The Agusan Del Sur Investment Incentives Code of 1998

November 12, 1998 AGUSAN DEL SUR PROVINCIAL ORDINANCE NO. 012-98, AS AMENDED AN ORDINANCE GRANTING TAX AND OTHER INCENTIVES TO INVESTORS, LOCAL OR FOREIGN, WHO CHOOSE ANY AREA WITHIN THE TERRITORIAL BOUNDARIES OF AGUSAN DEL SUR AS THEIR INVESTMENT SITE AND FOR OTHER PURPOSES Authored By: Hon. Santiago B. Cane, Jr. Hon. Lamberto R. De Leon Hon. Adolph Edward G. Plaza Hon. Nilo D. Manpatilan Be it ordained by the Sangguniang Panlalawigan of Agusan del Sur in session assembled, that: CHAPTER I Title and Declaration of Policy SECTION 1. Title of the Ordinance. This ordinance shall be known as THE AGUSAN DEL SUR INVESTMENT INCENTIVES CODE OF 1998. SECTION 2. Declaration of Policy. To accelerate the development of Agusan del Sur vis-a-vis and its neighbors, it is hereby declared as a provincial policy to encourage, attract; promote and welcome long term investment into activities, which will significantly contribute to the provincial socio-economic development and industrialization in line what is allowed by the Constitution and other relevant laws. Investment shall be encouraged in enterprises that significantly promote livelihood and employment opportunities for Agusanons; enhance economic value of farm products, promote the welfare of the consumers; transfer relevant technologies in agriculture, industry and support services, and/or expand the scope, quality and volume of exports and their access to foreign markets. CHAPTER II Definition of Terms SECTION 3. Definition of Terms. When used in this Ordinance, the following definition of terms shall apply: a. Province Comprises the fourteen (14) municipalities and the three hundred eighteen (318) barangays of the Province of Agusan del Sur. b. Long-term Investments Actual implemented projects based within the province of Agusan del Sur, that could generate employment to Agusan del Sur residents, contribute to the improvement of taxes for the national and local government units for at least ten (10) years. c. Juridical Person is a person, who, by operation of law has acquired status and rights to operate a legitimate business, can sue and can be sued. d. Registered Enterprises are establishments which are duly registered with the appropriate government agencies and have acquired rights and privileges to operate business within the jurisdiction of the province of Agusan del Sur. CAIHTE CHAPTER III Registration of Enterprises SECTION 4. Qualifications of a Registered Enterprise. To be entitled to registration under this code, an applicant shall satisfy the following: 4.1 Applicant(s) shall either be natural or juridical person or persons not disqualified by Philippine laws from doing business. In the country, Sole proprietorship, partnership, corporations, cooperatives or people's organizations/non-government organizations may avail of such incentives under this Ordinance; 4.2 Applicant(s) shall be duly registered or accredited with the Securities and Exchange Commission (SEC),the Department of Trade and Industry (DTI),Cooperative Development Authority (CDA),or any appropriate government agency; 4.3 Applications shall be filed with the Provincial Board of Investment (PBI),recorded in a registration book and the date appearing therein and stamped on the application shall be considered the date of the official acceptance. Prospective investors, who avail of this Ordinance shall, upon application, pay to the Office of the Provincial Treasurer the amount of FIVE HUNDRED PESOS (P500.00) as application fee, which is not refundable in case subject application is denied. SECTION 5. Approval and Registration Procedures. The Provincial Board of Investment through the Office of the Agusan del Sur Economic Research and Business Assistance Center or ASERBAC, shall accept all applications to this program for action of the Board. An Implementing Rules and Regulations (IRR) shall be formulated and adopted to facilitate action on applications filed. Criteria for evaluation and standard form shall be derived for this purpose. Applications filed shall be considered automatically approved if not acted upon by the Provincial Board of Investment within (20) working days from the date of application. SECTION 6. Criteria for Evaluation of Applications. 6.1 Capitalization 6.1.a At least ONE MILLION PESOS (P1,000,000.00) in initial capital investment for Filipino investors; 6.2.b For foreign investors, the provision of Executive No. 226, otherwise known as the Omnibus Investment Code of 1987 and Republic Act No. 7042 otherwise known as the Foreign Investment Act of 1991 shall prevail, respectively; 6.1.c Must remit and actually deposit the required amount of initial capital investment to any bank of their choice in Agusan del Sur and be covered by a Certificate of Deposit duly signed by the Bank Manager. 6.2 Manpower Requirements 6.2.a All investments shall be able to generate local employment of at least Ten (10) Agusan del Sur residents. However, for labor-intensive establishments, at least 90% of its total manpower requirements shall be filled-up by qualified residents of the locality. CHAPTER IV Incentives for Registered Enterprises SECTION 7. Incentives. All registered enterprises shall be granted the following incentives: 7.1 REAL PROPERTY TAX HOLIDAY. For three (3) years from the date of registration, registered firms shall be fully exempt from real property taxes for properties acquired and actually used for its business operations. 7.2 TRANSFER OF REAL PROPERTY TAX. For three (3) years from commercial operations, registered and expanding firms are exempt from the payment of transfer fees for real properties. DETACa 7.3 FRANCHISE TAX. For three (3) years from the date of registration, firms are exempt from the payment of franchise tax levied by the provincial government. 7.4 PROVINCIAL GOVERNOR'S FEES. For three (3) years from the date of registration, firms are exempt from the payment of provincial governor's fees and other charges. 7.5 Subject to the adoption of the local Sangguniang Bayan concerned, qualified investors are exempt from the payment of fees relative to the issuance of building or fencing permits. This applies only to buildings and other structures that are directly and actually used for business operations. This paragraph does not apply in cases where the investor's business is for housing construction or building houses for a profit. 7.6 Subject to the adoption of the local Sangguniang Bayan concerned, qualified investors shall also enjoy discounts on all local fees and other charges relative to the issuance of local business permits during the first three (3) years of operations, to wit: First year of operations 35% Second year of operations 25% Third year of operations 15% 7.7 Agusan del Sur resident professionals who are actually hired on full time basis by the successful applicants to this investment program either as officers, executives, consultants or as mere employees, by virtue of this Ordinance shall enjoy a Fifty percent (50%) discount per year on professional fees levied by the provincial government. 7.8 Enjoy other incentives or entitlements as provided for under the Philippine Omnibus Investment Code of 1987, and those being offered by the host Local Government Unit within the province, whichever is more advantageous to the investors. SECTION 8. Scope and Coverage. This ordinance applies to all kinds and type of business investments that are poured into the province after the approval of this Ordinance without prejudice to existing laws on environment, labor and human rights. CHAPTER V Appropriations and Final Provisions SECTION 9. Appropriations. The provincial government shall appropriate the amount of ONE MILLION PESOS (P1,000,000.00) annually as fund intended to defray the expenses necessary for the implementation of the provisions of this Code including Trade Missions of the Provincial Board of Investment. Any unspent amount will be reverted back to the General Fund for the ensuing year if the same has not been fully used on the year it was appropriated. SECTION 10. The Provincial Board of Investment. For the purpose of giving effect to this Investment Code, a Provincial Board of Investment (PBI) is hereby created with the following composition, powers and functions: 10.1 The Provincial Board of Investment shall be composed of the following: Chairman - The Provincial Governor Vice-Chairman - The President or the duly elected representative of the Agusan del Sur Chamber of Commerce and Industry Foundation, Inc. Members - Chairman, Committee on Budget, Finance and Appropriations of the Sangguniang Panlalawigan - Representative from DTI Provincial Office, who shall be permanently designated by the agency. - President or the duly elected representative of the Agusan del Sur Bankers Association. - A member of the Sangguniang Panlalawigan of Agusan del Sur duly elected by the majority of the SP members. - Representative of a duly accredited NGO in Agusan del Sur. - The Provincial Budget Officer. - President of Mayor's League in the province. 10.2 Powers and Functions of the Provincial Board of Investment: aDSIHc a. To screen, evaluate, accept, approve, or reject applicants who want to avail of this investment incentives and privileges and to issue Certificate of Registration. b. The chairman or any five (5) members of the PBI can call for a meeting to formulate rules and guidelines to ensure compliance with the provisions of this Code. The Board shall meet as often as necessary but at least once every three months. c. All applications submitted to the Provincial Board of Investment shall be acted upon within Twenty (20) working days upon receipt thereof. d. Subject to availability of funds and approval of the Sangguniang Panlalawigan, the Provincial Board of Investment is hereby empowered to conduct Trade Missions both local and foreign, for the purpose of attracting investors and provide necessary information and dissemination drive to persons or entities willing to avail of the Investment Incentives herein provided. e. Trade Missions involving local and foreign International Trade Organizations as well as Trade Missions involving Board of Investors Offices, foreign embassies and consulates in the Philippines and abroad shall be headed by the Provincial Governor or in his/her absence, by any of his/her duly authorized member of the Provincial Board of Investment. f. The Provincial Board of Investment is hereby empowered to identify, acquire and develop Industrial Estates and Business Parks and other investment areas in Agusan del Sur in accordance with the approved investment priorities of the province and the municipality or municipalities concerned. SECTION 11. ASERBAC. The Agusan del Sur Economic Research and Business Assistance Center (ASERBAC),aside from being an economic research arm of the provincial government, shall in addition to its defined functions and duties, serve as liaison and Secretariat to the Provincial Board of Investment and to assist the Board in its functions as well as process and provide all applicants with the application forms and other necessary papers to be filled up wherein all information and data of the applicants are stated: the name or names and addresses and citizenship of the applicants, the nature of business applied, paid up capital and the name of bank where the investment money is deposited, preferred location of business, date when business is to be established or started and the possible number of workers or employees to be hired. The ASERBAC Office shall, upon authority of the Board, initiate investment promotion programs for the province. In order to conform to the manpower requirements of its office, the ASERBAC is hereby reorganized with the following positions to take effect upon the approval of this Code: 1. One (1) Office Manager whose rank and position is equivalent to Provincial Assistant Department Head III, Salary Grade-24; 2. Three (3) Researchers whose rank and position carries Salary Grade-14; 3. Three (3) Clerk III positions with Salary Grade-6; 4. One (1) Computer Operator with Salary Grade-10; 5. One (1) Utility Worker with Salary Grade-1. SECTION 12. Exception. This Ordinance does not apply to financing or banking institutions, which are governed by the Central Banking Act and under the supervision of the Bangko Sentral ng Pilipinas. SECTION 13. Incentives and Privileges Transferability. Incentive and privileges granted under this Code are non-transferable, except in the event of death, permanent incapacity of a participating member, where the incentives and privileges shall be transferred to the heirs of the decedent in accordance with the law on succession. ETHIDa SECTION 14. Annual Inspection. The Provincial Board of Investment (PBI) shall conduct Annual Inspection on the participating firms on their progress either by itself or through the Local Government Units in municipalities where the business is situated. Said inspection shall be limited to the total gross sales/receipts, compliance of the Labor Code and environmental laws of the country, or to the provisions of this Code and the privileges granted as stated in the Certificate of Registration Exemption. SECTION 15. Reporting. At the end of each calendar year but not later than April 30, all registered firms to this program shall submit copies of the duly audited financial statements to the Provincial Board of Investment, copy furnished the Office of the Provincial Governor, the Sangguniang Panlalawigan, Provincial Treasurer, and the Local Mayor of the concerned municipality where the business is situated. SECTION 16. Violations. Willful violations committed by investors or any of their duly authorized representatives on any of the provision of this Code shall automatically strip them of the privileges herein provided. Firms who decide to wrap up their operations for whatever reasons within the first three (3) years of operations, shall be made to pay to the Provincial Government of Agusan del Sur, the total amount of incentives they had benefited upon the recommendation of the Provincial Board of Investment. SECTION 17. Repealing Clause. All ordinance, rules and regulations, or part thereof, whose provisions are in conflict with, or contrary to the provisions of this ordinance are hereby repealed, amended or modified accordingly. SECTION 18. Separability Clause. If for any reason, any provision, section or part of this Code is declared not valid by a Court of competent jurisdiction; suspended or revoked by the authorities concerned, such judgment shall not affect or impair the remaining provisions, which shall continue to be in full force and effect. SECTION 19. Distribution. Approved copies of this Code shall be sent to the different embassies and consulates within the Philippines, the Philippine Chamber of Commerce and Industry, Filipino-Chinese Chamber of Commerce, the Board of Investment, the Department of Trade and Industry and all other business groups in EAGA and the international business community. SECTION 20. Effectivity. This ordinance shall take effect thirty (30) days from the date of approval. APPROVED, November 12, 1998. Certified Correct: (SGD.) ATTY. MARCELO R. CAUPAYAN, JR. Secretary to the Sanggunian Attested: (SGD.) VIRGINIA M. GETES Provincial Vice Governor (SGD.) REGINA C. SALAZAR Acting Presiding Officer SP Member Approved: (SGD.) VALENTINA G. PLAZA Provincial Governor