[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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