PROMESA establishes the Financial Oversight and Management Board to oversee the development of budgets and fiscal plans for Puerto Rico's instrumentalities and government. The Oversight Board may issue subpoenas, certify voluntary agreements between creditors and debtors, seek judicial enforcement of its authority, and impose penalties.
The Oversight Board's responsibilities include:
- approving the governor's fiscal plan;
- approving annual budgets;
- enforcing budgets and ordering any necessary spending reductions; and
- reviewing laws, contracts, rules, regulations, or executive orders for compliance with the fiscal plan.
PROMESA establishes procedures and requirements for Puerto Rico to restructure its debt and designates the Oversight Board as the representative of the Puerto Rico debtor entities. The Oversight Board may initiate a procedure for debt restructuring and submit or modify a plan of adjustment.
The establishment of the Oversight Board operates as an automatic stay of creditor actions to enforce claims against the government of Puerto Rico.