Republic of the Bjilipyines

House of Representatives

Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

4764

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M, AMANTE
and
Honorable GUILLERMO A. ROMARATE, JR.

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.

jc 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 envisioned that Lake Mainit will
become a major economic engine in Caraga Region and the whole of Mindanao.
It shall be a model for sustainable lake development that is anchored on social
mobilization and environmental protection.

In the light of the foregoing, the passage of this bill is earngstly
requested.



“Republic ofthe Bllppins
House of Representatives
@ueson City, Aetew Manila

SIXTEENTH CONGRESS
Second Regular Session

House Bill No. 4764

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE

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

Be it

nacted by the Senate and House of Representatives of the Philippines in
n 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;

e. 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 no

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

the following 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;

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

f, 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;

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

h. To borrow funds from any local or foreign financial institutions
independent of the bonds it may issue or continue to issue, to
carry out the purposes of the Authority under this Act;

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,

j. 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 IIL
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  sucl
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 11. Power to Incur Debts and to Issue Bonds. —
Whenever the Board may deem it necessary for the Authority to incur
an indebtedness or to issue bonds to carry out the provisions of this
Act, it shall by resolution so declare and state the purpose for which
the proposed debt is to be incurred, The resolution shall be confirmed
by the vote of the stockholders representing a majority of the
subscribed capital stock outstanding and entitled to vote.

‘The authority shall submit to the NEDA Board and
the Monetary Board of the Bangko Sentral ng Pilipinas, for approval of
its proposal to incur indebtedness or to issue bonds. This shall be
considered authorized upon the approval of the President of the
Philippin

SECTION 12. 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, and considering
further a proper balanced productive and non-productive projects so
that inflation shall be held to the minimum.

SECTION 13. Form, rates of interest, etc. of bonds. - The Board
shall prescribe the form, the rates of interest, denominations,
maturities, negotiability, convertibility, call and redemption features,
and all other terms and conditions of issuance, placement, sale,
servicing, redemption, and payment of all bonds issued by the
Authority under this Act.

‘The bonds issued by virtue of this Act may be made
payable both as to principal and interest in Philippine currency or any
readily convertible foreign currency. Said bonds shall be receivable as.
security in any transaction with the government in which such
security is required.

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 A

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.

SECTION 16. Guarantee by the Government. ~ The Republic of the
Philippines hereby guarantees the payment by the Authority of both
the principal and the interest of the bonds, debentures, collaterals,
notes or such other obligations issued by the Authority by virtue of
this Act, and shall pay such principal and interest in the event that
the Authority fails to do so. In case the Authority shall be unable to
pay the said principal and interest, the Secretary of Finance shall pay
the amount thereof, which is hereby appropriated out of any funds in
the National Treasury not otherwise appropriated, and thereupon, to
the extent of the amount so paid, the Government of the Republic of
the Philippines shall succeed to all the rights of the holders of such
bonds, debentures, collaterals, votes or other obligations, unless the
sum so paid by the Republic of the Philippines shall be refunded by
the Authority within a reasonable time.

CHAPTER IV
MANAGEMENT AND PERSONNEL

SECTION 17. 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 18. Board of Directors; Composition. - The corporate powers
shall be vested in and exercised by a Board of Directors, hereinafter
referred to as the Board, which shall be composed of eleven (11)
members, to wit: The Secretary of Agriculture; the Secretary of
Energy, Secretary of Environmental and Natural Resources; the
Director General of NEDA; the Secretary of Public Works and


Highways; the Secretary of Trade and Industry; Secretary of Tourism;
a representative of the Province of Surigao del Norte to be designated
by the Sanggunian Panlalawigan; a representative of the Province of
Agusan del Norte to be designated by the Sangguniang Panlalawigan;
the General Manager of the Authority; a representative of the private
investors to be appointed by the President of the Philippines from
among the list of nominees to be submitted by the private investors.
The Board shall elect annually from among their members a
Chairman and a Vice- Chairman. There shall be a Corporate
Secretary who shall be appointed by the Board.

‘The officials next in rank to the above-mentioned
members shall serve as permanent alternate members and shall
attend meetings of the Board in the absence of their principals and
receive the corresponding per diems.

SECTION 19. Acting Chairman —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
clects a new Chairman,

SECTION 20. Effect of vacancies; quorum. - Vacancies in the
Board, as long as there shall be four members in office, shall not
impair the powers of the Board to execute its functions. The
affirmative vote of six (6) members of the Board shall be necessary at
all times to pass or approve any act or resolution.

SECTION 21. Qualification of Directors. - All members of the
Board shall be citizens and residents of the Philippines. 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 large agricultural,
industrial, or commercial enterprises, No person shall be a nominee
as member of the Board unless the nominee is of unquestioned
integrity and competence.

SECTION 22. Prohibition against “Conflict of interest.” - No
member of the Board shall be financially interested, directly or
indirectly, in any contract entered into by the Authority or in any
special 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 provision of this Section by two- thirds (2/3) vote of the
Board shall automatically be disqualified from serving his unexpired
term and he sball furthermore be perpetually disqualified for
membership in the said Board.

SECTION 23. Removal, Courtesy resignation. - A member of the
Board may be removed from office by a vote of the stockholders


holding or representing three-fourths (3/4) of the subscribed capital
stock outstanding and entitled to vote. No member of the Board shall
be required to submit a courtesy resignation at any time during his
term of office.

SECTION 24. Board Meetings. - The Board shall mect at least
once a month. The Board shall be convoked by the Chairman or upon
written request signed by a majority of the members.

SECTION 25. Per Diems and Allowances. ~ The members of the
Board shall receive for every meeting attended a per diem to be
determined by the Board. Members of the Board shall be reimbursed
by the Authority for actual expenses including travelling and
representation expenses incurred by them in the performance of their
duties for the Authority as authorized by the Board.

SECTION 26. — 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,

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

SECTION 27. 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 28. Compensation. - The General Manager shall receive
a compensation of Seven Hundred ‘Twenty Thousand Pesos
(P720,000.00) per annum which shall be charged against the annual
appropriations of the Authority for operating expenses. ‘The Board of
Directors shall provide per diems and allowances for the General
Manager.

SECTION 29. Residence, - The General Manager shall establish
his residence within the region. He shall not, during his term of office,
engage in any business, profession or calling; other than those
connected in the performance of his official duties as General Manager
of the Authority.

SECTION 30. Activitie of the Authority; Key Official - 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,
dutics 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;
c. A division chief for planning, programming and research;

d. A division chief for administration;


e. 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 31. Merit System. — All officials, agents and employees of
the Authority shall be selected and appointed based on merit and
fitness in accordance with a comprehensive and progressive merit
system to be established by the Authority. Personnel, including
temporary workers, shall be governed by such merit system.

SECTION 32, Appointed by the Board. - The Assistant General
Manager and Division Chiefs shall be appointed by the Board upon
ecommendation of the General Manager.

SECTION 33. Appointed by the General Manager. - Officials and
employees below the rank of Division Chief shall be appointed to
position in the approved budget by the General Manager upon written
recommendation of the division head concerned, using as guide the
standards set forth in the Authority’s merit system; Provided, That the
General Manager shall submit a quarterly report to the Board
regarding personnel selection, placement and training.

SECTION 34, — Minimum Wage. — All contracts entered into by the
Authority, which require the employment of persons, shall contain a
provision that no less than the regional minimum wage fixed by law
shall be paid to such persons so employed.

SECTION 35. Plans to be formulated within one year. - Upon its
organization, the Board of Directors shall formulate and report to the
stockholders with utmost manner, but in no case longer than one
year, its plans and recommendations for the accelerated and balanced
development of the region in accordance with the aim and purposes of
this Act

SECTION 36. Supplies and services other than personnel. ~ All
purchases of supplies or contracts for services, except for personnel
services, entered into by the Authority shall be done only after a
proper bidding is held. Bidding shall not be required when: (a) the
amount involved is five thousand pesos (P5,000.00) or less; (b) an
emergency, as certified to by the General Manager, requires immediate
delivery of the supplies or performance of the services: Provided, that
in comparing bids and making awards, the Authority shall consider
such factors as the cost and relative quality and adaptability of
supplies or services and the capability of bidders.


SECTION 37. Tenure of office of the General Manager. - The
General Manager shall serve for a fixed term of six (6) years, unless
earlier removed from office by vote of the stockholders holding or
representing two-thirds (2/3) of the subscribed capital stock
outstanding and entitled to vote.

SECTION 38. Auditing. ~ The Board of Directors shall provide and
appoint an auditor who shall formulate an auditing system for the
Authority. The Auditor shall make a semestral report covering the
financial conditions and operations of the Authority to the Board.
‘These audit reports shall contain a statement of the resources and
liabilities, including, earnings and expenses, the amount of paid-up
capital stock, surplus, reserves, profits, as well as losses, bad debts
and such other facts, which under auditing rules and regulations, are
considered necessary to accurately describe the financial conditions
and operation of the Authority. The Auditor shall report and be
directly responsible to the Board.

SECTION 39. External Auditor. - The Board of Directors shall
retain and engage the services of a reputable auditing firm, which
shall act as the external auditor of the organization. As such, it shall
render reports concerning the financial conditions of the Authority
which shall require a statement of the resources and liabilities,
including earnings and expenses, the amount of paid-up capital stock,
surplus, reserves, and profits, as well as losses, bad debts and such
other auditing rules and regulations, are considered necessary to
accurately describe the financial condition of the Authority.

SECTION 40. Repealing Clause. ~ All laws, decrees, executive
orders, proclamations, rules and regulations, or parts thereof
inconsistent herewith are hereby repealed or modified accordingly.

SECTION 41. — 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 42. —_Effectivity. - This Act shall take effect fifteen (15)

days after its publication in at least two (2) national newspapers of
general circulation

Approved,