PRIA, Government Policy, Made Personal

Summary

The Governor must send any law passed during a fiscal year to the Oversight Board within 7 business days, unless the Board’s own rules say something different. Each submitted law must include a formal cost estimate from a territorial government office with budget expertise showing the law’s effect on spending and revenue, and a short certification saying whether the law is “significantly inconsistent” with the certified Fiscal Plan. If it is inconsistent, the certification must explain why. The Board will notify the Governor and the Legislature if the estimate or certification is missing, or if the certification says the law clashes with the Fiscal Plan. The Board can order the Governor to provide missing materials, to fix the law, or to give a reasonable explanation. If the territory does not follow the Board’s directions, the Board may act, including stopping the law from being enforced, to protect the Fiscal Plan. The Board may also do a nonbinding early review of bills if the Legislature asks. The Board will work with the territory’s comptroller to make contracts public and may require advance Board approval for certain contracts, leases, and for proposed rules, regulations, or executive orders to make sure they do not hurt the Fiscal Plan and promote fair competition. If a contract, rule, or order breaks Board policy, the Board may stop it from taking effect. If the Governor asks the Legislature to reprogram money from a certified Budget, the Governor must send that request to the Board first. The Board will analyze whether the change conflicts with the Budget and must give that analysis to the Legislature before any reprogramming happens. After a territory becomes covered and until the Oversight Board is fully appointed, the territory must not pass laws that move funds or assets outside the normal course of business or that conflict with the territory’s constitution or laws as of June 30, 2016; such actions can later be reviewed and possibly rescinded. Once the Board is fully appointed, it may review and, if needed, rescind laws enacted between May 4, 2016 (for Puerto Rico) or 45 days before Board establishment (for other territories) and the appointment date, but only to the extent those laws change creditor priorities outside the normal course or conflict with the earlier laws. The Board must not use its powers to block actions needed to follow court orders or federal agency orders, to run federal programs or federally delegated programs, to carry out territorial laws that match a certified Fiscal Plan and federal requirements, or to protect federally funded mass transit assets.

Title 48, §2144

Territories and Insular Possessions, Source: USLM XML via OLRC

(a)Submission of legislative acts to Oversight Board

(1)Submission of acts

Except to the extent that the Oversight Board may provide otherwise in its bylaws, rules, and procedures, not later than 7 business days after a territorial government duly enacts any law during any fiscal year in which the Oversight Board is in operation, the Governor shall submit the law to the Oversight Board.

(2)Cost estimate; certification of compliance or noncompliance

The Governor shall include with each law submitted to the Oversight Board under paragraph (1) the following:

(A)A formal estimate prepared by an appropriate entity of the territorial government with expertise in budgets and financial management of the impact, if any, that the law will have on expenditures and revenues.

(B)If the appropriate entity described in subparagraph (A) finds that the law is not significantly inconsistent with the Fiscal Plan for the fiscal year, it shall issue a certification of such finding.

(C)If the appropriate entity described in subparagraph (A) finds that the law is significantly inconsistent with the Fiscal Plan for the fiscal year, it shall issue a certification of such finding, together with the entity’s reasons for such finding.

(3)Notification

The Oversight Board shall send a notification to the Governor and the Legislature if—

(A)the Governor submits a law to the Oversight Board under this subsection that is not accompanied by the estimate required under paragraph (2)(A);

(B)the Governor submits a law to the Oversight Board under this subsection that is not accompanied by either a certification described in paragraph (2)(B) or (2)(C); or

(C)the Governor submits a law to the Oversight Board under this subsection that is accompanied by a certification described in paragraph (2)(C) that the law is significantly inconsistent with the Fiscal Plan.

(4)Opportunity to respond to notification

(A)Failure to provide estimate or certification

After sending a notification to the Governor and the Legislature under paragraph (3)(A) or (3)(B) with respect to a law, the Oversight Board may direct the Governor to provide the missing estimate or certification (as the case may be), in accordance with such procedures as the Oversight Board may establish.

(B)Submission of certification of significant inconsistency with Fiscal Plan and Budget

In accordance with such procedures as the Oversight Board may establish, after sending a notification to the Governor and Legislature under paragraph (3)(C) that a law is significantly inconsistent with the Fiscal Plan, the Oversight Board shall direct the territorial government to—

(i)correct the law to eliminate the inconsistency; or

(ii)provide an explanation for the inconsistency that the Oversight Board finds reasonable and appropriate.

(5)Failure to comply

If the territorial government fails to comply with a direction given by the Oversight Board under paragraph (4) with respect to a law, the Oversight Board may take such actions as it considers necessary, consistent with this chapter, to ensure that the enactment or enforcement of the law will not adversely affect the territorial government’s compliance with the Fiscal Plan, including preventing the enforcement or application of the law.

(6)Preliminary review of proposed acts

At the request of the Legislature, the Oversight Board may conduct a preliminary review of proposed legislation before the Legislature to determine whether the legislation as proposed would be consistent with the applicable Fiscal Plan under this subtitle, except that any such preliminary review shall not be binding on the Oversight Board in reviewing any law subsequently submitted under this subsection.

(b)Effect of approved Fiscal Plan on contracts, rules, and regulations

(1)Transparency in contracting

The Oversight Board shall work with a covered territory’s office of the comptroller or any functionally equivalent entity to promote compliance with the applicable law of any covered territory that requires agencies and instrumentalities of the territorial government to maintain a registry of all contracts executed, including amendments thereto, and to remit a copy to the office of the comptroller for inclusion in a comprehensive database available to the public. With respect to Puerto Rico, the term “applicable law” refers to 2 L.P.R.A. 97, as amended.

(2)Authority to review certain contracts

The Oversight Board may establish policies to require prior Oversight Board approval of certain contracts, including leases and contracts to a governmental entity or government-owned corporations rather than private enterprises that are proposed to be executed by the territorial government, to ensure such proposed contracts promote market competition and are not inconsistent with the approved Fiscal Plan.

(3)Sense of Congress

It is the sense of Congress that any policies established by the Oversight Board pursuant to paragraph (2) should be designed to make the government contracting process more effective, to increase the public’s faith in this process, to make appropriate use of the Oversight Board’s time and resources, to make the territorial government a facilitator and not a competitor to private enterprise, and to avoid creating any additional bureaucratic obstacles to efficient contracting.

(4)Authority to review certain rules, regulations, and executive orders

The provisions of this paragraph shall apply with respect to a rule, regulation, or executive order proposed to be issued by the Governor (or the head of any department or agency of the territorial government) in the same manner as such provisions apply to a contract.

(5)Failure to comply

If a contract, rule, regulation, or executive order fails to comply with policies established by the Oversight Board under this subsection, the Oversight Board may take such actions as it considers necessary to ensure that such contract, rule, executive order or regulation will not adversely affect the territorial government’s compliance with the Fiscal Plan, including by preventing the execution or enforcement of the contract, rule, executive order or regulation.

(c)Restrictions on budgetary adjustments

(1)Submissions of requests to Oversight Board

If the Governor submits a request to the Legislature for the reprogramming of any amounts provided in a certified Budget, the Governor shall submit such request to the Oversight Board, which shall analyze whether the proposed reprogramming is significantly inconsistent with the Budget, and submit its analysis to the Legislature as soon as practicable after receiving the request.

(2)No action permitted until analysis received

The Legislature shall not adopt a reprogramming, and no officer or employee of the territorial government may carry out any reprogramming, until the Oversight Board has provided the Legislature with an analysis that certifies such reprogramming will not be inconsistent with the Fiscal Plan and Budget.

(3)Prohibition on action until Oversight Board is appointed

(A)During the period after a territory becomes a covered territory and prior to the appointment of all members and the Chair of the Oversight Board, such covered territory shall not enact new laws that either permit the transfer of any funds or assets outside the ordinary course of business or that are inconsistent with the constitution or laws of the territory as of June 30, 2016, provided that any executive or legislative action authorizing the movement of funds or assets during this time period may be subject to review and rescission by the Oversight Board upon appointment of the Oversight Board’s full membership.

(B)Upon appointment of the Oversight Board’s full membership, the Oversight Board may review, and in its sole discretion, rescind, any law that—

(i)was enacted during the period between, with respect to Puerto Rico, May 4, 2016; or with respect to any other territory, 45 days prior to the establishment of the Oversight Board for such territory, and the date of appointment of all members and the Chair of the Oversight Board; and

(ii)alters pre-existing priorities of creditors in a manner outside the ordinary course of business or inconsistent with the territory’s constitution or the laws of the territory as of, in the case of Puerto Rico, May 4, 2016, or with respect to any other territory, 45 days prior to the establishment of the Oversight Board for such territory;

but such rescission shall only be to the extent that the law alters such priorities.

(d)Implementation of Federal programs

In taking actions under this chapter, the Oversight Board shall not exercise applicable authorities to impede territorial actions taken to—

(1)comply with a court-issued consent decree or injunction, or an administrative order or settlement with a Federal agency, with respect to Federal programs;

(2)implement a federally authorized or federally delegated program;

(3)implement territorial laws, which are consistent with a certified Fiscal Plan, that execute Federal requirements and standards; or

(4)preserve and maintain federally funded mass transportation assets.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a)(5) and (d), 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 chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 2101 of this title and Tables. This subtitle, referred to in subsec. (a)(6), probably should be a reference to “this title”, meaning title II of Pub. L. 114–187, June 30, 2016, 130 Stat. 563, which is classified generally to this subchapter. Pub. L. 114–187 does not contain subtitles.

§2144 Review of Activities to Ensure Compliance with Fiscal Plan