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This page features the full text of
Republic Act No. 7922
Cagayan
Special Economic Zone Act of 1995
AN
ACT ESTABLISHING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE
MUNICIPALITY
OF SANTA ANA AND THE NEIGHBORING ISLANDS IN THE MUNICIPALITY OF APARRI,
PROVINCE OF CAGAYAN, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES.
REPUBLIC
ACT NO. 7922
AN
ACT ESTABLISHING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE
MUNICIPALITY
OF SANTA ANA AND THE NEIGHBORING ISLANDS IN THE MUNICIPALITY OF APARRI,
PROVINCE OF CAGAYAN, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES.
Section
1. Short Title. — This Act shall
be known as the "Cagayan Special Economic Zone Act of 1995."
Sec.
2. Declaration of Policy. — It
is hereby declared the policy of the government to actively encourage,
promote, induce and accelerate a sound and balanced industrial,
economic
and social development of the country in order to provide jobs to the
people
especially those in the rural areas, increase their productivity and
their
individual and family income, and thereby improve the level and quality
of their condition through the establishment, among others, of special
economic zones and free ports in suitable and strategic locations in
the
country and through measures that shall effectively attract legitimate
and productive foreign investments.
Sec.
3. The Cagayan Special Economic
Zone and Free Port. — In accordance with the foregoing declared policy,
there is hereby established a special economic zone and free port, to
be
known as the Cagayan Special Economic Zone, hereinafter known as the
Zone,
which shall cover the entire area embraced by the Municipality of Santa
Ana and the islands of Fuga, Barit, and Mabbag in the Municipality of
Aparri,
Province of Cagayan.
Sec.
4. Governing Principles. — The
Cagayan Special Economic Zone shall be managed and operated under the
following
principles:
(a) Under
the framework and limitations of the Constitution
and the applicable and the provisions of the Local
Government Code, the Zone shall be developed into and operated as a
self-sustaining, commercial, financial, investment, and
tourism/recreational
center and free port with suitable retirement/residential areas, in
order
to create employment opportunities in and around the Zone, and to
effectively
encourage and attract legitimate and productive foreign investments
therein;(b) Business
establishments operating within the Zone shall be entitled to the
existing
fiscal incentives as provided for under Presidential Decree No. 66, the
law creating the Export Processing Zone Authority (EPZA), or those
provided
under Book VI of Executive
Order No. 226, otherwise known as the Omnibus Investments Code of 1987;
(c) Any
provision of existing law, rules or regulations to the contrary
notwithstanding,
no taxes, local and national, shall be imposed on business
establishments
operating within the Zone. In
lieu of paying taxes, said business establishments shall pay and remit
to the national government five per centum (5%) of their gross income,
to be divided as follows:
(1) Two
per centum (2%) shall accrue to the general fund of the national
government;
chanrobles virtuallaw libraryred(2) One
per centum (1%) to the Province of Cagayan;
(3) One-half
per centum (1/2%) to be shared by the municipalities affected by the
declaration
of the Zone in proportion to their income from business activities
within
the Zone; and
(4) One
and one-half per centum (1 1/2%) to the Cagayan Economic Zone Authority
which shall be created under this Act;
(d) Existing
banking laws and Bangko Sentral ng Pilipinas (BSP) rules and
regulations
shall apply on foreign exchange and other current account transactions
(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;
chanrobles virtuallaw libraryred(e) Any
foreign investor who establishes a business enterprise within the Zone
and who maintains capital investment of not less than One hundred fifty
thousand United States dollars (US$150,000) shall be granted, along
with
his or her spouse, dependents, and unmarried children below twenty-one
(21) years of age, a permanent resident status within the Zone. The
responsibility and authority to grant such permanent resident status is
hereby delegated to the Cagayan Economic Zone Authority referred to in
Section 5 of this Act.chanrobles virtual law library
Such
foreign investor and his or her spouse, dependents, and unmarried
children
below the age of twenty-one (21) years, shall have the freedom of
ingress
and egress to and from the Zone without need of any special
authorization
from the Bureau of Immigration.
Likewise,
the Cagayan Economic Zone Authority shall 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 Employees.
The
names of foreigners granted permanent resident status and working visas
by the Cagayan Economic Zone Authority shall be reported to the Bureau
of Immigration within thirty (30) days from such grant.
The
foregoing is without prejudice to a foreigner acquiring permanent
resident
status in the Philippines in accordance with applicable immigration,
retirement,
and other related laws; and
(f) Except
as otherwise provided herein, the local government units totally or
partially
embraced within the Zone shall retain and maintain their basic autonomy
and identity.The Municipality of
Santa Ana and the Municipality of Aparri shall operate and function in
accordance with Republic
Act No. 7160, otherwise known as the Local Government Act of 1991,
insofar as the areas within their respective jurisdiction covered in
this
Act are concerned.
Sec.
5. Creation of the Cagayan Economic
Zone Authority. — A body corporate to be known as the Cagayan Economic
Zone Authority, hereinafter referred to as the CEZA, is hereby created
to manage and operate, in accordance with the provisions of this Act,
the
Cagayan Special Economic Zone and Free Port. This
corporate franchise shall expire in fifty (50) years counted from the
first
day of the fifth (5th) calendar year after the effectivity of this Act,
unless otherwise extended by Congress.
chanrobles virtuallaw libraryred
Sec.
6. Powers and Functions of the
Cagayan Economic Zone Authority. — The Cagayan Economic Zone Authority
shall have the following powers and functions:chanroblesvirtualawlibrary
(a) To
adopt, alter, use a corporate seal; to contract, lease, buy, sell,
acquire,
own and dispose, movable and immovable as well as personal and real
property
of whatever nature (including but not limited to shares of stock or
participation
in private corporations or in limited partnerships, or in joint
ventures
with limited liability), bonds, precious metals in bullions, ingots,
and
easily convertible foreign exchange; to sue and be sued in order to
carry
out its duties, responsibilities, privileges, powers and functions as
granted
and provided for in this Act; and to exercise the power of eminent
domain
for public use and public purpose;
chanrobles virtuallaw libraryred(b) Within
the limitation provided by law, to raise or borrow 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 form of securities, and to secure the same by a guarantee,
pledge,
mortgage, deed of trust, or an assignment of all or part of its
property
or assets;
(c) To
approve, accept, accredit and allow any local or foreign business,
enterprise
or investment in the Zone subject only to such rules and regulations as
CEZA may promulgate from time to time in conformity with the provisions
of this Act and the limitations provided in the Constitution;
(d) To
authorize or undertake, on its own or through others, and regulate the
establishment, operation and maintenance of public utilities, services,
and infrastructure in the Zone such as shipping, barging, stevedoring,
cargo handling, hauling, warehousing, storage of cargo, port services
or
concessions, piers, wharves, bulkheads, bulk terminals, mooring areas,
storage areas, roads, bridges, terminals, conveyors, water supply and
storage,
sewerage, drainage, airport operations in coordination with the Civil
Aeronautics
Board, and such other services or concessions or infrastructure
necessary
or incidental to the accomplishment of the objectives of this Act: Provided,
however, That the private investors in the Zone shall be given
priority
in the awarding of contracts, franchises, licenses, or permits for the
establishment, operation and maintenance of utilities, services and
infrastructure
in the Zone;
(e) To
construct, acquire, own, lease, operate and maintain on its own or
through
others by virtue of contracts, franchises, licenses, or permits under
the
build-operate-transfer scheme or under a joint venture with the private
sector any or all of the public utilities and infrastructure required
or
needed in the Zone, in coordination with appropriate national and local
government authorities and in conformity with applicable laws thereon;
(f) To
operate on its own, either directly or through a subsidiary entity, or
license to others, tourism-related activities, including games,
amusements,
recreational and sports facilities such as horse racing, dog racing,
gambling
casinos, golf courses, and others, under priorities and standards set
by
the CEZA;
(g) To
protect, preserve, maintain and develop the virgin forests, beaches,
coral
and coral reefs within the Zone.The
virgin forest within the Zone will be proclaimed as a national park and
will be covered by a permanent total log ban.For
this purpose, the rules and regulations of the Department of
Environment
and Natural Resources and other government agencies involved in the
above
functions shall be implemented by the CEZA;
(h) To
adopt, implement and enforce reasonable measures and standards to
control
pollution within the Zone;
(i) To
provide security for the Zone in coordination with the national and
local
governments. For this purpose,
CEZA may establish and maintain its own security force and firefighting
capability or hire others to provide the same;
(j) To
form, establish, organize and maintain subsidiary corporations, as its
business and operations may require, whether under the laws of the
Philippines
or not;
(k) To
issue rules and regulations consistent with the provisions of this Act
as may be necessary to implement and accomplish the purposes,
objectives
and policies herein provided; and
(l) 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.
Sec.
7. Board of Directors of CEZA.
— The powers of the Cagayan Economic Zone Authority shall be vested in
and exercised by a Board of Directors, hereinafter referred to as the
Board,
which shall be composed of fifteen (15) members, to wit:chanroblesvirtualawlibrary
(a) The
Secretary of Trade and Industry who shall serve as an ex officio
chairman
of the Board of Directors and four (4) other representatives of the
national
government;chanrobles virtuallaw libraryred(b) The
mayors of the Municipality of Aparri and the Municipality of Sta. Ana,
Province of Cagayan, as ex officio voting members;
(c) Two
(2) representatives of labor from among the workers in the Cagayan
Special
Economic Zone;
(d) Four
(4) representatives from the business and investment sectors in the
Zone,
two (2) of whom must come from the investors in the Municipality of
Sta.
Ana and the other two (2) must come from the investors in the islands
of
Fuga, Barit and Mabbag in the Municipality of Aparri; and
(e) Two
(2) representatives of the private sector coming from the residents of
the municipalities of Santa Ana and Aparri.
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
three (3) years, unless sooner removed for cause or dies or resigns
voluntarily.In
case of death, resignation or removal for cause, the replacement shall
serve only the unexpired portion of the term.
chanrobles virtuallaw libraryred
Except
for the representatives of the business and investment sectors, no
person
shall be appointed by the President of the Philippines as a member of
the
Board unless he is a Filipino citizen, of good moral character and of
recognized
competence in some relevant fields in business, banking, shipping,
business
or labor management, port operations, engineering, or law.
Members
of the Board shall receive a reasonable per diem which shall not be
less
than the amount equivalent to the representation and transportation
allowances
of the members of the Board and/or as may be determined by the
Department
of Budget and Management: 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
(P10,000.00)
for every Board meeting.
Sec.
8. Administrative and Chief Executive
Officer. — The President of the Philippines shall appoint a full-time
professional
and competent administrator and chief executive officer for the Cagayan
Economic Zone Authority whose compensation shall be determined by its
Board
of Directors and shall be in accordance with the revised compensation
and
position classification system. The
administrator as chief executive officer of CEZA shall be responsible
to
the Board and the President of the Philippines for the efficient
management
and operation of the Cagayan Special Economic Zone.
Sec.
9. Capitalization. — The Cagayan
Economic Zone Authority shall have an authorized capital stock of two
billion
(2,000,000,000) no par shares with a minimum issue value of Ten pesos
(P10.00)
each. The national government
shall initially subscribe and fully pay three hundred million
(300,000,000)
shares of such capital stock. The
initial amount necessary to subscribe and pay for the shares of stock
shall
be included in the General Appropriations Act of the year following its
enactment into law and thereafter. The
Board of Directors of CEZA may, from time to time and with the written
concurrence of the Secretary of Finance, increase the issue value of
the
shares representing the capital stock of the Cagayan Economic Zone
Authority. The
Board of Directors of CEZA, with the written concurrence of the
Secretary
of Finance, may sell shares representing not more than forty per centum
(40%) of the capital stock of the CEZA to the general public with such
annual dividend policy as the Board and the Secretary of Finance may
determine. The
national government shall in no case own less than sixty per centum
(60%)
of the total issued and outstanding capital stock of the CEZA.
Sec.
10. Supervision. — The Cagayan
Special Economic Zone shall be under the direct control and supervision
of the Office of the President of the Philippines for purposes of
policy
direction and coordination, in the meantime that the agency tasked with
the coordination of special economic zones is not yet in place.
Sec.
11. Relationship with the Municipalities
of Santa Ana and Aparri. — In case of any conflict between the Cagayan
Economic Zone Authority and the municipalities of Santa Ana and Aparri
on matters affecting the Cagayan Special Economic Zone other than in
defense
and security matters, the decision of CEZA shall prevail.
Sec.
12. Legal Counsel. — The Cagayan
Economic Zone Authority and the corporations in which CEZA owns a
majority
of the issued capital stock shall have its own internal legal counsel
under
the supervision of the government corporate counsel. When
the exigencies of its businesses and operations demand it, the CEZA may
engage the services of an outside counsel either on a case to case
basis
or on a fixed retainer.
Sec.
13. Auditor. — The Commission
on Audit shall appoint a representative who shall be a full-time
auditor
of the Cagayan Economic Zone Authority and its subsidiaries, and assign
such number of personnel as may be necessary to assist said
representative
in the performance of his or her duties. The
salaries and emoluments of the assigned auditor and personnel of the
Commission
on Audit shall be in accordance with the revised compensation and
position
classification system. The
Commission on Audit shall render an annual report to the President of
the
Philippines and to Congress on the business activities, transactions
and
operations of the Cagayan Economic Zone Authority.
Sec.
14. Separability Clause. — If
any provision of this Act shall be held unconstitutional or invalid,
the
other provisions not otherwise affected shall remain in full force and
effect.
Sec.
15. Repealing Clause. — All laws,
executive orders or issuances, or any parts thereof which are
inconsistent
herewith are hereby repealed or amended accordingly.
Sec.
16. Effectivity Clause. — This
Act shall take effect upon its publication in at least one (1)
newspaper
of general circulation.
Approved:
February 24, 1995
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