Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

House Bill No, 2762 _

Introduced by Representative JOSEPH GILBERT F. VIOLAGO

AN ACT
CREATING THE CENTRAL LUZON RAILWAYS CORPORATION, PRESCRIBING ITS
POWER, FUNCTIONS AND DUTIES, AND PROVIDING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Name, Duration and Domicile. - A corporation to serve as the
instrumentality of the Government of the Philippines in providing a railroad and
the transportation system for Central Luzon is hereby created, to be known as the

» Central Luzon Railways Corporation, and hereafter referred to as the Corporation.
The Corporation shall exist for a term of fifty (50) years from the date of the
approval of this Act. It shall have its main office in San Jose City and shall have
branches in Tarlac City and Angeles City. The construction of the railway network
shall consists of two phases within a period of ten (10) years: Phase 1 shall include
all the necessary construction works in San Jose City, Municipality of Mufioz,
Municipality of Guimba, all in the Province of Nueva Ecija and the municipality of
Victoria and Tarlac City, all in the Province of Tarlac; Phase Il shall cover all needed
works from Tarlac City to the Municipality of Capas, Tarlac leading to its last
station in Clark, Angeles City, Pampanga.

SEC, 2. Purposes and Specific Powers. - The Corporation shall have the
following purposes and specific powers:

(a) To own or operate railroads, tramways, and other kinds of land
transportation, vessels and pipelines, for the purpose of transporting for
consideration, passengers, mails and property from San Jose City to Tarlac
City up to Clark, Pampanga.


{b) Asan auxiliary to its main purpose, to own and/or manufacture rolling
stocks, equipment, tools and other appliances and to construct and operate
in connection with its railroad lines, toll viaducts, toll tunnels and the like

SEC. 3, Authorized Capital Stock of Central Luzon Railways Corporation. -
The Authorized Capital Stock of the Central Luzon Railways Corporation shall be
One Billion Pesos (P1 900,000,000.00) divided into Ten Million (P10,000,000.00)
shares at par value shares of one hundred pesos each (P! 06.00) which shall be
fully

subscribed by the Philippine Government, forty percent (40%) of which or Four
Hundred million pesos (P400,000,000.00) shall be initially paid-up and the balance
shall be paid from a continuing annual appropriation of not less than two hundred
million pesos (P200,000,000) which is hereby appropriated from any funds in the
National Treasury not otherwise appropriated. The said amount shall be
programmed and released by the Department of Budget and Management (DBM)
in accordance with the schedule of cash requirements to be prepared and
submitted by the Corporation.

Provided, That this continuing annual appropriation of Two Hundred
million pesos {P200,000,000.00) and the programming and release thereof shall
remain in force until the authorized capital subscribed by the Government shall
have been paid in full

Provided, further, that five (5%) from the proceeds of value-added tax shall

be allocated for ten (10) years starting from the passage of this Act to start the

* needed groundwork for its expansion to cover the provinces of Bataan, Zambales

and Bulacan and which allocation shall be administered by the Department of
Transportation.

SEC. 4. General Powers. - The Corporation shall have the following general
powers:

(a) To doaill such other things and to transact all such business directly or
indirectly necessary, incidental or conducive to the attainment of the
purpose of the corporation; and

(b) To exercise all powers of a railroad corporation under the Corporation
Law.

SEC. 5. Board of Directors, Composition and Appointment. - [he corporate
powers of the corporation shall be vested in and exercised by a Board of Directors
of not more than seven and not less than three members as may be fixed by the
President of the Philippines, consisting of chairman, vice-chairman, and other
members appointed by the President of the Philippines. The members of the
Board need not be stockhalders of the Corporation, The first members of the


Board shall serve as designated by the President in,their appointments for terms
‘of one, two, and three years, respectively, from the date they qualify and assume
office; but their successors shall be appointed for terms of three, except that any
person chasen to fill a vacancy shall serve only for the unexpired term of the
member whom he succeeds.

The Chairman and all the members of the Board must be residents of Central
Luzon for at least ten (10) years prior to the appointments.

SEC. 6. Powers and Duties of the Board of Directors. - The Board of Directors
shall have the following powers and duties:

(a) To prescribe, amend and repeal the by-laws, rules and regulations
governing the manner in which the general business of corporation may be
exercised, including provisions for the formation of such committee or
committees as the Board of the Directors may deem necessary to facilitate
its business.

{b) To appoint and fix the compensation General Manager, subject to
the approval of the President of the Philippines, and to appoint and fix the
compensation of the other officers of the Corporation. The Board by a
majority vote of all the members may, for cause, suspend and/or remove
the General Manager.

(c) To approve the annual and/or such supplemental budgets of the
Corporation which may be submitted to it by the General Manager from
time to time.

SEC. 7. Suspension and Removal of Directors. - Any member of the Board
of Directors may, for cause, be suspended or removed by the President of the
Philippines.

SEC, 8. Prohibition for Board Members. - No Chairman or member of the
Board of Directors of the Corporation shall at the same time serve in the
Corporation m any capacity whatsoever other than as Chairman or member
thereof, unless otherwise authorized by the President of the Philippines or existing
law.

SEC. 9. Management. - The management of the Corporation shall be vested
in the General Manager.

SEC, 10, Powers and Duties of the General Manager, - the General
Manager shall have the following powers and duties:

(a) To direct and manage the affairs and business of the Corporation on
behalf of the Board of Directors, and subject to its contro! and supervision;


(b) To sit in all meetings of the Board of Directors, as Vice-chairman, and
participates in its deliberations, with the right to vote, and to preside any
meetings for or in the absence of the Chairman;

(c) To submit within sixty (60) days after the close of each fiscal year an
annual report, through the Board of Directors, to the office of the President
of the Philippines;

{d) To appoint and fix the number and salaries, with the approval of the
Board of Directors, to remove, suspend, or otherwise discipline, for cause,
any subordinate employee of the Corporation; and

(e) To perform such other duties as may be assigned to him by the Board
of Directors from time to time.

SEC. 11. Appointment and Promotion. - \n the appointment and promotion
of officers and employees, merit and efficiency shall serve as basis, and no political
test or qualification shall be prescribed end considered for such appointments or
promotions. Said officers and employees shall be subject to the Civil Service Law,
rules and regulations.

SEC. 12, Exemption from Taxes and Duties and Port Charges. - The
Corporation is hereby exempt from payment of all taxes of every name and
naturemunicipal, city, provincial or national—upon its capital stock, franchises,
right of way, earnings, and all other property owned or operated by it and all
duties on all railways materials, supplies and equipment imported in the
Philippines for and/or by the said Corporation.

SEC. 13. Audit Personnel and Report. —

{a) Personnel - The Commission on Audit shall appoint a representative who
shall be the Auditor of the Corporation, and the necessary personnel to assist
said representative in the performance of his/her duties.

(b) Report - The financial transaction of the Corporation shall be audited in
accordance with law, administrative regulations and the principles and
procedures applicable to commercial corporate transactions. A report of audit
for each fiscal year, by the representative of the Commission on Audit, through
the latter, to the Board of directors of the Corporation, and copies thereof shall
be furnished the President of the Philippines, and the Chairmen of the Senate
Committee on Public Services and the House Committee on Transportation. The
report shall set forth the scope of the audit and shall include a statement of
assets and liabilities, capital and surplus or deficit; a statement and surplus or
deficit analysis; statement of income arid expenses; a statement of sources and
application of funds; and such recommendations and information as may be
necessary, together with.such recommendations with respect thereto as may


be advisable, including a report of any impairment of capital noted in the audit.
‘The report also shows specifically any program, expenditures or other financial
transaction or undertaking observed in the course of audit, which in the opinion
‘of the Auditor, has been carried on or made without authority of law.

SEC. 14, Legal Counsel. - The Corporation shall have its own Legal
department, the chief and members of which shall be appointed by the Board of
Directors.

SEC. 15. Exemption from the Land Transportation Commission Act.- The
Corporation shall not be subject to the authority and supervision of the Land
Transportation Office and the Philippine National Railways.

SEC. 16. Liquidation. - When its term or period of existence has expired in
‘accordance with the provision of this Act, the Corporation shall nevertheless
continue as a body corporate for three (3) years after the time of its dissolution
for the purpose of prosecuting and defending suits by or against it and of enabling
it gradually to settle and close its affairs, to dispose of and convey its properties,
but not for the purpose of continuing the business for which it was established. in
order to carry out its liquidation, upon the dissolution of the Corporation, a Board
of Liquidators shall be appointed by the President to take charge of winding up its
corporate affairs and effecting its liquidation.

SEC. 17. Strikes During National Emergency. - The provisions of law to the
contrary notwithstanding, in cases of national emergency, or when in the opinion
of the President of the Philippines, the national security or interest isin imminent
danger, employees and laborers of the Corporation shall not strike for the
purpose of securing changes or modification in their terms and conditions of
employment during said period of emergency.


SEC. 18. Reversion of General Funds. - All funds resulting from dissolution
and liquidation of the Corporation as herein provided shall revert to the general
funds of the Government.

SEC. 19. Applicability of the Corporation Law. - The provisions of the
Corporation Law which are not inconsistent with the provisions of this Act, shall
be applicable to the corporation created hereby.

SEC, 20. Repealing Clause. - The provisions of Republic Act No. 4156, as
‘amended, creating the Philippine National Railways and all acts, executive
orders, administrative orders" and proclamations or parts thereof inconsistent
with any of the provision of this Act, are hereby repealed or modified
accordingly.

SEC, 21. Separabilitv Clause. - \f any part or provision of this Act is
declared invalid or unconstitutional, the remaining parts or provisions not
affected thereby, shall remain in full force and effect.

SEC. 22. Effectivjty Clause. - This Act shall take effect upon its approval.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

SD
fy” E-Filed
& RECEIVED <2
= DATE July 29, 2022 a

House Bill No,_2762_

Introduced by Representative JOSEPH GILBERT F. VIOLAGO

EXPLANATORY NOTE

The Philippine National Railways used to operate in 479 kilometers of
route from La Union up to the Bicol region. However, due to neglect and
mismanagement, PNRs coverage was greatly reduced. On the North Main Line,
it served the provinces of Bulacan, Pampanga, Tarlac, Nueva Ecija, Pangasinan
and La Union and on the South Main Line, Batangas. Due to its decline, buses
became the most favorable mode of transport.

it was reported many times before that the North Main Line will be partly
replaced under the current Northrail Project, but due to the numerous
problems— legal, technical and administrative— as well as unresolved funding
controversies and anomalies hounding the project, we could not expect any swift
resolution of these complexities and an effective start of this project in the years
to come.

Hence, this project is proposed.

It is of common knowledge that all vehicles coming from Northern Luzon
going to the National Capital Region and vice-versa either passes at McArthur
Highway in the western board or at Maharlika Highway, formally known as Pan-
Philippine Highway in the east.

These strategic highways cover the provinces of Tarlac and Nueva Ecija—no
goods and passenger reach Manila without having to pass either route.

Yet, despite its strategic locations in facilitating economic development,
the full potentials of Central Luzon is not realized. True, they are considered the
powerhouses in grain production, alongside its sister provinces and one of the
biggest contributors to the nation's economy, but its industrial progress still
remains distant as it lacks the necessary nexus and infrastructure development
that could propel it to be one powerful industrial center while at the same time


contributing to the rapid development of tourism m the provinces of Northern
Luzon.

Verily, this proposed railway network will immensely benefit the region's
populace in terms of faster and safer transport services, but will also accelerate
trade and commercial activities and enhance the productivity of the people not
justin the region but also in all of the northern provinces of Luzon.

Just imagine its potentials when connecting trains from Pangasinan
Jeading to La Union in the years ahead will link up with this proposed railway
system of Central Luzon could complete an ideal rail transport network that
would certainly usher in a booming agricultural development and
industrialization. With a simultaneous rehabilitation ‘and revitalization of the
Bicol railway network, the country would have achieved an integrated modem
and efficient railway network leading to all of Luzon's airports and seaports,
carrying thousands ‘of people and goods every day, with Central Luzon serving a5
the primary dynamo and model for such goal and vision.

One-stop central depots for grains and other agricultural products could
‘also be developed in both Tarlac City, San Jose City and Clark, ‘Angeles City which
will reduce considerably the cost of transporting goods to Manila and which will
help ease traffic congestion in ‘Metro Manila. The mobility of those going to the
North Luzon will also be improved.

in view of the myriad and optimal benefits to socio-economic
development that this proposed bill seeks to attain, the passage of this measure
is earnestly requested.

JOSEPH GILBERT F. VIOLAGO