Oversight board nixes bill that would reinstate Tourism Co.
By The Star Staff
The Financial Oversight and Management Board has come out against House Bill 1103, which seeks to reinstate the Puerto Rico Tourism Co. (PRTC) as a public corporation attached to the Department of Economic Development and Commerce (DDEC), because it goes against the fiscal plan.
The bill would also allow the PRTC to issue debt and borrow money and, thus, its enactment and implementation would violate the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), the oversight board said.
“The Oversight Board shares the view that the Government should promote the development of Puerto Rico’s tourism industry. The Bill, however, seeks to reverse the consolidation of the PRTC with DDEC in contravention of the certified 2022 Commonwealth Fiscal Plan,” the oversight board noted in a letter dated June 27. “Reinstating the PRTC as a fiscally independent entity is contrary to the Fiscal Plan’s objectives of rightsizing and efficiency because the PRTC’s administrative/back-office functions are duplicative of DDEC functions.”
The letter was addressed to the governor and island legislative leaders.
The Fiscal Plan recognizes the importance of rightsizing and efficiency for the commonwealth to achieve fiscal stability and access to capital markets. To achieve efficiency, as required by the Fiscal Plan, the government must implement measures, such as agency consolidation, to share human and financial resources, the oversight board said.
“The PRTC’s consolidation with DDEC helps save the Commonwealth’s financial resources, prevents overlapping duties, eliminates redundancy, and ensures the effective and efficient delivery of services for the people and businesses of Puerto Rico,” the oversight board said. “Conversely, the Bill would result in wasteful duplicative operational expenses. We urge the Government to focus on continuing to develop a more integrated economic development structure under the DDEC umbrella, while complying with the Fiscal Plan, to accomplish rightsizing and agency operational efficiency measures.”
If the bill is a priority for the Legislature, the oversight board said it is willing to discuss whether the legislation could be modified to be consistent with the Fiscal Plan and budget and compliant with PROMESA.
“As mentioned above, although the Bill, in its current form, is inconsistent with the Fiscal Plan, we are mindful that amendments could be introduced during the legislative process that may alter the Bill,” the board said. “We are available to review any such revisions and, as noted above, discuss changes to the Bill that may remedy the inconsistencies discussed above.”
To press forward with the PRTC reinstatement, Gov. Pedro Pierluisi Urrutia would be required to make a PROMESA Section 204(a) submission, and the results of the preliminary review would not be binding on the oversight board in its review of such a submission, the letter said.