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

SECTION 1. Authority is hereby granted for the construction, construction of maintenance, and operation of a dam across the Agno River, in the subprovince of Benguet, Mountain Province, at a point to be approved by the Secretary of Commerce and Police, for the use of the waters of said river for the generation and development of the power necessary for the operation of an electric light, heat, and power system an power supply system in the city of Baguio, and in the subprovince of Benguet, in said Mountain Province, and for the erection, maintenance, and operation of an electric light, heat, and power supply system with all necessary buildings, poles, wires, apparatus, and appurtenances for supplying electric current in and to the city of Baguio and in the subprovinee of Benguet, Mountain Province; and the Governor-General is hereby authorized, on behalf of the Governor-General. Government of the Philippine Islands, to other for public bidding the franchise set forth in this Act, and to grant said franchise to the best bidder, upon such terms as to percentage of gross earnings, lo be paid in lieu of Insular, provincial, and municipal taxes on the franchise or earnings thereof, which shall in no case be less than one and one-half per centum, and under such terms and conditions as in time of advertisement and manner of bidding, as he may deem proper.

SEC  2. The franchise referred to in section one hereof shall be substantially in the following form :

"FRANCHISE.
"ARTICLE 1. There is hereby granted to ........................................ for the period of fifty years from and after the passage of this Act and upon the terms and conditions hereinafter set out, the right and privilege to construct a dam across the Agno River, at or near ............................................ in the subprovice of Benguet, Mountain Province; the right and privilege to use the waters of said river for    Purpose, the generation and development of the power necessary for the operation of an electric light, heat, and power supply system in the city of Baguio and in  the subprovince of Benguet, in said Mountain Province; the right and privilege to erect, maintain, and operate an electric light, heat, and power supply system at and in the city of Baguio, and in the subprovince of Benguet, in said  Right of way. Mountain Province ; and the right and privilege to erect, construct, maintain, and operate in, along, and over any and all streets, thoroughfares, and public places at and in said city and subprovince any and all necessary buildings, poles, wires, and all other necessary and proper constructions, erections, apparatus, and appurtenances of every kind and nature whatsoever for the transmission and distribution of electric currents for electric light, heat, and power and for any other purpose, excepting wireless telegraphy, for which electricity may be used to properly and fully supply said city of Baguio and subprovince of Benguet and any and all persons, companies, and corporations residing therein with such light, heat, and Surveys and plans, power: Provided, That any and all surveys, plats, and plans under or in accordance with which said dam and any and all buildings, lines for transmission of electricity for any purpose, and constructions and erections of every kind and nature whatsoever are to be constructed, shall first be submitted in and approved by the Director of Public Works and the Secretary of Commerce and Police, before the grantee shall be empowered to commence work thereunder, and that, after such approval, no deviation from said approved surveys, plats, and plans shall be permitted said grantee without prior approval of such and all deviations by said Director of Public Works Renewal and Secretary of Commerce and  Police: Provided further, That upon the expiration of the period of this grant and upon request of the grantee, a renewal hereof for a second period of fifty years may be allowed by the Philippine Commission or its successor upon such terms as to payment as may then seem advisable: And provided further, That this grant is expressly made subject to any and all vested rights which may have accrued prior to the passage of this Act.

"ART. 2. The grantee shall file his acceptance in writing of this grant and all the conditions hereof with the Secretary of Commerce and Police within thirty days after he receives notice in writing that the franchise has been awarded to him and, after completion of the dam and electric light, heat, and power supply system, as provided in article three hereof, shall then and thereafter, continuously, during the period of this grant, maintain a first-class electric light, heat, and power service at the places and in the manner herein provided.

"ART. 3. The grantee shall begin the construction of said dam before the expiration of the twelve months next following the date of filing the written acceptance of this franchise, and shall complete the same and all other necessary constructions and be ready to furnish electric light, heat, and power, as aforesaid, within three years from the date of filing said written acceptance.  Should said grantee default in the time set for either such beginning or such completion, the grant herein and hereby made shall then and there cease and determine, and any and all construction then begun or completed as the case may be, shall thereupon become the property of the Government of the Philippine Islands: Provided, That if such or either default on the part of the grantee as aforesaid shall occur by reason of causes not within the control of or power of prevention by said grantee, the Secretary of Commerce and Police may grant such extension of time for either such beginning or completion as may seem to him necessary and proper.

"ART. 4. The grantee shall have, and he is hereby expressly given, the right to charge and collect tolls, rates, and compensation for the supply by him of such electric light, heat, and power: Provided, That such tolls, rates, and compensation shall not be legal and effective until approved by the Board of Rate Regulation, and after being thus approved shall be and are hereby expressly made subject to regulation and revision by the Philippine Government.

"ART. 5. The grantee shall use only modern and first-class apparatus, appurtenances, and appliances, and all electric installation of every kind and nature shall be so insulated, connected, and fastened as not to come in direct contact with any person or object by which a 'ground' may be caused, and no part of any such apparatus, appurtenances, appliances, and installation shall be so placed as to interfere with the free and unobstructed use by the public of highways, roads, streets, alleys, or public places or as to interfere with any use of any public or private property: Provided, That the grantee herein shall, whenever the Philippine Commission or its successor so direct, place said wires in underground pipes or conduits at his own expense and without any cost or damage to the city of Baguio, the subprovince of Benguet or any township thereof, the Mountain Province, or the Government of the Philippine Islands.

"ART. 6. The grantee shall indemnify said city of Baguio, said subprovince of Benguet or any township thereof, said Mountain Province, and the Government of the Philippine Islands for any and all damage or injury which may be caused said city, townships, subprovince, province, and Government of the Philippine Islands, or either of them, arising from any casualty or accident to person or property by reason of any construction, installation, omission, or neglect, had and made by him under the powers herein granted, and for any and all valid claims made against said city, townships, subprovince, province, and the Government of the Philippine Islands, or either of them, by any person or persons by reason of any damage or injury caused by any such construction, installation. omission,  or neglect.

"ART. 7. The grantee may sell, grant, convey, assign, give, or sale arconveyance lease this grant and all rights hereunder, as well as all property acquired for the purposes hereof, to any person or persons, company, or corporation competent to construct the plant and conduct the business herein authorized, but no title to this grant, or rights or property acquired hereunder, shall pass to the grantee, nor shall any sale, grant, conveyance, assignment, gift, or lease by the grantee to any person or persons, company, or corporation be or become valid and binding unless and until the acceptance provided for in article two hereof shall have been made and filed as and when provided for in said article: Provided, That no transfer of this franchise shall become effective under the provisions of this article until said transfer has been previously approved in writing by the Secretary of Commerce and Police.

"ART. 8. Within thirty days after the date of an application therefor, the grantee shall furnish electric light, heat, and power etc. to any applicant therefor, for use in the said city and subprovince. As between two or more of such applicants, electricity shall be furnished in the order of the date of the applications therefor, up to the limit of the capacity of supply of said system, to be determined by the Director of Public Works. Should such capacity be at any time exceeded by the demand, the grantee shall, within a reasonable time after demand therefor by the Philippine Commission or its successor, increase such capacity up to the limit of the hydraulic power economically available at the power site.

"When the application is for electricity at a place distant not more than fifty meters from a main trunk line or feed wire, the cost  of making the connection shall he at the expense of the grantee.  When the electricity applied for is in an amount exceeding kilowatts and the distance from the main trunk line or feed wire to the place where it is to be used does not exceed one thousand six hundred meters, the connection shall he made at the expense of the grantee.

"When the place where the electricity is desired is more than fifty meters from a main trunk line or feed wire and the quantity desired is less than kilowatts, the expense of installation beyond the said distance of fifty meters shall be borne by the applicant for the electricity. In all cases the extra cost of construction to places beyond one thousand six hundred meters from a main trunk line or feed wire shall be borne by the applicant for the electricity.

"ART. 9. No stocks or bonds shall be issued by any corporation owning or operating under this grant except in exchange for actual cash, or for property at a fair valuation, equal to the par value of the stock or bonds so issued, nor shall such corporation declare any stock or bond dividends.

"ART. 10. The grantee shall keep records, books, and accounts of said system in form approved by the Insular Auditor, which shall always be open to full and free inspection by the Insular Auditor or by his deputy or representative duly authorized and shall, on or before the twentieth days of April, July, October, and January of each succeeding year, submit to the Insular Auditor verified quarterly reports showing the gross receipts, net receipts, and general financial condition of the business of said system for the quarter next last past.

"ART. 11. The grantee shall not use, employ, or contract for the labor of any person or persons held or alleged to be held in involuntary servitude, and any violation of the provisions of this article shall forthwith operate as a forfeiture of, and shall forfeit, this grant and any and all rights hereunder theretofore granted to, accrued to, and held by said grantee, and, in addition to such forfeiture, said grantee shall be deemed guilty of an offense and shall be punished by a fine of not less than twenty thousand pesos.

"ART. 12. In consideration of the franchise hereby granted, the grantee shall pay quarterly into the Treasury of the Philippine Islands such percentage of the gross earnings of the enterprise as may have been agreed upon at the time of the granting of this franchise, which percentage shall not be less than one and one-half per centum of such gross earnings, and when promptly paid, shall be in lieu of all Insular, provincial, and municipal taxes on this franchise or earnings thereof and the privileges granted herein, except taxes on real estate: Provided, That said grantee shall be exempt from the payment of all such taxes, except taxes on real estate, including the aforesaid per centum of gross earnings for a period of two and one-half years from the date of the acceptance of this franchise.

"ART. 13. Within the limits of the city of Baguio, the poles erected by the grantee shall be of such height that no wire or wires thereto attached or strung by him shall be less than twenty feet above the ground, and such poles shall not be of such crooked or ungainly appearance as to disfigure the streets and shall be placed and erected in a good and workmanlike manner under and in strict accordance with a plan or plans which shall first be approved by the streets and Director of Public Works. Whenever it may become necessary to take up any portion of the sidewalks or dig up the ground in any street or near the sides or corners of the streets or thoroughfares or in any public place for the purpose of erecting such poles, in each such case the grantee shall, after the erection of such poles and without delay, replace such sidewalks or fill in such ground in a neat, workmanlike manner, remove from such sidewalks, streets, or thoroughfares or public places all rubbish, dirt, sand, or other material which may have been for him placed there, taken up, or dug up by reason of such erection, and shall cause such sidewalks, streets, or thoroughfares or public places to be placed in as good condition as they and each of them were prior to such erection. All such work shall be subject to the approval of the Director of Public Works or the engineer of the city of Baguio.

"ART. 14. The grantee shall, within forty-eight hours after receipt by him of notice in writing from the Director of Public Works or the city engineer of Baguio, raise, cut, or remove any installation of any and all wires which may prevent or hinder the due prosecution and completion of any and all public work, the removal or placing in position of any and all buildings, or of any other necessary and proper work or construction whatsoever and shall, immediately upon the completion of such moving, placing in position, or work, replace such and all installations of wires so raised, cut, or removed, in a good and workmanlike manner, each and all such raising, cutting and removing, and replacement to be at his own cost and expense. Said notice shall be served on said grantee or his duly authorized representative or agent by any person competent to be a witness in a civil action. In case of refusal or failure of said grantee to comply with such notice and take proper action thereunder as aforesaid, the Director of Public Works or the city engineer of Baguio, as the case may be, may so raise, cut or remove, and replace such or any installation of wires as aforesaid provided to be raised, cut or removed, and replaced, and the cost and expense thereof shall be forthwith repaid by said grantee on demand. Failure on the part of said grantee to make such repayment shall be held and considered a failure to comply with the terms and conditions of this grant within the meaning and to the effect provided for in article nineteen hereof.

"ART. 15. The grantee shall, within six months from and after filing the written acceptance of this grant as provided for in article two hereof, deposit in the Insular Treasury the sum of one thousand pesos, and, within eighteen months from and after the date of such acceptance, shall deposit in said Treasury the further sum of nine thousand pesos, as a guarantee of the faithful performance of the conditions mentioned in this franchise and the agreement under which the franchise is awarded. Either or both of said deposits may be made in bonds of the United States or of the Philippine Islands of equal value: Provided, That the Insular Treasurer may accept duly executed and satisfactory bonds of a fidelity company in lieu of the cash or bond deposits in and by this article required to be made. In case said deposit of nine thousand pesos is not forfeitures, made as herein provided, or said grantee fails to commence the construction at the time provided for in article three hereof, said deposit of one thousand pesos shall at the option of the Governor-General thereupon be and become forfeited to the Insular Treasury as liquidated damages for the breach of the contract involved in the acceptance of this franchise and this franchise shall thereupon be and become null and void. In case said deposits of one thousand pesos and nine thousand pesos shall both have been so made and the construction of said dam, electric light, heat, and power supply system shall not be completed within the time named in article three hereof, then and in that case and at the option of the Governor-General both said deposits shall be and become forfeited to the Insular Treasury as liquidated damages for breach of the contract created by the acceptance of the grant by this Act made.  In case of the proper and timely fulfillment by said grantee of the terms and conditions in and by this article made and provided, both said deposits of one thousand and nine thousand pesos shall be returned to said grantee by the Insular Treasurer upon presentation to him of proper certificates of the Director of Public Works of the fulfillment of such terms and conditions: Provided, That if construction of said dam. electric  light,  heat, and power supply system shall be commenced at the lime named and set therefor in and by article three hereof and thereafter be properly forwarded,  the amount so deposited may. in the discretion of the Governor-General, be returned to said grantee in monthly or quarterly installments as said construction progresses, in the proportion which the  construction completed bears to the construction to be completed.

"ART. 16. The grantee shall, if required by the Director of Public Works, construct the dam aforesaid with such passes, chutes, or channels as may be necessary for the navigation of boats or rafts, and also such chutes or ladders as may be required for the safe passage of fish.

"ART. 17. This grant is expressly made subject to amendment, repeal by Congress or repeal by the Congress of the United States, and any and all lands or rights of use and occupation of lands or waters herein granted, or which may hereinunder accrue to said grantee, shall revert to the Government of the Philippine Islands or to the governments of the city of Baguio, the subprovince of Benguet or townships thereof, or the Mountain Province, as the case may be, upon the termination of the grant in and by this Act made, or upon the revocation of such grant, or upon the repeal of this Act, and this grant is hereby expressly made subject to all the limitations and conditions contained in all Acts of Congress relating to grants, franchises, and concessions of like nature to the grant by this Act made.

"ART. 18. The city of Baguio, the subprovinee of Benguet and townships thereof, and the Mountain Province shall have the privilege, without compensation, of using the poles of the grantee for the purpose of installing, maintaining, and operating a telephone or fire and police alarm system, but the wires of such telephone or fire and police alarm system shall be placed and stretched in such manner as to cause no interference with or damage to the wires of the electric service of the grantee.

"ART. 19. The Governor-General, after a hearing granted the parties interested, may declare forfeited this grant and all rights and privileges hereunder by reason of failure of said grantee to comply with any of the conditions and terms hereof, unless such failure shall have been directly or primarily caused by the act of God, the public enemy, or force majeure.   At any time within sixty days from and after the date of such declaration said grantee may apply to any court of competent jurisdiction for review of such declaration of forfeiture and relief therefrom, but no such application shall be considered by any such court unless made within the sixty days hereinbefore named.

"ART. 20. Whenever and wherever in this Act the word 'grantee' is used, said word is to be and shall be taken and understood to mean '............................................, his representatives, successors or assigns,' and whenever and wherever in this Act the word 'grant' is used, said word is to be and shall be taken and understood to mean 'franchise.'"

Enacted, December 19, 1910.