Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

Eighteenth Congress
First Regular Session

HOUSE BILL NO. 3877

Introduced by HON. YASSER ALONTO BALINDONG

AN ACT
CREATING THE LAKE LANAO DEVELOPMENT AUTHORITY,
DEFINING ITS POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER
PURPOSES

EXPLANATORY NOTE

This Bill proposes to establish a governmental authority that shall oversee and
implement the development of the second largest freshwater lake in the Philippines
which is located in Lanao del Sur — the Lake Lanao. This authority shall be called
the Lake Lanao Development Authority.

Considered as one of the fifteen (15) ancient lakes in the whole world, there
is a beautiful legend in Maranao folklore about Lake Lanao’s existence. It is said
that there was no lake in Lanao, but angels created the lake from where there was
once a mighty sultanate. The whole land was converted into a huge basin of deep
blue water from which the Agus River was made. There was a high cliff over the
outlet where the waters cascaded in majestic volume. It later became known as the
Maria Cristina Falls, named after a famous queen of Spain.

Proclamation No. 871 dated February 26, 1992, proclaimed Lake Lanao as a
watershed reserve. This Bill aims to help preserve Lake Lanao from deteriorating,
considering that it has five watersheds with rivers and major tributaries totaling 431
kilometers in length. The lake flows southwest into Iligan Bay via two channels, the
Maria Cristina Falls and Linamon Falls. Lake Lanao has a surface area of about
36,300 hectares while the total area of its inland water is 336 hectares.


Lake Lanao is a major source of livelihood among fisherfolk in the
surrounding city and municipalities as it is richly endowed with at least 18 species
of freshwater fish and supports a large number of waterfowls. It is also widely used
as a waterway to and from the surrounding places.

Lake Lanao is very important in the sense that the hydroelectric plant installed
along Lake Lanao and Agus River generates 70% of the electricity used by the
people of Mindanao. Agus River supports seven hydroelectric plants of the National
Power Corporation with a combined capacity of 727 megawatts.

Thus, there is a very critical need to ensure that Lake Lanao is properly
utilized and preserved for future generations with the use of its resources maximized
thru sustainable development.

The heart of this Bill is to oversee and implement the overall development of
Lake Lanao thru the creation of a centralized government agency. Thus, the Lake
Lanao Development Authority shall institute and implement a comprehensive
development plan designed to promote the rapid social and economic development
of Lake Lanao. It shall undertake studies on the marine and natural resources of
the Lake for policy and plan formulation.

The Bill exempts the Authority from taxes by the National Government to
allow it to maximize the use of its funds for the development of Lake Lanao.

This proposed creation of the Lake Lanao Development Authority has been
filed and refiled by almost all the Representatives of the Second District of Lanao
del Sur. And while it was approved in the Committee level in the 17" Congress, it
was not approved into law for lack of time. It is fervently hoped that this Bill may
be enacted into law by this 18" Congress for the sake of preserving a vital economic
and historic watershed that is actually one of the pillars of our nation’s economic
life.

YASSER ALONTO BA ING
Representative
2" District, Lanao del Sur


Republic of the Philippines
House of Representatives
Queson City, Metro Manila

Eighteenth Congress
First Regular Session

3877
HOUSE BILL NO.

Introduced by HON. YASSER ALONTO BALINDONG

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 the Representatives of the
Philippines in Congress assembled:

SECTION 1. Title. — This Act shall be known as the “Lake Lanao Development Authority.”

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;

(©) To hamess 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, waste 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: Provided, further, That the resulting lakeshore area
shall continue to be owned by the National Government;

(®) 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 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;

(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;

(i) The provisions of existing laws to the contrary notwithstanding, to exercise water rights
over public water within the Lake Lanao are 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



(k) 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 notis

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, real property of every kind and
description, including shares of stocks, 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 surety or guarantor to
worthwhile agricultural, industrial and commercial enterprises;

j. 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;

1. 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
(2,000,000,000 Php) no par value shares, of which the amount of one billion pesos (1,000,000,000
Php) 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 to 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 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


Secretary 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 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 Manger shall likewise have demonstrated executive
competence and experience in the field of public administration or the management of agricultural,
industrial or commercial enterprises and knowledge of the socio-economic 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 (2,00 Php); Provided, that, such per diem shall not exceed six thousand pesos
(6,000 Php) 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 amount and as frequently as necessary to discharge its duties and responsibilities properly.
The Board shall be convened by the Chairman or upon the written request 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.

d. To approve the annual and/or supplemental budgets of the Authority;
¢. To render annual reports to the President and such special reports as may be requested; and

£ 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;

¢. 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;

¢. Prepare the plantilla and appoint officials and employees below the rank 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;

f. 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 the 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

c. 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 department 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 (50,000,000 Php) 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
or the Office of the President.

SEC 20. Repealing Clause ~ Alll republic acts, executive orders, rules and regulations, and
other issuances, or parts thereof, that ate inconsistent with the provisions of this Republic 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,