[ Commonwealth Act No. 337, June 21, 1938 ]
AN ACT AUTHORIZING THE CHARTERED CITY OF CEBU TO ISSUE BONDS FOR THE PURPOSE OF PROVIDING FUNDS TO CONSTRUCT NECESSARY SEWER FACILITIES IN SAID CITY, AND AUTHORIZING ALSO A NATIONAL GOVERNMENT BOND ISSUE SECURED BY SAID CITY BONDS.
Be it enacted by the National Assembly of the Philippines:
Section 1. The Government of the City of Cebu is hereby authorized to negotiate a loan in the sum of three hundred fifty thousand pesos to be used for the construction of necessary sewer facilities in the said city. At the request of the City Council of Cebu, and on the recommendation of the Secretary of Finance, the necessary bonds for said loan shall be is-sued by the President of the Philippines, who is hereby authorized to issue the same in the name and behalf of said city. The bonds so authorized shall be issued in convenient denominations, in registered form, and shall be registered and transferable and payable in the Office of the Treasurer of the Philippines in Manila. They shall have the same date, bear interest at the same rate, and be payable at the same time as the bonds of the Commonwealth of the Philippines authorized to be issued in section three of this Act: Provided, however, That the interest rate on .said bonds shall not be in excess of five per centum per annum.
Section 2. The President of the Philippines is further authorized to convey and transfer said bonds to the Commonwealth of the Philippines for a consideration, charging the same to the net proceeds of the sale of bonds of the Commonwealth of the Philippines issued in an equivalent amount, as provided in section three of this Act, and to deposit the proceeds of said conveyance with the Treasurer of the Philippines. The proceeds of the conveyance to the National Government of said bonds shall be credited by the Treasurer of the Philippines to the "Public Works Bond Fund, City of Cebu" and be withdrawn only for the purpose set forth in this Act, by order of the Secretary of Finance.
Section 3. The President of the Philippines is authorized to issue in the name and behalf of the Commonwealth of the Philippines, bonds to the amount of three hundred fifty thousand pesos for a term of thirty years secured by the bonds of the City of Cebu herein authorized and conveyed and transferred to the National Government as provided in sections one and two of this Act. The President of the -Philippines shall determine the form of the National Government bonds, the date of issue thereof, and the rates and dates of payment of the interest thereon, which rate shall not be in excess of live per centum per annum. The National Government bonds may be coupon bonds or registered bonds, in the discretion of the President of the Philippines, and shall be registered in the Treasury of the Philippines, where the principal and interest shall be payable in Philippine currency or its equivalent in United States currency, in the discretion of the Secretary of Finance. The President of the Philippines is further authorized to sell said National Government bonds in the Philippines, only at public auction through the Treasurer of the Philippines, upon such terms and conditions as in his judgment are most favorable to the Commonwealth of the Philippines, and he shall deposit the proceeds of the sale thereof with the Treasury of the Philippines, to the credit of the National Treasury.
Section 4. The proceeds of the sale of the National Government bonds authorized to be issued by this Act are hereby appropriated for the payment of the bonds issued by the City of Cebu and conveyed and transferred as security for the National Government bonds above mentioned, in accordance with sections one and two of this Act.
Section 5. The National Government and city bonds hereby authorized to be issued shall be exempt from taxation by the Commonwealth of the Philippines or of any political or municipal subdivision thereof, and subject to the provisions of the Act of Congress, approved March 24, 1934, otherwise known as the Tydings-McDuffie Law, which facts shall be stated upon their face.
Section 6. A sinking fund is created for the payment of the National Government bonds issued under the provisions of this Act, in such a manner that the total amount thereof at each annual due date of the bonds issued shall be equal to the total of an annuity of nineteen hundred and thirty-seven pesos and thirteen centavos for each one hundred thousand pesos of bonds outstanding, accrued at the rate of interest of three and one-half per centum per annum.(awÞhi( Said fund shall be under the custody of the Treasurer of the Philippines who shall invest the same, in such manner as the Secretary of Finance may approve, in accordance with the provisions of Act Numbered Three thousand and fourteen which governs the investment of sinking funds, shall charge all the expenses of such investment to said sinking fund, and shall credit to the same the interest on investments and other income belonging to it.
Section 7. A standing annual appropriation is made out of any general funds in the National Treasury, of such sums as may be necessary to provide for the sinking fund created in section six and for the interest on the National Government bonds issued by virtue of this Act. A further appropriation is made out of the general funds in the National Treasury not otherwise appropriated, of a sufficient sum to cover the expenses of the issue and sale of the National Government and city bonds authorized by this Act. The National Government shall be reimbursed by the City of Cebu for the sums so disbursed for the sinking fund, interest and expenses of the issue and sale of the bonds, with in thirty days after payment of said expenses by the National Government out of the general fund of the City. In case the City Council of Cebu shall fail to make such reimbursement, the Collector of Internal Revenue and the city treasurer of the City of Cebu are hereby authorized and directed, any provision of existing law to the contrary notwithstanding, to withhold from the revenues of the said city that may come into their possession an amount sufficient to make the reimbursement or any other reimbursement above provided, and shall deposit said sum with the Treasurer of the Philippines, to the credit of the general funds of the National Government.
Section 8. The provisions of existing law to the contrary notwithstanding, the Director of Public Works shall have charge and exclusive control of all work to be done and improvements to be made under the provisions of this Act, which works shall be begun as soon as the Treasurer of the Philippines shall certify that the funds herein provided for are available.
Section 9. Until the bonds shall have been fully paid and until the National Assembly shall provide otherwise, the administration, control, operation, maintenance, and improvement of the sewerage system established with the proceeds of the sale of the bonds authorized by this Act shall be vested in a sewerage board, composed of the Director of Public Works or his representative, who shall be chairman of the Board, the Director of Health or his representative and the City Mayor who shall be members. Said board hereby created shall perform its functions in accordance with the regulations made or that may, in the future, be made with the approval of the Secretary of Public Instruction and the Secretary of Public Works and Communications. All income derived from the sewerage system shall be credited to a special fund which may be used only for the following purposes, in the order stated: First, for the payment of the reimbursement mentioned in section seven of this Act; second, for the operation and maintenance of the sewerage system; third, for the improvement and extension of the system, provided that the plans therefor have been duly approved by the Director of Public Works; and fourth, in case there is a surplus of the receipts not required for said purposes, said surplus may be used for the general purposes of the City of Cebu.
Section 10. This Act shall take effect upon its approval.
Approved, June 21, 1938.
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