SEC. 37. Local Tourism Development Planning.-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 the 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.

SEC. 38. Reports.-In order to monitor 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 Departments on the status of tourism plans and programs, tourist arrivals and tourism enterprises, among others, within their jurisdictions.

SEC. 39. Accreditation.-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 prescribe 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

and LGUS 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:

(a) Complete identification of the pertinent tourism enterprise;

(b) Location of this entity;

(c) Its registered owner or proprietor and the business address thereof;

(d) The specific term or terms of accreditation violated;

(e) The statement that the advisory shall only be lifted upon continued compliance of the enterprise with the terms of accreditation.

Tourism enterprises registered with the TIEZA in accordance with the pertinent provisions below and availing of the incentives under this Act shall further be ordered to pay back taxes in the amount equivalent to the difference between the taxes that they should have paid had they not availed of the incentives under this Act and the actual amount of taxes being paid by them under the same incentive scheme. The back taxes to be collected shall be computed up to three (3) years directly preceding the date of promulgation of the decision or order finding that the tourism enterprise violated the terms of its accreditation. For this purpose, the Department shall enlist the assistance of the Bureau of Internal Revenue in arriving at an accurate computation of back taxes to be paid by the pertinent tourism

enterprise. The proceeds of these back taxes shall be distributed as follows:

(a) One-third to the national government;

(b) One-third to the LGUS concerned, to be shared by them equally should there be more than one such LGU; and

(c) One-third to the TIEZA.

Nothing in this section shall diminish the powers of the LGUS under the Local Government Code, pertaining to the issuance of business permits, licenses and the like. When an enterprise fails to obtain or loses accreditation, the Department shall notify the LGU concerned so that it may take appropriate action in relation to an enterprise's licenses and permits to operate.

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 power and functions as defined under Section 6 of this Act.

SEC. 40. Value of Accreditation.-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.

SEC. 41. Local Government Capabilities Enhancement.-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.

SEC. 42. Tourism Officers.-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 bachelor's 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.

SEC. 43. Tourism Assistance.-In coordination with the Department's 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.

SEC. 44. Tourism Site Classification.The tourism councils established in the administrative regions of the country shall meet, on a regular basis, to classify 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.

CHAPTER III

TOURISM PROMOTIONS

SUBCHAPTER III-A. TOURISM PROMOTIONS

BOARD

SEC. 45. 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.

SEC. 46. Mandate.-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 country's 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.

SEC. 47. Board of Directors.-The TPB shall be governed and its powers exercised

(e) The Department of Trade and Industry (DTI) Secretary;

(f) The DOTC Secretary; and

(g) 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 49. 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 DFA, the DTI and the DOTC 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 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.

SEC. 48. The Chief Operating Officer.The TPB 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

composed as follows:

(a) The Department Secretary, as Chairperson;

(b) The TPB Chief Operating Officer, as Vice Chairperson;

(c) The TIEZA Chief Operating Officer;

(d) The Department of Foreign Affairs (DFA) Secretary;

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.

SEC. 49. Representative Directors.-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:

(a) Accommodation enterprises;
(b) Travel and tour services;

(c) Land, air and sea tourist transport

services;

the objective of promoting the country and enticing tourists to visit its tourism destinations and to enjoy its tourism products

(f) Contract loans, indebtedness and credit, and issue commercial papers and bonds, in any local or convertible foreign institutions, foreign government entities, and currency from international financial local or foreign private commercial banks

(e) Other tourism enterprise.

If a representative director ceases to be connected with the sector he or she represents, a representative director shall be appointed to serve the unexpired term. SEC. 50. Powers and Functions of the

Tourism Promotions Board.-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:

(a) Organize the TPB in a manner most efficient and economical for the conduct of its business and the implementation of its mandate;

(b) Develop and implement a plan to market the Philippines as a premier tourist destination;

(c) Direct and coordinate the resources and efforts of the government and the private sector in the tourism and allied fields for the full realization of the tourism plans and programs;

(d) Develop and promote the Philippines as a center for international meetings, incentives, conventions exhibitions, sports, medical tourism, and other special events;

(e) Engage in the business of tourism and perform acts in consonance therewith, such as, but not limited to attending conventions and other events abroad in representation of the country, encouraging sales promotions and advertising, and implementing programs and projects with

conditions prescribed by law, rules and regulations;

(g) 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 the Constitution (Article VII, Section 20 and Article XII, Section 2, paragraphs (4) and (5);

(h) Receive donations, grants, bequests and assistance of all kinds from local and foreign governments and private sectors and utilize the same;

(i) Extend loans through government banks and financial institutions, provide grants and other forms of financial assistance for manpower training, heritage preservation, infrastructure development and other programs of the Department;

(j) Obtain the services of local and foreign consultants, and enter into contracts locally and abroad in the performance of its functions; and

(k) perform all other powers and functions of a corporation.

SEC. 51. Meetings of the Board.—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.

SEC. 52. Capitalization.-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.

SEC. 53. Strategic Marketing Plan.-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 III-B. TOURISM PROMOTIONS

FUNDING

SEC. 54. Tourism Promotions Trust.— Within one hundred and twenty (120) days from the effectivity of this Act, 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 TEIZA 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.

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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.

SEC. 55. Tourism Promotions Fund.-The

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

(a) The investment earnings from the Tourism Promotions Trust;

(b) An appropriation from the national government of not less than five hundred million pesos (Php500,000,000.00) annually for at least five (5) years from the time of its constitution;

(c) Seventy percent (70%) of the fifty percent (50%) net income of the DFPC accruing to the Department, in lieu of its statutory remittance to the national government under Republic Act No. 7656, otherwise known as the Dividends Law of 1994;

(d) At least twenty-five percent (25%) of the fifty percent (50%) national government share remitted by the Philippine Amusements and Gaming Corporation (PAGCOR) to the National Treasury pursuant to Republic Act No. 7656; and

(e) At least twenty-five percent (25%) of the national government share remitted by the international airports and seaports to the National Treasury pursuant to Republic Act No. 7656.

In no case shall promotions and marketing activities receive less than fifty percent (50%) of the annual utilization of the fund. Not more than ten percent (10%) of the fund shall be used for all other administrative and operating expenses of the TPB. The unallocated portion of the fund shall be earmarked by the TPB as follows:

(a) For use by the TIEZA in the development of TEZS;

(b) For the Department, to enhance its programs for development planning, heritage preservation and infrastructure