S. No. 507 / 59 OG No. 36, 6022 (September 9, 1963)

[ REPUBLIC ACT NO. 3597, June 22, 1963 ]

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NUMBERED THIRTEEN HUNDRED EIGHTY-THREE, ENTITLED "AN ACT CREATING A PUBLIC CORPORATION TO BE KNOWN AS THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY."

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:SECTION 1. The first and second paragraphs of Section One of Republic Act Numbered Thirteen Hundred Eighty-three; are hereby amended to read as follows:

"SEC. 1. Creation of the National Waterworks and Sewerage Authority; its general purposes; zone and extent of jurisdiction comprised by it; domicile and, place of business of the corporation.&mdashFor the purpose of consolidating and centralizing all waterworks and sewerage items in the Philippines under one control, direction and general supervision, there is hereby created a public corporation to be known as the National Waterworks and Sewerage Authority, which shall be organized within one month after the approval of this Act.The National Waterworks and Sewerage Authority own and/or have jurisdiction, supervision and control over all territory now embraced by the Metropolitan Water District as well as all areas now served by existing government-owned waterworks and sewerage systems in cities, municipalities, and municipal districts, including those served by the Waterworks and Wells and Drills Sections of the Bureau of Public Works: Provided, That the Board of Directors of the National Waterworks and Sewerage Authority, in the interest of the public service, may from time to time extend its territory by the admission or inclusion of any area served by waterworks located in any other city, municipality or municipal district."

SEC. 2. Paragraphs (a), (g) and (l) of Section Two, of the same Act are hereby amended to read as follows;

"(a) To exist and have continuous succession under its corporate name until December thirty-first, two thousand thirteen, the provisions of Executive Order Numbered Three hundred ninety-nine, dated January five, nineteen hundred fifty-one, to the contrary notwithstanding: Provided, however, That at the end of said period the authority shall automatically continue to exist unless otherwise provided by law;""(g) To construct, maintain and operate such artesian wells and springs as may be needed and requested by any city or municipality, and to take control of and administer all such artesian wells and springs as may now be in actual operation, the respective city, municipality or municipal district concerned to appropriate sufficient funds for the purpose;""(l) When essential to the proper administration of its corporate affairs or when necessary for the proper transaction of its business or for carrying out the purpose for which it was organized, to contract indebtedness in any currency and issue bonds, subject to the approval of the Secretary of Finance.  The total long-term indebtedness of the Authority shall not at any time exceed five hundred million pesos or the, equivalent thereof in other currencies, the equivalent to be determined at the time such indebtedness is incurred, and such indebtedness shall be subject to the conditions set forth in section five of this Act; and to facilitate payment of its indebtedness, National Waterworks and Sewerage Authority shall be exempt from all taxes, duties, fees, imposts, charges, and restrictions of the Republic of the Philippines, its provinces, cities and municipalities;"

SEC. 3. Section Three of the same Act is hereby amended to read as follows:

"SEC. 3. Board of Directors; its members, reports to the President and Congress of the Philippines.&mdashUnless otherwise provided by law, all corporate powers of the National Waterworks and Sewerage Authority shall be vested in a Board of Directors to be composed of five members: a chairman, three other members, and the general manager of the Authority who will be an ex-officio member and vice-chairman.  Two of them must possess knowledge of waterworks, public works and/or sanitary engineering; one, knowledge of public health; and one, knowledge of business management and finance.  The chairman and the three other members of the Board shall be appointed for a term of six years by the President of the Philippines with the consent of the Commission on Appointments, their appointments to overlap for at least three years to insure the addition of not more than two new members in any one year."The Board shall establish basic policies on the conduct of the affairs of the Authority, including but not limited to, service, rates, and fiscal matters, giving the responsibility and full authority for executing same to the management.  The Board shall render annual reports to the President and the Congress of the Philippines."

SEC. 4. Section Five of the same Act is hereby amended to read as follows:

"SEC. 5. Resolution to incur indebtedness and issue bonds; their conditions, privileges, and exemptions; sinking funds; guaranty.&mdashWhenever the Board may deem it necessary for the Authority to incur indebtedness or issue bonds, it shall by resolution so declare and state the purpose for which the proposed debt is to be incurred and the conditions of such indebtedness.  In order that such resolution be valid, it shall be passed by the affirmative vote at least three members of the Board and approved by the Secretary of Finance."Subject to the approval of the Secretary of Finance, the Board of Directors may issue bonds under stipulated terms and conditions consisting of:  (1)  the total amount to be issued,  (2)  the maturity of the issue,  (3)  the coupon rate or the stipulated rate of interest,  (4)  the offering price,  (5)  the relative ranking in seniority of the particular bond issue with other obligations of the authority and  (6)  the redemption schedule of such bonds.  Any bonds issued by the authority are hereby declared exempt from taxation by the Government of the Republic of the Philippines, or by any authority, branch, division or political subdivision thereof, which fact shall be stated upon the face of said bonds.  The bonds shall be receivable as security in any transaction with the Government of the Republic of the Philippines in which such security is required."A sinking fund shall be created for each individual bond issue so authorized by the board and approved by the Secretary of Finance in such a manner that yearly contributions together with anticipated earnings on the accumulated funds shall be sufficient to retire the bond issue concerned at maturity.  The sinking fund shall be under the custody of the fiscal agent of the Philippine Government which shall invest the same either in the reacquisition of such outstanding bonds in the open market, the retirement of such bonds prior to maturity according to the predetermined schedule or in such manner as the Monetary Board and the Secretary of Finance may approve in accordance with Act Numbered Three Thousand Fourteen, and shall grant to the same the interest on investment and other incomes accruing to it."The Government of the Republic of the Philippines hereby guarantees the payment by the National Waterworks and Sewerage Authority of both the principal a the interest of the indebtedness incurred or bonds issued by said Authority by virtue of this Act,  and shall pay such principal and interest in case the said Authority fails to do so, and there are hereby authorized to be appropriated, of any funds in the National Treasury not otherwise appropriated, the sums necessary to make the payments guaranteed by this Act: Provided That the sums so paid by the Government of the Republic of the Philippines shall be refunded by the National Waterworks and Sewerage Authority.""The President of the Philippines is hereby authorized to guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, in the name and on behalf of the Republic of the Philippines, the payment of the indebtedness authorized under this Act, as well as the performance of all or any of the obligations undertaken by the National Waterworks and Sewerage Authority in the territory of the Republic of the Philippines pursuant to loan agreements entered into with any international lending or financial institutions."

SEC 5. Section Six of the same Act is hereby amended to read as follows:

"SEC. 6. Conduct of affairs and current business; officers and employees of the Authority.&mdashThe affairs and current business of the National Waterworks and Sewerage Authority shall be conducted and its rights and property shall be kept and preserved, under the direction of the Board, by a general manager, an assistant general manager, a chief engineer, an auditor, a treasurer, and such additional officers and employees as the Board may provide.The duties and powers as well as the compensation of said officers and employees shall be such as may be defined and prescribed or fixed by the Board which shall not be inconsistent with the provisions of this Act and other existing laws."The general manager shall be appointed by the President of the Philippines with the consent of the Commission on Appointments, and may be removed for cause by the "President of the Philippines.The assistant general manager, chief engineer, treasurer and all other officers and employees of the Authority shall be appointed by the general manager with the approval of the Board of Directors and shall be subject to the Civil Service Law, rules and regulations, except those whose positions may, upon recommendation of the Board of Directors, be declared by the President of the Philippine as policy-determining, primarily confidential, or highly technical in nature."The auditor shall be appointed by the Auditor General with the approval of the President of the Philippines, and may be removed for cause in like manner."

SEC. 6. Section Seven of the same Act is hereby amended to read as follows:

"SEC. 7. General Manager, Assistant General Manager, Chief Engineer, Treasurer and Auditor of the Authority; their functions; salaries.&mdashThe general manager, assistant general manager, chief engineer, treasurer and  auditor of the National Waterworks and Sewerage Authority shall each receive an annual salary which shall be fixed by the Board with the approval of the President.  The general manager shall direct and manage the affairs and business of the Authority on  behalf  of the  Board of Directors: shall submit  for the  approval of the Board an annual budget, and such supplemental budgets as may be necessary; shall submit to the Board an annual report and such partial reports as he may be required by it or he may see fit to render from time to time, regarding the condition of the business, or of any part of the business of the National Waterworks and Sewerage Authority; and shall perform such other executive duties as may be prescribed by law or may be required of him by resolution of the Board.  The assistant general manager shall per form such duties as may be required of him by the Board or general manager.  He shall act as general manager in case of the temporary absence or disability of the general manager.  The chief engineer and treasurer shall perform such duties as may be required of them by the Board or general manager."The auditor shall be the representative of the Auditor General who is hereby designated ex-officio auditor of the National Waterworks and Sewerage Authority."The auditor shall be the chief of its auditing department.  He shall audit, examine and settle all accounts of National Waterworks and Sewerage Authority according to existing law and regulations, and shall perform such other duties as the Auditor General, the General Manager, or the Board may require of him from time to time.  The employees of the Auditor's office shall be appointed by the Auditor General, who, with the approval of the Board, shall fix the number and salaries of said employees."

SEC. 7. A new paragraph is hereby inserted between the last line of the third paragraph of Section Eight and the first line of Section Nine of the same Act to read as follows:

"The National Waterworks and Sewerage Authority shall keep separate books of accounts for each Waterworks and Sewerage System and shall maintain a separate bank account for each system."

SEC. 8. The first paragraph of Section Nine of the same Act is hereby amended to read as follows:

"Sec. 9. Possession by the Authority of all water and sewer systems within its territory; charging and collection of uniform rates.&mdashThe National Waterworks and Sewerage Authority shall own and control all the water and sewer distributing systems of the City of Manila and the nearby municipalities comprising the Metropolitan Water District, as well as the water and sewer distributing systems of all other cities, municipalities and municipal districts in the Philippines, and shall charge and collect a uniform rate for all services rendered in each city, municipality, or municipal district, whether to any person, corporation, firm, government body, municipal entity or religious or charitable institutions: Provided. That the Public Service Commission shall exercise no control, supervision or jurisdiction whatsoever over the National Waterworks and Sewerage Authority in the fixing of rates or over its properties, the provisions of Commonwealth Act Numbered One hundred forty-six, as amended by Republic Act Numbered Two thousand six hundred seventy seven, to contrary notwithstanding."

SEC. 9. Sections Ten and Eleven of the same Act are hereby amended to read as follows:

"SEC. 10. National subsidy for non-revenue producing water systems and sanitary works.&mdashNon-self-support and/or non-revenue producing water systems and sanitary works, such as springs and artesian wells, shall receive from the National Government a subsidy to be provided in the Annual Appropriation Acts for the construction, operation, maintenance, and control of those works once completed.  The amount of the subsidy shall be determined by the Budget Commissioner who shall base such determination upon recommendation of the National Waterworks and Sewerage Authority.  The accounting and disbursing of funds for this particular item of expense shall be undertaken separately in the account books of the Authority."SEC. 11. Letting of contracts for public works of the Authority.&mdashAll construction and repair works authorized by the Authority, involving an estimated cost of ten thousand pesos or more, shall be let by the General Manager with the approval of the Board of Directors to contract under the usual bidding procedure of the Government, except in the case of construction or repair of water, sewer, and pipe lines, and such other projects which in the discretion of the  Board, due to its urgent nature, should be undertaken by the Authority by administration."

      .SEC. 10. This Act shall take effect upon its approval.Approved, June 22, 1963.

Source: Supreme Court E-Library