The Revised Municipal Investments And Incentives Code of Lal-Lo, Cagayan

February 10, 2014 Excerpts from the Minutes of the 30th Regular Session of the 8th Sangguniang Bayan of Lal-lo, Cagayan Held at the SB Session Hall on Monday, February 10, 2014. PRESENT: Hon. Florence Oliver B. Pascual Vice Mayor/Presiding Officer Hon. Antonio G. Villanueva SB Member Hon. Ricardo D. Dupaya SB Member Hon. Florante P. Paat SB Member Hon. Jamaica Indira U. Israel SB Member Hon. Winston L. Rosales SB Member Hon. Jimmy L. Siriban SB Member Hon. Aladino G. Dupaya, Jr. SB Member Hon. Henry L. Jose SB Member Hon. Roger T. Vinarao Ex-Officio Member ABSENT: None LAL-LO ORDINANCE NO. 004-14 THE REVISED MUNICIPAL INVESTMENTS AND INCENTIVES CODE OF LAL-LO, CAGAYAN Be it enacted by the Sangguniang Bayan of Lal-lo, Cagayan: HTcADC CHAPTER 1 Title and Declaration of Policy SECTION 1. Title. This ordinance shall be known and cited as the "The Revised Investments and Incentives Code of Lal-lo, Cagayan. SECTION 2. Declaration of Investment Policy. It is hereby declared as a policy of the Municipal Government to promote and encourage domestic and foreign investments in the Municipality of Lal-lo. Along this line, the following investment policies are hereby declared: a. To encourage investment projects that would utilize local labor, substantial amount of indigenous raw materials, and other natural resources of the municipality and adjacent municipalities; b. To promote the optimal utilization of natural resources management enunciated in existing local ordinances; c. To promote the marketing of Lal-lo products in order to maximize production, attain self-sufficiency and optimal productivity; d. To attract and encourage investment in priority areas; such as agri-business, basic and support industries, eco-tourism, and other activities that will significantly contribute to the socio-economic development of the municipality; e. To promote the Municipality of Lal-lo as a favorable investment destination with adequate power, adequate water resources, free urban congestion and pollution and easily accessible to Asia Pacific Region and other global markets; f. To encourage investment in business activities that will provide livelihood and employment to improve the quality of life and assure that the benefits of development shall accrue to the people of Lal-lo; and aScITE g. To promote the active participation of non-government organizations; and the private sector as partners and catalyst in achieving the development goals of the municipality. SECTION 3. Scope and Coverage. This Code shall apply to all persons, entities or enterprises, belonging to preferred areas of investment such as: agri-business, basic and support industries, eco-tourism and services, and other areas of investments as maybe determined from time to time by the Board. CHAPTER 2 Definition of Terms SECTION 4. Definition of Terms. When used in this Code, the following terms and phrases shall mean as follows: a. "LIPU" shall refer to the Lal-lo Investment Promotion Unit created under this Code that serves as the Secretariat and implementing arm of the Board; b. "Board" shall refer to the Lal-lo Investment Incentives Board (LIIB); c. "Code" shall refer to the Revised Investments and Incentives Code of Lal-lo, Cagayan; d. "Municipality" shall refer to the Municipality of Lal-lo covering all the areas within its territorial jurisdiction now existing or hereinafter acquired, as provided for by laws and its charter; e. "Existing Enterprises" shall refer to those establishment or enterprises whose places of operation or production are physically located with the territorial jurisdiction of Lal-lo at the time of the approval of this Code; f. "Expansion projects" include modernization and rehabilitation, and shall mean an increase of existing volume or value of production, or upgrading the quality of registered product or utilization of inefficient or idle equipment, under such guidelines as the Board may adapt; HEITAD g. "Incentives" shall refer to fiscal and non-fiscal incentives as provided for in this Code; h. "Local Personnel or Worker" refers to a person who is a bona fide resident of Lal-lo employed in an enterprise registered under this Code; i. "New Investors/Enterprise" shall refer to investors or enterprises that have not or are not currently engaged in any kind or type of business in Lal-lo but intended to, or actually established, their place of operation or production in Lal-lo; j. "Preferred Areas of Investment" refer to economic activities registered in accordance with the provision of the Code; k. "Registered Enterprises" refer to enterprises or business registered in accordance with the provision of the Code; l. "Municipal Fishing" fishing in municipal waters which include not only streams, lakes, inland bodies of water within the municipality which are not included within the protected areas as defined under RA 7856 (NIPAS Law), public forest, timber lands, forest reserves or fishery reserves, but also marine waters included between two (2) lines drawn perpendicular to the general coastline where the sea water touch the shoreline at low tide and a third line parallel with the general coastline including offshore islands and fifteen (15) kilometers from such coastline. m. "Commercial Fishing" the taking of fishery species by passive or active gear for trade, business or profit beyond subsistence or sports fishing, to be further classified as: 1. Small Scale Commercial Fishing fishing with passive or active fishing gears utilizing fishing vessels of from 3.1 to 20 gross tonnage: 2. Medium Scale Commercial Fishing fishing with active or passive fishing gear utilizing fishing vessels of from 20.1 to 150 gross tonnage; 3. Large Scale Commercial Fishing fishing utilizing active or passive fishing gears and vessels of more than one hundred fifty (150) gross tonnage; CHAPTER 3 Lal-lo Investments and Incentives Board SECTION 5. Creation of Lal-lo Investment and Incentives Board. There is hereby created a body to be known as the Lal-lo Investment and Incentives Board (LIIB) to implement the provisions of this Code: ATICcS SECTION 6. Composition of the Board. This Board shall be composed of the following: Chairman : Municipal Mayor Vice-Chairman : Vice-Mayor Members : Chairman, SB Committee on Appropriations : Chairman, SB Committee on Market Affairs : Municipal Agriculture Officer : Municipal Planning and Development Coordinator : Tourism Officer : (4) Business Sector/NGO Representatives Transportation Sector Hotel Operators Sector Market Vendors Representative Cooperative Sectors Ex-Officio Members : Business Permit and Licensing Officer : Municipal Treasurer : Municipal Engineer : MENRO : Local Investment Promotion Officer The membership of the Board may be increased or decreased by the Sangguniang Bayan as the need arises. SECTION 7. Board Meeting and Quorum. Within sixty (60) days upon approval of this Code, the Municipal Mayor, in his capacity as Chairman, shall convene the Board after appointing the members mentioned in Section 7 hereof. The Board shall meet at least once in every quarter or as often as maybe necessary, on such a day and time as it may fix. The presence of a quorum, which is the simple majority of its voting members, shall be required to exercise its powers and perform its functions. The voting members of the Board shall are the Vice-Chairman and the regular members. Ex-officio members are not entitled to vote while the Chairman of the Board shall vote only to break a tie. In the event that the Chairman and the Vice-Chairman are both absent, the members present may elect from among themselves the Temporary Chairman, provided that a quorum is attained. SECTION 8. Powers and Functions of the Board. The primary functions of the Board shall be: 1. To establish a favorable and stable policy on business that will encourage and support private sector investments; and 2. To assist in the operation of business activities consistent with the development needs and environment objectives of the municipality. In pursuance to this, the Board shall be vested with the following powers and functions: a) To formulate the rules and regulations to implement the intents and provisions of this Code; b) To initiate the conduct of technical researches on the priority investment areas to be promoted as well as the appropriate incentives and measures to be extended to registered enterprises; c) To formulate and adopt a short term, medium term and long-range investment promotions program and the corresponding incentives and support measures to be used to attract targeted investors; d) To provide direction for the operations and activities of the Lal-lo Investment Promotion Unit (LIPU) for the effective implementation of the provisions of this Code; e) To review and update the fiscal and non-fiscal incentives granted to registered enterprises under this Code every three (3) years; f) To promote Lal-lo as the "eco-tourism destination and hub of commerce and trade in the North". TIADCc g) To approve or reject applicants who want to avail of the investment incentives and privileges, and to issue Certificate of Registration and Exemptions. h) After due notice, cancel the registration or suspend the enjoyment of incentives or benefits of any registered enterprise for: (1) Failure to maintain the qualification for registration required under this code. (2) Violations of any provision of this Code and its implementing rules and regulations or of the terms and conditions of registration and the availment of incentives; i) To enter into agreement with any entity for the purpose of simplifying systems, procedures and requirement on investments and business operation in the Municipality; j) To look for additional areas where business opportunities is viable; k) To implement the provision of the Local Investment Incentives Code; l) To file charges against unscrupulous or illegal business activities; m) To assist in securing financial and technical assistance for business sectors; n) To provide directives to Investment Promotion Unit in extending extensive assistance to investors; o) To perform such other duties and functions as the need arises. CHAPTER 4 Lal-lo Investment Promotion Unit SECTION 9. Creation of the Lal-lo Investment Promotion Unit (LIPU). There is hereby created a Lal-lo Investment Promotion Unit, hereinafter referred to as LIPU that will serve as the Secretariat of the Board. The following shall be the members who shall be appointed by the Municipal Mayor through an Executive Order: Unit Head - The Secretary to the Sangguniang Bayan Members - 1 A Representative of the Treasury Office 2 The Chief of the Licensing Unit 3 A representative of the Mayor's Office 4 A representative of the MPDC Office In addition, the LIPU shall have the following duties and function: a) To undertake pro-active market development and investment promotion activities; b) To serve as a one-stop processing and approval center for existing and potential investors and enterprises; c) To assist in (1) securing licenses and permits, (2) arranging for the availment of local and national government incentives, and (3) identifying business or joint venture partners, raw, materials suppliers, possible business sites and other requirements of existing and potential investors and enterprises; d) To establish and maintain data on general business information on economic activities, available technology, financing sources and other relevant data or information; e) To network with counterpart investment promotion organizations and coordinate with support agencies of government and the private sector in investments promotion efforts; and f) To build the competence of LIPU staff in conducting investment and environment management promotion functions; AIDSTE g) To perform such other duties and functions as may be deemed necessary to carry out the objectives of the Code; SECTION 10. Lal-lo Investment Promotion Unit Services. Pursuant to its duties and function, the Lal-lo Investment Promotion Unit (LIPU) shall, among others, provide the following services: a) Provide information on investment opportunities, business procedures, permit requirements, government regulations and other data required by the investors; b) Assist investors in completing the requirements of government regulatory agencies; c) Make referrals to relevant government bodies, support organizations, service providers and important contracts; d) Organize appointments, itineraries and site visits including facilitating arrangements for logistical support; e) Make update on major infrastructure projects in the municipality both existing and planned, as well as the programs and developments that will impact the business environment; f) Undertake an active advocacy campaign to push infrastructure programs aimed at providing necessary facilities, as well as policy reforms to enhance municipality's tourism and agri-business investment climate. g) Other services that will be determined from time to time. CHAPTER 5 Investment Priority Areas SECTION 11. Criteria in Determining Investment Priority Areas. Based on a series of strategic planning workshops undertaken by the Technical Working Group created for the purpose, and also attended by all the Barangay Captains and municipal officials and department head, economic activities were included in the Investment Priority Areas considered to be environmentally, socio-economically and technically sound. The determinations of the preferred areas of investment to be listed in the Investment Priorities Plan were based on the following: a) Long run comparative advantage b) Economic soundness c) Extent of contribution of the activity to specific development goals d) Market and technical consideration e) Value of social objectives f) Other indicators of comparative advantage The criteria in determining investment priority areas shall be reviewed by the Board on a yearly basis subject to consultation with the concerned sectors and shall be adopted by a simple majority vote of all the voting members of the Board. SECTION 12. Investment Priority Areas. In the initial years of implementing the provisions of this Code, the following shall be adopted as Investment Priority Areas (IPAs) by the Board: I. Agriculture, Food and Forestry A. Agriculture, Fishery and Processed Food Coconut plantation Hybrid corn Hybrid rice production Poultry/livestock production Aqua-marine production such as but not limited to: - Tilapia production - Production of other aqua marine products Fish processing such as but not limited to frozen fish, chilled fish and canned fish AaCTcI Nursery for hybrid seeds, seedling or planting materials Hatchery High value crops and vegetables I. Basic Industries/Sectors Organic fertilizer Offshore fishing industry Post harvest facilities such as but not limited warehousing, drying, and milling of grains Fish ports, wharfs, ice plant and cold storage facilities Housing projects/real estate development II. Support Industries/Services 1. Common Carriers (land, air and water transportation) 2. Infrastructure a) Electric Power Transmission (400 Volts) b) Development and rehabilitation of existing roads and bridges c) Telecommunications (landline) d) Potable Water Supply and Distribution e) Irrigation facilities f) Establishment of abattoir g) Manufacturing and processing plant 3. Tourism a) Development of eco-tourism destinations b) Development of tourism facilities (hotels, resorts, tourist inns, restaurants, health spa and others) c) Tourist transport ( e.g., yacht, cruising boats, tourist buses/vans) d) Souvenir shops 4. Industrial Services a) Establishment of markets/trading/commercial centers b) Establishment of furniture common service facilities c) Training demonstration centers for agriculture and fisheries d) Education Facilities e) Health Facilities f) Banks and other financial and lending institutions g) Agriculture and fisheries information technology center III. Mandatory Inclusions A. Industrial Tree Plantation G Melina, Ipil ipil, Narra B. Exploration, Mining, Quarrying and Processing of Mineral Resources C. Ecological Solid Waste Management SECTION 13. Determination of Additional Investment Areas. a) Additional economic activities may be included in the list of priority investment areas by the Board and shall then be adopted for implementation under the Lal-lo Investment Promotion Program. EcTCAD The inclusion of investment priority areas should be based on the following factors: (1) Generation of high levels of employment, (2) High degree of value-added features, (3) Creation of linkages with local industries, (4) No deleterious effect on the environment. b) The Board, however, may remove an area or activity from the list, at any point, when any of the following conditions is present. 1. Sufficient investment in the areas or activity have been attained; 2. Continued extension of incentives or support measures for the specific investment areas is no longer to the interest of Lal-lo or may place the government and the public in adverse position; 3. The investment area or activity cannot attract investors within reasonable time and cost or may result in unfavorable business climate; and 4. Lack of progress in the implementation of an environmental management plan. SECTION 14. Review of Investment Incentives and Support Measures. To promote the growth of investment in the municipality particularly in the preferred investment areas; the Board shall review the package of incentives and supports measures once in every three (3) years, and recommend for approval to the Sangguniang Bayan the appropriate fiscal and non-fiscal incentives that the government shall grant to targeted investors and enterprises. CHAPTER 6 Registration of Enterprises SECTION 15. Qualification for New Enterprises. All new enterprises intending to avail of the incentives provided for in this Code must meet the following requirements: a) The business enterprise must have complied with all the requirements indicated under the law, both local and national; b) Project must not negatively impact the environment, whether in terms of pollution or resource use; c) Registered with Securities and Exchange Commission (SEC) in the case of a corporation and partnership, with Department of Trade and Industry in case of Single Proprietorship, and with all the requirements mandated under existing laws, local and national and under the Philippine Constitution; d) The prospective investors place of operation or production shall be located within the municipality; e) The prospective investment must engage in any of the areas or activities cited in the preferred areas of investment as may hereafter be declared by the Board; f) The new enterprise must have a capitalization of at least Three Million pesos (Php3,000,000.00); provided that the amount of capitalization shall be based on the total project cost as stated in the investor's project study submitted to and approved by the Board; g) The new enterprise shall actually employ qualified bona fide residents of the municipality of Lal-lo equivalent to at least 60% of its total labor/manpower requirements, both skilled and non-skilled. That in case the total labor force requirement cannot be provided by the municipality, then the new enterprise is allowed to hire from other places to complete its labor force requirement; HSAcaE h) Foreign companies intending to apply for registration must comply with Foreign Investment Act of 1991. i) The project must not be included in the negative list as provided for under the Foreign Investment Act (RA 7042) of a single proprietorship or Cooperative Development Authority (CDA) in the case of a cooperative. j) Locational Clearance from the Zoning Administrator. SECTION 16. Qualifications for Existing Enterprises. Any existing enterprise may avail of the incentives under this Code provided that the following qualifications are met: a) The business enterprise must have complied with all the requirements mandated under the existing laws, rules and regulations; b) The intended expansion or diversification of the existing enterprise must engage in an economic activity identified as an investment priority area; c) The existing enterprise whose place of operation or production is located within the territorial jurisdiction of the municipality, but which intends to undertake any of the following activities: 1) Relocated its principal but not the production site of activity, generating employment from other places of the country to the municipality of Lal-lo, Cagayan; or 2) Expand its existing production capacity or conduct 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. d) The expansion or diversification shall have an additional project cost of at least three million pesos (Php3,000,000.00); provided that the amount of capitalization shall be based on the total additional project cost and such expansion or diversification as stated in the investor's project study submitted to and approved by the Board; e) The expansion or diversification project will provide employment to bona fide residents of the municipality; and f) The expansion or diversification will include an environmental management plan. SECTION 17. Registration Procedures/Requirements. New or existing enterprises shall file its application for registration with the Board through the Lal-lo Investment Promotion Unit. A registration book shall be used to record all applications filed. The date appearing and stamped on the application shall be considered as the date of official acceptance. The following documents shall be likewise be submitted: a) Three (3) copies of duly accomplished application form as provided by the Lal-lo Investment Promotion Unit (LIPU) in accordance with the provisions of this Code; b) A copy of the Certificate of Registration issued by the Securities and Exchange Commission, the Department of Trade and Industry, Board of Investments or the Cooperative Development Authority, as the case may be; c) For existing enterprises, a copy of the latest financial statement; d) For corporate type of ownership, a board resolution authorizing the person to file the application. SECTION 18. Annual Registration Fee. Upon the approval/acceptance of any applicant to this program, the applicant shall be required to pay an Annual Registration Fee to the Municipal Treasurer in accordance with the rate prescribed below, after which the Board shall issue a Certificate of Registration along with the Certificate of exemptions to the business concerned as member/participant duly stating the incentives and privileges granted under the provision of this Code: HESIcT Capital Investment No. of Years of Exemption MICRO at least P3million 2 SMALL above 3M to P15M 3 MEDIUM above 15M to P100M 4 LARGE above P100Million 5 SECTION 19. Approval of Application. The Board shall formulate appropriate rules and regulations to facilitate actions on applications file, prescribe criteria for the evaluation of applications, and devise standard forms for use by the applicants. The Chairman of the Board shall approve all applications processed by the LIPU. CHAPTER 7 Rights and Privileges SECTION 20. Rights and Privileges. The Municipal Government of Lal-lo through the Lal-lo Investment and Incentives Board, guarantees to all registered enterprises their full entitlement of the rights and privileges provided under this Code and other laws, viz.: a) Right to concise and comprehensive information regarding the economic priorities of the municipality, target investment areas, and the general conditions applicable to incoming direct private investments; b) Full access to investment evaluation criteria and registration procedures to enhance government transparency in the process of granting investments and incentives to investors and the general public; c) Receives full guarantee to industrial peace, stability, growth and profit in operations whenever policies are formulated and modified affecting investments in the municipality; d) To be assisted in all phases of implementation of the investment projects; e) Not to be interfered or modify arrangement with investors after the details for the implementation of an investment project has been accepted and approved, and ownership and management structure of the enterprise has been established, unless the law provides otherwise; f) Right to fair competition between or among enterprises operating within the territorial jurisdiction of the municipality, whether domestic or foreign, when granting any special exemptions in identified target areas; g) The right to hire employees residing in the municipality and in cases where no local personnel or worker is qualified and capable, the right to employ qualified and capable non-residents or foreign personnel for the efficient operation of the enterprise. CHAPTER 8 Fiscal and Non-Fiscal Incentives SECTION 21. Incentives to Registered Enterprises. In addition to the incentives provided under Republic Act 7160, otherwise known as the "Local Government Code of 1991" and Republic Act 7916 known as "The Special Economic Zone Act of 1995," Executive Order No. 226 known as "Omnibus Investment Code of 1987, "Republic Act 9178" known as Barangay Micro Business Enterprises (BMBEs) Act of 2002, and other pertinent laws, a registered enterprise under this Code shall enjoy the following tax incentives: Fiscal Incentives 1. Exemption from the payment of all kinds of business taxes imposed by the municipality under the existing tax revenue ordinances, with a period of exemption subject to the following qualifications: caITAC Capital Investment No. of Years of Exemption MICRO at least P3million 2 SMALL above 3M to P15M 3 MEDIUM above 15M to P100M 4 LARGE above P100Million 5 However, all applicants of this Incentives Program shall be required to secure written Mayor's Permit for the operation of their business. 2. Discounted fees of ten percentum (10%) for the use of municipal heavy equipment and facilities for a period of three (3) years. 3. Discounted lease rate for the use of government land owned by the Municipality of Lal-lo for a period of three (3) years, subject to the approval of the Sangguniang Bayan. 4. Discounted on Real Property Tax up to fifty percentum (50%) of the municipal share. SECTION 22. Availment of Fiscal Incentives. The fiscal incentives provided in Section 16 and the immediate preceding section shall only availed once by the investors. Any expansion or diversification that shall be made within the period of exemption shall not be taxed. Non-fiscal Incentives 1. Provision of One-Stop Business Center for simplified documentation procedures 2. Consistent support of LGU to maintain peace and order in the locality 3. Assistance in the site selection and negotiation fro right of way 4. Assistance in labor recruitment and mediation 5. Assistance in securing direct source of power and water supply direction 6. Technical assistance for skills development 7. Assistance in sourcing of equipments and machineries 8. Acceptance of BOT and other financing schemes/arrangements CHAPTER 9 Final Provisions SECTION 23. Appropriations. Appropriation covering the current operating expenditures and capital outlay for the Board and the Lal-lo Investment and Incentive Board shall be included in the annual municipal budget. SECTION 24. Annual Inspection. The Lal-lo Investment and Incentive Board shall conduct an annual inspection on the participating firms on their progress either by itself or by requesting the local government agency to conduct the same (after the years of exemption granted by this Code), inspection shall be limited to the gross sales receipts; compliance of Minimum Wage Law or to the provisions of this Code and the privileges granted as stated in the Certificate of Registration/Exemption. SECTION 25. Reporting. At the end of each calendar year but not later than April 30, all registered members to this program shall submit copies of duly audited financial statements to the Lal-lo Investment and Incentive Board, the Sangguniang Bayan, the Municipal Treasurer, and the Office of the Mayor for evaluation and records purposes. SECTION 26. Monitoring and Evaluation. The LIPU shall monitor and evaluate project implementation for purposes of ensuing that the objectives of the projects are accomplished. SECTION 27. Penal Provisions. Any violation of the provisions of this Code, existing laws, ordinances, rules and regulations by any registered enterprise, 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. ICHDca SECTION 28. Separability Clause. It is declared that the provision of this Code are separable, and in any event that one or more of 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 29. 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 30. Effectivity. This ordinance shall take effect immediately upon its approval. UNANIMOUSLY APPROVED on 3rd and final reading on motion of Honorable Ricardo D. Dupaya duly seconded by Honorable Florante P. Paat. I HEREBY CERTIFY to the correctness of the foregoing ordinance. (SGD.) JOY M. LAGARICO LSO II/SB Secretary-OIC ATTESTED: (SGD.) FLORENCE OLIVER B. PASCUAL Vice Mayor/Presiding Officer APPROVED: March 3, 2014 (SGD.) FLORANTE C. PASCUAL, CPA Municipal Mayor