The Expanded Iloilo City Investment Incentives Ordinance of 2006

July 5, 2006 Excerpt from the Minutes of the 25th Regular Session of the Sangguniang Panlungsod of the City of Iloilo, Philippines, Held at the Session Hall, 2nd Floor, Iloilo Terminal Market Building, on Wednesday, July 5, 2006. ILOILO CITY REGULATION ORDINANCE NO. 114-06 THE EXPANDED ILOILO CITY INVESTMENT INCENTIVES ORDINANCE OF 2006 Sponsored by Councilor Jed Patrick E. Mabilog, co-sponsored by Councilor Armand S. Parcon and seconded by Councilor Eduardo L. Penaredondo Be it ordained by Sangguniang Panlungsod of the City of Iloilo, as it is hereby ordained, that: CHAPTER I Title and Declaration of Policy SECTION 1. Title . This Ordinance shall be known as "The Expanded Iloilo City Investment Incentives Ordinance of 2006." SECTION 2. Declaration of Policies . It is the policy of the City of Iloilo to attract and promote domestic and foreign investments in identified priority areas of economy; to provide significant employment opportunities to local residents; to increase productivity and improve utilization of the city's resources; to improve the technical skills of people employed in the enterprises; and to create an environment conductive for the start up growth and expansion of business. The City shall grant fiscal and non-fiscal incentives to persons or entities whose business significantly support the above-stated policies. CHAPTER II Investment Incentives Board SECTION 3. The Iloilo City Investment Incentives Board . There is hereby created the Iloilo City Investment Incentives Board (ICIIB) to carry out the provisions of this Ordinance. SECTION 4. Composition of the Board . Chair: City Mayor Vice Chair: Chair, Iloilo Business Club Members: 1. Two (2) representatives of the Sangguniang Panlungsod a. Chair, SP Committee on Trade and Industry b. Chair, SP Committee on Tourism, Culture and Historical Affairs 2. Representative, Office of the City Mayor 3. City Treasurer 4. City Planning and Development Coordinator 5. City Legal Officer 6. Director, DTI-Iloilo 7. Director, DOLE-Region VI 8. President, Filipino-Chinese Chamber of Commerce of Iloilo, Inc. 9. President, Chamber of Commerce and Industry of Iloilo, Inc. 10. President, Bankers' Association of Iloilo 11. President, Philippine Retailers Association-Iloilo Chapter 12. President, Iloilo Hotels, Resorts and Restaurants Association A member of the Board shall designate a permanent alternate in his/her behalf. The membership of the Board may be changed through an amendment of this Ordinance by the Sangguniang Panlungsod (SP) upon the recommendation of the Board. SECTION 5. Meeting and Quorum of the Board . The Board shall meet at least once every quarter or as deemed necessary, at such day and time as it may fix. The presence of the majority of all the members shall constitute a quorum. SECTION 6. Powers and Functions of the Board . The Board shall establish policies and guidelines which will encourage domestic and foreign investments and business activities consistent with the development needs of Iloilo City. Pursuant to this, the Board shall be vested with the following powers and functions: CAIHTE a) To promulgate rules, regulations and guidelines for the implementation of this Ordinance; b) To receive, evaluate and approve all applications for incentives under this Ordinance; c) To identify, update or amend the Investment Priority Areas (IPA); d) To adopt an investment program, which shall list the priority investment areas/activities and prescribe the corresponding incentives and support measures; e) To review the package of appropriate incentives and support measures, and recommend the same to the City Council; f) To revise or discontinue the grant of incentives or support measures for a duly identified area of economic activity included in the Investment Priority Areas (IPA); g) To designate a Secretariat and a Technical Working Group (TWG) to assist the Board in the implementation of the provisions of this Ordinance; h) To source out materials and financial resources with other institutions in order to augment the budget allocated by the Iloilo City Government in carrying out projects and activities related to the implementation of this Ordinance; and i) To enter into agreements with other government agencies, and/or private sector organizations for the effective and efficient implementation of this Ordinance. CHAPTER III Definition of Terms SECTION 7. Definition of Terms . a) Board shall refer to the Iloilo City Investment Incentives Board (ICIIB) created under this Ordinance. b) Bonafide Resident refers to a person who has resided continuously for at least six (6) months in the City of Iloilo prior to his/her employment with the applicants enterprise. c) City shall mean the City of Iloilo covering all areas within its territorial jurisdiction as provided for by law and its charter. d) Employment refers to the hiring of individuals by the business. e) Existing Business/Enterprises shall refer to those business which are in operation and have secured appropriate city permits and licenses and whose production areas are located within the territorial jurisdiction of the City of Iloilo prior to the approval of this Ordinance and have not previously availed of the herein incentives. f) Expansion of Business/Enterprises shall refer to existing business which shall increase their capitalization, production capacity/volume of operation, employment and putting up of new physical structure and facilities in a different location, and have not previously availed of the herein incentives. g) Investment Amount Total amount of expenditure put up in the business. It shall include pre-opening, working capital requirements and physical or fixed assets but to exclude the cost of the land. For expansion projects, only the incremental or additional investments put up to operate the expansion shall be considered in determining the total amount of investment. h) New Business/Enterprises shall refer to those business which are not yet in operation prior to the approval of this Ordinance. i) Ordinance shall refer to the Expanded Iloilo City Investment Incentives Ordinance of 2006. j) Registered Business/Enterprises shall refer to any business/enterprises qualified and issued a Certificate of Registration to avail of incentives under this Ordinance. CHAPTER IV Investment Priority Areas SECTION 8. Investment Priority Areas (IPA). A list of priority investment shall be drawn up by the Board covering the following areas: a) Manufacturing and processing enterprises b) Export-oriented industries c) Tourism-oriented industries d) Utility companies engaged in power generation and distribution, water, transportation support facilities and those of similar in nature e) Information and Communication Technology Enterprises f) Agro-Fishery g) Social services 1. Health Care Services 2. Educational Institution 3. Low-Cost Housing 4. Sports and Recreation h) Commercial buildings applied to Section 8 (letters a-g) only. CHAPTER V Registration of Enterprises SECTION 9. Qualifications of New Business/Enterprises . New business/enterprises who intend to register and avail of the incentives provided in this Ordinance must meet the following qualifications: DETACa a) That the place of operation or production will be located within the territorial jurisdiction of the City of Iloilo. This shall include the opening of the Branch within Iloilo City by an enterprise conducting business outside of the City. b) Engaged or will engage in the areas of investment as listed in the Iloilo City Investment Priorities Plan. c) That the actual investment is at least Five Million Pesos (Php5,000,00.00) n which shall be based on the total project cost stated in the investor's study submitted to and approved by the Board. d) Will provide employment to bonafide residents of Iloilo City, of not less than: 25 for investment worth P5 Million but less than 20 Million 50 for investment worth P20 Million but less than 40 Million 100 for investment worth P40 Million and above Provided that enterprises/industries using information, communication technology facilities, automated devices and equipment and the like requiring highly technological expertise or training maybe exempted from this requirement subject to the review of Technical Working Group (TWG) duly created for the purpose by the Board subject to the review and recommendation of the TWG and approval of the Board. SECTION 10. Qualification of Existing Business/Enterprise . An existing business/enterprise who intend to register and avail of the incentives under this Ordinance, must meet the following qualifications: a) That the existing business/enterprise whose place of operation is already located within the territorial jurisdiction of the City of Iloilo, will expand its operation by an additional investment of at least Five Million Pesos (Php5,000,000.00) b) Will be able to hire additional employees who are bonafide residents of Iloilo City of not less than: 25 for additional investment worth P5 Million but less than P20 Million 50 for additional investment worth P20 Million but less than P40 Million 100 for additional investment worth P40 Million and above c) The prospective, business/enterprise has complied with all applicable laws d) The business/enterprise must engage in activities mentioned in the Iloilo City Investment Priorities Plan Provided that enterprises/industries using information, communication technology facilities, automated devices and equipment and the like requiring highly technical expertise or training maybe exempted from this requirements subject to the review of Technical Working Group (TWG) duly created for the purpose by the Board. Findings/recommendations shall be subject to the approval of the Board subject to the review and recommendation of the TWG and approval of the Board. SECTION 11. Limitations on Availment of Incentives . Investors and enterprises referred to under Sections 9 and 10 of this Ordinance can avail of the incentives granted herein only once. SECTION 12. Requirements . Investor/enterprise qualified under Sections 9 and 10 of this Ordinance shall file the application not later than sixty (60) days from the start of its commercial operations. The application shall be considered officially accepted upon submission and/or payment of all the following: a) Three sets of the following documents: 1) Duly filled-up and notarized application form to be provided by the Board in accordance with the provisions of this Ordinance; 2) Certified true copy of applicant's Certificate of Registration with the Securities and Exchange Commission, Department of Trade and Industry, Cooperative Development Authority or other concerned government licensing agency, as may be applicable; 3) Project study of the proposed investment showing that the project is economically, technically, and financially feasible and viable; 4) Secretary's Certificate of the Board's resolution authorizing the applicant and the designation of the representative to sign documents and transact business with the Board; 5) For existing enterprise, an audited financial statement and income tax return for the past three (3) years; and 6) Other documents as may be required by the Board. b) Payment of non-refundable filing fee of One Thousand Pesos (Php1,000.00) for each application. Provided that all the documentary requirements specified under Section 12-a have been duly complied with. SECTION 13. Approval . The Board shall act on applications within thirty (30) working days from the receipt of complete requirements specified under Section 12. SECTION 14. Issuance of Certificate of Registration . An Enterprises/Investor whose application was approved under this Ordinance shall be issued a Certificate of Registration duly signed by the City Mayor and/or the Chairman of the Board. The Certificate of Registration shall be issued upon payment of a non-refundable registration fee in the following amount: P2,000.00 for investment or total project cost of P5 Million but less than P10 Million P5,000.00 for investment or total project cost of P10 Million but less than P20 Million P10,000.00 for investment or total project cost of P20 Million but less than P30 Million P15,000.00 for investment or total project cost of P30 Million but less than P40 Million P25,000.00 for investment or total project cost of P40 Million and above CHAPTER VI Incentives to Registered Enterprises SECTION 15. Period of Availment . A registered enterprise shall enjoy the fiscal incentives provided herein for a fixed period corresponding to the actual amount of investment put up by the investor/enterprises under the following brackets: aDSIHc Investment Incentive Period P5 Million but less than P20 Million One Year P20 Million but less than P40 Million Two Years P40 Million and above Three Years SECTION 16. Reduction of Business Taxes . A registered enterprise under this Ordinance shall enjoy a reduction of business taxes based on gross sales/receipts or realized during the preceding calendar year, to wit: a) New Enterprises: Year of Operation % of Reduction First Year 75 Second Year 50 Third Year 25 b) Expanding Enterprises: Year of Operation % of Reduction First Year 60 Second Year 40 Third Year 20 SECTION 17. Non-Fiscal Incentives . A registered enterprise shall be entitled to the following non-fiscal incentives which include but not limited to: a) Assistance in securing additional business permits and other related data b) Facilitating access to financial and technical assistance programs of the government c) Facilitating service connections with local utilities and other services as maybe recommended by the Board. SECTION 18. Tax Credits . Enterprises that have been granted incentives under this Ordinance but have paid their corresponding business taxes prior to the approval of the grant of incentives shall apply such payment as tax credits for its subsequent business tax obligations. CHAPTER VII Final Provisions SECTION 19. Appropriations . The amount of two hundred thousand pesos (P200,000.00) shall be appropriated chargeable against the 20% Development Fund of the Internal Revenue Allotment (IRA) of the City Government to defray the necessary or incidental expenses for the implementation of the provision of this Ordinance. Thereafter, the City Government shall annually appropriate funds based on the proposed budget submitted by the board. SECTION 20. Implementing Rules and Regulations (IRR) . Within 30 days from the effectivity of this Ordinance, the Board shall formulate the corresponding Implementing Rules and Regulations which shall take effect upon approval by the City Mayor. SECTION 21. Interpretation . All disputes pertaining to the interpretation and implementation of this Ordinance shall be resolved in favor of the City of Iloilo. SECTION 22. Penal Clause . Violation of any provisions of this Ordinance shall carry an imprisonment of not exceeding three months or a fine not exceeding P5,000.00 and/or revocation of incentives depending on the gravity of the violation as determined by the Board. SECTION 23. Judicial Relief. All orders or decisions of the Board/City Government in cases involving the provisions of this Ordinance shall immediately be final and executory. SECTION 24. Separability Clause . The provisions of this Ordinance are declared separable. The invalidity of the other provisions or of one or more provisions shall not affect the validity of the other provisions thereof. SECTION 25. Repealing Clause . All Ordinances, Executive Orders, Implementing Rules and Regulations and all issuances inconsistent with the provisions of this Ordinance are hereby repealed or modified accordingly. SECTION 26. Effectivity . This Ordinance shall take effect fifteen (15) days after its publication in a newspaper of local circulation. ENACTED. July 5, 2006. I hereby certify to the correctness of the above-quoted ordinance. (SGD.) RUTH H. ARROYO Board Secretary IV COUNTERSIGNED: (SGD.) GUILLERMO Y. DE LA LLANA Presiding Officer APPROVED: (SGD.) JERRY P. TREAS City Mayor ATTESTED: (SGD.) DIOSDADA C. CARADO City Secretary n Note from the Publisher: Copied verbatim from the official copy.