Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

House Bill No. _ 1252

Introduced by REP. MARCELINO R. TEODORO

EXPLANATORY NOTE

The State is directly responsible for providing water security to all citizens and
inhabitants of its territory. Water nurtures and sustains life. Societies worldwide can
neither endure nor survive without properly managing their water resources for the
effective and safe use of their people

The Philippines is a water-rich country. According to the World Bank (2015), the
annual available water volume per capita in the country is twice that of Asia and six times
the global scarcity threshold. Yet, many of our people are deprived of efficient access to
affordable, safe, and reliable potable water and to proper sanitation services. This is
because the governance and maintenance of our water resources remains fragmented
and uncoordinated. To date, there are over 30 government agencies at both the national
and local levels implementing separate and disharmonized policies, plans, and programs
to develop and operate water facilities and related infrastructure for various uses, and to
regulate water use, monitor water-related financial and technical parameters, and set
water tariff.

The bill proposes to create the Department of Water Resources to serve as the
primary agency responsible for national policy-making, coordination, and management
of all the water resources in the Philippines. All government agencies related to water
shall be rationalized under this Department. Integrated Water Resources Management
(IWRM) shall be adopted as the strategic framework for water management policy
making and planning in the country. IWRM promotes the coordinated development and
management of water, land, and related resources in order to maximize economic and
social welfare in an equitable manner without compromising the sustainability of vital
ecosystems and the environment.

The bill also proposes to create an independent Water Regulatory Commission to
ensure the effective and adequate delivery of water and sanitation services throughout
the country under a credible, transparent, and accountable regulatory framework. This


Commission shall always protect the consumer welfare and reject abusive practices in
the water industry.

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

Maw kex Tho—

MARCELINO R. TEODORO
Representative
First District, Marikina City


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

TWENTIETH CONGRESS
First Regular Session

re
House Bill No. _ 1252

Introduced by REP. MARCELINO R. TEODORO

AN ACT
ESTABLISHING THE NATIONAL FRAMEWORK FOR WATER RESOURCE
MANAGEMENT AND CREATING THE DEPARTMENT OF WATER RESOURCES
AND THE WATER REGULATORY COMMISSION, DEFINING THEIR MANDATES,
POWERS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:

CHAPTER |
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “National Water Resources
Act’.

SEC. 2. Declaration of Policy. ~ Access to water is a basic human right. All water
belongs to the State which shall govern its development and utilization for the people.

It is hereby declared the policy of the State to ensure the provision of safe, adequate,
affordable and sustainable water supply and improved sanitation services, while
maintaining the protection, preservation, and revival of the quality of the country's water
resources and ecological balance.

In pursuit of this policy, this Act shall have the principal objective of ensuring and
accelerating universal access to water supply and sanitation services, in a regulatory
regime that encourages responsible private sector participation, and shall foster and
prioritize the establishment of infrastructure and public works that adopt innovative
solutions and international best practices to address the challenges of climate change.
Further, all water and water treatment infrastructure projects are hereby declared as
projects imbued with national interest.


SEC. 3. Definition of Terms. - As used in this Act:

(a) Bulk water supplier refers to any entity, natural or juridical, whether
public or private, supplying or intending to supply large quantities of raw or treated
water to buyers for their own consumption, such as industrial companies, or for retail
distribution to consumers such as water service providers or real estate developers
managing their own distribution network.

(b) Environmental services refer to qualitative functions of natural non-
produced assets of land, water, and air, including related ecosystems, and their biota,
and which may be categorized into three basic types: (a) disposal services which reflect
the functions of the natural environment as an absorptive sink for residuals; (b)
productive services which reflect the economic functions of providing natural resource
inputs and space for production and consumption, and (c) consumer or consumption
services which provide for physiological as well as recreational and related needs of
human beings.

(c)_ Flood Control refers to methods, acts, and protocols to be observed in
order to prevent and reduce the detrimental and catastrophic effects of flood waters which
include sediment-laden or turbid flows, and hyper-concentrated flows or debris flows.

(3) Flood Risk Management (FRM) refers to acts of defining and
determining the appropriate methods, acts, and protocols aimed at preventing and
reducing the tisk of loss of both life and property due to flood waters. Flood risk
management consists of a cycle of prevention, mitigation, adaptation, preparedness and
early warning, and response and recovery. The elements of FRM include: integrating land-
use planning and coastal zone management into water management; adopting a holistic
approach so that FRM is part of wider risk or multi-hazard management of earthquakes,
landslides, droughts, and storm surges; managing risk and uncertainty as a whole so
it not only mitigates hydrological uncertainties but also social, economic and political
uncertainties on account of human behavior and the cultural dimensions of FRM.

(e) Gender Equality refers to the-principle asserting the equality of men
and women and their right to enjoy equal conditions realizing their full human potentials
to contribute to and benefit from the results of development, and with the’ State
recognizing that all human beings are free and equal in dignity and rights.

(f)_ Infrastructure and public works refer only to wholly or primarily water-
related projects and does not include projects that do not fall within the purview of the
objectives, power and duties of the Department of Water Resources created under this
Act.

(g) Integrated Water Resource Management (IWRM) refers to a systematic,
collaborative, and multi-stakeholder process which promotes the coordinated
development and management of water, land, and related resources within geophysical
boundaries in order to maximize the resultant economic and social welfare in. an
equitable manner, and without compromising the sustainability of vital ecosystems.

(h) License refers to the Water Supply or Sanitation Services Operating
License that the Water Regulatory Commission is authorized to grant and issue to service
providers.

(i) Licensee refers to a service provider to whom a license is granted or
issued by the Water Regulatory Commission


()_ Missionary Water Services refer to water supply or services to areas
that having existing safe water supply and services due to geographic limitation or
absence of economic and market viability.

(k) National Water Resources Management Plan (NWRMP) refers to a
Policy document that contains a framework to guide the development and management
of all the water resources in the Philippines, the general strategies and work to be
pursued to ensure the sustainability of the resource towards water security, and top-
level direction on the utilization of existing water resources in line with national
development plans, policies, and programs in accordance with the IWRM framework.

The NWRMP shall also include a water infrastructure development program or
all waters of the country as well as provide general guidance on how this shall be
supported within an integrated financing framework that can draw from public, private,
and international development funding sources.

(l)_ Net Waste Load refers to the difference of the initial waste load of the
abstracted water and the waste load of the final effluent discharge of an industry.

(m) River basin refers to an area of land drained by a stream or body of
fixed water and its tributaries which have a common outlet for surface run-off.

(n) River Basin Organization (RBO) refers to a multi-stakeholder
organization which plan, coordinate, and monitor activities within a river basin cluster.

(0) Sanitation refers to the provision of facilities and services for the safe
management of human excreta and wastewater, from collection to containment, and
storage and treatment onsite or conveyance, treatment and eventual safe end use or
disposal, and includes the safe management of solid waste and animal waste.

(p) Sediment management refers to control of sediment erosion and
deposition in rivers, reservoirs, and coastal zones through non-structural and structural
measures and control works,

(q) Sustainable Development Goals (SDGs) also known as the 17 Global
Goals refer to the universal call to action to end poverty, protect the planet and ensure
that all people enjoy peace and prosperity by 2030 adopted by Member States of the
United Nations in 2015

()_ Sepiage is the liquid and solid material pumped from a septic tank,
cesspool, or other primary treatment source.

(s)_ Septage Management refers to the provision of proper. collection,
treatment, and disposal of septage.

(t) Service Area refers to the area covered by the water distribution
system, sewerage or septage management services.

(u) Sewage refers to water borne human or animal wastes, excluding oil or
oil waste, removed from residences, buildings, institutions, and’ industrial and
commercial establishments together with such groundwater, surface water and storm
water as may be present including such waste from vessels, offshore structures, other
receptacles intended to receive or retain waste or other places or the combination
thereof.


(v)_ Sewerage refers to any system or network of pipelines, ditches,
channels or conduits including pumping stations, lift stations and force mains,
service connections including other infrastructure, devices, or appliances
appurtenant thereto, which include the collection, transport, pumping and treatment of
sewage to a point of disposal.

(Ww) Sewers refer to pipes or such other works or structures which are built
and constructed to carry, transport, and dispose sewage.

(x) Social inclusion refers to the process of improving the terms for
marginalized and disadvantaged individuals, indigenous peoples, and similar groups to
take part in society.

(y) Tariffs refer to amounts which may be charged by licensees for
their water supply

and sanitation services based on principles, standards, and guidelines
established by the Water Regulatory Commission.

(2) Water Demand Management refers to any method, whether
technical, economic, administrative, financial, or social, that will accomplish one or
more of the following:

(1) Reduce the quantity or quality of water required to accomplish a specific
task;

(2). Adjust the nature of the task or the way it is undertaken so that it can be
accomplished with less water or with lower quality water;

(3) Reduce the loss in quantity or quality of water as it flows from
source, through use to disposal;

(4). Shift the timing of use from peak to off-peak periods; and

(5) Increase the ability of the water system to continue to serve society
during times when water is in short supply.

(aa) Water Districts refer to government-owned and controlled corporations,
organized under Presidential Decree (PD) No. 198, as amended, or the Local Water
Utilities Administration Law, created primarily to acquire, install, operate, maintain, and
improve water supply and distribution systems for domestic, industrial and municipal
uses of residents and to provide, maintain and operate waste water collection, treatment
and disposal facilities within the boundaries of the district.

(bb) Water pollution refers to any alteration of the physical,
chemical, biological, or radiological properties of a body of water resulting in the
impairment of its purity or quality.

(co) Water Resource refers to water under the ground or groundwater,
water above the ground such as surface water, run-offs, floods, storm water and urban
drainage, treated wastewater, water in the atmosphere or rain water, and the waters
of the sea within the territorial jurisdiction of the Philippines.

(dd) Water resource allocation is the process of sharing the limited water
resources between competing users. This consists of (i) determining water availability,

6


and (ii) determining how the water should be shared among competing users. For the
purposes of this Act, resource allocation shall also mean water resources allocation.

(ee) Water Resources Regions refer to the contiguous clusters of river
basins which are grouped together according to the hydrological boundaries,
physiographic features, and homogeneity in climate, whether or not they straddle
different local government units, for administrative purposes under the Department
of Water Resources.

(ff) Water Service Provider (WSP) refers to the water district, any local
government unit (LGU)-run water utility, Barangay Waterworks and Sanitation
Association, Rural Waterwork Sanitation Association, cooperatives engaged in water
service provision, or private sector entity that provides water supply services to any given
area.

(gg) Water supply service refers to any activity comprising Levels |, tI and
Ill water supply

including bulk suppliers, suppliers to subdivisions, and other water service providers
SPs).

CHAPTER Il
THE DEPARTMENT OF WATER RESOURCES

SEC. 4. The Department of Water Resources. — There is hereby created
and established the Department of Water Resources, hereinafter referred to as the
Department.

SEC. 5. Mandate of the Department. ~The Department shail be the primary
agency responsible for the comprehensive and integrated identification and mapping
of all water resources, planning, policy formulation, and management of the
ownership, appropriation, utilization, exploitation, development, and protection of
water resources in the Philippines to ensure the optimal use thereof for domestic and
municipal water supply, sanitation, irrigation, hydropower, industry, navigation, flood
management, and recreation, and water utilization aspects of fisheries or aquaculture,

The Department shall also be the primary agency responsible for the
planning and policy formulation towards the attainment of universal access. to, safe,
adequate, affordable, and sustainable water supply, and improved sanitation services for
all Filipinos.

The Department shall be the primary national agency to enforce PD 1067,
otherwise known as The Water Code of the Philippines.

In the implementation of Republic Act (RA) No. 9275, otherwise known
as the Philippine Clean Water Act of 2004, the Department shall be responsible for
preparing, formulating and implementing a five-year plan of action for a national and a
regional septage management plan, which shall contain measures for the
construction of wastewater treatment facilities and provision, installation,
operation and maintenance and, where practicable, the integration of sewerage,
septage management, storm water management and other sanitation facilities.
Compliance with the mandate to implement septage management services and systems
by any WSP pursuant to the Philippine Clean Water Act of 2004 shalll be reckoned within


five (5) years from the date of promulgation or publication of the septage management
plan formulated by the Department.

SEC. 6. Guiding Principles. - In the pursuit of its mandate, the Department
shall be guided by the following key principles:

(a) The concept of good water governance for water security and
sufficiency shall be adopted across all levels of governance by stakeholders such as
the national government, local government units (LGUs), non-government organizations,
private organizations, individuals, global societal actors, and in various sectors such as
water supply, irrigation, fisheries, hydropower, navigation, ecosystem services, climate
change, and recreation. It shall entail publicly transparent, socially accountable, and
multi-stakeholder participatory water policy planning, management, and decision-making
processes.

(b) Access to safe water supply and improved sanitation is a human right
that needs to be fulfilled and protected;

(c) Integrated Water Resource Management (IWRM) shall be adopted as
the basic framework which is the coordinated development and management of water,
land, and related resources within hydrological boundaries to optimize economic
and social welfare without compromising the sustainability of vital ecosystems.
‘The IWRM Framework shall include an enabling environment that utilizes proper policies,
legal instruments, and institutional frameworks for effective implementation, participatory
and collaborative water policy and management decisions, and management instruments
for efficient use of updated and accurate data, science-based decision support
systems, proper information, education, communication programs, assessment and
allocation tools, or regulatory functions. It shall observe the mutual accountability
mechanism among stakeholders at the national, regional, and global levels reinforcing
multi-stakeholder decision-making following a framework with specific, measurable,
attainable, relevant, and timely actions;

(d) Each river basin has its unique characteristics relating to the physical,
sociocultural, and other aspects, and water management shall be performed at river-
basin level, involving all the stakeholders at that particular river basin;

(e) Integrated and accurate data collection and analysis and the use of
scientific decision support systems shall be undertaken in waler resources
management including flood modeling and warning systems that are essential for an
effective, efficient, and sustainable water resources management system:

(f) The State shall prioritize the development of surface water to ensure
adequate and reliable supply of water: Provided, That the development of water
resources shall include strategies for the mitigation of water-related hazards and climate
change adaptation;

(g) Water resources shall be fairly and sustainably managed, and water
services shall be provided where they are intended and most needed;

(h) The proper operation and maintenance of waterworks
systems resulting in the uninterrupted and adequate supply and distribution of
potable water for domestic and other purposes, and the proper operation and

ope



maintenance of sewerage systems which are essential services to public health and
safety, are to be ensured at all times; and

(i)_ The State recognizes the role of the private sector and mobilization of
private resources in the development of waterworks systems through concession
agreements, joint venture agreements, bulk water supply agreements, management
and service agreements and other contracts for water supply provision, water
sanitation and treatment services, and the development, operation and maintenance
of water supply and septage management systems. The State shall encourage the
private sector to provide the needed investments for programs and projects to ensure
adequate water supply and promote water security.

SEC. 7. Objectives of the Department. ~ The Department shall:

(a) Promote and adopt water demand management as a national policy to
ensure that water is optimized, that water efficiency and conservation become a way of
life, that the recycling and reuse of water and treated wastewater are widely practiced,
that water is properly priced to encourage efficient use and conservation, and that
rainwater, flood waters, and run-offs are captured or harvested, stored and treated for
future use;

(b) Prioritize and seek the immediate attainment of universal access to
safe, adequate, affordable and sustainable water supply and improved sanitation
services for all Filipinos, either through public programs and projects or public-private
Partnership or other mechanisms, in a manner consistent with the protection,
preservation, and revival of the quality of the country's water resources, and to adopt all
needed measures to advance the right of the people to a balanced and healthful ecology
in accord with the rhythm and harmony of nature: Provided, That the Department
shall pursue universal access to clean water by 2030;

(c)_ Strengthen and coordinate integrated water resources management
planning and policy making to ensure sustainable and fair allocation and efficient use of
water resources among competing uses and users;

- (d) Ensure that integrated water resources management is strongly
coordinated with land use and coastal and multi-hazard planning and management;

(e) Develop sustainably, and manage water sources and water resources
toward water security, taking into consideration water, land, and related resources aimed
at increasing water dependability for different uses, optimizing economic benefits and
social welfare without compromising the sustainability of vital environmental systems;

(f) Strengthen and coordinate policy making and planning towards
ensuring the availability of water for food security and energy security, as well asitowards
the protection of communities and environments against flood and other water induced
hazards including sediment hazards;

(g) Ensure that the strategy for water resources development and
conservation is participatory, and that planners, policymakers, and other stakeholders,
including water users, community members, indigenous and marginalized peoples, are
involved at all levels;

(h) Develop a standardized pricing framework for water use, septage and
sewerage services that accounts for environmental externalities and pricing
considerations such as reasonable rate of return; rate adjustment mechanisms for


consumer price indices and currency fluctuations; and other factors relevant to the
operation of waterworks systems and infrastructure;

() Ensure that all sources of water, including surface water,
groundwater, rainwater and floodwater are identified, mapped, monitored, conserved
and managed for productive use and the resulting wastewater is managed properly,
reused, and responsibly disposed of following approved environmental standards; and

() Prioritize and provide technical and financial assistance to fourth, fifth
and sixth class municipalities in the Philippines in the development of water resources
and waterworks systems and provision of water and sanitation services.

SEC. 8. Powers and Functions of the Department. ~ The Department shall
have the following powers and functions:

|. Policymaking and Planning

(2) Ensure that Integrated Water Resources Management (IWRM) is
adopted as the strategic framework for water management policymaking and planning
in the country and coordinate the implementation, promotion, revision and
enhancement of IWRM plans;

(b) Formulate policies, strategies, and targets in coordination with other
relevant entities to meet the goals and objectives for water supply and sanitation, water
quality, irrigation, hydropower, flood control, storm water utilization, and urban drainage.
Such policies shall, among other guidelines, integrate the issues of water and sanitation,
food security, energy, environment and flood control, and climate change:

(c) Formulate and develop policies to promote universal access to safe,
adequate, affordable, and sustainable water supply, and improved sanitation services for
all Filipinos;

(4) Prepare the NWRMP in consultation with other agencies and
stakeholders, following the IWRM framework and integrating therein a national land use
plan, submit the NWRMP to the National Economic and Development Authority (NEDA)
Board for approval and eventual adoption, and regularly update, every five years or
as deemed necessary by the Department, in order to ensure its relevance to the times;

(e)_ Undertake river basin survey, inventory and appraisal of water and
related resources, and develop comprehensive basin-wide plans of storage, retardation,
and control to maximize conservation and multipurpose use of water in the basin;

(f) Conduct continuing hydrological and hydrometeorological surveys
and studies of the country's renewable water supply, and establish, operate, and
maintain observation station networks;

(g) Formulate long-term policies to balance the sustainability and optimal
multiple use of water resources, define the hydrologic boundaries of basins of the
existing water supply sources, and develop or update existing River Basin Master or
Comprehensive Plans which includes all aspects of water management and development
such as water supply and sanitation, irrigation, flood control and storm water or urban
drainage, drought risk management, water resource development systems and other
public water works projects, including phasing of implementation;

(h) Identify, based on the river basin master plans, priority packages for
water infrastructure development per river basin, including water supply, ‘sanitation,

10


irrigation, hydropower, flood control and storm water or urban drainage, drought risk
management, water resource development systems and other public works projects;

(i) Evaluate and appraise all regional and inter-regional infrastructure
water development plans and programs as to their feasibility and consistency with
approved strategies and medium and long-term plans;

() Formulate policy, strategies, master plans and programs on flood risk
management in the context of integrated flood management (IFM) which integrates
water, land, coastal zone and multi-hazard management. In integrating land use
planning and water management, the Department shail harmonize and synthesize plans
to enable the sharing of information between land-use planning and water management
authorities. In this regard, a holistic approach shall be adopted by making the IFM a part
of a wider risk or multi-hazard management system that includes earthquakes,
landslides, fires, tsunamis, droughts, and other calamities of the same gravity or nature:

(kK) Strengthen and coordinate policy making and planning for flood
management, integrated with storm water or urban drainage and appropriate retention
or retarding basins in order to harvest and reuse water, and to plan against, prevent,
and minimize the detrimental and catastrophic effects of flooding;

(I). Assist and provide the NEDA with the required data and input from the
water sector in the formulation of the country’s short-term and long-term strategic
development plans and actions, and recommend to the NEDA Board the adoption
of general policies and guidelines for water resources development;

(m) Review, approve, and provide oversight over ail water-related
development plans, programs, and projects of any agency within the context of the
NWRMP, and overall national plans and programs;

(n) Develop and implement, in coordination with other relevant agencies,
effective codes, standards, benchmarks, and reasonable guidelines on project
investigation, formulation and planning of water resources infrastructure,
to ensure the safety of all public and private water structures in the country, and
assure efficiency and proper quality in the construction of water, sanitation, irrigation,
hydropower, flood control and drainage infrastructure;

(0) Ensure that gender equality, social inclusion, environmental protection,
climate resiliency, disaster risk reduction, and indigenous knowledge systems and
practices are integrated into any water resource management planning, policy making,
and the design and construction of water infrastructure;

(p) Ensure that the planning of water infrastructure considers the highest
efficiency and most appropriate technology and quality, in accordance with national
development objectives;

(q)_ Review existing guidelines appropriate for private sector participation
in the water sectorand submit recommendations to the Public-Private Partnership
(PPP) Center of NEDA and other concemed agencies to promote and enable more
PPPs in the sector;

(rf) Gather, analyze, and organize needed statistical data and
information; for those water-related data generated by other concerned agencies,
establish, in coordination with these agencies, the guidelines, standards,
methodologies, and protocols for data collection that will be officially recognized by

i


the Department, and institute mechanisms for coordination with other agencies as regards
their submission and certification of submitted water-related data to the Department;

(s)__In case of gaps in data collection by other agencies, under item (r)
above, the Department may collect the said data in accordance with the established
guidelines, standards, methodologies and protocols, and in coordination with the
respective agencies: Provided, that both the Department another agency ensure that
duplication of roles in data collection is prevented;

(t)_ Ensure continued stakeholder engagement through the creation
of a MultiSectoral Stakeholder Council with representatives from all water sector,
including vulnerable and indigenous communities: Provided, That the MultiSectoral
Stakeholder Council shall be the primary avenue for all multi-sectoral consultations
mandated under this Act, and shall be consulted in the formulation of all national plans,
programs, and policies of the Department: Provided, further, That the sectoral
representatives shall be appointed by the President of the Philippines, hereinafter
referred to as the President;

(u) Build a central repository of water data and effect inter-sectoral, inter-
agency, and inter-departmental coordination on all aspects of data gathering and
management for water resources development planning and compel the submission of
statistics and data on water utilization with the aim of operationalizing the integrated
approach to water resources management; n

(v) Ensure the effective implementation of all the provisions of PD 1067;

(w) Promote Philippine participation in information sharing and education on
best practices in support of international efforts to achieve universal access to safe water
and improved sanitation; and the integration of water, energy, environment and food
security;

(x) Ensure that the easements provided for in Title Vil, Chapter 2,
Section 2 of RA 386, otherwise known as the Civil Code of the Philippines and other
relevant laws are enforced, especially in all the esteros and waterways, as well as abate
the dumping of untreated wastewater and sewage into water bodies, including all acts
and omissions in violation of PD 984, also known as National Pollution Control Decree
of 1976, as amended, and other related laws; and

(y)_ Issue and promulgate rules, regulations and guidelines as may be
necessary to implement and enforce its powers and functions under this Act.

ll. Resource Allocation and Regulation

(8) Manage and conserve the country's water resources to ensure the
optimal use thereof for domestic water supply, sanitation, irrigation, hydropower,
navigation, flood control, and recreation purposes, and enhance and maintain water
quality, conserve watersheds, control water pollution, and restore the environment,
without compromising the natural ecosystem functions and services;

(b) Regulate and control the utilization, abstraction, diversion and
development of water resources, taking in consideration their equitable distribution
among competing demands and determine the standards of beneficial and priority
uses of water in times of crisis and national emergencies;

12


(c) Formulate, promulgate, and enforce rules and regulations for the
development and optimum use of water resources and its administration and
management, including coherent water protocols, operating rules of all existing and
future water infrastructure; general criteria, methods and standards for basic data
collection and project identification, formulation and planning, and appropriate sanctions
to be imposed for noncompliance;

(d) Regularly review regulations prescribed by any government agency
pertaining to water use, exploitation, development, and conservation or protection
of waters, water resources, and watershed or basin areas with respect to this Act;

(e) Impose fees or charges, as may be deemed necessary for water
resources development, conservation and protection, such as:

(1) Polluter’s Fee, which shall be based on the net waste load depending
on the wastewater charge formula pursuant to Section 13 of Republic Act No, 9275:
Provided, That the implementation of which shall be transferred from the Department
of Environment and Natural Resources to the Department of Water Resources;

(2) Raw water price, which shall take into account, among others, the
scarcity of water; and

(3) Appropriate payment structures for ecosystem services, which shall not
exceed five centavos (P0.05) per cubic meter of water consumption:

(f) Deputize LGUs to collect the national fees or charges for resource
regulation within their respective jurisdictions;

(g) Collect, regularly update, monitor, and analyze water resources
data including climatology, hydrological and other water-related data and ensure that
such data is easily accessible by relevant and authorized users;

(h) Establish, operate, and maintain observation station networks and
a centralized water resources data center for the scientific survey and appraisal of
surface and groundwater potentials of the country, and determine the annual renewable
water available per water resources region;

(i) Maintain a database that will contain updated relevant information on
water data which will be accessible by relevant and authorized users;

(), Develop and continuously update a computerized decision support
system that incorporates data management systems relating to acquisition and
database, model base in terms of physical design, planning and decision models, and
user-friendly interface concerning graphical and visualization tools;

(k) Conduct and promote special studies and research on water
economics and other aspects of water resources development and management as
may be needed to support the policy and plan proposals of the Department,” such
as, but not limited to, impacts of climate change, weather modification, flood
monitoring and modeling, environmental quality, and desalination;

10} Raise public awareness through information, education and
communications programs,and build capacities for informed participation in water
resources management at the national and river-basin level; and

13


(m) Review the status of water permits issued and outstanding as of the
date of the effectivity of this Act and compliance by the water permit holders with the terms
of their respective water permits.

If, in the determination of the Department, acting on the basis of
information, records and reports submitted by any holders of such water permits, there
is non-use of the water resource covered by such water permits for a period of one (1)
year from the date of issuance thereof, the Department shall cause the termination or
cancellation of any such water permits to the National Water Resources Allocation Board:
Provided, That the review made by the Department shall be considered prima facie
evidence of non-use in respect of any affected water permit. For purposes of this
Section, “non-use’refers to the failure of the water permit holder to utilize the water
resource or construct substantial works, facilities, systems or other infrastructure had
been constructed in pursuit of or for the purpose stipulated in the water permit.

The Department shall submit a report to Congress on the completion of its
review under this section within one (1) year from the effectivity of this Act.

ML. Institutional Arrangement with Public Water Agencies and
Organizations

(a) Develop guidelines including rules of partnership, between and among
the Department field offices of national government agencies, LGUs and other
stakeholders in water resource management, and facilitate the establishment of multi-
stakeholder river basin organizations (RBOs) per river basin, and strengthen and support
existing RBOs and monitor their activities;

(b) Coordinate the planned and ongoing river basin initiatives of
government agencies end corporations, to which the Department shall review and
endorse approval and funding from the national budget thereof, as may be provided
under existing laws, rules and regulations;

(c) Harmonize all relevant national river basin policies and formulate new
policies and create enabling policy environment that shall allow effective and efficient
management and governance of the country's river basins. To this end, all concerned
national government agencies and corporations shail consult the Department in such
planning and implementation;

(d) Serve as the national policy coordination office for LGUs and
non-governmental organizations in the development and sustainability of all river and
catchment basins, for which the Department shall recommend the approval and funding
thereof of national government agency and corporations’ support to such local and
nongovernment river and catchment basin initiatives;

(e) Serve as the government's central river basin database management
agency, to which all government agencies and existing river basin organizations with
relevant mandates and developmental initiatives within the river basins are required to
cooperate and regularly submit their updated databases for integration and consolidation;

(f) Develop materials for capacity building and training of prospective
RBOs, as well as other concermed units of the Department and other water-related
agencies, LGUs, and WSPs particularly in the areas of integrated water resources
management and river basin master planning;

14


(g) Authorize its representatives or any deputized agent to enter any
property of public dominion with prior notice and consent: and any private land, building
or enclave, whether inhabited or not, for the purpose of conducting hydrologic surveys
and investigations, including assessing and evaluating the conditions of water facilities
installed, and determining compliance with water laws and standards;

(h) Provide technical assistance to water users including farmers,
communities, and LGUs and other WSP whether directly or in coordination with other
agencies on all aspects of integrated water resources management;

(i) Respond to consumer complaints, and ensure the adequate
promotion of consume interests; and

() Deputize agents, whether from the public or private sector, to assist in
the performance of any of the powers and functions of the Department.

1V. Coordination

(2) Coordinate and integrate water resources development activities of the
country within the context of national plans and policies for social and economic
development;

(b) Coordinate with other government agencies, universities, academe
and_ private professional groups in all aspects of data gathering, the conduct of special
studies and research on all related aspects of water resources management and
development such as climate change, environmental quality, desalination, and the
development of operating strategies, procedures, and protocols and accompanying
computerized decision tools for major water facilities;

(c) Coordinate with the concerned and relevant agencies engaged in flood
control, flood risk management, and drought risk management; and

(d) Coordinate proactively with LGUs to ensure. the
integration of water resources development plans into their comprehensive
land use plans, Comprehensive Development Plans or

Provincial Physical Framework and Development Plan.
V. Other Functions

(a) Create when there are no existing water resources or operators, water
resource subsidiaries, instrumentalities, and entities to engage in water source
development, water supply, water transmission, water distribution, waste water
treatment and management, missionary water access, storm water management, and
sanitation in accordance with existing laws, without prejudice to private entities. capable
of and willing to engage in the aforementioned activities through concession
agreements, joint venture agreements, bulk water agreements, or service agreements or
contracts. For this purpose, the Department shall ensure compliance with existing
frameworks, rules, regulations and guidelines for private sector participation in. water
transmission, water distribution, waste water treatment and management, storm water
management, and sanitation.

(b) Enter into contracts, joint venture agreements or understanding,
public-private partnerships, and memorandum of agreements or understanding, either
domestic or foreign, relating to investment and financing water-related projects, under
such terms and conditions as the Department may deem proper and reasonable subject

15


to existing laws: Provided, That government entities with mandates to enter into
contracts with private entities under existing laws shall continue to have such authority:
Provided, further, That nothing in this Act shall be interpreted as adding approval,
endorsement, or consent requirements for water-related government projects;

(c) Appoint, hire, and maintain adequate staff and personnel, advisers
or consultants with suitable qualifications and experience, as necessary, subject to
existing rules and regulations; and

(d) Exercise such other powers and functions necessary or incidental
to the effective administration and management of the country's water resources.

SEC. 9. Composition. ~ The Department shall be composed of the Office of
the Secretary, and the various bureaus and services, and regional offices. The Office
of the Secretary shall house the Office of the Department Secretary, the Offices of the
Undersecretaries, the Offices of the Assistant Secretaries, and their immediate support
staff.

SEC. 10. Secretary of the Department of Water Resources. - The authority
and responsibility for the exercise of the mandate of the Department and for the
discharge of its powers and functions shall be vested in the Secretary of the
Department, hereinafter referred to as the Secretary of Water Resources, who shall be
appointed by the President. The Secretary of Water Resources shall:

(a) Submit to the NEDA Board the Department's recommendations on
policies on water resources requiring presidential decision, and advise the President on
the promulgation of executive or administrative orders, regulations, proclamations and
other issuances relative to matters under the jurisdiction of the Department;

(b) Establish the policies and standards for the operation of the
Department pursuant to the President's guidelines;

(c) Advise the President on the status of water management and
supply in the country, recommend to the President the declaration of a state calamity
in areas affected by water supply, and submit proposals to restore normalcy in the
affected areas;

(4) Promulgate rules and regulations necessary to carry out the
objectives, policies, and functions of the Department;

(e) Exercise supervision and contro! over all bureaus and offices under the
Department;

(f) Supervise all attached agencies and corporations in accordance with law;
(9) Represent the Department in contracts, awards, and other similar agreements;

(h) Delegate authority for the performance of any power or function, as definec
officials and employees under his direction as deemed appropriate

(i) Actas the Chairperson of the governing board of the attached agencies
of the Department;

() Designate and appoint officers and employees of the
Department, excluding the Undersecretaries, Assistant Secretaries, and Regional and

16


Assistant Regional Directors, in accordance with the civil service laws, rules and
regulations;

(k) Discipline the officials and employees of the Department, including
officials and employees of all the bureaus and offices under it, in accordance with civil
service laws, rules, and regulations; and

(l) Perform such other duties and responsibilities as may be provided by
Jaw.

The Secretary of Water Resources shall also serve as a voting member
of the NEDA Board,the Governing Boards of the Climate Change Commission, the
National Disaster Risk Reduction and Management Council, and the National Land Use
Committee.

SEC. 11. Undersecretaries and Assistant Secretaries. - The Secretary of
Water Resources shall be assisted by not more than three (3) Undersecretaries and three
(3) Assistant Secretaries, all of which shall be appointed by the President upon the
recommendation of the Secretary of Water Resources:

Provided, That at least one (1) Undersecretary and one (1) of the Assistant
Secretaries shall be career officers.

The Secretary of Water Resources is hereby authorized to delineate and
assign the respective functional areas of responsibility of the Undersecretaries and
Assistant Secretaries in accordance with the mandate and objectives of the
Department. Within their respective functional areas of responsibility, the
Undersecretaries and Assistant Secretaries shall have the powers and functions as
provided for in Chapter 2, Book IV of the Administrative Code of 1987.

SEC. 12. Qualifications and Appointment. — No person shall be
appointed Secretary,Undersecretary, and Assistant Secretary of the Department unless
the person is a citizen and resident of the Philippines, of good moral character, of proven
integrity, competence and expertise in water resource management.

SEC. 13. Department Bureaus and Services, and Regional Offices. - The
Department shall establish, operate, and maintain the Bureaus and Services under it
such as, but not limited to:

(a) Policy and Planning Bureau;

(b) Decision Support System Bureau;

(c) Bureau of Technical Services;

(d) Legal and Legislative Research Service;

(e) Internal Audit Service;

(f) Public Affairs Service;

(g) Administrative and Human Resources Service;

(h) Flood Control and Drainage Coordination Service;

v7


() Comptrollership and Financial Management Service; and
()) Local Water Service Providers Bureau.

A Water Resources Regional Office shall be organized per water resources
region and shall be responsible for implementing the mandates, powers, and duties of
the Department at the field level, except for policymaking which will be vested solely in
the Department.

The Bureaus, Services and Regional Offices shall each be headed by a
Director, who shall be responsible for the efficient and effective discharge of the
functions of the Bureau, Service, or Office concemed. The Bureau Director and
Regional Director shall be assisted by one (1) Assistant Director.

The Department shall retain existing Project Management Offices as may
be required, which shall be under the supervision and control of the appropriate official
determined by the Secretary of Water Resources.

SEC. 14. Attached Agencies. ~ The following agencies shall be attached to
the Department for purposes of policy and program coordination, monitoring, and
evaluation:

(a) The Metropolitan Waterworks and Sewerage System (MWSS), whose
mandate, powers, and functions are defined under RA 6234, as amended entitled, “An
Act Creating the Metropolitan Waterworks and Sewerage System and Dissolving the
National Waterworks and Sewerage Authority, and For Other Purposes,” shall be
transferred from the DENR and attached to the Department:

Provided, That the MWSS shall continue to facilitate the exercise by the
concessionaires of their responsibility; carry out accounting and notification functions;
monitor, report, and administer loans; perform related functions in connection with
existing projects; manage, operate, and dispose its retained assets: Provided, further,
That its regulatory arm, the MWSS ~ Regulatory Office, shall be fully absorbed by the
Water Regulatory Commission created under this Act;

(b) The National Irrigation Administration (NIA), whose mandate, powers,
and functions are defined under RA 3601 entitled “An Act Granting the National Irrigation
Administration,” as amended by PD 552 and PD 1702; and

(c)_ The Laguna Lake Development Authority (LLDA), whose mandate,
powers and functions are defined under RA 4850, as amended entitled “An Act Creating
the Laguna Lake Development Authority, Prescribing Its Powers, Functions and Duties,
Providing Funds Therefor, and For Other Purposes” shall be transferred from the
DENR and attached to the Department. The LLDA shall continue to serve as the lake
management and development authority similar to a multistakeholder river. basin
organization and shall ensure the implementation of the Laguna Lake Master Plan which
shall be updated by the Department to ensure alignment with the NWRMP

The Secretary of Water Resources shall be the Chairperson of the
Governing Boards of the aforementioned government-owned and controlled corporations
to be attached under the Department.

In case existing laws, rules and regulations provide for a specific process in
appointing the agency's Chairperson, the Secretary of Water Resources shall serve as
Co-Chairperson. Any other agency performing water resources management,

18


conservation and protection functions may be transferred to the Department as the
President deems necessary

SEC. 15. Offices, Functions and Personnel to be Completely Subsumed
Under the Department. The following offices with their applicable powers, functions,
personnel, funds and appropriations, records, equipment and property shall be
subsumed under the Department:

(a) The National Water Resources Board (NWRB) with its divisions and
sections, whose mandate, powers and functions are provided in PD 424 creating the
National Water Resources Council, now NWRB, as amended: Provided, That its water
utility regulation units and functions vested under Commonwealth Act No. 146, also
known as the Public Service Act, as amended, shall be absorbed by the Water
Regulatory Commission created under this Act: Provided, further, That its resource
allocation or regulation units vested under PD 1067 shall be absorbed by the National
Water Resources Allocation Board and the Resource Allocation Office, also created
under Section 18 of this Act;

(b) The Local Water Utilities Administration (LWUA) with its services,
departments and divisions, whose mandate, powers and functions are provided for in
Title Ill of Presidential Decree No. 198, as amended, otherwise known as the “Local
Water Utilities Administration Law’: Provided, That its economic regulatory functions over
local water districts shall be fully absorbed by the Water Regulatory Commission created
under this Act. In the implementation of its functions, LWUA will be transformed into the
Local Water Service Providers Bureau (LWSPB) which shall:

(1) fumish technical assistance and personnel training including
training programs for accounting and fiscal practices of local water service providers;

(2) monitor and evaluate compliance with local water standards
of water service providers; and :

(3) effect system integration, joint investment and operation, district
annexation and de-annexation whenever economically warranted, in accordance with
Section 50 of PD No. 198, as amended by Section 22, PD No. 768. The authority of
LWUA to review, approve and regulate the tariff rates of local water utilities to whom it
has extended loans or other financing under Section 64of PD No, 198, as amended, is
hereby transferred to the Water Regulatory Commission as provided inthis Act;

(c) The River Basin Control Office (RBCO) of the DENR whose
mandate, powers and functions are provided in Executive Order (EO) No.'510, Series
of 2006 and EO 816, Series of 2009,as amended: Provided, That its function pertaining
to watershed reforestation activities shall be transferred to the DENR-Forest
Management Bureau, but the targeting of priority watershed areas shall be coordinated
with the Department;

(4) The Manila Bay Coordinating Office of the DENR which was
strengthened by virtue of DENR Administrative Order 2011-01 to coordinate the efforts
of the fourteen (14) national agencies covered by the Mandamus Order of the Supreme
Court to rehabilitate Manila Bay; ,

(e) The Water Supply and Sanitation Unit of the Department of the
Interior and Local Government (DILG); and

19


(f) The Water Resources Management Office of the DENR whose
mandate, powers and ‘unctions are provided in EO 22, series of 2023.

SEC. 16. Functions to be Transferred to the Department. — The following
functions of there respective agencies, bureaus, and units shall be transferred to the
Department:

(a) The planning, programming, administration, monitoring, management
of the National Sewerage and Septage Management Program (NSSMP) of the
Department of Public Works and Highways (DPWH); and

(b) The following functions of the dissolved Pasig River Rehabilitation
Commission and transferred to the Manila Bay Task Force per EO 93 Series of 2019:

(1) Updating and leading in the overall implementation of the Pasig
River Rehabilitation Master Plan; and

(2) Ensuring that the easements provided for in the Civil Code and other
relevant laws are enforced, especially in all the esteros and waterways as well as
abating the dumping of untreated wastewater and sewage into water systems, including
all acts and omissions in violation of PD 984, as amended, and other related laws.

CHAPTER Ili
INTERDEPARTMENTAL RELATIONS
AND INSTITUTIONAL ARRANGEMENTS OF THE DEPARTMENT
SEC. 17. Interface and Institutional Arrangements with Other Agencies, —

(a) The Department of Health (DOH) shall continue to have primary
authority and responsibility for setting and enforcing drinking water quality standards.
The Department shall coordinate with the DOH in this aspect, and shall ensure
consistency of standards and targets, as well as the compliance of permittees with
mandated standards;

(b) The DENR shall continue to have primary authority and responsibility
for protecting the environment and managing the country’s watersheds. Further, the
Pollution Adjudication Board shall remain to have jurisdiction with respect to adjudication
of pollution cases based on exceedance of the DENR Effluent Standards and other acts
defined as prohibited under Section 27 of RA 9275 and filed by this Department.
Furthermore, the Department shall coordinate with the DENR regarding the
establishment of protocols for management of all water-related data being collected by
the DENR

(c) The Department of Energy (DOE) and the National Power Corporation
shall ensure that hydropower plant development plans are consistent with the
National Water Development and Management Plan;

(d) The Department shall coordinate with the Department of Agriculture
(DA) to ensure agricultural development that reduces long-term pollution for surface
water and groundwater, and agricultural and industrial economic development that

20


employs water efficiency, water recycling or reuse, and the appropriate treatment of
wastewater. Furthermore, the Department shall coordinate with the DA and its Bureau
of Soils and Water Management (BSWM) regarding the establishment of protocols for
management of all water-related data being collected by DA, as well as the outputs of
research and studies by BSWM which may serve as input to policy formulation by the
Department;

(e) The Department shall coordinate with the National Disaster Risk
Reduction and Management Council to ensure that its plans and designs for flood control,
flood risk management and drought risk management are aligned with the objectives and
plans of the Deparment;

The Department shall coordinate with Climate Change
Commission, Philippine Atmospheric, Geophysical and Astronomical Services
Administration, and National Mapping and Resource Information Authority for scientific
studies, integrated surveys, mapping, charting, and decision support systems;

(g)_ The Department shall coordinate with the Department of Tourism on
recreational or visual use of water resources;

(h) The Department shall coordinate with the Philippine Reclamation
Authority, Tourism Infrastructure and Enterprise Zone Authority and economic zone
authorities on water resources development and water requirements © within
reclamation areas, tourism development areas, and economic zones, respectively

(i) The Department shall coordinate with the Bangsamoro Autonomous
Region in Muslim Mindanao (BARMM), specifically its Economic and Development
Council, Disaster Risk Reduction and Management Council, and Ministry of Environment,
Natural Resources and Energy, regarding the preparation of master plans of river basins
that overlap with the inland waters within the BARMM's jurisdiction, and ensure the
alignment of these plans with the NWRMP and the Bangsamoro Development Plan
and other related regional plans of BARMM;

() The Department shall coordinate with the DPWH as regards the
construction of water projects including flood control and other related projects within the
purview of the DPWH: Provided,

That the flood management plans are aligned with the NWRMP, and that flood
waters be considered and harnessed as potential water source: Provider, further, That
the Department shall coordinate with the DPWH regarding the establishment of protocols
for management of all water-related data being collected by the DPWH and its Bureaus;

(k) The Department shall coordinate with the LGUs that own the Specific
areas or land where raw water will be sourced, as regards the implementation of Section
38 of this Act, specifically on the sharing of the total income generated from raw water
pricing;

() The Department shall coordinate with the Department of Human
Settlements and Urban Development in planning, monitoring and enforcing integrated
land use and water resources management in the Comprehensive Land Use
Development Plans and Zoning Ordinances of the LGUs to ensure, among others, the
protection of water sources and that water availability Is factored in proposed land use
development plans and projects;

2


(m) The Department shall coordinate with relevant government agencies,
including LGUs, with respect to development projects and shall ensure cross-cutting
collaboration between and among all water subsectors and facilitate inter-agency
Subsector coordination, strategic development, planning, monitoring and provision of
technical, institutional and financial capacity’ building support to their different
stakeholders at the water subsector level; and

(n) All other departments and agencies of the government
implementing water-related functions and projects shall ensure that the programs and
projects are consistent with the national water management plan of the Department.

CHAPTER IV
NATIONAL WATER RESOURCES ALLOCATION BOARD
AND THE RESOURCE ALLOCATION OFFICE

SEC. 18. Reconstitution of the National Water Resources Board (NWRB)
as the National Water Resources Allocation Board. - The NWRB is hereby
reconstituted and shall henceforth be known as the National Water Resources
Allocation Board, hereafter called the “Board”. The water resources allocation and
regulation functions of the NWRB are hereby transferred to the Board, which shall
supervise the effective appropriation and regulation of the water resources in the
country in accordance with PD 1067.

The Board shall be composed of the Secretary of Water Resources as.
the Chair, with the Secretary of Environment and Natural Resources as the Vice-
Chairperson, and the heads of agencies of the NEDA, Department of Justice,
Department of Science and Technology, and the University of the Philippines — National
Hydraulic Research Center as members.

SEC. 19. Functions of the Board. - The Board shall perform the following
functions:

(a) Promulgate, among others, rules and regulations for the
exploitation and optimum utilization of water resources, in accordance with PD 1067
and other existing laws, including the imposition on water appropriators of such fees
or charges by the Department of Water Resources:

Provided, That the imposition and collection of such fees and charges shall be
implemented by the Department of Water Resources;

(b) Approve the guidelines and processes pertaining to water regulation,
as recommended by the Secretariat;

(c) Review and decide on requests for permits to extract or utilize the
country’s water resources and grant the corresponding water rights, upon
recommendation of the Resource Allocation.

Office: Provided, That the water rights are exercised within five (5) years of granting of
such rights: i,

Provided, further, That applicants for water permits shall submit proof of land
ownership of, or right to use the property where the water source is located: Provided,

22


finally, That, if the applicant is currently using the water source being applied for
domestic or municipal purposes upon effectivity of this Act, such applicant may submit
such proof of prior use of possession of said property in lieu of ownership or right to use;

(d) Exercise appellate jurisdiction over decisions in cases involving the
following:

(1) Violations and disputes relating to the appropriation, utilization,
exploitation, development, control, conservation and protection of waters;

(2) Violations and disputes on raw water fees; and

(3) Violations and disputes involving water permits, administrative
allocation of water resources and transfer of water rights;

(f) Issue subpoena duces tecum and subpoena ad testificandum;

Cite any person or party in contempt for refusal to appear, testify or
comply with the lawful orders of the Board in relation to any matter subject to its
investigation

(h) Hear, receive evidence, and decide on cases falling within its
jurisdiction;

(i) Impose the appropriate sanctions over violations committed by
appropriators in accordance with existing laws, rules and regulations as wall as future
ules and regulations which the Board shall promulgate y

() Review, update, and revise all fees, charges, and penalties
imposed on all water appropriators as stated under Chapter Vil and Vill of PD
1067, upon recommendation by the Secretariat, and based on scientific and evidence-
based studies;

(k) Delegate specific tasks vested unto the Board that may be undertaken
by the Executive Director, as may be necessary; —

(1) Promulgate its own rules and procedures; and

(m) Exercise such other powers as may be necessary to carry éittits duties
and responsibilities under this law. :

No injunction may be issued by any court to restrain any proceeding before
the Board except on the basis of question of law by the Supreme Court on certiorari.

Every order or decision rendered by the Board shall be in writing and shall
state clearly and distinctly the facts and the law on which it is based. The Board shall
decide each case or application within thirty (30) days following its formal, submission
for resolution. It shall publish and make available for public inspection all decisions
and final orders including those in the adjudication of contested cases or applications

SEC. 20. Resource Allocation Office. ~ There is hereby created a Resource
Allocation Office which shall be attached to the Department. It shall serve as Secretariat
to the Board and shall exercise the following functions in order to provide technical
support to the Board towards the effective regulation of the country's water resources:

(a) Advise the Board on ail matters relating to resource allocation and
regulation;

23


(b) Formulate rules and regulation for the exploitation and optimum
utilization of surface water, groundwater, and seawater extraction and use, for the
approval of the Board, and for implementation by the Resource Allocation Office,
including the processes for the application of water permits, in accordance with PD 1067
and other existing laws;

(c)_ Process applications of rights to utilize water resources for the
appropriate, optimal and sustainable use of surface and ground water, for the approval
of the Board or its Executive Director, as may be delegated by the Board;

(4) Upon approval by the Board, issue water permits granted to water
appropriators;

(e) Monitor performance of water rights grantees including, among others,
ensuring that water utilization is in accordance with the terms of the permits granted unto
them;

(f) Investigate, motu proprio, violations of the water rights and the Water
Code

(g) In the case of violations and conflicts between and among users, file
the necessary cases for the decision of the Board;

(h) Enforce the decisions promulgated by the Board, and as may be
delegated by the Board;

(i) Coordinate with other relevant units of the Department regarding the
generation, updating, managing, and sharing of water data relevant to each other's
performance of functions;

() Respond to consumer complaints, and ensure the adequate
promotion of consumer interests; and

(k) Perform such other related functions and activities which are
necessary for the effective regulation of water-related services.

The Office shall be headed by an Executive Director which shall have
the rank of an Undersecretary, and shall be assisted by one (1) Deputy Executive
Director which shall have the rank of an Assistant Secretary.

CHAPTER V

WATER REGULATORY COMMISSION

24


SEC. 21. Water Regulatory Commission. - There is hereby created and
established as an independent, quasi-judicial regulatory body to be known as the
Water Regulatory Commission,hereinafter referred to as the Commission, which shall
be organized within one hundred eighty (180) days after the effectivity of this Act. The
Commission shall have a Board of Commissioners, and shall be vested with powers and
functions, as conferred and set forth hereunder.

SEC. 22. Powers and Functions of the Commission. ~ The overall authority
and powers of the Commission shall cover and apply to all service providers, whether
private or public, providing or intending to provide water supply, including suppliers to
subdivisions or other service providers, sewerage, or septage treatment and disposal
services for domestic, residential, institutional, industrial or commercial use.

The Commission shall exercise the following powers and functions

(a) Issue and promulgate rules, regulations and guidelines as may be
necessary to implement and enforce its powers and functions under this Act

(b) Promulgate and enforce just and reasonable technical standards,
classifications and measurements of service: Provided, That local water districts, LGU-
run and private utilities, especially level {I and III water service providers found performing
significantly below prescribed standards shall be required to submit a Public Service
Improvement Plan with committed performance improvements with a one-year
implementation timeframe: Provided, further, That unjustifiable failure to
implementprovisions of, or meet commitments in, the Public Service Improvement
Plan shall be cause for dissolution, consolidation, privatization, or management takeover
of the local water district: Provided, finally, That the Commission shall have the
power to cause such dissolution, consolidation, privatization, or management
takeover and shall mandate the Department to implement the same;

(c) Coordinate with the Department in the implementation of
intervention, consolidation, dissolution, privatization, or takeover, and shall ensure the
continuity of delivery of public service;

(d) Coordinate with the Philippine Competition Commission and provide
technica! support in the Commission's exercise of authority and jurisdiction to establish
rules and enforce regulations to monitor, investigate, provide remedies for, and
provide inputs in the Philippine Competition Commission's hearings and
deliberations on cases involving any market power abuse or anti-competitive
or discriminatory act or behavior by or against any participant in the water supply and
sanitation sector, excluding only those agreements involving projects that are not
considered natural monopolies, including in respect of the determination of whether
any merger, acquisition, joint venture or other transaction, agreement or arrangement by,
between or among water service providers or any participant in the water supply and
sanitation sector is anti-competitive or will substantially prevent,restrict or lessen
competition in the relevant market. Without prejudice to the actions that the Philippine
Competition Commission, pursuant to RA 10667, may undertake on its own, the Water
Regulatory Commission may be directed by the Philippine Competition Commission,
upon finding that a market participant has engaged in, or fell victim to such act or behavior,
to stop or redress the same within the functions and powers granted to the Water
Regulatory Commission under this Act.

(e) Issue licenses authorizing the operation of water supply and sanitation
services, including community water services, in any specified area or areas with water
supply and sanitation services in any specified area in the Philippines: Provided, That

25


any license to use water resources or operate water supply and sanitation services shall
be considered expired if not exercised by the licensee within five (5) years upon the date
of issuance;

(f)_ Impose and collect annual levies, and reasonable fees and surcharges
as may be necessary for achieving the purposes, powers and functions of the
Commission: Provided, That the rate of annual levies and fees shall be determined strictly
ona partial cost recovery basis for the reasonable and actual cost of regulation: Provided,
further, that nothing in this section shall be construed as authorizing the Commission to
impose and collect ad valorem annual levies

(g) With due regard to the standardized pricing framework developed
by the Department pursuant to Section 7(h) of this Act, review, determine, fix and
approve, consistent with the rules, guidelines, procedures and methodologies which the
Commission shall provide, proposed water and sewerage and septage management
tariffs, rates and charges that licensees may impose upon their consumers. The
sewerage and septage management tariffs, rates and charges may be in the form of an
environmental fee based on the actual water consumption of the consumers for regular
conduct of desiudging and fixed fees for emergency desludging.

The Commission shall endeavor to adopt a local pricing framework, which
shall provide for the minimum water, sewerage and septage management rates and allow
for uniform adjustments to the consumer price index, or foreign exchange, ds applicable,
across one or more areas: Provided, That service providers may apply for’ adjustments
to the tariff rates taking into consideration their actual and proposed expenditures in the
construction, operation, and maintenance of their respective water, sewerage, and
septage management systems, ‘

All applications for the imposition or adjustment of water ahd sewerage
and septage tariffs, rates and charges shall be acted upon by the Commission within a
period of four (4) months. If the Commission fails to issue a decision or resdlution within
said prescribed period, the application shall be deemed approved

(h) Appraise and value property and equipment used by’ licensees in
providing water supply and sanitation services and, for this purpose, develop a
database for the value of the property and equipment used by the licensees in providing
water supply and sanitation services by requiring each licensee to submit, on-a periodic.
basis, an appraisal report covering such assets duly signed and sealed by ‘an: appraisal
firm duly accredited by the Securities and Exchange Commission: Provided, That
Unless otherwise expressly warranted, the value of such property and equipment as
determined by such independent appraisal firms shall be presumed a true and reasonable
valuation thereof;

{i) Enforce technical, financial, and other performance standards set by
the Commission for licensees or utilities;

() Respond to consumer complaints and ensure the adequate promotion
of consumer interest and investigate motu propio violations of Sections 27, 28 and 29 of
this Act;

(k) Investigate accidents directly or indirectly arising from or connected with
the maintenance or operation of the service, and make such order or recommendation as
the public interest may warrant;

26


(I) Require the review or approval of contracts or agreements that may
impact on the tariff and rates of service provision entered into by service providers upon
petition or motu propio wherein its determination public interest so dictates;

(m) Require the submission of reports, plans, and other documents that
define the performance targets of the licensees or utilities, and regular accomplishment
reports;

(n) Conduct benchmarking and monitor the performance of licensees or
utilities under their jurisdiction, and publish reports detailing the results thereof;

(0) Amend, modify, suspend, or revoke any license issued by them,
after due notice and hearing, on any of the following grounds: (1) when the facts and
circumstances on the strength of which the license was issued have been
materially misrepresented or have materially changed;

(2) where the licensee has failed to meet or comply with terms, conditions, and
performance targets, including but not limited to service expansion, that may have
targets, including but not limited to service expansions, that may have been set in
the license; (3) where the licensee is found to be manifestly inefficient in the operation
of or provision of water supply and sanitation services in its area; or (4) when the
licensee thereof has violated or willfully refused to comply with any order, rule or
regulation of the Commission or any provision of this Act;

(P) Appoint an interim management committee to ensure continuity of
service in case a licensee, including those run by local government units, or local
water districts, fails to meet the conditions of the license

(q) Adopt and require that books, records, and accounts be kept and
maintained in accordance with the prescribed uniform accounting system

(r)_ Fix and determine, for rate-setting purposes, the proper and adequate
rates of depreciation of properties and equipment used in water supply and sanitation
services;

(s)_ Impose and collect annual levies and reasonable fees and surcharges
as may be necessary for achieving the purposes, powers and functions of the
Commission;

(t)_ Require the submission of reports on finances and operations, verified
under oaths by the owner or president and secretary of the board of the licensee;

(u) Determine and require the monitoring and submission of such data,
statistics and other information from any or all licensees as may be necessary for the
effective and efficient exercise of its duties, functions, powers and responsibilities.

(v)_ Investigate, motu propio or upon a written complaint, any. matter
concerning the operation of the service and violations of Sections 28 and 29 and other
provisions of this Act, including alleged inefficient or inappropriate performance of
obligations by water service providers, and, after due process, render decisions thereon
within one (1) year; :

(w) Impose penalties and fines against any licensee or against its owners,

directors, officers, agents or representatives for any violation of this Act or of the
license, order, rule regulation or requirement issued by the Commission;

7


(x) Require any licensee to pay the actual expenses incurred by the
Commission in any investigation if it shall be found that a licensee violated any
Provision of this Act or of the license,order, rule, regulation or requirement issued by the
Commission;

(y) Advise, apprise and coordinate with other relevant agencies of the
national or local government on any matter relating to water supply and sanitation
services;

(2) _Deputize agents, whether from the public or private sector, to assist
in the performance of any of the powers and functions of the Commission;

(aa) Appoint an interim or temporary management committee upon
appeal and after due hearing, to ensure continuity of service in case a licensee,
including those run by local government units, or local water districts, fails to meet
conditions of the license;

(bb) Appoint, hire and maintain adequate staff and personnel, advisers,
or consultants, with suitable qualifications and experience, as necessary;

(cc) _ Exercise original and exclusive jurisdiction over all cases involving
disputes between and among participants or stakeholders in the water supply and
sanitation services;

(dd) _ Issue rules and regulations on terms and conditions prescribing
minimum and mandatory terms for concession agreements, joint venture agreements,
management agreements, service contracts or other contractual arrangements that may
be entered into by government entities including local water utilities and local
government units and private sector entities or other water service providersmfor the
provision of water or sanitation services, such as the (i) the term, scope and total cost
Of the activity, which may be subdivided into phases; (ji) committed contributions
and corresponding performance security requirements in accordance with any agreed
phased implementation of the activity; and (ii) cost recovery schemes and percentage
of the parties’ share in the profits and losses, among others;

(ce) Upon the recommendation of the Department, and after due notice and
hearing, terminate or cancel water permits issued and outstanding as of the date of
the effectivity of this Act to any government or private sector entities to ensure optimal
and efficient use of water resources. The Commission shall principally rely on the prima
facie findings of the Department, acting on the basis of information, records and reports
submitted by any holders of such water permits as of the effectivity date of this Act, that
the water resource covered by such water permits have not been substantially utilized
or no substantial water works facilities, systems or other infrastructure has been
constructed in pursuit thereof, in each case, for a period one (1) year from the date of
issuance thereof, or if thewater is used, totally or partially, for any purpose other than
those approved in the water permit. The Commission shall decide .on the
recommendation for the Department within six (6) months from receipt of the
recommendation. The Commission by itself may exercise this function

(ff) Issue rules, guidelines, procedures, and methodologies for the
determination of the appropriate water and sewerage and septage management tariffs,
rates and charges and review and confirm such tariff

(gg) issue rules, guidelines, procedures and methodologies for the
computation of any adjustment of any approved water and sewerage and septage

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management tariffs, rates and charges based on the prevailing consumer price index or
foreign exchange adjustments set by the appropriate national government agency, or
any other factors customary in the water or sanitation industries which require
adjustment or rebasing of the tariffs, which adjustment shall be implemented
automatically subject to a thirty (30) day prior written notice to the Commission;

(hh) Determine the existence of any material adverse government action
which has a material and adverse effect on any of the rights and privileges of, or on the
enjoyment or exercise thereof by the licensees, or which has a material and adverse
effect on the licensees’ ability to comply with their financial or other contractual
obligations to provide water or sanitation services, and determine the appropriate
remedial measures therefor, which may include compensation or extension of permits
or licenses; and

(ii) Perform such other incidental powers and functions as may be
necessary to attain the objectives of this Act

SEC. 23. Composition of the Commission. ~

(a) The Commission shall be a collegial body composed of five (5)
full-time members consisting of a Chairperson and four (4) members, who shall all be
appointed by the President. All members of the Commission must be citizens and
residents of the Philippines, at least thirty-five (35) years of age, and of good moral
character, of recognized integrity and competence in the field of law, business,
commerce, finance, accounting or public administration, water or utility
economics,management, physical or engineering services, hydrology and other related
services, with at least three

(3) years of actual and distinguished experience in their respective fields of expertise:
Provided, That out of the four (4) members of the Commission, at least one (1) shall be
a member of the Philippine Bar with at least ten (10) years of experience in the active
practice of law, at least one (1) shall be a certified public accountant with at least ten
(10) years of experience in active practice, and at least one (1) shall be a licensed
engineer with experience in the water sector.

(b) The term of office of each member of the Commission shall be seven
(7) years: Provided, .

That among the members first appointed, the Chairperson shall serve for a period of
seven (7) years, two (2) members shall serve for five (5) years and the other two (2)
members shall serve for three (3) years: Provided, further, That any member whose term
has expired as specified herein shall serve as such until a successor shall have been
appointed and qualified: Provided, furthermore, That any appointment to fill a Vacancy
in the Commission arising from death, removal, retirement or resignation shall be
made only for the unexpired term: Provided, finally, That in no case shall any member
serve for more than seven (7) years in the Commission.

(c) The Commission shall meet as often as may be necessary on such
day or days as the Chairperson may fix. The presence of at least three (3) members of
the Commission shall constitute a quorum, which shall be necessary for the transaction
of any business. The affirmative vote of majority of the members of the Commission
where a quorum is present shall be necessary for the adoption of any order, resolution,
decisions, or other act of the Commission in the exercise of its quasi-judicial functions:
Provided, That in promulgating rules, regulations, guidelines and in exercising its
quasi-legislative functions, an affirmative vote of three (3) members shall be required.

29


(6) The Chairperson of the Commission shall exercise general
executive control_and supervision over the Commission and its members, staff and
personnel, agents and representatives.

Within three (3) months from the creation of the Commission and the appointment of
all Members of the Commission, the Chairperson shall determine and establish the
organizational structure and plantilla positions necessary to carry out the powers and
functions of the Commission subject to the review and approval of the Department of
Budget and Management (DBM)

The plantilla positions of the Commission shall be filled by regular
appointments in accordance with Civil Service laws, rules, and regulations. Members of
the Commission shall enjoy security of tenure and shall not be suspended or removed
from office except for just cause as specified by law.

(e) The Chairperson and members of the Commission or any of their
relatives within the fourth civil degree of consanguinity or affinity, legitimate or common
law, shall be prohibited from holding any interest whatsoever, either as investor,
stockholder, officer or director, in any company or entity engaged in provision of water
supply and distribution, septage management and sewerage services and must,
therefore, divest through sale or legal disposition of any and all interests in the water
sector upon assumption to office.

SEC. 24. Secretariat of the Commission. - The Commission shall establish
a Secretariat which shall provide the Commission with technical and support services
including the following:

(a) Provide the necessary technical inputs and secretariat support to
the Commission to facilitate the conduct of its functions

(b) Maintain a database on the water supply and sanitation subsector; and

(c) Coordinate with other relevant agencies of the national or local
government on any matter relating to water supply and sanitation.

SEC. 25. Executive Director. - The Commission shall appoint an’ Executive
Director who shall head the Commission Secretariat, keep and maintain the official
records of the Commission, render a report on the proceedings of the Commission, and
administer oaths in all matters falling within the jurisdiction of the Commission. -

The Executive Director shall be responsible for the effective
implementation of the policies, plans, programs, rules, regulations and directives of the
Commission; coordinate and supervise the activities of the different operating units
under the Commission; and perform such functions as may be assigned: by the
Chairperson or other members of the Commission.

SEC. 26. Compensation and Other Emoluments. — The compensation of
the members of the Commission and its staff shall conform to the provisions of RA 6758,
as amended, otherwise known as the Compensation and Position Classification Act of
1989, as amended, and other relevant laws.

CHAPTER VI

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REGISTRATION AND LICENSING

SEC. 27. Registration and Licensing of All Water Supply and Sanitation
Services. — All water supply and sanitation service providers, including bulk water
suppliers and those providing services to subdivisions and other service providers, shali
register with the Commission and, subject to its rules, guidelines, procedures and other
issuances of the Commission, obtain a license to operate from the appropriate
regulatory units: Provided, That the Commission shall act on the application for the
issuance or the conversion of such licenses and renewals thereof within the maximum
period of one (1) year as provided under this Act or by RA 11032, otherwise known
as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.

The Commission shall ensure that the grant and revocation of licenses
are carried out fairly, transparently, and without discrimination. Issuances of the
Commission shall specify, among others, the qualifications, requirements, and
procedure for the grant and revocation of licenses including the standards and
performance targets that shall continuously be complied with to keep the licenses valid.
Unless otherwise provided in this Act or by the Commission, no public water supply and
sanitation service provider shall commence or conduct the business of providing water
supply and sanitation services without first obtaining a license. Concession agreements
and other contracts for water supply provision and water sanitation and treatment
services currently existing shall remain valid and enforceable unless otherwise
terminated, after due notice and hearing for reasons provided in the existing terms
and conditions under the concession or service agreement or contract, or when
invalidated by the Commission, after due notice and hearing, where national
security, national emergency or public interest so dictates.

Concession agreements, joint venture agreement, bulk water supply
agreements, management and service agreements, and other contracts for water
supply provision and water sanitation and treatment services currently existing shall
remain valid and enforceable unless otherwise terminated, after due notice and hearing
for reasons provided in the existing terms and conditions under the concession or
service agreement or contract, or when invalidated by the Commission, after due notice
and hearing, where national security, national emergency or public. interest so
dictates. Until the issuance of new or converted or updated registrations, licenses or
permits, as contemplated under this Act, such existing concession agreements, joint
venture agreements, bulk water supply agreements, management and service
agreements and other contracts for water supply provision or water sanitation treatment
services shall serve as the license or other legal basis for the authority to engage in
water supply or sanitation services during the term thereof.

SEC. 28. Conditions of License. ~ The Commission may impose such
conditions on the licensee as it may deem necessary, such as:

(a) Tariffs, rates and charges that may be imposed from its customers or
consumers;

(b) Term fixing the duration of the privilege;

(c) Grounds for modification, suspension or cancellation of the License;

31


(4) Minimum technical performance and service level standards;
(e) Expansion targets and service level improvements over time;

(i Restrictions or conditions for transferability of the business or
controlling interest in the business;

(g) Reportorial requirements and obligations of the grantee; and

(h) Submission to annual performance audit by the Commission
or its duly authorized representative(s)

The Commission shall specify the requirements and procedure for
existing holders of a Certificate of Public Convenience (CPC), Certificates of Public
Convenience and Necessity (CPCN) issued by NWRB, or CoC issued by LWUA, to
convert their existing certificates into licenses to operate in accordance with Section 27
hereof.

To ensure continuity of water and sanitation services, a CPC, CPCN,
provisional authority or a CoC issued by NWRB or the LWUA prior to the effectivity of this
Act shall remain valid for a period of five (5) years counted from the later of the date of
issuance thereof or the date of effectivity of the implementing rules and regulations duly
issued by the Commission for the conversion thereof into licenses to operate in
accordance with this Act.

All local water utilities, existing water service providers or holders of CPCN
or CoC shall be duly prioritized in the issuance of the licenses to operate over the areas
where they currently operate or as may be covered by their franchises. The submission
of the CPC, CPCN, provisional authority, or the CoC issued by the NWRB or LWUA
shall be sufficient basis for the issuance of the new and converted or updated licenses
to operate required and contemplated under this Act. To ensure continuity of service,
the Commission shall complete the issuance of such converted or updated licenses
not later than six (6) months from the effectivity of the implementing rules and regulation
issued by the Commission pursuant to this Act.

All existing providers of water supply and sanitation services without a legal
and valid CPC, CPCN, provisional authority or CoC shall register with the Commission
for a license within six (6) months from the effectivity of this Act.

SEC. 29. Rights and Duties of Licensees, —

(a) Any person granted a license under this Act shall have the obligation to
ensure that licensed activities are conducted to further public interest and, in particula

(1) Foster the maintenance and development of efficient, coordinated, and
viable operation of their licensed activities; -

(2) Ensure that their water supply and sanitation services are
provided in a diligent, conscientious and workman like manner, in accordance with
applicable laws, rules, and regulations issued by the Commission and the generally
accepted standards and practices of the water supply and sanitation industry; and

(3) Comply with drinking water quality requirements and standards that
may be established by the Commission, and the DOH.

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(b) Any person granted a license under this Act shall, to the extent
allowed by law and specified in the license, has the right to acquire or lease land, lay
or repair water or sanitation main lines and other relevant facilities in public ways to fulfill
the terms and conditions under the license.

(c) Subject to any condition or limitation laid down in the license, a licensee
may discontinue water supply and sanitation services to a customer if such customer
defaults in the payment of fees due to the licensee for the water supplied or sanitation
services provided, or for acts of pilferage pursuant to Sections 8, 9, 10, and 11 of RA
8041, otherwise known as the Water Crisis Act of 1995.

(d) Any license issued under this Act shall contain provisions designed
to ensure that licensees:

(1) Publish the tariff and other charges approved by and the terms and
conditions imposed by the Commission for the provision of water supply and sanitation
services;

(2) Prepare, within three (3) months from the issuance of a license, in
consultation with its customers, a Customer Service Code specifying the manner and
procedure for: (a) metering, billing, and collection of the licensee's approved tariff and
other charges, (b) disconnection or suspension of service in case of non-payment of
tariffs or other charges, or acts of pilferage, and (c) recommendation and recovery of
arrears in tariffs and other charges;

(3) Maintain financial accounts in accordance with the manner and
procedure specified in the license and as may be required by the Commission, and

(4) Maintain and upon request by anyone during regular office hours,
promptly make available for scrutiny and inspection such data, statistics and other
information, as may be required by the Commission.

SEC. 30. Setting Tariffs, Rates, and Other Charges. - With due regard
to the standardized pricing framework developed by the Department pursuant to Section
7(h) of this Act, the Commission shall establish tariffs, rates and other charges which
are fair and reasonable, and ensure economic viability and a fair return on investments.

Service providers may apply for the setting of tariffs, rates and charges
based on and consistent with a rate-setting methodology that the Commission shall, after
due consultation, define and publish, taking into account the following, among others:

(a) Reasonable and prudent capital and recurrent costs of providing the
service including a reasonable rate of return on capital;

(b) Efficiency of the service;

(c) Incentives for enhancement of efficiency;

(d) Capacity to pay of the customers/consumers;
(e) Equity considerations;

(f) Administrative simplicity;

) In cases involving valid and subsisting concession agreements prior
to the enactment of this Act, the methodology provided under the’ Coricession
Agreement;

33


(h) Compliance with obligations as set out under pertinent laws,
jurisprudence, and, in cases involving valid and subsisting concession agreements priot
to the enactment of this Act, the provisions of the Concession Agreement; and

(i) To the fullest extent practicable, the terms and conditions of the
tariffs, rates or other price-setting mechanisms set forth in any concession agreement,
joint venture agreement or other similar agreement for the provision of water or
sanitation services by an existing service provider.

Tariffs, rates and charges set shall be presumed valid and reasonable
unless invalidated by the Commission, after due notice and hearing, acting on a
protest or contest duly filed with the Commission to ensure continuity of service,
application for setting of tariffs, rates and other charges shall be decided within a non-
extendible period of ninety (90) days from the date of filing thereof, and the failure of the
Commission to act on any such applications shall result in a provisional approval:

Provided, That in no case shall proceedings on any applications for the setting of
tariffs, rates and other charges exceed to a total period of one hundred twenty (120) days
reckoned from the date of filing of the application.

SEC. 31. Direct Access. — Fifty-one percent (51%) of the registered
water consumers in a service area, municipality, city or province may petition for direct
access to water from any water service provider subject to concurrence “by and
reasonable compensation to the service provider and approval by the Commission, If
the petition for direct access from any water service provider is approved by the
Commission, the new water service provider shall reimburse the existing service
provider for, as applicable, either the book value or the market value as determined by an
Independent appraiser accredited by the Commission, whichever is higher, of the water
source, water supply or —_water distribution or transmission facilities, pipelines and
other equipment which shall be transferred to or utilized by the new water service
provider. The Commission shall promulgate the implementing rules and procedures for
this mode of service, which shall include, among others, financial and technical
capability of the new service provider.

SEC. 32. Innovative Schemes to Improve Efficiency and Management
of Systems. - The Commission shall promote innovative schemes such as the
consolidation or integration of water supply and sanitation services, or providers in the
same service area, where it shall result in improved efficiency, service expansion and
lower costs. To this end, the Commission shall establish and issue such rules and
guidelines as may be necessary to (a) create incentives to encourage efficiency and
service expansion; (b) establish the standards and targets that service providers
are required to meet; and (c) define the fines and penalties that shall be imposed for
failure to meet such standards and targets.

CHAPTER VII

QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION

SEC. 33. Proceedings Before the Commission. — For the purpose of any
investigation, inquiry or proceeding, the Commission shall

34


(a) Issue subpoena duces tecum and subpoena ad testificandum;

(b) Appoint hearing officers to hear and receive evidence on behalf of the
Commission; and

(c)_ Cite any person or party for contempt for refusal to appear, testify, or
comply with an order of the Commission on any matter that is the subject of investigation,
inquiry or proceeding before the Commission.

SEC. 34, Orders and Decisions of the Commission. - Any order, resolution,
or decision of the Commission shall be promulgated promptly, expeditiously, reasonably,
and in writing, and shall state clearly and distinctly the facts and law on which itis based.
The Commission shall publish and make available for public inspection, all decisions and
final orders in the adjudication of contested cases or applications.

SEC. 35. Appeals Procedure and Prohibition Against Injunction. -

(a) The orders, rulings, and decisions of the Commission are final and
executory unless appeaied to the Court of Appeals within fifteen (15) days from receipt
of notice of such order, ruling or decision: Provided, That orders, rulings, and decisions
of the Commission approving tariffs, shall be immediately executory and may be
suspended only upor: appeal and filing of @ bond, in an amount to be fixed by the
Commission, to answer for damages occasioned by the suspension or stay of
execution of such orders, rulings, and decisions.

(b) No injunction may be issued by any court or administrative agency
to restrain any proceeding before, or the implementation or execution of any order,
Tuling, or decision of the Commission, except on the basis of a question of law brought
before the Supreme Court on certiorari.

(c)_ Any act or decision of the Commission shall not be invalidated merely
because of a defect or irregularity in, or in connection with, the appointment or vacancy
in the Office of the Chairperson or any other member of the Commission.

CHAPTER VIII

INTERDEPARTMENTAL RELATIONS OF THE COMMISSION

SEC. 36. Interface with Other Sector Regulators. —

{a) The DENR shall continue to exercise primary jurisdiction over
programs aimed at protecting the environment and the quality of water sources from
waste and pollution, and shall promulgate rules, regulations, and standards in this
regard. The DOH shall continue to exercise primary jurisdiction over the determination
and enforcement of standards for quality drinking water and sanitation.

(b) The Commission shail coordinate with the:

(1) DOH to ensure that the standards and targets for quality drinking water
and sanitation are consistently complied with;

(2) LGUs for development projects relating to water supply and sanitation;
and

35


(3) PCC for the provision of its technical advisory services in the exercise
of the exclusive authority and jurisdiction of the Commission to investigate and act on
any market power abuse oranti-competitive or discriminatory act or behavior by or against
any participant in the water supply and sanitation sector.

CHAPTER IX

TRANSITORY PROVISIONS

SEC. 37. Organizational Structure and Staffing Pattern. - The Secretary
of the Department and the Chairperson of the Commission shall determine the
respective organizational structure and staffing pattern of the Department and the
Commission in accordance with the revised compensation and position classification
system subject to the evaluation and approval of the Department of Budget and
Management and in compliance with the civil service laws, rules and regulations and other
relevant laws

SEC. 38. Transfer of Rights and Functions. — The Department shall, by
virtue of this Act be subrogated to all the rights and assume all the functions of the
government agencies and units whose powers and functions have been subsumed,
absorbed, transferred or attached to the Department. The Commission shall also, by
virtue of this Act, be subrogated to all the rights, and assume all the functions, of the
Water Utilities Division of the NWRB, the regulatory offices of MWSS and LWUA, the
regulatory units of all special economic zones, and all other government agencies and
units whose powers and functions have been transferred to the Commission in
accordance with the rules and regulations of the Civil Service Commission (csc)

The transfer of powers and functions to the Department or the Commission
of the concemed agencies as herein provided for, shall be deemed completed within
twelve (12) months aiter theeffectivity of this Act. All agencies transferred, subsumed
and attached to the Department orCommission shall continue to function under their
Present mandates until the six-month transition period mandated under this Act shall
have lapsed. The transfer of powers and functions shall include all applicable funds,
Personnel, records, property and equipment, as may be necessary. The heads of the
affected agencies shall continue to serve until replaced.

36


All rights and functions of the affected agencies are hereby transferred
to and assumed by the Department or Commission and shall be acted upon in
accordance with the rules and regulations of the Commission on Audit and other
pertinent laws, rules, and regulations.

Performance audit of all water-related agencies and institutions,
including LWUA and water districts, MWSS, MWSS-RO and its concessionaires,
LGU-run utilities, Tourism Infrastructure and Enterprise Zone Authorit /, Philippine
Economic Zone Authority, Bases Conversion and Development Authority, Subic Bay
Metropolitan Authority, DILG, and NIA, shail be conducted by the Department.

SEC. 39, Absorption, Separation or Retirement from Service of
Employees of the Subrogated

Agencies. - The current employees of all government agencies and units whose
Powers and functions have been transferred to, absorbed or subsumed by the
Department or Commission shail enjoy security of tenure, in accordance with their
staffing pattern and the selection process as prescribed under

RA 6656 or the Government Reorganization Law. Employees opting to be
separated from the service as a consequence of the consolidation, and reconstitution
under the provisions of this Act shall, within

‘one (1) month from their separation or phase out from the service, receive
separation benefits in accordance with existing laws, and those who are qualified to
retire shall be allowed to retire and be entitled to all benefits under existing retirement
laws,

CHAPTER X

FINAL PROVISIONS

SEC. 40. Applicability of Ease of Doing Business Law. - The
prescribed processing time provided under Section 9(b) of RA 11032 shall be
applicable to all agencies and LGUs covered under this Act particularly on accessing
government services.

SEC. 41. Appropriations. - The amount necessary for thé initial
implementation of this Act shall be charged against the currents year's appropriations
of the agencies, entities, divisions, sections or units subsumed or transferred to the
Department. Thereafter, such amount shall be included in the annual General
Appropriations Act.

SEC. 42. Water Trust Fund. - There is hereby created a Water. Trust
Fund in the Bureau of Treasury sourced from raw water pricing, permit fees,
registration fees, supervision and regulation enforcement fees, filing fees, testing
fees, payments for ecosystem services, and other service income from the use of
water resources, The Trust Fund shall be administered by the Department. The annual
levies, and reasonable fees and surcharges as may be necessary for achieving the
purposes, powers and function of the Commission under Section 22(f) of this Act shall
also be remitted to the Water Trust Fund. Proceeds from the trust fund shall be utilized
for water development, water sanitation and waste water treatment and management,
and water sustainability programs and projects authorized under this Act: Provided,

37


That a maximum of ten percent (10%) of the total proceeds generated from raw water
extraction and all payments for ecosystem services shall be given as share of the
concemed focal government unit or indigenous peoples (IP) community who own the
specific areas or land where the raw water was sourced: Provided, further, That the
Department shall prescribe standards for programs and projects where proceeds from
payments for ecosystem services shall be utilized.

SEC. 43. Implementing Rules and Regulations. - Upon the
effectivity of this Act, the Department and the Commission, as may be applicable,
as well as NEDA, DBM, DENR, CSC, and the National Commission on Indigenous
Peoples in consultation with concerned government agencies shall:

(a) Promulgate the rules and regulations of the Department and the
‘Commission necessary for the effective implementation of this Act within one hundred
twenty (120) days after its effectivity; and

(b) Submit to the DBM the Department's and the Commission's budget for fiscal
year following the promulgation of its implementing rules and regulations; and
implement the training of the personnel of the Department and the Commission.

SEC. 44. Mandatory Review of the Implementation of this Act. - The Department
and the Commission shall conduct a review of the implementation of this Act at the
end of the fifth (5'") year from the date of its effectivity and submit a report to Congress.

SEC. 45. Separability Clause. — If any reason, any portion or provision of this Act shall
be held unconstitutional or invalid, the remaining provisions not affected thereby shall
continue to be in full force and effect.

SEC. 46. Repealing Clause.
(a) The following provisions are hereby repealed:

(1) Section 3(h) and Section 12 on the provision with respect to fixing
of water rates and sanitation service fees, Section 3 (n) on the provision with respect
to regulation of waterworks and deep wells, and Section 3 (p) on the provision with
respect to regulation of waterworks and sanitation systems in privately owned
subdivisions of RA 6234 entitled “An Act Creating The Metropolitan Waterworks
And Sewerage System And Dissolving The National Waterworks And Sewerage
Authority, And For Other Purposes,” as amended;

(2) Section 62, 63, and 66 of Title Ill on Local Water Utilities
Administration Law of Presidential Decree No. 198 otherwise known as the
Provincial Water Utilities Act of 1973, as amended by Letter of Instruction No. 700,
series of 1978, Letter of Instruction No. 744, Series of 1978, EO 124, Series of 1987,
EO 123, Series of 2002, and EO 860, Series of 2010, on the regulation of water
districts;

(3) Section 1 of EO 124-A Series of 1987, amending EO 124, dated
30 January 1987. Reorganizing the Department of Public Works and Highways,
Redefining Its Powers and Functions,and For Other Purposes on reorganizing the
National Water Resources Council into the National Water Resources Board;

(4) EO 510 series of 2006 creating the RBCO, and EO 516 series of 2009
declaring the RBCO under the DENR as lead government agency for the integrated
planning, management, rehabilitation,and development of the country's river basin:



(5) EO 22, Series of 2023 creating the Water Resources Management
Office of the DENR

(b) The following provisions are hereby amended accordingly:

(1) Section 3 paragraph 3 Commonwealth Act No. 146, as amended,
pertaining to all cases involving the fixing of rates;

(2) Section 154, Article V, Chapter |, Title One, Book II of RA 7160, as
amended, otherwise known as the “Local Goverment Code of 1991”, and its
implementing rules and regulations on the power of the LGUs to fix the rates of water
utilities owned, operated and maintained by them within their jurisdiction is hereby
repealed or modified accordingly;

(3) Section 13(b) on the regulation of enterprises within the Economic
Zone under RA 7916 as amended, otherwise known as “The Special Economic Zone
Act of 1995";

(4) Section 69 of RA 9593, otherwise known as “The Tourism Act of
2009", and its implementing rules and regulations which mandate the Tourism
Infrastructure and Enterprise Zone Authority to grant franchises, supervise
the operation of public utilities, and register, monitor and =regulate enterprises
within Tourism Enterprise Zones, are hereby repealed or modified accordingly;

(8) Sections 7 of RA 9275, transferring the administration of the NSSMP
from the DPWH to the Department;

(6) Articles 3(d) and Chapters VII and Vili of PD 1067 pertaining to the
enforcement of the Water Code;

(7) Section 15 (Conditions in Permits) of the Implementing Rules and
Regulations (IRR) of PD 1067

(8) Section 3.2(b) EO 149, Series of 1993 transferring the Laguna
Lake Development Authority from the Office of the President to the DENR; and

(9) EO 168, Series of 2022, which transferred the National Irrigation
Administration from the Office of the President to the DA.

All other laws, presidential decrees, executive orders, presidential
proclamations, rules and regulations, or parts thereof which are inconsistent with the
provisions of this Act are hereby repealed or amended accordingly.

SEC. 47. Effectivity. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in a newspaper of general circulation.

Approved,