[Congressional Record Volume 162, Number 105 (Wednesday, June 29, 2016)]
[Senate]
[Pages S4732-S4734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 4932. Mr. PAUL submitted an amendment intended to be proposed by
him to the bill S. 2328, to reauthorize and amend the National Sea
Grant College Program Act, and for other purposes; which was ordered to
lie on the table; as follows:
Strike section 405 and insert the following:
SEC. 405. AUTOMATIC STAY UPON ENACTMENT.
(a) Definitions.--In this section:
(1) Liability.--The term ``Liability'' means a bond, loan,
letter of credit, other borrowing title, obligation of
insurance, or other financial indebtedness for borrowed
money, including rights, entitlements, or obligations whether
such rights, entitlements, or obligations arise from
contract, statute, or any other source of law related to such
a
[[Page S4733]]
bond, loan, letter of credit, other borrowing title,
obligation of insurance, or other financial indebtedness in
physical or dematerialized form, of which--
(A) the issuer, obligor, or guarantor is the Government of
Puerto Rico; and
(B) the date of issuance or incurrence precedes the date of
enactment of this Act.
(2) Liability claim.--The term ``Liability Claim'' means,
as it relates to a Liability--
(A) right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured; or
(B) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured.
(b) In General.--Except as provided in subsection (c) of
this section, the establishment of an Oversight Board for
Puerto Rico (i.e., the enactment of this Act) in accordance
with section 101 operates with respect to a Liability 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 the
Government of Puerto Rico that was or could have been
commenced before the enactment of this Act, or to recover a
Liability Claim against the Government of Puerto Rico that
arose before the enactment of this Act;
(2) the enforcement, against the Government of Puerto Rico
or against property of the Government of Puerto Rico, of a
judgment obtained before the enactment of this Act;
(3) any act to obtain possession of property of the
Government of Puerto Rico or of property from the Government
of Puerto Rico or to exercise control over property of the
Government of Puerto Rico;
(4) any act to create, perfect, or enforce any lien against
property of the Government of Puerto Rico;
(5) any act to create, perfect, or enforce against property
of the Government of Puerto Rico any lien to the extent that
such lien secures a Liability Claim that arose before the
enactment of this Act;
(6) any act to collect, assess, or recover a Liability
Claim against the Government of Puerto Rico that arose before
the enactment of this Act; and
(7) the setoff of any debt owing to the Government of
Puerto Rico that arose before the enactment of this Act
against any Liability Claim against the Government of Puerto
Rico.
(c) Stay Not Operable.--The establishment of an Oversight
Board for Puerto Rico in accordance with section 101 does not
operate as a stay--
(1) solely under subsection (b)(1) of this section, of the
continuation of, including the issuance or employment of
process, of a judicial, administrative, or other action or
proceeding against the Government of Puerto Rico that was
commenced on or before December 18, 2015; or
(2) of the commencement or continuation of an action or
proceeding by a governmental unit to enforce such
governmental unit's or organization's police and regulatory
power, including the enforcement of a judgment other than a
money judgment, obtained in an action or proceeding by the
governmental unit to enforce such governmental unit's or
organization's police or regulatory power.; or
(3) to enforce a claim for interest on a Bond.
(d) Continuation of Stay.--Except as provided in
subsections (e), (f), and (g) the stay under subsection (b)
continues until the earlier of--
(1) the later of--
(A) the later of--
(i) February 15, 2017; or (ii) six months after the
establishment of an Oversight Board for Puerto Rico as
established by section 101(b);
(B) the date that is 75 days after the date in subparagraph
(A) if the Oversight Board delivers a certification to the
Governor that, in the Oversight Board's sole discretion, an
additional 75 days are needed to seek to complete a voluntary
process under title VI of this Act with respect to the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities; or
(C) the date that is 60 days after the date in subparagraph
(A) if the district court to which an application has been
submitted under subparagraph 601(m)(1)(D) of this Act
determines, in the exercise of the court's equitable powers,
that an additional 60 days are needed to complete a voluntary
process under title VI of this Act with respect to the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities; or
(2) with respect to the government of the Commonwealth of
Puerto Rico or any of its territorial instrumentalities, the
date on which a case is filed by or on behalf of the
government of the Commonwealth of Puerto Rico or any of its
territorial instrumentalities, as applicable, under title
III.
(e) Jurisdiction, Relief From Stay.--
(1) The United States District Court for the District of
Puerto Rico shall have original and exclusive jurisdiction of
any civil actions arising under or related to this section.
(2) On motion of or action filed by a party in interest and
after notice and a hearing, the United States District Court
for the District of Puerto Rico, for cause shown, shall grant
relief from the stay provided under subsection (b) of this
section.
(f) Termination of Stay; Hearing.--Forty-five days after a
request under subsection (e)(2) for relief from the stay of
any act against property of the Government of Puerto Rico
under subsection (b), 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 (e)(2). A hearing
under this subsection may be a preliminary hearing, or may be
consolidated with the final hearing under subsection (e)(2).
The court shall order such stay continued in effect pending
the conclusion of the final hearing under subsection (e)(2)
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 thirty days after the conclusion of
such preliminary hearing, unless the thirty-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.
(g) Relief to Prevent Irreparable Damage.--Upon request of
a party in interest, the court, with or without a hearing,
shall grant such relief from the stay provided under
subsection (b) as is necessary to prevent irreparable damage
to the 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 (e) or (f).
(h) Act in Violation of Stay Is Void.--Any order, judgment,
or decree entered in violation of this section and any act
taken in violation of this section is void, and shall have no
force or effect, and any person found to violate this section
may be liable for damages, costs, and attorneys' fees
incurred in defending any action taken in violation of this
section, and the Oversight Board or the Government of Puerto
Rico may seek an order from the court enforcing the
provisions of this section.
(i) Government of Puerto Rico.--For purposes of this
section, the term ``Government of Puerto Rico'', in addition
to the definition set forth in section 5(11) of this Act,
shall include--
(1) the individuals, including elected and appointed
officials, directors, officers of and employees acting in
their official capacity on behalf of the Government of Puerto
Rico; and
(2) the Oversight Board, including the directors and
officers of and employees acting in their official capacity
on behalf of the Oversight Board.
(j) No Default Under Existing Contracts.--
(1) Notwithstanding any contractual provision or applicable
law to the contrary and so long as a stay under this section
is in effect, the holder of a Liability Claim or any other
claim (as such term is defined in section 101 of title 11,
United States Code) may not exercise or continue to exercise
any remedy under a contract or applicable law in respect to
the Government of Puerto Rico or any of its property--
(A) that is conditioned upon the financial condition of, or
the commencement of a restructuring, insolvency, bankruptcy,
or other proceeding (or a similar or analogous process) by,
the Government of Puerto Rico, including a default or an
event of default thereunder; or
(B) with respect to Liability Claims--
(i) for the non-payment of principal or interest (other
than to enforce a claim for interest on a Bond); or
(ii) for the breach of any condition or covenant.
(2) The term ``remedy'' as used in paragraph (1) shall be
interpreted broadly, and shall include any right existing in
law or contract, including any right to--
(A) setoff;
(B) apply or appropriate funds;
(C) seek the appointment of a custodian (as such term is
defined in section 101(11) of title 11, United States Code);
(D) seek to raise rates; or
(E) exercise control over property of the Government of
Puerto Rico.
(3) Notwithstanding any contractual provision or applicable
law to the contrary and so long as a stay under this section
is in effect, a contract to which the Government of Puerto
Rico is a party may not be terminated or modified, and any
right or obligation under such contract may not be terminated
or modified, solely because of a provision in such contract
is conditioned on--
(A) the insolvency or financial condition of the Government
of Puerto Rico at any time prior to the enactment of this
Act;
(B) the adoption of a resolution or establishment of an
Oversight Board pursuant to section 101 of this Act; or
(C) a default under a separate contract that is due to,
triggered by, or a result of the occurrence of the events or
matters in paragraph (1)(B).
(4) Notwithstanding any contractual provision to the
contrary and so long as a stay under this section is in
effect, a counterparty to a contract with the Government of
Puerto Rico for the provision of goods and services shall,
unless the Government of Puerto Rico agrees to the contrary
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in writing, continue to perform all obligations under, and
comply with the terms of, such contract, provided that the
Government of Puerto Rico is not in default under such
contract other than as a result of a condition specified in
paragraph (3).
(k) Effect.--This section does not discharge an obligation
of the Government of Puerto Rico or release, invalidate, or
impair any security interest or lien securing such
obligation. This section does not impair or affect the
implementation of any restructuring support agreement
executed by the Government of Puerto Rico to be implemented
pursuant to Puerto Rico law specifically enacted for that
purpose prior to the enactment of this Act or the obligation
of the Government of Puerto Rico to proceed in good faith as
set forth in any such agreement.
(l) Payments on Liabilities.--Nothing in this section shall
be construed to prohibit the Government of Puerto Rico from
making any payment on any Liability when such payment becomes
due during the term of the stay, and to the extent the
Oversight Board, in its sole discretion, determines it is
feasible, the Government of Puerto Rico shall make interest
payments on outstanding indebtedness when such payments
become due during the length of the stay.
(m) Findings.--Congress finds the following:
(1) A combination of severe economic decline, and, at
times, accumulated operating deficits, lack of financial
transparency, management inefficiencies, and excessive
borrowing has created a fiscal emergency in Puerto Rico.
(2) As a result of its fiscal emergency, the Government of
Puerto Rico has been unable to provide its citizens with
effective services.
(3) The current fiscal emergency has also affected the
long-term economic stability of Puerto Rico by contributing
to the accelerated outmigration of residents and businesses.
(4) A comprehensive approach to fiscal, management, and
structural problems and adjustments that exempts no part of
the Government of Puerto Rico is necessary, involving
independent oversight and a Federal statutory authority for
the Government of Puerto Rico to restructure debts in a fair
and orderly process.
(5) Additionally, an immediate.--but temporary--stay is
essential to stabilize the region for the purposes of
resolving this territorial crisis.
(A) The stay advances the best interests common to all
stakeholders, including but not limited to a functioning
independent Oversight Board created pursuant to this Act to
determine whether to appear or intervene on behalf of the
Government of Puerto Rico in any litigation that may have
been commenced prior to the effectiveness or upon expiration
of the stay.
(B) The stay is limited in nature and narrowly tailored to
achieve the purposes of this Act, including to ensure all
creditors have a fair opportunity to consensually renegotiate
terms of repayment based on accurate financial information
that is reviewed by an independent authority or, at a
minimum, receive a recovery from the Government of Puerto
Rico equal to their best possible outcome absent the
provisions of this Act.
(6) Finally, the ability of the Government of Puerto Rico
to obtain funds from capital markets in the future will be
severely diminished without congressional action to restore
its financial accountability and stability.
(n) Purposes.--The purposes of this section are to--
(1) provide the Government of Puerto Rico with the
resources and the tools it needs to address an immediate
existing and imminent crisis;
(2) allow the Government of Puerto Rico a limited period of
time during which it can focus its resources on negotiating a
voluntary resolution with its creditors instead of defending
numerous, costly creditor lawsuits;
(3) provide an oversight mechanism to assist the Government
of Puerto Rico in reforming its fiscal governance and support
the implementation of potential debt restructuring;
(4) make available a Federal restructuring authority, if
necessary, to allow for an orderly adjustment of all of the
Government of Puerto Rico's liabilities; and
(5) benefit the lives of 3.5 million American citizens
living in Puerto Rico by encouraging the Government of Puerto
Rico to resolve its longstanding fiscal governance issues and
return to economic growth.
(o) Voting on Voluntary Agreements Not Stayed.--
Notwithstanding any provision in this section to the
contrary, nothing in this section shall prevent the holder of
a Liability Claim from voting on or consenting to a proposed
modification of such Liability Claim under title VI of this
Act.
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