HOUSE OF REPRESENTATIVES

RECEIVED
18 JUL 2016

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS

First Regular Session
RECISTRATION UNIT

BILLS AND INDEX SERVICE
H. B. No. _1653

Introduced by HONORABLE BELLAFLOR J. ANGARA-CASTILLO

EXPLANATORY NOTE

Mindanao is seen as a key driver of our country’s economic growth, being the country’s second
biggest island grouping and home to more than 21.5 million people including 27 indigenous
‘communities. Mindanao's population already comprises a quarter of the country’s total
population. It holds great promise for agriculture and industrial development—as well as
abundant mineral resources valued at around $310 billion. There is also vast potential for
renewable energy such as in biomass, ocean energy and wind power.

Based on the National Economic Development Authority's (NEDA) Mindanao Strategic
Framework 2010-2020, Mindanao is envisioned to be a peaceful and socially-inclusive
community with a strong, sustainable and competitive economy that will be responsive to local
and global opportunities. A world-class, extensive railway system throughout the island would
greatly help realize this bright vision,

This bill seeks to establish a Mindanao Railways Corporation that will own and operate such a
system that could possibly be comprised of railroads, tramways and other kinds of land
transportation, The Corporation will see to it that there will be a considerable increase in the
mobility of our Mindanaoan fellowmen, It will connect at first booming major urban centers and
provincial capitals such as Davao City, lligan City, Cagayan de Oro City, Zamboanga City,
Cotabato City, Marawi City, Pagadian City, and Dipolog and eventually cover as many
Mindanaoan communities as possible.

We are convinced that the creation of the Mindanao Railways Corporation will pave the way to
Mindanao's development and accelerate economic activity to immensely benefit traders and
businessmen—and ultimately the entire country.

In view of the foregoing, the passage of this bill is earnestly sought

BELL, R bub brane

Representative
Lone District, Province of Aurora


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SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

H.B.No, 1693

Introduced by HONORABLE BELLAFLOR J, ANGARA-CASTILLO

AN ACT
CREATING THE MINDANAO RAILWAYS CORPORATION, PRESCRIBING ITS POWERS,
FUNCTIONS AND DUTIES, AND PROVIDING FOR THE NECESSARY FUNDS FOR ITS
OPERATION, AND FOR OTHER PURPOSES

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

SECTION 1, Name, Duration and Domicile. A corporation to serve as the instrumentality of
the Government of the Philippines in providing a railroad and the transportation system for the
whole island of Mindanao is hereby created, to be known as the Mindanao Railways
Corporation, and hereafter referred to as the Corporation. The Corporation shall exist for a term
of fifty (50) years from the date of the approval of this Act. It shall have its main office in Davao
City and shall have such branches and agencies within or outside Mindanao as may be
necessary for the proper conduct of its business.

SEC. 2, Purposes and Specific Powers. The Corporation shall have the following purposes
and specific Powers:

(a) To own or operate railroads, tramways, and other kinds of land transportation, vessels
and pipelines, for the purpose of transporting for consideration, passengers, mails and
property between any point in Mindanao.

(b) As an auxiliary to its main purpose, to own and/or operate powerhouses, hotels,
restaurants, terminals, warehouses, timber concessions, coal mines, iron and other
mineral properties and to manufacture rolling stocks, equipment, tools and other
appliances, to construct and operate in connection with its railroad lines, toll viaducts, toll
tunnels and the like.

SEC. 3. Authorized Capital Stock of the Mindanao Railways Corporation. The Authorized
Capital Stock of the Mindanao Railways Corporation shall be One Billion Pesos
(PI,000,000,000.00) divided into Ten Million (P10,000,000.00) shares at par value shares of one
hundred pesos each (P'100.00) which shall be fully subscribed by the Philippine Government,
twenty percent (20%) of which or Two Hundred million pesos (R200,000,000.00) shall be initially
paid-up and the balance shall be paid from a continuing annual appropriation of not less than
two hundred million pesos (2200,000,000.00) which is hereby appropriated out of any funds in
the National Treasury not otherwise appropriated. The said amount shall be programmed and
released by the Budget Commission in accordance with the schedule of cash requirements to
be prepared and submitted by the Mindanao Railways Corporation. Provided, That this
continuing annual appropriation of Two Hundred million pesos (R200,000,000.00) and the
programming and release thereof shall remain in force until the authorized capital subscribed by
the Government shall have been paid in full

SEC. 4, General Powers. The Corporation shall have the following general powers:
(a) To do all such other things and to transact all such business directly or indirectly
necessary, incidental or conducive to the attainment of the purpose of the corporation;

and
(b) Generally, to exercise all powers of a railroad corporation under the Corporation Law

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SEC. 5, Board of Directors, Composition and Appointment, The corporate powers of the
corporation shall be vested in and exercised by a Board of Directors of not more than eleven
and not less than five members as may be fixed by the President of the Philippines, consisting
of chairman, vice-chairman, and other members appointed by the President of the Philippines
with the consent of the Commission on Appointments. The members of the Board need not be
stockholders of the Corporation, The first members of the Board shall serve as designated by
the President in their appointments for terms of one, two, and three years, respectively, from the
date they qualify an assume office; but their successors shall be appointed for terms of three,
except that any person chosen to fill a vacancy shall serve only for the unexpired term of the
member whom he succeeds. For actual attendance of the meetings, each member shall receive
a per diem of eight hundred pesos (800.00)

The Chairman and all the members of the Board must be residents of Mindanao for at least
seven (7) years prior to the appointments.

SEC. 6. Powers and Duties of the Board of Directors. The Board of Directors shall have the
following powers and duties:

(a) To prescribe, amend and repeal, the by-laws, rules and regulations governing the
manner in which the general business of corporation may be exercised, including
provisions for the formation of such committee or committees as the Board of the
Directors may deem necessary to facilitate its business;

(b) To appoint and fix the compensation of the General Manager, subject to the approval of
the President of the Philippines, and to appoint and fix the compensation of the other
officers of the Corporation. The Board by a majority vote of all the members may, for
cause, suspend and/or remove the General Manager, and

(0) To approve the annual and/or such supplemental budgets of the Corporation which may
be submitted to it by the General Manager from time to time

SEC. 7. Suspension and Removal of Directors. Any member of the Board of Directors may,
for cause, be suspended or removed by the President of the Philippines.

SEC. 8, Prohibition for Board Members.- No Chairman or member of the Board of Directors
of the Corporation shall at the same time serve in the Corporation in any capacity whatsoever
other than as Chairman or member thereof, unless otherwise authorized by the President of the
Philippines or existing law.

SEC. 9, Managing Head. The management of the Corporation shall be vested in the General
Manager.

SEC. 10, 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 Corporation 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, as Vice-chairman, and participates in its
deliberations, with the right to vote, and to preside any meetings for or in the absence of
the Chairman;

(c) To submit within sixty (60) days after the close of each fiscal year an annual report,
through the Board of Directors, to the office of the President of the Philippines;

(d) To appoint and fix the number and salaries, with the approval of the Board of Directors,
to remove, suspend, or otherwise discipline, for cause, any subordinate employee of the
Corporation; and

(e) To perform such other duties as may be assigned to him by the Board of Directors from
time to time.

SEC. 11. Appointment and Promotion. In the appointment and promotion of officers and
employees, merit and efficiency shall serve as basis, and no political test or qualification shall
be prescribed and considered for such appointments or promotions. Said officers and
employees shall be subject to the Civil Service Law, rules and regulations.

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SEC. 12. Exemption from Taxes, Duties and Port Charges. The Corporation is hereby
exempt from payment of all taxes of every name and nature — municipal, city, provincial or
national - upon its capital stock, franchises, right of way, earnings, and all other property owned
or operated by it and all duties on all railways materials, supplies and equipment imported in the
Philippines for and/or by the said Corporation and this exemption shall extend to port charges
upon vessels whose entire cargo consist of materials for the construction or equipment of the
Corporation 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 cargo
of the vessel

SEC. 13. Audit Personnel and Report. The Commission on Audit shall appoint a
representative who shall be the Auditor of the Corporation, and the necessary personnel to
assist said representative in the performance of his/her duties. The number and salaries of the
Auditor and said personnel shall be determined by the Commission on Audit, subject to
appropriation by the Board of Directors. In case of disagreement, the matter shall be submitted
to the President of the Philippines whose decision shall be final. Said salaries and all other
expenses of maintaining the Auditor's office shall be paid by the Corporation,

(a) Report - The financial transaction of the Corporation shall be audited in accordance with
law, administrative regulations and the principles and procedures applicable to
commercial corporate transactions. A report of audit for each fiscal year, by the
representative of the Commission on Audit, through the latter, to the Board of directors
of the Corporation, and copies thereof shall be furnished the President of the Philippines,
and the Presiding Officers of the two Houses of Congress. 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 arid
expenses; a statement of sources and application of 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 also shows specifically any program, expenditures or other financial
transaction or undertaking observed in the course of audit, which in the opinion of the
Auditor, has been carried on or made without authority of law.

SEC. 14, Legal Counsel. The Corporation shall have its own Legal department, the chief and
members of which shall be appointed by the Board of Directors,

SEC. 15. Exemption from the Land Transportation Commission Act. The Corporation shall
not be subject to the authority and supervision of the Land Transportation Commission.

SEC. 16, Liquidation. When its term or period of existence has expired in accordance with the
provision of this Act, the Corporation shall nevertheless continue as a body corporate for three
(3) years after the time of its dissolution for the purpose of prosecuting and defending suits by or
against it and of enabling it gradually to settle and close its affairs, to dispose of and convey its
properties, but not for the purpose of continuing the business for which it was established, In
order to carry out its liquidation, upon the dissolution of the Corporation, a Board of Liquidators
shall be appointed by the President to take charge of winding up its corporate affairs and
effecting its liquidation,

SEC. 17. Strikes During National Emergency. The provisions of law to the contrary
notwithstanding, in cases of national emergency, or when in the opinion of the President of the
of the Philippines, the national security or interest is in imminent danger, employees and
laborers of the Corporation shall not strike for the purpose of securing changes or modification
in their terms and conditions of employment during said period of emergency.

SEC. 18. Reversion of General Funds. All funds resulting from dissolution and liquidation of
the Corporation as herein provided shall revert to the general funds of the Government.

SEC. 19. Applicability of the Corporation Law. The provisions of the Corporation Law which

are not inconsistent with the provisions of this Act, shall be applicable lo the corporation created
hereby.

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SEC. 20. Repealing Clause. The provisions of Republic Act No. 4156, as amended, creating
the Philippine National Railways and all acts, executive orders, administrative orders, and
proclamations or parts thereof inconsistent with any of the provision of this Act, are hereby
repealed or modified accordingly,

SEC. 21. Separability Clause. If any part or provision of this Act is declared invalid or
unconstitutional, the remaining parts or provisions not affected thereby, shall remain in full force
and effect.

SEC, 22. Effectivity. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in at least two (2) newspapers of general circulation.

Approved,

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