Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 1782

Introduced by Representatives Ron P. Salo

EXPLANATORY NOTE

The Philippine government is relentless in its quest towards tapping all possible
revenue resources to address the challenges in attaining good and responsive
governance and effective public service delivery every Filipino deserves

One of the most vaunted sources of revenues is real property, which is
considered as the most important natural resource and the biggest financial ‘asset, The
World Bank reported that 50% to 75% of the country’s wealth is contained in land
Ironically, the land market is contributing only 6% to the Gross National Product (GNP).
Characterized by inconsistencies and inefficiencies in the land administration and
management sector, specifically in real property valuation, our country has failed to capture
and maximize the huge potential that the land sector offers.

The real property valuation system in the Philippines depicts a depressing state of
chaotic, inefficient, and inequitable layers of bureaucracy. At least 23 national
government agencies (NGAs) and more than 1,700 local government units (LGUs)
perform or require valuation functions and services using varied systems and
methodologies for different purposes, thus, resulting to multiple, confusing, unrealistic, or
outdated values for the same property. The discrepancies in real property values have
had considerable cost to the government. Conflicting land values resulted to right-ofway
compensation problems, lengthy court itigations arising from valuation disputes, project delays
and unrealized revenues and socio-economic benefits. The system has also caused huge
disparities of taxable base for local and national taxation, and revenue leakages due to
the absence of single market based valuation for capital gains tax and other national land
related taxes, while the LGUs use the Schedule of Market Values (SMV) as basis for real
property tax.

The existing challenges in the land and real property valuation sector have also
meant the public's lack of confidence in real property values, Instances of overvaluation and
undervaluation, depending on the purpose of transaction, have proliferated, thus, derailing the
potential of the real property sector in taking a leap towards contributing to the country's
economic development.

The problems in real property valuation may be traced on the failure of LGUs to
correctly update the SMVs. While the Local Government Code (LGC) requires the

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regular conduct of the general revision of SMVs and property assessments every three
years, LGUs have failed to comply with the requirements of the law for lack of penal
sanctions in the law and for fear of political backlash arising from it. Expectedly, the
resulting condition is stagnant, outdated, and highly politicized real property valuation
that is inconsistent with the realities of the market economy. SMVs have become
generally undervalued, and failed to reflect the real market conditions of the real
property sector — causing huge foregone revenues of the LGUs. The BIR, on the other
hand, has no statutory mandate for the regular revision and updating of the zonal
values. Thus, this bill seeks to improve real property valuation for the government by
adopting a market based SMV to be used as basis of local and national real property
taxation, and as benchmark for other purposes as required by other government
agencies and instrumentaliies, as well as private entities.

Governed by intemationally accepted valuation standards and best practices, the
LGU SMVs shall represent the real market conditions of their respective localities, with
the aid of an effective national valuation database system. In light of Republic Act No.
9646 or the Real Estate Service Act, which now professionalizes and regulates the
appraisal/valuation practice, this bill also seeks to hamess the professional competence
of local government assessors and national government appraisers towards developing
and establishing an efficient and responsive valuation system in the country.

In order to implement the reforms, the Bureau of Local Government Finance
(BLGF), under the Department of Finance, is proposed to be reorganized and
strengthened to provide the institutional support and accountability to operationalize the
reform agenda. The BLGF is envisioned to oversee all matters relating to real property
valuation in the country, while taking the lead in reviewing the SMV of all LGUs for
approval by the Secretary of Finance, and compliance monitoring for the regular SMV
revision by LGUs. By doing so, the highly technical function of real property valuation is
separated from the political function of taxation. Thus, local officials are insulated from
the pressures and political backlash borne out of initiatives to correct and update their

respective SMVs.

The passage of this bill is eamestly sought as a timely and complementary
measure to support the long-term revenue efforts of the governments, the bill will allow
us to move toward a more rational and administration and management system that
fully taps the potential of the real property sector. In turn, the capacity of the
goverment to generate more revenues is enhanced, without necessarily imposing new
tax measures or increasing existing tax rates. Intended to be an instrument in
enhancing local autonomy, the bill will enable LGUs to achieving a more stable fiscal
wherewithal and a strengthened local real property tax base to fund service delivery
requirements of the LGUs, thereby achieving good and transparent governance, and
increased public performance.

In view of the foregoing, the approval of this bill is urgently sought.

RON P. SALO
KABAYAN Partylist

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 1782

Introduced by Representatives Ron P. Salo

AN ACT
INSTITUTING REFORMS IN REAL PROPERTY VALUATION AND
ASSESSMENT IN THE PHILIPPINES, REORGANIZING THE BUREAU OF
LOCAL GOVERNMENT FINANCE, AND APPROPRIATING FUNDS
THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “Real Property
Valuation and Assessment Reform Act”.

ARTICLE|
DECLARATION OF STATE POLICY AND OBJECTIVES,
AND DEFINITION OF TERMS:

SEC. 2. Declaration of Policy and Objectives. — Its the policy of the State to
promote the development and maintenance of a just, equitable, impartial, and
nationally consistent real property valuation based on internationally accepted
valuation standards, concepts, principles, and practices. Towards this end, the State
shall:

a) Establish and maintain standards to govern the valuation of real property in
the country;

b) Adopt market value as the single real property valuation base for the
assessment of real property related taxes in the country, and for the valuation
of real property for various transactions by all government agencies;

c) Promote the fiscal autonomy of local government units (LGUs) to provide
basic services to their constituency by enhancing their capacity to generate
local revenues from real property;

d) Separate the function of valuation of real properties from the functions of
tax policy formulation and the administration of the taxes due thereon;

e) Support the development and professionalization of the valuation practice in
the country pursuant to Republic Act No. 9646, otherwise known as the “Real
Estate Service Act of the Philippines";

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ta


f) Provide a comprehensive and up-to-date electronic database of all real
property transactions;

9) Support the development of an information database on valuation through
continuing research and monitoring of new developments in the discipline to
upgrade the country’s valuation system to be at par with global standards; and

h) Ensure transparency in real property transactions to protect public interest,
and develop confidence in the valuation system.

SEC. 3. Definition of Terms. — As used in this Act:

a) Appraiser, also known as valuer, refers to a person who conducts valuation;
specifically, one who possesses the necessary qualifications, license, ability,
and experience to execute or direct the valuation of real property;

b) Assessed value, also known as taxable value, refers to the market value of
the property multiplied by the corresponding assessment level;

c) Assessment refers to the act or process of determining the value of a
property, or proportion thereof subject to taxation, including the discovery,
listing, classification, and appraisal of properties;

d) Assessment level refers to the percentage applied to the market value to
determine the taxable value of the property based on property classifications
as prescribed in Republic Act No. 7160, otherwise known as the “Local
Government Code of 1991”, as amended;

e) Assessor refers to an official in the LGU who is a licensed appraiser and
performs appraisal and assessment of real properties, including plant,
machinery, and equipment, essentially for taxation and other purposes;

f) Building refers to a man-made structure permanently attached to land for
residential, commercial, industrial, recreational or other purposes;

9) Improvement refers to a valuable addition made to a property or an
amelioration in its condition, amounting to more than a mere repair or
replacement of parts, involving capital expenditures and labor intended to
enhance its value, beauty or utility or to adapt it for new or further purposes;

h) International Valuation Standards refer to standards that provide property
valuers with a framework composed of recognized principles and concepts as
well as internationally accepted definitions, best practices, and reporting
system;

i) Land refers to one of the major factors of production which is supplied by
nature without the aid of man. Land may include not only the earth's surface,
both land and water, but also anything that is attached to the earth's surface
including all natural resources in their original state, such as mineral deposits,
wildlife, and timber;

i) Machinery refers to machines, equipment, mechanical contrivances,
instruments, appliances or apparatus which may be attached, permanently or
temporarily, to the real property. It includes the physical facilities for production,

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the installations and appurtenant service facilities, those which are mobile, self-
powered or self-propelled, and those not permanently attached to the real
property which are actually, directly, and exclusively used to meet the needs of
the particular industry, business or activity and which by their very nature and
purpose are designed for, or necessary to its manufacturing, mining, logging,
commercial, industrial or agricultural purposes;

k) Market value refers to the estimated amount for which a property shall
exchange on the date of valuation between a willing buyer and a willing seller
in an arm's length transaction which is a transaction between independent,
unrelated parties involving no irregularity, after proper marketing wherein the
parties had each acted knowledgeably, prudently, and without compulsion;

)) Private appraisal sector refers to licensed nongovernmental real estate
service practitioners who have been active in the practice of real estate
appraisal for at least five (5) years;

m) Real estate refers to the land and all those items which are attached to the
land. It is the physical, tangible entity, together with all the additions or
improvements on, above or below the ground;

n) Real property refers to all the rights, interests and benefits related to the
ownership of real estate. Itis a legal concept distinct from real estate, which is
a physical asset;

0) Schedule of Market Values, hereinafter referred to as SMV, refers to a table
of base unit market values for all kinds of real property, except machinery
within an LGU prepared by assessors pursuant to existing laws, rules and
regulations;

p) Special purpose property refers to a property that is designed, constructed
and developed for a specific use or purpose. By its very nature, this type of
property is rarely offered for sale in the open market except as part of a going
concern. Due to the special design and the function, conversion of special
purpose property to other types of development or application is generally not
economically feasible; and

q) Valuation, also known as appraisal, refers to the systematic, analytic and
logical analysis of the recording of property facts, circumstances, investments
and other relevant data resulting in a supportable estimate or professional
opinion of the value of the property as of a specific date and for a specific
purpose

ARTICLE I
THE BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF)

Chapter 1
BLGF Central Operations

SEC. 4. Powers and Functions of the Bureau of Local Government
Finance (BLGF). - The BLGF of the Department of Finance (DOF) shall lead and

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manage the implementation of the provisions of this Act. It shall have the following
powers and functions:

a) Develop, adopt, and maintain valuation standards consistent with generally
accepted international valuation standards, regulations, and specifications for
real property appraisal used for taxation and other purposes, and ensure
compliance therewith by LGUs and other concerned parties;

b) In coordination with the Bureau of Internal Revenue (BIR), review and
ensure that the SMVs as prepared by the provincial assessors together with
municipal assessors, and city assessors, including the municipal assessors in
the Metropolitan Manila Area is compliant with real property valuation policies
and standards, and recommend its approval to the Secretary of Finance for
local and national taxation, and for other purposes;

©) Provide technical assistance on real property appraisal matters to
government agencies and instrumentalities, and coordinate or conduct the
valuation of special purpose property, when requested;

) Provide leadership and policy direction to LGUs on real property valuation
for taxation and other purposes, including the development and maintenance of
valuation standards, the regulation of valuation activities and other related
matters, and the promotion of valuation training and seminars;

) Maintain a roster of licensed local government appraisers and assessors;

f) Develop and maintain a comprehensive and up-to-date electronic database
of real property transactions and prices of materials for buildings, machinery,
and other structures;

g) Conduct continuing study and research on valuation, and maintain
information on current global and country trends and developments in real
property valuation;

h) Formulate and provide for uniform procedure on the different transactions in
the assessor's office, including the transfer, annotation, and issuance of tax
declarations;

i) Determine, fix, and collect a reasonable amount to be charged as
administration fees, fines, and penalties relative to the implementation of this
Act; and

}) Perform such other functions as are necessary, proper, and incidental to
implement the provisions of this Act.

SEC. 5. Establishment of the Real Property Valuation Service. - To
achieve the policies and objectives declared in this Act, the Real Property Valuation
Service, hereinafter referred to as the RPVS, within the BLGF with counterpart
personnel in the BLGF Regional Offices is hereby established.

SEC. 6. The BLGF Executive Director. - The BLGF Executive Director shall
be responsible for the efficient and effective day-to-day performance of the
responsibilities set forth in this Act, and shall be responsible for the overall internal
management and governance of the RPVS.

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SEC. 7. Creation of a Central Consultative Committee. —

a) A Central Consultative Committee shall be created and shall serve as the
consultative forum on matters pertaining to the setting, adoption, and
maintenance of the valuation standards and other related concerns on real
property valuation.

b) It shall be chaired by the BLGF Executive Director and shall be composed
of a representative each from the:

1) Bureau of Internal Revenue;

2) Department of Environment and Natural Resources (DENR);
3) Bangko Sentral ng Pilipinas (BSP);

4) National organization of government assessors;

5) National organization of appraisers in national government agencies;
and

6) Private appraisal sector.

©) The representatives of the BIR, DENR, and BSP must be performing
valuation-related functions. The national organization of government
assessors, and the private appraisal sector shall be represented by their
respective heads of organizations.

d) The Chairperson and members of the Committee shall not receive
additional salary for the performance of their functions. Members of the
consultative committee who are not incumbent government officials or
employees shall be entitled to honoraria, pursuant to existing laws and
regulations.

e) The Committee shall meet at the initiation of the Chairperson at least once
every semester and shall have as many meetings as the Chairperson may
deem necessary for the adoption of valuation standards. The Chairperson may
invite resource persons on issues concerning real property valuation.

Chapter 2
BLGF Regional Operations

SEC. 8. Role of the BLGF Regional Offices. - The BLGF Regional Offices,
through the Regional Director, shall be responsible for all matters relating to
valuation and the supervision of the SMVs in the region. They shall:

a) Implement policies, plans, programs, rules and regulations on real property
valuation of LGUs in the region;

b) Review, in coordination with the BIR, and endorse to the RPVS, the
proposed SMVs prepared by the assessors of the LGUs in the region;

©) Provide for economical, efficient and effective valuation services in the
region;

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d) Coordinate and consult with other government departments, bureaus and
agencies within the region dealing with real property valuation;

) Adopt and maintain a comprehensive and up-to-date electronic database of
all regional real property-related transactions, and have custody of all
transaction records submitted by local government assessors; and

f) Perform other functions as may be assigned by the BLGF Executive
Director.

SEC. 9. The Regional Consultative Committee. —

a) There shall be a Regional Consultative Committee that shall be chaired by
the BLGF Regional Director and shall be composed of a representative from
the:

1) BIR — Regional Office;

2) DENR ~ Regional Office;

3) Head of regional organization of government assessors;

4) Head of regional organization of national government appraisers;
5) Head of the private appraisal sector within the region; and

6) Head of the bankers association within the region

b) The members of the Regional Consultative Committee must be performing
valuation-related functions in their respective agencies or sector.

c) The Committee shall meet at the initiation of the BLGF Regional Director at
least once every quarter and shall have as many meetings as the BLGF
Regional Director may deem necessary for the performance of its function.
The BLGF Regional Director may invite resource persons on issues concerning
real property valuation.

SEC. 10. Function of the Regional Consultative Committee. — The
Regional Consultative Committee shall serve as a consultative forum in the region
for discussion on developments in the local real property market; concerns of
taxpayers, civil society, and other stakeholders; outcome of compliance reporting in
the region; level of complaints and appeals; training of local government assessors
in the region; appraisal and assessment concems in general; and other matters as
may be determined by the Committee.

ARTICLE Ill
VALUATION OF REAL PROPERTIES

Chapter 4
Valuation Standards and Market Values

SEC. 11. Development of Valuation Standards. — Notwithstanding the
provisions of existing laws to the contrary, the BLGF shall develop, adopt, maintain,
and implement uniform valuation standards which shall be used by all appraisers

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and assessors in the LGUs and other concerned parties in the appraisal or valuation
of lands, buildings, machinery and other real properties for taxation and other
purposes. The valuation standards shall conform with the generally accepted
international valuation standards and principles.

SEC. 12. Valuation of Real Property. — For valuation purposes, all real
properties, whether taxable or exempt, shall be valued or appraised based on
prevailing market values in the locality where the property is situated, in conformity
with the valuation standards adopted pursuant to this Act. The Secretary of Finance
shall promulgate the rules and regulations for the valuation of real property pursuant
to the provisions of this Act

For real property intended for low-cost or socialized housing and other
programs of the government imbued with social policy objectives, the provisions of
existing pertinent laws shall be applied after determination of the prevailing market
value of these properties in accordance with generally accepted international
valuation standards.

SEC. 13. Preparation of Schedule of Market Values. - The provincial
assessors together with the city and municipal assessors, including the municipal
assessors in the Metropolitan Manila Area, shall prepare the SMV for the different
classes of real property situated within their respective LGUs, pursuant to the
valuation standards, rules, regulations and other specifications set by the DOF. The
proposed SMV shall be submitted to the BLGF Regional Office and the BIR
Regional Office for their joint review and to ensure that the SMV complies with other
requirements within ninety (90) days from the receipt of the BLGF and BIR Regional
Offices.

SEC. 14. Approval of Schedule of Market Values. - The Secretary of
Finance shall approve the SMV within sixty (60) days from receipt of the joint
endorsement of the BLGF Executive Director and the Commissioner of Internal
Revenue; otherwise, said schedule shall be deemed approved.

The approved SMV shall be published by the DOF in the Official Gazette or in
at least two (2) newspapers of general circulation. The SMV shall take effect fifteen
(15) days after its publication.

The DOF shall post the approved SMV in its official website and shall furnish
the concerned LGU, through the BLGF and the BIR, with copies thereof.

SEC. 15. Setting Assessment Levels and Tax Rates. — The approved SMV
shall be transmitted to the concerned assessor who shall confer with the local chief
executive regarding the approved SMV. The assessor, in coordination with the local
treasurer, shall estimate the tax impact of the new SMV as against the existing
assessment levels and tax rates, calculate the expected level of tax burden that the
taxpayers will bear based in the new SMV and recommend amendments on the
assessment levels and/or tax rates. The assessor shall prepare a minimum of three
(3) estimates of the tax impact based on different scenarios and submit the tax
impact report to the local chief executive and the Sanggunian.

The local chief executive shall transmit the approved SMV, together with the
tax impact report, within fifteen (15) days from receipt of the same to the
Sanggunian for the enactment of an ordinance setting the appropriate assessment

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levels and tax rates. During the Sanggunian’s deliberations prior to the enactment of
the tax ordinance, it may calll upon the assessor to provide technical assistance and
calculate the tax impact of additional options in order to arrive at a desired level of
taxes that the Sanggunian will adopt. The concerned Sanggunian shall enact the tax
ordinance upon conduct of public hearings and proper consultations within sixty (60)
days from receipt thereof; otherwise, the existing ordinance on assessment levels
and tax rates shall remain in force and effect.

Upon the enactment by the Sanggunian of an ordinance for the assessment
levels and tax rates, the local chief executive shall act within ten (10) days, in the
case of cities and the municipality in the Metropolitan Manila Area, or within fifteen
(15) days, in the case of provinces, to approve the same. Failure of the concerned
local chief executive to act on the ordinance within the prescribed period shall
render the same approved.

SEC. 16. Publication of Assessment Levels and Tax Rates. — The
approved ordinance for the assessment levels and tax rates shall be published by
the concerned LGU in a newspaper of local circulation once a week for two (2)
consecutive weeks: Provided, That in provinces, cities, and municipalities where
there are no newspapers of local circulation, the same shall be posted in the
provincial capitol, including all concerned city halls, municipal halls, and in two (2)
other conspicuous public places therein.

SEC. 17. Use of Schedule of Market Values. - The approved SMV shall be
used as basis for the determination of real property-related taxes of national and
local governments, as follows:

a) For purposes of real property taxation, the approved SMV shall in no case
be adopted by the LGU less than six (6) months prior to the effectivity of the
new assessment rates to ensure the proper cleansing and updating of records,
and notification of property owners in the conduct of general revision of
assessment and property classification.

b) In computing any internal revenue tax, the BIR Commissioner shall use the
SMV, or the actual gross selling price in consideration, as stated in real
property transaction documents, whichever is higher.

) For other purposes, such as local transfer tax, tax on sand and gravel,
‘community tax, fees and charges, or as benchmark for real property appraisal
of other government agencies, the approved SMV may be used upon its
effectivity.

Notwithstanding the provisions of existing laws to the contrary, the failure to
conduct a general revision of assessment and property classification, and use of the
SMV shall render an LGU ineligible for any conditional or performance-based grants
or to contract any form of credit financing from the national government.

SEC. 18. Updating of Schedule of Market Values. — All provincial assessors
together with the city assessors, and the municipal assessors, including the
municipal assessors in the Metropolitan Manila Area, shall update their respective
SMVs within two (2) years from the effectivity of this Act. Thereafter, they shall
update the SMVs and conduct general revision of property assessments not earlier
than three (3) years, but not later than five (5) years, from the date of last revision

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The BLGF shall prepare the schedule for the updating of the SMVs in all provinces,
cities and municipalities within the Metropolitan Manila Area.

In case of any significant change in market value where the property is located
after the SMVs have been approved and prior to next revision, or where correction
of errors and inequalities in any SMV is deemed necessary or upon the directive of
the Secretary of Finance, the provincial assessors shall, together with the city
assessors, and the municipal assessors, including the municipal assessors in the
Metropolitan Manila Area, recommend revisions to their existing SMVs to the BLGF
Regional Office, through the Regional Director of the BLGF having jurisdiction over
the LGU concerned.

Such revision/s shall be subject to review by the concerned BLGF Regional
Office and the BIR Regional Office which shall complete their review and submit
their recommendations to the BLGF Executive Director, in accordance with Section
14 hereof.

SEC. 19. Conduct of Capacity Building Interventions. — The BLGF shall, in
coordination with the Philippine Tax Academy of the DOF, develop and conduct the
necessary training for all local assessors, local officials, and staff, and other
concerned BIR personnel on the preparation of the SMV in accordance with
generally accepted international valuation standards, concepts, principles and
practices; conduct of SMV impact studies, preparation of compliance reports, and
other subject areas.

Chapter 2

Der pment and Maintenance of Real Property Market Database

SEC. 20. Development of Real Property Information System. — The BLGF
shall develop and maintain an up-to-date electronic database of the sale, exchange,
lease, mortgage, donation and all other real property transactions and declarations
in the country and on the cost of construction or renovation of buildings and other
structure, and on prices of machinery.

For this purpose, the BLGF shall require the mandatory submission of
necessary documents from the concerned officials or employees of national
government offices or instrumentalities, LGUs, and the private sector. The updated
database shall be made available to the LGUs, national government agencies, and
the private sector: Provided, That the Commissioner of Internal Revenue or a duly
authorized representative shall be allowed access to the database without need of
prior approval: Provided, further, That nonsubmission of the required documents to
the BLGF will be subject to the provisions of Section 28 of this Act.

To further achieve these objectives and ensure efficient real property tax
administration, all provinces, cities and municipalities shall automate their
operations, adopt tax mapping technology, maintain software-enabled valuation
systems, undertake regular data cleansing, and computerized records management.
The National Government, through the Department of Information and
Communications Technology, shall provide the appropriate equipment and
connectivity, information and communications technology platform, and the

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appropriate training and capability building programs to third class up to sixth class
municipalities and provinces to ensure compliance with this section. The BLGF
shall establish mechanisms for the electronic submission of the required documents
in accordance with the succeeding sections of Chapter 2 of this Act.

SEC. 21. Duty of Register of Deeds to Supply Assessors with Real
Property Transactions Data. — The Register of Deeds shall prepare and submit to
the provincial assessors, together with the city assessors, and municipal assessors,
including the municipal assessors in the Metropolitan Manila Area, an abstract of the
entire registry every three (3) months and copies of all contracts selling, transferring
or otherwise converting, leasing, or mortgaging real property registered every end of
the month, The abstract shall include brief but sufficient description of the real
properties entered therein, their present owners, and the dates of their most recent
transfer or alienation accompanied by copies of corresponding deeds of sale,
donation, partition, or other forms of alienation.

SEC. 22. Duty of Official Issuing Building Permits or Certificates of
Registration of Machinery to Transmit Copy of Permit to the Assessor. — Any
public official or employee who may now or hereafter be required by law or
regulation to issue to any person a permit for the construction, addition, repair or
renovation of a building, or permanent improvement on land, or a certificate of
registration for any machinery, including machines, mechanical contrivances and
apparatus attached or affixed on land or to another real property, shall transmit a
copy of such permit or certification within thirty (30) days from its issuance to the
assessor of the province, city or municipality where the property is situated.

SEC. 23. Duty of Geodetic Engineers to Furnish Copy of Plans to
Assessor. — It shall be the duty of all geodetic engineers, public or private, to
furnish, free of charge, the assessor of the province, city or municipality where the
land is located, a copy of the blue or white print of each of all approved original
subdivision plans or maps of surveys, duly signed by a Senior Geodetic Engineer,
executed by them every end of the month from receipt of such approved plans from
the Land Management Bureau (LMB), the Land Registration Authority (LRA), or the
Housing and Land Use Regulatory Board (HLURB), as the case may be.

SEC. 24. Duty of Registrar of Deeds and Notaries Public to Assist the
Provincial, City or Municipal Assessor. — |t shall be the duty of the Registrar of
Deeds and notaries public to furnish, free of charge, the provincial, city or municipal
assessor with copies of all contracts selling, transferring, or otherwise conveying,
leasing, or mortgaging real property received by, or acknowledged before them
within such periods as the BLGF shall prescribe.

SEC. 25. Duty of Assessors to Transmit Documents to the BLGF. - It
shall be the duty of the assessors to transmit to the concerned BLGF Regional
Office all real property transactions data from the Register of Deeds, and the names
of the official issuing the building permit and those of the geodetic engineers within
one (1) month after the receipt of such data. The BLGF Regional Office shall record,
process and make a summary report of the real property data and submit the same
to the BLGF Central Office within one (1) month from receipt of such data

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Chapter 3
Appointment and Qualifications of Assessors

SEC. 26. Appointment of Assessors. — The local chief executive shall
appoint the provincial, city and municipal assessors and assistant assessors, as the
case may be, in accordance with civil service law, rules and regulations and the
following guidelines:

a) In the case of provincial and assistant provincial assessors and city and
assistant city assessors, the appointee shall be chosen from the list of at least
three (3) ranking eligible candidates within the region;

b) In the case of city and assistant city assessors, and the municipal and
assistant municipal assessors in the Metropolitan Manila Area, the appointee
shall be chosen from the list of at least three (3) ranking eligible candidates
within the region; and

©) In the case of municipal and assistant municipal assessors, the appointee
shall be chosen from the list of at least three (3) ranking eligible candidates
within the province.

The assessors shall be under the technical supervision of the BLGF, primarily
through a system of compliance reporting and of capacity building through education
and training programs.

SEC. 27. Qualification of Local Government Assessors. — No person shall
be appointed assessor or assistant assessor unless a citizen of the Philippines, a
resident of the region for a provincial or city assessor/assistant assessor, and of the
province for a municipal assessor/assistant assessor, a registered and licensed
appraiser, of good moral character, and must not have been convicted of any crime
involving moral turpitude. The appointee must have experience in real property
valuation or assessment work or in any suitable field, either in private or public
practice, for at least five (5) years in the case of the provincial or city assessor, and
three (3) years in the case of the municipal assessor.

ARTICLE IV
PENAL PROVISIONS

SEC. 28. Failure to Comply with the Required Submission of Documents.
— Any government official or employee who fails without justifiable reason to provide
or furnish data or information required pursuant to Sections 20, 21, 22, 23, and 24 of
this Act, shall be punished by a fine equivalent to the official's or employee's six (6)
months basic salary or suspension from the service for a period not exceeding one
(1) year, or both, at the discretion of the competent authority.

SEC. 29. Failure to Comply with the Valuation Standards. - An assessor
who, for unjustifiable reasons, fails to comply with the valuation standards
developed and adopted pursuant to this Act, or deliberately conceals any deviations
or departures from such standards in the valuation of real property, shall be

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punished by a fine equivalent to the official's or employee's six (6) months basic
salary or suspension from the service for a period not exceeding one (1) year, or
both, at the discretion of the competent authority.

SEC. 30. Failure to Prepare Schedule of Market Values. — An assessor
who, for unjustifiable reasons, intentionally or deliberately refuses or fails to prepare
the SMVs within the period set forth in this Act shall be punishable by a fine
equivalent to the official's or employee's basic salary for a period of one (1) month to
six (6) months, or by suspension from the service for not more than one (1) year, or
both, at the discretion of the competent authority. This shall also be a ground for
administrative and criminal liability in accordance with the provisions of Republic Act
No. 9646, otherwise known as the “Real Estate Service Act of the Philippines”

SEC. 31. Government Agents Delaying the Review, Approval and
Implementation of SMV, and Conduct of General Revisions. — Any government
official who delays, without justifiable cause, the review, approval and
implementation of the SMV, the conduct of general revisions, or cause the improper
use thereof shall be punished by a fine equivalent to the official's or employee's six
(6) months basic salary or suspension from the service for a period not exceeding
one (1) year, or both, at the discretion of the competent authority

SEC. 32. Violation of Other Provisions. — Any person, whether natural or
juridical, who violates any provision of this Act other than those punishable under
Sections 28, 29, and 30 hereof shall, when warranted, be dealt with under
applicable existing laws.

SEC. 33. Taxpayers’ Remedies in Case of Erroneous Assessments of
Real Properties. — The provisions of Section 226 on Local Board of Assessment
Appeals and Section 229 on Action by the Local Board of Assessment Appeals of
Republic Act No. 7160, as amended, shall apply in all cases of appeal as remedies
for the taxpayers in the assessment of their properties.

All concerned local governments shall cause the constitution of a fully
functioning Local Board of Assessment Appeals in their respective jurisdictions in
coordination with the LRA.

ARTICLE V
TRANSITORY PROVISIONS

SEC. 34. Transitory Guidelines. — Local government units which are in the
process of updating their SMVs, upon the effectivity of this Act, shall continue with
such revisions in accordance with Section 16 of this Act: Provided, That proper
notification and coordination with the BLGF shall be undertaken.

In case the SMV is not yet available or updated, the BIR Commissioner shall
adopt the existing SMV, zonal values or the actual price in consideration as stated in
real property transaction documents, whichever is higher, for purposes of computing
any internal revenue tax.

SEC. 35. Saving Clause. - The zonal values, as determined by the BIR and
approved by the Secretary of Finance for internal revenue tax purposes, and the

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SMVs prepared by the provincial assessors together with the city assessors, and
municipal assessors, including the municipal assessors in the Metropolitan Manila
Area, that have been approved by their respective Sanggunians for real property
taxation purposes shall continue to be in force and effect until repealed, superseded,
modified, revised, set aside, or replaced by the values provided under the updated
‘SMVs as approved in accordance with Section 15 of this Act, which shall be within
two (2) years upon the effectivity of this Act.

ARTICLE VI
FUNDING REQUIREMENTS

SEC. 36. Budgetary Requirements for the Updating of Schedule of
Market Values. — Each local Sanggunian shall appropriate the necessary funds
from locally generated revenues, the internal revenue allotment or such other
sources every fiscal year. The accumulated amount so appropriated shall be known
as the Real Property Tax Administration Fund (RPTAF) which shall be used for the
proper implementation of the updating of the SMVs and general revision of real
property assessments, and the administration of real property taxes in all LGUs.

The BLGF shall annually furnish the Department of Budget and Management
(DBM) with a list of LGUs with SMVs that are due for updating. The DBM, in their
review of the ensuing year budget of provinces, highly urbanized cities, independent
component cities and municipalities within the Metropolitan Manila Area, shall
ensure that sufficient funds have been budgeted to comply with the requirements of
this Act: Provided, That failure to provide the appropriations herein required shall
render their annual budgets inoperative.

ARTICLE VII
MISCELLANEOUS PROVISIONS

SEC. 37. Appropriations. - The amount necessary for the implementation of
this Act shall be included in the annual General Appropriations Act.

SEC. 38. Implementing Rules and Regulations (IRR). — Within six (6)
months after the effectivity of this Act, the DOF, in consultation with concemed
parties, shall issue the IRR for the effective implementation of this Act.

SEC. 39. Suppletory Application of Existing Laws. — The provisions of
Republic Act No. 7160, otherwise known as the “Local Government Code of 1991”,
as amended, and other laws consistent with this Act shall have suppletory effect.

SEC. 40. Separability Clause. - If any section or provision of this Act shall be
declared unconstitutional or invalid, other sections or provisions not affected thereby
shall continue to be in full force and effect.

SEC. 41. Repealing Clause.

a) Sections 188, 199(0), 201, 202, 209(a), 212, 214, 219, 220, 472(a)
paragraph 1, 472(b)(8), and 473(a) paragraph 1 of Republic Act No. 7160,

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otherwise known as the “Local Government Code of 1991", as amended, are
hereby repealed;

b) Section 3(n) of Presidential Decree No. 464 of 1974 is hereby repealed;

c) Section 6 of Republic Act No. 10752, otherwise known as “The Right-of-
Way Act” is hereby repealed;

d) Section 4(a) and (b) of Republic Act No. 8974 are hereby repealed;

e) Section 9 of Presidential Decree No. 921 on the administration of local
financial services in Metropolitan Manila and creating Local Treasury and
Assessment Districts, is hereby repealed;

f) Sections 19, 135(a), 138, 198(a), 199(0), 218 and 224(a) of Republic Act
No. 7160, otherwise known as the “Local Government Code of 1991”, are also
amended or modified accordingly;

g) Likewise, Sections 6(E), 24(D), 27(D)(5), 88(B) and 102 of Republic Act No.
8424, otherwise known as the “Tax Reform Act of 1997", are likewise amended
or modified accordingly;

h) Sections 4(h) and 9 of Presidential Decree No. 538 on the power of
Philippine Veterans Investment Development Corporation Industrial Authority
to collect real property tax are likewise amended or modified accordingly; and

i) All laws, presidential decrees, executive orders, presidential proctamations,
rules and regulations or parts thereof contrary to or inconsistent with this Act
are hereby repealed, superseded or modified accordingly.

SEC. 42. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved.

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