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FOURTEENTH CONGRESS OF THE REPUBLIC 
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7 
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OF THE PHILIPPINES 
First Regular Session 
1 
S E N A T E  
I\ECE!VED mt :..- 
Senate Bill No. 
5 08 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
It has long been a policy of the State to promote the electrification of the 
entire nation. 
Under P.D. 269 (National Electrification Administration Decree), it was the 
policy of the state to provide “the total electrification of the Philippines on an area 
coverage basis” the same “being vital to the people and the sound development 
of the nation”, and “to promote, encourage and assist all public service entities 
engaged in supplying electric service, particularly electric cooperatives” by 
‘‘giving every tenable support and assistance”. 
The loss of the tax-exempt status of electric cooperatives under P.D. 269 
has been affirmed by the Supreme Court on June 10, 2003 in G.R. No. 143-736 
entitled “Philippine Rural Electric Cooperatives Association Inc. vs. The 
Secretary, Department of Interior and Local Government.” The Supreme Court, in 
its decision, stated that the remedy of electric cooperatives under P.D. 269, to 
regain their tax-exempt status, is not judicial. 
Electric cooperatives under P.D. 269 have complained that because of 
cumbersome legal and technical requirements, they cannot register or convert as 
stock cooperatives under R.A. No. 6938. These cooperatives are now facing 
severe difficulty to sustain their financial viability and strength because of the loss 
of their financial viability and strength due to the loss of their tax-exempt status. 
To remedy the plight of electric cooperatives created under P.D. 269, 
there is now a need to amend Sections 196 and 234 (d) of the Local Government 
Code. This amendment will restore the tax-exemption privileges that electric 
cooperatives have enjoyed in the past. 
In view of these, passage of this bill is earnestly recommended. 
C_ 
)Senator 
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FOURTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
) 
OF THE PHILIPPINES 
S E N A T E  
Senate Bill No. 508 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
TO 
RESTORE THE TAX EXEMPTION PRIVELEGES OF ELECTRIC 
COOPERATIVES CREATED UNDER P.D. 269, OTHERWISE KNOWN AS THE 
“NATIONAL ELECTRIFICATION ADMlNJSTRATJON DECREE”, AMENDING 
FOR THIS PURPOSE SECTION 193 AND 234 (d) OF R.A. NO. 7160 
OTHERWISE KNOWN AS THE “LOCAL GOVERNMENT CODE OF 1991” 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 193 of Republic Act No. 7160 is hereby amended to read as 
follows: 
“Section 193. Withdrawal of Tax Exemption Privileges. - 
Unless otherwise provided in this Code, tax exemptions or 
incentives granted to, or presently enjoyed by all persons, whether 
natural or judicial, including government-owned AND controlled 
corporations, except local water districts, cooperatives duly 
registered under R.A. No. 6938, ELECTRIC COOPERATIVES 
DULY REGISTERED UNDER P.D. 269, non-stock and non-profit 
hospitals and educational institutions, are hereby withdrawn upon 
the effectivity of this Code.” 
SEC. 2. Section 234 (d) of Republic Act No. 7160 is hereby amended to read as 
follows: 
“Section 234. Exemption from Real Property Tax. x x x 
(d) All real property owned by duly registered cooperatives as 
provided for under R.A. No. 6938 (;) and DULY REGISTERED 
ELECTRIC COOPERATIVES UNDER P.D. 269; x x x ” 
SEC. 3. Repealing Clause - All laws, decrees, executive order, and rules and 
regulations, or parts thereof, inconsistent with the provisions of this Act, are 
hereby repealed or modified accordingly. 
SEC. 4. Separability Clause. - If, for any reason, any section or provisions of this 
Act is held unconstitutional or invalid, the other sections or provisions hereof shall 
not be affected and thereby remain in full force and effect. 
SEC. 5. Effectivity Clause - This Act shall take effect fifteen (15) days after its 
complete publication in at least two (2) national newspapers of general 
circulation. 
Approved,