Further Promoting the Renewable Energy

Denate Office of the Suretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 26 FEB -9 P2:29 First Regular Session SENATE RECEIVED BY 1807 S.B. No. _ Introduced by SENATOR IMEE R. MARCOS AN ACT FURTHER PROMOTING RENEWABLE ENERGY, AMENDING THEREFOR REPUBLIC ACT NO. 9513, OTHERWISE KNOWN AS THE "RENEWABLE ENERGY ACT OF 2008" AND REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS "THE LOCAL GOVERNMENT CODE OF 1991," AND FOR OTHER PURPOSES EXPLANATORY NOTE Article II, Section 16 of the 1987 Constitution provides that, "the State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature." Studies show that renewable energy resources (ie. sunlight, geothermal, heat, wind, tides, water, and other biomass) provide cleaner and better alternatives to fossil fuels since the former help reduce carbon emissions. Article X, Section 7 of the 1987 Constitution also provides that "local governments shall be entitled to an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas, in the manner provided by law, including sharing the same with the inhabitants by way of direct benefits." Thus, the Local Government Units (LGU's) should be treated as effective partners in promoting the development of renewable energy by giving them their just share in the proceeds of the utilization and development of renewable energy potentials in their areas. Unfortunately, a shift to renewable energy has been hampered by the lack of local government enthusiasm in renewable energy resources due to loss of livelihood and/or income, reduced collection in real property taxes, deleterious effects to native biodiversity and fisheries, raising the risk of tsunamis or storm surges, as well as health

concerns from rising temperatures and vibration. Further, Republic Act No. 9513, otherwise known as the "Renewable Energy Act of 2008" failed to address the constitutionally mandated just share of the LGUs in the proceeds of such activity. For instance, the Province of Ilocos Norte, which is known as the "Renewable Energy Capital of Southeast Asia", generates more than 280 megawatts of renewable energy resources through the windmills in the municipalities of Bangui, Burgos, and Pagudpod, the solar power plant in the Municipality of Currimao, and the hydroelectric plant in the Municipality of Pagudpud. Unfortunately, these LGU's collect much reduced amounts in real property taxes, collect with Renewable Energy (RE) developers merely paying much-reduced real property taxes often under protest. Thus, this bill seeks to amend Republic Act No. 9513 to secure a reasonable share of the LGU's in the promotion and development of renewable energy. Further, to prevent violent incidents such as the bombing of the two transmission towers of the Pagudpud Wind Farm of North Luzon Renewables (NLR), in 2016, the bill thus seeks to ensure safety and security measures by the Philippine National Police and, in times of alleged terrorism or insurgency, the Armed Forces of the Philippines, in protecting critical infrastructure such as power generation facilities. Given the abovementioned circumstances, the immediate passage of this bill is earnestly sought. Free h. Marca IMEE R. MARCOS

Sentale Office of thr secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES FEB -9 P2:29 First Regular Session SENATE RECEIVED BY 1807 S.B. No. _ Introduced by SENATOR IMEE R. MARCOS AN ACT FURTHER PROMOTING RENEWABLE ENERGY, AMENDING THEREFOR REPUBLIC ACT NO. 9513, OTHERWISE KNOWN AS THE "RENEWABLE ENERGY ACT OF 2008" AND REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS "THE LOCAL GOVERNMENT CODE OF 1991," AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. A new section in Chapter III of R.A. No. 9513 is hereby inserted, to

read as follows: "SECTION 6-A. PROJECT ENDORSEMENT BY THE LOCAL GOVERNMENT UNIT. - NO RENEWABLE ENERGY SERVICE (OPERATING) CONTRACT SHALL BE SIGNED BETWEEN THE DEPARTMENT OF ENERGY (DOE) AND THE RENEWABLE ENERGY (RE) DEVELOPER WITHOUT THE ENDORSEMENT FROM THE LEGISLATIVE BODY OF THE CONCERNED LOCAL GOVERNMENT UNIT (LGU). SUCH ENDORSEMENT SHALL NOT BE UNREASONABLY WITHHELD BY THE LGU. FOR THIS PURPOSE, THE LGU AND RE DEVELOPER SHALL CONDUCT PUBLIC CONSULTATIONS WHERE THE CONSTITUENTS ARE ADEQUATELY INFORMED OF THE DETAILS OF THE PROPOSED RENEWABLE ENERGY PROJECT AND THAT THEY ARE GIVEN THE OPPORTUNITY TO EXPRESS THEIR VIEWS ON THE ISSUE."

SEC. 2. Section 13 of R.A. No. 9513 is hereby amended, to read as follows:

"Section 13. Government Share. - The government share on existing and new RE development projects shall be equal to [one percent (1%)] TWO PERCENT (2%) of the gross income of RE resource developers resulting from the sale of renewable energy produced and such other income incidental to and arising from the renewable energy generation, transmission, and sale of electric power except for indigenous geothermal energy, which shall be at [one and a half percent (1.5%)] TWO AND A HALF PERCENT (2.5%) of gross income. PROVIDED THAT, THE GOVERNMENT SHARE SHALL BE ALLOCATED TO THE NATIONAL GOVERNMENT AND THE LGU UNDER A 40-60 RATIO. PROVIDED FURTHER THAT, THE SHARE OF THE LGU SHALL BE DISTRIBUTED, AS FOLLOWS: (A) FORTY PERCENT (40%) TO THE CONCERNED PROVINCE; (B) THIRTY PERCENT (30%) TO THE CONCERNED CITY OR MUNICIPALITY; AND (C) THIRTY PERCENT (30%) TO THE CONCERNED BARANGAY. THE SHARE OF EACH LOCAL GOVERNMENT UNIT SHALL BE RELEASED, WITHOUT NEED OF ANY FURTHER ACTION, DIRECTLY TO THE PROVINCIAL, CITY, MUNICIPALITY, OR BARANGAY TREASURER, AS THE CASE MAY BE, ON A QUARTERLY BASIS WITHIN FIVE (5) DAYS AFTER THE END OF EACH QUARTER, AND WHICH SHALL NOT BE SUBJECT TO ANY LIEN OR HOLDBACK THAT MAY BE IMPOSED BY THE NATIONAL GOVERNMENT FOR WHATEVER PURPOSE. To further promote the development of RE projects, the government hereby waives its share from the proceeds of micro-scale projects for communal purposes and non-commercial operations, which are not greater than one hundred (100) kilowatts."

SEC. 3. Section 290 of R.A. No. 7160 is hereby amended, to read as follows:

"Section 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry, [and] fishery charges, POWER

GENERATION PROJECTS and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction."

SEC. 4. Section 15 of R.A. No. 9513 is hereby amended, to read as

follows: "Section 15. Incentives for Renewable Energy Projects and Activities. - RE developers of renewable energy facilities, including hybrid systems, in proportion to and to the extent of the RE component, for both power and non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be entitled to the following incentives: xXX" (c) Special Realty Tax Rates on Equipment and Machinery. - Any law to the contrary notwithstanding, realty and other taxes on [civil works, equipment L] AND machinery t, and other improvements] of a Registered RE Developer actually and exclusively used for RE facilities shall not exceed one and a half percent (1.5%) of their original cost less accumulated normal depreciation or net book value: Provided, That in case of an integrated resource development and generation facility as provided under Republic Act No. 9136, the real property tax shall only be imposed on the power plant; XXX"

SEC. 5. A new section in R.A. No. 9513 is hereby inserted, to read as follows:

"SEC. 33. THE PHILIPPINE NATIONAL POLICE (PNP) SHALL ENSURE THAT SAFETY AND SECURITY MEASURES SHALL BE ENFORCED, AT ALL TIMES, TO PROTECT CRITICAL INFRASTRUCTURE, INCLUDING BUT NOT LIMITED TO, POWER GENERATION FACILITIES."

SEC. 6. A new section in R.A. No. 9513 is hereby inserted, to read as follows:

"SEC. 34. WHENEVER TERRORISM OR INSURGENCY IS ALLEGED AND WHEN PUBLIC SAFETY REQUIRES IT, THE LGUS MAY CALL UPON THE ARMED FORCES OF THE PHILIPPINES (AFP) TO SUPPRESS VIOLENCE AND DEFEND

CRITICAL INFRASTRUCTURE, INCLUDING BUT NOT LIMITED TO, POWER GENERATION FACILITIES."

SEC. 7. The sections in R.A. No. 9513 shall be renumbered accordingly.

SEC. 8. Separability Clause. - If for any reason any part or provision of this Act

shall be deemed unconstitutional or invalid, the other sections or provisions hereof shall not be affected and shall remain in force and effect.

SEC. 9. Repealing Clause. - All laws, decrees, executive issuances, rules and

regulations inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,