48 U.S.C. § 2121

(a) Purpose The purpose of the Oversight Board is to provide a method for a covered territory to achieve fiscal responsibility and access to the capital markets. (b) Establishment (1) Puerto Rico A Financial Oversight and Management Board is hereby established for Puerto Rico. (2) Constitutional basis The Congress enacts this chapter 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. (c) Treatment An Oversight Board established under this section— (1) shall be created as an entity within the territorial government for which it is established in accordance with this subchapter; and (2) shall not be considered to be a department, agency, establishment, or instrumentality of the Federal Government. (d) Oversight of territorial instrumentalities (1) Designation (A) In general 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 chapter. (B) Budgets and reports 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. (C) Separate Instrumentality Budgets and reports 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, shall 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. (D) Inclusion in Territory Fiscal Plan The Oversight Board may require, in its sole discretion, the Governor to include a covered territorial instrumentality in the applicable Territory Fiscal Plan. Any covered territorial instrumentality submitting a separate Instrumentality Fiscal Plan must also submit a separate Instrumentality Budget. (E) Separate Instrumentality Fiscal Plans 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. Any covered territorial instrumentality submitting a separate Instrumentality Fiscal Plan shall also submit a separate Instrumentality Budget. (2) Exclusion (A) In general 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 chapter. (B) Treatment A territorial instrumentality excluded pursuant to this paragraph shall not be considered to be a covered territorial instrumentality. (e) Membership (1) In general (A) The Oversight Board shall consist of seven members appointed by the President who meet the qualifications described in subsection (f) and section 2129(a) of this title . (B) The Board shall be comprised of one Category A member, one Category B member, two Category C members, one Category D member, one Category E member, and one Category F member. (2) Appointed members (A) The President shall appoint the individual members of the Oversight Board, of which— (i) the Category A member should be selected from a list of individuals submitted by the Speaker of the House of Representatives; (ii) the Category B member should be selected from a separate, non-overlapping list of individuals submitted by the Speaker of the House of Representatives; (iii) the Category C members should be selected from a list submitted by the Majority Leader of the Senate; (iv) the Category D member should be selected from a list submitted by the Minority Leader of the House of Representatives; (v) the Category E member should be selected from a list submitted by the Minority Leader of the Senate; and (vi) the Category F member may be selected in the President’s sole discretion. (B) After the President’s selection of the Category F Board member, for purposes of subparagraph (A) and within a timely manner— (i) the Speaker of the House of Representatives shall submit two non-overlapping lists of at least three individuals to the President; one list shall include three individuals who maintain a primary residence in the territory or have a primary place of business in the territory; (ii) the Senate Majority Leader shall submit a list of at least four individuals to the President; (iii) the Minority Leader of the House of Representatives shall submit a list of at least three individuals to the President; and (iv) the Minority Leader of the Senate shall submit a list of at least three individuals to the President. (C) If the President does not select any of the names submitted under subparagraphs (A) and (B), then whoever submitted such list may supplement the lists provided in this subsection with additional names. (D) The Category A member shall maintain a primary residence in the territory or have a primary place of business in the territory. (E) With respect to the appointment of a Board member in Category A, B, C, D, or E, such an appointment shall be by and with the advice and consent of the Senate, unless the President appoints an individual from a list, as provided in this subsection, in which case no Senate confirmation is required. (F) In the event of a vacancy of a Category A, B, C, D, or E Board seat, the corresponding congressional leader referenced in subparagraph (A) shall submit a list pursuant to this subsection within a timely manner of the Board member’s resignation or removal becoming effective. (G) With respect to an Oversight Board for Puerto Rico, in the event any of the 7 members have not been appointed by September 1, 2016 , then the President shall appoint an individual from the list for the current vacant category by September 15, 2016 , provided that such list includes at least 2 individuals per vacancy who meet the requirements set forth in subsection (f) and section 2129 of this title , and are willing to serve. (3) Ex officio member The Governor, or the Governor’s designee, shall be an ex officio member of the Oversight Board without voting rights. (4) Chair 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 chapter as the “Chair”) within 30 days of the full appointment of the Oversight Board. (5) Term of service (A) In general Each appointed member of the Oversight Board shall be appointed for a term of 3 years. (B) Removal The President may remove any member of the Oversight Board only for cause. (C) Continuation of service until successor appointed Upon the expiration of a term of office, a member of the Oversight Board may continue to serve until a successor has been appointed. (D) Reappointment An individual may serve consecutive terms as an appointed member, provided that such reappointment occurs in compliance with paragraph (6). (6) Vacancies A vacancy on the Oversight Board shall be filled in the same manner in which the original member was appointed. (f) Eligibility for appointments An individual is eligible for appointment as a member of the Oversight Board only if the individual— (1) has knowledge and expertise in finance, municipal bond markets, management, law, or the organization or operation of business or government; and (2) prior to appointment, an individual is not an officer, elected official, or employee of the territorial government, a candidate for elected office of the territorial government, or a former elected official of the territorial government. (g) No compensation for service 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. (h) Adoption of bylaws for conducting business of Oversight Board (1) In general As soon as practicable after the appointment of all members and appointment of the Chair, the Oversight Board shall adopt bylaws, rules, and procedures governing its activities under this chapter, including procedures for hiring experts and consultants. 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 chapter. (2) Activities requiring approval of majority of members 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 2141 of this title , to approve a Budget under section 2142 of this title , to cause a legislative act not to be enforced under section 2144 of this title , or to approve or disapprove an infrastructure project as a Critical Project under section 2213 of this title . (3) Adoption of rules and regulations of territorial government 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 chapter with the greatest degree of independence practicable. (4) Executive session Upon a majority vote of the Oversight Board’s full voting membership, the Oversight Board may conduct its business in an executive session that consists solely of the Oversight Board’s voting members and any professionals the Oversight Board determines necessary and is closed to the public, but only for the business items set forth as part of the vote to convene an executive session.