House committee reviews broad municipal-code overhaul in hearing on Senate Bill 777
January 21, 2026 | House of Representatives, House, Committees, Legislative, Puerto Rico, International
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The House Committee on Municipal Affairs convened Jan. 20 to consider Senate Bill 777, a comprehensive package of amendments to Puerto Rico s Código Municipal (Law 107-2020) that would expand municipal powers to address abandoned properties, adjust the process for expropriations and change how municipalities determine some local fiscal matters, including mayoral pay and municipal patent rules.
Department of Justice attorney Gerardo Rodríguez Ortiz told the committee the measure aims to provide municipalities with tools to act more efficiently but flagged several procedural concerns. "La brevedad del término propuesto podía plantear retos prácticos en su implementación, particularmente a la luz de la carga laboral que enfrentan los tribunales," Rodríguez Ortiz said, referring to a proposed rule that a court must issue a title or right within 48 hours after an expropriation determination. He recommended a study with the Office of Court Administration to set a realistic deadline based on current judicial capacity.
The Federación de Alcaldes, represented by executive director Ángel Morales Vázquez and legal adviser Hans Mercado González, endorsed the bill s broad intent. Mercado told the panel municipalities have been building administrative capacity under recent reforms such as Law 114 (2024) and urged the change to let local legislatures, rather than a population-based formula, weigh in on mayoral salary adjustments. "Los municipios tienen la capacidad y lo están haciendo," Mercado said of current municipal implementation steps, adding the measure would allow faster disposition of abandoned properties and potential new local revenues.
Lawmakers pressed both sides on safeguards. Several members asked how the bill would protect owners due-process rights if municipalities can declare properties estorbo público, impose fines and create liens before judicial review. DOJ and the Federación responded that the administrative estorbo process includes notice stages and an administrative hearing and that each stage remains subject to judicial review; they also noted that expropriation ultimately proceeds through the courts where compensation is litigated.
Members raised specific policy questions: the bill shortens deadlines to claim deposited compensation from three years to two years; it allows municipalities to certify demolition and cleanup costs and treat them as deductions when calculating just compensation; it narrows the time for intestate property adjudication from five to two years; and it adds procedural avenues for expedited transfer of certain properties for affordable housing or sale. The proposal would also implement a 10% bond requirement for parties seeking to pause certain "critical" projects and would cap mayoral pay increases in some instances (the text proposes a 25% ceiling in particular circumstances). The measure ties some new fiscal mechanics to Law 90 (2025), which treats municipal contract volume as municipal taxable income in some cases.
Several legislators urged greater clarity and protections. Representative Domingo Torres warned that measures intended to increase municipal autonomy must not "significar discreción sin controles ni poderes ampliados" that weaken transparency or citizens rights. Others pressed for explicit safeguards to prevent wealthier municipalities from gaining disproportionate advantage, and asked the committee to summon the Asociación de Alcaldes for the record; the panel chair agreed to issue that invitation before further action.
The committee did not hold any votes at the hearing. Members asked the Department of Justice and the Federación de Alcaldes to provide additional technical clarifications and recommended follow-up with the Office of Court Administration, the Asociación de Alcaldes and the Fiscal Oversight Board or AFAF on fiscal impact. The committee adjourned at 12:35 p.m. with further review and invitations to additional stakeholders planned.
Ending: The committee scheduled no final vote at the hearing and signaled additional meetings and written input would be sought before any floor action on SB 777.
Department of Justice attorney Gerardo Rodríguez Ortiz told the committee the measure aims to provide municipalities with tools to act more efficiently but flagged several procedural concerns. "La brevedad del término propuesto podía plantear retos prácticos en su implementación, particularmente a la luz de la carga laboral que enfrentan los tribunales," Rodríguez Ortiz said, referring to a proposed rule that a court must issue a title or right within 48 hours after an expropriation determination. He recommended a study with the Office of Court Administration to set a realistic deadline based on current judicial capacity.
The Federación de Alcaldes, represented by executive director Ángel Morales Vázquez and legal adviser Hans Mercado González, endorsed the bill s broad intent. Mercado told the panel municipalities have been building administrative capacity under recent reforms such as Law 114 (2024) and urged the change to let local legislatures, rather than a population-based formula, weigh in on mayoral salary adjustments. "Los municipios tienen la capacidad y lo están haciendo," Mercado said of current municipal implementation steps, adding the measure would allow faster disposition of abandoned properties and potential new local revenues.
Lawmakers pressed both sides on safeguards. Several members asked how the bill would protect owners due-process rights if municipalities can declare properties estorbo público, impose fines and create liens before judicial review. DOJ and the Federación responded that the administrative estorbo process includes notice stages and an administrative hearing and that each stage remains subject to judicial review; they also noted that expropriation ultimately proceeds through the courts where compensation is litigated.
Members raised specific policy questions: the bill shortens deadlines to claim deposited compensation from three years to two years; it allows municipalities to certify demolition and cleanup costs and treat them as deductions when calculating just compensation; it narrows the time for intestate property adjudication from five to two years; and it adds procedural avenues for expedited transfer of certain properties for affordable housing or sale. The proposal would also implement a 10% bond requirement for parties seeking to pause certain "critical" projects and would cap mayoral pay increases in some instances (the text proposes a 25% ceiling in particular circumstances). The measure ties some new fiscal mechanics to Law 90 (2025), which treats municipal contract volume as municipal taxable income in some cases.
Several legislators urged greater clarity and protections. Representative Domingo Torres warned that measures intended to increase municipal autonomy must not "significar discreción sin controles ni poderes ampliados" that weaken transparency or citizens rights. Others pressed for explicit safeguards to prevent wealthier municipalities from gaining disproportionate advantage, and asked the committee to summon the Asociación de Alcaldes for the record; the panel chair agreed to issue that invitation before further action.
The committee did not hold any votes at the hearing. Members asked the Department of Justice and the Federación de Alcaldes to provide additional technical clarifications and recommended follow-up with the Office of Court Administration, the Asociación de Alcaldes and the Fiscal Oversight Board or AFAF on fiscal impact. The committee adjourned at 12:35 p.m. with further review and invitations to additional stakeholders planned.
Ending: The committee scheduled no final vote at the hearing and signaled additional meetings and written input would be sought before any floor action on SB 777.
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