Establishing the San Pablo City Investment Code of 2008

July 1, 2008 Excerpt from the Minutes of the Regular Session of the Sangguniang Panlungsod, City of San Pablo, held on July 1, 2008 PRESENT: Hon. Frederick Martin A. Ilagan Vice-Mayor & Presiding Officer Hon. Danilo R. Yang Member Hon. Richard C. Pavico Member Hon. Diosdado A. Biglete Member Hon. Alejandro Y. Yu Member Hon. Angelo L. Adriano Member Hon. Leopoldo M. Colago Member Hon. Eleanor T. Reyes Member Hon. Dante B. Amante Member Hon. Arsenio A. Escudero Jr. Member Hon. Paolo Jose Cristobal C. Lopez Member Hon. Kristin Ann A. Picazo Member ABSENT: Hon. Gener B. Amante Member On motion of Hon. Angelo L. Adriano , duly seconded by Hon. Arsenio A. Escudero Jr., Hon. Paolo Jose Cristobal C. Lopez and Hon. Eleanor T. Reyes the following ordinance authored by Hon. Angelo L. Adriano was enacted, to wit: IHaCDE SAN PABLO CITY ORDINANCE NO. 009-08 AN ORDINANCE ESTABLISHING THE SAN PABLO CITY INVESTMENT CODE OF 2008 BY AUTHORITY OF COMMONWEALTH ACT NO. 520 AS AMENDED, OTHERWISE KNOWN AS THE CHARTER OF THE CITY OF SAN PABLO AND REPUBLIC ACT NO. 7160 AS AMENDED, OTHERWISE KNOWN AS A LOCAL GOVERNMENT CODE OF 1991, BE IT ORDAINED BY THE SANGGUNIANG PANGLUNGSOD OF SAN PABLO IN SESSION ASSEMBLED, that: CHAPTER I Title, Declaration of Policies and Purpose SECTION 1. Short Title . This ordinance shall be known as the "San Pablo City Investment Code of 2008." SECTION 2. Declaration of Policy . It is hereby declared a policy of the City Government of San Pablo to attract investors, both local and foreign, by creating a good business climate for them and providing incentives for investments that will promote development, income generation and employment for the people of San Pablo City. SECTION 3. Purposes, Intents, Objectives. It is the purpose, intent and objectives of this ordinance: a. To lay down the legal framework and mechanism for integrating the investment incentives laws of the national government with the local development initiatives; b. To spread development from the urban areas to undeveloped and underdeveloped areas of the city; c. To promote the flow of investors, both foreign and local into San Pablo City, thus generating employment opportunities and providing backward and forward linkages among industries in the city, province and the rest of the country; d. To transform selected areas of San Pablo City into highly developed Agri-Industrial, Industrial, Commercial, Tourist Investment and Financial Centers of the province of Laguna, the CALABARZON Region and the country in general; and e. To promote balanced development and general welfare of the people of San Pablo City through rationalized land use. DcCITS CHAPTER II Definition of Terms SECTION 4. Definition of Terms. For purposes of this Code, the following definition of terms shall apply: a. "BOI" refers to the Board of Investment under Executive Order No. 226, otherwise known as the Omnibus Investment Code. b. "Capitalization" refers to the total project cost. c. "Center" refers to San Pablo Business Development and Promotions Center. d. "Board" refers to the Local Investment Board. e. "Existing Firms" refer to those firms already operating in San Pablo City. f. "Firms under Expansion" refers to existing firms already engaged in preferred investment, which are expanding their operations in these preferred investment to Growth and Priority Development Areas pursuant to the City Land Use Plan/Zoning Ordinance. g. "Firms under Diversification" refers to existing firms that are investing in or diversifying to preferred investments listed in Section 12 hereof and locating these investments to Growth and Priority Development Areas, pursuant to the City Land Use Plan/Zoning Ordinance. h. "Foreign Investments" shall mean equity investments owned by a non-Philippine national. i. "Local Investment Code" refers to the San Pablo Investment Code of 2008. j. "Investment" means expenditures for future benefits. k. "National Laws" refer to the following: OIC OF 1987 OMNIBUS INVESTMENT CODE OF 1987 RA 7844 EXPORT DEVELOPMENT ACT OF 1994 RA 7916 SPECIAL ECONOMIC ZONE OF 1995 RA 7718 BUILD-OPERATE TRANSFER LAW OR BOT LAW WHICH WAS ENACTED ON MAY 1994 RA 8289 MAGNA CARTA FOR SMALL ENTERPRISE l. "Preferred Investment" refers to investments listed in Section 12 of this Code and those that may hereafter be identified by the Board. ASHEca m. "Business Plan" refers to a project profile in prescribed form, which presents the marketing, technical, financial, and socio-economic aspect of the project. n. "Registered Enterprise" shall mean an individual, partnership, cooperative, corporation or other entity incorporated and/or organized and existing under Philippine laws that is registered with the Board of Investment (BOI), Department of Trade and Industry, Securities and Exchange Commission, Cooperative Development Authority, and other registering agencies. o. "Registered Eligible Enterprise" shall mean any individual, partnership, cooperative, corporation, or other entity incorporated and/or organized and existing under Philippine law that is registered with the Local Investment Board and granted a Certificate of Eligibility for availment of benefits under this Code. CHAPTER III The Local Investment Board SECTION 5. Local Investment Board. There shall be created a Local Investment Board (LIB) for the purpose of overseeing the implementation of this Local Investment Code. SECTION 6. Composition of the Local Investment Board. The Board shall be composed of the following: a. City Mayor Chairperson b. Chairman, SP Committee on Trade, Commerce & Industry Vice Chairperson c. City Treasurer Member d. City Assessor Member e. City Planning and Development Officer Member f. Chairperson, SP Committee, Ways and Means Member g. Provincial director Department of Trade and Industry Member h. President of the San Pablo City Chamber of Commerce & Industry Member i. Chairperson of the San Pablo City Tourism Council Member The private sector representatives shall be appointed by the City Mayor for a term of two (2) years. Provided however, that the term of office of private sector representatives shall in no case extend beyond their tenure of office in their respective organizations. DTIaCS SECTION 7. Meeting of the Board. The Board shall meet at least once a month or the Chairperson may convene the Board anytime whenever he/she deems it necessary. SECTION 8. Powers and Duties of the Local Investment Board. The board shall be responsible for the regulation and promotion of investments in the City. The majority of the members of the LIB shall constitute a quorum sufficient for it to exercise its powers and perform its duties which shall be as follows: a. Establish and oversee the San Pablo Business Development and Promotion Center. b. Process and act on applications for incentive availment. c. Grant incentives to qualified investor applicants. d. Decide matters regarding interpretation and implementation of this Code. e. Check and verify compliance by registered enterprise. f. In case of violation of this Code, cancel or suspend availment of incentives given and/or require refund of incentives by an investor who has violated the provision of this Code. g. Make arrangements with national government agencies and/or private organizations for the purpose of promoting investments. h. Submit to the Sangguniang Panglungsod applications for incentives as recommended by the Board for approval of the City Council pursuant to the provisions of Book III, Article III, Section 458 (a.2.xii) of Republic Act No. 7160. i. Render an annual report to the Sangguniang Panglungsod. j. Exercise all powers necessary of incidental to attain the purpose of this Code. CHAPTER IV Incentives for Investors Eligible under National Laws SECTION 9. Investors Enjoying Incentives under National Laws. a. Investors enjoying incentives under E.O. 226 (OIC of 1987), RA 7844, RA 7916, RA 7718 and RA 8289, shall be exempted from the following: HSCATc 1. Payment of building permit fees, business fees, sales taxes and other fees and charges imposed by existing city ordinances. The exemption for business fees, sales taxes and other fees shall be for a maximum period of five (5) years from the date of approval by the board. 2. Payment of basic real property tax imposed by existing city ordinance on improvements, but only for new improvements introduced by the investor. In the case of already existing improvements, the exemption shall apply only to the increase in the assessment because of rehabilitation, adaptation, expansion, or introduction of equipment/machines. The exemption shall be for maximum of five (5) years from the date of approval by the Board. b. Investors enjoying incentives under OIC of 1987 shall be exempted from payment of the fees and taxes as enumerated under paragraphs 1 and 2 above, for a maximum period of four (4) years for non-pioneer and five (5) years for pioneer industries. c. In both cases under subsections a. and b., investors must show compliance with all requirements under existing national and local laws or guidelines issued by accrediting agencies and present the certificate of registration showing the grant of incentive by the appropriate national agency. The period during which the grant of incentives shall be valid shall not extend beyond the period of incentive granted in the certificate of registration issued by the national agency. Exemption granted shall be effective only upon approval of the application by the Board. Fees paid prior to approval of incentives availment under this Chapter shall not be subject to refund. Neither shall exemptions granted include fees and taxes already accrued prior to approval of the application. CHAPTER V Incentives for Preferred Investments, and Others SECTION 10. This chapter grants incentives to investors in preferred investments, investors locating their businesses in growth and priority development areas and investors under expansion and diversification. SECTION 11. Incentives. Investors enjoying incentives under this Chapter shall be exempted from: IAEcCT a. Payment of building permit fees, business fees, business sales taxes and other fees and charges imposed by existing city ordinance, but only for fees and taxes that fall due after approval of the application for incentives: For investors in Preferred Investments, investors locating their businesses in growth and priority development areas and investors under expansion and/or diversification, the exemption for business fees, sales taxes, and other fees shall commence from the date of actual commercial operation. Provided however, that in both instances, payment of Amusement Taxes shall be governed by existing City Ordinance or provisions of RA 7160 on the collection of Amusement Tax. Provided further, that investors enjoying tax incentives under this section can file a request for the reduction of amusement taxes with the Sangguniang Panglungsod which may either approve or disapprove such application . b. Payment of basic real property tax imposed by existing city ordinance for property investments of new investors and only for new improvements introduced by the existing investors: In the case of existing improvements, the exemption shall apply only to the increase in the assessment because of rehabilitation, adaptation, expansion and/or diversification. The exemption for basic real property tax shall commence from the date of actual commercial operation. Special Education Fund (SEF) shall be paid in full. SECTION 12. Investors under Preferred Investment. The incentives in Section 11 hereof shall be available to those investing in new projects under preferred investments listed below, to wit: a. Manufacture of agro-based products b. Manufacture of handicraft products c. Tourism related-businesses d. Property development projects e. Transhipment facilities f. Labor intensive enterprises g. Education-related entities but not limited to new educational facilities and bookstores h. Information & Communication Technology-related investments i. Other preferred investment areas/activities as the Board may deem appropriate SIAEHC SECTION 12 (A). Addition of Preferred Investment. The Board may, if necessary, add new investments to the list after a study made either by the LIB or study group engaged by the LIB. The bases for addition to the list found in Section 12 are: 1. It must generate high levels of employment. 2. It must feature a high degree of added value to raw materials. 3. It must create linkages with local industries. 4. It must be environment-friendly. SECTION 12 (B). Removal of Preferred Investment. The Board may recommend to the Sangguniang Panglungsod the removal of any activity from the list of preferred investments under Section 12 or additions thereto under Section 12 (A) in the following cases: 1. Sufficient investments in the preferred area of activity have been attained as determined by the Local Investment Board. 2. The continued extension of incentives for the specific investment is no longer to the interest of San Pablo City. 3. The investment or activity does not attract investors within a reasonable length of time or may result in an unfavorable business climate. SECTION 12 (C). Capitalization Requirements, Period of Exemption for Preferred Investments. To qualify for incentives as an investor in a preferred investment, the following requirements with respect to capitalization must be complied with for the period during which the incentives are granted. Capitalization Incentive Availment under (in Pesos) Section 11.a Section 11.b Over 30 Million but not more than 50 Million 3 years Over 50 Million but not more than 100 Million 4 years 1 year Over 100 Million 5 years 2 years CHAPTER VI Other Incentive SECTION 13. Tax Credit for Persons Donating Property to the City . Persons donating land or real property to the city for its priority projects shall be entitled to the tax credit which can be used to pay tax obligations to the city government. Priority projects contemplated herein include but are not limited to: housing projects, resort projects, public markets, bus terminals, health projects, educational institutions, scholarships, government centers, and sports facilities. IaESCH Land swapping and pure donations contemplated under B.P. 220 and P.D. 957 are excluded in the coverage of the above section. SECTION 14. Basis of Tax Credit. The amount of tax credit shall be 10% of the fair market value of the property as determined by the office of the City Assessor. SECTION 15. Rules of Donation . The following rules shall govern the implementation of sections 13 and 14 of the Code: a. For the determination of qualification under section 13, the prospective donor shall submit to the Board through the Investment Promotions Center, his/her intent to donate. b. The Board determines whether the prospective donation qualifies for the tax credit under this chapter. The Board shall then pass a resolution approving the application under sections 13 and 14. c. The Board shall submit the resolution approving the grant of incentive together with the Deed of Donation to the Sangguniang Panglungsod for ratification. d. The donor shall avail of the tax credits within five (5) years from the date the donation is ratified by the Sangguniang Panglungsod. CHAPTER VII Requirements, Application, and Approval Process SECTION 16. Requirements. For firms to enjoy the incentives under this Code, they must comply with the following: a. Period for filing of applications Applications for incentives under Chapter IV and V may be filed before the start of construction or commencement of business operations but in no case later than six months after commencement of business operations. b. Requirements common to Single Proprietorships, Partnerships, Corporations, and Cooperatives. 1. Three (3) copies of completed application form available at the San Pablo Business Development and Promotions Center. 2. Business plan of the proposed investment (prescribed form available at the Center). 3. A certified copy of the Certificate of Business Name Registration from the Department of Trade and Industry, or the SEC or CDA registration. DHcESI 4. A certification from the City Treasurer that the applicant has no outstanding obligation with the city. 5. Certificate of Registration if enjoying incentives under the National Laws. c. Additional requirements for Partnerships, Corporation and Cooperatives: a. Authority from the partnership, or the Board of Directors of the Corporation to file application. b. Partnership or incorporation documents. c. Cooperative Development Authority documents in the case of cooperatives. d. At least eighty (80%) percent of the unskilled workforce must be bonafide residents of San Pablo City . SECTION 17. Application, Evaluation and Approval. a. Time for filing of applications Applications must be filed within the period provided in Section 16 (a), hereof. b. Venue for filing of applicants All applications shall be filed with the Local Investment Board through the San Pablo Business Development and Promotions Center under the Mayor's Office. c. Filing Fee A non-refundable filing fee of Two Thousand Pesos (P2,000.00) shall be paid to the City Treasurer. d. Processing Time The Board shall act upon applications within (30) working days from official acceptance. e. Procedure for Filing, Processing/Evaluation and Approval. 1. The head or senior staff of the Center provides pre-counseling/advice to prospective applicants as to the various provisions of the Code. 2. The Center issues a checklist of requirements and forms for the applicant to accomplish. 3. The applicant presents all the required documents to the Center. 4. If the Center determines that the documents submitted are complete, it requires the applicant to pay the non-refundable filing fee of Two Thousand Pesos (P2,000.00). DHEACI 5. The Center accepts the application and supporting documents, indicating the date of acceptance and official receipt number in the application form and the Application and Registration Book. 6. The Center forwards the application and its evaluation report and recommendation to the Board, through the Chairperson. The Board shall deliberate and decide on the application. 7. The Center records the approval or disapproval of the Board in the Application and Registration Book. 8. The Center informs the applicant of the decision of the Board, and if the application is subsequently approved by the Sangguniang Panglungsod, requires payment of the registration fee as provided in Section 18 hereof. 9. The Certificate of Eligibility is issued and the business is registered as an eligible enterprise. SECTION 18. The Approved Eligible Enterprise shall pay a one-time registration fee as follows: Investment Cost Registration Fee Over 30 Million 50 Million 50,000.00 Over 50 Million 100 Million 75,000.00 Over 100 Million 100,000.00 SECTION 19. Certificate of Eligibility . A qualified enterprise under this Code shall be issued a Certificate of Eligibility with the signature of the Chairperson and/or such other officer as the Board may designate for the purpose. The certificate shall be in such form and style as the Board may determine and shall state, among others, the following: a. The name of the eligible enterprise. b. The area of investment that the eligible enterprise will engage in. c. Such terms and conditions as should be complied with by the eligible enterprise to continue to qualify for incentives during the period granted in its Certificate of Eligibility. DSHTaC CHAPTER VIII SECTION 20. Submission of Reports and Other Documents. Every registered eligible enterprise shall, for each investment availing of incentives under this Code, submit to the Board through the Center the following reports and/or documents within the time prescribed: a. Amendments of Articles of Incorporation and by-laws, or Articles of Partnership, or Articles of Cooperative, within thirty calendar days from the date of approval of said amendments by the Securities and Exchange Commission or Cooperative Development Authority. b. Change of directors within 30 days from the change. c. Report on alien officers and/or employees within 30 days from the date of registration as an eligible enterprise, or from the appointment of the aliens/replacements, with the added requirement that alien officers and employees are registered as such with the Bureau of Immigration and Deportation (BID) and with the Department of Labor and Employment (DOLE). d. Audited Annual Financial Statements with Bureau of Internal Revenue (BIR) stamp acknowledging receipt within 30 calendar days after submission of the same to the Bureau of Internal Revenue (BIR), but not later than 30 days after the deadline for filing such audited statements with the BIR. CHAPTER IX San Pablo Business Development and Promotions Center SECTION 21. San Pablo Business Development and Promotions Center. The LIB shall establish a San Pablo Business Development and Promotions Center with adequate personnel and budget for personal services, operation and maintenance, equipment, promotions, and other needs. The Center shall perform the following functions: a. Prepare Investment Promotion plan for approval of the Board. b. Assist the Board in the promotional aspect of the Code such as: establishing business linkages and networking, conducting and coordinating investment missions, preparing trade and investment promotion collateral, conducting/coordinating investment economic briefings. c. Provide pre-counseling/advice to prospective applicants and answer their inquiries. d. Receive applications of firms/establishments, seeking to avail of incentives under this Code. e. Evaluate applications on the basis of documents submitted. The Center shall forward complete applications of qualified investors to the Board, otherwise it shall inform applicants of the rejection of their applications and the reason/s thereof. cSEaDA f. In the event the application is approved by the Board, furnish the City Treasurer and the City Assessor, copies of the Board resolutions granting incentives and Certificate of Eligibility, for their information and guidance in the implementation thereof. g. Have custody and responsibility for filing and safekeeping of all records and documents. h. Provide administrative and secretarial services to the Board. i. Facilitate the issuance of business permits of registered eligible enterprise. j. Conduct ocular inspection of the premises of the business establishments and perform necessary examination pursuant to section 26, Visitorial Power. k. Receive required reports and other documents from registered eligible firms. l. When appropriate, as when registered business has violated the Code, recommend the cancellation or revocation of the Certificate of Eligibility and withdrawal of all incentives granted. m. Perform such other functions and responsibilities as may be authorized. CHAPTER X Appropriations SECTION 22. Appropriations. The city shall appropriate the funding requirement which is necessary for the implementation of the provision of this Code based on the budget presented by the Board, to include Personal Services, Maintenance and other Operating Expenses (MOOE), Capital Outlay and Contingency. CHAPTER XI Miscellaneous Provisions SECTION 23. 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 and business activity of any enterprise registered or applying for registration as eligible enterprise, provided that such inspection or examination is done at a reasonable time of the day, during office hours. TcSCEa SECTION 24. Transitory Provision . Establishments that may have filed applications for incentives under the San Pablo Investment Code of 2005 but are not qualified for incentives under this new ordinance are given 2 months from effectivity of this ordinance to complete their applications for incentives under the old ordinance. CHAPTER XII Final Provisions SECTION 25. Sanctions for Late Submissions of Reportorial Requirements. For late submission of the reportorial requirements, every registered eligible enterprise shall be fined as follows: 1st Violation P1,000.00 per day of delay for every violation. 2nd Violation P20,000.00 plus P200.00 per day for every violation. 3rd Violation and subsequent violation P50,000.00 plus P500.00 per day for every violation. SECTION 26. Penal Clause . Any violation of the provision of this Code, existing laws, ordinances, rules and regulations shall be ground for the cancellation or revocation of the Certificate of Eligibility of the business and the withdrawal of all incentives granted under the Code. SECTION 26 (a). Cancelation or revocation of the Certificate of Eligibility shall mean the withdrawal of all incentives granted under the Code; and all fees and charges previously unpaid because of the exemption shall become due and demandable. SECTION 26 (b). The Board may cancel or revoke the Certificate of Eligibility of the concerned business enterprise through a formal written notice to that effect. The revocation shall become effective on the 16th day from receipt thereof. SECTION 27. Appeal. The applicant adversely affected by any decision of the Board may within 15 days from the receipt of such decision, appeal the same to the Board, whose decision shall be final and executory. SECTION 28. Separability Clause . The provisions of this Code are hereby declared separable. The validity of one or more provisions shall not affect the validity of the other provisions thereof. SECTION 29. Repealing Clause . This San Pablo Investment Code of 2008 shall supercede the San Pablo Investment Code approved under Ordinance No. 2005-63 without prejudice to vested rights. SECTION 30. Effectivity . This Code shall take effect on the day following completion of its publication once a week for three consecutive weeks in a newspaper of general circulation in San Pablo City. CDTSEI ENACTED: UNANIMOUSLY July 1, 2008. I HEREBY CERTIFY to the correctness of the above-quoted: ORDINANCE No. 2008-09, c.s.: IMELDA D.R. LAGRIMAS Asst. Secretary to the Sangguniang Panlunsod CGADH I ATTESTED: FREDERICK MARTIN A. ILAGAN Vice-Mayor & Presiding Officer <http://sangguniangpanlungsodspc.com/ordinance/year/2008/> last visited July 11, 2013.