NINETEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVI

“Introduced by Representative Rufus B. Rox

House Bill No. 301 2
EXPLANATORY NOTE

This bill was filed during the 18" Congress and was approved by the House of
Representatives.

In the case of Mandanas vs Executive Secretary (G.R. No. 199802, July 03, 2018) the
Supreme Court ruled with finality that the phrase "internal revenue” appearing in Section 284
of Republic Act No. 7160, otherwise known as the Local Government Code of 1991 is
unconstitutional and ordered it deleted from the law along with other references to the same.
It basically ruled that all references to “internal revenue’ in connection with the computation of
the Internal Revenue Allotment (IRA) is unconstitutional and the ruling therefore widened the
base amounts for the computation of the IRA.

As such, this bill is filed to amend the Local Government Code of 1991 to reflect the
tuling of the Supreme Court.

In view of the foregoing, immediate approval of this measure is earnestly requested

Mie



NINETEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez _

House Bill No, 3012

AN ACT
INTENSIFYING LOCAL GOVERNMENT PARTICIPATION IN NATIONAL DEVELOPMENT
BY INCREASING THE SHARE OF LOCAL GOVERNMENT UNITS IN NATIONAL TAXES,
AMENDING FOR THE PURPOSE SECTION 284 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 284 of Republic Act No. 7160, as amended, otherwise known as
the Local Government Code of 1991 is hereby amended to read as follows:

“SECTION 284. Allotment of [Internal Revenue] NATIONAL Taxes. - Local
government units shall have a share of national [internal revenue] taxes based on the
Collection of the third fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%)
(b) On the second year, thirty-five percent (35%);
(©) On the third year and thereafter, {forty percent (40%)] FIFTY PERCENT (50%).

Provided, That in the event that the National Government incurs an unmanageable
public sector deficit, the President of the Philippines is hereby authorized, upon the
recommendation of the Secretary of Finance, Secretary of Interior and Local Government, and
Secretary of Budget and Management, and subject to consultation with the presiding officers
of both Houses of Congress and the presidents of the ‘liga’, to make the necessary
adjustments in the [internal revenue] NATIONAL TAX allotment of local government units but
in no case shall the allotment be less than thirty percent (30%) of the collection of national
[internal revenue] taxes of the third fiscal year preceding the current fiscal year: Provided,
further, That in the first year of the effectivity of this Code, the local government units shall, in
addition to the thirty percent (30%) [internal revenue] NATIONAL TAX allotment which shall
include the cost of devolved functions for essential public services, be entitled to receive the
amount equivalent to the cost of devolved personal services.”

SEC. 2. All laws, decrees, executive orders, rules and regulations contrary to or
inconsistent with any provision of this Act are hereby repealed or amended accordingly.

SEC. 3. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in a newspaper of general application.

Approved,