FURTHER AMENDING PRESIDENTIAL DECREE NO. 198 OTHERWISE KNOWN AS THE "PROVINCIAL WATER UTILITIES ACT OF 1973", AS AMENDED BY PRESIDENTIAL DECREE NO. 768

• Number: Presidential Decree No. 1479
• Sections: 19

Preamble

WHEREAS, Presidential Decree No. 198, as amended by

Presidential Decree No. 768, declares as a national policy the local operation

and control of water system; authorizes the formation of local water districts;

provides for the administration of such districts and charters a national

administration to facilitate improvement of local water utilities;

WHEREAS, in order to accelerate the development and

expansion of domestic water systems, there is a need to further amend certain

provisions of Presidential Decree No. 198, as amended.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution, do hereby

order and decree the further amendment of Presidential Decree No. 198, as

follows:

Section 1

SECTION 1. The first paragraph of Section 6 of Presidential

Decree No. 198, as amended, is hereby amended to read as follows:

"SEC. 6. Formation of District.—This Act is the

source of authorization and power to form and maintain a district. For purposes

of this Act, a distinct shall be considered as a quasi-public corporation

performing public service and supplying public wants. As such, a district shall

exercise the powers, rights and privileges given to private corporations under

existing laws, in addition to the powers granted in, and subject to such

restrictions imposed, under this Act.

x x x

(c) A statement completely transferring any and all waterworks and/or

sewerage facilities managed, operated by or under the control of such city,

municipality or province to such district upon the filing of resolution forming

the district.

Section 2

SEC. 2. A new sentence is hereby added to Section 8 of the

same decree to read as follows:

"SEC. 8. Number and Qualifications. xxx

Provided, however, that if the district has availed of the financial

assistance of the Administration, the Administration may appoint any of its

personnel to sit in the board of directors with all the rights and privileges

appertaining to a regular member, for such period as the indebtedness remains

unpaid, in which case the board shall be composed of six

members."

Section 3

SEC. 3. Section 25 of the same decree is hereby amended.

Section 4

SEC. 4. Section 26 of the same decree is hereby amended to

read as Section 25 as follows:

"SEC. 25. Authorization.—The district may exercise

all the powers which are expressly granted by this Title or which are

necessarily implied from or incidental to the powers and purposes herein stated.

For the purpose of carrying out the objectives of this Act, a district is hereby

granted the power of eminent domain, the exercise thereof shall, however, be

subject to review by the Administration."

Section 5

SEC. 5. Sections 27, 28, 29, 30 and 31 of the same decree

are hereby amended to read as Sections 26, 27, 28, 29 and 30, respectively.

Section 6

SEC. 6. Section 32 of the same decree is hereby amended to

read as Section 31.

"SEC. 31. Protection of Waters and Facilities of

District.—A district shall have the right to

x x x

(e) take over the management, administration, operation and maintenance of

all watersheds within its territorial boundaries."

Section 7

SEC. 7. Sections 33, 34, 35, 36, 37, 38, 39, 40 and 41 of

the same decree are hereby amended to read as Sections 32, 33, 34, 35, 36, 37,

38, 39 and 40, respectively.

Section 8

SEC. 8. A new section is hereby inserted to be known as

Section 9

SEC. 9. Section 47 of the same decree is hereby amended to

read as follows:

"SEC. 47. Exclusive Franchise.—No franchise shall

be granted to any other person or agency for domestic, industrial or commercial

water service within the district or any portion thereof unless and except to

the extent that the board of directors of said district consents thereto by

resolution duly adopted, such resolution, however, shall be subject to review by

the Administration."

Section 10

SEC. 10. Section 61 of the same decree is hereby amended to

read as follows:

"SEC. 61. Loans.

x x x

(f) Funding of Loan.—When a loan is made to local water utility, the

necessary amount of such loan shall be programmed to assure completion of the

project for which such loan was granted."

Section 11

SEC. 11. The last paragraph of Section 63 of the same decree

is hereby amended to read as follows:

"SEC. 63. Rate Review.

x x x

The rates or charges established by such local district, after hearing shall

have been conducted for the purpose, shall be subject to review by the

Administration to establish compliance with the above-stated provisions. Said

review of rates or charges shall be executory and enforceable after the lapse of

seven calendar days from posting thereof in a public place in the locality of

the water district, without prejudice to an appeal being taken therefrom by a

water concessionaire to the National Water Resources Council whose decision

thereon shall be appealable to the Office of the President. An appeal to the

Council shall be perfected within thirty days after the expiration of the

seven-day period of posting. The Council shall decide on appeal within thirty

days from perfection.

Section 12

SEC. 12. Section 67 of the same decree is hereby amended to

read as follows:

"SEC. 67. Capital Stock.—The authorized capital of

the Local Water Utilities Administration is Two Billion, Five Hundred Million

Pesos divided into Twelve Million Five Hundred Thousand share of stock with a

par value of Two Hundred Pesos per share which shall be subscribed by the

National Government and opened to subscription by private investors or

government financial institutions."

Section 13

SEC. 13. Section 68 of the same decree is hereby amended to

read as follows:

"SEC. 68. Payment for National Government

Shares.—All amounts x x x x at par value. Whatever balance remaining of

said subscription shall be paid from a continuing appropriation which is hereby

made out of any funds in the National Treasury not otherwise appropriated, such

annual appropriation to be programmed and released in accordance with pertinent

budget laws: Provided, That this continuing appropriation shall remain

in force until the balance of the unpaid subscription of the government to the

capital stock of the administration have been paid in full."

Section 14

SEC. 14. New sections are hereby inserted to be known as

Section 15

SEC. 15. Sections 76, 77, 78 and 79 of the same decree are

hereby amended to read as Sections 78, 79, 80 and 81, respectively.

Section 16

SEC. 16. This Decree shall take effect immediately.

Done in the City of Manila, this 11th day of June in the year of Our Lord,

nineteen hundred and seventy-eight.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential

Assistant

Section 41 which shall read as follows: "SEC. 41. Disposition of Income.

Section 41 which shall read as follows:

"SEC. 41. Disposition of Income.—The income of the

district shall be disposed of according to the following priorities:

"First to pay its contractual and statutory obligations and to meet its

essential current operating expenses.

"Second, to allocate at least fifty percent (50%) of the balance exclusively

as a reserve for debt service and operating and maintenance, to be used for such

purposes only during periods of calamities, force majeure or unforseen

events.

"Third, to allocate the residue as a reserve exclusively for expansion and

improvement of its physical facilities."

Section 76

Section 76 and 77, respectively, which shall read as follows:

"SEC. 76. Government Assistance to Non-Viable

Districts.—There shall be included in the General Appropriations Act an

outlay in the form of National Government aid or subsidy to meet the financial

requirements in the development of water supply systems of water districts which

are determined by the Administration to be financially non-viable in such amount

as the Administration may recommend, but not exceeding the cost of source

development and main transmission line. Releases of such funds shall be made

directly to the Administration. In the development of such water supply systems,

the Administration shall exert all efforts to bring the levels of services

within the cost repayment capacity of the beneficiaries."

"SEC. 77. Special Projects.—Whenever required by

the National Government to provide funding requirements for the development of

waterworks and sewerage systems in municipalities, cities or provinces, or

portions thereof not yet covered by a duly formed water district, an outlay

shall be provided in the General Appropriations Act, upon the request of the

Administration, separate from its capitalization, for the purposes of meeting

the financial requirements of the project: Provided, however, That in

the event that funds for the project have already been appropriated by the

National Government, such funds shall by released directly to the

Administration. Expenses incurred by the Administration for the service rendered

may be drawn from such account as provided in Section 70 of this

Title."