Law Summary

SECTION 1: Amendment of Franchise Grant

• Legal Principle: This section amends the original Republic Act No. 3247, granting the Cagayan Electric Power and Light Co., Inc. a franchise to operate an electric system.
• Key Definitions:
  • Grantee: Cagayan Electric Power and Light Co., Inc., a corporation organized under Philippine law.
  • Electric light, heat, and power system: Refers to the infrastructure for generating and distributing electricity.
• Important Requirements:
  • The grantee is authorized to construct, maintain, and operate an electric light, heat, and power system in specified areas.
  • The areas include the municipalities of Tagoloan and Opol, and the city of Cagayan de Oro, and its suburbs.
  • The grantee can install necessary infrastructure (poles, wires, transformers, etc.) on public properties.
• Relevant Timeframes:
  • The franchise is granted for a period of 50 years from the approval date of this Act.
• Consequences:
  • The grantee must comply with the terms of the franchise and the provisions of the Constitution and relevant laws.

SECTION 2: Franchise Tax Obligations

• Legal Principle: This section outlines the financial obligations of the grantee regarding franchise tax.
• Key Definitions:
  • Franchise Tax: A tax imposed on the gross earnings from the sale of electricity.
• Important Requirements:
  • The grantee is required to pay a franchise tax of 3% of gross earnings from electric current sold.
  • Tax distribution:
    • 2% to the National Treasury
    • 1% to the treasuries of the municipalities of Tagoloan, Opol, and Cagayan de Oro City.
• Consequences:
  • This franchise tax is in lieu of all other taxes and assessments, exempting the grantee from additional taxes on privileges, earnings, income, franchise, and related infrastructure.

SECTION 3: Title Amendment

• Legal Principle: This section amends the title of the original Act to reflect the expanded franchise scope.
• Updated Title:
  • “An Act granting the Cagayan Electric Power and Light Co., Inc., a franchise to install, operate, and maintain an electric light, heat, and power system in the municipalities of Tagoloan and Opol and in the City of Cagayan de Oro and its suburbs.”

Effective Date

• Legal Principle: The Act becomes effective upon approval.
• Relevant Details:
  • Approved on June 21, 1963.

Key Takeaways

• Republic Act No. 3570 amends the franchise of Cagayan Electric Power and Light Co., Inc. to include additional areas and extend the franchise term to 50 years.
• The company is subject to a 3% franchise tax on gross earnings, with specific allocations to government entities.
• The title of the original Act has been amended to accurately reflect the expanded operational areas.
• The amended provisions underscore the importance of compliance with both the franchise terms and relevant constitutional and statutory requirements.