"Section 1. Coal-bearing lands in the Philippines shall not be disposed of in any manner except as provided in this Act.

"The ownership and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the coal which may be found on or under the surface. The ownership of, and the right to extract and utilize the coal included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents. The ownership of, and the right to extract and utilize the coal included within all areas for which Torrens titles are granted are excluded and excepted from all such titles.

"Sec. 2. Any unreserved and unappropriated coal-bearing lands may be leased by the Secretary of Agriculture and Natural Resources in blocks or tracts of not less than fifty nor more than twelve hundred hectares each in such manner as may, in the opinion of the Secretary of Agriculture and Natural Resources, allow the economic development and exploitation of the coal deposit: Provided, That an applicant may be granted a lease or leases on not more than six separate blocks or tracts of coal land in any one province: And provided, further, That the aggregate area of all such blocks or tracks shall not be more than twelve hundred hectares in the whole Philippines. The lease may be granted to any person twenty-one years of age or over who is a citizen of the Philippines or to any association, partnership or corporation organized under the laws of the Philippines: Provided, That at least sixty per centum of the capital of such corporation or association is owned and held at all times by such citizens.

"Sec. 3. Leases under the provisions of this Act shall be issued upon publication, in the manner and subject to the rules prescribed by the Secretary of Agriculture and Natural Resources, for a period of not more than twenty-five years, renewable for another twenty-five years subject to such terms and conditions as may be authorized by law at the time of such renewal, and no such lease shall be assigned or sublet except with the consent of the Secretary of Agriculture and Natural Resources, and in this case only persons, partnerships, associations, or corporations having the qualifications required of lessees: Provided, That failure of an applicant to prosecute his coal lease application with reasonable diligence and to have the area covered thereby surveyed within one year from the date said application is filed in the Bureau of Mines shall be considered a waiver of his aforesaid coal lease application. Every lease shall contain a clause by which the lessee shall bind himself to comply with the rules and regulations issued by the Secretary of Agriculture and Natural Resources for the purpose of insuring the exercise of reasonable diligence, skill, and care in the operation of said property and for the prevention of undue waste, together with such other rules and regulations as the said Secretary may make for the protection of the interests of the Government and for the promotion of the public welfare. For the privilege of mining, extracting, and disposing of the coal in the land covered by his lease, the lease shall pay to the Government of the Philippines through the Collector of Internal Revenue, such royalties as may be specified in the lease, which shall not be less than ten centavos per ton of one thousand and sixteen kilos, to be due and payable upon the removal of the coal from the locality where mined and an annual rental, payable in advance on the date of the approval of the lease and on the same date every year thereafter on the lands covered by such lease, at the rate of two pesos and fifty centavos per hectare or fraction thereof for each and every year for the first ten years, and five pesos per hectare or fraction thereof of each and every year thereafter during the life of the lease: Provided, That such rental for any year shall be credited against the royalties as they accrue for that year as provided in this Act: And provided, further, That such rental and royalties paid during any year shall be credited against the specific tax provided for in section one hundred forty-three of the national internal revenue code, as amended.

"Sec. 4. Any person, association, partnership, or corporation holding a lease of coal lands under this Act may, at any time surrender such lease or any portion thereof, and with the approval of the Secretary of Agriculture and Natural Resources and through the same procedure and upon the same terms and conditions as in the case of the first lease granted under this Act, secure and hold additional leases on such blocks or tracts as provided in this Act, covering additional lands separate from or contiguous to those embraced in the original lease or leases, but in no event shall the total number of such lease exceed six in any one province, or the total area embraced in such original and new leases exceed in the aggregate twelve hundred hectares in the whole Philippines.

"Sec. 5. Subject to the approval of the Secretary of Agriculture and Natural Resources, lessees holding under leases contiguous blocks or areas may consolidate their said leases or holdings so as to include in a single holding a total of not to exceed twelve hundred hectares, provided all lessees have at time of such consolidation complied individually with all their obligations towards the Government.

"Sec. 6. Each lease shall be for such leasing block or tract of land as may be offered or applied for, not less than fifty nor more than twelve hundred hectares of land as hereinabove provided.

"Sec. 7. Any person, association, partnership or corporation who, without first securing a coal lease, revocable permit or license under the provisions of this Act, shall mine and extract coal belonging to the government and dispose of the same for commercial purposes, or from an area covered by a coal lease, permit or license of another person without his permission, shall be guilty of theft, or qualified theft, as the case may be, and shall be punished, upon conviction, in accordance with the provisions of the revised penal code, besides paying compensation for the damage caused thereby: Provided, That in the case of association, partnership, or corporation, the president or manager thereof shall be responsible for the acts committed by such association, partner, or corporation.

"Section 10. That in order to provide for the supply of local and domestic needs for fuel, the Secretary of Agriculture and Natural Resources may, under such rules and regulations as he may prescribe in advance, issue to any applicant qualified under section two of this Act, whether or not he is an applicant for, or holder of, one or more coal leases under this Act, not more than three limited licenses or commercial revocable permits granting the right to prospect for, mine, and dispose of coal belonging to the Government on specified separate tracts covering an area of not to exceed four hectares each to any one person, association partnership, or corporation in any one or more coal fields for a period of not exceeding ten years, on such conditions not inconsistent with this Act as in his opinion will promote the coal industry and safeguard the public interest upon payment of a royalty of fifty centavos per ton for the coal mined in lieu of the specific tax on coal."

"Sec. 2-A. In case a coal lease or revocable permit application covers in whole or in part private land, the same shall be accompanied by the written authority of the owner of the land: Provided, That in case of refusal of the owner of the land to grant such written authority, the matter as well as the amount of compensation to be paid to the owner of the land shall be fixed by agreement between the applicant and the surface owner, and in case of their failure to agree as to the conditions of the granting of the written permission and the amount of compensation to be paid, all questions issue shall be determined by the court of first instance of the province in which said land is situated in an action instituted for the purpose by the applicant and the permission may be granted by the court as soon as the applicant deposits the amount fixed as compensation for any resulting damage or files a bond to be approved by the court sufficient to insure the payment of the compensation for the owner of the land. The court shall thereupon determine the compensation for any resulting damage, for the purposes for which the land has been applied for, and thereafter grant the written authority required herein. The owner who holds a Torrens title on his land included in a coal lease shall be entitled to receive five per cent of the royalty due to the government on coal extracted from his private land.

Conflicts and disputes arising out of coal lease and/or coal revocable permit applications shall be submitted to the Director of Mines for decision: Provided, That the decision or order of the Director of Mines may be appealed to the Secretary of Agriculture and Natural Resources within thirty days from the date of its receipts. In case anyone of the parties should disagree from the decision or order of the Director of Mines or of the Secretary of Agriculture and Natural Resources, the matter may be taken to the court of competent jurisdiction within thirty days from the receipt of such decision or order; otherwise, the decision of the Director of Mines or the Secretary of Agriculture and Natural Resources as the case may be, shall be final and binding upon the parties concerned."