Agency role and objectives
- Section 2 makes the corporation an agency of the Commonwealth and the Government for the following objectives:
- Section 2 requires facilitation of the acquisition, settlement and cultivation of lands whether acquired from the Government or from private parties.
- Section 2 provides for affording opportunities to own farms to tenant farmers and small farmers from congested areas, and to trainees who completed the prescribed military training.
- Section 2 mandates encouragement of migration to sparsely populated regions and facilitation of the amalgamation of the people in different sections of the Philippines.
- Section 2 directs development of new money crops to replace present export crops that may suffer loss of preferences in the American market.
Core powers over land and settlement
- Section 3 empowers the corporation to hold public agricultural lands without limitation as to area for a period not exceeding twenty-five years, renewable by the President for another period not exceeding twenty-five years.
- Section 3 authorizes the corporation to recommend to the President the reservation of public lands, preferably those along national highways.
- Section 3 requires that reserved lands be provided with clearing, breaking, and cultivation for subsistence farming, for money crops, or for both, on a cooperative basis or under beneficial arrangements for settlers.
- Section 3 directs that the corporation provide for survey into convenient lots and set aside areas for town sites, roads, government building sites, parks, and other public improvements.
- Section 3 charges the expenses for survey and subdivision for allotment to settlers or for initial cultivation to the fund appropriated under the law, prorated among the lots of the subdivisions and charged against corresponding settlers.
Disposition limits, qualifications, and restrictions
- Section 3 empowers the corporation to dispose of reserved, held, surveyed, or subdivided lands to persons qualified under the Constitution and the Public Land Act, and with any other qualifications the Board of Directors may prescribe.
- Section 3 requires that disposition and final grant of land be subject to limitations in the Constitution and the Public Land Act, and to conditions imposed by the Board of Directors.
- Section 3 prohibits, within ten years after final grant, any encumbrance, alienation, or transfer of the land except by inheritance, and prevents the land from becoming liable to satisfy any debt contracted prior to the expiration of that ten-year period.
- Section 3 permits mortgages or pledges of improvements or crops on the land to credit agencies created under the Act.
- Section 3 limits holdings by stating that no settler may hold a lot more than twenty-four hectares.
- Section 3 prohibits any officer or employee of the corporation from acquiring, directly or indirectly, any land within the reservation unless the acquisition has specific approval of the Board of Directors in each case.
- Section 3 provides a recruitment rule: applicants must be recruited from all provinces in proportion to their respective population; if a province cannot fill its quota, the unfilled portion is covered from other provinces with greater number of applicants.
Acquisition from private parties and development activities
- Section 3 authorizes acquisition from private parties of lands necessary to carry out corporate purposes for roads, highways, streets, and avenues, or for private lands surrounded by or adjacent to public land acquired by the corporation.
- Section 3 empowers the corporation to make contracts and enter into arrangements convenient and advantageous for the common interest of settlers and the Government, including development, exploitation, and operation of corporate properties.
- Section 3 authorizes the corporation to establish and operate credit agencies to extend credit to settlers secured by the rights acquired by them as settlers, based on the crops raised or improvements made by them.
- Section 3 caps loan interest: the rate of interest on such loans must not exceed six per centum per annum.
- Section 3 authorizes creation and operation of electric light and water plants, water supplies, irrigation systems, and trading stores or cooperatives to buy and sell commodities and to provide other services or improvements that the Board judges will promote settlers’ well-being.
- Section 3 allows the corporation to act as agent, broker, commission merchant, or representative of settlers in marketing products raised or made by settlers.
- Section 3 authorizes borrowing, issuing bonds, or otherwise raising funds for corporate objects whenever necessary in the interest of settlers, with the corporation’s property as security.
- Section 3 empowers the corporation to engage in manufacturing, milling, lumbering, retailing, and other business enterprises or industries necessary or desirable to ensure success of land settlement projects.
- Section 3 authorizes adoption of uniform rules and regulations necessary to carry out the purposes of the Act.
Board governance and compensation limits
- Section 4 requires the Board to elect its chairman from among its members.
- Section 4 establishes that three members constitute a quorum for transaction of business.
- Section 4 provides that non-government members of the board receive per diems determined by the board, not to exceed thirty pesos for each day of meeting actually attended.
Manager appointment and staffing approvals
- Section 5 requires the Board to appoint a manager subject to the approval of the President of the Philippines.
- Section 5 sets the manager’s compensation at a maximum of eighteen thousand pesos per annum.
- Section 5 provides that the manager may appoint technical, clerical, and other employees subject to approval by the Board.
- Section 5 requires presidential approval for appointments for positions with compensation of two thousand four hundred pesos per annum or more.
Capital, appropriations, and reporting
- Section 6 sets the corporation’s capital stock at twenty million pesos, subscribed by the Government of the Philippines.
- Section 7 appropriates funds to pay for capital subscriptions required from time to time by the Board with presidential approval.
- Section 7 limits yearly capitalization funding: the aggregate value that may be paid in any one year must not exceed four million pesos.
- Section 7 specifies funding sources as the proceeds of the coconut oil excise tax or any other available funds in the Philippine Treasury.
- Section 8 requires the corporation to submit its annual report and balance sheet to the President of the Philippines and the National Assembly in accordance with sections 574 to 577 inclusive of the Administrative Code.
Effectivity and commencement
- Section 9 provides that the Act takes effect upon its approval.
- The law was approved June 3, 1939, so effectivity is upon approval.