Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
First Regular Session

463

House Bill No.

Introduced by Honorable Agapito H. Gua

EXPLANATORY NOTE

This bill has already been approved on Third Reading during the 15" Congress. It seeks to
reorganize the Cooperative Development Authority (CDA) and in so doing, shall repeal Republic
Act No, 6939 which initially created the Cooperative Development Authority.

This proposed piece of legislation takes into cognizance the history and struggles of the
cooperative movement in the country. Likewise, it supports the capacities and capabilities of
cooperatives to spur countryside and rural development leading to societal transformation.

Section 3 of this house bill reorganizes the Cooperative Development Authority to carry out the
provisions of Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of
2008.

The Authority shall be an agency attached to the Office of the President for policy and program
coordination.

In this light, passage of the bill is earnestly sought.

AGA H.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress
First Regular Session

House Bill No. 463

Introduced by Honorable Agapito H. Guanlao

AN ACT.
RECOGNIZING THE COOPERATIVE DEVELOPMENT AUTHORITY, REPEALING FOR
THE PURPOSE REPUBLIC ACT NO. 6939, CREATING THE COOPERATIVE
DEVELOPMENT AUTHORITY,

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

SEC. 1, Short Title. ~ This Act shall be known as the “Cooperative Development Authority
Character Act of 2013.”

SEC. 2 Declaration of Policy. — \t is hereby declared the policy of the State to promote the
viability and growth of cooperatives as instruments of equity, social justice and economic development
and to create an agency, in fulfillment of the mandate in Section 15, Article XII of the 1987 Constitution.

Toward this end, the State shall recognize cooperatives as associations organized for the
economic and social betterment oftheir members, operating business enterprises based on mutual aid, and
founded upon internationally accepted cooperative principles and practices. The state recognizes the
cooperatives as primarily responsible for the institutional development of cooperatives. Accordingly, the
State recognizes the rights of the cooperatives to initiate and foster within their own ranks cooperative
promotion, organization, training, information gathering audit and support services, with government
assistance where necessary. In furtherance of this policy, the National Economic and Development
Authority shall include the promotion of growth and expansion of cooperatives as major and
indispensable components of national development plans.

The government and all its branches, subdivisions, instrumentalities and agencies shall ensure the
provision of technical guidance, financial assistance and other services to enable the cooperatives to
develop into viable and responsive economic enterprises towards a strong cooperative movement free
from any condition which infringes upon the objectives and character of cooperatives. The State shall,
except as provided in this Act, maintain the policy of non-interference in the management and operation
of cooperatives.

SEC. 3. Cooperative Development Authority. ~The Cooperative Development Authority created
under Republic Act No. 6939, hereinafter referred to as the Authority, is hereby recognized to carry out
the provisions of this Act and those of Republic Act No. 9520, otherwise known as the “Philippine
Cooperative Code Of 2008”. The Authority shall have its principal place of business in Metro Manila, and
shall maintain offices and branches in such other places as the proper conduct of its business shall require.



‘The Authority shall be an agency attached to the Office of the President for policy and program
coordination.

SEC. 4. Powers, Functions and Responsibilities. - The Authority shall have the following
powers and functions:

a)

b)

d)

e)

Exercise supervision and jurisdiction over all types and categories of cooperatives registered
with the Authority;

Register all types of cooperatives including amendments to its by-laws; division, merger,
consolidation, dissolution and liquidation of cooperatives as well as the transfer of all or
substantially all of their assets and liabilities;

Order the cancellation or revocation of the Certificate of Registration after due notice and
hearing pursuant to Articles 67 & 68 of the Philippine Cooperative Code of 2008 and the by-
laws of the cooperative;

Formulate, adopt and implement integrated plans and programs on cooperative development
consistent with the national policy on cooperatives, and establish an integrated framework on
cooperative development for all government agencies;

Develop and formulate, in consultation with the cooperative sector, and issue appropriate
regulations, standards, rules, orders, guidelines and/or circulars to implement the Cooperative
Code to ensure the sound operation of cooperatives;

Establish a consultative mechanism in order to provide the cooperative sector a system for
maximum participation on matters of government plans, projects and policies related to
cooperatives.

‘The cooperative sector shall undertake the organization/streamlining or rationalization of an

apex body, representing all types and categories of cooperatives under the Philippine Cooperative
Code of 2008, which shall function as the overall consultative and coordinating body with the
Authority.

‘The Authority, in consultation with the cooperative sector, shall promulgate the guidelines for

the implementation of the consultative mechanism;

8)
h)

a)

Establish and maintain a continuing educational and capabitity-program for the Authority ;
Require the submission of annual reports, audited financial statements and such reports in
compliance with the Philippine Cooperative Code of 2008, in such forms as may be
prescribed by the Authority;

Conduct regular inspection or examination of a cooperative in accordance with rules and
regulations promulgated by the Authority and when deemed necessary conduct a special
inspection and investigation to protect the interest and welfare of the members of
cooperatives. However, the Authority may delegate this power to accredited federations and
unions in accordance with the Philippine Cooperative Code of 2008 and the implementing
rules and regulations issued for this purpose;

Compel the cooperative to call a General Assembly under the supervision of the Authority,
subject to the criteria or condition/s to be defined in the implementing rules and regulations
issued for this purpose;

Tn case a cooperative fails to call and conduct a General Assembly, the Authority shall,
on its own, call a general assembly meeting to address and settle the issues. The Authority
may enlist the aid and support of and/or deputize any and all enforcement agencies of the
government and federations and unions for the implementation of its orders;


k) Impose sanction for non-compliance with lawful orders, rules and regulations of the
Authority, including the Articles of Cooperation and the By-Laws of the cooperative subject
to conditions as defined in the implementing rules and regulations of this Act;

1) Collect reasonable fees, fines or charges in the performance of its registration and regulatory
functions;

m) Establish and strengthen extension offices in all political and ad
country and such other places as may be determined by the Authority;

n) Hear, decide and settle disputes between and among members, officers and directors of
cooperatives, and between and among cooperatives in accordance with Article 137 of the
Philippine Cooperative Code of 2008;

©) Implement and enforce its decision with the assistance of deputized law enforcement
agencies or the local government unit concerned as may be necessary; and

p) Exercise such other powers and functions as may be necessary to implement the provisions of
the Philippine Cooperative Code of 2008.

SEC. 5. Organizational Structure. ~ The Authority shall have a Board of Directors and an Office

of the Administrator.

The Board of Directors, hereinafter referred to as the Board, shall be the collegial policy-making
body of the Authority which shall be composed of the Chairperson and six (6) members of the Board of
Directors, all of whom shall be chosen from among the nominees of the cooperative sector, with two (2)
representatives each from Luzon, Visayas and Mindanao. They shall be appointed by the President of the
Philippines and shall serve for a term of six (6) years without reappointment. Except for the Chairperson,
the Members of the Board shall serve on a part-time basis only: Provided, That any vacancy in the Board
shall be filled-up by appointment of the President in accordance with the provisions of this section:
Provided, further, That a member so appointed shall serve only for the unexpired term: Provided, finally,
That the incumbent Chairperson and members of the Board shall continue to serve and act as chairperson
and members of the present Board shall continue to serve and act as chairperson and members of the
present Board up to the end of their term under Republic Act No. 6939.

Except for the Chairperson, the members of the Board shail be entitled to per diem at rates to be
determined and approved by the Department of Budget and Management and actual travel expenses.

The Office of the Administrator shall be headed by the Chairperson of the Board who shall
‘exercise over-all supervision on the operations of the Authority.

SEC. 6. Powers and Functions of the Board. ~ The Board as the policy making body shall have
the following powers and functions:

a) Formulate policies, rules and regulations consistent with the provisions of the Philippine

Cooperative Code of 2008;

b) Adopt implementing rules and regulations for the conduct of the internal operations of the
Authority;

©) Organize the operating structure and functions of the Authority. No changes in the approved
organizational structure including the transfer of personnel shall be effected without the
approval of the Board; and

4) Approve and adopt the annual budget of the Authority.

SEC. 7. Qualification of Members of the Board. ~ The Chairperson or a Member of the Board
who shall be appointed must possess the following qualifications:

a) A natural born Filipino citizen;

strative regions in the



b) Must not be more than sixty (60) years old at the time of the appointment and must be in
‘good health;

©) A holder of at least a bachelor’s degree and five (5) years of experience as an official or
officer of a cooperative, government agency, or non-government organization engaged in
cooperative development or, in the absence of the bachelor’s degree, at least seven (7) years
of experience in cooperatives either as an officer of a cooperative or a government agency or
non-government organization engaged in cooperative development;

) Except the Chairperson who should be a resident of the Philippines, the other Members of the
Board must be a resident of the region represented for at least five (5) years; and

€) Must be recommended and endorsed by a federation and/or union cooperatives operating in
g00d standing under the provisions of this Act and the Philippine Cooperative Code of 2008.

Any person appointed as Chairperson or regular member of the Board shall, upon
appointment, divest himself of any direct or indirect pecuniary interest or dealings with any
cooperative.

SEC. 8. Removal of Members of the Board. ~ The President of the Philippines may remove any
‘member of the Board or any of the following reasons:

a) Ifthe member is subsequently disqualified under the provisions of this Act;

b) If the member becomes physically or mentally incapacitated to properly discharge the duties
and responsibilities of the position on such incapacity has lasted more than six(6) months;
and

©) If the member is guilty of acts or omissions which are fraudulent or illegal in character or
which are manifestly opposed to the aims, objectives and interests of the Authority and the
cooperative sector.

SEC. 9. Meetings of the Board. - The Board shall meet at least once a month for the transaction
of its regular business. Special meetings may be called by the Chairperson or majority of the members of
the Board to consider specific matters. A majority vote by the entire Board shall be required for a
decision. All regular and special meetings of the Board shall be held at the head office in Metro Manila.

SEC. 10. Chairperson/Administrator. - The Chairperson shall be the Administrator of the
‘Authority and shall have the rank and privileges of an Undersecretary.

In the absence of the Administrator, the Director IV shall be the Officer-In-Charge of the
Authority who shall exercise the powers and duties of the Administrator.

SEC. 11. Powers and Functions of the Chairperson/Administrator. - The
Chairperson/Administrator of the Authority shall have the following powers and functions:

a) Preside over the meetings of the Board;

b) Supervise the over-all operations of the Authority;

©) Prepare, consolidate and submit periodic reports for the consideration of the Board;

d) Implement a human resource management system consistent with the Civil Service Code that
will promote professionalism and excellence in accordance of sound principles of
‘management;

©) Prepare the proposed annual and supplemental budgets of the Authority for the consideration
and approval of the Board;

f) Report to the President of the Philippines and Congress on the performance and
accomplishment of the Authority on a periodic basis;

g) Represent the Authority in all undertakings where its presence is required; and



h) Perform such other function as may be required by the law.

SEC. 12. Power to Register Cooperatives. - The power to register cooperatives shall be vested
solely on the Authority pursuant to the provisions of the Philippine Cooperative Code of 2008,

Alll cooperatives duly registered with the Authority shall present their Certificate of Registration
to the nearest Bureau of Intemal Revenue office and the latter shall within ten (10) days issue the
Certificate of Tax Exemption.

Any provision of law, executive order, rule or regulation to the contrary notwithstanding, the
certificate of registration issued by the Authority to a duly registered cooperative shall ipso facto
constitute as the sole legal basis or requirement for the full enjoyment of the tax exemption granted under
Articles 60 and 61 of the Philippine Cooperative Code of 2008. Any public official or employee who
violates or in any manner circumvents this provision shall dealt with under Article 140 of Philippine
Cooperative Code of 2008.

The Authority shall cite this provision in the certificate of registration.

SEC. 13. Prohibition. - Except as provided for under Article 130 of the Philippine Cooperative
Code of 2008, the use of the word “cooperative” by any person or organization unless duly registered
with the Cooperative Development Authority shall be prohibited and shall be penalized under Article 140
of the Philippine Cooperative Code of 2008.

SEC. 14. Settlement of Disputes. - Disputes within or between cooperatives, or disputes within or
between federation or unions shall be mediated, conciliated or settled in accordance with this Act, Article
137 of Philippine Cooperative Code of 2008 and its implementing rules and regulations or Republic Act
‘No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004.

SEC. 15. Cooperatives in the Education System. - The history, philosophy, concepts, values,
principles and practices of cooperatives and their role as a factor in the national economy shall be
disseminated both in formal and non-formal education

Notwithstanding existing laws, memorandum orders and directives, cooperatives development
and administration as a field of study may be offered as a baccalaureate, post baccalaureate or masteral
program in state universities and colleges (SUCs) in accordance with the standards, rules and regulations
promulgated by their respective Board of Regents, the Commission on Higher Education (CHED) and
the Authority in consultation with the cooperative sector as necessary: Provided, That SUCs shall provide
for equivalency credit and accreditation of work experiences and non-formal education and training of
cooperative leaders, managers and members: Provided further, That in cases where the SUCs do not offer
fa separate academic program in cooperatives development and administration, the SUCs shall be
encourage to include a 3-unit subject in the curricula of accountancy, agribusiness, agriculture,
agricultural economics, business, community development, economics, education, forestry, social
sciences, and other curricula that can be instrumental in the development of cooperatives. Special
incentives including scholarships shall be formulated by the Authority for students taking up degree
courses on cooperatives development and administration.

The role of non-government organizations, not registered as cooperatives but duly registered
under Philippine laws and engaged in cooperative promotion, organization, research and education, shall
be recognized. The Authority may accredit such non-government organizations as non-academic training
organizations. The training courses offered by them may be eligible as credits for the purposes of
academic, professional and career advancements of their trainees. Existing training centers for
cooperatives may qualify as non-government organizations under this Act.



Upon request of cooperatives, State colleges and universities shall provide technical assistance
and guidance to cooperatives in the communities where they are located.

SEC. 16. Cooperatives in the Banking System. — The promotion and development of cooperative
banks as part of the banking system and of financial service cooperatives as defined in the Philippine
Cooperative Code of 2008 shall be a major concern of the Authority which shall undertake the necessary
program towards this end in collaboration with the Bangko Sentral ng Pilipinas (BSP) and the cooperative
sector concerned.

SEC 17. Cooperatives Engaged in Services Covered by Other Laws. ~ Registered cooperatives
may engaged in business endeavors in accordance with its approved articles of cooperation provided the
acquire the necessary licences, franchises, certificates of authority and permits from the appropriate
agencies governing their type of cooperatives such as, but not limited to those providing manpower
services, construction services, professional services, health care services, security services, social welfare
services, research development, related health services, ecological and environmental services, farmers
and fisherfolk cooperatives and services to indigenous cultural minorities.

SEC. 18. Reorganization of the Authority. — The Authority shall be reorganized within one
hhundred twenty (120) days from the effectivity of this Act.

SEC. 19. Transitory Provisions. — Upon the effectivity of this Act, the personnel of the
Cooperative Development Authority shall, unless removed for cause and after due process continue to
perform their duties and responsibilities and shall receive their corresponding salaries and benefits.

In the reorganization and staffing of the Authority, these personnel shall be given subject to civil
service rules and regulation and rules of the Organization, Position Classification and Compensation
Bureau of the Department of Budget and Management (DBM); Provided, that Those who shall not be
absorbed by the organization shall be allowed to retire under existing retirement laws if qualified or under
Section 10 and other applicable provisions of Executive Order No. 366, S. 2004, whichever is beneficial
to the employee concemed.

SEC. 20. Appropriations. - The amount necessary for the implementation of this Act shall be
included in the annual General Appropriations Act.

SEC. 21. Transfer of Fund and Programs. — The Cooperative Development Loan Fund and the
Fund Management Training and Assistance Program created under Presidential Decree No. 175, as
amended, and the Cooperative Marketing Project created under loan agreements, all granted to the
Department of Agriculture, is hereby transferred to the Authority which shall be used for the development
and strengthening of cooperatives.

SEC. 23. Implementing Rules and Regulations. — The Board shall, in consultation with the
cooperative sector, formulate the implementing rules and regulations for the effective implementation of
the provisions this Act. The implementing rules and regulations shall take effect within fifteen (15) days
after publication in the Official Gazette or in two (2) newspapers of general circulation. All subsequent
amendments to the implementing rules and regulation shall also be published before taking effect.

SEC. 24 Information Campaign. — The Cooperative Development Authority is mandated to
conduct a six (6) months information campaign on the provisions of this Act from its effectivity.

SEC. 25 Repealing Clause. ~ Republic Act No. 6939, creating the Cooperative Development
Authority is hereby repealed. All other laws, decrees, executive orders, rules and regulations or parts
thereof inconsistent with the provisions of this Act are hereby amended or modified accordingly.

SEC. 26. Separability Clause. ~If for any cause, any part of this Act is declared
unconstitutional, the rest of the provisions shall remain force and effect.



SEC. 27. Effectivity Clause. — This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in at least two (2) national newspapers of general circulation.

Approved,