AN ACT CREATING A PUBLIC CORPORATION TO BE KNOWN AS THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY.

Case Overview and Summary

Summary of Republic Act No. 1383

Creation of the National Waterworks and Sewerage Authority (Section 1):
- A public corporation called the National Waterworks and Sewerage Authority is created.
- Its purpose is to consolidate and centralize all waterworks, sewerage, and drainage systems in the Philippines under one control.
- It has jurisdiction over the Metropolitan Water District, existing government-owned waterworks and sewerage systems within cities, municipalities, and municipal districts, and areas served by the Waterworks and Wells and Drills Sections of the Bureau of Public Works.
- Its jurisdiction extends to non-self-supporting and non-revenue producing water systems and sanitary works.
- Its domicile and place of business is in the City of Manila.

Powers and General Functions of the Authority (Section 2):
- It has perpetual succession, can prescribe by-laws, adopt and use a seal, sue and be sued in any court.
- It can construct, maintain, and operate waterworks for supplying water, regulate water usage, and fix water rates. (Section 2e)
- It can construct, maintain, and operate sanitary sewer systems and charge for construction and service rates. (Section 2f)
- It can construct, maintain, and operate storm drains, artesian wells, and springs, and take control of existing ones. (Section 2g)
- It can acquire, purchase, hold, transfer, sell, lease, rent, mortgage, encumber, and dispose of real and personal property. (Section 2h)
- It can construct works across streams, watercourses, canals, ditches, flumes, streets, avenues, highways, or railways, with the right of way. (Section 2i)
- It can exercise the right of eminent domain. (Section 2j)
- It can issue regulations for the sanitary protection of watersheds, reservoirs, water mains, springs, and other water sources, and for the protection of water and sewer service, with violations punishable by a fine of not more than 500 pesos or imprisonment for not more than 6 months, or both. (Section 2k)
- It can contract indebtedness and issue bonds, subject to the approval of the Secretary of Finance, with a bonded indebtedness limit of 150 million pesos. (Section 2l)
- It can transact business and exercise powers necessary to carry out its purposes. (Section 2m)

Board of Directors (Section 3):
- The Authority is governed by a Board of Directors composed of a chairman, three other members, and the general manager as an ex officio member.
- Two members must have knowledge of waterworks, public works, and/or sanitary engineering, one must have knowledge of public health, and one must have knowledge of business management and finance.
- The chairman and three other members are appointed by the President of the Philippines with the consent of the Commission on Appointments for a term of 6 years.
- The Board shall render annual reports to the President and Congress.

Board Meetings and Procedures (Section 4):
- The chairman shall fix the time and place for the first meeting, where the Board shall adopt rules of procedure and fix regular meeting times.
- A quorum is constituted by at least three members, and two affirmative votes are necessary for adopting resolutions or motions.
- The chairman receives a per diem of 30 pesos, and each member (except the general manager) receives a per diem of 25 pesos for attending meetings.
- The Board shall appoint its secretary and fix the secretary's salary.

Issuance of Bonds (Section 5):
- The Board can incur indebtedness or issue bonds by resolution passed by at least three members and approved by the Secretary of Finance.
- The bonds shall not be sold at less than par, shall be redeemable after 10 years and payable after 40 years from the date of issue, shall bear interest at an annual rate determined by the Secretary of Finance, and shall be in registered form and transferable at the office of the National Treasurer.
- The bonds are exempt from taxation by the Philippine government and are receivable as security in transactions with the government.
- A sinking fund shall be created for the payment of the bonds, under the custody of the Central Bank of the Philippines, and invested as approved by the Monetary Board and the Secretary of Finance.
- The Philippine government guarantees the payment of the principal and interest of the bonds, and shall appropriate funds from the National Treasury if the Authority fails to pay.

Officers and Employees of the Authority (Section 6):
- The affairs and current business of the Authority shall be conducted under the direction of the Board, by a general manager, an assistant general manager, a chief engineer, an auditor, a treasurer, and additional officers and employees as provided by the Board.
- The duties, powers, and compensation of the officers and employees shall be defined and prescribed or fixed by the Board.
- The general manager, assistant general manager, chief engineer, and treasurer 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.
- Other officers and employees shall be subject to the Civil Service Law, rules, and regulations, except those whose positions are declared by the President 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, and may be removed for cause in like manner.

Functions of Key Officers (Section 7):
- The general manager represents the Authority in all business matters, submits annual and partial reports, and performs executive duties prescribed by law or required by the Board.
- The assistant general manager performs duties required by the Board or the general manager, and acts as general manager in case of the general manager's temporary absence or disability.
- The chief engineer and treasurer perform duties required by the Board or the general manager.
- The Auditor is the representative of the Auditor General, audits and settles all accounts of the Authority, and performs duties required by the Auditor General, the general manager, or the Board.

Dissolution of Metropolitan Water District and Transfer of Assets and Liabilities (Section 8):
- The Metropolitan Water District created under Act No. 2832 is dissolved, and its records, assets, and liabilities are transferred to the Authority.
- All existing government-owned waterworks and sewerage systems in cities, municipalities, and municipal districts, including springs and other water sources, as well as their bonds, sinking funds, and indebtedness, are transferred to the Authority.
- The Board is authorized and directed to receive and assume all such assets and liabilities on behalf of the Authority and to pledge such assets as security for the payment of the waterworks and sewerage bonded debt.
- The net book value of the properties and assets of the Metropolitan Water District and other government-owned waterworks and sewerage systems shall be received by the Authority in payment for an equal value of the Authority's assets.
- Any reference to the Metropolitan Water District or any existing government-owned waterworks and sewerage systems in any Act, Executive Order, Proclamation, or city or municipal ordinance shall be deemed a reference to the National Waterworks and Sewerage Authority.

Possession and Control of Water and Sewer Systems (Section 9):
- The 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.
- The Authority 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 institution.
- The Public Service Commission shall exercise no control, supervision, or jurisdiction over the Authority in the fixing of rates or over its properties.
- The Authority shall exist as an independent agency of the Government under the Department of Public Works and Communications for administrative purposes.

National Subsidy for Non-Revenue Producing Water Systems and Sanitary Works (Section 10):
- Non-self-supporting and non-revenue producing water systems and sanitary works, such as springs, artesian wells, and drainage systems, shall receive a subsidy from the National Government for their construction, operation, maintenance, and control.
- The amount of the subsidy shall be determined by the Budget Commissioner based on the recommendation of the Authority and provided in the Annual Appropriation Acts.
- The accounting and disbursing of funds for this expense shall be undertaken separately in the account books of the Authority.

Letting of Contracts for Public Works (Section 11):
- Construction and repair works involving an estimated cost of 10,000 pesos or more shall be let by the general manager with the approval of the Board to contract under the usual bidding procedure of the Government.
- Exception: Construction or repair of water, sewer, and pipe lines or storm drains, and other urgent projects, which may be undertaken by the Authority by administration at the discretion of the Board.

Repeal or Modification (Section 12):
- All Acts, executive orders, administrative orders, and proclamations or parts thereof inconsistent with any provisions of this Act are repealed or modified accordingly.

Effective Date (Section 13):
- This Act shall take effect upon its approval, which was on June 18, 1955.