Isabela Investment and Incentives Code of 2006

May 2, 2006 Excerpt from the Minutes of the Regular Session of the Sangguniang Panlalawigan of Isabela Held at Ilagan on May 2, 2006. Present: Hon. Ramon M. Reyes Vice Governor & Presiding Officer Hon. Cesar C. Purugganan Floor Leader Hon. Jesus A. Cruz, Jr. Member (1st District) Hon. Kiryll S. Bello Member (1st District) Hon. Ysmael G. Atienza Member (3rd District) Hon. Matthew Joseph P. Alindada Member (4th District) Hon. Joel Amos P. Alejandro Member (3rd District) Hon. Virgilio A. Padilla Member (4th District) Hon. Cecilia Claire N. Reyes Member, PCL President Isabela Chapter Hon. Marlon N. Mapagu Member, LMB Federation President Hon. Francisco Ignacio D. Ramirez V. Member, SK Federation, President Absent: Hon. Ma. Josephine B. Borromeo Member (1st District) Hon. Ana Cristina S. Go Member (2nd District) Hon. Bartolome A. Mallillin Member (3rd District) ISABELA PROVINCIAL ORDINANCE NO. 001-06 AN ORDINANCE ENACTING THE ISABELA INVESTMENT AND INCENTIVES CODE OF 2006 Sponsored by: Hon. Matthew Joseph P. Alindada Chairman, Committee on Commerce Trade and Industry Co-Sponsored by: Hon. Cesar C. Purugganan Chairman: Committee on Laws, Rules and Regulations Co-Sponsored by: Hon. Jesus A. Cruz, Jr. Chairman, Committee on Oversight and Accreditation WHEREAS, to accelerate the sound development of the province, it is the policy of the Provincial Government of Isabela to encourage new investments and promote investments expansion and diversification of environmentally safe industries; WHEREAS, Republic Act 7160 otherwise known as the Local Government Code of 1991, provides that Local Government Units may, through ordinances, grant tax exemptions, incentives or relief under such terms and conditions as they may be deemed necessary; WHEREAS, the Sangguniang Panlalawigan see the need to formulate and enact the Isabela Investment and Incentives. Code of 2006 to further enhance the competitiveness of Isabela in terms of attracting investors to do business in this province; WHEREFORE, be it enacted by the Sangguniang Panlalawigan of Isabela in session assembled to enact: SECTION 1. Title. This ordinance shall be known as the "ISABELA INVESTMENT AND INCENTIVES CODE of 2006". SECTION 2. Declaration of Policy Objectives . It is hereby declared as a policy of the Provincial Government of Isabela to promote and encourage domestic and foreign investment in the province. Pursuant to the objectives are the following: a) To encourage investments that would optimize local human, physical and natural resources in the province within the context of sustainable and equitable development; b) To showcase and promote Isabela's products and services; c) To provide a package of fiscal and non fiscal incentives for investors in preferred investment areas; and d) To ensure investment-friendly atmosphere free enterprise and private initiatives and a guarantee of non-political interference. SECTION 3. Scope and Coverage. This code shall cover all persons, entities or enterprises engaged in preferred areas of investment. CHAPTER 2 n Definition of Terms SECTION 4. Definition of Terms . When used in this Code, the following terms and phrases shall mean as follows: a) "IIPC" refers to the Isabela Investment Promotion Center (IIPC); b) "Board" refers to the Isabela Investment and Incentives Promotion Board (IIIPB); c) "Council" Refers to the Investment Promotion Council (IPC); d) "Code" refers to the Isabela Investment and Incentive Code of 2006 (IIIC); e) "Province" refers to the Isabela Province of Isabela; f) "Existing Enterprises" refers to this established businesses whose places of operation or production are physically located within the Province; g) "Capitalization" refers to the total or initial investment which may be in cash or in property excluding land; h) "Expansion and Diversification" refers to increased existing registered capacity and coverage of production upgrading of registered quality goods and services or efficient utilization of idle equipment; i) "Incentive" refer to fiscal and non fiscal incentives as provided for in this code; j) "New Enterprises" refer to investors or enterprises that have not or are not currently engaged in any kind or type of business in Isabela but intends to establish their operation or production in Isabela; k) "Preferred Areas of Investment" refer to economic activities or sectors declared as priority investment areas by the Isabela Investment Promotion Board in accordance with the provisions of the Code; and l) "Registered Enterprises" refer to the enterprises or businesses registered in accordance with the provision of the Code. CAIHTE CHAPTER 3 Isabela Investment and Incentives Board SECTION 5. Creation of the Isabela Investment and Incentives Board There is hereby created a body to be known as the Isabela Investment and Incentives Board (IIIB). SECTION 6. Composition of the Board . The Board shall be composed of the following: Chairman: Vice Governor/Presiding Officer Co-Chairman: Floor Leader Members: Sangguniang Panlalawigan members SECTION 7. Board Meeting and Quorum . Within 30 days upon approval of this code, the Vice Governor in her capacity as Chairman, shall convene the Isabela Investment and Incentives Board. The Board shall meet quarterly or as often as necessary, on such a day and time as it may be fixed. The presence of the majority of its members shall constitute a quorum. SECTION 8. Powers and Functions of the Board . The Board shall perform the following powers and functions: a) To formulate investment policies in accordance with existing national and local laws rules and regulations; b) To evolve and adopt investment promotions with the corresponding incentives and support measures; c) To grant fiscal and non-fiscal incentives granted to registered enterprises; d) To review, evaluate and grant applications for incentives of registered enterprises upon recommendation of the Isabela Investment Promotions Council; e) To suspend or cancel the enjoyment of incentives or benefits of any registered enterprise for failure to maintain the requirements/qualifications required under this Code. CHAPTER 4 Isabela Investment Promotions Council SECTION 9. Creation of Isabela Investment Promotion Council . There is hereby created a body to be known as the "Isabela Investment Promotions Council. " SECTION 10. Composition of the Council. The Council shall be composed of the following: Chairman: Governor Co-Chairman: PCCI Representative Regular Member: Chairman, Committee on Trade and Industry of the Sangguniang Panlalawigan President, League of Municipalities City Mayor Regional Line Agencies (DTI, DENR and DA) Academe (Isabela State University and Private Schools Representative) Civil Societies Organization Representative/s Provincial Planning and Development Coordinator Provincial Treasurer On Call Members: * Other Line Agencies/Entities The secretariat shall be formed or designated by the council. SECTION 11. Council Meeting and Quorum . Within sixty (60) days upon approval of this Code, the Governor in his/her capacity as Chairman, shall convene the IPC. The Investment Promotion Council shall meet quarterly or as often as necessary, on such a day and time as it may be fixed. The presence of the majority of its members shall constitute a quorum. SECTION 12. Powers and Functions of the Council . The Council shall perform the following powers and functions: a) To encourage and initiate the conduct of technical researches on the priority investment areas of promotions; b) To monitor and supervise the operations and activities of the Isabela Investment Promotions Center (IIPC). CHAPTER 5 The Isabela Investment Promotion Center SECTION 13. Isabela Investment Promotion Center (IIPC). There is hereby created a center in the province which shall be hereinafter referred to as Isabela Investment Promotion Center (IIPC). The IIPC shall have the following duties and functions: a) To aggressively undertake extensive investment promotion, programs and activities; b) To serve as a one-stop action center; c) To establish and maintain relevant and up-to-date data on general business information; d) To develop and maintain linkages and network locally and internationally; and e) To act as Secretariat of the Investment Promotions Council. SECTION 14. Structure and Manpower Complement . The Center shall be managed by a full-time Head who will be responsible in the overall management of the Center. He/She shall be recommended by the Investment and Incentives Board for appointment/designation by the Provincial Governor subject to existing Civil Service personnel rules and regulations. The manager shall have four (4) staff. Aside from the staff complement of the Provincial Government of Isabela, the Center shall be supported by technically competent staff from other agencies. SECTION 15. Isabela Investment Promotion Center Services . Pursuant to its duties and functions, the Isabela Investment Promotion Center (IIPC) shall provide the following services, among others: a) Provision of Investment Information; b) Provide Investment servicing such as but not limited to business counseling and joint venture matching; c) Organize relevant investment marketing activities such as trade fair/business mission and site visits; d) Make referrals to concerned agencies, support organizations, service providers and important contracts; and e) Facilitate investors' completion or required documents. CHAPTER 6 Preferred Areas of Investment SECTION 16. Criteria in Determining Investment Priority Areas . The determination of preferred areas of investment shall be based on the following: a) Long term benefits; b) Economic viability and/or feasibility; c) Extent of compatibility of the activity/ies to the Province's development goals; d) Product innovativeness and technological advancement; e) Health and Social impact of the project; f) Local manpower generation; and g) Development and utilization of local & indigenous resources; h) Sustainability with local and national environmental policies. SECTION 17. Preferred Areas of Investments . The following shall be the Preferred Investment Areas: 1. Agriculture based Enterprises: a) Cereal production, processing and Trading DETACa b) Root Crop Production, Processing and Trading c) Legumes Production, Processing and Trading d) Plantations and Orchards Production, Processing and Trading e) Marine and Aquaculture Production, Processing and Trading f) Livestock and Poultry Production, Processing and Trading g) Seeds and Seedlings Production and Trading h) High Value Vegetable Production, Processing and Trading i) Feeds Manufacturing j) Organic Fertilizer Production k) Special Agro-Fishery Production and Enterprises 2. Industrial tree plantation & minor based forest products 3. Ceramics and Tiles Production 4. Gifts and Holiday Decors Manufacturing 5. Infrastructures and Utilities 6. Medical Facilities and Services 7. Tourism Facilities and Services 8. Amusement and Recreation Facilities and Services SECTION 18. Investment Priority Plan (IPP) . The Board shall formulate an IPP on preferred areas embodying specific details. SECTION 19. Determination of Additional Investment Areas . Additional economic activities may be included in the list of preferred investment areas as maybe recommended by the Investment Promotion Council and approved by the Board. The inclusion of activities may be included in the list of preferred investment should be based on the following factors: 1) generation of high level employment, 2) high degree of value-added features, 3) creation of linkages with local industries, 4) no deleterious effect on the environment. The Board, however, may recommend to the Sangguniang Panlalawigan for the deletion of an area or activity from the list, when any of the following conditions is present (1) sufficient investment in the areas or activity has been attained; (2) continued extension of incentives or support measures for the specific investment areas is no longer to the interest of the public; and (3) lack of progress in the implementation of an environmental management plan. SECTION 20. Review of Investment Incentives and Support Measures . To promote the growth of investment in Isabela particularly in the preferred investment areas; the Council shall conduct periodic review of the package of incentives and support measures and may likewise recommend for consideration of the Board appropriate specific fiscal and non-fiscal incentives that the province may grant. CHAPTER 7 Qualifications of Enterprises and Requirements of Availments SECTION 21. Qualifications of New Enterprises . Enterprises which intend to avail of the incentives provided by this Code must meet the following qualifications: a) Must be duly registered with the Local Government, D.T.I., S.E.C., B.I.R., C.D.A. (if Cooperative); b) Must have complied with all the requirements indicated under the law, both local and national; c) Must have its principal office/place of operation or production in the Province; d) Must engage in business in the preferred areas of investment; e) Must have capitalization/cash outlay of at least Php3 Million Pesos; and f) Must get at least 70% of its workers/employees from the manpower pool of the province or locally. SECTION 22. Qualification of Existing Enterprises . Any existing enterprise may avail of the incentives provided it meets the following qualifications: a) Must have complied with all the requirements indicated under the law, both local and national; b) Must have an additional investment of at least 50% of its current capital, provided that the total amount of capitalization for expansion is not less than Php3 Million; and c) The expansion or diversification must include an environmental management plan. SECTION 23. Documentary Requirements . New or existing enterprise shall file its application for availment of incentives with the Council through the Isabela Investment Promotion Center (IIPC). The following documents shall be submitted: a) Three (3) copies of duly accomplished application forms to be provided by the Isabela Investment Promotion Center (IIPC); b) A copy of Certificate of Registration issued by the Securities and Exchange Commission or the Department of Trade and Industry or Board of Investments or the Cooperative Development Authority, as the case may be; c) For existing enterprises, a copy of the latest financial statement of the applicant firm duly certified by a Public Accountant; and d) For corporations and cooperatives, a board resolution authorizing the applicant-representative to file the application and a copy of Articles of Incorporation and/or By-Laws; e) Application fee shall be One thousand pesos Php1,000.00. SECTION 24. Application Procedures . The Investment Promotion Council (IPC) shall formulate appropriate rules and regulations to facilitate the screening, processing and approval of applications field and devise standard forms for use by the applicants. CHAPTER 8 Fiscal and Non-Fiscal Incentives SECTION 25. Fiscal Incentives to Registered Enterprises . In addition to the incentives provided under Republic Act 7160, otherwise known as "Local Government Code of 1991" and other pertinent laws as maybe enacted by the government, a registered enterprise shall under this code maybe granted subject to approval of the Board enjoy the following fiscal incentives: 1. Use of real properties owned by the Provincial Government for free for a period not exceeding 3 years; 2. Exemption from payment of basic real property tax as provided herein: a. For enterprises established in 5th and 6th class municipalities for a period of six (6) years; and b. For enterprises established in 2nd and 3rd class municipalities for a period for 3 years. Provided that the tax exemption should pertain only to the thirty-five (35%) percent share of the province. 3. Exemption from tax on transfer of real property ownership for a period not exceeding 3 years. 4. Exemption from franchise tax for a period not exceeding 3 years. aDSIHc SECTION 26. Non-Fiscal Incentives . Registered enterprises may be granted the following non-fiscal incentives: 1. Site selection and registration assistance 2. One-stop documentation center/processing application (streamlining of bureaucracy) 3. Labor recruitment and arbitration assistance 4. Assurance of peace, order and safety 5. Provincial Government sponsored manpower development training 6. Recognition of outstanding enterprise 7. Provision of technical assistance and services CHAPTER 9 Implementing Rules and Regulations SECTION 27. Implementing Rules and Regulations (IRR) . The Isabela Investment code through the Board shall formulate by the Implementing Rules and Regulations for the efficient and effective implementation of this Code within thirty (30) days upon approval hereof. CHAPTER 10 Appropriations SECTION 28. Appropriations . An initial fund for the operation of the Investment Promotion Center shall be appropriated by the Province. In the subsequent years, the Provincial Government shall appropriate annually based on the budget presented by the Council , subject to the approval of the Chief Executive, confirmation of the Sangguniang Panlalawigan and the usual government accounting and auditing rules and regulations. CHAPTER 11 Final Provisions SECTION 29. Separability Clause . It is declared that the provisions of this Code are separable, and in any event that one or more the provisions are declared illegal or unconstitutional by a competent court, the validity of the other provisions shall not be and shall continue to be in force and effect. SECTION 30. Repealing Clause. All ordinances, executive orders, rules and regulations inconsistent or in conflict with the provisions of this Code are hereby repealed, amended or modified accordingly. SECTION 31. Effectivity . This Ordinance shall take effect immediately upon its approval and circulation within the province. Approved, May 2, 2006. I hereby attest to the correctness of the above-quoted ordinance. (SGD.) ATTY. FERDIMAR A. GARCIA Secretary, Sangguniang Panlalawigan ATTESTED BY: (SGD.) RAMON M. REYES Vice Governor & Presiding Officer APPROVED: (SGD.) MA. GRACIA CIELO M. PADACA Provincial Governor n Note from the Publisher: Copied verbatim from the official copy. Missing Chapter 1.