May pag-asa pang makolekta

Sa usapin ng “utang” ng SPCWD sa Lunsod

Ulat ni Dodie C. Banzuela

San Pablo City—May posibilidad pang makolekta ng lunsod na ito ang “3%” mula sa “gross annual sales” ng San Pablo City Water District matapos na magpalabas ng legal opinion hinggil dito si city legal officer Atty. Eleno Mendoza na nakasaad sa kanyang October 8, 2004 letter na ipinadala kay Konsehal Maria Evita R. Arago.

Si Arago ang chairperson ng committee on water resources and development ng Sangguniang Panglunsod.

Nakabatay ang nasabing “pagkolekta ng 3%” sa Resolution No. 309 na naaprubahan noong pang December 17, 1973 kaugnay naman sa paglikha ng San Pablo City Water District mula sa dating San Pablo Water System.

Ayon sa nasabing Resolusyon, “the transfer of all existing water facilities from the San Pablo Waterworks System to the San Pablo Water District provided that pursuant to Section 31 (b) of presidential Decree No. 198, the latter shall pay unto the City of San Pablo, in lieu of taxes an amount of 3% of its gross annual sales to be paid annually to the City at the end of its Fiscal Year not later than July 31st of the following Fiscal Year.”

Sa panayam ng DERETSO kay Mendoza, sinabi nito na, “Malinaw ang isinaad ko sa aking liham, mabuti nga at binuksan na ang usaping ito (ni Arago) upang mapag-isipan ng ating local government ang prosesong gagawin sa pagsingil ng 3%. I am at the service of the city government of San Pablo kaya’t laging first and foremost sa akin ang kapakanan ng lunsod, lalo na’t may kinalalaman ‘yon sa pagpapataas ng kita ng siyudad. Subalit dapat nating tiyakin na lahat ng gagawin natin ay nakabatay sa batas at umiiral na mga regulasyon.”

Sa ipinaabot namang mensahe ni Arago sa DERETSO, ipinaalam nito na “hindi siya (Arago) kumbinsido sa nasabing legal opinion ni Mendoza.” Sa initial na pagsusuri pa ni Arago, batay na rin sa nasabing liham, “may kiling pa si Mendoza sa water district.” Hindi naman tinukoy ni Arago ang kanyang konkretong dahilan kung bakit nga ba “hindi siya kumbinsido.” Sinabi pa nito na maghahayag siya ng full statement kapag nakakuha na siya ng iba pang legal opinion sa iba pang legal group.

Ang Sulat

Sa ngalan ng paglilingkod sa publiko, inilalathala ng DERETSO, en toto, ang nasabing liham ni Mendoza.

October 08, 2004

HONORABLE MARIA EVITA R. ARAGO

Chairperson

Committee on Water, Water Resources and Development

Sangguniang Panlungsod

San Pablo City

Madam Chairperson:

This pertains to your October 01, 2004 letter, requesting the undersigned to render a legal opinion on the conflicting interpretation relative the intent of City Council Resolution No. 309, series of 1973, on whether or not to obligate SPCWD to pay the City Government (sic) as a result of the latter’s use of the City’s natural wealth which is the water resource of San Pablo City.

PREFATORY

Ownership of all water of the Philippines belongs to the State. Article XII, Section 2, of the 1987 Constitution provides, inter alia, viz:

“Section 2. – All lands of the public domain, waters, minerals, coals, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber natural resources are owned by the State. xxx in cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant. xxx” (Italics & format ours)

Adopting the principle of Jura Regalia (Regalian Doctrine), that all things under its control is owned by the king, the State enacted several pieces of legislation in the utilization and development of these resources; water resources laws we shall cite. PD No. 1067, otherwise known as the Philippine Water Code, which provided for a decree instituting a water code, revising and consolidating the laws governing the ownership, appropriation, utilization, exploitation, development, conservation and protection of water resources. PD No. 1067 thus, reiterated the principles enshrined in Section 2 of the Article XII of the Constitution when it provided in its preamble, that all waters of the Philippines belongs to the State. Article 5 of PD No. 1067 in the same vein likewise provides:

“Article 5 – The following belong to the State:

a) River and their natural beds;

b) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves;

c) Natural lakes and lagoons;

d) All other categories of surface water such as water flowing over lands, water from rainfall whether natural or artificial and water from agricultural runoff, seepage and drainage;

e) Atmospheric water ;

f) Subterranean or ground water; and

g) Seawater.” (Italics & format ours)

The case in point, Presidential Decree 198 on the other hand, was enacted for the purpose of declaring a national policy favoring local operation and control of water systems; authorizes the formation of local administration of such districts; chartering a national administration such powers as are necessary to optimize public service from water utility operations.

For purposes of discussion, we shall confine ourselves to the chief issue, which is:

THE INTERPRETAION OF THE IN LIEU PROVISION EMBODIED UNDER SECTION 30 (b) PD No. 198, AND AS ADOPTED IN CITY COUNCIL RESOLUTION No. 309, SERIES OF 1973.

DISCUSSION

That Supreme Court on several occasions had ruled, that charters, franchises, or contracts granted by law which contains the magic words IN LIEU provisions means, in exchange for something taken or provided. The particular provision is found in Section 30(b) of PD No. 198, which provides, viz:

“Section 30(b) – In-lieu Share. – As an incident in the acquisition of existing water system of a city, municipality, or province, a district may enter into a contract to pay in-lieu share for such utility plant, an annual amount not exceeding three percent (3% ) of the district’s gross receipts from water sales in a year: provided, however, that no contract of this nature shall be executed during the first five (5) years of the existence of the district; and provided, further, that the Board of Directors shall determine that such contract will not adversely affect or impair the fiscal position and operations of the district as verified by the administration. ( As amended by Section 11, PD No. 768; Section 5, PD No. 1479 ).” (Italics & format ours)

The In-lieu phrase found in the above- quoted provision is an incident to the acquisition by the SPCWD of the existing facilities, assuming there are, and refers to the payment by the latter of the value of the utility plants or facilities previously owned by the City and transferred to the SPCWD by virtue of the take-over by the latter pursuant to PD No. 198. It must be emphasized that before the advent of R.A. No. 7160 in 1991, local government units were under the direct control and supervision of the national government. PD No. 198 emanated not from congress, but by virtue of the Martial Law Powers of then President Marcos. It was only in 1992 when the LGU’s acquired full autonomy; the aspect of control by the executive branch of government was removed paving the way for a limited administrative supervision. PD No. 198 grants the City Government the authority to collect from SPCWD by way of contract an amount not exceeding three percent (3%) of the district’s gross receipts from water sales in every year. It is high time the Honorable Chairperson has open-up this matter so that the process can be laid for the city government to collect what is due to it under the law.

With regard to the provision in Resolution No. 309, series of 1973, the imposition that SPCWD is required to pay three percent (3%) of its annual gross sales, the same is rendered nugatory based on the following, viz:

1) SPCWD under the charter creating it is exempt from payment of taxes.

“Section 46. Exemption from taxes. – A district shall (1) be exempt from paying income taxes, and (2) shall be exempt from payment of (a) all National Government, local government and municipal taxes and fees, including any facilities, filing, recordation, license or permit fees or taxes and any fees, charges or costs involved in any court or administrative proceeding in which it may be a party and (b) all duties or imposts on imported machinery, equipment and materials required for its operations. (As amended by Sec. 20, PD 768).” (Italics & format ours)

2) The Local Government Code exempts the SPCWD from payment of certain taxes.

“Section 193. – Withdrawal of Tax Exemption Privileges. – Unless otherwise provided in this code, tax exemption or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under RA No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code.” (Italics & format ours)

Article 283 of the Rules and Regulations Implementing the Local Government Code of 1991 likewise provides:

“Article 283. Withdrawal of Tax Exemption Privileges or Incentives. – Unless otherwise provided in this Rule, beginning January 1, 1992, all local tax exemption privileges or incentives granted to and presently enjoyed by any person, whether natural or juridical, including GOCCs, are considered withdrawn, except the following:

a) Local water districts; xxx “ (Italics & format ours)

The aforequoted provisions of the LGC does not however, foreclosed the right of the City Government to collect from SPCWD other forms of taxes. It is submitted that facilities of SPCWD not directly involved in water extraction may be subject to realty tax.

Finally, on the observation of the Honorable Chairperson, that the intention of the ordinance ( should be resolution ), is to obligate the SPCWD to pay the latter’s use of the City’s natural wealth, in this case, the water resources of San Pablo City, the same is misplaced for the reasons stated in the prefatory. The city government never acquired dominion much more ownership in the water resources of San Pablo City the same being State owned, and regulated by the latter through various national government agencies herein mentioned.

Respectfully submitted

ELENO M. MENDOZA, JR.

City Legal Officer