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

SEVENTEENTH CONGRESS
t Regular Session

HOUSE BILLNO. 5822 _

Introduced by HON. RENE L. RELAMPAGOS
First District, Bohol

EXPLANATORY NOTE

‘This bill seeks to create a special economic-development zone in the
Municipalities of Maribojoc, Loon, Calape and Tubigon, all situated in the
northwestern part of the First District of the Province of Bohol. This bill is in line
with the administration’s program to generate employment opportunities and
reduce, minimize, if not to totally eradicate, poverty especially those living in the
rural areas or countryside.

‘This part of the first district of Bohol forms part of the larger area of Cebu-
Bohol Economic Basin, the emerging center of industrial, commercial and tourism
activ in Central Visayas. Further, the Catagbacan Port, located at the
Municipality of Loon, has been identified by the Philippine Ports Authority for
conversion as an International Cruise Port in view of the port's strategie location in
relation to the ports in nearby island provinces and the Chocolate Hills of Bohol.

With the increase in the manufacturing industry and trade activities in Central
sayas in general and in the Cebu-Bohol Economic Basin in particular, the
Maribojoc, Loon, Calape and Tubigon 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 Maribojoc, Loon,
Calape and Tubigon is the development of North Bohol Special Economic Zone
(North Bohol Ecozone) where its principal office will be located in the Municipality of
Loon. Based on the strategic location and potential of these areas, the following
activities are identified for possible development within the proposed North Bohol
Special Economic Zone: refueling, restocking, and rewatering of vessels;
transshipment port for bulk and containerized cargoes; ship repair and refurbishing
station; power generation station and other industrial enterprise:

‘The creation of North Bohol ecozone will address the following economic
purposes, among others:

1. The need for more space for the location of industrial activities to
sustain 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. The need to disperse the development in Metro Cebu to other parts
of Central Visayas in order to promote equity and balan
development of the region;

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

In view of these accruing economic benefits of the establishment of an
economic zone in the said municipalities of Bohol and the significant contribution it
will give to the entire country’s development and objective of inclusive growth, the
urgent consideration and approval of this measure is highly recommended.

yf
RENE; py RELAMPAGOS


Republic of the Philippines
HOUSE OF REPRESENTATIV)
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session
5822
HOUSE BILL NO. my

Introduced by HON. RENE L, RELAMPAGOS,
First District, Bohol

“AN ACT
ESTABLISHL A SPECIAL ECONOMIC ZONE.
MUNICIPALITIES OF MARIBOJOC, LOON, CALAPE AND TUBIG!
PROVINCE OF BOHOL (NORTH BOHOL ECOZONE), CREATING
y PURPOSE THE NORTH BOHOL SPECIAL ECONOMIC ZONE
AUTHORITY (NBSEZA), APPROPRIATING FUNDS THEREFOR AND
KOK OTHER PURPOSES”

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

itle. — This Act shall be known as the “Maribojoc, Loon
cal Economie Zone Act of 2017.”

SECTION 1.
Calape and Tubigon (North Bohol) Spe

SEC. 2. Declaration of Policy. - {1 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 arcus, 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 in the country and through measures that
shall ctectively attract legitimate and productive foreign investments.

Creation of Special Economie Zone in the Municipalities of
Maribojoc, Loon, Calape and Tubigon, Provinee of Bohol. ~ It pursuit of
the above declared state poliey 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 cstablished a special economic zone, referred
hereinafter as the Maribojoc, Loon, Calape and Tubigon Ecozone or North Bohol
Ecozone. The North Bohol Ecozone shall cover all the bi s in the municipalities
of Maribojoe Loon, Calape and Tubigon in the Province of Bohol. The specific metes
and bounds of the North Bohol Ecozone shall be more particularly defined in a
sidential proclamation that shall be issued for this purpose.

SEC. 4. Governing Principles. - ‘The North Bohol Special Econow
shall be mai ed and operated by the North Bohol Special Economi e Authority
or NBSEZA as created under Section 10 of this Act, under the following principles:



B.

c

Db.

SEC. 5. Incentive:
administer the following incentives to the registered enterpri

G.

Within the framework and limitations of the 1987 Philippine Constitution
and applicable provisions of the Local Government Code, the North Bohol
Eeozone 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.

The North Bohol Ecozone shall be provided with transportation,
telecommunications and other facilities needed to attract legitimate and
productive investments, generate linkage industries and employment
opportunities for the people in the municipalities of Maribojoc, Loon,
Calape and Tubigon as well as the people of the Province of Bohol and
neighboring, provinces, towns and ci

‘The North Bohol 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 Authority (PEZA) and/ or the Department
of Trade and Industry (DTD), with foreign entities or enterprises.

Foreign citizens and companies owned by non-Filipinos in whatever
proportion may set up enterprises in the North Bohol Ecozone, either by
themselves or in joint venture or partnership with Filipinos in any sector of
industry, international trade and commerce within the North Bohol
Ecozone.

‘The areas comprising the North Bohol Ecozone may be expanded or
reduced when necessary. For this purpose, the NBSEZA, in consultation
with the concerned LGUs, shall have the power to acquire either by
purchase, negotiation or condemnation proceedings, any private land
within or adjacent to the North Bohol Ecozone for the following purposes:
() consolidation of lands for North Bohol Ecozone development; (2)
acquisition of right of way to the North Bohol Ecozone; and (3) the
protection of watershed areas and natural assets valuable to the prosperity
of the North Bohol Ecozone.

Goods manufactured by an North Bohol 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
be formulated by the NBSEZA, together with the PEZA, the Bureau of
Customs and the DTI, in accordance with the National Internal Revenue
Code (NIRC) of 1997, mended and the Tariff and Customs Code of the
Philippines, as amended. However, in order to protect domestic industries,
a 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.

The national government shall maintain it ability to coordinate with the
North Bohol Ecozone and the local government units concerned,

to Registered Enterprises. — The NBSEZA may

located within the

North Bohol Eeozone to the extent of the activity and/or project:


B.

D.

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 NBSEZA before submitting its
income tax return (ITR) with the NBSEZA for validation.

Failure to s re certification and/or to file the ITH or NOLCO.
availment for validation by the NBSEZA within forty-five (45) days from
the last day of each statutory filing date for ITR shall cause the forfeiture of
the 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.

ed enterpr availing of the ITH as provided here shall not be
entitled to avail of the NOLCO,

Imposition of a tax rate of five percent (5%) on Gross Income Earned
(GIE). = Except for real property tax on land, no local and national tax.
prescribed under Republic Act No. 8424 or the NIRC of 1997,
such as income tax, excise tax and franchise taxes, shall be imposed on
registered enterprises operating within the North Bohol Ecozone. In lieu
thereof, five percent (5%) of the gross income earned shall be paid as
follows:

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

iy

‘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 North Bohol Ecozone
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, m
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 exceeding twice the rate which would have been used had the
annual allowance 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.

chinery

Capital Equipment Incentives. - (1) Importations of capital equipment,
spare parts, tools and dye, or those required for pollution abatement and
control, cleaner production and waste reduction 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



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 (BOD), shall be entitled
year income tax holiday.

Category B
entitled to

Registered domestic enterprise on the following, shall be
ix- year income tax holiday:

1. Located in less developed areas as defined by the BOI; or

Producing, rendering new products and/or ser
backward or forward linkages.

es or having strong,

Category C — Registered export enterprise shall be entitled to a six-year
income tax holiday: Provided, however, That if the export ente
complies with the following: (1) large capital investments or sizeable
employment generation; (2) use high level of technology; or (3) located
outside Metro Manila, it shall be entitled to an eight-year income tax
holiday.

Registered enterprises embarking on new investments that are listed in
the current Investment Priorities Plan (IPP) shall be entitled 10 incentives
provided herein pertaining to the new investments and subject to such
terms and conditions as the BOI may determine.

For this purpose, a registered enterprise shall be defined as any person,
natural or juridical, licensed to do business in the Philippines and
registered with the NBSEZA to transact business within the North Bohol
Special Economic Zone. A registered export enterprise shall be defined as
any registered enterprise engaged directly or indirectly in the production,
manufacture or trade of produets 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
enterprise, meanwhile, shall be defined as any registered enterprise not
falling under the definition of a registered export enterprise.

Additional investments in the project shall be entitled to the income tax
holidays corresponding to such investments as may be determined by the
BOI. Additional income tax holiday may be granted for as long as the
estment is made on the same project: Provided, however, That the total
ITH period for an export enterprise availing of an eight-year ITH shall not
xceed twenty (20) years. Any unused incentives shall therefore be deemed
forfeited if not used during the incentive period.

s registered with the NBSEZA 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



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 domestically in sufficient quantity, of
comparable quality and at reasonable prices;

‘They are reasonably needed and will be used exclusively by the
registered enterprise in the manufacture of its products, unless prior
approval of the NBSEZA is secured forthe part-time utilization of
said equipment in a nonregistered activity to maximize usage thercof or
the proportionate taxes and duties are paid on a specific equipment and
machinery being permanently used for nonregistered activities; and

al of the NBSEZA must be secured by any sale, transfer or
disposition of the imported capital equipment, machinery or spare
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;

ji. the same is made to another enterprise, upon the payment of
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
conditions provided for in the previous paragraphs other than in
paragraph (2) herein, 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 (5) 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.



H.

(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 pe
(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.

The availment by a registered export-oriented enterprise of the
incentive stated under the immediately preceding two (2) paragraphs shall
be subject to the following conditions: (a) that said capital equipment,
machinery and spare parts will be used exclusively 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; and (c) that the approval of the NBSEZA is obtained by the
registered 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.

*, The importation of source documents by information technology. —

Registered enterprises shall be eligible for tax and duty free importation.

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
manufacture, processing or production of its export products forming part
thereof, exported directly and indirectly by the registered export-oriented
enterprise, based on the actual taxes and duties paid for such materials,
supplies and/or semi-manufactured products by the registered enterprise.

Incentives on Breeding Stocks and Genetic Materials. — Importation of

breeding stocks and genetic materials within ten (10) years from the date

istration of commercial operation of the enterprise shall be exempt

all taxes and duties: Provided, That such breeding stocks and genctic

ls are reasonably needed in the registered activity, and approved by
the NBSEZA.

The availment of the incentives by the registered enterprise shall be
subject to the following: (a) that said breeding stocks and genctic materials


would have been qualified for tax and duty-free importation under the
preceding paragraph; (b) that the breeding stocks and genetic materials
are reasonably needed in the registered activity; (c) that approval of the
NBSEZA 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.

‘The provisions of law to the

Exemption from Wharfage and Port Du
shall be

contrary notwithstanding, exports by a registered enterpris
exempted from wharfage and port dues.

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.

‘Tax Treatment of Merchandise in North Bohol Ecozone. —

. Domestic merchandise sent from the North Bohol 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
Philippines while in the export processing zone, be subject to internal
revenue laws of the Philippines as domestic goods sold, transferred or
disposed of for local consumption.

Merchandise sent from the North Bohol 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.

1p

3. Articles produced or manufactured in the North Bohol 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 North
Bohol Ecozone shall be considered for tax purposes to have been sent to
customs territory.

‘Tax Treatment of Raw Materials and Capital Equipment in the North
Bohol Ecozone. ~ Importations of raw materials and capital equipment
shall be treated as in the Omnibus Investments Code.

- Importations of raw materials and capital equipment shall be treated as in

the Omnibus Investments Code. — Registered export-oriented enterpris

e


shall have access to the utilization of the bonded warehousing, system in
accordance with the rules and regulations of the Bureau of Customs.

mployment of Foreign Nationals. — Subject to the provisions of Section
29 of Commonwealth Act No. 613, as amended, a registered enterprise
y employ foreign nationals in supervisory or technical positions for a
jod not exceeding ten (10) years from its registration: Provided, ‘That
when the majority of the capital stock of a registered enterprise is owned
by foreign investors, the positions of the president, treasurer and general
manager or their equivalents may be retained by foreign nationals beyond
the period 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 ma his
holdings therein

pe

stoc!

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.
-y shall be entitled to a multiple entry visa, valid for a period of three (3)
and shall be allowed to enter and leave the Philippines without
documentary requirements other than valid passports or oth
travel documents in the nature of passports. The validity of the multiple
entry visa shalll be extendible yearly

‘The said foreign nationals admitted under this provision, as well as
their respective spouses and dependents shall be exempt from: (a)
obtaining alien certificates 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 agenc

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

A. He/s

¢ 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 loaths
disea nd

ome, dangerous or contagious

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

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

side in the
ts. For this purpose, he or she should

As a holder of investor's visa, an a
Philippines while his or her investment sul



submit an annual report, in the form duly prescribed for the purpose, to prove that
hie or she has maintained his or her investment in the counts Should said alien
withdraw his or her investments from the Philippines, then the investor's visa issued
to him or her shall automatically expire.

SEC. Administration, Implementation and Monitoring of
Incentives. ~ The NBSEZA shall be responsible for the administration and
implementation of the incentives granted to its respective registered enterprises:
Provided, That any incentive administration policy adopted by the BOL for registered
cuterprises shall be uniformly applied by the NBSEZA.

‘The following are the duties and responsibilities of the NBSEZA in the
administration of incentiv

\. To adopt consistent procedures of adininistering incentives in accordance
with the guidelines established by the BOI;

B. To adopt and implement tems and procedures affecting trade and
customs policies in accordance with the requirements established by the
DOF and the BOL

C. To submit information on registered enterprises to the DOF and the BOL
as required by any of these agencies to ascertain consistency of investment
policies and incentives, including their implementation as provided for in
paragraph (A), and to ensure proper implementation of systems and
procedures affecting trade and customs policies as provided also in
paragraph (B); and

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

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

SEC, 8. Extension of Period of Availment. — The availment period of
the incentives provided here may be extended by the NBSEZA, in the event that the
registered enterprise suffers operational force majeure or any event equivalent
thereto, impairing its viability: Provided, That the availment period shall not exceed
the duration of the said force majeure or equivalent event.

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

Kiseal incentives under this Act shall be terminated after a cumulative period
of twenty (20) years from the date of registration or start of commereial operation,
whichever is applicable, except that it could be extended with regard to industries
deemed indispensable to national development.



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

SEC. 10. Creation of the North Bohol Special Economic Zone
Authority. - There is created a body corporate to be known as the North Bohol
Special Economic Zone Authority or NBSEZA, which shall manage and operate, in
accordance with the provisions of this Act, the North Bohol Special Economic Zone,
‘This corporate franchise shall expire in fifty (50) years counted from the first day of
the fifth (5!) calendar year after the effectivity of this Act, unless extended by
Congress of the Philippines. It shall be organized within one hundred eighty (180)
days after the effectivity of this Act.

ipal Office of the NBSEZA. ~ The North Bohol Special
Zone Authority maintain its principal office in the Municipality of
Loon, Province of Bohol but it may establish branches within the Philippines as may
ben for the proper conduct of its business.

SEC. 12. Powers and Functions of the NBSEZA. ~ The North Bohol
Special Economie Zone Authority shall have the following powers and functions:

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

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

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

D. To regulate and undertake the establishment, operation and maintenance
of utilities, other services and infrastructure in the North Bohol Ecozone
such as but not limited to heat, light and power, water supply,
telecommunications, transport, toll roads and bridges, port services and
the like, and to fix just, reasonable and competitive rates, fares, charges
and prices thereof;

‘Yo construct, acquire, own, lease, operate and maintain on its own or
through contracts, franchise, licenses, bulk purchase from the private
seetor 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 North Bohol
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-
related activities, including games, amusements, recreational and sports
facilities;

G. Subject to the approval of the President of the Philippines and the
Monetary Board of the Bangko Sentral ng Pilipinas and upon the


recommendation of the Department of Finance, to raise or borrow
adequate and necessary funds from local or foreign sources to finance its
projects and programs under this Aet, 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;

HL. To protect, preserve, maintain and develop the forests, beaches, coral and
coral reefs and maintain ecological balance within the North Bohol
Eeozone;

1. ‘To create, operate and/or contract to operate such functional units of
offices of the NBSEZA as it may deem necessary;

J. ‘Yo 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 North Bohol Ecozone in accordance with prevailing rules of origin, and
the pertinent regulations of the PEZA, the DTI and/or the Departm.
Finance (DOF);

L. To issue working visas renewable every two (2) years to foreign e
n technicians with highly specialized skills which no
as certified by the Department of Labor and Employm

and fore

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 iss ch grant;

tance of s

N. To exereise 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 pol
this Act; and

©. ‘Yo 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
policies provided herein.

SEC. 13. Board of Directors of the North Bohol Special Eeonomic
Zone Authority. — The powers of the North Bohol Special Economic Zone
Authority shall be vested in and exercised by a Board of Directors, referred to herein
as the Board, whieh shall be composed of the following:

A. The Chairman who shall, at the same time be the administrator of the
NBSEZA;
B. A Vice Chairman who shall come from among the members of the Board;

n (10) Member

s consisting of:


1. The Governor of the Province of Bohol;

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

North Bohol Ecozone;

3. One (1) representative from the domestic investor:

4. One (1) representative from the foreign investors;

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

6. Two (2) representatives from the workers in the North Bohol Ecozone.

he Governor and the Congressional Representative shall serve as ex-ofli
members of the Board, whose term in the Board corresponds to theit terms as
elected officials

‘The Chairman and the members of the Board, except the ex-officio members,
shall be appointed by the President of the Philippines to serve for a term of six (6)
years, unless sooner separated from service due to death, voluntary resignation or
removal for cause. In case of death, resignation or removal for cause, the
replacement shall serve only the unexpired portion of the term.

Except for the representatives of the business and labor sectors, no pers
shall be appointed by the President of the Philippines as a member of the Boa
unless he is a natural born citizen of the Philippines, of legal age, of good mo:
of proven ability and integrity and a degree-holder in any of the following
fields; economics, business, accounting, public administration, law, management or
their equivalent and with at least ten (10) years relevant working, experience
preferably in the field of business management or public administration.

‘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 rules and regulations: Provided, however, That the total per diem
collected each month shall not exceed the equivalent per diem for four (4) meetings.
Unless and until the President of 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
(10,000.00) for every Board meeting,

SEC. 14. Appellate Powers of the Board. — The Board, on an appeal
properly taken by an interested party from a decision, judgment or order of the
Chairman-Administrator, shall have the power to:

\. 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
imposed by the Chairman-Adminis
Act; and

or compromise, as the case may be, fi
trator pursuant to the provisions of this

es



C. Review, confirm, modify, revise, amend or reverse, as the case may be,
impositions by the Chairman-Administrator of liens on personal and real
property of entities or enterprises registered with the North Bohol Ecozone
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 violation
thereo

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 judgment or decision of the Chairman-
Administrator can be modified or reverse

SEC. 15. Orders. —

A. Effectiveness of Orders. ~ Except in emergency situations, all orde!
and regulations of the Chairman-Administrator and NBSEZA shall take
effect within such reasonable time as the NBSEZA may prescribe, and shall
continue in force and effect until a further order, rule or regulation, or for a

pecified period of time as shall be prescribed in the order, rule or
regulation,

B. Emergencies. — Whenever the Chairman-Administrator is of the opinion
that an emergency requiring immediate action exists with respect to safety
and security within the North Bohol Ecozone, the Chairman-Administrator
shall have the power, cither upon his initiative without complaint, at once,
if the Chairman-Administrator so orders, without answer or other form of
pleading by the interested person or persons, and with or without notice,
hearing or the making or filing of a report, to make such just and
reasonable orders, rules and regulations as may be essential in the inte
of safety and security within the North Bohol Ecozone to meet
emergency: Provided, That the Chairman-Administrator_ immediately
thereafter must initiate proceedings to the matter giving rise to any such
order, rule or regulation.

. Suspension and Modification of Orders. — The Chairman-Administrator
shall have the power to suspend or modify orders upon such notice and in
such manner as the Chairman-Administrator shall find proper.

SEC, 16, Power to Administer Oaths. ~ The members of the Board, the
Chairman-Administrator and such other duly designated officers of the NBSEZA
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 mecting
where a quorum is present shall be necessary for the adoption of any rule, ruling,
order, resolution, decision or other 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 special meetings which shall not be more than once a month to



consider urgent matters upon call of the Chairman or upon the initiative of at least
five (5) members. Internal rules of procedure in the conduct of Board meetings shall
he as prescribed by the Board.

SEC. 19. Organization and Personnel. ~ ‘The Board of Directors of the
NBSEZA shall provide for an organization and staff of its officers and employ
Upon recommendation of the Chairman-Administrator, the Board shall appoint and
fix 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 the NBSEZA, any provision of existing law to
the contrary notwithstanding: Provided, further, That the Chairman-Administrator
may carry out removal of such officers and employees.

‘The officers and employees of the NBSEZA, 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 NBSEZA, subject to civil service and
Ombudsman laws and regulations, shall be removed or suspended except for cau

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 NBSEZA in accordance with the
policies of the Board;

B. To iblish the internal organization of the NBSEZA 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
fiseal year an annual report to the Board and such other reports as may be
required;

‘To submit to the Board for its approval policies, systems, procedures, rules
nd regulations that are essential to the operation of the North Bohol
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 North Bohol Eeozone; and

G. To perform such other duties as may be
which are necessary or incidental to his offic

ned to him by the Board or

SEC. 21, The Office of Enforcement and Legal Servic To
effectively implement the provisions of this Act and the mandates of the Chairman-
Administrator and NBSEZA, a permanent office within the NBSEZA 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 NBSEZA as a whole in their exercise of their powers as
provided for under this Act. ‘This office shall be under the supervision of the Office of
the Government Corporate Counsel.

Phe exercise of the function by the Chairman-Administrator to issue subpoena
ad testificandum, 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 Servi

EC. 22. Banking Rules or Regulations. — Existing laws, rules and
regulations of the Bangko Sentral ng Pilipinas shall apply to banks and fi
institutions to be established in the North Bohol 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
stered enterprise in the NBSEZA shall have the right to remit carnings 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 North Bohol Ecozone and must therefore divest, through sale or legal
disposition, of any and all interests in such undertakings upon the members’

mption of office. Any violation of this section shall subject the member
concerned to removal from the NBSEZA 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 NBSEZA shall accept employment or enter into a
contract of service with an entity regulated by the NBSEZA 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 North Bohol Special Economic Zone.

SEC. 27. Capitalization. — The Bohol North Special Economic Zone
Authority shall have an authorized capital stock of one (1) billion (1,000,000,000) no
par shares with a minimum issue of Ten pesos (P10.00) cach, the majority shares of
which shall be subscribed and paid for by the national government and the local
government units (LGUs) embracing the North Bohol Special Economie Zone. ‘The
Board of Directors of the NBSEZA may, with the written concurrence of the Secretary



of Finance, sell shares representing not more than forty percent (40%) of the capital
stock of the NBSEZA to the general public under such policy as the Board and the
Secretary of Finance may determine. The national government and the LGUs shall,
in no case, own less than sixty percent (60%) of the total issued and outstanding
capital of the North Bohol Special Economic Zone Authority.

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

SEC. 28. Supervision. — The North Bohol Special Economic Zone shall be
r the direct control and supervision of the Philippine Economic Zone Authority
:ZA) for purposes of policy direction and coordination.

SEC. 29. Relationship with the Regional Development Council. ~
‘The North Bohol Special Economic Zone Authority shall determine the development
xouls for the North Bohol Ecozone within the framework of national development
plans, policies, and goals. The Administrator shall, upon approval by the Board,
submit the North Bohol 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 North Bohol Special
Ecozone Zone shall retain their basic autonomy and identity. ‘The barangays in all
the Municipalities of Maribojoc, Loon, Calape and Tubigon shall operate and
function in accordance with the Local Government Code of 1991. In case of any
conflict between the NBSEZA and the Province of Bohol on matters. affecting the
North Bohol Ecozone other than defense and security matters, the decision of the
NBSEZA shall prevail.

SEC. 31. Interpretation and Construction. ~ The powers, authoritie
and functions that are vested in the NBSEZA are intended to decentralize
governmental functions and authority and to promote an efficient and effective
working relationship between the North Bohol Ecozone, the national government
and the local government units.

SEC. 32. Auditing. — The Commission on Audit shall appoint a
representative who shall be a full time auditor of the NBSEZA and assign such
number of personnel as may be necessary to assist said representative in the
performance of his and/or her duties. The salaries and emoluments of the assigned
auditor and personnel be in accordance with pertinent laws, rules and
regulations.

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

SEC. 34. Separability Clause. ~ If for any reason, any part or provision of
is Act is declared invalid or unconstitutional, the remaining parts or provisions not
affected thereby shall remain in full force and effect.



SEC. 35. Effectivity Clause. - This Act shall take effect after fifteen (15)
days from its publication in the Official Gazette or in a national newspaper of gencral
circulation,

Approved,