[Congressional Record Volume 168, Number 12 (Wednesday, January 19, 2022)]
[House]
[Pages H230-H232]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PUERTO RICO RECOVERY ACCURACY IN DISCLOSURES ACT OF 2021

  Ms. DEAN. Mr. Speaker, I move to suspend the rules and concur in the 
Senate amendment to 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 Senate amendment is as follows:
  Senate amendment:

       Strike out all after the enacting clause and insert:

     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) Definitions.--In this section:
       (1) List of material interested parties.--The term ``List 
     of Material Interested Parties'' means the List of Material 
     Interested Parties established under subsection (c)(1).
       (2) Oversight board.--The term ``Oversight Board'' has the 
     meaning given the term in section 5 of PROMESA (48 U.S.C. 
     2104).
       (b) Required Disclosure.--
       (1) In general.--In a case commenced under section 304 of 
     PROMESA (48 U.S.C. 2164), no attorney, accountant, appraiser, 
     auctioneer, agent, 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 filed with the 
     court 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 any entity or person on the List of 
     Material Interested Parties.
       (2) Supplement.--A professional person that submits a 
     statement under paragraph (1) shall promptly supplement the 
     statement with any additional relevant information that 
     becomes known to the person.

[[Page H231]]

       (3) Disclosure.--Subject to any other applicable law, rule, 
     or regulation, a professional person that fails to file or 
     update a statement required under paragraph (1) or files a 
     statement that the court determines does not represent a good 
     faith effort to comply with this section shall disclose such 
     failure in any filing required to conform to the disclosure 
     requirements under rule 2014(a) of the Federal Rules of 
     Bankruptcy Procedure.
       (c) List of Material Interested Parties.--
       (1) Preparation.--Not later than 30 days after the date of 
     enactment of this Act, the Oversight Board shall establish a 
     List of Material Interested Parties subject to--
       (A) the approval of the court; and
       (B) the right of the United States trustee or any party in 
     interest to be heard on the approval.
       (2) Inclusions.--Except as provided in paragraph (3), the 
     List of Material Interested Parties shall include--
       (A) the debtor;
       (B) any creditor;
       (C) any other party in interest;
       (D) any attorney or accountant of--
       (i) the debtor;
       (ii) any creditor; or
       (iii) any other party in interest;
       (E) the United States trustee and any person employed in 
     the office of the United States trustee; and
       (F) the Oversight Board, including the members, the 
     Executive Director, and the employees of the Oversight Board.
       (3) Exclusions.--The List of Material Interested Parties 
     may not include any person with a claim, the amount of which 
     is below a threshold dollar amount established by the court 
     that is consistent with the purpose of this Act.
       (d) Review.--
       (1) In general.--The United States trustee shall review 
     each verified statement submitted pursuant to subsection (b) 
     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 
     applications filed under section 316 or 317 of PROMESA (48 
     U.S.C. 2176, 2177) that fail to satisfy the requirements of 
     subsection (b).
       (e) Limitation on Compensation.--In a 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) filed 
     after the date of enactment of this Act, the court may deny 
     allowance of compensation or reimbursement of expenses if--
       (1) the professional person has failed to file the verified 
     disclosure statements required under subsection (b)(1) or has 
     filed inadequate disclosure statements under that subsection; 
     or
       (2) during the professional person's employment in 
     connection with the case, the professional person--
       (A) is not a disinterested person (as defined in section 
     101 of title 11, United States Code) relative to any entity 
     or person on the List of Material Interested Parties; or
       (B) represents or holds an adverse interest in connection 
     with the case.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Pennsylvania (Ms. Dean) and the gentleman from Wisconsin (Mr. 
Fitzgerald) each will control 20 minutes.
  The Chair recognizes the gentlewoman from Pennsylvania.


                             General Leave

  Ms. DEAN. Mr. Speaker, I ask unanimous consent that all Members have 
5 legislative days to revise and extend their remarks and to include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Pennsylvania?
  There was no objection.
  Ms. DEAN. Mr. Speaker, I yield myself such time as I may consume.
  H.R. 1192, the Puerto Rico Recovery Accuracy in Disclosures Act of 
2021, or PRRADA, is commonsense legislation that would promote greater 
transparency and integrity with respect to the ongoing financial 
reorganization of Puerto Rico. This will be the third time in just over 
2 years that the House will vote on this legislation, but, Mr. Speaker, 
I think the third time will be the charm.
  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 the 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.
  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.
  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 under certain 
disclosures similar to those required under the Bankruptcy Code.
  Additionally, the bill would require the United States Trustee to 
review these disclosures and to submit comments in response to the 
court, and it also authorizes the United States Trustee to object to 
compensation requested by professionals.
  And 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. Common sense.
  The House passed H.R. 1192 last February, and the Senate passed an 
amended version of the Act last December. The Senate amendments 
streamlined PRRADA's reporting requirements, strengthened the 
incentives for good faith compliance, and clarify other provisions of 
the Act.
  Now, Puerto Rico's restructuring is drawing to a close, which makes 
passage of this legislation especially urgent.
  I thank Representative Velazquez for her leadership in championing 
this bill and for her relentless dedication 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 year and the year before by unanimous votes, and I 
reserve the balance of my time.
  Mr. FITZGERALD. Mr. Speaker, I yield myself such time as I may 
consume.
  I rise today in support of the Senate amendment to H.R. 1192, the 
Puerto Rico Recovery Accuracy in Disclosures Act of 2021.
  In 2016, Puerto Rico was experiencing severe financial pressure from 
significant debt and related obligations.
  In response to Puerto Rico's financial distress, Congress enacted the 
Puerto Rico Oversight, Management, and Economic Stability Act of 2016. 
That 2016 law created a bankruptcy process for Puerto Rico.
  Like existing bankruptcy law in 2016, the law permitted certain 
professionals working on Puerto Rico's bankruptcy, like lawyers and 
accountants, to apply to get paid for their services pending judicial 
approval.
  But the 2016 law lacked certain disclosure requirements for these 
professionals that would typically apply to restructuring professionals 
in other bankruptcy cases.
  The gap in the 2016 law created the potential for undisclosed 
conflicts of interest for professionals involved in Puerto Rico's 
bankruptcy.
  This bill fills the gap by mandating the necessary disclosure 
requirements. The bill also establishes a process for overseeing and 
policing disclosures that bankruptcy professionals make.
  H.R. 1192 passed the House unanimously in February of 2021. In 
December, the Senate passed H.R. 1192 with a few minor amendments to 
improve the bill's administrative abilities. The amendments also 
enhanced the incentives for professionals to make significant efforts 
to comply with the new disclosure requirements.
  H.R. 1192 will serve important goals and interests, including the 
interests of creditors and taxpayers and Puerto Rico itself.
  Mr. Speaker, I encourage my colleagues to support this bill, and I 
reserve the balance of my time.
  Ms. DEAN. Mr. Speaker, I reserve the balance of my time.
  Mr. FITZGERALD. Mr. Speaker, I yield 5 minutes to the gentlewoman 
from Puerto Rico (Miss Gonzalez-Colon).
  Miss GONZALEZ-COLON. Mr. Speaker, I rise in support of the approval 
in the House of the Senate amendment to H.R. 1192, the Puerto Rico 
Recovery Accuracy in Disclosures Act of 2021.
  I joined Representative Velazquez to promote this bipartisan and 
commonsense bill to help ensure the restructuring process under PROMESA 
serves Puerto Rico's interests. Actually, just

[[Page H232]]

this week, the plan was approved by the Federal Court, so this is 
perfect timing to approve this bill today.

  Though it required some technical corrections, it is satisfying to 
see this bill has already achieved passage in both Chambers. I wish for 
my colleague, Congresswoman Velazquez, to be fully recovered in time to 
see it become law.
  The intent of this legislation remains the same, and this bill will 
require any person or firm hired as legal, financial or technical staff 
or consultants for the Financial Oversight Board in the court cases for 
the restructuring of Puerto Rico's debt, to submit verified disclosures 
of all connections with debtors, creditors, or other interested parties 
in the process, before being compensated.
  Our intention is not to exclude people with experience in Puerto 
Rico's financial transactions from being resources in the restructuring 
process, but it is essential that their connection to any parties 
interested in those transactions be known. Conflict of interest, or the 
appearance of conflict of interest, can be best avoided if there is 
accountability and transparency.
  Anyone working to inform the Board's decisions, or representing it 
before the court, needs to be committed to defending the interests of 
the people of Puerto Rico first, in accordance with the law and 
justice.
  Lack of transparency creates a lack of trust, and this bill will work 
toward avoiding that by making these disclosures a legal mandate rather 
than the Board's own discretion.
  Our goal is to reach the day we no longer need the provisions of 
PROMESA and the Oversight Board, but until that happens, these 
instruments must be accountable and transparent.
  I ask my colleagues to support the passage of the Senate amendment to 
H.R. 1192, the Puerto Rico Recovery Accuracy in Disclosures Act of 
2021.

                              {time}  1230

  Ms. DEAN. Mr. Speaker, I am prepared to close, and I reserve the 
balance of my time.
  Mr. FITZGERALD. Mr. Speaker, I just reiterate that I think there is a 
lot of support in the Chamber, and I support it as well.
  Mr. Speaker, I yield back the balance of my time.
  Ms. DEAN. Mr. Speaker, in closing, 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.
  I thank my colleague, Representative Velazquez from New York, the 
author of the bill, for her leadership on this issue, and I strongly 
urge my colleagues to support this commonsense measure.
  Mr. Speaker, I yield back the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I rise in strong support of the Senate 
Amendment to H.R. 1192, the Puerto Rico Recovery Accuracy in 
Disclosures Act of 2021. I was proud to introduce this bill with 
bipartisan support in the House. I would like to thank House Speaker 
Nancy Pelosi and Chairman Jerry Nadler for bringing this legislation to 
the floor and to Senator Bob Menendez for introducing a companion bill 
in the Senate and for his tireless efforts to make sure this Bill would 
get approved in the Senate.
  H.R. 1192 already unanimously passed this House back on February 24, 
2021 and I expect to do so the same today.
  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, otherwise known as PROMESA. When PROMESA was 
originally passed, it incorporated Chapter 11's bankruptcy requirement 
that professionals file fee applications with the court. But PROMESA 
did not include Chapter 11's disclosure requirements that go hand-in-
hand with those fee applications. PRRADA remedies this and makes sure 
that professionals paid by the taxpayers of Puerto Rico are fully 
transparent about what interests they are serving.
  Puerto Ricans should be confident that the Board's bankruptcy 
advisors do not have their ``thumb on the scale'' to favor certain 
debts where they have a self-interest. This bipartisan bill ensures 
integrity and transparency of the PROMESA process.
  While we can have differing 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 Committee Staff 
and the bipartisan cosponsors of this bill. I strongly encourage all 
members to vote ``Yes'' on this critical piece of legislation.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Pennsylvania (Ms. Dean) that the House suspend the 
rules and concur in the Senate amendment to the bill, H.R. 1192.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the Senate amendment was concurred in.
  A motion to reconsider was laid on the table.

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