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THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
First R.egular Session 
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Introduced by Senator JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
It has long been the 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 piiblic. service entities engaged in 
supplying electric service, particularly electric cooperatives” by “giving every tenable 
support and assistance”. 
-Under P.D. 2x9,~ 
electric cooperatives created under the law were granted several 
tax incentives, including permanent exemption from paying income taxes. Sections 193 
and 234 of R.A. No. 
7160 (Local Government Code), however, have withdrawn the tax 
exemption privileges of electric cooperatives registered under P.D. 269. Tax exemption 
privileges are now only available to cooperatives registered under R.A. No. 6938 
(Cooperative Code of the Philippines). 
The loss of the tax-exempt status ofelectric cooperatives under P.D. 269 has been 
affirmed by the Supreme Court on 10 June 2003 in G.R. No. 143-736 entitled “Philippine 
Rural Eiectric Cooperatives Association Inc. vs. The Secretary, ‘Department of Interior 
and Local Government.” The Supreme Court, in its decision, stated that the rei edy of 
electric cooperatives under P.D. 269, to regain their tax-exempt status, is not judic al. 1. . 
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Electric cooperatives under P.D. 269 have complained that bec se of 
cuinbersoine 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 strengh because of 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 193 and 234 (d) o f  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 earnestiy recommended 
RCITO ESTRAD 


TIHIRTEENTI-I CONGRESS OF TFZ liEPUBLIC ) 
OF TI-E PI-IILIPPrNES 
1 
First Regular Session 
1 
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S.B. No. 
783 
Introduced by Senator JINGGOY EJERCITO ESTRADA 
AN ACT 
TO RESTORE TEE TAX EXEMPTION PRIVILEGES OF ELECTRIC 
COOPERATIVES CREATED UNDER P.D. 269, OTHERWISE KNOWN AS THE 
“NATIONAL 
ELECTRIFICATION 
ADMINISTRATION 
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 bji the Senale and the House of Represenra‘ntives of the Philppines in 
Congress assembled: 
SECTION 1. Section 193 of Republic Act No. 7169 is hereby amended to read as 
follows : 
“Section 193. With&miml of Tnx Exenptioiz Privileges. - Unless 
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otherwise pmvided 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. 693 8, 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.” 
SECTION 2. Section 234 (d) ofRepublic Act No. 7160is hereby amended to read 
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as follows: 
“Section 234. Exemption from Real Property Tax. x x x 
(d) All real property owned by duly regktered cooperatives asprovided f runder 
R.A. No. 6938 (;) and DULY REGISTERED ELECTRIC COOPERATIVES 
UNDER P.D. 
269; x x x (‘ 
SECTION 3. Repenling CZnuse - All laws, decrees, executive order, and rules 
and regulations, or parts thereof, inconsistent with the provisions of this Act, are hereby 
repealed o modified accordingly 
SECTION 4. Sepiird~ility Clause - If, for any reason, any section or pro\iision 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. 
SECTION 5. Eff.ectivily Clmse - This Act shall take effect fifteen (1 5) days after 
its complete publication in at least two (2) national newspapers of general circulation 
Approved,