An Ordinance Enacting the Investment Incentives Code of the Municipality of Banaybanay, Davao Oriental

September 8, 2009 BANAYBANAY MUNICIPAL ORDINANCE NO. 001-09 AN ORDINANCE ENACTING THE INVESTMENT INCENTIVES CODE OF THE MUNICIPALITY OF BANAYBANAY, DAVAO ORIENTAL Be it Ordained by the Sangguniang Bayan of Banaybanay, Davao Oriental, that: CHAPTER I Introductory Provisions SECTION 1. Title . This ordinance shall be known and cited as the Banaybanay Investment Incentives Code. SECTION 2. Policy Declaration . To hasten the sound development of Banaybanay, Davao Oriental in consonance with its Municipal Comprehensive Development Plan (MCDP), the Annual Investment Plan (AIP) and the Davao Integrated Development Plan (DIDP), it is, hereby, declared as the official standing policy of the Municipality of Banaybanay to improve its business climate and to welcome/encourage both domestic and foreign capital and investments for new, expansion or diversification projects in businesses and industries and whether of the small, medium, or large scale categories. It is further declared to be the policy of the Municipal Government of Banaybanay to promote the establishment and operation of non-government organizations (NGOs), the civil society organization (CSOs) and people's organizations (POs) to serve as active partners of the government in the pursuit of development. SECTION 3. Scope and Coverage. This Ordinance shall apply to all persons, entities, or enterprises engaged in small, medium, and large agri-business and other business activities. Such as: 3.a. Agri-Business Sector 3.a.1. Fish Production and Processing and other fishery products 3.a.2. Livestock and Poultry Production and Processing 3.a.3. High Yielding Value Commercial Crops Production and Processing 3.a.4. Coconut and Coconut by-products Processing 3.a.5. Ornamental Plants and cut Flower 3.a.6. High Value Commercial Vegetables 3.a.7. Rice production, marketing and manufacturing 3.a.8. Manufacturing and marketing of organic fertilizers 3.a.9. Manufacturing and marketing of feeds 3.a.10. High breed seed production 3.b. Tourism Facilities 3.b.1. Beach offshore and Inland Resorts 3.b.2. Hotels, Restaurants, and Inns 3.b.3. Sports and Recreation Centers 3.b.4. Parks and Playgrounds 3.b.5. Beach offshore 3.c. Infrastructure Facilities 3.c.1. Telecommunications Facilities 3.c.2. Roads leading to industrial and tourism areas 3.c.3. Port and bonded warehouses 3.d Property Development 3.d.1. Private Industrial Estate 3.d.2. Commercial/Office Buildings 3.d.3. Residential Area Development 3.d.4. Convention Center Establishment 3.d.5. Storage and Warehouse 3.e. Transportation Facilities 3.e.1. Land (Passenger Bus, Passenger Jeeps, Cars) 3.e.2. Water (Passenger Boats, Yacht, Speed Boats and the like) 3.e.3. Air (Chartered) 3.f. Extraction and Processing of Mineral Resources 3.f.1. Marble 3.f.2. Magnesite/Limestone 3.f.3. Gold 3.f.4. Silica 3.f.5. Nickel AIDSTE 3.f.6. Chromite 3.f.7. Copper 3.f.8. Other Minerals 3.f.9. Mineral Water 3.g. Light Manufacturing Activities 3.g.1. Products from indigenous materials (abaca, tambiling, romblon, pandan, bamboo, buri, coconut midribs, nito and other native materials) 3.g.2. Bulky house wares (Woodcarvings) 3.g.3. Furniture and fixtures 3.g.4. Processing of industrial crops such as abaca, rubber, cotton etc. 3.g.5. Garment and foot-ware making 3.g.6. Manufacturing of farm implements CHAPTER II Investment Incentives Board SECTION 1. Creation. There is hereby created a BANAYBANAY INVESTMENT INCENTIVES BOARD (BIIB) to implement the provisions of this Code and to improve the business climate and inflow of investment in the Municipality of Banaybanay. SECTION 2. Composition of the Board. The BANAYBANAY INVESTMENT INCENTIVES BOARD (BIIB) shall be composed of the following: Chairman - The Municipal Mayor Vice Chairman - The Vice Mayor Member - Chairman, SB Comm. of Finance and Appropriations - Chairman, SB Comm. on Infrastructure and Communications - Municipal Planning and Development Coordinator - Municipal Treasurer - Chairman, SB Comm. on Agriculture - Municipal Agrarian Reform Officer - Municipal Agriculturist - Municipal Assessor - DTI Provincial Director - CENRO - 2 representatives from the private sectors - Municipal Health Officer Provided, however, that the 2 representatives from the private sectors shall be appointed by the Mayor out of the five (5) nominees upon recommendation of the Federation of CSOs/PSOs; provided finally that the term of office of the 2 private sectors representatives shall be co-terminus with the Municipal elective officials, unless otherwise earlier revoked. SECTION 3. Powers and Functions of the Board . The primary function of the board is to establish a stable and favorable business policy which will encourage and support private sector investment and in the operation of business activities consistent with the development needs of the Municipality. The Board is hereby vested the following powers: a) To promulgate the governing implementing Rules and Regulations in the implementation of the provisions of this code ; b) To identify priority investment areas or activities to be promoted and to introduce appropriate incentives and support measures so as to attract inflow of investments; c) To adopt a short and medium term investment promotion program, which shall specify the list of priority investment areas and activities and corresponding incentives and support measures to be offered to investors; d) To monitor and evaluate the investment incentives and programs implementation; e) To secure funding and resources to implement the budgetary support provided by Municipal Government for the operation of the Board and the designated Secretariat; f) To enter into any appropriate agreement with other government agencies and/or private sector organizations for purposes of simplifying system, procedures and requirements on business investment and operation in Banaybanay, Davao Oriental. SECTION 4. Meetings and Quorum . The Board shall meet once every month or as often as necessary, and at such day and time it may fix. The presence of at least a majority of its members shall constitute a quorum. SECTION 5. Formation of the Technical Working Group (TWG). To provide technical support to the BANAYBANAY INVESTMENT INCENTIVES BOARD, a technical working group is hereby formed as ancillary to the board. SECTION 6. Composition of the Technical Working Group. The Technical Working Group shall be composed of the following: Senior Trade and Industry Dev't. Specialist, DTI AaCTcI Municipal Planning and Development Coordinator Municipal Assessor Secretary to the Sanggunian The Assistant Municipal Treasurer Sr. Revenue Collection Officer Department of Environment and Natural Resources 2 Representatives from the private sector Municipal Engineer SECTION 7. Function and Responsibilities of the Technical Working Group. The Technical Working Group who shall provide the technical support at the same time act as Secretariat to the Board, shall have the following functions and responsibilities: 1) Review and correlate information, data and studies to come up with local policies and incentives on investments; 2) Recommend and submit to the Board, local policies and incentives on investment for its consideration and approval, and for legislation by the Sangguniang Bayan; 3) Promulgate implementing guidelines and procedures on the availment by the investors of the local incentives adopted and legislated by the Municipal Government; 4) Accept, process and evaluate all application for legislation for the availment of the local incentives and submit its recommendation for action by the Board; 5) Extend appropriate and thorough assistance to investor on the application for local incentive thru the establishment of One-Stop Banaybanay Investment Assistance Center and maintaining network with other agencies and office; and 6) Submit reports to the Board through its Chairman on the development and implementation of local policies and incentives as adopted and legislated by the Municipal Government. acEHCD CHAPTER III Definition of Terms SECTION 1. Definition of Terms . When used under this code, the following terms and phrases shall mean as follows: a) "Board" shall refer to the Banaybanay Investment Incentives Board (BIIB) created under this code. b) "Municipality" shall mean the Municipality of Banaybanay covering the areas within its territorial jurisdiction as provided by law and its charter. c) "Code" shall refer to the Banaybanay Investment Incentives Code. d) "New Investors/Enterprises" shall refer to those prospective investors who have not engaged in any kind or type of business in the municipality and is interested in establishing its place of operation or production in the Municipality. e) "Registered Enterprises" shall mean those enterprises/businesses registered in accordance with the provision of this code. f) "Small Scale Enterprises" shall refer to those registered enterprises whose capitalization is PhP100,000.00 but not more than PhP2.0 Million with an employment of 30% minimum and 50% maximum for bona fide residents. g) "Medium-Scale Enterprises" shall refer to those enterprises whose capitalization is at least Two point One Million (-P-2.1M) Pesos but not more than Ten Million (-P-10.0M) Pesos with an employment of at least 50% to 70% depending upon the availability of qualified workers. h) "Large-Scale Enterprises" refer to those registered enterprises/businesses whose capitalization is more than Ten point One Million (-P-10.1M) Pesos with an employment of at least 60% to 80% of Employment for bona fide residents depending upon the availability of qualified workers. i) "Pioneer Enterprises" shall mean DTI, SEC, CDA registered enterprises which are: (i) engaged in the manufacture, processing or production, and not merely in the assembly or packaging of goods, commodities or raw materials that have not been or not being produced in the Philippines on a commercial scale, or (ii) which uses a design, formula, scheme, element, methods, processes, or systems of production or transportation of any element, substance or raw materials into another raw materials or finished goods which is new and untried in the Philippines, or (iii) engaged in the pursuit of agricultural, forestry and mining activities and/or service including the industrial aspects of food processing whenever appropriate, pre-determined by the BOI to be flexible and highly essential to the attainment of the national goal; in relation to a declared food and agricultural program for self-sufficiency and other social benefits of the projects, or (iv) which produces non-conventional sources of energy or uses on converts to code or other non conventional fuels or sources of energy in its production, manufacturing or processing operations: Provided, that the final production in any of the foregoing instances, involves, or will involve, substantial use and processing of domestic raw materials, whenever available, taking into account the risk magnitude of investment. j) "Non-pioneer Enterprises" shall include all DTI, SEC, CDA registered producer enterprises other that pioneer enterprises; k) "Center" shall refer to Municipal Investment Incentives Center; l) "Cooperative" is duly registered association of persons with a common bond of interest who have voluntarily joined together to achieve a lawful common interest and making equitable contribution to the capital required and accepting with the universally accepted cooperatives principle; m) "Existing Enterprises" shall refer to those existing business establishment where place of operation or production are physically located within the territorial jurisdiction of the Municipality; n) "Foreign Capital or Foreign Investment" shall mean equity investment owned by a non-Philippine National made in the form of Foreign exchange or other assets actually transferred to the Philippines and registered with the Central Bank and the Board, which shall assess and appraise the value of such assets other than foreign exchange; o) "Local/Domestic Capitalist or Local Domestic Investor" shall refer to the agency owned by a Philippine National, made in the form of Philippine currency peso or other assets and registered either in the Securities and Exchange Commission (SEC) or in the Department of Trade and Industry (DTI) or the Cooperative Development Authority (CDA); p) "Incentives" shall refer to tax exemptions and concession; q) "Priority Investment Areas" shall mean the economic activities that the Board shall have determined, approved and declared as such, and where investors are encouraged to put in their investments; r) "Joint Venture" shall mean two or more entities, whether natural or juridical, one of which must be a Philippine National, combining their 'property, money efforts, skills or knowledge to carry out a single business enterprise to profit, which is duly registered with the SEC as a corporation or partnership; s) "Preferred Areas of Investments" (PAI) shall also mean to be of the same meaning as Investment Priority Areas; t) "Processing Fee" is the amount paid to the Center for processing application of investors as approved by the Board; u) "Production Capacity" is the quantity of products or services produced in given period of time; v) "Registration Fee" is the fix amount to be paid to the Municipal Treasurer for the registration of their firms so that they can avail of the incentives; w) "Residents/Citizens/People/Locals" shall refer to any person who is a bona fide resident of the Municipality. A bona fide resident is one who is residing within the Municipality for at least the past six (6) months; x) "Staff" shall refer to the personnel of the TWG and the Municipal Investment Incentives Center who is the technical advisory to the Board. CHAPTER IV Preferred/Priority Areas and Appropriate Incentives and Support Measures SECTION 1. Priority Investment Areas/Activities. A list of priority areas and activities to be promoted to targeted investors shall be drawn up by the Board, based on findings and recommendations of the Technical Working Group commissioned for the purpose, and in consultation with the other government and private sector leaders of the Municipality of Banaybanay. The Board shall adopt the list for implementation under the Banaybanay Investment Program upon the concurrence of the Sangguniang Bayan. SECTION 2. Appropriate Incentives and Support Measures . To promote the growth of investments in the Municipality in general, and in the preferred investment and business activities, in particular, the Board shall identify and recommend for the approval of the Sangguniang Bayan, the necessary and appropriate incentives and support measures which the Municipality may extend to the targeted investors for them to avail. HSAcaE SECTION 3. Effectivity of Appropriate Incentives and SUPPORT Measures . The Board shall review the package of appropriate incentives and support measures every two (2) years; However, at any time prior to or after the holding of the regular review process that may be conducted every two (2) years, the Board may, after careful and judicious reckoning, delete an area of activity from the list of preferred investment areas and activities. This maybe done by the Board, only if it has proven that sufficient investment in specific areas or activities have already been attained and where it can it be reckoned that the continued extension of incentives or support measures for the expansion of the said areas or activities may place the interest of the Municipality and the public in adverse position. Further, the Board may also delete/remove an investment area or activity from list where it is convinced that investment in such areas or activity in the Municipality can not be attracted within reasonable cost or may result. In creating in unfavorable business climate. Still further, the Board may also add to the list, specific areas of investment activities which it may deem necessary and beneficial to the development of the municipal economy. The decision of the Board on the matter of deleting specific preferred investment or activities in the list to be recommended to the Sangguniang Bayan for approval shall be made publicly known one day after the Sangguniang Bayan decision would have been made. With the use of any of the appropriate information dissemination medium the effectivity of the incentive will be upon the approval of the code. CHAPTER V Qualification Requirements and Registration of Enterprises SECTION 1. Qualification of New Enterprise . New business enterprises intending to avail of the incentives provided in this code must meet the following qualification: 1.a The business enterprise must have complied with all the requirements mandated under existing local and national laws and the constitutions. 1.b The plant location and business address of the new enterprise must be within the territorial jurisdiction of Banaybanay, Davao Oriental, Thus operation must be within the municipality regardless of its business office location. 1.c The prospective investment must engage in activities in preferred areas of investment as may hereafter be declared by the Board. SECTION 2. Incentives to Existing Enterprise. 1. At least it has an existing capital of 1M. 2. The enterprises must be expanded at least 25% of its existing capital. SECTION 3. Application Requirements. Application must be filed with the Board and recorded in a registration book and the date appearing therein and stamped on the application shall be considered on the date of its official acceptance. However, it shall only be deemed officially accepted upon submission of the documentary requirements as mandated under the implementing rules and regulations enacted for this purpose and after a non-refundable filing fee of One Thousand (-P-1,000.00) Pesos shall have been paid to the Banaybanay Investment Incentives Board through the Municipal Treasurer. SECTION 4. Approval and Registration Procedure . The Board shall formulate appropriate rules and regulations to facilitate action on application files with the center, to prescribe criteria for the evaluation of applications and to devise standard forms for use by applicants. The Manager of the Center shall strictly abide with these rules and all completed applications shall be indorsed to the Mayor for approval upon the recommendation of the Board. SECTION 5. Certificate of Registration . A registered enterprises shall be issued a Certificate of Registration with the signature of the Chairman of the Board and such other officer as the Board may empower and designate for the purpose. The Certificate shall be in such form and style as the Board may determine and shall state, among other matters, the following: 5.a. The name of the registered enterprise; 5.b. The preferred/priority area of investment in which the registered enterprise will engage; 5.c. The other terms and conditions to be observed by the registered enterprise by virtue of its regulation. CHAPTER VI Rights and Privileges SECTION 1. Rights and Privileges Guaranteed by the Municipal Government. All new investors/enterprises are entitled to the rights and guarantee provided by law and the Constitution. In addition to such rights and guarantees and to foster investors' confidence in the incentive program, the Municipal Government, through the Banaybanay Investment Incentive Board (BIIB), shall: 1.a. Provide a concise and comprehensive information to prospective investors on the economic priorities of the municipality, including target investment areas and the general conditions applicable to incoming direct private investments. 1.b. Communicate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives. 1.c. Take the fullest possible account of the need of the investors for stability, growth and profit in their operations in the formulation or modifications of policies and ordinances that affect investments. 1.d. Not interfere or modify arrangements with the investors after the details of the implementation of an investment project has been accepted and approved, and the ownership and management structure of the enterprise has been established unless the law provides otherwise. HESIcT 1.e. Avoid undue distortion of composition between or among enterprise operating within its territorial jurisdiction, whether domestic or foreign, when granting any special exemptions or incentives aimed at encouraging investments in the identified target areas; 1.f. In accordance with law and where no local personnel or workers is capable and available, allow the employment of qualified foreign personnel where this is necessary for the efficient operation of the enterprise or for technology transfer; and 1.g. Resolve all doubts concerning the benefits and incentives granted under the ordinances shall be strictly considered as mandated by the LGC (Pls. refer to Sec. 56 1 of LGC). CHAPTER VII Incentive to Registered Enterprises SECTION 1. Tax Incentives to Registered Enterprises . A) Pioneer Enterprise. a. Full exception from all local government taxes, permits, fees and charges within three year for small. Four (4) years for medium and five (5) years for large scale industries from date of registration. B) Non-Pioneer Enterprise. a. Full exemption from local taxes. Permits and charges within five (5) years from date of registration. CHAPTER VIII Appropriations SECTION 1. Appropriations. An initial funding of PhP50,000.00 shall be allocated by the Municipal Government to defray the necessary expenses for the implementation of the provisions of this Code, the operation of the Banaybanay Investment Incentives Board and the Municipal Incentives Center, sourced from the 20% LGU Development Fund. Thereafter, the Municipal Government shall appropriate annually, based on a budget presented by the Board, the funding requirements which is deemed necessary for the continued implementation of the provisions of this Code, subject to the usual Government Accounting and Auditing Regulations. CHAPTER IX Final Provisions SECTION 1. Penal Clause . Any violation of the provisions of this Code, its rules and regulations, shall be a ground for the cancellation or revocation of the registration of the business and the withdrawal of all incentives granted under this Code. SECTION 2. Separability Clause . The provisions of this Code are hereby declared to be separable, and in the event that one or more of the provisions are held illegal or unconstitutional, the validity of the other provisions shall not be affected. SECTION 3. Repealing Clause . All ordinances, executive orders, and rules and regulations inconsistent or in conflict with the provisions of this Code are hereby repealed, amended or modified accordingly. SECTION 4. Effectivity . This Ordinance shall take effect immediately upon its approval. CARRIED BY THE VOTE OF: Affirmative: Sangguniang Bayan Members (SBM): Hon. Glicerio U. Patricio, Jr. Hon. Liezel S. Teves Hon. Casilongan K. Mamukid Hon. Concordio D. Bagaoisan Hon. Flores M. Alingalan Hon. Bernardo Y. Celmar, Jr. Hon. Rogelio A. Dignos Hon. Roger M. Tambuang Hon. Emedio S. Mante - ABC President Hon. Delfrin Jimz P. Patricio - MSKF President Absent: Negative: None Proponent: Hon. Concordio D. Bagaoisan - SBM Passed: 08 September 2009 101st REGULAR SESSION OF THE 11th COUNCIL Comments: APPROVED. CERTIFIED CORRECT: (SGD.) DEMETRIO C. BAGAYAS Vice Mayor, Presiding Officer ATTESTED: (SGD.) EDEN CELESTINO S. CACHO Secretary to the Sanggunian APPROVED: (SGD.) ATTY. PEDRO T. MEJOS Municipal Mayor