Angeles City Investment and Incentive Code of 2011

December 28, 2011 ANGELES CITY ORDINANCE NO. 301-11 (PO-604-09-10) AN ORDINANCE PROVIDING LOCAL INVESTMENT INCENTIVES TO INDUSTRIES AND BUSINESSES IN THE CITY OF ANGELES AND FOR OTHER PURPOSES CHAPTER I Title, Policies and Objectives SECTION 1. Short Title. This Act shall be known as the Angeles City Investment and Incentive Code of 2011. SECTION 2. Declaration of Policies. It is hereby declared a general policy of the City Government of Angeles to attract investors, both local and foreign, by creating a good climate for investors and providing incentives for investments that will promote sustainable development, income generation and employment for the people of Angeles City. Furthermore, the development of the local economy of Angeles City shall be pursued under the principle of contributing to the national economic goal of achieving global competitiveness, fostering economic efficiency, and encouraging and supporting investments that promote countrywide development and create productive and quality employment. In line with this, the following are hereby declared as specific policies of the City Government of Angeles: a. The City shall create and maintain a stable and market-responsive investment administration that will encourage and support private-sector investments; b. The City shall extend fiscal and non-fiscal incentives to promote investments in economic activities that will significantly contribute to the achievement of the city's development objectives; c. The City shall grant incentives based on a system that is clear and simple to administer, time-bound, and performance-based taking into consideration the need to be competitive in attracting local and foreign investments; d. The City recognizes that industrial peace is an essential element of economic growth. SECTION 3. Objectives. The Objectives of this Code are as follows: a. To lay down a comprehensive and legal framework and mechanism for integrating the investment incentives laws of the national government with the local development initiatives; b. To promote and attract foreign and local investment generate employment opportunities and provide backward and forward linkages among industries in the city, province and the country; c. To transform selected areas of Angeles City into highly developed centers of Industry, Commerce, Tourism, Medical, Eco-Tourism, and Finance of the province, the region as well as of the entire country; d. To promote balanced development and the general welfare of the people of Angeles City through rationalized land use. CHAPTER II Definition of Terms SECTION 4. Definition of Terms . For purpose of this Code, the following definition of terms shall apply: BOI Board of Investment under Executive Order No. 226, otherwise known as the Omnibus Investment Code. Capitalization means the total project cost including buildings, machineries, vehicles, Furniture and fixtures Information System and working capital. CaSAcH Sustainable Development means a pattern of resource <http://en.wikipedia.org/wiki/Resource> use that aims to meet human needs while preserving the environment <http://en.wikipedia.org/wiki/Environment_%28biophysical%29> so that these needs can be met not only in the present, but also for generations to come. Expansion means modernization and rehabilitation and increase of existing volume of production or upgrading the quality of the registered product or utilization of inefficient or idle equipment under such guidelines as Board may adopt. Center means the Angeles City Business Development and Promotions Center. Board means the Angeles City Investment Board. Existing Firms means those firms already existing and operating within the jurisdiction of Angeles City. Firms under Expansion means existing firms already engaged in preferred investment and are expanding their operations in these preferred investments to Growth and Priority Development Areas pursuant to the City Land Use Plan/Zoning Ordinance. Firms under Diversification refers to existing firms that are investing in or diversifying to preferred investments listed in Section 12 and locating these investments in the Growth and Priority Development Areas, pursuant to the City Land Use Plan/Zoning Ordinance. Subsidiary a company that is more than fifty percent owned by another company to which it is subordinate. Foreign Investment means equity investments owned by a non-Philippine national. Code/Local Investment Code refers to the Angeles City Investment and Incentive Code of 2011. Investment means expenditures for future benefits. National Laws refers to the following: OIC of 1987 OMNIBUS INVESTMENT CODE of 1987. RA 7844 EXPORT DEVELOPMENT ACT of 1994. RA 7916 SPECIAL ECONOMIC ZONE ACT OF 1995. RA 7718 BUILD-OPERATE TRANSFER LAW OR BOT LAW, ENACTED MAY 1994 RA 8289 MAGNA CARTA FOR SMALL ENTERPRISES Tourism Act of 2009 (TIEZA) RA 7160 Local Government Code, Sec. 192 RA 7160 (IRR) Section 282 Preferred Investment refers to investments listed in Section 12 of this Code and those that may hereafter be identified by the Board. Business Plan means a project profile in prescribed form, which presents the marketing, technical, financial and socio-economic aspects of the project. Registered Enterprise means any individual, partnership, cooperative, corporation or other entity incorporated and/or organized and existing under Philippine laws that is registered with the Board of Investment (BOI), Department of Trade and Industry, Securities and Exchange Commission, Cooperative Development Authority, and other business registering agencies. Registered Eligible Enterprise means any individual, partnership, cooperative, corporation, or other entity incorporated and/or organized and existing under Philippine laws that is registered with the Angeles City Investment Board and granted a Certificate of Eligibility for availment of benefits under this Code. CHAPTER III Angeles City Investment Board SECTION 5. Angeles City Investment Board. The Angeles City Investment Board (ACIB) is hereby created for the purpose of overseeing the implementation of the Angeles City Investment and Incentive Code. SECTION 6. Composition of the Angeles City Investment Board. The Board shall be composed of the following: Chairperson - City Mayor Vice Chairperson - City Vice Mayor Members - Chairperson, SP Committee, Ways and Means Chairperson, SP Committee, Trade and Industry City Treasurer City Assessor City Planning and Development Officer Provincial Director-Department of Trade and Industry Representative from MACCII Representative from FCCCII Representatives of the CSOs/NGOs in the DCAC Legal Officer SECTION 7. Meetings and Quorum of the Board. The Board shall meet at least once every quarter, or as may deem necessary. The presence of majority members shall constitute a quorum, and a majority of the quorum of a meeting shall be required by the Board to exercise its powers and perform its functions. IaHDcT SECTION 8. Powers and Duties of the Angeles City Investment Board. The Board shall be responsible for the regulation and promotion of investments in the City. The majority of the members of the ACIB shall constitute a quorum sufficient for it to exercise its powers and perform its duties which shall be as follows: a. Approve, disapprove incentives applications, and cancel or suspend availed incentives subject to the provision of this Code. b. Make arrangements with national government agencies and/or private organizations for the purpose of promoting investments. c. Monitor and evaluate Annual Reports of Eligible Registered Enterprises submitted to the Center. d. Exercise all powers necessary or incidental to attain the purpose of this Code. e. Designate the Angeles City Investment Promotions Center to act as the Secretariat and to consequently supervise the same in its operations. CHAPTER IV Incentives for Preferred Investments, and Others SECTION 9. Investors Enjoying Incentives under National Laws. Investors enjoying incentives under E.O. 226 (OIC of 1987), RA 7844, RA 7916, RA 7718, RA 8289 and TIEZA, shall be entitled to the following non-fiscal incentives: 1. Assistance with site location; 2. Assistance in facilitating and processing of all documents and requirements of the City; 3. Assistance in the labor recruitment and/or manpower sourcing; 4. Assistance in securing direct source of electric power, water supply, telecommunications and other utilities; 5. Recognition of outstanding enterprises; 6. Other non-fiscal incentives as may be determined by the Board. CHAPTER V Incentives SECTION 10. This Chapter grants incentives to investors in preferred investments and investors locating their businesses in Growth and Priority Development Areas in relation to the Comprehensive Land Use Plan, investors under expansion and diversification and the industries provided in the CLUP. SECTION 11. Incentives . Section 192 of RA 7160 and Article 282 of the Implementing Rules and Regulations of the Local Government Code shall be the bases for granting tax incentives. Capitalization and Employment Generation Requirements, Period of Exemption for Preferred Investments and Existing Business under Expansion and Diversification with a minimum of Ten Million Pesos for preferred investments shall be entitled to the incentives provided for under this ordinance for a period of one (1) year. A. For Preferred Investments Classification Investment Schedule of Employment of Enterprise Committed Year Incentives Size Medium 15,000,000.00-30,000,000.00 1 100% 20 Medium 30,000,001.00-50,000,000.00 1 100% 25 Medium 50,000,001.00-100,000,000.00 1 100% 30 Large 100,000,001.00 and above 1 100% 35 B. For Enterprises under Expansion or Diversification Classification Investment Schedule of Employment of Enterprise Committed Year Incentives Size Small 10M-20M 1 100% 10 Medium 20,000,001.00-30,000,000.00 1 100% 20 Medium 30,000,001.00-50,000,000.00 1 100% 25 Medium 50,000,001.00-100,000,000.00 1 100% 30 Large 100,000,001.00-above 1 100% 35 SECTION 12. Investors under Preferred Investment. The incentives in Section 11 shall be available to those investing in new projects under preferred investments listed below: a. Tourism related business such as but not limited to: 1. Mid-range hotels and other tourist-related facilities (Restaurants, Spas, Clubs, Souvenir Shops) 2. Resorts 3. Theme Parks 4. Tourist Transport Facilities 5. Eco-Tourism Projects b. Property Development projects such as but not limited to: 1. Commercial complexes (malls) 2. Retirement villages (with medical facilities) 3. Convention centers DEIHAa 4. Private industrial estates 5. Economic Zones c. Hospitals/Medical Centers for Retirees (Tourism related) d. Common bonded warehouses e. Education-related entities but not limited to new educational facilities and bookstores f. Any business enterprise that may produce and/or utilize renewable or innovative energy and prevent climate change. g. IT and IT-enabled services h. SWM or Recycling facilities, sewage treatment plants i. Manufacturers 1. Food processing 2. Furniture 3. Garments 4. Souvenir shops SECTION 12 (A). Addition of Preferred Investments . The Board may, if necessary, add new investments to the list after a study made either by the ACIB or study group engaged by the ACIB. The bases for addition to the list found in Section 12 are: a. Must generate high levels of employment. b. Must feature a high degree of added value to raw materials. c. Must create linkages with local industries. d. Must promote sustainable development. SECTION 12 (B). Removal of Preferred Investment . The Sangguniang Panglungsod may recommend the removal of any activity from the list of preferred investments under Section 12 or of additions thereto under Section 12 (A) in the following cases: a. Sufficient investments in the preferred area of activity have been attained as determined by the Angeles City Investment Board. b. The continued extension of incentives for the specific investment is no longer to the interest of Angeles City. c. The investment or activity does not attract investors within a reasonable length of time or may result in an unfavorable business climate. SECTION 13. Investors under Expansion and Diversification . Investors who are expanding in and/or diversifying to a preferred investment in Growth and Priority Development Areas are qualified for incentives under Section 11, provided that the requirements are complied with. CHAPTER VI Other Incentives SECTION 14. All qualified and accepted applicants to the Investment Incentive Program shall enjoy the Business Tax Exemption Privileges for a period stated hereof. For construction of buildings and other improvements excluding land, effective upon occupancy and/or completion, whichever comes first. SECTION 15. Existing business of any nature and real properties shall not be allowed to apply under this Ordinance for the purpose of availing the incentive program. SECTION 16. Coverage. Business enterprises applicants falling under the following types or nature of business shall be given priority under the investment incentives program: Tourism related; Technology related; Service Industry (manpower services); Housing Development; Food Processing and Infrastructure (BOT). CHAPTER VII Requirements, Application, and Approval Process SECTION 17. Requirements . For firms to enjoy the incentives under this Code, they must comply with the following: a. Period for filing of applications Applications for incentives under Chapter IV and V must be filed before the start of construction or commencement of business operations. b. Requirements common to Single Proprietorships, Partnerships, Corporations, and Cooperatives: 1) Three (3) copies of completed application forms available from the Angeles City Business Development Center. 2) Business plan of the proposed investment (prescribed form available from the Center). 3) A certified copy of the Certificate of Business Name Registration from the Department of Trade and Industry, or the SEC or CDA registration. c. Certification from the City Treasurer that the applicant has no outstanding obligation with the City. DcHSEa d. Certification of Registration if enjoying incentives under the National Laws. e. Additional requirements for Partnerships, Corporations, and Cooperatives. f. Authority from the partnership or Board of Directors to file applications. g. Partnership or incorporation documents. h. Cooperatives Development Authority documents in the case of cooperatives. i. Proof of compliance with the pertinent provisions of Sections 9 to 13 as to capitalization, employment generation, nature of investment, and project or business location, as the case may be. j. Performance bond and/or Cash bond equivalent to 5% of committed investment. k. Construction Bond equivalent to 1% of total project cost. SECTION 18. Procedure for Filing, Processing/Evaluation and Approval of Application. 1. The Center provides orientation/briefing to prospective applicants as to the various provisions of the Code. 2. The Center issues a checklist of requirements and forms for the applicant to accomplish. 3. The applicant submits all the required documents to the Center. 4. If the Center determines that the documents submitted are complete, it requires the applicant to pay the non-refundable filing fee of Two Thousand Pesos (Php2,000.00). 5. The Center accepts the application and supporting documents, indicating the date of acceptance and official receipt number in the application form and the Application and Registration Book. 6. The Center forwards the application and its Evaluation Report and Recommendation to the Board. The Board shall deliberate and decide within 15 working days upon receipt of the application. 7. The Center records the approval or disapproval of the Board in the Application and Registration Book. 8. The Center notifies the applicant through a formal written communication of the decision of the Board and if approved, requires payment of the registration fee as provided in Section 20 hereof. 9. Upon Payment of the Registration Fee, the Certificate of Eligibility is issued and the business is registered as an eligible enterprise. 10. A Performance Security shall be put up by the investor in the name of the city which is refundable and non-interest bearing equivalent to 5% committed investment renewable annually. 11. For new construction, in lieu of a surety bond, a construction bond equivalent to 1% of the project cost is required. Refundable after presentation of the Occupancy Permit. SECTION 19. The Approved Enterprise shall pay a one-time registration fee as follows: Investment Cost One-Time Registration Fee Over 10M 20,000.00 Over 25M 25,000.00 Over 50M 30,000.00 150M 35,000.00 SECTION 20. Certificate of Eligibility. A qualified enterprise under this Code shall be issued a Certificate of Eligibility with the signature of the Chairperson and/or such other officer as the Board may designate for the purpose. The Certificate shall be in such form and style as the Board may determine and shall state among others, the following: a. The name of the eligible enterprise. b. The area of investment that the eligible enterprise will engage in. c. Committed investment must be reached within half of the period of incentive time. d. Such items and conditions as should be complied with by the eligible enterprise to continue to qualify for incentives during the period granted in its Certificate of Eligibility. e. The Certificate of Eligibility will be valid for one year from the date of issuance and renewal prior to expiration date. CHAPTER VIII Reports and Other Documents SECTION 21. Submissions of Reports and Other Documents. Every registered eligible enterprise shall for each investment availing of incentives under this Code, submit to the Board through the Center the following reports and/or documents within the time prescribed: a. Amendments of Articles of Incorporation of by-laws, or Articles of Partnership, or Article of Cooperation, within thirty (30) calendar days from the date of approval of said amendments by the Securities and Exchange Commission or Cooperative Development Authority; CTHaSD b. Change of Directors within 30 calendar days from the change; c. Quarterly report on alien officers and/or employees within 30 calendar days from the date of registration as an eligible enterprise, or from the appointment of the aliens/replacements, with the added requirement that alien officers and employees are registered as such with the Bureau of Immigration and Deportation (BID) and with the Department of Labor and Employment (DOLE); d. Quarterly report on employment of bona fide Angeles City residents within 30 calendar days from the date of registration as eligible enterprise and/or from the appointment of their replacements; e. Quarterly report on business operations including production or gross sales or receipts, to be submitted within 30 calendar days from end of each quarter; f. Audited Annual Financial Statements with Bureau of Internal Revenue (BIR) stamp acknowledging receipt within 30 calendar days after submission of the same to the Bureau of Internal Revenue (BIR), but not later than 30 calendar days after the deadline for filing such audited statements with the BIR. CHAPTER IX Angeles City Business Development and Promotion Center SECTION 22. Angeles City Business Development and Promotions Center. There shall be an Angeles City Business Development and Promotions Center with adequate personnel and budget for personal services, operation and maintenance, equipment, promotions, and other needs. The Center shall perform the following functions: a. Prepare Investments Promotion Plan for approval of the Board; b. Assist the Board in the promotional aspect of the Code such as: establishing business linkages and networking, conducting and coordinating investment missions, preparing trade and investment promotion collateral, conducting/coordinating investment/economic briefings; c. Provide orientation/briefing to prospective applicants and answer their inquiries; d. Receive applications of firms/establishments, seeking to avail of incentives under this Code; e. Evaluate applications on the basis of documents submitted. The Center shall forward complete applications of qualified investors to the Board, otherwise it shall inform applicants of the rejection of their applications and the reason/s therefore; f. In the event the application is approved by the Board, furnish the City Treasurer, City Assessor, and the Business Permit and Licensing Division, copies of the Board resolution granting incentives and Certificate of Eligibility, for their information and guidance in the implementation thereof; g. Have custody and responsibility for filing and safekeeping of all records and documents; h. Provide administrative and secretariat services to the Board; i. Facilitate the issuance of business permits of registered eligible enterprises; j. Conduct ocular inspection of the premises of the business establishments; k. Receive required reports and other documents from registered eligible firms; l. When appropriate, as when a registered business has violated the Code, recommend the cancellation or revocation of the Certificate of Eligibility and withdrawal of all incentives granted; m. Perform such other functions and responsibilities as may be authorized. CHAPTER X Budgetary Requirements SECTION 23. Budgetary Requirements. The City shall appropriate the funding requirements which are necessary for the implementation of the provisions of this Code based on the budget presented by the Board, to include Personal Services, Maintenance and Other Operating Expenses (MOOE), Capital Outlay and Contingency. CHAPTER XI Miscellaneous Provisions SECTION 24. Visitorial Power of the Board or the Center. The Board, the Center or any duly authorized member thereof, is hereby empowered and authorized to conduct an ocular inspection of the premises and business activity of any enterprise, and examine the books registered or applying for registration as eligible enterprise, provided that such inspection or examination is done at a reasonable time of the day, during office hours. TacSAE CHAPTER XII Final Provisions SECTION 25. Penalty. Cancellation or revocation of the Certificate of Eligibility shall mean the withdrawal of all incentives granted under the Code, and all fees and charges previously unpaid because of the exemption shall become due and demandable. SECTION 26. Separability Clause. The provisions of this Code are hereby declared separable. The validity of one or more provisions shall not affect the validity of the other provisions thereof. SECTION 27. Repealing Clause. This Code supersedes, amends and repeals previous ordinances inconsistent herewith. SECTION 28. Effectivity. This Code shall take effect on the day following its publication in a newspaper of local circulation in Angeles City. Sponsored by Councilors Bonifacio, Nepomuceno, Rivera and Lacson Seconded by Councilors Indiongco and Sangil UNANIMOUSLY APPROVED by the Members Present: Councilors Morales, Suller Indiongco, Rivera, Sangil, Bonifacio, Lacson, E. Pamintuan, Dimapilis and JC Pamintuan during Regular Session No. 43 held on December 27, 2011. Approved by His Honor, the City Mayor on December 28, 2011. APPROVED: EDGARDO D. PAMINTUAN City Mayor MA. VICENTA L. VEGA-CABIGTING City Vice Mayor & Presiding Officer ATTESTED: LEONARDO KIRK I. GALANZA Executive Assistant V City Secretary ATTY. ERIC V. MENDOZA Department Head II