City Investment and Incentives Code of 2015

September 21, 2015 Excerpt from the Minutes of Regular Session of the Sangguniang-Panlungsod of San Pedro, Laguna Held at the Sangguniang-Panlungsod Session Hall at 10:00 in the Morning on September 21, 2015. RESOLUTION NO. 2015-250 SAN PEDRO CITY ORDINANCE NO. 039-15 AN ORDINANCE ADOPTING THE INVESTMENT AND INCENTIVES CODE OF THE CITY OF SAN PEDRO, LAGUNA Sponsored by: Coun. Diwa T. Tayao WHEREAS , the Local Government Code of 1991 provides that Local Government Units through Ordinances duly approved, may grant tax exemptions, incentive or relief under such terms and conditions as my deemed necessary; WHEREAS , to accelerate the sound development of the city, it is the policy of the City Government of San Pedro to encourage new investment and promote investment expansion and/or diversification of environmentally safe industry; WHEREAS , the proposed City of San Pedro Investment and Incentive Code was promulgated by the City Development Council through the help of the Technical Working Group created by the City Mayor under Executive Order No. 2014-008, pursuant to Section 109 of Republic Act 7160, otherwise known as the Local Government Code of 1991, to further enhance the competitiveness of the City of San Pedro in terms of enticing investors to do business in the city; WHEREAS ,after thorough and meticulous review, discussion and deliberation by this body, it has been found that the same is in conformity with the provisions of existing laws and will indeed contribute to the development missions of the City Government of San Pedro; WHEREFORE ,be it ordained as it is hereby ordained by the Sangguniang-Panlungsod of San Pedro, Laguna in its regular session duly assembled: CHAPTER I Title and Declaration of Policy SECTION 1. Short Title . This Ordinance shall be known as the " City Investment and Incentives Code of 2015 ." SECTION 2. Declaration of Policies . It is the policy of the City of San Pedro to attract new investments, both local and foreign; keep and retain existing investments; and encourage their expansion, innovation and diversification thereby generating high quality productive employment, high paying jobs and income and reinvigorating the local economy through the provision of fiscal and non-fiscal incentives, maintaining a more business friendly environment for the City of San Pedro that is consistent with the Comprehensive Land Use Plan (CLUP), Comprehensive Development Plan (CDP) and Zoning Ordinance of the City. SECTION 3. Scope . This Code applies to all direct capital investments in the City of San Pedro, including local and foreign, resident and non-resident, with capital expenditures (CAPEX) such as land acquisition, land development, building construction, machineries and equipment allocated in the preferred areas of investments that would be entitled to fiscal and non-fiscal incentives. The incentive in this Code shall be in addition to any incentive granted by the national government to a registered enterprise. SECTION 4. Purposes, Intents and Objectives . It is the purpose, intent and objective of this Code to: a. Promote the integrated social, economic and business development of the City of San Pedro, thereby enhancing and promoting the general welfare and well-being of its people as envisioned by the Local Government Code and the City Charter of 2013. b. Initiate and guide local and foreign investments in the investment priority areas with upstream and downstream linkages in the regional and national economy, as catalyst of economic change, part of the development strategy for the sustainable growth of the City of San Pedro. c. Attract and encourage more investments in the City of San Pedro, a gateway City to the prosperous CALABARZON Region, consistent with the national government's policy of dispersing business, services and industries outside of but to the peripheral areas of Metro Manila. d. Effectively link the City of San Pedro as an emerging business center in the global business community through capital investments in the sunrise industries, products and services specified in the investment priority areas. e. Institute the necessary tradeoffs between the City Government's short term goal of increasing tax revenue generation in favor of granting of time bound tax exemption moratorium as a balancing strategy for the purpose of achieving significant medium term benefits such as increased productive employment, generating new industry, products and services, encouraging innovation, efficiency and productivity thereby boosting the domestic economy of the city of San Pedro. f. Align the provision of incentives for enterprises to support the effective implementation of the Comprehensive Land Use Plan and Zoning Ordinance (CLUPZO) of the City of San Pedro. CHAPTER II Definition of Terms SECTION 5. Definition of Terms . a. BID refers to the Bureau of Immigration and Deportation. HEITAD b. Board refers to the City Investment Promotion Board. c. BOC refers to the Bureau of Customs. d. Bonafide Resident means a person born and lives in the City of San Pedro or one with at least six (6) months residency of a registered voter of the City of San Pedro. e. Capital Investment means the total project cost which includes land and development, building, machineries, equipment and working capital. f. DENR refers to the Department of Environment and Natural Resources. g. Diversification means production of new products and/or services by an existing enterprise. h. DTI refers to the Department of Trade and Industry. i. Existing Enterprise means an enterprise already operating in San Pedro City and plans to diversify/expand to other business ventures falling within the investment priority areas (IPAs). j. Enterprise Small means an enterprise with Php10,000,000.00 to Php50,000,000.00 capital investment. k. Enterprise Medium means an enterprise with Php50,000,001.00 to Php250,000,000.00 capital investment. l. Enterprise Large means an enterprise with Php250,000,001.00 and above capital investment. m. Expansion means installation of additional facilities/equipment that will result to increase in production capacity and service. n. Incentives means a percentage reward or waiver on tax accrual payment with the City Government. o. New Enterprise means new investments falling within the Investment Priority Areas (IPA) consistent with the Comprehensive Land Use Plan (CLUP), Comprehensive Development Plan (CDP) and Zoning Ordinance of the City. p. PCCI refers to the Philippine Chamber of Commerce and Industry. q. Registered Enterprise means an individual, partnership, cooperative, corporation or other entity incorporated and organized under Philippine Laws and registered with the San Pedro City Investment Promotion Board. r. Start of Business Operation means the date of approval of the business permit. s. TIEZA refers to the Tourism Infrastructure Enterprise Zone Authority. t. Tax Holiday means a period during which tax concessions are made for some reason; examples include an export incentive or an incentive to start a new business given by the City Government, in which a company is excused from all or part of its tax liability. CHAPTER III Investment Priority Areas SECTION 6. Investment Priority Area (IPA) . The identified General Investment Priority Areas eligible for incentives are: a. Agriculture and Fishery 1. Urban agriculture includes vertical farming, hydro phonics, scientific and aqua-culture farming. 2. Establishment and operations of facilities that provide services such as agriculture and fishery products, e.g. ,cold storage, AAA abattoir. b. Manufacturing Industry 1. Processing of fruits, vegetables, fish, livestock, poultry and dairy products. 2. Packaging includes manufacture of packaging products such as corrugated boxes, bottles and tin cans and other container of products manufactures. 3. Foundry and Metal Fabrication includes all types of metal-based products. 4. Manufacture of Machinery and Equipment includes all types of machinery and its parts and components including its engines, motors, metal and wood working machinery, power generation, communication equipment and apparatus (excluding radio and television),office computing and accounting machinery, and medical equipment and devices. c. Tourism Development 1. Construction and operation of hotels. 2. Theme parks and resorts. d. Infrastructure Development 1. Treater Bulk Water Supply distribution, Waste Water Management, Septage Collection, Treatment and Disposal under Public Private Partnership (PPP). 2. Renewable and Waste to Energy under Public Private Partnership (PPP). 3. High Capacity Convention Center. 4. High Capacity Sports Complex. ATICcS 5. Recycling Plant. 6. Power Generation and Transmission. e. Information Technology-Business Process Management (IT-BPM) 1. Business Process Management includes ICT Services, voice and non-voice. f. Transportation 1. Urban Mass Transportation Development includes transport operations and facilities under Public Private Partnership (PPP). g. Real Property Development 1. Construction and operations of enclave community, shopping malls/center with minimum land area development of two (2) hectares. 2. Medium to High Rise Residential/Commercial Development. 3. Economic Zones and Industrial Parks under PEZA and General Industry Zone (GIZ) under DTI. 4. Commercial Complex. SECTION 7. Review of Investment of Priority Areas (IPA) . The list of Investment Priority Areas (IPA) for a given year shall remain valid for the succeeding years until it is modified or changed by the Board. By the 4th quarter of each year, the Board shall review the Investment Priority Areas (IPA),and decide any addition or deletion to the priority areas on the basis of the following: a. Availability of resources; b. Investment areas with few ventures or none at all; and/or c. Socio-economic contribution to the city. CHAPTER IV Qualifications of Enterprise SECTION 8. General Qualifications . The following qualifications and criteria shall be met by new and/or existing enterprises in order to avail of the local incentives provided in this Code: a. Submit proof of financial capacity and capability to undertake the establishment, expansion or diversification of the project; b. Minimum capitalization of not less than Ten Million Pesos (Php10,000,000.00); c. Invest in the City of San Pedro for a minimum period of ten (10) years; d. Compliance will all requirements mandated under the existing local and national laws and the Philippine Constitution; e. Place of operations/production shall be located in the City of San Pedro; f. Proposed project must be in the list of IPAs; and g. At least sixty percent (60%) of construction and operations workers are residents of the City of San Pedro, except in cases as verified and approved by the Board, when the expertise/skills required is not available in the locality. SECTION 9. Registration Requirements . An application for registration shall be secured and filed with the City Investments Promotion Regulatory Unit (CIPRU) together with the necessary documents prescribed in the Implementing Rules and Regulations (IRR). SECTION 10. Certificate of Registration . A registered enterprise shall be issued a Certificate of Registration by the City Investments Promotion Regulatory Unit (CIPRU) within the timeframe prescribed under the Implementing Rules and Regulations (IRR) of this Code. SECTION 11. Reconsideration . Applicants whose application for registration has been disapproved by the Board for any reason may appeal the Board's decision by way of a Motion for Reconsideration within thirty (30) calendar days after receipt of the notification of disapproval. Upon deliberation, the Board will give its final and non-appealable decision within thirty (30) calendar days after receiving the motion. CHAPTER V Fees SECTION 12. Fees . The investor will pay the application fee of Five Thousand Pesos (Php5,000.00) for Small Enterprise; Eight Thousand Pesos (Php8,000.00) for Medium Enterprise; and Ten Thousand Pesos (Php10,000.00) for Large Enterprise upon submission of its application for availment of incentives. The said payment is non-refundable should the investor decide not to push through or abandon its application. CHAPTER VI Incentives to Registered Enterprises SECTION 13. Fiscal and Non-Fiscal Incentives . All enterprises registered under the City Investment and Incentives Code shall enjoy the following incentives parallel to those being offered under existing national laws such as those under the Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA). It shall apply to both local and foreign investments, small, medium and large enterprises that will invest in the City of San Pedro for a minimum period of ten (10) years. A. Fiscal Incentives 1. Small Enterprise a. Exempted from paying the Building Permit Fees except those imposed by the National Government Agencies but should apply for the permit; b. Two (2) consecutive years full exemption from Business Tax and other fees and charges imposed by existing City Ordinances except those imposed by the National Government Agencies from the start of business operation but should apply for the permit; TIADCc c. Two (2) years full exemption from payment of basic Real Property Tax (RPT) imposed by the City Starting from the date of approval of registration including improvements, machine and equipment; d. On the third year of operation, the investor shall be entitled to a twenty five percent (25%) discount on payment of taxes and fees mentioned above; and e. From the fourth year of operation and the succeeding years full payment of all taxes and fees will be required from the investor. 2. Medium Enterprise a. Exempted from paying the Building Permit Fees except those imposed by the National Government Agencies but should apply for permit; b. Three (3) consecutive years full exemption from Business Tax and other fees and charges imposed by existing City Ordinances except imposed by the National Government Agencies from the start of business operation but should apply for the permit; c. Three (3) consecutive years full exemption from payment of basic Real Property Tax (RPT) imposed by the City starting from the date of approval of registration including improvements, machine and equipment; d. On the fourth year of operation, the investor shall be entitled to a twenty five percent (25%) discount on payment of taxes and fees mentioned above; and e. From the fifth year of operation and the succeeding years, full payment of all taxes and fees will be required from the investor. 3. Large Enterprise a. Exempted from paying the Building Permit Fees except those imposed by the National Government Agencies but should apply for the permit; b. Four (4) consecutive years of full exemption from Business Tax and other fees and charges imposed by existing City Ordinances from the start of business operation except those imposed by the National Government Agencies but should apply for the permit; c. Four (4) consecutive years full exemption from basic Real Property Tax (RPT) of lots and improvements, machine and equipment from the date of approval of registration; d. On the fifth year of operation, the investor shall be entitled to a fifty percent (50%) discount on payment of taxes and fees mentioned above; and e. From the sixth year of operation and the succeeding years, full payment of all taxes and fees will be required from the investor. B. Non-Fiscal Incentives The City Investments Promotion Regulatory Unit (CIPRU) will assist, guide and/or facilitate in the following areas: 1. Securing local permits and licenses; 2. Identifying business location and factory licenses; 3. Access to technical assistance programs of the government; 4. Service connections with local utilities; 5. Sourcing of workers through Public Employment and Service Office (PESO) and jobs fair in cooperation with the academic schools and colleges and other LGUs; 6. Promotional campaign for the investor products and services in cooperation with the City Public Information Office through our e-billboard and local publication; or 7. Application documents through the City Investments Promotion Regulatory Unit (CIPRU). CHAPTER VII City Investment Promotions Board (CIPB) SECTION 14. Composition of the Board. There shall be a City Investment Promotions Board (CIPB) which shall be composed of the following: a. Chairman City Mayor b. Vice-Chairman City Vice Mayor c. Members: 1. Chairperson of the Committee on Business, Trade & Industry of the Sangguniang-Panlungsod 2. Representative from the San Pedro Chamber of Commerce and Industry 3. Representative from San Pedro Tourism Council 4. City Administrator 5. City Business Permits and Licensing Officer 6. City Zoning Administrator 7. City Planning and Development Coordinator 8. City Treasurer 9. City Legal Officer AIDSTE 10. City Assessor 11. City Building Official SECTION 15. Meeting and Quorums . The Board shall meet regularly once a month or as the need arises through a special meeting. The presence of the majority members shall constitute a quorum to do business. SECTION 16. Powers and Functions of the Board. The following shall be the powers and functions of the Board: a. Formulate, review and recommend policies for a sustainable business climate which will encourage and support private sector investments and generation of economic activities; b. Identify and periodically review priority investment areas eligible for incentives; c. Formulate and review investment promotions plan; d. Approve and disapprove application for registration and conduct hearings for reconsideration under the City Investment and Incentives Code; e. Formulate objective criteria in the evaluation and screening of applications for private sector investments; f. Formulate Implementing Rules and Regulations (IRR) of this Code and its regular updating; g. Recommend to the Sangguniang-Panlungsod amendments to the existing City Investment and Incentives Code; and h. Conduct hearings on issues concerning violations on any of the provisions of this Code and impose proper sanctions and penalties in accordance with this Code. CHAPTER VIII City Investment Promotions and Regulatory Unit (CIPRU) SECTION 17. City Investment Promotions and Regulatory Unit (CIPRU) . There shall be a City Investment Promotions and Regulatory Unit (CIPRU) manned by personnel under the administrative supervision and control of the City Mayor. SECTION 18. Duties and Responsibilities of City Investment Promotions and Regulatory Unit (CIPRU) . The City Investment Promotions and Regulatory Unit shall: a. Implement the provisions of this Code and its Implementing Rules and Regulations (IRR); b. Serve as secretariat to the Board and perform the following: 1. Prepare minutes of the meeting; 2. Perform administrative and other functions as directed by the Board; 3. Prepare budgetary requirements for the operations of the Board and CIPRU; and 4. Keep all records and maintain a library of literature regarding investments. c. Receive, conduct preliminary evaluation and process applications for registration; d. Conduct studies, gather and analyze data needed by the Board; e. Monitor compliance of registered enterprises with the provisions of this Code and its terms of registration; f. Report to the Board any violation of this Code; g. Provide Investment facilitation assistance; h. Review and recommend applications of private sector investments eligible for incentives for approval of the Board; i. Maintain a database system of registered capital investments for both new and existing enterprises; j. Coordinate with DTI, BOI, PEZA, TIEZA, PCCI, BOC, BID, DENR, IT-BPAP, PPP Centre and all other government agencies in the performance of its mandate to simplify the process, procedures and complementation of activities; k. Coordinate with City Government departments and offices particularly with the Public Affairs and Information Office, Business Permits and Licensing Office, Assessor, Treasury, Sangguniang-Panlungsod, City Engineering, Zoning, City Environment and Natural Resources Office, Bureau of Fire Protection and Barangays; l. Promote and market the City of San Pedro as an investment destination; m. Provide advice and consulting services to prospective and existing investors; n. Provide relevant and timely information on new laws and directions that may affect the implementation of this Code; and o. Perform other duties and functions as directed by the Board. CHAPTER IX Final Provisions SECTION 19. Exemption . This Ordinance shall not apply to financing or banking institutions and other enterprises governed by the Central Banking Act and under the supervision of the Bangko Sentral ng Pilipinas (BSP). SECTION 20. Funding . The City Government shall provide appropriate funds for the operations of CIPRU based on its approved work and financial plan. SECTION 21. Implementing Guidelines . The Board shall promulgate the rules and regulations to implement the intent and provisions of this Code within thirty (30) days from the approval of this Code by the Sangguniang Panlungsod and shall have the authority to impose administrative fines in amounts that are just and reasonable in cases of non-compliance on the part of the registered enterprises under this Code and its Implementing Rules and Regulations. Such Rules and Regulations shall take effect fifteen (15) days following its publication in a local newspaper or bulletin of general circulation. SECTION 22. Cancellation of Registration . Any violation of the provisions of this Code and other existing local and national laws whether in part or in whole, shall be a ground for the cancellation of the business registration with the Board and immediate withdrawal of all the incentives granted under this Code. The following are also grounds for cancellation of business registration. a. Non-Compliance in the reportorial requirements (various detailed reports reflected in IRR). AaCTcI b. Any misrepresentation, fraud or falsification of information on the application and its requirements. SECTION 23. Amendments . Any modification or amendment/s to this Code shall be reviewed and recommended by the Board to the Sangguniang-Panlungsod. SECTION 24. Separability Clause . The provisions of this Code are hereby declared to be separable, and in the event that one or more of the provisions are declared by the Court illegal and unconstitutional, the validity of the other provisions shall not be affected. SECTION 25. 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. SECTION 26. Effectivity . This ordinance shall take effect fifteen (15) days after its publication in a newspaper of general circulation. ENACTED: SEPTEMBER 21, 2015. THIS IS TO CERTIFY THAT THE ABOVE RESOLUTION/ORDINANCE IS TRUE AND CORRECT. (SGD.) ATTY. ANASTACIO P. MEJORADA Sangguniang-Panlungsod Secretary (SGD.) HON. DELIO L. HATULAN Member, Sangguniang-Panlungsod (SGD.) HON. MARLON A. ACIERTO Member, Sangguniang-Panlungsod (SGD.) HON. DIWA T. TAYAO Member, Sangguniang-Panlungsod (SGD.) HON. IRYNE V. VIERNEZA Member, Sangguniang-Panlungsod (SGD.) HON. ROMEO B. MARCELO ABC President ATTESTED BY: (SGD.) HON. LESLIE E. LU Member, Sangguniang-Panlungsod Temporary Presiding Officer APPROVED: (SGD.) HON. RAFAEL P. CAMPOS City Vice-Mayor/OIC-Mayor