48 U.S.C. § 2142 — Approval of Budgets

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- Page 363 TITLE 48—TERRITORIES AND INSULAR POSSESSIONS § 2143 ance certification to the Governor and the Legislature for such Territory Budget. (2) Certification of developed Instrumentality Budgets If the Governor develops an Instrumentality Budget that is a compliant budget by the day before the first day of the fiscal year for which the Instrumentality Budget is being developed and in accordance with the process established under subsection (c), the Oversight Board shall issue a compliance certification to the Gov- ernor for such Instrumentality Budget. (3) Deemed certification of Territory Budgets If the Governor and the Legislature fail to develop and approve a Territory Budget that is a compliant budget by the day before the first day of the fiscal year for which the Territory Budget is being developed, the Oversight Board shall submit a Budget to the Governor and the Legislature (including any revision to the Territory Budget made by the Oversight Board pursuant to subsection (d)(2)) and such Budget shall be— (A) deemed to be approved by the Governor and the Legislature; (B) the subject of a compliance certifi- cation issued by the Oversight Board to the Governor and the Legislature; and (C) in full force and effect beginning on the first day of the applicable fiscal year. (4) Deemed certification of Instrumentality Budgets If the Governor fails to develop an Instru- mentality Budget that is a compliant budget by the day before the first day of the fiscal year for which the Instrumentality Budget is being developed, the Oversight Board shall submit an Instrumentality Budget to the Gov- ernor (including any revision to the Instru- mentality Budget made by the Oversight Board pursuant to subsection (c)(2)) and such Budget shall be— (A) deemed to be approved by the Gov- ernor; (B) the subject of a compliance certifi- cation issued by the Oversight Board to the Governor; and (C) in full force and effect beginning on the first day of the applicable fiscal year. (f) Joint development of Budgets Notwithstanding any other provision of this section, if, in the case of a Territory Budget, the Governor, the Legislature, and the Oversight Board, or in the case of an Instrumentality Budget, the Governor and the Oversight Board, jointly develop such Budget for the fiscal year that meets the requirements under this section, and that the relevant parties certify that such budget reflects a consensus among them, then such Budget shall serve as the Budget for the territory or territorial instrumentality for that fiscal year. (Pub. L. 114–187, title II, § 202, June 30, 2016, 130 Stat. 566.) § 2143. Effect of finding of noncompliance with Budget (a) Submission of reports Not later than 15 days after the last day of each quarter of a fiscal year (beginning with the fiscal year determined by the Oversight Board), the Governor shall submit to the Oversight Board a report, in such form as the Oversight Board may require, describing— (1) the actual cash revenues, cash expendi- tures, and cash flows of the territorial govern- ment for the preceding quarter, as compared to the projected revenues, expenditures, and cash flows contained in the certified Budget for such preceding quarter; and (2) any other information requested by the Oversight Board, which may include a balance sheet or a requirement that the Governor pro- vide information for each covered territorial instrumentality separately. (b) Initial action by Oversight Board (1) In general If the Oversight Board determines, based on reports submitted by the Governor under sub- section (a), independent audits, or such other information as the Oversight Board may ob- tain, that the actual quarterly revenues, ex- penditures, or cash flows of the territorial government are not consistent with the pro- jected revenues, expenditures, or cash flows set forth in the certified Budget for such quar- ter, the Oversight Board shall— (A) require the territorial government to provide such additional information as the Oversight Board determines to be necessary to explain the inconsistency; and (B) if the additional information provided under subparagraph (A) does not provide an explanation for the inconsistency that the Oversight Board finds reasonable and appro- priate, advise the territorial government to correct the inconsistency by implementing remedial action. (2) Deadlines The Oversight Board shall establish the deadlines by which the territorial government shall meet the requirements of subparagraphs (A) and (B) of paragraph (1). (c) Certification (1) Inconsistency If the territorial government fails to provide additional information under subsection (b)(1)(A), or fails to correct an inconsistency under subsection (b)(1)(B), prior to the applica- ble deadline under subsection (b)(2), the Over- sight Board shall certify to the President, the House of Representatives Committee on Nat- ural Resources, the Senate Committee on En- ergy and Natural Resources, the Governor, and the Legislature that the territorial govern- ment is inconsistent with the applicable cer- tified Budget, and shall describe the nature and amount of the inconsistency. (2) Correction If the Oversight Board determines that the territorial government has initiated such measures as the Oversight Board considers sufficient to correct an inconsistency certified under paragraph (1), the Oversight Board shall certify the correction to the President, the House of Representatives Committee on Nat- ural Resources, the Senate Committee on En- ergy and Natural Resources, the Governor, and the Legislature.