporation
established by the Commonwealth that has the
authority to receive amounts directly or
indirectly from the Commonwealth (other than
amounts received from the sale of goods, the
provision of services, or the loaning of funds
to the Commonwealth).
(B) Exclusion.--The term ``Commonwealth
government'' does not include the Authority.
(5) Control period.--The term ``control period'' means--
(A) in the case of a public corporation, a control
period for the public corporation initiated under
section 322(a)(2); and
(B) in the case of the Commonwealth government, a
control period for the Commonwealth government
initiated under section 322(b)(2).
(6) Control year.--The term ``control year'' means any
fiscal year for which a financial plan and budget for a public
corporation or the Commonwealth government approved by the
Authority under section 323 or 324 is in effect.
(7) Emergency manager.--The term ``emergency manager''
means an emergency manager for a public corporation appointed
under section 322(a)(5)(A).
(8) Financial plan and budget.--The term ``financial plan
and budget'' means--
(A) in the case of a public corporation, a
financial plan and budget developed for the public
corporation under section 323; and
(B) in the case of the Commonwealth government--
(i) a financial plan and budget for the
Commonwealth government developed under section
324; and
(ii) a budget of the Commonwealth
government for any fiscal year that is subject
to a financial plan and budget described in
clause (i).
(9) Governor.--The term ``Governor'' means the Governor of
the Commonwealth.
(10) Legislative assembly.--The term ``Legislative
Assembly'' means the Legislative Assembly of Puerto Rico.
(11) Public corporation.--
(A) In general.--The term ``public corporation''
means an entity created by Commonwealth law as a public
corporation.
(B) Inclusions.--The term ``public corporation''
includes--
(i) the Aqueduct and Sewer Authority;
(ii) the Convention Center District
Authority;
(iii) the Electric Power Authority;
(iv) the Highway and Transportation
Authority;
(v) the Housing Finance Authority;
(vi) the Industrial Development Company;
(vii) the Infrastructure Financing
Authority;
(viii) the Port of the Americas Authority;
(ix) the Ports Authority;
(x) the Public Buildings Authority;
(xi) the Public Finance Corporation;
(xii) the Sales Taxes Financing
Corporation; and
(xiii) the University of Puerto Rico.
(12) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
Subtitle A--Establishment and Organization of Authority
SEC. 311. COMMONWEALTH FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY.
(a) Establishment.--Pursuant to article IV, section 3, clause 2 of
the Constitution of the United States, the Puerto Rico Financial
Responsibility and Management Assistance Authority is established in
accordance with this section.
(b) Membership.--
(1) In general.--The Authority shall consist of--
(A) the Secretary; and
(B) 5 additional members who--
(i) meet the qualifications described in
subsection (c); and
(ii) are appointed by the President, in
consultation with the committees and
individuals described in paragraph (3).
(2) Authorized actions.--Beginning on the date on which the
President has appointed at least 3 members to the Authority,
the Authority may take any action authorized by this title.
(3) Consultation required.--The President shall appoint the
members of the Authority after consultation with--
(A) the Committee on Energy and Natural Resources
of the Senate;
(B) the Committee on Natural Resources of the House
of Representatives;
(C) the Resident Commissioner of the Commonwealth;
and
(D) the Governor.
(4) Chairperson.--The Secretary shall serve as chairperson
of the Authority.
(5) Terms of service.--
(A) Initial appointment; designation.--Each member
appointed to the Authority shall be--
(i) appointed for an initial term of 2
years; and
(ii) designated into 3 tiers, consisting of
not more than--
(I) 1 member to serve in tier I;
(II) 2 members to serve in tier II;
and
(III) 2 members to serve in tier
III.
(B) Subsequent appointments.--For the term
immediately following the initial term under
subparagraph (A)(i), a member of the Authority may be
reappointed, or a new member named, for a term of--
(i) for the member serving in tier I--
(I) 1 additional term of not more
than 1 year; and
(II) such subsequent terms of not
more than 3 years as the President
determines to be appropriate;
(ii) for a member serving in tier II--
(I) 1 additional term of not more
than 2 years; and
(II) such subsequent terms of not
more than 3 years as the President
determines to be appropriate; and
(iii) for a member serving in tier III--
(I) 1 additional term of 3 years;
and
(II) such subsequent terms of not
more than 3 years as the President
determines to be appropriate.
(C) Removal.--The President may remove a member of
the Authority only for cause.
(6) Voting.--In voting on any matter in carrying out this
title--
(A) the chairperson of the Authority shall have 2
votes; and
(B) each other member of the Authority shall have 1
vote.
(7) Citizenship; residence.--
(A) Citizenship.--Each member of the Authority
shall be a United States citizen.
(B) Residence.--Of the members of the Authority
described in paragraph (1)(B)--
(i) 3 shall maintain a primary residence in
the Commonwealth; and
(ii) 2 shall not be residents of the
Commonwealth.
(c) Qualifications for Membership.--An individual meets the
qualifications for membership on the Authority if the individual--
(1) has knowledge and expertise in finance, management, and
the organization or operation of business or government;
(2) complies with Federal conflict of interest requirements
of section 208 of title 18, United States Code;
(3) is not, and has not been for a period of not less than
5 years before the date of appointment, an officer or employee
of--
(A) the Commonwealth; or
(B) any public corporation; and
(4)(A) does not provide goods or services to the
Commonwealth; and
(B) is not the spouse, parent, child, or sibling of an
individual who provides goods or services to the Commonwealth.
(d) No Compensation for Service.--A member of the Authority--
(1) shall serve without pay; but
(2) may receive reimbursement for any reasonable and
necessary expenses incurred by reason of service on the
Authority.
(e) Adoption of Bylaws for Conducting Business of Authority.--
(1) In general.--As soon as practicable after the date of
appointment of the members to the Authority, the Authority
shall adopt bylaws, rules, and procedures governing the
activities of the Authority under this title, including
procedures for hiring experts and consultants.
(2) Submission.--The bylaws, rules, and procedures adopted
under paragraph (1) shall--
(A) be public documents; and
(B) be submitted by the Authority, on adoption, to
each of--
(i) the Governor;
(ii) the Legislative Assembly;
(iii) the President; and
(iv) Congress.
(3) Certain activities requiring approval of majority of
members.--
(A) In general.--Except as provided in subparagraph
(B), under the bylaws adopted under paragraph (1), the
Authority may conduct operations in accordance with any
procedures that the Authority considers appropriate.
(B) Affirmative vote required.--Notwithstanding
subparagraph (A), an affirmative vote of a majority of
the members of the Authority shall be required for the
Authority--
(i) to approve or disapprove a financial
plan and budget under section 323 or 324;
(ii) to implement recommendations on
financial stability and management
responsibility under section 328;
(iii) to issue new bonds, notes, or other
obligations under section 331; and
(iv) to allocate resources under title V.
(4) Adoption of rules and regulations of commonwealth.--The
Authority may incorporate in the bylaws, rules, and procedures
adopted under paragraph (1) any rules and regulations of the
Commonwealth government that the Authority considers to be
appropriate to enable the Authority to carry out activities
under this title with the maximum degree of independence
practicable.
SEC. 312. EXECUTIVE DIRECTOR AND STAFF.
(a) Executive Director.--
(1) Appointment.--The chairperson of the Authority, with
the consent of the Authority, shall appoint an Executive
Director for the Authority.
(2) Compensation.--
(A) In general.--Subject to subparagraph (B), the
Executive Director shall be paid at a rate determined
by the Authority.
(B) Rate of pay.--The rate of pay for the Executive
Director under subparagraph (A) may not exceed the
basic pay payable for level IV of the Executive
Schedule under section 5315 of title 5, United States
Code.
(b) Staff.--With the approval of the chairperson, the Executive
Director may appoint and fix the pay of additional personnel as the
Executive Director considers appropriate, subject to the condition that
no individual appointed by the Executive Director may be paid at a rate
that exceeds the rate of pay for the Executive Director.
(c) Inapplicability of Certain Employment and Procurement Laws.--
(1) Civil service laws.--The Executive Director and staff
of the Authority--
(A) may be appointed without regard to the
provisions of title 5, United States Code, governing
appointments in the competitive service; and
(B) may be paid without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of title 5,
United States Code, relating to classification and
General Schedule pay rates.
(2) Commonwealth employment and procurement laws.--
(A) Employment laws.--The Executive Director and
staff of the Authority may be appointed and paid
without regard to the provisions of the Puerto Rico
Code governing appointments and salaries.
(B) Procurement laws.--The provisions of the Puerto
Rico Code governing procurement shall not apply to the
Authority.
(d) Staff of Federal Agencies.--On the request of the chairperson,
the head of any Federal or Commonwealth government department or agency
may detail to the Authority, on a reimbursable or nonreimbursable
basis, any of the personnel of the department or agency to assist the
Authority in carrying out the duties of the Authority under this title.
SEC. 313. POWERS OF AUTHORITY.
(a) In General.--The Authority may, for the purpose of carrying out
this title--
(1) hold hearings;
(2) sit and act at such times and places as the Authority
considers appropriate;
(3) take testimony;
(4) receive evidence;
(5) administer oaths or affirmations to witnesses appearing
before the Authority; and
(6) provide assistance and recommendations regarding
financial stability and management responsibility to the
Commonwealth government for the purposes of this title.
(b) Powers of Members and Agents.--Any member or agent of the
Authority may, if authorized by the Authority, take any action that the
Authority is authorized to take under this section.
(c) Obtaining Official Data.--
(1) Federal government.--Notwithstanding sections 552 and
552b of title 5, United States Code, the Authority may secure
directly from any Federal department or agency information
necessary to enable the Authority to carry out this title, with
the approval of the head of the applicable Federal department
or agency.
(2) Commonwealth government.--
(A) In general.--Notwithstanding any other
provision of law, the Authority shall have the right to
secure copies of any records, documents, information,
or data from any entity of the Commonwealth government
necessary to enable the Authority to carry out the
responsibilities of the Authority under this title.
(B) Access.--At the request of the Authority, the
Authority shall be granted direct access to any
information systems, records, documents, information,
or data described in subparagraph (A) that would enable
the Authority to carry out the responsibilities of the
Authority under this title.
(C) Provision by heads of entities.--The head of
the department or agency of the Commonwealth government
responsible for the information shall provide the
Authority with any information and assistance
(including granting the Authority direct access to
automated or other information systems) as the
Authority may require under this paragraph.
(d) Gifts, Bequests, and Devises.--
(1) In general.--The Authority may accept, use, and dispose
of gifts, bequests, or devises of services and real and
personal property for the purpose of aiding or facilitating the
work of the Authority.
(2) Use.--Any gifts, bequests, or devises of money accepted
by the Authority, and any proceeds from sales of other property
received as gifts, bequests, or devises by the Authority,
shall--
(A) be deposited in an account established by the
Authority; and
(B) be available for disbursement on order of the
chairperson of the Authority.
(e) Subpoena Power.--
(1) In general.--The chairperson of the Authority may issue
subpoenas requiring the attendance and testimony of witnesses
and the production of any evidence relating to any matter under
investigation by the Authority.
(2) Scope.--The attendance of witnesses and the production
of evidence may be required by the Authority--
(A) from any place within the United States; and
(B) at any designated place of hearing within the
United States.
(3) Failure to obey a subpoena.--
(A) Application to united states district court.--
If a person refuses to obey a subpoena issued under
paragraph (1), the Authority may apply to a United
States district court for an order requiring the person
to appear before the Authority to give testimony or
produce evidence relating to the matter under
investigation.
(B) Judicial district.--An application may be made
under subparagraph (A) in--
(i) the judicial district in which the
hearing is conducted; or
(ii) the judicial district in which the
person subject to the subpoena is found,
resides, or transacts business.
(C) Contempt.--The United States district court may
treat as civil contempt any failure to obey the order
of a court under this paragraph.
(4) Service of subpoenas.--The Authority shall serve
subpoenas under this subsection in the manner provided for
subpoenas issued by United States district court under the
Federal Rules of Civil Procedure for the United States district
courts.
(5) Service of process.--All service of process of any
court to which application is made under paragraph (2) may be
served in the judicial district in which the person required to
be served resides or may be found.
(f) Administrative Support Services.--On the request of the
Authority, the Administrator of General Services may provide to the
Authority, on a reimbursable basis, the administrative support services
necessary for the Authority to carry out the responsibilities of the
Authority under this title.
(g) Authority To Enter Into Contracts.--The Executive Director of
the Authority may enter into any contract that the Executive Director
considers appropriate (subject to the approval of the chairperson of
the Authority) to carry out the responsibilities of the Authority under
this title.
(h) Civil Actions To Enforce Powers.--The Authority may seek
judicial enforcement of the authority to carry out the responsibilities
of the Authority under this title.
(i) Penalties.--
(1) Acts prohibited.--Any officer or employee of the
Commonwealth government shall be guilty of a misdemeanor if the
officer or employee--
(A)(i) takes any action in violation of any valid
order of the Authority; or
(ii) fails or refuses to take any action required
by an order described in clause (i); or
(B)(i) knowingly and willfully prepares, presents,
or certifies any information (including any projections
or estimates) or report for the Authority or any of the
agents of the Board that is false or misleading; or
(ii) on learning that any information described in
clause (i) is false or misleading, fails to immediately
advise the Authority or agents of the Board in writing
of the discovery.
(2) Administrative discipline.--In addition to any other
applicable penalty, any officer or employee of the Commonwealth
government who knowingly and willfully violates paragraph (1)
shall be subject to appropriate administrative discipline,
including, as appropriate--
(A) suspension from duty without pay; or
(B) removal from office by order of the Governor or
Authority.
(3) Report by governor on disciplinary actions taken.--In
the case of a violation of paragraph (1) by an officer or
employee of the Commonwealth government, the Governor shall
immediately submit to the Authority a report that--
(A) describes all pertinent facts; and
(B) includes a statement of the action taken
relating to the violation.
SEC. 314. EXEMPTION FROM LIABILITY FOR CLAIMS.
The Authority (including the members of the Authority) may not be
liable for any obligation of or claim against the Commonwealth
resulting from actions taken to carry out this title.
SEC. 315. TREATMENT OF ACTIONS.
(a) Jurisdiction Established.--Except as provided in section
313(e)(3), any action against the Authority or any action otherwise
arising out of this title, in whole or in part, shall be brought in the
United States District Court for the District of Puerto Rico.
(b) Appeal.--
(1) Court of appeals.--Notwithstanding any other provision
of law, any order of the United States District Court for the
District of Puerto Rico that is issued pursuant to an action
brought under subsection (a) shall be reviewable only pursuant
to a notice of appeal to the United States Court of Appeals for
the First Circuit.
(2) Supreme court.--Notwithstanding any other provision of
law, review by the Supreme Court of a decision of the Court of
Appeals that is issued under paragraph (1) may be available
only if the petition for review is filed by the date that is 10
days after the date of entry of the decision of the Court of
Appeals.
(c) Timing of Relief.--No order of any court granting declaratory
or injunctive relief against the Authority (including relief permitting
or requiring the obligation, borrowing, or expenditure of funds) shall
take effect during--
(1) the pendency of the action before the court;
(2) the period during which appeal may be taken; or
(3) if appeal is taken, the period before the court has
entered a final order disposing of the action.
(d) Expedited Consideration.--It shall be the duty of the United
States District Court for the District of Puerto Rico, the United
States Court of Appeals for the First Circuit, and the Supreme Court to
advance on the docket, and to expedite to the greatest extent
practicable, the disposition of any action brought under subsection
(a).
SEC. 316. FUNDING FOR OPERATION OF AUTHORITY.
(a) Annual Budgeting Process.--
(1) Submission of budget.--The Authority shall submit to
the Secretary for inclusion in the annual budget of the
President a proposed budget for the Authority for each fiscal
year.
(2) Contents of budget.--A budget submitted under paragraph
(1) shall describe--
(A) expenditures of the Authority by category,
including expenditures for staff of the Authority;
(B) services of personnel and other services
provided by or on behalf of the Authority for which the
Authority made no reimbursement; and
(C) any gifts or bequests made to the Authority
during the previous fiscal year.
(3) Appropriations required.--For fiscal year 2016 and each
fiscal year thereafter, an amount may be obligated or expended
by the Authority for a fiscal year only if the amount has been
approved by an Act of Congress.
(b) Special Rule for Funding of Operations During Fiscal Year
2015.--As soon as practicable after the date of appointment of the
members of the Authority, the Authority shall submit to the Governor
and the President, for submission to Congress--
(1) a request for reprogramming of funds under the budget
account for the Department of the Treasury; and
(2) a description of anticipated expenditures of the
Authority for fiscal year 2015.
SEC. 317. SUSPENSION OF ACTIVITIES.
The Authority shall suspend any activities carried out under this
title, and the terms of the members of the Authority shall expire, on
the date that is 3 years after the date on which the Authority
certifies that all control periods initiated under section 322 have
terminated.
SEC. 318. APPLICATION OF LAWS OF COMMONWEALTH TO AUTHORITY.
(a) No Control, Supervision, Oversight, or Review by Governor or
Legislative Assembly.--The Governor and the Legislative Assembly may
not exercise any control, supervision, oversight, or review over the
Authority or any activities of the Authority.
(b) Authority Not Subject to Representation by Secretary of
Justice.--In any action brought by, or on behalf of, the Authority, and
in any action brought against the Authority--
(1) the Authority shall be represented by such counsel as
the Authority may select; but
(2) in no case may the Authority be represented by the
Secretary of Justice of the Commonwealth.
Subtitle B--Responsibilities of Authority
PART I--CONTROL PERIOD
SEC. 321. EARLY OPT-IN AUTHORITY.
Notwithstanding the timeframes provided in subsections (a)(1) and
(b)(1) of section 322, the Authority may carry out this title beginning
on the date on which the Legislative Assembly enacts a resolution
supporting the actions of the Authority authorized by section 322.
SEC. 322. CERTIFICATIONS BY AUTHORITY.
(a) Public Corporations.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act and annually thereafter, the Authority
shall certify whether any public corporation--
(A) does not have sufficient revenue to meet the
debt obligations of the public corporation;
(B) has defaulted with respect to any loan, bond,
note, or other form of borrowing;
(C) is unable to meet the payroll of the public
corporation for any pay period;
(D) has a cash deficit at the end of any quarter of
the fiscal year equal to or greater than the difference
between--
(i) the estimated revenues of the public
corporation during the remainder of the fiscal
year; and
(ii) the estimated expenditures of the
public corporation (including repayments of
temporary borrowing) during the remainder of
the fiscal year; and
(E) fails to make any required payments relating to
pensions and benefits for current and former employees
of the public corporation.
(2) Budget control.--If the Authority certifies that a
public corporation is unable to meet any of the requirements
under paragraph (1), a control period shall be initiated for
the public corporation in accordance with section 323.
(3) Termination.--A control period for a public corporation
initiated under this subsection terminates on the date on which
the Authority certifies that--
(A) the public corporation has adequate access to
short-term and long-term credit markets at reasonable
interest rates to meet the borrowing needs of the
public corporation; and
(B) for 2 consecutive years after the initiation of
a control period, the expenditures made by the public
corporation during each fiscal year did not exceed the
revenues of the public corporation during that year, as
determined in accordance with generally accepted
accounting principles.
(4) Consultation required.--In making a certification under
this subsection, the Authority shall consult with the
Government Development Bank of Puerto Rico.
(5) Emergency manager.--
(A) In general.--If, during a control period for a
public corporation, the Authority certifies that over
the course of 2 consecutive quarters the expenditures
made by a public corporation exceed the revenues of
that public corporation in violation of the financial
plan and budget required under section 323, the
Authority may appoint an emergency manager for the
public corporation.
(B) Authority.--
(i) Authority of board of directors and
officers.--The emergency manager shall exercise
all authorities previously exercised by the
board of directors and officers of the public
corporation under the charter, bylaws, or
organic statute of the public corporation or
the applicable laws of the Commonwealth.
(ii) Additional authority.--
(I) In general.--In addition to the
authority under clause (i), the
emergency manager may propose increases
in, decreases in, or other changes to
any rates, fees, taxes, or other
charges that the public corporation has
the power to impose on people or
property within the Commonwealth.
(II) Required demonstration.--An
increase, decrease, or change proposed
under subclause (I) shall be
accompanied by a demonstration of the
reasonable necessity of the increase,
decrease, or change to maintain--
(aa) the operation,
property, physical plant and
equipment, or financial
condition of the public
corporation; or
(bb) the ability of the
public corporation to obtain
unsecured credit on the capital
markets at a reasonable
interest rate.
(III) Review.--
(aa) In general.--An
increase, decrease, or change
proposed under subclause (I)
shall be subject to review by
any commission, authority,
agency, or governmental body
with authority to review the
rates, fees, taxes, or other
charges imposed by the public
corporation.
(bb) Deemed approval.--If a
commission, authority, agency,
or governmental body fails to
approve and implement or
disapprove the proposed
increase, decrease, or change
by the date that is 120 days
after the date on which the
increase, decrease, or change
is submitted to the commission,
authority, agency, or
governmental body, the proposed
increase, decrease, or change
shall be deemed approved by the
commission, authority, agency,
or governmental body.
(C) Salary.--The public corporation shall be
responsible for paying the salary and any other
compensation of the emergency manager.
(b) Commonwealth Government.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act and annually thereafter, the Authority
shall certify whether the Commonwealth government--
(A) does not have sufficient revenue to meet debt
obligations of the Commonwealth government;
(B) has defaulted with respect to any loan, bond,
note, or other form of borrowing;
(C) is unable to meet the payroll of the
Commonwealth government for any pay period;
(D) has a cash deficit at the end of any quarter of
the fiscal year equal to or greater than the difference
between--
(i) the estimated revenues of the
Commonwealth government during the remainder of
the fiscal year; and
(ii) the estimated expenditures of the
Commonwealth government (including repayments
of temporary borrowing) during the remainder of
the fiscal year; and
(E) fails to make any required payments relating to
pensions and benefits for current and former employees
of the Commonwealth government.
(2) Budget control.--If the Authority certifies that the
Commonwealth government is unable to meet any of the
requirements under paragraph (1), a control period for the
Commonwealth government is initiated in accordance with section
324.
(3) Termination.--A control period for the Commonwealth
government initiated under this subsection terminates on the
date on which the Authority certifies that--
(A) the Commonwealth government has adequate access
to short-term and long-term credit markets at
reasonable interest rates to meet the borrowing needs
of the Commonwealth government; and
(B) for 4 consecutive years after the initiation of
a control period for the Commonwealth government, the
expenditures made by the Commonwealth government during
each fiscal year did not exceed the revenues of the
Commonwealth government during that year, as determined
in accordance with the generally accepted accounting
principles contained in the comprehensive annual
financial report for the Commonwealth.
(4) Required consultation.--In making a certification under
this subsection, the Authority shall consult with the
Government Development Bank of Puerto Rico.
SEC. 323. FINANCIAL PLAN AND BUDGET FOR PUBLIC CORPORATIONS DURING
CONTROL PERIOD.
(a) Development; Contents.--
(1) In general.--For each fiscal year for which a public
corporation is in a control period under section 322(a), the
Governor or the emergency manager (as applicable) shall develop
and submit to the Authority a financial plan and budget for the
public corporation in accordance with this section.
(2) Contents.--
(A) In general.--A financial plan and budget for
the public corporation for a fiscal year shall specify
the budgets for the public corporation for the
applicable fiscal year and the subsequent 3 fiscal
years (including the projected revenues and
expenditures of each fund of the public corporation for
those fiscal years), in accordance with the
requirements described in subparagraph (B).
(B) Requirements.--The financial plan and budget
shall--
(i) meet the standards described in
paragraph (3) to promote the financial
stability of the public corporation;
(ii) provide for estimates of revenues and
expenditures on a modified accrual basis;
(iii)(I) describe lump-sum expenditures by
department, by object class;
(II) describe capital expenditures
(together with a schedule of projected capital
commitments of the public corporation and
proposed sources of funding);
(III) contain estimates of short-term and
long-term debt, whether outstanding or
anticipated to be issued; and
(IV) contain cash flow forecasts for each
fund of the public corporation, at such
intervals as the Authority may require;
(iv) include a statement describing methods
of estimations and significant assumptions; and
(v) include such other provisions, and meet
such other criteria, as the Authority considers
to be appropriate to meet the purposes of this
title, including provisions relating to--
(I) changes in personnel policies
and levels for each department of the
public corporation;
(II) changes in the structure and
organization of the public corporation;
and
(III) management initiatives to
promote--
(aa) productivity;
(bb) improvement in the
delivery of services; or
(cc) cost savings.
(3) Standards to promote financial stability.--
(A) In general.--The standards to promote the
financial stability of the public corporation
applicable to the financial plan and budget for a
fiscal year are as follows:
(i) In the case of the financial plan and
budget for the first fiscal year of a control
period, the expenditures of the public
corporation may not exceed the revenues of the
public corporation for that fiscal year.
(ii) During each of the 5 subsequent fiscal
years, the public corporation shall make
continuous, substantial progress toward
equalizing the expenditures and revenues of the
public corporation for those fiscal years in
equal annual installments, to the maximum
extent practicable.
(iii) The public corporation shall provide
for the orderly liquidation of the cumulative
fund balance deficit of the public corporation,
as evidenced by financial statements prepared
in accordance with generally accepted
accounting principles.
(iv) If funds in any account of the public
corporation that are dedicated for specific
purposes have been withdrawn from that account
for any other purpose, the public corporation
shall fully restore the funds to the account.
(v) The financial plan and budget shall
ensure the continuing long-term financial
stability of the public corporation, as
indicated by factors including--
(I) access to short-term and long-
term capital markets;
(II) the efficient management of
the public corporation workforce; and
(III) the effective provision of
services by the public corporation.
(B) Application of sound budgetary practices;
assumptions based on current law.--In meeting the
standards described in subparagraph (A) with respect to
a financial plan and budget for a fiscal year, the
public corporation shall--
(i) apply sound budgetary practices,
including--
(I) reducing costs and other
expenditures;
(II) improving productivity;
(III) increasing revenues; or
(IV) any combination of those
practices; and
(ii) base estimates of revenues and
expenditures on Federal law, as in effect at
the time of preparation of the financial plan
and budget.
(b) Submission, Review, and Approval.--
(1) Submission.--Not later than February 1 of each fiscal
year preceding a fiscal year during which a public corporation
is in a control period under section 322(a), the Governor or
emergency manager (as applicable) shall submit to the Authority
and the Legislative Assembly a financial plan and budget for
the public corporation for that following fiscal year, as
developed in accordance with this subsection.
(2) Review by authority.--On receipt of a financial plan
and budget for a fiscal year under paragraph (1), the
Authority--
(A) shall promptly review the financial plan and
budget; and
(B) in conducting the review, may request any
additional information the Authority considers to be
necessary and appropriate to carry out this part.
(3) Action on approval.--
(A) Certification to governor.--
(i) In general.--If the Authority
determines that the financial plan and budget
for a fiscal year submitted under paragraph (1)
meets the applicable requirements of this
section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying that approval to--
(AA) the emergency
manager (as
applicable);
(BB) the Governor;
(CC) the
Legislative Assembly;
(DD) the President;
and
(EE) Congress; and
(II) the Governor or the emergency
manager (as applicable) shall promptly
submit the financial plan and budget to
the Legislative Assembly.
(ii) Deemed approval.--
(I) In general.--If the Authority
has not provided to the emergency
manager (as applicable), the Governor,
the Legislative Assembly, and Congress
a notice certifying approval under
clause (i)(I)(bb) or a statement of
disapproval under paragraph (4)(A)(ii)
by the date that is 30 days after the
date on which the Authority receives
the financial plan and budget under
paragraph (1), the Authority shall be
deemed to have--
(aa) approved the financial
plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (i)(I)(bb) to--
(AA) the emergency
manager (as
applicable);
(BB) the Governor;
(CC) the
Legislative Assembly;
(DD) the President;
and
(EE) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
emergency manager (as applicable), the
Governor, the Legislative Assembly, the
President, and Congress an explanation
for the failure of the Authority to
submit a notice certifying approval or
a statement of disapproval during the
30-day period described in that
subclause.
(B) Adoption by legislative assembly.--Not later
than 30 days after the date of receipt of the financial
plan and budget for a fiscal year from the Governor or
the emergency manager (as applicable) under
subparagraph (A)(i)(II), the Legislative Assembly
shall--
(i) by Act, adopt the financial plan and
budget, which shall serve as the adoption of
the budget of the public corporation for the
fiscal year; and
(ii) submit the financial plan and budget
to--
(I) the emergency manager (as
applicable);
(II) the Governor; and
(III) the Authority.
(4) Action on disapproval.--
(A) In general.--If the Authority determines that
the financial plan and budget for a fiscal year
submitted under paragraph (1) does not meet the
applicable requirements under this section, the
Authority shall--
(i) disapprove the financial plan and
budget; and
(ii) submit to the emergency manager (as
applicable), the Governor, and the Legislative
Assembly a statement containing--
(I) the reasons for the
disapproval;
(II) a description of the amount of
any shortfall in the budget or
financial plan; and
(III) any recommendations for
revisions to the budget the Authority
considers to be appropriate to ensure
that the financial plan and budget
meets the applicable requirements under
this section.
(B) Revised financial plan and budget.--
(i) In general.--Not later than 15 days
after the date of receipt of a statement from
the Authority under subparagraph (A)(ii), the
Governor or the emergency manager (as
applicable) shall promptly submit to the
Authority and the Legislative Assembly a
revised financial plan and budget for the
applicable fiscal year that addresses the
reasons of the Authority for disapproval.
(ii) Approval.--If the Authority determines
that the revised financial plan and budget for
a fiscal year submitted by the Governor or the
emergency manager (as applicable) under clause
(i) meets the applicable requirements under
this section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying that approval to--
(AA) the emergency
manager (as
applicable);
(BB) the Governor;
(CC) the
Legislative Assembly;
(DD) the President;
and
(EE) Congress; and
(II) the Governor or the emergency
manager (as applicable) shall promptly
submit the financial plan and budget to
the Legislative Assembly.
(iii) Disapproval.--
(I) In general.--If the Authority
determines that the revised financial
plan and budget for a fiscal year
submitted by the Governor or the
emergency manager (as applicable) under
clause (i) does not meet the applicable
requirements under this section, the
Authority shall--
(aa) disapprove the
financial plan and budget;
(bb) submit to the
Governor, the emergency manager
(as applicable), the
Legislative Assembly, the
President, and Congress a
statement containing the
reasons for the disapproval;
and
(cc)(AA) recommend a
financial plan and budget for
the public corporation that
meets the applicable
requirements under this
section; and
(BB) submit the financial
plan and budget to the
Governor, the emergency manager
(as applicable), and the
Legislative Assembly.
(II) Submission of rejected
financial plan and budget.--The
Governor or the emergency manager (as
applicable) shall promptly submit to
the Legislative Assembly a revised
financial plan and budget disapproved
by the Authority under this clause.
(iv) Deemed approval.--
(I) In general.--If the Authority
has not provided to the Governor, the
Legislative Assembly, and Congress a
notice certifying approval under clause
(ii)(I)(bb) or a statement of
disapproval under clause (iii)(I)(bb)
by the date that is 15 days after the
date on which the Authority receives
the revised financial plan and budget
submitted by the Governor or the
emergency manager (as applicable) under
clause (i), the Authority shall be
deemed to have--
(aa) approved the revised
financial plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (ii)(I)(bb) to--
(AA) the emergency
manager (as
applicable);
(BB) the Governor;
(CC) the
Legislative Assembly;
(DD) the President;
and
(EE) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
Governor, the emergency manager (as
applicable), the Legislative Assembly,
the President, and Congress an
explanation for the failure of the
Authority to submit a notice certifying
approval or a statement of disapproval
during the 15-day period described in
that subclause.
(C) Action by legislative assembly.--
(i) In general.--Not later than 30 days
after the date of receipt of an approved
revised financial plan and budget of the
Governor or the emergency manager (as
applicable) for a fiscal year under
subparagraph (B)(ii) or, in the case of a
financial plan and budget disapproved by the
Authority, the financial plan and budget
recommended by the Authority under subparagraph
(B)(iii)(I)(cc), the Legislative Assembly
shall--
(I) by Act, adopt the financial
plan and budget, which shall serve as
the adoption of the budget of the
public corporation for the fiscal year;
and
(II) submit the financial plan and
budget to--
(aa) the emergency manager
(as applicable);
(bb) the Governor; and
(cc) the Authority.
(5) Revisions to financial plan and budget.--
(A) Action by governor.--The Governor or the
emergency manager (as applicable) may submit to the
Authority proposed revisions to the financial plan and
budget for a control year at any time during the
control year.
(B) Procedure.--Except as provided in subparagraph
(C), the procedures described in paragraphs (2), (3),
and (4) shall apply with respect to a proposed revision
to a financial plan and budget in the same manner as
those procedures apply with respect to the original
financial plan and budget.
(C) Exception for revisions not affecting
appropriations.--To the extent that a proposed revision
to a financial plan and budget adopted by the
Legislative Assembly pursuant to this section does not
increase the amount of spending with respect to any
account of the public corporation, the revision shall
take effect on the date of approval by the Authority of
the revision, subject to review by Congress.
SEC. 324. FINANCIAL PLAN AND BUDGET FOR THE COMMONWEALTH DURING A
CONTROL PERIOD.
(a) Financial Plan and Budget Required; Contents.--
(1) In general.--For each fiscal year for which the
Commonwealth government is in a control period under section
322(b), the Governor shall develop and submit to the Authority
a financial plan and budget for the Commonwealth in accordance
with this section.
(2) Contents.--
(A) In general.--A financial plan and budget for
the Commonwealth for a fiscal year shall specify the
budgets for the Commonwealth government for the
applicable fiscal year and the subsequent 3 fiscal
years (including the projected revenues and
expenditures of each fund of the Commonwealth
government for those fiscal years), in accordance with
the requirements described in subparagraph (B).
(B) Requirements.--The financial plan and budget
shall--
(i) meet the standards described in
paragraph (3) to promote the financial
stability of the Commonwealth government;
(ii) provide for estimates of revenues and
expenditures on a modified accrual basis;
(iii)(I) describe lump-sum expenditures by
department, by object class;
(II) describe capital expenditures
(together with a schedule of projected capital
commitments of the Commonwealth government and
proposed sources of funding);
(III) contain estimates of short-term and
long-term debt, whether outstanding or
anticipated to be issued; and
(IV) contain cash flow forecasts for each
fund of the Commonwealth government, at such
intervals as the Authority may require;
(iv) include a statement describing methods
of estimations and significant assumptions; and
(v) include such other provisions, and meet
such other criteria, as the Authority considers
to be appropriate to meet the purposes of this
title, including provisions relating to--
(I) changes in personnel policies
and levels for each department or
agency of the Commonwealth government;
(II) changes in the structure and
organization of the Commonwealth
government; and
(III) management initiatives to
promote--
(aa) productivity;
(bb) improvement in the
delivery of services; or
(cc) cost savings.
(3) Standards to promote financial stability.--
(A) In general.--The standards to promote the
financial stability of the Commonwealth government
applicable to the financial plan and budget for a
fiscal year are as follows:
(i) In the case of the financial plan and
budget for the first fiscal year of a control
period, the expenditures of the Commonwealth
government for the fiscal year may not exceed
the revenues of the Commonwealth government for
that fiscal year.
(ii) During each of 5 subsequent fiscal
years, the Commonwealth government shall make
continuous, substantial progress toward
equalizing the expenditures and revenues of the
Commonwealth government for those fiscal years
in equal annual installments, to the maximum
extent practicable.
(iii) The Commonwealth government shall
provide for the orderly liquidation of the
cumulative fund balance deficit of the
government, as evidenced by financial
statements prepared in accordance with
generally accepted accounting principles.
(iv) If funds in any account of the
Commonwealth government that are dedicated for
specific purposes have been withdrawn from that
account for any other purpose, the Commonwealth
government shall fully restore the funds to the
account.
(v) The financial plan and budget shall
ensure the continuing long-term financial
stability of the Commonwealth government, as
indicated by factors including--
(I) access to short-term and long-
term capital markets;
(II) the efficient management of
the Commonwealth government workforce;
and
(III) the effective provision of
services by the Commonwealth
government.
(B) Application of sound budgetary practices;
assumptions based on current law.--In meeting the
standards described in subparagraph (A) with respect to
a financial plan and budget for a fiscal year, the
Commonwealth government shall--
(i) apply sound budgetary practices,
including--
(I) reducing costs and other
expenditures;
(II) improving productivity;
(III) increasing revenues; or
(IV) any combination of those
practices; and
(ii) base estimates of revenues and
expenditures on Federal law, as in effect at
the time of preparation of the financial plan
and budget.
(b) Submission, Review, and Approval.--
(1) In general.--Not later than February 1 of each fiscal
year preceding a fiscal year during which the Commonwealth
government is in a control period under section 322(b), the
Governor shall submit to the Authority and the Legislative
Assembly a financial plan and budget for that following fiscal
year, as developed in accordance with this section.
(2) Review by authority.--On receipt of a financial plan
and budget for a fiscal year from the Governor under paragraph
(1), the Authority--
(A) shall promptly review the financial plan and
budget; and
(B) in conducting the review, may request any
additional information the Authority considers to be
necessary and appropriate to carry out this part.
(3) Action on approval.--
(A) Certification to governor.--
(i) In general.--If the Authority
determines that the financial plan and budget
for a fiscal year submitted by the Governor
under paragraph (1) meets the applicable
requirements of this section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying that approval to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress; and
(II) the Governor shall promptly
submit the financial plan and budget to
the Legislative Assembly.
(ii) Deemed approval.--
(I) In general.--If the Authority
has not provided to the Governor, the
Legislative Assembly, and Congress a
notice certifying approval under clause
(i)(I)(bb) or a statement of
disapproval under paragraph (4)(A)(ii)
by the date that is 30 days after the
date on which the Authority receives
the financial plan and budget from the
Governor under paragraph (1), the
Authority shall be deemed to have--
(aa) approved the financial
plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (i)(I)(bb) to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
Governor, the Legislative Assembly, the
President, and Congress an explanation
for the failure of the Authority to
submit a notice certifying approval or
a statement of disapproval during the
30-day period described in that
subclause.
(B) Adoption by legislative assembly.--Not later
than 30 days after the date of receipt of the financial
plan and budget for a fiscal year from the Governor
under subparagraph (A)(i)(II), the Legislative Assembly
shall--
(i) by Act, adopt the financial plan and
budget, which shall serve as the adoption of
the budget of the Commonwealth government for
the fiscal year; and
(ii) submit the financial plan and budget
to--
(I) the Governor; and
(II) the Authority.
(C) Review of legislative assembly financial plan
and budget.--On receipt of the financial plan and
budget for a fiscal year from the Legislative Assembly
under subparagraph (B), and taking into account any
items or provisions disapproved by the Governor or
disapproved by the Governor and reenacted by the
Legislative Assembly, the Authority--
(i) shall promptly review the financial
plan and budget; and
(ii) in conducting the review, may request
any additional information the Authority
considers to be necessary and appropriate to
carry out this part.
(D) Results of authority review.--
(i) Approval.--If the Authority determines
that the financial plan and budget for the
fiscal year submitted by the Legislative
Assembly under subparagraph (B)(ii) meets the
applicable requirements under this section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying the approval to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress; and
(II) the Legislative Assembly shall
promptly submit the financial plan and
budget to the Governor for transmission
to the President and Congress.
(ii) Disapproval.--If the Authority
determines that the financial plan and budget
for a fiscal year submitted by the Legislative
Assembly under subparagraph (B)(ii) does not
meet the applicable requirements under this
section, the Authority shall--
(I) disapprove the financial plan
and budget; and
(II) submit to the Governor, the
Legislative Assembly, the President,
and Congress a statement containing--
(aa) the reasons for the
disapproval;
(bb) a description of the
amount of any shortfall in the
budget or financial plan; and
(cc) any recommendations
for revisions to the budget the
Authority considers to be
appropriate to ensure that the
budget is consistent with the
financial plan and budget.
(iii) Deemed approval.--
(I) In general.--If the Authority
has not submitted to the Governor, the
Legislative Assembly, the President,
and Congress a notice certifying
approval under clause (i)(I)(bb) or a
statement of disapproval under clause
(ii)(II) by the date that is 15 days
after the date on which the Authority
receives the financial plan and budget
from the Legislative Assembly under
subparagraph (B)(ii), the Authority
shall be deemed to have--
(aa) approved the financial
plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (i)(I)(bb) to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
Governor, the Legislative Assembly, the
President, and Congress an explanation
for the failure of the Authority to
submit a notice certifying approval or
a statement of disapproval during the
15-day period described in that
subclause.
(E) Authority review of revised financial plan and
budget.--
(i) In general.--Not later than 15 days
after the date of receipt of a statement from
the Authority under subparagraph (D)(ii)(II),
the Legislative Assembly shall--
(I) promptly, by Act, adopt a
revised financial plan and budget for
the applicable fiscal year that
addresses the reasons for disapproval
cited in the statement; and
(II) submit the revised financial
plan and budget to--
(aa) the Governor; and
(bb) the Authority.
(ii) Approval.--If, after reviewing the
revised financial plan and budget for a fiscal
year submitted by the Legislative Assembly
under clause (i) in accordance with the
procedures described in this subsection, the
Authority determines that the revised financial
plan and budget meets the applicable
requirements under this section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying that approval to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress; and
(II) the Legislative Assembly shall
promptly submit the financial plan and
budget to the Governor for transmission
to the President and Congress.
(iii) Disapproval.--
(I) In general.--If, after
reviewing the revised financial plan
and budget for a fiscal year submitted
by the Legislative Assembly under
clause (i) in accordance with the
procedures described in this paragraph,
the Authority determines that the
revised financial plan and budget does
not meet the applicable requirements
under this section, the Authority
shall--
(aa) disapprove the
financial plan and budget;
(bb) submit to the
Governor, the Legislative
Assembly, the President, and
Congress a statement
containing--
(AA) the reasons
for the disapproval;
and
(BB) a description
of the amount of any
shortfall in the budget
or financial plan; and
(cc)(AA) recommend a
financial plan and budget for
the Commonwealth government
that meets the applicable
requirements under this
section; and
(BB) submit that financial
plan and budget to the
Governor, the Legislative
Assembly, the President, and
Congress.
(II) Submission of rejected
financial plan and budget.--The
Legislative Assembly shall promptly
submit to the Governor for transmission
to the President and Congress a revised
financial plan and budget disapproved
by the Authority under this clause.
(iv) Deemed approval.--
(I) In general.--If the Authority
has not provided to the Governor, the
Legislative Assembly, and Congress a
notice certifying approval under clause
(ii)(I)(bb) or a statement of
disapproval under clause (iii)(I)(bb)
by the date that is 15 days after the
date on which the Authority receives
the revised financial plan and budget
submitted by the Legislative Assembly
under clause (i), the Authority shall
be deemed to have--
(aa) approved the financial
plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (ii)(I)(bb) to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
Governor, the Legislative Assembly, the
President, and Congress an explanation
for the failure of the Authority to
submit a notice certifying approval or
a statement of disapproval during the
15-day period described in that
subclause.
(F) Deadline for transmission by authority.--
Notwithstanding any other provision of this subsection,
not later than June 15 of each fiscal year preceding a
fiscal year that is a control year, the Authority shall
submit to Congress--
(i) as applicable, a notice certifying the
approval by the Authority of--
(I) the initial financial plan and
budget of the Legislative Assembly for
that following fiscal year under
subparagraph (D)(i); or
(II) the revised financial plan and
budget of the Legislative Assembly for
that following fiscal year under
subparagraph (E)(ii); or
(ii) an approved and recommended financial
plan and budget of the Authority for the
Commonwealth government for that following
fiscal year under subparagraph (E)(iii).
(4) Action on disapproval.--
(A) In general.--If the Authority determines that
the financial plan and budget for a fiscal year
submitted by the Governor under paragraph (1) does not
meet the applicable requirements under this section,
the Authority shall--
(i) disapprove the financial plan and
budget; and
(ii) submit to the Governor and the
Legislative Assembly a statement containing--
(I) the reasons for the
disapproval;
(II) a description of the amount of
any shortfall in the budget or
financial plan; and
(III) any recommendations for
revisions to the budget the Authority
considers to be appropriate to ensure
that the financial plan and budget
meets the applicable requirements under
this section.
(B) Revised financial plan and budget.--
(i) In general.--Not later than 15 days
after the date of receipt of a statement from
the Authority under subparagraph (A)(ii), the
Governor shall promptly submit to the Authority
and the Legislative Assembly a revised
financial plan and budget for the applicable
fiscal year that addresses the reasons of the
Authority for disapproval.
(ii) Approval.--If the Authority determines
that the revised financial plan and budget for
a fiscal year submitted by the Governor under
clause (i) meets the applicable requirements
under this section--
(I) the Authority shall--
(aa) approve the financial
plan and budget; and
(bb) submit a notice
certifying that approval to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress; and
(II) the Governor shall promptly
submit the financial plan and budget to
the Legislative Assembly.
(iii) Disapproval.--
(I) In general.--If the Authority
determines that the revised financial
plan and budget for a fiscal year
submitted by the Governor under clause
(i) does not meet the applicable
requirements under this section, the
Authority shall--
(aa) disapprove the
financial plan and budget;
(bb) submit to the
Governor, the Legislative
Assembly, the President, and
Congress a statement containing
the reasons for the
disapproval; and
(cc)(AA) recommend a
financial plan and budget for
the Commonwealth government
that meets the applicable
requirements under this
section; and
(BB) submit the financial
plan and budget to the Governor
and the Legislative Assembly.
(II) Submission of rejected
financial plan and budget.--The
Governor shall promptly submit to the
Legislative Assembly a revised
financial plan and budget disapproved
by the Authority under this clause.
(iv) Deemed approval.--
(I) In general.--If the Authority
has not provided to the Governor, the
Legislative Assembly, and Congress a
notice certifying approval under clause
(ii)(I)(bb) or a statement of
disapproval under clause (iii)(I)(bb)
by the date that is 15 days after the
date on which the Authority receives
the revised financial plan and budget
submitted by the Governor under clause
(i), the Authority shall be deemed to
have--
(aa) approved the revised
financial plan and budget; and
(bb) submitted a notice
certifying approval described
in clause (ii)(I)(bb) to--
(AA) the Governor;
(BB) the
Legislative Assembly;
(CC) the President;
and
(DD) Congress.
(II) Explanation of failure to
respond.--If subclause (I) applies with
respect to a financial plan and budget,
the Authority shall submit to the
Governor, the Legislative Assembly, the
President, and Congress an explanation
for the failure of the Authority to
submit a notice certifying approval or
a statement of disapproval during the
15-day period described in that
subclause.
(C) Action by legislative assembly.--
(i) In general.--Not later than 30 days
after the date of receipt of an approved
revised financial plan and budget of the
Governor for a fiscal year under subparagraph
(B)(ii) or, in the case of a financial plan and
budget disapproved by the Authority, the
financial plan and budget recommended by the
Authority under subparagraph (B)(iii)(I)(cc),
the Legislative Assembly shall--
(I) by Act, adopt the financial
plan and budget, which shall serve as
the adoption of the budget of the
Commonwealth government for the fiscal
year; and
(II) submit the financial plan and
budget to--
(aa) the Governor; and
(bb) the Authority.
(ii) Review by authority.--A financial plan
and budget submitted by the Legislative
Assembly under clause (i) shall be subject to
review by the Authority and revision by the
Legislative Assembly in the same manner as the
financial plan and budget submitted by the
Legislative Assembly after an approved
preliminary financial plan and budget of the
Governor under subparagraphs (C) through (F) of
paragraph (3).
(5) Revisions to financial plan and budget.--
(A) Action by governor.--The Governor may submit to
the Authority proposed revisions to the financial plan
and budget for a control year at any time during the
control year.
(B) Procedure.--Except as provided in subparagraph
(C), the procedures described in paragraphs (2), (3),
and (4) shall apply with respect to a proposed revision
to a financial plan and budget in the same manner as
those procedures apply with respect to the original
financial plan and budget, except that the reference
contained in paragraph (3)(A)(ii) to a 30-day period
shall be considered to be a 20-day period.
(C) Exception for revisions not affecting
appropriations.--To the extent that a proposed revision
to a financial plan and budget adopted by the
Legislative Assembly pursuant to this section does not
increase the amount of spending with respect to any
account of the Commonwealth government, the revision
shall take effect on the date of approval by the
Authority of the revision, subject to review by
Congress.
SEC. 325. REVIEW TO ENSURE COMPLIANCE.
(a) Legislative Assembly Acts.--
(1) In general.--Not later than December 31 of each control
year, the Legislative Assembly shall submit to the Authority--
(A) a copy of each Act that, during the control
year, was--
(i) passed by the Legislative Assembly and
signed by the Governor;
(ii) vetoed by the Governor and repassed by
\2/3\ of the members of each of the Senate and
House of Representatives of the Legislative
Assembly; or
(iii) passed by the Legislative Assembly
and allowed to become effective without the
signature of the Governor; and
(B) an estimate of the costs of carrying out the
Act.
(2) Prompt review.--On receipt from the Legislative
Assembly of an Act under paragraph (1), the Authority shall
promptly review the Act to determine whether the Act is
consistent with--
(A) the applicable financial plan and budget
approved under section 323 or 324 for the control year;
and
(B) the estimate of the costs of carrying out the
Act under paragraph (1)(B).
(3) Actions by authority.--
(A) Approval.--Except as provided in subparagraph
(C), if the Authority determines that an Act described
in this subsection is consistent with the applicable
financial plan and budget--
(i) the Authority shall submit to the
Legislative Assembly a notice of the approval;
and
(ii) the Legislative Assembly shall submit
to Congress a copy of the Act for review.
(B) Finding of inconsistency.--Except as provided
in subparagraph (C), if the Authority determines that
an Act described in this subsection is significantly
inconsistent with the applicable financial plan and
budget, the Authority shall--
(i) notify the Legislative Assembly of the
finding;
(ii) provide the Legislative Assembly with
an explanation of the reasons for the finding;
and
(iii) to the extent the Authority considers
to be appropriate, provide to the Legislative
Assembly recommendations for modifications to
the Act.
(C) Exception for emergencies.--Subparagraphs (A)
and (B) shall not apply with respect to any Act that
the Legislative Assembly determines should take effect
immediately due to an emergency circumstance.
(4) Effect of finding.--If the Authority makes a finding
under paragraph (3)(B), the Legislative Assembly may not submit
to Congress the Act for review.
(5) Deemed approval.--
(A) In general.--Subject to subparagraph (B), if
the Authority fails to notify the Legislative Assembly
of an approval or disapproval of an Act described in
this subsection by the date that is 7 days after the
date on which the Legislative Assembly submits the Act
to the Authority, the Authority shall be deemed to have
approved the Act in accordance with paragraph (3)(A).
(B) Extension.--The Authority may elect to extend
the deadline described in subparagraph (A) to a period
of not longer than 14 days, subject to the condition
that the Authority shall notify the Legislative
Assembly and the Governor of the election.
(6) Preliminary review of proposed acts.--
(A) In general.--Subject to subparagraph (B), at
the request of the Legislative Assembly, the Authority
may conduct a preliminary review of proposed
legislation pending before the Legislative Assembly to
determine whether the legislation as proposed would be
consistent with the applicable financial plan and
budget approved under section 323 or 324.
(B) Treatment.--A preliminary review under
subparagraph (A) shall not be binding on the Authority
in reviewing any Act subsequently submitted under this
subsection.
(b) Effect on Contracts and Leases.--
(1) Mandatory prior approval.--
(A) In general.--In the case of a contract or lease
described in subparagraph (B) that is proposed to be
entered into by the Commonwealth government during a
control year, the Governor (or other appropriate
officer or agent of the Commonwealth government)--
(i) shall submit to the Authority the
proposed contract or lease for review and
approval; and
(ii) may not enter into the contract or
lease unless the Authority determines that the
proposed contract or lease is consistent with
the financial plan and budget for the control
year.
(B) Contracts and leases described.--A contract or
lease referred to in subparagraph (A) is--
(i) a labor contract entered into through
collective bargaining; or
(ii) such other type of contract or lease
as the Authority may specify for purposes of
this subparagraph.
(2) Review after execution.--
(A) In general.--In addition to the prior approval
of certain contracts and leases under paragraph (1),
the Authority may require the Governor (or other
appropriate officer or agent of the Commonwealth
government) to submit to the Authority--
(i) any other contract (including a
contract to carry out a grant) or lease entered
into by the Commonwealth government during a
control year that is executed after the date on
which the Authority has approved the financial
plan and budget for the control year under
section 323 or 324; or
(ii) any proposal of the Commonwealth
government to renew, extend, or modify a
contract or lease during a control year that is
made after the date on which the Authority has
approved that financial plan and budget.
(B) Action by authority.--The Authority shall
review each contract or lease submitted under
subparagraph (A) to determine whether the contract or
lease is consistent with the financial plan and budget
for the applicable control year.
(C) Action by governor.--If the Authority
determines under subparagraph (B) that a contract or
lease is not consistent with the applicable financial
plan and budget, to ensure that the contract or lease
will be consistent with the financial plan and budget,
the Governor shall--
(i) take such action pursuant to the
authority of the Governor to revise the
contract or lease; or
(ii) submit a proposed revision to the
financial plan and budget in accordance with
section 323(b)(5) or 324(b)(5).
(3) Contracts subject to legislative assembly approval.--In
the case of a contract or lease that is required to be
submitted to the Authority under this subsection and is subject
to approval by the Legislative Assembly under the laws of the
Commonwealth, the Governor shall submit the contract or lease
to the Authority only after the Legislative Assembly has
approved the contract or lease.
(c) Restrictions on Reprogramming of Amounts.--
(1) Submissions of requests to authority.--If the Governor
submits to the Legislative Assembly a request for the
reprogramming of any amounts provided in a budget for a fiscal
year that occurs during a control year after the date on which
the budget is adopted by the Legislative Assembly--
(A) the Governor shall submit the request to the
Authority; and
(B) the Authority shall--
(i) analyze the effect of the proposed
reprogramming on the financial plan and budget
for the fiscal year; and
(ii) submit the analysis to the Legislative
Assembly by not later than 15 days after the
date of receipt of the request.
(2) No action permitted.--The Legislative Assembly may not
adopt a reprogramming during a fiscal year that occurs during a
control year, and no officer or employee of the Commonwealth
government may carry out any reprogramming during such a year,
until the Authority has provided to the Legislative Assembly an
analysis of a request for the reprogramming in accordance with
paragraph (1).
SEC. 326. RESTRICTIONS ON BORROWING.
(a) In General.--The Commonwealth government may not borrow money
during a control year, unless the Authority provides to the Governor a
certification that both the receipt of funds through that borrowing and
the repayment of obligations incurred through the borrowing are
consistent with the financial plan and budget for the control year.
(b) Revisions to Financial Plan and Budget.--If the Authority
determines that a borrowing proposed to be carried out by the
Commonwealth government under subsection (a) is not consistent with the
financial plan and budget, the Governor may submit to the Authority a
proposed revision to the financial plan and budget in accordance with
section 324(b)(5) to ensure that the borrowing is consistent with the
revised financial plan and budget.
(c) Borrowing Described.--This subsection shall apply with respect
to any borrowing carried out by the Commonwealth government,
including--
(1) borrowing through the issuance of bonds;
(2) the exercise of authority to obtain funds from the
United States Treasury; or
(3) any other means.
SEC. 327. FINDING OF NONCOMPLIANCE.
(a) Submission of Reports.--On initiation of a control period under
section 322(b), the Governor shall submit to the Authority a report
that--
(1) describes the actual revenues obtained and expenditures
made by the Commonwealth government during the preceding
quarter, as compared to cash flows during that quarter; and
(2) compares those actual revenues, expenditures, and cash
flows with the most recent projections for those items.
(b) Demand for Additional Information.--If the Authority
determines, based on reports submitted by the Governor under subsection
(a), independent audits, or such other information as the Authority may
obtain, that the revenues or expenditures of the Commonwealth
government during a control year are not consistent with the financial
plan and budget for the year, the Authority shall require the Governor
to provide such additional information as the Authority determines to
be necessary to explain the inconsistency.
(c) Certification of Variance.--
(1) In general.--After requiring the Governor to provide
additional information under subsection (b), the Authority
shall certify to the Legislative Assembly, the President, the
Secretary, and Congress that the Commonwealth government is at
variance with the financial plan and budget, unless--
(A) the Authority determines to be reasonable and
appropriate, taking into account the terms of the
financial plan and budget--
(i) an explanation for the inconsistency
based on the additional information; or
(ii) a remedial action (including revising
the financial plan and budget pursuant to
section 324(b)(5)) implemented by the
Commonwealth government to correct the
inconsistency; and
(B) the Governor agrees to submit the reports
described in subsection (a) on a monthly basis for such
period as the Authority may require.
(2) Inconsistencies attributable to acts of congress.--
(A) Determination by authority.--If the Authority
determines that the revenues or expenditures of the
Commonwealth government during a control year are not
consistent with the financial plan and budget for the
year as approved by the Authority under section 324 as
a result of the terms and conditions of the budget of
the Commonwealth government for the control year or as
a result of any law enacted by Congress that affects
the Commonwealth, the Authority shall submit to the
Governor a notification of the determination.
(B) Certification.--In the case of an inconsistency
described in subparagraph (A), the Authority shall
certify to the Legislative Assembly, the President, the
Secretary, and Congress that the Commonwealth
government is at variance with the financial plan and
budget unless the Commonwealth government adopts or
implements a remedial action (including revising the
financial plan and budget pursuant to section
324(b)(5)) to correct the inconsistency that the
Authority finds reasonable and appropriate, taking into
account the terms of the financial plan and budget.
(d) Effect of Certification.--If the Authority certifies to the
Secretary that a variance exists--
(1) the Authority may withhold any funds deposited in an
account of the Authority which would otherwise be expended on
behalf of the Commonwealth government; and
(2) the Secretary shall withhold funds otherwise payable to
the Commonwealth under such Federal programs as the Authority
may specify (other than funds dedicated to making entitlement
or benefit payments to individuals), in such amounts and in
accordance with such other conditions as the Authority may
specify.
SEC. 328. RECOMMENDATIONS REGARDING FINANCIAL STABILITY AND MANAGEMENT
RESPONSIBILITY.
(a) In General.--The Authority may at any time submit
recommendations to the Governor, the Legislative Assembly, the
President, and Congress regarding actions the Commonwealth government
or the Federal Government may take to ensure compliance by the
Commonwealth government with a financial plan and budget, or to
otherwise promote the financial stability, management responsibility,
and service delivery efficiency of the Commonwealth government,
including recommendations relating to--
(1) the management of the financial affairs of the
Commonwealth government, including cash forecasting,
information technology, placing controls on expenditures for
personnel, reducing benefit costs, reforming procurement
practices, and placing other controls on expenditures;
(2) the structural relationship of departments, agencies,
and independent agencies within the Commonwealth government;
(3)(A) the modification of existing revenue structures; or
(B) the establishment of additional revenue structures;
(4) the establishment of alternatives for meeting
obligations to pay for the pensions of former Commonwealth
government employees;
(5) modifications or transfers of the types of services
that are the responsibility of, and are delivered by, the
Commonwealth government;
(6) modifications of the types of services that are
delivered by entities other than the Commonwealth government
under alternative service delivery mechanisms (including
privatization and commercialization);
(7) the effects of Commonwealth laws and court orders on
the operations of the Commonwealth government;
(8) the establishment of a personnel system for employees
of the Commonwealth government that is based on employee
performance standards; and
(9) the improvement of personnel training and proficiency,
the adjustment of staffing levels, and the improvement of
training and performance of management and supervisory
personnel.
(b) Response to Recommendations.--
(1) In general.--In the case of any recommendations
submitted under subsection (a) during a control year that are
within the authority of the Commonwealth government to adopt,
not later than 90 days after the date of receipt of the
recommendations, the Governor or the Legislative Assembly
(whichever has the authority to adopt the recommendation) shall
submit to the Authority, the President, and Congress a
notification describing whether the Commonwealth government
will adopt the recommendations.
(2) Implementation plan required.--If the Governor or the
Legislative Assembly (as applicable) notifies the Authority and
Congress under paragraph (1) that the Commonwealth government
will adopt a recommendation submitted under subsection (a), the
Governor or the Legislative Assembly shall include in the
statement a written plan to implement the recommendation that
includes--
(A) specific performance measures to determine the
extent to which the Commonwealth government has adopted
the recommendation; and
(B) a schedule for auditing compliance by the
Commonwealth government with the plan.
(3) Recommendations not adopted.--If the Governor or the
Legislative Assembly (as applicable) notifies the Authority,
the President, and Congress under paragraph (1) that the
Commonwealth government will not adopt a recommendation
submitted under subsection (a) that the Commonwealth government
has authority to adopt, the Governor or the Legislative
Assembly shall include in the statement an explanation for the
rejection of the recommendation.
(c) Implementation of Rejected Recommendations.--
(1) In general.--If the Governor or the Legislative
Assembly (as applicable) notifies the Authority, the President,
and Congress under subsection (b)(1) that the Commonwealth
government will not adopt a recommendation submitted under
subsection (a) that the Commonwealth government has authority
to adopt, the Authority, by a majority vote of the members of
the Authority, may take such action concerning the
recommendation as the Authority determines to be appropriate,
after consultation with--
(A) the Committee on Energy and Natural Resources
of the Senate; and
(B) the Committee on Natural Resources of the House
of Representatives.
(2) Effective date.--This subsection shall apply with
respect to recommendations of the Authority made after the date
that is 180 days after the date of enactment of this Act.
PART II--ISSUANCE OF BONDS
SEC. 331. AUTHORITY TO ISSUE BONDS.
(a) In General.--
(1) Request of governor.--Subject to the requirements of
this part, the Authority may at the request of the Governor and
pursuant to an Act of the Legislative Assembly, issue bonds,
notes, or other obligations to borrow funds for the use of the
Commonwealth government, in such amounts and in such manner as
the Authority considers appropriate.
(2) Special rule for instrumentalities with independent
borrowing authority.--In the case of an agency or
instrumentality of the Commonwealth government that has the
authority to issue bonds, notes, or obligations to borrow funds
without the enactment of an Act of the Legislative Assembly,
the Authority may issue bonds, notes, or other obligations to
borrow funds for the use or functions of the agency or
instrumentality at the request of the head of the agency or
instrumentality.
(b) Deposit of Funds Obtained Through Borrowing With Authority.--
(1) In general.--Any amounts obtained by the Commonwealth
government through borrowing by the Authority pursuant to this
part shall be deposited in an escrow account held by the
Authority.
(2) Allocation.--The Authority shall make available to the
Commonwealth government funds from the escrow account in such
amounts and at such times as the Authority considers
appropriate, consistent with the specified purposes of the
funds and the applicable financial plan and budget.
(c) Uses of Funds Obtained Through Bonds.--Any amounts obtained
through the issuance of bonds, notes, or other obligations pursuant to
this part may be used for--
(1) any purpose (consistent with the applicable financial
plan and budget) under part I for which the Commonwealth
government may use borrowed funds; and
(2) any other purpose that the Authority considers
appropriate.
SEC. 332. PLEDGE OF SECURITY INTEREST IN REVENUES OF COMMONWEALTH
GOVERNMENT.
(a) In General.--The Authority may pledge or grant a security
interest in revenues to individuals or entities purchasing bonds,
notes, or other obligations issued pursuant to this part.
(b) Dedication of Revenue Stream From Commonwealth Government.--The
Authority shall require the Governor--
(1) to pledge or direct to the Authority any taxes or other
revenues otherwise payable to the Commonwealth government that
are not otherwise pledged or committed, including payments from
the Federal Government, for purposes of securing repayment of
bonds, notes, or other obligations issued under this part; and
(2) to transfer to the Authority the proceeds of any tax
levied for purposes of securing any bonds, notes, or other
obligations issued under this part immediately on collection of
the proceeds.
SEC. 333. ESTABLISHMENT OF DEBT SERVICE RESERVE FUND.
(a) In General.--As a condition for the issuance of bonds, notes,
or other obligations pursuant to this part, the Authority shall
establish a debt service reserve fund, which shall be a trust fund held
for the benefit and security of the obligees of the Authority whose
bonds, notes, or other obligations are secured by the debt service
reserve fund, consisting of such funds as the Authority may make
available for the debt service reserve fund.
(b) Requirements.--
(1) Uses of funds.--Amounts in a debt service reserve fund
established under subsection (a) may be used only for--
(A) the payment of the principal of bonds secured
in whole or in part by the debt service reserve fund;
(B) the purchase or redemption of the bonds;
(C) the payment of interest on the bonds; or
(D) the payment of any redemption premium required
to be paid when the bonds and notes are redeemed prior
to maturity.
(2) Restrictions on withdrawals.--
(A) In general.--There may not be withdrawn from
the debt service reserve fund an amount that would
reduce the amount of the debt service reserve fund to
less than the minimum reserve fund requirement
established for the debt service reserve fund in the
resolution of the Authority establishing the fund,
except for withdrawals for--
(i) the purpose of making payments of
principal, interest, redemption premiums, and
sinking fund payments, if any, with respect to
the bonds for the payment of which other
amounts of the Authority are not available; and
(ii) the purpose of funding the operations
of the Authority for a fiscal year (in such
amounts and under such conditions as are
established under the budget of the Authority
for the fiscal year under section 316(a)).
(B) Use of excess funds.--Nothing in subparagraph
(A) prohibits the Authority from transferring to other
funds or accounts of the Authority any income or
interest earned by, or increments to, the debt service
reserve fund due to the investment of funds in the debt
service reserve fund (to the extent the transfer does
not reduce the amount of the debt service reserve fund
below the minimum reserve fund requirement established
for the debt service reserve fund) for such purposes as
the Authority considers to be appropriate to promote
the financial stability and management efficiency of
the Commonwealth government.
SEC. 334. OTHER REQUIREMENTS FOR ISSUANCE OF BONDS.
The Authority may not issue bonds, notes, or other obligations
pursuant to this part that are secured in whole or in part by a debt
service reserve fund established under section 333 if issuance of the
bonds would cause the amount in the debt service reserve fund to fall
below the minimum reserve requirement for the debt service reserve
fund, unless the Authority, on issuance of the bonds, deposits in the
debt service reserve fund an amount (from the proceeds of the bonds to
be issued or from other sources) that, when added to the amount already
in the debt service reserve fund, would cause the total amount in the
debt service reserve fund to equal or exceed the minimum reserve fund
requirement established by the Authority on the date of the
establishment of the debt service reserve fund.
SEC. 335. NO FULL FAITH AND CREDIT OF THE UNITED STATES.
(a) In General.--The full faith and credit of the United States is
not pledged for the payment of any principal of or interest on any
bond, note, or other obligation issued by the Authority pursuant to
this part.
(b) Responsibility or Liability of the United States.--The United
States is not responsible or liable for the payment of any principal of
or interest on any bond, note, or other obligation issued by the
Authority pursuant to this part.
PART III--OTHER DUTIES OF AUTHORITY
SEC. 341. DUTIES OF AUTHORITY DURING YEAR OTHER THAN CONTROL YEAR.
(a) In General.--During the period beginning on the termination of
a control period under subsection (a)(3) or (b)(3) of section 322 and
ending with the suspension of activities of the Authority under section
317, the Authority shall--
(1) review the budgets of the Commonwealth government
adopted by the Legislative Assembly for each fiscal year
occurring during the period;
(2) at such time as the Authority considers appropriate
prepare and submit to the Governor, the Legislative Assembly,
the President, and Congress a report analyzing the budget;
(3)(A) monitor the financial status of the Commonwealth
government or a public corporation; and
(B) if the Authority determines that a risk to the
financial status of the Commonwealth government or a public
corporation exists and that a control period needs to be
implemented with respect to the Commonwealth government or a
public corporation in accordance with section 322, submit to
the Governor, the Legislative Assembly, the President, and
Congress a report describing the determination; and
(4) carry out activities under part II with respect to
bonds, notes, or other obligations of the Authority outstanding
during the period.
(b) Requiring Governor To Submit Budgets to Authority.--With
respect to the budget for each fiscal year during the period described
in subsection (a), on the date on which the Governor submits the budget
of the Commonwealth government adopted by the Legislative Assembly to
the President in accordance with this title, the Governor shall
transmit the budget to the Authority.
SEC. 342. GENERAL ASSISTANCE IN ACHIEVING FINANCIAL STABILITY AND
MANAGEMENT EFFICIENCY.
In addition to any other actions described in this subtitle, the
Authority may undertake cooperative efforts to assist the Commonwealth
government in achieving financial stability and management efficiency,
including--
(1) assisting the Commonwealth government in avoiding
defaults, eliminating and liquidating deficits, maintaining
sound budgetary practices, and avoiding interruptions in the
delivery of services;
(2) assisting the Commonwealth government in improving--
(A) the delivery of government services;
(B) the training and effectiveness of personnel of
the Commonwealth government; and
(C) the efficiency of management and supervision;
and
(3) making recommendations to the President for submission
to Congress on changes to this title or other Federal laws or
other actions of the Federal Government that would assist the
Commonwealth government in complying with an approved financial
plan and budget.
SEC. 343. OBTAINING REPORTS.
The Authority may require the Governor, the Legislative Assembly,
and the Inspector General of Puerto Rico to prepare and submit any
reports that the Authority considers appropriate to assist the
Authority in carrying out the responsibilities of the Authority under
this subtitle, including submitting copies of any reports regarding
revenues, expenditures, budgets, costs, plans, operations, estimates,
and other financial or budgetary matters of the Commonwealth
government.
SEC. 344. REPORTS AND COMMENTS.
(a) Annual Reports to Congress.--Not later than 30 days after the
last day of each fiscal year that is a control year, the Authority
shall submit to Congress a report that describes--
(1) the progress made by the Commonwealth government and
public corporations in meeting the objectives of this title
during the fiscal year;
(2) the assistance provided by the Authority to the
Commonwealth government and public corporations in meeting the
purposes of this title for the fiscal year; and
(3) any other activities of the Authority during the fiscal
year.
(b) Review and Analysis of Performance and Financial Accountability
Reports.--The Authority shall--
(1) review each report prepared and submitted by the
Governor under this title; and
(2) submit to Congress a report that analyzes the
completeness and accuracy of each report.
(c) Comments Regarding Activities of Commonwealth Government.--At
any time during a control year, the Authority may submit to Congress a
report that describes any action taken by the Commonwealth government
(or any failure to act by the Commonwealth government) that the
Authority determines would--
(1) adversely affect the ability of the Commonwealth
government to comply with an approved financial plan and
budget; or
(2) have a significant adverse impact on the best interests
of the Commonwealth.
(d) Reports on Effect of Federal Laws on Commonwealth Government.--
At any time during any year, the Authority may submit to the Governor,
the Legislative Assembly, the President, and Congress a report that
describes--
(1) the effect of laws enacted by Congress on the financial
plan and budget for the year; and
(2) the financial stability and management efficiency of
the Commonwealth government in general.
(e) Making Reports Publicly Available.--The Authority shall make
any report submitted under this section available to the public, except
to the extent that the Authority determines that the report contains
confidential material.
Subtitle C--Chief Financial Officer
SEC. 351. ESTABLISHMENT OF OFFICE.
(a) In General.--There is established within the executive branch
of the Commonwealth government an Office of the Chief Financial Officer
of Puerto Rico, which shall be headed by the Chief Financial Officer of
Puerto Rico.
(b) Transfer of Government Development Bank Functions and
Personnel.--Effective with the appointment of the first Chief Financial
Officer under section 352, the functions and personnel of the
Government Development Bank are transferred to the Office.
(c) President of Government Development Bank.--With respect to the
Government Development Bank--
(1) the Chief Financial Officer shall appoint the President
of the Government Development Bank, subject to the approval of
the Governor; and
(2) the Chief Financial Officer may remove the President of
the Government Development Bank for cause, after consultation
with the Governor.
SEC. 352. APPOINTMENT; REMOVAL.
(a) Appointment.--
(1) Control year.--
(A) In general.--During a control year initiated
under section 322(b), the Chief Financial Officer shall
be appointed by the Governor in accordance with this
paragraph.
(B) Recommendations.--Prior to the appointment of
the Chief Financial Officer, the Authority may submit
recommendations for the appointment to the Governor.
(C) Nomination.--In consultation with the Authority
and the Legislative Assembly, the Governor shall
nominate an individual for appointment and notify the
Legislative Assembly of the nomination.
(D) Notification.--After the expiration of the 7-
day period beginning on the date on which the Governor
notifies the Legislative Assembly of the nomination
under subparagraph (B), the Governor shall notify the
Authority of the nomination.
(E) Effectiveness.--The nomination shall be
effective subject to approval by a majority vote of the
Authority.
(2) Other years.--
(A) In general.--During a year other than a control
year initiated under section 322(b), the Chief
Financial Officer shall be appointed by the Governor
with the advice and consent of the Legislative
Assembly.
(B) Recommendations.--Prior to appointment under
subparagraph (A), the Authority may submit
recommendations for the appointment.
(b) Removal.--
(1) Control year.--During a control year initiated under
section 322(b), the Chief Financial Officer may be removed for
cause by the Authority or by the Governor with the approval of
the Authority.
(2) Other years.--During a year other than a control year
initiated under section 322(b), the Chief Financial Officer
shall serve at the pleasure of the Governor, except that the
Chief Financial Officer may only be removed for cause.
(c) Salary.--The Chief Financial Officer shall be paid at an annual
rate determined by the Governor, except that the rate may not exceed
the rate of basic pay payable for level IV of the Executive Schedule,
as described in section 5315 of title 5, United States Code.
SEC. 353. FUNCTIONS OF CHIEF FINANCIAL OFFICER.
(a) Functions During Control Year.--During a control year initiated
under section 322(b), the Chief Financial Officer shall have the
following duties:
(1) Preparing the financial plan and budget for the use of
the Governor.
(2) Preparing the budgets of the Commonwealth for the year
for the use of the Governor.
(3) Ensuring that all financial information presented by
the Governor is presented in a manner consistent with
applicable law.
(4) Implementing appropriate procedures and instituting
such programs, systems, and personnel policies within the
authority of the Chief Financial Officer, to ensure that
budget, accounting, and personnel control systems and
structures are synchronized for budgeting and control purposes
on a continuing basis.
(5) With the approval of the Authority, preparing and
submitting to the Governor and the Legislative Assembly--
(A) annual estimates of all revenues of the
Commonwealth government (without regard to the source
of the revenues), including proposed revenues, which
shall be binding on the Governor and the Legislative
Assembly for purposes of preparing and submitting the
budget of the Commonwealth government for the year,
except that the Governor and the Legislative Assembly
may prepare the budget based on estimates of revenues
that are lower than those prepared by the Chief
Financial Officer; and
(B) quarterly re-estimates of the revenues of the
Commonwealth government during the year.
(6) Supervising and assuming responsibility for financial
transactions to ensure--
(A) adequate control of revenues and resources; and
(B) that appropriations are not exceeded.
(7) Maintaining systems of accounting and internal control
designed to provide--
(A) full disclosure of the financial impact of the
activities of the Commonwealth government;
(B) adequate financial information needed by the
Commonwealth government for management purposes;
(C) effective control over, and accountability for,
all funds, property, and other assets of the
Commonwealth government; and
(D) reliable accounting results to serve as the
basis for preparing and supporting agency budget
requests and controlling the execution of the budget.
(8) Submitting to the Legislative Assembly a financial
statement of the Commonwealth government, containing such
details and at such times as the Legislative Assembly may
specify.
(9) Supervising and assuming responsibility for the levying
and collection of all taxes, special assessments, licensing
fees, and other revenues of the Commonwealth government (as may
be required by law), and receiving all amounts paid to the
Commonwealth government from any source (including the
Authority).
(10) Maintaining custody of all public funds belonging to
or under the control of the Commonwealth government (or any
department or agency of the Commonwealth government), and
depositing all amounts paid in such depositories and under such
terms and conditions as may be designated by the Legislative
Assembly or the Authority.
(11)(A) Maintaining custody of all investment and invested
funds of the Commonwealth government or in possession of the
Commonwealth government in a fiduciary capacity.
(B) Maintaining the safekeeping of all bonds and notes of
the Commonwealth government and the receipt and delivery of
Commonwealth government bonds and notes for transfer,
registration, or exchange.
(12)(A) Apportioning the total of all appropriations and
funds made available during the year for obligation so as to
prevent obligation or expenditure in a manner that would result
in a deficiency or a need for supplemental appropriations
during the year.
(B) With respect to appropriations and funds available for
an indefinite period and all authorizations to create
obligations by contract in advance of appropriations,
apportioning the total of those appropriations, funds, or
authorizations in the most effective and economical manner.
(13) Certifying all contracts (whether directly or through
delegation) prior to execution as to the availability of funds
to meet the obligations expected to be incurred by the
Commonwealth government under the contracts during the year.
(14) Prescribing the forms of receipts, vouchers, bills,
and claims to be used by all agencies, offices, and
instrumentalities of the Commonwealth government.
(15) Certifying and approving prior to payment all bills,
invoices, payrolls, and other evidences of claims, demands, or
charges against the Commonwealth government, and determining
the regularity, legality, and correctness of those bills,
invoices, payrolls, claims, demands, or charges.
(16) In coordination with the Inspector General of Puerto
Rico, performing internal audits of accounts and operations and
records of the Commonwealth government, including the
examination of any accounts or records of financial
transactions, giving due consideration to the effectiveness of
accounting systems, internal control, and related
administrative practices of the departments and agencies of the
Commonwealth government.
(b) Functions During All Years.--At all times, the Chief Financial
Officer shall have the following duties:
(1) Administering all borrowing programs of the
Commonwealth government for the issuance of long-term and
short-term indebtedness.
(2) Administering the cash management program of the
Commonwealth government, including the investment of surplus
funds in governmental and nongovernmental interest-bearing
securities and accounts.
(3) Administering the centralized Commonwealth government
payroll and retirement systems.
(4) Governing the accounting policies and systems
applicable to the Commonwealth government.
(5) Preparing appropriate annual, quarterly, and monthly
financial reports of the accounting and financial operations of
the Commonwealth government.
(6) Not later than 120 days after the end of each fiscal
year, preparing the complete financial statement and report on
the activities of the Commonwealth government for the ending
fiscal year, for the use of the Governor.
(c) Reports.--
(1) In general.--At all times, the Chief Financial Officer
shall be responsible for reporting revenues received by the
Commonwealth government, including preparing, not later than 60
days after the last day of the applicable quarter or year,
quarterly and annual reports concerning the cash position of
the Commonwealth government.
(2) Requirements.--Reports described in paragraph (1) shall
include the following:
(A)(i) Comparative reports of revenue and other
receipts by source, including tax, nontax, and Federal
revenues, grants and reimbursements, capital program
loans, and advances.
(ii) Each source shall be broken down into specific
components.
(B)(i) Statements of the cash flow of the
Commonwealth government for the preceding quarter or
year, including receipts, disbursements, net changes in
cash inclusive of the beginning balance, cash and
investment, and the ending balance, inclusive of cash
and investment.
(ii) Statements under clause (i) shall reflect the
actual, planned, better, or worse dollar amounts and
the percentage change with respect to the current
quarter, year-to-date, and fiscal year.
(C) Quarterly cash flow forecast for the quarter or
year involved, reflecting receipts, disbursements, net
change in cash inclusive of the beginning balance, cash
and investment, and the ending balance, inclusive of
cash and investment with respect to the actual dollar
amounts for the quarter or year, and projected dollar
amounts for each of the 3 succeeding quarters.
(D) Monthly reports reflecting a detailed summary
analysis of all Commonwealth government investments,
including--
(i) the total of long-term and short-term
investments;
(ii) a detailed summary analysis of
investments by type and amount, including
purchases, sales (maturities), and interest;
(iii) an analysis of investment portfolio
mix by type and amount, including liquidity,
quality, and risk of each security, and similar
information;
(iv) an analysis of investment strategy,
including--
(I) near-term strategic plans and
projects of investment activity;
(II) forecasts of future investment
strategies based on anticipated market
conditions; and
(III) similar information; and
(v) an analysis of cash utilization,
including--
(I) comparisons of budgeted
percentages of total cash to be
invested with actual percentages of
cash invested and the dollar amounts;
(II) comparisons of the next return
on invested cash expressed in
percentages (yield) with comparable
market indicators and established
Commonwealth government yield
objectives; and
(III) comparisons of estimated
dollar return against actual dollar
yield.
(E)(i) Monthly reports reflecting a detailed
summary analysis of long-term and short-term borrowings
inclusive of debt in the current fiscal year and the
amount of debt for each succeeding fiscal year, not to
exceed 5 years.
(ii) All reports described in clause (i) shall
reflect--
(I) the amount of debt outstanding by type
of instrument;
(II) the amount of authorized and unissued
debt, including availability of short-term
lines of credit, United States Treasury
borrowings, and similar information;
(III) a maturity schedule of the debt;
(IV) the rate of interest payable on the
debt; and
(V) the amount of debt service requirements
and related debt service reserves.
Subtitle D--Effect
SEC. 361. EFFECT.
Nothing in this title--
(1) relieves any obligations existing as of the date of
enactment of this Act of the Commonwealth government to repay
any individual or entity from whom the Commonwealth government
has borrowed funds, whether through the issuance of bonds or
otherwise;
(2) limits the authority of Congress to exercise authority
over the Commonwealth pursuant to article IV, section 3, clause
2 of the Constitution of the United States; or
(3) impairs the right of residents of the Commonwealth to
express the preference of the residents regarding whether--
(A) to maintain the territorial status of the
Commonwealth in existence as of the date of enactment
of this Act; or
(B) to establish a permanent nonterritorial status
with the United States.
SEC. 362. PREEMPTION.
This title preempts all Federal, State, and local laws relating to
the Commonwealth, any public corporation, or any process for
establishing or reviewing rates, fees, taxes, or other charges.
TITLE IV--ADDITIONAL REPORTS AND STUDIES
SEC. 401. REPORT ON EXCLUSION OF TERRITORIES FROM EXCHANGES.
(a) In General.--Not later than February 1, 2017, the Secretary of
Health and Human Services, in consultation with the Joint Committee on
Taxation, shall submit to Congress a report that describes the impact
on each territory of the exclusion of such territories from the
provisions of part 2 of subtitle D of title I of the Patient Protection
and Affordable Care Act (42 U.S.C. 18031 et seq.).
(b) Information in Report.--The report submitted under subsection
(a) shall include the following:
(1) With respect to health insurance coverage, an estimate
of the total number of uninsured and underinsured individuals
residing in each territory.
(2) A description of the number of health insurance issuers
in each territory and the health insurance plans offered by
such issuers offer.
(3) An estimate of the amount of Federal income taxes that
are currently paid in each territory and an estimate of the
amount that those taxes would be, in aggregate per territory,
if the Federal income tax system applied to the territory.
(4) An estimate of the Federal income taxes that would be
paid, in the aggregate per territory, if individuals residing
in each territory paid the average per capita Federal income
tax share devoted to Federal health funding that is paid by
residents in the 50 States and the District of Columbia.
SEC. 402. STUDY OF PUERTO RICO PUBLIC PENSION DEBT.
Not later than 6 months after the establishment of the Puerto Rico
Financial Responsibility and Management Assistance Authority under
title III of this Act, the Joint Board for the Enrollment of Actuaries
established under section 3041 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1241) shall report to such Authority
and the Office of Domestic Finance of the Department of the Treasury on
the following with respect to the Puerto Rico public pension plans:
(1) Recommendations on actions that would be necessary to
ensure that such plans can be sustainably maintained and funded
by the government of Puerto Rico for the next 20 years.
(2) The feasibility of an assumption by the Department of
the Treasury of the assets and unfunded liabilities of such
plans, individually or collectively, in a manner substantially
similar to the actions taken with respect to the District
Retirement Fund under the District of Columbia Retirement
Protection Act of 1997.
(3) Whether a freeze of future benefit accruals under such
plans is necessary or advisable.
(4) The extent to which benefit reductions, such as have
been made in previous municipal bankruptcy proceedings, would
be necessary or advisable to attain sustainability for such
plans or create parity with payment reductions applicable to
retired individuals who are, directly or indirectly, Puerto
Rico bondholders.
SEC. 403. HEALTH AND HUMAN SERVICES REPORT.
(a) In General.--Not later than 90 days after the date of enactment
of this Act, the Secretary of Health and Human Services shall submit to
the Committee on Finance and the Committee on Energy and Natural
Resources of the Senate, the Committee on Ways and Means and the
Committee on Natural Resources of the House of Representatives, and to
the Resident Commissioner of the Commonwealth, recommendations that
specify the manner in which the Federal Government should more
equitably allocate resources across the territories--
(1) without--
(A) adding to the Federal debt; or
(B) significantly decreasing the solvency of the
Federal Old-Age and Survivors Insurance Trust Fund and
the Federal Disability Insurance Trust Fund under
section 201 of the Social Security Act (42 U.S.C. 401),
the Federal Hospital Insurance Trust Fund under section
1817 of such Act (42 U.S.C. 1395i), and the Federal
Supplementary Medical Insurance Trust Fund under
section 1841 of such Act (42 U.S.C. 1395t); and
(2) to promote--
(A) horizontal equity across territories; and
(B) inter-temporal horizontal equity across States
and territories to account for relative Federal income
tax burdens and needs.
(b) Estimate of Effects.--Not later than 90 days after the date on
which the recommendations are submitted under subsection (a), the
Office of the Actuary of the Centers for Medicare & Medicaid Services
shall provide to the Secretary of Health and Human Services and to the
Committee on Finance and the Committee on Energy and Natural Resources
of the Senate and the Committee on Ways and Means and the Committee on
Natural Resources of the House of Representatives an estimate of the
effects that such recommendations would have on the Federal Hospital
Insurance Trust Fund under section 1817 of the Social Security Act (42
U.S.C. 1395i).
(c) Economic Impact Analysis.--Not later than 90 days after the
date on which the recommendations are submitted under subsection (a),
the Office of the Actuary of the Centers for Medicare & Medicaid
Services shall provide to the Secretary of Health and Human Services,
the Committee on Finance and the Committee on Energy and Natural
Resources of the Senate, the Committee on Ways and Means and the
Committee on Natural Resources of the House of Representatives, and to
the Resident Commissioner of the Commonwealth an economic impact
analysis of the benefits and costs of such recommendations, including
an executive summary detailing the results of the analysis in
nontechnical terminology.
(d) Final Report.--Not later than 90 days after the date on which
the estimate and analysis are provided under subsections (b) and (c),
the Secretary of Health and Human Services, acting through the Medicare
Payment Advisory Commission and the Medicaid and CHIP Access
Commission, shall review such estimates and analyses and provide to the
Committee on Finance and the Committee on Energy and Natural Resources
of the Senate, the Committee on Ways and Means and the Committee on
Natural Resources of the House of Representatives, and to the Resident
Commissioner of the Commonwealth a report containing a final assessment
and recommendations based on such estimates and analyses to provide
equitable treatment to territories and do so in a fiscally responsible
way, both intra- and inter-temporally.
TITLE V--TRANSITION ASSISTANCE
SEC. 501. ASSISTANCE BY THE AUTHORITY, IF NECESSARY, TO ASSIST
TRANSITION TO STABILITY.
(a) Appropriation.--There is authorized to be appropriated, and
there is appropriated, $3,000,000,000. Such amount shall remain
available through fiscal year 2016.
(b) Use of Funds.--Amount appropriated under subsection (a) may be
used by the Authority to provide resources, if the Authority determines
it to be necessary, to assist the transition of the Commonwealth to
financial, fiscal, economic, and health care stability.
(c) Reasons for Use of Funds.--If the Authority provides funds to
the Commonwealth under subsection (b), the Authority shall, not later
than 30 days prior to allocating such funds, submit a report concerning
the reasons for the use of such funds, including the perceived need for
transition assistance and empirical analysis verifying such need, to--
(1) the Committee on Finance and the Committee on Energy
and Natural Resources of the Senate;
(2) the Committee on Ways and Means and the Committee on
Natural Resources of the House of Representatives;
(3) the Resident Commissioner of the Commonwealth; and
(4) the Governor.
(d) Audit.--The Comptroller General shall--
(1) conduct an audit of the use of funds provided to Puerto
Rico under subsection (b); and
(2) when practicable, submit to the appropriate committees
of Congress a report detailing the expenditures under this
section and the purpose of such expenditures.
SEC. 502. OFFSET FOR TRANSITION ASSISTANCE AND PREVENTION AND PUBLIC
HEALTH FUND.
(a) In General.--Subsection (b) of section 4002 of the Patient
Protection and Affordable Care Act (42 U.S.C. 300u-11) is amended--
(1) in paragraph (2), by striking ``2017'' and inserting
``2015''; and
(2) by striking paragraphs (3) through (5).
(b) Rescission of Unobligated Funds.--Of the funds made available
by such section 4002, the unobligated balance is rescinded.
TITLE VI--TECHNICAL ASSISTANCE
SEC. 601. TECHNICAL ASSISTANCE TO IMPROVE ACCOUNTING, DISCLOSURE, AND
ECONOMIC MEASUREMENT PRACTICES IN THE TERRITORIES.
(a) In General.--The Secretary of the Treasury (referred to in this
section as the ``Secretary'') shall provide technical assistance to the
territories of the United States (including the Commonwealth of Puerto
Rico) to provide for improved accounting and disclosure practices in
the applicable territory.
(b) Inclusions.--In providing technical assistance under subsection
(a), the Secretary, in consultation with any appropriate economic
measurement agency and economic statistical agency of the Federal
Government and the Federal Reserve Bank of New York, may provide
assistance relating to--
(1) information technology upgrades;
(2) improving economic forecasting capabilities;
(3) improving and expanding economic indicators for the
territory in order to bring the indicators into line with the
indicators regularly used to track regional conditions in the
United States;
(4) budgeting, cash management, and spending controls; and
(5) ensuring that agencies in the territory use financial
systems that are compatible with the systems of other agencies
of the territory to provide for consistent, timely financial
reporting and visibility into expenses.
(c) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
the period of fiscal years 2016 through 2019.
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