Republic Act No. 9593

Short Title.* - This Act shall be known as "The Tourism Act of 2009".

- The State declares tourism as an indispensable element of the national economy and an industry of national interest and importance, which must be harnessed as an engine of socioeconomic growth and cultural affirmation to generate investment, foreign exchange and employment, and to continue to mold an enhanced sense of national pride for all Filipinos.

Towards this end, the State shall seek to:

- Pursuant to the above declaration, the State shall adopt the following objectives:

- The following terms, as used in this Act, are defined as follows:

Mandate.* - The Department of Tourism, hereinafter referred to as the Department, shall be the primary planning, programming, coordinating, implementing and I8 regulatory government agency in the development and promotion of the tourism industry, both domestic and international, in coordination with attached agencies and other government instrumentalities. It shall instill in the Filipino the industrys fundamental importance in the generation of employment, investment and foreign exchange.

- The Department shall have the following powers and functions:

- The Department shall consist of the Department Proper, Department offices, services and unit, and the regional and foreign offices.

- The Department Proper shall consist of the Offices of the Secretary, Undersecretaries and Assistant Secretaries. necessary for the implementation of this Act.

- The Office of the Secretary shall consist of the Secretary and his or her immediate staff.

- The Secretary shall be assisted by at least three (3) Undersecretaries, namely:

- The Office of Product Development shall have the following functions:

- The Office of Tourism Development Planning, Research and Information Management shall have the following functions:

- The Office of Industry Manpower Development shall have the following functions:

- Recognizing the need for internationally competitive standards of facilities and services, the Office of Tourism Standards and Regulations shall have the following functions:

- Recognizing that increased linkages are necessary between various government offices and the private sector and among the various entities in the private sector itself to properly implement tourism policy, the Office of Tourism Coordination shall have the following functions:

- In line with the objective of ensuring a sustainable funding mechanism for the implementation of tourism policies, plans, programs, projects and activities, the Office of Tourism Resource Generation shall be tasked with the collection of necessary fees and charges which shall be used by the Department in the promotion and marketing efforts of the requiring governmental coordination. TPB and the development of infrastructure facilities, utilities and services of the TIEZA. The proceeds of such collection shall accrue directly and automatically to the Department. The guidelines for the collection and disbursement of these proceeds shall be defined in the implementing rules and regulations of this Act.

There is hereby created a special fund, to be disbursed and administered by the Department, called the Tourism Development Fund, which shall be used for the development, promotion and marketing of tourism and other projects of the Department that will boost tourism in the country. The fund shall be sourced from the fees and charges which will be collected by the Department. A special account shall be established for this fund in the National Treasury. Disbursements made from the fund shall be subject to the usual accounting and budgeting rules and regulations.

- The Department shall establish, operate and maintain a regional office in each administrative region in the country. A regional office, headed by a regional director, shall have the following functions:

- The creation, operation and supervision of foreign field offices of the Department shall be retained therein.

- The Office of Special Concerns shall be responsible in effectively coordinating and monitoring the various directives, pronouncements and issuances of the President pertaining to the priorities of the government and the Department.

- The Financial and Management Service shall provide the Department with staff advice and assistance on budgetary, financial and management matters and shall perform such other related functions as may be assigned or delegated to it by the Secretary.

- The Administrative Affairs Service shall provide the Department with staff advice and assistance on personnel information, records, communications, supplies, equipment, collection, disbursements, security, other custodial work and such other related duties and responsibilities as may be assigned or delegated to it by the Secretary.

- The Legal Affairs Service shall provide the Department with staff advice and assistance on all legal matters affecting the Department and perform such other related functions as may be assigned or delegated to it by the Secretary.

- The Internal Audit Service shall be responsible for instituting and conducting an audit program for the Department to ensure compliance with17 existing rules and regulations for an efficient and effective fiscal administration and performance of department affairs.

- The Legislative Liaison Unit shall establish and maintain regular coordination and liaison with Congress, monitor the passage of legislative measures that are in the Departments agenda, provide relevant information and technical support to Members of Congress, and perform such other related functions as may be assigned or delegated by the Secretary.

SUBCHAPTER 11 - B. RATIONALIZATION OF FUNCTIONS

Reorganization of Offices.* - The Philippine Tourism Authority is hereby reorganized as the Tourism Infrastructure and Enterprise Zone Authority, as hereinafter provided. The Philippine Conventions and Visitors Corporation is hereby reorganized as the Tourism Promotions Board, as hereinafter provided. The Bureaus for Domestic and International Tourism Promotions, and the Office of Tourism Information of the Department are hereby absorbed into the Tourism Promotions Board.

- Where certain functions are declared redundant on account of the reorganization, the Department, the TIEZA Board and the Tourism Board shall provide for the reassignment, insofar as practicable, of affected employees to similar positions within the Department and its attached agencies, taking into consideration their skills and experience, without loss of seniority or other rights and privileges. In any case, all relevant laws, decrees, executive orders, rules and regulations concerning the rights of government employees in the reorganization of an office shall be respected.

- There shall be no mandatory separation of any employee as a result of the reorganization of the Department and its attached agencies and corporations. However, if any employee elects to leave the service or retire, said employee shall be entitled to claim separation or retirement benefits as may be provided18 under existing laws governing the civil service or other laws and issuances, whichever may be beneficial to the employee concerned.

SUBCHAPTER 11 - C. ATTACHED AGENCIES AND CORPORATIONS

Attached Agencies and Corporations.* - The TPB, the TIEZA and the DFPC shall be attached to the Department and shall be under the supervision of the Secretary for program and policy coordination. Furthermore, the following agencies and corporations shall be attached to the Department under the supervision of the Secretary for program and policy coordination: the IA; the National Parks Development Committee (NPDC), created under Executive Order No. 30 (1963); the Nayong Pilipino Foundation (NPF), created under Presidential Decree No. 37 (1972), as amended; the PRA; and the Philippine Commission on Sports Scuba Diving (PCSSD). Except as hereinafter provided, each of the attached agencies and corporations shall continue to operate under their respective charters.

Intramuros Administration, National Parks Development Committee and Nayong Pilipino Foundation. - The Intramuros Administration, the National Parks Development Committee and the Nayong Pilipino Foundation shall continue to be attached to the Department and operate under their respective charters. They may be authorized to operate TEZs, under the supervision of the TIEZA, as provided under Chapters IV and V of this Act, within their respective jurisdictions: Provided, That any restoration activity undertaken by the IA, the NPDC or the NPF may be entitled to a tax deduction equivalent to the full cost of the restoration activity directly incurred in accordance with the provisions of the National Internal Revenue Code, as amended.

- For purposes of policy and program coordination, the Philippine Retirement Authority is hereby attached to the Department and placed under the supervision of the Secretary. The Secretary shall be the ex officio Chairperson of its Board of Trustees: Provided, That this provision shall apply after the expiration of the term of office of the incumbent Chairperson.

- The Philippine Commission on Sports Scuba Diving shall likewise be attached to the Department and placed under the supervision of the Secretary, who shall be the ex officio Chairperson of its Board of Trustees. It shall undertake measures to provide the standard basic dive rules to all levels or kinds of divers, regulate scuba sports and technical diving in the country and ensure the safety of the sport through the formulation of policies pursuant thereto, in coordination with the Office of Tourism Standards and Regulations, including the regulation of the accredited scuba sports and technical diving establishments.

SUBCHAPTER 11 - D. CONTROL AND SUPERVISION OF AREAS WITH OVERLAPPING JURISDICTIONS

Rationalization of Tourism Areas, Zones and Spots.* - Any other area specifically defined as a tourism area, zone or spot under any special or general law, decree or presidential issuance shall, as far as practicable, be organized into a TEZ under the provisions of this Act. With respect to tourism zones, areas or spots not organized into TEZs, the Department, through appropriate arrangements, may transfer control over the same or portions thereof, to another agency or office of the government, or to a LGU. This shall only be effected upon the submission by the latter, within a reasonable time, of comprehensive development plans for the use, preservation and promotion of these zones, areas or spots and upon the approval thereof by the Department. Such transfer shall not have the effect of diminishing the jurisdiction of the Department over these zones, areas or spots.

The Department shall exercise supervisory powers over such agency, office or LGU in accordance with the terms of the transfer or the development plan of the zone, area or spot. Where a government agency or office or a LGU fails to implement the comprehensive plan approved by the Department, the Department may rescind the arrangement transferring control over the tourism zone, area or spot and regain such control thereof.

- The Department, in coordination with the Department of Environment and Natural Resources (DENR), shall identify areas covered by the NIPAS with ecotourism potentials and cultural heritage value, and prepare policies, plans and programs for their development, preservation, operation or conversion into TEZs. The designation of these areas as TEZs shall be subject to the provisions of Subchapter IV - A of this Act.

The ecotourism sites in the National Ecotourism Strategy pursuant to Executive Order No. 111 (1999) may also be developed into TEZs with the National Ecotourism Steering Committee responsible for finding the appropriate TEZ operator for the sites.

- The Department, in accordance with the National Tourism Development Plan and local government initiatives, shall coordinate with the Department of Public Works and Highways (DPWH) and the Department of Transportation and Communications (DOTC) in the establishment of a tourism infrastructure program in the respective work programs of said agencies, identifying therein vital access roads, airports, seaports and other infrastructure requirement in identified tourism areas. The said agencies and the Department of Budget and Management (DBM) shall accord priority status to the funding of this tourism infrastructure program.

SUBCHAPTER 11 - E. SHARED RESPONSIBILITIES OF NATIONAL AND LOCAL GOVERNMENTS

Coordination Between National and Local Governments.* - In view of the urgent need to develop a national strategy for tourism development while giving due regard to the principle of local autonomy, the Department, the Department of the Interior and Local Government (DILG) and LGUs shall integrate and coordinate local and national plans for tourism development. The Department may provide financial and technical assistance, training and other capacity - building measures to LGUs for the preparation, implementation and21 monitoring of their tourism development plans, gathering of statistical data, and enforcement of tourism laws and regulations, giving due priority to areas that have been identified as strategic in the implementation of the national tourism development plan. LGUs shall ensure the implementation of such plans. The Department, the TPB and the TIEZA shall prioritize promotion and development assistance for LGUs which successfully adopt and implement their tourism development plans.

- The Department, in coordination with its attached agencies, LGUs and the private sector, shall continuously update the existing national tourism development plan in view of evolving needs and capabilities of LGUs and the domestic and global tourism market.

- LGUs, in consultation with stakeholders, are encouraged to utilize their powers under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, to ensure the preparation and implementation of a tourism development plan, the enforcement of standards and the collection of statistical data for tourism purposes. They shall, insofar as practicable, prepare local tourism development plans that integrate zoning, land use, infrastructure development, .the national system of standards for tourism enterprises, heritage and environmental protection imperatives in a manner that encourages sustainable tourism development.

- In order to monitor the resources of the Department and to ascertain the economic and social impact of tourism, all LGUs shall provide an inventory of all the resources available to the Department for use in the implementation of this Act. They shall likewise periodically report to the Department on the status of tourism plans and programs, tourist arrivals and tourism enterprises, among others, within their jurisdictions.

- In order to encourage global competitiveness, strengthen data gathering and research on tourism, and facilitate the promotion of individual enterprises and the industry as a whole, the Department shall prescribe22 and regulate standards for the operation of the tourism industry. Primary tourism enterprises shall be periodically required to obtain accreditation from the Department as to the quality of their facilities and standard of services. Accreditation shall be voluntary for secondary tourism enterprises.

The Department shall evolve a system of standards for the accreditation of these enterprises in accordance with the relevant tourism development plan. These standards shall adhere, insofar as practicable, to those recognized internationally. The Department and LGLJs shall ensure strict compliance of tourism enterprises with these standards.

The Department, through the Office of Tourism Standards and Regulations, shall act on complaints regarding accredited tourism enterprises, and after notice and hearing, may impose fines, or downgrade, suspend or revoke accreditation, for violation of the terms thereof. The Department shall likewise have the power and the duty to issue tourism advisories pertaining to tourism enterprises found to have violated the terms of their accreditation. A tourism advisory shall contain the following:

The Department may, under such relevant terms and conditions stipulated, delegate the enforcement of the system of accreditation to LGUs that have adopted and successfully implemented their tourism development plans.

The Department shall promulgate the necessary implementing rules and regulations to enforce the provisions of this section pursuant to its powers and functions as defined under Section 6 of this Act.

- The Department shall develop a system to enhance the value of accreditation among primary and secondary tourism enterprises. Only accredited enterprises shall be beneficiaries of promotional, training and other programs of the Department and its attached agencies and corporations.

Accredited enterprises shall, insofar as practicable, give due preference to other accredited enterprises in obtaining relevant services.

The Department shall develop an integrated system of accreditation in coordination with concerned agencies and entities, in order to reduce the regulatory and financial burden on tourism - related enterprises.

- The Department shall develop support and training programs to enhance the capability of LGUs to monitor and administer tourism activities, and enforce tourism laws, rules and regulations in their respective jurisdictions. Funding for such programs shall be shared equitably between the Department and the LGUs concerned.

- Every province, city or municipality in which tourism is a significant industry shall have a permanent position for a tourism officer. He or she shall be responsible for preparing, implementing and updating local tourism development plans, and enforcing tourism laws, rules and regulations. In the performance of his or her functions, the tourism officer shall coordinate with the Department and its attached agencies.

Prior to appointment, every tourism officer must have obtained a relevant bachelors degree and at least five (5) years of substantial involvement in the tourism industry. The Department may also prescribe other relevant qualifications and require periodic completion of training programs. Such qualifications and the powers and functions of tourism officers shall be defined in the implementing rules and regulations of this Act.

- In coordination with the Departments regional offices, every province, city or municipality in which tourism is a significant industry shall establish a tourist information and assistance center to assist tourists and tourism enterprises.

- The tourism councils established in the administrative regions of the country shall meet, on a regular basis, to class& and evaluate tourism destinations, sites and activities within their respective regions. Such classifications and evaluations may be used by the Department and its attached agencies, LGUs, and the private sector as guide in the development and implementation of their respective programs.

Tourism Promotions Board.* - 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 Promotions Board (TPB). The TPB shall formulate and implement an integrated domestic and international promotions and marketing program for the Department.

- The TPB shall be responsible for marketing and promoting the Philippines domestically and internationally as a major global tourism destination, highlighting the uniqueness and assisting the development of its tourism products and services, with the end in view of increasing tourist arrivals and tourism investment. Specifically, it shall market the Philippines as a major convention destination in Asia. To this end, it shall take charge of attracting, promoting, facilitating and servicing large - scale events, international fairs and conventions, congresses, sports competitions, expositions and the like. It shall likewise ensure the regular advertisement abroad of the countrys major tourism destinations and other tourism products, not limited to TEZs. It may also provide incentives to travel agencies abroad which are able to draw tourists and tourism investments to the country.

- The TPB shall be governed and its powers exercised by a Board of Directors ("Tourism Board), composed as follows:

The Chairperson of the Tourism Board shall have voting rights in case of a tie.

The Tourism Board shall appoint a corporate secretary whose functions shall include the preparation of agenda for board meetings, in consultation with the Chairperson.

- The TPB shall have a Chief Operating Officer who must be a Filipino, with a bachelors 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 and27 appointed by the Secretary, and shall have a term of office of six (6) years, unless removed for cause in accordance with law.

- In accordance with Section 47, paragraph (g) of this Act, the Tourism Congress, as created under Chapter VIII, Section 104, shall elect from, among its members the directors to represent the tourism industry in the Tourism Board, specifically the following groups:

- The TPB shall have all the general powers of a corporation provided under the Corporation Code. Furthermore, it shall have the following powers and functions:

- The Tourism Board shall meet at least once a month at the principal office of the TPB, unless the Tourism Board previously agrees in writing to meet at another location.

- The TPB shall have an authorized capital of Two hundred fifty million pesos (Php250,000,000.00) which shall be fully subscribed by the national government.

- The TPB shall draft comprehensive short - , medium - and long - term marketing plans for the Philippines as a destination for travel, business and investment, particularly tourism investment. It shall coordinate, insofar as practicable, with relevant agencies of the government and the private sector in the preparation of such plans.

Such plans shall be duly approved by the Tourism Board. The Chief Operating Officer shall ensure that the marketing plans are duly implemented, and shall periodically report to the Tourism Board the status of their implementation. He or she shall also coordinate to ensure that the other agencies of the government and the private sector which assisted in the preparation of marketing plans perform their respective duties under the plans.

SUBCHAPTER 111 - B. TOURISM PROMOTIONS FUNDING

Tourism Promotions Trust.* - Within one hundred and twenty (120) days from the effectivity of this Ad, an audit shall be conducted by the Commission on Audit to determine the true value of the assets and liabilities of the PTA. After such audit, the TIEZA and the Department, in coordination with the Privatization Council, shall determine which assets shall be put up for sale or lease: Provided, That concerned LGUs interested to manage and operate said assets shall have the right of first refusal. The TIEZA and the Department shall take into consideration the importance of maintaining and preserving the PTA assets which may already be considered cultural treasures and heritage sites, such as the Banaue Hotel and similar assets, which shall not be sold or in any way disposed of and shall be placed under the ownership of the TIEZA for their continued maintenance.

The Tourism Promotions Trust shall hereby be established from the proceeds of the sale or lease of the assets of the PTA. The trust shall be managed by a government - owned bank or financial institution selected by the Tourism Board. Said bank or institution shall report the status and profitability of the trust on a quarterly basis to the Tourism Board, the Secretary, and the Joint Congressional Tourism Oversight Committee created under this Act.

- The proceeds of the following shall be placed in a special Tourism Promotions Fund to finance the activities of the TPB:

- At the beginning of each year, ten percent (10%) of the allocation for promotions and marketing shall be set aside as a Special Contingency Fund of the TPB. This shall be used in the event of emergencies to provide the TPB with sufficient resources to undertake marketing and promotions activities that will encourage sustained tourism interest in the Philippines and that will address the adverse effects of these emergencies.

- Notwithstanding any provision of existing laws, decrees, executive orders to the contrary, the TPB shall be exempt from the payment of corporate income tax, as provided under the National Internal Revenue Code (NIRC) of 1997, as amended.

- The TPB shall be open for membership to entities, groups and individuals with economic, social or cultural interest in travel trade, congresses and conventions

Tourism Enterprise Zones.* - Any geographic area with the following characteristics may be designated as a Tourism Enterprise Zone:

- The TIEZA shall designate TEZs, upon the recommendation of any LGU qr private entity, or through joint ventures between the public and the private sectors. Such designation shall be subject to the provisions of this Act and to minimum requirements which the TIEZA shall subsequently promulgate.

TEZs shall not proliferate in a manner that diminishes their strategic economic and developmental value to the national economy.

- 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:

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.

- 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.* - 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).

- 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.

- The TIEZA shall be governed and its powers exercised by a Board of Directors ("TIEZA Board"), composed as follows:

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 TIEZA shall have a Chief Operating Officer who must be a Filipino, with a bachelors 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.

- The five (5) representative directors shall represent each of the following groups:

- 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.

- 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:

- 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:

- 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.

- The TIEZA shall obtain the funds for its operations from the following:

- 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 governments 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.

- 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.

- 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.

- Tourism enterprises within a TEZ shall register with the TIEZA to avail of incentives and benefits provided for in this Act.

- 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.

- 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.* - 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.

- 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.

- 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 operators 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.

- 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.

- 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.

- 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.

General Principles on the Grant and Administartion Incentives*

Fiscal Incentives Available to TEZ Operators and Registered Enterprises.* - The following incentives may, in the discretion of the TIEZA Board, be granted to registered tourism enterprises within TEZs:

- The following incentives may, in the discretion of the TIEZA Board, be granted to registered tourism enterprises within TEZs:

Incentives Available to Tourism Enterprises Outside TEZs.* - The grant of fiscal and other incentives to tourism enterprises not located within TEZB shall be governed by the following provisions:

Duty Free Philippines Corporation.* - The Duty Free Philippines shall be reorganized to become the Duty Free Philippines Corporation (DFPC), which shall be attached to the Department.

- The DFPC shall be a body corporate to operate the duty - and tax - free merchandising system in the Philippines to augment the service facilities for tourists and to generate foreign exchange and revenue for the government, as established by the Department under Executive Order No. 46.

In the performance of its functions, the DFPC shall have all the general powers of a corporation established under the Corporation Code, in furtherance of its charter.

The DFPC shall have the exclusive authority to operate or franchise out stores and shops that would sell, among others, duty. and tax - free merchandise, goods and articles, in international airports and seaports, and in TEZs and ports of entry throughout the country in a manner that

The DFPC shall likewise be authorized to operate stores and shops within the immediate vicinity of international airports and seaports to service the requirements of the international duty - free market.

The DFPC shall operate without prejudice to any privatization in the future, subject to existing laws on privatization and procedures on public bidding.

- The DFPC shall be governed by a Board of Directors, composed as follows:

The Chairperson of the DFPC Board shall have voting rights in case of a tie.

The DFPC Board shall appoint a corporate secretary whose functions shall include the preparation of agenda for board meetings, in consultation with the Chairperson.

- The DFPC 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.

- The DFPC shall have an authorized capitalization of Five hundred million pesos (Php500,000,000.00) which shall be fully subscribed by the national government. A minimum of fifty percent (50%) of the annual net profits of the DFPC shall be remitted automatically to the Office of the Secretary to fund tourism programs and projects, in lieu of its statutory remittance to the national government under Republic Act No. 7656, seventy percent (70%) of which shall be given to the TPB.

- The DFPC Board shall have the power to sue and be sued; to contract and be contracted with; to own and hold such real and personal property as shall be necessary for corporate purposes; to receive real and personal property by gift, devise or bequest: to adopt a seal and alter the same; to adopt bylaws, rules and regulations; to exercise all the general powers of a corporation under the Corporation Code; and to perform all such acts as may be necessary to carry out this section.

- Consistent with the nature of its operations and primary function to operate as a tax - and duty - free merchandising system, and to enable it to compete in the international tax - and duty - free market, DPPC shall be entitled to exemption from the following:

International and Domestic Tourist Travel.* - The Department, through the development of an inter - modal international and domestic land, sea and air access system, and in coordination with relevant government agencies, shall increase and improve the accessibility of the Philippines to domestic and foreign tourists. Realizing the critical importance of the progressive development of the civil aviation environment in the advancement of the country's international and domestic tourism sector:

- The Department, the DFA and the Department of Justice shall develop a system of granting visas that encourages the arrival and longer stay of tourists in the Philippines.

Tourism Coordinating Council.* - A council that shall serve as a coordinating body for national tourism development efforts shall be formed, consisting of the Secretary, as Chairperson; the TPB Chief Operating Officer; the TIEZA Chief Operating .Officer; the heads of other agencies attached to the Department; the Secretaries of the DOTC, the DPWH, the DFA, the DENR, the DILG, the DOLE and the Department of Education (DepEd); and the heads of the Philippine National Police (PNP), the BI, the National Historical Institute, the National Commission for Culture and the Arts, the PAGCOR, the leagues of LGUs and such other government agencies that the President may designate; a representative each from the Tourism Congress, an accredited NGO or PO engaged in ecotourism, and a recognized indigenous peoples federation.

The Council shall prepare a five (5) - year strategic plan to develop and enhance a culture of tourism. It shall also approve an annual infrastructure development plan that shall promote access to and from airports and seaports, and TEZ and other tourism destinations which shall be accorded priority by the relevant infrastructure agencies of the national government.

- The Department shall work closely with the DepEd for the development of basic education programs - formal, informal and non - formal learning systems and interventions - for in - school and out - of - school youth in the promotion of a cultwe of tourism through the development and integration of tourism concepts and the enhancement of education in languages, history and culture and the arts.

The Department shall also work closely with the CHED in the regulation of colleges and universities that grant undergraduate and postgraduate degrees in tourism.

The Technical Education and Skills Development Authority is hereby mandated to develop, in conjunction with the Department, programs for the training of tourism entrepreneurs by providing programs for languages, history and cultural appreciation, and small business management.

- The PNP shall establish a Tourism Security Force to assist in maintaining peace and order within areas of high tourism traffic. A tourist police assistance desk office shall likewise be established in such areas. The Department shall coordinate with the DILG in training the members of the force in cultural sensitivity, languages and relevant laws.

- Insofar as allowed by applicable laws and their respective charters, government - owned and - controlled banks and financial institutions shall provide microfinance schemes for the assistance and development of small - and medium - scale enterprises in the tourism industry.

- No temporary restraining order or preliminary injunction shall be issued or be effective against the TIEZA unless the same is issued by the Supreme Court.57

- A Joint Congressional Oversight Committee on Tourism, hereinafter referred to as the "Oversight Committee", is hereby constituted in accordance with the provisions of this Act. The Committee shall be composed of the Chairpersons of the Committees on Tourism of both Houses of Congress, the Chairperson of the Committee on Appropriations of the House of Representatives, the Chairperson of the Committee on Finance of the Senate, and three (3) additional members from each House to be designated by the Senate President and the Speaker of the House of Representatives. The Oversight Committee shall be in existence for a period of ten (10) years from the effectivity of this Act.

The Secretary shall report to the Oversight Committee on a monthly basis the latest statistics on tourist arrivals and other relevant data. He or she shall also report, on a quarterly basis, the status of implementation of this Act based on the monthly report submitted thereto by all attached agencies of the Department with respect to the implementation of their respective programs.

- Within thirty (30) days from the publication of the implementing rules and regulations of this Act, the Secretary shall convene a Tourism Congress of representatives of all accredited tourism enterprises and former government officials involved in the tourism industry to serve as the private sector consultative body to assist the government in the development, implementation and coordination of Philippine tourism policy.

The Tourism Congress shall adopt and ratify its constitution, shall elect its officers and shall establish a secretariat, both for the Tourism Congress as a whole and for component sectors. It shall also nominate such representatives as required under this Act. Finally, it shall endeavor to meet annually to carry out its mandate.

Personnel and Compensation.* - The employees and management of the TIEZA, the TPB and the DFPC shall be exempt from the coverage of the Salary Standardization Law.

Subject to existing constitutional and legal prohibitions on double compensation for Board members in an ex officio capacity, the members of the TIEZA Board, the Tourism Board and the DFPC Board shall not be entitled to compensation but may receive reasonable per diems for attendance at regular and special Board meetings.

- All attached agencies of the Department shall submit their annual budgets to the Secretary for approval, and shall furnish copies of the same to the Oversight Committee.

The budgets of the TPB, the TIEZA and the DFPC reported to the Oversight Committee shall contain detailed information on the compensation and benefits received by their employees.

- Upon consultation with stakeholders, the Secretary shall promulgate the implementing rules and regulations of this Act within ninety (90) days after its effectivity. The Oversight Committee shall be furnished a copy thereof immediately after promulgation.

- This Act shall be subject to congressional review by Congress three (3) years after its approval and every three (3) years thereafter.

- The transfer of powers and functions in the Department and agencies attached thereto, as herein provided for, shall take effect within six (6) months after the effectivity of this Act. The foregoing transfer of powers and functions shall include all applicable funds, personnel, records, property and equipment, as may be necessary. The same shall apply to agencies which have been attached to the Department by virtue of this Act.

As such, all offices under the Department and all attached agencies affected by the provisions of this Act shall continue to function under their present mandates until transition is effected as provided for under this Act.

All officers currently serving in the PCVC, the PTA and the DFP Boards shall continue to serve the unexpired portion of the term of the position in the Boards of the TPB, the TIEZA and the DFPC, respectively.

The heads of the agencies shall continue to serve until replaced as provided for under this Act.

- The TPB, the TIEZA and the DFPC shall, by virtue of this Act, be subrogated to all rights and assume all liabilities of the PCVC, the PTA and the DFP, respectively, in accordance with pertinent laws, rules and regulations.

- The provisions of Executive Order No. 120 (Reorganizing the Ministry of Tourism, Defining its Powers and Functions and for Other Purposes); Executive Order No. 292, as amended (The Administrative Code of 1987); Presidential Decree No. 189, as amended, (Creating the Philippine Tourism Authority); Presidential Decree No. 1448, as amended, (Creating the Philippine Convention and Visitors Corporation); Executive Order No. 46 (Granting the Department of Tourism, Through the Philippine Tourism Authority, Authority to Establish and Operate a Duty - and Tax - Free Merchandising System); Executive Order No. 30 (Creating an Executive Committee for the Development of Quezon Memorial, Luneta and Other National Parks); Presidential Decree No. 37 (Creating the Nayong Pilipino Foundation); Presidential Decree No. 1616 (Creating the Intramuros Administration); Presidential Decree No. 442, as amended (Labor Code); Republic Act No. 7160 (The Local Government Code); Republic Act No. 7722 (Creating the Commission on Higher Education); Republic Act No. 9497 (Creating the Civil Aviation Authority of the Philippines); and all other laws, presidential decrees, executive orders, proclamations and administrative regulations inconsistent with the provisions of this Act are hereby amended, modified, superseded or repealed accordingly.

- In the event that any provision of this Act or parts thereof be declared unconstitutional, such declaration shall not affect the validity of the other provisions.

- This Act shall take effect thirty (30) days after its publication in the Official Gazette or in at least two (2) newspapers of national circulation.

Approved,

| PROSPERO C. NOGRALES Speaker of the House of Representatives | JUAN PONCE ENRILE President of the Senate |