City of Masbate Investment and Incentive Code 2007 as Amended

March 29, 2011 Excerpts from the Minutes of the 28th Regular Session of the 4th Sangguniang Panlungsod Held at the Sangguniang Panlungsod Session Hall, Masbate City on March 29, 2011 Introduced by: Hon. Allan B. Cos - City Vice Mayor/Presiding Officer Hon. Ruby M. Sanchez - City Councilor Hon. Alberto R. Abayon - City Councilor Hon. Rudy O. Yaneza, Jr. - City Councilor Hon. Janus M. Tuason - City Councilor Hon. Lucio J. Aguilar, Jr. - City Councilor Hon. Jona A. Rey - City Councilor Hon. Andrei B. Diez, Sr. - City Councilor Hon. Leilah D. Placer - City Councilor Hon. Flor V. Rejuso - Ex-Officio /LIGA President Hon. Ma. Maica M. Dela Rosa - Ex-Officio /SK Fed. President MASBATE CITY ORDINANCE NO. 121-11 CITY OF MASBATE INVESTMENT AND INCENTIVE CODE 2007 AS AMENDED CHAPTER I General Provisions ARTICLE I Title and Declaration of Policy Statement SECTION 1. Title . This Ordinance shall be known and cited as the CITY OF MASBATE INVESTMENT AND INCENTIVE CODE OF 2007 AS AMENDED. SECTION 2. Declaration of Policy . To accelerate the sound development of the City of Masbate in accordance with the vision for a "Vibrant Masbate City by 2020: the Country's Marine Sanctuary", it is hereby declared to be the policy of the City to encourage investments, expansion and diversification that will provide services, employment opportunities, generate income, raise the standard of living of the people, maintain and enhance the socio-ecological balance that will provide an equitable distribution of wealth in the City of Masbate. ARTICLE II Definition of Terms SECTION 3. Definition . When used in this Code: a. Enterprise includes single proprietorship, partnership, corporation and cooperative. b. Board shall refer to the City of Masbate Investment and Incentive Board (CMIIB), created under this Code. c. Bona fide Resident refers to a person with 6 months residency in the City of Masbate. d. City shall mean the City of Masbate covering all the areas within its territorial jurisdiction as provided by law. e. Code shall refer to the City of Masbate Investment and Incentive Code of 2007 as Amended (CMIIC). f. Existing Enterprise refers to establishment/enterprise whose place of operation or production is located within the territorial jurisdiction of the City and before the enactment of this Code. CAIHTE g. New Enterprise refers to a new investment that is within the Priority Investment Area that is not engaged in any kind or type of business, which is interested in establishing its place of operation or production in the City of Masbate such as, Small, Medium and Large Enterprises (based on total assets). h. Priority Investment Areas (PIA) shall mean the economic activities as enumerated in Section 11 of the Code. i. Registered Enterprises shall mean those enterprises/businesses which have already qualified for incentive. j. IPAC refers to Investment Promotion and Assistance Center. k. Capitalization refers to total assets (based on SME classification) required to start the enterprise activity. l. Small and Medium Enterprise any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated; must have value falling under the following enterprises: Micro Php1,000,000.00 to 3,000,000.00; Small Php3,000,001 to Php15,000,000; Medium Php15,000,001 to Php100,000,000; and Large more than Php100,000,000. m. Expansion shall include modernization and rehabilitation and shall mean increase of existing volume or value of production or upgrading the quality of the registered product or the utilization of inefficient or idle equipment. n. New Enterprise Activity refers to those undertaken by a newly formed/organized entity, be it individual or juridical. ARTICLE III Rules of Construction SECTION 4. General Rules . In construing the provisions of this Code, the following rules of construction shall be observed unless inconsistent with the manifest intent of such provision. a. Words and Phrases Words and phrases shall be construed and understood to their common and approved usages. Words and phrases that may require a technical, peculiar or appropriate meaning under this Code shall be construed and understood according to such technical, peculiar or appropriate meaning. b. Gender and Number Every word in this Code importing the masculine gender shall extend and apply to both male and female. Every word importing the plural number shall extend to one person or thing as well. c. Reasonable Time In all cases where the act is required to be done within a reasonable time, the time required should mean the period that is necessary for the prompt performance of such an act. d. Computation of Time The time within which an act to be done as provided in this Code or any rule or regulation issued pursuant thereto, when expressed in days, shall be computed by excluding the first day and including the last day. If the last day falls on Sunday or holiday, the same shall be excluded from the computation and the day following shall be considered the last day. e. References All references to chapters, articles, sections are to chapters, articles, and sections in this Code, unless otherwise specified. f. Conflicting Provisions of Chapters or Articles If the provisions of the different chapters or articles contravene each other, the provision of each chapter or article shall prevail as to specific matters and questions involved therein. DETACa g. Conflicting Provisions of Sections If the provisions of different sections in the same chapter or article conflict with each other, the provision of the section which is the last in point or sequence shall prevail. CHAPTER II City of Masbate Investment and Incentive Board ARTICLE IV City of Masbate Investment and Incentive Board SECTION 5. The City of Masbate Investment and Incentive Board. There is hereby created a City of Masbate Investment Incentive Board (CMIIB) to implement the provisions of this Code. SECTION 6. Composition of the Board The Board shall be composed of the following: Chairman - City Mayor Vice Chairman - Provincial Director, Department of Trade and Industry Members - SP Member/Chairman, Committee on Trade & Commerce - Economic Enterprise Manager - President, Masbate Association of Business Leaders, Inc. (MABLI), Business Sector Representative - Small Scale Enterprise Representative - Representative of the Provincial Governor - Representative, Masbate Bankers Association - Representative, Masbate Consumers Federation SECTION 7. Meetings and Quorum of the Board . The first organizational meeting of the Board shall be held within fifteen days after the last publication of this Code in the newspaper of general circulation within the City of Masbate to determine its internal policies and guidelines; thereafter, 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 fix. The presence of at least a majority of the members shall constitute a quorum to perform its functions. SECTION 8. Powers and Functions of the Board. The following shall be the powers and functions of the Board: a. Policy formulation, approval and direction of the Investment Promotion Assistance Center; b. Recommend any modification of incentives and reclassification of priority investment areas subject to the approval of the Sangguniang Panlungsod; c. Approval of the application of projects for registration; d. Program direction of investment promotion activities on the area. ARTICLE V Investment Promotion and Assistance Center SECTION 9. Creation. The Investment Promotion and Assistance Center is created to serve as a body that implements the local investment policies. It shall serve as the one-stop shop action center of the City Government and shall be established as a separate unit under the direct supervision of the City Mayor. aDSIHc SECTION 10. Objectives. The Investment Promotion and Assistance Center shall have the following objectives: 1. To recommend policies to the Board pertaining to investment measures to spur the development of the industry in the area; 2. To administer research works on the industry and project profiles; 3. To update database to make the IPAC effective in performing its functions; 4. To formulate and implement proactive marketing strategies to entice investments in prospective and priority areas; and 5. To evaluate and recommend qualified applicants for registration in order to avail the incentives. SECTION 11. Functions. The Investment Promotion and Assistance Center shall perform the following functions: 1. Assist investors in the registration and processing of necessary documents/requirements; 2. Provide investor with after-care services; 3. Prepare and disseminate promotion collaterals; 4. Prepare and formulate marketing strategies; 5. Recommend investment policy advocacy to the Board; 6. Coordinate a network linkage with national and local government agencies, private sectors and other organizations/institutions; and 7. Serve as Secretariat to the Board. SECTION 12. Human Resource . The IPAC shall have the following personnel composition and qualifications: a. One (1) IPAC Officer an Accounting major preferably Certified Public Accountant, Marketing, Economics or Management graduate with at least 3 years of relevant training or experience, computer literate and with compensation equivalent to Salary Grade 22. b. One (1) Project Development Officer III preferably an Economics, Agricultural Business, Agricultural Economics or Management graduate with at least 1 year of relevant training or experience, computer literate and with compensation equivalent to Salary Grade 18. c. One (1) Marketing Officer I preferably Communication Arts, Marketing and Management graduate, computer literate and with compensation equivalent to Salary Grade 11. The above cited personnel shall be appointed by the Mayor upon the recommendation of the City of Masbate Investment and Incentive Board and the Personnel Selection and Promotion Board. ARTICLE VI Priority Investment Areas and Appropriate Incentives SECTION 13. Priority Investment Areas . A list of priority areas shall be provided to investors. SECTION 14. Coverage of Priority Investment Areas. Priority shall be given but not limited to such business enterprises/establishments herein provided as follows: ETHIDa I. Agriculture, Aqua and Forestry-Based Industries Production and processing of meat Coconut processing Rootcrops processing Fruit processing Spices production Coffee processing Cutflower Production Quality seeds and seedlings of fruit trees and other planting materials Fish/marine products processing Industrial tree Plantation Particle Board Activated Carbon Manufacturing Animal feeds Production Aquaculture feeds Production Production of Livestock and Poultry Dairy products Carabao Breeding and Production Goats and sheep Beef (cow-calf feedlot operation) Farm Services and Post Harvest Facilities Herbal medicine processing Food processing II. Manufacturing Canning Packaging Light Materials Industry Ceramics and Non-Metallic Mineral Processing Organic Chemicals Recycling of plastics and plastic products and other recyclable materials Leather and leather products Fine jewelry III. Basic Industries Fertilizer (organic) Solid Waste Materials IV. Consumer Manufactures a. Public Utilities Common Carriers (Land, Air and water transport facilities) Cargo trucks, new and modernized transport system Other specialized mass transport system b. Information/Communication and Technology Call Centers AIDSTE c. Tourism Related Enterprises Tourism Transport Facilities for air, water and tourist buses and vans Hotels, caf, resort, sauna and spa or health and wellness establishments d. Infrastructure and Services e. Recreational Center f. Aesthetic improvement on buildings and other structures for business use located in existing commercial centers, wherein said improvements are socially acceptable, environment-friendly and contribute positive values to the benefit of the city. g. Export activities h. Food chain SECTION 15. Fiscal Incentives . Registered enterprise shall be granted the following fiscal incentives: 1. The exemption/s from Business Tax on Gross Sales or Receipts should be based on the capitalization: Year Micro Small Medium Large 1 55% 65% 75% 85% 2 50% 60% 70% 80% 3 45% 55% 65% 75% 4 40% 50% 60% 70% 5 35% 45% 55% 65% 2. Exemption from the payment of Mayor's Permit Fee for new enterprises for a period of 1 year; 3. Exemption from Amusement Tax for amusement/tourism-related activities for 1 year; 4. Exemption from annual fixed tax for delivery truck or van for 3 years on industries engaged in manufacturing/production. SECTION 16. Non-Fiscal Incentives . Apart from fiscal incentives, registered enterprises shall likewise be granted non-fiscal incentives. The City Government of Masbate, through the Masbate City Investment Incentive Board, shall: 1. Provide concise and comprehensive information to prospective investors about the economic priorities of the City Government, including target investment areas and the general conditions applicable to incoming direct private investments; 2. Formulate 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 or ordinances that will affect investments; 4. Not interfere or modify any arrangement with the investors after details of the implementation of an investment project has been accepted, approved and the ownership or management structure of the enterprise has been established, unless the law provides otherwise; AaCTcI 5. Avoid undue distortion of completion between or among enterprises operating within the City 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 are capable or available, allow the employment of qualified foreign personnel when necessary for the efficient operation of the enterprise or technology transfer; and 7. Resolve all doubts concerning the benefits and incentives granted under an ordinance enacted for the purpose of encouraging investment. CHAPTER III Registration of Enterprises ARTICLE VII Qualifications SECTION 17. Qualifications of New Enterprises. New investors who intend to avail of the incentives provided in this Code must meet the following qualifications; 1. That the business enterprises must have complied with all the requirements mandated under existing local and national laws and the Constitution; 2. That the prospective investment/expansion and or diversification must be in the list of Priority Investment Areas; 3. That the prospective investor's place of operation or production be located within the territorial jurisdiction of Masbate City; 4. That the new enterprise must have a capitalization of at least One Million Pesos (Php1,000,000.00) pesos and will provide at least 75% labor force that are bonafide residents of Masbate City. SECTION 18. Qualification of Existing Enterprises. An existing enterprise may avail of the incentives under this Code provided that it meets the following qualifications: 1. That the business enterprises 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 covered under the Priority Investment Areas; 3. That in the case of enterprise whose place of operation or production is already located in the City of Masbate, and who shall register to avail this incentives will be required to expand its existing production capacity or construct new buildings and civil works for the installation of new machineries and equipments or improvements thereof, which will result in an increase in production capacity; and 4. That the expansion/diversification shall have capitalization of at least Three Million Pesos (Php3,000,000.00) Pesos and will provide 75% labor force that are bonafide residents of Masbate City. SECTION 19. Applicant Requirements. Application shall be filed with the Board which shall be recorded in a registration book and the date and stamped appearing on the application shall be considered as the date of official receipt thereof. A payment of non-refundable/non-transferable filing fee of One Thousand (Php1,000.00) Pesos shall be paid together with the following documents; a. Three (3) copies of accomplished application forms to be provided for by the Board; EcTCAD b. A copy of the complete project study of the proposed investment showing that the project is environmentally safe, economically, technically and financially feasible and viable; c. A copy of its Articles of Incorporation and By-Laws as approved by the Securities and Exchange Commission (SEC), for corporations; Articles of Cooperation and By-Laws approved by the Cooperative Development Authority (CDA), for cooperatives; Business Name Registration Certificate from the Department of Trade and Industry (DTI), for sole proprietorship and Certificate of Registration if registered with the Board of Investment (BOI), as the case may be; d. A certified true copy of its Certificate of Registration issued by the Cooperative Development Authority, Securities and Exchange Commission, the Board of Investment and the Department of Trade and Industry, as the case may be; e. Resolution of the applicant's Board of Directors, in case of cooperative or a corporation, authorizing the filing of the application; f. For existing enterprise, a copy of the latest audited financial statement. SECTION 20. 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 one preferred area; devise standard forms for use of applicants. SECTION 21. Certificate of Registration. A registered enterprise under this code shall be issued a Certificate of Registration with the signature of the Chairman and/or such other officers as the Board may empower and designate for the purpose. The Certificate of Registration shall be in a form and style as the Board may determine. SDHTEC ARTICLE VIII Duties and Responsibilities of Registered Enterprises SECTION 22. The following shall be the Duties and Responsibilities of a Registered Enterprise : 1. Submission of Reports and other Documents Every Registered Enterprise shall submit to the Board the following reports and/or documents within the time herein prescribed: a. Amendments of Articles of Incorporation or By-Laws, or Articles of Partnership, or Articles of Incorporation, within thirty (30) calendar days from the date of submission of said amendments with the Securities and Exchange Commission or Cooperative Development Authority; b. Change of Directors within thirty (30) days from the date of such change; c. Report on alien officers or employees within thirty (30) days from date of registration or from the appointment of such aliens/replacements; Provided, that such aliens are registered as much with the Bureau of Immigration and Deportation (BID), and with the Department of Labor and Employment (DOLE); d. Report on employment of bona fide Masbate City residents within thirty (30) calendar days from the date of the appointment and their replacement; e. Audited Financial Statements, within thirty (30) calendar days after its submission to the Bureau of Internal Revenue. 2. Compliance with the Provisions of this Code The Certificate of Registration of a Business Enterprises as provided in this Code, may be cancelled or revoked due to the following: a. Violation of any of the provision of this Code; and b. Failure to commence actual project development within three (3) months from approval or Registration, except with natural calamities and acts of God; b.1 Cancellation or revocation of the Certificate of Registration shall mean withdrawal of all incentives granted under this Code, and all fees and charges from the time it was revoked shall be forfeited in favor of the City government. b.2 Upon recommendation of the IPAC for valid cause the Board may cancel or revoke the Certificate of Registration of the concerned business enterprise through a formal written notice and shall take effect on the 16th day from receipt thereof; and b.3 The applicant or business enterprise adversely affected by any decision of the Board may appeal the same within 15 days to the Sangguniang Panlungsod whose decision shall be final and executory. CHAPTER IV Appropriations ARTICLE X Funding Source SECTION 23. Appropriations . An initial funding to defray the expenses for or incidental to the implementation of the provisions of this Code and of the Masbate City Investment and Incentive Board shall be secured from the Masbate City Government General Fund in the amount of Five Hundred Thousand Pesos (Php500,000.00). Thereafter, the City Government shall appropriate an annual budget, to be prepared and submitted by the Investment Promotion and Assistance Center Officer for the operational functions of the Board and the Center, which is necessary for the implementation of the provisions of this Code, subject to the usual government accounting and auditing rules and regulations. AScHCD ARTICLE XI Final Provisions SECTION 24. Applicability Clause . All other matters relating to the implementation of this Code shall be governed by pertinent provisions of existing laws and other ordinances. SECTION 25. Repealing Clause. All provisions of an existing Ordinance, other rules and regulations inconsistent or in conflict with the provisions hereof are hereby repealed, amended or modified accordingly. SECTION 26. Effectivity . This Ordinance shall take effect fifteen (15) days after publication in a newspaper of local circulation. ENACTED, March 29, 2011 We hereby certify to the correctness of the foregoing ordinance which was duly enacted by the Sangguniang Panlungsod during its special session on March 29, 2011. (SGD.) JONA A. REY City Councilor/Sponsor (SGD.) OSCAR A. ESPENILLA Secretary to the Sangguniang Panlungsod ATTESTED AND CERTIFIED TO BE DULY ADOPTED: (SGD.) ALLAN B. COS City Vice Mayor/Presiding Officer APPROVED on April 8, 2011 (SGD.) SOCRATES M. TUASON City Mayor