An Ordinance Enacting the Investments and Incentives Code of the Municipality of Naujan, Province of Oriental Mindoro

February 15, 2016 Excerpt from the Journal of the Regular Session of the Sangguniang Bayan of Naujan, Province of Oriental Mindoro Held on February 15, 2016 at the Sangguniang Bayan Session Hall Present: Hon. Sheryl B. Morales, Councilor Presiding Officer Pro Tempore Hon. Mara Edamzel L. Dudas, Councilor Member Hon. Wilson A. Viray, Councilor Member Hon. Candido J. Melgar, Jr., Councilor Member Hon. Jojo B. De Villa, Councilor Member Hon. Edgar Ibrahim C. Llamar, MD, FPSO-HNS, Councilor Member Hon. Leo G. De Villa, Councilor Member Hon. Great M. Delos Reyes, Councilor Member On Official Business: Hon. Henry Joel C. Teves, Vice Mayor Regular Presiding Officer Hon. Deogracias U. Dela Paz IV, Liga ng mga Barangay President Member NAUJAN MUNICIPAL ORDINANCE NO. 90-16 Sponsored by: Honorable Candido J. Melgar, Jr. AN ORDINANCE ENACTING THE INVESTMENTS AND INCENTIVES CODE OF THE MUNICIPALITY OF NAUJAN, PROVINCE OF ORIENTAL MINDORO WHEREAS, the Municipal Government of Naujan in consonance with its Local Development Investment Plan welcomes and encourages the domestic and foreign investors to establish or expand enterprises that would utilize substantial amount of labor, raw materials and natural resources in the municipality; WHEREAS, there is a recognized need and a definite advantage to promote and develop the agricultural and commercial industries in the community in order to provide employment and livelihood opportunities, and further improve the quality and standard of living of its residents; HTcADC WHEREAS, the Municipal Government of Naujan encourages the investors to participate in corporate-social responsibilities by granting them fiscal and non-fiscal incentives; WHEREAS, fiscal and non-fiscal incentives are attractive solutions to the problems encountered by investors and are aimed to create a friendlier and more favorable business climate to the Municipality of Naujan; WHEREAS, pursuant to Section 192 of the Local Government Code of 1991, the municipal government may, through an ordinance duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as the municipal government may deem necessary; NOW THEREFORE, BE IT ORDAINED BY THE SANGGUNIANG BAYAN OF NAUJAN IN SESSION ASSEMBLED THAT: SECTION 1. Title. This Ordinance shall be known as the Naujan Investments and Incentives Code of 2016 hereinafter referred to as NIIC, for brevity. SECTION 2. Declaration of Policy . It is hereby declared policy of the Municipal Government of Naujan to attract investors, both local and foreign to invest in the Municipality of Naujan by providing incentives in order to increase the profitability of their projects and the competitiveness with other localities which are means for the development, income and employment generation of the people of Naujan. It is likewise the purpose of this Ordinance: 1. To transform Naujan into a developed agri-business and commercial economy in the Province of Oriental Mindoro; 2. To promote the flow of investors which would generate employment opportunities and provide linkages among micro, small, medium, and large business or industries in the municipality while providing measures for the protection of the existing investments; 3. To promote sustainable development of undeveloped and underdeveloped areas of the municipality without jeopardizing the environment and welfare of the next generation; 4. To lay down the legal framework and mechanism of integrating the investment/incentives laws of the national government to the local development initiative; 5. To increase the profitability of putting business in Naujan; 6. To make Naujan a competitive municipality for investment development in terms of adequate human resources, accessible basic services for employees-employer needs, low crime incidence and extensive government support. CAIHTE SECTION 3. Definition of Terms. When used under this Code, the following terms and phrase shall mean as follows: 1. New Project refers to a project/activity listed in the IPAs that has not started commercial operation undertaken by: 1) a newly organized/formed enterprise; or, 2) an existing enterprise that shall engage in an entirely distinct and different activity from its existing business operations, which must have a total investment of at least Two Million Pesos (P2,000,000.00); 2. Expansion Project shall mean installation of additional facilities/equipment that will result in increase in production capacity of the same line within the same existing plant/facilities of the enterprise, which must have total investment of not less than Ten Million Pesos (P10,000,000.00) including its additional investments; 3. Existing Project project of an existing enterprise that has started commercial operation at the time of application with the Board that does not qualify as new expansion or modernization project; 4. Biodiversity (BD)-Friendly Business refers to those investments that either directly or indirectly supports the protection of the flora and fauna species and other natural resources conservation initiatives and activities. These types of businesses should incorporate biodiversity relevant knowledge and technical resources management and development processes and practices that enhance BD resource conservation to include those businesses that directly or indirectly support BD ( i.e. , use of indigenous species, protection of flora and fauna and the like); aScITE 5. Micro Enterprise any business activity 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 of not more than Three Million Pesos (P3,000,000.00); 6. Small Enterprise any business activity 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 of Three Million and One Pesos (P3,000,001.00) to Fifteen Million Pesos (P15,000,000.00); 7. Medium Enterprise any business activity 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 of Fifteen Million and One Pesos (P15,000,001.00) to One Hundred Million Pesos (P100,000,000.00); 8. Large Enterprise any business activity 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 of over One Hundred Million Pesos (P100,000,000.00). SECTION 4. The Naujan Investments and Incentives Board (NIIB) . There is hereby created the Naujan Investments and Incentives Board, herein after referred to as "Board", to make policy direction for a sound business climate for investors. SECTION 5. Composition of the Board. The Board shall be composed of the following: Chairperson : Municipal Mayor Vice Chairperson : President of Naujan Business Group Members : SB Chairperson, Committee on Trade, Commerce & Industry SB Chairperson, Committee on Ways and Means Investments Promotion Officer (IPO)/Local Economic & Investments Promotion Officer (LEIPO) Municipal Planning and Development Officer Municipal Agriculturist Municipal Tourism Officer/Coordinator Four (4) Representatives from People's Council of Naujan (PCN) Advisers : Provincial Directors of DTI, DILG, DOLE, DA and TESDA SECTION 6. Meetings and Quorum of the Board. The Board shall meet every quarter or as necessary. The presence of the majority of the members shall constitute a quorum during its meeting. SECTION 7A. Powers and Functions of the Board. The primary function of the Board is to establish a favorable and a stable policy on business climate which will encourage and support private sector investment and in the operation of business activities. The Board is generally vested with the following powers: 1. Promulgate the implementing rules and regulations of the NIIC; 2. Recommend to the Sanggunian any amendments to the Code; 3. Adopt the investments promotion program as recommended by the IPC; 4. Periodically review investment priority areas (IPAs) eligible for incentives; 5. Act on applications for registration of projects and availment of local incentives; 6. Supervise the operation of the IPC; 7. Establish cooperative undertakings with other LGUs, the private sector, NGOs or other institutions as may be necessary; 8. Enlist the assistance of local government offices, national agencies and private sector organizations as may be necessary, useful and incidental to the effective and efficient implementation of the NIIC; 9. Establish trade and investment satellite offices in such other places as may be necessary to effectively carry out its mandates; and 10. Perform such other tasks necessary and incidental to the exercise and performance of their functions. SECTION 7B. Term of Office . The term of office of the four representatives of the PCN in the Board shall be co-terminus with the members of the Sangguniang Bayan and shall not exceed three (3) terms or nine (9) consecutive years. The term of office of the Board shall commence upon the issuance of an Executive Order of the Local Chief Executive. SECTION 7C. Powers and Functions of the Chairperson. The Chairperson shall have the following powers and duties: a. To confirm the mandated members of the Board from Vice Chairperson down to members; b. To preside over the regular and special meetings of the Board; c. To render annual reports as may be requested; d. To recommend to the Board policies and support measures that may be deemed necessary to carry out the objectives of the Code; e. Generally, to exercise such other powers and perform such other duties as may be authorized by the Board, from time to time. HEITAD SECTION 7D. Powers and Function of the Vice Chairperson. The Vice Chairperson shall have the following powers and duties: a. To preside over the regular and special meetings of the Board in the absence of the Chairperson; b. To perform other duties of the Chairperson in the absence of the latter, and such other duties as may be assigned to him by the Board. SECTION 8. Investments Promotion Center (IPC) . The Investments and Promotion Center (IPC) is hereby created to carry out the objectives of the NIIC. The head of the IPC who may be the LEIPO/IPO, who is holding a permanent position, shall be appointed by the Board. The IPC shall serve as the Secretariat of the Board and shall take an active role in Implementing this Code with the following duties and functions: a. Record the proceedings of every meeting of the Board; b. Prepare and implement the Annual Investments and Promotion Plan as approved by the Board; c. Receive, process and evaluate applications for registration and applications for the availment for the local incentives and submit its recommendation to the Board within a specified period from the receipt of application; d. Assist in: Securing licenses and permits; Identifying business or joint venture partners, raw materials suppliers and possible business sites; Sourcing out skilled manpower and service providers; Facilitate in resolving issues and concerns encountered by investors, among others. e. Render after care services to registered enterprises; f. Monitor and evaluate project implementation of registered enterprises; g. Establish and update databank on general business information; h. Strengthen networking relationships; i. Prepare and disseminate investment promotion collaterals, i.e. , brochures, industry and project profile, as well as the cost of doing business in the LGU; aDSIHc j. Conduct briefings to investors; k. Represent the LGU in trade and investments meetings, conferences, or conventions and other similar gatherings in both domestic and foreign venues whenever so directed by the Board; l. Collate, analyze and compile pertinent data and studies concerning areas that have been or may be declared as Investment Priority Areas (IPAs); m. Recommend to the Board any modification/amendments to existing legislation and procedures on local investments; n. Perform such other functions as may be necessary to implement the intent of this Code. SECTION 9. Annual Investment Priorities Plan . The Board after consultation with the appropriate government agencies and the private sector shall submit to the Sangguniang Bayan, within the last week of the third quarter of every fiscal year, an Annual Investment Priorities Plan for the ensuing year, for its adoption. SECTION 10. Investment Priority Areas (IPAs) . Business enterprises having the following type or nature of business shall be given priority under this Code: a. Agriculture/Agribusiness this covers commercial production and commercial processing of agricultural and fishery products, including their by-products and wastes. b. Tourism subject to minimum capitalization requirements as provided for under this Code, it covers tourism enterprises that are outside the tourism enterprise zones (TEZs) and are engaged in the following: i. Accommodation establishments such as, but not limited to, hotels, resorts, tourist inns, pension houses, private homes for homestay, ecolodges, condotels; ii. Convention and exhibition facilities for "meetings, incentives, conventions and exhibition" (MICE) facilities; iii. Amusement parks; iv. Adventure and ecotourism facilities; v. Sports facilities and recreational center; vi. Theme parks; vii. Agri-tourism farms and facilities; viii. Tourism training centers and institutes; ix. Restoration/preservation and operation of historical shrines, landmarks and structures. c. Power and Energy this involves the exploration, development and/or utilization of energy sources adopting environmentally-friendly technologies. This also covers developers of renewable energy facilities, including hybrid systems. However, those projects must have endorsement from the Department of Energy (DOE). ATICcS d. Infrastructures such as but not limited to the following: i. Port Development Projects these cover seaport projects that must cater shipping lines and/or different sea transport systems, which is endorsed by the Philippine Ports Authority (PPA); ii. Water Supply and/or Distribution this involves bulk supply projects and new or upgrading of water distribution systems. However, the same shall be limited to treated water and should be in accordance with the Philippine National Standard for Drinking Water; iii. Waste Management Facilities these comprise establishment of solid waste, waste water, toxic and hazardous waste (THW) treatment facilities; Provided that, the proponent of these projects must have technical expertise and capabilities in the handling, treatment, storage and disposal of the toxic and hazardous waste; Provided, further that the proponent/must only handle toxic and hazardous waste generated from the municipality; iv. Telecommunication Infrastructures these consist the establishment of new telecommunications infrastructures as endorsed by the National Telecommunications Commission (NTC) and utilizing at least fiber optic technology; v. PPP Projects these comprise projects under the Public-Private-Partnership (PPP) program of the government, as endorsed by the PPP Center or other government concerned agency/unit. e. Industrial Tree Plantation this covers extensive plantation of forest land of tree crops, except fruit trees, for commercial purposes with an area of not less than two hundred (200) hectares. Tree crops include timber and non-timber species such as rubber, rattan, bamboo, and other species for commercial and industrial purposes. f. Business Process Outsourcing (BPO) Activities and Other Information Technology (IT) Enabled Services these cover voice and non-voice business processing operations, creative and knowledge based services; g. Housing Projects this covers the development of low-cost mass housing and the manufacture of modular housing components preferably using indigenous raw materials with a minimum project cost of not less than Ten Million Pesos (P10,000,000.00) and other housing projects ( i.e. , subdivisions, condominiums) with a minimum project cost of not less than One Hundred Million Pesos (P100,000,000.00); ETHIDa h. Mass Transport System this covers the establishment of an alternative mode of transportation which utilizes non-conventional fuel ( i.e. , electricity, wind power, solar power) with a minimum project cost of at least One Hundred Million Pesos (P100,000,000.00); i. Research and Development/Industrial Service Facilities in support of the Micro, Small and Medium Enterprises (MSMEs) this covers research and development activities and the establishment of product testing and quality control laboratories, training and demonstration centers, packaging facilities and manufacture of parts/components and materials and supplies directly/reasonably needed in the production of local food and non-food products; j. Hospital/Medical/Health and Wellness Services including Retirement Villages and Facilities for Persons with Disability this covers the establishment of the following: i. Medical facilities including secondary, tertiary hospitals with a minimum capacity of fifty (50) beds and a project cost of at least One Hundred Million (P100,000,000.00); ii. Health Spa and Resort, such as, but not limited to, establishment and operation of destination spa, resort/hotel spa therapeutic centers, traditional healing services, e.g. , "hilot"; iii. Retirement Villages, however, it must have at least four hectares of contiguous land, with project cost of at least Two Hundred Million Pesos (P200,000,000.00) and endorsed by the Philippine Retirement Authority (PRA); iv. Special Schools, Day Care Centers/Homes, Residential Communities or Retirement Villages solely to suit the needs and requirements of persons with disability. These projects must have endorsement from the Department of Social Welfare and Development (DSWD). SECTION 11. Amendments . Pursuant to this Code, the Board may submit or propose amendments to the Sangguniang Bayan in the areas of the Annual Investment Priorities Plan, alter any terms of the declaration of an investment area or terminate the status of preference. In no case, however, shall any amendments of the plan impair whatever rights which may have already been legally vested in the registered enterprises, which shall continue to enjoy such rights to the full extent under this Code. The Board shall not accept application in an area after approval of its deletion as an Investment Priority Area. SECTION 12. Registration of Enterprises . 1. Pre-Qualification Requirements For purposes of application for registration and availment of incentives under this Code, the following qualifications shall be complied with: a. The enterprise must have complied with all the requirements mandated under existing laws, rules and regulations for doing business in the Philippines; b. The activity engaged in must be listed in the IPAs under Section 11 of this Code; c. The place of operation or production shall be located within the territorial jurisdiction of Naujan; d. At least fifty percent (50%) of its workforce shall be bonafide residents of Naujan giving equal opportunities for men, women, the poor, indigenous people and the physically handicapped; e. Project must have safeguards against pollution or resource use if necessary; f. Must have an initial investment of not less than Two Million Pesos (P2,000,000.00) for new projects or at least Ten Million Pesos (P10,000,000.00) for expansion projects, except those provided in Section 11, paragraphs (g), (h) and (j) of this Code. 2. Types of Projects for Registration a. New Projects b. Expansion Projects 3. Documentary Requirements a. Single Proprietorship Copy of Business Name Registration issued by the Department of Trade and Industry (DTI); Copy of Audited Financial Statements (if existing); Completed application form for registration to be provided by the Board; Locational clearance to be issued by the Zoning Officer certifying that the location conforms to the municipality's Zoning Ordinance; Such other documents that may be required by the Board. b. For Partnership/Corporation Copy of the Articles of Partnership or Incorporation; Certified true copy of its Certificate of Registration issued by the Securities and Exchange Commission (SEC), for Corporation/Partnership; Resolution of the applicant's Board of Directors, in case of a Corporation authorizing the filing of application; Copy of Audited Financial Statements (if existing); Environmental Compliance Certificate (ECC) or Non Compliance Certificate (NCC), if applicable; Completed application form for registration to be provided by the Board; Locational clearance to be issued by the Zoning Officer certifying that the location conforms to the municipality's Zoning Ordinance; Such other documents that may be required by the Board. c. For BOI Registered Enterprises Certified true copy of the BOI Certificate of Registration; Copy of the documents submitted to BOI pertaining to their registration; 4. No Double Availment of incentives/benefits under different laws and/or programs. 5. Prior Consent of NCIP . The enterprise must secure from the Office of the National Commission on indigenous Peoples (NCIP) a Free and Prior Informed Consent (FPIC) should the proposed site of investment be located within the ancestral domain claim of the indigenous people. 6. Registration Procedures a. Filing of Application All applications shall be filed with the Investment Promotion Center (IPC). b. Check Listing/Assessment of Documents Client presents documents for check listing on its completeness and consistency of information. cSEDTC c. Date of Official Acceptance only complete application shall be officially accepted and registered in the Registration Book. Date stamped on the application shall be considered as the date of official acceptance of the application. d. Notice of filing of application in the municipal or barangay hall shall suffice publication requirement. e. Order of Payment shall be issued for complete application for payment of the filing fee. f. Evaluation/Approval of Application Once an application is officially accepted, the project will be evaluated by the IPC, which may conduct an ocular inspection at the premises of the business, if necessary. The evaluation of the application shall be presented for the action of the Board. If the application is approved, the IPC shall notify the applicant and inform the Municipal Treasurer's Office and the Municipal Assessor's Office of such approval, guidance and appropriate action. If the application is denied, the IPC shall inform the applicant in writing. In both cases, a Board Resolution shall be entered in the minutes of the meeting of the Board. g. Filing Fee A non-refundable filing fee in the amount of Three Thousand Pesos (P3,000.00) shall be paid together with the required documents for registration. Micro enterprises shall be exempted from the application fee. h. Certificate of Registration Upon approval, an enterprise shall be issued a Certificate of Registration with the signature of the Chairperson of the Board or such other officer as the Board may designate for the purpose as the need arises. It shall state among others, the following: (1) name of Registered Enterprise; (2) the Investment Priority Area (IPA) in which the registered enterprise will engage in; (3) the incentives granted and period of its availment; and (4) Such other terms and conditions to be observed by virtue of its registration. SECTION 13. Incentives. A. Fiscal Incentives . The following fiscal incentives shall be given to enterprises consistent with the Municipal Revenue Code and Book II of the Local Government Code of 1991 which include the following: 1. Exemption from payment of business taxes imposable by the municipality for a period of five (5) years; AIDSTE 2. Exemption from payment of business taxes pursuant to Section 133 (g) of the LGC; 3. Exemption from the payment of basic real property tax representing the 40% share of the municipality for five (5) years; 4. Exemption from the payment of basic real property tax representing the 40% share of the municipality for ten (10) years for Commercial Tree Plantation; 5. Exemption from the payment of basic real property tax representing the 40% share of the municipality for five (5) years for Fruit Bearing Tree Plantation. B. Non-Fiscal Incentives . In addition to the incentives provided under the Omnibus Incentive Code of 1997 and the incentives provided in the preceding Section, registered enterprises and investors, as well as existing enterprises shall be granted the following non-fiscal incentives: 1. Provision of one-stop documentation center for simplified documentation procedures in business registration; 2. Provision of technical trainings to answer the skills requirement of industries located in the municipality of Naujan pursuant to a MOA between the LGU and the concerned national agency; 3. Assist investors in securing electric power and water supply connection; 4. Coordinate the negotiation of special rates for utilities for industrial with a certain minimum load; 5. Assist investors in their site selection and negotiation for right of way; 6. Such other after care services that may be accorded to investors. SECTION 14. Appropriation . There shall be allocated One Million Pesos (P1,000,000.00) annually as Municipal Investment Fund which may be sourced from the General Fund Annual Budget of the Municipal Government of Naujan. Thereafter, the Municipal Government shall appropriate annually based on the budget presented by the Board. Said fund shall be used for investment development and promotional activities as determined by the Board. SECTION 15. Inspection . The Board is empowered and authorized to conduct inspection of the premises or examination of the business of the registered enterprises to check on the progress. This shall include the records and books of the enterprise's business operations, audited financial statements and total incentives availed under this Code and other codes. SECTION 16. Penal Clause . Any violation of the provisions of this Code shall be ground for the cancellation or revocation of the Certificate of Registration of the project/business. The cancellation or revocation of the Certificate of Registration shall mean the withdrawal of all the incentives granted under this Code and all taxes, fees and charges previously exempted shall become due and demandable. SECTION 17. Separability Clause . Should any provision of this Ordinance be declared unconstitutional or illegal by any court of competent jurisdiction, those parts which are not so declared shall remain in full force and effect. SECTION 18. Repealing Clause . All resolutions, ordinances and executive orders or any provision thereof which are inconsistent with any of the provisions hereof are hereby amended or modified accordingly. SECTION 19. Effectivity Clause . This Ordinance shall take effect after the lapse of sixty (60) days from the date of publication in a newspaper of general circulation. ENACTED: This 15th day of February 2016, in Naujan, Oriental Mindoro, on motion of Coun. Candido J. Melgar, Jr., duly seconded by all members present. I HEREBY CERTIFY THAT THIS IS A TRUE AND ACCURATE COPY OF MUNICIPAL ORDINANCE NO. 90, S. 2016, DULY ENACTED BY THE SANGGUNIANG BAYAN ON FEBRUARY 15, 2016. (SGD.) GINA DC. PATLING Secretary to the Sangguniang Bayan ATTESTED: (SGD.) SHERYL B. MORALES Presiding Officer Pro Tempore APPROVED: February 18, 2016 (SGD.) ATTY. MARK N. MARCOS Municipal Mayor