[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2676 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 2676
To provide for the adjustment of the debts of the Commonwealth of
Puerto Rico, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 14, 2016
Mr. Menendez (for himself, Mr. Schumer, Mr. Brown, Ms. Cantwell, Mr.
Blumenthal, Ms. Warren, and Mr. Booker) introduced the following bill;
which was read twice and referred to the Committee on Energy and
Natural Resources
_______________________________________________________________________
A BILL
To provide for the adjustment of the debts of the Commonwealth of
Puerto Rico, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Puerto Rico Stability Act of 2016''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--TECHNICAL ASSISTANCE AND FISCAL REFORM
Subtitle A--Technical Assistance
Sec. 101. Definitions.
Sec. 102. Improving accounting and disclosure practices.
Sec. 103. Purchases by territory government.
Subtitle B--Fiscal Stability and Reform Boards and Chief Financial
Officers
Sec. 111. Establishment of Fiscal Stability and Reform Board.
Sec. 112. Establishment of Chief Financial Officer.
Sec. 113. Development and approval of fiscal plans.
Sec. 114. Severability.
TITLE II--ADJUSTMENTS OF DEBTS OF A TERRITORY OR ITS MUNICIPALITIES
Subtitle A--General Provisions
Sec. 201. Definitions.
Sec. 202. Who may be a debtor.
Sec. 203. Reservation of territorial power to control municipalities.
Sec. 204. Limitation on jurisdiction and powers of court.
Subtitle B--Initial Stay on Litigation
Sec. 211. Definitions.
Sec. 212. Effective date.
Sec. 213. Automatic stay.
Subtitle C--Adjudication and Judicial Review
Sec. 221. Petition and proceedings relating to petition.
Sec. 222. Jurisdiction.
Sec. 223. Venue.
Sec. 224. Selection of presiding judge.
Sec. 225. Appellate review.
Sec. 226. Applicable rules of procedure.
Sec. 227. Severability.
Subtitle D--The Plan
Sec. 231. Filing of plan of adjustment.
Sec. 232. Confirmation.
Subtitle E--Additional Provisions
Sec. 241. Compensation of professionals.
Sec. 242. Interim compensation.
Sec. 243. Applicability of other sections.
TITLE III--PUERTO RICO CHAPTER 9 UNIFORMITY
Sec. 301. Short title.
Sec. 302. Amendment.
Sec. 303. Effective date; application of amendment.
Sec. 304. Severability.
TITLE I--TECHNICAL ASSISTANCE AND FISCAL REFORM
Subtitle A--Technical Assistance
SEC. 101. DEFINITIONS.
In this title:
(1) Board.--The term ``Board'' means a Fiscal Stability and
Reform Board established in accordance with section 111.
(2) Chief financial officer.--The term ``Chief Financial
Officer'' means a Chief Financial Officer established in
accordance with section 112.
(3) Compliant budget.--The term ``compliant budget'' means
a budget that is prepared in accordance with--
(A) modified accrual accounting standards; and
(B) the applicable Fiscal Plan.
(4) Covered territorial instrumentality.--The term
``covered territorial instrumentality'' means a territorial
instrumentality designated by the Board pursuant to section
111(b) to be subject to the requirements of subtitle B.
(5) Covered territory.--The term ``covered territory''
means a territory for which a Board has been established under
section 111.
(6) Fiscal plan.--The term ``Fiscal Plan'' means a fiscal
plan for a covered territory submitted and approved in
accordance with section 113.
(7) Governor.--The term ``Governor'' means the chief
executive of a territory.
(8) Legislature.--
(A) In general.--The term ``legislature'' means the
legislative body responsible for enacting the laws of a
territory.
(B) Exclusion.--The term ``legislature'' does not
include Congress.
(9) Modified accrual accounting standards.--The term
``modified accrual accounting standards'' means accounting
standards issued by the Governmental Accounting Standards Board
that recognize--
(A) revenues as they become available and measured;
and
(B) expenditures as liabilities are incurred.
(10) Office.--The term ``Office'' means an Office of the
Chief Financial Officer established in accordance with section
112.
(11) Territorial government.--The term ``territorial
government'' means the government of a covered territory,
including each territorial instrumentality of the government of
the covered territory.
(12) Territorial instrumentality.--
(A) In general.--The term ``territorial
instrumentality'' means a political subdivision, public
agency, instrumentality, or public corporation of a
territory.
(B) Exclusion.--The term ``territorial
instrumentality'' does not include a Board.
(13) Territory.--The term ``territory'' means--
(A) the Commonwealth of Puerto Rico;
(B) Guam;
(C) American Samoa;
(D) the Commonwealth of the Northern Mariana
Islands; or
(E) the United States Virgin Islands.
SEC. 102. IMPROVING ACCOUNTING AND DISCLOSURE PRACTICES.
(a) In General.--On request of the applicable Governor,
legislature, or Board (if any), the Secretary of the Treasury (referred
to in this section as the ``Secretary'') may provide technical
assistance to a territory that the Secretary determines to be eligible
for technical assistance relating to fiscal and financial practices.
(b) Inclusions.--In providing technical assistance under subsection
(a), the Secretary may, in association with any Federal department or
agency or the Federal Reserve System, including any Federal Reserve
Bank, provide assistance relating to--
(1) information technology upgrades;
(2) improving economic forecasting, including multiyear
fiscal forecasting capabilities;
(3) budgeting, tax collection, cash management, and
spending controls;
(4) ensuring that agencies in the territory use financial
systems that are compatible with the systems of other agencies
of the territory and Federal agencies to provide for
consistent, timely financial reporting and visibility into
expenses;
(5) improving and expanding economic indicators for the
territory to make available for the territory the indicators
regularly used to track regional conditions on the United
States mainland; and
(6) such other matters as the Secretary, in consultation
with the territory, determines to be appropriate.
(c) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 103. PURCHASES BY TERRITORY GOVERNMENT.
Section 302 of the Omnibus Insular Areas Act of 1992 (48 U.S.C.
1469e) is amended to read as follows:
``SEC. 302. INSULAR GOVERNMENT PURCHASES.
``The governments of the Commonwealth of Puerto Rico, Guam,
American Samoa, the Commonwealth of the Northern Mariana Islands, and
the United States Virgin Islands are authorized to make purchases
through the General Services Administration.''.
Subtitle B--Fiscal Stability and Reform Boards and Chief Financial
Officers
SEC. 111. ESTABLISHMENT OF FISCAL STABILITY AND REFORM BOARD.
(a) Request.--Effective on the date on which the Governor of a
territory signs a resolution adopted by the legislature of the
territory to request the establishment of a Fiscal Stability and Reform
Board under this subtitle, a Board is established for the territory.
(b) Board Oversight of Territorial Instrumentalities.--
(1) Designation.--
(A) In general.--A Board, at such time as the Board
determines to be appropriate, may designate a
territorial instrumentality as a covered territorial
instrumentality that is subject to the requirements of
this subtitle.
(B) Budgets and reports.--A Board may require the
Governor or the Chief Financial Officer of the
applicable covered territory to submit to the Board
such annual budgets or monthly or quarterly reports
relating to a covered territorial instrumentality as
the Board determines to be necessary.
(C) Inclusion in fiscal plan.--The Governor of the
applicable covered territory shall include in the
applicable Fiscal Plan a description of each
requirement under section 113(c) for each covered
territorial instrumentality.
(2) Exclusion.--
(A) In general.--A Board, at such time as the Board
determines to be appropriate, may exclude any
territorial instrumentality of the covered territory
from the requirements of this subtitle.
(B) Treatment.--A territorial instrumentality
excluded pursuant to this paragraph shall not be
considered to be a covered territorial instrumentality.
(c) Exemption From Liability for Claims.--A Board, and each member
of the Board, shall not be liable for any obligation of, or claim
against, the applicable covered territory resulting from any action of
the Board to carry out this subtitle.
(d) Membership.--
(1) In general.--A Board shall consist of 9 members who
meet the qualifications described in paragraph (6), and of
whom:
(A) 2 members shall be appointed by the President
in accordance with the requirements described in
paragraph (5).
(B) 2 members shall be appointed by the Governor of
the applicable covered territory.
(C) 1 member shall be appointed by the chief
justice of the highest appellate court of the
applicable covered territory.
(D) 4 members shall be appointed by the legislature
of the applicable covered territory as follows:
(i) If the legislature has 2 chambers--
(I) 1 member shall be appointed by
the political party holding the most
seats in the lower chamber of the
legislature;
(II) 1 member shall be appointed by
the political party holding the second-
most seats in the lower chamber of the
legislature;
(III) 1 member shall be appointed
by the political party holding the most
seats in the upper chamber of the
legislature; and
(IV) 1 member shall be appointed by
the political party holding the second-
most seats in the upper chamber of the
legislature.
(ii) If the legislature has 1 chamber--
(I) 2 members shall be appointed by
the political party holding the most
seats in the legislature; and
(II) 2 members shall be appointed
by the political party holding the
second-most seats in the legislature.
(2) Chairperson.--The member appointed under paragraph
(1)(C) shall serve as the chairperson of the Board.
(3) Period of appointment.--
(A) In general.--Except for the member appointed
under paragraph (1)(C) and for the initial terms of
members, each member of the Board shall be--
(i) appointed for a term of 4 years; and
(ii) eligible for reappointment.
(B) Initial terms.--
(i) For members appointed under paragraph
(1)(A), as designated by the President at the
time of appointment--
(I) 1 member shall be appointed for
a term of 2 years; and
(II) 1 member shall be appointed
for a term of 4 years.
(ii) For members appointed under paragraph
(1)(B)--
(I) both members shall be appointed
to a term to terminate 6 months after
the next gubernatorial election; and
(II) in the event that the Governor
of a territory signs a resolution
adopted by the legislature of the
territory to request the establishment
of a Board under this subtitle within
12 months of the next gubernatorial
election, both members shall be
appointed to a term of 2 years.
(iii) For members appointed under paragraph
(1)(C), the member shall remain appointed for
the life of the Board.
(iv) For members appointed under paragraph
(1)(D), as designated by the appointing entity
at the time of appointment--
(I) if the legislature has 2
chambers--
(aa) 1 member shall be
appointed by the political
party holding the most seats in
the lower chamber of the
legislature to a term to
terminate 6 months after the
next legislative election of
the applicable territory;
(bb) 1 member shall be
appointed by the political
party holding the second-most
seats in the lower chamber of
the legislature to a term to
terminate 6 months after the
next legislative election of
the applicable territory;
(cc) 1 member shall be
appointed by the political
party holding the most seats in
the upper chamber of the
legislature to a term to
terminate 30 months after the
next legislative election of
the applicable territory; and
(dd) 1 member shall be
appointed by the political
party holding the second-most
seats in the upper chamber of
the legislature to a term to
terminate 30 months after the
next legislative election of
the applicable territory; and
(II) if the legislature has 1
chamber--
(aa) 1 member shall be
appointed by the political
party holding the most seats in
the legislature to a term to
terminate 6 months after the
next legislative election of
the applicable territory;
(bb) 1 member shall be
appointed by the political
party holding the second-most
seats in the legislature to a
term to terminate 6 months
after the next legislative
election of the applicable
territory;
(cc) 1 member shall be
appointed by the political
party holding the most seats in
the legislature to a term to
terminate 30 months after the
next legislative election of
the applicable territory; and
(dd) 1 member shall be
appointed by the political
party holding the second-most
seats in the legislature to a
term to terminate 30 months
after the next legislative
election of the applicable
territory.
(4) Vacancies.--
(A) In general.--Each member shall remain appointed
as long as the applicable qualifications of appointment
under paragraph (6) remain satisfied, except that any
member may be removed by the original appointing
entity.
(B) Effect.--Any vacancy in the Board--
(i) shall not affect the powers of the
Board; and
(ii) shall be filled in the same manner as
the original appointment by the original
appointing entity as soon as practicable after
the date on which the vacancy occurs, subject
to the approval described in paragraph (3).
(C) Term.--A member appointed to fill a vacancy
shall serve for the remainder of the term to which the
member was appointed.
(5) Approval of membership.--A new member appointed shall
be approved by the full board, excluding the member that the
new member was appointed to replace.
(6) Requirements for presidential appointments.--
(A) Timing; required consultation.--As soon as
practicable after the date on which a territory submits
to the President a resolution described in subsection
(a), and after consultation with the appropriate
committees of Congress and the Governor of the
applicable covered territory, the President shall
appoint members to the Board under paragraph (1)(A).
(B) Removal.--The President may remove a member
appointed by the President only for cause.
(7) Qualifications.--
(A) In general.--An individual meets the
qualifications for membership on the Board if the
individual has knowledge and expertise relating to
finance, management, economics, or the organization or
operation of business or government.
(B) Connection to covered territory.--Not less than
6 members shall have knowledge and expertise relating
to the history, socioeconomic circumstances, and
heritage of the applicable covered territory.
(C) Residence in covered territory.--Not less than
6 members shall maintain a primary residence in the
applicable covered territory.
(D) Special limitation on membership.--No current
member of the applicable territory's legislature shall
be eligible to serve on the Board.
(8) Conflicts of interest.--
(A) In general.--An individual appointed to serve
as a member of the Board--
(i) shall be subject to--
(I) the Federal conflict of
interest requirements described in
section 208 of title 18, United States
Code, except with respect to subsection
(b) of that section; and
(II) the conflict of interest
disclosure requirements under title I
of the Ethics in Government Act of 1978
(5 U.S.C. App.); and
(ii) shall not have any other conflict of
interest relating to the duties of the Board,
including ownership of any debt security of--
(I) the applicable territorial
government; or
(II) a territorial instrumentality.
(B) Definition.--For purposes of subparagraph
(A)(ii), the term ``conflict of interest'' includes the
interests of an organization in which the individual is
serving as officer, director, trustee, general partner
or employee, or any person or organization with whom
the individual is negotiating or has any arrangement
concerning prospective employment.
(C) 3-year restriction.--
(i) In general.--Any individual who serves
as a member of the Board shall not, during the
3-year period beginning on the date on which
membership on the Board terminates, knowingly
make, with the intent to influence, any
communication to or appearance before any
member of the Board or Chief Financial Officer
on behalf of any other person (except the
United States or a State or local government).
(ii) Penalty.--Any individual who violates
clause (i) shall be subject to the penalties
described in section 216 of title 18, United
States Code.
(iii) Violations.--If a member of the Board
is determined to be in violation of the
requirements described in subparagraph (A), the
member shall be removed from membership on the
Board and may be subject to additional actions
or penalties set forth under Federal ethics
rules.
(e) No Compensation for Service.--Each member of the Board shall--
(1) serve without compensation; and
(2) be allowed travel expenses, including per diem in lieu
of subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from the home or regular place of business of
the member in the performance of the duties of the Board.
(f) Bylaws.--
(1) In general.--As soon as practicable after the
appointment of all members to the Board, the Board shall adopt
bylaws, rules, and procedures to govern the activities of the
Board under this subtitle, including procedures for hiring
experts and consultants.
(2) Treatment.--The bylaws, rules, and procedures adopted
pursuant to this subsection shall be--
(A) public documents; and
(B) on adoption, submitted by the Board to--
(i) the President; and
(ii) the Governor and legislature of the
applicable covered territory.
(g) Staff.--
(1) In general.--On the approval of the chairperson, the
Board may appoint such staff as are necessary to enable the
Board to perform the duties of the Board.
(2) Eligible individuals.--For purposes of chapter 11 of
title 18, United States Code, and section 2635 of title 5, Code
of Federal Regulations, or any successor thereto, the executive
director and other staff employed by the Board shall be
considered employees of an Executive agency (as defined in
section 105 of title 5, United States Code), including a member
of the staff who is--
(A) a private citizen;
(B) an employee of the applicable territorial
government; or
(C) an employee of the Federal Government.
(3) Detailees.--
(A) Federal employees.--On request of the
chairperson of the Board, the head of a Federal
department or agency may detail to the Board, on a
reimbursable or nonreimbursable basis, and in
accordance with the Intergovernmental Personnel Act of
1970 (42 U.S.C. 4701 et seq.), any of the personnel of
the department or agency to assist the Board in the
performance of the duties of the Board.
(B) Territorial government employees.--On request
of the chairperson of the Board, the head of any
department or agency of the applicable territorial
government may detail to the Board, on a reimbursable
or nonreimbursable basis, any of the personnel of the
department or agency to assist the Board in the
performance of the duties of the Board.
(4) Officers.--
(A) Appointment.--The chairperson may appoint to
the Board an executive director or such other officers
as the chairperson determines to be necessary to assist
the Board in the performance of the duties of the
Board.
(B) Term; payment.--An executive director or
officer appointed pursuant to subparagraph (A) shall
serve for such period and be paid such compensation as
the Board determines to be appropriate.
(h) Funding.--
(1) In general.--The Board--
(A) may use funds provided by the applicable
territorial government to ensure sufficient funds are
made available to cover all expenses of the Board; and
(B) shall submit to the Governor and legislature of
the applicable covered territory for inclusion in the
annual budget appropriations process of the applicable
territorial government a report describing any request
and use of funds provided by the applicable territorial
government.
(2) Local funding.--A covered territory shall designate a
dedicated territorial government source of funding, not subject
to subsequent legislative appropriation, sufficient to support
the annual costs of the Board, as determined by the Board, to
carry out this subtitle.
(i) Powers.--
(1) Hearings.--The Board may, for the purpose of performing
the duties of the Board--
(A) hold such hearings, meet and act at such times
and places, take such testimony, receive such evidence,
and administer such oaths as the Board considers to be
appropriate; and
(B) require, by subpoena or otherwise, the
attendance and testimony of such witnesses and the
production of such books, records, correspondence,
memoranda, papers, documents, tapes, and materials as
the Board considers to be appropriate.
(2) Issuance and enforcement of subpoenas.--
(A) Issuance.--A subpoena issued under paragraph
(1)(B) shall--
(i) bear the signature of the chairperson
of the Board; and
(ii) be served by any person or class of
persons designated by the chairperson to serve
a subpoena under paragraph (1)(B).
(B) Enforcement.--In the case of contumacy or
failure to obey a subpoena issued under paragraph
(1)(B), the United States district court for the
district in which the subpoenaed person resides, is
served, or may be found may issue an order requiring
the person--
(i) to appear at any designated place to
testify; or
(ii) to produce documentary or other
evidence.
(C) Noncompliance.--Any failure to obey the order
of a court under this paragraph may be punished by the
court as a contempt of court.
(3) Entrance into contracts.--The Board, or any of the
staff of the Board on behalf of the Board, may enter into such
contracts as the Board considers appropriate to carry out the
duties of the Board.
(j) Duties.--
(1) Monitoring and recommendations.--
(A) In general.--Based on information provided in a
monthly report submitted under section 112(f)(1)(A),
the Board may recommend to the Governor and legislature
of the applicable covered territory policy adjustments
that should be made to ensure the expenditures and
revenues of the adopted budget for the applicable
fiscal year are balanced.
(2) Improvements to operational efficiency.--
(A) In general.--The Board shall work with the
applicable territorial government to improve the
operational efficiency of the applicable territorial
government, including the efforts of the applicable
territorial government--
(i) to strengthen financial recordkeeping
and reporting;
(ii) to control the number and cost of
government contracts;
(iii) to collect and enforce the collection
of taxes;
(iv) to promote economic growth;
(v) to improve Federal grant management;
and
(vi) to increase the effective use of
information technology.
(B) Report.--Within a reasonable period of time,
the Board shall submit to the applicable territorial
government a report describing recommendations to
improve the operational efficiency of the applicable
territorial government, including efforts described in
subparagraph (A).
(3) Review of budgets; quarterly reports.--
(A) Budget proposed by governor.--
(i) Submission to board.--The Governor of
the applicable covered territory shall submit
to the Board for review a proposed budget for
each fiscal year, in consultation with the
Chief Financial Officer and based on the
applicable forecast of revenues submitted by
the Chief Financial Officer, by not later than
the earlier of--
(I) the date that is 120 days
before the first day of the fiscal year
covered by the proposed budget; and
(II) the date that is 60 days
before the date by which the Governor
is required under applicable law to
submit to the legislature of the
applicable covered territory a proposed
budget for the applicable fiscal year.
(ii) Determination of compliant budget.--
Not later than the date that is 15 days after
the date on which a Board receives a proposed
budget under clause (i), the Board shall--
(I) determine whether the proposed
budget is a compliant budget; and
(II)(aa) if the proposed budget is
a compliant budget--
(AA) approve the compliant
budget; and
(BB) submit the compliant
budget to the legislature of
the applicable covered
territory; or
(bb) if the proposed budget is not
a compliant budget, provide to the
Governor of the applicable covered
territory--
(AA) a notice of violation
that includes a description of
any corrective action suggested
by the Board; and
(BB) an opportunity to
correct the violation by
requiring the Governor to
submit to the Board a revised
budget by not later than the
date that is 15 days after the
date on which the notice of
violation under subitem (AA) is
provided.
(iii) Revised budgets.--Not later than the
date that is 7 days after the date on which the
Board receives a revised budget under clause
(ii)(II)(bb)(BB), the Board shall--
(I) determine whether the revised
budget is a compliant budget in
consultation with the Chief Financial
Officer; and
(II)(aa) if the revised budget is a
compliant budget--
(AA) approve the compliant
budget; and
(BB) submit the compliant
budget to the legislature of
the applicable covered
territory; or
(bb) if the revised budget is not a
compliant budget--
(AA) issue a notice of
noncompliance;
(BB) publicly submit
recommendations of the Board
and the Chief Financial Officer
for adjustments that should be
made to ensure the adopted
budget of the territorial
government for the applicable
fiscal year is a compliant
budget;
(CC) submit the
noncompliant budget to the
legislature of the applicable
covered territory with
recommendations of the Board
and the Chief Financial Officer
for adjustments that should be
made to ensure the adopted
budget of the territorial
government for the applicable
fiscal year is a complaint
budget; and
(DD) issue a directive that
the legislature shall strive to
adopt the Board's
recommendations in the budget
of the territorial government
for the applicable fiscal year.
(B) Budget approval by legislature.--
(i) In general.--The legislature of the
applicable covered territory shall submit to
the Board the budget adopted by the legislature
not later than--
(I) the date that is 30 days before
the first day of each applicable fiscal
year; or
(II) the date previously approved
in writing by the Board not to exceed
60 days after the first day of the
applicable fiscal year, if a date was
approved in writing.
(ii) Determination by board.--Not later
than the date that is 7 days after the date on
which the Board receives an adopted budget
submitted under clause (i), the Board shall--
(I) determine whether the adopted
budget is a compliant budget in
consultation with the Chief Financial
Officer; and
(II)(aa) if the adopted budget is a
compliant budget, issue a compliance
certification for the compliant budget;
or
(bb) if the budget is not a
compliant budget--
(AA) issue a certificate of
noncompliance;
(BB) publicly submit
recommendations of the Board
and the Chief Financial Officer
for adjustments that should be
made to the budget of the
territorial government for the
upcoming fiscal year to ensure
the revenues and expenditures
are consistent with the Fiscal
Plan;
(CC) provide to the
Governor and legislature of the
applicable covered territory a
certificate of noncompliance
that includes a description of
any recommendations of the
Board and the Chief Financial
Officer for adjustments that
should be made to the budget of
the territorial government for
the upcoming fiscal year to
ensure the revenues and
expenditures are consistent
with the Fiscal Plan; and
(DD) issue a directive that
the Governor and the
legislature shall strive to
adopt the Board's
recommendations in the budget
of the territorial government
for the upcoming fiscal year.
(C) Quarterly reports.--On receipt of a quarterly
report from the Chief Financial Officer under section
112(f)(1)(B), the Board shall--
(i) conduct a review to determine whether
the actual quarterly revenues and expenses for
the applicable territorial government are in
compliance with the applicable approved budget;
and
(ii) if the Board determines that the
actual quarterly revenues and expenses for the
applicable territorial government are not in
compliance with the applicable approved budget
under clause (i), provide to the Governor
recommendations for adjustments that should be
made to ensure the revenues and expenditures of
the adopted budget of the applicable
territorial government for the applicable
fiscal year are balanced.
(4) Issuance of debt.--No territorial government may,
without providing prior written and public notice to the Board,
issue debt or guarantee, exchange, modify, repurchase, redeem,
or enter into a similar transaction with respect to the debt of
the territorial government.
(5) Authority to review discretionary tax waivers.--
(A) In general.--Not later than the date that is
180 days after the date of the establishment of a Board
under subsection (a), the Governor of the applicable
covered territory shall submit to the Board an audited
report documenting each outstanding discretionary tax
waiver agreement to which any entity of the applicable
territorial government is a party, including each
agreement pursuant to which the applicable entity of
the territorial government waived, changed the due date
of, or changed the amount of taxes due.
(B) New tax waivers.--Effective on the date on
which a Board is established under subsection (a), no
new tax waiver agreement may be executed by the
applicable territorial government without prior
approval of the Board.
(k) Termination of Board.--A Board shall terminate on certification
by the Board that--
(1) the Board has been in operation for not less than 3
years and the applicable territorial government has adequate
access, on an unsecured basis, to short-term and long-term
credit markets at reasonable interest rates to meet the
borrowing needs of the territorial government using a compliant
budget; or
(2) for not less than 3 consecutive fiscal years prior to
the certification, the expenditures made by the applicable
territorial government for each fiscal year did not exceed the
revenues of the territorial government during that fiscal year,
using a compliant budget.
SEC. 112. ESTABLISHMENT OF CHIEF FINANCIAL OFFICER.
(a) Establishment of Office.--
(1) In general.--Effective on the date on which the
Governor of a territory signs a resolution adopted by the
legislature of the territory to request the establishment of a
Fiscal Stability and Reform Board under this subtitle, an
Office of the Chief Financial Officer is established for the
territory, which shall be headed by the Chief Financial Officer
of the territory.
(2) Authority to request.--Effective with the appointment
of the first Chief Financial Officer under subsection (d), the
Chief Financial Officer may request other offices be
consolidated within the office, subject to the approval of the
applicable territory's legislature, with the function and
personnel of the offices transferred to the office.
(3) Retention of authority.--Notwithstanding paragraph (2),
the applicable territory shall retain its authority to appoint
and remove personnel and agency heads of consolidated offices.
(4) Conflicts of interest.--
(A) In general.--An individual appointed to serve
as a Chief Financial Officer--
(i) shall be subject to--
(I) the Federal conflict of
interest requirements described in
section 208 of title 18, United States
Code, except with respect to subsection
(b) of that section; and
(II) the conflict of interest
disclosure requirements under title I
of the Ethics in Government Act of 1978
(5 U.S.C. App.); and
(ii) shall not have any other conflict of
interest relating to the duties of the Chief
Financial Officer, including ownership of any
debt security of--
(I) the applicable territorial
government; or
(II) a territorial instrumentality.
(B) Definition.--For purposes of subparagraph
(A)(ii), the term ``conflict of interest'' includes the
interests of an organization in which the individual is
serving as officer, director, trustee, general partner
or employee, or any person or organization with whom
the individual is negotiating or has any arrangement
concerning prospective employment.
(C) 3-year restriction.--
(i) In general.--Any individual who serves
as Chief Financial Officer shall not, during
the 3-year period beginning on the date on
which his or her tenure as Chief Financial
Officer terminates, knowingly make, with the
intent to influence, any communication to or
appearance before any member of the Board or
Chief Financial Officer on behalf of any other
person (except the United States or a State or
local government).
(ii) Penalty.--Any individual who violates
clause (i) shall be subject to the penalties
described in section 216 of title 18, United
States Code.
(iii) Violations.--If a Chief Financial
Officer is determined to be in violation of the
requirements described in this subparagraph,
the member shall be removed from the position
of Chief Financial Officer and may be subject
to additional actions or penalties set forth
under Federal ethics rules.
(b) Staff.--
(1) In general.--The Chief Financial Officer may appoint
such staff as are necessary to enable the Office to perform the
duties of the Office.
(2) Eligible individuals.--For purposes of chapter 11 of
title 18, United States Code, and section 2635 of title 5, Code
of Federal Regulations, or any successor thereto, the executive
director and other staff employed by the office shall be
considered employees of an Executive agency (as defined in
section 105 of title 5, United States Code), including a member
of the staff who is--
(A) a private citizen;
(B) an employee of the applicable territorial
government; or
(C) an employee of the Federal Government.
(3) Detailees.--
(A) Federal employees.--On request of the Chief
Financial Officer, the head of a Federal department or
agency may detail to the Office, on a reimbursable or
nonreimbursable basis, and in accordance with the
Intergovernmental Personnel Act of 1970 (42 U.S.C. 4701
et seq.), any of the personnel of the department or
agency to assist the Office in the performance of the
duties of the Office.
(B) Territorial government employees.--On request
of the Chief Financial Officer, the head of any
department or agency of the applicable territorial
government may detail to the Office, on a reimbursable
or nonreimbursable basis, any of the personnel of the
department or agency to assist the Office in the
performance of the duties of the Office.
(c) Funding.--
(1) In general.--The Chief Financial Officer--
(A) may use funds provided by the applicable
territorial government to ensure sufficient funds are
made available to cover all expenses of the Office; and
(B) shall submit to the Governor and legislature of
the applicable covered territory for inclusion in the
annual budget appropriations process of the applicable
territorial government a report describing any request
and use of funds provided by the applicable territorial
government.
(2) Local funding.--A covered territory shall designate a
dedicated territorial government source of funding, not subject
to subsequent legislative appropriation, sufficient to support
the annual costs of the Office, as determined by the Chief
Financial Officer, to carry out this subtitle.
(d) Appointment.--
(1) In general.--The Chief Financial Officer shall be
appointed by the applicable territory's Governor as follows:
(A) Prior to the appointment of the Chief Financial
Officer, the Board may submit recommendations for the
appointment to the applicable territory's Governor.
(B) In consultation with the Board and the
applicable territory's legislature, the applicable
territory's Governor shall nominate an individual for
appointment and notify the applicable territory's
legislature of the nomination.
(C) After the expiration of the 7-day period that
begins on the date the applicable territory's Governor
notifies the legislature of the nomination under
subparagraph (B), the applicable territory's Governor
shall notify the Board of the nomination.
(D) The nomination shall be effective subject to
approval by a majority vote of the Board.
(2) Removal.--The Chief Financial Officer may be removed
for cause by the Board or by the applicable territory's
Governor with the approval of the Board.
(3) Salary.--The Chief Financial Officer shall be paid at
an annual rate determined by the Board as the Board determines
to be appropriate.
(e) Powers.--
(1) Issuance and enforcement of subpoenas.--
(A) Purpose.--The Chief Financial Officer may, for
the purpose of performing the duties of the office,
require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such
books, records, correspondence, memoranda, papers,
documents, tapes, and materials as the Chief Financial
Officer considers to be appropriate.
(B) Issuance.--A subpoena issued under paragraph
(1)(B) shall--
(i) bear the signature of the Chief
Financial Officer; and
(ii) be served by any person or class of
persons designated by the Chief Financial
Officer to serve a subpoena under paragraph
(1)(B).
(C) Enforcement.--In the case of contumacy or
failure to obey a subpoena issued under paragraph
(1)(B), the United States district court for the
district in which the subpoenaed person resides, is
served, or may be found may issue an order requiring
the person--
(i) to appear at any designated place to
testify; or
(ii) to produce documentary or other
evidence.
(D) Noncompliance.--Any failure to obey the order
of a court under this paragraph may be punished by the
court as a contempt of court.
(2) Entrance into contracts.--The Chief Financial Officer,
or any of the staff of the office on behalf of the Chief
Financial Officer, may enter into such contracts as the Chief
Financial Officer considers appropriate to carry out the duties
of the office.
(f) Functions.--In addition to any other duties necessary and
proper to fulfill the purposes of the Office, the Chief Financial
Officer shall have the following duties:
(1) Monthly and quarterly reports.--The Chief Financial
Officer, in consultation with the applicable territorial
government, shall submit to the Board:
(A) A report not later than the date that is 7 days
after the last day of each month to provide--
(i) an accounting of the cash balance of
the applicable territorial government; and
(ii) a description of the amount of actual
expenditures and revenues of the applicable
territorial government, as compared to the
amounts budgeted, for the applicable fiscal
year.
(B) Not later than the date that is 15 days after
the last day of each quarter of a fiscal year, the
Chief Financial Officer in consultation with the
Governor of the applicable covered territory shall
submit to the Board, in such form as the Board may
require, a report describing--
(i) the actual cash revenues, cash
expenditures, and cash flows of the territorial
government for the preceding quarter; as
compared to
(ii) the actual cash revenues, cash
expenditures, and cash flows contained in the
approved budget for the applicable quarter.
(C) A report under subparagraph (B) shall include--
(i) a description of any accrued revenues
and expenditures during the applicable quarter,
as compared to the accrued revenues and
expenditures contained in the approved budget
for the quarter; and
(ii) a balance sheet, if the Board requires
a balance sheet.
(2) Revenue forecasting.--Not later than the date that is
75 days before the date on which the Governor of the applicable
covered territory is required under applicable law to submit to
the legislature of the applicable covered territory a proposed
budget for the upcoming fiscal year, the Chief Financial
Officer shall submit to the applicable territorial government
and Board a forecast of revenues for the upcoming fiscal year
to be used to develop the budget.
(A) Requirements.--A forecast under paragraph (2)
shall be--
(i) based on applicable law; and
(ii) prepared in accordance with the
applicable Fiscal Plan.
(3) Financial and accounting information.--The Chief
Financial Officer shall ensure the following:
(A) All financial information presented by the
applicable territory is presented in a manner, and is
otherwise consistent with any requirements promulgated
by the Board.
(B) Appropriate procedures are implemented and
institute such programs, systems, and personnel
policies within the Officer's authority, to ensure that
the applicable territory's budget, accounting and
personnel control systems and structures are
synchronized for budgeting and control purposes on a
continuing basis.
(C) Appropriate forms of receipts, vouchers, bills,
and claims to be used by all agencies, offices, and
instrumentalities of the applicable territorial
government.
(4) Accounting management.--The Chief Financial Officer
shall:
(A) Supervise the applicable territory's financial
transactions to ensure adequate control of revenues and
resources, and to ensure that appropriations are not
exceeded.
(B) Maintain systems of accounting and internal
control designed to provide--
(i) full disclosure of the financial impact
of the activities of the applicable territorial
government;
(ii) adequate financial information needed
by the applicable territorial government for
management purposes;
(iii) effective control over, and
accountability for, all funds, property, and
other assets of the applicable territorial
government; and
(iv) reliable accounting results to serve
as the basis for preparing and supporting
agency budget requests and controlling the
execution of the budget of the applicable
territorial government.
(C) Maintain accounting of all public funds
belonging to or under the control of the applicable
territorial government (or any department or agency of
the applicable territorial government).
(D) Maintain accounting of all investment and
invested funds of the applicable territorial government
or in possession of the applicable territorial
government in a fiduciary capacity.
(E) Submit to the applicable territorial government
a financial statement of the applicable territorial
government, containing such details and at such times
as the applicable territorial government may specify.
(5) Certifying contracts.--All contracts (whether directly
or through delegation) shall be certified by the Chief
Financial Officer prior to execution as to the availability of
funds to meet the obligations expected to be incurred by the
applicable territorial government under such contracts during
the year.
(6) Auditing.--The Chief Financial Officer shall perform
internal audits of accounts and operations and records of the
applicable territorial 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 applicable territorial
government.
SEC. 113. DEVELOPMENT AND APPROVAL OF FISCAL PLANS.
(a) In General.--Not later than the date that is 60 days before the
date on which the Governor of an applicable covered territory is
required under applicable law to submit to the legislature of the
applicable covered territory a proposed budget for the upcoming fiscal
year, the Governor, in consultation with the Chief Financial Officer,
shall develop and submit to the Board and applicable territorial
government a Fiscal Plan for the applicable territorial government in
accordance with this section.
(b) Initial Fiscal Plan.--The Governor of an applicable covered
territory in consultation with the Chief Financial Officer shall
develop an initial Fiscal Plan in accordance with subsection (a) within
90 days of the Governor of the applicable covered territory signing a
resolution adopted by the legislature of the territory to request the
establishment of a Fiscal Stability and Reform Board under this
subtitle, or not later than the date that is 60 days before the date on
which the Governor of the applicable covered territory is required
under applicable law to submit to the legislature of the applicable
covered territory a proposed budget for the upcoming fiscal year,
whichever comes chronologically first.
(c) Requirements.--
(1) In general.--A Fiscal Plan shall, to the maximum extent
practicable, with respect to the applicable territorial
government--
(A) provide for estimates of revenues and
expenditures in accordance with modified accrual
accounting standards and based on--
(i) applicable laws; or
(ii) specific laws that require enactment
in order to reasonably achieve the projections
of the Fiscal Plan;
(B) ensure the funding of essential public
services;
(C) provide full funding to cover all existing
public pension obligations;
(D) provide for the elimination of budget gaps in
financing;
(E) provide for a reduction in the debt burden to a
level that is sustainable;
(F) improve fiscal governance;
(G) enable the achievement of fiscal targets;
(H) create independent forecasts of revenue for the
period covered by the Fiscal Plan; and
(I) not impede investments to promote sustained
economic growth.
(2) Term.--A Fiscal Plan shall be in effect for a period of
not less than 5 years.
(3) Transparency.--A Fiscal Plan shall be made publicly
available no less than 15 days after final approval as
specified within subsection (d).
(d) Approval by Board.--
(1) Requirement.--The Governor of a covered territory shall
not submit to the legislature of the applicable covered
territory an annual budget for a fiscal year unless the Fiscal
Plan has been approved for that fiscal year in accordance with
this subsection.
(2) Approval.--Not later than the date that is 15 days
after the date on which the Governor submits a Fiscal Plan to
the Board under subsection (a), the Board shall--
(A) certify the Fiscal Plan; or
(B) fail to certify the Fiscal Plan and provide to
the Governor recommendations for revisions to the
Fiscal Plan.
(3) Revised fiscal plan.--
(A) In general.--Not later than the date that is 15
days after the date on which the Board submits
recommendations to the Governor under paragraph (2)(B),
the Governor shall submit to the Board a revised Fiscal
Plan.
(B) Approval; disapproval.--Not later than the date
that is 7 days after the date on which the Governor
submits to the Board a revised Fiscal Plan under
subparagraph (A), the Board shall--
(i) certify the revised Fiscal Plan; or
(ii) disapprove the revised Fiscal Plan.
(4) Development by board.--
(A) In general.--
(i) Nonaction by governor.--If the Governor
of a covered territory fails to submit to the
Board a revised Fiscal Plan on or before the
date specified in paragraph (3)(A), the Board
shall develop and submit to the Governor a
final revised Fiscal Plan not later than the
date that is 22 days after the date on which
recommendations are provided to the Governor
under paragraph (2)(B).
(ii) Disapproval by board.--If the Board
disapproves a revised Fiscal Plan under
paragraph (3)(B)(ii), the Board shall develop
and submit to the Governor a final revised
Fiscal Plan not later than the date that is 7
days after the date of disapproval.
SEC. 114. SEVERABILITY.
If any provision of this subtitle or the application of such
provision to any person or circumstance is held to be unconstitutional,
the remainder of this subtitle, and the application of the provision to
any other person or circumstance, shall not be affected.
TITLE II--ADJUSTMENTS OF DEBTS OF A TERRITORY OR ITS MUNICIPALITIES
Subtitle A--General Provisions
SEC. 201. DEFINITIONS.
In this title:
(1) Affiliate.--The term ``affiliate'' means, in addition
to the definition made applicable in a case under this title by
section 243(a)--
(A) for a Territory, any municipality of the
Territory; and
(B) for a municipality, the governing Territory and
any of the Territory's other municipalities.
(2) Bond.--The term ``Bond'' means a bond, loan, line of
credit, note, or other borrowing title, in physical or
dematerialized form, of which--
(A) the issuer, borrower, or guarantor is the
municipality or Territory as defined by paragraphs (5)
and (11); and
(B) the date of issuance or incurrence of debt
precedes the date of enactment of this Act.
(3) Court.--The term ``court'' means the district court for
the territory in which the debtor is located or, for any
territory in which the debtor is located that does not have a
district court, the United States District Court for the
District of Hawaii.
(4) Debtor.--The term ``debtor'' means the Territory or
municipality concerning which a case under this title has been
commenced.
(5) Municipality.--The term ``municipality''--
(A) includes any political subdivision, public
agency, instrumentality or instrumentality of a
Territory; and
(B) should be broadly construed to effectuate the
purposes of this title.
(6) Property of the estate.--The term ``property of the
estate'', when used in section 541 of title 11, United States
Code, made applicable in a case under this title by section
243(a) means property of the debtor.
(7) Special revenues.--The term ``special revenues'' means
receipts derived from the ownership, operation, or disposition
of projects or systems of the debtor that are primarily used or
intended to be used primarily to provide transportation,
utility, or other services, including the proceeds of
borrowings to finance the projects or systems.
(8) Special tax payer.--The term ``special tax payer''
means record owner or holder of legal or equitable title to
real property against which a special assessment or special tax
has been levied the proceeds of which are the sole source of
payment of an obligation issued by the debtor to defray the
cost of an improvement relating to such real property.
(9) Special tax payer affected by the plan.--The term
``special tax payer affected by the plan'' means special tax
payer with respect to whose real property the plan proposes to
increase the proportion of special assessments or special taxes
referred to in paragraph (2) assessed against such real
property.
(10) State.--The term ``State'' when used in a section of
title 11, United States Code, made applicable in a case under
this title by section 243(a) means State or Territory when used
in reference to a the relationship of a State to the
municipality of the State.
(11) Territory.--The term ``Territory'' means the
Commonwealth of Puerto Rico, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, or the United
States Virgin Islands.
(12) Trustee.--The term ``trustee'' when used in a section
of title 11, United States Code, made applicable in a case
under this title by section 243(a) means debtor, except as
provided in section 926 of title 11, United States Code.
SEC. 202. WHO MAY BE A DEBTOR.
An entity may be a debtor under this title if the entity--
(1) is--
(A) a Territory that has requested the
establishment of a Fiscal Stability and Reform Board in
accordance with section 111; or
(B) a municipality--
(i) of a Territory that has requested the
establishment of a Fiscal Stability and Reform
Board in accordance with section 111; and
(ii) that has been specifically authorized,
in its capacity as a municipality or by name,
to be a debtor under this title by Territory
law, or by a governmental officer or
organization empowered by Territory law to
authorize such entity to be a debtor under this
title; and
(2) desires to effect a plan to adjust its debts.
SEC. 203. RESERVATION OF TERRITORIAL POWER TO CONTROL MUNICIPALITIES.
Subject to the limitations imposed by title III, this title does
not limit or impair the power of a Territory to control, by legislation
or otherwise, a municipality of or in the Territory in the exercise of
the political or governmental powers of such municipality, including
expenditures for such exercise, but--
(1) a Territory law prescribing a method of composition of
indebtedness of such municipality may not bind any creditor
that does not consent to such composition; and
(2) a judgment entered under such a law may not bind a
creditor that does not consent to such composition.
SEC. 204. LIMITATION ON JURISDICTION AND POWERS OF COURT.
Subject to the limitations imposed by title II, notwithstanding any
power of the court, unless the debtor consents or the plan so provides,
the court may not, by any stay, order, or decree, in the case or
otherwise, interfere with--
(1) any of the political or governmental powers of the
debtor;
(2) any of the property or revenues of the debtor; or
(3) the debtor's use or enjoyment of any income-producing
property.
Subtitle B--Initial Stay on Litigation
SEC. 211. DEFINITIONS.
In this subtitle, any term not defined under section 201 that is
defined in title 11, United States Code, has the meaning given that
term under title 11, United States Code.
SEC. 212. EFFECTIVE DATE.
Effective on the date on which the Governor of a territory signs a
resolution adopted by the legislature of the territory to request the
establishment of a Fiscal Stability and Reform Board under section 111,
section 213 shall take effect.
SEC. 213. AUTOMATIC STAY.
(a) Except as otherwise provided in this section, the adoption of a
resolution under section 111 operates with respect to any claim, debt,
or cause of action related to a Bond as a stay, applicable to all
entities (as such term is defined in section 101 of title 11, United
States Code), of--
(1) the commencement or continuation, including the
issuance or employment of process, of a judicial,
administrative, or other action or proceeding against a
Territory or municipality, or to recover a claim against a
Territory or municipality;
(2) the enforcement, against a Territory or municipality or
against property of a Territory or municipality, of a judgment;
(3) any act to obtain possession of property of a Territory
or municipality, or of property from a Territory or
municipality, or to exercise control over property of a
Territory or municipality;
(4) any act to create, perfect, or enforce any lien against
property of a Territory or municipality;
(5) any act to create, perfect, or enforce against property
of a Territory or municipality any lien to the extent that such
lien secures a claim;
(6) any act to collect, assess, or recover a claim against
a Territory or municipality; and
(7) the setoff of any debt owing to a Territory or
municipality against any claim against a Territory or
municipality.
(b) The adoption of a resolution under section 111 does not operate
as a stay under subsection (a) of this section of the continuation of,
including the issuance or employment of process, a judicial,
administrative, or other action or proceeding against a Territory or
municipality that was commenced on or before the date of the adoption
of the resolution under section 111.
(c) Except as provided in subsection (d), (e), or (f), a stay of an
act under subsection (a) shall cease to have effect no later than 12
months after the date of the adoption of a resolution under section
111, or upon a the commencement of a voluntary case under this title by
the filing with the bankruptcy court of a petition by an entity that
may be a debtor under section 202, whichever comes chronologically
first.
(d) On motion of a party in interest and after notice and a
hearing, the court may grant relief from a stay under subsection (a)--
(1) for cause, including the lack of adequate protection of
a security interest in property of such party in interest; or
(2) with respect to a stay of an act against property under
subsection (a), if--
(A) the debtor does not have an equity in such
property; and
(B) such property is not necessary for a Territory
or municipality to provide essential services.
(e) Thirty days after a request under subsection (d) of this
section for relief from the stay of any act against property of a
Territory or municipality under subsection (a) of this section, such
stay is terminated with respect to the party in interest making such
request, unless the court, after notice and a hearing, orders such stay
continued in effect pending the conclusion of, or as a result of, a
final hearing and determination under subsection (d) of this section. A
hearing under this subsection may be a preliminary hearing, or may be
consolidated with the final hearing under subsection (d) of this
section. The court shall order such stay continued in effect pending
the conclusion of the final hearing under subsection (d) of this
section if there is a reasonable likelihood that the party opposing
relief from such stay will prevail at the conclusion of such final
hearing. If the hearing under this subsection is a preliminary hearing,
then such final hearing shall be concluded not later than 30 days after
the conclusion of such preliminary hearing, unless the 30-day period is
extended with the consent of the parties in interest or for a specific
time which the court finds is required by compelling circumstances.
(f) Upon request of a party in interest, the court, with or without
a hearing, shall grant such relief from the stay provided under
subsection (a) of this section as is necessary to prevent irreparable
damage to the secured interest of an entity in property, if such
interest will suffer such damage before there is an opportunity for
notice and a hearing under subsection (d) or (e) of this section.
(g) No order, judgment, or decree entered in violation of this
section shall have any force or effect.
(h) In any hearing under subsection (d) or (e) concerning relief
from a stay--
(1) the party requesting such relief has the burden of
proof on the issue of the debtor's equity in property; and
(2) the party opposing such relief has the burden of proof
on all other issues.
Subtitle C--Adjudication and Judicial Review
SEC. 221. PETITION AND PROCEEDINGS RELATING TO PETITION.
(a) A voluntary case under this title is commenced by the filing
with the bankruptcy court of a petition by an entity that may be a
debtor under section 202.
(b) Notwithstanding section 202 and subsection (a), a case under
this title concerning an unincorporated tax or special assessment
district that does not have its own officials is commenced by the
filing under subsection (a) of a petition by the governing authority of
the district or the board or body having authority to levy taxes or
assessments to meet the obligations of such district.
(c) After any objection to the petition, the court, after notice
and a hearing, may dismiss the petition if--
(1) the debtor did not file the petition in good faith; or
(2) the petition does not meet the requirements of this
title.
(d) If the petition is not dismissed under subsection (c), the
court shall order relief under this title.
(e) The court may not--
(1) on account of an appeal from an order for relief, delay
any proceeding under this title in the case in which the appeal
is being taken; or
(2) order a stay of such proceeding pending such appeal.
(f) The reversal on appeal of a finding of jurisdiction shall not
affect the validity of any debt incurred that is authorized by the
court under section 364(c) or 364(d) of title 11, United States Code.
(g) For purposes of this title, the Governor may take any action
necessary on behalf of the debtor to prosecute the debtor's case;
including--
(1) filing a petition;
(2) submitting or modifying a plan of adjustment; or
(3) otherwise generally submitting filings in relation to
the restructuring case with the court.
(h) Debtors under this title may file petitions or submit or modify
plans of adjustment jointly if they are affiliates.
(i) Except as provided in subsection (j), this title shall take
effect on the date of the enactment of this Act.
(j) This title shall apply with respect to--
(1) cases commenced under this title on or after the date
of the enactment of this Act; and
(2) debts, claims, and liens created before, on, or after
such date.
SEC. 222. JURISDICTION.
(a) The district courts shall have original and exclusive
jurisdiction of a case under this title.
(b) Section 157 of title 28, United States Code, shall apply to a
case under this title.
SEC. 223. VENUE.
Venue shall be proper in--
(1) with respect to a Territory, the district court for the
Territory or, for any territory that does not have a district
court, in the United States District Court for the District of
Hawaii; and
(2) with respect to a municipality, the district court for
the Territory in which the municipality is located or, for any
territory that does not have a district court, in the United
States District Court for the District of Hawaii.
SEC. 224. SELECTION OF PRESIDING JUDGE.
(a) For cases in which the debtor is a Territory, the chief judge
of the court of appeals for the circuit embracing the district in which
the case is commenced shall designate a bankruptcy judge to conduct the
case.
(b) For cases in which the debtor is not a Territory, and the case
has not been jointly filed with the case of a Territory or there is no
case in which the affiliate Territory is a debtor, the chief judge of
the court of appeals for the circuit embracing the district in which
the case is commenced shall designate a bankruptcy judge to conduct the
case.
(c) A bankruptcy judge designated under subsection (a) or (b) shall
be subject to the provisions of chapter 6 of title 28, United States
Code.
(d) Notwithstanding section 156, of title 28, United States Code,
the bankruptcy judge designated under subsection (a) or (b) may appoint
as many law clerks and additional judicial assistants as the judge
deems necessary to assist in presiding over cases commenced under this
title.
SEC. 225. APPELLATE REVIEW.
(a) Except as provided in subsection (b), subsections (a) and (d)
of section 158 of title 28, United States Code, shall apply to a case
under this title.
(b) Only an order confirming a plan of adjustment or dismissing a
petition shall be considered final for purposes of section 158(a) of
title 28, United States Code.
SEC. 226. APPLICABLE RULES OF PROCEDURE.
For all cases brought under this title, the Federal Rules of
Bankruptcy Procedure shall apply.
SEC. 227. SEVERABILITY.
If any provision of this title or the application thereof to any
person or circumstance is held invalid, the remainder of this title, or
the application of that provision to persons or circumstances other
than those as to which it is held invalid, is not affected thereby.
Subtitle D--The Plan
SEC. 231. FILING OF PLAN OF ADJUSTMENT.
The debtor shall file a plan for the adjustment of the debtor's
debts. If such a plan is not filed with the petition, the debtor shall
file such a plan at such later time as the court fixes.
SEC. 232. CONFIRMATION.
(a) A special tax payer may object to confirmation of a plan.
(b) The court shall confirm the plan if--
(1) the plan complies with the provisions of title 11,
United States Code, made applicable in a case under this title
by section 243(a);
(2) the plan complies with the provisions of this title;
(3) the debtor is not prohibited by law from taking any
action necessary to carry out the plan;
(4) except to the extent that the holder of a particular
claim has agreed to a different treatment of such claim, the
plan provides that on the effective date of the plan each
holder of a claim of a kind specified in section 507(a)(2) of
title 11, United States Code, will receive on account of such
claim cash equal to the allowed amount of such claim;
(5) any regulatory or electoral approval necessary under
applicable nonbankruptcy law in order to carry out any
provision of the plan has been obtained, or such provision is
expressly conditioned on such approval;
(6) the plan is in the best interests of creditors and is
feasible;
(7) the plan is consistent with the Fiscal Plan submitted
under title II;
(8) the plan ensures that accrued pension liability in the
Commonwealth Employee Retirement System and Teacher Retirement
System shall be treated as senior, first priority secured debt,
senior to any existing senior secured debt by statutory lien
and notwithstanding any other provision of law may be satisfied
by payment from the general revenues of the Commonwealth,
provided that the maximum claim to be treated as secured by
this senior, first priority secured statutory lien of an active
annuitant shall be equal to the Pension Benefit Guaranty
Corporation maximum guarantee for participants in a single-
employer plan and that the maximum claim to be treated as
secured by this senior, first priority secured statutory lien
of an active or vested inactive participant in said pension
funds shall be equal to the full benefit accrued by such active
or inactive participant; and
(9) feasible and equitable the plan does not unduly impair
the claims of holders of bonds that are--
(A) general obligations of the Territory to which
the Territory pledged the full faith and credit and the
taxing power of the Territory; and
(B) identified in an applicable nonbankruptcy law
as having a first claim on available Territory
resources.
Subtitle E--Additional Provisions
SEC. 241. COMPENSATION OF PROFESSIONALS.
(a) After notice to the parties in interest and the United States
Trustee and a hearing, the court may award to a professional person
employed by the debtor, in the debtor's sole discretion, or employed by
a committee under section 1103 of title 11, United States Code--
(1) reasonable compensation for actual, necessary services
rendered by the professional person, or attorney and by any
paraprofessional person employed by any such person; and
(2) reimbursement for actual, necessary expenses.
(b) The court may, on its own motion or on the motion of any party
in interest, award compensation that is less than the amount of
compensation that is requested.
(c) In determining the amount of reasonable compensation to be
awarded to a professional person, the court shall consider the nature,
the extent, and the value of such services, taking into account all
relevant factors, including--
(1) the time spent on such services;
(2) the rates charged for such services;
(3) whether the services were necessary to the
administration of, or beneficial at the time at which the
service was rendered toward the completion of, a case under
this title;
(4) whether the services were performed within a reasonable
amount of time commensurate with the complexity, importance,
and nature of the problem, issue, or task addressed;
(5) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill
and experience in the restructuring field; and
(6) whether the compensation is reasonable based on the
customary compensation charged by comparably skilled
practitioners in cases other than cases under this title or
title 11, United States Code.
(d) The court shall not allow compensation for--
(1) unnecessary duplication of services; or
(2) services that were not--
(A) reasonably likely to benefit the debtor; or
(B) necessary to the administration of the case.
(e) The court shall reduce the amount of compensation awarded under
this section by the amount of any interim compensation awarded under
section 242, and, if the amount of such interim compensation exceeds
the amount of compensation awarded under this section, may order the
return of the excess to the debtor.
(f) Any compensation awarded for the preparation of a fee
application shall be based on the level and skill reasonably required
to prepare the application.
SEC. 242. INTERIM COMPENSATION.
A debtor's attorney, or any professional person employed by the
debtor, in the debtor's sole discretion, or employed by a committee
under section 1103 of title 11, United States Code, may apply to the
court not more than once every 120 days after an order for relief in a
case under this title, or more often if the court permits, for such
compensation for services rendered before the date of such an
application or reimbursement for expenses incurred before such date as
is provided under section 241. After notice and a hearing, the court
may allow to such applicant such compensation or reimbursement.
SEC. 243. APPLICABILITY OF OTHER SECTIONS.
(a) Sections 101, 102, 104, 105, 106, 107, 108, 112, 333, 344,
347(b), 349, 350(b), 351, 361, 362, 364(c), 364(d), 364(e), 364(f),
365, 366, 501, 502, 503, 504, 506, 507(a)(2), 509, 510, 524(a)(l),
524(a)(2), 544, 545, 546, 547, 548, 549(a), 549(c), 549(d), 550, 551,
552, 553, 555, 556, 557, 559, 560, 561, 562, 922, 923, 924, 925, 926,
927, 928, 929, 930, 942, 944, 945, 946, 1102, 1103, 1109, 1111(b),
1113, 1122, 1123(a)(l), 1123(a)(2), 1123(a)(3), 1123(a)(4), 1123(a)(5),
1123(b), 1123(d), 1124, 1125, 1126(a), 1126(b), 1126(c), 1126(e),
1126(f), 1126(g), 1127(d), 1128, 1129(a)(2), 1129(a)(3), 1129(a)(6),
1129(a)(8), 1129(a)(10), 1129(b)(l), 1129(b)(2)(A), 1129(b)(2)(B),
1142(b), 1143, 1144, and 1145 of title 11, United States Code, apply in
a case under this title.
(b) A term used in a section of title 11, United States Code, made
applicable in a case under this title by subsection (a) has the meaning
defined for such term for the purpose of such applicable section,
unless such term is otherwise defined in section 201.
(c) A section made applicable in a case under this title by
subsection (a) that is operative if the business of the debtor is
authorized to be operated is operative in a case under this title.
(d) Solely for purposes of this title, a reference to ``this
title'', ``this chapter'', or words of similar import in a section of
title 11, United States Code, made applicable in a case under this
title by subsection (a) or to ``this title'', ``title 11'', or words of
similar import in a section of title 28, United States Code, made
applicable in a case under this title by section 222 or 225 or in the
Federal Rules of Bankruptcy Procedure made applicable in a case under
this title by section 226 shall be deemed to be a reference to this
title.
TITLE III--PUERTO RICO CHAPTER 9 UNIFORMITY
SEC. 301. SHORT TITLE.
This title may be cited as the ``Puerto Rico Chapter 9 Uniformity
Act of 2015''.
SEC. 302. AMENDMENT.
Section 101(52) of title 11, United States Code, is amended to read
as follows:
``(52) The term `State' includes Puerto Rico and, except
for the purpose of defining who may be a debtor under chapter 9
of this title, includes the District of Columbia.''.
SEC. 303. EFFECTIVE DATE; APPLICATION OF AMENDMENT.
(a) Effective Date.--Except as provided in subsection (b), this Act
and the amendment made by this Act shall take effect on the date of the
enactment of this Act.
(b) Application of Amendment.--The amendment made by this title
shall apply with respect to--
(1) cases commenced under title 11 of the United States
Code on or after the date of the enactment of this Act; and
(2) debts, claims, and liens created before, on, or after
such date.
SEC. 304. SEVERABILITY.
If any provision of this title or any amendment made by this title,
or the application of such provision or amendment to any person or
circumstance, is held to be unconstitutional, the remainder of this
title and the amendments made by this title, or the application of that
provision or amendment to other persons or circumstances, shall not be
affected.
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