Be it enacted by the Senate and House of Representatives of the Philippines in Legislature  assembled and by the authority of the same:

SECTION 1. Section nine of Act Numbered Eleven hundred and twenty, entitled the Friar Lands Act, as amended by Acts Numbered Eighteen hundred and forty-seven, Nineteen hundred and thirty-three, Twenty-three hundred and seventy-nine, Twenty-live hundred and nine, and Three thousand and twenty-four, is hereby amended to read as follows:

"SEC. 9. In the event the Director of Lands should find any of said lands vacant, he is directed to take possession and charge thereof, and he may either lease such unoccupied lands for a term not exceeding three years, or sell same, as may be solicited, and in making such leases or such sales he shall proceed as provided in section eleven of this Act: Provided, however, That the sale made to an individual shall not exceed one hundred and forty-four hectares and to a corporation shall not exceed one thousand and twenty-four hectares: And provided, further, That this limitation shall not apply to sales made to a provincial or municipal government or to any other branch, subdivision, or entity of the Government."

SEC. 2. Section eleven of the same Act, as amended by Acts Numbered Eighteen hundred and forty-seven, Nine-teen hundred and thirty-three, Twenty-three hundred and seventy-nine, Twenty-five hundred and nine,  and Three thousand and twenty-four, is hereby amended to read as follows:

"SEC. 11. Should any person who is the actual and bona fide settler upon and occupant of any portion of said lands at the time the same is conveyed to the Government of the Philippine Islands desire to purchase the land so occupied by him, he shall be entitled to do so at the actual cost thereof to the Government, and shall be granted fifteen years from the date of the purchase in which to pay for the same in equal annual installments, should he so desire, paying interest at the rate of four per centum per annum on all deferred payments. And the contracts of sale made prior to the approval of this Act may be extended, in the discretion of the Director of Lands, for a period of not more than ten years from the date on which said contracts must expire under the provisions of Act Numbered Eleven hundred and twenty. The terms of purchase shall be agreed upon between the purchaser and  the Director of Lands, subject to the approval of the Secretary of Agriculture and Natural Resources.

"Both in case of lease and of sale of vacant lands under the provisions of section nine of this Act, the Director of Lands shall notify the municipal president or municipal presidents of the municipality or municipalities in which said lands lie of said lease or sale before the same takes place. Upon receipt of such notification by said municipal president or municipal presidents the latter shall publish the same for three consecutive days, by bandillos, in the poblacion and barrio or barrios affected, and shall certify all these acts to the Director of Lands who shall then, and not before, execute a lease or proceed to make the said sale with preference, other conditions being equal, to the purchaser who has been a tenant or bona fide occupant at any time of the said lands or part thereof, and if there has been more than  one occupant to the last tenant or occupant: Provided: however, That  no lease or sale of vacant lands made in accordance with this section shall be valid nor of any effect without the requisite as to publication by bandillos, above provided: Provided, further, That the provisions of this paragraph shall not apply to leases or sales made to any provincial or municipal government or any subdivision, branch, or entity of the Government."

SEC. 3. Section twenty-one of the  same Act, as amended by Acts Numbered Twenty-five hundred and nine and Twenty-eight hundred and four, is hereby further amended to read as follows:

"SEC. 21. The Governor-General when authorized by resolution of the Senate, may, by proclamation, designate any tract or tracts of said lands as nonalienable, and reserve the same for public use, and  thereafter such tracts shall not be subject to sale, lease, or other disposition under this Act: Provided, however, That on petition by any provincial municipal government, or branch of the Insular Government, or any Government entity, the Governor-General may, by executive order, exempt from lease, sale, or other disposition any unsold or vacant land for the public service or use; and such provincial or municipal government, or branch of the Insular Government, or Government entity shall pay to the friar lands sinking fund the full value of the property so reserved,together with the accrued interest thereon; and after the entire price of the property so reserved and the accrued interest thereon has been paid to the Bureau  of Lands, the title to said property shall be transferred by the Director of Lands to the province, municipality, branch of the Insular Government or Government entity concerned."

SEC. 4. This Act  shall take effect on its approval.

Approved, December 4, 1926.