U.S. Speaker of the House Paul Ryan (Photo by Chip Somodevilla/Getty Images)

The Financial Oversight & Management Board’s members would be selected from a list of candidates submitted by the U.S. House speaker, Senate majority leader, and minority leaders of the House and Senate. The board, which will have offices in Puerto Rico and anywhere else needed, will appoint an executive director.

The governor of Puerto Rico would be an ex-oficio member without voting powers.

The board, which would begin operating as soon as it has four members, will have the power to issue subpoenas requiring documents or testimony. Failure to obey a court order may put the person in civil contempt.

The entity, which will have immunity from liability, will also have broad powers to oversee debt restructuring, but the bill states that any restructuring agreement already consummated shall be deemed in conformance.

While the duties of the board will be limited to ensuring the government drafts a budget that is consistent with a five-year fiscal plan prepared by the government, it will have encompassing powers to achieve those goals. The governor will be required to submit quarterly reports on revenues and expenses for the board’s revision.

According to the bill, if the board determines a budget is not balanced or that revenues and expenditures do not go hand in hand, the board will “make reductions in non-debt expenditures to ensure that the actual quarterly revenues and expenses are in compliance with the applicable certified budget.”

It will also be able to institute automatic hiring freezes or prohibit specific territorial  instrumentalities from entering into contracts in excess of $100,000.

The legislation does not specifically say the board can levy new taxes, but it does state that all proposed laws and contracts will also have to be approved by the board.

There will be an automatic stay on all litigation against the government except for those that were filed before December.

The legislation does not contain initiatives for economic development, but subject to the approval of the board, employers will be allowed to pay new employees under the age of 25 a minimum wage of $4.25 for a period that cannot exceed five years. Regulations issued by the U.S. Labor secretary involving exemptions on the rates of pay to executive, professional,  outside sales and computer employees will have no effect in Puerto Rico.

“A troubling new development has underlined the need to address Puerto Rico’s fiscal crisis. Last week, the Puerto Rican government broke its fiscal obligations when it passed a moratorium on repaying any of its debt. Congress has a Constitutional and financial responsibility to bring order to the chaos that is unfolding in the U.S. territory—chaos that could soon wreak havoc on the American bond market. I applaud Rep. Duffy for introducing H.R. 4900, which holds the right people accountable for the crisis, shrinks the size of government, and authorizes an independent board to help get Puerto Rico on a path to fiscal health. Just as important for the long-term, this bill protects American taxpayers from bailing out Puerto Rico. I want to thank Chairman Bishop for his leadership in developing this responsible legislation,” House Speaker Paul Ryan (R-WI) stated in response to the introduction of the bill.

“We are nearing the conclusion of a collaborative and open drafting process that has involved all stakeholders to reach a responsible consensus.

“This package of reforms will restore the guardrails of freedom and self-governance in Puerto Rico. It will hold Puerto Rico accountable to its debt, uncover audited financial statements, enforce fiscal responsibility and cut red tape holding down the Island’s economy. It provides tools to redirect Puerto Rico from a path of destitution towards a path of prosperity, preserving freedom and opportunity for the next generation.

“This is the constitutionally-sound solution that will provide real, long-lasting reform to the Commonwealth while respecting the rights of all parties and creditors. It is the Island’s best shot to mitigate its financial collapse and future calls for a bailout, which would be untenable. Congress must act now to avoid a humanitarian crisis that will severely impact 3.5 million Americans living in Puerto Rico and millions of Americans on the mainland,” committee Chairman Rob Bishop said in a statement following the bill’s release.

“The three and a half million Americans living in the U.S. territory deserve the attention and support of Congress. After decades of mismanagement, Puerto Rico’s investors also deserve better. A protracted and chaotic legal battle would not serve the interest of creditors or the island. Worse would be a mutli-billion dollar taxpayer bailout thrust on the shoulders of America’s taxpayers and retirees. The PROMESA Act will ensure that the island meets its debt obligations in a controlled, responsible manner, without saddling the U.S.  taxpayers with the bill.  If we get this right, we have an opportunity to put the people of Puerto Rico on a path to economic opportunity. However, if we do nothing, the American people will be on the hook,” the bill’s co-sponsor Rep. Sean Duffy added.

Notwithstanding the provisions in the bill, Puerto Rico will be allowed to hold a status vote.