Tourism Enterprise Zones.
SEC. 60. Tourism Enterprise Zones. — Any geographic area with the following characteristics may be designated as a Tourism Enterprise Zone:
The area is capable of being defined into one contiguous territory;
It has historical and cultural significance, environmental beauty, or existing or potential integrated leisure facilities within its bounds or within reasonable distances from it;
It has, or it may have, strategic access through transportation infrastructure, and reasonable connection with utilities infrastructure systems;
It is sufficient in size, such that it may be further utilized for bringing in new investments in tourism establishments and services; and
It is in a strategic location such as to catalyze the socioeconomic development of neighboring communities.
Development Planning.
SEC. 61. Development Planning. — Each application for designation as a TEZ shall be accompanied by a development plan which shall, consistent with principles of economic, socioeconomic development of neighboring communities. cultural and environmentally sustainable development, specifically identify:
Tourism focal points and resources available within the proposed TEZ and adjoining areas;
Features which satisfy the requisites for the designation of a TEZ enumerated under Section 59 of this Act;
Areas for infrastructure development, for investment, and for preservation, as well as the kind of development, nature of investment or sustainable activities allowed within preserved areas, respectively;
Medium- and long-term studies on market trends, and corresponding development strategies for the TEZ;
Studies on the economic impact of development within the TEZ and in surrounding communities;
Studies on the environmental, cultural and social carrying capacity of the TEZ and surrounding communities;
Design plans for structures which incorporate design and sustainability principles from local architecture and the surrounding environment; and
Such other information that the TIEZA may require.
No TEZ shall be designated without a development plan duly approved by the TIEZA and without the approval, by resolution, of the LGU concerned. Any deviation or modification from the development plan shall require the prior authorization of the TIEZA. The TIEZA may cause the suspension of granted incentives and withdrawal of recognition as a TEZ operator. It may likewise impose reasonable fines and penalties upon TEZ operators and responsible persons for any failure to properly implement the approved development plan.
Lands identified as part of a TEZ shall qualify for exemption from the coverage of Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992, and Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, subject to rules and regulations to be crafted by the TIEZA, the Housing and Urban Development Coordinating Council and the Department of Agrarian Reform.
Operation of TEZs.
SEC. 62. Operation of TEZs. — The TEZ proponent shall establish a corporate entity, to be known as the TEZ operator, which shall administer the TEZ and supervise its activities. The designation of a TEZ does not vest ownership of the resources therein upon the TEZ operator. Where the TEZ operator possesses rights to land or other resources within the TEZ, the TEZ operator shall be entitled to exercise such rights as allowed by existing laws in a manner consistent with the duly-approved development plan as provided above.
Where rights to land and other resources within the TEZ are vested in a private third party, the TEZ operator shall encourage the private third party to participate in policy making, planning and program development and implementation by encouraging its registration as a tourism enterprise where appropriate, and through the judicious administration of incentives and provision of services.
Except as herein provided, the LGUs which comprise, overlap, embrace or include a TEZ in their territorial jurisdictions shall retain their basic autonomy and identity in accordance with the Local Government Code.
The government shall encourage, facilitate and provide incentives for private sector participation in the construction and operation of public utilities and infrastructure in the TEZs using any of the schemes allowed under Republic Act No. 6957, as amended, otherwise known as the Build-Operate-and- Transfer Law.
SUBCHAPTER IV-B. TOURISM INFRASTRUCTURE
AND ENTERPRISE ZONE AUTHORITY
The Tourism Infrastructure and Enterprise Zone Authority.
SEC. 63. The Tourism Infrastructure and Enterprise Zone Authority. — Under the supervision of the Secretary and attached to the Department for purposes of program and policy coordination shall be a body corporate known as the Tourism Infrastructure and Enterprise Zone Authority (TIEZA).
Mandate.
SEC. 64. Mandate. — The TIEZA shall be a body corporate which shall designate, regulate and supervise the TEZs established under this Act, as well as develop, manage and supervise tourism infrastructure projects in the country. It shall supervise and regulate the cultural, economic and environmentally sustainable development of TEZs toward the primary objective of encouraging investments therein. It shall ensure strict compliance of the TEZ operator with the approved development plan. Pursuant thereto, the TIEZA shall have the power to impose penalties for failure or refusal of the tourism enterprises to comply with the approved development plan, which shall also be considered a violation of the terms of accreditation. Such power shall further be defined under the implementing rules and regulations of this Act.
The TIEZA shall continue to exercise functions previously exercised by the PTA under Presidential Decree No. 564, unless otherwise inconsistent with the other provisions of this Act. It shall however cease to operate the DFP.
In addition to its mandate to regulate and supervise TEZs, the TIEZA shall likewise be deemed a government infrastructure corporation under the provisions of Executive Order No. 292, otherwise known as the Administrative Code of 1987.
Tourism enterprises outside of TEZs and without accreditation shall be governed by pertinent laws, rules and regulations.
Board of Directors.
SEC. 65. Board of Directors. — The TIEZA shall be governed and its powers exercised by a Board of Directors ("TIEZA Board"), composed as follows:
The Department Secretary, as Chairperson;
The TIEZA Chief Operating Officer, as Vice Chairperson;
The TPB Chief Operating Officer;
The DPWH Secretary;
The DENR Secretary;
The DILG Secretary: and
Five (5) representative directors, to be appointed by the President, upon the recommendation of the Tourism Congress from a list of at least three (3) nominees per group as enumerated in Section 67. They must be Filipinos with recognized competence in business management, marketing, finance, tourism and other related fields and shall serve a term of office of three (3) years, which term may be extended for a period not exceeding three (3) years.
The Secretaries of the DPWH, the DENR and the DILG shall each designate a permanent representative in the Board, who must possess relevant experience. The permanent representative shall be duly authorized to act on behalf of the Secretary in his or her absence.
The Chairperson of the TIEZA Board shall have voting rights in case of a tie.
The TIEZA Board shall appoint a corporate secretary whose functions shall include the preparation of agenda for board meetings, in consultation with the Chairperson.
The Chief Operating Officer.
SEC. 66. The Chief Operating Officer. — The TIEZA shall have a Chief Operating Officer who must be a Filipino, with a bachelor’s degree in any of the following fields: business, law, tourism, public administration or other relevant fields and have demonstrated expertise therein. He or she must have been engaged in a managerial capacity for at least five (5) years prior to his or her appointment. He or she shall be elected by the Board from a list of qualified applicants and appointed by the Secretary, and shall have a term of office of six (6) years, unless removed for cause in accordance with law.
Representative Directors.
SEC. 67. Representative Directors. — The five (5) representative directors shall represent each of the following groups:
Tourism estate development and management services;
Accommodation enterprises;
Air, sea and land tourism transport services;
Travel and tours enterprises: and
Other tourism enterprises.
If a representative director ceases to be connected with the sector he or she represents, a new representative director shall be appointed to serve the unexpired term.
Meetings of the Board.
SEC. 68. Meetings of the Board. — The TIEZA Board shall meet at least once a month at the principal office of the TIEZA, unless the TIEZA Board previously agreed in writing to meet at another location.
General Powers and Functions of the TIEZA Board.
SEC. 69. General Powers and Functions of the TIEZA Board. — The TIEZA Board shall have the general powers of a corporation as provided under the Corporation Code. Furthermore, it shall also have the following powers:
Organize the TIEZA in a manner most efficient and economical for the conduct of its business and the implementation of its mandate;
Develop policies, plans and programs in coordination with the Department for the development and operation of TEZs and adopt rules and regulations necessary for the implementation of the provisions of this Act;
Enter into, make, perform and carry out contracts of every class, kind and description which are necessary or incidental to the realization of its purposes with any person, firm or corporation, private or public, and with foreign government entities;
Contract loans, indebtedness and credit, issue commercial papers and bonds, in any local or convertible foreign currency from international financial institutions, foreign government entities, and local or foreign private commercial banks or similar institutions under such terms and conditions prescribed by law, rules and regulations;
Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property for the purpose of financing the programs and projects deemed vital for the early attainment of its goals and objectives, subject to the provisions of Article VII, Section 20 and Article XII, Section 2, paragraphs (4) and (5) of the Constitution;
Construct, own or lease, operate and maintain infrastructure facilities or enter into joint ventures, and grant franchises for, and supervise the operation of, public utilities within TEZs, in coordination with LGUs and agencies concerned;
Undertake, or authorize the undertaking of, reclamation projects within TEZs;
Preserve, restore or reconstruct all national cultural treasures and shrines located within TEZs, in coordination with the National Museum and other concerned agencies;
Receive donations, grants, bequests and assistance of all kinds from local and foreign governments and private sectors and utilize the same;
Exercise eminent domain and police power, including, but not limited to, the power to recommend to the Department the removal of structures which may be considered nuisances per se or which impede or impair the enjoyment of historical, cultural and natural endowments;
Coordinate with LGUs and other government agencies for the provision of basic services, utilities and infrastructure required by TEZs;
Review and approve proposals for the designation of TEZs based on the criteria provided herein, and approve, facilitate and assist in the organization of TEZ operators;
Regulate and supervise the operations of TEZ operators, review and ensure compliance with the development plans, and establish and implement other policies, plans and programs for the development and operation of TEZs;
Register, monitor and regulate enterprises seeking to invest and operate within a TEZ, and approve and grant incentives to such registered enterprises as provided under this Act; and
Exercise the general powers of a corporation.
Powers and Functions of the Chief Operating Officer.
SEC. 70. Powers and Functions of the Chief Operating Officer. — In addition to those stated in Section 23 of Presidential Decree No. 564 on the powers of the former General Manager of the PTA, which are hereby adopted under this Act, the Chief Operating Officer shall implement the policies, plans and programs of the TIEZA.
He or she shall likewise exercise the following powers and functions:
Recommend to the TIEZA Board the designation of TEZs in accordance with set policies and standards:
Coordinate with the Philippine National Police and other concerned agencies of government for the maintenance of peace and order within the TEZs;
Ensure that all revenues of the TEZs are collected and applied in accordance with law;
Submit to the Board the ongoing and proposed projects, work and financial programs, annual budget of receipts and expenditures of the TEZs;
Receive protests, complaints and claims concerning TEZ operators, enterprises and residents, and make recommendations to the TIEZA Board for appropriate action;
Enforce all legal easements along seashores, lakeshores, riverbanks, among others, as provided under existing laws, rules and regulations, to allow free and open access thereto and aid in the proper development of the national patrimony;
Take such emergency measures as may be necessary to avoid fires, floods and mitigate the effects of storms and other natural or public calamities;
Recommend to the TIEZA Board all necessary acts to properly supervise the operations of TEZ operators;
Coordinate with the TPB for the promotion of tourism and the encouragement of investments in TEZs; and
Exercise such other powers and functions as are necessary to the implementation of this Act.
Capitalization.
SEC. 71. Capitalization. — The TIEZA shall have an authorized capital of Two hundred fifty million pesos (Php250,000,000.00) which shall be fully subscribed by the national government.
Funding.
SEC. 72. Funding. — The TIEZA shall obtain the funds for its operations from the following:
Fifty percent (50%) of the proceeds from travel tax collections;
A reasonable share from the collections of the Office of Tourism Resource Generation, to be determined by the Department;
Income from projects managed by the TIEZA; and
Subsidies or grants from local and foreign sources that may be received by the TIEZA.
At least five percent (5%) from the travel tax collection which shall accrue to the TIEZA shall be earmarked for the development of historic, cultural, religious and heritage sites and prime tourist destinations. Another five percent (6%) shall be earmarked for the development of ecotourism sites in depressed provinces with strong tourism potentials.
Collection and Allocation of Travel Taxes.
SEC. 73. Collection and Allocation of Travel Taxes. — For purposes of this Act, the TIEZA shall be the principal agency responsible for the timely collection of travel taxes.
Amounts to be collected by the TIEZA shall be distributed in the manner provided for under this Act: Provided, That the national government shall look for alternative funding sources for programs funded by the travel tax in the event of a phase out of travel tax collection following international agreements.
Pursuant to Section 72 of this Act, fifty percent (50%) of the proceeds from travel tax collections shall accrue to the TIEZA.
The government’s contribution to the Higher Education Development Fund, equivalent to forty percent (40%) from the total gross collections of the travel tax, shall be retained: Provided, That the Commission on Higher Education (CHED) shall give priority to tourism-related educational programs and courses. The ten percent (10%) share of the National Commission for Culture and the Arts from the total gross collections of the travel tax shall likewise be retained.
Exemption from Payment of Corporate Income Tax.
SEC. 74. Exemption from Payment of Corporate Income Tax. — Notwithstanding any provision of existing laws, decrees, executive orders to the contrary, the TIEZA shall be exempt from the payment of corporate income tax, as provided under the NIRC.
Survey of Resources.
SEC. 75. Survey of Resources. — The TIEZA shall, in coordination with appropriate authorities and neighboring cities and municipalities, conduct a survey of the physical and natural assets and potentials of the TEZ areas under its jurisdiction.
Registration.
SEC. 76. Registration. — Tourism enterprises within a TEZ shall register with the TIEZA to avail of incentives and benefits provided for in this Act.
One-Stop Shop Processing.
SEC. 77. One-Stop Shop Processing. — The TIEZA shall establish offices where prospective TEZ investors can register to obtain the incentives and benefits under this Act and all necessary permits and licenses from all national and local government offices. All government agencies shall coordinate with the TIEZA for the issuance of such permits and licenses.
The TlEZA shall collect fees necessary for the issuance of these permits and licenses.
Investigation and Inquiries.
SEC. 78. Investigation and Inquiries. — Upon a written formal complaint made under oath, which on its face provides reasonable basis to believe that some anomaly or irregularity may have been committed within TEZs, the TIEZA Chief Operating Officer shall have the power to inquire into and investigate the conduct of TEZ operators, registered enterprises and/or their employees. For this purpose, he or she may subpoena witnesses, administer oaths and compel the production of books, papers and other evidence. The TIEZA Chief Operating Officer shall thereafter make a recommendation to the TIEZA Board for appropriate action.
SUBCHAPTER IV-C. TEZ ADMINISTRATION
Administration of TEZs.
SEC. 79. Administration of TEZs. — Each TEZ shall be administered and supervised by a TEZ operator. A TEZ operator shall be an entity duly incorporated under the Corporation Code and other relevant laws, unless the TEZ operator is a LGU or any other instrumentality of the government in the pursuit of their mandates, where capital may be provided by LGUs and/or private entities.
Articles of Incorporation and Bylaws of TEZ Operators.
SEC. 80. Articles of Incorporation and Bylaws of TEZ Operators. — Except as provided herein and as may be provided by rules and regulations duly promulgated by the TIEZA, each duly incorporated TEZ operator shall draft its articles of incorporation and bylaws in accordance with the Corporation Code.
Boards of Directors and Consultative Bodies of TEZ Operators.
SEC. 81. Boards of Directors and Consultative Bodies of TEZ Operators. — The seats of the Board of Directors of a TEZ operator shall be allocated pro-rata according to the respective capital contributions of the TEZ operator’s shareholders.
TEZ operators are encouraged to reserve seats on their Boards of Directors for relevant interest groups, such as those representing environmental, religious, cultural, TEZ investors’, TEZ residents’ and other interests. In ally case, TEZ operators may form consultative bodies for such special interest groups to assist them in the formulation and implementation of policies, plans and projects.
TEZ Administrator.
SEC. 82. TEZ Administrator. — The Board of Directors of each TEZ operator shall appoint its TEZ Administrator, who shall be responsible for implementing the policies, plans and projects of the TEZ operator's Board of Directors. The TIEZA shall provide guidelines on the necessary educational and practical qualifications required of a TEZ Administrator. In addition to such qualifications, all TEZ Administrators must undergo and pass a training program of the Department to provide TEZ Administrators with knowledge and skills relevant to the operation of the TEZ.
Civil Dispute Resolution.
SEC. 83. Civil Dispute Resolution. — The TIEZA shall establish a civil dispute mediation office to effectively and efficiently resolve civil disputes concerning tourism enterprises and/or tourism-related issues within a TEZ where at least one of the parties to the dispute was residing in the TEZ at the time the dispute arose, and is still residing within the TEZ at the time the complaint is filed with the mediation office. No civil dispute may be filed in court without having undergone mediation proceedings as provided under this section except in extraordinary cases where a party may suffer irreparable damage. The TIEZA shall charge reasonable fees for civil dispute mediation. This provision is without prejudice to the application of the rules pertaining to Katarungang Pambarangay with respect to other matters.
Labor Dispute Resolution.
SEC. 84. Labor Dispute Resolution. — To resolve disputes between workers and employers for any violation of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, the TIEZA shall, in coordination with the Department of Labor and Employment DOLE), establish a labor dispute resolution office to mediate between workers and employers.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
