THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
1 
First Regular Session 
, 5 
P437 
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S E N A T E  
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S. No. 1983 
Introduced by Senator Biazon 
EXPLANATORY NOTE 
For the Maranaws, Lake Lanao is their lifeblood. The lake’s rich marine 
resources provide them with sustenance as well as a source of livelihood. Its waters 
make navigation and water transportation from one town to another possible. It also 
serves as a holy place where Muslim devotees perform their cleansing rituals or 
absolutions. More importantly, it is the source of hydroelectric power, which supplies the 
entire island of Mindanao with relatively cheaper electricity. 
Because of Lake Lanao’s multi-dimensional features, it is imperative that 
measures for its administration as well as its preservation be taken. This proposed 
legislation seeks to create and operate a Lake Lanao Development Authority, which shall 
be mandated to perform this vital role. 
This body would be tasked with the coordination, planning and management of all 
government programs for the area, maximize the efficiency and ensure sustainable 
development of Lake Lanao and its surrounding environment. The body shall undertake 
policy studies and formulate the same to ensure the enhancement of all the inherent 
benefits derived from the lake. 
For the foregoing reasons, the early passage of this bill is earnestly sought. 
RODOLFO G. BIAZON 
RODOLFO G. BIAZON 
Senator 


SENATE 
OFFICE OF THE SECRETARY 
Q 
THIRTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILPPINES 
First Regular Session 
Introduced by Senator Biazon 
AN ACT 
CREATING THE LAKE LANA0 DEVELOPMENT AUTHORITY, DEFINING ITS 
POWERS, FUNCTIONS AND DUTIES, PROVIDING FUNDS THEREOF AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
CHAPTER I 
DECLARATION OF POLICY AND CREATION OF AUTHORITY 
SECTION 
Authority Act.” 
1. Title. - This Act shall be known as the “Lake Lanao Development 
SECTION 
2. Declaration of Policy. - It is hereby declared the policy of the State to 
promote and accelerate the sustainable development and balanced growth of the Lake 
Lanao Area and the surrounding provinces, cities and municipalities, hereinafter referred 
to as the Area, within the context of the national and regional plans and policies for 
social and economic development and to carry out the development of the Area with due 
regard and adequate provisions for environmental management and control, preservation 
qf the quality of human life and ecological systems, and the prevention of undue 
ecological disturbances, deterioration and pollution. 
SECTION 
3. Creation of the Lake Lanao Development Authority. - To effectively 
carry out the declared policy, there is hereby created a body corporate to be known as the 
Lake Lanao Development Authority hereinafter referred to as the Authority, which shall 
be organized within one hundred twenty (120) days after the effectivity of this Act. 
The Authority shall exercise the powers and functions herein vested and conferred 
upon it in such a manner as will, in its judgment, aid to the fullest possible extent, in 
carrying out the purposes and objectives set forth below. 
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SECTION 
Principal Ofice. - The Authority shall maintain its principal office in 
Marawi City and branch offices in such other places in the Area as are necessary for the 
proper conduct of its business. 
4. 
SECTION 
powers and functions: 
5. 
Powers and Functions. - The Authority shall exercise the following 
(a) Make a comprehensive survey of the physical and natural resources and 
potentialities of the Lake Lanao Area particularly its social and economic 
conditions, hydrologic characteristics, power potentials, scenic and tourist spots 
and such other problems of the Area, and on the basis thereof, to draft a 
comprehensive and detailed plan designed to conserve and utilize optimally the 
resources within the Area particularly Lake Lanao, to promote the Area’s rapid 
social and economic development and upon approval of the National Economic 
and Development Authority (NEDA) Board of such plan, to implement the same 
including projects in line with said plan: Provided, That the implementation of all 
fisheries plans and programs of the Authority shall require the coordination of the 
Bureau of Fisheries and Aquatic Resources to ensure that such plans and 
programs are consistent with the national fisheries plans and programs. For the 
purpose of said survey, the Department of Environment and Natural Resources 
(DENR) and other concerned public agencies shall submit, and private entities 
shall provide necessary data to expedite the creation of development plans within 
the Area; 
(b) 
Identify areas designated as agricultural, industrial and commercial zones 
surrounding the Area in coordination with the Local Development Councils of the 
concerned cities and municipalities; 
(c) 
Coordinate with national and local government units, agencies and public 
corporations to ensure that all plans, program and projects with respect to Lake 
Lanao Area to avoid ovwlapping and waste of scarce government resources; 
(d) 
Harness and promote private participation in business ventures within the 
Area through the different schemes provided for in accordance with Republic Act 
no. 6957, as amended (the Build-Operate-and Transfer Law); 
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(e) Plan, program, finance and/or undertake infrastructure projects such as river, 
flood and tide control works, waste water and sewerage works, water supply, 
roads, pot works, imgation, and related works when so required within the 
context of its development plans and programs: Provided, That should any project 
be financed wholly or in part by the Authority, it is hereby authorized to collect 
reasonable fees and toll$ as may be fixed by its Board of Directors from users 
and/or beneficiaries thqreof to recover costs of construction, operation and 
maintenance of the projects: Provided, jkrther, That if the Authority should find 
it necessary to undertake such infrastructure projects which are classified as social 
overhead capital projects as determined by the NEDA, the Authority shall be 
authorized to receive financial assistance from the National Government in such 
amount as may be necessary to cany out the said projects subject to such terms 
and conditions that may be imposed by the National Government; 
(f) 
Reclaim or cause to be reclaimed portions of the lake or undertake 
reclamation projects and/or acquire such parcels of land from the lake, which may 
be necessary to accomplish the aims and purposes of the Authority: Provided, 
That the land so reclaimed shall be the property of the Authority and title thereto 
shall be vested in the Authority: Provided, further, That the resulting lakeshore 
area shall continue to be owned by the National Government; 
(g) 
Establish research centers for the purpose of undertaking studies on the 
marine and other natural resources of Lake Lanao for policy or plan formation 
and project implementation; 
(h) For the purpose of effectively regulating and monitoring activities in Lake 
Lanao, the Authority shall have exclusive jurisdiction to issue new permit for the 
use of lake waters for my project; including navigation, construction, operation of 
fish pens, fish enclosures, fish corral and the like, and to impose necessary 
safeguard for lake quality control and management and to collect necessary fees 
for said activities and projects: 
Provided, That the Authority’s Board may 
determine new areas of fishery development or activities which it may place 
under the supervision of the Bureau of Fisheries and Aquatic Resources taking 
into account the overall development plans and programs for Lake Lanao: 
Provided, firther, That the Authority shall, subject to the approval of the 
President of the Philippines, promulgate such rules and regulations which shall 
govern fisheries development activities in Lake Lanao which shall take into 
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consideration, among others, the following socio-.qc@g&p ~
~
fide resident fishermen whether individually or adlectively in the form of 
cooperatives, lakeshore,town development, a master plan for fish pen construction 
and operation, communal fishing groudd for lakeshore town residents, preference 
to lakeshore town residents hiring laborer for fishery projects; 
(i) The provisions of existing laws to the contrary notwithstanding, exercise water 
rights over public water within the Area whenever necessary to carry out the 
Authority’s projects; 
(i) Promulgate and establish, in coordination with the DENR and other existing 
government agencies, water quality standards for industrial, agricultural and 
municipal waste discharges into the lake and to cooperate with said existing 
agencies of the Government in enforcing such standards; and 
(k) Undertake studies on the improvement and maintenance of the desirable water 
quality of Lake Lanao, and in pursuance thereof, prepare a water quality 
management program on continuing basis, which the Authority shall carry out 
with the assistance and support of the National and Local Government Units 
involved in water quality management. 
SECTION 
6. Compensation for damages. - Compensation for damages to the water 
and aquatic resources of Lake Lanao and its tributaries resulting from failure to meet 
established water and effluent quality standards or from such other wrongful act or 
omission of a person, private or public, natural or juridical, punishable under the law 
shall be awarded to the Authority to be earmarked for water quality control and 
management. 
CHAPTER II 
CORPORATE POWERS 
SECTION 
7. Corporate Powers of the Authority. - The Authority shall have the 
following corporate powers and functions: 
(a) To succeed on its corporate name; 
(b) To sue and be sued in such corporate name; 
(c) To adopt, alter and use a corporate seal; 
(d) To adopt, amend, and repeal its by-laws; 
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(e) To enter into contracts of any kind and description, to ana& it to cam out its 
purposes and functions under this Act; 
(0 To acquire, buy, purchase, hold or lease, such persoqal and real property as it 
deems necessary or convenient in the transaction of its business and/or in 
relation with carrying out its purposes under this Act; and to lease, mortgage, 
sell, alienate, or otherwise encumber, utilize, exploit or dispose any such 
personal and real property held by it, subject to prior or existing individual or 
communal right of private parties or of the government or any agency or 
enterprise thereoc 
(g) To exercise the right of eminent domain whenever the Authority deems it 
necessary for the attainment of the objectives of the Authority under this Act; 
(h) To borrow funds from any local or foreign financial institutions independent 
of the bonds it may issue or may continue to issue, to carry out the purposes 
of the Authority under this Act; 
(i) For carrying on its business, or for the purpose of attaining or furthering any 
of its objectives, to perform any and all acts which a corporation, a co- 
partnership, or natural person is authorized to perform under the laws not 
existing or which may be enacted hereafter; and 
0) To issue such rules and regulations as may be necessary to effectively carry 
out the powers and purposes herein provided including the plans, programs 
and projects of the Authority, subject to the approval of the NEDA. 
SECTION 
8. Capitalization and Financing. -The Authority shall have an authorized 
capital of One Hundred Million Pesos (PlOO,OOO,OOO.OO) of which the amount of Fifty- 
One Million Pesos (P51,000,000.00) shall be subscribed by the National Government and 
Forty-Nine Million Pesos (P49,000,000.00) shall be subscribed by cities, provinces, 
municipalities, government corporations and private investors: Provided, That at least 
twenty-five percent (25%) of the National Government’s subscription shall be fully paid 
Provided, further, That the authorized capital stock may be increased upon the 
recommendation of NEiDA. 
The authorized capital stock of the One Hundred Million pesos (PlOO,OOO,OOO.OO) 
shall be divided into One Million (1,000,000) Shares of stock with a par value of One 
Hundred Pesos (P100.00) per share. 
? 
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SECTION 
Powers of Municipal Corporations to Subscribe. - For puqgses of 
attaining the purposes of this Act, municipalities, cities q d  provhws are hereby 
authorized to subscribe, own, buy and hold shares of stock of the Authority. 
9. 
SECTION 
10. Operating Expenses. - For the operating expenses of the Authority, the 
sum of Five Million Pesos (P5,000,000.00) is hereby appropriated annually for five (5) 
years from the general fund of the National Government not otherwise appropriated from 
the date of approval of this Act. 
The Board of Directors may appropriate out of the funds of the Authority such 
amounts as may be needed or necessary for its operating expenses. 
SECTION 
11. Power to Incur Debts and to Issue Bonds. - Whenever the Board of 
Directors may deem it necessary for the Authority to incur an indebtedness or to issue 
bonds to carry out the provisiohs of this Act, it shall, by resolution, so declare and state 
the purpose for which the proposed debt is to be incurred. The resolution shall be passed 
by the affirmative vote of at least four (4) members of the Board and approved by the 
President of the Philippines upon the recommendation of the Secretary of Finance in 
consultation with the NEDA. 
SECTION 
Bond Limit. - The bonds shall be issued in such amounts as will be 
needed at any one time, taking into account the rate at which said bonds may be absorbed 
by the buying public and the fund requirements of projects ready for execution, 
12. 
considering further a proper balanced productive and non-productive projects so that 
inflation shall be held to the minimum. 
CHAPTER III 
MANAGEMENT AND PERSONNEL 
SECTION 
13. Incorporation. - The members of the first Board of Directors shall be 
elected by the stockholders and the incorporation shall be held to have been effected from 
the date of the first meeting of such Board. 
SECTION 
Governing Body. - The corporate powers and functions of the 
Authority shall be vested in and exercised by a Board of Directors, hereinafter referred to 
as the Board, which shall be composed of a Chairman and six (6) members to be 
appointed by the President of the Philippines who shall serve for a term of four (4) years, 
unless sooner removed from or is incapacitated to perform the functions of the office: 
14. 
e 
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Provided, That a majority of the members of the Board must have been residents of the 
Area for at least ten (10) years prior to their appointment. 
In case of any vacancy in the Board, the same shall be filled by the President of 
the Philippines only for the unexpired term. 
All members of the Board, including the General Manager, shall be natural-born 
citizens of the Philippines and at least thirty-five (35) years of age. They shall have 
demonstrated executive competence and experience in the field of public administration, 
economic planning, resource management, or in the establishment and management of 
agricultural, industrial or commercial enterprises and knowledgeable of the socio- 
economic conditions of Lake Lanao. The General Manager shall be appointed by the 
President of the Philippines, upon recommendation by the Board. 
In case of vacancy in the position of Chairman, or in the absence of or temporary 
incapacity of the Chairman, the Vice-chairman shall act as such until the Board duly 
elects a new Chairman. 
SECTION 
15. Efect of vacancies; Quorum. - Vacancies in the Board, as long as 
there shall be four members in office, shall not impair the power of the Board to execute 
the functions of the Authority. The affirmative vote of four (4) members of the Board 
shall be necessary at all times to pass or approve any act or resolution. 
SECTION 
16. Prohibition against “Conflict of Interests”. - No member of the 
Board shall be financially interested, directly or indirectly, in any contract entered into by 
the Authority or in any special privileges granted by the Authority during his term of 
office. All contracts entered into in violation of this provision shall automatically be null 
and void. Any member of the, Board found violating the provisions of this section, by 
two-thirds (2/3) vote of the Board shall automatically be disqualified from serving his 
unexpired term, and he shall furthermore be perpetually disqualified for membership in 
the said Board and any other government office or agency. 
SECTION 
17. Removal, courtesy resignation. - A member of the Board may be 
removed from office by a majority vote of all the members of the Board. No member of 
the Board shall be required to svbmit a courtesy resignation at any time during his term of 
office. 
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SECTION 
18. Meetings of the Board. - The Board shall meet at its principal office 
at least once a month and as frequently as necessary to discharge its duties and 
responsibilities properly. The Board shall be convened by the Chairman or upon the 
written request by a majority of its members. 
SECTION 
have the following powers and functions: 
19. Powers and Functions of the Board. - The Board of Directors shall 
(a) 
To formulate, prescribe, amend, and repeal rules and regulations to 
govern the conduct of business of the Authority; 
To appoint and fix the compensation of all officials from division 
heads and above, and others of comparable rank including the 
Assistant General Manager upon the recommendation of the General 
Manager; 
By a majority vote of all members of the Board, to suspend, remove or 
otherwise discipline for just cause all officials appointed by the Boar4 
To approve the annual and/or supplemental budgets of the Authority; 
and 
To do such other acts and perform such other functions as may be 
necessary to carry out the provisions of this Act. 
co) 
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(e) 
SECTION 
20. Powers and Functions of the General Manager. - 
The General 
Manager shall be the executive of the Authority. As Such, he shall have the following 
powers and duties: 
(a) 
Submit, for consideration of the Board, the policies and measures 
which he believes to be necessary to carry out the purposes and 
provisions of this Act; 
Execute and administer the policies, plans, programs and projects 
approved by the Board; 
Direct and supervise the operation and internal administration of 
the Authority. The General Manager may delegate certain of his 
administrative responsibilities to other officers of the Authority 
subject to the rules and regulations of the Board; 
Prepare the annual budget of the Authority for the consideration of 
the Board; 
Appoint officials and employees below the rank of division heads 
to positions in the approved budget upon written recommendation 
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of the division head concerned using as guide the standard set fmth 
in the Authority's merit system; 
Submit quarterly reports to the Board on personnel selection, 
placement and training; 
Submit to the NEDA an annual report and such other reports as 
may be required, including the details of the annual and 
supplemental budgets of the Authority; and 
Perform such other functions as may be provided by law. 
21. Compensation. - The General Manager shall receive compensation in 
accordance with the Compensation and Position Classification Act of 1989. The 
members of the Board shall receive, for every meeting actually attended, a per diem of 
One thousand pesos (P1,OOO.OO): Provided, That such per diem shall not exceed Three 
Thousand Pesos (p3,OOO.OO) during any month for each member. 
SECTION 
22. Residence. -The General Manager shall establish his residence within 
the region. The General Manager shall not, during his term of office, engage in any 
business or profession or calling other than those connected in the performance of his 
oMicial duties as General Manager of the Authority. 
SECTION 
23. Activities of the Authority: Key Oficials. - In carrying out the 
activities of the Authority, the General Manager shall be assisted by an Assistant General 
Manager who shall have such powers, duties, and functions that may be delegated to him 
by the General Manager, and shall act as General Manager in the absence of or during the 
temporary incapacity of andor until such time as a new General Manager is duly 
appointed. 
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SECTION 
24. Divisions. - There shall be created the following divisions within the 
Authority: the Administrative, Legal, Operations, Financial and Management, Auditing, 
Planning and Programming, and such other divisions as may be necessary to effectively 
carry out the functions of the Authority. The head of each division shall be appointed by 
the Board upon the recommendation of the General Manager, and shall receive an annual 
compensation as may be fixed by the Board. 
SECTION 
25. 
Merit and Compensation System. - 
All officials, agents and 
employees of the Authority shall be selected and appointed on the basis of merit and 
fitness in accordance with a comprehensive and progressive merit system to be 
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established by the Authority. The recruitment, transfer, promotion and dismissal of all 
personnel of the Authority, including temporary workers, shall be governed by such merit 
system. 
SECTION 
NEDA for policy and program integration. 
26. Supervision by the NEDA. - The Authority shall be directly under the 
SECTION 
27. Submission of Financial Statement to NEDA. - The Authority shall 
submit its audited financial statements to NEDA within sixty (60) days after the close of 
the fiscal year, and it shall continue to operate on the basis of not more than the 
preceeding year’s budget until the said financial statements shall have been submitted. 
SECTION 
28. Management Audit by the NEDA. - The NEDA, may, at its own 
instance, initiate a management audit of the Authority when there is a reasonable ground 
to believe the affairs of the Authority have been mismanaged. Should such audit indicate 
mismanagement, the NEDA shall take such appropriate measures as may be required by 
the circumstances. 
SECTION 
29. Plans to be formulated within one year. - Upon its organization, the 
Board of Directors shall formulate with the utmost expeditious manner, but in no case 
longer than one (1) year, its plans and recommendations for the accelerated and balanced 
development of the Area in accordance with the aims and purposes of this Act. 
SECTION 
30. Auditing. - The auditing department shall be headed by the duly 
appointed representative of the Commission on Audit whose salary shall be determined 
and paid according to law. All personnel of the auditing department shall be appointed, 
and their number and salaries fixed by the Commission on Audit. 
SECTION 
31. Penal Clause. - Any person, natural or juridical, who shall violate 
any of the provisions of this Act or any rules or regulation promulgated by the Authority 
pursuant thereto shall be liable to imprisonment of not less than one (1) year but not 
exceeding three (3) years or a fine of not less than Fifty Thousand Pesos (P50,OOO.OO) nor 
more than One Hundred Pesos (P100,OOO.OO) or both, at the discretion of the Court. 
If the offender is a corporation, partnership or association, the officer or officers 
of the organization concerned shall be liable therefore. 
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The Authority is hereby authorized to pursue separate civil actions for damages 
resulting from infractions of the provisions of this Act, rules or regulations issued 
pursuant thereto andor conditions embodied in the clearances or permits issued by the 
Authority. 
SECTION 
32. Separability Clause. - The provisions of this Act are hereby declared 
to be separable, and in the event that any one or more of such provisions are held 
unconstitutional, they shall not affect the validity of other provisions. 
SECTION 
33. Repealing Clause. - All laws, decrees, orders, rules and regulations 
or parts thereof inconsistent Witli the provisions of this Act are hereby repealed, amended 
accordingly. 
SECTION 
34. Effectivity. - This Act shall talce effect fifteen days (15) days after its 
publication in the Official Gazette or in two (2) newspapers of general circulation, 
whichever comes first. 
Approved. 
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