Draft bill 160.

Summary.

The draft bill regulates Rural Aqueduct Administrative Boards (Juntas Administradoras de Acueductos Rurales, JAAR), nonprofit community organizations with their own legal personality and assets that operate and maintain rural aqueducts in Panama. It covers systems managed by communities, local organizations or other operators in rural and periurban areas unserved by the National Water and Sewerage Institute (IDAAN). It assigns technical, health and administrative authority over the rural drinking water subsector to the Ministry of Health (Ministerio de Salud, MINSA), acting through the Directorate of the Drinking Water and Sanitation Subsector (Dirección del Subsector de Agua Potable y Alcantarillado Sanitario, DISAPAS).

A board would be formed through a community assembly, approved bylaws, election of its directors and internal rules. The bill creates a national register administered by MINSA/DISAPAS and requires registration for official recognition. Applicants would submit their founding record, bylaws, list of directors, internal rules and a plan or description of the system they manage. Boards would update their information and renew their directors every two years; failure to update could lead to administrative penalties.

Boards would manage and operate their systems, ensure water quality under MINSA standards, set tariffs and collection methods, perform preventive and corrective maintenance, and keep administrative and financial records and reports. Each year, they would publish their tariffs, revenue, expenses, investments and financial statements signed by qualified personnel, both in a visible community location and on the National JAAR Register (Registro Nacional de JAAR) portal.

The bill treats resources managed by the boards as community public funds subject to state oversight. Tariffs would reflect actual operating, maintenance and sustainability costs under MINSA guidelines, and funds could be used only for aqueduct purposes. Each board would establish an emergency reserve in the percentage set by regulation. Boards would allocate seventy percent (70%) of revenue and resources to investment, maintenance, expansion, improvements and system sustainability, and thirty percent (30%) to operating expenses. Breaching this allocation would constitute a serious administrative violation.

The Office of the Comptroller General of the Republic would exercise prior and subsequent control and audit board funds, assets and operations. Purchases, contracts and investments above the amount set by regulation would require its prior endorsement. The Comptroller's Office could conduct audits, inspections, account reviews and financial performance assessments at any time. Boards would submit quarterly and annual reports, maintain formal accounts and provide requested documents.

Administrative violations would include misappropriation or misuse of funds, failure to file reports, negligent maintenance, improper charges and breaches of health standards. Penalties would include warnings, fines, suspension of directors, temporary intervention of a board and, in serious cases, cancellation of its legal personality. Boards could not hire or appoint anyone related to a director within the fourth degree of blood relationship or the second degree by marriage. Such an appointment or contract would be void, and the directors involved could face administrative, civil and criminal liability. The bill also addresses criminal liability for offenses against public administration or community property.

MINSA, the Comptroller's Office, municipalities, IDAAN and the Ministry of Housing and Land Management (MIVIOT) would coordinate rural water management measures. Boards would present management reports and financial statements at an annual community assembly, publish the information on social networks for 15 consecutive days and notify system users. Community complaints could be lodged with MINSA and the Comptroller's Office. Existing boards would have twelve months to comply and register; all boards would undergo an initial audit within the first eighteen months. The Executive Branch would issue regulations within three months of promulgation. The proposed law would take effect upon promulgation and repeal contrary provisions. Its provisions could affect user communities, aqueduct operators and suppliers of water supply works and services.