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SIXTEENTH CONGRESS ) tS Pr
OF THE REPUBLIC OF THE PHILIPPINES ) 3 RECEIVED
First Regular Session ) © pare? 4 JUL 2013

HOUSE OF REPRESENTATIVES
House Bill No.

Introduced by Representative Ben P, Evardone
Lone District, Eastern Samar

EXPLANATORY NOTE

‘The President drafts the proposal for the allocation of the yearly national budget which i
deliberated on by the bicameral congress. The Constitution qualify in Article VI Section 25 (1) that
“Congress may not increase the appropriations recommended by the President for the operation of the
Government as specified in the budget. The form, content and manner of preparation of the budget
shall be preseribed by law.”

‘Though there is this delineation of powers and evident disparity therein, we have noticed in
the past that the President can wield excessive control over budget spending. ‘The most common
method of such restraining has been budget impounding. This happens when the chief executive
refuses to release, for political and/or other reasons, Congress-appropriated funds for other public
officials or for government institutions. Though itis true that the Administrative Code has vested unto
the President such authority to suspend expenditure of funds of an agency or a government official, it
is likewise true that this power, especially of recent times, has been misused and abused. And we
know what happens when funds do not get disbursed. Projects and delivery of services are most likely
delayed, if not canceled altogether.

I pushes for an increased congressional oversight powers to limit executive control
over the provisions of the General Appropriations Act. If this bill is enacted, all appropriations shall
be released immediately within the first semester of the year with approved work and financial plans,
Furthermore, instances of rescissions and reservations deemed necessary by the President, with the
recommendation of the Department of Budget and Management, shall be sent to both houses of the
Congress as a proposal. ‘The Congress shall act on this proposal in a period not less than 60 days
before the end ofa regular session, if not submitted within the last 60 days of a regular session,

In view of the foregoing, immediate approval of this bill is earnestly sought.

BEN P. EVARDONE
Representative


SIXTEENTH CONGRESS
OF THE REPUBLIC OF THE PHILIPPINES
First Regular Session )

HOUSE OF REPRESE) [VES
House Bill No. i g

Introduced by Representative Ben P, Evardone
Lone Distriet, Eastern Samar

THE BUDGET IMPOUNDMENT CONTROL ACT

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

SECTION 1. Title, - ‘This is Act shall be known as "Phe Bud:
Act"

Impoundmemt Control

ECTION 2, Dev

ion of Policy. = It is the policy of the State to formulate and
implement a National Budget that is truly an instrument of national development
Towards this end, all appropriations, except those which shall be deterred,
reserved, or otherwise withheld in the General Appropriations Act, s
Within the Grst semester of the year through the issuance of
accordance with approved work and Financial plans, and shall be utilized according to the
purposes provided in the General Appropriations Act, Any deterral,
reservation of appropriations in the General Appropriations Act shail be in accordance
with this Act,

escinded,

hall be released
vices of allotment in

rescission or

SECTION 3. Definition of ‘Terms, - For purposes of this Act:
(a) Rescission - means cancellation of all or part of an enacted appropriation,
which has not yet been spent or obligated.
{b) Reservation = means imposition of reserves on appropriated amounts for
government expenditures.
(©) Deferral of rel + means withholding or delaying the release of
appropriated amounts provided for projects or activities.
@) impoundment resolution = means a joint esolution of both Houses of
Congress expressing ils approval of a rescission, reservation or deferral of an
appropriation or several appropriation items as proposed by the President
(e) Advice of allowment - the formal document issued by the Department of
Budget and Management, which contains authorizations, conditions, and amount
of obligations that an agency can incur pursuant to a legislative appropriation.
() Work-and-financial plan - the monthly breakdown of financial requirements
and physica Wee targets of an ageney.



(e) Appropriations = unless otherwise deseribed or specified herein, the term
appropriations refers to the appropriations included in the annual General
Appropriations Act.

SECTION 4. Rescission and Reservation of a Budget Appropriation, -Whenever the
President, upon the recommendation of the Secretary of the Department of Budget and
Management, determines that all or part of any budget appropriation will not be required
{o carry out the full objectives or scope of programs for which itis provided, or that such,
budget appropriation should be rescinded for fiscal poticy or other reasons, including the
termination of authorized projects or activities, or whenever all or part of any budget
appropriation for the current fiscal year is to be reserved from obligation for such fiseal
year, the President shall transmit to both Houses of Congress a special message
specifying:

1}. The amount of budget appropriation which he proposes to be rescinded or

Which is to be so reserved;

2), Any account, department, agency or instrumentality of the government to

which such budget appropriation is available for obligation, and the specific

projects or governmental functions involved;

3). The reasons why the budget appropriations should be rescinded or is to be so

reserved;

4) The estimated fiscal, economic and budgetary effect of the proposed rescission

or reservation; and

5) All facts, circumstances and considerations relating 10 or bearing upon the

proposed rescission or reservation, and the estimated effect of the proposed

rescission or reservation upon the purposes, programs, activities and projects {¢

Which such appropriation is provided,

SECTION 5. Approval of Rescission or Reservation, - Both Houses of Congress shall act
on the proposed rescission or reservation within sixty (60) calendar days after the receipt
of such proposal from the President by issuing a joint impoundment resolution: Provided,
“That if the President's special message is received within the period of less than sixty (60)
calendar days before the end of a regular session, the President's message shall be
deemed (0 have been submitted on the first day of the succeeding regular session of
Congress and the sixty (60) day period referred to in this Section shall commence on the
day after such first day. 1f Congress does not issue an impoundment resolution within the

specified periocl, the President shall not proceed with the rescission or reservation
procedures. Provided, however, that in the event of a Congressional approval to rescind,
the funds corresponding to the rescinded appropriations shall revert to the unappropriated
surplus of the general fund and shall not be made available for expenditure for any
purpose except as provided for by a subsequent legislative enactment.

ECTION 6, Use of Reserves. - When changes in conditions during the year justify the
use of the reserved appropriations which have been imposed under this Act of under the
General Appropriations Act, the amount involved shall be allocated back for the use by,
and upon the request of the Department, office or agency on whose appropriation the
reserve was originally imposed.



SECTION 7, Deferral of Releases.

4) Whenever the President, the Secretary of Budget and Management, the head of
any department, agency or instrumentality of the Government proposes to defer the
release of any appropriation for a specific purpose, program, activity, or project, the
President shall transmit to the House of Representatives and the Senate a special message

(1) The amount of the appropriation proposed to be deferred;

(2) Any account, department, agency of instrumentality of the Government to
which such appropriation is available for obligation, and the specific projects or
governmental functions involved; :

(3) The period of time during which the appropriation is proposed to be deferred;
(A)The reasons for the proposed deferral, inching any legal authority invoked by
him to justify the proposed deterral;

(5)The estimated fiscal, economic and budgetary effect of the proposed deferral;
(6) All facts, cireumstances and considerations relating to or bearing upon the
proposed deferral and the decision to effect the proposed deferral, including an
analysis of such facts, circumstances and considerations in terms of thelr
application to any legal authority and specific elements of legal authority invoked
by him (o justify such proposed deferral, and the estimated effect of the proposed
deferral upon the objects, purposes, program, activities and projects for which
such appropriation is provided.

b) A deferral may not be proposed for any period of time e:
end of the fiscal year in which the special message proposing the del
to the House of Representatives an! the Senate.

ending beyond the
rral yas transinitted

SECTION 8. Approval of Release Deferral. - Both Houses of Congress shall act on the
proposed deferral within sixty (60) calendar days after the receipt of the proposal from
the President: Provided That if the President's special message is received within a period
of less than sixty (60) calendar days before the end of a regular session, the President's
message shall be deemed to have been submitted on the first day of the succeeding
regular session of Congress and the sixty (60) day period referred to in this Section shall
commence on the day after such first day, If Congress does not issue an impoundment
resolution within the specified period, the President shall not proceed with the deferral
procedures.

SECTION 9, Submission of Quarterly Reports, Within thiny (30) days afer the end of
each quarter, the Secretury of the Department of Budget and Management shall submit to
the Committee on Appropriations of the House of Representatives and the Committee on
Finance of the Senate, a list of releases made out of reserved and deferred appropriations,
and comparative statements showing the annual general appropriations, the annual
program of continuing and automatic appropriations, and the corresponding releases of
allotments and cash allocations for cach department, agency, corporation and fund:
Provided, ‘That the releases from each lump-sum or special-purpose fund shall be



supported with schedules indicating the specifie departmentsfagencies, corporations or
entities which received the fund releases and the purposes of such releases. The quarterly
reports shall also include a cumulative summary of ull appropriations rescinded, deterred
or reserved,

TION 10, Mode of Transmittal of the Special Message of the President, - The
President shall transmit to Congress at any time during the budget year but not later than
the fifteenth day of October of the budget year the special message which may include

‘one or more proposals for impoundment, reservation, or deferral on one or more

nce af the Senate and the Committee

appropriation items through the Committee on F
on Appropriations of the House of Representatives.

SECTION 11, Penal Provision, - Any violation of the Sections 2,4,5,6,7,8, and 9 of this
Act shall be punished by of fine not exceeding Five Hundred Thousand Pesos
(500,000.00) and the penalty of perpetual special disqualification,

SECTION 12. Repealing Clause. - All laws, decrees, executive orders, letters of

instructions, letters of implementation, rules und regulations or parts thereof inconsistent

with the provi
accordingly.

jons of this Act are hereby repealed, modified, superseded or amended

SECTION 13. Effectivity Clause. - This Act shall tke effect fifteen (15) days after its
complete publication in the Official Gazette or in at feast two (2) national newspapers of
gel i circulation, whichever comes eastier.

Approved,