Further Amending Presidential Decree No. 198 Otherwise Known As The "Provincial Water Utilities Act Of 1973", As Amended By Presidential Decree No. 768

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M a n i l a

PRESIDENTIAL DECREE No. 1479

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

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. The first paragraph of Section 6 of Presidential Decree No. 198, as amended, is hereby amended to read as follows:

"Sec....

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Summary of Presidential Decree No. 1479

Formation and Powers of Water Districts
- Water districts are considered quasi-public corporations performing public service. (Section 1)
- Water districts have powers and privileges of private corporations under existing laws, in addition to powers granted by this Act. (Section 1)
- Cities, municipalities, or provinces must transfer all waterworks and sewerage facilities to the water district upon formation. (Section 1)

Board of Directors
- If the district has availed financial assistance from the Administration, the Administration may appoint one of its personnel to the board of directors while indebtedness remains unpaid, making the board consist of six members. (Section 2)

Powers of Water Districts
- Water districts have the power of eminent domain, subject to review by the Administration. (Section 4)
- Water districts can take over management, administration, operation, and maintenance of all watersheds within their territorial boundaries. (Section 6)

Income Disposition
- Income priorities: 1) contractual obligations and operating expenses, 2) at least 50% for debt service and maintenance reserve, 3) residue for expansion and improvement. (Section 8)

Exclusive Franchise
- No other franchise for water service can be granted within the district without consent from the district's board of directors, subject to review by the Administration. (Section 9)

Loans
- When a loan is made to a local water utility, the necessary amount shall be programmed to ensure project completion. (Section 10)

Rate Review
- Rates established by water districts are subject to review by the Administration for compliance. (Section 11)
- Appeals can be made to the National Water Resources Council and then to the Office of the President. (Section 11)

Capital Stock
- The Administration's authorized capital is 2.5 billion pesos divided into 12.5 million shares at 200 pesos per share, to be subscribed by the National Government and open to private investors or government financial institutions. (Section 12)
- The National Government's subscription shall be paid from a continuing appropriation from the National Treasury until fully paid. (Section 13)

Government Assistance
- The General Appropriations Act shall include an outlay as National Government aid or subsidy for financially non-viable water districts, not exceeding the cost of source development and main transmission line. (Section 14)
- An outlay shall be provided in the General Appropriations Act for funding waterworks and sewerage systems in areas not covered by a water district, upon request of the Administration. (Section 14)