Cauayan City Investment Incentive Code of 2011

September 2, 2011 CAUAYAN CITY ORDINANCE NO. 010-11 AN ORDINANCE ENACTING THE CAUAYAN CITY INVESTMENT INCENTIVE CODE OF 2011 AND FOR OTHER PURPOSES (Sponsor: Hon. Jose L. Abad) Be it Ordained by the Sangguniang Panlungsod, City of Cauayan, Isabela, that : CHAPTER I Title and Declaration of Policy SECTION 1. Title . This Ordinance shall be known and cited as the CAUAYAN CITY INVESTMENT INCENTIVE CODE OF 2011. SECTION 2. Declaration of Policy. To enhance a dynamic and peaceful City of Cauayan, Isabela, striving to establish a global standard of excellence towards a progressive society and building a strong community deserving of honor and dignity in accordance with the updated City development Plan. It is hereby declared that the policy of the City to encourage new investment of expansions/diversification in agri-business, tourism, warehouses, garments and light manufacturing activities and other property development such as establishments of private industrial state. The City of Cauayan welcomes and encourages domestic and foreign capital to establish enterprises that would utilize local labor, raw materials available in the City. Finally, to promote and enhance NGO's private collaboration towards effective local development and serve as active partner in achieving local autonomy. CHAPTER II Definition of Terms SECTION 3. Definition of Terms . When used under this Code, the following terms and phrases shall mean as follows: 1. " Board " shall refer to the Cauayan City Investment Incentive Board created under this Code. 2. " City " shall mean the City of Cauayan covering all the areas within its territorial jurisdiction as provided for law and its charter. 3. " Code " shall refer to the Cauayan City Investment Incentive Code of 2011. 4. " Existing Establishments/Enterprises " shall refer to those establishments/enterprises whose places of operation of production are located within the territorial jurisdiction of the City of Cauayan. 5. " Local Personnel/Worker " shall refer to those workers or personnel who are bona fide residents of the City of Cauayan. 6. Investment is the total amount needed to make business operational. 7. " New Investors/Enterprises " shall refer to those prospective investors who have not engaged in any kind or type of business and is interested in establishing its place of operation of production in the City. 8. " Preferred Areas of Investments " shall mean the economic activities that the Board shall have approved and declared as such after a thorough study and evaluation. 9. " Registered Enterprises " shall mean those enterprises/businesses registered in accordance with the provisions of this Code. CHAPTER III City Investment Incentive Board SECTION 4. The Cauayan City Investment Incentive Board. There is hereby created a Cauayan City Investment Incentive Board (CCIIB) to implement the provisions of this Code. SECTION 5. Composition of the Board. The Board shall be composed of the following: Chairman: City Mayor Vice-Chairman: City Vice Mayor Members: 1. Sangguniang Panlungsod Committee on Laws and Good Governance CAIHTE 2. Sangguniang Panlungsod Committee on Infrastructure and General Services 3. Sangguniang Panlungsod Committee on Transportation and Communication 4. Sangguniang Panlungsod Committee on Labor, Trade, Industry and Economic Enterprise 5. Sangguniang Panlungsod Committee on Agriculture 6. Sangguniang Panlungsod Committee on Cooperative & Livelihood 7. City Administrator 8. City Legal Officer 9. City Treasurer 10. City Economic Enterprise Officer 11. City Budget Officer 12. City Planning and Development Officer 13. Two (2) representatives from NGO 14. President-Filipino-Chinese Chamber of Commerce Provided, that membership of the Board may be increased by the Sangguniang Panlungsod through the recommendation of the Board as maybe deemed necessary for the effective implementation of the provisions of the Code; Provided, further, that the representatives of the Department of Trade and Industry and Two (2) Private Sector Representatives shall be appointed by the City Mayor, upon the recommendation of the sectors or entity they represent; Provided, finally, that the term of office of the Private Sector Representatives shall be Three (3) years and co-terminus with that of the appointing authority. SECTION 6. Meetings and Quorums of the Board . The Board shall meet at least once every quarter or as often as may be necessary, on such a day and time as it may be. The presence of at least a majority of its members shall constitute a quorum of a meeting, held, shall be required for the Board to exercise its powers and perform its function. SECTION 7. Powers and Functions of the Board . The primary function of the Board shall be to establish a favorable and stable policy on business climate which will encourage and support private sector investment and in the operation of business activities consistent with the development needs of Cauayan, pursuant to this, the Board shall be vested with the following powers (functions): 1. To promulgate the governing Implementing Rules and Regulations in the implementation of the provisions of this Code: Subject to the approval of the Sangguniang Panlungsod; 2. To commission economic and technical research for the purpose of identifying priority investment areas and/or activities to be promoted as well as appropriate incentive and support measure which should be extended to new investors, to attract investors into these areas and/or activity; 3. 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 used to attract targeted investors; 4. To designate the Cauayan City Investment Promotion Center to act as secretariat and to consequently supervise the same in this operations specifically in the implementation of the provisions of this Code; 5. To secure additional funding and other resources to supplement the budgetary support provided by the Cauayan City Government for the operation of the secretariat in its implementation of the Code; 6. To enter into any agreement with other government agencies and/or private sector organizations for the purpose of simplifying systems, procedures and requirements on investments and business operation in Cauayan City; 7. In such other powers as may be authorized under the Ordinance or necessary to its existence. SECTION 8. Cauayan City Investment Promotion Center . Composition of Cauayan City Investment Promotion Center shall be as follows: 1. Legal Office. 2. Information Office. 3. Tourism Office. SECTION 9. Powers and Functions . The Center shall serve as the technical secretariat of the Board and shall implement its policies and guidelines as follows: 1. Accept, process and evaluate all applications for registration for the availment of the local incentives and submits its recommendation for action by the Chairman within fifteen (15) working days from the receipt of the application; 2. Provide the necessary support services to investors as guaranteed under the Code; 3. Establish and maintain networking relations with other offices and agencies whenever appropriate and necessity; 4. Collate, analyze and compile pertinent data and information and studies concerning areas that have been or may be declared as "preferred/priority areas of investment" by the Board; 5. Recommend to the Board any modification/amendments to existing legislation and procedures on local investments; 6. Prepare the Agenda for Meetings of the Board and submit for its consideration and approval the policies and measure which are determined necessary to carry out the provisions of the Code; 7. Submit Annual Reports to the Board thru the Chairman, on the activities of the Center relative to the implementation of the Code, within the Sixty (60) days after the close of the calendar year. DETACa CHAPTER IV Priority Investment Areas/Activities and Appropriate Incentives and Support Measures SECTION 10. Priority Investment Areas . A list of priority investment areas and activities to be promoted to targeted investors shall drawn up by the Board, based on findings and recommendations of economic and technical research commissioned for the purpose, and in consultation with the Advisory Committee and other government and private sector leaders of Cauayan City. The Board shall adopt the list for implementation under the Cauayan City Investment Program upon the concurrence of the Sangguniang Panlungsod. SECTION 11. Appropriate Incentives and Support Measures . The Board shall identify and recommend for the approval of the Sangguniang Panlungsod appropriate incentives and support measures which it shall be willing to extend to targeted investors. To promote priority investment areas and activities. SECTION 12. Effectivity of Appropriate Incentives and Support Measures . The Board shall review the package of appropriate incentives and support measures every two (2) years. Provided that the Board may remove an area or activity from the list, at any point, when it deems that sufficient investments of the areas or investment activity had been attained and where continued extension of incentives or support measures for the expansion of said area or activity may place the interest of the City and the public in adverse position. The Board may also remove an investment area or activity from the list where it is convinced that investments in such areas or activity in the City cannot attract investors within reasonable time and cost or may result in unfavorable business climate. CHAPTER V Registration of Enterprises SECTION 13. Qualifications of a New Enterprises . New investors who intends to avail of the incentive provided in this Code must meet the following qualifications: 1. That the business enterprise must have complied with all the requirements mandated under existing local and national laws and the Constitution. 2. That the prospective investors place of business operation or production be located within the territorial jurisdiction of Cauayan City. 3. That the prospective investment must engage in activities referred areas of investments as may hereafter be declared by the Board. 4. The new enterprise must have a capitalization of at least Five Million Pesos (P5,000,000.00) but nor more than Ten Million Pesos (P10,000,000.00) in case of a small scale enterprises: at least Ten Million Pesos (P10,000,000.00) but nor more than Forty Million Pesos (P40,000,000.00) in case of medium scale enterprise; and more than Forty Million Pesos (P40,000,000.00) in case of large industry; provided, that the amount of capitalization shall be based on the total project cost as stated in the investor's study submitted to and approved by the Board. 5. That the new enterprise will provide out of the labor force an employment of no less than Ten (10) persons in case of small-scale enterprise; at least Twenty (20) persons in case of a medium-scale enterprise; and at least Fifty (50) persons in case of a large industry who are at least bonafide residents of Cauayan City. Capital Investment Employment Registration Fee Incentives From P5,000,000.00 to 5 to 10 persons P5,000.00 One (1) year P10,000,000.00 classified as Small-Scale Industry. Less than P10,000,000.00 11 to 20 persons P10,000.00 One (1) year but not more than P40,000,000.00 Classified as Medium-Scaled Industry. More than P40,000,000 50 persons above P20,000.00 One (1) year Classified as Large-Scale Industry. SECTION 14. Qualifications of an Existing Enterprise . An existing enterprise may avail of the incentives under this Code provided that it meets the following qualifications: 1. That the business enterprise must have complied with all the requirements mandated under existing local and national laws and the Constitution. 2. That the expansion/diversification must engage in activities mentioned in Section 2 hereof or in other preferred areas of investments as may hereafter be declared by the Board. 3. That the existing enterprise whose place of business operation or production is already located within the territorial jurisdiction of Cauayan City, Isabela, but which will undertake any of the following activities/projects: a. Relocate its principal offices from other places in the Philippines to Cauayan City, Isabela; or b. Expand its existing production capacity or construct new buildings and other civil works for the installation of new machinery and equipment or improvements thereof which will result in an increase in production capacity. 4. That the expansion/diversification shall have a capitalization of at least Five Million Pesos (P5,000,000.00) but less than Ten Million Pesos (P10,000,000.00) in case of a small-scale enterprise; at least Ten Million Pesos (P10,000,000.00) but not more than Forty Million Pesos (P40,000,000.00) in case of a medium-scale enterprise; and more than Forty Million Pesos (P40,000,000.00) in case of a large industry; Provided, that the amount of capitalization shall be based on the total project cost of such expansion/diversification as stated in the investor's project study submitted to and approved by the Board. 5. That the expansion/diversification shall provide out of the labor force an employment of no less than Ten (10) persons in case of a small-scale enterprise; at least Twenty (20) persons in case of a medium-scale enterprise; and at least Fifty (50) persons in case of a large industry, who are bona fide residents of Cauayan City, Isabela. SECTION 15. Application Requirements . Applications shall be filed with the Board, recorded in a registration book and the date appearing therein and stamped on the application shall be considered the date of official receipt thereof. A non-refundable filing fee of One Thousand Pesos (P1,000.00) shall be paid together with the following documents for registration: 1. Three (3) copies of completed application form to be provided for by the Board in accordance with the provisions of this code; 2. A copy of the complete project study of the proposed investment showing that the project is economically, technically, and financially feasible, viable and socially acceptable; aDSIHc 3. A copy of its Articles of Incorporation and By-laws as approved by the Securities and Exchange Commission and Board of Investments, as the case may be; 4. A certified true copy of its certificate of registration with the Securities and Exchange Commission, the Board of Investments and Department of Trade and Industry, as the case may be; and 5. Resolution of the applicant's Board of Directors, in case of corporation, authorizing the filing of application or letter request from the registered owner. SECTION 16. Approval and Registration Procedures . The Board is authorized to adopt rules and regulations to facilitate action on applications filed with it; prescribed criteria for the evaluation of several applications filed in preferred area; device standard's forms or use of applicants. SECTION 17. Certificate of Registration . A registered enterprise under this Code shall be issued a certificate of registration with the signature of its Chairman and/or such other office of the Board as it may empower and designate for the purpose. The certificate of registration shall be in such form and style as the Board may determine. CHAPTER VI Rights and Privileges SECTION 18. Rights and Privileges Guaranteed by the City Government . All investors and registered enterprises are entitled to the right and guarantees provided by law and the Constitution. In addition to such rights and guarantees, and to enhance confidence in the incentives program, the City Government Investment Incentive Board, shall: 1. Provide concise and comprehensive information to prospective investors on the economic priorities of the City Government, including target investment areas and the general conditions applicable to incoming direct private investments; 2. Disseminate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives; 3. Take the fullest possible account of the need of the investors for stability, growth and profit in their operations in the formulation or modification of policies and Ordinances that affect investment; 4. 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; 5. Avoid undue distortion of between or among enterprises 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; 6. 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 enterprises or for technology transfer; and 7. Resolve all doubts concerning the benefits and incentives granted under the Ordinances enacted for the purpose of encouraging investment, in favor of the investor. CHAPTER VII Incentives to Registered Enterprises SECTION 19. Tax Incentives to Registered Enterprises . In addition to the incentives provided by law and by the Local Government Code of 1991, registered enterprise qualified under this Code shall enjoy the following tax incentives: 1. Within a year from the start of official commercial operation, a registered enterprise under this Code shall be fully exempt from the Mayor's Permit, building permit fees, business sales taxes, locational clearance fee, annual inspection fee, zoning fee imposed under existing ordinance but excluding garbage fee. 2. Exemption from the payment of basic real property tax only on properties directly used in the business for a period of one (1) years from the date of the approval of the registration by the Board. But the concerned enterprise shall pay the special educational fund as imposed under the Tax Code of Cauayan City, Isabela. CHAPTER VIII Appropriations SECTION 20. Appropriations . An initial funding sourced-out from the 20% Development Fund and subsequently included in the general appropriation ordinance yearly thereafter to defray the expenses necessary for or incidental to the implementation of the provisions of this Code and of the Cauayan City Investment Incentives Board shall be sourced from the City Government fund as contained and hereby adopted. The City Government of Cauayan shall appropriate annually, based in a budget presented by the Board, the necessary funding requirements which is deemed necessary for the continued implementation of the provisions of this Code, subject to the usually government accounting and auditing rules and regulations. CHAPTER IX Final Provisions SECTION 21. Penal Clause . Any violation of the provisions of this Code, existing laws, Ordinances, rules and regulations, shall be ground for the cancellation or revocation of the registration of the business and the withdrawal of all incentives granted under this Code. SECTION 22. Separability Clause . The provisions of this Code are hereby declared to be separable and in the event that one or more of the other provisions are held illegal or unconstitutional, the validity of other provisions shall not be affected. SECTION 23. Repealing Clause . All ordinances, executive orders and rules and regulations in consistent or in conflict with the provisions of this Code are hereby repealed, amended or modified accordingly. SECTION 24. Effectivity . This ordinance shall take effect immediately upon its approval. ENACTED: September 2, 2011 . ETHIDa CERTIFIED CORRECT: ROMEO N. PEREZ City Secretary to the Sanggunian HON. LEONCIO A. DALIN, JR. City Councilor HON. EUGENIO B. ASIRIT, JR. City Councilor HON. ALEJANDRO Q. UY, III City Councilor (Absent) HON. RUBEN G. TUMBAGA City Councilor HON. EDGAR M. DE LUNA City Councilor HON. EDWIN G. LUCAS City Councilor HON. REYNALDO Q. UY City Councilor HON. SALCEDO T. FORONDA City Councilor HON. FRANCISCO N. MALLILLIN City Councilor HON. VICTOR G. DY City Councilor? LNB President HON. SAMANTHA EZRA L. DALIN City Councilor/SKF President (Absent) ATTESTED: HON. JOSE L. ABAD City Councilor & Presiding Officer Pro Tempore APPROVED: BENJAMIN G. DY City Mayor