San Carlos City, Negros Occidental Investment Incentive Code of 1997

March 5, 1998 SAN CARLOS CITY ORDINANCE NO. 198-98 AN ORDINANCE ENACTING THE SAN CARLOS CITY, NEGROS OCCIDENTAL INVESTMENT INCENTIVE CODE OF 1997 AND FOR OTHER PURPOSES Introduced by: Hons. L. B. Yu, Tolcidas and Santillan Be it ordained by the Sangguniang Panlungsod of the City of San Carlos, Negros Occidental, in regular session assembled that: TCAScE ARTICLE I Title and Declaration of Policy SECTION 1. Title. This Ordinance shall be known and cited as the San Carlos City, Negros Occidental Investment Incentive Code of 1997. SECTION 2. Declaration of Policy. It is hereby declared to be the policy of the City Government of San Carlos, Negros Occidental to attract and encourage new investment, both foreign and domestic to come and invest in the city for the purpose of accelerating the sound development of the city in accordance with the City Development Plan. The City of San Carlos welcomes and encourages domestic and foreign capitals to establish enterprises that would utilize substantial amount of labor, raw materials and natural resources of the city in the expansion and diversification of agri-business, tourism facilities, transshipment facilities, miscellaneous light manufacturing activities, property development and such other areas of investments that provide employment opportunities, raise standard of living of the people and provide equitable distribution of wealth. ARTICLE II Definition of Terms SECTION 3. Definition of Terms. The following terms and phrases shall mean as follows when used under this Code: cTDaEH a.) "Code" shall refer to the San Carlos City Investment Incentive Code of 1997. b.) "Board" shall refer to the San Carlos Investment Board created under this Code. c.) "City" still mean San Carlos City covering all areas within its territorial jurisdiction. d.) "Local Investment" shall refer to any equity investment made by a Filipino in the form of cash or other assets actually put into the project. e.) "Foreign Investment" shall mean an equity investment made by a non-Filipino or Foreign Corporation in the form of foreign exchange or other assets actually transferred or invested in the Philippines. f.) "New Enterprises" shall refer to those prospective investors who have not engaged in any type of business in San Carlos City but interested in establishing their places of operation in the city. g.) "Existing Establishment or Enterprises" shall refer to those enterprises who are actually engaged and whose operations are located in the city. h.) "Priority Investment Area" shall mean the economic activities that the Board shall have approved and declared as such after thorough study and evaluation. i.) "Registered Enterprise" shall mean enterprise or business registered in accordance with the provision of this code. cSaATC j.) "National Law" shall refer to decrees, executive orders and all acts passed by Congress. k.) "Special Economic Zone" shall refer to RA 7916 known as the Special Economic Zone of 1995. l.) "BOT" shall mean to build-operate-transfer (build-transfer or RA 7718, which was passed on May 5, 1994. m.) "Bonafide Resident" shall mean people living or residing legitimately in San Carlos City, Negros Occidental. ARTICLE III San Carlos City Investments Board SECTION 4. San Carlos City Investment Board. There shall be created the San Carlos City Investment Board (SCCIB) for the purpose of overseeing the implementation of the provision of this Code. Chairman San Carlos City Mayor Vice Chairman City Vice Mayor Members: Chairman SP Committee on Engineering Chairman SP Committee on Urban Planning Chairman SP Committee on Business & Trade Chairman SP Committee on Finance, Budget & Appropriations City Administrator City Legal Officer City Planning & Development Coordinator City Treasurer City Accountant Dept. of Trade Representative Two (2) Private Sector Representatives Provided, that the membership of the Board maybe increased by the Sangguniang Panlungsod through the recommendation of the Board. Provided further, that the representative from the Department of Trade and Industry and the two (2) Representatives from the Private Sector shall be appointed by the City Mayor upon recommendation of the department and sector they represent. Provided furthermore, that the term of office of the Private Sector Representative shall be two years. Provided finally, that the City Legal Officer shall be the Secretary to the Board. SECTION 6. n Meeting and Quorum of the Board. The Chairman or any five (5) members of the Board may call a meeting. The Board shall meet at least once every quarter or as often as maybe necessary on such a day and time as it may fix. The presence of at least a majority of its members shall constitute quorum. SECTION 7. Powers and Functions of the Board. The primary function of the Board shall be to establish favorable and stable policy on business to promote and encourage investors to invest in San Carlos City. The majority members of the Board shall constitute a quorum for it to exercise its powers and performs its duties which shall be as follows: ISHCcT a.) To promulgate the governing Implementing Rules and Regulations for the implementation of the provision of this Code; b.) To commission economic and technical research for the purpose of preparing the Site Development Priority Plan (SDPP) pursuant to the land and use plan of the city; c.) To grant appropriate incentives and support measures in order to attract qualified investors; d.) Process and approve application for incentive availment; e.) Decide controversies concerning the implementation of this Code; f.) Check and verify the compliance by the registered enterprises; g.) Cancel and suspend the enjoyment of incentive benefits of this Code and/or require refund of incentives enjoyed by such investors for violating the provisions of this Code; h.) To secure additional funding and other resources to implement the budgetary support provided by the San Carlos City Government for the operation of the Secretariat in the implementation of this Code; i.) Exercise all powers necessary or incidental to attain the purpose of this Code. CAacTH j.) Assist in the settlement of disputes arising from labor problems. SECTION 8. Powers and Functions of the Chairman. The Chairman of the Board shall have the following powers and duties: a.) To preside over the regular and special meetings of the board; b.) To render annual report to and such other reports as may be requested by the San Carlos City Government; c.) To act as liaison between investors seeking collaboration in particular area of investment; d.) To recommend to the Board such policies and measures he may deem necessary to carry out the objectives of this Code; e.) Generally, to exercise such other powers and perform such other duties as may be directed by the Board from time to time. ARTICLE IV Preferred/Priority Investment Areas/Activities and Appropriate Incentives and Support Measures SECTION 9. Preferred Priority Investment Areas/Activities. The Board shall prepare all list of priority investment areas and activities to be promoted to prospective investors based on findings and recommendation of economic and technical researches upon consultation with the private sectors and upon approval by the Sangguniang Panlungsod. The Board shall, in addition, identify and recommend for approval by the Sangguniang Panlungsod appropriate incentives and support measures to promote priority investment areas and activities. IAETDc A. Preferred Investment Areas/Activities Incentives will be provided to new, expanding and diversification of projects in the following investment areas: 1. Agri-business such as but not limited: a.) Dried fruit processing b.) Canned food products c.) Cut flower production 2. Tourism facilities such as but not limited to: a.) Hotels b.) Beach and mountain resorts c.) Parks, restaurants and marina 3. Transshipment facilities such as but not limited to: a.) Airport infrastructures/airport facilities b.) Common bonded warehouses c.) Shipping facilities/Seaport Infrastructure d.) Ship Building/Shipbreaking/Ship repair 4. Miscellaneous manufacturing activities such as but not limited to: DcHSEa a.) Garment b.) Footwear c.) House wares d.) Toys e.) Electrical & Electronics 5. Property development such as but not limited to: a.) Private Industrial Estate b.) Commercial/Office buildings c.) Convention centers d.) Retirement Estate e.) Memorial Park 6. Power projects: a.) Power Generation b.) Power Transmission B. Other Preferred Investments Incentives will be provided to new, expanding or diversifying projects of the following enterprises that are: 1. Registered under the following National Special Laws: a.) Omnibus Investment Act of 1987; SCaITA b.) Export Development Act of 1994; c.) Special Economic Zone Act of 1995; d.) BOT Law; e.) Other laws that shall be promulgated hereafter that are giving incentives. 2. Labor generating enterprises; 3. Enterprises established in less developed areas as determine by the zoning ordinance; 4. Manufacturing enterprises using raw materials available locally; 5. General Merchandising or consumer oriented firms; 6. Service oriented enterprises. C. Additional Investment Areas Based on the result of a study, the Board may include in the list additional investment areas, subject to the approval by the Sangguniang Panlungsod, provided it: 1. Generates high levels of employment 2. Features a high degree of value-added 3. Creates linkages with local industries 4. Must not have deleterious effect on the environment Provided, that the Board shall review these additional investment areas every two (2) years and may remove an area from the list if it deems sufficient investment in the area has been attained and when continued extension would adversely affect the interest of the city and the public. The Board may also remove an area from the list of preferred areas if it is convinced that the investment area is not attractive and may only result in an unfavorable business climate. aTHCSE ARTICLE V Investor/Investment SECTION 10. Investor/Investment. This Code shall apply to any person or entity with the following qualifications: a.) All Filipinos and foreign nationals not otherwise disqualified by law; b.) Single proprietorship, partnership or corporation who are registered by the Bureau of Domestic Trade. Provided banks and financing institutions who are governed by banking laws shall be excluded; c.) Other investors with initial capital investment of not less than (P5,000,000.00) for Filipino investors and Two Hundred Thousand Dollars ($200,000.00) for foreign investors. Provided, it must be proven that the required investment have been remitted to a bank in San Carlos City; Provided, in case of corporation, capitalization shall mean fully paid-up capital of a minimum Five Million Pesos (P5,000,000.00). ARTICLE VI Registration of Enterprise SECTION 11. Qualifications of a New Enterprise. New investors who intend to avail of the incentives provided in this Code shall meet the following qualifications: a.) That the business enterprise must have complied with all the requirements mandated under existing local and national laws; b.) That the investor's place of operation or production be located within the territorial jurisdiction of the City of San Carlos; c.) That the prospective investment must engage in preferred areas of investment as maybe hereafter be declared by the Board; cAaDHT d.) That the enterprise must have a capitalization of at least Five Million Pesos (P5,000,000.00) but not more than (P10,000,000.00) Ten Million Pesos in case of a small scale enterprise, at least Ten Million Pesos (P10,000,000.00) but not more than Thirty Million Pesos (P30,000,000.00) in case of a medium scale enterprise and more than Thirty Million Pesos (P30,000,000.00) in case of a large industry. Provided, in case of corporation, capitalization shall mean fully paid-up capital of a minimum Five Million Pesos (P5,000,000.00); e.) That the new enterprise shall provide substantial number of employment to bonafide residents of San Carlos City out of labor force. SECTION 12. Qualification of an Existing Enterprise. An existing enterprise may avail of the incentives under this Code provided it meets the following qualifications: a.) That the business enterprise must have complied with all the requirements mandated under existing local and national laws; b.) That the expansion, diversification must engage in activities mention in Section 9 or in any other preferred areas of investments as may hereafter be declared by the Board. c.) That the existing enterprise whose place of operation is already located in the City of San Carlos, but which will undertake any of the following activities: HCaDIS 1.) Relocate its principal office from other places in the Philippines to San Carlos City. 2.) Expand its existing production capacity or construct new buildings or other civil works, which will result in an increase in production capacity or output. d.) That the expansion shall have the capitalization of at least Five Million Pesos (P5,000,000.00) but not more than Ten Million Pesos (P10,000,000.00) for small-scale enterprise, at least Ten Million Pesos but not more than Thirty Million Pesos (P30,000,000.00) for medium-scale enterprise and more than Thirty Million Pesos (P30,000,000.00) for large-scale industry; Provided, in case of corporation, capitalization shall mean fully-paid capital of a minimum Five Million Pesos (P5,000,000.00); e.) That the expansion shall provide out of labor force substantial number of employment to bonafide residents of San Carlos City; SECTION 13. Qualification Requirements. All applications shall be filed in the Office of the City Mayor, through the San Carlos City Investment Board, which shall be acted upon by the Board within thirty (30) days from receipt. The date appearing in the Registry Book and stamp on the application shall be official receipt thereof. Non-refundable fee to the following shall be collected: a.) Small-scale enterprise P2,000.00 b.) Medium-scale enterprise 5,000.00 AHCETa c.) Large-scale industry 10,000.00 The following papers or documents shall be submitted together with the application: a.) Three (3) copies of completed form to be provided for by the Board; b.) Project study of the proposed investment showing that the project is technically, financially and economically viable; c.) A copy of its Article of Incorporation and By-laws duly approved by the Securities and Exchange Commission and the Board of Investment, as the case may be; d.) A certified true copy of its Certificate of Registration with the Securities and Exchange Commission, the Board of Investment, the CDA and the Department of Trade and Industry, as the case may be; and e.) Resolution of the applicant's Board of Director in case of corporation authorizing the filing of the application. SECTION 14. Registration and Approval Procedures. The Board is authorized to adopt rules and regulations to facilitate action on all application filed with it, prescribed criteria for the evaluation of several applications, and device standard form for use of applicants. Registration procedures shall be as follows: ScHADI 1. Applications shall be submitted to the Board with the required documents; 2. Applicant pays the non-refundable filing fee as prescribed in Section 13; 3. Evaluation of the project; 4. If not qualified, the Board shall inform the applicants; 5. If found qualified, the Board forwards the application to the Chairman for approval; 6. Once approved by the Chairman, the Board inform the applicants in writing and delivers the Certificate of Registration; DACcIH SECTION 15. Certificate of Registration. A registered enterprise shall be issued a Certificate of Registration with the Signature of the Chairman of the Board and such other officer as the Board may empower or designate for the purpose. The certificate shall be in such forms and style as the Board may determine and shall state among other matters, the following: 1. The name of the registered enterprise; 2. The preferred/priority areas of investment in which the enterprise will engage; 3. Other terms and conditions to be observed by the registered enterprise by virtue of its registration. ARTICLE VII Rights and Privileges of Registered Enterprise SECTION 16. Rights and Privileges Guaranteed by the City Government. In addition to the rights and guarantees provided by law and constitution, the City Government through the San Carlos City Investment Board, in order to enhance investors' confidence in the incentive program of the city, shall: 1. Provide comprehensive information to prospective investors on the economic priorities of the City Government; 2. Take full account of the need of the investors in the formulation of policies and ordinances that affect investments; HSCATc 3. Not interfere or modify arrangement with investor after investment prospect has been accepted and approved, unless the law provides otherwise; 4. Allow, in accordance with law to employ qualified foreign personnel where no local personnel or worker is capable and available; 5. Resolve in favor of the investor all doubts concerning benefits and incentives granted under ordinances enacted for the purpose of encouraging investments; 6. Assist in the settlement of disputes arising from labor problems; 7. Establish and operationalize investment and promotion centers to assist the prospective investors in the registration and issuance of business permits, identification of sites and negotiation with lot owners, land conversion, identification of potential joint-venture partners; 8. Allow free use of City Government land for a period of twenty-five (25) years for the construction of infrastructure by the prospective investor, subject to the approval by the Sangguniang Panlungsod of the city. Provided, that it shall be constructed in less developed area of the city, not allotted for government use and the cost of the infrastructure shall not be less than Ten Million Pesos (P10 Million).Provided further, that the infrastructures shall be turnover to the City Government, without the need of reimbursement after the 25-year period has lapsed as if it closes shops before the 25-year period. IDTSEH In case the registered enterprise decides to continue his business operation after the twenty-five year period, the enterprise may continue occupying the infrastructures, PROVIDED, the City Government has no plans for its use, and PROVIDED FURTHER, that the investor shall have to pay the rental for the infrastructure and the land so occupied at the rate that may be determined by the city and approved by the Sangguniang Panlungsod. ARTICLE VIII Incentives to Registered Enterprises SECTION 17. Tax Incentives to Registered Enterprise. In addition to the incentive provided by law and by RA 7160 or Local Government Code of 1991, new investment of a registered enterprise provided for in Section 9, sub-sections A, B and C who qualified under this code shall enjoy the following tax incentives: 1. Preferred/Priority Investment Areas/Activities: a.) Within seven (7) years from the start of the commercial operation, the registered enterprises under this code shall be fully exempted from the payments of Mayor's Permit fees, Building Permit fees, Business Sales taxes, transfer tax and other fees and charges imposed under Ordinance No. 258, Series of 1974, known as the San Carlos City Revenue Code of 1974, as amended; b.) Within five (5) years from registration or start of commercial operation, whichever are earlier, the registered enterprises shall be fully exempted from paying the Basic Real Property Tax and Special Educational Fund (SEF).Provided, that the applicants to this incentive program are required to secure licenses and permits necessary to operate their business without paying the corresponding fees or charges. SICDAa 2. Other Preferred Investments For new, expanding or diversifying business enterprise registered under National Laws such as Omnibus Investment Code of 1987, Export Development Act of 1994, the Special Economic Zone Act of 1995, the BOT Law or other laws that shall be promulgated thereafter, which grant incentives, shall enjoy the same tax incentives enumerated in Section 17, sub-section 1-a and b from the date of registration or from the start of commercial operation, whichever is earlier. 3. Additional Investment Areas For new, expanding or diversifying business enterprises engaged in other types of business, the exemption which starts from the date of registration or commercial operation, whichever is earlier, shall enjoy the same tax incentives enumerated in Section 17, subsection 1 and 2. ARTICLE IX Appropriation SECTION 18. Appropriation. The City government shall appropriate annually, based on a budget presented by the Board, the necessary funding requirement for the continued implementation of the provision of this code. ARTICLE X Miscellaneous Provisions SECTION 19. Miscellaneous Provisions : 1. Existing business that is retired for the purpose of availing this incentive program shall not be allowed to apply under this ordinance. DHIcET 2. The incentives and privileges granted to registered enterprises are not transferable except in the event of death and permanent incapacity where the privileges shall be transferred to the heir of the descendant in accordance with the law of succession. 3. At the end of each fiscal/calendar year, the registered members shall submit financial statement to the San Carlos City Investment Board. ARTICLE XI Final Provisions SECTION 20. Penal Clause. Any violation of the provision of this code, existing laws, ordinances, rules and regulations, shall be the ground for cancellation or revocation of the registration of the business and the withdrawal of all the incentives granted under this code. SECTION 21. Separability Clause. The provision of this code are hereby declared to be separable and in the event that one or more of the provisions are declared not valid by any competent bodies or court of competent jurisdiction, such judgment shall not affect or impair the remaining provisions, sections or part which shall continue to be in force and effect. SECTION 22. Repealing Clause. All ordinances, rules and regulations or part thereof, inconsistent or in conflict with the provisions of this code are hereby repealed, amended or modified accordingly. SECTION 23. Effectivity. This ordinance shall take effect immediately upon approval. ENACTED: March 5, 1998, by the affirmative votes of Hons. MAISOG, CATURAY, REYES, L. B. YU, SANTILLAN, TOLCIDAS, AZCONA, VALMAYOR, D. N. YU, APUHIN, GADIANE and DAVILA. HcDSaT n Note from the Publisher: Copied verbatim from the official copy. Missing Section 5.