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Council asks Aquino, House to amend Renewable Energy Act and stipulate SEF

ORMOC CITY – The city council, during its regular session this week, passed two resolutions urging Pres. Benigno Simeon Aquino III, the Senate and the House of Representatives to amend section 15 letter c of RA 9513 or the Renewable Energy Law of 2008, and to “explicitly provide a one percent (1%) additional levy on real property to exclusively accrue to the Special Education Fund (SEF).”
In the first resolution, the council urged the President to “urge Congress” to amend the said section and “certify such amendment as urgent” considering its “adverse effect on the allocation of Special Education Fund (SEF) of renewable energy producing LGU’s”.
The second resolution, addressed to the Senate and House of Representatives, urged both houses to amend the said provision and explicitly provide for another one percent levy which should accrue exclusively to the SEF, as provided before in the Local Government Code.
The said provision in the Renewable Energy Act of 2008, signed into law by then Pres. Gloria Macapagal-Arroyo, has reduced Ormoc’s tax take from the geothermal plants operating in its mountains to only 1.5 percent instead of the usual 2.5 %, one percent of which was for the SEF.
The council, in the two resolutions, claimed it was “unaware of the public consultation made prior to the passage of the new law” and “therefore missed the opportunity to disclose its position on the salient provisions of RA 9513” especially the said section.
Records on the passage of the law, however, show that ex-Congressman Eufrocino “Dodong” Codilla Sr., Mayor Eric Codilla’s father, was a co-author of the House version. The former congressman, being the representative of a geothermal producing district,  was also automatically a member of the committee on energy which oversees all legislation regarding energy. Its principal author was Pres. Arroyo’s son, Rep. Juan Miguel “Mikey” Arroyo. Both are LAKAS members.
The law was passed on the congressman’s third term, when the Ormoc city officials from his son mayor down to the last councilor were all LAKAS party mates.
It was also learned that the Energy Development Corporation is trying to recover some P49-million from the city as “over payment” on realty taxes it paid for 2009 and 2010.
France Ariola, public relations officer of EDC, said that the team handling the tax matter said the demand for a refund is according to the new law now being implemented by the Renewable Energy Management Board. “The Renewable Energy Act is explicit on the 1.5% special realty tax rate as the maximum applicable for realty and other taxes. Based on the bicameral proceedings, the legislators clearly intended to include all realty and other taxes and levies such as basic realty tax and SEF as part of the 1.5% special realty tax.
Hence, she added, EDC is simply complying with the said rate, as provided for under the new law.  This was confirmed in fact by the Bureau of Local Government Finance that a registered RE Developer shall only be subject to the maximum rate of 1.5% based on the RE Act, which translates to the reduction of the SEF depending on the LGU concerned.  As such, an RE Developer like EDC can no longer distinguish RPT and SEF as new applicable rate of 1.5% now appears to cover both. “
It is now up to the LGU how much it would give to the Special Education Fund.
In his report to the council, councilor Filomeno Maglasang of the city committee on energy said that previously, they had been planning to ask the President to suspend the implementation of the Renewable Energy Law. But that possibility became uncertain, he added, hence the two resolutions.
It remains to be seen if Pres. Aquino will be sympathetic to the cause of the handful of renewable energy producing LGU’s. In Aquino’s second State of the Nation Address, he underscored the different LGU’s propensity of taxing virtually anything just to raise money for themselves, not taking into consideration the long term effects it might have on the whole economy.
To quote, the President said, “Iyan din po ang aking panawagan sa ating Local Government Units. Kabilang po ako sa mga sumasang-ayon na kayo ang pinaka-nakakaalam sa pangangailangan ng taumbayan sa inyong mga lungsod at munisipyo. Makakaasa po ang ating mga LGU sa higit na kalayaan at kakayahan, kung makakaasa rin tayong gagamitin ito sa tuwid na paraan, at isasaalang-alang ang kapakanan ng buong sambayanan. (That is also my call to LGU’s. I agree that you know best what is good for your constituents and we respect that, as long as we see it is being put to good use.)
Halimbawa po, may ilang munisipyo na naisipang magbuwis sa mga transmission lines ng kuryente na dadaan sa kanilang mga pook. Magpapasok nga po ng kita sa kanilang lokal na kaban, pero kapalit nito, tataas din ang gastusin ng mas nakararaming Pilipino sa kuryente.  (For example, some LGUs plan on taxing power transmission lines that pass through their territories. Yes, it will increase their local tax take but in the process, it will increase the cost of operations of these facilities, a cost they will pass on the majority of power users.)”
The President continued to say that he hoped local executives would take the interest of the Filipino people as a whole and not only the welfare of their own areas, because the country’s progress will eventually encompass all.  With a report from M.  Collander



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