Amendment on irrigation funds and administration

Section 1 amends Section 13 of Act No. 2152 (as amended by Section 4 of Act No. 3523) to govern temporary administration of an irrigation system.
Section 13 applies when the appropriators do not organize according to the preceding section, or while the rights of using appropriated public water are being determined and adjudicated.
Temporary administration follows the system’s geographical scope:
- The municipal council administers if the system affects one municipality alone.
- The provincial board administers if the system affects two or more municipalities of a province.
- The Director of Public Works administers if the system affects two or more provinces.

Administration rules for administration, use, and distribution of waters must be previously approved by the Irrigation Council.
In preparing those regulations, all persons interested must be given a hearing.

The cost of this service becomes a lien upon the crops as the first priority, and in the second place upon the land of water users and ditch owners, consistent with the distribution of charges.
The distribution is based on the irrigable area held by each appropriator or ditch owner, in proportion to the total area served by the system.
The distribution to be used is shown by the accounts of the municipal council, provincial board, or the Director of Public Works, depending on who administers.

Funds necessary to defray administration expenses prior to the expiration of each agricultural year (the period between the beginning of planting and completion of harvesting) must be advanced under the following rules:
- The municipality or province advances out of its funds, or
- The Director of Public Works advances out of any unappropriated funds in the National Treasury, in accordance with the appropriation.
Reimbursement is required from the land-owner or ditch owner at the end of each year with interest at the rate of 4%.
The Director of Public Works’ advance from the National Treasury is capped: it must not exceed PHP 1,000,000 in any one year.
If the municipalities or provincial boards are without funds to cover the expenses, the Director of Public Works administers the system for such time as the funds advanced are paid from the National Treasury.

The municipal and provincial treasurers must collect the annual administration charges upon completion of each harvest.
Treasurers collect as delegates of the Director of Public Works.
The lien has preference over all other liens, except:
- liens for taxes on the land, and
- any mortgage lien in favor of the Philippine Agricultural Bank, or its successor.
The preferred lien cannot be removed until all charges are paid or the property is sold for payment.

If there is default of payment on an installment payable on any parcel of land, within one year after the default the following must file with the clerk of the Court of First Instance of the district where the land is situated:
- a list of all lands where default has been made.
The filing is made by the municipal mayor, provincial governor, or the Director of Public Works, as applicable.
After filing, the clerk must publish the lands in the manner provided for publication of summons in a civil action.
The publication must include a notice requiring owners to file an answer within 30 days after completion of publication.
After filing of an answer, the case proceeds to judgment under the Rules of Court for other actions.

After termination of the 30 days period, judgment is entered against persons who did not answer.
Their lands, or the portion deemed necessary, may be sold after 10 days’ public notice at public auction by the sheriff to satisfy the preferred lien.

Any excess over the amount of the lien and the cost of procedure is returned to the interested person.
The interested person has one year thereafter to redeem the land by paying the amount of judgment and costs with interest at 6%.

If maintenance costs in a year are exceptionally high such that they exceed 50% of the net profits, the exceptional cost must be distributed equitably over two or more years, but not more than five.
If a crop is unharvested at the time of execution of the lien, execution is levied first on said crop.

In preparing the regulations on administration, use, and distribution (and in preparing related regulations), the customs and usages of each locality must be taken into consideration.
The regulations must fix one day of the year for a meeting of all persons interested to prepare an estimate of expenditure for the next succeeding year.