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SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )

Second Regular Session )
HOUSE OF REPRESENTATIVES , :
Introduced by Representative Maximo B. Rodriguez, pcerers
House Bill No. 6862
EXPLANATORY NOTE

Cagayan de Oro River is one of the rivers draining the northem central part of
Mindanao. The river has its headwaters in the Kalatungan Mountain Range in Bukidnon. It
traverses the municipalities of Talakag, Baungon and Libona, picking up tributaries
(Kalawaig River ,Tagite River Bubunaoan River) along the way. It finally empties into the
Macajalar Bay at Cagayan de Oro City. It serves as the natural boundary between the
Bukidnon and Lanao del Sur and between Bukidnon and Cagayan de Oro City. It is popular
for whitewater rafting and is the main tourist attraction of Cagayan de Oro City.

Just recently, Cagayan de Oro River overflowed and the whole city suffered from
flashfloods. The flashfloods destroyed not just properties but agricultural areas and farm-to-
market roads as well. Based on the Progress Reports of the Regional Disaster Coordinating
Council of Region 10 based in Cagayan de Oro City, the flashfloods of January 3, 2009 have
affected 21,605 persons or 5,223 families in the city and have damaged houses with 141
totally damaged and 1,410 partially damaged in an estimated cost of 1.9 million as of
January 8, 2009 only.

In the January 11, 2009 floods that befell Cagayan de Oro City, 37,086 persons or
7,410 families were affected with 94 houses totally damaged and 71 partially damaged.

To prevent flashfloods from recurring, there is a need for a more comprehensive
flood control and drainage system along Cagayan de Oro River, its tributaries and natural
waterways. Hence, this bill which seeks to create the Cagayan de Oro River Basin
Development Authority which shall oversee the preservation, protection and development of
the waterways flowing into it.

In view thereof, immediate approval of this Bill is sought.

MAXIMO B. RODRIGUEZ, JR.


SEVENTEENTH CONGRESS __)
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.
House Bill NOB 862

AN ACT
CREATING THE CAGAYAN DE ORO RIVER BASIN DEVELOPMENT AUTHORITY,
DEFINING ITS POWERS AND FUNCTIONS AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Short Title. — This Act shall be known as the “Cagayan De Oro River Basin
Development Authority Act :

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to promote
and accelerate the preservation, protection, development and balanced ecology of the
Cagayan de Oro River Basin and its tributaries, including its surrounding provinces, cities
and municipalities, within the context of the national plans and policies for social and
economic development. Towards this end, the State shall focus its resources and capability
to implement, manage and oversee the necessary measures and programs on flood control
and drainage system in all the river systems in the region in order to eliminate the adverse
effects of typhoons and floods during rainy seasons on the lives and properties of people
residing along the area traversed by the Cagayan de Oro River.

SEC. 3. Cagayan de Oro River Authority. — There is hereby created a corporate body to
be known as the CAGAYAN DE ORO RIVER BASIN DEVELOPMENT AUTHORITY,
hereinafter referred to as the “CDO RIVER AUTHORITY,” which shall be organized within
‘one hundred (100) days after the approval of this Act.

The CDO River Authority shall be under the supervision of the Office of the
President. All policies and programs, orders, rules and regulations promulgated, all
appointments made and all transactions entered by CDO River Authority shall be subject to
the approval of the President of the Philippines.

SEC. 4. Mandate. - The CDO River Authority shall exercise the following mandates:
a) Prepare a master plan to preserve, protect and develop the Cagayan de Oro
River and its major tributaries which shall include the Kalawaig River, Tagite
River, and Bubunaoan River and other rivers or river systems within the
territorial jurisdiction of the CDO River Authority;
Conduct engineering surveys of the major rivers and river systems, assess
and monitor water quality, pinpoint pollution sources and identify the rivers
that need to be developed for exploitation or rehabilitation;
Plan, program, finance and undertake infrastructure projects such as river,
flood and tidal control, waste and sewerage system, water supply, roads, port,
irrigation, housing and related public works which are required within the
context of its development plans and programs, including the readjustment,
relocation or resettlement of population as may be deemed necessary and
beneficial by the CDO River Authority;
Initiate and facilitate planning, implementation, monitoring and evaluation of
pertinent projects with positive impact on environment and development,

b)

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including dredging, widening and deepening of river channels and
improvement of river alignments, revetments, construction of dams and
reforestation;

e) Prioritize rivers positively identified for development and rehabilitation and
prepare a river-specific plan of operation for the development, rehabilitation
and general improvement of environmentally degraded rivers;

f)_ Initiate funding arrangements with local and foreign donors, including fund-
raising, to finance priority development projects and provide direct funding of
minor initiatives expected to create a positive impact on the environment in
the projected area;

g) Recommend to the proper agencies offering financial support, technical and
physical assistance about the level of priority to be accorded to river systems
development and rehabilitation projects;

h) Coordinate and integrate such projects or operations of local govemments,
government agencies, public corporations and, where clearly necessary and
feasible, those of private entities, as will bear directly upon the plans and
activities of the CDO River Authority so as to make possible the accelerated
and intensive development and rehabilitation of the rivers and river systems
within the context of the master plan and to set up a compact and well-trained
staff for effective liaison and consultation or joint planning and implementation
with such government and private entities;

i) Investigate, identify natural washes and gullies, study the lay of the land,
improve, construct and administer all flood control and drainage systems in
the areas covered;

j) Investigate and identify available and possible water resources for the
purpose of utilizing the same and implement the acquisition thereof,

k) Set the minimum depth and slope and standard of flood control and drainage
systems so that water will reach their natural outfalls; and

}) Plan, design, construct the necessary flood control and drainage systems for
the next twenty (20) years following the approval of this Act.

SEC. 5. Powers and Functions. — The CDO River Authority shall exercise the following
powers and functions:

a) Cause, oversee, coordinate and monitor the implementation of, and
Periodically update the master plan to preserve, protect, develop and exploit
the physical and natural resources of the Cagayan de Oro River and its major
tributaries and areas along such rivers and tributaries;

b) Exercise supervision, control and regulation over the implementation of the
infrastructure projects such as river, flood and tidal control, waste water and
sewerage system, water supply, roads, port, irrigation, housing and related
public works within its master plans and programs;

©) Exercise the right of eminent domain whenever the Commission deems it
necessary to attain the mandate under this Act;

d) Enter into contracts of any kind and description to enable it to carry its
mandate and functions;

) Acquire, buy, purchase, hold or lease, such personal and real property as it
deems necessary or convenient in the transaction of the business or in
carrying out its mandate and to lease, mortgage, sell, alienate or otherwise
encumber or dispose of any personal and real property held by the CDO
River Authority;

f) Sue and be sued in its corporate name;

@) 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 CDO River Authority under this Act;


h) Collect from the users of drainage system such fees as may be necessary to
finance the continuous operation and reimburse within a period of not less
than twenty-five (25) years the cost of construction thereof;

i) Report annually to the President and the Congress of the Philippines of its
activities including those in collaboration with the various government and
private entities engaged in the implementation of the projects and programs.
The report shall include, among others, a comparison of the developmental
and rehabilitation targets as set for the year ending, the extent to which actual
accomplishments measure up to such targets and the appropriate
administrative and legislative recommendations; and

i) Perform such other functions as may be necessary to carry out the provisions
of this Act.

SEC. 6. Principal Office. - The CDO River Authority shall have its principal office in
Cagayan de Oro City but it may have branch offices in such other places within the territorial
jurisdiction of the CDO River Authority as are necessary for the proper conduct of its
business.

SEC. 7. Territorial Jurisdiction. — The territorial jurisdiction of the CDO River Authority
shall include the Cagayan de Oro River, its tributaries and the areas adjacent to them in
Cagayan de Oro in the Provinces of Bukidnon and Lanao del Sur.

SEC. 8. Board of Directors. — The duties and functions of the CDO River Authority shall be
directed, its properties managed and preserved and its corporate powers exercised, unless
otherwise provided in this Act, by a Board of Directors which shall be composed of the
following:

a) Secretary of Public Works and Highways;

b) _ Director-General of the National Economic Development Authority;

©) Secretary of Environment and Natural Resources;

d) Secretary of Agriculture;

e) Secretary of the Interior and Local Goverment;

f) Secretary of Finance;

9) Secretary of Tourism;

h) Administrator of the National Irrigation Administration;

i) Representative from the private sector;

i) Congressman of the 1* District of Cagayan de Oro City;

k) Congressman of the 1* District of Cagayan de Oro City; and

1) Mayor of Cagayan de Oro City.

The Board of Directors shall elect from among themselves a chairman and a vice-
chairman.

The representative of the private sector shall be appointed by the President of the
Philippines from among the list of recommendees to be submitted by the private sector.

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 shall receive the corresponding per diems.

The representative of the private sector shall be a Filipino citizen, of good moral
character, and with recognized competence in the field of public administration or directly
related to water works management and engineering or allied services.

‘The members of the Board shall be reimbursed by the CDO River Authority for actual
expenses, including traveling and subsistence, incurred by them in the performance of their
duties,

No member of the Board shall have financial or pecuniary interest, directly or
indirectly, in any business contract or transaction entered into by the CDO River Authority or
in any privilege granted by it. Neither shall a member have any interest, financial or


‘otherwise, in any undertaking or business with an inherent conflict of interest with the CDO
River Authority

SEC. 9. Powers and Duties of the Board of Directors. - The Board of Directors shall
exercise the following powers and duties:

a) Formulate, prescribe, amend and repeal rules and regulations to govern the conduct
and operation of the CDO River Authority;

b) Provide comprehensive policy guidance for the preservation, protection and
development of the Cagayan de Oro River and its other tributaries as provided in this
Act;

) Decide the objectives, strategies and policies to be followed by the CDO River
Authority;

d) Ensure that the CDO River Authority performs its functions in a proper, efficient and
effective manner,

) Determine the organizational structure of the CDO River Authority, establish a human
resources management system based on merit and fitness, and adopt a rational
‘compensation and benefits scheme;

f) Suspend, remove or otherwise discipline for just cause any staff member appointed
by the Board;

9) Approve the annual and supplementary budgets for submission to the Congress of
the Philippines;

h) Submit an annual report to the President of the Philippines; and

i) Perform such other functions as may be necessary to carry out the purpose of this
Act.

SEC. 10. Meetings. - The Board shall meet regularly once a month and may hold special
meetings to consider urgent matters upon call of the Chairman or any of its three (3)
members. The majority of the Board shall constitute a quorum and the decisions of the
Board shall require the concurrence of at least five (5) members. The intemal rules of
procedure in the conduct of Board meetings shall be prescribed by the Board.

SEC. 11. Administrator. - The CDO River Authority shall be headed by an Administrator
who shall be the chief executive officer (CEO) of the CDO River Authority and shall be
fesponsible for the general administration and management of the agency. The
Administrator must be a natural bom citizen of the Philippines, at least forty-five (45) years of
age, with at least ten (10) years experience in the field of public administration or the
management of agricultural, industrial or commercial enterprises and a recognized authority
on flood control and drainage or related fields.

The Administrator shall be appointed by the President of the Philippines upon the
recommendation of the Board for a term of three (3) years unless earlier removed for cause
by the President.

For purposes of law enforcement functions, the Administrator is deemed a person in
authority. All subordinate officials and personnel are deemed agents of persons in authority.

SEC. 12. Powers and Functions of the Administrator. — The Administrator shall exercise
the following powers and functions:

a) Execute, administer and implement the objectives, policies and programs of
the CDO River Authority and enforce decisions, orders, rules and regulations
approved or prescribed by the Board of Directors;

b) Prepare the agenda for the meeting of the Board and submit for consideration
thereof the policies and measures which he believes necessary to carry out
the provisions of this Act;

©) Direct and supervise the operation and internal administration of the CDO
River Authority. The Administrator may delegate certain administrative


responsibilities to other officers of the CDO River Authority subject to the
rules and regulations of the Board; and
d) Exercise such other powers as may be directed by the Board

SEC. 13. Compensation. — The Administrator shall receive a compensation to be
determined by the Board which shall be charged against the annual appropriation of the
CDO River Authority. The Board of Directors shall provide the per diems and allowances for
the Administrator.

SEC. 14. Residence. — The Administrator shall establish his residence within the territorial
jurisdiction of the CDO River Authority. The Administrator shall not, during his term of office,
engage in any business or profession other than those connected in the performance of his
official duties as Administrator.

SEC. 15. Administrative Staff. — The activities of the CDO River Authority shall be carried
under the supervision and control of the Administrator through the following administrative
officials:

a) An Assistant Administrator who shall be appointed by the President of the
Philippines upon the recommendation of the Board. He shall exercise such
powers, duties and functions that may be delegated by the Administrator and
shall act as Administrator in the absence of or during the temporary incapacity
of or until such time a new Administrator is duly appointed;

b) An Administrative Officer who shall be responsible for providing services
related to personnel, training, information, records, supplies, general services,
equipment and security;

A Planning and Management Development Officer who shall be responsible

for providing services to planning, programming, statistics and project

development;

‘A Budget and Finance Officer who shall be responsible for providing staff

advice and assistance on budgetary matters and safekeeping of corporate

assets;

e) A Legal Officer who shall represent the CDO River Authority in legal actions
and proceedings;

f) An Engineering and Construction Officer who shall be responsible for
providing services related to detailed engineering plans and construction and
maintenance of projects facilities; and

9) An Information Officer who shall take charge of re-orientation and education
of personnel and the communities living along the river banks.

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d)

SEC.16. Structure, Staffing and Pay Scale. - The Board of Directors of CDO River
Authority shall determine the organizational structure and staffing pattem of CDO River
Authority and pay scales of the officers and employees thereof conforming to that of existing
government-owned or controlled corporations and subject to the evaluation or screening by
the Civil Service Commission and of the Organization Position Classification and
Compensation Bureau of the Department of Budget and Management. The Board may
reorganize said structure, modify such pattem, or alter the same scale and create or abolish
division, sections or units and any of its subsidiaries.

SEC. 17. Merit System. — All officials, agents and employees of the CDO River
Authority shall be selected and appointed on the basis of merit and fitness in accordance
with a comprehensive and progressive merit system to be established by the CDO River
Authority immediately upon its organization. The recruitment, transfer, promotion and
dismissal of all its personnel including temporary workers shall be governed by such merit
system


SEC. 18. Appointment by the Board. — The administrative officers and employees shall be
appointed by the Board upon the recommendation of the Administrator.

SEC. 19. Authorized Capital Stock. — The authorized capital stock of CDO River Authority
shall be Five Hundred Million Pesos (P500,000,000.00) divided into Two Million Five
Hundred Thousand (2,500,000.00) par value shares of Two hundred pesos (P200.00) each:
Provided, That eighty percent (80%) of the authorized capital shall be fully subscribed by the
National Government to be appropriated out of any funds in the National Treasury not
otherwise appropriated of which at least fifty percent (50%) shall have been fully paid:
Provided, That twenty percent (20%) thereof shall be subscribed and paid for by the City
Govemment of Cagayan de Oro

SEC. 20. Operating Expenses. — For the operating expenses of the CDO River Authority,
the sum of Twenty Million Pesos (P20,000,000.00) is hereby authorized to be appropriated
annually for two (2) years. Thereafter, the Board of Directors shall appropriate out of the
funds of the CDO River Authority such sums as may be needed for its operating expenses.

SEC. 21. Tax Exemption. - CDO River Authority shall be exempt from the payment of
income taxes, franchise taxes, realty taxes and all kinds of taxes and licenses of the National
Government, its provinces, cities, municipalities and other govemment agencies and
instrumentalities: Provided, That its subsidiary corporations shall be subject to all said taxes
five (5) years after their establishment. Such exemption shall include any tax or fee imposed
by the government on the sale, purchase or transfer of foreign exchange and all notes,
bonds and debentures, and other obligations issued by CDO River Authority both as to
principal and interests.

The importation of machinery, equipment, materials, and supplies by CDO River
Authority paid from the proceeds of any loan, credit or indebtedness incurred under this Act
shall be exempt from all taxes, fees, imposts, other charges and restrictions imposed by the
government of the Republic of the Philippines or any of its agencies and political
subdivisions.

SEC. 22. Audit. - The Chairman of the Commission on Audit shall appoint a
representative who shall be the resident auditor of the CDO River Authority. He shall
likewise appoint the necessary personnel to assist said representative in the performance of
his duties. The salaries of the auditor and his staff shall be fixed by the Chairman of the
Commission on Audit. The salaries and other expenses for the auditor's office shall be
included in the budget of the Commission on Audit. The auditor of the CDO River Authority
and personnel under him may be removed only for cause by the Chairman of the
Commission on Audit.

SEC. 23. Annual Audit Report. - An annual audit report shall be submitted by the
Commission on Audit to the Board of Directors of the CDO River Authority and copies
thereof shall be furnished to the President of the Philippines. The report shall set forth the
scope of the audit and shall include a statement of assets and liabilities, capital and surplus
or deficit; a statement and surplus or deficit analysis; statement of income and expenses; a
statement of sources and application of funds; and such comments and information as may
be necessary, together with such recommendations with respect thereto as may be
advisable, including a report of any impairment of capital noted in the audit. The report shall
also show specifically any program, expenditures or other financial transaction or
undertaking observed in the course of audit, which in the opinion of the auditor, has been
carried out or made without authority of law.

SEC. 24. Applicability of the Corporation Code. — The provisions of the Corporation
Code, as amended, insofar as they are not inconsistent with this Act, shall be applicable to
CDO River Authority.


SEC.25. Repealing Clause. — All laws, decrees, executive orders, rules and
regulations and other issuances, or parts thereof, inconsistent with the provisions of this Act,
are hereby repealed or modified accordingly

SEC. 26. Separability Clause. — If any part or provision of this Act is declared
unconstitutional, other parts or provisions hereof which are not affected thereby shall
continue to be in full force and effect.

SEC. 27. Effectivity. — This Act shall take effect fifteen (15) days after its publication in at
least two (2) national newspapers of general circulation.

Approved,