FIFTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )

First Regular Session : )
SENATE

Senate Bill No. 1219

Introduced by Senator Manny Villar

EXPLANATORY NOTE

The largest body of inland water on Mindanao is Lake Sultan-Alonto, more
commonly known as Lake Lanao—which lies in the western part of the isfand.
With an area of 355 square kilometers, it is the second largest lake in the
Philippines. Located in the Province of Lanao del ‘Sur, Lake Lanao is counted as
‘one of the 15 ancient lakes in the world. It has a maximum depth of 112 meters,
and a mean depth of 60.3 meters.

The lake serves as a reservoir for the generation of hydro-electric power
on the Agus River. The Lanao Lake and Agus River system generates 70% of
the electricity used by the people of Mindanao. It likewise supports a major
fishery, and is important for recreational activities including boating, swimming
and sport fishing.

Lake Lanao is of great limnological interest. The fauna includes many
species of fishes and invertebrates, which are endemic to the lake. It also
supports large numbers of waterfowl.

It is imperative that we ensure the preservation, proper utilization and
sustainable development of Lake Lanao for the benefit of the people of Lanao.

This proposed measure: seeks to respond to this need by creating a
centralized government agency — the Lake Lanao Development Authority, that
would administer and implement the over-all development of Lake Lanao and its
surrounding areas.

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

MANNY VILLAR:
Serator

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FIFTEENTH CONGRESS OF THE ) fy, OFFICE CON | SE RETARY
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Introduced by Senator Manny Villar

AN ACT
CREATING THE LAKE LANAO DEVELOPMENT AUTHORITY, DEFINING ITS
POWERS, FUNCTIONS AND DUTIES, 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 “Lake Lanao
Development Authority Act of 2010”.

Sec. 2. Declaration of Policy. - It is hereby declared a policy of the State
to promote and accelerate the development and balanced growth of Lake Lanao
and its surrounding cities and municipalities, within the context of national plans
and policies for sustainable development, with due regard and adequate
provisions for environmental management and control, preservation of the quality
of human life and ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution.

For purposes of this act, the Lake Lanao Development Authority created
under Section 3 of this Act shall identify the surrounding cities and municipalities,
which shall be known as the “Area”.

Sec. 3. Creation of the Lake Lanao Development Authority. — To
effectively carry out the declared policy, there is hereby created under the Office
of the President of the Philippines, a body corporate to be known as the Lake
Lanao Development Authority hereinafter referred to as the Authority.

Sec. 4. Powers and Functions of the Authority, - The Authority shall
have the following purposes and functions

(a) To make a comprehensive survey of the physical and natural resources
and potentialities of Lake Lanao and the Area, particularly its social and
economic conditions, hydrologic characteristics, power potentials, scenic ,
and tourist spots, conservation of water resources and such other areas of
concerns, and on the basis thereof, to’ craft a comprehensive and detailed
Lake Lanao Development Plan to promote its rapid social and economic
development: Provided, That the implementation of all fisheries plans and
programs of the Authority shall require prior consultation with the Bureau
of Aquatic Resources to ensure that such plans and programs are
consistent with national fisheries plans and programs;


(b) To pass upon and approve all plans, programs and projects proposed by
local government units, public corporations and private entities that is
related to the utilization of the resources and the development of Lake
Lanao and the Area, and monitor the proper implementation of said plans,
programs and projects, consistent with the objectives and purposes of this
‘Act. With mandatory prior consultation with the Department of
Environment and Natural Resources (DENR), the Authority shall issue the
necessary permit for approved plans, programs and projects: Provided,
That, any application for permit that has been disapproved by the
Authority may be appealed to the Office of the President within fifteen (15)
days from receipt of such disapproval, whose decision shall be final;

(c) To harness and promote private participation in business ventures in
terms of capital expenditures, land, expertise, financing and their facilities
for the development and growth of the Area;

(d) To plan, program, finance and/or undertake infrastructure projects such as
river, flood and tide control works, waster water and sewerage works,
water supply, roads, pot works, irrigation, housing and related works when
so required within the context of its development plans and programs,
including the readjustment; relocation or restoration, or resettlement of
population, as may be deemed necessary and beneficial by the Authority:
Provided, That should any project be financed wholly or in part by the
Authority, it is hereby authorized to collect reasonable fees and tolls as
may be fixed by its Board of Directors from users and/or beneficiaries
thereof to recover costs of construction, operation and maintenance of the
projects: Provided, further, That if the Authority should find it necessary to
undertake such infrastructure project as social overhead capital projects,
the Authority shall be authorized to receive financial assistance from the
government and foreign donors, subject to such terms and conditions that
may be imposed by the Government;

(e) To reclaim or cause to be reclaimed portions of Lake Lanao or undertake
reclamation projects and/or acquire such bodies of land from the Lake
which may be necessary to accomplish the aims and purposes of the
Authority: Provided, That the land so reclaimed shall be the property of the
Authority and title thereto shall be vested in the Authority: Provided,
further, That the resulting lakeshore area shall continue to be owned by
the National Government;

(f) To establish research centers to undertake studies on the marine and
other natural resources of Lake Lanao for policy or plan formation and
project implementation;

(g) To exercise exclusive jurisdiction to issue new permit for the use of the
lake waters for any projects, including navigation, construction, operation
of fish pens, fish enclosures, fish corral and the like, and to impose
necessary safeguard for lake quality control and management and to
collect necessary fees for said activities and projects: Provided, That the
Authority's Board may determine new areas of fishery development or
activities, taking into account the over-all development plans and
programs for Lake Lanao: Provided, further, That the Authority shall,
Subject to the approval of the President of the Philippines, promulgate
such rules and regulations which shall govern fisheries development
activities in Lake Lanao, including the advisability of placing the
supervision of said activities under the Bureau of Fisheries and Aquatic
Resources of the local government units in the Area;

v


(h) To require the cities and municipalities embraced within the area to pass
appropriate zoning ordinances and regulatory measures to carry out the
objectives of the Authority and to enforce the same with the assistance of
the Authority;

(

The provisions of existing laws to the contrary notwithstanding, to exercise
water rights over public water within the Lake Lanao area whenever
necessary to carry out the Authority's projects; To promulgate and
establish, in coordination with the Department of Environment and Natural
Resources and other existing government agencies, water quality
standards for industrial, agricultural and municipal waste discharges into
the Lake and to ensure the cooperation of said existing agencies of the
Government in enforcing such standards; and

@

To undertake studies on the improvement and maintenance of the
desirable water quality of Lake Lanao, and in pursuance thereof, prepare
a water quality management program on a continuing basis, which the
Authority shall carry out with the assistance and support of the national
and local government units involved in water quality management

Sec. 5. Corporate Powers. - The Authority shall exercise the following
powers and functions:

(a) To sue and be sued;
(b) To adopt and use a corporate seal with judicial notice;
(c) To undertake the programs and projects specified in Section 4 hereof,

(d) To engage in agricultural, industrial and commercial or other activities
necessary or directly contributory to the socio-economic development of
the Area, and, for this purpose, whether by itself or in cooperation with
private entities, to organize, finance, invest in, and operate subsidiary
corporations: Provided, That the Authority shall engage only, unless public
interest requires otherwise, in those activities as are in the nature of new
ventures or are clearly beyond the scope, capacity or interest of private
enterprises;

(e) To invest in or otherwise acquire, own, hold, use, operate, sell, assign,
transfer, exchange, mortgage, pledge, lease, develop or otherwise deal in,
teal property of every kind and description, including shares of stock,
bonds, debentures, notes, evidence of indebtedness, and other securities;

(f) To exercise the right of eminent domain or acquire by purchase, privately
owned land within the area for purposes of implementing projects of the
Authority;

(g) To borrow funds from any local or foreign financial institutions independent
of the bonds it may issue to carry out the purposes of the authority;

(h) To acquire, lease, or own such property or assets in whatever form and
serve as the custodian of such properties or assets, real or movable, and
sell or otherwise dispose of the same as the Authority may deem it
necessary in the pursuit of its aims, objectives and purposes;


(i) To lend or facilitate the extension of financial assistance and/or act as
surety or guarantor to worthwhile agricultural, industrial and commercial
enterprises;

i)

To accept grants, donations, gifts, bequests, funds and/or properties in
whatever form and whatever source in coordination with the appropriate
agency and administer the same in accordance with the terms thereof, or
in the absence of any condition, in such manner consistent with the policy,
aims and objectives of the Authority provided for in this Act;

(k) To enter into a contract of any kind and description to enable it to carry out
its purposes and objectives;

(I) To issue such rules and regulations as may be necessary to effectively
carry out the powers and purposes herein provided, including plans,
programs and projects of the Authority, the same to take effect thirty (30)
days after publication thereof, in a newspaper of general circulation; and

(m)For the purposes of attaining or in furtherance of any of its objectives, to
perform any and all acts which a corporation, co-partnership, or natural
person is authorized to perform under the laws existing or which may be
enacted hereafter.

Sec. 6. Capitalization. - The Authority shall have an authorized capital of
two billion pesos (Php2,000,000,000.00) no par value shares, of which the
amount of one billion pesos (Phpl,000,000,000.00) shall be subscribed by the
provinces, cities, and municipalities in the Area and at least twenty-five percent
(25%) shall be subscribed by the National Government.

Sec. 7. Power to Incur Debts and Issue Bonds. -Whenever the Board of
Directors may deem it necessary for the Authority to incur an indebtedness or to.
issue bonds to carry out the provisions of this Act, it shall, by resolution, so
declare and state the purposes for which the proposed debt is to be incurred.
The resolution shall be passed by the affirmative vote of at least four (4)
members of the Board and approved by the President of the Philippines upon the
recommendation of the Seoretary of Finance in consultation with the National
Economic Development Authority (NEDA) and the Monetary Board.

Sec. 8. Tax Exemption. - The Authority shall be exempt from payment of
all taxes imposed by the National Government, its provinces, cities, municipalities
and other government agencies and instrumentalities: Provided, That, its
subsidiary corporations shall be subject to all said taxes five (5) years after their
establishment under a graduated scale. Such exemption shall include any tax or
fee imposed by the Government on the sale, purchase or transfer of foreign
exchange and all notes, bonds, and debentures, and other obligations issued by
the Authority, both as to the principal and interest.

Sec. 9. Governing Body. - The corporate powers and functions of the
Authority shall be vested in and exercised by a Board of Directors, hereinafter
referred to as the Board, which shall be composed of a Chairman and six (6)
members, to be appointed by the President of the Philippines who shall serve for
a term of six (6) years, unless sooner removed from or is incapacitated to
perform functions of the office: Provided, That a majority of the members of the
Board must be residents of Lanao del Sur and Lanao del Norte.

In case of any vacancy in the Board, the same shall be filled by the
President of the Philippines for the unexpired term. No person shall be


appointed as Chairman or member of the Board, or as general Manager, unless
he is a natural-born citizen of the Philippines, at least thirty (30) years of age and
of proven probity and integrity. In addition, the General Manager shall likewise
have demonstrated executive competence and experience in the field of public
administration or the management of agricultural, industrial or commercial
enterprises and knowledgeable of the socioeconomic conditions of Lake Lanao
and its surrounding cities and municipalities

Sec. 10. Prohibition against Conflict of Interest. - No member of the
Board shall be financially interested, directly or indirectly, in any contract entered
into by the Authority or in any special privilege granted by the Authority during his
term of office. All contracts entered into in violation of the provision of this Section
shall, by two-thirds (2/3) vote of the Board, automatically be disqualified from
serving his unexpired term, and he shall furthermore be perpetually disqualified
for membership in the said Board.

Sec. 11. Compensation. - The General Manager shall receive
compensation in accordance with the Compensation and Position Classification
Act of 1998 and shall not engage in any business, calling or profession during his
term of office other than those connected with the performance of his official
functions and duties. The members of the Board shall receive, for every meeting
actually attended, a per diem of two thousand pesos (Php2,000.00): Provided,
That such per diem shall not exceed six thousand pesos (Php6,000.00) during
any month for each member. Members of the Board shall be reimbursed by the
Authority for actual expenses (including traveling and subsistence expenses)
incurred by them in the performance of their duties for the Authority as may be
specifically authorized by the Board.

Sec. 12 Quorum. - The presence of four (4) members of the Board,
including the Chairman or Vice-chairman, shall constitute a quorum for the
transaction of the business of the Board.

Sec. 13. Meetings of the Board, - The Board shall meet preferably at its
principal office at least once a month and as frequently as necessary to
discharge its duties and responsibilities properly. The Board shall be convened
by the Chairman or upon the written quest of a majority of its members. Except
when otherwise provided for in this Act, the vote of a majority of the members
constituting a quorum shall be sufficient for the adoption of any rule, resolution,
decision or any act of the Board.

Sec. 14. Powers and Functions of the Board. - The Board shall have
the following powers and functions:

(a) To formulate, prescribe, amend and repeal rules and regulations to govern
the conduct of business of the Authority;

(b) To appoint and fix the compensation of all officials from division heads and
above, and others of comparable rank, including the Assistant General
Manager;

(c) By a majority vote of all members of the Board, suspend, remove or
otherwise discipline for just cause all officials appointed by the Board;

(a) To approve the annual and/or supplemental budgets of the Authority;

(e) To render annual reports to the President and such special reports as may
be requested: and


(f) To do such other acts and perform such other functions as may be
necessary to carry out the provisions of this Act.

Sec. 15. Powers and Functions of the General Manager. - The General
Manager shall be the chief executive of the Authority, as such, he or she shall
have the following powers and functions:

(a) To submit, for the consideration of the Board, the policies and measures
which he or she believes to be necessary to carry out the purposes and
provisions of this Act;

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

(c) Direct and supervise the operation and internal administration of the
Authority. The General Manager may delegate some of his or her
administrative responsibilities to other officers of the Authority subject to
the rules and regulations of the Board;

(d) Prepare the annual budget of the Authority for the consideration of the
Board;

(e) Prepare the plantilla and appoint officials and employees below the rank of
division heads to positions in the approved budget upon written
recommendations of the division head concerned, using as a guide the
‘standard set forth and such other reports as may be required;

() Exercise such other powers as may be vested in him by the Board.

Sec. 16. Representation of the Authority. - The General Manager shall
be the principal representative of the Authority. He shall be empowered, in such
capacity and in accordance with the instructions of the Board:

(a) To represent the Authority in all dealings with other offices, agencies, and
instrumentalities of the Government and will all other persons and entities,
whether public or private domestic, foreign or international;

(b) To sign contracts concluded by the Authority, annual reports, balance
sheets, profit and loss statements, correspondences and other documents
of the Authority; and

(©) To represent the Authority, either personally or through counsel, in any
legal proceedings or actions.

Sec. 17. Departments. - There shall be created the following departments
within the authority: the Administrative, Legal, Operations, Financial and
Management, Auditing, Planning and Programming, and such other departments
as may be necessary to effectively carry out the functions of the Authority. The
head of each Department shall be appointed by the Board upon recommendation
of the General Manager, and shall receive an annual compensation as may be
fixed by the Board.

Sec. 18, Auditing. - The auditing department shall be headed by the duly
appointed representative of the Commission on Audit whose salary shall be
determined and paid according to law. All personnel of the auditing department


shall be appointed, and their number and salaries fixed by the Commission on
Audit.

Sec. 19. Appropriations. - The sum of fifty million pesos
(PhP50,000,000.00) necessary for the initial operating expenses of the Authority
is hereby charged to the appropriations authorized for the Regional Development
Fund. Thereafter, the sum necessary for the continued operation and
maintenance of the Authority shall be included in the annual budget of the Office
of the President.

Sec. 20. Repealing Clause. - All republic acts, executive orders, rules
and other issuances, or parts thereof, that are inconsistent with this Act are
hereby repealed or modified accordingly.

Sec. 21. Separability Clause. - If for any reason or reasons, any part or
provision of this Act shall be declared or held to be unconstitutional or invalid
other parts or provisions hereof, which are not affected thereby shall continue to
be in full force and effect.

Sec. 22. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation.

Approved,