Organization and Purpose.
SEC. 15. Organization and Purpose. — Cooperative
non-stock, non-profit membership corporations may be organized, and electric
cooperative corporations heretofore formed or registered under the Philippine
Non-Agricultural Co-operative Act may as hereinafter provided be
converted, under this Decree for the purpose of supplying, and of promoting and
encouraging the fullest use of, service on an area coverage basis at the lowest
cost consistent with sound economy and the prudent management of the business of
such corporations.
Powers.
SEC. 16. Powers. — A cooperative is hereby vested
with all powers necessary or convenient for the accomplishment of its corporate
purpose and capable of being delegated by the President or the National Assembly
when it comes into existence; and no enumeration of particular powers hereby
granted shall be construed to impair any general grant of power herein
contained, nor to limit any such grant to a power or powers of the same class as
those so enumerated. Such powers shall include, but not be limited to, the
power:
(a) To sue and be sued in its corporate name;
(b) To have existence for a period of fifty years;
(c) To adopt a corporate seal and alter the same;
(d) To generate, manufacture, purchase, acquire, accumulate and transmit
electric power and energy, and to distribute, sell, supply and dispose of
electric energy to persons who are its members and to other persons not in
excess of ten per centum of the number of its members: Provided,
however, That a cooperative may furnish electric cold storage or processing
plant service to non-members without limitation: And provided, further,
That a cooperative which acquires existing electric facilities may continue
service from such facilities without requiring such persons to become members,
but such persons may become members upon such terms as may be prescribed in the
cooperative's by-laws;
(e) To assist persons to whom service is or will be supplied by the
cooperative in wiring their premises and in acquiring and installing
electrically powered appliances, equipment, fixtures and machinery for
agricultural, commercial and industrial uses by the financing thereof or
otherwise, and in connection therewith to wire, or cause to be wired, such
premises, and to purchase, acquire, lease as lessor or lessee, sell, distribute,
install and repair such electrically-powered appliances, equipment, fixtures and
machinery;
(f) To assist persons to whom service is or will be supplied by the
cooperative in constructing, equipping, maintaining and operating electric cold
storage or processing plants, by the financing thereof or otherwise;
(g) To construct, purchase, lease as lessee, or otherwise acquire, and to
equip, maintain, and operate, and to sell, assign, convey, lease as lessor,
mortgage, pledge, or otherwise dispose of or encumber, electric transmission and
distribution lines or systems, electric generating plants, lands, buildings,
structures, dams, plants and equipment, and any other real or personal property,
tangible or intangible, which shall be deemed necessary, convenient or
appropriate to accomplish the purpose for which the cooperative is
organized;
(h) To purchase, lease as lessee, or otherwise acquire, and to use, and
exercise and to sell, assign, convey, mortgage, pledge or otherwise dispose of
or encumber franchises, rights, privileges, licenses and easements;
(i) To borrow money and otherwise contract indebtedness and to issue notes,
bonds, and other evidence of indebtedness and to secure payment thereof by
mortgage, pledge, or deed of trust of, or any other encumbrance upon, any or all
of its then owned or after-acquired real or personal property, assets,
franchises, or revenues: Provided, That any borrowing from or any
encumbering of its properties as security in favor of any lending sources other
than the NEA shall require the prior approval of the NEA Administrator and his
certification that such is in furtherance of the purposes and is consistent with
the provisions of this Decree, and that such borrowing and/or encumbering will
not diminish the security of, or of the ability of the cooperative to repay, any
then-outstanding indebtedness of the cooperative to the NEA or any other lending
source below the level of such security and ability were such additional
borrowing not being undertaken;
(j) To construct, maintain and operate electric transmission and distribution
lines along, upon, under and across publicly owned lands and public
thoroughfares, including, without Limitation, all roads, highways, streets,
alleys, bridges and causeways: Provided, That such shall not prevent or
unduly impair the primary public uses to which such lands and thoroughfares are
otherwise devoted;
(k) To exercise the power of eminent domain in the manner provided
by law for the exercise of such power by other corporations constructing or
operating electric generating plants and electric transmission and distribution
lines or systems;
(l) To become a member of other cooperatives or corporations or to own stock
therein, provided such cooperatives or corporations are engaged in a
business or activities germane to or having a reasonable relation to the
business or activities of the cooperative, its members, its directors, or its
employees;
(m) To conduct its business and exercise its powers within or without the
province or provinces in which it supplies service;
(n) To adopt, amend and repeal by-laws;
(o) To fix, maintain, implement and collect rates, fees, rents, tolls and
other charges and terms and conditions for service: Provided, That by
appropriate rules and regulations the NEA shall require that such shall be in
furtherance of the purposes and in conformity with the provisions of this
Decree; and
(p) To do and perform any other acts and things, and to have and exercise any
other powers which may be necessary, convenient or appropriate to accomplish the
purpose for which the cooperative is organized.
Name.
SEC. 17. Name. — The name of a cooperative shall
include the words "Electric" and "Cooperative," and the abbreviation "Inc." The
name of a cooperative organized under this Decree shall be distinct from the
name of any other cooperative already organized or converted under this Decree.
The foregoing requirement shall not apply to any cooperative which becomes
subject to this Decree by complying with the provisions of Section 31.
Incorporators.
SEC. 18. Incorporators. — Five or more persons,
including cooperatives, may organize a cooperative in the manner hereinafter
provided.
Articles of Incorporation.
SEC. 19. Articles of Incorporation. —The articles
of incorporation of a cooperative shall recite that they are executed pursuant
to this Decree and shall state: (a) the name of the cooperative; (b) the address
of its principal office; (c) the names and addresses of the incorporators; and
(d) the names and addresses of its original directors, who shall constitute the
board until the first election of the board by the members; and may contain any
other provisions not inconsistent with this Decree that are deemed necessary or
advisable for the conduct of its business. Such articles shall be signed by each
incorporator and acknowledged by at least two of the incorporators (or on their
behalf, if they are cooperatives). It shall not be necessary to recite in the
articles of incorporation the purpose for which the cooperative is organized or
any of its corporate powers.
By-Laws.
SEC. 20. By-Laws. — Unless reserved to the members
in the articles of incorporation, the power to adopt and thereafter to amend or
repeal by-laws shall vest in and be exercised by the board, the affirmative
votes of a clear majority of all directors in office, after due notice to all
directors, being requisite for such purpose. The by-laws shall set forth the
basic rights and duties of members and directors and may contain any other
provisions for the regulation and management of the affairs of the cooperative
not inconsistent with its articles of incorporation or this Decree.
Members.
SEC. 21. Members. — Each incorporator of a
cooperative shall be a member thereof, but no other person may became a member
thereof unless such other person agrees to use services furnished by the
cooperative when made available by it. Membership in a cooperative shall not be
transferable, except as provided in the by-laws. The by-laws may
prescribe additional qualifications and limitations with respect to
membership.
The provision of any law or regulation to the contrary notwithstanding, an
officer or employee of the Government shall be eligible for membership in any
cooperative if he meets the qualifications therefor and he shall not be
precluded from being elected to or holding any position therein, or from
receiving such compensation or fee in relation thereto as may be authorized by
the by-laws: Provided, That elective officers of the Government except
barrio captains and councilors, shall be ineligible to become officers and/or
directors of any cooperative. For this purpose, individual permission need not
be obtained from the proper head of office: Provided, however, That
this authority shall not be construed as a permit to the government officer or
employee concerned to devote official time to the affairs of the
cooperative.
SEC 22. Meetings of Members. (a) An annual meeting
of the members of a cooperative shall be held at such time and place as shall be
provided in the by-laws.
(b) Special meetings of the members may be called by the President, by the
board, by any three directors or, unless a smaller number or percentage be
prescribed in the by-laws, by not less than 100 members or five per centum of
all members, whichever shall be the lesser.
(c) Except as otherwise provided in this Decree and unless otherwise
provided for in the by-laws, written or printed notice stating the time
and place of each meeting of the members and, in the case of special meeting,
the purpose or purposes for which the meeting is called, shall be given to each
member, either personally or by mail, not less than ten days nor more than
twenty-five days before the date of the meeting. If mailed, such notice shall be
deemed to be given when deposited in the Philippine mail with postage prepaid,
addressed to the member at his address as it appears on the records of the
cooperative.
(d) Unless the by-laws prescribe the presence of a greater or lesser
percentage or number of the members for such purpose, a quorum for the
transaction of business at all meetings of the members of a cooperative having
not more than 1,000 members shall be five per centum of all members, present in
person, and of a cooperative having more than 1,000 members shall be five per
centum of all members or 100, whichever is lesser, present in person. If less
than a quorum is present at any meeting, a majority of those present in person
may adjourn the meeting from time to time without further notice.
(e) Each member shall be entitled to one vote of each matter submitted to a
vote at a meeting of the members. Voting shall be non-cumulative and in person,
but, if the by-laws so provide, may also be by mail or by
proxy.
Waiver of Notice.
SEC 23. Waiver of Notice. — Any person entitled to
notice of a meeting may waive notice in writing either before or after such
meeting; however, his attendance shall constitute a waiver of notice of such
meeting, unless such person participates therein solely to object to the
transaction of any business because the meeting has not been legally called or
convened.
Board of Directors.
SEC. 24. Board of Directors. — (a) The business of
a cooperative shall be managed by a board of not less than five directors, each
of whom shall be a member of the cooperative or of another which is a member
thereof. The by-laws shall prescribe the number of directors, their
qualifications other than those prescribed in this Decree, the manner of holding
meetings of the board and of electing successors to directors who shall resign,
die or otherwise be incapable of acting. The by-laws may also provide for the
removal of directors from office and for the election of their successors.-
Directors shall not receive any salaries for their services as such and, except
in emergencies, shall not receive any salaries for their services to the
cooperative in any other capacity without the approval of the members. The
by-laws may, however, prescribe a fixed fee for attendance at each meeting of
the board and may provide for reimbursement of actual expenses of such
attendance and of any other actual expenses incurred in the due performance of a
director's duties.
(b) The directors of a cooperative named in any articles of incorporation,
consolidation, merger or conversion shall hold office until the next annual
meeting of the members and until their successors are elected and qualify. At
each annual meeting or, in case of failure to hold the annual meeting as
specified in the by-laws, at a special meeting called for that purpose, the
members shall elect directors to hold office until the next annual meeting of
the members, except as otherwise provided in this Decree. Each director
shall hold office for the term for which he is elected and until his successor
is elected and qualifies.
(c) Instead of electing all the directors annually, the by-laws may provide
that each year half of them or one-third of them, or a number as near thereto as
possible, shall be elected on a staggered term basis to serve two-year terms or
three-year terms, as the case may be.
(d) A majority of the board of directors in office shall constitute a
quorum.
(e) The board shall exercise all of the powers of a cooperative not conferred
upon or reserved to the members by this Decree or by its articles of
incorporation or by-laws.
Districts.
SEC. 25. Districts. — The by-laws may provide for
the division of the territory served or to be served by a cooperative into two
or more districts for any purpose, including, without limitation, the nomination
and election of directors. The by-laws shall prescribe the boundaries of the
districts, or the manner of establishing such boundaries, the manner of changing
such boundaries, and the manner in which such districts shall function.
SEC. 26. Officers. The officers of a cooperative
shall consist of a president, vice-president, secretary and treasurer, who shall
be elected annually by and from the board. When a person holding any such office
ceases to be a director, he shall ipso facto cease to hold such office. The
offices of secretary and treasurer may be held by the same person. The board may
also elect or appoint such other officers, agents, or employees as it deems
necessary or advisable and shall prescribe their powers and duties. Any officer
may be removed from office and his successor elected in the manner prescribed in
the by-laws.
Amendment of Articles of Incorporation.
SEC. 27. Amendment of Articles of Incorporation. —
A cooperative may amend its articles of incorporation by complying with the
following requirements: Provided, however, That a change of location of
principal office may effected in the manner set forth in Section 28. The
proposed amendment shall be presented to a meeting of the members, the notice of
which shall set forth or have attached thereto the proposed amendment or an
accurate summary thereof. If the proposed amendment, with any changes, is
approved by the affirmative vote of not less than two-thirds of the total votes
cast thereon at such meeting, articles of amendment shall be executed and
acknowledged on behalf of the cooperative by its president or vice-president and
its seal shall be affixed thereto and attested by its secretary. The articles of
amendment shall recite that they are executed pursuant to this Decree and shall
state: (1) the name of the cooperative; (2) the address of its principal office;
and (3) the amendment to its articles of incorporation. The president or
vice-president executing such articles of amendment shall make the annex thereto
an affidavit stating that the provisions of this Section with respect to the
amendment set forth in such articles were duly complied with.
Change of Location of Principal Office.
SEC. 28. Change of Location of Principal Office. —
A cooperative may, upon authorization of its board or members change the
location of its principal office by filing a certificate reciting such change of
principal office, executed and acknowledged by its president or vice-president
under its seal attested by its secretary, in the place provided for in
Consolidation.
SEC. 29. Consolidation. — Any two or more
cooperatives (each of which is hereinafter designated a "consolidating
cooperative") may consolidate into a new cooperative (hereinafter designated the
"new cooperative"), by complying with the following requirements:
(a) The proposition for the consolidation of the consolidating cooperatives
into the new cooperative and proposed articles of consolidation to give effect
thereto shall be submitted to a meeting of the members of each consolidating
cooperative, the notice of which shall have attached thereto a copy of the
proposed articles of consolidation or an accurate summary thereof.
(b) If the proposed consolidation and the proposed articles of consolidation,
with any amendments, are approved by the affirmative vote of not less than
two-thirds of the total votes cast thereon by each consolidating cooperatives
voting thereon at each such meeting, articles of consolidation in the form
approved shall be executed and acknowledged on behalf of each consolidating
cooperative by its president or vice-president and its seal shall be affixed
thereto and attested by its secretary. The articles of consolidation shall
recite that they are executed pursuant to this Decree and shall state: (1) the
name of each consolidating cooperative and the address of its principal office;
(2) the name of the new cooperative and the address of its principal office; (3)
a statement that each consolidating cooperative agrees to the consolidation; (4)
the names and addresses of the directors of the new cooperative; and (5) the
terms and conditions of the consolidation and the mode of carrying the same into
effect, including the manner in which members of the consolidating cooperatives
may or shall become members of the new cooperative; and may contain any other
provisions not inconsistent with this Decree that are deemed necessary or
advisable for the conduct of the business of the new cooperative. The president
or vice-president of each consolidating cooperative executing such articles of
consolidation shall make and annex thereto an affidavit stating that the
provisions of this Section with respect to such articles were duly complied with
by such cooperative.
Merger.
SEC. 30. Merger. — Any one or more cooperatives
(each of which is hereinafter designated a "merging cooperative") may merge with
one or more other cooperatives by complying with the following requirements:
(a) The proposition for the merger of the merging cooperatives into the
surviving cooperative and proposed articles of merger to give effect thereto
shall be submitted to a meeting of the members of each merging cooperative and
of the surviving cooperative, the notice of which shall have attached thereto a
copy of the proposed articles of merger or an accurate summary thereof.
(b) If the proposed merger and the proposed articles of merger, with any
amendments, are approved by the affirmative vote of not less than two-thirds of
the total votes cast thereon by each cooperative voting thereon at each such
meeting, articles of merger in the form approved shall be executed and
acknowledged on behalf of each such cooperative by its president or
vice-president and its seal affixed thereto and attested by its secretary. The
articles of merger shall recite that they are executed pursuant to this Decree
and shall state: (1) the name of each merging cooperative and the address of its
principal office;(2) the name of the surviving cooperative and the address of
its principal office; (3) a statement that each merging cooperative and the
surviving cooperative agree to the merger; (4) the names and addresses of the
directors of the surviving cooperative; and (5) the terms and conditions of the
merger and the mode of carrying the same into effect, including the manner in
which members of the merging cooperatives may or shall become members of the
surviving cooperative and may contain any other provisions not inconsistent with
this Decree that are deemed necessary or advisable for the conduct of the
business of the surviving cooperative. The president or vice-president or each
cooperative executing such articles of merger shall make and annex thereto an
affidavit stating that the provisions of this Section with respect to such
articles were duly complied with by such cooperative.
Effect of Consolidation or Merger.
SEC. 31. Effect of Consolidation or Merger. — (a)
In the case of consolidation, the existence of the consolidating cooperative
shall cease and the articles of consolidation shall be deemed to be the articles
of incorporation of the new cooperative; and in the case of merger, the separate
existence of the merging cooperatives shall cease and the articles of
incorporation of the surviving cooperative shall be deemed to be amended to the
extent, if any, that changes therein are provided for in the articles of
merger;
(b) All rights, privileges, immunities and franchises and all property, real
and personal, including without limitation applications for membership, all
debts due on whatever account and all other choses in action of each of the
consolidating or merging cooperatives shall be deemed to be transferred to and
vested in the new or surviving cooperative without further act or deed;
(c) The new or surviving cooperative shall be responsible and liable for all
the liabilities and obligations of each of the consolidating or merging
cooperatives, and any claim existing or action or proceeding pending by or
against any of the consolidating or merging cooperatives may be prosecuted as if
the consolidation or merger has not taken place, but the new or surviving
cooperatives shall be substituted in its place; and
(d) Neither the rights of creditors nor any liens upon the property of any
such cooperatives shall be impaired by such consolidation or
merger.
Conversion of Existing Corporation.
SEC. 32. Conversion of Existing Corporation. — Any
corporation heretofore organized or registered under the Philippine
Non-Agricultural Co-operative Act and supplying or having the corporate power to
supply electric energy may convert itself into a cooperative under this Decree
by complying with the following requirements, and shall thereupon become subject
to this Decree with the same effect as if originally organized hereunder:
(a) The proposition for the conversion of such corporation and proposed
articles of conversion to give effect thereto shall be submitted to a meeting of
the members or stockholders of such corporation, the notice of which shall have
attached thereto a copy of the proposed articles of conversion or an accurate
summary thereof.
(b) If the proposition for the conversion and the proposed articles of
conversion, with any amendments, are approved by the affirmative vote of not
less than two-thirds of the total votes cast thereon by members at such meeting,
and/or, if such corporation is a stock corporation or has both members and
voting stockholders, by the affirmative vote of the holders of not less than
two-thirds of those shares of the capital stock of such corporation represented
at such meeting and voting thereon, articles of conversion in the form approved
shall be executed and acknowledged on behalf of such corporation by its
president or vice-president and its seal shall be affixed thereto and attested
by its secretary. The articles of conversion shall recite that they are executed
pursuant to this Decree and shall state: (1) the name of the corporation and the
address of its principal office prior to the conversion into a cooperative; (2)
a statement that such corporation elects to become a cooperative, non-profit,
membership corporation subject to this Decree; (3) its name as a cooperative;
(4) the addresses of the principal office of the cooperative; (5) the names and
addresses of the directors of the cooperative, and (6) the manner in which
members or stockholders of such corporation may or shall become members of the
cooperative; and may contain any other provisions not inconsistent with this
Decree that are deemed necessary or advisable for the conduct of the business of
the cooperative. The president or vice-president executing such articles of
conversion shall make an annex thereto an affidavit stating that the provisions
of this Section were duly complied with in respect to such articles. The
articles of conversion shall be deemed to be the articles of incorporation of
the cooperative.
Dissolution.
SEC. 33. Dissolution. — A cooperative may be
dissolved in the following manner: The proposition to dissolve shall be
submitted to the members of the cooperative at any annual or special meeting,
the notice of which shall set forth such proposition. The members at any such
meeting shall approve, by the affirmative vote of not less than a majority of
all members of the cooperative, the proposition that the cooperative be
dissolved ( hereinafter designated the "certificate") shall be executed and
acknowledged on behalf of the cooperative by its president or vice-president
under its seal, attested by its secretary, stating: (1) the name of the
cooperative; (2) the address of its principal office; and (3) that the members
of the cooperative have duly voted that the cooperative be dissolved. Also, an
affidavit, made by its president or vice-president executing the certificate,
shall state that the statements in the certificate are true. Upon the filing of
the certificate and affidavit as provided for in Section 34, the
cooperative shall cease to carry on its business except to the extent necessary
for the winding up thereof, but its corporate existence shall continue until
articles of dissolution shall have been filed. The board shall immediately cause
notice of the dissolution proceedings to be mailed to each known creditor of and
claimant against the cooperative and to be published once a week for two
successive weeks in a newspaper of general circulation in the territory in which
the principal office of the cooperative is located. The board shall wind up and
settle the affairs of the cooperative, collect sums owing to it, liquidate its
property and assets, pay and discharge its debts, obligations and liabilities,
other than those to patrons arising by reason of their patronage, and do all
other things required to wind up its business; and, after paying or discharging
or adequately providing for the payment or discharge of all its debts,
obligations and liabilities, other than those to patrons arising by reason of
their patronage, shall distribute any remaining sums and/or unliquidated assets,
first, to patrons for the pro rata return of all amounts standing to their
credit by reason of their patronage; second, to members for the pro rata
repayment of membership fees; and third, to patrons for the amounts of any
outstanding contributions in aid of construction they have made. Any sums and/or
unliquidated assets then remaining shall be distributed in such manner as
provided in the cooperative's articles of incorporation or by-laws,
which may provide for distribution of such sums or assets on a patronage basis
to persons who were members in one or more prior years or for transfer thereof
to a new cooperative to succeed the one being dissolved. The board shall
thereupon authorize the execution of articles of dissolution, which shall be
executed and acknowledged on behalf of the cooperative by its president or
vice-president, and its seal shall be affixed thereto and attested by its
secretary. The articles of dissolution shall recite that they are executed
pursuant to this Decree and shall state: (1)the name of the cooperative; (2) the
address of its principal office; (3) the date on which the certificate of
election to dissolve was filed; (4) that there are no actions or suits pending
against the cooperative; (5) that all debts, obligations and liabilities of the
cooperative have been paid and discharged or that provision to the extent
possible has been made therefor; and (6) that the provisions of this Section
have been duly complied with. The president or vice-president executing the
articles of dissolution shall make the annex thereto an affidavit stating that
the statements made therein are true.
Section 34.
Nonprofit, Non-discriminatory, Area Coverage Operation and Service.
SEC. 35. Nonprofit, Non-discriminatory, Area Coverage
Operation and Service. — A cooperative shall be operated on a non-profit
basis for the mutual benefit of its members and patrons; shall, as to rates and
services make or grant no unreasonable preference or advantage to any member or
patron nor subject any member or patron to any unreasonable prejudice or
disadvantage; shall not establish or maintain any unreasonable difference as to
rates or services either as between localities or as between classes of service;
shall not give, pay or receive any rebate or bonus, directly or indirectly, or
mislead its members in any manner as to rates charged for its services; and
shall furnish service on an area coverage basis: Provided, That, for
any extension of service which if treated on the basis of standard terms and
conditions is so costly as to jeopardize the financial feasibility of the
cooperative's entire operation, the cooperative may require such contribution in
aid of construction, such facilities extension deposit, such guarantee of
minimum usage for a minimum term or such other reasonable commitment on the part
of the person to be served as may be necessary and appropriate to remove such
jeopardy, but no difference in standard rates for use of service shall be
imposed for such purpose.
The by-laws of a cooperative or its contracts with members and patrons shall
contain such reasonable terms and conditions respecting membership, the
furnishing of service and the disposition of revenues and receipts as may be
necessary and appropriate to establish and maintain its non-profit, cooperative
character and to assure compliance with this Section, No bona fide applicant for
membership on non-member patronage who is able and willing to satisfy and abide
by all such terms and conditions shall be denied arbitrarily, capriciously or
without good cause.
Disposition of Property.
SEC. 36. Disposition of Property. — (a) The board
of a cooperative shall have full power and authority, without authorization by
the members thereof, to authorize the execution and delivery of a mortgage or a
deed of trust, or the pledging or encumbering otherwise, of any or all of the
property, assets, rights, privileges, licenses, franchises and permits of the
cooperative, whether acquired or to be acquired, and wherever situated, as well
as the revenues therefrom, all upon such terms and conditions as the board shall
determine, to secure any borrowing by or indebtedness of the cooperative.
(b) A cooperative may not otherwise sell, lease or except by consolidation or
merger, otherwise dispose of the property (other than merchandise and property
which shall represent not in excess of ten per centum of the value of the
cooperative's total assets, or which in the judgment of the board are not
necessary or useful in operating the cooperative) unless such sale, lease or,
except in the case of consolidation or merger, other disposition is (1)
authorized by the affirmative vote of not less than a majority of all members of
the cooperative and (2) consented to by the NEA and any other lending source
which then holds a lien on any of the cooperative's properties.
Non-liability of Members for Debts of Cooperative.
SEC. 37. Non-liability of Members for Debts of
Cooperative. — No member shall be liable or responsible for any debts of
the cooperative and the property of the members shall not be subject to
execution therefor.
Limitation of Actions.
SEC. 38. Limitation of Actions. — No action or suit
may be brought against a cooperative, or against any agent, servant or employee
thereof, by reason of the maintenance of electric transmission or distribution
lines, or any related equipment, facilities or machinery, on any real property
after the expiration of a period of five (5) years of continuous maintenance of
such lines or related equipment facilities or machinery.
SEC. 39. Assistance to Cooperatives; Exemption from
Taxes, Imposts, Duties,- Fees; Assistance from the National Power
Corporation. — Pursuant to the national policy declared in Section 2, the
Congress hereby finds and declares that the following assistance to cooperatives
is necessary and appropriate:
(a) Provided that it operates in conformity with the purposes and
provisions of this Decree, a cooperative (1) shall be permanently exempt from
paying income taxes, and (2) for a period ending on December 31; of the
thirtieth full calendar year after the date of a cooperative's organization or
conversion hereunder, or until it shall become completely free of indebtedness
incurred by borrowing, whichever event first occurs, shall be exempt from the
payment (A) of all National Government, local government and municipal taxes and
fees, including any franchise, filing, recordation, license or permit fees or
taxes and any fees, charges, or costs involved in any court or administrative
proceeding in which it may be a party, and (B) of all duties or imposts on
foreign goods acquired for its operations, the period of such exemption for a
new cooperative formed by consolidation, as provided for in Section 29,
to begin from as of the date of the beginning of such period for the constituent
consolidating cooperative which was most recently organized or converted under
this Decree: Provided, That the Board of Administrators shall, after
consultation with the Bureau of Internal Revenue, promulgate rules and
regulations for the proper implementation of the tax exemptions
provided for in this Decree.
(b) The National Power Corporation shall, except with respect to the National
Government, give preference in the sale of its power and energy to cooperatives,
and shall otherwise provide the maximum support of and assistance to
cooperatives of which it is capable, including assistance in developing
dependable and reliable arrangements for their supplies of bulk power, either
from itself, or from other sources. In pursuance of the foregoing policy, the
National Power Corporation shall not, except upon prior written agreement
approved by the cooperative's board, compete in the sale of power and energy
which without regard to the location of the point of delivery thereof, will be
utilized and consumed within any area franchised to a
cooperative.
Exemption from Board of Power and Waterworks and Securities Exchange Commission.
SEC. 40. Exemption from Board of Power and Waterworks and
Securities Exchange Commission. — (a) Cooperatives shall be exempt from
regulation by the Board of Power and Waterworks.
(b) The provisions of the Securities Act shall not apply to any note, bond or
other evidence of indebtedness issued by any cooperative or to any mortgage,
deed of trust, indenture or other instrument executed to secure the same. The
provisions of said Act shall not apply to the issuance of membership
certificates or any other evidence of member or patron interest by a
cooperative.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
