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

SECTION 1. Authority is hereby granted to divert and utilize certain waters of the Pasipi River, in the municipality of Lucban, Province of Tayabas, for the purpose of generating power for the maintenance of an electric light, heat, and power system, and to install, operate, and maintain an electric light, heat, and power supply system in the municipality of Lucban, Province of Tayabas, and the Governor-General is hereby authorized, on behalf of the Government of the Philippine Islands, to offer for public bidding the franchise set forth in this Act, and to grant said franchise to the best bidder upon such terms as to the percentage of gross earnings paid in lieu of provincial and municipal taxes on the franchise or earnings thereof, which shall not in any case be less than one per centum, and under such terms and conditions as to 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 terms and form:

"FRANCHISE


"ARTICLE 1. There is hereby granted to ............................................................................................................................................ for the period of thirty-five years from and after the passage of this Act, the right and privilege to divert and utilize the waters of the Pagsipi River, in the municipality of Lucban, Province of Tayabas, to generate and develop the power necessary to operate an electric light, heat, and power supply system in the said municipality of Lucban, Province of Tayabas; the right and privilege to construct, operate, and maintain dams, ditches, power-houses, transmission lines, and all other accessories in connection with the use of said waters, as herein provided; the right and privilege to install, maintain, and operate an electric light, heat, and power supply system in the municipality of Lucban,, Province of Tayabas, and the right and privilege to construct and place, maintain, and operate, in, along, and over any and all streets, thoroughfares, and public places in the municipality of Lucban, poles, wires, and all apparatus and appurtenances  for the transmission and distribution of electric currents for electric light, heat, and power, for municipal, domestic, and industrial use in the said municipality of Lucban: Provided, That the water used for the purpose of this franchise shall be returned to the river in the manner and place approved by the Director of Public Works.

"ART. 2. The poles erected by the grantee shall be of such Poles. height as to support wires strung thereon at a distance of at least twenty feet above the ground, shall not be of such crooked or ungainly appearance as to disfigure the streets, and shall be placed in accordance with a plan which must have been approved by the municipal council; and said grantee shall supply electric power  and light to any applicant for the same within thirty days after the date of his application, and, as between such applicant and other like applicants in the order of the date of his application up to the limit of the capacity of the plant of said grantee, to be determined by the district engineer of the province on the application of such person or said grantee; and should the demand for electric light or power at any time increase beyond the capacity of the plant of said grantee to supply the same, the capacity of the plant of said grantee shall be increased to meet such demand, if the Philippine Legislature shall so direct: Provided, That the point at which the electric light or power is to be supplied, as mentioned in this article, is not more than fifty meters from the principal lines of the distribution wires of the grantee.

"ART. 3. All apparatus and appurtenances used by the grantee shall be modern and first class in every respect, and said wires shall be insulated and carefully connected and fastened so as not to come in direct contact with any object through which a "ground" could be formed, and shall be stretched so as not to interfere with the free and unobstructed use of said streets, public thoroughfares and places.

"ART. 4. Whenever it shall be necessary in the erection of said poles to destroy any portion or the sidewalks or dig up the ground etc. in any street or near the sides or corners of streets or public places, then the said grantee shall, after said poles are erected, without delay, replace the sidewalks and the soil in a scrupulous and workmanlike manner and remove from said sidewalks, streets, or public places all rubbish, sand and earth, or other material which may have been placed there, or dug up in the erection of the poles, and shall put such sidewalks, streets, or public places in as good a condition as before they were destroyed or disturbed.

"ART. 5. Whenever any person has obtained permission to use any of the streets of the municipality for the purpose of removing any building or in the prosecution of any municipal work or for any other cause whatsoever, making it necessary to raise or remove any of said wires which may obstruct the removal of said building or hinder the prosecution of said work, the said grantee, upon forty-eight hours' notice from the municipal council of Lucban, shall raise or remove any of said wires which may hinder the prosecution of such work or obstruct the removal of said building so as to allow the free and unobstructed prosecution of the work. Such notice shall be a duly adopted resolution of the municipal council, in writing, and served upon said grantee or his duly authorized representative or agent by any person competent to be a witness in a civil action; and in case of the refusal or failure of said grantee to comply with such notice, the municipal president, with the approval of the municipal council first had, shall order such wires raised or removed at the expense of said grantee, for the purposes aforesaid.

"ART. 6. Said grantee hereby contracts and covenants to indemnify the municipality of Lucban for any injury arising from any casualty or accident to person or property by reason of the construction under this franchise or of any neglect or omission to keep the said poles and wires in a safe condition, and for all valid claims against said municipality for damages caused by said wires or electric currents conducted thereby. The municipality shall notify the grantee as soon as possible of the existence of any claim that may arise in cases in which said grantee is responsible to the municipality under the provisions of this article.

"ART. 7. The grantee shall file his acceptance of this franchise with the Secretary of Commerce and Police within ninety days from the date thereof, and shall commence  work within ninety of filing of such acceptance, and shall complete the system and have the same in operation within eighteen months from the date of such acceptance, and shall thereafter maintain a first-class electric light, heat, and power service, and in consideration of the franchise hereby granted shall pay quarterly into the Insular Treasury to be distributed in accordance with Act Numbered Two thousand and ninety-six, the percentum of gross earnings of the enterprise agreed upon at the time of the award of this franchise, which shall be in lieu of all provincial and municipal taxes on the franchise and the privileges granted hereunder, except taxes on real estate: Provided, That such grantee shall be exempt from the payment of such percentage for a period of three years from the date of the acceptance of this franchise.

"ART. 8. Within three months after the filing of his acceptance, in writing, of this franchise, as herein provided for, the grantee shall deposit in the Insular Treasury one thousand pesos, and within nine months after such acceptance shall deposit in said Treasury the additional sum of nine thousand pesos, as a guarantee of the faithful performance of the conditions of this franchise and of the contract subject to which the concession is made. Any of these deposits, or both, may be made in United States bonds or Philippine bonds of the same amount: Provided, That the Insular Treasurer may accept duly executed and satisfactory fidelity bonds of a fidelity company or any persons of acknowledged solvency previously recommended by the treasurer of the province, in lieu of Return of deposits, the deposits in cash or bonds required by this clause. If the deposit of nine thousand pesos is not made as herein required, or the construction is not commenced by the grantee within the time herein specified, the deposit of one thousand pesos shall be forfeited to the Province of Tayabas and the municipality of Lucban, in equal shares, at the option of the Governor-General, as liquidated damages for the breach of the contract involved in the acceptance of this franchise, and this franchise shall become null and void. If said deposits of one thousand pesos and nine thousand pesos have been made and the work to be done under this franchise has not been commenced within the period designated, or has not been completed within the time specified, both said deposits may be forfeited at the option of the Governor-General, and be divided equally between the Province of Tayabas and the municipality of Lucban as damages for the breach of the contract involved in the acceptance of the franchise granted by this Act.  In case of the
fulfillment of the conditions by this article provided, both said deposits of one thousand and nine thousand pesos shall be returned by the Insular Treasurer to the grantee upon proper certificate of the district engineer of the fulfillment of said conditions: Provided, That if work shall be begun by the grantee within the time specified the funds deposited may be returned to the grantee as the work progresses, in monthly or quarterly installments in the discretion of the municipal authorities, in the proportion which the work done bears to the work to be done.

"ART. 9. The grantee shall have the right, and the same is Rates. hereby granted to him, to charge and collect for the light or power furnished by him: Provided, That the rates shall before going into effect be approved by the Board of Rate Regulation created by Act Numbered Seventeen hundred and seventy-nine, which said Board may require rates to be changed from time to time, as in its judgment is deemed in the interest of the public and the grantee hereunder.

"ART. 10. The municipality of Lucban shall have the privilege, without compensation, oi 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. 11. This franchise is granted with the understanding and upon the condition that it shall be subject to amendment, alteration or repeal by the Congress of the United States as provided in section seventy-four of the Act of Congress approved July first, nineteen hundred and two, entitled 'An Act temporarily to provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes and that it shall be subject, in all respects, to the limitations upon corporations and the granting of franchises contained in said Act of Congress or in the laws in force in the Philippine Islands, and that all lands or rights of use or occupation of lands secured by virtue of this franchise shall revert upon its termination to the Insular, provincial, or municipal government by which such lands were respectively granted.

"ART. 12. The grantee of this franchise is forbidden to issue stocks and bonds, stock or bonds under this franchise 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.  Neither shall said grantee declare any stock or bond dividend.

"ART. 13. The books of the grantee shall always be open to the inspection of books. inspection of the provincial treasurer, made in person or through his delegate.  It shall be the duty of the grantee to submit to the provincial treasurer quarterly reports in duplicate showing the gross receipts and the net receipts for the quarter past and the general condition of the business, a copy of which  shall be forwarded  by the provincial treasurer to the Insular  Auditor, who shall keep the same on file.

"ART. 14. The grantee may sell, lease, give, grant, convey, or assign this franchise and all property and rights acquired there under to any person, company, or corporation competent to conduct the business authorized thereby, but no title to this franchise or to the property or rights acquired thereby shall pass by sale, lease, gift, grant, conveyance, transfer, or assignment to the vendee, donee, transferee, lessee, or assignee, or be enjoyed by him until he shall have filed in the office of the Secretary of Commerce and Police an agreement in writing agreeing to comply with all the terms and conditions imposed on the grantee by the franchise and accepting the said franchise subject to all its existing terms and conditions: Provided, however, That no transfer of this franchise shall become effective under the provisions of this article until it has been previously approved in writing by the Secretary of Commerce and Police.

"ART. 15. The municipal council of Lucban, after hearing the grantee, shall have the power, with the approval of the Governor-General, to declare the forfeiture of this franchise for failure to comply with any of the terms and conditions thereof unless such failure shall have been directly or primarily caused by the act of God, the public enemy, or force majeure. Against such declaration of forfeiture the grantee may apply to any court of competent jurisdiction for such relief as may be proper, but if he fails to appeal within ninety days after the forfeiture has been declared by the municipality and approved by the Governor-General the right to apply to the courts shall be considered waived.

"ART. 16. The provisions of this Act to the contrary notwithstanding, the grantee, in order to enter upon the definitive enjoyment of the franchise granted to it by this Act, shall be required to comply with all provisions of law and regulations now existing or hereafter promulgated, governing the use and enjoyment of the public waters in the Philippine Islands.

"Art. 17. Wherever in this franchise the term grantee is used, it shall be held and understood to stand for and represent................its representatives, successors or assigns."

SEC. 3. This Act shall take effect on its passage.

Enacted, February 6, 1912.