Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 5483

Introduced By Representative ALLAN BENEDICT S. REYES

EXPLANATORY NOTE

The Philippines, while surrounded by bodies of water and appearing to have unlimited
‘supply, is in the verge of experiencing a huge water crisis. Unfortunately, water is a finite
resource and with rising demand shrinking our current water sources, serious questions arise
as to how long our water supply will last.

To prevent this impending water crisis, the Government needs the active participation
and cooperation of private entities and individuals to find better ways to conserve water. One
of the proven effective methods for this purpose are water recycling and water reuse since
these approaches create new and reliable water supply without compromising public health.
In the United States, for instance, non-potable reuse is a widely accepted practice that
continues to grow. In particular, recycled water is commonly used in the U.S. for non-potable
purposes, such as agriculture, landscape, public parks, and golf course irrigation. Other non-
potable applications also include “cooling water for power plants and oil refineries, industrial
process water for such facilities as paper mills and carpet dyers, toilet flushing, dust control,
construction activities, concrete mixing, and artificial lakes.”

It is recognized that the Philippines already has the Philippine Clean Water Act of
2004? which provides the country with a comprehensive water quality management program.
In fact, one objective of this law is “[t]o encourage cooperation and self-regulation among
citizens and industries through the application of incentives and market-based instruments
and to promote the role of private industrial enterprises in shaping its regulatory profile within
the acceptable boundaries of public health and environment.”* While the said Act provides
for incentives and rewards for water quality management, it is limited to the “adoption of
procedures that will preserve and protect our water bodies through the introduction of
innovative equipment and processes that reduce if not totally eliminate the discharge of
pollutants into our water bodies.”> Similarly, the Act only incentivizes provisions for “water
pollution control technology, cleaner production and waste minimization technology.”

"Water shortage inthe Philippines threatens sustainable development and health. World Health Organization, avilable
at

sustainable-development-and-health (last accessed on 9 November 2019)
Water Reuse and Reeying: Community and Environmental Benefis, United Sates Envionmental Proecon Agency
available at (ast accessed on 9 November 2019.)

» "Republic Act No. 9275, An Act Providing for A Comprehensive Water Quality Management and for Other Purposes,
22 March 2004, (hereinafter, the “Philippine Clean Water Act of 2004”)

4+ Section 2(0), Id

5 See Sections 21 and 25, Id

© Section 25, Id

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Moreover, the said Act only refers to “machinery, equipment and spare parts used for
industrial wastewater treatment/collection and treatment facilities."”

To address this gap, the Philippines needs another law that will also recognize and
reward the use of water recycling or water reuse devices and technologies or the
development or undertaking of any effective water recycling and reuse processes or
activities. Admittedly, however, while water recycling and reuse are sustainable approaches
and can be cost-effective in the long term, the installation of related devices, the treatment of
recyclable wastewater and the installation of distribution systems can be initially expensive. *
Therefore, the Government needs to further encourage private entities and individuals to
patronize such devices and technologies and to actively participate in Government programs
or activities that are geared towards the promotion of water conversation through recycling
and reuse. To achieve this, the Government must provide attractive incentives and rewards
to boost the cooperation and active participation of private entities and individuals in using,
developing or undertaking effective water recycling and reuse projects, technologies,
processes or activities.

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

QM /a~—

HON. ALLAN BENEDICT S. Reyes“
Representative
3" District, Quezon City

Section 25, Id
Water Reuse and Recycling: Community and Environmental Benefits, United States Environmental Protection Agency
available at btips://srww3.epa.gov/region9/swater/recycling/ (last accessed on 9 November 2019.)

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 5463

Introduced By Representative ALLAN BENEDICT S. REYES

AN ACT PROVIDING INCENTIVES AND REWARDS TO PRIVATE ENTITIES AND
INDIVIDUALS WHO USE WATER RECYCLING AND REUSE DEVICES AND
TECHNOLOGIES OR DEVELOP OR UNDERTAKE EFFECTIVE WATER RECYCLING
AND REUSE PROCESSES OR ACTIVITIES AND APPROPRIATING FUNDS THEREFOR

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 “Water Recycling
Incentives Act of 2019.”

1
2
3
4 SECTION 2. Coverage. - This Act shall apply to the installation and use of any water
5 recycling devices or technologies in households, businesses and other
6 _ industrial/commercial establishments. The incentives and rewards provided in this Act
7 shall be given to any outstanding and innovative projects, technologies, processes and
8 techniques or activities in water recycling and reuse as well as to any development or
9 undertaking for effective water recycling and reuse, or active participation in any program
10 geared towards the promotion thereof.

12 SECTION 3. Definition of Terms. - As used in this Act, water recycling and reuse
13 shall mean any act of “reclaiming wastewater for beneficial purposes such as agricultural
14 and landscape irrigation, industrial processes, toilet flushing, and replenishing a ground
15 water basin (referred to as ground water recharge). For this purpose, wastewater shall
16 include water that has been used in the hand basin, shower, bath, washing machine, or
17 laundry tub. It shall also include the water from the toilet, kitchen sink or dishwasher that
18 may be recycled and reused after undergoing treatment. Similarly, commercial wastewater
19 that comes from non-domestic sources, such as carwash shops, beauty salon, water
20 parks, etc. that may contain hazardous chemicals or materials and requires special
21 treatment shall also be considered as recyclable or reusable wastewater. Finally, the term
22 wastewater, as used in this Act, shall also include stormwater or rainwater that is collected
23 or harvested from stormwater drainage systems, including rainwater runoff from roads,
24 buildings and open lands.

26 SECTION 4. Incentives. - The fiscal incentives provided under Section 26 of

27 Republic Act 9275, otherwise known as the Philippines Clean Water Act of 2004, shall
28 similarly apply to any undertaking, development and/or adoption of water recycling and

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reuse projects, technologies, processes, techniques or activities by private entities and
individuals. These include the following

1. Tax and Duty Exemption on Imported Capital Equipment - Private entities and
individuals shall enjoy tax-and-duty-free importation of machinery, equipment
and spare parts used for water recycling and reuse: Provided, That the
importation of such machinery, equipment and spare parts shall comply with the
following conditions:

a) They are not manufactured domestically in sufficient quantity, of
comparable quality and at reasonable prices;
b) They are reasonably needed and will be used actually, directly and
exclusively for the above-mentioned activities; and

The importation is with the written endorsement by the Department of

Environment and Natural Resources (‘DENR") stating that the

importation of such machinery, equipment and spare parts would be

beneficial to environmental protection and management: Provided,
further, That the sale, transfer or disposition of such machinery,
equipment and spare parts without prior approval of the Bureau of

Investments (“BOI”) within five (5) years from the date of acquisition shall

be prohibited, otherwise the private entity or individual and the

concerned vendee, transferee or assignee shall be solidarity liable to pay
twice the amount of tax and duty exemption given it.

ic)

2. Tax Credit on Domestic Capital Equipment - A tax credit equivalent to one
hundred percent (100%) of the value of the national internal revenue taxes and
customs duties that would have been waived on the machinery, equipment, and
‘spare parts, had these items been imported shall be given to private entities
and individuals, subject to the same conditions and prohibition cited in the
preceding paragraph.

3. Tax and Duty Exemption of Donations, Legacies and Gifts - All legacies, gifts
and donations to private entities and individuals for the support and
maintenance of water recycling and reuse projects, technologies, processes,
techniques or activities shall be exempt from donor's tax and shall be deductible
from the gross income of the donor for income tax purposes. Imported articles
donated to, or for the account of any private entities and individuals to be
exclusively used for water recycling and reuse programs shall be exempted
from the payment of customs duties and applicable internal revenue taxes.

SECTION 5. Rewards. - The rewards provided under Section 25 of Republic Act

9275, otherwise known as the Philippines Clean Water Act of 2004, shalll likewise apply to
outstanding and innovative projects, technologies, processes and techniques or activities
in water recycling and reuse. Accordingly, rewards, monetary or otherwise, shall also be
provided to individuals, private organization and entities, including civil society, that have
undertaken outstanding and innovative projects, technologies, processes and techniques
or activities in water recycling and reuse. For this purpose, as a special account in the
National Treasury, to be known as the National Water Recycling and Reuse Fund shall be
administered by the DENR, in coordination with the local government units (“LGUs”) and
other concerned agencies. Disbursements from the said Fund shall be subject to the usual
accounting and budgeting rules and regulations.

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COorauaunn

SECTION 6. /mplementing Rules and Regulations and Standard Forms. - Within
sixty (60) days from the promulgation of this Act, the necessary rules and regulations for
the proper implementation of its provisions shall be formulated by the appropriate
government office or agency in coordination with all the stakeholders and covered
establishments and institutions.

SECTION 7. Repealing Clause. - All laws, executive orders, administrative
orders, rules, regulations, decrees, and other issuances or parts thereof, which are
inconsistent with the provisions of this Act are hereby revoked, repealed, or modified
accordingly.

SECTION 8. Separability Clause. - If any provision of this Act is held
unconstitutional or invalid, the other provisions not affected thereby shall continue in
operation and remain in full force and effect.

SECTION 9. Effectivity Clause. — This Act shall take effect fifteen (15) days after

its publication the Official Gazette or in the two (2) national newspaper of general
circulation.

Approved,

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