CHAPTER XIV

GOVERNMENT SHARE

Section 80
Government Share in Mineral Production Sharing Agreement

The total government share in a mineral production sharing agreement shall be the excise tax on
mineral products as provided in Republic Act No. 7729, amending Section 151(a) of the National
Internal Revenue Code, as amended.

Section 81
Government Share in Other Mineral Agreements

The share of the Government in co-production and joint-venture agreements shall be negotiated by
the Government and the contractor taking into consideration the:

a. capital investment of the project;

b. risks involved;

c. contribution of the project to the economy; and

d. other factors that will provide for a fair and equitable sharing between the Government and
the contractor.

The Government shall also be entitled to compensations for its other contributions which shall be
agreed upon by the parties, and shall consist, among other things, the contractor's income tax,
excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising
from dividend or interest payments to the said foreign stockholders, in case of a foreign national, and
all such other taxes, duties and fees as provided for under existing laws.

The Government share in financial or technical assistance agreement shall consist of, among other
things, the contractor's corporate income tax, excise tax, special allowance, withholding tax due from
the contractor's foreign stockholders arising from dividend or interest payments to the said foreign
stockholder in case of a foreign national and all such other taxes, duties and fees as provided for
under existing laws.

The collection of Government share in financial or technical assistance agreement shall commence
after the financial or technical assistance agreement contractor has fully recovered its pre-operating
expenses, exploration, and development expenditures, inclusive.

Section 82
Allocation of Government Share

The Government share as referred to in the preceding sections shall be shared and allocated in
accordance with Sections 290 and 292 of Republic Act No. 7160 otherwise known as the Local
Government Code of 1991. In case the development and utilization of mineral resources is
undertaken by a government-owned or -controlled corporation, the sharing and allocation shall be in
accordance with Sections 291 and 292 of the said Code.
Section 66. Benefits to Host Communities. - The obligations of generating companies and energy
resource developers to communities hosting energy generating facilities and/or energy resource
developers as defined under Chapter II, Sections 289 to 294 of the Local Government Code and
Section 5(i) of Republic Act No. 7638 and their implementing rules and regulations and applicable
orders and circulars consistent with this Act shall continue: Provided, further, That the obligations
mandated under Chapter II, Section 291 of Republic Act No. 7160, shall apply to privately-owned
corporations or entities utilizing the national wealth of the locality.

To ensure the effective implementation of the reduction in cost of electricity in the communities
where the source of energy is located, the mechanics and procedures prescribed in the Department
of the Interior and Local Government (DILG)-DOE Circulars No. 95-01 and 98-01 dated October 31,
1995 and September 30, 1998, respectively and other issuances related thereto shall be pursued.

Towards this end, the fund generated from the eighty percent (80%) of the national wealth tax shall,
in no case, be used by any local government unit for any purpose other than those for which it was
intended.

In case of any violation or noncompliance by any local government official of any provision thereof,
the DILG shall, upon prior notice and hearing, order the project operator, through the DOE, to
withhold the remittance of the royalty payment to the host community concerned pending completion
of the investigation. The unremitted funds shall be deposited in a government bank under a trust
fund.