Republic of the Philippines /
HOUSE OF REPRESENTATIVE an .
Quezon City, Metro Manila 2" AWN 3 9 2002 *

con GMO PO

NINETEENTH CONGRESS \
First Regular § q

House Bill No._03.0

Introduced by Representative GERALDINE B. ROMAN

EXPLANATORY NOTE

This bill seeks to strengthen the administration and operational governance
of the Subic Bay Metropolitan Authority (SBMA) by way of further amending
provisions of Republic Act No. 7227. In this bill amendments were introduced to
improve revenue collection and thereby increasing the shares of the Local

Government Units (LGU) affected and the share of the national government.

It is high time to incorporate provisions to professionalize the SBMA
Board of Directors and also to ensure and strengthen the public safety and security

of the freeport zone,

Reallocation formulas as to the sharing received by the Province of Bataan
and Pampanga from the 2% tax on gross income from all business enterprises

within the freeport zone were introduced in this version.

Sections designating additional seats to the Board of Directors of the
SBMA of Local Government Units (LGU) and from Indigenous Peoples residing

with in Subic Bay Freeport Zone were incorporated.


Above-mentioned amendments were taken into consideration during the
17" Congress on the basis of reaffirming the powers granted to the Subic bay
Metropolitan Authority (SBMA) by Republic Act No. 7227, as amended.

In view of the foregoing, the passage of this bill is earnestly sought,

()
ERALDINE B. ROMAN



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

NINETEENTH CONGRESS
First Regular Session

House Bill No. 530

Introduced by Representative GERALDINE B. ROMAN

AN ACT
REVITALIZING THE BASES CONVERSION DEVELOPMENT, AMENDING FOR
THE PURPOSE REPUBLIC ACT NO. 7227, OTHERWISE KNOWN AS THE
“BASES CONVERSION AND DEVELOPMENT ACT OF 1992,” AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:
SECTION 1. Section 12 of Republic Act (RA) No. 7227, as amended, is hereby further

amended to read as follows:

“SEC. 12. Subic Special Economic Zone. ~ Subject to the concurrence
by resolution of the sangguniang panlungsod of the City of Olongapo and the
sangguniang bayan of the Municipalities of Subic, Morong and Hermosa,
there is hereby created a Special Economic and Free-port Zone consisting of
the City of Olongapo and the Municipality of Subic, Province of Zambales,
the lands occupied by the Subic Naval Base and its contiguous extensions as
embraced, covered, and defined by the 1947 Military Bases Agreement
between the Philippines and the United States of America as amended, and
within the territorial jurisdiction of the Municipalities of Morong and
Hermosa, Province of Bataan, hereinafter referred to as the SUBIC Special
Economic Zone whose metes and bounds shall be delineated in a
proclamation to be issued by the President of the Philippines. Within thirty
(30) days after the approval of this Act, each local government unit shall
submit its resolution of concurrence to join the Subic Special Economic Zone

to the Office of the President. Thereafter, the President of the Philippines shall


issue a proclamation defining the metes and bounds of the zone as provided
herein.

“THE MUNICIPALITIES OF SAN ANTONIO, SAN
MARCELINO AND CASTILLEJOS OF THE PROVINCE OF
ZAMBALES AND THE MUNICIPALITIES OF MORONG, HERMOSA
AND DINALUPIHAN OF THE PROVINCE OF BATAAN MAY, BY
RESOLUTION OF THEIR RESPECTIVE SANGGUNIANG BAYAN,
CEDE IN WHOLE OR IN PART, FOR A PERIOD OF NOT LESS
THAN FIFTY (50) YEARS, THEIR ENTIRE MUNICIPAL
TERRITORY TO THE SUBIC SPECIAL ECONOMIC ZONE.

“The abovementioned zone shall be subject to the following policies:

“a) Within the framework and subject to the mandate and
limitations of the Constitution and the pertinent provisions of the Local
Government Code, the Subic Special Economic Zone shal! be developed into
a self-sustaining, industrial, commercial, financial and investment center to
generate employment opportunities in and around the zone and to attract and
promote productive foreign AND DOMESTIC investments;

“b) The Subic Special Economic Zone shall be operated and
managed as a separate customs territory ensuring free flow or movement of
goods and capital within, into and exported out of the Subic Special Economic
Zone, as well as provide incentives such as tax and duty-free importations of
raw materials, capital and equipment. However, exportation or removal of
goods from the territory of the Subic Special Economic Zone to the other parts
of the Philippine territory shall be subject to customs duties and taxes under
[the Fasi ustoms ° sere d.| REPUBLIC
A NO. 10863, OTHERWISE KNOWN AS THE “CUSTOMS
MODERNIZATION AND TARIFF ACT,” the National Internal Revenue
Code of 1997, as amended, and other relevant tax laws of the Philippines;

“c) The provision of existing laws, rules and regulations to the
contrary notwithstanding, no national and local taxes OF ANY KIND OR
NATURE shall be imposed within the Subic Special Economic Zone. In lieu
of said taxes, a five percent (5%) tax on gross income earned shall be paid by
all REGISTERED business enterprises within the Subic Special Economic
Zone and shall be remitted as follows: three percent (3%) to the National
Government; and two percent (2%) to the Subic Bay Metropolitan Authority
(SBMA) for distribution to the local government units affected by the


declaration of and contiguous to the zone, namely: the City of Olongapo and
the municipalities of Subic, San Antonio, San Marcelino and Castillejos of the
Province of Zambales, and the municipalities of Morong, Hermosa and
Dinalupihan of the Province of Bataan, on the basis of population (0%)
40%, land area (25%) 40%, and equal sharing (25%) 20%.

“In case of conflict between national and local laws with respect to tax
exemption privileges in the Subic Special Economic Zone, the same shall be
resolved in favor of the latter;

“d) No exchange control policy shall be applied and free markets
for foreign exchange — gold, securities and futures shall be allowed and
maintained in the Subic Special Economic Zone;

“e) The Central Bank, through the Monetary Board, shall
supervise and regulate the operations of banks and other financial institutions
within the Subic Special Economic Zone;

“f) Banking and finance shall be liberalized with the

establishment of foreign currency depository units of local commercial banks
and offshore banking units of foreign banks with minimum Central Bank
regulation;
“g) Any investor within the Subic Special Economic Zone whose
continuing investment shall not be less than Two hundred fifty thousand
dollars ($250,000), fhisther} THE INVESTOR’S spouse and dependent
children under twenty-one (21) years of age, shall be granted permanent
resident status within the Subic Special Economic Zone. They shall have
freedom of ingress and egress to and from the Subic Special Economic Zone
without any need of special authorization from the Bureau of Immigration
[and Deportation]. The {Subie—Bay-Metropolitan—Authorityreferredto—in
Seetion-413-of this Act] SBMA may also issue working visas renewable every
two (2) years to foreign executives and other aliens possessing highly-
technical skills which no Filipino within the Subic Special Economic Zone
possesses, as certified by the Department of Labor and Employment. The
names of aliens granted permanent residence status and working visas by the
{Subic Bay Metropolitan Authority] SBMA shall be reported to the Bureau of
Immigration [and Deportation] within thirty (30) days after issuance thereof,

“h) The defense of the zone and the security of its perimeters
shall be the responsibility of the national government in coordination with the

{Subie Bay Metropolitan-Authority} SBMA. [Fhe Subie-Bay Metropolitan



forees:-and] IN THE EVENT THAT AN ASSISTANCE OF THE
MILITARY IS NECESSARY, THE EXPENSES SHALL BE BORNE BY
THE NATIONAL GOVERNMENT. THE MILITARY SHALL NOT
INTERFERE IN THE INTERNAL AFFAIRS OF SBMA EXCEPT TO
PROVIDE THE NECESSARY SECURITY AND DEFENSE.

THE SBMA SHALL PROVIDE AND ESTABLISH ITS OWN
LAW ENFORCEMENT DEPARTMENT WHICH SHALL EXERCISE
THE FOLLOWING POLICE AUTHORITY WITHIN THE SUBIC BAY
FREEPORT ZONE:

“1, MAINTAIN PEACE AND ORDER, ENSURE PUBLIC
SAFETY AND IMPLEMENT ALL LAWS, AND RULES AND
REGULATIONS OF THE SBMA;

“2, REGULATE THE INGRESS AND EGRESS TO, FROM AND
WITHIN THE SUBIC BAY FREEPORT ZONE;

“3, EXERCISE THE GENERAL POWERS TO CONDUCT
SEARCH AND SEIZURE WITHIN THE SUBIC BAY
FREEPORT ZONE IN ACCORDANCE WITH THE
CONSTITUTION AND PERTINENT LAWS; AND

“4, EFFECT THE ARREST OF CRIMINAL OFFENDERS,
INVESTIGATE AND PREVENT CRIMES OCCURRING
WITHIN THE SUBIC BAY FREEPORT ZONE AND ASSIST
IN THE PROSECUTION THEREOF.

“THE SBMA SHALL ALSO PROVIDE AND ESTABLISH ITS

OWN FIREFIGHTING FORCE WHICH SHALL HAVE THE SAME
FUNCTIONS AS THE BUREAU OF FIRE PROTECTION WITHIN
‘THE SUBIC BAY FREEPORT ZONE;

“i) Except as herein provided, the focal government units comprising
the Subic Special Economic Zone shall retain their basic autonomy and
identity. The cities shall be governed by their respective charters and the
municipalities shall operate and function in accordance with Republic Act No.
7160, otherwise known as the Local Government Code of 1991.


SEC. 2. Section 13 of RA 7227, as amended, is hereby further amended to read as follows:
“SEC. 13. The Subic Bay Metropolitan Authority.
a) Creation of the Subte Bay Metropolitan Authority. ~ A body
corporate to be known as the Subic Bay Metropolitan Authority (SBMA) is

hereby created as an operating and implementing arm of the Conversion
Authority.

“b) Powers and Functions of the Subie—Bay—Metropolitan
Authority] SBMA. {The Subic Bay-Metropolitan—Authority otherwise

EXCEPT AS OTHERWISE PROVIDED HEREIN, THE SBMA SHALL
HAVE AUTHORITY AND JURISDICTION OVER ALL ECONOMIC
ACTIVITIES WITHIN THE SUBIC SPECIAL ECONOMIC ZONE. IT
SHALL EXERCISE THE FOLLOWING POWERS AND FUNCTIONS:
“1, To operate, administer, manage and develop the ship repair

and ship building facility, container port, oil storage and refueling
facility and Cubi Air Base within the Subic Special Economic and Free-
Port Zone as a free market in accordance with the policies set forth in
Section 12 of this Act:

“2. TO INSPECT AND REGISTER, UNDER THE FLAG
OF THE REPUBLIC OF THE PHILIPPINES, LEISURE SHIPS
AND PLEASURE YACHTS OF ANY SHIP OWNER, WHETHER
A NATURAL OR JURIDICAL PERSON, AND IRRESPECTIVE
OF NATIONALITY OR DOMICILE. FOR THIS PURPOSE, THE
SBMA SHALL ADMINISTER AND MAINTAIN AN OPEN
REGISTER OF LEISURE SHIPS AND PLEASURE YACHTS
SUBJECT ONLY TO SUCH RULES AND REGULATIONS TO
BE PROMULGATED BY THE SBMA IN CONSULTATION
WITH THE DEPARTMENT OF TRANSPORTATION
WITHOUT PREJUDICE TO THE REQUIREMENTS OF THE
CONSTITUTION,

“[2]3. To accept any local or foreign investment, business or
enterprise AND ADMINISTER AND IMPLEMENT INCENTIVES
GRANTED TO ITS REGISTERED BUSINESS ENTERPRISES,
subject only to such rules and regulations to be promulgated by the

{Sub hority}SBMA _fin—conformity—with—the—poli the



Conversion Authority} without prejudice to the nationalization

requirements provided for in the Constitution;

“[3]4. To undertake [and —regulate—the—establishment,

Pp S Hutitities, other s-andinfr
+E isdiag ai vel
in the Subic Spee pp’ ed
b - ds d_port_terminal ces eSs1ONS,
dental-th ni eordination-with the Ci:
POF OP

ies-Board,-and to-fix-just-and-reasonable-sates;-fares,charges
and—other—prices—therefor] ON ITS OWN OR THROUGH
CONTRACT, FRANCHISE, LICENSE, OR PERMIT, TO FIX
AND IMPOSE JUST AND REASONABLE RATES, FARES,
CHARGES AND OTHER PRICES FOR THE ESTABLISHMENT,
OPERATION AND MAINTENANCE OF UTILITIES,
FACILITIES, INFRASTRUCTURE, SERVICES, BUSINESSES,
ACTIVITIES AND CONCESSIONS IN THE SUBIC SPECIAL
ECONOMIC ZONE PERTAINING TO THE FOLLOWING:
ELECTRONIC, WEB AND CLOUD DATA OPERATORS
AND PROVIDERS AND TELECOMMUNICATIONS:
PROVIDED, THAT THE NATIONAL
TELECOMMUNICATIONS COMMISSION SHALL
CONTINUE TO EXERCISE ITS POWER TO
REGULATE AND SUPERVISE THE QUALITY,

SAFETY, RELIABILITY, SECURITY,
COMPATIBILITY AND INTER-OPERABILITY OF
PUBLIC TELECOMMUNICATIONS, RADIO

STATIONS FOR BOTH PRIVATE AND PUBLIC USE,
RADIO SPECTRUM, RADIO AND TELEVISION
BROADCAST STATIONS, CABLE TELEVISIONS AND
PAY TELEVISIONS WITHIN THE SUBIC SPECIAL
ECONOMIC ZONE;

“ji, SHIPPING AND MARITIME BUSINESS AND
ACTIVITIES, INCLUDING STEVEDORING AND PORT
TERMINAL SERVICES OR CONCESSIONS:
PROVIDED, THAT THE MARITIME INDUSTRY
AUTHORITY SHALL CONTINUE TO EXERCISE ITS
POWER TO REGULATE AND SUPERVISE THE



SHIPBUILDING AND SHIP REPAIR OF ANY

MERCHANT MARINE VESSEL OPERATED OR TO BE

OPERATED IN THE DOMESTIC TRADE AND THE

DOMESTIC SHIPPING INDUSTRY WITHIN THE

SUBIC SPECIAL ECONOMIC ZONE;

“iti, AIRPORT OPERATIONS: PROVIDED, THAT THE
CIVIL AVIATION AUTHORITY OF THE PHILIPPINES
SHALL CONTINUE TO EXERCISE ITS POWER TO
REGULATE AND SUPERVISE THE SAFETY,
QUALITY, RELIABILITY AND AFFORDABILITY OF
AIR TRANSPORT SERVICES FOR THE RIDING
PUBLIC WITHIN THE SUBIC SPECIAL ECONOMIC
ZONE;

“iv. ALL OTHER FACILITIES, INFRASTRUCTURE,
SERVICES, BUSINESSES, ACTIVITIES AND
CONCESSIONS INSIDE THE SUBIC SPECIAL
ECONOMIC ZONE;

“[4] 5. To construct, acquire, own, lease, operate and maintain
on its own or through contract, franchise, license permits bulk purchase
from the private sector and build-operate-transfer scheme or joint-
venture the required utilities and infrastructure in coordination with
local government units and appropriate government agencies concerned
and in conformity with existing applicable laws therefor;

“[5] 6. To adopt, alter and use a corporate seal; to contract,
ease sell, dispose, acquire and own properties; to sue and be sued in
order to carry out its duties and functions as provided for in this Act and
to exercise the power of eminent domain for public use and public
purpose;

“[6] 7. Within the limitation provided by law, to raise and/or
borrow the necessary funds from local and international financial
institutions and to issue bonds, promissory notes and other securities for
that purpose and to secure the same guarantee, pledge, mortgage, deed
of trust, or assignment of its properties held by the [Subie-Authority]
SBMA for the purpose of financing its projects and programs within the
framework and limitations of this Act.


“[7|8. To operate directly or indirectly or ISSUE licenseS
TO OPERATE tourism-related INFRASTRUCTURE AND activities,
[subject-to priorities and standards -set-by the Subic Authority] including
games, [and] amusements, [except] RECREATIONAL AND SPORTS
FACILITIES SUCH AS horse racing, dog racing, [and] casino
[gambling—which—shall_continue—to—beticensed_by_the Philippine
Amusement —-and— Gaming —Corporation {PAGCOR} upon
recommendation—ofthe—Conversion—Authority;] AND ONLINE
GAMING, GOLF COURSES, DUTY FREE STORES, AND
OTHERS, WITHIN THE SUBIC SPECIAL ECONOMIC ZONE
AND UNDER PRIORITIES AND STANDARDS SET BY THE
SBMA fie J preserve the forested parks}

“[8]9. To. [authorize—the—establishment—of—appropriate
‘edueational—and—medieal—institutions] UNDERTAKE AND
REGULATE THROUGH FRANCHISE, LICENSE OR PERMIT,
AND SET OR FIX JUST, REASONABLE AND COMPETITIVE
RATES, FARES, AND CHARGES FOR THE ESTABLISHMENT,
OPERATION AND MAINTENANCE OF OTHER SERVICES,
INCLUDING EDUCATIONAL AND MEDICAL INSTITUTIONS
AND INFRASTRUCTURE SUCH AS WATER SUPPLY AND
DISTRIBUTION, LAND TRANSPORTATION, TOLL ROADS
AND BRIDGES WITHIN THE SUBIC SPECIAL ECONOMIC
ZONE SUBJECT TO COMPLIANCE WITH THE
REQUIREMENTS OF THE DEPARTMENT OF EDUCATION,
COMMISSION ON HIGHER EDUCATION AND THE
DEPARTMENT OF HEALTH; AND TO ESTABLISH AND
CONDUCT FORMAL AND INFORMAL TRAINING OR
EDUCATIONAL COURSES: PROVIDED, THAT FORMAL
COURSES SHAI BE SUBJECT TO ACCREDITATION OR
APPROVAL BY THE APPROPRIATE GOVERNMENT
AGENCY FOR RECOGNITION OF CREDITS[|;

“{9} 10. To protect, PRESERVE, maintain and develop the

virgin forests within the baselands which will be proclaimed AND
MAINTAINED as a national park and subject to a permanent total log
ban, and for this purpose, the rules and regulations of the Department of

Environment and Natural Resources and other government agencies


directly involved in the above functions shall be implemented by the
{Sabie Authority] SBMA:

“{19} 11. To adopt and implement measures and standards for
environmental pollution control of all areas within its territory,
including, {but-nettimited] to all bodies of water and to enforce the
same. For which purpose the [Subie-Authority] SBMA shall create an
Ecology Center fend} THAT SHALL _ IS! E THE
ENVIRONMENTAL COMPLIANCE CERTIFICATE FOR ALL
-ENVIRONMI ‘ALLY CRITICAL ACTIVITIES AND
PROJECTS, TREE CUTTING PERMIT, DISCHARGE PERMIT
AND PERMIT TO OPERATE AIR POLLUTION SOURCE AND
INSTALLATION IN THE SUBIC SPECIAL ECONOMIC ZONE;

“12, TO RECLAIM LANDS IN THE SUBIC SPECIAL
ECONOMIC ZONE, NOT LIMITED TO FORESHORE AND
SUBMERGED AREAS, BY DREDGING, FILLING OR OTHER
MEANS IN COMPLIANCE WITH ALL ENVIRONMENTAL
LAWS AND GUIDELINES, AND TO ACQUIRE, DEVELOP,
IMPROVE, ADMINISTER, DEAL-IN, SUBDIVIDE AND LEASE
RECLAIMED LANDS INSIDE THE SUBIC SPECIAL
ECONOMIC ZONE: PROVIDED, THAT THE LAND
RECLAIMED BY A REGISTERED ENTERPRISE IN EXCESS
OF TWENTY (20) HECTARES OR THE ACTUAL COST OF
WHICH EXCEEDS ONE BILLION PESOS (P1,000,000,000) MAY
BE LEASED BY THE SBMA TO SAID REGISTERED
ENTERPRISE FOR A PERIOD OF NINETY-NINE (99) YEARS;

“13. TO PROVIDE FOR, OPERATE, OR
ADMINISTER SUCH SERVICES, AS MAY BE NECESSARY
FOR THE EFFICIENT, ECONOMICAL AND BENEFICIAL
UTILIZATION OF THE RECLAIMED AREAS IN THE SUBIC
SPECIAL ECONOMIC ZONE;

“14, UNLESS OTHERWISE PROVIDED IN THIS
ACT, TO BE THE SINGLE AUTHORITY RESPONSIBLE FOR
THE IMPLEMENTATION AND ENFORCEMENT OF THIS
ACT, ITS IMPLEMENTING RULES AND REGULATIONS (IRR)
AND OTHER ISSUANCES PROMULGATED BY THE SBMA
BOARD OF DIRECTORS; THE NATIONAL BUILDING CODE



OF THE PHILIPPINES AND ITS IRR; AND THE FIRE CODE
OF THE PHILIPPINES AND ITS IRR; INSOFAR AS THESE
LAWS, RULES AND REGULATIONS ARE APPLICABLE TO
THE SBMA, THE SUBIC SPECIAL ECONOMIC ZONE AND
SUBIC BAY FREEPORT BUSINESS ENTERPRISES,
LOCATORS, RESIDENTS AND STAKEHOLDERS; AND

“(44 15. To exercise such powers as may be essential,
necessary or incidental to the powers granted to it hereunder as well as
to carry out the policies and objectives of this Act.”

“c) Board of Directors. ~ The powers of the {Subie-Authority] SBMA
shall be vested in and exercised by a Board of Directors [hereinafter referred
to-as-the-Beard,which-shall-be] composed of [fifteen-(45)] SEVENTEEN
(17) members, [te-wit} AS FOLLOWS:

“1 fReprese £-the-tlocal_government—units—th
coneur-to-join-the Subie Special Beonomie- Zone} A PROFESSIONAL
MANAGER AS FULL-TIME CHAIRPERSON WHO SHALL
ALSO BE THE ADMINISTRATOR AND CHIEF EXECUTIVE
OFFICER OF THE SBMA, THE COMPENSATION OF THE
ADMINISTRATOR AND CHIEF EXECUTIVE SHALL BE
DETERMINED BY THE SBMA BOARD OF DIRECTORS
SUBJECT TO THE APPROVAL OF THE SECRETARY OF
BUDGET AND MANAGEMENT,

“2. Two (2) representatives from the National Government;

“3, Five (5) representatives from the private sector [eoming-from
supply depot and naval air station}: [and]

“4 [Phe-remaining_balaneete-complete the Beard-shall
sectors] ONE (1) REPRESENTATIVE EACH FROM THE
FOLLOWING LOCAL GOVERNME) UNITS THAT
ELECTED TO JOIN THE SUBIC SPECIAL ECONOMIC ZONE:
THE CITY OF OLONGAPO AND THE MUNICIPALITIES OF
CASTILLEJOS, SAN ANTONIO, SAN MARCELINO AND
SUBIC OF THE PROVINCE OF ZAMBALES; AND THE
MUNICIPALITIES OF MORONG, HERMOSA AND
DINALUPIHAN OF THE PROVINCE OF BATAAN: PROVIDED,



THAT SUCH REPRESENTATIVE MUST BE A RESIDENT AND
REGISTERED VOTER OF THE LOCAL GOVERNMENT UNIT
BEING REPRESENTED; AND
“S,ONE REPRESENTATIVE FROM THE INDIGENOUS
PEOPLES RESIDING WITHIN THE SUBIC BAY FREEPORT
ZONE.
“The [ehaitman-and-the] members of the Board OF DIRI

STORS:
shall be appointed by the President to serve for a FIXED term of six (6) years,
unless sooner removed for cause except for the representatives of the local
government units who shall serve for a FIXED term of three (3) years. In
case of removal for cause, the replacement shall serve only the unexpired
portion of the term. IN THE EXIGENCY OF THE SERVICE, THE
MEMBERS OF THE BOARD OF DIRECTORS SHALL CONTINUE
TO SERVE IN A HOLD-OVER CAPACITY UPON THE EXPIRATION
OF THEIR RESPECTIVE TERMS UNTIL THEIR REPLACEMENTS
SHALL HAVE BEEN APPOINTED AND QUALIFIED.

“No person shall be appointed as a member of the Board OF
DIRECTORS unless fhe} THE MEMBER is a Filipino citizen, of good moral
character, AT LEAST A COLLEGE GRADUATE, and of recognized
competence in relevant fields including, but not limited to, economics,
FINANCE, management, international relations, law, Jer] engineering[-},
ENVIRONMENT AND ECOLOGY, OR INDIGENOUS PEOPLES

CONCERNS. [Preference in-the appointment of the-members-of the Board
shattbe-given-te-residents- within the Subie Special Boonomie-Zone-]
[Members of the Board shall receive a per diem: of not more than Hive

inerease-| EXCEPT THE CHAIRPERSON, THE MEMBERS OF THE
BOARD OF DIRECTORS SHALL BE ENTITLED TO PER DIEMS,
ALLOWANCES AND OTHER BENEFITS IN ACCORDANCE WITH
EXISTING POLICIES, PRINCIPLES AND RULES GOVERNING THE
COMPENSATION OF MEMBERS OF THE BOARD OF
DIRECTORS IN GOVERNMENT-OWNED AND -CONTROLLED


CORPORATIONS AS MAY BE FORMULATED BY THE
GOVERNANCE COMMISSION FOR GOVERNMENT-OWNED OR-
CONTROLLED CORPORATIONS.”

[68}ChestemcanAedmninistr The —President—shall—appei

[(e)] (D) Capitalization. ~The {Subie- Authority} SBMA shall have an
authorized capital stock of Twenty billion pesos (P20,000,000,000) divided
into twenty thousand (20,000) no-par shares fully subscribed and paid up by
the Republic of the Philippines with

“XX X XX
(2) All other assets which have the President may transfer to the fSubie
Authority} SBMA as part of the equity contribution of the Government; and

“XX xX OX Xx

SEC. 3. Section 14 of Republic Act No. 7227, as amended, is hereby further amended to

tead as follows:

“SEC. 14, Relationship with the Conversion Authority and the Local
Government Units.

(a) The provisions of existing laws, rules and regulations to the
contrary notwithstanding, the {Subie—Authority] SBMA shall exercise
administrative powers, rule-making and disbursement of funds over the Subic
Special Economic Zone in conformity with the oversight function of the
Conversion Authority.

(b) In case of conflict between the {Subie-Authority] SBMA and the
local government units concerned on the matters affecting the Subic Special

Economic Zone other than defense and security, the decision of the fSubie
Authority] SBMA shall prevail.


SEC. 4. Section 15 of Republic Act No. 7227, as amended, is hereby further amended to
read as follows:

“SEC. 15, Clark and Other Special Economic Zones (CSEZ).~ x X x

“XXXXX

“The provisions of existing laws, rules and regulations to the contrary
notwithstanding, no national and local taxes shall be imposed on registered
business enterprises within the CFZ. In lieu of said taxes, a five percent (5%)
tax on gross income [eared] shall be paid by all registered business
enterprises within the CFZ and shall be directly remitted as follows: three
percent (3%) to the National Government, and two percent (2%) to the to the
treasurer’s office of the municipality or city where they are located.

“XXXXX”

SEC. 5. The Supreme Court shall designate a branch of the Regional Trial Court and/or
Municipal Trial Court in each of the local government units comprising the Subic Special
Economic Zone to handle cases filed by or involving the SBMA or its residents or registered
business enterprises on any matter or incident occurring within the Subic Special Economic

Zone.

SEC. 6. Within ninety (90) days from the effectivity of this Act, the following shall
promulgate the necessary rules and regulations for the implementation of the specific
provisions of this Act:

a) ‘The Department of Finance, in coordination with the Bureau of Internal
Revenue, and in consultation with the SBMA and CDC, for the necessary rules and
regulations implementing Sections 1 and 4 of this Act but only insofar as it amends Section
12 (c) and Section 15 of Republic Act No. 7227, as amended;

b) The National Commission on Indigenous Peoples, in coordination and
consultation with the SBMA, for the necessary rules and regulations implementing Section 3
of this Act but only insofar as it provides for the designation of one (1) seat in the SBMA
Board of Directors to represent the indigenous peoples residing within the Subic Bay
Freeport Zone; and

) The SBMA for the necessary rules and regulations implementing all the other

provisions of this Act.


SEC. 7. If any provision of this Act is subsequently declared unconstitutional, the validity of

the remaining provisions hereof shall remain in full force and effect.

SEC. 8. All laws, decrees, orders, proclamations, rules and regulations or other issuances or
parts thereof inconsistent with the provisions of this Act, are hereby repealed or modified
accordingly.

SEC. 9. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in a newspaper of general circulation.

Approved,