Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1431

Introduced by HONORABLE LUIS JOSE ANGEL N. CAMPOS, JR.

EXPLANATORY NOTE

Section 235 of Republic Act No. 7160, otherwise known as the Local Government Code
of 1991, limits the levy and collection of the Special Education Fund (“SEF”) to provinces or
cities, and municipalities within the Metropolitan Manila Area only.

Section 272 of the same law provides that the SEF shall be used only for: (a) the
operation and maintenance of public schools; (b) construction and repair of school buildings,
facilities and equipment; (c) educational research; (d) purchase of books and periodicals, and (e)
sports development, as determined and approved by the Local School Board.

In light with the changing times and increasing need of funds to address concerns with
public schools all over the Philippines, there is a need to expand the application of the SEF to
include municipalities even those outside of Metropolitan Manila. Issues that adversely affect
our public school system needs to be addressed, issues such as teacher to student ratio, increasing
number of enrollees, shortage in classrooms, introduction of new fields of education such as
information and communications technology or computer science into public school curriculum
and so forth.

This bill seeks to (i) allow municipalities outside the Metro Manila Area to impose their
own SEF; (ii) allow the SEF to be used for other matters such as compensation for volunteer
school teachers; and (iii) allow the SEF to be used as payment for loans, debts and other forms of
borrowing undertaken in order to supplement the national budget for education

Given the foregoing, the approval of this bill is earnestly sought.

LUIS JOSE ANGEL N. CAMPOS


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL pass

AN ACT
EXPANDING THE PURPOSES AND APPLICATION OF THE SPECIAL EDUCATION
FUND (SEF), AMENDING FOR THE PURPOSE SECTIONS 100, 235 AND 272 OF
REPUBLIC ACT 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT
CODE OF 1991

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

SECTION 1. Section 100 of Republic Act No. 7160, otherwise known as the “Local
Government Code of 1991” is hereby amended to read as follows:
“Sec. 100 Meeting and Quorum; Budget. —

(a) The local school board shall meet at least once a month or as often as necessary
(b) Any of the co-chairmen may call a meeting. A majority of all its members shall
constitute a quorum. However, when both co-chairmen are present in the meeting, the
local chief executive concerned, as a matter of protocol, shall be given preference to
preside over the meeting. The division superintendent, city superintendent, or district
supervisor, as the case may be, shall prepare the budget of the school board concerned.
Such budget shall be supported by programs, projects, and activities of the school board
for the ensuing fiscal year. The affirmative vote of all the members shall be necessary to
approve the budget
(©) The annual school board budget shall give priority to the following:
(1) Construction, repair, and maintenance of school buildings and other facilities of
public elementary and secondary schools;
(2) Establishment and maintenance of extension classes where necessary; and
(3) [Sports activities at the division, district, municipal, and barangay levels]
PAYMENT OF SALARIES, ALLOWANCES, AND OTHER BENEFITS OF
TEACHERS INCLUDING THE CREATION OF TEACHER ITEMS FOR THE


SAID EXTENSION CLASSES, TEACHING AIDS, AND OTHER
INSTRUCTIONAL MATERIALS.”
SEC. 2. Section 235 of the same Code is hereby amended to read as follows:
“Sec. 235. Additional Levy on Real Property for the Special Education Fund. ~

A SPECIAL EDUCATION FUND (SEF) IS HEREBY CREATED FOR EVERY
LOCAL GOVERNMENT UNIT MENTIONED HEREUNDER TO BE FUNDED FROM THE
ADDITIONAL LEVY ON REAL PROPERTY PRESCRIBED UNDER THIS SECTION

A province, city, or municipality within the Metropolitan Manila Area, may levy and
collect an annual tax of one percent (1%) on the assessed value of real property IN THEIR
RESPECTIVE TERRITORIAL JURISDICTION which shall be in addition to the basic real
property tax PROVIDED UNDER THIS CODE.

EVERY MUNICIPALITY OUTSIDE THE METROPOLITAN MANILA AREA MAY
LIKEWISE LEVY AND COLLECT AN ANNUAL TAX OF ONE HALF PERCENT (1/2%),
ON THE ASSESSED VALUE OF THE PROPERTY WITHIN SAID MUNICIPALITY. The
proceeds OF THE ADDITIONAL LEVY STATED IN THE PRECEDING PARAGRAPHS
thereof shall exclusively accrue to the Special Education Fund (SEF) OF THE LOCAL
GOVERNMENT UNIT CONCERNED.

SEC. 3. Section 272 of the same Code is hereby amended to read as follows:

“Sec. 272. Application of Proceeds of the Additional One Percent Special Education
Fund (SEF) Tax. —

The proceeds from the additional once percent (1%) tax on real property accruing to the
Special Education Fund shall be automatically released to the local school boards; provided, that,
in case of provinces, the proceeds shall be divided equally between the provincial and municipal
school boards: Provided, however, that the proceeds shall be allocated for the operation and
maintenance of public schools, construction and maintenance of additional school buildings
and/or other related facilities as determined by the local school board. INCLUDING BUT NOT
LIMITED TO THE FOLLOWING: PARENTS’-TEACHERS’ ASSOCIATIONS AND/OR
ASSEMBLY HALLS AND SCHOOL STAGES, PROCUREMENT OF SERVICE VEHICLES
FOR USE IN THE TRANSPORT OF TEACHERS AND NON-TEACHING PERSONNEL,
INSTALLATION OF COMPUTER SOFTWARE AND HARDWARE, PURCHASE AND/OR
ACQUISITION OF LABORATORY EQUIPMENT, REPAIR AND MAINTENANCE OF ALL
SUCH OTHER SCHOOL-RELATED EQUIPMENT AND FACILITIES, PAYMENT OF
ELECTRIC AND WATER BILLS, EDUCATIONAL RESEARCH, PURCHASE OF
PRESCRIBED TEXTBOOKS, PERIODICALS, AND OTHER REFERENCE MATERIALS,
INSTRUCTIONAL MATERIALS, TEACHING AIDS, AND SPORTS DEVELOPMENT,
PAYMENT OF SALARIES, ALLOWANCES AND OTHER BENEFITS OF TEACHING AND
NON-TEACHING PERSONNEL, ESTABLISHMENT AND CREATION OF EXTENSION
CLASSES INCLUDING THE CREATION OF NEW TEACHER ITEMS AS WELL AS


CONTRACTUAL POSITIONS: PROVIDED, THAT THE HIRING OF TEACHERS
THEREFORE SHALL BE IN ACCORDANCE WITH THE SELECTION AND PROMOTION
SYSTEM OF THE DEPARTMENT OF EDUCATION SUCH AS RANKING AND
LOCALIZATION: PROVIDED, FURTHER, THAT THE TEACHER HIRED SHALL BE
PAID A SALARY EQUIVALENT TO THAT RECEIVED BY A NATIONALLY PAID
SCHOOL TEACHER, PROVIDED FURTHERMORE, THAT THE SAID TEACHER SHALL
BE ENTITLED, WHENEVER POSSIBLE, TO THE SAME ALLOWANCES RECEIVED BY
THE LATTER, REMUNERATION OR HONORARIA OF VOLUNTEER SCHOOL
TEACHERS; SCHOLARSHIP AND TRAINING OF STUDENTS, TEACHERS, AND
SCHOOL ADMINISTRATORS AS WELL AS CONTRIBUTIONS TO SEMINARS,
WORKSHOPS, RESEARCH STUDIES, CONFERENCES AND MEETINGS FOR THE
PUBLIC EDUCATIONAL SECTOR.

THE RESPECTIVE LOCAL SCHOOL BOARDS OF A PROVINCE, CITY, OR
MUNICIPALITY WITHIN THE METRO MANILA AREA, INCLUDING THE LOCAL
SCHOOL BOARD OF A COMPONENT MUNICIPALITY OF A PROVINCE SHALL.
DETERMINE THE SPECIFIC FUND ALLOCATION AS TO THE AMOUNT AND
SCHEDULE OF DISBURSEMENT OF THE SPECIFIC USES OF THE SCHOOL BOARD
FUND BY VOTE OF THE MAJORITY OF THE QUORUM OF THE LOCAL SCHOOL
BOARD CONCERNED PROVIDED, FURTHER THAT THE RESPECTIVE LOCAL
SCHOOL BOARDS SHALL BE AUTHORIZED TO EXTEND ASSISTANCE TO OTHER
LOCAL SCHOOL BOARDS FOR THE PURPOSES PREVIOUSLY PROVIDED.

A PROVINCE, CITY, OR MUNICIPALITY MAY USE THE SPECIAL EDUCATION
FUND (SEF) AS LOAN COLLATERAL IN OBTAINING A LOAN, CREDIT, OR
INDEBTEDNESS FROM ANY FINANCIAL INSTITUTION, ENTITY, OR
INTERMEDIARY: PROVIDED, THAT THE PURPOSE OF THE LOAN SHALL BE THE
SAME AS THOSE STATED ABOVE AS ALLOWABLE USES FOR THE SEF: PROVIDED,
FURTHER, THAT THE PROJECT TO BE FINANCED AND THE USE OF THE SEF AS
COLLATERAL MUST BE APPROVED BY THE MAJORITY OF ALL THE MEMBERS OF
THE LOCAL SCHOOL BOARD: PROVIDED, FURTHERMORE, THAT THE LOAN MUST
BE INCLUDED IN THE LOCAL GOVERNMENT UNIT’S BUDGET AND THERE MUST
BE PROPER APPROPRIATIONS FOR THE PURPOSE: PROVIDED, FURTHERMORE,
THAT THE LOCAL SCHOOL BOARD MUST AUTHORIZE THE TRANSFER OF THE SEF
TO THE GENERAL FUND, TO THE EXTENT NEEDED TO AMORTIZE LOANS DULY
INCURRED BY THE LOCAL GOVERNMENT UNIT: PROVIDED, FURTHERMORE,
THAT THE PAYMENT OF THE PRINCIPAL INTEREST, AND/OR OTHER COSTS SHALL
BE CHARGEABLE TO SEF OF THE BORROWING LOCAL GOVERNMENT: PROVIDED,
FINALLY, THAT THE LENDER INSTITUTION OR FINANCIAL INTERMEDIARY
PROVIDING OT ARRANGING THE LOAN OR CREDIT TO THE SCHOOL BOARD OF A


PROVINCE, CITY, OR MUNICIPALITY WITHIN THE METRO MANILA AREA SHALL
BE ENTITLED TO AN ASSIGNMENT OF THE CORRESPONDING PORTION OF THE
FUND ACCRUING TO THE LOCAL SCHOOL BOARD CONCERNED WHICH SHALL
CONSTITUTE A PREFERRED OR PRIORITY LIEN OR ENCUMBRANCE ON SAID FUND
AND SAID LENDING INSTITUTION OR INTERMEDIARY SHALL BE ENTITLED TO
DEBIT THE ACCOUNT DEPOSIT OR PLACEMENT OF THE BORROWING LOCAL
SCHOOL BOARD AS AND WHEN PAYMENT SCHEDULE OF THE LOAN, CREDIT OR
INDEBTEDNESS BECOME DUE AND PAYABLE WITHOUT NEED OF FURTHER
NOTICE OR DEMAND TO THE LOCAL SCHOOL BOARD TO ENSURE TIMELY
PAYMENT OF SUCH LIABLITIES OR OBLIGATIONS OF THE LOCAL SCHOOL BOARD
CONCERNED.

SEC. 4. REPEALING CLAUSE. - All other laws, decrees, executive orders, and other
administrative issuances and parts thereof which are inconsistent with the provisions of this Act
are hereby modified, amended, superseded or repealed accordingly.

SEC. 5. EFFECTIVITY. - This Act shall take effect after fifteen (15) days following
the completion of its publication in the Official Gazette or any major daily newspaper of general

circulation in the Philippines.

Approved,