; RECEIVED
eb of he Bip arp, 03 AUG 2016
House of Representatives DATE

Quezon City, Metro Manila

UNE: _G 32 dm
BY: fore,
QFCISTRATION UNIT
BILLS 4N) WNDFX SERVICE

SEVENTEENTH CONGRESS
First Regular Session

80

2

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE
and
Honorable ROBERT ACE S. BARBERS

EXPLANATORY NOTE

This bill proposes to create the Lake Mainit Development Authority,
which shall lead in the management and development of Lake Mainit and its
immediate environs.

Lake Mainit, straddling between the provinces of Agusan Del Norte and
Surigao Del Norte, is endowed by nature with rich natural resources that remain
to be untapped up to now. Being a sanctuary for fishes, crustaceans, and other
marine life, Lake Mainit has become a major host of aquaculture and other
livelihood activities for the locals living near its shores. Currently, a hydropower
plant is also being constructed using the lake's outflow current as a testament
that Lake Mainit can become a major source of power in Mindanao.

‘The scenic beauty of the lake also suggests of its potential to become a
prime lake resort destination that can rival other well-known tourist spots. Its
strategic location along the Pan-Philippine Friendship Highway furthermore
makes tourism development even more feasible.

With the creation of the Authority, it is envisjned fhat Lake Mainit will
become a major economic engine in Caraga Region And thd whole of Mindanao.
It shall be a model for sustainable lake developmeftt that fs anchored on social
mobilization and environmental protection.

In the light of the foregoing, the paspage of fhis bill is earnestly
requested.

HOUSE OF REPRESENTATIVES



Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

House Bill No.

2485

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE.
and
Honorable ROBERT ACE S. BARBERS

AN ACT
CREATING THE LAKE MAINIT DEVELOPMENT AUTHORITY,
PRESCRIBING ITS POWERS, FUNCTIONS AND DUTIES,
AND PROVIDING FUNDS THEREOF.

Be it enacted by the Senate and House of Representatives of the Philippines in
session assembled:

CHAPTER I
DECLARATION OF POLICY AND CREATION OF AUTHORITY

SECTION 1. Short Title. - This Act shall be known as the “Lake
Mainit Development Authority Act.”

SECTION 2. Declaration of Policy. ~ It shall be the policy of the
State to promote the sustainable development of Lake Mainit, its sub-
watersheds, and surrounding areas; with adequate provisions in the
protection of the environment, ecological systems, quality of human
life, and socio-economic viability.

SECTION 3. Definition of Terms. - For purposes of this Act, the
following terms are hereby defined:
a. Act - the enabling Act creating the Lake Mainit Development
Authority;

b. Authority - shall mean the Lake Mainit Development
Authority;

c. Board ~ shall refer to the Board of Trustees of the LMDA;


d. Municipal Corporation — a corporation organized for political
purposes with political powers exercised for public good and
public interest, subject to legislative control and with the
officers of the government as its members to administer or
discharge public duties;

. Government Corporation - a corporation engaged in
performing functions impressed with public interest;

{Investor - shall include public and private investors, whether
foreign or local, or private individuals or juridical persons;

g. Region - shall refer to the Lake Mainit Watershed, its sub-
watersheds, and surrounding areas;

h. Subsidiary Corporation - a corporation that is organized or a
corporation already in existence wherein at least fifty-one
percent (51%) of its share of stock is owned or controlled by
the organizing or subscribing Authority, in this case, The Lake
Mainit Development Authority, to carry out or accomplish its
purposes;

i, Watershed - an extent or area of land where water from rains
drains into Lake Mainit and into the sea.

SECTION 4. Creation of the Lake Mainit Development Authority. ~
A corporate body is hereby created, to be known as the Lake Mainit
Development Authority, which shall be organized within one hundred
twenty (120) days after the approval of this Act.

‘The Authority shall execute the powers and
functions herein vested and conferred upon in order to carry out the
aims and purposes set forth in this Act

SECTION 5. Location of Principal Office. - The Authority shall
maintain its principal office in the Municipality of Kitcharao, Province
of Agusan del Norte. It may also have branch offices in other areas as
deemed necessary to the discharge of its functions.

SECTION 6. Special Powers and Functions. - The Authority shall
have the following purposes:

a. To make a comprehensive survey on the region, particularly its
social and economic conditions, hydrologic characteristics,
water and aquatic resources, power potentials, scenic and
tourist spots, and other concerns; and on the basis thereof,
draft a comprehensive and detailed plan designed to promote
the region’s rapid social and economic development and sound
environmental management, and to implement such plan.


Provided that such plan is in accordance with national
guidelines and existing laws and is approved by the National
Economic Development Authority (NEDA); For the purpose of
this survey, public and private entities shall provide necessary
data except those that are deemed inviolable under existing
laws;

To prepare a water quality management program and
undertake regular projects for the improvement and
maintenance of the desirable water quality of the watershed;

. To regularly monitor the environmental condition of the region,
especially its biodiversity and level of pollution, and perform
actions to address any concerns;

|. To provide the necessary planning, management and technical
assistance to prospective and existing investors in the region;

. To pass upon and approve or disapprove all plans, programs,
and projects within the region proposed by local government
units, public corporations, and private enterprises.

‘The Authority shall issue the necessary clearance for all
proposed plans, programs, and projects within 30 days from
submission thereof, unless the proposal will cause
unmanageable pollution, ecological imbalance, or massive
displacement of livelihood and people.

Provided, the Authority is hereby empowered to institute
necessary legal proceeding against any person who shall
implement any plan, program, or project without prior
clearance from the Authority. Provided further, that any local
government unit, public corporation, and private enterprise
whose plan, program, or project was disapproved by the
Authority may appeal the decision to the NEDA within fifteen
(15) days from receipt of such notice, and its decision on the
matter shall be final. Reasonable fees as determined by the
Board shall be collected by the Authority for the processing of
such plan, program, or project. Provided furthermore,
expansion plans shall be considered as new plans subject to
the review of the Authority and payment of the processing fees.

‘The Authority, national and local government offices, and
public corporations shall coordinate their plans, programs, or
projects and licensing procedures with respect to the Lake
Mainit region to craft a Lake Mainit Development Plan, which
shall be binding upon all parties concerned upon the approval
of the NEDA Board.


To exercise exclusive jurisdiction on the issuance of permits
for the use of water bodies of the watershed for any projects or
activities affecting the same, including but not limited to
navigation, irrigation, potable water supply, recreation and
tourism, domestic and agricultural use, construction, and
operation of fish enclosures; and collect reasonable fees for the
conduct of said activities;

. To develop water supply from ground or lake water for
municipal, agricultural, and industrial uses; and to enter into
agreements with local government units, government agencies
and corporations, and private entities to supply, distribute,
and market such water resource;

. To exercise water rights over public waters, whether ground or
surface water, within the watershed whenever necessary to
carry out the purposes of the Authority;

To engage in agriculture, industry, commerce, or other
activities within the region which may be necessary or directly
contributory to the socio-economic development of the region,
and, for this purpose, whether by itself or in cooperation with
private persons or entities, to organize, finance, invest in, and
operate subsidiary corporations: Provided, that the Authority
shall engage only, unless public interest requires otherwise, in
activities that are considered new ventures or are clearly
beyond the scope, capacity, or interest of private enterprises
due to considerations on geography, technical or capital
requirements, returns on investment, and risk;

To plan, program, finance, and undertake infrastructure
projects such as river, flood, and tidal control works, waste
water and sewerage, water supply, irrigation, housing, roads,
and related works, when so required within the context of its
development plans and programs, including the readjustment,
relocation, or resettlement of people within the region as
deemed necessary by the Authority.

Provided, for any project to be financed wholly or in part by
the Authority, it is hereby authorized to collect reasonable fees
and tolls, as determined by the Board and subject to the
approval of the NEDA Board, from users and beneficiaries to
recover costs of construction, maintenance, and operation of
the projects.

Provided further, if the Authority should find it necessary to
undertake such infrastructure projects classified by the NEDA
as social overhead capital, the Authority shall be authorized to


receive financial assistance from the government in such
amount as may be necessary to carry out the said project
subject to the terms and conditions that may be imposed by
the government upon recommendation of the NEDA Board.
Provided furthermore, such amount is hereby authorized to be
appropriated out of the funds of the National Treasury not
appropriated;

k. To receive compensation for damages to the water and marine
resources of Lake Mainit and its sub-watersheds resulting
from failure to meet established water and effluent quality
standards or from other act of omission of a person, private or
public, juridical or otherwise, punishable under the law; and
shall be earmarked for water quality control and management;

1. To make the recommendation to the proper agencies on the
peso or dollar financing, technical support, physical assistance
and, generally, the level of priority to be accorded to
agricultural, industrial and commercial projects, soliciting or
requiring direct help from or through the government or any of
its instrumentalities;

m. To lend or facilitate the extension of financial assistance or act
as surety or guarantor, or both, to worthwhile agricultural,
industrial, and commercial enterprises;

n. To reclaim or undertake reclamation projects or acquire such
body of lands from the lake, or both, as may be necessary to
accomplish the aims and purpose of the Authority subject to
the approval of the NEDA Board. Provided, the reclaimed land
shall be the property of the Authority; and,

o. To make an annual report to the stockholders regarding the
operation of the Authority more particularly a statement of its
financial conditions, activities undertaken, progress of projects
and programs and plans of action for the incoming years;
Provided, however, that a majority of the stockholders may
require the Authority to submit report or reports other than
the annual report herein required, which report must be
submitted within a period of thirty (30) days from notice

thereof.
CHAPTER II
CORPORATE POWERS
SECTION 7. Powers of the Authority. - The Authority shall have

the following powers and functions:


To succeed on its corporate name;
To sue and be sued in such corporate name;

To adopt, alter, and use a corporate seal;

. To adopt, amend, and repeal its by-laws;

To enter into contracts of any kind and description, to enable
it to carry out its purpose and functions under this Act;

To acquire, buy, purchase, hold or lease, such personal and
real property as it deems necessary or convenient in the
transaction of its business or in relation to carrying out of its
purposes under this Act, or both; 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
the government;

To exercise the right of eminent domain whenever the
Authority deems it necessary to attain its objectives under this
Act;

To raise, borrow or obtain funds, from any source, private or
government, foreign or domestic and to enter into any financial
or credit arrangements in order to support and carry out its
objectives and purposes, subject to the approval of the
Monetary Board of the Bangko Sentral ng Pilipinas upon the
recommendation of the Department of Finance and to other
pertinent laws governing public debt and expenditure;

‘To purchase, hold, alienate, mortgage, pledge, or otherwise
dispose of the shares of the capital stock of, or any bond,
securities, or other evidence of indebtedness created by any
other corporation, co-partnership, or government agencies or
instrumentalities; and with the owner of said stock, to exercise
all the rights of ownership, including the right to vote thereon;

Provided, that the Authority shall not invest its funds in any
highly risky debt instruments issued without recourse to
commercial banks or investment houses as well as in any
speculative stocks; and,

For carrying on its business, or for the purpose of attaining or
furthering any of its objectives, to perform any acts which a
corporation, co-partnership, or natural person is authorized to
perform under the laws now existing or which may be enacted
hereafter.


CHAPTER III
CAPITALIZATION AND FINANCING

SECTION 8. Capitalization and Financing. - The Authority shall
have an authorized capital of One Hundred Million Pesos
(P100,000,000.00) of which the amount of Fifty-One Million Pesos
(P51,000,000.00) shall be subscribed by the National Government and
Fourty-Nine Million Pesos (P49,000,000.00) shall be subscribed by
provinces, cities, and municipalities within the region; and
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, the authorized capital stock may be increased upon the
recommendation of NEDA.

The authorized capital stock of One Hundred
Million Pesos (P100,000,000.00) shall be divided into One Million
(1,000,000) shares of stock with a par value of one hundred pesos
(P100.00) per share.

The shares of stock of the Authority shall be divided
into 700,000 common shares (voting) and 300,000 preferred shares
(non- voting), with such fixed rates of return to be determined by the
Board. Of the common shares of 700,000, a minimum of 400,000
shares shall be subscribed by the National Government, and at least
sixty percent (60%) of the balance shall be subscribed by the
Provinces of Agusan del Norte and Surigao del Norte in such
proportion as may be agreed upon by both provincial governments.
The remaining balance of the common shares shall be open for
subscription to municipalities and private investors.

Of the preferred shares of 300,000 a minimum of
110,000 shares shall be subscribed by the National Government. The
balance of the preferred shares shall be available for subscription to
local government units, government corporations, and private
investors. Provided, that preferred shares shall enjoy preference with
respect to the distribution of dividends and assets in case of
dissolution.

SECTION 9. Powers of Municipal Corporations to Subscribe. - For
purposes of attaining the purposes of this Authority, provinces, cities
and municipalities are hereby authorized to subscribe, own, buy or
hold shares of stock of this Authority.

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 date of the enactment
of this Act.



‘The Board may appropriate out of the funds of the Authority
such sums as may be needed for operating expenses.

SECTION 14. Exemption from tax. - The Authority shall be exempt
from all taxes, licenses, fees and duties incidental to its operations.
‘This exemption shall extend to its Period of Exemption of subsidiary
corporations. Provided that its subsidiary corporations shall be
subject to all said taxes, licenses, fees and duties five (5) years after
their establishment under a graduated scale as follows: twenty per
centum (20%) of all said taxes during the sixth year, forty per centum
(40%) of all said taxes during the seventh year, sixty per centum (60%)
of all said taxes during the eight year, eighty per centum (80%) of all
said taxes during the ninth year, and one hundred per centum (100%)
of all said taxes during the tenth year after said establishment. Such
exemption shall include any tax or fee imposed by the government on
the sale, purchase or transfer of foreign exchange. All notes, bonds,
debentures and other obligations issued by the Authority shall be
exempt from all taxes both as to principal and interest, except
inheritance and gift taxes.

SECTION 15. Sinking Fund. - A sinking fund shall be established
in such manner that the total annual contribution thereto accrued at
such rate of interest as may be determined by the Board as confirmed
by the stockholders representing a majority of the subscribed capital
stock outstanding and entitled to vote, shall be sufficient to redeem at
maturity the bonds issued under this Act.

Such fund shall be under the custody of the
treasurer of the Authority who shall invest the same in such manner
as the Board may direct, charge expenses of investment to said
sinking fund, and credit the same with the interest on investment and
other income belonging to it.

CHAPTER IV
MANAGEMENT AND PERSONNEL

SECTION 16. 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 17. Board of Directors. - The Authority shall be
governed by a Board of Directors composed of five (7) ex officio
members and twelve (12) appointive members, as follows:

Ex-officio members


a. Secretary of Environment and Natural Resources or a
representative;

Secretary of Agriculture or a representative;

Director General of the National Economic and Development
Authority (NEDA) or a representative;

Secretary of Public Works and Highways or a representative;
Secretary of Energy or a representative;

Secretary of Trade and Industry or a representative;
Secretary of Tourism or a representative;

es

pres

Appointive members:
a. A representative of the Province of Agusan del Norte;
b. A representative of the Province of Surigao del Norte;
c. A representative from the indigenous peoples; and,
d. A representative from the private sector.

The Secretary of Environment and Natural
Resources shall serve as Chairperson of the Board. The Board shall
elect from among the appointive members the General Manager of the
Authority who shall serve as the Vice-Chairperson. The selection,
appointment, and term of office of the appointive members shall be in
accordance with the pertinent provisions of Republic Act No. 10149,
otherwise known as the GOCC Governance Act of 2011.

SECTION 18. Powers and Functions of the Board of Directors.-

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

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

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

d. To approve the annual or supplemental budgets of the
Authority; and,

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

SECTION 19. Meetings of the Board. - The Board shall meet at
least once a month,

SECTION 20. Per Diems. - The members of the Board shall receive
per diem for every board meeting: Provided, that these shall be


determined by the GCG using as reference, among others, Executive
Order No. 24 dated February 10, 2011. Provided, further, that the
Directors shall not be entitled to retirement benefits as such directors.

SECTION 21. Powers of the General Manager. - The General
Manager shall be the Chief Executive of the Authority. As such, he
shall have the following powers and duties:

a. To prepare the agenda for the meeting of the Board and to
submit for consideration thereof the policies and measures
which he believes to be necessary to carry out the purposes
and provisions of this Act;

b. To execute and administer the policies, plans, programs, and
projects approved by the Board;

c. To direct and supervise the operation and internal
administration of the Authority. The General Manager may
delegate certain administrative responsibilities to other officers
of the Authority subject to the rules and regulations of the
Board;

d. To appoint officials and employees below the rank of division
heads to positions in the approved budget upon written
recommendation of the division head concerned using as guide
the standard set forth in the Authority's merit system;

e. To submit quarterly reports to the Board on personal
selection, placement, and training;

f. To 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,

g. To perform other functions as may be provided by law.

SECTION 22. Qualifications of the General Manager. ~ No person
shall be appointed General Manager unless he is a natural-born
citizen, resident of the Philippines, has unquestioned integrity and
demonstrated executive competence and experience in any of the
fields of public administration, economic planning, environmental and
natural resource management, or in the establishment and
management of large agricultural, commercial or industrial
enterprises.

SECTION 23. Tenure of Office of the General Manager. - The
General Manager shall be elected by the Board annually from among
the appointive members appointed by the President of the Philippines.


SECTION 24. — Compensation. - The General Manager shall receive
compensation at rates in accordance with the Salary Standardization
Law.

SECTION 25. Activities of the Authority; Key Officials. - The
activities of the Authority shall be carried out under the supervision of
the General Manager through the following administrative officials
who will be responsible directly to him:

a. 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 the General Manager in the
absence of the former during his temporary incapacity or until
such time as a new General Manager is duly appointed, or both.

b. A division chief for operations;
¢. A division chief for planning, programming and research;
d. A division chief for administration;

©. A corporate counsel, with the rank of division head, to advise
and represent the Authority on legal matters, procedures and
actions;

f. A corporate treasurer, with a rank of division head, who shall
have custody of the funds and properties of the Authority.

SECTION 26. Auditor. - The Chairman of the Commission on
Audit (COA) shall be the ex officio Auditor of the Authority. For this
purpose, he may appoint a representative who shall be the Auditor of
the Authority and the necessary personnel to assist said
representative in the performance of his/her duties.

SECTION 27. Implementing Rules and Regulations. — The
implementing rules and regulations to effectively carry out the
provisions of this Act shall be promulgated and adopted by the Board
of Directors of the Authority within ninety (90) days after the approval
of this Act which shall be published in at least one (1) national
newspaper of general circulation.

SECTION 28. Repealing Clause. ~ All laws, decrees, executive
orders, proclamations, rules and regulations, or parts thereof
inconsistent herewith are hereby repealed or modified accordingly.

SECTION 29. —_Separability Clause. ~ If any provision of this Act is
held invalid or unconstitutional, the other provisions not affected
hereby shall remain valid and subsisting.


SECTION 30. —_Effectivity. - This Act shall take effect fifteen (15)
days after its publication in at least two (2) national newspapers of
general circulation.

Approved,