2023 Laws of Puerto Rico › TITLE TWENTY-THREE - Public Planning and Development (§§ 1 — 11273) › PART I - Public Planning (§§ 1 — 229ccc) › Chapter 4 - Management and Budget Office (§§ 101 — 110) › § 104 - Governor—Duties and powers

(a) In tune with Article IV, Section 4 of the Constitution of the Commonwealth of Puerto Rico, the Governor shall submit to the Legislative Assembly at the beginning of each regular session, an Annual Budget of Capital Improvements and Operating Expenses of the Commonwealth, its Instrumentalities and Public Corporations, chargeable to the General Fund, the Special Funds, the grants from the United States Government, bond issues and loans, the public corporations” own revenues, and any other sources of income, which will indicate the government’s programs and objectives proposed by the Chief Executive for the following fiscal year, based on the long term orientation and goals of the Fiscal and Economic Growth Plan, the Integrated Development Plan, the Four-Year Investment Plan, and the Land Use Plan drafted and adopted by the Planning Board.
The budget shall contain the following information, in the form, extent, or detail the Governor deems convenient:
(1) A message from the Governor expounding his program, fiscal and budgetary recommendations.
(2) A general presentation of the objectives, plans and programs on which the budget is based, as well as the manner that said objectives, plans and programs can be achieved with the resources that are recommended in the budget plan.
(3) Descriptions of the functions, programs and activities of the Government and its agencies, including, when feasible or convenient, information on the cost of the programs in force and proposed, the objectives attained and the projected and completed administrative improvements.
(4) All the revenues and expenditures of the Government of the Commonwealth of Puerto Rico and its instrumentalities and public corporations during the last completed fiscal year.
(5) An estimate of all expected revenues for the current fiscal year at the time the budget is submitted, and an estimate of the expenses to be incurred during the same period by the Government of the Commonwealth and its instrumentalities and public corporations.
(6) Calculations of all potential revenues of the Government of the Commonwealth and its instrumentalities and public corporations, regardless of their origin, during the following fiscal year according to:
(A) Laws in effect on the date the budget is submitted;
(B) legislative measures that affect such revenues, if any;
(C) the federal programs in effect; and
(D) from other sources.
Said calculation of revenues shall:
(i) be validated on or before February 14th prior to the beginning of each fiscal year by an independent consultant, who shall be selected by the Fiscal Oversight Board while said entity is operating, but that does not exceed five (5) years from the date on which the Governor approves the Fiscal and Economic Growth Plan;
(ii) establish assumptions on which the projection is based;
(iii) be itemized on a month-by-month basis; and
(iv) For purposes of approving a balanced budget, the income estimate shall exclude the refund estimate and the amounts to be deposited in any special fund created by law. The refund estimate to be excluded must be subject to evaluation.
(E) The calculation contemplated in clause (6) of this subsection shall be reviewed by an independent consultant and the Secretary of the Treasury before submitting the same as part of the budget to be considered by the Legislative Assembly.
(7) The recommended or proposed appropriations chargeable to all the calculated resources, after due consideration of the Fiscal and Economic Growth Plan, the Puerto Rico Integrated Development Plan, the Four-Year Investment Program and the land-use plans prepared by the Planning Board for the following fiscal year, except the Legislative Assembly and the Office of the Comptroller of the Commonwealth of Puerto Rico, which shall be exempt from submitting budget requests that the Governor shall include in the recommended budget, itemized in a budget for their regular operating expenses equal to the one in effect. The Office of the Comptroller shall submit its own fund request for regular operating expenses directly to the Legislative Assembly, on or before November 30th of the year before the year for which the request is made, and shall furnish to the Office a copy of all the information it submits to the Legislative Assembly, so that said Office may advise the Legislative Assembly regarding the fund requests for the regular operating expenses of said body. Every two (2) years, the Office of the Comptroller of Puerto Rico shall submit to the Legislative Assembly a report of its operating expenses including an external audit. Beginning on Fiscal Year 2003-2004, the Judicial Branch shall be appropriated a sum equal to three point three percent (3.3%) of the average of the total amount of the annual revenues earned in accordance with the provisions of the Laws of the Commonwealth of Puerto Rico, and covered into the General Fund of the Treasury of Puerto Rico during the two (2) fiscal years preceding the current year, and those covered into the Dedicated Sales Tax Fund, created by §§ 11a through 16 of Title 13, and into any other special fund created by law after July 1, 2007, nourished from resources generated by taxation and non-taxation revenues. Provided, that in the event that the average of the total amount of annual revenues is less than the average of the preceding year, the basis amount shall be equal to the last annual appropriation received by the Judicial Branch. Said three point three percent (3.3%) shall be increased for Fiscal Year 2004-2005 by one tenth of one percent (0.1%), and by two tenths of one percent (0.2%) for the following three (3) fiscal years, until it reaches a maximum of four percent (4%) of the revenues of the General Fund of the Treasury of Puerto Rico for Fiscal Year 2007-2008. These resources shall be used for the operating expenses of the Judicial Branch. In the event the Judicial Branch should require sums in addition to those appropriated pursuant to this chapter for the development, construction, and extension of its physical structure or for any other purpose, it shall submit the necessary budget request with its pertinent justifications directly to the Legislative Assembly. The recommendations and requests for appropriations of lump sums in the general budget bill for each government body shall be supported in the budget submitted by detailed calculations, expense items, and by programs or activities. The budget shall include a Budget Control Reserve which shall consist of the reserved funds of the supervised entities in the Budget of the Commonwealth that represent two point five percent (2.5%) of the total operating expense appropriations and special appropriations, which shall not be available for expenses but rather transferred to an account under the custody of the Office of Management and Budget to be released in accordance with the “Puerto Rico Fiscal Oversight and Economic Recovery Organic Act.”
(8) The financial statements and any other economic data and information, including the budgets of public corporations and enterprises which, in his judgment, could be necessary or convenient in order to make known in as detailed a manner as feasible:
(A) The financial condition of the Commonwealth Government at the close of the last fiscal year;
(B) its estimated fiscal situation at the close of the current fiscal year, including all balances available for expending, and
(C) the estimated fiscal situation at the close of the following year, if the proposals contained in the budget are adopted.
(9) Five-year income and expenditure projections, a reconciliation of said projections with previous projections and a detailed description of any present or projected variation.
(10) Special appropriations, appropriations for operating expenses and capital expenses, and all other appropriations for the fiscal year.
(b) The Governor shall submit the appropriations and income-generating draft bills, in agreement with the recommended Budget during the Regular Session of the Legislature, within the term prescribed by law.
(c) In tune with Section 8, Article VI of the Constitution of the Commonwealth of Puerto Rico, he/she shall act according to the following priority guidelines for the disbursement of public funds, when the available funds for a specific fiscal year are not sufficient to cover the appropriations approved for that year. These functions may be delegated on the Management and Budget Director:
(1) Order the payment of interest and amortizations corresponding to the public debt.
(2) Order that the commitments entered into by virtue of legal contracts in force, judgments of the courts in cases of condemnation under eminent domain, and binding obligations to safeguard the credit, reputation and good name of the Government of the Commonwealth of Puerto Rico, be attended to.
(3) Order that preference be given to disbursements charged to appropriations for regular expenses connected with the:
(A) Conservation of public health.
(B) Protection of persons and property.
(C) Public education programs.
(D) Public welfare programs.
(E) Payment of employer contributions to retirement systems and payment of pensions to individuals granted under special statutes; and then, the remaining public services in the order of priority determined by the Governor; Provided, That the disbursements related to the services listed hereunder shall not have preference among themselves but shall be handled simultaneously; Provided, further, That any adjustments due to reductions may be made in any of the appropriations for regular expenses, including the service areas indicated in this subparagraph.
(4) Order the construction of capital works or improvements with duly executed contracts; Provided, That priority shall be given to emergency works caused by catastrophes or acts of nature, acts of God; and then, to those works that are most responsive to the development of the normal and economic life of Puerto Rico.
(5) Order that the payment of contracts and commitments contracted under special appropriations for operations be honored, and then, that special preference be given to those phases of the programs that are in the process of development or in a stage of planning which, if postponed, would affect the interests of the clients served by the program, directly or indirectly.
(d) The administrative measures stated below shall be adopted for the implementation of the priority guidelines established above: The Governor, or the Management and Budget Director, as delegated by the former, shall submit to the President of the Senate and the Speaker of the House of Representatives, as well as to the Committees on Finance of both Legislative Bodies, a detailed report of the adjustments which have been necessary to make in order to balance the budget by virtue of the provisions of this section. Together with this report, the Governor shall submit his/her recommendations regarding the manner that the postponed works and activities are to be handled. The obligations corresponding to the postponed works shall be canceled for the purposes of the year which has been adjusted and shall be entered into the books of the Secretary of the Treasury against the funds available for appropriation in subsequent years, through the corresponding warrant of appropriations:
(1) To adjust the appropriations for the regular operating expenses provided for the various Commonwealth agencies and instrumentalities, according to the priority guidelines established in subsection (c) of this section.
(2) To adjust the appropriations approved for the development of capital works the execution of which has not been brought to public auction, by postponing that part of the lawfully authorized work which cannot be completed because of limitation of funds.
(3) To adjust the appropriations for special programs which, if postponed, do not affect nor are in conflict with the commitments and obligations contracted, by reducing or adjusting the sums authorized by law.
(e) Regarding the administration and control of the budget, he/she shall have the following powers that he/she may delegate on the Management and Budget Director:
(1) To approve the budgetary items, through executive budgets, of the lump sum appropriations approved in the General Budget Joint Resolution, or any other laws; and of resources available in special federal or Commonwealth funds. These details may be prepared on the basis of specific fiscal years or on quotas for stated periods of time within a fiscal year.
(2) To amend the budgetary items as he deems necessary without affecting the total amount appropriated to the agencies, except as provided in subsections (c) and (d) of this section or when it is otherwise provided by other statutes.
(3) To approve and authenticate through executive budgets, or position and expense authorizations, the special authorizations to incur expenses and create positions, from any funds or appropriations, regardless of their source. Those authorizations not covered in the executive budgets indicated in clause (1) of this subsection shall be deemed as special.
(4) To determine which vacant positions, or those that may be vacated later, shall not be covered during whatever period is considered necessary.
(5) To establish budgetary reserves and restrict the funds available to the agencies, in whatever way he deems pertinent, when, in the execution and control of the budget, he considers it necessary regardless of the circumstances established in subsections (c) and (d) of this section.
(6) To include in the details of the budget those items needed to pay debts incurred by the bodies in previous years chargeable to the various sources of revenues, including payments made on account of the payment agreements entered into with the Electric Power Authority and the Aqueduct and Sewer Authority, and to reduce by said amounts the resources available to the body for the fiscal year in which the adjustment is made. The exercise of this function shall not apply to the bodies or enterprises which operate with their independent treasury, nor to those bodies that receive appropriations over which the Office exerts no budgetary control, which shall take the pertinent measures to settle the debts of previous years.
(7) To authorize the Secretary of the Treasury to advance funds to the agencies, chargeable to the General Fund for obligations or disbursements of programs with United States Government grants which have been approved but have not been received, and for the payment of capital improvements which have been contracted for and are in the process of being built, until new appropriations become effective.
History —June 18, 1980, No. 147, p. 645, § 4; Aug. 3, 1995, No. 110, § 6; Dec. 20, 2002, No. 286, § 1; July 10, 2007, No. 59, § 1; Dec. 8, 2015, No. 208, § 301b; Apr. 7, 2016, No. 22, § 4.1.