Puerto Rico Oversight, Management, and Economic Stability Act

114th Congress · Approved Jun 30, 2016 · 130 Stat. 549

An Act

To reauthorize and amend the National Sea Grant College Program Act, 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; Table of Contents.

(a)

Short Title.— This Act may be cited as the “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA”.

(b)

Table of Contents.— The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Effective date.

Sec. 3. Severability.

Sec. 4. Supremacy.

Sec. 5. Definitions.

Sec. 6. Placement.

Sec. 7. Compliance with Federal laws.

TITLE I— ESTABLISHMENT AND ORGANIZATION OF OVERSIGHT BOARD

Sec. 101. Financial Oversight and Management Board.

Sec. 102. Location of Oversight Board.

Sec. 103. Executive Director and staff of Oversight Board.

Sec. 104. Powers of Oversight Board.

Sec. 105. Exemption from liability for claims.

Sec. 106. Treatment of actions arising from Act.

Sec. 107. Budget and funding for operation of Oversight Board.

Sec. 108. Autonomy of Oversight Board.

Sec. 109. Ethics.

TITLE II— RESPONSIBILITIES OF OVERSIGHT BOARD

Sec. 201. Approval of fiscal plans.

Sec. 202. Approval of budgets.

Sec. 203. Effect of finding of noncompliance with budget.

Sec. 204. Review of activities to ensure compliance with fiscal plan.

Sec. 205. Recommendations on financial stability and management responsibility.

Sec. 206. Oversight Board duties related to restructuring.

Sec. 207. Oversight Board authority related to debt issuance.

Sec. 208. Required reports.

Sec. 209. Termination of Oversight Board.

Sec. 210. No full faith and credit of the United States.

Sec. 211. Analysis of pensions.

Sec. 212. Intervention in litigation.

TITLE III— ADJUSTMENTS OF DEBTS

Sec. 301. Applicability of other laws; definitions.

Sec. 302. Who may be a debtor.

Sec. 303. Reservation of territorial power to control territory and territorial instrumentalities.

Sec. 304. Petition and proceedings relating to petition.

Sec. 305. Limitation on jurisdiction and powers of court.

Sec. 306. Jurisdiction.

Sec. 307. Venue.

Sec. 308. Selection of presiding judge.

Sec. 309. Abstention.

Sec. 310. Applicable rules of procedure.

Sec. 311. Leases.

Sec. 312. Filing of plan of adjustment.

Sec. 313. Modification of plan.

Sec. 314. Confirmation.

Sec. 315. Role and capacity of Oversight Board.

Sec. 316. Compensation of professionals.

Sec. 317. Interim compensation.

TITLE IV— MISCELLANEOUS PROVISIONS

Sec. 401. Rules of construction.

Sec. 402. Right of Puerto Rico to determine its future political status.

Sec. 403. First minimum wage in Puerto Rico.

Sec. 404. Application of regulation to Puerto Rico.

Sec. 405. Automatic stay upon enactment.

Sec. 406. Purchases by territory governments.

Sec. 407. Protection from inter-debtor transfers.

Sec. 408. GAO report on Small Business Administration programs in Puerto Rico.

Sec. 409. Congressional Task Force on Economic Growth in Puerto Rico.

Sec. 410. Report.

Sec. 411. Report on territorial debt.

Sec. 412. Expansion of HUBZones in Puerto Rico.

Sec. 413. Determination on debt.

TITLE V— PUERTO RICO INFRASTRUCTURE REVITALIZATION

Sec. 501. Definitions.

Sec. 502. Position of Revitalization Coordinator.

Sec. 503. Critical projects.

Sec. 504. Miscellaneous provisions.

Sec. 505. Federal agency requirements.

Sec. 506. Judicial review.

Sec. 507. Savings clause.

TITLE VI— CREDITOR COLLECTIVE ACTION

Sec. 601. Creditor Collective action.

Sec. 602. Applicable law.

TITLE VII— SENSE OF CONGRESS REGARDING PERMANENT, PRO-GROWTH FISCAL REFORMS

Sec. 701. Sense of Congress regarding permanent, pro-growth fiscal reforms.

SEC. 2. Effective Date.

(a)

In General.— Except as provided in subsection (b), this Act shall take effect on the date of the enactment of this Act.

(b)

Title III and Title VI.—

(1)

Title III shall apply with respect to cases commenced under title III on or after the date of the enactment of this Act.

(2)

Titles III and VI shall apply with respect to debts, claims, and liens (as such terms are defined in section 101 of title 11, United States Code) created before, on, or after such date.

SEC. 3. Severability.

(a)

In General.— Except as provided in subsection (b), if any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of this Act, or the application of that provision to persons or circumstances other than those as to which it is held invalid, is not affected thereby, provided that title III is not severable from titles I and II, and titles I and II are not severable from title III.

(b)

Uniformity.— If a court holds invalid any provision of this Act or the application thereof on the ground that the provision fails to treat similarly situated territories uniformly, then the court shall, in granting a remedy, order that the provision of this Act or the application thereof be extended to any other similarly situated territory, provided that the legislature of that territory adopts a resolution signed by the territory’s governor requesting the establishment and organization of a Financial Oversight and Management Board pursuant to section 101.

SEC. 4. Supremacy.

The provisions of this Act shall prevail over any general or specific provisions of territory law, State law, or regulation that is inconsistent with this Act.

SEC. 5. Definitions.

In this Act—

(1)

Agreed accounting standards.— The term “agreed accounting standards” means modified accrual accounting standards or, for any period during which the Oversight Board determines in its sole discretion that a territorial government is not reasonably capable of comprehensive reporting that complies with modified accrual accounting standards, such other accounting standards as proposed by the Oversight Board.

(2)

Bond.— The term “Bond” means a bond, loan, letter of credit, other borrowing title, obligation of insurance, or other financial indebtedness for borrowed money, including rights, entitlements, or obligations whether such rights, entitlements, or obligations arise from contract, statute, or any other source of law, in any case, related to such a bond, loan, letter of credit, other borrowing title, obligation of insurance, or other financial indebtedness in physical or dematerialized form of which the issuer, obligor, or guarantor is the territorial government.

(3)

Bond claim.— The term “Bond Claim” means, as it relates to a Bond—

(A)

right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or

(B)

right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.

(4)

Budget.— The term “Budget” means the Territory Budget or an Instrumentality Budget, as applicable.

(5)

Puerto rico.— The term “Puerto Rico” means the Commonwealth of Puerto Rico.

(6)

Compliant budget.— The term “compliant budget” means a budget that is prepared in accordance with—

(A)

agreed accounting standards; and

(B)

the applicable Fiscal Plan.

(7)

Covered territorial instrumentality.— The term “covered territorial instrumentality” means a territorial instrumentality designated by the Oversight Board pursuant to section 101 to be subject to the requirements of this Act.

(8)

Covered territory.— The term “covered territory” means a territory for which an Oversight Board has been established under section 101.

(9)

Executive director.— The term “Executive Director” means an Executive Director appointed under section 103(a).

(10)

Fiscal plan.— The term “Fiscal Plan” means a Territory Fiscal Plan or an Instrumentality Fiscal Plan, as applicable.

(11)

Government of puerto rico.— The term “Government of Puerto Rico” means the Commonwealth of Puerto Rico, including all its territorial instrumentalities.

(12)

Governor.— The term “Governor” means the chief executive of a covered territory.

(13)

Instrumentality budget.— The term “Instrumentality Budget” means a budget for a covered territorial instrumentality, designated by the Oversight Board in accordance with section 101, submitted, approved, and certified in accordance with section 202.

(14)

Instrumentality fiscal plan.— The term “Instrumentality Fiscal Plan” means a fiscal plan for a covered territorial instrumentality, designated by the Oversight Board in accordance with section 101, submitted, approved, and certified in accordance with section 201.

(15)

Legislature.— The term “Legislature” means the legislative body responsible for enacting the laws of a covered territory.

(16)

Modified accrual accounting standards.— The term “modified accrual accounting standards” means recognizing revenues as they become available and measurable and recognizing expenditures when liabilities are incurred, in each case as defined by the Governmental Accounting Standards Board, in accordance with generally accepted accounting principles.

(17)

Oversight board.— The term “Oversight Board” means a Financial Oversight and Management Board established in accordance with section 101.

(18)

Territorial government.— The term “territorial government” means the government of a covered territory, including all covered territorial instrumentalities.

(19)

Territorial instrumentality.—

(A)

In general.— The term “territorial instrumentality” means any political subdivision, public agency, instrumentality—including any instrumentality that is also a bank—or public corporation of a territory, and this term should be broadly construed to effectuate the purposes of this Act.

(B)

Exclusion.— The term “territorial instrumentality” does not include an Oversight Board.

(20)

Territory.— The term “territory” means—

(A)

Puerto Rico;

(B)

Guam;

(C)

American Samoa;

(D)

the Commonwealth of the Northern Mariana Islands; or

(E)

the United States Virgin Islands.

(21)

Territory budget.— The term “Territory Budget” means a budget for a territorial government submitted, approved, and certified in accordance with section 202.

(22)

Territory fiscal plan.— The term “Territory Fiscal Plan” means a fiscal plan for a territorial government submitted, approved, and certified in accordance with section 201.

SEC. 6. Placement.

The Law Revision Counsel is directed to place this Act as chapter 20 of title 48, United States Code.

SEC. 7. Compliance with Federal Laws.

Except as otherwise provided in this Act, nothing in this Act shall be construed as impairing or in any manner relieving a territorial government, or any territorial instrumentality thereof, from compliance with Federal laws or requirements or territorial laws and requirements implementing a federally authorized or federally delegated program protecting the health, safety, and environment of persons in such territory.