Legislative Review Process
The legislative review process of the Financial Oversight and Management Board for Puerto Rico is an important component of its mission to help Puerto Rico achieve and sustain fiscal responsibility.
PROMESA requires the Governor to submit each enacted law to the Oversight Board with a formal estimate of the impact, if any, that the law will have on expenditures and revenues, as well as a certification finding that the law is or is not significantly inconsistent with the applicable certified fiscal plan. PROMESA also allows the Legislature to seek a non-binding preliminary review from the Oversight Board regarding pending legislation to determine whether legislative bills are consistent with the applicable certified fiscal plan.
The Oversight Board’s review of legislation is pursuant of Section 204(a) of PROMESA. The Oversight Board also reviews rules, regulations, and executive orders pursuant to Section 204(b) of PROMESA. For the policy, click here.
Legislative Review: Acts
Section 204(a) of PROMESA requires the Governor of Puerto Rico to submit any new law to the Oversight Board for review within seven business days of the law’s enactment.
The Governor’s submission must include a formal estimate of the impact, if any, that the new law will have on expenditures and revenues. This estimate must be prepared by an appropriate entity of the Government of Puerto Rico with expertise in budgets and financial management.
The same government entity must also certify whether the law under review is or is not significantly inconsistent with the applicable certified fiscal plan. PROMESA Section 204(a)(2) outlines this process in detail.
Act 215-2024 amends Act 107-2020, also known as the “Municipal Code of Puerto Rico,” primarily to modify certain aspects of municipal procurement processes and property tax collections.
In a letter dated June 26, 2025, the Oversight Board indicated that Act 215 would reverse some of the progress made to improve government procurement in Puerto Rico. Act 215 would reduce the number of contracts subject to competitive bidding, raise the thresholds for municipal no-bid purchases, eliminate oversight by municipal legislatures for most contracts, and grant mayors the discretion to permit contracts that violate the law to remain in effect.
As such, the Oversight Board determined that Act 215 impairs or defeats the purposes of PROMESA, including achieving fiscal responsibility and promoting market competition. The Oversight Board calls on the Government and municipalities not to implement Act 215 unless and until the Oversight Board agrees it complies with PROMESA.
Act 224-2024, among other things, further amends Act 127-1958, known as the “Death in the Line of Duty Pension Act,” to extend benefits to certain employees of the Emergency Management and Disaster Administration Bureau and its numerous municipal offices.
In a letter dated May 23, 2025, the Oversight Board noted that on April 7, 2025, the Fiscal Agency and Financial Advisory Authority (AFAAF) submitted a PROMESA Section 204(a) Certification acknowledging that Act 224 is “significantly inconsistent” with the Commonwealth Fiscal Plan. The Oversight Board agreed with this assessment because the Act would extend pension benefits beyond what is provided in the Commonwealth Plan of Adjustment and the resulting Confirmation Order.
The Oversight Board calls on the Governor and the Legislature not to implement Act 224.
Act 37 amends Act 107-2020, known as the “Municipal Code of Puerto Rico” to exempt housing properties operating under the U.S. Department of Agriculture Rural Development Program and Section 8 of the federal Housing and Community Development Act from paying real property taxes to the Municipal Revenue Collection Center (CRIM). Act 37 also exempts certain housing properties administered by the Puerto Rico Department of Housing from paying past-due real property taxes to CRIM.
The Government’s analysis in its PROMESA Section 204(a) submission found that Act 37 could result in revenue losses between $33.5 million and $35.7 million per year for fiscal years 2025–2028 and does not include any offsetting measures. Accordingly, the Oversight Board said that Act 37 violates the Commonwealth and CRIM Fiscal Plans, and PROMESA. The Oversight Board called on the Government not to implement Act 37 until the Oversight Board agrees it complies with PROMESA.
Act 141 amends Act 107-2020, also known as the “Municipal Code of Puerto Rico,” to raise the threshold of holding a public auction or competitive bid process for any construction or public improvement project from $200,000 to $500,000.
In a letter to the Puerto Rico Government dated January 21, 2025, the Oversight Board found that Act 141 directly contravenes procurement best practices and undermines market competition. As such, Act 141 impairs or defeats the purposes of PROMESA.
The Oversight Board said it understands the importance of facilitating the procurement of construction projects and public improvements, particularly during times of emergency, and is willing to discuss alternatives to amend the Act. Regardless, Act 141 cannot be implemented unless and until the Board agrees it complies with PROMESA.
Act 99 would transfer central government funds to financial cooperatives as a result of losses due to the default of Puerto Rico Government Bonds.
In a letter dated Aug. 23, 2024, to the Puerto Rico Government, the Oversight Board outlined its position on Act 99, agreeing with the Government’s assessment that Act 99 is inconsistent with the Puerto Rico and COSSEC Fiscal Plans. The Oversight Board also determined that Act 99 violates the Commonwealth Plan of Adjustment.
Lastly, the letter notified the Government that on August 16, 2024, the Oversight Board adopted a resolution determining that Act 99 impairs or defeats PROMESA’s purposes.
Other Acts
| Document | Date | Download |
|---|
Legislative Review: Bills
The Puerto Rico Legislature can also seek preliminary review from the Oversight Board regarding pending legislation and its consistency with the applicable certified fiscal plan, as outlined in PROMESA Section 204(a)(6).
During the review process, the Oversight Board determines whether the legislation, as proposed, is or is not consistent with the applicable certified fiscal plan. If it finds the proposed law is not consistent with the applicable certified fiscal plan, or determines the law would violate other provisions of PROMESA, the Oversight Board will explain its determination to the requesting legislator and, where appropriate, offer to collaborate with the legislator on reforming the measure to make it consistent with the certified fiscal plan.
Recognizing the review of pending legislation is preliminary, and bills may change prior to passage, PROMESA provides that preliminary review determinations are not binding and, if bills eventually are enacted into law, the Governor is still required to comply with the process for submitting newly enacted laws for review discussed above and in PROMESA Section 204(a)(1)-(5).
Senate Bill 127 seeks to create the “Essential Employees Incentivized Retirement and Guaranteed Fair Pension Special Act” and allow the incentivized retirement of “essential” employees, excluded from the Final Stipulation Concerning Act 80 of 2020 and Joint Resolution 33 of 2021 between the Oversight Board and the Government.
In a letter dated June 13, 2025, the Oversight Board noted that the Bill, if enacted, would violate the Commonwealth Plan of Adjustment and the Confirmation Order, which is binding in federal court, by creating new pension benefits. The Bill is also inconsistent with the Fiscal Plan because it increases expenditures without offsetting those costs by increasing revenues or cutting spending. If enacted, the Bill would impair or defeat the purposes of PROMESA.
Senate Bill 130 seeks to amend Act No. 127 of June 27, 1958, known as the “Pensions for Disability or Death in the Line of Duty Act,” to expand death and disability benefits to eligible public employees to include disability or death resulting from a disease that is the source of a declared pandemic by the President of the United States. In addition, the bill proposes to extend the death and disability benefits under Act 127-1958 to certain categories of public employees and their beneficiaries.
In its May 12, 2025, letter, the Oversight Board noted that Senate Bill 130 violates the Commonwealth’s Plan of Adjustment, PROMESA and Puerto Rico’s Certified Fiscal Plan. The Oversight Board also expressed concerns that the bill was passed without sufficient analysis. The Oversight Board urged legislators not to approve Senate Bill 130 in any form that expands pension benefits, and refrain from sending such a measure to the Governor for enactment.
In its April 7, 2025, letter to the Governor and legislative leaders, the Oversight Board said it became aware that nine bills had been submitted by the administration that proposed to change current tax laws and are now currently under the Oversight Board’s review. The fiscal and budgetary impacts of these nine bills have not been fully evaluated, nor has any public analysis been made available.
However, the Oversight Board agrees with the Government that tax reform is necessary and is ready to work with the Government and Legislature on responsible reforms to simplify the Puerto Rico tax code, along with those bills that are not inconsistent with the Fiscal Plan and the budget process.
Senate Bill (SB) 132 would amend Act 107-2020, also known as the “Municipal Code of Puerto Rico,” to establish a base salary of $3,000 a month for municipal police officers.
In a letter dated March 18, 2025, to Senate Majority Leader Gregorio Matías Rosario, the Oversight Board concluded that SB 132 as currently drafted, could adversely affect municipal finances, as a recurring source of funds is not identified to cover its costs.
The Oversight Board also asked the Senate Majority Leader to submit a draft of SB 132 to the Legislative Assembly’s Budget Office (OPAL) for an assessment of its fiscal impact.
HJR 231 seeks to mandate the Puerto Rico Electric Power Authority (PREPA), LUMA Energy LLC, and Genera PR to provide credits to customers who claim their appliances or equipment were damaged by power outages or brownouts. However, the Legislative Assembly did not identify how PREPA would pay for this customer credit without an increase in electricity rates. It also mandates a credit program that would impair the Puerto Rico Energy Bureau’s oversight of PREPA. The Oversight Board determined that HJR 231 is inconsistent with the Fiscal Plans for Puerto Rico and the PREPA Fiscal Plan, and the urged the Legislative Assembly not to send the Bill to the Governor and the Governor not to sign the Bill into law.
Other Bills
| Document | Date | Download |
|---|