Issuance of Electrical Permit in Favor of Cable Link and Holdings Corp. to House Its Power Supply in Connection with Its Cable TV Business

March 3, 2010 DILG LEGAL OPINION NO. 021-10 OFFICE OF THE UNDERSECRETARY FOR LOCAL GOVERNMENT Mr. Armando M. Merilleno President Cable Link and Holdings Corporation 8210 Dr. A. Santos Avenue Paraaque City Dear Mr. Merilleno : This has reference to your earlier letter requesting our legal opinion and intercession in the issuance of an electrical permit in your company's favor to house your company's power supply in connection with your cable TV business. Per your letter, it appears that your company, Cable Link Holdings Corporation, is a holder of a congressional franchise under Republic Act 9382 passed by Congress on 24 July 2006 to own and operate a cable TV (CATV) station all over the country. Your company was also given by the National Telecommunications Commission (NTC) with a permit to operate a cable TV (CATV). On 02 December 2009, your company applied for an electrical permit to house your company's power supply with the Office of the Building Official of the City of Pasig. Since the said Building Official has not replied to your application for a considerable length of time, you represented that you wrote a letter to Mayor Robert Eusebio on 04 January 2010. In a letter dated 18 January 2010, Engrs. Jessie D. Ramos and Mamerto V. Mesina, Jr. from the Electrical and Mechanical Section, Office of the City Building Official, required your company to submit a copy of the Sanggunian Resolution, without mentioning, however, the nature thereof. You further represented that you asked for a clarification from the Office of the Building Official regarding the required Sanggunian Resolution, but the same was rendered futile, due to the latter's non-reply. cSITDa It is your position that your company need not submit the Sangguniang Resolution as required by the aforesaid two (2) Engineers from the City Building Official considering that your company is already a grantee of a legislative franchise. Such being the case, the City Government of Pasig, through its Sangguniang Panlungsod, cannot anymore impose another franchise tax or require your company to justify your legal, technical and financial capacity to undertake the CATV business as these are already evaluated, reviewed and passed upon by Congress. Furthermore, according to you, such additional requirement of a sanggunian resolution would defeat the permit to operate a CATV given by the NTC. Finally, you represented that you were also given a Mayor's permit on your cable business. Should this Department opine in your company's favor, you are requesting that this Department, in the exercise of its "oversight supervision over local governments," direct the Mayor of Pasig to issue the permit to house your company's supply without imposing an additional requirement of a sanggunian resolution. With regard to the issue that the additional requirement of a sanggunian resolution would undermine the legislative franchise and the NTC permit, this Department, in the exercise of its general supervision over Local Government Units (LGUs), deems it proper to refer first the matter to Mayor Roberto Eusebio of Pasig for his initial comment. With regard to the impending imposition of a local franchise by the City of Pasig via the sanggunian resolution, please be informed that we had already an occasion to answer a similar query in DILG Opinion No. 68, series of 2003. In this regard, it bears to note that the authority to impose and collect local franchise tax by the Local Government Units (LGUs) was based on the Local Government Code of 1991 (RA 7160). Hence, may we invite your attention to Section 10, RA 9382, viz.: "SEC. 10. Tax Provisions. The grantee shall be subject to the payment of all taxes, duties, fees or charges and other impositions under the National Internal Revenue Code (NIRC) of 1997, as amended, and other applicable laws: Provided, That nothing herein shall be construed as repealing any specific tax exemptions, incentives or privileges granted under any relevant law: Provided, further, That all rights, privileges, benefits and exemptions accorded to existing and future cable/community antennae television systems shall likewise be extended to the grantee. The grantee shall file the return with the city or municipality where its principal place of business is located and pay the taxes due thereon to the Commissioner of Internal Revenue or his duly authorized representative in accordance with the NIRC and the return shall be subject to audit by the Bureau of Internal Revenue." aSIAHC Well-settled is the rule that when two (2) laws are in existence whose provisions are in complete repugnancy, and reconciliation or harmonization becomes impossible, "the last one enacted, as the latest expression of the legislative will, supersedes and repeals the earlier act although it contains no repealing clause" (Iloilo Palay and Corn Planters Association, Inc. vs. Feliciano, G.R. No. L-24022, March 3, 1965) . Moreover, "where there are two statutes, the earlier special and the later general the terms of the general broad enough to include the matter provided for in the special the fact that one is special and the other is general creates a presumption that the special is to be considered as remaining an exception to the general, one as a general law of the land, the other as the law of a particular case" (State vs. Stoll, 17 Wall. (US), 425; cited in Agpalo, Statutory Construction, 2nd Ed. P. 198, and Butuan Sawmill Inc. vs. City of Butuan, 16 SCRA 755). Applying therefore the above jurisprudence to the case at hand, it is clear that Cable Link and Holdings Corporation's franchise is pursuant to a special law which was enacted solely and specifically for said company. On the other hand, the Local Government Code of 1991 (RA 7160) is a general law of general application, since it applied to the governance of all local government units in the Philippines. Therefore, being a special law, Cable Link and Holdings Corporation's franchise is beyond the ambit of the provisions of the Code. Moreover, Cable Link and Holdings Corporation's legislative franchise came after the effectivity of the Local Government Code of 1991. Relative thereto, in the case of PLDT vs. City of Davao (G.R. No. 143867, 22 August 2001), the Supreme Court held that the withdrawal of tax exemptions by virtue of Section 137 of the Code is only applicable to existing franchises at the time of the effectivity of the Code. The Decision stated " . . . Sec. 137 does not state that it covers future exemptions. . . . . The Tax Code provision withdrawing the tax exemption was not construed as prohibiting future grants of exemptions from all taxes" . Based therefore on the aforesaid Supreme Court ruling, the Local Government Code of 1991 does not operate to preclude Congress from enacting subsequent laws, such as RA 9382 which is the legislative franchise of Cable Link and Holdings Corporation, that have the effect of superseding any existing law/s on a particular matter. Foregoing considered, we are of the view that Cable Link and Holdings Corporation is exempted from paying local franchise tax provided that this same tax exemption is accorded to existing cable/community antennae television systems pursuant to Section 10, RA 9382. We hope that we have addressed your concern accordingly. DTESIA Very truly yours, By Authority of the Secretary: (SGD.) ATTY. JESUS B. DOQUE IV Director III