Title 48, Territories and Insular PossessionsRelease 119-110

§2142 Approval of Budgets

Title 48 › CHAPTER 20 — PUERTO RICO OVERSIGHT, MANAGEMENT, AND ECONOMIC STABILITY › SUBCHAPTER II — RESPONSIBILITIES OF OVERSIGHT BOARD › § 2142

Last updated Sep 22, 2026|Official source

Summary

The Oversight Board must send the Governor and the Legislature a schedule, as soon as possible after its members and Chair are appointed and each year it operates, for developing, submitting, approving, and certifying budgets. The schedule covers the number of fiscal years the Board picks, but it must include at least one fiscal year after the fiscal year when the notice is sent. The Board will also send a revenue forecast by the schedule for the Governor to use. The Board will consult with the Governor and Legislature about dates, but the Board alone can set or change the schedule by sending a new notice. The Governor must send proposed budgets by the schedule. The Board will check if each budget follows the Fiscal Plan. If a budget is compliant, the Board approves it and sends Territory Budgets to the Legislature. If not, the Board gives a notice saying what must be fixed and lets the Governor revise as many times as the schedule allows. If the Governor misses the deadline, the Board will make a compliant budget and send it to the Governor (or to the Governor and Legislature for Territory Budgets). The Legislature must send any adopted Territory Budget by the schedule. The Board will either certify a compliant adopted budget or tell the Legislature what to fix and allow revisions. If no compliant Territory or Instrumentality Budget exists by the day before the first day of the fiscal year, the Board’s submitted budget is treated as approved, is certified, and goes into effect on the first day of that fiscal year. If the Governor, Legislature, and Board jointly agree in writing on a budget that meets the rules, that budget will be used for the year.

Full Legal Text

Title 48, §2142

Territories and Insular Possessions, Source: USLM XML via OLRC

(a)Reasonable schedule for development of Budgets

As soon as practicable after all of the members and the Chair have been appointed to the Oversight Board in the fiscal year in which the Oversight Board is established, and in each fiscal year thereafter during which the Oversight Board is in operation, the Oversight Board shall deliver a notice to the Governor and the Legislature providing a schedule for developing, submitting, approving, and certifying Budgets for a period of fiscal years as determined by the Oversight Board in its sole discretion but in any case a period of not less than one fiscal year following the fiscal year in which the notice is delivered. 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 consult 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 Governor and Legislature a forecast of revenues for the period covered by the Budgets by the time specified in the notice delivered under subsection (a), for use by the Governor in developing the Budget under subsection (c).

(c)Budgets developed by Governor (d) Budget approval by Legislature

(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 delivered 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)

(B)if the Oversight Board determines that the Budget is not a compliant budget, the Oversight Board shall provide to the Governor—

(i)a notice of violation that includes a description of any necessary corrective action; and

(ii)an opportunity to correct the violation 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 Budgets to the Oversight Board as the schedule established in the notice delivered under subsection (a) permits. If the Governor fails to develop a Budget that the Oversight Board determines is a compliant budget by the time specified in the notice delivered under subsection (a), the Oversight Board shall develop and submit to the Governor, in the case of an Instrumentality Budget, and to the Governor and the Legislature, in the case of a Territory Budget, a revised compliant budget.

(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 compliant 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 compliance 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 Governor 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 certification 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 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, the Oversight Board shall submit an Instrumentality Budget to the Governor (including any revision to the Instrumentality Budget made by the Oversight Board pursuant to subsection (c)(2)) and such Budget shall be—

(A)deemed to be approved by the Governor;

(B)the subject of a compliance certification 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.

Reference

Citations & Metadata

Citation

48 U.S.C. § 2142

Title 48, Territories and Insular Possessions

Last Updated

Sep 22, 2026

Release point: 119-110