Exempt Products from Production Share Payment
- The Forest Land Manager (FLM) is exempt from paying production share on:
- Products from thinning, pruning, rouging, and other silvicultural treatments.
- Tops and branches by-products from sawlogs, veneer logs, or pulpwood harvest.
- Harvests from non-wood species planted as intercrops, windbreaks, or greenbreaks.
- Wood and non-wood species planted, maintained, and protected by the FLM at their own expense (e.g., post-harvest replanting).
Establishment of Reforestation Guarantee Fund
- On the seventh year of the FLMA, the FLM must open an interest-bearing bank account called the Reforestation Guarantee Fund.
- The account is in the name of the FLM but requires written concurrence from a DENR authorized representative for withdrawals.
Procedures for Payment and Management of Production Share
- After each harvest and sale, the FLM shall deposit at least 40% of the gross income from specified products into the Reforestation Guarantee Fund.
- Not less than 60 days after harvest and sale, and upon written DENR concurrence, the FLM shall withdraw an amount equal to 30% of gross income, less any previous forest charges paid, and remit it to DENR as the government's production share.
- Remaining funds in the account stay with the FLM for replanting activities.
Provisions for Payment Deferment
- Payment of production share may be deferred due to natural calamities or other justifiable unforeseen circumstances.
- Deferment requires approval from the Community Environment and Natural Resources Office (CENRO) and a revised payment schedule.
- Deferment cannot exceed five years.
Duration and Termination of Production Share Payments
- Production share payments continue throughout the FLMA duration for all final crop species planted with government funds.
- If the FLMA is renewed for another 25 years, production shares apply to crops maturing in the renewal period.
- Payment ends when cumulative production shares equal the real value of the initial government investment.
Expansion of Reforestation Beyond FLMA Area
- After full payment of production shares, the FLM may reforest areas adjacent or contiguous to the original FLMA.
- These new areas must be identified by DENR and planted under mutually acceptable plans considering the FLM's capabilities.
- The FLM has the first option to apply for a new FLMA over these additional reforested areas.
Administrative Changes and Effectivity
- Sections 21 to 35 of the original guidelines have been renumbered to sections 23 through 37, including intermediate decimal numbering for subsections.
- This amended administrative order took effect immediately upon adoption on June 25, 1991.