48 U.S.C. § 2141 — Approval of Fiscal Plans

Page 360 TITLE 48—TERRITORIES AND INSULAR POSSESSIONS § 2128 territory to ensure that sufficient funds are available to cover all expenses of the Oversight Board. (1) Permanent funding Within 30 days after June 30, 2016, the terri- torial government shall designate a dedicated funding source, not subject to subsequent leg- islative appropriations, sufficient to support the annual expenses of the Oversight Board as determined in the Oversight Board’s sole and exclusive discretion. (2)(A) Initial funding On the date of establishment of an Oversight Board in accordance with section 2121(b) of this title and on the 5th day of each month thereafter, the Governor of the covered terri- tory shall transfer or cause to be transferred the greater of $2,000,000 or such amount as shall be determined by the Oversight Board pursuant to subsection (a) to a new account established by the territorial government, which shall be available to and subject to the exclusive control of the Oversight Board, with- out any legislative appropriations of the terri- torial government. (B) Termination The initial funding requirements under sub- paragraph (A) shall terminate upon the terri- torial government designating a dedicated funding source not subject to subsequent legis- lative appropriations under paragraph (1). (3) Remission of excess funds If the Oversight Board determines in its sole discretion that any funds transferred under this subsection exceed the amounts required for the Oversight Board’s operations as estab- lished pursuant to subsection (a), any such ex- cess funds shall be periodically remitted to the territorial government. (Pub. L. 114–187, title I, § 107, June 30, 2016, 130 Stat. 562.) § 2128. Autonomy of Oversight Board (a) In general Neither the Governor nor the Legislature may— (1) exercise any control, supervision, over- sight, or review over the Oversight Board or its activities; or (2) enact, implement, or enforce any statute, resolution, policy, or rule that would impair or defeat the purposes of this chapter, as de- termined by the Oversight Board. (b) Oversight Board legal representation In any action brought by, on behalf of, or against the Oversight Board, the Oversight Board shall be represented by such counsel as it may hire or retain so long as the representation complies with the applicable professional rules of conduct governing conflicts of interests. (Pub. L. 114–187, title I, § 108, June 30, 2016, 130 Stat. 563.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a)(2), was in the original ‘‘this Act’’, meaning Pub. L. 114–187, June 30, 2016, 130 Stat. 549, known as the Puerto Rico Oversight, Management, and Economic Stability Act and also as PROMESA, which is classified principally to this chap- ter. For complete classification of this Act to the Code, see Short Title note set out under section 2101 of this title and Tables. § 2129. Ethics (a) Conflict of interest Notwithstanding any ethics provision gov- erning employees of the covered territory, all members and staff of the Oversight Board shall be subject to the Federal conflict of interest re- quirements described in section 208 of title 18. (b) Financial disclosure Notwithstanding any ethics provision gov- erning employees of the covered territory, all members of the Oversight Board and staff des- ignated by the Oversight Board shall be subject to disclosure of their financial interests, the contents of which shall conform to the same re- quirements set forth in section 13104 of title 5. (Pub. L. 114–187, title I, § 109, June 30, 2016, 130 Stat. 563; Pub. L. 117–286, § 4(c)(45), Dec. 27, 2022, 136 Stat. 4359.) Editorial Notes AMENDMENTS 2022—Subsec. (b). Pub. L. 117–286 substituted ‘‘section 13104 of title 5.’’ for ‘‘section 102 of the Ethics in Gov- ernment Act of 1978 (5 U.S.C. App.).’’ SUBCHAPTER II—RESPONSIBILITIES OF OVERSIGHT BOARD § 2141. Approval of Fiscal Plans (a) In general As soon as practicable after all of the mem- bers and the Chair have been appointed to the Oversight Board in accordance with section 2121(e) of this title in the fiscal year in which the Oversight Board is established, and in each fiscal year thereafter during which the Over- sight Board is in operation, the Oversight Board shall deliver a notice to the Governor providing a schedule for the process of development, sub- mission, approval, and certification of Fiscal Plans. The notice may also set forth a schedule for revisions to any Fiscal Plan that has already been certified, which revisions must be subject to subsequent approval and certification by the Oversight Board. The Oversight Board shall con- sult with the Governor in establishing a sched- ule, but the Oversight Board shall retain sole discretion to set or, by delivery of a subsequent notice to the Governor, change the dates of such schedule as it deems appropriate and reasonably feasible. (b) Requirements (1) In general A Fiscal Plan developed under this section shall, with respect to the territorial govern- ment or covered territorial instrumentality, provide a method to achieve fiscal responsi- bility and access to the capital markets, and— (A) provide for estimates of revenues and expenditures in conformance with agreed ac- counting standards and be based on— Page 361 TITLE 48—TERRITORIES AND INSULAR POSSESSIONS § 2141 1 So in original. Probably should be ‘‘Fiscal Plan’’. (i) applicable laws; or (ii) specific bills that require enactment in order to reasonably achieve the projec- tions of the Fiscal Plan; (B) ensure the funding of essential public services; (C) provide adequate funding for public pension systems; (D) provide for the elimination of struc- tural deficits; (E) for fiscal years covered by a Fiscal Plan in which a stay under subchapters III or IV is not effective, provide for a debt bur- den that is sustainable; (F) improve fiscal governance, account- ability, and internal controls; (G) enable the achievement of fiscal tar- gets; (H) create independent forecasts of rev- enue for the period covered by the Fiscal Plan; (I) include a debt sustainability analysis; (J) provide for capital expenditures and in- vestments necessary to promote economic growth; (K) adopt appropriate recommendations submitted by the Oversight Board under sec- tion 2145(a) of this title; (L) include such additional information as the Oversight Board deems necessary; (M) ensure that assets, funds, or resources of a territorial instrumentality are not loaned to, transferred to, or otherwise used for the benefit of a covered territory or an- other covered territorial instrumentality of a covered territory, unless permitted by the constitution of the territory, an approved plan of adjustment under subchapter III, or a Qualifying Modification approved under subchater VI; and (N) respect the relative lawful priorities or lawful liens, as may be applicable, in the constitution, other laws, or agreements of a covered territory or covered territorial in- strumentality in effect prior to June 30, 2016. (2) Term A Fiscal Plan developed under this section shall cover a period of fiscal years as deter- mined by the Oversight Board in its sole dis- cretion but in any case a period of not less than 5 fiscal years from the fiscal year in which it is certified by the Oversight Board. (c) Development, review, approval, and certifi- cation of Fiscal Plans (1) Timing requirement The Governor may not submit to the Legis- lature a Territory Budget under section 2142 of this title for a fiscal year unless the Oversight Board has certified the Territory Fiscal Plan for that fiscal year in accordance with this subsection, unless the Oversight Board in its sole discretion waives this requirement. (2) Fiscal Plan developed by Governor The Governor shall submit to the Oversight Board any proposed Fiscal Plan required by the Oversight Board by the time specified in the notice delivered under subsection (a). (3) Review by the Oversight Board The Oversight Board shall review any pro- posed Fiscal Plan to determine whether it sat- isfies the requirements set forth in subsection (b) and, if the Oversight Board determines in its sole discretion that the proposed Fiscal Plan— (A) satisfies such requirements, the Over- sight Board shall approve the proposed Fis- cal Plan; or (B) does not satisfy such requirements, the Oversight Board shall provide to the Gov- ernor— (i) a notice of violation that includes recommendations for revisions to the ap- plicable Fiscal Plan; and (ii) an opportunity to correct the viola- tion in accordance with subsection (d)(1). (d) Revised Fiscal Plan (1) In general If the Governor receives a notice of violation under subsection (c)(3), the Governor shall submit to the Oversight Board a revised pro- posed Fiscal Plan in accordance with sub- section (b) by the time specified in the notice delivered under subsection (a). The Governor may submit as many revised Fiscal Plans to the Oversight Board as the schedule estab- lished in the notice delivered under subsection (a) permits. (2) Development by Oversight Board If the Governor fails to submit to the Over- sight Board a Fiscal Plan that the Oversight Board determines in its sole discretion satis- fies the requirements set forth in subsection (b) by the time specified in the notice deliv- ered under subsection (a), the Oversight Board shall develop and submit to the Governor and the Legislature a Fiscal Plan that satisfies the requirements set forth in subsection (b). (e) Approval and certification (1) Approval of Fiscal Plan developed by Gov- ernor If the Oversight Board approves a Fiscal Plan under subsection (c)(3), it shall deliver a compliance certification for such Fiscal Plan to the Governor and the Legislature. (2) Deemed approval of Fiscal Plan developed by Oversight Board If the Oversight Board develops a Fiscal Plan under subsection (d)(2), such Fiscal Plan shall be deemed approved by the Governor, and the Oversight Board shall issue a compli- ance certification for such Fiscal Plan to the Governor and the Legislature. (f) Joint development of Fiscal Plan Notwithstanding any other provision of this section, if the Governor and the Oversight Board jointly develop a Fiscal Plan for the fiscal year that meets the requirements under this section, and that the Governor and the Oversight Board certify that the fiscal plan 1 reflects a consensus between the Governor and the Oversight Board, then such Fiscal Plan shall serve as the Fiscal Plan for the territory or territorial instrumen- tality for that fiscal year. (Pub. L. 114–187, title II, § 201, June 30, 2016, 130 Stat. 563.) Page 362 TITLE 48—TERRITORIES AND INSULAR POSSESSIONS § 2142 Editorial Notes REFERENCES IN TEXT Subchapter IV, referred to in subsec. (b)(1)(E), was in the original a reference to title IV, meaning title IV of Pub. L. 114–187, June 30, 2016, 130 Stat. 585, which is classified principally to subchapter IV of this chapter. For complete classification of title IV to the Code, see Tables. § 2142. Approval of Budgets (a) Reasonable schedule for development of Budgets As soon as practicable after all of the mem- bers and the Chair have been appointed to the Oversight Board in the fiscal year in which the Oversight Board is established, and in each fis- cal year thereafter during which the Oversight Board is in operation, the Oversight Board shall deliver a notice to the Governor and the Legisla- ture providing a schedule for developing, sub- mitting, approving, and certifying Budgets for a period of fiscal years as determined by the Over- sight Board in its sole discretion but in any case a period of not less than one fiscal year fol- lowing the fiscal year in which the notice is de- livered. The notice may also set forth a schedule for revisions to Budgets that have already been certified, which revisions must be subject to subsequent approval and certification by the Oversight Board. The Oversight Board shall con- sult with the Governor and the Legislature in establishing a schedule, but the Oversight Board shall retain sole discretion to set or, by delivery of a subsequent notice to the Governor and the Legislature, change the dates of such schedule as it deems appropriate and reasonably feasible. (b) Revenue forecast The Oversight Board shall submit to the Gov- ernor and Legislature a forecast of revenues for the period covered by the Budgets by the time specified in the notice delivered under sub- section (a), for use by the Governor in devel- oping the Budget under subsection (c). (c) Budgets developed by Governor (1) Governor’s proposed budgets The Governor shall submit to the Oversight Board proposed Budgets by the time specified in the notice delivered under subsection (a). In consultation with the Governor in accordance with the process specified in the notice deliv- ered under subsection (a), the Oversight Board shall determine in its sole discretion whether each proposed Budget is compliant with the applicable Fiscal Plan and— (A) if a proposed Budget is a compliant budget, the Oversight Board shall— (i) approve the Budget; and (ii) if the Budget is a Territory Budget, submit the Territory Budget to the Legis- lature; or (B) if the Oversight Board determines that the Budget is not a compliant budget, the Oversight Board shall provide to the Gov- ernor— (i) a notice of violation that includes a description of any necessary corrective ac- tion; and (ii) an opportunity to correct the viola- tion in accordance with paragraph (2). (2) Governor’s revisions The Governor may correct any violations identified by the Oversight Board and submit a revised proposed Budget to the Oversight Board in accordance with paragraph (1). The Governor may submit as many revised Budg- ets to the Oversight Board as the schedule es- tablished in the notice delivered under sub- section (a) permits. If the Governor fails to de- velop a Budget that the Oversight Board deter- mines is a compliant budget by the time speci- fied in the notice delivered under subsection (a), the Oversight Board shall develop and sub- mit to the Governor, in the case of an Instru- mentality Budget, and to the Governor and the Legislature, in the case of a Territory Budget, a revised compliant budget. (d) Budget approval by Legislature (1) Legislature adopted budget The Legislature shall submit to the Over- sight Board the Territory Budget adopted by the Legislature by the time specified in the notice delivered under subsection (a). The Oversight Board shall determine whether the adopted Territory Budget is a compliant budg- et and— (A) if the adopted Territory Budget is a compliant budget, the Oversight Board shall issue a compliance certification for such compliant budget pursuant to subsection (e); and (B) if the adopted Territory Budget is not a compliant budget, the Oversight Board shall provide to the Legislature— (i) a notice of violation that includes a description of any necessary corrective ac- tion; and (ii) an opportunity to correct the viola- tion in accordance with paragraph (2). (2) Legislature’s revisions The Legislature may correct any violations identified by the Oversight Board and submit a revised Territory Budget to the Oversight Board in accordance with the process estab- lished under paragraph (1) and by the time specified in the notice delivered under sub- section (a). The Legislature may submit as many revised adopted Territory Budgets to the Oversight Board as the schedule estab- lished in the notice delivered under subsection (a) permits. If the Legislature fails to adopt a Territory Budget that the Oversight Board de- termines is a compliant budget by the time specified in the notice delivered under sub- section (a), the Oversight Board shall develop a revised Territory Budget that is a compliant budget and submit it to the Governor and the Legislature. (e) Certification of Budgets (1) Certification of developed and approved Territory Budgets If the Governor and the Legislature develop and approve a Territory Budget that is a com- pliant budget by the day before the first day of the fiscal year for which the Territory Budget is being developed and in accordance with the process established under subsections (c) and (d), the Oversight Board shall issue a compli-