PREAMBLE

ARTICLE I

NAME AND PURPOSE

SEC. 2. Bangsamoro Symbol. - The Bangsamoro Parliament, hereinafter referred to as the "Parliament", shall adopt the official flag, emblem, and hymn of the Bangsamoro Autonomous Region. The flag of the Republic of the Philippines shall always be displayed alongside the Bangsamoro flag. Whenever the Bangsamoro hymn is sung it shall always be preceded by the singing of the Philippines National Anthem.

ARTICLE III

TERRITORIAL JURISDICTION

SEC. 1. Territorial Jurisdiction. - Territorial jurisdiction is the land mass as well as the waters over which the Bangsamoro Autonomous Region has jurisdiction, which shall be an integral, indivisible, and inseperable part of the national territory of the Republic of the Philippines as defined by the Constitution and existing laws.

SEC. 2. Composition. - The territorial jurisdiction of the Bangsamoro Autonomous Region, subject to the plebiscite as provided in Section 3, Article XV of this Organic Law, shall be composed of:

(a) The present geographical area known as the Autonomous Region in Muslim Mindanao created under Republic Act No. 6734, as amended by Republic Act No. 9054, which shall subsist as such until this Organic Law is ratified through a plebiscite:

(b) The municipalities of Baloi, Mtinai, Nummgan, Pantar, Tagoloan, and Tangkal in the Province of Lanao de! Norte that voted for inclusion in the Autonomous Region in Muslim Mindanao during the 2001 plebiscite:

(c) The following thirty-nine (39) baraiigays in the municipalities of Aleoaan, Carmen, Kabacan, Midsayap, Pigkawayan. and Pikit in the Province of North Cotabato that voted for inclusion in the Autonomous Region in Muslim Mindanao during the 2001 plebiscite:

(1) Dunguan, Lower Mioe'sding, and Tapodoc in the Municipality of Aleosan. (3);

(2) Manarapan and Nasapian in the Municipality of Carmen (2);

(3) Nanga-an, Simbuhay, and Sanggadong in the Municipality of Kabacan (3);

(4) Damatulan, Kadigasan, Kapinpilan, Kadarangan, Central Labas, Malingao, Mudseng0, Nabalawag, Olandang, Sambulawan, and Tugal in the Municipality of Midsayap (12);

(5) Lower Baguer, Balacayon, Buricain, Datu Binasing, Kadingilan, Matilac, Patot, and Lower Pangangkalan in the Municipality of Pigkawayan (8); and

(6) Bagoinged, Balatican, S. Balong, S. Balongis, Batulawan, Buliok, Gokotan, Kabasalan, Lagunde, Macabual, and Macasandeg in the Municipality of Pikit (11);

(d) The City of Cotabato;

(e) The City of Isabela m the Province of Basilan; and

(f) All other contiguous areas where a resolution of the local government unit or a petition of at least ten percent (10%) of the registered voters in the area seeks for their inclusion at least two (2) months prior to the conduct  of the ratification of this Organic Law.

The establishment of the territorial jurisdiction of the Bangsamoro Autonomous Region shall take effect upon ratification of this Organic Law by majority of the votes cast in the abovementioned territorial jurisdiction in a plebiscite conducted for the purpose: Provided,That in all cases, the political units directly affected shall vote favorably in the plebiscite, as provided in Section 3, Article XV of this Organic Law.

SEC. 3. Inland Waters. - All inland waters such as lakes, rivers, river systems, and streams within its territorial jurisdiction shall form part of the Bangsamoro Autonomous Region inland waters. The preservation and management of the inland waters shall be under the Bangsamoro Government as provided for  Section 22, Article XIII of this Organic Law.

SEC. 4. Bangsamoro Municipal and Regional Waters. -The municipal and regional waters of the Bangsamoro Autonomous Region shall extend up to fifteen (15) kilometers and nineteen (19) kilometers, respectively, from the low-water mark of the coasts that are part of the Bangsamoro territorial jurisdiction.

Where a constituent local government unit of the Bangsamoro Autonomous Region and an adjoining local government unit are so situated on opposite shores such that there is thirty (30) kilometers of waters or less between them, a line equally distant from the opposite shores shall be drawn to demarcate the Bangsamoro waters and the municipal waters of the adjoining local government unit.

In case the constituent local government unit of the Bangsamoro Autonomous Region and an adjoining local government unit are so situated on opposite shores that there is more than thirty (30) kilometers but less than thirty-four (34) kilometers of waters between them, a line shall be drawn at the edge of the fifteen-kilometer municipal waters of the adjoining local government unit to demarcate it from the Bangsamoro waters.

SEC. 5. Constituent Units. - The constituent units of the Bangsamoro Autonomous Region are the provinces, cities. municipalities, barangays, and geographical areas within its territorial jurisdiction.

ARTICLE IV

SEC. 7. Social Justice. - The Bangsamoro Government shall ensure every Filipino citizen in its territorial jurisdiction the provision of the basic necessities and equal opportunities in life. Social justice shall be promoted in all aspects of life and phases of development in the Bangsamoro Autonomous Region.

SEC. 8. International Treaties and Agreements. - The Bangsamoro Government, shall respect and adhere to all international treaties and agreements binding upon the National Government.

SEC. 9. Rights of Non-Moro Indigenous Peoples. - The Bangsamoro Government shall recognize and promote the rights of non-Moro indigenous peoples within the framework of the Constitution and national laws.

SEC. 10. Freedom of Choice. - The freedom of choice of all peoples within the Bangsamoro Autonomous Region shall be respected. Indigenous peoples shall have the freedom to retain their distinct indigenous and ethnic identity in addition to their Bangsamoro political identity. There shall be no discrimination on the basis of identity, religion, and ethnicity.

ARTICLE V

POWERS OF GOVERNMENT

SEC. 1. Powers of the National Government. -All powers, functions, and responsibilities not granted by the Constitution or by national law to the Bangsamoro Government shall be vested in the National Government.

SEC. 2. Powers of the Bangsamoro Government. -Subject to Section 20, Article X of the Constitution and this Organic Law, the Bangsamoro Government shall exercise its authority over the following matters without prejudice to the general supervision of the President of the Republic of the Philippines:

(a) Administration of justice;

(b) Administrative organization;

(c) Agriculture, livestock, and food security;

(d) Ancestral domain and natural resources;

(e) Barter trade and countertrade;

(f) Budgeting;

(g) Business name registration;

(h) Cadastral land survey;

(i) Civil service;

(j) Classification of public lands;

(k) Cooperatives and social entrepreneurship;

(l) Creation, division, merger, abolition or alteration of boundaries of municipalities and barangays;

(m) Creation of government-owned or controlled corporations and pioneer firms;

(n) Creation of sources of revenues;

(o) Cultural exchange, and economic and technical cooperation:

(p) Culture and language;

(q) Customary Laws;

(r) Development programs and laws for women, labor, the youth, the elderly, the differently-abled, and indigenous peoples;

(s) Disaster risk reduction and management;

(t) Ecological solid waste management and pollution control;

(u) Economic zones, industrial centers, and free ports;

(v) Education and skills training;

(w) Eminent domain;

(x) Environment, parks, forest management, wildlife, and nature reserves conservation;

(y) Fishery, marine, and aquatic resources;

(z) Grants and donations;

(aa) Hojj and Umrah;

(bb) Health;

(cc) Housing and human settlements;

(dd) Humanitarian services and institutions;

(ee) Human rights;

(ff) Indigenous peoples' rights;

(gg) Inland waters;

(hh) Inland waterways for navigation;

(ii) Islamic banking and finance;

(jj) Labor, employment, and occupation;

(kk) Libraries and museums, and historical, cultural, and archaeological sites;

(ll) Loans, credits, and other forms of indebtedness;

(mm) Mechanisms for consultations for women and marginalized sectors;

(nn) People's organizations:

(oo) Power sector investments;

(pp) Public-utilities operations;

(qq) Public works and infrastructure;

(rr) Quarantine regulations;

(ss) Registration of births, marriages, and deaths, copies to be furnished the Philippine Statistics Authority;

(tt) Regulation of the manufacture and distribution of food, drinks, drugs, and tobacco;

(uu) Science and technology, research councils and scholarship programs;

(vv) Social, services, social welfare, and charities;

(ww) Sports and recreation;

(xx) Technical cooperation for human resource development;

(yy) Tourism development;

(zz) Trade and industry;

(aaa) Urban and rural planning development;

(bbb) Urban land reform and  use; and

(ccc) Water supply and services, flood control, and irrigation systems.

SEC. 3. General Welfare. - The Bangsamoro Government shall exercise the powers expressly granted, those necessarily implied therefrom, as well as power; necessary, appropriate, or incidental for its efficient and effective governance and those which are essential to the promotion of general welfare. Within its territorial jurisdiction, the Bangsamoro Government shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant, scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among its residents, maintain peace and order, and preserve the comfort and convenience of its inhabitants.

ARTICLE VI

SEC. 2. Powers of Government. - The powers of government shall be vested in the Parliament which shall exercise those powers and functions expressly granted to it in this Organic Law, and those necessary for, or incidental to, the proper governance and development of the Bangsamoro Autonomous Region. It shall set policies, legislate on matters within its authority, and elect a Chief Minister who shall exercise executive authority on its behalf.

SEC. 3. Legislative Authority. - The Parliament shall have the authority to enact laws on matters that are within the powers and competencies of the Bangsamoro Government.

SEC. 4. Executive Authority. ~ The executive function and authority shall be exercised by the Cabinet which shall be headed by a Chief Minister, The Chief Minister shall be elected by a majority vote of all the members of the Parliament.

The Chief Minister shall nominate two (2) Deputy Chief Ministers who shall be elected by the Parliament., as provided for in Section 35 of this Article, and appoint the members of the Cabinet, majority of whom shall come from the Parliament.

Bangsamoro Parliament

SEC. 5. Powers. - The Parliament shall have the following powers:

(a) Enact laws to promote, protect, and ensure the general welfare of the Bangsamoro people and other inhabitants in the Bangsamoro Autonomous Region;

(b) Call for a referendum on important issues affecting the Bangsamoro Autonomous Region:

(c) Enact a law on initiatives;

(d) Conduct inquiries in aid of legislation in accordance with its rules. The rights of persons appearing in or affected by such inquiry shall be respected;

(e) Enact a law that allows the Chief Minister, Speaker of the Parliament, and the Presiding Justice of the Shari'ah High Court to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations;

(f) Enact a law within the competencies of the Bangsamoro Government to regulate the grant of regional franchises and concessions, and empower the Chief Minister to grant leases, permits. and licenses over agricultural lands and for forest management;

(g) Discipline its members as provided in Section 26. Article VII of this Organic Law;

(h) Enact laws declaring Bangsamoro holidays; and

(i) Be consulted on matters affecting the environment,

SEC. 6. Composition. - The Parliament shall be composed of eighty (80) members, unless otherwise increased by the Congress of the Philippines.

SEC. 7. Classification and Allocation of Seats. - The seats in the Parliament shall be classified and allocated, as follows:

(a) Party Representatives. - One-half of the members of the Parliament shall be representatives of political parties who are elected through a system of proportional representation based on the Bangsamoro territorial jurisdiction.

Any organized group in the Bangsamoro Autonomous Region may register as a political party with the Bangsamoro Electoral Office, with qualifications to be prescribed by the Bangsamoro Electoral Code.

Each registered political party shall submit to the Bangsamoro Electoral Office before the election a manifestation of intent to participate in the parliamentary election of party representatives in the Bangsamoro Autonomous Region, incorporating therein a list of nominees, ranked from one (1) to forty (40), from which party representatives shall be chosen in case they obtain the required number of votes. No person shall be nominated in more than one (1) list.

The number of seats allocated for each political party shall be based proportionately on the percentage of votes obtained by each political party as against the total votes cast in the Bangsamoro Autonomous Region for the election of party representatives.

Any elected party representative who changes political party affiliation during the representative's term of office shall forfeit the seat in the Parliament: Provided, That if the elected party representative changes political party affiliation within six (6) months before an election, the same person shall not be eligible for nomination as party representative under the new party or organization.

(b) Parliamentary District Seats. - Not more than forty percent (40) of the members of the Parliament shall be elected from single member parliamentary districts apportioned for the areas and in the manner provided for by the Parliament. For the first parliamentary election following the ratification of this Organic Law, the allocation of the parliamentary district seats shall be determined by the Bangsamoro Transition Authority as provided for in Section 4, Article XVI of this Organic Law. In the allocation of district seats, the Bangsamoro Transition Authority shall adhere to the standards set in Section 10, Article VII of this Organic Law.

The Parliament may undertake by law new redistricting in order to ensure a more equitable representation of the constituencies in the Parliament.

The district representatives shall be elected through direct plurality vote by the registered voters in the parliamentary districts.

(c) Reserved Seats and Sectoral Representatives. - Reserved seats and sectoral representatives shall constitute at least ten percent (10%) of the members of the Parliament, which shall include two (2) reserved seats each for non-Moro indigenous peoples and settler communities. Women, youth, traditional leaders, and the Utama shall have one sectoral seat each: Provided, That the reserved seats and sectoral representatives shall in no case be less than eight (8) seats.

The Parliament shall determine the manner of election of the reserved seats and sectoral representatives.

For the first: parliamentary election following the ratification of this Organic Law, the allocation of reserved and sectoral representative seats shall be determined by the Bangsamoro Transition Authority as provided for in Section 4, Article XVI of this Organic Law.

SEC. 8. Election for Reserved Seats for Non-Metro Indigenous Peoples. - Notwithstanding the immediately preceding sections, reserved seats for non-Moro indigenous peoples, such as Teduray, Lambangian, Dulangan Manobo, B'laan, and Higaonon, shall adhere to their customary laws and indigenous processes based on the following:

(a) Primacy of customary laws and practices;

(b) Primacy of consensus building;

(c) Acceptability to the community;

(d) Inclusive and full participation;

(e) Representation of the collective interests and aspirations of non-Moro indigenous peoples;

(f) Sustainability ans strengthening of indigenous political structures;

(g) Track record and capability; and

(h) Gender equality.

SEC. 9. Regional Parties. - A free and open regional party system shall be allowed to evolve according to the free choice of the people. Towards this end, only regional political parties duly accredited by the Bangsamoro Electoral Office, as approved by the Commission on Elections, shall participate in the parliamentary elections in the Bangsamoro Autonomous Region. The Bangsamoro Government shall ensure the inclusion of women's agenda and the involvement of women and the youth in the electoral nominating process of the political parties.

SEC. 10. Redistricting for Parliamentary Membership. -The Parliament shall have the power to reconstitute by law the parliamentary districts apportioned among the provinces, cities, municipalities, and geographical areas of the Bangsamoro Autonomous Region to ensure equitable representation in the Parliament, The redistricting, merging, or creation of parliamentary districts shall be based on the number of inhabitants and additional provinces, cities, municipalities, and geographical areas, which shall become part of the Bangsamoro territorial jurisdiction.

For the purpose of redistricting, parliamentary districts shall be apportioned based on population and geographical area: Provided, That each district shall comprise, as far as practicable, contiguous, compact, and adjacent territorial jurisdiction: Provided, further, That each district shall have a population of at least one hundred thousand (100,000).

SEC. 11. Term of Office, - The term of office of the members of the Parliament shall be three (3) years: Provided, That no member shall serve for more than three (3) consecutive terms. Voluntary renunciation of office for any length of time or the dissolution of the Parliament by the Wall shall not be considered as an interruption in the continuity of the service for the full term for which the member was elected.

SEC. 12. Qualifications. - No person shall be a member of the Parliament unless the person is a citizen of the Philippines, at least twenty-five (25) years of age on the day of the election, able to read and write, and a registered voter in the Bangsamoro Autonomous Region.

A candidate for youth represented ve shall not be less than eighteen (18) years and not more than thirty (30) years of age at the time of election.

A candidate for district representative must be a registered voter of the district in which the person is a candidate, and has resided in the district for at least one (1) year immediately preceding the day of the election.

SEC. 13. Salaries of Members of the Parliament, - The Parliament shall determine the salaries and emoluments of its members: Provided, That the salaries and emoluments of the members of the Parliament shall not be higher than those of a Provincial Governor: Provided, further, That the salaries and emoluments of the Deputy Chief Ministers and the Speaker of the Parliament shall be one salary grade higher than those of the members: Provided, furthermore, That the salaries and emoluments of the Chief Minister shall not be higher than those of the Members of the Congress of the Philippines.

The Parliament shall adopt the Revised Compensation and Position Classification System of the National Government as provided for in Republic Act No. 6758, as amended, and relevant executive issuances; Provided, finally, That no increase in the compensation, shall take effect until after the expiration of the full term of all the members of the Parliament approving such increase.

For the first Parliament, the salaries and emoluments of its members shall be determined by a law to be passed by the Bangsamoro Transition Authority.

Members of the Parliament shall not receive during their tenure other salary and emoluments from the Bangsamoro Government or from the National Government.

SEC. 14. Disclosure. - Members of the Parliament shall, upon their assumption of office, make a full disclosure of their financial and business interests, including those of their spouses and children. They shall notify the Parliament of any potential conflict of interest that may arise from the filing of bills or resolutions of which they are authors.

SEC. 15. Prohibition Against Conflict of Interest. — The Chief Minister, Deputy Chief Ministers, members of the Cabinet, and members of the Parliament, during their term, shall not engage, directly or indirectly, in any business or commercial enterprise in the Bangsamoro Autonomous Region where there may be a conflict of interest in the exercise of their functions.

SEC. 16. Prohibited Business and Pecuniary Interest. -

(a) It shall be unlawful for the Chief Minister, Deputy Chief Ministers, members of the Cabinet, and members of the Parliament to directly or indirectly:

(1) Engage in any business transaction with the Bangsamoro Government or with any of its authorized boards, officials, agents, or attorneys, whereby money is to be paid, or property or an;y other thing of value is to be transferred, directly or indirectly, out of the resources of the Bangsamoro Government to such person or firm:

(2) Hold such interests in any cockpit or other games licensed by the Bangsamoro Government:

(3) Purchase any real estate or other property forfeited in favor of the Bangsamoro Government for unpaid casts or assessment, or by virtue of a legal process at the instance of the Bangsamoro Government;

(4) Be a surety for any person contracting or doing business with the Bangsamoro Government for which a surety is required; and

(5) Possess or use any public property of the Bangsamoro Government for private purposes.

(b) All other prohibitions governing the conduct of national public officers relating to prohibited business and pecuniary interest as provided for under Republic Act No. 6713, otherwise know n. as the "Code of Conduct and Ethical Standards for Public Officials and Employees" and other national laws shall also be applicable to the Chief Minister, Deputy Chief Ministers, members of the Cabinet, and members of the Parliament.

SEC. 17. Practice of Profession. -

(a) The Chief Minister, Deputy Chief Ministers, and members of the Cabinet are prohibited from practicing their profession or engaging in any occupation other than the exercise of their functions as officials of the Bangsamoro Government.

(b) Members of the Parliament who are not holding Cabinet positions may practice their professions, engage in any occupation, or teach in schools except during session hours: Provided, That members of the Parliament who are also members of the Philippine Bar shall not:

(1) Appear as counsel before any court in any civil case wherein, the Bangsamoro Government or any office, agency, or instrumentality of the government is the adverse party;

(2) Appear as counsel in any criminal case wherein an officer or employee of the National Government or the Bangsamoro Government is accused of an offense-committed in relation to the office;

(3) Collect any fee for appearance in administrative proceedings involving the Bangsamoro Government: and

(4) Use property and personnel of the government except when the member concerned is defending the interest of the government.

(c) Doctors of medicine may practice their profession even during official hours of work only on occasions of emergency: Provided, That the members concerned do not derive monetary compensation therefrom.

SEC. 18. Statement of Assets, Liabilities, and Net Worth. - Officials and employees of the Bangsamoro Government shall file sworn statements of assets, liabilities, and net worth, lists of relatives within the fourth civil degree of consanguinity or affinity in government service, financial and business interests, and personal data sheets as required by national law.

SEC. 19. Forfeiture of Seat. - The seat of a member of the Parliament shall he forfeited under any of the following circumstances:

(a) Voluntary resignation in the form of either a written or oral declaration in the Parliament:

(b) Conviction of a grave offense by a regular court or a finding of guilt of a grave offense as defined by the rules of the Parliament for treason, high crimes., heinous crimes, crimes against morality, or other crimes punishable by more than six (6) years of imprisonment;

(c) Permanent physical or mental incapacity that makes the Member unable to discharge the; duties of a member, or death;

(d)  Substitution by the party to which the member belongs with another member of the same party, the member having been elected under the proportional representation system;

(e) Expulsion by the Parliament for disorderly behavior, with the concurrence of two-thirds of all its members; and

(f) Such other grounds as may be provided in the Bangsamoro Electoral Code.

SEC. 20. Filing of Vacancy. - In case of a vacancy of a proportional representation seat, the party to which that seat belongs shall fill the vacancy.

In case of a vacancy of a district seat by an affiliated member of the Parliament, the party to which the member belongs shall, within thirty (30) days from the occurrence of such vacancy nominate a new member who shall be appointed by the Chief Minister subject to the Bangsamoro Electoral Code.

In case of a vacancy in the seat occupied by an unaffiliated member of the Parliament occurring at least one (1) year before the expiration of the term of office, a special election may be called to fill such vacancy in the manner prescribed by a law enacted by the Parliament.

The appointed or selected member of the Parliament, as the case may be, shall serve the unexpired term of the vacant office.

SEC. 21. Privileges and Immunities. - Any member of the Parliament who commits an offense within the Bangsamoro territorial jurisdiction, that is punishable by not more than six (6) years imprisonment, shall be privileged from arrest while the Parliament is in session.

No member of the Parliament shall be questioned or be held liable in any other place for any speech or debate in the Parliament or in any of its committees.

SEC. 22. Sessions of the Parliament. - The Parliament shall conduct its regular session forty-five (45) days after the election of the Parliament up to thirty (30) days before the opening of its next regular session, unless earlier dissolved by a vote of no confidence. A special or emergency session may be called by the Speaker, upon the request of the Chief Minister or by a majority of ail the members of the Parliament.

SEC. 23. Officers of the Parliament. - On the first day of session of the Parliament following their election, the members shall elect by a majority vote of ail its members the Speaker, a Deputy Speaker, and the other officers of the Parliament, as the rules of th» Parliament may provide.

In case of death, removal resignation, or permanent disability or legal incapacity of the Speaker, the Deputy Speaker shall act as Speaker until a new Speaker shall have been elected by the Parliament.

SEC 24. Presiding Officer. -   The Speaker, Deputy Speaker, or any other person presiding over the Parliament shall:

(a) Secure the honor and dignity of the Parliament;

(b) Ensure the rights and privileges of ay the members; and

(c) Assure public access to the proceedings of the Parliament and its committees.

SEC. 25. Rules of the Parliament. - The Parliament shall adopt its own rules for the conduct of its business.

(a) Every bill passed by the Parliament shall embrace only one subject which shall be expressed m the title thereof.

(b) No bill shall become a law in the Bangsamoro Autonomous Region unless it has passed three (3) readings on separate days and printed copies thereof in its final form have been distributed to members of the Parliament, three (3) days before its passage, except when the Chief Minister certifies to the necessity of its immediate enactment to meet a public calamity or emergency.

(c) Every bill passed by the Parliament shall, before it becomes a law, be presented to the Chief Minister. The Chief Minister shall sign the bill within thirty (30) days after the date of its receipt, otherwise, it shall become a law as if the Chief Minister had signed it.

(d) The Speaker of the Parliament shall, within ten (10) working days from their approval thereof, submit to the President and to the Congress of the Philippines a certified true copy of all laws and resolutions approved by the Parliament.

(e) The rules of the Parliament or any amendment thereto shall be effective fifteen (15) days following its complete publication in a regional newspaper of general circulation.

SEC. 26. Proceedings. - A majority of all the members of the Parliament shall constitute a quorum to do business, but a smaller number may adjourn from day to day and may compel the attendance of absent members in such manner, and under such penalties as the Parliament may provide.

The Parliament may punish its members for disorderly behavior, and with the concurrence of' two-thirds of all its members, suspend or expel a member. A penalty of suspension, when imposed, shall not exceed sixty (60) days.

The Parliament shall keep a Journal of its proceedings. and from time to time publish the same, excepting such, parts as may, in its judgment affect national and/or regional security; and the yeas and nays on any question shall, at the request of one-fifth of the members present be entered into the Journal. The Parliament shall also keep a record of its proceedings.

SEC. 27. Appropriations. - No public money, including the block grant and other national government subsidies and support funds given in lump sum, shall be spent without an appropriations law clearly defining the purpose for which it is intended. The Parliament shall pass an annual appropriations law.

SEC. 28. Budget. - The form, content, and manner of preparation of the Bangsamoro budget shall be prescribed by law enacted by the Parliament, consistent with existing laws, rules and regulations of the National Government. For this purpose, the Parliament shall create a Bangsamoro Budget Office.

SEC. 29. Reenacted Budget. - If by the end of the fiscal year, the Parliament shall have failed to pass the Bangsamoro appropriations bill for the ensuing fiscal year, the Bangsamoro appropriations law for the preceding fiscal year shall be deemed reenacted and shall remain in force and effect until a new Bangsamoro appropriations bill is passed by the Parliament.

Only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and operating expenses authorized in the annual budget of the preceding year shall be deemed reenacted and the disbursement of funds shall be in accordance therewith.

EXECUTIVE OFFICERS

SEC. 30. Qualifications of the Chief Minister. - No person shall be elected as Chief Minister unless a member of the Parliament, a natural-born citizen of the Philippines, and. at least twenty-five (25) years of age on the day of the election.

SEC. 31. Election of the Chief Minister. - On the first day of session following the election of the members of the Parliament, the Parliament shall elect the Chief Minister by a majority vote of all its members.

If no member of the Parliament obtains the majority vote necessary to be elected Chief Minister in the first round of voting, a runoff election shall be conducted: Provided, That the members of the Parliament shall elect the Chief Minister from the two (2) candidates who obtained the highest number of votes cast in the first round.

SEC. 32. Powers, Duties, and Functions of the Chief Minister. - The Chief Minister shall exercise the following powers, duties, and functions:

(a) Head the Bangsamoro Government:

(b) Appoint heads of ministries, agencies, bureaus, and offices of the Bangsamoro Government or other officers of Bangsamoro-owned or controlled corporations or entities with original charters;

(c) Appoint other officers in the Bangsamoro Government, as may be provided by the Parliament;

(d) Formulate a platform of government subject to the approval of the Parliament:

(e) Issue executive orders and other policies of the Bangsamoro Government;

(f) Represent the Bangsamoro Government in. the affairs of the Bangsamoro Autonomous Region;

(g) Proclaim a state of calamity whenever typhoons, flash floods, earthquakes, tsunamis, or other natural or man-made calamities that cause widespread damage or destruction to life or property in the Bangsamoro Autonomous Region: and

(h) Exercise such other powers and functions inherent to the office.

SEC. 33. Administration, of the Oath of Office. - The Wali shall administer the oath of office of the Chief Minister and all the members of the Parliament upon their election.

SEC. 34. Membership in Other Offices. - The Chief Minister shall be a member of the Mindanao Development Authority. The Chief Minister shall be an ex officio member of the National Security Council and the National Economic and Development Authority Board on matters concerning the Bangsamoro Autonomous Region.

SEC. 35. Deputy Chief Ministers. - There shall be two (2) Deputy Chief Ministers who shall be nominated by the Chief Minister and elected by members of the Parliament.

The Bangsamoro Autonomous Region shall have three (3) subregions, namely: south western Mindanao, north central Mindanao, and south central Mindanao, all within the Bangsamoro territorial jurisdiction. To ensure representation of all the subregions, the two (2) Deputy Chief Ministers shall come from the other two (2) subregions different from that of the Chief Minister.

For purposes of this provision, the coverage of each subregion shall be determined by the Parliament.

The Deputy Chief Ministers may each hold a cabinet position.

In case of death, permanent physical oriental incapacity, removal from office, or resignation of the Chief Minister, the Deputy Chief Minister, more senior in age, shall act as the Chief Minister until the Parliament shall have elected a new Chief Minister. The election shall be held within thirty (30) days from the occurrence of the vacancy.

SEC. 36. Dissolution of Parliament Upon a Vote of No Confidence. - Within seventy-two (72) hours upon a vote of no confidence of at least, two-thirds of all the members of the Parliament against the government of the day, the Chief Minister shall advise the Wali to dissolve the Parliament and call for a new parliamentary election. The election for a new Parliament shall be held not later than one hundred twenty (120) days from the date of dissolution.

The incumbent Chief Minister and the Cabinet shall continue to conduct the affairs of the Bangsamoro Government until a new Parliament is convened and a new Chief Minister is elected and qualified.

In no case shall the Wali countermand the advice of the Chief Minister.

SEC. 37. Prohibitions During Holdover. - After a vote of no confidence against the government of the day shall have been obtained, and before a new government is formed, the Chief Minister and the Cabinet shall continue to perform their duties and functions: Provided, That they shall not contract basis. approve new contracts or disburse public funds except those for payment of salaries and wages and expenses for the regular operations of the government.

The Chief Minister and the Cabinet, during the holdover period, shall not make appointments, except temporary appointments to positions when continued vacancies therein will prejudice public service or endanger public safety.

Administrative Organization

SEC. 38. Organization of the Bureaucracy. - The Bangsamoro Government shall have the power to create offices and organize its own bureaucracy. It may establish other offices and institutions necessary for the exercise of its functions and delivery of social services in the Bangsamoro Autonomous Region.

SEC 39. Civil Service. - The Civil Service Commission shall establish a regional Civil Service field office and other field offices as may be needed in the Bangsamoro Autonomous Region for the efficient performance of its powers and duties.

The Bangsamoro Government shall enact a civil service law: Provided, That it shall be in accordance with existing national laws. In case of conflict with the national laws, the Constitution and existing national civil service laws, rules, and regulations shall prevail.

This law shall govern the conduct of civil servants, the qualifications for nonelective positions, adopt the merit and fitness system, and protect civil service eligibles in various government positions, including government-owned or controlled corporations with original charters in the Bangsamoro Autonomous Region, The Bangsamoro Government shall have disciplinary authority over its own officials and employees,

SEC. 40. Bangsamoro Electoral Office. - The Commission on Elections shall establish a Bangsamoro Electoral Office under its supervision and control which shall implement and enforce its orders, rulings, and decisions. The budget of the Bangsamoro Electoral Office shall be part of the yearly budget of the Commission on Elections.

SEC. 41. Accountability of Public Officers. - Public office is a a public trust. Public officers and employees shall at all times be accountable to the people serve them with utmost responsibility, integrity, loyalty, and efficiency, act with, patriotism and justice, and lead modest lives.

SEC. 42. Other Offices. - The Parliament may create other offices such as for the youth, women, settler communities, disaster risk reduction and management, and planning and development including a Bangsamoro Pilgrimage Authority which shall exercise jurisdiction over Hajj and Umrah matters affecting pilgrim s from within the Bangsamoro Autonomous Region.

ARTICLE VIII

WALI
 

SEC. 3. Sources of Shari'ah. - The following are the sources of Shari'ah:

Principal Sources:

(a) Al-Qur'an or the Koran:

(b) Al-Sunnah or traditions of Prophet Muhammad SAW;

Secondary Sources:

(a) Al-Ijmoor Consensus; and

(b) Al-Qiyas or Analogy.

SEC. 4. Power of the Parliament to Enact Laws Pertaining lo Shari'ah. - The Parliament shall have the power to enact laws on personal family, and property law jurisdiction.

The Parliament has the power to enact laws governing commercial .and other civil actions not provided for under Presidential Decree No. 1083, as amended, otherwise known as the ''Code of Muslim Personal Laws of the Philippines, " and criminal jurisdiction on minor offenses punishable by arresto menor or ta'zir which must be equivalent to arresto menor or fines commensurate to the offense.

SEC. 5. Jurisdiction of the Shari'ah Circuit Courts. - The Shari'ah Circuit Courts in the Bangsamoro Autonomous Region shall exercise exclusive original jurisdiction over the following cases where either or both parties are Muslims: Provided, That the non-Muslim party voluntarily submits to its jurisdiction:

(a) All cases involving offenses defined and punished under Presidential Deere No. 1083, where the act or omission has been committed in the Bangsamoro Autonomous Region:

(b) All civil actions and proceedings between parties residing in the Bangsamoro Autonomous Region who are Muslims or have been married in accordance with Article 13 of Presidential Decree No. 1083, involving disputes relating to:

(1) Marriage;

(2) Divorce;

(3) Betrothal or breach of contract to marry;

(4) Customary dower or mahr:

(5) Disposition and distribution of property upon divorce;

(6) Maintenance and support, and consolatory gifts; and

(7) Restitution of marital rights:

(c) All cases involving disputes relative to communal properties;

(d) All cases involving ta'zir offenses defined and punishable under Shari'ah law enacted by the Parliament punishable by arresto menor or the corresponding fine, or both:

(e) All civil actions under Shari'ah law enacted by the Parliament involving real property in the Bangsamoro Autonomous Region where the assessed value of the property does not exceed Four hundred thousand pesos (P400,000.00); and

(f) All civic actions, if they have not specified in an agreement which law shall govern their relations, where the demand or claim does not exceed Two hundred thousand pesos (P200,000.00).

SEC. 6. Jurisdiction of the Shari'ah District Courts. - The Shari'ah District Courts in the Bangsamoro Autonomous Region shall exercise exclusive original jurisdiction over the following cases where either or both are Muslims: Provided, That the non-Muslim party voluntarily submits to its jurisdiction:

(a) All cases involving custody, guardianship, legitimacy, and paternity and filiation arising under Presidential Decree No. 1083;

(b) All cases involving disposition, distribution, and settlement of the estate of deceased Muslims, probate of wills, issuance of letters of administration, or appointment of administrators or executors regardless of the nature or the aggregate value of the property;

(c) Petitions for the declaration of absence and death, and for the cancellation or correction of entries in the Muslim Registries mentioned in Title VI of Book Two of Presidential Decree No. 1083;

(d) All actions arising from customary and Shari'ah complaint contracts in which the parties are Muslims, if they failed to specify the law governing their relations;

(e) All petitions for mandamus, prohibition, injunction, certiorari, habeas corpus, and all other auxiliary writs and processes, in aid of its appellate jurisdiction;

(f) Petitions for the constitution of a family home, change of name, and commitment of an insane person to an asylum;

(g) All other personal and real actions not falling under the jurisdiction of the Shari'ah Circuit Courts wherein the parties involved are Muslims, except those for forcible entry and unlawful detainer, which shall fall under the exclusive original jurisdiction of the Municipal Trial Court;

(h) All special civil actions for interpleader or declaratory relief when the parties are Muslims residing in the Bangsamoro Autonomous Region or the property involved belongs exclusively to Muslims and is located in the Bangsamoro Autonomous Region;

(i) All civic actions under Shari'ah law enacted by the Parliament involving real property in the Bangsamoro Autonomous Region where the assessed value of the property exceeds Four hundred thousand pesos (P400,000.00); and

(j) All civil actions, if they have not specified in an agreement which law shall govern their relations where the demand or claim exceeds Two hundred thousand pesos (P200,000.00).

The Shari'ah District Court in he Bangsamoro Autonomous Region shall exercise appellate jurisdiction over all cases decided upon by the Shari'ah Circuit Courts in the Bangsamoro Autonomous Region within its territorial jurisdiction, as provided under Article 144 of Presidential Decree No. 1063, as amended.

SEC. 7. Shari'ah High Court. - There is hereby created within the Bangsamoro territorial jurisdiction, as part of the Philippine judicial system, a Shari'ah High Court. It shall exercise exclusive original jurisdiction over the following cases where either or both parties are Muslims: Provided, That the non-Muslim party voluntarily submits to its jurisdiction:

(a) All petitions for mandamus, prohibition, injunction, certiorari, habeas corpus, and all other auxiliary writs and processes, in aid of its appellate jurisdictions; and

(b) All actions for annulment of judgments of Shari'ah District Courts.

The Shari'ah High Court shall exercise exclusive appellate jurisdiction over cases under the jurisdiction of the Shari'ah District Courts within or outside the Bangsamoro Autonomous Region.

The decisions of the Shari'ah High Court shall be final and executory except on questions of law which may be raised before the Supreme Court following the procedure for appeals from the Court of Appeals to the Supreme Court.

Nothing contained herein shall affect the original and appellate jurisdiction of the Supreme Court as provided in the Constitution.

Pending the complete organization of the Shari'ah High Court, the decisions of the Shari'ah District Courts shall be appealable to the Court of Appeals.

SEC. 8. Qualifications of Shari'ah Judges. -

(a) Shari'ah Circuit Court. - No person shall he appointed judge of the Shari'ah Circuit Court unless a citizen of the Philippines who is a Muslim, a regular us ember of the Philippine Bar, at least thirty (30) years of age, must have been engaged, in the practice of law for five (5) years or more, and has completed at least two (2) years of Shari 'ah or Mamie Jurisprudence.

(b) Shari'ah District Court. - No person shall be appointed judge of the Shari'ah District Court, unless a citizen of the Philippines who is a Muslim, a regular member of the Philippine Bar, at least thirty-five (85) years of age. must have been engaged in the practice of law for ten (10) years or more, and has completed at least two (2) years of Shari'ah or Islamic Jurisprudence.

(c) Shari'ah High Court. - No person shall be appointed justice of the Shari'ah High Court unless a natural-born citizen of the Philippines who is a Muslim, a regular member of the Philippine Bar, at least forty (40) years of age, must have been engaged in the practice of law for fifteen (15) years or more, and has completed at least two (2) years of Shari'ah or Islamic Jurisprudence.

A Shari'ah Justice or Judge must be a person of competence, integrity, probity, and independence.

The Supreme Court may grant the incumbent Shari'ah District and Circuit Court judge who are not regular members of the Philippine Bar a reasonable period within which to qualify, pending which they shall be allowed to continue discharging their duties.

SEC. 9. Composition of the Shari'ah High Court. - The Shari'ah High Court shall be composed of five (5) Justices, including the Presiding Justice.

SEC. 10. Compensation, Benefits, Tenure, and Privileges. - Justice of the Shari'ah High Court shall have the same rank, prerogatives, salaries, allowances, benefits, tenure and privileges as the Justices of the Court of Appeals.

Judges of the Shari'ah District Courts shall have the same rank, prerogative, salaries, allowances, benefits, tenure, and privileges as judges of the Regional Trial Court.

Judges of the Shari'ah Circuit Court shall gave the same rank, prerogative, salaries, allowances, benefits, tenure, and privileges as judges of the Municipal Trial Court.

SEC. 11. Shari'ah Rules of Court. - The existing Special Rules of Procedure in Shari'ah courts shall continue to be in force and effect until the Supreme Court promulgate a new Shari'ah Rules of Court.

SEC. 12. Special Bar Examination for Shari'ah. - The Supreme Court shall administer Shari'ah Special Bar Examinations for admission of applicants to the Philippine Bar as special members thereof to practice law in the Shari'ah courts. A successful examinee who has qualified for special membership in the Philippine Bar shall be duly conferred the title of counselor-at-law.

SEC. 13. Practice of Law Before Shari'ah Courts. - The following are eligible to practice before Shari'ah courts:

(a) Shari'ah counselor-at-law; and

(b) A regular member of the Philippine Bar: Provided, That a Muslim, or a non-Muslim who submits to the jurisdiction of the Shari'ah court who acts on one's behalf as counsel, shall be allowed to appear as such before any Shari'ah court.

SEC. 14. Appointment and Discipline of Shari'ah Court Personnel. - The Supreme Court shall appoint the Shari'ah court personnel and shall have the power to discipline them.

SEC. 15. Bangsamoro Shari'ah Integrated Bar. - The Supreme Court may adopt the rules for the integration of the Shari'ah Bar under such conditions as it shall see fit in order to raise the standards of the profession and improve the administration of justice in the Bangsamoro Autonomous Region.

SEC. 16. Creation of New Offices. - The Parliament may create a Shari 'ah public assistance office, a. Shari'ah special prosecution service, a Shari'ah academy, and the Office of the Jurisconsult of Islamic Law. Pending the creation of the Shari'ah special prosecution service, the existing national prosecution service of the Department of Justice shall prosecute criminal cases before the Shari'ah courts.

SEC. 17. Traditional or Tribal Justice Systems. - The Parliament shall enact laws to promote and support the traditional or tribal justice systems that are appropriate for the indigenous peoples.

The indigenous peoples shall have the right to use their own commonly accepted justice systems, conflict resolution institutions, peace building processes or mechanisms, and other customary laws and practices within their respective communities and as may be compatible with the national legal system and with internationally recognized human rights.

The traditional justice systems are the mechanisms to determine, settle, and decide controversies and enforce decisions involving disputes between members of the indigenous peoples concerned in accordance with the customary laws of these communities.

SEC. 18. Office for Traditional or Tribal Justice System. - There is hereby created an Office for Tribal Justice System that shall be responsible for overseeing the study, preservation, and development of the tribal justice system within the Bangsamoro Autonomous Region. The powers and functions of the Office for Tribal Justice System shall be defined by the Parliament.

The Office for Tribal Justice System shall ensure the full participation of indigenous peoples in the formulation, implementation, and evaluation of policies related to the strengthening of tribal justice systems: Provided, That such systems shall maintain their indigenous character in accordance with the respective practices of each tribe.

SEC. 19. Regular Courts. - Regular courts in the Bangsamoro Autonomous Region shall continue to exercise their judicial functions, as provided by national law.

SEC. 20. Alternative Dispute Resolution. - The Bangsamoro Government shall adopt the principles of conciliation and mediation in settling disputes, with the Parliament enacting the necessary legislation to institute the mechanism for alternative dispute resolution. The Shari'ah courts and traditional or tribal adjudicatory tribunals may utilize this mode of settlement and resolution of cases.

ARTICLE XI

NATIONAL DEFENSE AND SECURITY, PUBLIC ORDER AND
SAFETY, AND COAST GUARD SERVICES

SEC. 1. National Defense and Security. - The defense and security of the Bangsamoro Autonomous Region shall be the responsibility of the National Government.

SEC. 2. Public Order and Safety. - The Philippine National Police shall create a Police Regional Office in the Bangsamoro Autonomous Region which shall be organized, maintained, supervised, and utilized for the primary purpose of law enforcement and maintenance of peace and order in the Bangsamoro in accordance with Republic Act No. 6975, otherwise known as the "Department of the Interior and Local Government Act of 1990," as amended by Republic Act No. 8551, otherwise known, as the "Philippine National Police Reform and Reorganization Act of 1998." The Police Regional Office in the Bangsamoro Autonomous Region shall be under the direct operational control and supervision of the Philippine National Police.

The Police Regional Office in the Bangsamoro Autonomous Region shall be headed by a Regional Director who shall, upon consultation with the Chief Minister, be appointed in accordance with Republic Act No. 6975, as amended.

To facilitate entry into the Philippine National Police of Moro Islamic Liberation Front and Moro National Liberation Front members from the Bangsamoro Autonomous Region., the age, height, and educational attainment requirements may be waived by the National Police Commission, subject to existing rules and regulations: Provided, That such shall be availed of within, a period of five (5) years from the ratification of this Organic Law: Provided, further, That the requirement of educational attainment shall be complied within fifteen (15) years from their entry: Provided, finally, That their ranks and grades shall be subject to existing laws, rules and regulations governing the Philippine National Police.

SEC. 3. Regional Office of the National Police Commission. - The National Police Commission shall establish the National Police Commission Bangsamoro Regional Office under its direct control, supervision, and administration, in accordance with Republic Act No. 6975, as amended. The Secretary of the Interior and Local Government shall appoint the Regional Director who shall head the National Police Commission Bangsamoro Regional Office.

The National Police Commission Bangsamoro Regional Office shall have the power to investigate complaints against members of the Police Regional Office in the Bangsamoro Autonomous Region. Appeals from the decisions of the National Police Commission Bangsamoro Regional Office shall be filed with the National Police Commission, Pending resolution of the appeal, the decision of the National Police Commission Bangsamoro Regional Office may be executed.

SEC. 4. Consultation with the Chief Minister on Police Matters Affecting the Police Regional Office in the Bangsamoro Autonomous Region. - The National Police Commission shall consult the Chief Minister on police matters affecting the Police Regional Office in the Bangsamoro Autonomous Region.

SEC. 5. Jail Management and Penology. - The Bureau of Jail Management and Penology shall establish a regional office in the Bangsamoro Autonomous Region under its direct operational and administrative control and supervision, in accordance with Republic Act No. 6975, as amended. and Republic Act No. 9263. otherwise known as the "Bureau of Fire Protection and Bureau of Jail Management and Penology Professionalization Act of 2004." The Bureau of Jail Management and Penology shall support the regional office in the establishment, maintenance, and improvement and procurement of jail facilities, the appropriation for the subsistence of detainees and prisoners, the establishment, maintenance, operation, and management of separate detention homes, and the designation of jail wardens.

SEC. 6. Fire Protection. - The Bureau of Fire Protection shall establish a regional office in the Bangsamoro Autonomous Region under its direct operational and administrative control and supervision, in accordance with Republic Act No. 6975, as amended, and Republic Act No. 9263. The Bureau of Fire Protection shall support the regional office in the establishment. maintenance, and improvement and procurement of fire protection and prevention facilities, the enforcement of Republic Act No. 9514, otherwise known as the "Fire Code of the Philippines of 2008," and other existing laws on fire safety enforcement, protection, and prevention.

SEC. 7. Coast Guard Services. - The Philippine Coast Guard shall establish a regional office in the Bangsamoro Autonomous Region which shall be organized, maintained, supervised, and utilized for the primary purpose bf law enforcement over coast guard matters. It shall be under the direct operational and administrative control and supervision of the Philippine Coast Guard.

ARTICLE XII

FISCAL AUTONOMY

SEC. 8. Tax Incentives. - The Parliament may grant tax exemptions and incentives under this Organic Law upon a vote of majority of ail its members: Provided, That these tax exemptions and incentives shall not diminish national revenues: Provided, further, That the grant of tax exemptions and incentives administered by the Regional Board of Investments of the Autonomous Region in Muslim Mindanao as provided for in Executive Order No. 458, Series of 1991, in relation to Executive Order No. 226, Series of 1987, otherwise known as the "Omnibus Investments Code," shall continue to apply.

Nothing in this Organic Law shall be construed to alter, diminish, or repeal the incentives already granted and administered by investment promotion agencies of the National Government to existing locators or registered business entities.

SEC. 9. Limitations on the Taxing Powers; Exceptions. - Unless otherwise provided herein, the taxing power of the Bangsamoro Government shall not extend to the following:

(a) Income tax. except when levied on banks and other financial institutions;

(b) Customs duties, registration fees of vessels and wharfage on wharves, tonnage dues, and all other kinds of customs fees, charges, and dues except vessels which registered by their owners with the Bangsamoro Government and wharfage on wharves constructed and maintained by the Bangsamoro Government or its constituent local government units;

(c) Taxes, fees, or charges and other unpositions upon goods carried into or out of, or passing through the territorial jurisdictions of the province, cities, municipalities, or barangays in the the Bangsamoro Autonomous Region in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise except tolls on bridges or roads constructed and maintained by the Bangsamoro Government or its constituent provinces, cities, municipalities, or barangays concerned;

(d) Taxes, fees, or charges on agricultural and aquatic products when sold by marginal farmers or fisherfolk;

(e) Taxes on business enterprises certified by the Board of Investments or by the Parliament as pioneer or non-pioneer for a period of six (6) and four (4) years, respectively, from the date of
registration;

(f) Excise taxes on articles enumerated under the National Internal Revenue Code of 1997_; as amended, and taxes, fees, or charges on petroleum products;

(g) Percentage or value-added tax on sales, barters, or exchanges or similar transactions on goods or services except as otherwise provided by national law;

(h) Taxes on the gross receipts of transportation contractors and persons engaged m the transportation of passengers or freight by hire and common carriers by air, land, or water except as provided in this Organic Law;

(i) Taxes on premiums paid by way of reinsurance or retrocession;

(j) Taxes, fees, or other charges on Philippine products actually exported, except as otherwise provided by law enacted by the Congress of the Philippines;

(k) Taxes, fees, or charges on countryside and barangay business enterprises and cooperatives duly registered under Republic Act No. 6810, otherwise known as the ''Magna Corta for Countryside and Barangay Business Enterprises," and Republic Act No. 6938, otherwise known as the "Cooperative Code of the Philippines," as amended; and

(l) Taxes, fees, or charges or any kind on the National Government, its agencies and instrumentalities, and local government units except on government-owned or controlled corporations or entities that are primarily organized to do business.

However, where all taxable elements are within the Bangsamoro territorial jurisdiction, the Parliament may impose the following taxes to the exclusion of the Bureau of Internal Revenue of the National Government:

(1) Capital Gains Tax - Tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of real properties, classified as capital assets, including pacto de retro sales and other forms of conditional sale:

(2) Documentary Stamp Tax. - Tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of the obligation, right or property incident thereto;

(3) Donor's Tax. - Tax on a donation or gift that is imposed on the gratuitous transfer of property between two (2) or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible; and

(4) Estate Tax. - Tax on the right of the deceased person to transmit to the lawful heirs and beneficiaries of the deceased person at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition.

In case the Parliament does not impose the abovementioned taxes, the Bureau of Internal Revenue of the National Government shall continue to levy a ad collect said taxes: Provided, That if the Bangsamoro Government shall impose them, the tax rates shall be pursuant to the National Internal. Revenue Code of 1997, as amended: Provided, further. That in no case shall the abovementioned taxes be imposed and collected by both the Bureau of Internal Revenue and the Bangsamoro Government.

The Intergovernmental Fiscal Policy Board shall promulgate rules on the determination of taxable elements in relation to taxes (1) to (4) above, and the sharing of revenues from the collection of such taxes where the taxable elements are both situated within and outside of the Bangsamoro territorial jurisdiction. Any dispute between the National Government and the Bangsamoro Government arising from the imposition of the above taxes shall be resolved by ths Intergovernmental Fiscal Policy Board.

SEC. 10. Sharing of Taxes Collected by the National Government. - National Government taxes, fees, and charges collected i.n the Bangsamoro Autonomous Region, other than tariff and customs duties, shall be shared as follows:

(a) Twenty-five percent (25%) to the National Government: Provided, That for the first ten (10) years following the effectivity of this Organic Law, this share shall accrue to the Bangsamoro Government: Provided, further, That after this first ten (10) year period, upon petition of the Bangsamoro Government, the National Government may extend the period as it shall deem necessary; and

(b) Seventy-five percent (75%) to the Bangsamoro Government, inclusive of the shares of the constituent local government units.

The shares in taxes, fees, and charges provided under this section shall be separate and distinct from the annual block grant appropriated to the Bangsamoro Government under Section 15 of this Article.

SEC. 11. Assessment and Collection of Taxes; Bangsamoro Revenue Office. - The Parliament shall establish by law the Bangsamoro Revenue Office for the assessment and collection of Bangsamoro taxes, as well as all other collectible taxes in the Autonomous Region.

Until such time that the Bangsamoro Revenue Office is established, tax collection shall be undertaken by the Bureau of Internal Revenue. The share of the Bangsamoro Government shall be retained  by the National Government collecting agencies and remitted to the Bangsamoro Government in lump sum without need if an appropriations law.

Upon its establishment, the Bangsamoro Revenue Office shall start collecting such taxes regularly: Provided, That it shall report promptly all its collections to, and remit the share of the National Government through a duly accredited government depository bank: Provided, further, That the National Government and the Bangsamoro Government shall share the costs of administering the tax collection as provided herein.

SEC. 12. Payment of Taxes by Corporations, Partnerships, or Firms. -  Corporations, partnerships, or firms directly engaged in business in the Bangsamoro Autonomous Region shall pay their corresponding taxes, fees, and charges in the province or city where the corporation, partnership, or firm is doing business.

Corporations, partnerships, or firms whose central, main, or head offices are located outside the Bangsamoro Autonomous Region but are doing business within its territorial jurisdiction, shall pay the income taxes for income derived from their, business operations in the Bangsamoro Autonomous Region to the city or municipality where their branch offices or business operations or activities are located. The Bureau of Internal Revenue and the Bangsamoro Revenue Office shall agree on modalities for the filing of income tax returns through the Intergovernmental Fiscal Policy Board.

The Intergovernmental Fiscal Policy Board shall promulgate rules to implement this provision, including the determination of covered entities and the allocation of income for covered entities.

SEC. 13. Share of the Constituent Local Government Units in Taxes Within, the Bangsamoro Autonomous Region. - The Parliament shall enact a law detailing the shares of constituent, local government units in the seventy-five percent (75%) share of the Bangsamoro Government in the national taxes, fees, and charges collected in the Bangsamoro territorial jurisdiction.

SEC. 14. Bangsamoro Tax and Revenue Code. - The Parliament shall enact a Bangsamoro tax and revenue code, which shall cover the taxing powers of the Bangsamoro Government, in accordance with the Constitution and this Organic Law.

Block Grant

SEC. 15. Annual Block Grant. - The National Government shall provide an annual block grant which shall be the share of the Bangsamoro Government in the national internal revenue tax collections of the Bureau of Internal Revenue and collections of the Bureau of Customs. The amount shall be sufficient for the exercise of the powers and functions of the Bangsamoro Government under this Organic Law and in no case shall be less than the last budget received by the Autonomous Region in Muslim Mindanao immediately before the establishment of the Bangsamoro Autonomous Region.

SEC, 16. Block Grant Amount. - For the budget year immediately following the year of the effectivity of this Organic Law, the amount of the block grant shall be equivalent to five percent (5%) of the net national internal revenue tax collection of the Bureau of Internal Revenue and the net collection of the Bureau of Customs from the third fiscal year immediately preceding the current fiscal year.

For purposes of this section,, the net national infernal revenue tax collections of the Bureau of Internal Revenue is the sum of all internal revenue tax collections of the Bureau of Internal Revenue during the base year less the internal revenue allotment of local government units, the amount released during the same year for tax refunds, payments for informers' reward, and any portion of internal revenue tax collections which are presently set aside, or hereafter earmarked under special laws for payment to third persons.

SEC. 17.  Automatic Appropriation, - The annual block grant shall be automatically appropriated in the General Appropriations Act of the Congress of the Philippines to the Bangsamoro Government.

SEC. 18. Regular Release. - The block grant shall be released without need of any further action, directly and comprehensively to the Bangsamoro Government, and shall not be subject to any lien or holdback that may be imposed by the National Government for whatever purpose.

SEC 19. Allocation of the Block Grant. - The Parliament shall pass an annual appropriations law allocating the block grant to various agencies and programs according to the powers and functions of the Bangsamoro Government. The Parliament shall assign the highest budgetary priority to education, health, and social services as may be provided in its appropriations law. The Parliament shall not include the procurement of firearms, ammunition, armaments, and explosives in its annual appropriations law from the block grant. Copies of the development plans of the Bangsamoro Government shall be furnished the Department of the Interior and Local Government. In the allocation of the block grant, the national laws and the budgeting rules and regulations implemented by the Department of Budget and Management and Department of the Interior and Local Government applicable to local government units shall apply.

The Bangsamoro Government's annual appropriations law shall set performance standards and targets for each sector. Any unspent amount in the current year's block grant shall revert to the Bangsamoro Treasury under a Special Fund for reappropriation: Provided, however, That any subsequent appropriation thereof shall follow the same conditions as provided in this section.

SEC. 20. General Limitations. - The use of funds shall be subject to the following limitations:

(a) The total appropriations, whether annual or supplemental, for Personal Services of the Bangsamoro Government for one (1) fiscal year shall not exceed forty-five percent (45%) of the total revenue sources of the Bangsamoro Government as provided under Section 6 of this Article. The appropriations for salaries, wages, representation and transportation allowances of officialls and employees of the public utilities and economic enterprises owned, operated, and maintained by the Bangsamoro Government shall not be included in the annual budget, or in the computation of the maximum amount for Personal Services. The appropriations for Personal Services of such economic enterprises shall be charged against their respective budgets;

(b) No official or employee shall be entitled to a salary rate higher than the maximum fixed for the position or other positions of equivalent rank by applicable laws or rules and regulations issued thereunder;

(c) The Bangsamoro Government shall not appropriate funds to provide any salaries, wages or any form of emoluments to officials and employees of the National Government;

(d) In cases ot' abolition of positions and the creation of new ones resulting from the abolition of existing positions in the Bangsamoro Government, such abolition or creation shall be made in accordance with Section 10, Article XVI of this Organic Law. The provisions of civil service laws, rules, and regulations shall apply suppletorily;

(e) Positions in the official plantilla for career positions that are occupied by incumbents holding permanent appointments shall be covered by adequate appropriations;

(f)  No changes in designation or nomenclature of positions resulting in a promotion or demotion in rank or increase or decrease in compensation shall be allowed except when the position is actually vacant and the filling of such positions shall be strictly made in accordance with civil service laws, rules, and regulations; and

(g) The creation of new positions and salary increases or adjustments shall not be made retroactive.

SEC. 21. Deductions from the Block Grant; Exceptions. - Twenty (20) years from the operationalization of the Bangsamoro Government, the following shall be deducted from the block grant:

(a) Revenues from the following taxes imposed and collected in the Bangsamoro territorial jurisdiction by the Bangsamoro Government three (3) years prior:

(1) Capital Gains Tax;

(2) Documentary Stamp Tax:

(3) Donor's Tax; and

(4) Estate Tax: and

(b) Share of the Bangsamoro Government in the income derived from the exploration, development, and utilization of natural resources, as provided under Section 34, Article XII of this Organic Law, collected three (3) years prior.

The amount allocated for the operation of the Bangsamoro Sustainable Development Board, as provided in Section 8, Article VI of this Organic Law, shall not be included in the amount herein to be deducted from the block grant. The abovementioned deduction shall not include the shares of constituent local government units and of indigenous communities in government income derived from the exploration, development, and utilization of natural resources under Sections 35 and 36 of this Article, respectively.

SEC. 22. Review of the Block Grant Formula. - The formula of the block grant, as provided above, shall be reviewed by the Intergovernmental Fiscal Policy Board five (5) years after its effectivity,. and every five (5) years thereafter to consider, among others, the fiscal needs of the Bangsamoro Government and the actual revenues it shall be able to generate and to ensure that all block grant expenditures are transparent and performance-based: Provided, That if the National Government shall no longer have any representative in the Intergovernmental Fiscal Policy Board, the review shall be undertaken by the Intergovernmental Relations Body.

SEC. 23. Development Programs and Projects. - Immediately after the ratification of this Organic Law, and for another five (5) years thereafter, the National Government shall provide for additional funds that will subsidize expenditures for development projects and infrastructure in the Bangsamoro Autonomous Region, including provincial and municipal roads, in accordance with a development plan formulated by the Bangsamoro Government. The National Government and the Bangsamoro Government, through the Intergovernmental Relations Body, shall agree on the amount and manner of the release of said amount to the Bangsamoro Government.

Loans

Grants and Donations

Economic Agreements and Conventions

Sharing in the Exploration, Development
and Utilization of Natural Resources

Intergovernmental Fiscal Policy Board

ARTICLE XIII

Sustainable Development

Approved: JUL 27 2018

(SGD.) RODRIGO ROA DUTERTE
  President of the Senate