Industrial group, lawmakers clash and find common ground on taxes, energy and labor at joint hearing
By THE STAR STAFF
Business leaders and lawmakers in a hearing this week debated some of Puerto Rico’s most pressing economic challenges, including tax policy, energy reform, labor regulations and water infrastructure, as officials seek ways to improve government efficiency and strengthen the island’s business climate.
The hearing, held Tuesday at the headquarters of the Puerto Rico Manufacturers Association (PRMA), was convened under House Resolution 456 and brought together members of the House Committee on Reorganization, Efficiency and Diligence, chaired by Rep. Ángel Morey Noble, and the House Committee on Small and Medium-Sized Businesses.
The event allowed representatives of Puerto Rico’s industrial sector to present recommendations directly to legislators as they consider potential amendments, repeals and new legislation aimed at improving the island’s economic competitiveness.
Tax reform and business costs emerged as an early focal point. Industry representatives argued that municipal sales tax bureaucracy and employer-related costs tied to the State Insurance Fund continue to burden businesses.
Carlos Serrano, a certified public accountant who chairs the PRMA’s Fiscal Policy Committee, said proposals to redistribute government fiscal surpluses should be accompanied by a broader economic development strategy. He urged policymakers to invest surplus funds in equipment acquisition and capital incentives to stimulate growth.
Kenneth Rivera, secretary of the PRMA’s board of directors, criticized the complexity of Puerto Rico’s tax system, describing it as difficult for the average citizen to understand. He advocated for simplified tax returns with pre-filled information based on taxpayer records and accelerated depreciation provisions.
Energy policy generated some of the most extensive discussion. PRMA representatives strongly opposed a return to a state-run electricity monopoly under the Puerto Rico Electric Power Authority, arguing that reforms should focus on accountability, transparency and reliability rather than reversing the current structure.
Eidalia González, speaking on behalf of PRMA’s Energy Committee, called for strict performance metrics and oversight of private operators while warning against actions that could undermine legal certainty for investors. She also urged faster implementation of battery storage projects promoted by Genera PR and a quicker approval process for the island’s Integrated Resource Plan.
González cautioned policymakers against embracing nuclear energy without carefully evaluating costs and water consumption requirements.
Rubén Ríos, PRMA’s director of strategic alliances, warned that continuing disputes and litigation surrounding Puerto Rico’s energy system are undermining efforts to attract manufacturing investments and reshoring opportunities. He said multinational companies evaluating Puerto Rico are increasingly considering competing destinations such as Costa Rica and the Dominican Republic.
Lawmakers defended some alternative proposals. Morey Noble highlighted House Bill 1092, which would formally include small modular nuclear reactors as a potential source of base-load generation.
Labor policy was another area where business leaders called for significant changes. Members of the PRMA’s Human Capital Committee argued that excessive labor-related legislation is increasing costs for employers and discouraging business expansion.
Georyanne Ríos cited Puerto Rico’s labor force participation rate of roughly 45%, compared with about 61% in the mainland United States, and contended that weaknesses in monitoring certain social assistance programs may discourage workforce participation. Industry representatives also endorsed eliminating the Minimum Wage Commission and advocated for more flexible work arrangements to encourage older adults to remain in the workforce.
Morey Noble agreed that policymakers should avoid measures that unnecessarily increase business operating costs and expressed support for examining stronger oversight mechanisms tied to public assistance programs.
The hearing also addressed long-standing concerns about Puerto Rico’s water infrastructure.
Engineer Carlos González described the loss of some 350 million gallons of water per day within the Puerto Rico Aqueduct and Sewer Authority system as an unacceptable economic drain. He promoted the use of modern bottom-oxygenation technologies as a less costly alternative to traditional reservoir dredging and proposed the creation of technical brigades to audit and segment the island’s roughly 10,000 miles of water pipelines over a six-month period.
The session additionally featured a presentation by Edsel Cardona Torres of Mission Companies Inc., who discussed electrical engineering technologies designed to improve energy efficiency and manage power demand peaks at commercial and industrial facilities.
PRMA officials described the hearing as a historic opportunity to bring lawmakers and private-sector stakeholders together to shape public policy. They said the discussions underscored the importance of incorporating technical expertise and operational experience into legislative efforts intended to boost Puerto Rico’s competitiveness and economic growth.
