Sixteenth Cengress
Third Regular Session

HOUSE BILL NO. 6440

Introduced by Honorable Karlo Alexei B. Nograles

EXPLANATORY NOTE

This bill seeks to create the Department of Sports, the government entity
primarily responsible for implementing policies on the promotion and
development of sports and health fitness programs in the country.

On January 24, 1990, Congress enacted Republic Act No. 6847,
otherwise known as the “Philippine Sports Commission Act” which created the
Philippine Sports Commission (PSC). RA 6847 mandated the PSC to provide
the leadership, formulate the policies and set the priorities and direction of all
national amateur sports promotion and development, particularly giving
emphasis on grass-roots participation; encourage wide participation of all
sectors, government and private, in amateur sports promotion and development;
and supplement government appropriations for sports promotion and
development.

After more than 20 years since the creation of the PSC, there is much to
be desired in the state of Philippine sports. Over the years, the state of
Philippine sports appears to have worsened rather than improved. Since
Mansueto Velasco won a silver medal in boxing during the 1996 Atlanta
Olympics, the Philippines has not won a single medal in the succeeding editions
of the Summer Olympics. When the Philippines won its first ever overall
championship in the Southeast Asian Games during the 2005 edition held in
Manila, Philippine sports seemed to have reached its threshold. Unfortunately,
the experiences and the lessons leamed in earning that victory were not
sustained.


‘The Philippines is rich in talent as can be proven by the many sports
heroes that the county has produced in various sports disciplines. Arguably, the
most recognizable Filipino today is a sportsman, the Honorable Emmanuel D.
Pacquiao, who has brought pride to the country with his many victories in the
boxing ring. Filipinos are also known for our passion for sports. With the
many sporting events, whether local or international, being held in the country
in recent years, Filipinos have impressed foreign sports personalities and sports
associations and federations with our remarkable achievements.

This measure intends to address the various challenges that confront
Philippine sports. This bill proposes the creation of a Department of Sports, a
cabinet-level agency that will provide leadership in the promotion and
development of sports in the country and set the parameters to address the needs
of our athletes, coaches, trainers and sports officials. The Department of Sports
will be responsible for promulgating policies that will help the country improve
its performance in international competitions. Equally important is its role in
finding solutions to the problems besetting Philippine sports including the lack
of a comprehensive national sports program, the need to enhance the partnership
with various sectors involved in sports, obsolete training methods, lack of
modern and high quality training facilities, equipment, and sports venues.

It is now high time for the government to prioritize sports in the national
agenda, and consider sports as an integral factor in nation building. The
approval of this proposed measure is a step in the right direction.

In view of the foregoing, passage of this bill is eamestly sought.

KARLO ALEXEI B. NOGRALES


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Republic of the Philippines
House Or REPRESENTATIVES
‘Quezon City, Metro Manila

Sixteenth Congress
Third Regular Session

HOUSE BILL NO. 6440

Introduced by Honorable Karlo Alexei B. Nograles

AN ACT
CREATING THE DEPARTMENT OF SPORTS, DEFINING ITS
POWERS AND FUNCTIONS AND APPROPRIATING FUNDS
THEREFOR

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

CHAPTERI
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the “Department
of Sports Act.”

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the
State to promote physical education and encourage sports programs, league
competitions, and amateur sports, including training for international
competitions to foster self-discipline, teamwork and excellence for the
development of a healthy and alert citizenry. The State also recognizes that
sports foster patriotism and nationalism, accelerate social progress, and promote

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Bill Drafting Service


total human development. Toward this end, it is imperative to establish a
single, unified and integrated national sports body responsible for the promotion
and development of sports, promotion of the welfare of people involved in

sports, promotion of ethical practices in sports, ensuring the wider participation

of all sectors of society in the national sports program, and helping Filipino
athletes attain their fullest potential.

CHAPTER IL
DEPARTMENT PROPER

SEC. 3. Department of Sports. — The Department of Sports, hereinafter
referred to as the Department, is hereby created to carry out the above-declared
policy. It shall be the primary policy-making, planning, coordinating,
implementing and regulating entity of the government in the promotion and
development of sports, physical education and physical fitness in the country.

SEC. 4. Objectives. — The objectives of the Department are as follows:

a) Prepare, formulate, implement and oversee an integrated sports
promotion and development program in consultation with the various
stakeholders including other government agencies, non-governmental
organizations, associations and groups involved in sports;

b) Initiate and promote a nationwide grassroots-based sports
development program and strengthen the sports club system;

c) Encourage and support the participation of Filipino athletes in

regional and international sports competitions including the Southeast Asian
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Games, the Asian Games, the Olympics, the Paralympics, the Universiade or
World University Games, as well as international, regional and world
competitions staged by other reputable international sports associations,
federations and organizations;

d) Provide leadership in the development of sports in the country,
formulate the policies, and set the priorities and direction of all national amateur
sports promotion and development programs, particularly giving emphasis on
grass-roots development and participation;

e) Encourage wider participation of all sectors including the
government and private sector in amateur sports promotion and development
especially among the youth;

f) Improve the performance of Filipino athletes in regional and
international sports competitions and develop athletes to become a source of
national pride;

g) Provide resources, services and facilities to enable Filipinos to
pursue and achieve excellence in sports;

h) Foster peace and camaraderie within the country through
competitive and recreational sports;

i) Improve the sporting abilities of Filipinos generally through the

improvement of the standards of coaching in the different sport disciplines;


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j) Foster cooperation in sports between the Philippines and other
countries through the provision of access to resources, services and facilities
related to sports;

k) Initiate measures for the elimination of unethical and unfair
practices in sports and any other measure necessary in furtherance of public
interest and in consonance with the Olympic Charter; and

)) Supplement government appropriations for sports promotion and
development by encouraging the private sector to contribute to the funding of
the various programs of the Department.

SEC. 5. Duties and Functions. — The Department shall have the
following duties and functions:

a) Inform and advise the President on the activities, programs, plans
and all other matters relating to sports promotion and development;

b) Plan, implement and oversee an integrated sports promotion and
development program of the country, in coordination with the various sectors
involved in sports, including the Philippine Olympic Committee (POC),
national sports associations, public and private schools, government
corporations and entities, local government units (LGUs), Armed Forces of the

Philippines, and other sports organizations and private corporations;


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c) Establish and maintain linkages with international _ sports
federations, national sports organizations of other countries and international
non-governmental organizations whose main objectives relate to sports;

d) Establish, develop and maintain fully-equipped sports facilities and
centers in strategic places in the country and, as far as practicable, include
modern sports complexes adequate for major international competitions;

e) — Rationalize and regulate the establishment of publicly funded
sports facilities or complexes and supervise the management and maintenance
thereof, excluding school or college-owned sports facilities or complexes;

f) Plan and formulate other programs to be undertaken by the
Department pursuant to the objectives of this Act and review or evaluate the
organizational set-up, projects and programs of the Department;

g)  Delineate and define areas of responsibilities of all sectors involved
in sports promotion and development, respecting the individual set-up,
priorities, structure and competence of the different government agencies and
private institutions;

h) Assist the proper government agency in the formulation of an
industry incentives program for the manufacture of sports equipment and
supplies which comply with international standards and quality;

i) Provide such incentives, recognitions and awards to deserving

associations, athletes, game officials, coaches, trainers and other persons or


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entities involved in or supporting sports development in accordance with
existing laws;

ji) Recommend and propose to the Department of Education
(DepEd), Department of the Interior and Local Government (DILG) and other
government agencies and instrumentalities which conduct sports programs, to
incorporate in their respective annual budget a separate and specific budget for
sports promotion and development;

k) Encourage, promote and sustain the creation and establishment of
regional, provincial, municipal and barangay or school district sports promotion
and development councils, composed of officials of the DepEd, DILG, LGUs
and representatives of the private sector, which shall initiate, conduct and
coordinate sports activities in their respective jurisdictions;

1) Encourage and organize, in consultation with the national sports
associations and related organizations, national, regional and international
sports competitions, events and games;

m) Collect and disseminate information and provide advice on matters
related to the activities of the Department;

n) Provide access to persons from other countries to the resources,
services and facilities of the Department for the purpose of fostering

cooperation in sports between the Philippines and other countries;


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0) — Cooperate with national and international sports organizations and
federations in promoting ethical standards in sports and foster an environment
that is free from the unsanctioned use of performance enhancing drugs and
doping methods; and

p) — Exercise such other duties and functions as may be necessary or
incidental to attain the objectives of this Act.

SEC. 6. Powers of the Department. — The Department shall exercise the
following powers:

a) Appoint the officers and other personnel of the Department and fix
their compensation subject to existing laws, rules and regulations;

b) Delegate authority for the performance of any function to officers
and employees under its direction;

c) — Enter into contracts;

d) Acquire, use and control any land, building, facilities, equipment,
instruments, tools and rights required or otherwise necessary for the
accomplishment of the objectives of the Department;

©) Acquire, own, possess and dispose of any real or personal property:

f) Regulate the acquisition, procurement, distribution and use of
sportswear, equipment, instruments, tools and other sports essentials necessary

and required for training of national pool athletes;


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2) — Confer, extend and grant awards, benefits and privileges to athletes
and officials for outstanding performances in national and_ international
competitions;

h) — Confer, extend and grant support or assistance to national sports
associations which are in good standing with the Department;

i) Exercise supervisory and visitorial powers over the national sports
associations in connection with their sports promotion and development
programs with respect to which financial assistance is extended by the
Department;

Dd Accept donations, gifts, bequest and grants for the purposes of the
Department;

k) Ensure the implementation by various government departments and
agencies of their sports promotion and development programs as indicated in
their respective annual budgets;

)) Impose sanctions upon any national sports association, institution,
organization, body, entity, team, athletes and sports official for violation of its
policies, rules and regulations; and

m) Perform any and all other acts incidental to or required by virtue of
its creation.

SEC. 7. Secretary of Sports. — The authority and responsibility for the

discharge of its power and functions shall be vested in the Secretary of Sports,


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hereinafter referred to as the Secretary, who shall have supervision and control
of the Department. The Secretary shall be appointed by the President of the
Philippines subject to the confirmation by the Commission on Appointments.

SEC. 8. Powers and Functions of the Secretary. - The Secretary shall
exercise the following powers and functions:

a) Exercise over-all supervision and direction over the entire
operations of the Department and its attached agencies;

b) Establish policies and standards for the effective, efficient and
economical operation of the Department in accordance with the programs of the
government;

c) Review and approve request for financial and manpower resources
of all operating offices of the Department;

a) — Designate and appoint officers and employees of the Department in
accordance with civil service laws, rules and regulations;

e) Advise the President on the promulgation of executive and
administrative orders, regulatory and legislative proposals on matters pertaining
to the promotion and development of sports and physical fitness in the country;

f) Implement and enforce policies, decisions, orders, rules and
regulations issued by the Department;

g) Execute contracts, incur obligations, acquire and dispose of assets

and deliver documents on behalf of the Department;


h) Approve the organizational structure, staffing pattern, operating
and capital expenditures of the Department; and

i) Exercise such other powers and functions and perform such other
duties as may be authorized, delegated, or assigned by law.

SEC. 9. Undersecretaries and Assistant Secretaries. — The Secretary
shall be assisted by three (3) Undersecretaries and three (3) Assistant Secretaries
all of whom shall be appointed by the President upon the recommendation of
the Secretary.

One (1) of the Undersecretaries shall be a career officer coming from the
ranks of existing government agencies or offices involved in sports or qualified
individuals in the private sector who actively support the promotion and
development of sports in the country.

The Undersecretaries shall exercise the powers and functions as provided
under Section 10, Chapter 2, Book IV of the Administrative Code of 1987 while
the Assistant Secretaries shall perform such duties and functions as may be
assigned by the Secretary or provided for by law.

SEC. 10. Qualifications. — The Secretary, Undersecretaries and Assistant
Secretaries of the Department must be citizens of the Philippines, publicly
recognized personalities in the field of sports, at least thirty (30) years of age, of

good moral character and of proven integrity.


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SEC. 11. Compensation. — The Secretary, Undersecretaries and
Assistant Secretaries shall be entitled to compensation and to other benefits and
privileges provided under existing laws.

SEC. 12. Regional Offices. - The Department is authorized to establish,
operate and maintain a regional office in each of the administrative regions of
the country. The regional office shall be headed by a regional director and
assisted by an assistant regional director.

The regional offices shall, within their respective administrative regions,
exercise the following functions:

a) Implement laws, policies, plans, programs, projects, rules and
regulations of the Department;

b) Provide efficient and effective service to the people;

c) Coordinate with regional offices of other departments, offices, and
agencies;

4) — Coordinate with the LGUs; and

) Perform such other functions as may be provided by law or
assigned by the Secretary.

SEC. 13. Structure and Staffing Pattern. — The organizational
framework and staffing pattern of the Department shall be prescribed and
approved by the Secretary within ninety (90) days after the approval of this Act

and the authorized positions created therein shall be filled by regular

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appointments by the President or Secretary as the case may be. In filling of
positions created, preferences shall be given to the incumbent personnel of the
Philippine Sports Commission: Provided, That such individuals comply with
the qualification standards set by the Civil Service Commission for the positions
that they shall be appointed to: Provided, however, That if such individuals
possess the same qualifications, the more senior personnel shall be given
priority.

SEC. 14. Secretariat. — The Department shall organize bureaus,
divisions, and offices in such manner as would best carry out the declared
policies and objectives enunciated herein and consistent with the provisions of
civil service laws, rules, and regulations.

There shall be an administrative services bureau, which shall be primarily
responsible for providing services related to financial management, personnel,
records, supplies and equipment, and a support services bureau, which shall be
primarily responsible for plans and programs formulation and development,
sports facilities and maintenance, engineering, sports medicine and such other
functions and responsibilities as may be necessary and required by the
Department.

SEC. 15. Specialized Bureaus. — To ensure the proper and efficient
implementation of this Act, the following specialized bureaus under the

Department, are hereby created:

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a) Amateur Sports Development Bureau; and

b) _ International Sports Development Bureau.

SEC. 16. Amateur Sports Development Bureau. — The Amateur Sports
Development Bureau shall be headed by an executive director and shall be
primarily responsible for the promotion and development of amateur sports in
the country.

The Amateur Sports Development Board shall exercise the following
functions:

a) Plan, implement and oversee an integrated amateur sports
promotion and development program for the country in coordination with
various sports sectors, which among others include the public and private
schools, government corporations and entities, the LGUs, the Armed Forces of
the Philippines and such other sectors involved in sports;

b) Encourage and promote the creation and establishment of regional,
provincial, municipal and barangay sports promotion and development councils,
which shall initiate, conduct and coordinate sports activities in their respective
jurisdiction;

c) Provide the leadership and set the priorities and direction of all
national amateur sports promotion and development, giving emphasis on

grassroots participation;

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d) Encourage wide participation of all sectors, whether government or
private, in amateur sports promotion and development;

©) Promote social and cultural integration through the revival of
indigenous games and sports;

f) Identify and nurture sports talents for further development and
promote excellence in sports, traditional games and other physical activities;

g) Recommend the formulation of policies and programs that will
foster the development of amateur sports specially in the grassroots level;

h) Impose sanctions upon any national sports association, institution,
organization, body, entity, team, athlete or sports official engaged in amateur
sports for violation of its policies, rules and regulations;

i) Encourage the implementation by various government departments
and agencies of their sports promotion and development programs as indicated
in their respective annual budgets; and

j) Perform acts which are necessary or incidental to the proper
exercise of its functions.

SEC. 17. Divisions under the Amateur Sports Development Board. —
To ensure efficiency and specialization, there shall be two divisions established
under the Amateur Sports Development Board, as follows:

a) Grassroots Sports Development Division; and

b) National and Local Sports Competition Division.

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SEC. 18. Grassroots Sports Development Division. — The Grassroots
Sports Development Division shall have the following functions:

a) Formulate and implement a physical fitness testing and evaluation
program to determine, monitor and establish a fitness profile of the different
sectors of society, and a grassroots development program in order to encourage,
improve and enhance the physical fitness and participation in sports of the
citizens at the city, municipality and barangay level;

b) Support the formation of sports club in schools, workplaces, cities,
municipalities and barangays and the conduct of activities aimed at encouraging
the citizens to participate and successfully compete in sports and various
physical activities;

c) Provide technical assistance to grassroots sports stakeholders;

d) Coordinate with and assist the basic, tertiary and technical
education institutions in the implementation of their physical education and
school sports development curriculum, policies and programs;

e) Assist public and private educational institutions in the
implementation of the intramural sports program and encourage competitive
activities between and among grassroots sports clubs; and

f) Develop the criteria for and implement an awards and incentives
scheme to encourage mass grassroots sports participation, sustained

involvement and excellent performance in grassroots sports activities.

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SEC. 19. National and Local Sports Competition Division. — The
National and Local Sports Competition Division shall have the following
functions:

a) Plan and conduct regular formal and informal sports competitions
at the national and local levels; and

b) Establish and implement a system for identifying and developing
athletic talents for inclusion in the developmental athletes pool.

SEC. 20. International Sports Development Bureau. — The International
Sports Development Bureau to be headed by an executive director shall have
the following functions:

a) Formulate and recommend the adoption of a national training and
development program for athletes participating in international competitions in
all relevant sports, in coordination and cooperation with the concerned national
sports associations;

b) Plan, implement and administer all aspects to ensure successful
participation of the country in regional and international sporting events, games
and competitions;

c) Coordinate the activities of the private and public sectors
supporting the athletes who participate in international competitions; and

d) — Ensure the availability of adequate budget and resources for said

purposes.

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SEC. 21. Divisions under the International Sports Development
Bureau. — There shall be established two divisions under the International
Sports Development Bureau, as follows:

a) National Sports Association Affairs Division; and

b) _ International Sports Competition Division.

SEC. 22. National Sports Association Affairs Division. — The National
Sports Association Affairs Division shall have the following functions:

a) Process, facilitate and oversee agreements and transactions
conducted between and among the Department, national sports associations and
other local and international sports institutions, federations, associations and
organizations to ensure their compliance with the policies and programs of the
Department;

b) Facilitate all necessary arrangements for the participation of
national athletes in international competitions;

c) Develop, prescribe and ensure the observance of criteria and
standards for athletes and sports teams representing the country in international
competitions;

d) Prescribe the criteria for selecting individuals, associations or clubs
entitled to financial and other forms of support to enable their participation in
international conferences, seminars, clinics, competitions and similar programs;

and

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) _ Establish appropriate linkages with international sports bodies.

SEC. 23. International Sports Competition Division. — The International
Sports Competition Division shall have the following functions:

a) Coordinate with the national sports associations and the Philippine
Olympic Committee for the preparation and training of the members of the
national athletes’ pool;

b) Develop, prescribe, and monitor the implementation of criteria for
the selection and retention of members of the national athletes’ pool supported
by the Department;

c) Coordinate with the national sports association in monitoring and
conducting periodic evaluation of members of the national athletes’ pool;

d) Assist the national sports associations in the selection of national
team members for international competitions; and

©) Identify and recommend athletes, coaches and international sports
participants who may qualify for awards and incentives.

CHAPTER IIL
NATIONAL OLYMPIC COMMITTEE

SEC. 24. Philippine Olympic Committee. ~ The Philippine Olympic
Committee which is affiliated with the International Olympic Committee shall
continue to be recognized as the National Olympic Committee for the

Philippines. It is autonomous in character.

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The Philippine Olympic Committee shall maintain its primary
responsibilities for activities pertaining to the country’s participation in the
Olympic Games, Asian Games, Southeast Asian Games and other international
athletic competitions in accordance with the rules and regulations of the
International Olympic Committee, the Olympic Council of Asia, the Southeast
Asian Games Federation and other international sports bodies.

CHAPTER IV
NATIONAL SPORTS ASSOCIATIONS

SEC. 25. National Sports Associations. — The national sports
associations (NSAs), organized for their respective sports in the Philippines and
affiliated with their respective international federations which are recognized by
the International Olympic Committee, shall be recognized as such by the
Department in accordance with the standards and criteria prescribed by the
Department.

The charters, constitutions and by-laws of NSAs and their policies and
programs shall conform to the policies laid down in this Act. The Department
shall also recognize special national sports associations to represent the
differently-abled and school-based sports associations which shall, for all intent
and purposes, have the same status, privileges and obligations as regular NSAs.

The NSAs recognized by the Department shall be autonomous and shall

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particular sport for which they are organized, subject however to the
supervisory and visitorial powers of the Department.

Each NSA shall, by its constitution and by-laws, determine its
organization and membership. No team, school, club, organization or entity
shall be admitted as a voting member of a national sports association unless
sixty percent (60%) of the athletes composing said team, school, club,
organization or entity are Filipino citizens.

SEC. 26. Powers and Functions of NSAs. — The Department recognizes
the following powers and functions of the various NSAs:

a) Adopt a constitution and by-laws not inconsistent with the
constitution and by-laws of the Philippine Olympic Committee;

b) Raise funds by donations, benefits and other means for their
purposes;

c) Purchase, sell, lease or otherwise encumber property, real or
personal, for the accomplishment of their respective purposes;

d) Affiliate with international or regional sports associations;

) — Conduct competitions for the promotion of their respective sports;

f) Appoint their representative to the Philippine Olympic Committee;

g) Decide all questions on the amateur status and discipline of the
athletes and officials connected with the associations as well as the members

thereof and all disputes between members;

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h) Adopt, in coordination with the Philippine Olympic Committee, a

training program for the development of the athletes and their preparation for
international competitions;

i) Select the athletes, coaches and other officials for their national
teams taking into consideration not only their athletic abilities but also their
discipline, moral character, aptitude and attitude;

j) Keep accurate records of all official marks, scores and results
attained by the athletes in all competitions, as well as all results of sports
competitions, recognize and confirm the same and furnish copies to the
Department;

k) Qualify and license referees, umpires and other game officials who
shall officiate in competitions in their respective sports; and

1) Perform such other acts as may be deemed necessary for the proper
accomplishment of their objectives.

SEC. 27. Incentives and Other Non-monetary Benefits. — The
Department shall grant incentives, cash and other non-monetary benefits to all
national athletes, coaches and trainers who bring honor and recognition to the
country by winning in international competitions pursuant to Republic Act No.

9064, otherwise known as “Sports Benefits and Incentives Act of 2001.”

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CHAPTER V
MISCELLANEOUS PROVISIONS

SEC. 28. Tax Exemption. - To encourage popular participation in
amateur sports, no tax of any kind shall be levied on the use of sports facilities,
whether the tax be on the user, owner or operator of the sports facility.

SEC. 29. Donations and Contributions. — All donations and
contributions to the Department in connection with its fund-raising projects and
its continuing sports development programs shall be exempt from the donor’s
taxes, and shall be deductible in full in the computation of the taxable net
income of the donor. Donations and contributions to the various national sports
certified by the Department pursuant to the development of sports in the country
shall likewise be exempt from the payment of the donor’s and estate taxes and
shall be deductible in full in computing the taxable net income of the donor.

SEC. 30. Exemption from Travel Taxes. — The Department and its
delegation or representatives to any international sports competitions,
convention, conference, meeting and events, and athletes, coaches and other
officials to any international competition shall be exempt from the payment of
travel tax, airport tax and any other travel related taxes or fees now or hereafter
imposed by law or regulation.

SEC. 31. Presidential Land Grant. — The provisions of any existing law
to the contrary notwithstanding, the President may, upon the recommendation of

the Secretary of Environment and Natural Resources, grant by donation, sale,
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lease or otherwise, to the Department portions of the land of the public domain
as may be necessary for the establishment of regional training centers in all the
regions of the country and for the accomplishment of any of its purposes.

SEC. 32. Sports Facilities. - The administration and full control of all
existing sports facilities, including land, buildings and equipment, owned by the
national government as well as those owned by government-funded
foundations, associations and entities shall be transferred to the Department.
The sports facilities owned by the local government units, state colleges and
universities, or public schools shall remain with these institutions or entities.

All rental income from the sports equipment and facilities owned and
operated by the Department shall be remitted directly to the Department to be
used exclusively for the operation and maintenance of these equipment and
facilities.

SEC. 33. Assistance by Government Entities. ~The Department may

call upon any government entity for assistance in the exercise of its powers and
the performance of its functions. All heads of departments, agencies,
corporations and offices of the government are hereby enjoined to render full

assistance and cooperation to the Department to ensure the attainment of its

objectives and the success of the national sports development program.

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CHAPTER VI
TRANSITORY PROVISIONS

SEC. 34. Abolition of the Philippine Sports Commission. — The
Philippine Sports Commission created under Republic Act No. 6847, also
known as the “Philippine Sports Commission Act,” is hereby abolished. The
powers and functions, applicable funds and appropriations, records, equipment,
property and personnel of the Philippine Sports Commission shall be transferred
to the Department.

The Philippine Sports Commission shall conduct an inventory of its
assets and liabilities and must tum over all their properties, together with the
inventory, to the Department and wind up their respective affairs within six (6)
months after the effectivity of this Act.

The abolition of the Philippine Sports Commission and the organization
of the Department shall be governed by the law, rules and regulations as
provided for in Republic Act No. 6656, entitled “An Act to Protect the Security
of Tenure of Civil Service Officers and Employees in the Implementation of
Government Reorganization.”

All programs, contracts and projects of the Philippine Sports
Commission, which are inconsistent with the policies and provisions of this Act,
shall be terminated on or before six (6) months after the approval of this Act.
Contracts, programs and projects which cannot be unilaterally terminated shall

remain in full force and effect. The Department shall negotiate for the
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rescission of the contract or termination of the project or program for a period
earlier than what has been previously agreed upon.

SEC. 35. Separation from Service. — Employees separated from the
service as a result of this reorganization shall, within ninety (90) days
therefrom, receive the separation or retirement benefits to which they are
entitled under the law. The separation pay or retirement benefits shall have
priority of payment out of the savings of the agency.

SEC. 36. Funding. —In order to provide the necessary funds required for
the organization and initial calendar year of operational expenditures of the
Department, the amount of Two hundred million pesos (P200,000,000.00) from
the National Treasury is hereby appropriated. The operating expenses for the
Department itself shall not exceed twenty percent (20%) of the annual
appropriation and that at least eighty percent (80%) of the annual appropriation
and all of the national sports development funds, as hereinafter provided, shall
be disbursed for the national sports program, particularly in support of the
identification, recruitment and training of athletes in pre-regional, regional,
national and international competitions.

To finance the integrated sports development program, including the
holding of the national games and all other sports competitions at all levels
throughout the country as well as to carry out well-planned preparations to

sustain the complete needs of national and developmental athletes during the

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preparation and participation at international sports competitions, such as, but
not limited to the Olympics, Asian Games, Southeast Asian Games,
Paralympics, Universiade or World University Games and other international
competitions sanctioned by international sports institutions, federations,
organizations and associations, thirty percent (30%) of the charity fund
representing the proceeds of six (6) lottery draws per annum of the Philippine
Charity Sweepstakes Offices, taxes on horse races from ten (10) racing days to
be determined by the Philippine Racing Commission and the Department, five
percent (5%) of the gross income before taxes of the Philippine Amusement and
Gaming Corporation, the proceeds from the sale of stamps as hereinafter
provided shall be automatically remitted directly to the Department by the
concerned entity and are hereby constituted as the National Sports Development
Fund.

Further, the Philippine Postal Corporation is hereby authorized to print
paper and gold stamps which shall depict sporting events and such other motif
as the Philippine Postal Corporation and the Department may agree at the
expense of the Department. Any deficiency in the financial requirements of the
Department for its annual sports development program shall be covered by an

annual appropriation passed by Congress.

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SEC. 37. Implementing Rules and Regulations. — Within ninety (90)
days from the effectivity of this Act, the Secretary of Sports shall issue the
necessary rules and regulations for the effective implementation of this Act.

SEC. 38. Annual Report. — The Secretary of Sports shall submit to
Congress an annual report generally dealing with the activities and operations of
the Department, together with the audit report of the relevant accounts.

CHAPTER VII
FINAL PROVISIONS

SEC. 39, Separability Clause. — If any provision or part of this Act is
declared invalid or unconstitutional, the remaining parts or provisions not
affected shall remain in full force and effect.

SEC. 40. Repealing Clause. — Republic Act No. 6847, otherwise known
as the “Philippine Sports Commission Act” is hereby repealed. All other laws,
rules, regulations, executive orders, circulars, and other issuances or parts
thereof, which are inconsistent with the provisions of this Act are hereby
repealed or amended accordingly.

SEC. 41, Effectivity. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

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