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RISSTRATION UNIT
BILLS AN INDEX SERVICE

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

SEVENTEENTH CONGRESS
First Regular Session

House BillNo, 2631

INTRODUCED BY: HON. GWENDOLYN F. GARCIA

EXPLANATORY NOTE

This bill is a refiled bill originally authored by then Congressman Pablo John F.
Garcia. This has been deliberated and favorably acted upon by the House
during the 14!» Congress, transmitted and received by the Senate on May 15,
2008. In the 15» Congress, the Committee on Local Government with majority
of its members approved this bill, which is why the Committee has reported
‘out this bill as contained in Committee Report No. 4434. And again in the 16th
Congress, this bill has reach the Senate, with the substitute bill H. No. 5021
which was transmitted and received by the Senate on 14 November 2014.

This bill seeks to rationalize the income requirement for the creation of a
municipality, creation of the province and the declaration of highly
urbanized status in the case of a component city.

This bill will effectively complement Republic Act No. 9009 that has made
more stringent the income requirement for the conversion of a municipality or
cluster of barangays into a component city, the income requirement for the
creation of a municipality and the creation of a province and the
declaration of highly urbanized status in the case of component cities, have
remained the same.

We therefore have a situation where a city may not be created if the income
of a municipality or a cluster of barangays falls below P100 Million, while for a
P2.5 Million a new municipality may be formed and for a mere P20 Million, a
new province may be created. Likewise, we have a situation where, despite
the P100 Million threshold in the creation of a city, a highly urbanized city may
be declared on the basis of a PSOMillion income.

There is therefore a need to further amend Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, in order to rationalize the
income requirement for the creation and conversion or declaration of the
different species of local government units.

The early passage of this bill therefore is urgently sought.

NTATIVES


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

SEVENTEENTH CONGRESS
First Regular Session

1631

House Bill No.

INTRODUCED BY: HON. GWENDOLYN F. GARCIA

AN ACT RATIONALIZING THE INCOME REQUIREMENTS FOR
THE CREATION OF A MUNICIPALITY, THE DECLARATION OF HIGHLY URBANIZED
STATUS IN THE CASE OF COMPONENT CITIES AND
THE CREATION OF A PROVINCE,
AMENDING FOR THE PURPOSE SECTION 442 (a), 452 (a) AND 461 (a) AND (c)
OF REPUBLIC ACT NO. 7160, AS AMENDED, OTHERWISE KNOWN AS THE
"LOCAL GOVERNMENT CODE OF 1991"

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

Section 1. Section 442 (a) of Republic Act No. 7160, as amended
otherwise known as the "Local Government Code of 1991" , is hereby
amended to read as follows:

"Sec. 442. Requisites for Creation - (a) A municipality may be
created if it has a average annual income, as certified by the provincial
treasurer, of a least [Two] Twelve million five hundred thousand pesos
{(2,500,000.00)] (P12,500,000.00) for the last two (2) consecutive years based
‘on the [1991] 2016 constant prices, a population of the least twenty-five
thousand (25,000) inhabitants as certified by the Philippine Statistics Authority;
and a contiguous territory of at least fifty (50) square kilometer as certified by
the Lands Management Bureau: Provided, that the creation thereof shall not
reduce the land area, population or income of the original municipality or
municipalities at the time of said creation to less than the minimum
requirements prescribed herein.

xx"

Section 2. Section 452 (a) and 453 of the Local Government Code of
1991, as amended, are hereby amended to read to read as follows:

"Sec.452. Highly Urbanized Cities. - (a) Cities with a minimum
population of two hundred thousand (200,000) inhabitants, as certified by the
[National Statistics Authority] Phillppine Statistics Authority, and with [the
latest] A LOCALLY - GENERATED annual income FOR THE LAST TWO (2)
CONSECUTIVE YEARS of at least TWO HUNDRED fifty million pesos


{{S0,000,000.00)] (P250,000,000.00) based on [1991] 2000 constant prices, as
certified by the [city treasurer] Department of Finance, shall be classified as
highly urbanized cities [J: PROVIDED, THAT THE ANNUAL AVERAGE INCOME
SHALL INCLUDE THE INCOME ACCRUING TO THE GENERAL FUND, BUT
EXCLUDING THE INTERNAL REVENUE ALLOTMENT (IRA) SHARES, SPECIAL FUNDS,
TRUST FUNDS AND NO-RECURRING INCOME.

"xX"

"SEC. 453. Duty to declare highly urbanized status. - it shall be the duty
of [the President] CONGRESS TO PASS JOINT RESOLUTION to declare a city as
highly urbanized within thirty (30) days after it shall have meet the minimum
requirements prescribed in the immediately preceding section, upon proper
{application} determination therefor [and ratification]: PROVIDED, THAT THE
DECLARATION SHALL BE RATIFIED in a plebiscite by the qualified voters
[therein]OF THE PROVINCE IN WHICH THE CITY GEOGRAPHICALLY BELONGS."

SECTION 3. SE.CTION 461 (a) and (c) of the Local Government Code of
1991, as amended, is hereby amended to read as follows:

"Sec. 461. Requisites for Creation. - (a) A province may be
created If it has an average LOCALLY-GENERATED annual income for the LAST
TWO (2) CONSECUTIVE YEARS, as certified by the Department of Finance, of
not less than [Twenty] Two Hundred milion pesos [(P20,000,000.000]
(P200,000,000.00) based on THE [1991] YEAR 2000 constant price and either of
the following requisites:

Sex!

“(c)The average annual Locally-Generated income shall include the
income accruing to the general fund, exclusives of the INTERNAL REVENUE
ALLOTMENT (IRA) SHARES, special funds, trust funds, transfers and non-
tecurting income."

SECTION 4. the Department of Interior and Local Government (DILG)
shall issue the necessary rules and regulations within sixty (60) days after the
affectivity of this Act.

SECTION 5. All laws, decrees, executive orders, rules and regulations
which are inconsistent with this Act are hereby amended, or modified
accordingly.

SECTION 6. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,