Pinoy Coops: Rules and Regulations Implementing the Special Provisions of RA 9520

RULES AND REGULATIONS IMPLEMENTING THE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008 (REPUBLIC ACT NO. 9520)

TITLE AND DEFINITIONS

Section 1. Title. These Rules shall be known as the "Rules and Regulations Implementing the Special Provisions of the Philippine Cooperative Code of 2008."

Section 2. Definition of Terms. For the purpose of these Rules and Regulations, the following terms are defined as follows:

1. Accreditation - shall refer to the act of the OTC Board of Directors recognize the Transportation Service Cooperatives and which shall take place after registration with the CDA as evidenced by a Certificate of Accreditation.

2. Agrarian Reform Area - shall refer to the area subject to the coverage of Comprehensive Agrarian Reform Program (CARP)/Comprehensive Agrarian Reform Program Extension with Reform (CARPER).

3. Agrarian Reform Beneficiaries (ARBs) - shall refer to the qualified beneficiaries of Comprehensive Agrarian Reform Program (CARP) as defined under Section 22, Chapter VII of R.A. 6657.

4. Agrarian Reform Community (ARC) - shall refer to a community composed and managed by ARBs who are willing to be organized and to undertake the integrated development of an area and/or their organizations or cooperatives as defined under RA 9700, otherwise known as the Comprehensive Agrarian Reform Program Extension with Reform (CARPER) Act.

5. Agrarian Reform Cooperative - shall refer to one organized by marginal farmers majority of which are Agrarian Reform Beneficiaries duly registered with the Authority for the purpose of developing an appropriate system of land tenure, land development, land consolidation or land management in areas covered by agrarian reform and for other purposes as provided by law. The same shall also refer to Agrarian Reform Beneficiaries Cooperative (ARB Coop) as defined in DAR Administrative Order No. 05, Series of 2009.

6. Authority - shall refer to Cooperative Development Authority (CDA).

7. BFAD - shall refer to Bureau of Food and Drugs.

8. Blanket Loan/Wholesale Loan - shall refer to a housing loan contracted/obtained by a housing cooperative intended to identify member-beneficiaries for land acquisition, land improvement, house construction, home improvement, or renovation and other similar purposes.

9. BSP - shall refer to Bangko Sentral Pilipinas.

10. CGS - shall refer to the Certificate of Good Standing issued by the Authority to all types of cooperatives. Transportation Service Cooperative shall also secure another CGS from OTC or LGU, whichever is applicable.

11. CLOA - shall refer to the Certificate of Land Ownership Award.

12. Commission - shall refer to the Insurance Commission.

13. Cooperative Education and Transport Operation Seminar (CETOS) - shall refer to seminars conducted by CDA and/or OTC for the purpose of providing continuing education on cooperative and transport operation to enhance the knowledge and capability of the officers as well as the members of the Transportation Service Cooperative.

14. Cooperative Housing Program - shall refer to an alternative housing approach, in partnership with government/non-government agencies involved in a housing program, undertaken by a financially and organizationally stable cooperative to address the housing problems of its members primarily the low-income earners through its own cooperative efforts in planning and direct production of affordable, decent and adequate housing units.

15. CPCN/Franchise/Permit - shall refer to the Certificate of Public Convenience and Necessity issued by the appropriate government agencies which authorizes the grantee thereof to render the appropriate public service.

16. Dairy Cooperative - shall refer to one whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products.

17. Distribution of Electricity - shall refer to the conveyance of electric power by a distribution utility through its distribution system pursuant to the provisions of the EPIRA Law.

18. Distribution of Utility - shall refer to any Electric Cooperative, private corporation, government-owned utility, or existing local government unit which has an exclusive franchise to operate a distribution system in accordance with the EPIRA Law.

19. DAR - shall refer to the Department of Agrarian Reform.

20. DOH - shall refer to Department of Health.

21. DOTC - shall refer to Department of Transportation and Communications.

22. Electric Cooperative - shall refer to one organized for the primary purpose of undertaking power generation, utilizing renewable energy sources, including hybrid system, acquisition and operation of subtransmission or distribution to its household members.

23. Extension Offices - shall refer to the offices of the Authority covering one geo-political region each as their area of jurisdiction.

24. EPIRA - shall refer to the Electric Power Industry Reform Act of 2001.

25. GSIS - shall refer to the Government Service Insurance System.

26. High Rise/Condominium Housing - shall refer to the construction of at least five (5) storey residential building in high density urban and rural areas to provide housing to low income earners.

27. HDMF - shall refer to the Home Development Mutual Fund or Pag-IBIG Fund.

28. HLURB - shall refer to the Housing and Land Use Regulatory Board.

29. Housing Beneficiaries - shall refer to regular members in good standing of the Housing Cooperative who actively in the By-laws and duly approved internal policies of the cooperative.

30. Housing Cooperative - shall refer to one organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. It is co-owned and controlled by its members.

31. Insurance Cooperative - shall refer to one engaged in the business of insuring life and property of cooperatives and their members. It shall also refer to Cooperative Insurance Societies (CIS).

32. Insurance Like Activity - shall refer to any activity involving regular collection of premiums, fees, contributions, or charges prior to the occurrence of contingent event and the payment of guaranteed benefits upon the occurrence of such event.

33. LBP - shall refer to the Land Bank of the Philippines.

34. LGU - shall refer to Local Government Unit.

35. LTFRB - shall refer to the Land Transportation Franchising and Regulatory Board.

36. LTO - shall refer to the Land Transportation Office.

37. LWUA - shall refer to the Local Water Utilities Administration, created under PD 198, as amended.

38. MARINA - shall refer to Maritime Industry Authority.

39. Marginal Farmers - shall refer to farmers who are tilling an area of not more than three (3) hectares.

40. Medium Rise Housing - shall refer to the construction of a maximum of four (4) storey residential building in high density urban and rural areas to provide housing to low income earners.

41. Member in Good Standing - shall refer to one who is a regular member and has complied with all the requisites for membership. One who possesses all the qualifications and none of the disqualifications provided in the Cooperative By-laws as ascertained by the Board of Directors and has the right to vote and be voted upon.

42. Micro-Insurance - shall refer to an activity providing specific insurance, insurance-like, and other similar products and services that meet the needs of the low-income sector for risk protection and relief against distress, misfortune and other contingent events. This shall include all forms of insurance, insurance-like and other similar activities, as may be defined by concerned regulatory bodies with features such as: premiums, contributions, fees or charges collected/deducted prior to the occurrence of a contingent event and guaranteed benefits provided upon occurrence of a contingent event.

43. Micro-Insurance Product - shall refer to a financial product or service that meets the risk protection needs of the poor where the amount of premiums, contributions, fees or charges computed on a daily basis does not exceed five percent (5%) of the current daily minimum wage rate for non-agricultural workers in Metro Manila, as approved by the National Wages Productivity Board (NWPB)/Regional Tripartite Wages Productivity Board (RTWPB) and the maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate for non-agricultural workers in Metro Manila.

44. NDA - shall refer to National Dairy Authority.

45. Next of Kin - shall, for purposes of succession, refer to an natural person who is an heir of an agrarian reform beneficiary and who is qualified to be a member of the cooperative as ARB under its By-laws and as determined by DAR.

46. NHA - shall refer to the National Housing Authority.

47. NWRB - shall refer to the National Water Resources Board, created under PD 424.

48. OTC - shall refer to the Office of Transportation Cooperatives.

49. PCG - shall refer to the Philippine Coast Guard.

50. Referendum - shall refer to a mechanism of securing the approval of the general membership of an Electric Cooperative on issues affecting its registration, operation, and management.

51. Regular Insurance Product - shall refer to all other insurance policies not covered by Micro-Insurance Product.

52. Renewable Energy Resources - shall refer to energy resources that do no have an upper limit on the total quality to be used. Such resources are renewable on a regular basis and the renewable rate is rapid enough to consider availability over an infinite time. These include among others, biomass, solar, wind, hydro and ocean energy.

53. RTWPB - shall refer to the Regional Tripartite Wages Productivity Board.

54. SSS - shall refer to the Social Security System.

55. Socialized Housing - shall refer to the housing program and project undertaken by the government and private sector for the underprivileged and homeless which may also be undertaken by a Housing Cooperative. This includes sites and services development, long-term financing and liberalized terms on interest payments.

56. Sub-transmission Assets - shall refer to the facilities related to the power delivery service below the transmission voltages and based on the functional assignment of assets, including, but not limited to stepdown transformers used solely by load customers, associated switchyard/substation, control and protective equipment, reactive compensation equipment to improve customer power factor, overhead lines, and the land where such facilities/equipment are located. These include NPC assets linking transmission system and the distribution system which are neither classified as generation nor transmission.

57. Supply of Electricity - shall refer to the sale of electricity by a party other than a generator or a distributor in the franchise area of a distribution utility using the wires of the distribution utility concerned.

58. Technical Plan - shall refer to all technical documents required in planning a housing project namely, the bar chart and construction schedule, systematic development plan, the architectural and detailed engineering and housing design, contract documents, technical and material specification.

59. Transmission of Electricity - shall refer to the conveyance of electricity through the high voltage system.

60. Transportation Service Cooperative - shall refer to one which engages in land and sea transportation, limited to small vessels, as defined or classified under the Philippine Maritime laws, organized under the provision of the Code.

61. Urban Areas - shall refer to all cities regardless of their population density and to municipalities with a population density of at least 500 persons per square kilometer.

62. Urbanizable Areas - shall refer to the sites and lands within display marked and great potential of becoming urban areas within the period of five (5) years.

63. Water Tariff - shall refer to the water rate charged to customers/members for water consumption as determined by the cooperative and approved by the NWRB.

64. Water Permit - shall refer to the authority to appropriate and use water.

65. Water Right - shall refer to the privilege granted by the government to appropriate and use water.

66. Water Service Cooperative - shall refer to a duly registered cooperative organized to own, operate, and manage water supply systems for the provision and distribution of potable water for its members/consumers.

67. Water Supply - shall refer to the supply of potable water as provided by the cooperative for domestic, industrial, commercial, and other uses.

68. Worker Beneficiaries - shall refer to a natural person who renders service for a value as an employee or laborer in an agricultural enterprise or farm within an ARC, regardless of whether his compensation is paid on a daily, weekly, monthly or "pakyaw" basis.

RULE I - HOUSING COOPERATIVES

Pursuant to the provisions of Art. 62(13) (par.2) under Chapter V of Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Cooperative Development Authority in consultation with NHA, HDMF, SSS, LBP, and concerned cooperative sector hereby promulgates the following rules and Regulations for the proper guidance and compliance of Housing Cooperatives.

Section 1. Coverage. This Rule shall cover all cooperatives duly registered with the Authority under R.A. 9520 organized to assist or provide access to housing for the benefit of its regular members.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest and actually residing or working in the intended area of operation, may organize a housing cooperative.

Section 3. Purpose and Objectives. A Housing Cooperative shall be organized for any or all of the following purposes:

(1) To facilitate access and/or provide affordable housing units to its members;

(2) To create a resource mobilization program to ensure financial stability for the cooperative;

(3) To foster and strengthen the principles of cooperativism by promoting a comprehensive and integrated community development program which are planned and managed by the cooperative members thereby ensuring a sustained and self-reliant cooperative community.

(4) To develop collaborative efforts and partnership with other cooperatives, CDA, NHA, GSIS, HDMF, SSS, LBP, DBP, HLURB and other government agencies, financial institutions and entities thereby assuring availability of resources and lower cost of housing development.

(5) To expand the cooperatives business operations by stabilizing the available resources for the continuing production of housing units for its members.

(6) To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes.

Section 4. Housing Programs and activities. Housing Cooperatives may engage in the following activities:

a. Socialized Housing;

b. Medium Rise Public and Private Housing;

c. High Rise/Condominium Housing;

d. Student/Faculty Dormitory Housing;

e. Production and Distribution of Housing Materials;

f. Estate Management; and

g. Other similar activities.

Section 5. Registration Jurisdiction. Housing Cooperatives shall file their application for registration with the CDA Extension Office, which shall have jurisdiction over the said cooperatives.

Section 6. Capitalization. For purposes of registration with the Authority, a housing cooperative shall have a minimum paid-up capitalization of Fifteen Thousand Pesos (P 15, 000.00).

Section 7. Requirements for Registration. The following shall be complied with upon filing of application:

A. New Applicant

(1) Name Verification Slip;

(2) Articles of Cooperation and by-Laws;

(3) Sworn Statement of the treasurer elected by the subscribers showing that at least ` twenty-five per centum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capital be less than Fifteen Thousand Pesos (15,000.00);

(4) Surely Bond of Accountable Officers handling funds, properties and securities;

(5) Pre-Membership Education Seminar (PMES);

(6) Economic Survey;

(7) Pre-Feasibility Study of the housing projects undertaking as reviewed by NHA;

(8) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name; and

(9) Registration Fee.

B. Existing Cooperative

(1) Amended Articles of Cooperation and By-laws;

(2) A Resolution certified by the Board Secretary and by the majority of the Board of Directors stating that the said amendments have been duly approved by at least two-thirds (2/3) vote of the members with voting rights;

(3) Audited Financial Statements showing profitable operations for the past two (2) years;

(4) Pre-feasibility study of the housing projects undertaking as reviewed by NHA;

(5) Proof of business track record of the cooperative; and

(6) Amendment Fee.

Section 8. Financing and Technical Assistance. The Authority, in coordination with appropriate government agencies and financial institutions, shall assist the housing cooperative in availing technical and financial assistance for its housing projects.

For this purpose, a special window for the financing of the housing projects shall be created by the appropriate housing agencies and government financial institutions. The financing shall be in the form of blanket loans or wholesale loans to qualified housing cooperatives, with interest rates and terms equal to, or better than those given for socialized housing projects without need for individual processing.

Section 9. Documentary Requirements in Availing for Technical and/or Financial Assistance. The cooperative in availing technical and/or financial assistance shall file its application with the appropriate government financial institutions.

For this purpose, the applicant cooperative shall comply with the documentary requirements as maybe required by such appropriate government financial institution.

Section 10. Conditions for the Proposed Housing Project. The proposed housing project of the cooperative shall have the following features as certified by the NHA:

1. Availability of Land Suitable for Housing. The land proposed for housing is classified as a safe and buildable area and not affected by any government infrastructure project, agricultural or industrial reserve.

2. Land Ownership. The land is owned by the cooperative or there is an on-going negotiation between the landowner and cooperative through a Contract to Sell or Reservation Agreement between the landowner and the cooperative and that the land is free from any liens and encumbrances.

3. Target Beneficiaries. The proposed housing project should have at least 30 initial target member-beneficiaries.

Section 11. Membership. Membership in Housing Cooperatives shall be open to all natural persons who meet the qualifications for membership prescribed in the cooperative By-laws.

Section 12. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Housing Cooperative such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of General Assembly, Board of Directors and Committees.

c. Manner of election and qualifications of Officers, Directors and Committee Members;

d. Allocation and distribution of surplus; and

e. Other matters relating to the internal affairs of Housing Cooperatives.

All matters relating to the technical aspects of the housing program and such other similar matters affecting the Housing Cooperatives shall be regulated by the NHA or HLURB as the case maybe.

Section 13. Joint Monitoring and Evaluation Committee. The Joint Monitoring and Evaluation Committee shall be composed of CDA, as the lead agency, NHA, HLURB, HDMF, SSS, GSIS, LBP, DBP, concerned cooperative sector and other appropriate government agencies and financial institutions.

The Committee shall have the following functions:

1. To formulate joint standards for the proper implementation, monitoring, organization, management, and development of cooperative housing project all matters relating to the organizations, management, and development of the cooperative housing projects.

2. To recommend changes to this IRR from time to time if the need arises.

3. To assist in settling inter/intra cooperative disputes.

4. To submit annual accomplishment report to the Authority.

Section 14. Settlement of Disputes. Intra/inter cooperative disputes shall, as far as impracticable, be settled amicably through the conciliation and mediation mechanism embodied in the By-laws of the cooperative, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation for Cooperative Disputes, and in applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the NHA or HLURB, the same shall be referred to the said agency and it shall be resolved in accordance with the NHA or HLURB regulations.

RULE II - AGRARIAN REFORM COOPERATIVES

Pursuant to the provisions of Art. 93 (6) and Art. 94 (par. 2) under Chapter XI of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Authority in consultation with the DAR, BSP, LBP, and the concerned cooperative sector hereby promulgates the following rules and regulations for proper guidance and compliance of Agrarian Reform Cooperatives.

Section 1. Coverage. This Rule shall cover all Agrarian Reform Cooperatives duly registered with the Authority under R.A. No. 9520.

Section 2. Organization. At least fifteen (15) marginal farmers majority of which are Agrarian Reform Beneficiaries in an agrarian reform areas may organized an Agrarian Reform Cooperative.

Section 3. Purposes and Objectives. Agrarian Reform Cooperatives shall be organized for any or all of the following purposes:

(1) To develop an appropriate system of land tenure, land development, land consolidation or land management in areas covered by agrarian reform;

(2) To coordinate and facilitate the dissemination of scientific methods of production and provide assistance in the processing, storage, transport, and marketing of farm products for Agrarian Reform Beneficiaries and their immediate families, hereinafter referred to as "beneficiaries";

(3) To provide financial facilities to beneficiaries for provident or production purposes at reasonable costs;

(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiaries and marginal farmers at the lowest possible costs;

(5) To provide social security benefits, health, medical and social insurance benefits and other social and economic benefits that promote the general welfare of the agrarian reform beneficiaries and marginal farmers;

(6) To provide a non-formal education, vocational/technical training and livelihood program to beneficiaries and marginal farmers;

(7) To act as channels for external assistance and services to the beneficiaries and marginal farmers;

(8) To undertake a comprehensive and integrated development program in agrarian reform and resettlement areas with special concern for the development of agro-based, marine-based, and cottage-based industries;

(9) To represent the beneficiaries on any or all matters that affect their interest; and

(10) To undertake such other economic or social activities as may be necessary or incidental in the pursuit of the foregoing purposes.1avvphi

Section 4. Registration Jurisdiction. Agrarian Reform Cooperatives shall file their duly accomplished application for registration with the CDA Extension Office, which shall have jurisdiction over the said cooperatives.

Section 5. Registration Requirements. The following shall be complied with upon filing of application:

(1) Name Verification Slip;

(2) Articles of Cooperation and By-Laws;

(3) Sworn Statement of the Treasurer elected by the subscribers showing that at least twenty-five per centum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capital be less than Fifteen Thousand Pesos (P15,000.00);

(4) Surety Bond of Accountable Officers;

(5) Pre-Membership Education Seminar (PMES);

(6) Economic Survey;

(7) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name;

(8) Mother CLOA in case of plantation based ARBs;

(9) Written verification from the DAR to the effect that the cooperative organization is needed and desired by the beneficiaries; results of a study that has bee conducted fairly indicate the economic feasibility of organizing the same and that will be economically viable in the operations; that at least majority of the members are Agrarian Reform Beneficiaries, and the same may now be organized and registered in accordance with the requirements of the Philippine Cooperative Code of 2008; and

(10) Registration fee.

Section 6. Cooperative Name. All cooperatives organized for any or all of the purposes/objectives enumerated under Section 3 of this Rule shall always bear the word "Agrarian Reform" whether engaged in the operation of public utilities and services and/or other business activities/services.

Existing ARB Coops shall amend their cooperative name to conform to this Section.

Section 7. Amendments of Articles of Cooperation and By-laws. Agrarian Reform Cooperative intending to engage in the operation of public utilities and services shall amend its Articles of Cooperation and By-Laws to legally provide for such services. IT shall also comply with the other requirements imposed by the Authority and the appropriate government agencies for cooperatives engaged in public utilities and services.

Section 8. Capitalization. For purposes of registration with the Authority, Agrarian Reform Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).

However, to engage in the operation of public utilities and services, the minimum capitalization shall be in accordance with the Rules and Regulations prescribed by the Authority for Multi-Purpose cooperatives under Rule 3 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (Republic Act No. 9520) and by the concerned government agency.

In case the ARB Coop engages in Transport Service, it shall comply with the other requirements prescribed in Section 5, Rule 5 of these Rules and Regulation.

Section 9. Membership Termination and Valuation and/or Transfer of Share Capital. Agrarian Reform Cooperative, other than plantation-based Agrarian Reform Cooperative shall be governed by Articles 30,31 and 74 of RA 9520 and the By-laws of the Cooperative.

However, plantation-based Agrarian Reform Cooperative which is covered by collective Certificate of Land Ownership Award (CLOA), shall be governed by the joint DAR-CDA Administrative Order No. 09, Series of 2008 entitled "Revised Rules and Regulations on ARB Membership Status and Valuation and/or Transfer of Paid-Up Share Capital in Agrarian Reform Plantation-Based Cooperatives dated September 4, 2008" including any amendments thereto or subsequent issuances.

Section 10. Privileges. Subject to reasonable terms and conditions that may be imposed by the DAR and the Authority, an Agrarian Reform Cooperatives duly registered with the Authority may be given exclusive right to do any or all of the following economic activities in agrarian reform and resettlement areas:

(1) Supply and distribution of consumer, agricultural, aqua-cultural, and industrial good, production inputs, and raw material and supplies, machinery, equipment, facilities and other services and other services and requirements of the beneficiaries and marginal farmers at reasonable prices;

(2) Marketing of the products and services of the beneficiaries in local and foreign markets;

(3) Provision of essential public services at cost such as power, irrigation, potable water, passenger and/or cargo transportation by land or sea, communication services, and public health and medical care services;

(4) Management, conservation, and commercial development of marine, forestry, mineral, water and other natural resources subject to compliance with the laws and regulations on environmental and ecological controls; and

(5) Provision of financial, technological, and other services and facilities requires by the beneficiaries in their daily lives and livelihood. Such terms and conditions shall be jointly formulated by the DAR and the Authority.

Section 11. Preferential Right/Treatment. In an agrarian reform and resettlement areas, a duly registered Agrarian Reform Cooperatives shall have preferential right/treatment form the government in the following matters:

(1) In the construction, maintenance and management of roads, bridges, canals, wharves, ports, reservoirs, irrigation systems, waterworks systems, and other infrastructures with government funding

The technical assistance, facilities and equipments to such agrarian reform cooperatives shall be provided by the Government.

(2) In the grant of Franchise and Certificate of Public Convenience and Necessity for the operation of public utilities and services: Provided, that it meets the requirements and conditions imposed by the appropriate government agency granting the Franchise or Certificate of Public Convenience and Necessity,

In case of electric service provider in the area, it shall, upon the request of an Agrarian Reform Cooperative, immediately provide electric services to the agrarian reform areas. If the electric service provided fails to provide the services requested within a period of one (1) year, the Agrarian Reform Cooperative may undertake to provide the electric services in the area through its own resources. All investments made by the said Agrarian Reform Cooperative for the electrification of the agrarian reform resettlement areas shall be subject to the electric services provider once it takes on the service.

Section 12. Lease of Public Lands. Agrarian Reform Cooperative may lease public lands for a period not exceeding twenty five (25) years, subject to renewal for another twenty five (25) years only, provided the application for renewal shall be made one (1) year before the expiration of the lease and such lease shall be for the exclusive use and benefit of the beneficiaries and marginal farmers subject to the provisions of the CARP, as amended..

Section 13. Cooperative Estates. Landholdings like plantations, estates, or haciendas acquired by the State in accordance with the CARP, as amended, for the benefit of the workers shall be collectively owned through a Mother CLOA by the worker beneficiaries under a cooperative set-up.

Section 14. Assistance. The Government shall provide the necessary financial and technical assistance to Agrarian Reform Cooperatives to enable them to discharge the purposes and objectives under Section 3 of this Rule which shall be in accordance with a joint program for the organization and financing of the Agrarian Reform Cooperatives. The joint program shall be geared towards the gradual assumption of full ownership and management control of the cooperative estate by the Agrarian Reform Cooperatives.

Section 15. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Agrarian Reform Cooperative such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of General Assemble, Board of Directors and Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;

d. Allocation and distribution of surplus; and

e. Other matters relating to the internal affairs of Agrarian Reform Cooperatives.

All matters relating to land acquisition, development of an appropriate system of land tenure, land development, land consolidation, or land management in areas covered by agrarian reform and such other similar matters affecting the Agrarian Reform Cooperatives shall be regulated by the DAR.

All matters relating to land valuation and assessment shall be regulated by the LBP.

Section 16. Financing Program. Any Financing Program to be availed of by ARB Coops shall be in accordance with the joint program to be developed by the DAR, the BSP, and the Authority.

Section 17. Settlement of Disputes. Intra/inter cooperative disputes shall other than land disputes, as far as practicable, be settled amicably through the conciliation and mediation mechanism embodied in the By-laws of the cooperative, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation- Mediation for Cooperative Disputes and in applicable laws.

Should such conciliation - mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the DAR, the same shall be referred to the said agency and it shall be resolved in accordance with the DAR regulation.

RULE III- INSURANCE COOPERATIVES

Pursuant to the provisions of Art. 108 under Chapter XIII of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Commission and the Authority in consultation with the concerned cooperative sector hereby promulgate the following rules and regulations for the proper guidance and compliance of the Insurance Cooperatives.

Section 1. Coverage. This Rules shall cover all Insurance Cooperatives duly registered under R.A. 9520 organized for the purpose of engaging in the business of insuring life and property of cooperatives and their members.

Section 2. Organization. Fifteen (15) or more duly registered cooperatives may organize as Insurance Cooperative.

Section 3. Purposes and Objectives. An Insurance Cooperative shall provide its constituting members different types of insurance coverage consisting of, but not limited to, life insurance with special group coverage, loan protection, retirement plans, endowment with health and accident coverage, fire insurance, motor vehicle coverage, bonding, crop, livestock protection and equipment insurance.

It may also provide "micro-insurance products" and regular insurance to cooperatives and its members.

Section 4. Membership. Membership in Insurance Cooperative shall be open to all duly registered cooperatives of all types and categories

Section 5. Registration Jurisdiction. Any applicant cooperative proposing to engage into the business of insuring life and property of cooperatives and their members shall file their duly accomplished application for registration with the CDA Central Office Registration Division.

Section 6. Capitalization. An Insurance Cooperative registered with the Authority pursuant to this Rule shall secure a Certificate of Authority from the Commission within two (2) years from the date of its registration. Failure to secure the same shall be a ground for the revocation/cancellation of the certificate of Registration.

Said Certificate of Authority shall be valid until the 30th day of June of the year following its issuance.

Section 8. Suspension or Revocation of Certificate of Authority. The Commission may, after due notice and hearing, suspend or revoke the Certificate of Authority issued to an Insurance cooperative for violation of any existing laws, rules or regulations, or any provisions of the Insurance Code.

Section 9. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Insurance Cooperative such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of Directors and Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;

d. Allocation and distribution of net surplus; and

e. Other matters relating to the internal affairs of Insurance Cooperatives.

All matters relating to the organization and operations concerning insurance business of such Insurance Cooperative shall be regulated by the Commission as provided for in the Insurance Code and other related laws.

Section 10. Joint Committee. In order to fully implement the provisions of this Rule, a Joint Committee, to be composed of two (2) representatives each from the Authority and the Commission and a representative from the Insurance Cooperatives shall be formed. The representative from the Authority shall Chair of the Committee.

The Joint Committee shall be constituted within thirty (30) days upon effectivity of these Rules and Regulations.

Section 11. Functions of the Joint Committee. The Joint Committee shall have the following functions:

1. To oversee the implementation of this Rule;

2. To ensure compliance with the administrative and other requirements of the Authority and the Commission;

3. To make recommendation on the amendment of this Rule as maybe necessary; and

4. Such other function as the need arises.

Section 12. Limitation. Cooperatives intending to engage in insurance, insurance like, and other similar activities shall register with the Authority and secure a Certificate of Authority from the Commission.

However, CIS are not allowed to serve the insurance needs of other cooperatives that are not member-owners of the CIS. A CIS serving the insurance needs of non-member cooperatives and the general public shall be required to get a commercial insurance license from the Insurance Commission.

Primary Cooperatives which are not registered and licensed to operate as Insurance Cooperative, are prohibited to engage in insurance, insurance like and other similar activities with their members. However, those already engaging in such shall be given two (2) years transition period to undertake any of the following options:

To organize an insurance cooperative with other primary cooperatives that have the same insurance-like business activity;

(2) To join an existing Insurance Cooperative;

(3) To partner with licensed micro-insurance providers; and

(4) To buy a micro-Insurance product through a licensed agent or broker.

All existing Insurance Cooperative with members which are non-cooperative and/or cooperative oriented societies and organizations are hereby given five (5) year period to terminate and remove such entities from their member registry. Failure to comply within the given period shall constitute a violation of this Rule and shall be dealt with accordance with the provision of RA 9520 and other applicable laws.

Section 13. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws. Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by the Authority or in court of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the Commission, the same shall be referred to the said agency and it shall be resolved in accordance with the Commission regulation.

RULE IV-WATER SERVICE COOPERATIVES

Pursuant to the provisions of Art. 111 (3) under Chapter XIV of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Authority in consultation with the NWRB, the LWUA, and concerned cooperative hereby promulgates the following rules and regulations for the proper guidance and compliance of the Water Service Cooperative.

Section 1. Coverage. This Rule shall apply to all cooperative duly registered with the Authority under R.A. 9520 whose main purpose or one of its purposes is to own, operate, and manage water supply systems for the provision and distribution of potable water to its members and other customers.

Section 2. Organization. Fifteen (15) or more natural person who are Filipino citizens, of legal age, having a common bond of interest and actually residing or working in the intended area of operation, may organize a Water Service Cooperative.

Section 3. Membership in Water Service Cooperative. Membership in Water Service Cooperative is composed of two kinds:

a. Regular Member - refers to a natural person (member-consumer) with water service connection with the right to voted upon and entitled to all the rights and privileges of membership under the Code.

b. Associate Member - refers to a natural person other than a regular member of the household. It shall also refer to member- institution or entity availing of the services of Water service Cooperative, such as, but not limited to: corporation, industrial and commercial establishment, joint venture, other cooperative, place worship, local government building or facility, etc, as maybe represented by the head of such establishment or entity, but is not entitled to vote and be voted upon. However, shall be entitled to the preferential rights and privileges as indicated in the Cooperative By-laws and under the Code.

Section 4. Requirements for Registration. The following shall be complied with upon filing of application:

(1) Name Verification Slip;

(2) Articles of Cooperation and By-laws;

(3) Sworn statement of the treasurer elected by the subscribers showing that at least twenty-five per centum (25%) of the authorized share capital be less than Fifteen Thousand Pesos (P15,000.00);

(4) Surely Bond of Accountable Officers handling funds properties and securities;

(5) Certificate of Pre-Membership Education Seminar (PMES);

(6) Economic Survey;

(7) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name;

(8) Land Ownership (any of the following: Certificate of Title Declaration. Lease Agreement, Deed of Donation, Deed of Sale, etc.)

(9) Well Drilling Data (in case of existing groundwater source ) including Physical & Chemical Analysis of water; and

(10) Registration fee.

Section 5. Registration Jurisdiction. Water Service Cooperatives shall file their application with the CDA Extension Office, which shall have jurisdiction over the said cooperatives.

Section 6. Capitalization. For purposes of registration with the Authority, a Water Service Cooperative shall have a minimum paid-up capitalization of Fifteen Thousand Pesos (P15,000.00).

Section 7. Service Area. The cooperative shall only provide services within the area specified in the CPC. In case of expansion, the cooperative shall apply for an extension of service area with the NWRB.

Section 8. Water Permit. Every Water Service Cooperative shall secure a water permit from the NWRB in accordance with the provisions of the Water Code of the Philippines.

Section 9. Requirements for Filing Water Permit Applications. All applications shall be filed in the prescribed form, sworn to by the applicants and supported by the following documents:

1. For domestic purpose

1. Duly accomplished Water Permit Application and Notices;

2. Land Ownership (any of the following: Certificate of Title, Tax Declaration, Lease Agreement, Deed of Donation, Deed of Sale, etc;

3. Certificate of Conformance from the LWUA;

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of the point of diversion;

5. Subdivision Plan (if applicable);

6. Well drilling Data (in case of existing ground water source): and

7. Clearance from DOH, if reuse of wastewater for human consumption.

2. For Municipal Use

1. Proof of land ownership of, legal title to, or right to use, the property on which the water source is situated;

2. Certificate of Registration with the Authority;

3. Certificate of Conformance from LWUA;

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of the point of diversion;

5. Submission Plan (if applicable);

6. Well Drilling Data (in case of existing groundwater source authenticated by the well driller) including Physical and Chemical, Analysis water;

7. Environmental Compliance Certificate (for projects considered as Environmentally Critical Projects Areas) or Certificate of Non-Coverage from the Department of Environment and Natural Resources- Regional Office; and

8. Such other documents that may be required by the NWRB.

Section 10. Requirements for the Issuance of CPC and Tariff Approval. The following documents are required to be submitted for an Application for a CPC and Approval of Tariff:

1. Certificate of Registration from the Authority;

2. Articles of Cooperation and By-Laws;

3. Special Power of Attorney authorizing the signatory to sign and file the application;

4. Favorable Endorsement from LWUA;

5. Approved water permits and/or MOA with water service provider, in case of bulk water supply;

6. Official receipt of annual water charge(s);

7. Clearance that applicant has no unpaid fees and charges from NWRB;

8. Plan of water distribution system;

9. Plan elevation and cross-sectional views of tank/reservoir;

10. Plan elevation and cross-sectional views of pump house, machinery and equipment;

11. Certificate of Potability;

12. Latest Audited Financial Statements for the last two years, if applicable;

13. Actual Balance sheet showing Balance Sheet items for water operations for the last 2 years, if not available, submit the following:

a. Accounts receivable -Water Supply

b. Materials Inventory

c. Property and Equipment in Service, at cost

d. Accumulated Depreciation

e. Customers Deposits

14. Itemized list of assets entitled to return as of the end of the last historical year. This should support the Property and Equipment in Service referred to in item 10 above;

15. Actual Income Statement showing Income Statement items for water operations for the last 2 years, if applicable;

16. Business plan for the next 5 years;

17. Projected Financial Statement for five years with the following:

a. Income Statement

b. Balance Sheet

c. Assumptions

18. Itemized list of new investments for the next 5 years;

19. Proposed schedule of water rates; and

20. Levels of Service agreed with consumers commensurate with proposed rates.

Section 11. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Water Service Cooperative, such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of Directors and Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;

d. Allocation and Distribution of surplus; and

e. Other matters relating to the internal affairs of Water Service Cooperatives.

All matters relating to the Certificate of Public Convenience such as capitalization

and investment requirements, equipment and facilities, water tariff, and such other matters affecting their water service operations shall be governed by the NWRB.

Section 12. ROLE OF LWUA. The LWUA shall have the following roles relating to Water Service Cooperative:

1. To provide technical assistance such as capacity building;

2. To assist in the determination of water potability; and

3. Such other assistance as maybe requested by the cooperatives.

Section 13. Preferential Rights. Whenever two or more public service entities have competing interests with respect to the granting and renewal of CPC and one is an Water Service Cooperative duly registered with the Authority under R.A. 9520, the NWRB shall accord preference to the latter over any type of public service entity.

Section 14. Responsibility of Water Service Cooperative. Every Water Service Cooperative shall operate, maintain, and provide safe and adequate potable water service. In all cases where practicable, the concerned Water Service Cooperative shall give notice to its member-consumers in advance of any contemplated interruption of water supply and the probable duration thereof in the area(s) affected. In addition, the Water Service Cooperative's responsibilities shall include:

1. Service Standards

a. Service Coverage

b. Water Quality

c. Reliability of Supply

2. Operational Performance

a. Operational Efficiency

b. Financial Viability

3. Customer Service

a. Service Request and Complaints

b. Standard Response Time

4. Operating Policies and Procedures on Billing and Collection

5. Protection of Member-Consumers

In relation to this Section, the cooperative shall develop its own Customer Service Code consistent with its By-laws and in compliance with the NWRB Economic Regulatory Guidelines.

Section 15. Reporting Requirements. All Water Service Cooperatives shall submit reports to the Authority as required under Rule 8 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9250). Other reports required by the NWRB, the DOH and other government agencies shall likewise be submitted to the concerned agency.

Section 16. Sanctions and Penalties. All Water Service Cooperative shall be subjected to corresponding Sanctions and Penalties as maybe imposed by the Authority and the NWRB for violation or non-compliance with administrative and statutory requirements.

Section 17. Requirements for Renewal of CPC. The CPC shall be valid for five (5) years and renewable prior to its expiry date. The following requirements to be submitted:

1. Board Resolution authorizing the signatory to sign and file the application;

2. Certificate of Good Standing issued by the Authority;

3. Approved Water Permits;

4. Official receipts of Annual Water change;

5. Official receipt of Supervision and Regulation Fee;

6. Clearance that applicant has no unpaid fees and charges from the NWRB;

7. Plan of Water Distribution System;

8. Plan elevation and cross-sectional views of tank/reservoir;

9. Plan elevation and cross-sectional views of pump house, machinery and equipment;

10. Certificate of Potability;

11. Annual Reports for the last five years;

12. Latest Audited Financial Statement for the last five years;

13. Actual Balance Sheet showing Balance Sheet items for water operations for the last 5 years, if not available, submit the following:

a. Account Receivable - Water Supply

b. Materials Inventory

c. Property and Equipment in Service, at cost

d. Accumulated Depreciation

e. Customers' Deposits

14. Itemized list of assets entitled to return as of the end of the last historical year. This should support the Property and Equipment in Service referred to in item 13 (c) above;

15. Actual Income Statement showing Income Statement items for water operations for the last 5 years;

16. Business plan for the next 5 years;

17. Projected Financial Statement for five years with the following:

a. Income Statement

b. Balance Sheet

c. Assumptions

18. Itemized list of new investments for the next 5 years;

19. Proposed Schedule of Water Tariff; and

20. Levels of Service agreed with consumers commensurate with proposed rates.

Section 18. Securing of Water Permit and/or CPC. Water Service Cooperative including Multi-Purpose Cooperative with water service operation is required to secure water permit from the NWRB.

For Water Service Cooperative operating without water permit and/or CPC, the Authority shall report the matter to the NWRB for appropriate action. The NWRB shall notify the Authority of whatever action taken on the matter. Henceforth, failure of the cooperative to legalize its operation within two (2) years from the date of referral to the NWRB, the same shall be considered a valid ground for the revocation of its Certificate of Registration, after due process.

Section 19. Action on the Application for CPC. Upon submission of the complete requirements for the issuance of CPC, the NWRB shall approve or reject the same within six (6) months from date of receipt thereof.

Section 20. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.

However, in cases where the issue/s fall within the jurisdiction of the NWRB, the same shall be referred to the said agency and it shall be resolved in accordance with the NWRB regulation.

RULE V - TRANSPORTATION SREVICE COOPERATIVES

Pursuant to the provisions of Art. 113 (par. 2) under Chapter XIV of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Authority in consultation with the DOTC, LTO, LTFRB, MARINA, OTC and the concerned cooperative sector, hereby promulgates the following rules and regulations for the proper guidance and compliance of Transportation Service Cooperatives.

Section 1. Coverage. This Rule shall cover all Transportation Service Cooperatives duly registered with the Authority under RA 9520 which are organized to render public services such as land and sea/water transportation services, limited to small vessels, for the safe conveyance of passengers and/or cargo. Transportation Service Cooperative organized under the provisions of Executive Order No. 898, Series of 1983, shall be governed by Chapter XIV of RA 9520, and by this Rule.

Section 2. Allied Businesses by Transportation Service Cooperative. Subject to pertinent national laws and local ordinances, primary Transportation Service Cooperatives including secondary and tertiary federation of cooperatives, may engage in a business related to transportation service, including but not limited to:

(1) Importation, distribution and marketing of petroleum products in accordance with existing laws;

(2) Operation of gasoline stations and transportation service centers;

(3) Importation, distribution and marketing of spare parts and supplies; and

(4) Marketing of vehicle/drivers insurance policies.

Section 3. Multi-purpose Cooperatives intending to engage in Transportation Service. Multi-purpose cooperatives intending to engage in regular passenger and/or cargo services as an additional activity shall comply with the foregoing requirements:

1. Amended Article of Cooperation and By-Laws;

2. CETOS;

3. Franchise and vehicle units requirement, as provided in this Rule and other requirements as may be prescribed by appropriate regulatory agencies; and

4. Amendment Fee.

Section 4. Registration Jurisdiction. Transportation Service Cooperative shall file its duly accomplished registration documents with the CDA-Extension Office where its principal office is located, which shall have jurisdiction over the said cooperative.

Section 5. Capitalization. For purposes of registration with CDA, Transportation Service Cooperatives shall have a minimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).

However, to operate as such, the minimum capitalization and number of cooperatively owned units shall be in accordance with the rules and regulations prescribed by the concerned government agency as shown below:

TYPE OF TRANSPORTATION SERVICE COOPERATIVE		MINIMUM CAPITALIZATION	MINIMUM NO. OF UNITS
A. LAND
	Tricycle	P 15,000.00	5
	Jeepney	P 30,000.00	5
	Taxi	P 30,000.00	5
	AUV/FX/Van	P 30,000.00	5
	Mini Bus/Bus P	50, 000.00	2
	Trucks for Hire	P 50, 000.00	2
B. WATER
	Ship	P 10,000,000.00	1
	Ferry Boat	P 5,000,000.00	1
	Motorized Banca	P 100,000.00	1

Section 6. Registration Requirements. The following shall be complied with upon filing of application:

(1) Name Verification Slip;

(2) Articles of Cooperation and By-laws;

(3) Sworn Statement of the treasurer elected by the subscribers showing that at least twenty-five per centum (25%) of the authorized share capital has been subscribed and least twenty-five per centum (25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capital be less than Fifteen Thousand Pesos (P15,000.00);

(4) Pre-Membership Education seminar (PMES);

(5) Cooperative Education and Transport Operation Seminar (CETOS);

(6) Surety Bond Of Accountable Officers handling funds, properties and sureties;

(7) Economic Survey;

(8) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name;

(9) Undertaking to comply with the auditing and accounting standards prescribed by the Authority;

(10) Other requirements as may be required by law; and

(11) Registration Fee.

Section 7. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Transportation Service Cooperative, such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board of Directors and Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;

d. Allocation and distribution of surplus; and

e. Other matters relating to their internal affairs of Transportation Service Cooperatives.

All matters relating to the Franchise or Certificate of Public Convenience and Necessity of Transportation Service Cooperatives such as capitalization and investment requirements, equipment and facilities, frequencies, rate-fixing, registration, dropping and substitution of units, and such other matters affecting their transportation service operations shall be governed by the following government agency:

(a) For land transportation - LTFRB/LTO/OTC

(b) For water transportation - MARINA/PCG

In case there are two (2) or more applicants for the same public service Franchise or Certificate of Public Convenience and Necessity, all things being equal, preference shall be given to a Transportation Service Cooperative by the concerned government agency.

Section 8. Monitoring Committee. The Authority shall establish a committee for the monitoring of Transportation Service Cooperative composed of representative from the Authority, who shall be Ex-Officio Chairperson thereof, the LTO, LTFRB, OTC, LGU, and other concerned government agencies as may be necessary, and the National Federation of Transportation Cooperatives. Said Committee shall be organized within thirty (30) days from the effectivity of this Rule and establish its own internal rules as to its operation, conduct of meeting, and other matters necessary to exercise such functions.

The Authority shall likewise create a Local Monitoring Committee in its extension offices to facilitate the monitoring of these Transportation Service Cooperatives. Said Committee shall likewise be organized within ninety (90) days from the receipt of the rules and functions formulated by the National Committee convene every quarter to discharge its functions and appoint a Secretary from among its members.

The permanent Secretariat shall come from the Authority.

The Committee shall have the following functions:

(1) To oversee the implementation of this Rule;

(2) To recommend changes on this Rule from time to time if a need arises;

(3) To assist as far as practicable the cooperative in settling inter and intra cooperative disputes;

(4) To submit quarterly accomplishment report including recommendation/resolution to be adopted in the settlement of the aforesaid disputes to the CDA Board of Administrators through the Executive Director and to the OTC Board of Directors through its Executive Director copy furnished all agencies involved.

Section 9. Continuing Education and Training. The concerned government agencies shall coordinate to support registered cooperatives by extending seminars for the purpose of continuing education on cooperative and other related trainings in order to enhance the knowledge and capability of the officers as well as members of the cooperative. The concerned agencies involved in the Transportation Service Cooperative shall form a trainer's team which shall formulated educational program/module to be used in the training seminar.

Section 10. Renewal of Franchise and Vehicle Registration. Renewals of franchise and vehicle registration shall be granted to Transportation Service Cooperatives provided such cooperative presents a Certificate of Good Standing from the Authority and the OTC. In the case of Tricycle Transportation Service Cooperative, a Certificate of Operation from the Local Government Unit concerned shall be required as proof that it has continuously provided the required public transportation services.

Section 11. Settlement of Disputes. Intra/Inter cooperative dispute shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.

However, in cases where the issue/s fall within the jurisdiction of the DOTC, LTFRB, LTO, MARINA, and OTC the same shall be referred to the said agencies and shall be resolved in accordance with their regulations.

RULE VI - ELECTRIC COOPERATIVES

Pursuant to the provisions of Art. 134 (par.2) under Chapter XVII of Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Authority in consultation with the concerned cooperative sector hereby promulgates the following rules and regulations for the proper guidance and compliance of Electric Cooperatives.

Section 1. Purposes and Objectives. Electric Cooperatives shall be organized to undertake power generation utilizing new and renewable energy sources, including hybrid systems, acquisition, and operation of sub-transmission and/or distribution and supply of electricity as its primary purposes. However, it shall not be precluded to venture into any other purpose that other laws, rules, regulations, and their own By-laws may allow as long as it is related to the primary purpose and objective of the cooperative. It shall also continue to undertake the implementation of the Rural Electrification Program in their respective areas of coverage in consonance with the terms and conditions appurtenant to their Certificates of Franchise; provided the right of the Electric Cooperatives to exercise the power of eminent domain in furtherance of the rural electrification program, shall not be diminished, instead it shall be in full force and effect, subject to the requirements of the Constitution and existing relevant laws.

Section 2. Coverage. This Rule shall apply to all Electric Cooperatives registered with the Authority under R.A. 9520 that may undertake power generation utilizing renewable energy sources, including hybrid systems, acquisition and operation of sub transmission or distribution as its primary purposes. This Rule shall also cover new distribution utilities that will register with the Authority.

Section 3. Cooperative Principles and Practices. Electric Cooperatives registered with the Authority shall conduct their affairs in accordance with Filipino culture, good values and experience and the universally-accepted principles of cooperation which include, but are not limited to, the following:

1. Voluntary and Open Membership - Electric Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination;

2. Democratic Member Control - Electric Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives, directors, or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels are organized in the same democratic manner;

3. Member Economic Participation - Members of the Electric Cooperatives contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting-up reserves, part of which should at least be indivisible; benefiting members in proportion to their patronage of the cooperative's business; and supporting other activities approved by the membership;

4. Autonomy and Independence - Electric Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure democratic control of their members and maintain their cooperative autonomy;

5. Education, Training and Information - Electric Cooperatives shall provide education, training and information for their members, elected and appointed representatives, managers, and employees so that they can contribute effectively and efficiently to the development of their cooperatives;

6. Cooperation Among Cooperatives - Electric Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures; and

7. Concern for Community - Electric Cooperatives work for the sustainable development of their communities through policies approved by their members.

Section 4. Membership in the Electric Cooperatives. Membership in Electric Cooperatives registered with the Authority shall have the following types:

a. Regular Member - refers to a natural person (member-consumer) with electrical service connection who has the right to vote and be voted upon and entitled to all the rights and privileges of membership under the Code.

b. Associate Member - refers to a member-institution or entity availing of the services of electric cooperative, such as, but not limited to: corporation, industrial and commercial establishment, joint venture, other cooperative, place of worship, local government building or facility, etc, as represented by its head of such establishment or entity, but is not entitled to vote and be voted upon. However, shall be entitled to the preferential rights and privileges as indicated in the by-laws and under the Code.

Section 5. Registration Requirements. The following are the requirements for the registration of electric cooperatives which shall be submitted in four (4) copies to the Authority:

A. Registration Documents:

a.1 For existing electric cooperative not registered with the Authority:

1. certificate true copy of the board resolution certifying the result of the vote approved through a referendum approving the registration of the cooperative with the Authority in compliance with Article 128;

2. Certified copy of Articles of Cooperation and By-Laws;

3. Duly audited financial statement for the past two (2) immediately preceding years;

4. List of names of incumbent Board of Directors and their addresses certified by the Board Secretary and attested to by the Chairperson;

5. Sworn Statement of the Treasurer of the authorized share capital, the subscribed share capital of the members, and the amount of paid-up share capital of members and the amount of paid-up share capital received by the Treasurer, to be submitted within six (6) months from the registration; and

6. Surety Bond of Accountable Officers handling funds, properties and sureties;

a.2 For new electric cooperatives:

1. Name Verification Slip;

2. Certified true copy of the Grant Franchise;

3. Articles of Cooperation and By-laws;

4. Sworn Statement of the treasurers elected by the subscribers showing that at least twenty-five per centum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capital be less than Fifteen Thousand Pesos (P15,000.00);

5. Surely Bond Accountable Officers handling funds, properties and sureties;

6. Certificate of Pre-Membership Education seminar (PMES);

7. Economic Survey;

8. Undertaking to Change Name in the event that another cooperative has acquired prior right to the use of the proposed name;

9. Detailed feasibility study indicating viability of the proposed business activity; and

10. Undertaking to comply with the auditing and accounting standards prescribed by the Authority.

a.3. Electric Cooperative Deemed Registered under Art. 144 of the Code:

1. Certificate of Registration and/or Certificate of Confirmation;

2. Articles of Cooperation and By-laws; and

3. Latest audited financial statement.

The said documents shall be submitted to the nearest office of the Authority of to the CDA Central Office, at the option of the Cooperative. Upon submission of the abovementioned documents, the Authority shall issue the new certificate of registration to the Cooperative.

B. Registration fee as prescribed by the Authority.

Section 6. Jurisdiction Upon Registration. Electric Cooperative intending to register with the Authority shall file their application with the CDA Extension Office, which shall have jurisdiction over the said cooperatives upon approval of their registration. However, if an electric cooperative opted to register with the CDA Central Office as provided for in the preceding Section, and such registration has been processed and approved by the CDA Central Office, such registration shall be forwarded to the CDA Extension Office where the cooperative is located and the same Extension Office shall assume jurisdiction over the said cooperative.

Section 7. Registration Options. Electric Cooperatives registered with the National Electrification Administration (NEA) under Presidential Decree No. 269, as amended, which opt not to register with the Authority, are allowed to retain the world "cooperative" in their registered names, but they shall not be entitled to the benefits and privileges provided under R.A. 9520.

Section 8. Registration of Electric Cooperatives. The registration on an Electric Cooperative with the Authority under Article 127 of the Code shall be submitted for approval to the members through a referendum, as a voting procedure, specially called for such purpose.

The required number of votes for registration with the Authority shall be twenty percent (20%) of all members in good standing within the area of coverage. No proxy voting shall be allowed.

Unless otherwise provided in the By-laws of the cooperative, the term member in good standing shall be as defined in the Code of in this Rule.

Section 9. Procedure in the Conduct of Referendum for registration with the Authority. In compliance with Art. 128 of RA 9520 hereunder are the procedures in conducting the same:

A. BOD Initiated Referendum. The Board of Directors shall undertake the following:

1. Issue Notice referendum indicating the following:

a. Date of Referendum;

b. Mode of Conduct of the Referendum which may either be:

b.1 survey Form; and

b.2 Assembly Meeting in the respective districts which maybe simultaneous sequential.

2. Posting/Publication of Notice of referendum shall be done not later than 30 days prior to the scheduled conduct of referendum.

3. Identification of members in good standing based on the qualification and disqualification provisions in the By-laws.

4. Provision of Referendum Questionnaire Form to qualified members to vote whether to register or not to register with the Authority.

5. Collection of Questionnaire forms and canvassing of Votes by the cooperative's Election Committee.

6. Reporting of the results of the canvassing, i.e. favor or not favor.

7. Certification by the Election Committee as to the result of the referendum duly noted by the majority of the Board of Directors.

B. Member-Consumer Initiated referendum. In case the Board of Directors shall refuse to conduct a referendum, the Member-Consumers may initiate a referendum through a petition duly signed by at least three hundred (300) members of each district of the cooperation who are entitled to vote by filling the same to the Board of Directors. The Board of Directors shall act within thirty (30) days from receipt thereof whether to grant or deny said petition. Failure of the Board of Directors to act within the given period or the denial of the petition, the petitioners may conduct motu proprio the said referendum through the procedures above prescribed. The result of the referendum shall be certified by a committee designated during the conduct of a referendum to supervise the same.

The general membership through their proponents for referendum shall submit all the documentary requirements for resignation to the concerned CDA Extension Office, which may register the applicant Electric Cooperative upon finding that all the documents for registration are complete and in order.

Section 10. Amendments of Existing Articles of Cooperation and By-laws. Any provision or any part thereof in the existing Articles of Cooperation and By-laws of the cooperative, which are found to be inconsistent or contrary to the provisions of the Code and of this Rule shall be amended accordingly. Such amendments shall conform to the provision of Art. 18 of the Code. Said application for amendments shall be filed with the concerned CDA Extension Office or the CDA Central Office, at the option of the Cooperative, in four (4) copies for registration.

Section 11. Capitalization. An electric cooperative shall not be registered with the Authority unless it complies with the financial requirements of minimum paid up capitalization of Five Million Pesos (P5,000,000.00).

Section 12. Share Capital in the Electric Cooperatives. Electric Cooperatives shall issue and distribute share certificates under the name of each of their members. Said share certificates shall take into consideration, among others, the previous equity contributions, and the amortization component, through the payments made, capital build-up and other capital contributions. The interest on share capital shall be paid to the members in accordance with the provision of Sec. 9, Rule 10 of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RA 9520).

Section 13. Quorum Requirement. Unless otherwise provided in the By-laws of the Electric Cooperative, quorum shall be five per centum (5%) of all the members entitled to vote.

Section 14. Term of Office. Unless otherwise provided in the By-laws of the Electric Cooperative, the term of office of the members of the Board shall not exceed two (2) years, however, they shall be eligible for re-election.

Section 15. rates and Tariffs. All electricity rates and tariffs of electric cooperatives registered under the Authority shall be subject to the rules on application and approval of and by the Energy Regulatory Commission.

Section 16. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or in court of competent jurisdiction.

However, in cases where the issue/s fall within the jurisdiction of the Energy Regulatory Commission, the same shall be referred to the said agency and shall be resolve in accordance with this regulation.

RULE VII-DAIRY COOPERATIVES

Pursuant to the provisions of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008, the Cooperative development Authority and National Dairy Authority hereby promulgated the following rules and regulations for the guidance and compliance of the Dairy Cooperatives.

Section 1. Coverage. This Rule shall cover all dairy Cooperatives duly registered under R.A. 9520 organized for the purpose of engaging in the procurement, processing and marketing of milk and dairy products.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond interest and actually residing or working in the intended area of operation, may organize a dairy cooperative.

Section 3. Purposes and Objectives. A Dairy Cooperative shall be organized for any or all of the following purpose:

1. To standardize the quality, uniformly of grade of milk, and other dairy products;

2. To assist its members a guaranteed market outlet, to bargain for the best price terms possible in the market place, including over-order premiums in milk marketing orders, and to market the milk efficiently, i.e., balancing plant needs, diverting milk surpluses, and assembling producer milk and to have the highest quality producer milk possible in the market; and

3. To effectively represent their constituting members in the legislative, regulatory and public relations arenas.

Section 4. Membership. Membership in Dairy Cooperative shall be open to all dairy farmers.

Section 5. Registration Jurisdiction. Any applicant Dairy Cooperative shall file its duly accomplished application for registration with the VDA Extension Office, which shall have jurisdiction over the said cooperative.

Section 6. Registration Requirements. The following shall be compiled with upon filing of application:

1. Name Verification;

2. Articles of Cooperation and By-laws;

3. Sworn Statement of the treasurer elected by the subscribers showing that the least twenty-five per centum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capital be less than Fifteen Thousand Pesos (P15,000.00);

4. Pre-membership Education Seminar (PMES);

5. Surety Bond Accountable Offices handling funds, properties and sureties;

6. Economic Survey;

7. Undertaking to Change Name in the event that another cooperative acquired prior right to the use of the proposed name;

8. Undertaking to comply with the auditing and accounting standards prescribed by the Authority;

9. Other requirements as may be required by law; and

10. Registration fee.

Section 7. Capitalization. A Dairy Cooperative shall have a minimum paid-up capitalization of at least Fifteen Thousand Pesos (P15,000.00).

Section 8. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Dairy Cooperative, such as:

a. Exercise of rights and privileges of members;

b. Formulation of Rules and procedures and the conduct of meetings of the General Assembly, Board of Directors and Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;

d. Allocation and distribution of net surplus; and

e. Other matters relating to the internal affairs of Dairy Cooperatives.

All matters relating to the technical and operations concerning dairy business of such Dairy Cooperative shall be regulated by NDA, DOH-BFAD and other concerned government agency.

Section 9. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable through conciliation-mediation mechanism embodied in the cooperative by-laws and in applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by the Authority or adjudication by the Commission or in a Court of competent jurisdiction.

However, in cases where the issue/s fall within the jurisdiction of the NDA, DOH-BFAD the same shall be referred to the said agencies and shall be resolved in accordance with their regulations.

COMMON PROVISIONS

Section 1. Requirements. A copy of these Rules shall be among the documents required to be kept ready and accessible for inspection and examination by the members of the cooperative and the Authority in accordance with Art. 52 of the Code.

Section 2. Interpretation. Unless otherwise stated in these Rules, In case of doubt as to the meaning of any provision of these Rules, the same shall be resolved and interpreted liberally in favor of the cooperatives and their members.

Section 3. Suppletory Rule. Special Rules, Circulars, Orders and other issuances by the appropriate government agencies in pursuance of the provisions of the Code and these Rules, and not inconsistent thereto, shall have suppletory application to these Rules.

Section 4. Mandate. The Authority is mandated to implement and enforce these Rules and Regulations.

Section 5. Separability. If any provision of these Rules and Regulations is declared null and void or unconstitutional, the other provisions not affected thereby shall continue to be in force and effect.

Section 6. Amendment. These Rules and Regulations shall be subject to automatic review three (3) years after the effectivity thereof. Any amendment thereto, shall be subject to the review and approval of the JCOCC.

Section 7. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation.

RECOMMENDING APPROVAL:

THE BOARD OF ADMINISTRATORS COOPERATIVE DEVELOPEMNT AUTHORITY

LECIRA V. JUAREZ Chairman

This Implementing Rules and Regulations (Part I) was approved by the Joint Congressional Oversight Committee on Cooperatives during its meeting on February 16, 2010 at the Senate of the Philippines, Pasay City pursuant to Article 138 of RA 9520.

Members of the Joint Congressional Oversight Committee on Cooperatives.

For the Senate of the Philippines: Sen. JUAN MIGUEL F. ZUBIRI Chair, Senate Panel

For the House of the Representatives: Rep. ERNESTO C. PABLO Chair, House Panel

Pinoy Coops

Tuesday, January 18, 2011

Rules and Regulations Implementing the Special Provisions of RA 9520

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