HOUSE \F REPRESENTATIVES
RECEIVED
pore. 8 AUG 2016
Te, Foy ame
By: ‘

SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
REOSTR ATION UAT
Introduced by Representative Maximo B, RofrigligS Jini. 6 x SERVICE

2571

House Bill No.,

EXPLANATORY NOTE

This bill was originally introduced as House Bill No, 1723 during the 15" Congress
where it was approved by the Committee on Cooperatives Development and substituted
by House Bill No. 6912, approved on 2" reading, approved on 3! reading and was
transmitted to the Senate where it was not acted upon. It was again re-filed during the 16”
Congress.

‘The Constitution recognizes the vital importance of cooperatives as instruments for
social justice and economic development and, for this reason has mandated Congress to
create an agency to promote the viability and growth of cooperatives. Section 15, Article
Xil of the fundamental law provides:

"SEC. 15, The Congress shall create an agency to promote the viability and
growth of cooperatives as instruments for social justice and economic development.

Pursuant to the aforequoted Constitutional mandate, Congress enacted Republic
Act 6939, creating the Cooperative Development Authority [CDA], which was signed by
President Corazon C. Aquino on March 10, 1990, Despite the dedication and valiant
efforts of its officials and personnel, particularly those assigned to man its various
Extension Offices, the Authority has encountered tremendous difficulties and obstacles in
the pursult of its mission to promote the viability and growth of cooperatives. To solve
these identified problems, this bill is submitted for consideration.

The bill Seeks to strengthen the development and regulatory powers of the CDA in
order to ensure that the Authority will be more responsive to the challenges of the future
by creating the Cooperative Development Council and Cooperative Adjudication Board in
the CDA. The Cooperative Development Council shall establish a more concrete
relationship between the sector and the government, Various plans and programs of the
sector and the government geared towards the promotion, organization and development
of cooperatives shall be synchronized for optimum result. The Cooperative Adjudication
Board in the CDA Is a specialized quasi-judicial body which guarantees prompt resolution
of disputes and grievances between and among members of the cooperatives, as well as
between cooperatives. The passage of this bill enhances the capability of the CDA in
promoting the viability and growth of cooperatives for national development, thus, its
passage is imperative.

/}}
MAXIMO B, RODRIGUEZ, JR.


SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES '
First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B, Rodriguez, Jr.

House Bill No,20¢ 4

AN ACT
REORGANIZING 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:

SECTION 1. Short Title. — This Act shall be known as the "Cooperative Development
Authority Charter Act".

SEC 2, Declaration of Policy. — It 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 futfillment of the mandate in Section 15, Article
XIl of the 1987 Constitution

Toward this end, the State shall recognize cooperatives as associations organized
for the economic and social betterment of their members, operating business enterprises
bad 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
reorganized 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, Power, Functions and Responsibilities. - The Authority shall have the following
powers and functions:

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

b) 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;

c) 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;

d) 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;

(e) 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;

(f) 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/streamiining 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;

(9) Establish and maintain a continuing educational and capability-program for
the Authority;

(h) | 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;

(i) 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 Phillppine 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;

In 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 sanctions 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;

(i) 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 administrative
regions in the 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;

(0) Implement and enforce its decision with the assistance of deputized law
enforcement agencies or the local government unit concerned as maybe 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 6. 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 shalt 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 provision 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 up to the end
of their term under Republic Act No. 6939.

Except for the Chairperson, the members of the Board shall 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 overall 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;

c) 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

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

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

a) natural bom Filipino citizen;

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

c)  Abholder 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;

d) 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

e) Must be recommended and endorsed by a federation and/or union of
cooperatives operating in good 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 Member of the Board. ~ The President of the Philippines may remove
any member of the Board for any of the following reasons

a) __ If the 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 and such incapacity has lasted
more than six (6) months; and

c) 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 ChairpersonvAdministrator. — The
Chairperson/Administrator of the Authority shall have the following powers and functions:

a) Preside over the meetings of the Board;

b) Supervise the overall operations of the Authority;

c) 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 with 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 functions as may be required by 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

All cooperatives duly registered with the Authority shall present their Certificate of
Registration to the nearest Bureau of Internal 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 shail be 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 federations or unions shall be mediated, conciliated or settled in
accordance with this Act, Article 137 of the 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 18. 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 SUC's 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 SUC's do not offer a separate academic program in cooperatives
development and administration, the SUC's shall be encouraged 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 concer 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 concemed.

SEC 17. Cooperatives Engaged In Services Covered by Other Law. - Registered
cooperatives may engage in business endeavors in accordance with its approved articles,
of incorporation provided they acquire the necessary licenses, 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
hundred 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
preference 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 concerned.

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 Funds and Programs - The Cooperative Development Loan Fund and
the Fund for 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 of 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 regulations 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 in 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,