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THIRTEENTH CONGRESS OF THE REPUBLIC 
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OF THE PHILIPPINES 
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First Regular Session 
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s;' No. 
introduced by Senator S. R. OsmeAa 111 
EXPLANATORY NOTE 
It is a known fact that a modern and efficient railroad system is one of the 
cheapest forms of land transportation available. A railroad system that would cut 
across the central plain of Luzon onward to the Cagayan valley region will certainly 
stimulate economic activity. 
This bill aims to create the North Luzon Railways Corporation. It shall: 
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Own or operate railways, tramways and other kinds of land transportation 
vessels and pipelines, to transport passengers, mail and property between 
any points in Cagayan, Isabela, Nueva Vizcaya and Nueva Ecija; and 
2. Own and operate or grant franchises for the operation of land transportation, 
vessels and pipelines in support of or in supplement of its railways lines. 
In view of the above, the early passage of this bill is earnestly requested 
SERGIO OSMENA 111 
Senator 
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THIRTEENTH CONGRESS OF THE REPUBLI 
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:I-) 
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OF THE PHILIPPINES 
1 
First Regular Session 
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lntroduced by Senator S. R. OsmeAa 111 
AN ACT 
CREATING THE NORTH LUZON RAILWAYS CORPORATION, PRESCRIBING ITS 
POWERS, FUNCTIONS AND DUTIES, AND PROVIDING FUNDS THEREFOR AND 
FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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SECTION 1. Name, Duration and Domicile. - A  corporation to serve as 
the instrumentality of the Government of the Philippines in providing a North 
Luzon railroad system, is hereby created to be known as the North Luzon 
Railways Corporation (NLRC), which shall exist for a term of fifty (50) years from 
the date or approval of this Act. It shall have its main office in Tuguegarao, and 
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shall have such branches and agencies in San Jose, Nueva Ecija, Bayombong, 
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Nueva Viscaya; Santiago, Isabela; and Aparri, Cagayan for the proper conduct 
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of business. 
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SEC. 2. Purpose and Specific Powers. - The NLRC shall have the 
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following purpose and specific powers: 
a. To own or operate railroads, tramways, and other kinds of land 
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transportation, vessels and pipelines, for the purpose of transporting , 
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for consideration, passengers, mail and property between any points 
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in Cagayan, Isabela, Nueva Viscaya and Nueva Ecija and to own, 
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operate or grant franchises for the operation of land transportation, 
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vessels and pipelines in support or in supplement of its railways lines. 


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b. To do all such other things and to transact all such business directly 
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or indirectly necessary, incidental or conducive to the attainment of 
the purpose of the corporation. 
SEC. 5. Board of Directors, 
omposition and Appointment. - The 
corporate powers of the NLRC shall be vested in and exercised by a Board of 
Directors composed of eight members and a chairman. Two member shall 
represent the Department of Finance (DOF) and the National Economic 
Development Authority (NEDA). The governors of the province of Cagayan, 
Isabela, Nueva Viscaya and Nueva Ecija shall represent the local government 
units (LGUs) and the President of the Republic of the Philippines shall appoint 
two (2) members representing the private sector. The Secretary of the DOTC 
shall act as the chairman. For actual attendance of meetings, each member 
shall receive a per diem of One thousand pesos (P-l,OOO.OO). 
SEC. 6. Meetings of the Board of Directors. -- The Board shall hold its 
meeting at least four (4) times but not more than six (6) times a month. 
SEC. 7. Powers and Duties of the Board of Directors. - The Board 
shall have the following powers and duties: 
'a. To prescribe, amend and repeal by-laws, rules and regulations 
governing the manner in which the general business of the 
corporation may be exercised, including provisions for the formation of 
such committee, or committees as the Board may deem necessary to 
facilitate its business. 
b. To appoint and fix compensation of the General Manager and to 
appoint and fix the compensation of the other officers of the NLRC. 
The Board by a majority vote of all members, may, for cause, suspend 
and/or remove the General Manager and any other officer of the 
NLRC. 
c. To approve the annual and/or supplemental budgets of the NLRC as 
submitted by the General Manager. 


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SEC. 8. Build-Operate-and-Transfer Scheme. - The NLRC, through its 
Board of Directors, shall have the authority to enter into contract with any duly 
pre-qualified private contractor for the financing, construction, operation and 
maintenance of any financially viable infrastructure facilities through the built- 
operate-and-transfer or build-and-transfer scheme as provided by law. 
SEC. 9. Suspension and Removal of Directors. - Any member of the 
Board of Directors may be suspended or removed by the President of the 
Republic. 
SEC. IO. Prohibition for the Board Members. - The Chairman or any 
member of the Board of Directors cannot, at any time, serve the NLRC in any 
capacity. Relatives in the third degree of affinity or sanguinity of any member of 
the Board of Directors shall be disqualified from being appointed General 
Manager and/or officer of the NLRC or in any other capacity serve the NLRC. 
SEC. I1.Managing Head. - The management of the NLRC shall be 
vested in the General Manager. 
SEC. 12. 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 NLRC on behalf 
of the Board of Directors, and subject to its control and supervision; 
b. To sit in all meetings of the Board of Directors and serve as the 
Secretary of the Board; 
c. To submit within sixty (60) days after the close of each fiscal year an 
annual report, through the Board of Directors, to both Houses of 
Congress and to the Office of the President of the Philippines; and 
d. To perform such other duties as may be assigned to him by the Board 
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NLRC’s officers and employees. 
of Directors from time to time. 
SEC. 13. Appointment and Promotion. - The provisions of the Civil 
Service rules and regulations shall govern the appointment and promotion of the 


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SEC. 14. Exemption from Taxes, Duties and Port Charges. - The 
NLRC is hereby exempt from payment of all taxes of very name and nature - 
municipal, city, provincial or national - upon its capital stock, franchises, right of 
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ways, earnings, and all other property owned or operated by it and all duties on 
all railways materials, supplies and equipment imported in the Philippines. This 
exemption shall extend to port charges upon vessels whose entire cargo 
consists of materials for the construction or equipment of the NLRC and to such 
proportion of the prescribed port charges on other vessels as the tonnage of 
materials for such constructions or equipment may bear to the tonnage of the 
entire cargo of the vessel. ' 
SEC. 15. Audit Personnel and Report. - 
a. Personnel - The Chairman of the Commission on Audit (COA) shall 
designate from the COA office the NLRC's Chief Auditor. The 
necessary personnel as determined by the COA Commissioner to 
assist the designated Auditor shall come from the COA office of the 
provinces of Cagayan, Isabela, Nueva Viscaya, and Nueva Ecija. The 
salaries and other expenses of maintaining the Auditor's office shall 
be paid by the NLRC. 
b. Reporf - The financial transactions of the NLRC shall be audited in 
accordance with law, administrative regulations, and the principles 
and procedures applicable to commercial corporate transactions. A 
report of auditor for each fiscal year by the Chief Auditor shall be 
submitted to the board of Directors, who, shall submit the same to the 
President of the Philippines, and copies thereof shall be furnished the 
President of 
the 
Senate 
and 
Speaker 
of 
the 
House 
of 
Representatives. 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 and exp,enses; a statement of sources and application of 


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funds, and such comments 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 shall likewise show any program, expenditure, or 
other financial transaction or undertaking observed in the course of 
audit, which in the opinion of the Chief Auditor, has been carried on or 
made without authority of law. 
SEC. 16. Legal Counsel. - The NLRC shall have its own legal 
department, the chief and members of which shall be appointed by the Board of 
Directors. 
SEC. 17. Liquidation. - Three (3) years before the expiration of the 
NLRC, the Board of Directors shall constitute a Comniittee on Liquidation. The 
Committee shall take charged of winding up the NLRC’s corporate affairs and 
effecting its liquidation. The same committee shall submit a final report to the 
President of the Philippines and to both Houses of Congress. 
SEC. 18. Reversion of General Funds. - All funds resulting from 
dissolution and liquidation of the NLRC as herein provided shall revert to the 
National Treasury 
SEC. 19. Applicabilify of the Corporafion 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. 
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All acts, executive orders, 
administrative orders, proclamations, rules and regulations or parts thereof 
inconsistent with any of the provisions of this Act, are hereby repealed or 
modified accordingly . 
SEC. 21. Separabilify Clause. In the event any provision of this Act or 
the application of such provision to any person or circumstance is declared 
unconstitutional, the remainder of this Act or the application of said provision to 
other persons or circumstances shall not be affected thereby. 


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Approved, 
SEC. 4. Effectivity, - This Act shall take effect fifteen (15) days after its 
publication in two (2) national newspapers of general circulation.