5278 , the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which Representative Duffy introduced on May 18, 2016. This bill is a revised version of H.R. 4900 , which Representative Duffy had introduced on April 12, 2016. 4900 and H.R. 5278 on May 25, 2016. Most sections are similar or identical. Many changes clarified or modified existing provisions, although some new provisions were added and other provisions were dropped. The measure is organized into seven titles, which are summarized below. A brief description of Puerto Rico, its relationship with the federal government, and its fiscal challenges is presented below. A short overview of the bill, along with a comparison with previous legislation involving control boards, follows. The body of the report provides a section-by-section description of H.R. 5278 . Appendix A gives a background on Puerto Rico's fiscal situation and aspects relevant to H.R. Appendix B contains a summary of provisions of the federal Bankruptcy Code cited in H.R. Brief Overview

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; H.R. 5278 ) would create a structure for exercising federal oversight over the fiscal affairs of territories. PROMESA would establish an Oversight Board with broad powers of budgetary and financial control over Puerto Rico. PROMESA also would create procedures for adjusting debts accumulated by the Puerto Rico government and its instrumentalities. PROMESA would also expedite approvals of key energy projects and other "critical projects" in Puerto Rico. 4900

The current version of PROMESA ( H.R. 5278 ) differs from the previous version ( H.R. 4900 ) in several ways. The structure and appointment process for the board was modified to allow the President to select one board member at his sole discretion. The powers of the board were also modified in some ways. 5278 specifies that the board could only begin to establish bylaws and take other major actions once all members were appointed. In H.R. 4900 , by contrast, the board could take certain actions, such as setting a schedule for formulation of Fiscal Plans, once four members were appointed (§201). Other changes include a new provision that empowers the Chief Justice of the U.S. Supreme Court to appoint a presiding judge to conduct Title III debt adjustment cases in which the territory is a party. For cases involving only the instrumentalities of the territory, the chief judge of the applicable Court of Appeals would appoint the presiding judge (§308). The relationship between Title VI collective action procedures to reach debt modification agreements and the Title III debt adjustment process was also modified. A provision to allow a transfer of certain federally controlled parts of Vieques Island to Commonwealth control was dropped. The time limit on a provision to allow a training wage below the usual federal minimum wage was changed from five to four years, or until the Oversight Board terminated. H.R. An amendment offered by Representative Bishop, Chairman of the Committee on Natural Resources, made technical corrections; dropped a provision that would have allowed other territories to request establishment of an Oversight Board; accelerated deadlines for appointment of Oversight Board members; modified the provision of funding for the Oversight Board; modified treatment of certain preexisting agreements with creditors; and would empower the Oversight Board to rescind laws enacted by the Puerto Rico government from May 4, 2016, until all members of the board were appointed. Congressional leaders would then each submit lists of candidates. 5278 includes a new provision for a public comment period. In general, it would prevent
the commencement or continuation of an action or proceeding against the Government of Puerto Rico that was or could have been commenced before the enactment of PROMESA, or to recover a Liability Claim against the Government of Puerto Rico that arose before the enactment of PROMESA; enforcement of a judgment obtained before the enactment of PROMESA against the Government of Puerto Rico or its property; any act to obtain property of or from the Government of Puerto Rico or to exercise control over property of the Government of Puerto Rico; any act to create, perfect, or enforce any lien against property of the Government of Puerto Rico; any act to create, perfect, or enforce against property of the Government of Puerto Rico any lien to the extent that the lien secures a Liability Claim that arose before the enactment of PROMESA; any act to collect, assess, or recover a Liability Claim that arose before PROMESA's enactment; and setoff of any debt owed to the Government of Puerto Rico that arose before PROMESA's enactment against any Liability Claim against the Government of Puerto Rico. H.R. The House Committee on Natural Resources marked up H.R. Amendments agreed to include technical corrections and extensions of certain studies on the Puerto Rico government and economy, among others. The major provisions of the bill, however, were unaffected. The House passed an amended version of H.R. 5278 on June 9, 2016, by a 297-127 vote. The Senate approved the measure ( S. 2328 ) on June 29, 2016, by a 68-30 vote. President Obama signed the measure into law on June 30, 2016.
Representative Duffy introduced H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), on May 18, 2016. This bill is a revised version of H.R. 4900, introduced by Representative Duffy on April 12, 2016. The House Committee on Natural Resources marked up H.R. 5278 on May 25, 2016. Amendments include technical corrections and extensions of certain studies on the Puerto Rico government and economy. The major provisions of the bill were unaffected. The House passed an amended version of H.R. 5278, which is organized into seven titles, on June 9, 2016, (297-127). The Senate approved the measure (S. 2328) on June 29, 2016 (68-30). On June 30, 2016, President Obama signed the bill into law.
The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; H.R. 5278) would create a structure for exercising federal oversight over the fiscal affairs of territories. PROMESA would establish an Oversight Board with broad powers of budgetary and financial control over Puerto Rico. PROMESA also would create procedures for adjusting debts accumulated by the Puerto Rico government and its instrumentalities and potentially for debts of other territories. Finally, PROMESA would expedite approvals of key energy projects and other "critical projects" in Puerto Rico.
The current version of PROMESA (H.R. 5278) differs from the previous version (H.R. 4900) in several ways, although most sections are similar or identical. Many changes clarified or modified existing provisions, although some provisions were added or altered and others were dropped. For instance, H.R. 4900 would have allowed other territories, through normal political processes, to request setup of an Oversight Board.
The structure and appointment process for the board was modified to allow the President to select one board member at his sole discretion. The process by which congressional leaders would submit lists of potential board members was specified in more detail. H.R. 5278 also specifies that the board could only begin to establish bylaws and take other major actions once all members were appointed. In H.R. 4900, by contrast, the board could act in certain ways, such as setting a schedule for formulation of Fiscal Plans, once four members were appointed. The powers of the board were also modified in some ways and the independence of the board was strengthened.
Other changes include a new provision that empowers the Chief Justice of the U.S. Supreme Court to appoint a presiding judge for Title III debt adjustment cases in which the territory is a party, while the chief judge of the applicable Court of Appeals would appoint the presiding judge for cases involving only the instrumentalities of the territory. The relationship between Title VI collective action procedures to reach debt modification agreements and the Title III debt adjustment process was also modified. A provision to allow a transfer of certain federally controlled parts of Vieques Island to Commonwealth control was dropped. The time period that the Puerto Rico governor could propose, subject to board approval, to set a training wage below the usual federal minimum wage but above a $4.25/hour floor was shortened from five to four years, or when the Oversight Board terminates, if sooner. A public comment period provision was added to the Title V expedited approval process. Mandates for reports from a congressional task force and the Government Accountability Office (GAO) were also added.
The report presents a brief description of Puerto Rico, its relationship with the federal government, and its fiscal challenges. A short overview of the bill, along with a comparison with previous legislation involving control boards, follows. The body of the report provides a section-by-section description of H.R. 5278. Appendix A gives a background on Puerto Rico's fiscal situation and aspects relevant to H.R. 4900. Appendix B contains a summary of provisions of the federal Bankruptcy Code cited in H.R. 5278.