House committee hears DDEC concerns and recommendations on bill to reestablish independent Puerto Rico Tourism Company

Legislators heard testimony on House Bill 822, which would reestablish the Puerto Rico Tourism Company as an independent public corporation responsible for promoting tourism and defining tourism policy, during a committee hearing where the Department of Development, Economic Development and Commerce (DDEC) presented a written analysis and recommendations.

DDEC legal counsel Luis Méndez del Nido told the committee the department does not oppose re-creating the tourism company but recommended changes to preserve a policy link between tourism promotion and the island’s broader economic-development strategy. "The secretary of the Department of Development, as today, should serve as chair of the tourism company’s board of directors," Méndez said in the department’s presentation, arguing that would maintain coordination with the department and address concerns raised previously by the Financial Oversight and Management Board under PROMESA.

DDEC recommended that, if the tourism company becomes independent, the board retain the powers granted in the existing Tourism Organic Law rather than being only advisory. The department warned that fully severing the tourism company from DDEC could complicate compliance with PROMESA-related requests for efficiency and consolidation previously urged by the oversight board.

A central financing proposal from DDEC’s presentation would redirect 25% of the room-occupancy tax (room tax) to the Fondo de Incentivos Económicos (Economic Incentives Fund) established under Puerto Rico’s Code of Incentives (as cited in the department’s memorial). DDEC said the suggestion aims to preserve a funding link to economic development and to allow the department to use those resources for economic incentives, research and promotion aligned with a comprehensive economic-development plan. The department provided a fiscal projection in its memorial that estimates annual room-tax receipts at about $25,000,000, and noted that some room-tax revenue currently supports commonwealth debt service; DDEC also identified the Fondo de Incentivos Económicos’ statutory annual cap at $125,000,000.

DDEC warned that the bill should not diminish the statutory functions of the Destination Marketing Organization (DMO) created under Law 17 of 2017. The department recommended the DMO keep its responsibilities for overseas destination promotion and that DDEC be included in oversight and implementation of any DMO marketing-services contracts to ensure coordinated messaging with Invest Puerto Rico and other economic-development actors.

Committee members questioned DDEC officials on contracting limits proposed in the bill — the draft text would allow an executive director to sign contracts up to $375,000 when budgeted — and on whether the existing Office of Management and Budget (OGP) review remains compulsory for agency contracts. DDEC responded that the Office of Management and Budget evaluates all government contracts and budgetary impacts, including professional services and technology purchases.

Members also asked about Invest Puerto Rico’s budget and the island’s cruise-industry activity. Committee members raised concerns that cruise calls have fallen since 2019 and sought clarity on who has led efforts to regain cruise lines; DDEC’s legal counsel said the department had not been the direct party to such solicitations because the tourism company did not consolidate under DDEC as originally planned, and that the department could not categorically state prior requests had been made.

No committee vote occurred during the hearing. Committee members asked DDEC to provide a version of the department’s memorial signed by the secretary for the record within five days.

The hearing record shows multiple references to statutes and provisions governing the tourism company’s creation and consolidation (see authorities). The session concluded after additional questions and requests for follow-up from members of the House committee.