HOUSE OF REPRESENTATI
_.. RECEIVED

DATES O WUN 2016

TIME:_/2/

REGISTRATION UNIT
BILLS AND INDEX SERVICE

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

1a

HOUSE BILLN

Introduced by the Honorable Victoria Isabel G. Noel

EXPLANATORY NOTE

The islands that make up the Philippine archipelago is green with the graceful
leaves of the coconut tree. Sixty-eight of the seventy-nine provinces of the country are
coconut areas. Of 12 million hectares of farmland, 3.1 million hectares easily a fourth,
are coconut grown, The coconut industry is expectedly one of the major sources of
employment generation. Supposed to be one of the leading industries, it is strongly
depended upon for foreign exchange eamings

But it has not given its full potential. The late Hon, Ramon Mitra, erstwhile
Secretary of Agriculture, statesman and at one time Speaker of the House sought to
correct the matter by filing HB 32445 during the 8° Congress. Unfortunately, for
reasons now difficult to explain the bill did not become a law. Over the years
stagnation has characterized the industry. Starting with senile or badly unhealthy trees
that give very low yield, costly and outdated processing methods that result in inferior
quality copra oil, the industry declined. No advantage has been taken of the many
high value by-products that coconut oil can give through technological development

Clearly, there is an urgent need for an agency mandated to oversee and
supervise an integrated approach that will result in the coconut industry producing
and yielding all it can. This agency if it is to succeed must be properly manned and
full funded so it can be the source of needed economic uplift the country badly needs.

Interested experts, pundits in science and technology, as well: as
knowledgeable economic gurus have enumerated factors that need immediate
attention if the Philippines desire to be globally competitive, specifically in'the copra
oil industry. First low yield, poor quality trees have to be substantially improved by
continuous study and experimentation. Added to this extensive research for more and
improved coco by-products must be sustained germane to this a close study of
improved copra soil extraction and processing and needs to be given priority. In this
way can high value copra oil be guaranteed to produce downstream excellent coco



products. Then knowledgeable marketing strategies and strong credit institutions need
to be brought in

Our tree of life, properly nurtured and never neglected, can ensure a sustained
quality of life for always employed farmers, lessees and tillers who all can in the
process be direct participants in and beneficiaries of the industry. On this industry, its
viability and sustained improvement in the areas of production processing and
marketing and intensive research depends and can well guarantee the economic well
being of a major part of the country’s population. In view of the foregoing immediate
approval of this bill is eamestly sought

This proposed measure was filed in the previous congress. It was referred to

the Committee on Agriculture and Food, and further refined by the Technical Working
Group (TWG) created by the same. The bill however did not pass into law due to lack

of material time.
VICTORIA I$ABELG. NOEL -


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

141

HOUSE BILL NO,,

Introduced by the Honorable Victoria Isabel G. Noel

ANACT
REVITALIZING THE COCONUT INDUSTRY, APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled.

ARTICLE I
GENERAL PROVISIONS

SECTION 1. Short Title. ~ This Act shall be known as “The Cocoriut Industry
Development Act of 2016.

SEC. 2 Statement of Policy. ~ \t is the policy of the State to recognize the
essential role of coconut as a strategic, indigenous, replenishable and renewable source of
livelihood for a great number of people.

Towards this end, the State shall promote the rapid, steady and continuous
integrated development and growth of the coconut industry in all its aspects and ensure

that the coconut farmers, farm workers, processors, lessees and tillers, and their families,


shall become direct participants in, and beneficiaries of, such development and growth
thereby increasing their income and uplifting their quality of life. :

SEC. 3. Goals and Objectives. ~ Pursuant to the above-mentioned policy, the

effort of government shall be directed towards the following goals and objectives: .

a) Promote the steady, accelerated and orderly development of the coconut
industry consistent with the agrarian reform policy of the government

b) Develop and establish the coconut based farming systems including but not
limited to the establishment of mode! coconut farms;

©) Hasten and advance industrialization in the coconut industry and the
diversification and proper utilization of coconut products and by-products:

4) Promote the effective utilization and marketing of coconut products and by-
products in the domestic and foreign markets and preserve the competitiveness and
reliability. of the country as a major producer and supplier of said products, by
establishing national standards acceptable in the intemational market

©) To increase production by expanding the planting and replanting program of
coconut trees in strategic areas identified as having the most potential:

) Conduct scientific researches and investigations in all areas pertaining to
agricultural, industrial, marketing and socio-economic aspect of the coconut industry
and encourage the participation of small farm holders in research and technology;

2) Encourage and promote the organization of coconut farmers cooperatives,

associations, and organizations and provide them credit and financing schemes; s



h) Generate and disseminate information and communication to farmers,
producers and other sectors to ensure the appreciation and adoption of appropriaté
technology and practices, inventions, as well as the proper awareness and correct
understanding of issues and development in the coconut industry; and

i) Coordinate and integrate all efforts of various agencies of government and

provide general direction for the steady and orderly development of the industry.

ARTICLE I
PHILIPPINE COCONUT INDUSTRY DEVELOPMENT AUTHORITY
SEC. 4 Philippine Coconut Industry Development Authority. ~* To*
implement the policy and objectives of this Act, there is hereby created and established a
corporate body known as the Philippine Coconut Industry Development Authority
(PHILCIDA), hereinafter referred to as the Authority,

SEC. 5. Powers and Functions. - The Authority shall exercise the following

powers and functions:

2) Formulate and adopt a general program of development geared towards
increased farm productivity, through planting or replanting of suitable seedling
varieties, rehabilitation and fertilization of coconut, integrated coconut-based
farming systems and product processing, and whenever necessary, the construction
of related support and infrastructure facilities. For this purpose, the Authority shall

adopt a special program to maximize the yield of small coconut farmers and their


farm families particularly those farms covered by the agrarian reform program of

overnment

5) Undertake scientific researches and investigations on crop and varietil
improvement, pests and diseases. agronomy and mineral nutrition, coconut wood
utilization, virology and biochemistry and epidemiology of cadang-cadang, and
such other similar studies on varietal and crop improvement of general or local
suitability;

©) Undertake scientific researches and investigations on food, non-food
products and by-products including bio-diesel, directly: or in collaboration with
other public agencies or the private sector:

d) Establish, maintain and operate such number of research centers and

experiment stations, including laboratories, seed gardens, nurseries, pilot farms and

industrial facilities as may’ be necessary to undertake extensive research in coconut

pests and diseases, improvement of copra, manufacture of coconut products and.by-
products and the greater utilization of the coconut for traditional and non-traditional
uses;

©) Purchase or fabricate such machineries, material, equipment and supplies as
may be necessary to execute successfully such researches, investigations and
experimental work as provided under this Act on its own or in partnership with
other agencies:

Conduct intensive studies and data research, establish and maintain a

database of primary, accurate and reliable information on coconut culture,



production, pricing capacity, marketing, inventories as well as scientific thesis and
treaties in coordination with other government offices, the private sector and
intemational agencies and bodies;

) Promote the utilization and integration of in-house developed technologies;

h) Construct, invest, establish and operate integrated coconut centrals,
processing plants and integrated processing mills and other support facilities in aid
of its research and development function;

i) Create subsidiaries or enter into partnerships or joint ventures with any
public oF private foreign or local entity, natural or juridical, and acquire, own or
hold shares of stock or interest therein for the purpose of fully utilizing the
commercial value of pioneer and new technology generated in the industry, or of
financing the manufacture, on commercial scale, of coconut trees: Provided. That
such subsidiary, partnership, joint venture, which the Authority is authorized to
create, shall be governed by the provisions of general laws applicable to

corporations and such entities: Provided, further, That after such parmership,

subsidiary, or joint venture with private Filipino citizens or entities authorized to be
created shall have become fully viable for commercial operation, and the Authority
has recovered its investments or contributions the Authority shall immediately
divest itself of its interest over the partnership, subsidiary, or joint venture in favor

or any private person or entity. For purposes of this paragraph, the Authority shall

make studies and investigations of the enterprises and projects for which the loans,



contributions and subscriptions to the capital of the enterprise or investments
mentioned are needed, and determine the advisability of financing the same:

ji) Promote, encourage and help coconut planters, farmers, processors and
workers organize themselves into associations and cooperatives to give them greater
control in the marketing of their products and to help them obtain more credit

ster and accredit such associations and cooperatives for purposes of

facilities to reg

participation in the developmental programs of the Authority: Provided, That the
Authority shall not directly or indirectly influence the farmers in the exercise of
their choice or selection of candidates or leaders in the organizations;

k) Render training, extension service programs and disseminate information to
coconut farmers, farm workers and processors relative to production technology,

marketing systems and other technical skills and values, attitude formation and

socio-economic development strategies:
1) Expand and develop the domestic and foreign market for coconut products
and by-products.

m) Regulate the marketing and the exportation of coconut products and by

products to conform with quality or food standards recognized by both the domestic
and intemational market;

n) Take samplings and conduct examination of any copra product to measure
and determine its moisture content as required in the trade; conduct laboratory
analysis to determine the chemical characteristics of coconut products and by-

products including the presence of toxin and other contaminations and issue the

6



necessary commodity clearance and export permit: Provided, That the Authority
may withhold the issuance of such clearance or permit, or suspend or cancel any
clearance or permit already issued in case of violation by the holder of any
provision of this Act or rules and regulations duly promulgated by the Authority;

©) Require exporters, traders, millers, refiners, desiccators, oleo-chemical

processor, other manufacturers and end-users of coconut products and by-products

to submit periodic reports of production, receipts of deliveries or purchases or both,
sales, inventory, contracts and such other data the Authority may deem necessary to
properly and effectively promote the development of the industry. All information
given to the Authority by the individual firms shall be confidential in nature and
could not be used against them;

p) Undertake, initiate or participate in trade missions to obtain better
preferential trading arrangements with importing countries, and enter or otherwise
participate in behalf of the coconut trading industry in all agreements,
arrangements, missions or conventions with any foreign govemment or entity with
respect to trading relations, market quotas, tariff and non-tariff barriers and such
other matters affecting the export of coconut products and by-products;

@) Provide, in coordination with the private sector, a system of accreditation of
association of traders, millers, desiccators, farmers, exporters and end-users of

coconut products:

1) To assist coconut farmers, organizations in marketing their products locally

or abroad when the need arises.


s) Assist coconut farmers organizations in establishing farmer-owned bonded
warehouses and processing facilities:
1) Impose and collect all fees, charges, assessments and imposts including’

interests and surcharges authorized under this Act or its implementing rules and

regulations and disburse funds generated by the Authority from its operations to
carry out its functions:

u) Grant or accept and receive donations of any kind for any purpose not
inconsistent with the purposes of this Act:

v) Enter into, make and execute contracts of any kind as may be necessary or
incidental to the attainment of its purposes;

8) Promulgate its own rules for investigation and procedure to investigate
complaints involving violations of this Act or any rules and regulations issued
pursuant thereto, or any such other laws, rules and orders affecting the coconut
industry: attribute or settle conflicting claims or render the appropriate decision or
award including the imposition and administrative penalty of suspension of license,
registration, permit or clearance issued in accordance with this Act;

x) Order the closure of any mill, refinery, processing firm, copra warehouse or

any place or building where coconut products are stored or to intercept and seize

any vehicle or ship or vessel carrying or transporting coconut products where there
is reasonable ground to believe that the owner, possessor or person or persons in
control of such place, building, vehicles, ship or vessel, of such products have

Violated the provisions of this Act or any rules and regulations promulgated thereto .,


Authority shail be v

in a manner that is prejudicial and detrimental to the coconut industry, or the
consuming public:

y) Develop and recommend measures and methodology quarantine for coconut
products and by-products and to impose such restrictions in the transport movement
or handling of the same in accordance with such standards and quarantine ~
procedure determined by the Authority;

2) Call upon or deputize any official or law enforcement agency of the
govemment as may be necessary to assist the Authority in carrying out and
enforcing its functions under this Act:

2a) Obtain loans and grants from local and foreign sources to finance or support
the operations of the Authority under this Act;

bb) Issue swhpoena or subpoena duces tecum to summon witnesses to appear in

any investigation or hearing conducted by it; and

cc) Exercise all powers and functions necessary or incidental to attain the

national policy and objectives under this Act

ARTICLE I
BOARD OF DIRECTORS AND OTHER PERSONNEL
SEC. 6 Board of Directors. ~ The corporate powers and duties of the

d and exercised by a Board of Directors, hereinafter referred to as

the Board, composed of eleven (11) members to be appointed by the President, five (5) of

whom shall represent the coconut farmer sector, the trading and processing sector and the


science and research sector. The chairman shall be designated by the President from
among the members appointed.

SEC. 7. Tenure, ~The members of the Board shall hold office for a term of
six (6) years or until their successors shall have been appointed and qualified or unless
sooner removed for cause. The first members of the Board to be appointed under this Act
shall hold office as follows: Three (3) members for two years, Four (4) members for four
years and Four (4) members, inclusive of the chairman, for six years. Appointment to
vacant positions shall only be for the unexpired term of the predecessor.

SEC. 8. Powers and Functions. ~ The Board shall exercise the following
powers and functions ae

8) Formulate and adopt a national government plan for the coconut industry
and promulgate the necessary nules and regulations, policies and measures in support
of the plan: 5

b) Prescribe the organization of the Authority and fix the compensation of all
its personnel in accordance with law and determine and grant such allowances and
incentives as it may deem proper with the rates to be approved by the Department of
Budget and Management:

c) Reorganize the Authority when there is a need to institute reforms in the
organizational structure to effect economy and promote efficiency. For this purpose,

the Board may group, coordinate, consolidate or integrate positions and create,

ssify, split and abolish positions;



4) Adopt, promulgate or amend, revise, modify or repeal rules and regulations
necessary to implement the provisions of this Act;

©) Appoint the administrator and deputy administrators and other officers upon
the recommendation of the chairman and chief executive officer:

1) Approve the annual budget and such supplemental budgets of the Authority;

9) Review, revise, modify, increase or decrease the fees and assessment
authorized to be collected in this Act as market condition may warrant taking into ~
account public interest, cost of services and the prices of coconut products and by
products; and

h) Perform such other duties as may be assigned to it by the President of the
Philippines.

SEC. 9. Quorum and Meeting. ~ The Board shall meet as often as the
exigency of the service may demand. The presence of at least six (6) members shall
constitute a quorum and the vote of a majority of the members present constituting a
quorum shall be necessary for the adoption of any rule, resolution, decision or any other
act of the Board. ai .

SEC. 10. Compensation. ~ The members of the Board may receive per °
diems for every meeting actually attended at such amount to be fixed by the Board but
not to exceed Two Thousand Pesos (P2,000.00) per board meeting: Provided, That it shall
not exceed four (4) board meetings during any month for each member.

SEC. 11 Officers and Personnel. ~The chairman of the Board, who shall

have the rank and privileges of a department secretary, shall be the head and chief

u


executive officer of the Authority. Upon his recommendation, the Board shall appoint an
administrator of the Authority who shall be the chief operating officer, with the rank and
privileges of a department undersecretary. ‘The administrator shall have the responsibility "_
of managing the day-to-day affairs and operations of the Authority subject to the
supervision and control of the chief executive officer and in accordance with the policies ,

established by the Board.
There shall be such sufficient number of deputy administrators as the Board may

prescribe to assist the administrator who shall be appointed or removed for cause by the

Board. The administrator and the deputy administrator may be delegated with such
powers and duties as the chairman and chief executive officer may prescribe from time to
time

SEC.12. Application of the Civil Service Law. - All officers and employees
of the Authority shall be subject to the civil service laws, rules and regulations, and all

selection and appointments shall be based on merit and fitness.

ARTICLE IV
MANAGEMENT AND OPERATIONS
SEC. 13. Management. ~ The management of the corporate affairs of the
Authority shall be the responsibility of the chief executive officer with the assistance of
the administrator, deputy administrator and such other officers as may be determined by

the Board,


SEC. 14. Duties of the Chief Executive Officer. - The chief executive

officer shall exercise the following duties and responsibilities

@ _ Initiate and develop corporate policies, programs and objectives for approval
of the Board:

4) Establish general administrative and operating policies;

Appoint all other non-oflicer employees of the Authority:

® Execute for and in behalf of the Authority contracts, obligations and
agreements which are required to be approved by the Board:

2) Appoint technical consultants

Af Discipline officers and employees in accordance with civil service laws, rules
and regulations:

g) Submit the intemal organizational structure of the Authority, financial ”
statements and other reports as may be required by the Board; .

4) Delegate or assign any of the foregoing powers and duties except the power
© appoint any official in the hierarchy of authority: and always subject to his
supervision and control: and

i) Exercise such other powers and duties as may be delegated by the Board

SEC. 15. Corporate Planning Office. ~ To assist the chief executive officer

in the formulation of general plans and programs, promulgation of policies, the

monitoring and evaluation of industry and corporate activities, there shall be a Corporate

Planning Office which shall serve as the technical arm under the office of the chairman,

having the status of a branch which shall be headed by an executive director with a rank

13


of a deputy administrator The executive director shall be co-temminous with the
chairman and with three (3) permanent managers performing the functions of plans and
programs development, policy research and analysis, and monitoring and evaluation.

SEC. 16. Duties of the Chief Operating Officer. - The chief operating

officer shall exercise the following duties and responsibilities:

a) Ensure that the administrative and operating policies are carried out under
the direction and control of the chairman and chief executive officer;

4) Prepare and submit to the chief executive officer, within sixty (60) days
before the beginning of each calendar year, an annual operational budget of the
Authority: and

©) Monitor operational problems, adopt remedial measures and submit policy
proposals to improve the day-to-day affairs and operations of the Authority

SEC.17. Branch Offices. ~ The Authority shall have the following

branches

a) Agricultural Research and Development Branch for the execution and
implementation of policies, plans and programs relating to advancement in
industrialization and development;

b) Industrial Research and Development Branch for the execution and
implementation of policies, plans and programs relating to advancement in
industrialization and development for the coconut products and by-products,

particularly on food, oleo-chemicals, fuels and lubricants;

14


©) Market Research and Development Branch for the formulation and

plementation of policies, plans and programs relating to domestic and

international markets development affecting the coconut industry including the
enforcement of market rules and regulations formulated by’ the Authority; :
d) Field Operations Branch for execution and implementation of policies, plans
and programs relating to production, marketing and processing activities;
©) Administration and Finance Branch for developing and maintaining the

delivery of all necessary administrative, financial and manpower support for the

whole operations of the Authority: and

£) Development Information and Communication Branch for the execution and

implementation of policies, plans and programs relating to development information
and communication as well as other socio-economic research and development

Every branch shall be headed by a deputy administrator or such qualified acting

or officer in charge as may be designated by the chief executive officer.

SEC.18. Regional Offices. ~ The Authority shall establish and organize
regional offices in accordance with the political and administrative regions in the country
and such number of provincial or district offices, or both, that will assist the Authority in
the full implementation of this Act.

SEC.19. Departments, Divisions and Units. ~ There shall be, under the
office of the chairman and chief executive officer, an administrator and deputy
administrators of specialized departments, divisions, units or offices as may be necessary

to provide the needed administrative, technical and specialized services, as may be

15


deemed proper and expedient by the Board, which shall be headed by a person with the
required specialization or expertise.
ARTICLE V
SOURCES OF FUNDING

SEC. 20. Coconut Development Fund. - There is hereby established a,
National Coconut Development Fund, herein referred to as the “Coconut Fund.” 10 be
administered by the Authority for the purpose of finaneing the growth and development
of the coconut industry, including human resource development, training of farmers and
other related activities. As initial capitalization, the sum of ONE BILLION PESOS
(P1,000,000,000.00) is hereby appropriated 10 be made available within one (1) year from
the approval of this Act.

Thereafter, 2 continuing appropriation is hereby authorized to be appropriated in
the amount of not less than One Billion Pesos of the total industry export performance of
the immediately preceding year as reported by the Bangko Seniral ng Pilipinas and to be
deposited in a trust account with an authorized government bank as may be determined
by the Authority. The amount shall be released annually by the said bank to the Authority
upon presentation of its approved budget and programs. ;

SEC.2]. Special Corporate Support Fund. ~ The Authority shall have a
Special Corporate Support Fund for its administrative operating expenses to be funded
from the following sources:

a) An assessment of twelve centavos (PO.12) per kilogram of copra or husked

nuts, or their equivalent in other coconut products, delivered to and purchased by

16



traders, exporters, millers, desiccators and other end-users of coconut products:
Provided, That such assessment shall be collected by the Authority and deposited
with any goverment depository bank which shall be used exclusively for the
operational, supplemental or special budget duly approved by the Board: Provided,
further, That no portion of the fund nor any unexpended balance thereof, including
its eamings, shall be transferred to the general or any special funds of the
government, but shall remain as corporate funds to be used in accordance with the
authorized purposes; and
b) The proceeds of regulatory and service fees or charges as may be determined
and imposed by the Board in the implementation of the provisions of this Act to
cover reasonable costs of service in the issuance of licenses, certificates, export
permits prior commodity clearances including other incomes to be withdrawn in
accordance with the immediately preceding paragraph. Such regulatory and service
fees or charges shall be exempted from the provisions of Presidential Decree No.
1234, entitled “/nstituting A Procedure For The Management Of Special And
Fiduciary Funds Earmarked Or Administered By Departments, Bureaus, Offices And
Agencies of the National Government, Including Government-Owned Or Controlled
Corporations.
SEC.22. Other Sources of Funding. ~ In the event the funds as provided in
Sections 20 and 21 of this Act become insufficient, an amount not less than the initial
appropriation mentioned in Section 20 hereof shall be appropriated from the following

sources:



a) The proceeds of the value-added tax imposed on all cocohut products and
by-products, except copra, copra cake and meal which are hereby exempted from
payment of value added tax and on the services of coconut oil mills, desiccated
coconut factories and other processors of coconut products shall be collected by the
Bureau of Intemal Revenue under Executive Order No. 273, entitled “Adopring A
Value-Added Tax. Amending For This Purpose Certain Provisions Of The National

Internal Revenue Code, And For Other Purposes.”: Provided, That such proceeds
of the value added tax shall be deposited with the Treasurer of the Philippines within
the first ten (10) days of each quarter and shall be automatically appropriated to
finance the programs and projects of the Authority

b) The proceeds of the basic export and premium duties under Section 514
(Export Products Subject To Duty and Rates) of the Tariff and Customs Code levied
on copra, coconut oil, copra meal or cake and desiccated coconut exports, should the
President of the Philippines reimpose such duties under and by virtue of the flexible
clause provision of Section 515 of such Code: Provided, That such proceeds shall be
collected by the Bureau of Customs and deposited with the Treasurer of the
Philippines within the first ten (10) days of each quarter and shall be automatically
appropriated and released to finance socio-economic and developmental programs
and projects of the Authority; ~

c) The proceeds of loans which the Authority may obtain’ from financial

institutions: Provided, That should the total outstanding proceeds shall at any one *


time exceed One Billion Pesos (P1,000,000,000.00), the transaction shall be subject
to the approval of the President; and

d) The proceeds from sale of bonds and other certificates of indebtedness issued
by the Authority and duly approved by the Monetary Board, in an amount exceeding
‘One Hundred Million Pesos (P100,000,000,00) at any one time: Provided, That the
bonds and other certificates of indebtedness to be issued under this Act shall be ~”
exempt from taxation: Provided, further, That proceeds of the bonds and other
certificates of indebtedness herein mentioned shall be used to finance socio-
economic and developmental programs and projects of the Authority as the President,

of the Philippines may approve

ARTICLE VE
REGISTRATION, LICENSE, PERMITS

s

Application for Registration. ~ Any person directly or indirectly

din the business involving coconut products or by-products shall apply for

registration with the Authority. For purposes of this Act, such person shall include:
a) Traders:
b) Processors
©) Refiners:
@) Marine surveyors;

e) Trade intermediaries or brokers:


£) Laboratories dealing with the examination or analysis of coconut; either whole
or husked; copra and coconut oil such as, but not limited to, paring oil, cochin oil, acid
oil, glycerine methy! ester, fatty alcohol, copra or paring meal; other coconut products; *
and

g) Coconut lumber processors, sawmills and dealers. <

SEC. 24. License to Operate. - Upon approval of application for
registration, the Authority shall issue the corresponding license to operate under such
rules and regulations promulgated for the purpose. The application for registration and
license shall be mandatory for both the principal and his agents in the case of natural

persons, and the central or main offices and their branches or subsidiaries in the case of

juridical persons,

SEC. 25, Limitation. ~ The license to operate shall be valid only for the
business, activity or function registered, Any additional business covered by this Act not
included in the registration shall be subject to a separate application in which the
Authority may issue a new or amended license to operate.

SEC.26. Denial of Registration and License. ~ The Authority may refuse
any application for registration and issuance of license, or renewal thereof, if the
applicant has been found by the Authority, after inquiry or investigation, to have
committed an act or acts violative of the rules and regulations administered by the

Authority

20


ARTICLE VII
COMMODITY SUPERVISION

SEC.27. Application for Export Clearance. ~ Notwithstanding any
provision of law to the contrary, all exporters of copra, coconut oil, desiccated coconut,
copra cake or meal, and other coconut products and by-products shall file with the
Authority, not later than ten (10) days prior to the date of loading, an application for
export clearance specifiing the following

a) Name of exporter,

b) Commodity;

©) Volume,

d) Value;

e) Name and address of consignee:

{Authorized agent bank report of foreign sale reference number for the report

of foreign sales

g) Date of sale;

h) Period of shipment;

i) Port of loading,

i) Name of vessel: and .

4) Destination and port of discharge

SEC.28. Issuance of Export Clearance. ~ The export clearance shall be

issued by the Authority upon satisfaction of the following:


a) The export price must not be less than ninety-five percent (95%) of the
prevailing market quotation or Bangho Sentral ng Pilipinas guiding rate as
determined by the Authority; and

b) The exporter has complied with the regulations governing the products for
export, including the payment of administrative fees and assessment,

SEC.29. Commodity Clearance. ~ Before shipment of coconut products
covered under Section 27 of this Act, the exporter shall obtain a commodity clearance
from the Authority showing the following

a) An export clearance for the product issued to the exporter,

b) Inspection and sampling of the products by the inspector or surveyor
appointed or designated by the Authority;

©) Laboratory analysis of the samples attesting that the product is an exportable
quality, which analysis shall be valid only for one (1) month from the date it is
reported by the laboratory services of the Authority; and

4) Payment to the Authority of all fees related to the exportation of the products.

SEC 30. Periodic Commodity Clearance. - A periodic commodity
clearance shall be issued to regular exporters of desiccated coconut with existing plant

facilities upon filing of an application on a plant basis within thirty (30) days prior to the

date of initial shipment covered by said clearance. The periodic commodity clearance

shall be valid for a period of six (6) months from date of issuance unless sooner revoked

or canceled.

iS


SEC. 31 Use of Moisture Meter. - For an accurate determination of
moisture content in the copra resecada, and in observation of the standard scale for
moisture content esiablished by the Authority, all persons or firms engaged in the
business involving copra shall use moisture meters duly calibrated, serialized and sealed

by the Department of Science and Technology

SEC. 32. Fees. ~ The Authority shall collect in addition to the fees for the
issuance, renewal or replacement of license and registration such reasonable fees to cover

the cost of services under this Act.

ARTICLE VIII
INCENTIVES
SEC.33. Restoration of Tax Incentives. — Notwithstanding the provisions of

Executive Order No. 93, entitled “Withdrawing All Tax And Duty Incentives, Subject To"

Certain Exceptions, Expanding The Powers Of The Fiscal Incentives Review Board And
For Other Purposes." the following tax incentives granted to the coconut industry, its
institutions, members and participants are hereby restored:

a) Deduetibility for income tax purposes of gifts, donations, and contributions
made to the Authority to be used directly in the implementation of its development
programs

b) The tax and fee exemption privileges granted to agro-industrial coconut

cooperatives under Section 1 of Republic Act No. 4403, entitled “An der

Encouraging The Organization Of Agro-Industrial Coconut Cooperatives Under The


Jurisdiction Of The Philippine Coconut Administration, Amending For The Purpose
Republic Act Numbered Eleven Hundred Forty-Five,” as follows:
1. Agro-industrial coconut cooperatives with net assets of not more than
Five Hundred Thousand Pesos (P500,000.00) shall be exempt from all taxes and
govemment fees of whatever nature; and those with net assets in excess of Five
Hundred Thousand Pesos (P500,000.00) shall be exempt from the payment of
documentary stamp tax, resident taves, tax on banks and insurance companies and
municipal and city taxes, but shall be liable for the payment of income tax at the
full rate provided for under existing laws on the amount allocated for interest on

capital, fixed and percentage taxes at the full rate provided for under existing laws

on gross sales 10 non-members; and all other taxes provided for under existing
laws
2. Agro-industrial coconut cooperatives may deposit their sealed cash
boxes, documents and valuable papers in the safes of city or municipal treasurer
and other government offices free of charge and the depository of said articles
shall issue a receipt therefor; and _ .
3. Agro-industrial cooperatives shall be represented’ in courts” by

provincial or city’ fiscal or the government corporate counsel or his representative

in any case where they are a party either as a plaintiff or defendant, except when

the government is one of the parties;
¢) Exemption from all assessments, levies, taxes and fees of whatever nature +

arising from the sale or transfer to the Authority of coconut seednut for the planting

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or replanting program under Presidential Decree No. 1468, entitled “Revising
Presidential Decree Numbered Nine Hundred Sixty One:

4) The deductibility as business expense for income tax ee of ~
contributions, donations ‘miade. by miatiber® of the eaconit industry t0 coconut
farmers cooperatives or associations duly accredited by the Authority;

¢) Exemption from payment of sales tax, special fund impost to diese, specific
tax applied to diesel fuel, manufacturer's tax on coconut oil to be used as engine
fuel, either in its pure state or as blending component for diesel fuel under Section 1

of Executive Order No. 827, entitled “Exempting Coconut Oil From The Coconut

Lewy And Sales Tax As Well As From The Special Fund Impost To Diesel,” including
the recognition as exports of all sales of coconut oil to the Philippine National Oil
Company under the coco diesel program and for purposes of the grant of export
credits and other privileges per Executive Order No. 846, entitled “Amending
Executive Order No. 827” and Letter of Instructions No. 1332 to the Bangko Sentral

Pilipinas, Philippine National Oi! Company and Philippine Coconut Authority

and other agencies concemed to ensure the

1) success of the coco-diesel program of the government:

g) Exemption from any and all assessable taxes, including income tax, duties,
levies, imposts and other similar charges as well as ad valorem duty imposed by
Executive Order No. 860, entitled “Imposing An Additional Duty Of Three Percent
(3%) Ad Valorem On All Imports,” on the purchase abroad and importation into the

Philippines by coco-chemical enterprises duly registered with the Board of

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Investment and the Authority and the sale by foreign suppliers or contractors of all
required. necessary and useful machinery, equipment and services for the
establishment of a chemical processing plant under Executive Order No. 880,
entitled “Declaring The Establishment Of A Coconut Chemical Industry As A Means
To Rationalize The Coconut Industry Of The Philippines And Granting Additional
Incentives Therefor; "

h) Exemption from all taxes, duty, imposts and other charges of whatever nature
arising from acquisition of capital equipment and machinery including real estate tax
on land and its improvement used by any person or enterprise to undertake a private
productivity program in accordance with a farm development plan approved by the
Authority, which privileges shall be enjoyed for a period of ten (10) years from the
date of said approval: Provided. That the project shall be implemented and fully.
developed within five (5) years from the date of approval of the farm sisveopaeaat
plan; and

i) Generally, all other tax and non-tax incentives granted to the coconut
industry, its institutions, members and participants under other existing applicable
laws, decrees, executive orders and similar issuances.

SEC. 34. Tax Exemption. ~ Notwithstanding the provisions of any law to

the contrary, all real and personal properties, equipment and machinery acquired by the
Authority for its operations under this Act shall be exempt from all taxes, fees, duties

imposts and assessments, both national and local except income tax.

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ARTICLE IX
SPECIAL PROVISIONS
SEC.35. Conservation of Coconut Trees. — In order to conserve and protect

the resources devoted to coconut industry, the Authority shall regulate the cutting or

destruction of coconut trees, and in furtherance thereof, no person shall convert public

and agricultural lands primarily devoted to coconut into other uses without the prior
approval of the Department of Agrarian Reform (DAR) and the Authority: Provided, That
the cutting or conversion may be allowed only in cases where it is shown that majority of
the coconut trees in the land have become senescent and economically unproductive as
determined and certified by the Authority: Provided, further, That no coconut trees may
be cut nor any coconut farms be subject of conversion where such tree or farm is
involved in the productivity and rehabilitation program of the Authority: . Provided,
furthermore, That the affected farmers, tenants, lessees and regular farm workers shall be .
furnished of the findings of the Authority ae

SEC. 36. Measures to Protect the Industry. ~ When the general welfare of
the industry for national interest so requires, and when there exist unabated increase in
production capacity resulting, singly or collectively, in cutthroat competition, |
overproduction, underselling, and smuggling of poor quality coconut products, thereby
threatening the viability and stability of the coconut industry or any sector thereof, the
Authority shall regulate or otherwise suspend the issuance of license for the
establishment and operation of any new coconut oil mill, desiccated coconut plant or

refinery or the upgrading of capacities of existing mill, plant or refinery, In granting the

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license, the Authority shall evaluate and determine the need for the establishment of

additional mills or plant or upgrading the capacity of any existing mills or plant in

relation to: :
a) The existing market demand:

b) The production capacity prevailing in the country, locally or any sector of the
industry:

©) The level and flow of supply or raw materials; and

d) Such other circumstances which may affect the viability or stability of the

industry concemed.

ARTICLE X
PENALTIES
SEC. 37. Penalties. - Any person who willfully or deliberately violates any of
the provisions of this Act or rules or regulations duly promulgated hereunder shall be
punished by a fine of not less than Fifty Thousand Pesos (P50,000.00) but not more than ,
‘One Hundred Thousand Pesos (P100,000.00), or by imprisonment of not more than five
(S) years, or both: Provided. That should the violation constitute an act punishable under
the Revised Penal Code, the pertinent provision and penalty prescribed in the’said Code
shall apply
If the violation be committed by an association, partnership, corporation or any
juridical person, the officer or officers, director or employee responsible for the violation

shall be held liable and shall suffer the penalties provided herein, An alien found guilty

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shall after having served his sentence be immediately deported and in case of a
naturalized citizen, his Certificate of Naturalization shall be cancelled. :
SEC. 38. Interest and Charges. ~ Assessment and regulatory or service fees
or charges which are not paid on the due date thereof shall be subject to penalty interest
of fourteen (14%) percent per annum plus a surcharge of twenty five (25%) percent in

case of willful or fraudulent failure to pay

ARTICLE XI

TRANSITORY PROVISIO!

SEC. 39. Abolition. ~ The Philippine Coconut Authority is hereby abolished
and its powers and functions transferred to the Philippine Coconut Industry Development
Authority together with all its appropriation and funding from all sources, equipment and
other assets and such personnel as are necessary: Provided, ‘That as a result or incident of
the abolition, no personnel shall be terminated or separated except when the Board shall
exercise its authority to reorganize pursuant to Article III, Section 8 of this Act: Provided,
further, That the Authority, through its Board, shall effect the transfer of the herein
personnel in a manner that will insure the least disruption of on-going programs and
projects: Provided, furthermore, That until such a reorganization is implemented all
officers and employees of the abolished agency shall continue to exercise all functions

and discharge all their duties and responsibilities.

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SEC. 40. implementation. — The Secretary of Agriculture shall, in
coordination with the Secretary of Environment and Natural Resources, issue the

necessary rules and regulations for the effective implementation of this Act.

ARTICLE XI
MISCELLANEOUS

SEC.41.  Separability Clause. — If any part or provision of this Act is
declared unconstitutional, other parts or provisions thereof which are not affected thereby
shall continue to be in full force and effect,

SEC.42. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations and other issuances or parts thereof, inconsistent with the provisions of this
Act, are hereby repealed or modified accordingly

SEC. 43. _Effeetivity. ~ This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation.

Approved,

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