Capitalization and Financing.
SEC. 6. Capitalization and Financing.—The Authority shall have an authorized capital of one hundred million pesos (P100,000,000.00) of which the amount of twenty million pesos (P20,000,000.00) shall be subscribed by the stockholders. Of the subscribed capital, the amount of five million pesos (P 5,000,000.00) shall be fully paid up.
The authorized capital stock of one hundred million pesos (P100,000,000.00), shall be divided into one (1) million shares of stock with a par value of one hundred pesos (P100.00) per share.
The shares of stock of the Authority shall be divided into:
(1) 700,000 common shares (voting)
(2) 300,000 preferred shares (non-voting)
Of the subscribed common shares of 200,000, at least 60% shall be subscribed by the provinces of Laguna and Rizal equally, of which subscription, 25% shall be fully paid.
The remaining common shares shall be open for subscription to cities, municipalities, provinces and private investors.
The preferred shares of stock of 300,000 shall be available for subscription to cities, municipalities, provinces, government corporations and to private investors: Provided, however, That private investors who will subscribe to the common shares shall subscribe and/or purchase one (1) preferred share for every common share held by them.
Powers of Municipal Corporations to Subscribe.
SEC. 7. Powers of Municipal Corporations to Subscribe. —For purposes of attaining the purposes of this Authority, municipalities, cities and provinces are hereby authorized to subscribe, own, buy or hold shares of stock of this Authority.
Operating expenses.
SEC. 8. Operating expenses.—For the operating expenses of the Authority, the sum of five hundred thousand pesos (P500,000.00) is hereby authorized to be appropriated annually for two (2) years from the general fund of the National Government not otherwise appropriated.
Thereafter the Board of Directors may appropriate out of the funds of the Authority such sums as may be needed or necessary for its operating expenses.
Power to issue bonds.
SEC. 9. Power to issue bonds.—Whenever the Board of Directors may deem it necessary for the Authority to incur an indebtedness or to issue bonds to carry out the provisions of this Act, it shall by resolution, so declare and state the purpose for which the proposed debt is to be incurred. The resolution shall he confirmed by the affirmative vote of the stockholders representing a majority of the subscribed capital stock outstanding and entitled to vote.
Bond limit.
SEC. 10. Bond limit.—The bonds shall be issued in such amounts as will be needed at any one time, taking into account the rate at which said bonds may be absorbed by the buying public and the fund requirements of projects ready for execution, and considering further a proper balanced productive and non-productive projects so that inflation shall be held to the minimum.
Form, rates of interest, etc. of bonds.
SEC. 11. Form, rates of interest, etc. of bonds.—The Board of Directors, shall prescribe the form, the rates of interest, the denominations, maturities, negotiability, convertibility, call and redemption features, and all other terms and conditions of issuance, placement, sale, servicing, redemption, and payment of all bonds issued by the Authority under this Act.
The bonds issued by virtue of this Act may be made payable both as to principal and interest in Philippine currency or any readily convertible foreign currency. Said bonds shall be receivable as security in any transaction with the government in which such security is required.
Exemption from tax.
SEC. 12. Exemption from tax.—The Authority shall be exempt from all taxes, licenses, fees, and duties, incidental to its operations. This exemption shall extend to its subsidiary corporations: Provided, That its subsidiary corporations shall be subject to all said taxes, licenses, fees, and duties five (5) years after their establishment under a graduated scale as follows: twenty (20)per centum of all said taxes during the sixth year, forty (40)per centum of all said taxes during the seventh year, sixty (60)per centum of all said taxes during the eight year, eighty (80) per centum of all said taxes during the ninth year, and one hundred (100) per centumof all sold taxes during the tenth year, after said establishment. Such exemption shall include any tax or fee imposed by the government on the sale, purchase or transfer of foreign exchange. All notes, bonds, debentures and other obligation issued by the Authority shall be exempt from all taxes both as to principal and interest, except inheritance and gift taxes.
Sinking Fund.
SEC. 13. Sinking Fund.—A sinking fund shall be established in such manner that the total annual contribution thereto accrued at such rate of interest as may be determined by the Boards of Directors as confirmed by the stock-holders representing a majority of the subscribed capital stock outstanding and entitled to vote, shall be sufficient to redeem at maturity the bonds issued under this Act.
Such fund shall be under the custody of the treasurer of the Authority who shall invest the same in such manner as the Board of Directors may direct; charge all expenses of investment to said sinking fund, and credit the same with the interest on investment and other income belonging to it.
Guarantee by the government.
SEC. 14. Guarantee by the government.—The Republic of the Philippines hereby guarantees the payment by the Authority of both the principal and the interest of the bonds, debentures, collaterals, notes or such other obligations issued by the Authority by virtue of this Act, and shall pay such principal and interest in the event that the Authority fails to do so. In case the Authority shall be unable to pay the said principal and interest, the Secretary of Finance shall pay the amount thereof which is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collaterals, notes or other obligations, unless the sum so paid by the Republic of the Philippines shall be refunded by the Authority within a reasonable time.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
