Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

HOUSE BILLNO. 605 __

Introduced by HON. EDGAR M. CHATTO
First District, Bohol

EXPLANATORY NOTE

‘This bill seeks to create a special economic-development zone in the Municipalities of
Tubigon, Calape, Loon and Maribojoc, all situated in the northwestern part of the First
District of the Province of Bohol. This is a re-filed bill and is in line with the
administration's program to generate employment opportunities and reduce, minimize, if
St to totally ekadicate, poverty capecialty those Hvine ta the rual aruea or eaxmutyeid,

This part of the first district of Bohol forms part of the larger area of Cebu-Bohol
Economic in, the emerging center of industrial, commercial and tourism activities in
Central Visayas. The Municipalities of Tubigon, Loon, Maribojoc have their own ports
which are ‘for development. Further, the Catagbacan Port, located at the Municipality
of Loon, has identified by the Philippine Ports Authority (PPA) for conversion as an
International Cruise Port in view of the port's strategic location in relation to the ports in
nearby island ovloces and the Chocolate Hi Hills of Bohol.

With increase in the manufacturing industry and trade activities in Central
Visayas in ral and in the Cebu-Bohol Economic Basin in particular, the Tubigon, Calape,
Loon and Maribojoc areas which are in the northwestern part of Bohol facing Cebu, and the
nearest to Cebu island via Argao have become potential areas for investments particularly in
coast-oriented or port related industries.

Hence, under this bill, proposed in the Municipalities of Tubigon, Calape, Loon and
Maribojoc is the development of Bohol Island Special Economic Zone where its principal
office will be ited in the Municipality of Loon. Based on the strategic location and
potential of areas, the following activities are identified for possible development
within the posed Bohol Island Special Economic Zone: refueling, restocking, and
rewatering of ; transshipment port for bulk and containerized cargoes; ship repair
and refurbishi station; power generation station and other industrial enterprises.

The creation of Bohol Island Special Ecozone will address the following economic
purposes, among others:
L Fee ene Secamire weer x ts Jocetion of neinetcia seth iies to sumtais
the development of Central Visayas and in contribution to the national
effort of achieving for the country the status of a newly industrialized
country (NIC);
2. Bias pais fo lepeane the aeslocenet in MSeSC COs A Cite fats ot
yas in order to promote equity and balance in the
pat ary rl

3. The need to provide jobs, increase productivity and improve the level and
quality of living conditions of the people in the said municipalities; and



4. The need to stimulate the repatriation of Filipino capital by providing
attractive climate and incentives for business activity.

Further, near the Bohol Island Special Economic Zone are found many potential
areas for tourism development. The stretches of white sand beach and nearby deep sea
areas which are reputed for their exotic marine life are just waiting development and can
complement the activities which are proposed in the Bohol Island Special Ecozone.

In view of these accruing economic benefits of the establishment of an economic zone
thie mad smeinicpattie Of Beticl and the significant Gonttbetion ft wail pve to the tatiee
country's development and objective of inclusive growth, the urgent consideration and
approval of this measure is highly recommended.



Republic of the Philippines
HOUSE OF REPRESENTA‘
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

| if
| HOUSE BILL NO. 605

Introduced by HON. EDGAR M. CHATTO
First District, Bohol

“AN ACT

TUDIOOR CAPA LOGIT ECONOMIC ZONE IN THE MUNICIPALITIES OF
TUBIGON, LOON AND MARIBOJOC IN THE PROVINCE OF BOHOL
TO BE KN‘ AS THE BOHOL ISLAND SPECIAL ECONOMIC ZONE (BISEZ),

CREATING FOR THE PURPOSE THE BOHOL ISLAND SPECIAL ECONOMIC
ZONE Al povanticnee Y (BISEZA), APPROPRIATING FUNDS THEREFOR AND

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

SECTION 1. Title. — This Act shall be known as the “Tubigon, Calape, Loon and
Maribojoc Special Economic Zone or the Bohol Island Special Economic Zone (BISEZ) Act
of 2022.”

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
actively encourage, promote, induce and accelerate the sound and balanced industrial,
economic and social development of the country in order to provide jobs to the people,
especially those in rural areas, increase their productivity and their individual and family
income, and thereby improve the level and quality of their living conditions through the
establishment, among others, of special economic zones in suitable and strategic locations
fe tie county and Wel och wiesontes thet snail atieshealy tvact hag thats an seoosaets
foreign investments.

SEC, 3. Creation of Special Economic Zone in the Municipalities of

Tubigon, , Loon and Maribojoc, Province of Bohol. - In pursuit of the above
declared cape and subject to the concurrence of the concerned local government

units (LGUs) of the said municipalities and the Province of Bohol affected by the zone, there
is established a a special economic zone, referred hereinafter as the Tubigon, Calape, Loon
and M: ¢ Special Ecozone or Bohol Island Special Ecozone (BISEZ). The Bohol ‘sland
Special Ecozone shall cover all the barangays in the municipalities of Tubigon, Calape, Loon

and Maribojog in the Province of Bohol. ‘The specific metes and bounds of the Bohol Island
Special Ecozone shall be more particularly defined in a presidential proclamation that shall
be issued for this purpose.

SEC. 4. Governing Principles. - The Bohol Island Special Ecozone shall be
managed and operated by the Bohol Island Special Economic Zone Authority or BISEZA as
created under Bestion 10 of this Act, under the following principles:

A Within the framework and limitations of the 1987 Philippine Constitution
and applicable provisions of the Local Government Code, the Bohol Island
Ss Ecozone shall be developed into and operated as a decentralized,
self-restraint and self-sustaining industrial, commercial and/or trading,


agro-industrial, tourist, banking, financial and investment center with
suitable residential areas.

B. ‘The Bohol Island Special Ecozone shall be provided with transportation,
telécommunications and other facilities needed to attract legitimate and
productive investments, generate linkage industries and employment

ities for the people in the municipalities of Tubigon, Calape, Loon
Maribojoc as well as the people of the Province of Bohol and its

neighboring provinces, towns and cities.

C. The Bohol Island Special Ecozone may establish mutually beneficial
economic relations with other entities or enterprises within the country or,
subject to the administrative guidance of the Department of Foreign Affairs
(DFA), the Philippine Economic Zone Aboety | (PEZA) and/ or the
Department of Trade and Industry (DTI), with foreign entities or
enterprises.

D. Foreign citizens and companies owned by non-Filipinos in whatever
may set up enterprises in the Bohol Island Special Ecozone,
tes by themselves or in joint venture or partnership with Filipinos in any
sector of industry, internat ‘ntertiational trade and commerce within the Bobo
Island Special Ecozone.

E, The areas comprising the Bohol Island Special Ecozone may be expanded
or Feduced when necessary. For this purpose, the BISEZA, in consultation
with the concerned LGUs, shall have the power to acquire either by
putchase, negotiation or condemnation proceedings, any private land
within or adjacent to the Bohol Island Special Ecozone for the following
purposes: (1) consolidation of lands for Bohol Island Special Ecozone
development; (2) ae of right of way to the Bohol Island Special

ne; and (3) the protection of watershed areas and natural assets
valuable to the prosperity of the Bohol Island Special Ecozone.

F. Goods manufactured by an Bohol Island Special Ecozone enterprise shall
be made available for immediate retail sale in the domestic market, subject
to the payment of corresponding taxes on materials and other regulations
that may be formulated by the BISEZA, together with the PEZA, the Bureau
of Customs and the DTI, in accordance with the National Internal Revenue
Code (NIRC) of 1997, as amended and the Tariff and Customs Code of the
Philippines, as amended. However, in order to protect domestic industries,
negative list of industries shall be drawn up and regularly updated by the
PEZA. Enterprises engaged in industries included in such negative list shall
not be allowed to sell their products locally.

G. The national government shall maintain its ability to coordinate with the
Bohol Island Special Ecozone and the local government units concerned,

SEC, 5. Incentives to Registered Enterprises. — The BISEZA may administer
the following incentives to the registered enterprises located within the Bohol Island Special
Ecozone to the extent of the activity and/or project:

A. Income Tax Holiday (ITH). - Registered enterprises shall be entitled to an
income tax holiday from the start of their commercial operations to the
extent of their activity under the following categories:

Category A - Registered domestic enterprise located in highly developed
areas, as determined by the Board of Investments (BOI), shall be entitled to

a four-year income tax holiday.


Category B — Registered domestic enterprise on the following shall be
entitled to a six-year income tax holiday:

1, Located in less developed areas as defin

Category C — Registered export enterprise shall be entitled to a six-year

income tax holiday: Provided, however, That if the export enterprise

complies with the following: (2) large capital investments or sizeable

employment generation; (2) use high level of technology; or (3) located

cutee Metco | Menai: it shall be entitled to an eight-year income tax
pos:

Registered enterprises embarking on new investments that are listed in
current Investment Priorities Plan (IPP) shall be entitled to incentives
herein pertaining to the new investments and subject to such

Teclas and condiioas as the BOI may determine.

|
For this purpose, eae ease ortee ah be aeons ae Ree
natural or juridical, licensed to do business in the Philippines and
registered with the BISEZA to transact business within the Bohol Island
Special Ecozone. A registered export enterprise shall be defined as any
registered enterprise engaged directly or indirectly in the production,
manufacture or trade of products or services which earns at least seventy
percent (70%) of its normal operating revenues from the sale of its
products or services abroad for foreign currency. A registered domestic
meanwhile, shall be defined as any registered enterprise not
chahar tha Gsfntng. oft vasiahered aigoet ealerpiies

Additional investments in the project shall be entitled to the income tax

hol corresponding to such investments as may be the

iI. Additional income tax holiday may be granted for as long as the

Aaceeement mate 3 eae ee Provided, however, That the total

period for an export enterprise availing of an eight-year ITH shall not

slr EY (a0) 9m An a na re ENS UE eS
ted if not used during the incentive period.

Enterprises registered with the BISEZA are required to share in the
development fund of the BOI for investment promotion projects of the
government equivalent to one percent (1%) of the ITH granted to every
application.

‘The Bureau of Internal Revenue (BIR) shall require a registered
enterprise availing of the ITH or Net Operating Loss Carryover (NOLCO) to
secure a certificate of eligibility from the BISEZA before submitting its
income tax return (ITR) with the BISEZA for validation.

Failure to secure certification and/or to file the ITH or NOLCO
aviiment for validation by the BISEZA ethin forty-five (45) days from the
last day of each statutory filing date for ITR shall cause the forfeiture
availment for the taxable period.

. Net Operating Loss Carryover (NOLCO). — Net operating loss of the
business or enterprise during the first three (3) years from the start of
commercial operations which have not been previously offset as deduction
from gross income shall be carried over as a deduction from gross income
for the next five (5) consecutive years immediately following the year of


such loss: Provided, however, That operating loss resulting from availment
of incentives provided in this Act shall not be entitled to NOLCO.

Registered enterprises availing of the ITH as provided here shall not be
cated tava ‘the NO! NOLCO,

3 ie SP in ca et ina pa Hasna
— Except for real property tax on land, no local and national taxes as
prescribed under Republic Act No. 8424 or the NIRC of 1997, as amended
such as income tax, excise tax and franchise taxes, shall be imposed on
registered enterprises operating within the Bohol Island Special Ecozone.
a
as

1. (Three percent (3%) to the national government; and

2. Two percent (2%) shall be remitted by the business establishments to
the treasurer's office of the municipality or city where the enterprise is
located.

|All persons and service establishments in the Bohol Island Special
shall be subject to national and local taxes under the NIRC of 1997,
as amended and the Local Government Code.

). Accelerated Depreciation. — Accelerated depreciation of plant, machinery
and equipment that are reasonably needed and actually used for the
production and transport of goods and services may be allowed using a rate
not twice the rate which would have been used had the annual
all ce been computed in accordance with the rules and regulations
prescribed by the Secretary of Finance and the provisions of the NIRC of
1997, as amended,
Capital Equipment Incentives. ~
Qa) epee Gone of capital erp), pers parts, tools and dye, or those
required for pollution abatement and control, cleaner production and
waste rettciien including consignment thereof by registered enterprises
upon the effectivity of this law, shall be exempted to the extent of one
hundred percent (100%) of the taxes and customs duties: Provided, That
imported items thereof shall be used exclusively by the registered
enterprise in its registered activity: Provided, further, That the
importation of machinery and equipment and accompanying parts shall
comply with the following conditions:

1. (They are not manufactured Renee anita omni, of
comparable quality and at reasonable prices;

2. They are reasonably needed and will be used exclusively by the
registered enterprise in the manufacture of its products, unless prior
approval of the BISEZA is secured for __ the part-time utilization of said
equipment in a nonregistered activity to maximize usage thereof or the
proportionate taxes and duties are paid on a specific equipment and
Easchinary hekig potstauraly used foc ctr uotoned activicion 3 and

3. Approval of the BISEZA must be secured by any sale, transfer or
Faget lagak a gp percent he pence Nae aan
is made: Provided, That if such sale or transfer or disposition is made


within the first five (5) years from date of importation, any of the
following conditions must be present:

i. the same is made to another enterprise enjoying tax and duty
exemption on imported capital equipment;

ii. the same is made to another enterprise, upon the payment of any
taxes and duties on the net book value of the capital equipment to
be sold;

iii. the exportation of the capital equipment, machinery, spare parts or
source documents or those required for pollution abatement and
control; or

iv. proven technical obsolescence of the said equipment, machinery or
Spare parts.

When this sale, transfer or disposition is made under any of the
shs

conditions provided
ee teas the registered firm shall not pay the taxes and
‘duties waived on such items: Provided, further, That if the registered

enterprises sell, transfer or dispose the said imported items without
prior approval within five (5) years from the date of the importation, the
registered enterprise and the vendee, transferee or assignee shall be
‘solidarily liable to pay twice the amount of the tax and duty exemption
‘given it: Provided, finally, That even if the sale, transfer or disposition
‘of the capital equipment, machinery or spare parts is approved after five
|G) years from the date of importation, the registered enterprises are
still liable to pay the taxes and duties based on the net book value of the
|capital equipment, machinery or spare parts if any of the registration
terms and conditions has been violated. Otherwise, they shall no longer
‘be subject to the payment of the taxes and duties waived thereon.

(2) The purchase of machinery, capital equipment, raw materials,
supplies, parts and semi-finished products to be used in the fabrication of
machinery and capital equipment by a registered export-oriented
enterprise from a domestic manufacturer shall be subject to zero percent
(0%) value-added tax.

‘The registered export-oriented enterprise shall be granted a tax credit
equivalent to the amount of duties that would have been waived on the
machinery, capital equipment, raw materials, supplies, parts and semi-
finished products used in the fabrication of machinery and capital
equipment, had these items been imported, upon its submission to the
Department of Finance (DOF) of the bill of materials evidencing the
transaction value of such and other pertinent documents, for verification
and proper endorsement.

be subject to the following conditions: eroding anes or
machinery and spare parts will be used ape by the registered
enterprise in its registered activity; (b) that the capital equipment or
machinery where the raw materials, supplies, parts and semi-finished

products were used would have qualified for tax and duty-free importation;
SEO ee Te ee eee erie true trite
enterprise. If the registered enterprise sells, transfers or disposes of these


machineries, capital equipment and spare parts, the provision in the
preceding paragraphs for such disposition shall apply.

This incentive shall be deemed waived if application for tax credit under
this subsection was not filed within one (1) year from the date of delivery.

F. The importation of source documents by information technology. —
Registered enterprises shall be eligible for tax and duty free importation.

G. Raw Materials Incentives. - Every registered export-oriented enterprise
shall enjoy a tax credit equivalent to the internal revenue taxes and
customs duties paid on the supplies, raw materials and semi-manufactured
products provided the same are not sufficient in quantity, quality or are not
competitively priced in the Philippines and which are used in the
a eedsthate, peoteeabig ot pendiuction of tee tapoet picdeicts Soecalig part

i indirectly by the

enterprise, based on the actual taxes and duties paid for such materials,
she and/or semi-manufactured products by the registered enterprise.
I

tives on Breeding Stocks and Genetic Materials. — Importation of
breeding stocks and genetic materials within ten (10) years from the date of
registration of commercial operation of the enterprise shall be exempt from
all taxes and duties: Provided, That such breeding stocks and genetic
seers ere cease eet a the negate cli iy A APOE PT
¢ BISEZA.

\The availment of the incentives by the registered enterprise shall be
subject to the following: (a) that said breeding stocks and genetic materials
would have been qualified for tax and duty-free importation under the
asbesting perasrep (i) tn tie ieseiing stocks ase pacts eves Mie ate
reasonably needed in the registered activity; (c) that approval of the
BISEZA has been obtained by the registered enterprise; and (d) that the
purchase is made within ten (10) years from the date of registration of
commercial operation of the registered enterprise.

This incentive shall be deemed waived if application for tax credit under
this subsection is not filed within one (1) year from the delivery date.

I, Exemption from Wharfage and Port Dues. — The provisions of law to the
contrary notwithstanding, exports by a registered enterprise shall be
exempted from wharfage and port dues.

J. Deferred Imposition of the Minimum Corporate Income Tax. — The
‘Minimum Corporate Income tax (MCIT) of two percent (2%) of the gross
income as of the end of the taxable year shall be imposed when the MCIT is
greater than the income tax computed under the NIRC of 1997, as amended,
for the taxable year: Provided, however, That said MCIT shall be imposed
only after the enterprise's entitlement period to the income tax-based
incentives has expired.

K. Tax Treatment of Merchandise in Bohol Island Special Ecozone. —

1. Domestic merchandise sent from the Bohol Island Special Ecozone to
areas outside the said ecozone shall, whether or not combined with or
‘made part of other articles also of local origin or manufactured in the
sk cer Aa $ > export processing zone, be subject to internal
|revenue laws of the Philippines as domestic goods sold, transferred or
‘disposed of for local consumption.


2. Merchandise sent from the Bohol Island Special Ecozone to areas
outside the said ecozone shall, whether or not combined with or
made part of other articles while in the zone, be subject to rules and
regulations governing imported merchandise. The duties and taxes
‘shall be based on the value of said imported materials except when the
final product is exempt.

3. Articles produced or manufactured in the Bohol Island Special Ecozone
and exported therefrom shall, on subsequent importation into the
customs territory, be subject to the import laws applicable to like
articles manufactured in a foreign country.

4. |Unless the contrary is shown, merchandise taken out of the Bohol
Island Special Ecozone shall be considered for tax purposes to have
been sent to customs territory.

L Tu Tne of tan Metin nd Cap Ene te Bo

Ecozone. — Importations of raw materials and capital
Welneseat chal bs seed wei the Ontaibos emai Investments Code.

M. Importations of raw materials and capital equipment shall be treated as in
the Omnibus Investments Code. — Registered export-oriented enterprise
shall have access to the utilization of the bonded warehousing system in
accordance with the rules and regulations of the Bureau of Customs.

N. Employment of Foreign Nationals. - Subject to the provisions of Section 29
of Commonwealth Act No. 613, as amended, a registered enterprise may
employ foreign nationals in supervisory or technical positions for a period
not exceeding ten (10) years from its registration: Provided, That when the
moaiority of the capital tock of a ssgiaesed eaterpeise 8 owned Wy. ees
investors, the positions of the president, treasurer and general manager
thr eblents ay be retuned by eg maton bond the prod
set forth herein, and such officer is the owner or a stockholder owning at
least ten percent (10%) of the outstanding capital stock of the registered
enterprise and he remains the owner or maintains his stockholdings

Foreign nationals under employment contract within the purview of
this incentive, their spouses and unmarried children under twenty-one (21)
years of age, who are not excluded by Section 29 of Commonwealth Act No.
613, as amended, shall be permitted to enter and reside in the Philippines
during the period of employment of such foreign nationals. They shall be
entitled to a multiple entry visa, valid for a period of three (3) years, and
shall be allowed to enter and leave the Philippines without further
documentary requirements other than valid passports or other travel
documents in the nature of passports. The validity of the multiple entry
visa shall be extendible yearly.

‘The said foreign nationals admitted under this provision, as well as
respective spouses and dependents shall be exempt from: (a)
obtaining alien curtifcates of registration and immigration clearance
certificates; and (b) securing the Alien Employment Permit (AEP) and all
types of clearances, permits, licenses or their equivalents required by any
government department or agency.

SEC. 6. Incentive to Investors. — Any foreign national covered under subsection
(M) of Section 5 of this Act, who invests an amount of US $150,000.00, either in cash


and/or equipment, in a registered enterprise shall be entitled to an investor's visa:
Provided, Te

A. He/she is at least eighteen (18) years of age;
B. He/she has not been convicted of a crime involving moral turpitude;

|
C. He/she is not afflicted with any loathsome, dangerous or contagious
ase;

D. He/she has not been institutionalized for any mental disorder or disability.

Provided, further, That in securing the investor's visa, the alien-applicant shall be
entitled to same privileges provided for under subsection (M), Section 5 hereof.

As a holder of investor's visa, an alien shall be entitled to reside in the Philippines
while his or her investment subsists. For this purpose, he or she should submit an annual
report, in the form duly prescribed for the purpose, to prove that he or she has maintained
his or her investment in the country. Should said alien withdraw his or her investments
from the PI ;, then the investor's visa issued to him or her shall automatically expire.

SEC. 7. Administration, Implementation and Monitoring of Incentives. —
‘The BISEZA\ shall be responsible for the administration and implementation of the
incentives eager) to its respective registered enterprises: Provided, That any incentive
cata py policy adopted by the BOI for registered enterprises shall be uniformly
app!

The following are the duties and responsibilities of the BISEZA in the administration
of incentives:

A. To adopt consistent procedures of administering incentives in accordance
with the guidelines established by the BOT;

B. To adopt and implement systems and procedures affecting trade and
customs policies in accordance with the requirements established by the
DOF and the BOI;

CG To Sabra aioe cm rag ene ees Tes Oe
by any of these agencies to ascertain consistency of investment
ia ies and incentives, including their implementation as provided for in

(A), and to ensure proper implementation of systems and
lures affecting trade and customs policies as provided also in
paragraph (B); and

D. To all other duties and responsibilities as may be required by the
President of the Philippines.

For proper monitoring, the BOI shall create a single database of all incentives
provided by all incentives granting agencies, including the BISEZA, and all information
thereto. entry bookkeeping and accounting shall be done by the BOI in recording all
incentives granted by the government for transparency purposes,

SEC. 8. Extension of Period of Availment. — The availment period of the
Instn peaviiel beps my he eencod by fhe Hees fe hs Font at ON ees
beset ree perational force majeure or any event equivalent thereto, impairing its
viability: 1 That the avallment period shall not exceed the duration of the said force
veeaee ce: cnivaiet sont



SEC. 9. Duration of Incentives. — Enterprises registered with the BISEZA may
enjoy ITH or NOLCO granted by the latter prior to the availment of the five percent (5%)
GIE.

Fiscal incentives under this Act shall be terminated after a cumulative period of
ay G25) petes Pinan the dite OF reparation os ant ee of commercial operation, whichever
applicable, except that it could be extended with regard to industries deemed
it eaabik national oivekioasant:

‘The industries exempted from this provision shall be recommended by the BOI, with
the concurrence of the Secretaries of the Departments of Finance and Trade and Industry.

SEC. 10. Creation of the Bohol Island Special Economic Zone Authority.
— There is created a body corporate to be known as the Bohol Island Special Economic Zone
a oe ee ee ribo otait hecenie dell ae ie RES Go)
Special Ecozone. This corporate franchise shall expire in fifty (50)
ye an Hm hi dot ih) lenge ae: ey of ie
srr adimaitren peng It shall be organized within one hundred

chy G8) Fie tas Wiactiviey oe te Ack

wits Principal Office of the BISEZA. — The Bohol Island Special Economic
Zone Authority shall maintain its principal office in the Municipality of Loon, Province of
Bohol but it may establish branches within the Philippines as may be necessary for the
proper conduct of its business.

SEC. 12. Powers and Functions of the BISEZA, — The Bohol Island Special
Roonaan Ze ey, shall have the following powers and functions:

A. To operate, administer, manage and develop the Bohol Island Special
Ecozone accor according to the principles and provisions set forth in this Act;

B. To register, regulate and supervise the enterprises in the Bohol Island
Special Ecozone in an efficient and decentralized manner, subject to
laws;

C. To coordinate with local government units and exercise general supervision
over the development plans, activities and operations of the Bohol Island
Special Ecozone;

D. To regulate and undertake the establishment, operation and maintenance
of utilities, other services and infrastructure in the Bohol Island Special
ee eae cacoens aed elds oe water supply,

ecommunications, transport, toll roads and bridges, port services and
Helis Sori ts peo soacabis aad socigoteies ates ove, caeges and
prices thereof;

£. To|construct, acquire, own, lease, operate and maintain on its own or
through contracts, franchise, licenses, bulk purchase from the private
sector or permits under any of the schemes allowed in Republic Act No.
6957 or the Build-Operate-Transfer Law, as amended by Republic Act No.
7718, or enter into joint venture on adequate facilities and infrastructures
required or needed for the operation and development of the Bohol Island
Special Ecozone, in coordination with the appropriate national and local
government authorities and in conformity with applicable laws thereon;

F. To operate on its own, either directly or through a license to other tourism-
perv activities, including games, amusements, recreational and sports


adequate and necessary funds from local or foreign sources to finance its
projects and programs under this Act, and for that purpose to issue bonds,
promissory notes and other forms of securities, and to secure the same by a
guarantee, pledge, mortgage, deed of trust or an assignment on all or part
of its property or assets;

H. To protect, preserve, maintain and develop the forests, beaches, coral and
coral reefs and maintain ecological balance within the Bohol Island Special
Ecozone;

I. To) create, operate and/or contract to operate such functional units of
A aaNet

J. To|adopt, alter and use a corporate seal; make contracts, leases, own or
otherwise dispose of personal or real property; sue and be sued; and
otherwise carry out its functions and duties as provided for in this Act;

K. To issue certificates of origin for products manufactured or processed in
the Bohol Island Special Ecozone in accordance with prevailing rules of
origin, and the pertinent regulations of the PEZA, the DTI and/or the
Department of Finance (DOF);

L To issue working visas renewable every two (2) years to foreign executives
and foreign technicians with highly specialized skills which no Filipino
possesses, as certified by the Department of Labor and Employment

OLE);

M. To report to the Bureau of Immigration (BI) the names of the foreigners
who have been granted permanent resident status and working visas within
thirty (30) days after issuance of such grant;

N. To exercise such powers as may be essential, necessary or incidental to the
powers granted to it hereunder as well as those that shall enable it to carry
out, implement and accomplish the purposes, objectives and policies of this
Act; and
O. To issue or amend rules, regulations, procedures and practice as may be
required and consistent with the provisions of this Act and as may be
necessary to accomplish and implement the purposes, objectives and
SEC. 13. Board of Directors of the Bohol Island Special Economic Zone
Authority. — The powers of the Bohol Island Special Economic Zone Authority shall be
vested in and exercised by a Board of Directors, referred to herein as the Board, which shall
be composed of the following:

A. The Chairman who shall, at the same time be the administrator of the
BISEZA;

B. A Vice Chairman who shall come from among the members of the Board;
C. Ten (10) Members consisting of:
1. [The Governor of the Province of Bohol;


6.

. ‘The Congressional Representative of the district covering the site of the

Bohol Island Special Ecozone;

One (1) representative from the domestic investors;

|One (2) representative from the foreign investors;

|Four (4) representatives or one (1) private resident and taxpayer from
jeach of the municipalities of Tubigon, Calape, Loon and Maribojoc;
and

Two (2) representatives from the workers in the Bohol Island Special
Ecozone.

The Governor and the Congressional Representative shall serve as ex-officio

members of
officials.

the Board, whose term in the Board corresponds to their terms as elected

irman and the members of the Board, except the ex-officio members, shall be
the President of the Philippines to serve for a term of six (6) years, unless
ted from service due to death, voluntary resignation or removal for cause. In
eget sso it scarey te reppseeemi wea aerye ae
of the term,

for the representatives of the business and labor sectors, no person shall be

Ex
appointed fo the Prosilont of the Palippines as a member of the Bosrd tnlezs be 18 a

natural born
ability and i

citizen of the Philippines, of legal age, of good moral character, of proven

integrity and a degree-holder in any of the following fields: economics, business,

accounting, cf iblic administration, law, management or their equivalent and with at least

ten (10)
or public

relevant working experience preferably in the field of business management
i n.

The members of the Board shall each receive reasonable per diem at a rate to be
determined by the Department of Budget and Management (DBM) in accordance with

existing
month shall
President of

and regulations: Provided, however, That the total per diem collected each
it exceed the equivalent per diem for four (4) meetings. Unless and until the
Philippines has fixed a higher per diem for the members of the Board, such

per diem shall not be more than ten thousand pesos (P10,000.00) for every Board meeting.
SEC. 14. Appellate Powers of the Board. — The Board, on an appeal properly

taken by anl

Administrator,

interested party from a decision, judgment or order of the Chairman-
, shall have the power to:

A. Review, confirm, modify, revise, amend or reverse, as the case may be,
decisions, judgments and/or orders of the Chairman-Administrator;
|

B. Confirm, remit, mitigate, increase or compromise, as the case may be, fines
imposed by the Chairman-Administrator pursuant to the provisions of this
Act;

CG Review, confirm, modify, revise, amend or reverse, as the case may be,
impositions by the Chairman-Administrator of liens on personal and real

pl

of entities or enterprises registered with the Bohol Island Special
in default, or those who have failed to perform their obligations

pursuant to the rules and regulations promulgated under this Act, or those
who shall have failed to pay the fines or other pecuniary penalties for

a thereof,


In no case shall the Chairman-Administrator participate in the hearing and
adjudication of an appealed case before the Board where the subject of appeal is a judgment

or decision rendered by his office. In such case, it requires five (5) concurring votes of the
members of the Board who actively participated in the deliberation of the appealed case
before the jus it or decision of the Chairman-Administrator can be modified or reverse.
SEC. 15. Orders. -
|
A ‘iveness of Orders. — Except in emergency situations, all order, rules

regulations of the Chairman-Administrator and BISEZA shall take
within such reasonable time as the BISEZA may prescribe, and shall
inue in force and effect until a further order, rule or regulation, or for a
i period of time as shall be prescribed in the order, rule or

r or other form of pleading by the interested person or persons, and
or without notice, hearing or the making or filing of a report, to make
just and reasonable orders, rules and regulations as may be essential
interest of safety and security within the Bohol Island Special
Ecozone to meet such emergency: Provided, That the Chairman-

lor immediately thereafter must initiate proceedings to the
giving rise to any such order, rule or regulation.

C. Suspension and Modification of Orders. - The Chairman-Administrator
pt orate uy orc irae pp lal
such manner as the Chairman-Administrator shall

oa Power to Administer Oaths. - The members of the Board, the
Chairman-Administrator and such other duly designated officers of the BISEZA shall have
the authority to administer oaths in the transaction and performance of their official duties.

|
SEC. 17. Quorum. — The presence of at least five (5) members of the Board shall
constitute a quorum and the majority vote of three (3) members in a meeting where a
quorum is present shall be necessary for the adoption of any rule, ruling, order, resolution,
decision or act of the Board in the exercise of its functions.

SEC. 18, Board Meetings. - The Board shall meet regularly once a month and
may hold meetings which shall not be more than once a month to consider urgent
sees aienl oa. Of the. Charnes eee en Ot a ee Gee
Internal rules of procedure in the conduct of Board meetings shall be as prescribed by the
Board.

SEC. Organization and Personnel. fag leh Pane gritos
audi GUA ae Dr estan ca Oat GF in tdlioee, ad aeiees. Uy
recommendation of the Chairman-Administrator, the Board shall appoint and Pe The
remuneration, allowances and other emoluments of its officers and employees in
accordance with existing laws on compensation and position classification: Provided, That
the Board shall have exclusive and final authority to promote, transfer, assign or reassign
officers of BISEZA, any provision of existing law to the contrary notwithstanding:
Provided, er, That the Chairman-Administrator may carry out removal of such officers
and empl


The officers and employees of the BISEZA, including all members of the Board, shall
not engage directly or indirectly in partisan activities nor take part in any election, except to
vote.

No officer or employee of the BISEZA, subject to civil service and Ombudsman laws
and regulations, shall be removed or suspended except for cause, as provided by law.

SEC. 20. Powers and Duties of the Chairman-Administrator. - The
Chairman-Administrator shall have the following powers and duties:

A. To direct and manage the affairs of the BISEZA in accordance with the
policies of the Board;

B. To establish the internal organization of the BISEZA under such conditions
that the Board may prescribe;

C. To submit an annual budget and necessary supplemental budget to the
Board for its approval;

D. To submit within thirty (30) days after the close of each calendar and/or
fiscal year an annual report to the Board and such other reports as may be

E. To submit to the Board for its approval policies, systems, procedures, rules
and regulations that are essential to the operation of the Bohol Island
Special Ecozone;

F, To create a mechanism in coordination with relevant agencies for the
promotion of industrial peace, the protection of the environment and the
advancement of the quality of life in the Bohol Island Special Ecozone; and

G. To perform such other duties as may be assigned to him by the Board or
are necessary or incidental to his office.

SEC. 21. The Office of Enforcement and Legal Service. ~ To effectively
implement the provisions of this Act and the mandates of the Chairman-Administrator and
BISEZA, a permanent office within the BISEZA which shall be composed of an in-house
counsel of the latter and its necessary support staff, shall be established by the Board.

This office shall provide adequate legal assistance to the Chairman-Administrator
and to the BISEZA as a whole in their exercise of their powers as provided for under this Act.
ae a i be under the supervision of the Office of the Government Corporate
Cor

‘The exercise of the function by the Chairman-Administrator to issue subpoena ad

subpoena duces tecum and the imposition of any administrative sanction

shall be within the exclusive determination and recommendation of the Office of
Enforcement and Legal Service.

SEC, 22, Banking Rules or Regulations. — Existing laws, rules and regulations
of the Bangko Sentral ng Pilipinas shall apply to banks and financial institutions to be
established in the Bohol Island Special Ecozone, such as those governing foreign exchange
and other concurrent account transactions or trade and non-trade, local and foreign
borrowings, foreign investments, establishment and operation of local and foreign banks,
foreign currency deposit units, offshore banking units and other financial institutions under
the supervision of the BSP.


SEC. 23. Remittance of Earnings. - In the case of foreign investments, a
registered enterprise in the BISEZA shall have the right to remit earnings from the
investment in the currency in which the investment was originally made and at the
exchange rate prevailing at the time of remittance, subject to the provisions of Section 74 of
Republic Act No. 265, as amended.

SEC. 24. Prohibited Interests. — All members of the Board or any of their
relatives within’ the fourth (4) civil degree of consanguinity or affinity, legitimate or
common law, shall be prohibited from holding any interest whatsoever, either as investor,
stockholder, officer or director, in any company or entity engaged in the business,
operations and transactions of the enterprise, company or entity registered in the Bohol
Island Special Ecozone and must therefore divest, through sale or legal disposition, of any
and all int sts in such undertakings upon the members’ assumption of office. Any
violation of this section shall subject the member concerned to removal from the BISEZA
for cause as well as administrative, civil or criminal prosecution under applicable laws.

SEC. 25. Limitation of Subsequent Employment. — No member of the Board
or any employee of the BISEZA shall accept employment or enter into a contract of service
with an entity regulated by the BISEZA until the expiry of one (1) year from the termination
of the appointment, whether by resignation or revocation or otherwise.

SEC. 26. Ipso Facto Clause. ~ Sections 30-41 of Republic Act No. 7916, shall ipso
facto apply to the Bohol Island Special Ecozone.

SEC. 27. Capitalization. — The Bohol Island Special Economic Zone Authority
shall have an authorized capital stock of one (1) billion (1,000,000,000) no par shares with
a Ziska sre of ‘Ten pesos (P10.00) each, the majority shares of which shall be
subscribed and paid for by the national government and the local government units (LGUs)
embracing the Bohol Island Special Ecozone. The Board of Directors of the BISEZA may,
with the written concurrence of the Secretary of Finance, sell shares representing not more
than forty (40%) of the capital stock of the BISEZA to the general public under such
pected sant pe renee eerie eg ‘The national government
and the LGUs shall, in no case, own less than sixty percent (60%) of the total issued and
outstanding sian of the Bohol Island Special Economic Zone Authority.

The amount necessary to subscribe and pay for the shares of the national
government tp the capital stock of the BISEZA shall be included in the annual General
Appropriations Act. For LGUs, the funds shall be taken from their internal revenue
allotment eae local funds.

SEC. 28. Supervision. — The Bohol Island Special Economic Zone shall be under
the direct control and supervision of the Philippine Economic Zone Authority (PEZA) for
purposes of policy direction and coordination.

|
SEC. 29. Relationship with the Regional Development Council. —
Bohol Island Special Economic Zone Authority shall determine the development goals for
the Bohol Island Special Ecozone within the framework of national development plans,
policies, and goals. The Administrator shall, upon sooo by the Board, submit the Bohol
Island Special Ecozone plans, programs and projects to the Regional Development Council
for inclusion and inputs to the overall regional development plan.

SEC. 30, Relationship with Local Government Units. — Except as provided
herein, the local government units comprising the Bohol Island Special Ecozone shall retain
their basic autonomy and identity. The barangays in all the Municipalities of Tubigon,
Calape, Loon and Maribojoc shall operate and function in accordance with the Local
Government Code of 1991. In case of any conflict between the BISEZA and the Province of
Bohol on mat affecting the Bohol Island Special Ecozone other than defense and
security the decision of the BISEZA shall prevail.



SEC. 31. Interpretation and Construction. — The powers, authorities and
functions it are vested in the BISEZA are intended to decentralize governmental
functions and authority and to promote an efficient and effective working relationship
between the Bohol Island Special Ecozone, the national government and the local
government units.

SEC. 32. Auditing. — The Commission on Audit shall appoint a representative who
cha be lin ur ote SEZ od sgn uch ur prone oy be
necessary to assist said representative in the performance of his and/or her duties. The
salaries and of the assigned auditor and personnel shall be in accordance with
pertinent | rules and regulations.

SEC. Repealing Clause, ~ All laws, decrees, executive orders, presidential
decrees, and regulations or any part thereof contrary to or inconsistent Leteerss the
provisions of this Act are hereby repealed or modified accordingly.

SEC. Separability Clause. — If for any reason, any part or provision of this
Act is dec. invalid or unconstitutional, the remaining parts or provisions not affected
thereby shall in full force and effect.

Effectivity Clause. — This Act shall take effect after fifteen (15) days
from its pub in the Official Gazette or in a national newspaper of general circulation.

Approved,