REPUBLICACTNo.3601

ANACTGRANTINGTHENATIONALIRRIGATIONADMINISTRATION

ARTICLEIEstablishmentandObjectives

Section1.Nameanddomicile.Abodycorporate isherebycreatedwhichshall be knownas theNationalIrrigationAdministrationhereinaftercalledtheNIAforshort,whichshallbeorganizedimmediatelyaftertheapproval of this Act. It shall have its principal seat of business at the City of Manila and shall haverepresentativeinallprovincesfortheproperconductofitsbusiness.

Section2.Powersandobjectives.TheNIAshallhavethefollowingpowersandobjectives:

(a)To investigate,study, improve,constructandadministerall international irrigationsystems in thePhilippines

(b)Toinvestigateallavailableandpossiblewaterresourcesinthecountryforthepurposeofutilizingthesame for irrigation,and toplan,designandconstruct thenecessaryprojects tomake the ten totwentyyear period following the approval of this Act as the Irrigation Age of the Republic of thePhilippines

(c)Tocollectfromtheusersofeachirrigationsystemconstructedbyitsuchfeesasmaybenecessarytofinancethecontinuousoperationofthesystemandreimbursewithinacertainperiodnotlessthantwentyfiveyearsthecostofconstructionthereofand

(d)Todoallsuchotherthingsandtotransactallsuchbusinessasaredirectlyorindirectlynecessary,incidentalorcondusivetotheattainmentoftheaboveobjectives.

ARTICLEIICapitalization

Section 3.Working capital. The working capital of the NIA shall be three hundred million pesos, to besubscribed and paid entirely by the Government of the Republic of the Philippines through bonds to befloatedby theCentralBank,whichshalldeliverannually to theNIA thesumof thirtymillionpesosuntil itswholecapitalstockisfullypaid.

ThePresidentofthePhilippinesisauthorizedtoissue,preferablyinthePhilippines,orabroadifnecessary,inthenameandbehalfoftheRepublicofthePhilippines,bondsinsuchamountsasmaybeneededtocovertheannualsubscriptionoftheGovernmenttothecapitalstockoftheNIA.

The Secretary of Finance, in consultation with the Monetary Board, shall prescribe the form, the rate ofinterest, thedenomination,maturity,negotiability, convertibility, call and redemption features,andall othertermsandconditionsof issuance,placement,sale,servicing,redemption,andpaymentofallbondsissuedundertheauthorityofthisAct.

The bonds issued under the authority of this section may be made payable, both as to principal andinterests,inPhilippinecurrencyoranyreadilyconvertibleforeigncurrency.

Nothing in this section shall be interpreted to mean that the Secretary of Finance, in the redemption ofsecurities, ispreventedfromapplyingthelotteryprinciplebywhichbonds,drawnbylot,mayberedeemedbeforematurityeitherattheirfacevalueorabove.

ThebondstobeissuedunderthisActshallbeexemptedfromtaxationbytheGovernmentoftheRepublicofthePhilippinesorbyanypoliticalsubdivisionthereof,whichfactshallbestatedontheirfaceinaccordancewiththisActunderwhichthesaidbondsareissuedandshalllikewisebeexemptfromattachment,executionorseizure.

AllamountsdeliveredtotheNIAbytheCentralBankashereinprovidedshall,beginningwiththesixthyearaftertheiractualdelivery,bereturnedbytheNIAtotheCentralBankinfiftyequalyearlyinstallments.

AllamountscollectedbytheNIAasirrigationfeesshallbeaddedtoitsoperatingcapital.

For thepurposeof implementing thepowersof theNIA, it isherebyauthorized toobtain loans forand inbehalf of the Republic of the Philippines, out of the proceeds of the sale of imported surplus agriculturalcommodities,underthetermsandconditionssetforthinTitleIVoftheUnitedStatesPublicLawNumberedFourhundredandeighty.

Asinkingfundshallbeestablishedinsuchmannerthatthetotalannualcontributionsthereto,accruedasatsuch rateof interestasmaybedeterminedby theSecretaryofFinance inconsultationwith theMonetaryBoard,shallbesufficienttoredeematmaturitythebondsissuedunderthisAct.SaidfundshallbeunderthecustodyoftheCentralBankofthePhilippineswhichshallinvestthesameinsuchmannerastheMonetaryBoardmayapproveshallchargeallexpensesofsuchinvestmenttosaidsinkingfund,andshallcredit thesamewiththeinterestoninvestmentsandotherincomebelongingtoit.

A standingannual appropriation is herebymade, out of any funds in theNational Treasury not otherwiseappropriated,ofsuchsumwhich,addedtotheyearlyinstallmentsreturnedbytheNIAtotheCentralBankasherein provided, shall be sufficient to provide for the sinking fund herein created and for the interest onbondsissuedbyvirtueofthisAct.Suchsumasmaybenecessaryisherebyfurtherappropriated,outofanyfundsintheNationalTreasurynototherwiseappropriated,tocovertheexpensesoftheissueandsaleofthebondsauthorizedbythisAct.

ARTICLEIIIGoverningBody

Section 4. Board of Directors. The powers and functions of the NIA shall be exercised by a Board ofDirectors composedof sevenmembers, towit: TheSecretary ofPublicWorks andCommunications,whoshall be theChairman, theSecretaryofAgricultureandNaturalResources, theChairmanof theBoardofDirectors of the National Power Corporation, the Director of Plant Industry, the Director of AgriculturalExtension, and two other members who shall be appointed by the President of the Philippines, one onrecommendation of any national rice and corn organization of good standing and the second, on therecommendation of the minority party through its duly authorized officers, and with the consent of theCommissiononAppointments,andwhoshallserveforatermofsixyears,withtheexceptionofthetwofirstappointees,oneofwhomshallserveonlyfortwoyears,andtheotherforfouryears.Anypersonappointedto fill a vacancy in theBoard shall serve only for the unexpired termof the appointivememberwhomhesucceeds.

Foractualattendanceatmeetings,eachmemberoftheBoardshallreceiveaperdiemoftwentyfivepesos,but the total amount of per diems that a member may receive in a month shall in no case exceed onehundredpesos.

Section 5.Powers and duties of the Board of Directors. The Board of Directors shall have the followingpowersandduties:

(a)Toprescribe,amendand repeal,with theapprovalof thePresidentof thePhilippines, rulesandregulations governing the manner in which the general business of the NIA may be conducted,including provisions for the formation of such committee or committees as the Board may deemnecessarytofacilitateitsbusiness

(b) With the approval of the President, to appoint, and fix the compensation of, an IrrigationAdministrator, an Assistant Irrigation Administrator from a list of names submitted by the IrrigationAdministrator, a secretary and a treasurer, and, by amajority vote of all themembers, to suspendand/orremovethesaidofficialsforcause,withtheapprovalofthePresidentand

(c)Toapprove,subjecttothefinalactionofthePresident,theannualand/orsupplementalbudgetsof

theNIAwhichmaybesubmittedtotheBoardbytheIrrigationAdministratorfromtimetotime.

Section6.ProhibitionforBoardMembers.ThechairmanandothermembersoftheBoardofDirectorsshallnotatthesametimeservewiththeNIAinanyothercapacity,unlesssoauthorizedbythePresident.

ARTICLEIVManagement

Section7.ManagingHead.ThemanagementoftheNIAshallbevestedintheIrrigationAdministrator.

Section 8.Powers and duties of the Irrigation Administrator. The Irrigation Administrator shall have thefollowingpowersandduties:

(a)TodirectandmanagetheaffairsandbusinessoftheNIA,onbehalfoftheBoardofDirectorsandsubjecttoitscontrolandsupervision

(b)TositinallmeetingsoftheBoardandparticipateinitsdeliberations,butwithouttherighttovote

(c)Tosubmitwithinsixtydaysafterthecloseofeachfiscalyearanannualreport,throughtheBoardofDirectorstothePresidentofthePhilippines

(d)With theapprovalof theBoard, toappointand fix thenumberofsuchsubordinatepersonnelasmay be necessary for the proper discharge of the duties and functions of the NIA, and, with theapproval of the Board, to remove, suspend, or otherwise discipline, for cause, any subordinateemployeeoftheNIAand

(e)ToperformsuchotherdutiesasmaybeassignedtohimbytheBoardfromtimetotime.

ARTICLEVAppointmentsandPromotions

Section9.ApplicationsofCivilServiceLawandRules.AllofficersandemployeesoftheNIAshallbesubjecttotheCivilServiceLawandRules,exceptthosewhosepositionsmay,uponrecommendationoftheBoardofDirectors,bedeclaredbythePresidentaspolicydetermining,primarilyconfidentialortechnicalinnature.

ARTICLEVIAudit

Section10.Auditorandpersonnelunderhim.TheAuditorGeneralshallappointarepresentativewhoshallbetheAuditorof theNIA,andthenecessarypersonnel toassistsaidrepresentative intheperformanceofhis duties. The number and salaries of the Auditor of the NIA and the personnel under him shall bedetermined by the Auditor General, subject to appropriation by the Board of Directors. in case ofdisagreement,themattershallbesubmittedtothePresidentofthePhilippines,whosedecisionshallbefinal,SaidsalariesandallotherexpensesofmaintainingtheAuditor'sOfficeshallbepaidbytheNIA.

Section 11.Report. The financial transactions of the NIA regulations, and the principles and proceduresapplicableshallbeauditedinaccordancewithlaw,administrativetocorporatetransactions.Areportofauditfor each fiscal year shall be submitted, within sixty days after the close of the fiscal year, by therepresentativeoftheAuditorGeneral,throughthelatter,totheBoardofDirectors,andcopiesthereofshallbefurnishedthePresidentofthePhilippinesandthepresidingofficersofthetwoHousesofCongress.Thereportshallsetforththescopeoftheauditandshallincludeastatementofassetsandliabilities,capitalandsurplus or deficit a statement of surplus or deficit analysis a statement of income and expenses astatementofsourcesandapplicationof fundsandsuchcommentsand informationasmaybenecessary,together with such recommendation with respect thereto as may be advisable including report of anyimpairmentofcapitalnotedintheaudit.Thereportshallalsoshowspecificationanyprogram,expenditures,or other financial transaction or undertaking observed in the course of audit which, in the opinion of theAuditor,hasbeencarriedonormadewithoutauthorityoflaw.

ARTICLEVIIMiscellaneousprovisions

Section12.Abolitionof the IrrigationDivisionof theBureauofPublicWorks.The IrrigationDivisionof theBureau of PublicWorks is hereby abolished, and all its personnel, unexpended appropriations, functions,duties,equipment,records,assetsandliabilitiesaretransferredandassignedtotheNIA.

Section 13. Applicability of the Corporation Law. The provisions of the Corporation Law which are notinconsistentherewithshallbeapplicabletotheNIA.

Section14.Implementation.ThePresidentofthePhilippinesshallbyexecutiveorderissuesuchrulesandregulationsasmaybenecessarytoimplementthisAct.

Section15.Repealingclause.All laws,Acts,executiveorders,administrativeorders,rulesandregulations,orpartsthereofinconsistentherewitharerepealedormodifiedaccordingly.

Section16.Effectivity.ThisActshalltakeeffectuponitsapproval.

Approved:June22,1963