---
kind: "section"
citation: "48 U.S.C. § 2142"
title: "48"
title_heading: "Territories and Insular Possessions"
number: "2142"
heading: "Approval of Budgets"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/48/2142"
units:
  - "Chapter 20 — Puerto Rico Oversight, Management, and Economic Stability"
  - "Subchapter II — Responsibilities of Oversight Board"
---

# §2142. Approval of Budgets

- (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](/usc/48/2104.md?p=17) in the fiscal year in which the [Oversight Board](/usc/48/2104.md?p=17) is established, and in each fiscal year thereafter during which the [Oversight Board](/usc/48/2104.md?p=17) is in operation, the [Oversight Board](/usc/48/2104.md?p=17) shall deliver a notice to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) providing a schedule for developing, submitting, approving, and certifying [Budgets](/usc/48/2104.md?p=4) for a period of fiscal years as determined by the [Oversight Board](/usc/48/2104.md?p=17) 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](/usc/48/2104.md?p=4) that have already been certified, which revisions must be subject to subsequent approval and certification by the [Oversight Board](/usc/48/2104.md?p=17). The [Oversight Board](/usc/48/2104.md?p=17) shall consult with the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) in establishing a schedule, but the [Oversight Board](/usc/48/2104.md?p=17) shall retain sole discretion to set or, by delivery of a subsequent notice to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15), change the dates of such schedule as it deems appropriate and reasonably feasible.
- (b) **Revenue forecast—** The [Oversight Board](/usc/48/2104.md?p=17) shall submit to the [Governor](/usc/48/2104.md?p=12) and [Legislature](/usc/48/2104.md?p=15) a forecast of revenues for the period covered by the [Budgets](/usc/48/2104.md?p=4) by the time specified in the notice delivered under [subsection (a)](#a), for use by the [Governor](/usc/48/2104.md?p=12) in developing the [Budget](/usc/48/2104.md?p=4) under [subsection (c)](#c).
- (c) **Budgets developed by Governor—**
  - (1) **Governor’s proposed budgets—** The [Governor](/usc/48/2104.md?p=12) shall submit to the [Oversight Board](/usc/48/2104.md?p=17) proposed [Budgets](/usc/48/2104.md?p=4) by the time specified in the notice delivered under [subsection (a)](#a). In consultation with the [Governor](/usc/48/2104.md?p=12) in accordance with the process specified in the notice delivered under [subsection (a)](#a), the [Oversight Board](/usc/48/2104.md?p=17) shall determine in its sole discretion whether each proposed [Budget](/usc/48/2104.md?p=4) is compliant with the applicable [Fiscal Plan](/usc/48/2104.md?p=10) and—
    - (A) if a proposed [Budget](/usc/48/2104.md?p=4) is a [compliant budget](/usc/48/2104.md?p=6), the [Oversight Board](/usc/48/2104.md?p=17) shall—
      - (i) approve the [Budget](/usc/48/2104.md?p=4); and
      - (ii) if the [Budget](/usc/48/2104.md?p=4) is a [Territory Budget](/usc/48/2104.md?p=21), submit the [Territory Budget](/usc/48/2104.md?p=21) to the [Legislature](/usc/48/2104.md?p=15); or
    - (B) if the [Oversight Board](/usc/48/2104.md?p=17) determines that the [Budget](/usc/48/2104.md?p=4) is not a [compliant budget](/usc/48/2104.md?p=6), the [Oversight Board](/usc/48/2104.md?p=17) shall provide to the [Governor](/usc/48/2104.md?p=12)—
      - (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)](#c-2).
  - (2) **Governor’s revisions—** The [Governor](/usc/48/2104.md?p=12) may correct any violations identified by the [Oversight Board](/usc/48/2104.md?p=17) and submit a revised proposed [Budget](/usc/48/2104.md?p=4) to the [Oversight Board](/usc/48/2104.md?p=17) in accordance with [paragraph (1)](#c-1). The [Governor](/usc/48/2104.md?p=12) may submit as many revised [Budgets](/usc/48/2104.md?p=4) to the [Oversight Board](/usc/48/2104.md?p=17) as the schedule established in the notice delivered under [subsection (a)](#a) permits. If the [Governor](/usc/48/2104.md?p=12) fails to develop a [Budget](/usc/48/2104.md?p=4) that the [Oversight Board](/usc/48/2104.md?p=17) determines is a [compliant budget](/usc/48/2104.md?p=6) by the time specified in the notice delivered under [subsection (a)](#a), the [Oversight Board](/usc/48/2104.md?p=17) shall develop and submit to the [Governor](/usc/48/2104.md?p=12), in the case of an [Instrumentality Budget](/usc/48/2104.md?p=13), and to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15), in the case of a [Territory Budget](/usc/48/2104.md?p=21), a revised [compliant budget](/usc/48/2104.md?p=6).
- (d) **Budget approval by Legislature—**
  - (1) **Legislature adopted budget—** The [Legislature](/usc/48/2104.md?p=15) shall submit to the [Oversight Board](/usc/48/2104.md?p=17) the [Territory Budget](/usc/48/2104.md?p=21) adopted by the [Legislature](/usc/48/2104.md?p=15) by the time specified in the notice delivered under [subsection (a)](#a). The [Oversight Board](/usc/48/2104.md?p=17) shall determine whether the adopted [Territory Budget](/usc/48/2104.md?p=21) is a [compliant budget](/usc/48/2104.md?p=6) and—
    - (A) if the adopted [Territory Budget](/usc/48/2104.md?p=21) is a [compliant budget](/usc/48/2104.md?p=6), the [Oversight Board](/usc/48/2104.md?p=17) shall issue a compliance certification for such [compliant budget](/usc/48/2104.md?p=6) pursuant to [subsection (e)](#e); and
    - (B) if the adopted [Territory Budget](/usc/48/2104.md?p=21) is not a [compliant budget](/usc/48/2104.md?p=6), the [Oversight Board](/usc/48/2104.md?p=17) shall provide to the [Legislature](/usc/48/2104.md?p=15)—
      - (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)](#d-2).
  - (2) **Legislature’s revisions—** The [Legislature](/usc/48/2104.md?p=15) may correct any violations identified by the [Oversight Board](/usc/48/2104.md?p=17) and submit a revised [Territory Budget](/usc/48/2104.md?p=21) to the [Oversight Board](/usc/48/2104.md?p=17) in accordance with the process established under [paragraph (1)](#d-1) and by the time specified in the notice delivered under [subsection (a)](#a). The [Legislature](/usc/48/2104.md?p=15) may submit as many revised adopted [Territory Budgets](/usc/48/2104.md?p=21) to the [Oversight Board](/usc/48/2104.md?p=17) as the schedule established in the notice delivered under [subsection (a)](#a) permits. If the [Legislature](/usc/48/2104.md?p=15) fails to adopt a [Territory Budget](/usc/48/2104.md?p=21) that the [Oversight Board](/usc/48/2104.md?p=17) determines is a [compliant budget](/usc/48/2104.md?p=6) by the time specified in the notice delivered under [subsection (a)](#a), the [Oversight Board](/usc/48/2104.md?p=17) shall develop a revised [Territory Budget](/usc/48/2104.md?p=21) that is a [compliant budget](/usc/48/2104.md?p=6) and submit it to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15).
- (e) **Certification of Budgets—**
  - (1) **Certification of developed and approved Territory Budgets—** If the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) develop and approve a [Territory Budget](/usc/48/2104.md?p=21) that is a [compliant budget](/usc/48/2104.md?p=6) by the day before the first day of the fiscal year for which the [Territory Budget](/usc/48/2104.md?p=21) is being developed and in accordance with the process established under subsections [(c)](#c) and [(d)](#d), the [Oversight Board](/usc/48/2104.md?p=17) shall issue a compliance certification to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) for such [Territory Budget](/usc/48/2104.md?p=21).
  - (2) **Certification of developed Instrumentality Budgets—** If the [Governor](/usc/48/2104.md?p=12) develops an [Instrumentality Budget](/usc/48/2104.md?p=13) that is a [compliant budget](/usc/48/2104.md?p=6) by the day before the first day of the fiscal year for which the [Instrumentality Budget](/usc/48/2104.md?p=13) is being developed and in accordance with the process established under [subsection (c)](#c), the [Oversight Board](/usc/48/2104.md?p=17) shall issue a compliance certification to the [Governor](/usc/48/2104.md?p=12) for such [Instrumentality Budget](/usc/48/2104.md?p=13).
  - (3) **Deemed certification of Territory Budgets—** If the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) fail to develop and approve a [Territory Budget](/usc/48/2104.md?p=21) that is a [compliant budget](/usc/48/2104.md?p=6) by the day before the first day of the fiscal year for which the [Territory Budget](/usc/48/2104.md?p=21) is being developed, the [Oversight Board](/usc/48/2104.md?p=17) shall submit a [Budget](/usc/48/2104.md?p=4) to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15) (including any revision to the [Territory Budget](/usc/48/2104.md?p=21) made by the [Oversight Board](/usc/48/2104.md?p=17) pursuant to [subsection (d)(2)](#d-2)) and such [Budget](/usc/48/2104.md?p=4) shall be—
    - (A) deemed to be approved by the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15);
    - (B) the subject of a compliance certification issued by the [Oversight Board](/usc/48/2104.md?p=17) to the [Governor](/usc/48/2104.md?p=12) and the [Legislature](/usc/48/2104.md?p=15); 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](/usc/48/2104.md?p=12) fails to develop an [Instrumentality Budget](/usc/48/2104.md?p=13) that is a [compliant budget](/usc/48/2104.md?p=6) by the day before the first day of the fiscal year for which the [Instrumentality Budget](/usc/48/2104.md?p=13) is being developed, the [Oversight Board](/usc/48/2104.md?p=17) shall submit an [Instrumentality Budget](/usc/48/2104.md?p=13) to the [Governor](/usc/48/2104.md?p=12) (including any revision to the [Instrumentality Budget](/usc/48/2104.md?p=13) made by the [Oversight Board](/usc/48/2104.md?p=17) pursuant to [subsection (c)(2)](#c-2)) and such [Budget](/usc/48/2104.md?p=4) shall be—
    - (A) deemed to be approved by the [Governor](/usc/48/2104.md?p=12);
    - (B) the subject of a compliance certification issued by the [Oversight Board](/usc/48/2104.md?p=17) to the [Governor](/usc/48/2104.md?p=12); 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](/usc/48/2104.md?p=21), the [Governor](/usc/48/2104.md?p=12), the [Legislature](/usc/48/2104.md?p=15), and the [Oversight Board](/usc/48/2104.md?p=17), or in the case of an [Instrumentality Budget](/usc/48/2104.md?p=13), the [Governor](/usc/48/2104.md?p=12) and the [Oversight Board](/usc/48/2104.md?p=17), jointly develop such [Budget](/usc/48/2104.md?p=4) for the fiscal year that meets the requirements under this section, and that the relevant parties certify that such [budget](/usc/48/2104.md?p=4) reflects a consensus among them, then such [Budget](/usc/48/2104.md?p=4) shall serve as the [Budget](/usc/48/2104.md?p=4) for the [territory](/usc/48/2104.md?p=20) or [territorial instrumentality](/usc/48/2104.md?p=19-A) for that fiscal year.

## Source credit

(Pub. L. 114–187, title II, § 202, June 30, 2016, 130 Stat. 566.)