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By authority of the United States, be it enacted by the Philippine Commission, that:

SECTION  1. Section four of Act Numbered Eighty-two, entitled ''The Municipal Code." as amended by section one of Act Numbered Three hundred and three and section one of Act Numbered Fourteen hundred and thirty-three, is hereby amended to read as follows:

SEC. 4. (a) "Incorporated municipalities shall be of passes, according to the number of inhabitants. Municipalities of the first class shall be those which contain not less than twenty-five thousand inhabitants, and shall have eighteen councilors; of the second class, those containing eighteen thousand and less than twenty-five thousand inhabitants, and shall have fourteen councilors; of the third class, those containing ten thousand and less than eighteen thousand inhabitants, and shall have ten councilors; of the fourth class, those containing less than ten thousand inhabitants, and shall have eight councilors.

"There  shall  not  be   expended  during  any  calendar year for salaries and wages of  municipal officials and employees, of every description, excluding those employed on public works but including fees paid justices of the peace; and auxiliary justices of the peace, in municipalities of the first class more than fifty per centum, in municipalities of the second class more than sixty per centum, in municipalities of the third class more than sixty-five per centum, and in municipalities of the fourth class more than seventy-five per centum, of the annual revenues accruing to the municipal general funds during said calendar year, exclusive of all balances carried forward from preceding years, and any and all appropriations, loans, or gifts made from Insular, provincial, or private funds, anything contained in section twenty-two (g) of this Act to the contrary notwithstanding: Provided, however, That the provincial board, by and with the approval of the Governor-General, may by resolution authorize any incorporated municipality to exceed the foregoing percentages upon such conditions and under such limitations as may be prescribed by such resolution: And provided further, That nothing herein contained shall be construed to prevent the payment, from the municipal school fund of salaries of such municipal teachers and other school employees as may be approved by the division superintendent of schools.

"(b) Municipalities of less than two thousand inhabitants may be incorporated under the provisions of this Act, or may, upon petition signed by a majority of the qualified electors thereof, be attached as a barrio to an adjacent and incorporated municipality, if the council of the latter shall grant said petition and the Commission shall approve it.

"(c) A barrio or barrios with an aggregate population of more than two thousand may be incorporated under the provisions of this Act as a separate municipality upon the granting by the Commission of a petition signed by two-thirds of the qualified electors thereof.

"(d) In case of controversy, the Commission shall determine to which class a town shall belong, and thereafter, if its population shall sufficiently increase or diminish, it shall pass to a higher or lower class by order of the provincial board.

"(e) In case the class of a municipality shall be raised the additional councilors appropriate to its new class shall be obtained by electing at the regular election next following the change one-half of the total number of councilors prescribed for municipalities of that class and at each succeeding election an equal number. During the interim between, the change and the seating of the councilors first elected thereafter the council shall consist of the former number of councilors. After the seating of said first-elected councilors and until the seating of those next elected it shall consist of a number midway between the former number and the number prescribed for the new class.

(f) in case a municipality is reduced in class all of the councilors in office shall be allowed to serve out their full terms, except that in case of death, resignation, or removal of any such councilor the vacancy thereby, caused shall not be filled unless such vacancy reduces the number of councilors below that proscribed for the new class, in which case the vacancy shall be filled as hereinafter in this Act provided.  At the election next following the change of class the number of councilors elected shall be equal to one-half of the number prescribed for the new class, and at each succeeding election an equal number shall be elected."

SEC. 2. The public good requiring the speedy enactment of this bill, the passage of the same is hereby expedited in accordance with section two of "An Act prescribing the order of procedure by the Commission in the enactment of laws," passed September twenty-sixth, nineteen hundred.

SEC. 3. This Act shall take effect January first, nineteen hundred and eight.

Enacted,  August 20, 1907.