Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section seven of Commonwealth Act Numbered Five hundred eighty-six, as amended by Commonwealth Act Numbered Six hundred fifty-six, is hereby amended to read as follows:

"SEC. 7. Commencing with the school year  nineteen hundred forty to nineteen hundred forty-one, public elementary education   (comprising the primary and  intermediate   courses)    shall   be   supported   by the National government.  Sites for school houses,  for primary  and for intermediate classes, shall be acquired by the municipalities,  municipal districts,  or chartered cities,  as the case may be, through purchase or conditional or absolute Ration: Provided, That the Department of Education may with the approval of the President of the Philippines, waive any requirement for the acquisition of school sites of standard size whenever the same are not available.

The necessary funds shall be provided by the national government for the purchase of supplementary readers and other library books which had been previously approved by the Board on Text Books or by the Director of public schools, and for financing athletic activities in the intermediate classes: Provided, That books which are a contribution to Philippine literature shall be preferred.

SEC. 2. Section eight of the same Commonwealth Act Numbered Five hundred eighty-six is hereby amended to read as follows:

"SEC. 8. To enable the National Government to properly finance the public elementary schools and meet the burden of their operation as provided in this Act, from and after July first, nineteen hundred and forty, the disposition of the proceeds of the taxes under Commonwealth Act Numbered Four hundred and sixty-five, known an the Residence Tax Law, shall be as follows:

"Of all the taxes collected and remitted to the Collector of Internal Revenue as provided in Section eight of Commonwealth Act Numbered Four hundred and sixty-five, fifty per centum shall be allotted in the following proportions by the said Collector among the provinces, chartered cities, municipalities, and municipal districts on the basis of population as shown by the latest official census;

"One-half to the general funds of the provinces. A sub-province shall receive its proportionate share of the proceeds allotted to the province; and

"The other half to the general funds of the chartered cities, municipalities, and municipal districts.

"Out of the remaining fifty per centum of the proceeds of said taxes, municipalities and municipal districts shall continue to receive the corresponding share in the school fund  of municipalities  and  municipal  districts to  which they were entitled under the provisions of law in force prior to July first, nineteen hundred and forty, balance including the share of chartered cities in the school fund of cities to which they were entitled under the provisions of law in force prior to July first, nineteen hundred sixty-two shall accrue to the National Government.”

SEC. 3. Such sums as may be necessary to implement the provisions of this Act are appropriated annually, out of the funds in the National Treasury not otherwise appropriated: Provided, however, That in place of the matriculation fees that will not be collected, the amount of two million pesos shall be set aside and distributed to all the cities, municipalities, and municipal districts, except the City of Manila, at the rate of two pesos for every intermediate pupil, the same to be computed for the school year 1963-1964 on the basis of the enrollment as of March, 1963: Provided, further, That in every subsequent school year, an additional sum shall be appropriated and added to the said amount which shall be the product of two pesos multiplied by the number of intermediate pupils enrolled as of March of the preceding school year which is in excess of the number of such pupils enrolled as of March, 1963.

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

Approved, June 19, 1964.