Investment Code of Santiago City

September 5, 2011 Excerpt from the Minutes of the 50th Regular Session of the 7th City Council Held on September 5, 2011 at the Session Hall. Approved under Suspended Rules Sponsored by: Coun. Orlando T. Chan SANTIAGO CITY ORDINANCE NO. 7THCC-29 ENACTING THE INVESTMENT CODE OF SANTIAGO CITY TITLE I Title, Declaration of Policy ARTICLE 1. Short Title. This Ordinance shall be known as the "Investment Code of Santiago City". ARTICLE 2. Declaration of Policy. It is hereby declared the policy of Santiago City to attract new investments, both local and foreign, keep and retain existing investments and encourage their expansion by creating and maintaining a business friendly environment. ARTICLE 3. Statement of Objectives. In furtherance of its declared policy, this ordinance shall have the following objectives: a. To promote a balanced economic development in Santiago City and promote the general welfare of its people; b. To establish the legal framework and mechanism for integrating the investment incentive laws of the national government with the city's development initiative; c. To promote the growth of local and foreign investments in the city thereby generating employment opportunities and providing backward and forward linkages among industries in the city, the Province of Isabela, and the rest of the Cagayan Valley Region; d. To accelerate the transformation of Santiago City into a highly developed agricultural, industrial, trading, commercial, tourism, technology, investment and financial center in the Cagayan Valley Region; e. To spread the benefits of sustainable economic development to all areas of the city, particularly in the growth and zonal areas as specified in the Comprehensive Land Use Plan of the City. TITLE II Local Investment Board ARTICLE 4. The Loca1 Investment Board. There is hereby created the City Trade and Investment Promotion Board which shall implement the provisions of this Code. ARTICLE 5. Composition of the Board . The Board shall be composed of eighteen (18) members as follows: a. City Mayor as Chairman Emeritus; b. City Local Economic and Investment Promotion (LEIPO); c. City Planning and Development Coordinator; d. City Business Permits and Licensing Officer; e. City Legal Officer; cSaATC f. City Information Officer or its equivalent; g. City Public Employment and Services Officer; h. City Assessor; i. Chairperson, Committee on Business, Trade and Commerce, Sangguniang Panlungsod; j. Seven (7) representatives from the business sector; k. One (1) Non-Government Organization (NGO); and l. One (1) People's Organization (PO) ARTICLE 6. Meetings of the Board. The Board shall meet at least once every quarter. ARTICLE 7. Appointment of the Board Personnel. The Board shall recommend for the approval of the City Mayor appointments of its technical staff and other personnel subject to Civil Service Law, Rules and Regulations. ARTICLE 8. Powers and Duties of the Board. The Board shall be responsible for the regulation and promotion of investments in the city. It shall exercise its powers and perform its duties as follows: a. Recommend to the City Mayor the Investments Priorities Plan as defined in Art. 13 hereof, which contain a listing of specific activities that can qualify for incentives under this Code as determined by the Board pursuant to Title IV of this Code; b. Promulgate such rules and regulations as may be necessary to implement the intent and provisions of this Code; c. Approve or deny applications for registration with the Board, prescribing such terms and conditions as it may deem necessary to promote the objectives of this Code including refund of incentives when appropriate, restricting availment of incentives not needed by the project in the determination of the Board requiring payment of application, registration, publication, and other necessary fees for incentive availment under this Code; d. After due hearing, decide controversies concerning the implementation of this Code that may arise between the registered enterprise or investor and the city government agencies, within thirty (30) days after the controversy has been submitted for decision; e. Ensure the compliance by registered enterprise with the relevant provisions of this Code, with the rules and regulations promulgated under this Code and with the terms and conditions of registration; f. After due notice and hearing, cancel the registration or suspend the enjoyment of incentive of any registered enterprise and/or require refund of incentives enjoyed by such enterprise including interests and monetary penalties for (a) failure to maintain the qualifications required by this Code for registration with the Board or (b) for violation of any provisions of this Code, of the rules and regulations issued under this Code, of the terms and conditions of registration, or of laws for the protection of labor or of the consuming public: Provided, that the registration of an enterprise whose project timetable, as set by the Board is delayed by one year, shall be subject to reevaluation. For this purpose, the Board may formulate appropriate guidelines in consultation with the relevant government agencies and the private sector, to implement the programs; and g. Enter into agreement/s with other agencies of government for the simplification and facilitation of systems and procedures involved in the promotion of investment, operation of registered enterprises, and other activities necessary for the effective implementation of the Code. TITLE III Definition of Terms ARTICLE 9. "Board" shall mean the Santiago City Trade and Investment Promotion Board. ARTICLE 10. "Registered Enterprises" shall mean any person, partnership, cooperative, corporation or other entity incorporated and/or organized and existing under Philippine laws that are registered with the Board. ARTICLE 11. "Investment Priorities Plan" shall mean the overall plan prepared by the Board which shall contain a listing of specific activities that can qualify for incentives under this Code as determined by the Board pursuant to Title IV. TITLE IV Investment Priorities Plan ARTICLE 12. Investment Priorities Plan. The Board, after consultation with the appropriate government agencies and the private sector, shall submit to the City Mayor an Investment Priorities Plan within a reasonable period of time. ARTICLE 13. Criteria in Investment Priority Determination. No economic activity shall be included or added to in the Investment Priorities Plan unless it is shown to be economically, technically and financially sound after thorough investigation and analysis by the Board taking into consideration the following: cHDAIS a. The economic soundness of the specific activity; b. The extent of contribution of an activity to the development goals of the City; c. Other indicators of comparative advantage; d. The market and technical aspect and considerations of the activity proposed to be included. e. Generate high levels of employment and features a high degree of added value to raw materials; and f. Create forward and backward linkages with local industries and the government sector. ARTICLE 14. Approval of the Investment Priorities Plan. The City Mayor shall approve the whole or part of such plan as in effect or alternatively return the whole or part of the plan to the Board for revision. Upon the effectivity of the plan or portions thereof, the City Mayor shall issue all necessary directives to all departments, agencies or instrumentalities of the City Government to ensure the implementation of the plan by the agencies concerned. ARTICLE 15. Removal of the Preferred Investments . The Board, in consultation with the concerned government agencies and the business sector, shall recommend the removal of any activity from the list specified in the Investment Priorities Plan or of any addition thereto in any of the following cases: a. Sufficient investment in the preferred area of activity have been attained; or b. The continued extension of incentives for the specific investments is no longer to the interest of the City; or c. The investment or activity do not attract investors within a reasonable length of time or may result in an unfavorable business environment. TITLE V Trade and Investment Promotion Office ARTICLE 16. The Trade and Investment Promotion Office. There is hereby created a Trade and Investment Office. ARTICLE 17. One Stop Action Center. The office shall serve as the one-stop action center for the purpose of facilitating applications for the registration of and issuance of business permit to the enterprises covered under this Code. ARTICLE 18. Composition of the Office. The Office shall be composed of the following: a. The City Local Economic and Investment Promotion Officer (LEIPO); b. The City Trade and Investment Promotion Secretariat; EATCcI c. The Information and Communication Unit; and d. The Information and Institutional Linkages Unit. ARTICLE 19. Powers and Duties of the Office. The Office shall have the following powers and duties: a. Prepare and recommend Investment Priorities Plan for the consideration of the Board, which shall contain a listing of specific activities that can qualify for incentives under this Code duly supported by studies and data specified in Title IV of this Code; b. Assist the Board in the promotional aspect of this Code such as establishing business linkages and networking, conducting and coordinating investment mission, preparing trade and investment promotions materials, conducting/coordinating investment or economic briefings; c. Provide counseling/advice to the public on matters of business and investments; d. Receive applications of persons and entities seeking to avail of incentives under this code; e. Evaluate applications for registration on the basis of documents submitted. The office shall forward complete applications of qualified investors to the Board and inform applicants of its approval or disapproval, as the case may be, and in case of disapproval, the reason thereof; f. Appoint its technical staff and other personnel subject to the Civil Service Law, Rules and Regulations; g. Periodically check and verify either by inspection of the books of by requiring regular reports to ascertain compliance by registered enterprises with the provision of this Code with existing laws, rules and regulations; h. Within three (3) months after the close of the year, submit an annual report to the Board on its activities including recommendations on investment policies; and i. Exercise such other powers and perform such other functions as may be delegated to it by the Board. TITLE VI Registration of Enterprises ARTICLE 20. Qualification of Registered Enterprise. To be entitled to registration under the Investment Priorities Plan, an applicant must satisfy the Board that: a. He is a citizen of the Philippines, in case the applicant is a natural person or in case of a partnership or corporation, it is organized under Philippine Laws or in case it is a foreign corporation, it is duly licensed by the Securities and Exchange Commission (SEC) to do business in the Philippines; b. That it proposes to engage in an activity listed in the Investment Priorities Plan; and c. The applicant is capable of operating on a sound and efficient basis and of contributing to sustainable economic development of the city in particular and to the national economy in general. TITLE VII Incentives to Registered Enterprises ARTICLE 21. Incentives to Registered Enterprises . All registered enterprises shall be entitled to the incentives provided for under this Code to the extent engaged in the preferred areas of investment specified in the Investment Priorities Plan. Tax Exemption a. Local Business Taxes For two (2) years from the start of commercial operation, registered firms shall be fully exempt from the payment of local business tax imposed by existing revenue ordinances. Provided that registered enterprises shall be liable to pay the Mayor's Permit Fees and other regulatory fees and incidental charges. b. Transfer tax For period of two (2) years from start of commercial operation, registered firms shall be exempt from payment of transfer tax on real property. c. Amusement tax For period of two (2) years from start of commercial operation, registered firms shall be exempt from payment of amusement tax. d. Exemption from Payment of Other Permit Fees. Registered Enterprises shall be exempt from payment of development, building, sanitary, electrical, mechanical, and occupancy permits. It shall, however, secure the proper permits for monitoring compliance of related rules and regulations. Other Services and Incentives e. Simplification of Procedures Simplified registration requirements and processes such as issuance of locational clearance, permits and licenses by the City Mayor's Office, shall be undertaken. DHITCc f. Government assistance such as identifying suitable business/factory sites, joint venture match-making and access to financial and technical assistance programs of the government, networking with different academic institutions and training centers and linkages for micro and small enterprises to other companies through subcontracting and other arrangements. g. Assistance in getting immediate services connection from utility providers like electricity, water and telecommunications. h. Assistance in hiring qualified managers, supervisors and workers. i. Technical assistance, loan facilitation, capability enhancement and marketing of the products and services of such enterprises. ARTICLE 22. Subject to such guidelines as may be prescribed by the Board, the number of years of total business tax exemptions may be extended in any of the following cases: a. Additional one year if thirty percent (30%) of the total direct employment or at least 300 employees are bona fide residents of the City. b. Additional two years if seventy percent (70%) of total direct employment or at least 500 are bona fide resident of the City. TITLE VIII Promotion of Local Employment ARTICLE 23. Promotion of Local Employment. Local Employment shall be promoted as follows: a. The city shall provide assistance to enterprises in accessing the City's qualified labor pool through the Public Employment and Services Office (PESO) in terms of employment facilitation activities such as, but not limited to, job fairs and other similar activities. b. The city shall undertake the appropriate training programs to support the specific labor skills requirements of enterprises located in the city. Enterprises that will implement training programs accredited by the appropriate government agency shall be entitled to deduction from business tax as stated in Art. 22 (a) hereof; and c. Enterprises are encouraged to employ qualified residents of the city. They are also encouraged to implement skills enhancement programs to residents to accelerate the development of the local labor pool. TITLE IX Donations to the Local Government ARTICLE 24. Tax Credit for Donations to the City . Registered enterprises donating immovable or movable property or money to the City for its priority projects such as, but not limited to, socialized housing project, resettlement sites, right-of-way, public markets, health projects, educational institutions, scholarships, government centers and sports facilities shall be entitled to tax credit equivalent to 50% of the cash donation or the Fair Market Value of the property donated. Land swapping and donations contemplated under B.P. 220 and P.D. 957 are excluded from the coverage of this section. ARTICLE 25. Rules of Donation. The following rules shall govern the donation contemplated under the preceding article: a. The registered enterprise/donor shall submit to the Board through the Office his/hers/its intent to donate; and b. The Board shall determine whether or not the proposed donation qualifies for the tax credit as provided by existing laws, rules and regulations. TITLE X General Provisions ARTICLE 26. Power of the City Mayor to Rationalize Incentives. The City Mayor may, upon recommendation of the Board and in the interest of sustainable local economic development, rationalize the incentive scheme herein provided; extend the period of availment of incentives or increase rates of tax exemption of any project whose viability or profitability require such modification. ARTICLE 27. Refunds and Penalties. In case of cancellation of the certificate of registration granted under this Code, the Board may, in appropriate cases, require the refund of incentives availed of and impose corresponding fines and penalties. ARTICLE 28. Appropriation. The City shall appropriate the funds necessary for the implementation of the provisions of this Code based on a budget presented by the Board to include personal services, maintenance and other operating expenses (MOOE), capital outlay and contingency. ARTICLE 29. Amendments. Subject to publication requirements, the Board may at any time, add additional areas in the list of preferred investment areas, alter any of the terms of the declaration of an investment area, or terminate the status of preference. In no case, however, shall any amendment of the list of preferred investment areas impair whatever rights may have already been legally vested in qualified enterprises which shall continue to enjoy such rights to the full extent allowed under this Code. The Board shall not accept applications in an area of investment prior to the approval of the same as a preferred area nor after approval of its deletion as a preferred area of investment. ARTICLE 30. Effectivity of Implementing Rules and Regulations. The Board shall promulgate rules and regulations to implement the intent and provision of this Code. Such rules and regulations shall take effect fifteen (15) days following its publication in newspaper of general circulation. A copy of the same shall be submitted to the Sangguniang Panlungsod. cEaSHC ARTICLE 31. Oversight Committee. The Committee on Trade, Commerce and Industry is hereby designated as the oversight committee of the Sanggunian with respect to this Code. ARTICLE 32. Separability Clause. The provisions of this Code are hereby declared separable. Consequently, the invalidity of one or more provisions shall not affect the validity of the other provisions thereof. ARTICLE 33. Repealing Clause. All City Ordinances, Executive Orders, Administrative Orders, Rules and Regulations, or parts thereof, which are inconsistent with the provisions of this Code, are hereby repealed, amended or modified accordingly. ARTICLE 34. Effectivity. This Code shall take effect on the day following completion of its publication once a week for two (2) consecutive weeks in a newspaper of general circulation. ENACTED, September 5, 2011. CERTIFIED TRUE AND CORRECT: (SGD.) ALVIN N. ABAYA City Vice Mayor & Presiding Officer ATTESTED: (SGD.) WILFREDO M. BALTAR Secretary to the Sanggunian APPROVED: (SGD.) AMELITA S. NAVARRO City Mayor THIS IS TO CERTIFY that the above Ordinance was published in the Luzonwide News Correspondent in its September 17-23 and 24-30, 2011 issue. (SGD.) WILFREDO M. BALTAR Secretary to the Sanggunian