Sec. 101. Territory Financial Oversight and Management Board
1,074 words·~5 min read·
/bill/114/hr/4900/ih/section-101A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The purpose of the Oversight Board is to provide a method to achieve fiscal responsibility and access to the capital markets. Except as provided in paragraph (2), a Financial Oversight and Management Board for a territory is established in accordance with this section only if the Legislature of the territory adopts a resolution signed by the Governor requesting the establishment. Notwithstanding paragraph (1), a Financial Oversight and Management Board is hereby established for Puerto Rico.
The Congress enacts this subsection pursuant to article IV, section 3 of the Constitution of the United States, which provides Congress the power to dispose of and make all needful rules and regulations for territories. An Oversight Board established under this section— shall be created as an entity within the territorial government for which it is established in accordance with this title; and shall not be considered to be a department, agency, establishment, or instrumentality of the Federal Government.
An Oversight Board, in its sole discretion at such time as the Oversight Board determines to be appropriate, may designate any territorial instrumentality as a covered territorial instrumentality that is subject to the requirements of this Act. The Oversight Board may require in its sole discretion the Governor to submit to the Oversight Board such budgets and monthly or quarterly reports regarding a covered territorial instrumentality as the Oversight Board determines to be necessary and may designate any covered territorial instrumentality to be included in the Territory Budget; except that the Oversight Board may not designate a covered territorial instrumentality to be included in the Territory Budget if applicable territory law does not require legislative approval of such covered territorial instrumentality’s budget.
The Oversight Board in its sole discretion may or, if it requires a budget from a covered territorial instrumentality whose budget does not require legislative approval under applicable territory law, must designate a covered territorial instrumentality to be the subject of an Instrumentality Budget separate from the applicable Territory Budget and require that the Governor develop such an Instrumentality Budget. The Oversight Board may require in its sole discretion the Governor to include a covered territorial instrumentality in the applicable Territory Fiscal Plan.
The Oversight Board may designate in its sole discretion a covered territorial instrumentality to be the subject of an Instrumentality Fiscal Plan separate from the applicable Territory Fiscal Plan and require that the Governor develop such an Instrumentality Fiscal Plan. An Oversight Board, in its sole discretion, at such time as the Oversight Board determines to be appropriate, may exclude any territorial instrumentality from the requirements of this Act. A territorial instrumentality excluded pursuant to this paragraph shall not be considered to be a covered territorial instrumentality.
The Oversight Board shall consist of 7 members appointed by the President who meet the qualifications described in subsection (e), except that the Oversight Board may take any action under this Act (or any amendments made by this Act) at any time after the President has appointed 3 of its members. The President shall appoint the individual members of the Oversight Board, of which two individuals should be selected from a list of individuals submitted by the Speaker of the House of Representatives; two should be selected from a list submitted by the Majority Leader of the Senate; one should be selected from a list submitted by the Minority Leader of the House of Representatives; and one should be selected from a list submitted by the Minority Leader of the Senate.
Of the two individuals to be selected from a list of individuals submitted by the Speaker of the House of Representatives, one shall maintain a primary residence in the territory or have a primary place of business in the territory. The Governor, or the Governor’s designee, shall be an ex officio member of the Oversight Board without voting rights. The voting members of the Oversight Board shall designate one of the voting members of the Oversight Board as the Chair of the Oversight Board (referred to hereafter in this title as the Chair ).
Each appointed member of the Oversight Board shall be appointed for a term of 3 years. The President may remove any member of the Oversight Board only for cause. Upon the expiration of a term of office, a member of the Oversight Board may continue to serve until a successor has been appointed. An individual is eligible for appointment as a member of the Oversight Board only if the individual— has knowledge and expertise in finance, municipal bond markets, management, law, or the organization or operation of business or government; and is not an officer, elected official, or employee of the territorial government or a candidate for elected office of the territorial government.
Members of the Oversight Board shall serve without pay, but may receive reimbursement from the Oversight Board for any reasonable and necessary expenses incurred by reason of service on the Oversight Board. As soon as practicable after the appointment of its members, the Oversight Board shall adopt bylaws, rules, and procedures governing its activities under this Act, including procedures for hiring experts and consultants and conflict of interest rules. Such bylaws, rules, and procedures shall be public documents, and shall be submitted by the Oversight Board upon adoption to the Governor, the Legislature, the President, and Congress.
The Oversight Board may hire professionals as it determines to be necessary to carry out this subsection. Under the bylaws adopted pursuant to paragraph (1), the Oversight Board may conduct its operations under such procedures as it considers appropriate, except that an affirmative vote of a majority of the members of the Oversight Board’s full appointed membership shall be required in order for the Oversight Board to approve a Fiscal Plan under section 201, to approve a Budget under section 202, or to cause a legislative act not to be enforced under section 204.
The Oversight Board may incorporate in its bylaws, rules, and procedures under this subsection such rules and regulations of the territorial government as it considers appropriate to enable it to carry out its activities under this Act with the greatest degree of independence practicable. Upon a majority vote of the Oversight Board’s full appointed membership, the Oversight Board may conduct its business in an executive session that consists solely of the Oversight Board’s appointed members and is closed to the public, but only for the business items set forth as part of the vote to convene an executive session.