Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. _740

Introduced by HON. ROZZANO RUFINO B. BIAZON

EXPLANATORY NOTE

Laguna de Bay is considered to be the largest brackish water lake in the Philippines
having a total surface area of nine hundred (900) square kilometers. The Laguna de Bay
Region encompasses 61 municipalities and cities within six (6) provinces including Metro
Manila, of which 29 towns are lakeshore covering 187 barangays and 32 non-lakeshore
towns. There are around 13.6 million people living in the Laguna de Bay Region that rely on
it for food, irrigation, transportation, flood water reservoir, and industrial cooling. Laguna
Lake has been tapped to provide potable water to three (3) barangays in the City of
Muntinlupa and that preparations are reportedly underway to widen the area that the lake
could supply potable water.

Despite the importance of the said lake, it suffers from deteriorating water quality and
that it could perish in the near future if no action is taken by the government. The Philippine
Millennium Ecosystem Assessment Sub-Global assessment of the UN done on the Laguna
Lake Basin found that the major sources of pollution of the 22 major river tributaries of the
lake are domestic wastes, both solid and liquid effluents, food processing plant wastes,
livestock wastes, chemical manufacturing spillage, various industrial effluents, fertilizers and
pesticides from agricultural runoff, and eroded soils from the watersheds. The same study
showed that by volume, the domestic sector contributes 68.5%; industry 19%; and
agriculture, 11.5% and that the total coliform counts in all rivers are in excess of the
allowable limits. It also disclosed that the lake waters are contaminated with toxic and
hazardous substances coming from the industrial and agricultural sectors and lake sediments
are likewise contaminated with heavy metals;

Land conversion due to industrialization and change in land cover as a result of
deforestation have the effect of diminishing the Laguna de Bay’s volume and may lead to soil
erosion thereby impairing the hydrology of the basin. The presence of illegally constructed
fish pens which cover more than half of the lake’s surface area and the use of pellets
containing chernical-based substance, further pollute the lake.


The structure, organization and powers and functions of the Laguna Lake
Development Authority, the agency primarily tasked to take care of the lake and the Bay
Region seem to be inadequate to ensure the sustainable development of Laguna Lake. This
bill therefore seeks to strengthen the Laguna Lake Development Authority in order that it will
be able to effectively and efficiently undertake the coordinated development and management
of the lake’s water, land and related resources. In this manner, we will hopefully ensure that
Laguna Lake will still be there for future generations of Filipinos to enjoy.

In view of the foregoing, early passage of this bill is eamestly sought.

RO obi Fron

Representative
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

~ 740
House Bill No.

Introduced by HON. ROZZANO RUFINO B. BIAZON

AN ACT
TO STRENGTHEN THE LAGUNA LAKE DEVELOPMENT AUTHORITY (LLDA),
THEREBY REPEALING REPUBLIC ACT NO. 4850, AS AMENDED, OTHERWISE
KNOWN AS THE LAGUNA LAKE DEVELOPMENT AUTHORITY ACT OF 1966,
AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. — This Act shall be known as the “Laguna Lake
Development Authority Act of 2016”.

SEC. 2. Declaration of Policy. ~ It is hereby declared the policy of the State to
promote and develop Laguna Lake and the surrounding areas that comprise the Bay Region
in a sustainable manner, with Laguna Lake as its focal point whose water resources must be
systematically managed and protected for various uses.

Toward this end, the State shall adopt an integrated water resources management
(1WRM) approach, using the lake”s watersheds as planning units to interconnect and integrate
its various ecosystems pursuant to the constitutional mandate of protecting and advancing the
right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature.

In accordance with the IWRM approach, any development program in the region shall
always consider sustainable environmental management and the prevention of any ecological
harm, resource deterioration and pollution to allow the lake to realize its full potentials
including, among other uses, its being a major national resource in fish production.

SEC. 3. Definition of Terms. — As used in this Act, the following terms shall mean:

(a) Laguna Lake or Laguna de Bay shall refer to that area covered by lake water when
it is at the average annual maximum lake level of elevation twelve point fifty (12.50) meters
as referred to a datum ten (10.00) meters below mean lower low water (MLLW) of Manila de
Bay. Lands located at and below such elevation are public lands which form part of the bed
of said lake.


() Integrated Water Resources Management (IWRM) shall refer to the process that
promotes the coordinated development and management of water, land and related resources
in order to maximize the resultant economic and social welfare in an equitable manner
without compromising the sustainability of vital ecosystems.

(©) Watershed shall refer to the geographic area of land that drains water to a shared
destination or to an area of land that drains downslope to the lowest point. The water moves
through a network of drainage pathways, both underground and on the surface. Other terms
used interchangeably with watershed include drainage basin or catchment basin.

(4) Environment shall refer to the physical factors of the total surroundings of human
beings including, but not limited to, the lakes and other bodies of water, land. air,
atmosphere, climate, sound, odor, plants, insects, animals, its biological and physical factors,
all its life support systems and all other surrounding matters that affect directly or indirectly
the existence of human life and other life forms in a specific area.

(©) Shoreland/akeshore areas/buffer zone shall refer to that part of Laguna Lake
along the lakeshore lying at elevation twelve point fifty (12.50) meters and below and
alternately submerged or exposed by the annual or seasonal rising and lowering of the lake
levels. This is a linear strip of land of approximately fourteen thousand (14,000) hectares
designed to separate the incompatible elements or uses or to control pollution/nuisance and
for identifying and defining development areas or zones.

() Groundwater shall refer to the subsurface water that occurs beneath a water table
in soils and rocks, or in geological formations.

(g) Aquaculture shall refer to fishery operations involving all forms of raising and
culturing fish and other fishery species in fresh, brackish and marine water areas.

(h) Aquastructure refers to a fish pen which is a structure enclosing a particular area
in the lake which makes use of poles surrounded by nets, fastened by a weight of sinkers
‘embedded in the lake bed or fish cage which is an inverted mosquito net fastened to bamboos
and such other structures used for culturing fishery/aquatic resources.

(® Effluent shall refer to discharge from known sources which is passed into a body
of water or land, or wastewater flowing out of a manufacturing plant, industrial plant
including domestic, commercial and recreational facilities.

(j) Pollution shall refer to any alteration of the physical, chemical and biological
properties of any water, air and land resources of the Laguna Lake Region or any discharge
thereto of any liquid, gaseous or solid wastes which will render such water, air and land
resources harmful, detrimental or injurious to public health, safety or welfare or which will
adversely affect their utilization for domestic, commercial, industrial, agricultural,
recreational or other legitimate purposes.

4, Laguna Lake Region. ~ For purposes of this Act, the Laguna Lake Regi
shall comprise the provinces of Laguna and Rizal; the cities of Calamba, Sta. Rosa, San
Pablo, Pasay, Caloocan, Quezon, Manila, Makati, Mandaluyong, San Juan, Pasig. Marikina,
Muntinlupa, Antipolo, Tagaytay, Tanauan, Taguig, Lipa and Dasmarifias; the towns of
Silang, Carmona and General Mariano Alvarez in Cavite Province; the towns of Mauban,

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Real, Lucban and Sampaloc in Quezon Province; the towns of Sto. Tomas and Malvar in
Batangas; and the town of Pateros in Metro Manila and all areas that drain into the Laguna
Lake: Provided, That any city or town that may be subsequently created in the future out of
the aforementioned municipalities and cities surrounding the Laguna Lake shall form part of
the Laguna Lake Region.

SEC. 5. Laguna Lake Development Authority (LLDA). - The Laguna Lake
Development Authority created under Republic Act No. 4850 and hereinafter referred to as
the Authority, shall pursue the sustainable development of the lake and the Bay Region. It
shall maintain its principal office at a convenient place within the region and such branch
offices in other places within the Bay Region as are necessary for the proper conduct of its
business.

SEC. 6. Powers and Functions of the LLDA. ~ The Authority shall have the following
powers and functions:

(a) Periodically conduct, monitor and update a comprehensive survey of the Bay
Region, including its socio-economic conditions, water quantity and quality in the
lake proper and all its major tributary rivers, irrigation, water supply, transport
route, reservoir of floodwater, hydroelectric and other power potentials, scenic
and tourist spots, state of its watersheds and other physical and natural
potentials on the basis of which it shall prepare a sustainable regional
development master plan. Such plans, projects and programs shall be drawn up in
close coordination with other concerned government agencies and the private
sector as well as other stakeholders. All concemed public and private agencies
shall provide the Authority the necessary data for the purposes of the said survey:

(b) Develop a long-term, sustainable and integrated program that shall be able to
attract more private sector-driven investments into the Bay Region, in consonance
with a regional master plan which shall be formulated in consultation with all
stakeholders, concerned government agencies, local government units (LGUs) and
civil society:

(c) Review all plans, projects and programs, including expansions thereto. proposed
and submitted by LGUs, public corporations and private persons or corporations
that relate to the development of the Bay Region to ensure that they conform to
the environmental standards prescribed by the Authority and other similar laws;

(d) Collect reasonable fees and impose charges in the performance of its mandate;

(c) Engage, whether by itself or in cooperation with private persons or entities, in
agriculture, commerce or industry, which are in the nature of new ventures:

() Implement infrastructure projects such as flood control, solid waste management,
wastewater and sewerage, water supply. roads, ports, irrigation, housing. leisure
parks and related works, within the context of its development master plan.
including the readjustment, relocation or resettlement of population within the
Bay Region that may be deemed necessary and beneficial in pursuit of its
mandate. Should any of these projects be financed wholly or in part by the
‘Authority, it shall have authority to collect reasonable fees and tolls from users or

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beneficiaries to recover costs of construction, operation and maintenance of the
projects. Infrastructure projects that are in the nature of social overhead capital
projects shall be entitled to receive the corresponding financial assistance from the
government;

(g) Undertake massive information and education campaign among the stakeholders.
in close coordination with the LGUs and other government agencies within the
Laguna de Bay Region on the importance of environmental protection and
conservation of the Laguna Lake and its watersheds;

(h) Implement dredging and/or reclamation projects in close coordination with the
Philippine Reclamation Authority (PRA) and LGUs concerned;

(i) Determine new areas of fishery development, taking into account the overall
development plans and programs for the lake and related bodies of water and
promulgate rules and regulations governing fisheries development in the Bay
Region;

(j) Engage in experimental/pilot fish production such as the propagation of
omamental fish and similar aquaculture projects in the lake and other bodies of
water within its jurisdiction, in collaboration with the Bureau of Fisheries and
‘Aquatic Resources (BFAR). It shall improve present fishery techniques and
practices to provide equitable access to its fishery resources for the socioeconomic
amelioration of small fisher folk, improvement of their communal fishing
grounds, sustainable aquaculture development and operation. In hiring laborers for
fishery-related projects, there shall be preference for qualified shore land
residents;

(k) Regulate the use and occupancy of shore land areas by enjoining LGUs within the
Bay Region to establish watershed management councils or wetlands whenever
suitable and consistent with the Authority's policies;

(1) Develop surface and groundwater supply sources for municipal, agricultural,
commercial and industrial use, in close coordination with the National Water
Resources Board (NWRB) or the Local Water Utilities Administration (LWUA),
as the case may be, pursuant to existing laws, executive orders and other issuances
which may be necessary to accomplish the aims and purposes of the Authority:

(m)Enter into agreements with LGUs, governmental agencies and corporations and
the private sector for the supply, treatment, distribution and marketing of such
water;

(n) Establish and enforce anti-pollution standards on municipal, agricultural,
commercial and industrial wastewater and effluents being discharged into the lake
in coordination with appropriate government agencies;

(0) Conduct continuing research, development and extension programs in close
coordination with the academe, the Department of Environment and Natural
Resources (DENR) and the Department of Science and Technology (DOST) on
lake water quantity and quality, integrated watershed management and enterprise

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development and management with the end in view of promoting sustainable
development in the region;

(p) Adopt rules and regulations governing the approval of sewage works and
industrial waste disposal systems and the issuance of clearance and/or permits in
accordance with the provisions of this Act when necessary and inspect the
construction and maintenance of sewage works and industrial waste disposal
systems for compliance to clearance and/or permit conditions;

(q) Require all projects or activities in or affecting the Bay Region to secure
Environmental Compliance Certificates (ECCs) required under Presidential
Decree No. 1586 and grant clearances and/or permits for projects or activities
located within or affecting the Bay Region including, but not limited to, industrial
and commercial activities, navigation, irrigation, power generation, housing,
resettlement and other forms of land developments, construction and operation of
aquastructures, aquaculture development, dredging/reclamation and similar or
related activities and to impose necessary safeguards for lake water quantity and
quality control and management and to collect necessary fees for said activities
and projects:

(r) Issue, renew or deny permits subject to reasonable guidelines for the discharge of
sewage, industrial waste or for the installation or operation of sewage works and
industrial disposal system or parts thereof for the prevention and abatement of
pollution;

(s) Require subdivisions, condominiums, clinical and medical establishments,
mortuaries, public buildings and other similar human settlements in the Bay
Region to construct appropriate central sewerage systems and sewage treatment
works, The Authority may impose reasonable fees and other similar charges for
the issuance or renewal of all permits herein required;

(t) Issue orders or decisions to compel compliance with the provisions of this Act and
its implementing rules and regulations only after proper notice and hearing:

(u) Make, issue, alter or modify orders or decisions, after notice and hearing.
requiring the discontinuance of pollution specifying the conditions and the time
within which such discontinuance must be accomplished:

(v) After due notice and hearing, revoke, suspend or modify any clearance and/or
permit issued under this Act to prevent or abate pollution:

(w)Deputize or request the assistance of appropriate government agencies ot
instrumentalities for the purpose of enforcing this Act and its implementing rules
and regulations and the orders and decisions of the Authority;

(x) To inspect and investigate at all reasonable times to enter any public and private
property devoted to agricultural, commercial and industrial use on any matter
relating to pollution and existing and/or imminent environmental danger; and


(y) Exereise such powers and perform such other functions as may be necessary to
carry out its duties and responsibilities under this Act.

SEC. 7. Corporate Powers. — The Authority shall have the following corporate
powers:

(a) To succeed in its corporate name;

(b) To sue and be sued in its corporate name;
(c) To adopt, alter and use a corporate seal;
(d) To adopt, amend or repeal its by-laws;

(e) To emter into contracts to enable it to carry out its purposes and functions under
this Act;

(f) To acquire, buy, purchase, hold or lease such personal and real property as it may
deem necessary in the transaction of its business or in relation to carrying out its
purposes under this Act and to lease, mortgage, sell, alienate or otherw
‘encumber, utilize, exploit or dispose any such personal and real property held by
it, subject to individual or communal right of private parties or of the government
or any agency or enterprise thereof;

(g) To exercise the right of eminent domain whenever the Authority deems it
necessary to achieve the objectives of this Act;

(h) To borrow funds from any local or foreign sources independent of the bonds it
may issue or may continue to issue to carry out the purposes of this Act:

(i) To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the shares of
the capital stock of, or any bond, securities or other evidence of indebtednes:
created by any other corporation, co-partnership or government agencies or
instrumentalities; and while the owner of said stock, to exercise all the rights of
ownership, including the right to vote thereon: Provided, That the LLDA shall not
invest its funds in any high risk debt instruments issued without recourse to
commercial banks or investment houses as well as in any highly speculative
stocks:

(j) To perform any and all acts which a corporation, co-partnership or juridical

person is authorized to perform under existing laws or which may be enacted
hereafter;

(k) To provide incentives to encourage the private sector to fully subscribe its shares
of stock; and

(1) To issue such other rules and regulations as may be necessary from time to time to
achieve the purposes of this Act, the same to take effect thirty (30) days after its
publication in a newspaper of general circulation.


SEC. 8. Board of Directors. — The Authority shall be governed by a Board of
Directors hereinafter referred to as the Board, whose members shall be appointed by the
President of the Philippines and composed of the following:

(a) Secretary of Environment and Natural Resources, Chairman;

(b) General Manager, LLDA , Vice Chairman;

(c) Governor, Province of Laguna;

(d) Governor, Province of Rizal;

(e) Secretary, Department of Agriculture;

(f) Secretary, National Economic and Development Authority:

(g) Secretary, Department of Public Works and Highways;

(h) Chairman, Metro Manila Development Authorit

(i) Representative of the Bay Region City and Municipal Mayors’ Association to be
constituted sixty (60) days from the passage of this Act from among the mayors
of towns and cities that comprise the Bay Region, as defined in Section 3 of this
Act;

(i) Representative of fisher folk in Laguna; and

(k) Representative of fisher folk in Rizal

‘The representatives of fisher folk from the Laguna and Rizal shall be appointed by the
President of the Philippines to be chosen from among the nominees recommended by the
coalition of Laguna and Rizal fisher folk non-government and peoples organizations.
respectively. The term of the appointive members shall be six (6) years without
reappointment, or until their successors are duly appointed and qualified. Vacancy, other than
through the expiration of the term, shall be filled for the unexpired term only.

Members of the Board who are cabinet secretaries may designate alternate
representatives to the Board.

SEC. 9. Powers and Functions of the Board of Directors. ~ The Board of Directors
shall exercise the following powers and functions:

(a) Prescribe policies, rules and regulations to govern the conduct of business of the
Authority including its procedures;

(b) Upon the recommendation of the General Manager, approve the Authority's
organizational and administrative structures and corresponding staffing pattern as
may be deemed necessary; fix their reasonable compensation, allowances and
other benefits in accordance with the Salary Standardization Law; prescribe their
duties and establish such methods and procedures as may be necessary to insure
the efficient, honest and economical administration of the provisions and purposes
of this Act: Provided, however, That the personnel of the Authority below the
rank of Assistant General Manager shall be appointed by the General Manager:

7


Provided, further, That the personnel appointed by the General Manager. except
those below the rank of Department Heads, and others of comparable rank, shall
be subject to the confirmation by the Board: Provided, finally, That the personnel
of the Authority shall be selected only from those with civil service eligibility and
be subject to civil service laws, rules and regulations:

(c) Upon the recommendation of the General Manager, approve the annual and
supplemental budgets of the Authority and authorize such operating and capital
expenditures and disbursements as may be necessary or proper for the effective
management, operation and administration of the Authority:

(d) Create and organize a Technical Advisory Council composed of representatives
from the government and other stakeholders to assist and advise the Board: and

(c) Perform such other functions as may be necessary to carry out the provisions of
this Act.

SEC. 10. Meetings of the Board. — The Board shall meet at least once a month.

SEC. 11. Per Diems. - Members of the Board shall receive a per diem of not more
than five thousand pesos (P5,000.00) for every board meeting: Provided, however, That the
per diem collected per month does not exceed the equivalent two (2) meetings: Provided.
‘further, That the amount of per diem for every board meeting may be increased by the
President but such amount shall not be increased within two (2) years after its last increase.

SEC. 12. Powers and Functions of the General Manager. ~ The General Manager
shall be the Chief Executive Officer of the Authority and shall have the following powers and
functions:

(a) Submit for consideration of the Board policies and measures that are necessary to
carry out the purposes and objectives of this Act;

(b) Execute, administer and implement the policies, plans, programs and projects
approved by the Board;

(c) Manage and supervise the operation and administration of the Authority;

(d) Appoint all officials and employees of the Authority below the rank of Assistant
General Manager and remove, suspend or otherwise discipline the same for cause,
in accordance with existing civil service laws, rules and regulations;

(e) Submit quarterly reports to the Board on personnel selection, placement and
training;

() Render an annual report to the Board and various stakeholders regarding the
operation of the Authority including its latest financial statements:

(g) Represent the Authority in all dealings with offices, agencies and instrumentalities
of the government and with all persons and other entities, public or private.
domestic and foreign; and


(h) Perform such other functions as may be provided in the by-laws and as may be
vested in hinv/her by the Board.

SEC. 13. Qualifications of the General Manager. ~ No person shall be appointed
General Manager unless he is a natural born citizen, resident of the Philippines, has
unquestioned integrity and demonstrated executive competence and experience in any of the
fields of public administration, economic planning, environmental and natural resource
management, or in the establishment and management of large agricultural, commercial or
industrial enterprises.

SEC. 14. Tenure of Office of the General Manager. ~ The General Manager shall be
appointed by the President of the Philippines for a fixed term of six (6) years. In case of
resignation, retirement, separation, transfer, reassignment, removal and other cause of
cessation from office, the replacement shall serve only for the unexpired portion of the term.

SEC. 15. Compensation. — The General Manager shall receive compensation at rates
in accordance with the Salary Standardization Law.

SEC. 16. Management Structure. ~ In carrying out the activities of the Authority. the
General Manager shall be assisted by two (2) Assistant General Managers, one for Operations
and another for Administration, who shall have such powers, duties and functions as the
General Manager may prescribe and/or delegate and shall act as the General Manager in the

absence of or during the temporary incapacity of and/or until such time as a new General
Manager is duly appointed.

The Authority shall have the following departments under the direct supervision and
control of the General Manager:

(a) Corporate Legal Affairs Department — which shall provide legal advice and
support to all the corporate units on legal implications of the various undertakings
of the Authority and divided into Litigation Division and Research and
Documentation Division;

(b) Administrative Department — which shall be responsible for providing service
relating to human resource management, records management and general
services;

(c) Finance Department ~ which shall be responsible on revenue planning. generation
and enhancement, assistance on budgetary and financial matters, and safekeeping
of corporate assets;

(d) Policy Planning and Management Services Department ~ which will undertake
policy research and development, and advise the General Manager on policy
positions and public advocacy measures for approval of the Board:

(€) Integrated Water Resources Management Services Department ~ This will serve
as the main technical arm of the Authority and shall integrate the functions of lake
basin management and development. It shall oversee the management of the
Laguna Lake and its river systems including the shore lands; and

9


(0) Environmental Protection Department ~ which will manage all the environmental
regulatory functions of the Authority.

‘The Board shall periodically review the appropriateness of the existing organizational
structure and amend the same whenever it may deem necessary and beneficial to achieve the
purposes of this Act. Any proposed change in the organizational structure of the Authority
shall be subject to the approval of the President of the Philippines.

SEC. 17. Creation of the LLDA Environmental Adjudication Panel (LEAP). ~ For the
purpose of effectively carrying out the quasi-judicial powers of the Authority within the Bay
Region, the LLDA Environmental Adjudication Panel (LEAP) is hereby created which shall
be composed of a Chairman and two (2) other members representing the Office of the
General Manager, the Corporate Legal Affairs Department and the concerned department
depending on the matter under controversy, to be designated by the General Manager. The
LEAP is hereby mandated to take cognizance and adjudicate violations of this Act including
all existing and relevant laws, policies, rules and regulations. Any decision, order or

resolution shall be concurred into by the majority members of the panel and duly approved by
the General Manager.

The Corporate Legal A fairs Department shall serve as the Secretariat of the LEAP.

SEC. 18. Fines and Penalties. — The Authority is hereby authorized to impose
administrative fines and other penalties it may deem reasonable and appropriate as
determined and approved by the Board for non-compliance with permit conditions and for
undertaking development activities without clearance/permit from the Authority against any
person, juridical or otherwise, within the Bay Region who may be found violating, or have in
fact violated, any of its rules and regulations.

Likewise, the Authority is authorized to institute the necessary legal proceedings
against those who shall commence to implement any development activities within the Bay
Region without its prior approval or clearance.

SEC. 19. Damages. ~ Compensation for any damage to the shore land, water and
aquatic resources of Laguna Lake and its tributaries resulting from failure to meet established
water and effluent quality standards or from such other wrongful acts or omissions of a
person, private or public, juridical or otherwise punishable under existing laws, shall be
awarded to the Authority for water quantity/quality control and management projects.

SEC. 20. Penal and Civil Liability Clause. ~ Any person, natural or juridical, who
shall violate any of the provisions of this Act and its implementing rules and regulations shall
be liable to imprisonment not exceeding three (3) years or a fine not less than Fifty thousand
Pesos (P50,000.00), or both, at the discretion of the court. This shall be without prejudice to
the imposition of penalties as may be provided under existing and relevant laws, rules and
regulations.

If the violator is a corporation, partnership or association, the officer/officers of the
organization concerned shall be held liable.

The Authority is hereby authorized to initiate, file, prosecute and defend all suits.
actions or to pursue separate civil actions for damages resulting from infractions of the

10


provisions of this Act, rules or regulations issued pursuant thereto and/or conditions
embodied in the clearances or permits issued by the Authority.

SEC. 21. Annual Fees. ~ The Authority is hereby authorized to collect annual fees for
the use of the lake waters, its tributaries and shore land areas for all beneficial purposes
including, but not limited to, fisheries, aquaculture, municipal, agricultural, irrigation,
commercial, industrial, hydroelectric generation and other power potential, transport and
navigation, waste disposal purposes, recreation and dredging/reclamation from all private and
public entities whether government or non-government agencies, among others the water
utilities sector, All the fees so collected shall be accordingly appropriated for the sustainable
development of the lake and its watershed areas: Provided, That the fees collected for
fisheries may be shared between the Authority and other government agencies and LGUs as
follows: thirty-five percent (35%) of the fish pen fee shall go to shore land LGUs; five
percent (5%) shall go to the Project Development Fund; and the remaining sixty percent
(60%) shall be retained by the Authority.

SEC. 22. Sinking Fund. ~ A sinking fund shall be established in such manner that the
total annual contribution thereto accrued at such rate of interests, as may be determined by
the Board of Directors and confirmed by the stockholders representing a majority of the
subscribed capital stock outstanding and entitled to vote, shall be sufficient to redeem at
maturity the bonds issued under this Act.

Such fund shall be under the custody of the treasurer of the Authority who shall invest
the same in such manner as the Board of Directors may direct; charge all expenses of
investment to said sinking fund, and credit the same with the interest on investment and other
income belonging to it.

SEC. 23. Capitalization and Financing. ~ The Authority shall have an authorized
capital of Seven Hundred Million Pesos (P700,000,000.00). The authorized capital shall be
divided into seven million (7,000,000) shares of stock with a par value of One hundred pesos
(P100.00) per share. The national government shall subscribe to four million two hundred
thousand (4,200,000) shares, the Province of Laguna to seven hundred thousand (700,000)
shares, the Province of Rizal to seven hundred thousand (700,000) shares and the balance of
one million four hundred thousand (1,400,000) shares shall be open for subscription to other
government agencies or LGUs and private individuals or corporations within the Bay Region.

The shares of stock of the Authority shall be divided into:

(a) Four million nine hundred thousand (4,900,000) ordinary shares (voting); and

(b) Two million one hundred thousand (2,100,000) preferred shares (non-voting)

SEC. 24. Funding. — The amount necessary to subscribe and pay for the remaining
shares of the national government to the capital stock of the Authority shall be included in the
annual General Appropriations Act. For LGUs, the subscriptions shall be taken from their
internal revenue allotment and other local funds.

SEC. 25. Exemption from Taxes. — The Authority shall be exempt from all taxes,
licenses, fees, imposts, charges, costs and duties except real property tax incidental to its

operations and service/filing fees in any court or administrative proceedings in which it may

i


be a party, restrictions and duties to the Republic of the Philippines, its provinces, cities,
municipalities and other government agencies and instrumentalities. Such exemption shall
include any tax or fee imposed by the government on the sale, purchase or transfer of foreign
exchange. All notes, bonds, debentures and other obligations issued by the Authority shall be
exempt from all taxes, both as to principal and interest.

SEC. 26. Auditor. ~ The Chairman of the Commission on Audit (COA) shall be the ex
officio Auditor of the Authority. For this purpose, he may appoint a representative who shall
be the Auditor of the Authority and the necessary personnel to assist said representative in the
performance of his/her duties.

The Chairman of the COA or his authorized representative shall submit to the Board
after the close of each calendar year, an audited statement showing the financial condition
and progress of the Authority for the calendar year just ended.

SEC. 27. Implementing Rules and Regulations. ~ The implementing rules and
regulations to effectively carry out the provisions of this Act shall be promulgated and
adopted by the Board of Directors of the Authority within ninety (90) days after the approval
of this Act which shall be published in at least one (1) national newspaper of general
circulation.

SEC. 28. Repealing Clause. — Republic Act No. 4850, as amended, Presidential
Decree No. 813, Executive Order No. 927 and all laws, orders, issuances, rules and
regulations inconsistent herewith are hereby repealed.

SEC. 29. Separability Clause. ~ If any provision of this Act is declared
unconstitutional, the same shall not affect the validity and effectiveness of the other
provisions hereof.

SEC. 30. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in at least two (2) national newspapers of general circulation.

Approved,

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