Republic of the Philippines

OFFICE OF THE SANGGUNIANG PANLUNGSOD

City of Iloilo

EXCERPT FROM THE MINUTES OF THE REGULAR SESSION OF THE SANGGUNIANG

PANLUNGSOD OF THE CITY OF ILOILO, PHILIPPINES, HELD AT THE SESSMi ~~
ILOILO TERMINAL MARKET BUILDING, J. DE LEON STREET, ILOIL~tfIY, 'ON r
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WEDNESDAY, NOVEMBER 18, 2009. ~(;'/~If' .. 'r: ~ .'.l. ~"';';",JI
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PRESENT:
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HON. JED PATRICK E. MABILOG :-: 1 '1flruV 3-.009,
Vice Mayor & Presiding Officer ~:' .' 1,, ;<f.L l/, f'~
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HON. EDUARDO L. PENAREDONDO, Floor Leader U"""A i i\""'" .
HON. LYNDON V. ACAP Member
HON. ELDRID C. ANTIQUIERA Member
HON. JULIENNE L. BARONDA Member
HON. JOSE S. ESPINOSA III, Asst. Floor Leader Member
HON. ELY A. ESTANTE, JR. Member
HON. JOHN MELCHOR MABILOG, SK Federation Pres. Ex Officio Member
HON. MA. IRENE D. ONG, Liga ng mga Barangay Pres. Ex Officio Member
HON. ARMAND S. PARCON Member
HON. ANTONIO V. PESINA, JR. Member
HON. ERWIN J. PLAGATA Member
HON. NIELEX C. TUPAS Member
HON. PERLAS. ZULUETA Member

ABSENT:

HON. JEFFREY P. GANZON Member

REGULATION ORDINANCE NO. 2009-358

AN ORDINANCE ENCOURAGING ALL HOUSEHOLD ENTITIES TO
I E NATURAL ENERGY FROM RENEWABLE SOURCES AND

TP VIDING REAL PROPERTY TAX INCENTIVE THEREOF."

Sponsored by Councilor Eldrid C. Antiquiera, seconded by

Councilor Antonio V. Pesina, Jr.

WHEREAS, the Kyoto Protocol which was ratified by 184 parties of the Convention sets
t e binding targets for 37 industrialized countries and the European community for reducing
nhouse gas (GHG) emissions. This amounts to an average of five per cent against 1990
levels over the five-year period 2008-2012. Under the treaty, countries must meet their targets
primarily through national measures for which the Kyoto Protocol has tendered three market-
based mechanisms, to wit: emission trading or known as the "carbon market", clean development
mechanism (CDM) and joint implementation (JI);

WHEREAS, such mechanisms help stimulate green investment and help Parties meet
their emission targets in a cost-effective way. The Kyoto Protocol is generally seen as an
important first step towards a truly global emission reduction regime that will stabilize GHG
emissions, and provides the essential architecture for any future international agreement on
climate change;

WHEREAS, US President Barack Obama recently pledged to allocate $129bn for encouraging
the use of solar power, hybrid cars and renewable energy projects as the Environment Protection Agency
(EPA) made a potentially historic shift, telling the White House that global warming was endangering
public health. The move by the EPA could lead to nationwide measures to limit carbon emissions in the
US;
 Reg. Ord. No. 2009-358, Nov. 18, 2009 Page2

WHEREAS, as part of the global community and as a gesture of international

cooperation, Philippines has proactively responded to such initiative by enacting Republic Act
No. 9513 otherwise known as the "Renewable Energy Act of 2008." This aims to make the
Philippines 60 percent energy self-sufficient by 2010. The new act is expected to mitigate the
global problem of climate change by aggressively tapping and developing renewable energy
derived from solar, biomass, geothermal, hydropower, wind and ocean energy technologies;

WHEREAS, the new law provides a seven-year income tax holiday and tax exemptions
for the carbon credits generated from renewable energy sources. A 10% corporate income tax, as
against the regular 30%, is also provided once the income tax holiday expires; energy self-
sufficiency to 60% by 2010 from 56.6% in 2005, by tapping resources like solar, wind,
hydropower, ocean and biomass energy; renewable energy facilities will also be given a 1.5%
realty tax cap on original cost of equipment and facilities to produce renewable energy;

WHEREAS, whiW the Philippines is the second largest geothermal power producer in the
world, the highest wind power potential in the region, and one with the highest solar power
penetration and abundant hydropower and biomass resources, 26% of the country's power comes
from burning imported coal, whilst 23% comes from burning oil. Last year the country imported
101.4 million barrels of oil, costing $7.5 billion;

WHEREAS, an analysis by the Renewable Energy Coalition showed renewable energy

sources can reduce the country's oil imports by half, and the savings can be used for social and
infrastructure programs;

WHEREAS, based on the Department of Energy projection, if renewable energy sources can
supply an additional 2,500 megawatts (MW) of total power supply in the next 10 years, then the country
could stand to gain some US$ 1.2 billion in energy savings over the same period;

WHEREAS, the proposed ordinance aims to increase the utilization of renewable energy
by harnessing our local capabilities in the use of renewable energy systems, and promoting their
efficient and cost-effective commercial application by providing real property tax incentives;

7od NOW, THEREFORE, BE IT ORDAINED, as it is hereby ordained by the Sangguniang

oflloilo City duly assembled, THAT:

ARTICLE I: DECLARATION OF POLICY

Republic Act No. 7160, otherwise known as "The Local Government Code of 1991",
o k 1, Section 3 thereof on Operative Principles of Decentralization, explicitly provides: - The
ormulation and implementation of policies and measures on local autonomy shall be guided by
the following operative principles:

(i) Local government units shall share with the national government the
responsibility in the management and maintenance of ecological balance within
their territorial jurisdiction, subject to the provisions of this Code and national
policies;

In implementing thereof, the Sangguniang Panlungsod exercises certain powers, duties

and functions which are stated in Section 458(a)(l)(vi) of the Local Government Code of 1991.
It runs as follows:
 Reg. Ord. No. 2009-358, Nov. 18, 2009 Page3

"Section 458.

(vi) Protect the environment and impose appropriate penalties for acts which
endanger the environment, such as dynamite fishing and other forms of destructive
fishing, illegal logging and smuggling of logs, smuggling of natural resources products
and of endangered species of flora and fauna/ and burn farming, and such other
activities which would result in pollution acceleration of eutrophication of rivers and
lakes or ofecological imbalance."

ARTICLE II: DEFINITION OF TERMS

Section 1. Definition of terms. - As used in this Ordinance, the following terms shall
mean:

"biomass resources" refers to non-fossilized, biodegradable organic material originating

from naturally occurring or cultures plants, animals and micro-organisms, including agricultural
products, by-products and residues such as, but not limited to, bio fuels except com, Soya beans
and rice but including sugarcane and coconut, rice hulls, rice straws, coconut husks and shells,
com cobs, com stovers, bagasse, biodegradable organic :fractions of industrial and municipal
wastes that can be used in bioconversion process and other processes, as well as gases and
liquids recovered from the decomposition and/ or extraction of non-fossilized and biodegradable
organic materials.

"geothermal resources" refers to mineral resources, classified as renewable energy

resource, in the form of: (i) products of geothermal processes, embracing indigenous steam, hot
water and hot brines; (ii) steam and other gases, hot water and hot brines resulting from water,
gas, or other fluids artificially introduced into geothermal formations; (iii) heat or associated
energy found in geothermal formations; and (iv) any by-product derived from them.
"green energy option" refers to the mechanism to empower end-user to choose renewable
energy in meeting their energy requirements.

"hybrid systems" refers to any power or energy generation facility which makes use of
two(2) or more types of technologies utilizing both conventional and/ or renewable fuel
resources, such as, but not limited to, integrated solar/wind systems, biomass/ fossil fuel systems,
hydro/fossil fuel systems, integrated solar/biomass systems, integrated wind/fossil fuel systems
with a minimum often(IO) megawatts or ten percent (10%) of the annual energy output provided
by the Renewable Energy (RE) component.

"hydroelectric power resources" or "hydropower resources" refers to water resources

ound technically feasible for development of hydropower projects which includes rivers, lakes,

f
I
waterfalls, irrigation canals, springs, ponds, and other water bodies.

"non-power application" refers to renewable energy systems or facilities that produce

mechanical energy, combustible products such as methane gas, or forms of useful thermal energy
such as heat or steam, that are not used for electricity generation, but for applications such as, but
not limited to, industrial/commercial cooling, and fuel for cooking and transport.

"ocean energy systems" refers to energy systems which convert ocean or tidal current,
ocean thermal gradient or wave energy into electrical or mechanical energy.

"renewable energy(systems) developer" or "RE Developers" refers to individual/s or a

'f-- group of individuals formed in accordance with existing Philippine Laws engaged in the
lj exploration, development and utilization of RE resources and actual operation of RE
systems/facilities.
 Reg. Ord. No. 2009-358, Nov. 18, 2009 Page4

"renewable energy resources (RE Resources)" refers to energy resources that do not
have an upper limit on the total quantity to be used. Such resources are renewable on a regular
basis, and whose renewal rate is relatively rapid to consider availability over an indefinite period
of time. These include, among others, biomass, solar, wind, geothermal, ocean-energy, and
hydropower conforming with internationally accepted norms and standards on dams, and other
emerging renewable energy technologies.

"solar energy" refers to the energy derived from solar radiation that can be converted into
useful thermal or electrical energy.

"wind energy" refers to the energy that can be derived from wind that is converted into
useful electrical or mechanical energy.

"Department of Energy or DOE' refers to the government agency created pursuant to

Republic Act No. 7638 whose functions are expanded in Republic Act No. 9136 and further
explained in Republic Act No. 9513.

"Household Entity" refers to a domestic establishment, a collective group living in a

house, acknowledging the authority of a head, the members of which, with few exceptions, are
bound by marriage, blood, affinity or other bond, between whom there is an intimacy and by
whom there is felt a concern with and an interest in the life of all that gives it a unity.

ARTICLE III: MECHANISMS OF THE SCHEME

Section 1. Scope- This ordinance shall cover incentive on real property tax imposed on
residential units where renewable energy as a source of electric power is used or consumed.

Section 2. Availment of the privilege - An incentive of 20% discount on Real Property Tax for
residential units shall be given to the applicant whose energy needs in their household is sourced, in
whole or in part, from renewable energy resources derived from biomass, geothermal, hydropower
resources as well as solar and wind energy and ocean energy systems, hybrid or otherwise, and used for
power generation or non-power applications PROVIDED that the availment of this privilege is non-
transferable; PROVIDED FURTHER that the zoning classification by the City Planning Office of the
City of Iloilo shall be the controlling factor in determining whether the unit is within residential zone.

Section 3. Who may file the application - All household entities, either owned in part or in

E ole, or leased and whose property or properties, are registered with the City Assessor's Office;
OVIDED THAT for those applicant whose property is only leased or rented, they can only avail of the
incentives as far as real property tax on the leased or rented residential unit is concerned.

Section 4. Where to file the application - A pro-forma application may be filed, in person or
through authorized representative, with the City Environment Office which shall coordinate with the City
Engineers Office for the purpose of conducting inspection to determine compliance with this Ordinance.
he latter shall issue a certification of compliance to the effect that the power consumption of the said
ousehold is sourced wholly or partially from renewable energy.

Se ction 5. Processing of the application - The City Engineer's Office shall have the
~echnical expertise to deliver the following duties and function:

~,, 5.1 Upon receipt of the application from the City Environment's Office, it shall conduct
inspection for the purpose of determining the household consumption is, in part or in

f- whole, derived from renewable energy resources;

52 To stamp an audit seal on the renewable energy source in order to prevent fraud;
 Reg. Ord. No. 2009-358, Nov. 18, 2009 Page5

5.3 To issue a certification of compliance with the electrical usage requirement of this
ordinance sufficient to avail the said real property tax discount. The said certification
shall immediately qualify the applicant to 20% real property tax incentive.

Section 6. Form and content of the application - The application shall be in the
prescribed form, duly subscribed and sworn to before any person authorized by law to administer
oath. It shall state, among others, the name and address of the applicant, the RE source, the audit
seal number, and the basis of claim on the ground of ownership or possession.

Evidence of ownership or possession by the applicant may be proved by showing of the

original document, such as but not limited to, land title, deed of sale, tax declaration, tax
assessment and lease contract.

Section 7. Power and Duties of the City Environment Office- They shall have the
following powers and duties:

7 .1 They shall receive, process, and examine the application as to the completeness,
sufficiency and its due execution. It shall thereafter endorse the same to the City
Engineer's Office for ocular inspection;

7.2 They shall have the duty of recording, filing and retrieval of applications filed by
the household entity which have applied and those who have been granted a certificate
of compliance;

7.3 To approve the application on the basis of the certificate of compliance;

7.4 Upon receipt of the certificate of compliance, they shall make an endorsement on
the application;

7.5 In case of appeal, to forward to the City Mayor such findings for which the latter
shall have the final authority to approve or reject the same;

7.6 They shall have reportorial duty to the City Mayor, the City Treasurer and the
Bureau and Internal Revenue regarding the status and in any matter related to this
scheme;

7.7 They shall periodically issue a report of these cases to the City Assessor's Office
for purpose of noting said real property tax discount on the said building;
(
7.8 They are empowered to cancel any certificate of compliance upon finding of any
violation of the requirements under this ordinance, or commission of fraud, such as
transferring the RE source from one household or commercial unit to another.

Section 8. Effect of approving the application for reduction in the payment of real
property tax - When the application for real property tax reduction is endorsed by the City
Environment Office and the corresponding certificate of compliance has been issued, the latter
can be presented to the Office of the City Treasurer who shall authorize the reduction of real
property tax charges of 20%; PROVIDED that in order to annually avail of said privilege the
applicant should complete a renewal form on every applicable fiscal year; PROVIDED
FURTHER, that should the occupancy of lot is less than the 12 months period within the fiscal
year, then the availment of privilege shall be given pro- rata to the period of occupancy or
possession of said property.
Reg. Ord. No. 2009-358. Nov. 18. 2009 Page6

Section 9. Effect of denying the application and procedure - Where the application is
denied by the City Environment Office, the applicant may appeal his case with the City Mayor
within ten ( 10) working days from receipt of the decision; otherwise it shall become final. Any
household can only apply once every fiscal year. A denied application is construed as one
application for that fiscal year, unless appealed, and therefore prevent the refilling of another
petition for the.same fiscal year.

The decision of the City Mayor on appealed cases shall become final.

Section 10. Recording, filing and retrieval of decision on Appeal - The City
Environment Office shall prescribe the proper recording, filing and retrieval system of the
decision.

Section 11. Authority to collect filing and other fees. - The Office of the City
Treasurer, upon presentation of the certificate of compliance by the petitioner, is authorized to
collect the real property taxes with the discount as prescribed herein as certified by the City
Environment Office and a certification fee as provided under Revenue Regulation Ordinance No.
2007-016.

Section 12. Periodic review - The Office of the City Engineer shall call for a periodic
review of the approved applications by conducting spot checks at any time of the day as may be
necessary. If it finds any violation of the requirements or commission of fraud and the annual
real property tax has been paid, in full or in part, with the 20% discount, the status quo shall be
retained but the petitioner shall be disqualified from filing a petition under this Ordinance within
the next three(3) years. If the real property tax has not been paid in at all, the Office of the City
Engineer may unilaterally withdraw the certificate of compliance and cancel the same. This
means that the applicant is disqualified from the real property tax discount for that fiscal year and
shall be barred further from filing an application under this Ordinance within the next two (2)
years.

Section 13. Separability clause - If any portion or provision of this Ordinance is

declared void or unconstitutional, the remaining portions or provisions thereof shall not be
affected by such declaration. This ordinance is also subject to any further rules and regulations
that the Department of Energy (DOE) is authorized to enact in accordance with Republic Act No.
9513.

Section 14. Effectivity clause - This ordinance shall take effect upon approval.

ENACTED, November 18, 2009.

I hereby certify to the correctness of the above quoted ordinance.

ATTESTED AND CERTIFIE

TO BE D~ENACTED:
,,t .}. L
JED RICKE. MABILOG
Vice Mayor and Presiding Officer

/rot