09 JUL 2013

SIXTEENTH CONGRESS. ) fon fan
REPUBLIC OF THE PHILIPPINES. )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No,_1219
EXPLANATORY NOTE

This bill was originally introduced as House Bill No, 1723 by the
undersigned Rufus B. Rodriguez 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.

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 XII 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 pursuit 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.

RUFYS B. RODRIGUEZ

MAXI B, RODRIGUEZ, JR.


SIXTEENTH CONGRESS. )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B, Rodriguez and
Representative Maximo B. Rodriguez, Jr.

1219

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

House Bill No.

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 of 2013”.

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 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 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;

©) 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/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;

(g) 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


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:

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 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 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 shail 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) Anatural born 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) 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;

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 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 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;

e) 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 shall 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 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 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 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 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 shalll take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) national newspapers of
general circulation.

Approved,