[Congressional Record Volume 167, Number 34 (Tuesday, February 23, 2021)]
[House]
[Pages H560-H563]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PUERTO RICO RECOVERY ACCURACY IN DISCLOSURES ACT OF 2021

  Ms. JACKSON LEE. Madam Speaker, I move to suspend the rules and pass 
the bill (H.R. 1192) to impose requirements on the payment of 
compensation to professional persons employed in voluntary cases 
commenced under title III of the Puerto Rico Oversight Management and 
Economic Stability Act (commonly known as ``PROMESA'').
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1192

       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 Recovery 
     Accuracy in Disclosures Act of 2021'' or ``PRRADA''.

     SEC. 2. DISCLOSURE BY PROFESSIONAL PERSONS SEEKING APPROVAL 
                   OF COMPENSATION UNDER SECTION 316 OR 317 OF 
                   PROMESA.

       (a) Required Disclosure.--
       (1) In general.--In a voluntary case commenced under 
     section 304 of PROMESA (48 U.S.C. 2164), no attorney, 
     accountant, appraiser, auctioneer, agent, consultant, or 
     other professional person may be compensated under section 
     316 or 317 of that Act (48 U.S.C. 2176, 2177) unless prior to 
     making a request for compensation, the professional person 
     has submitted a verified statement conforming to the 
     disclosure requirements of rule 2014(a) of the Federal Rules 
     of Bankruptcy Procedure setting forth the connection of the 
     professional person with--
       (A) the debtor;
       (B) any creditor;
       (C) any other party in interest, including any attorney or 
     accountant;
       (D) the Financial Oversight and Management Board 
     established in accordance with section 101 of PROMESA (48 
     U.S.C. 2121); and
       (E) any person employed by the Oversight Board described in 
     subparagraph (D).

[[Page H561]]

       (2) Other requirements.--A professional person that submits 
     a statement under paragraph (1) shall--
       (A) supplement the statement with any additional relevant 
     information that becomes known to the person; and
       (B) file annually a notice confirming the accuracy of the 
     statement.
       (b) Review.--
       (1) In general.--The United States Trustee shall review 
     each verified statement submitted pursuant to subsection (a) 
     and may file with the court comments on such verified 
     statements before the professionals filing such statements 
     seek compensation under section 316 or 317 of PROMESA (48 
     U.S.C. 2176, 2177).
       (2) Objection.--The United States Trustee may object to 
     compensation applications filed under section 316 or 317 of 
     PROMESA (48 U.S.C. 2176, 2177) that fail to satisfy the 
     requirements of subsection (e).
       (3) Right to be heard.--Each person described in section 
     1109 of title 11, United States Code, may appear and be heard 
     on any issue in a case under this section.
       (c) Jurisdiction.--The district courts of the United States 
     shall have jurisdiction of all cases under this section.
       (d) Retroactivity.--
       (1) In general.--If a court has entered an order approving 
     compensation under a case commenced under section 304 of 
     PROMESA (48 U.S.C. 2164), each professional person subject to 
     the order shall file a verified statement in accordance with 
     subsection (a) not later than 60 days after the date of 
     enactment of this Act.
       (2) No delay.--A court may not delay any proceeding in 
     connection with a case commenced under section 304 of PROMESA 
     (48 U.S.C. 2164) pending the filing of a verified statement 
     under paragraph (1).
       (e) Limitation on Compensation.--
       (1) In general.--In a voluntary case commenced under 
     section 304 of PROMESA (48 U.S.C. 2164), in connection with 
     the review and approval of professional compensation under 
     section 316 or 317 of PROMESA (48 U.S.C. 2176, 2177), the 
     court may deny allowance of compensation for services and 
     reimbursement of expenses, accruing after the date of the 
     enactment of this Act of a professional person if the 
     professional person--
       (A) has failed to file statements of connections required 
     by subsection (a) or has filed inadequate statements of 
     connections;
       (B) except as provided in paragraph (3), is on or after the 
     date of enactment of this Act not a disinterested person, as 
     defined in section 101 of title 11, United States Code; or
       (C) except as provided in paragraph (3), represents, or 
     holds an interest adverse to, the interest of the estate with 
     respect to the matter on which such professional person is 
     employed.
       (2) Considerations.--In making a determination under 
     paragraph (1), the court may take into consideration whether 
     the services and expenses are in the best interests of 
     creditors and the estate.
       (3) Committee professional standards.--An attorney or 
     accountant described in section 1103(b) of title 11, United 
     States Code, shall be deemed to have violated paragraph (1) 
     if the attorney or accountant violates section 1103(b) of 
     title 11, United States Code.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Texas (Ms. Jackson Lee) and the gentleman from North Carolina (Mr. 
Bishop) each will control 20 minutes.
  The Chair recognizes the gentlewoman from Texas.


                             General Leave

  Ms. JACKSON LEE. Madam Speaker, I ask unanimous consent that all 
Members have 5 legislative days to revise and extend their remarks and 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Texas?
  There was no objection.
  Ms. JACKSON LEE. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, as I always do, let me thank the sponsor of this 
legislation for her leadership, the gentlewoman from New York (Ms. 
Velazquez), and all of those who have supported this important 
leadership bill.
  H.R. 1192, the Puerto Rico Recovery Accuracy In Disclosures Act, or 
PRRADA, is commonsense legislation that would promote greater 
transparency and integrity with respect to the ongoing financial 
reorganization of Puerto Rico.
  In response to dire fiscal issues facing Puerto Rico at the time, 
Congress passed the Puerto Rico Oversight, Management, and Economic 
Stability Act, or PROMESA, in 2016. That legislation established a 
financial oversight and management board with control over Puerto 
Rico's budget, laws, financial plans, and regulations and the authority 
to retain professionals to assist the board in executing its 
responsibilities.
  Though largely patterned on Chapter 11 of the Bankruptcy Code, 
PROMESA did not incorporate all facets of Chapter 11 and other relevant 
provisions of the code. Importantly, this includes the code's mandatory 
disclosure requirements regarding actual or potential conflicts of 
interest that professional persons seeking to be retained in a 
bankruptcy case must make to the court prior to their retention.
  This bill would close that loophole by conditioning the compensation 
of professional persons retained under PROMESA upon certain disclosures 
similar to those required under the Bankruptcy Code.
  Additionally, the bill would require the United States Trustee to 
review these disclosures and submit comments in response to the court 
and also authorize the United States Trustee to object to compensation 
requested by the professionals.
  Finally, H.R. 1192 would allow courts to deny compensation for 
services and reimbursement of expenses if the professional person did 
not comply with the disclosure requirement, was not a disinterested 
person, or represented or held an interest adverse to the bankruptcy 
estate.
  I thank Ms. Velazquez for her leadership in championing this bill and 
for her relentless dedication, which we all have witnessed, to ensuring 
that the people of Puerto Rico receive the fair, efficient, and 
transparent restructuring process they deserve.
  I urge my colleagues to support this bill, which was passed out of 
the House last Congress by a unanimous vote.
  Madam Speaker, as a senior member of the Judiciary, Committee, I rise 
in strong support of H.R. 1192, the ``Puerto Rico Recovery Accuracy in 
Disclosures Act of 2021'' or ``PRRADA Act,'' which conditions 
compensation of professional persons retained under the congressionally 
passed ``Puerto Rico Oversight, Management, and Economic Stability 
Act'' (``PROMESA'') upon the applicant providing certain disclosures 
similar to those required under Bankruptcy Code section 327.
  In response to dire fiscal issues facing Puerto Rico at the time, 
Congress passed Pub. L. 114-187, the ``Puerto Rico Oversight, 
Management, and Economic Stability Act'' or ``PROMESA'' in 2016, 
legislation I strongly supported and cosponsored.
  The Act established the Financial Oversight and Management Board 
(Board), a fiscal control board comprised of seven members that would 
have control over Puerto Rico's budget, laws, financial plans, and 
regulations.
  It empowered the board to propose a budget for Puerto Rico and 
restructure its obligations owed to bondholders, estimated to be $6.5 
billion, and other creditors.
  Although largely patterned on chapter 11 of the Bankruptcy Code, 
PROMESA did not incorporate all facets of chapter 11 and other relevant 
provisions of the Code.
  For example, although the Board is authorized to retain and 
compensate professional persons in connection with its efforts to 
reorganize Puerto Rico, PROMESA does not include certain restrictions 
that the Bankruptcy Code requires for such purposes.
  For example, Section 327 of the Bankruptcy Code, unlike PROMESA, 
authorizes professional persons, such as attorneys, financial advisors, 
appraisers, and others, to be retained in connection with the 
administration of a bankruptcy case provided they meet the following 
conditions: first, such a person must not hold or represent an interest 
adverse to the bankruptcy estate; and second, the professional must be 
a ``disinterested person.''
  As I indicated at the outset, H.R. 1192, the ``Puerto Rico Recovery 
Accuracy in Disclosures Act of 2021'' or ``PRRADA,'' conditions 
compensation of professional persons retained under PROMESA upon the 
applicant providing certain disclosures similar to those required under 
Bankruptcy Code section 327.
  In addition, it would require the United States Trustee to review 
such disclosures and submit comments in response to the court as well 
as authorize the United States trustee to object to compensation 
requested by professionals. Further, the measure would apply 
retroactively to professionals who have previously been awarded 
compensation.
  Finally, H.R. 1192 would authorize the court to deny allowance of 
compensation for services and reimbursement of expenses accruing after 
the bill's enactment date if the professional person did not comply 
with the disclosure requirement, was not a disinterested person, or 
represented or held an interest adverse to the bankruptcy estate.
  I urge all Members to join me in voting for H.R. 1192, the ``Puerto 
Rico Recovery Accuracy in Disclosures Act of 2021.''
  Madam Speaker, I reserve the balance of my time.
  Mr. BISHOP of North Carolina. I yield myself as much time as I may 
consume.

[[Page H562]]

  I rise today in support of the Puerto Rico Recovery Accuracy in 
Disclosures Act.
  In 2016, Puerto Rico was experiencing significant financial pressures 
brought on by sizable debt and related obligations. In response to 
Puerto Rico's financial crisis, Congress enacted the Puerto Rico 
Oversight, Management, and Economic Stability Act of 2016. The 2016 law 
established a bankruptcy mechanism for Puerto Rico to address its 
obligations.
  Like the general bankruptcy law, the 2016 law enables bankruptcy 
professionals, like accountants, consultants, and lawyers, to apply for 
payment for their services upon court approval. But the 2016 law 
omitted disclosure requirements that apply to compensated professionals 
in proceedings under the general Bankruptcy Code, title 11 of the 
United States Code, pursuant to rule 2014(a) of the Federal Rules of 
Bankruptcy Procedure.
  Most significantly, the gap in the 2016 law created a potential for 
undisclosed compensation terms and undiscovered conflicts of interest 
vis-a-vis parties of interest for professionals serving in Puerto 
Rico's bankruptcy.
  To address this concern, this bill applies the disclosure 
requirements of rule 2014(a) to professionals serving in connection 
with Puerto Rico's bankruptcy and seeking compensation for those 
services.
  The bill also requires oversight of the disclosures that bankruptcy 
professionals make.
  This bill's disclosure and oversight requirements increase the 
likelihood that conflicts of interest will be caught and timely 
addressed before compensation decisions are made.
  Taken as a whole, this added transparency will benefit important 
interests, such as those of creditors and taxpayers--and ultimately, of 
Puerto Rico itself.
  Madam Speaker, I encourage my colleagues to support this bill, and I 
reserve the balance of my time.

                              {time}  1715

  Ms. JACKSON LEE. Madam Speaker, I yield 4 minutes to the gentlewoman 
from New York (Ms. Velazquez), the author of this legislation and also 
a champion, as all Members of the United States Congress know, during 
the very trying and difficult times of our friends in Puerto Rico. It 
is her voice that has been the most singularly powerful in their 
advocacy, along with her wonderful colleague, the distinguished 
representative, the Resident Commissioner from Puerto Rico.
  Ms. VELAZQUEZ. Madam Speaker, I rise in strong support of H.R. 1192. 
I was proud to introduce this bill with bipartisan support in the 
House.
  I would like to take this opportunity to thank Speaker of the House 
Nancy Pelosi and Chairman Jerry Nadler for bringing this legislation to 
the floor, and Mr. Bishop, the ranking member of the subcommittee, and 
Senator Bob Menendez for introducing a companion bill in the Senate.
  The Puerto Rico Recovery Accuracy in Disclosures Act of 2021, or 
PRRADA, eliminates a double standard currently facing Puerto Rico. 
Under U.S. Code and Federal bankruptcy procedure, any conflicts of 
interest, or even the perception of such conflict, between those 
working on the bankruptcy and the debtor are required to be disclosed. 
However, a loophole in the current law prevents this requirement from 
being extended to the people of Puerto Rico.
  In 2016, Congress passed the Puerto Rico Oversight, Management, and 
Economic Stability Act, or PROMESA, to set up an orderly bankruptcy 
process to restructure its debt, stimulate economic development, and 
put the island on a path to financial recovery. This bill will extend 
current U.S. law, requiring disclosures of conflicts of interest to 
Puerto Rico, thereby improving transparency and restoring confidence in 
the island's future.
  Puerto Ricans should be confident that the board's bankruptcy 
advisers do not have their thumb on the scale to favor certain debts 
where they have a self-interest. This bipartisan bill ensures integrity 
of the PROMESA process.
  While we can have different opinions on how effectively the oversight 
board is carrying out its mission, one thing should be clear: The 
island's residents should be entitled to the same rights and 
protections as any debtor on the mainland.
  Once more, I would like to thank Chairman Nadler, the staff, and the 
bipartisan cosponsors of the bill. I strongly encourage all Members to 
vote ``yes'' on this critical piece of legislation. I also would like 
to recognize the gentlewoman from Puerto Rico (Miss Gonzalez-Colon), 
who is a cosponsor of the bill.
  Mr. BISHOP of North Carolina. Madam Speaker, I yield 5 minutes to the 
gentlewoman from Puerto Rico (Miss Gonzalez-Colon).
  Miss GONZALEZ-COLON. Madam Speaker, I rise in support of the Puerto 
Rico Recovery Accuracy in Disclosures Act, H.R. 1192.
  Representative Velazquez and myself have proposed this bipartisan 
initiative in the last two Congresses, having achieved passage in the 
House during the last session. I think Congresswoman Velazquez is very 
thoughtful in terms of how important this is and the effects on PROMESA 
regarding this bill.
  We support this bill as an important component in ensuring the 
restructuring process under PROMESA, and it looks out for Puerto Rico's 
interests.
  This legislation requires any counsel and professional personnel that 
the financial oversight board may hire to work on a title III case for 
the restructuring of Puerto Rico's debt to submit verified disclosures 
of their connections with the debtor, creditors, or persons employed by 
the oversight board prior to being compensated.
  These provisions extend the same requirements to decisions about the 
hiring of personnel for the restructuring as are imposed on such 
personnel under existing bankruptcy rules. I think it is important to 
have the same kind of rules for those people who are going to be 
managing, as we speak, those kinds of negotiations.
  Our intention is not to exclude any people with expertise and 
knowledge about Puerto Rico's fiscal transactions from being resources 
in the restructuring process, but I think it is essential that any such 
connection be clear and known so that such persons' qualifications and 
the role they are going to be playing can be better evaluated.
  Conflict of interest, or the appearance of a conflict of interest, 
can be best avoided if there are accountability and transparency during 
the process. This bill would allow that to happen.
  This bill would require that such personnel must disclose in detail 
their participation and involvement with any entity involved in the 
issuance of Puerto Rico's debt and in any claims involving Puerto 
Rico's debt, informing the identity of each one.
  Anyone who is serving in the board--and I repeat, anyone who is 
serving in the board--working to inform its decisions, or representing 
it before the title III court, must have the trust of all parties that 
they are committed to defending the interests of Puerto Rico to the 
best of their ability in accordance to the law and justice.
  A lack of transparency in personnel decisions creates a lack of 
confidence and distrust. Learning that someone was involved in the 
business of one of the parties in the case, only after they are named 
and working on the case, does not create assurance of their commitment 
to the best interests of Puerto Rico or even managing the debt.

  Our goal must be to reach the day that we will no longer need the 
provisions of PROMESA or the fiscal oversight board, and we can 
dedicate ourselves to rebuild our economy and provide for growth. But 
until that happens, we must demand that those instruments created by 
PROMESA be accountable and transparent in their processes. Anything 
else should be unacceptable.
  That is the reason this bill, H.R. 1192, is important, and I ask my 
colleagues to support and pass this bill.
  Madam Speaker, I say thank you to the Congresswoman from New York 
(Ms. Velazquez) for this bill and for allowing this initiative to be a 
bipartisan one.
  Mr. BISHOP of North Carolina. Madam Speaker, I thank the gentlewoman 
from Puerto Rico, and I thank the gentlewomen from Texas and New York.
  Madam Speaker, I urge my colleagues to support the bill, and I yield 
back the balance of my time.
  Ms. JACKSON LEE. Madam Speaker, I yield myself such time as I may 
consume.

[[Page H563]]

  Madam Speaker, let me indicate again, this is a very vital initiative 
to continue to help in Puerto Rico's recovery. Let me thank the 
gentlewoman from New York for her leadership and, of course, the 
gentlewoman from Puerto Rico. This partnership and bipartisan 
collaboration with the other cosponsors is very crucial as we continue 
to work as a Congress to do our job for the people of Puerto Rico.
  H.R. 1192 closes a loophole under current law by establishing 
disclosure requirements regarding actual or potential conflicts of 
interest in the bankruptcy process under PROMESA. In doing so, this 
legislation promotes transparency and accountability in the Puerto Rico 
restructuring process.
  Again, I thank my colleague, Ms. Velazquez from New York, the author 
of the bill, for her leadership on this issue, and Mr. Nadler and his 
work.
  I strongly urge my colleagues to support this commonsense measure. 
This, of course, along with the gentlewoman from Puerto Rico, is 
helping the people of Puerto Rico, our neighbors and our fellow 
Americans.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Texas (Ms. Jackson Lee) that the House suspend the 
rules and pass the bill, H.R. 1192.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mrs. GREENE of Georgia. Madam Speaker, on that I demand the yeas and 
nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
will be postponed.

                          ____________________