Rules and Regulations Implementing the Paniqui, Tarlac Investment Incentive Code of 1999

October 20, 1999 Excerpts from the Minutes of the Regular Session of the Sangguniang Bayan of Paniqui, Tarlac Held on October 20, 1999 at the SB Session Hall. PRESENT: Councilor Joy Gilbert R. Lamorena Temporary Presiding Officer Councilor Dante P. Belarmino Councilor Sergio C. Baltazar Councilor Brett P. Recto Councilor Romeo R. Lagmay Councilor Rosauro V. Tayag Councilor Godofredo G. Tangonan, Jr. Councilor Maximino R. dela Cruz (ABC) Councilor Christian Alfred F. Cuchapin (SK) ABSENT: Vice Mayor Rodolfo J. Villanueva Councilor Rommel C. David RESOLUTION NO. 142-99 WHEREAS, the Municipality of Paniqui, in its effort to address the growing needs for employment of the populace and investment in business activities, is creating the Paniqui Investment Incentive Code; WHEREAS, the Paniqui Incentive Code will encourage and promote increased private investments in the municipality, create a business friendly environment between the local officials and the business sector and place Paniqui in a better competitive position to live and invest in the province of Tarlac; NOW THEREFORE, on motion of Councilor Dante P. Belarmino, properly seconded, RESOLVED, as it is hereby Resolved, to approve as it hereby approves, the Paniqui, Tarlac Investment Incentive Code of 1999. RESOLVED FURTHER, that this resolution be enacted into an ordinance, to wit; MUNICIPALITY OF PANIQUI ORDINANCE NO. 11-99 AN ORDINANCE IMPLEMENTING THE PANIQUI, TARLAC INVESTMENT INCENTIVE CODE OF 1999 Be it ordained by the Sangguniang Bayan of Paniqui, Tarlac, that; RULE I Policy Application ARTICLE 1. Title. These Rules shall be known and cited as the Rules and Regulations implementing the PANIQUI, TARLAC INVESTMENT INCENTIVE CODE OF 1999. ARTICLE 2. Purpose. These Rules are promulgated to prescribe the procedure and guidelines for the implementation of the Paniqui, Tarlac Investment Incentive Code of 1999 in order to facilitate compliance therewith and achieve the objectives thereof. ARTICLE 3. Declaration Policy. To accelerate the sound development of Paniqui, Tarlac in accordance with the updated Municipal Development Plan and the National Development Plan up to the year 2000, it is hereby declared to be the policy of the Municipality of Paniqui to encourage new investments or expansion/diversification in Agri-Business activities Miscellaneous light manufacturing activities, Property Development, Local Utilities, Environmental Protection and Enhancement Project and the Establishment of Educational Institutions and such other preferred areas of investments as may be determined from time to time, which will provide employment opportunities, raise the standard of living of the people of Paniqui, Tarlac and provide for the equitable distribution of wealth. The Municipality of Paniqui welcomes and encourages domestic and foreign capital to establish enterprises that would utilize substantial amount of labor, raw materials and natural resources of the municipality. CAIHTE It is further declared to be the policy of the Municipality to promote the establishment and operation of non-government organizations to serve as active partners in achieving local autonomy. ARTICLE 4. Scope of Application. These Rules shall apply to all persons, entities or enterprises, government and non-government organizations and instrumentalities to the extent provided in the Code. ARTICLE 5. Rules of Interpretation. Any conflict or controversy arising under the Code shall be resolved on the basis of applicable legal provision or jurisprudence in the absence thereof, the customs and traditions in so far as they are applicable to the conflict or controversy may be resorted to. RULE II Creation, Composition, Meetings, Powers and Functions of the Paniqui, Tarlac Investment Incentive Board ARTICLE 6. The Paniqui, Tarlac Investment Incentive Board. There is hereby created a Paniqui, Tarlac Investment Incentive Board (PTIIB) to implement the provisions of this Code. ARTICLE 7. Composition of the Board. The Board shall be composed of the following: Chairman: Municipal Mayor Vice Chairman: Municipal Vice Mayor Members: Chairman, SB Market, Trade, Commerce and Industry Committee Chairman, SB Public Works Committee Chairman, SB Finance and Appropriation Committee Chairman, SB Agriculture Chairman, SB Health and Social Welfare Committee Municipal Treasurer Municipal Planning and Development Officer Municipal Legal Officer Department of Trade and Industry Representative Two (2) NGO Representatives The members of the Board may be increased by the Sangguniang Bayan through the recommendation of the Board as it may deem necessary for the effective implementation of the provisions of this code. ARTICLE 8. Meetings and Quorum of the Board. The Board shall meet at least once every quarter or as often as may be necessary, on such a day as it may fix. The presence of at least a majority of its members shall constitute a quorum in a meeting validly held shall be required for the board to exercise its powers and perform its functions. ARTICLE 9. Powers and Functions of the Board. The primary functions 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 Paniqui, Tarlac. Pursuant to this, the Board shall be vested with the following powers: 1. To promulgate the governing Implementing Rules and Regulations in the implementation of the Investment Incentive Code, subject to the approval of the Sangguniang Bayan. 2. To commission an independent study group to conduct an economic and technical research for the purpose of identifying priority investment areas and/or activities to be promoted as well as appropriate incentives and support measures which should be extended to attract investors into these areas and/or activities. 3. To adopt a short and medium-term investment promotion program which shall specify the list of priority investment areas and corresponding incentives and support measures to be used to attract targeted investors. 4. To propose and recommend the necessary appropriations to the Paniqui, Tarlac Council or secure additional funding from other sources in order to support the operations of the Paniqui, Tarlac Investment Promotion Center. 5. To enter into any agreement with other government agencies and/or private sector organizations for the purpose of simplifying systems, procedures and requirements and business operations in Paniqui, Tarlac, and other activities necessary for the effective implementation of the Code. ARTICLE 10. Powers and Functions of the Chairman. The Chairman of the Board shall have the following powers and duties: 1. To preside over the regular and special meetings of the Board; 2. To render annual reports to the Paniqui, Tarlac Local Government and such special reports as may be requested; 3. To recommend to the Board such policy measures he may deem necessary to carry out the objectives of this code; 4. To approve applications for the grant of fiscal incentives to qualified applications in accordance with the policies set by the Board as approved by the Sangguniang Bayan. 5. Generally, to exercise such other powers and perform such other duties as may be authorized by the Board, from time to time. ARTICLE 11. Powers and Functions of the Vice-Chairman. The Vice-chairman of the Board shall have the following powers and duties: 1. Preside over the regular and special meetings of the Board in the absence of the chairman; DETACa 2. Perform other duties of the chairman in the absence of the latter, and such other duties as may be assigned to him by the Board. RULE III Definition of Terms ARTICLE 12. Definition of Terms. When used under this Code, the following terms and phrases shall mean as follows: 1. "Board" shall refer to the Paniqui, Tarlac Investment Incentive Board created under this Code. 2. "Capitalization" shall mean the Total Project Cost. 3. "Center" shall mean the Paniqui, Tarlac Investment Promotion Center. 4. "Municipal" shall refer to the Municipality of Paniqui covering all areas within its territorial jurisdiction as provided for by law and its charter. 5. "Code" shall refer to the Paniqui, Tarlac Investment Incentive Code of 1999. 6. "Existing establishments/enterprises" shall refer to those establishments/enterprises whose places of operation or production are located within the territorial jurisdiction of Paniqui, Tarlac. 7. "Local Personnel/Worker" shall refer to those workers or personnel who are bonafide residents of Paniqui, Tarlac. 8. "New Investors/enterprises" shall refer to those prospective investors who have not engaged in any kind of or type of business in Paniqui, Tarlac and are interested in establishing their places of operation or production in the Municipality. 9. "Preferred/Priority Areas of Investment" shall refer to the economic activities cited under Article 3, Rule 1 of the Paniqui, Tarlac Investment Incentive Code of 1999 and those areas which the Board may subsequently recommend and approved by the Sangguniang Bayan. 10. "Project Study" refers to a Project Profile which presents, among others, highlights of the financial and the socio-economic impact of the project. 11. "Registered enterprises" shall mean those enterprises/businesses registered in accordance with the provisions of this Code. RULE IV Priority Investment Areas/Activities and Appropriate Incentives and Support Measures ARTICLE 13. Preferred/Priority Investment Areas. Incentives will be provided to new, expansion and diversification projects in the following investment areas: 1. Agri-business projects such as but not limited to: a. Production and Processing of High Value Crops such as Sweet Potato, Corn b. Production and Processing Fruits c. Bagsakan Center d. Agricultural Processing/Storage Facilities e. Post Harvest Facilities 2. Miscellaneous light manufacturing activities such as but not limited to: a. garments b. fashion accessories and leather goods c. furniture d. gifts, toys and houseware e. metalcraft f. food and food preparation g. other consumer manufactures 3. Property Development such as but not limited to: a. Private Industrial Estate b. Commercial/Office Buildings c. Housing Development d. Convention Center Establishment 4. Local Utilities 5. Environmental Protection and Enhancement Projects 6. The Establishment of Educational Institutions ARTICLE 14. Determination of Additional Investment Areas. The Board, as a result of a study conducted by an independent economic and technical research group commissioned for the purpose, and in consultation with the Advisory Committee and other government and private sector leaders of Paniqui, Tarlac, the center may recommend to the Board additional investment areas for inclusion in the list of priority investment areas which upon due deliberation and approval shall then be adopted for implementation under the Municipal Development Plan and Municipal Trade and Industry Development Plan for 1999 with the concurrence of the Sangguniang Bayan. Basis for inclusion of investment areas are: aDSIHc a. It must generate high levels of employment; b. It must feature a high degree of value added; c. It must create linkages with local industries; d. It must not have deleterious effect on the environment. ARTICLE 15. Appropriate Incentives and Support Measures. The Board, upon the recommendation of the center shall identify and recommend for the approval of the Sangguniang Bayan appropriate incentives and support measures which it shall be willing to extend to targeted investors, to promote priority investment areas and activities. ARTICLE 16. Effectivity of Appropriate Incentives and Support Measures. The Center shall review the package of appropriate incentives and support measures and the investment areas or activity, every year, and recommend to the Board to remove an area or activity from the list, at any point, when it deems that sufficient investments in the area or activity have been attained and where continued extension of incentives and support measures for the expansion of the said area or activity may place the interest of the Municipality of Paniqui and the public in adverse position. The Center may also recommend to the Board to remove an investment area or activity from the list where such area or activity in the municipality within a reasonable cost may result in unfavorable business climate. ARTICLE 17. Removal/Deletion of a Preferred/Priority Investment Area. Upon the recommendation of the Center, the Board may remove an area or activity from the list of preferred/priority areas for investments. Bases for the removal of Preferred Investment Area are as follows: a. Sufficient investment in the areas or activity have been attained. b. The continued extension of incentives or support measures for the specific investment area is no longer to the interest of the municipality; and c. The Investment Area or Activity cannot attract investors within a reasonable time and cost or may result in an unfavorable business climate. RULE V Registration of Enterprises ARTICLE 18. Qualification of a New Enterprise. A new enterprise which intends to avail of the incentives 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 by and through presentation of certification issued by either the Securities and Exchange Commission, Dept. of Trade and Industry or Cooperative Development Authority and other National Government Accrediting Agencies as the case may be; 2. That the prospective investor's place or operation or production be located within the territorial jurisdiction of Paniqui, Tarlac; 3. The investment must be among the approved "preferred/priority areas of investments" 4. The investment must provide employment among bona fide residents of the municipality under article 12 hereof. 5. The new enterprise must have a capitalization of: a) At least One Million Pesos but not more than Ten Million pesos in case of a small-scale enterprise b) Over Ten Million pesos but not more than Forty Million Pesos in case of a medium-scale enterprise c) More than Forty Million Pesos in case of a large-scale industry 6. That the expansion/diversification shall provide out of the labor force an employment of: a) no less than ten (10) persons in case of a small-scale enterprise; b) at least Twenty (20) Persons in case of a medium-scale enterprise; and c) at least One Hundred (100) Persons in case of a large industry. who are bona fide residents of Paniqui, Tarlac. ARTICLE 19. Qualification of an Existing Enterprise. An existing enterprise may avail this Code provided that it meets the following requirements. 1. It must have complied with all the requirements mandated under existing local and national laws and the Constitution, by and through the presentation of certificates of registration issued by either the Securities and Exchange Commission, Dept. of Trade and Industry or Cooperative Development Authority and other National Government Accrediting agencies as the case may be; 2. The expansion or diversification must be among the approved "preferred/priority areas of investments"; ETHIDa 3. The existing enterprise whose place of operation or production is already located within the territorial jurisdiction of Paniqui, Tarlac and which will undertake any of the following activities/projects: a) Relocate its principal office from other places in the Philippines to Paniqui, Tarlac; 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 production capacity. 4. That the expansion/diversification shall have a capitalization of: a) At least One Million Pesos but not more than Ten Million pesos in case of a small-scale enterprise; b) Over Ten Million Pesos but not more than Forty Million pesos in case of a medium-scale enterprise; and c) More than Forty Million pesos 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: d) no less than Ten (10) Persons in case of a small-scale enterprise; e) at least Twenty (20) persons in case of a medium-scale enterprise; and f) at least One Hundred (100) persons in case of a large industry. who are bona fide residents of Paniqui, Tarlac. ARTICLE 20. Application Requirements. Application shall be filed with the Board, recorded in a registration book and the date appearing therein and stamped on the application shall be considered as the date of official acceptance. 1. Venue of filing All applications shall be filed with the Paniqui, Tarlac Investments Incentive Board, through the Paniqui, Tarlac Investment Promotion Center. 2. Processing Time Applications shall only be deemed officially accepted upon submission of complete requirements of the Center. Application for incentives shall be acted upon by the Center within ten (10) working days from the official acceptance thereof and by the Chairman of the Board within an additional Ten (10) working days. If and when the application is not acted upon within the stated period of a total of twenty (20) days, the application is deemed approved. 3. Filing Fee The following non-refundable filing fee shall be paid as follows: a) P1,000.00 for the enterprises with a capitalization range of One Million pesos (P1M) to Five Million Pesos (P5M) b) P2,500.00 for enterprises with a capitalization range of over Five Million Pesos (P5M) to Ten Million Pesos (P10M) c) P10,000.00 for the enterprises with a capitalization range of over Ten Million Pesos (P10M) to Forty Million Pesos (P40M) d) P50,000.00 for enterprises with a capitalization range of over One Hundred Million Pesos (P100M) to One Billion Pesos (P1B) e) P100,000.00 for enterprises with a capitalization range of over One Billion pesos (P1B) 4. Required Documents for Registration. For single proprietorship: a. Three (3) copies of completed application form of which, can be secured from the Center. b. A copy of the project Study of the proposed investment, indicating the project is socio-economically, technically, and financially feasible and viable; c. A certified true copy of its Certificate of Registration of Business Name from the Department of Trade and Industry. For Partnership and Corporation: a) Three (3) copies of completed application form of which, can be secured from the Center; b) A copy of the Project Study of the proposed investment, indicating the project is socio-economically, technically, and financially feasible and viable; c) A certified true copy of its Certificate of Registration and Articles of Incorporation from the Securities and Exchange Commission; d) Authority from the partners or the Board of Directors authorizing the filing of application. cSEDTC For Cooperatives: a) Three (3) copies of completed application form of which, can be secured from the Center; b) A copy of the Project Study of the proposed investment, indicating the project is socio-economically, technically, and financially feasible and viable; c) A certified true copy of its Certificate of Registration and Articles of Incorporation from the Cooperative Development Authority; d) Authority from the Board of Directors authorizing the filling of application. ARTICLE 21. Approval and Registration Procedures. 1. Registration Procedure. a) Application shall be submitted to the Center, together with the required documents; b) The applicant pays the non-refundable filing fee; c) Submitted, the project study will be evaluated by the Center; d) If found not qualified, the Center informs the applicant; e) If found qualified, the Center forwards the application to the Chairman of the Board for approval; f) Once approved by the Chairman, the Center informs the applicant in writing and delivers the Certificate of Registration; g) The Center, then, informs all concerned agencies, entities of such approval for their information, guidance and appropriate action. 2. Certification of Registration A registered enterprise under the Code shall be issued a Certificate of Registration with the signature of the Chairman of the Board and/or such other officer as the Board may empower and style as the board may determine and shall state among others, the following: a) The name of the Registered enterprise; b) The preferred/priority area of investment in which the registered enterprise will engage in; c) The other terms and conditions to be observed by the registered enterprise by virtue of its registration. RULE VI Rights and Privileges of Registered Enterprises ARTICLE 22. Rights and Privileges by the Municipal Government. All enterprises registered under the Code are entitled to the rights and guarantees provided by law and the Constitution. In addition to such rights and guarantees, and to enhance investor confidence in the incentive program, the Municipal Government, thru the Paniqui, Tarlac Investment Incentive Board, shall: a) Provide a concise and comprehensive information to prospective investor on the economic priorities of the Municipal Government, including target investment areas and the general conditions applicable to incoming direct private investments; b) Communicate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives; c) 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 investments; d) 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; e) Avoid undue distortion of completion 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 area; f) 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, g) Resolved all doubts concerning the benefits and incentives granted under the ordinances enacted for the purpose of encouraging investments, in favor of an investor. RULE VII The Paniqui, Tarlac Investment Promotion Center ARTICLE 23. Powers and Functions. The Center shall serve as the Core Group for conceptualization, support and implementation of developmental project/program, which will help the Municipality and its residents and other sectors to attain growth. Above all, the Center shall act as the technical secretariat of the Board and shall implement its policies and guidelines specifically as follows: SDAaTC a) Accept, process and evaluate all applications for registration for the availment of the local incentives and submit its recommendation for action by the Chairman within ten (10) working days from receipt of application; b) provide the necessary support services to investors, as guaranteed under this Code; c) Establish and maintain networking relations with other offices and agencies whenever appropriate and necessary; d) Collate, analyze and compile pertinent data and information and studies concerning areas that have been or may be declared as "preferred/priority areas of investments" of the Board; e) Recommend to the Board any modifications/amendments to existing legislation and procedures on local investments; f) Prepare the Agenda for Meetings of the Board and submit for its consideration and approval the policies and measures which are deemed necessary to carry out provisions of the Code; g) Submit Annual Reports to the Board thru the Chairman, on the activities of the Center relative to the implementation of the Code, within sixty (60) days after the close of the calendar year. RULE VIII Incentives to Registered Enterprises ARTICLE 24. Tax Incentives to Registered Enterprises. In addition to incentives provided by the law and the national government as well, an enterprise registered under the Code shall enjoy the following incentives: a) For enterprises employing 50% of their labor from qualified residents of the municipality shall be exempted from business tax: 100% 1st year 80% 2nd Year 40% 3rd Year 20% 4th year 0% 5th Year b) For enterprises employing 70% of their labor from qualified residents of the municipality shall be exempted from business tax: 100% 1st & 2nd Year 40% 3rd Year 20% 4th Year 10% 5th Year 0% 6th Year Davao Sample: Business Tax exemption can be availed by the enterprise based on its aggregate sales on the initial year of availing the exemption. For the succeeding year, the basis of the exemption will be the incremental sales. a) Within three (3) years from the start of commercial operations, a registered enterprise under this Code shall be fully exempt from the mayor's permit fees, building permit fees, business sales taxes, and other fees and charges imposed under existing municipal ordinances; b) Exemption from the basic real property tax imposed under the Tax Code of Municipality of Paniqui for a period of Two (2) years from the date of approval of registration by the Board. RULE IX Appropriations ARTICLE 25. Appropriations. An initial funding to defray the expenses necessary for or incidental to the implementation of the provisions of this Code and of the Paniqui, Tarlac Investment Incentive Board shall be sourced from the Paniqui, Tarlac Government fund. The Municipal Government shall appropriate annually, based on 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 usual government accounting and auditing rules and regulations. RULE X Miscellaneous Provisions ARTICLE 26. Visitorial Power. Visitorial Power of the Board or Center. The Board, the Center, or any duly authorized member thereof, is hereby empowered and authorized to conduct an ocular inspection of the premises or examination of the business activity of any enterprise, including the records and books of any enterprise registered or applying for registration at any reasonable time of the day, during office hours, for verification or ascertaining, the enterprise's strict compliance with the provisions of the Code or of these Rules, or when the Board or Center deems it necessary in or incidental to the effective exercise and performance of their respective functions and powers. ARTICLE 27. Reportorial. Submission of Reports and other Documents. Every registered enterprise shall, for each preferred/priority areas of investments, submit to the Board the following reports and/or documents with the time herein prescribed: acEHCD a) Amendment of Articles of Incorporation or By-Laws, Articles or Partnership or Article of Incorporation, within thirty (30) calendar days from the date of submission of the said amendments with Securities and Exchange Commission or Cooperative Development Authority; b) Change of Directors within thirty (30) calendar days from the change; c) Report on alien officers or employees within thirty (30) calendar days from the date of registration or from the appointment of their aliens/replacements; provided that such aliens are registered as such with the Department of Labor and employment; d) Report on employment of bona fide local residents within thirty (30) calendar days from the date of registration or from the appointment of their replacements; e) Quarterly report on the enterprise's business operations, including its production or gross sales or receipts, within thirty (30) calendar days from the end of each quarter; f) Audited Annual Financial Statements, within thirty (30) calendar days after its submission to the bureau of Internal Revenue; g) Report on total local incentives availed of under the Code. RULE XI Final Provisions ARTICLE 28. Sanctions for Late Submission of Reportorial Requirements. For late submission of the reportorial requirements, every registered enterprise shall, for each preferred/priority area of investment, be fined in accordance with the following: a) 1st violation P5.00 per day every violation; b) 2nd violation P10.00 per day every violation; c) 3rd violation & subsequent violation P20.00 per day for violation ARTICLE 29. Penal Clause. Any violation of the provisions of the 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. The Certificate of Registration of a Business enterprise, as provided in the Code and these Rules, may be canceled or revoked due to the following: a) Approval Violation of the Provisions of this code and these Rules; b) Violation of existing local and national laws, ordinances, rules and regulations; c) Failure to commence actual project development within One (1) year from approval of registration. Cancellation or revocation of the certificate of registration shall mean the withdrawal of all incentives granted under the Code; and all fees and charges previously exempted shall become due and demandable. Upon the recommendation of the Center, the chairman of the Board may cancel or revoke the Certificate of Registration of the concerned business enterprise through a formal written notice to that effect, and shall become effective on the 16th day from receipt thereof. ARTICLE 30. Approval. The applicant adversely affected by any decision may, within fifteen (15) days from the receipt of such decision shall be final and executory. ARTICLE 31. 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 the other provisions shall not be affected thereby. ARTICLE 32. Repealing Clause. All ordinances, executive orders and rules and regulations inconsistent or in conflict with the provisions of this Code are hereby repealed, amended or modified accordingly. ARTICLE 33. Effectivity. This ordinance shall take effect immediately upon its approval. CARRIED. I HEREBY CERTIFY to the correctness of the above-quoted resolution. (SGD.) ESTHER C. FELICIANO Sangguniang Bayan Secretary ATTESTED: (SGD.) HON. JOY GILBERT R. LAMORENA Temporary Presiding Officer APPROVED: (SGD.) HON. ELPIDIO D. IBARRA Municipal Mayor