Republic of the Phil
Ronse of Representatives
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

COMMITTEE REPORT NO. 2059

Submined, by he Committces on Government Reorganization and Appropriations on
MAR 201 5

M2
60a

Recommending ils approval in substituvien of House Bill Nos. 212, 1164, 4400, 4610, and
4687.

Re: House Bill No. _

Sponsors: Re

jalusjos and Abaya

Mr, Speaker:

The Committees on Goverment Reorganization and Appropriations, to which were
referred House Bill No. 212, introduced by Representative Neptali M. Gonzales 11, entitled:

SAN ACT
INSTLIUTING REFORMS IN THE REAL PROPERTY VALUATION AND.
ASSESSMENT PRACTICES IN THE PHILIPPINES AND FOR OTHER PURPOSES”

House Bill No. 1164, introduced by Represemtative Rodolfo G. Biazon, entitled:

“AN ACT
INSTITUTING REFORMS IN REAL PROPERTY VALUATION IN THE PHILIPPINES,
ESTABLISIIING THE NATIONAL VALUATION AUTHORITY AND APPROPRIATING
FUNDS THEREFOR”

House Bill No, 4400, introduced by Representative Me! Senen S. Sarmiento, entitled:

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

House Bill No. 4610, introduced by Representatives Diosdado Macapagal Arroyo and Gioria
Macapagal-Arroyo. entitled:

“AN ACT
ENSTITUTIONALIZING REFORMS IN REAL PROPERTY APPRAISAL AND.
ASSESSMENT PRACTICES IN THE PHILIPPINES, CREAT!NG FOR THE PURPOSE
THE NATIONAL APPRAISAL AUTHORITY AND FOR OTHER PURPOSES”


and Howse Bill No. 4687, introduced by Representatives Rufus B, Rodriguez and Maximo B.
Rodriguez, Ir. entitied:

“AN ACT
INSTETUTING KEFORMS IN REAL PROPERTY VALUATION IN THE PHILIPPINES.
REORGANIZING THE BUREAL OF LOCAL GOVERNMENT FINANCE, Ab
APPROPRIATING FINDS THEREFOR” .
6044

have considered the same and recommend that the attached House Bill No. ____ entitled
“AN ACT INSTITUTING REFORMS IN REAL PROPERTY VALUATION AND
ASSESSMENT (N THE PHILIPPINES, REORGANIZING THE BUREAU OF LOCAL
GOVERNMENT FINANCE, AND APPROPRIATING FUNDS THEREFOR” be approved
in substitution of House Bill Nos. 212, 1164, 4400, 4610, and 4687 with Representatives
Neptai: M. Gonzales #1, Rodolfo G. Biazon, Mei Senen S. Sarmiento, Diosdado Macapagal
Asroyo. Gloria Macapagal-Arroyo, Rufus B, Rodriguez, Maxime 8. Rodriguez Jr., Jorge T.
Almonte, Julieta R, Cortuna, and David 1.. Kho as authors thereof,

,

Respectfully submited:

ittee on Government Reorganization

‘THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
Quezon City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

FIFTEENTH CONGRESS
Second Regular Session
ar
nouspeit no. 6044
(in Substitution of H.B. Nos. 212, 1164, 4400, 4610, and 4687)

_ HH

INTRODUCED BY THE HONORABLES NEPTALI M. GONZALES HU, RODOLFO G.
BIAZON, MEL SENEN S. SARMIENTO, DIOSDADO MACAPAGAL ARROYO,
GLORIA MACAPAGAL-ARROYO, RUFUS B. RODRIGUEZ, MAXIMO B.
RODRIGUEZ JR., CESAR G. JALOSJOS, JOSEPH EMILIO A. ABAYA, JORGE T.
ALMONTE, JULIETA R. CORTUNA, AND DAVID L. KHO

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 "THE REAL PROPERTY
VALUATION AND ASSESSMENT REFORM ACT OF 2012."

DECLARATION OF STATE POLICY AND OBJECTIVES,
AND DEFINITION OF TERMS

SEC. 2. Declaration of Policy and Objectives. — It is the policy of the State to promote
the development and maintenance of a just, equitable, impartial, and nationally consistent real
Property valuation based on intemationally accepted valuation standards, concepts,

10 principles, and practices. Towards this end, the State shall:
1 (@) Promote the fiscal autonomy of local governments to provide basic services to their
n constituency by enhancing their capacity to generate local revenues from real

13 Property;

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

(©) Adopt market value as the single real property valuation base for the assessment of
real property related taxes in the country, and for valuing or appraising real property
for various transactions by all goverment agencies;

(d) Separate the function of valuing or appraising of real properties from the functions of
tax policy and administering the taxes due thereon;

(€) Support the development and professionalization of the valuation snd appraisal
practice in the country pursuant to Republic Act No. 9646, ctherwise known as “The
Real Estate Service Act of the Philippines;”

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

(g) Support the development of a “body of knowledge” on valuation by continuing
yesearch and monitoring of new developments in the valuation discipline for
upgrading the country’s valuation and keeping it abreast with global developments;
and

(h) Ensure transparency in real property transactions to protect the public and develop
confidence in the work of appraisers and assessors.

SEC. 3. Definition of Terms, — As used in this Act, the following terns shall mean:

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

(b) “Assessor refers to sn official in the local government unit who is a licensed appraiser,

- svtwo performs appraisal and assessment of real properties including plant, machinery
and equipment, essentially for taxation and other purposes. This definition also
includes assistant assessors.

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

(4) Improvements sefer 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, which is intended to enhance its value, beauty or
utility oF to adapt it for new or further purposes.


aw awn

cy

(c) Land refers to one of the major factors of production consisting sometimes of a
material economic good, which is supplied by nature without the aid of man, Land
may include not only the earth surface, both land and water, but also anything that is
attached to the earth’s surface. Thus, all natural resources in their original state, such
as mineral deposits, wildlife, timber, and fish, are land within the technical meaning
of the term: so also are sources of energy, outside of man himself, such as water, coal
deposits, and the natura! fertility of the soil

(f) Machinery refers to machines, equipment, mechanical contrivances, instruments,
appliances or apparatus which may or may not be attached, permanently or
temporarily, to the real property. It includes the physical facilities for production, the
installations and appurtenant service facilities, those which are mobile, seif-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
pecessury 10 its manufacturing, mining, logging, commercial, industrial or agricultural
purposes.

(g) Market Vatue setors to the estimated amount for which a property should exchange
on the date of valuation between a willing buyer and a willing seller in an arm’s
Jength transaction (a transaction between independent, unrelated patties involving no
irregularity) after proper marketing wherein the parties had each acted
knowledgeably, prudently, and without compulsion.

(h) Private appraisal sector refers to ficensed non-governmental real estate service
practitioners who have been active in the practice of real estate appraisal for the last
five (5) years.

i) Real Estate refers to the land and all those items that are attached to the land. It is the
physical, tangible entity, together with alll the additions or improvements on, above or
below the ground.

(j) Real Property refers to all the rigbts, interests, and benefits related to the ownership
of real estate, plant, machinery, and equipment.

(k) Schedule of Market Values, hereinafter referred to as SMV, refers to a table of base
unit market values for all kinds of real properties. except machinery, within a local
government unit prepared by assessors pursuant to existing laws, rules and

regulations


ween

a

G@) 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 concem. Because
of the special design and function, conversion of special purpose properties to other
types of development or application is generally not economically feasible.

(ov) Valuation aud appraisal refers 10 the systematic and analytic determination and
recording of property facts, circumstances, investments, and investigation of other
relevant data resulting in a supportable estimate and opinion of value or a professional
conclusion based upon supporting data, logical analysis and judgment as of a specific
date and for a specific purpose.

ARTICLE UL
STRENGTHENING THE BUREAU OF LOCAL GOVERNMENT FINANCE
Chapter 1
BLGF Central Operations

SEC. 4, Role of the Bureau of Local Government Finance. — The Bureau of Local
Government Finance (BLGF), through the Real Property Valuation Service (RPVS) as
hereinafter established, shall lead and manage the implementation of the provisions of this
‘Act. The BLGF shall have the following powers and functions:

(a) Develop, adopt, and maintain valuation standards consistent with generally accepted
valuation standards, regulations and specifications for real property appraisal used for
tax and other purposes, and ensure comptiance therewith by local government units
and other concerned parties;

(b) Review for compliance with the real property valuation policies and standards and

~ fecortimend for approvat of the Secretary of Finanve the Schedule of Market Values
{(SMVs} as prepared by the provincial assessors together with municipal assessors,
and city assessors, including the municipal assessor in Metro Manila, for tax, both
Jocal and national, and for other purposes;

(c) Provide technical assistance on teal property appraisal matters to goverament
agencies and instrumentalities, and coordinate or conduct the valuation and appraisal
of special purpose properties, when requested;

(4) Provide leadership and policy directions to local government units on real property
valuation and sppraisal for taxation and other purposes, including the development
and maintenance of valuation standards, the regulation of valuation and appraisal


activities and other related matters, and the promotion of valuation and appraisal
training and seminars;

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

(©) 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 stu¢y and research on valuation, and maintain an information
base on current global and country trends and developments in real property valuation
and appraisal;

{h) Determine, fix, and collect reasonable amounts to be charged as administration fees,
fines, and pensities 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 policy
and objectives declared in this Act, there shall be established the Real Property Valuation
Service, hereinafter referred to as the RPVS, within the Bureau of Local Government
Finance.

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

(2) Develop and implement policies, plans, programs, and operating standards for the
attainment of the objectives of this Act,

(b) Provide policy directions and leadership in all aspects of valuation and appraisal and
their implementation in the regiona! offices;

(©) Recommend to the Secretary of Finance the approval of the Schedule of Market
Values (SMVs) prepared by the provincial assessors together with municipal
assessors, and city assessors, inchuding the municipal assessor in Metro Manila, for
tax and other purposes;

@ Advise and assist other government agencies on matters pertaining to real property
valuation and appraisal; and

(© Perform such other functions as may be provided by law, or required in pursuance of
this Act.


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SEC. 7. Consultations with Concerned Agencies and Sectors. — (a) A Central
Consultative Committee shall be created, chaired by the BLGF Executive Director and
composed of a representative each from the:

1. Bureau of Internal Revenue (BIR);

2, Department of Environment and Natural Resources (DENR):

3. Bangko Sentral ng Pilipinas (BSP);

4, National organization of govertiment assessors;

5, National organization of appraisers in national government agencies;
6. Private appraisal sector; and

7. Union of Locai Authorities of the Philippines (ULAP).

(b) The member-representatives from the BIR, DENR, and BSP must be performing
valustion-related functions. The pational organization of government assessors, the
private sector, and the ULAP shell be represented by their respective heads of

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

(@) The Committee shal! meet at the initiation of the Chairperson at least once every
semester, and shal) have as many meetings as the Chairperson may deem necessary
for the adoption of valuation standanis.

SEC. 8 Functions of the Central Consuttative Committee. — The Central Consultative
Committee shall serve as the consultative forum on matters pertaining to the setting, adoption
amd maintenance of the valuation standards.

7 7 Chapter 2
BLGF Regional Operations

SEC. 9. Role of the BLGF Regional Offices. — The BLGF Regional Offices, through the
Regional Director, shali be responsible for all matters relating ‘0 valuation and appraisal and
the SMVs in the region, such as:

(@) Implementation of the provisions of this Act and related policies, plans, programs.

rules and regulations on real property valuation or appraisal of local government units
in the region;


ewan eune

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() Review and endorsement to the BLGF Executive Director of the proposed SMVs
prepared by the provincial assessors together with the municipal assessors, and city
assessors within the region;

(©) Provision for economical, efficient, and effective service relating to the
implementation of the provisions of this Act in the region;

(@) Coordination and consuhation with regional offices of other government departments,
bureaus, and agencies within the region dealing with real property valuation and
appraisal;

(e) Provision for leadership and policy direction in the area of real property valuation and
appraisal to local government units in the region;

(® Adoption and maintenance of a comprehensive and up-to-date regional electronic
database of alt regional real property-related transactions, and have custody of all
transaction records submitted by local government assessors; and

(g) Performance of other functions as may be assigned by the BLGY Executive Director.

SEC. 10. The Regional Consultative Committee. — (a) There shall be a Regional
Consultative Committee chaired by the BLGF Regional Director, and composed of a
representative each fiom:

1) Bureau of Intemal Revenue - Regional Office:

2) Department of Environment and Natural Resources - Regional Office;
3) Regional organization of government assessors;

4) Regional organization of national government appraisers;

5) Private appraisal sector within the region; and

6) Bankers association within the region

(b) The members of the Regional Consultative Committee must be performing valuation
“"""~ gad “appraisat related functions. Representatives from the regional organization of

government assessors, private appraisal sector, and banking association within the
region shall be represented by the head of their respective regional organization.

(©) The Committee shall meet at the initiation of the BLGF Regional Director at Jeast
once every quarter, and shall have as many meetings as the BLGF Regional Director
may deem necessary for the performance of its functions,

SEC. il. Functions of the Regional Consultative Committee. — The Regional
Consultative Committee shall serve as the consultative forum in the region for discussion on
developments in the local real property market; concems of taxpayers, civil society, and other
stakeholders; outcome of Compliance Reporting in the region; level of complaints and



appeals; local government unit training in the region; appraisal and assessment concerns in
general; and other matters as may be determined by ihe Commitiee.

ARTICLE BL
VALUATION AND APPRAISAL OF REAL PROPERTIES
Chapter 1
Valuation Standards and Market Values

SEC. 12. Development of Valuation Standards, — Notwithstanding the provisions of
existing Jaws to the contrary, the BLGF shall develop, adopt, maintain and implement
uniform valuation standards which shall be used by all appraisers and assessors in the local
government units and other concerned parties in appraising or valuing lands, buildings,
machinery and other real properties for taxation and other purposes. The valuation standards
shall conform with generally accepted international valuation standards and principles.

SEC. 33. Valuation and appraisal of Real Property. - For valuation purposes, all real
properties, whether taxable or exempt, shall be valued or appraised at the market value
prevailing in the locality where the property is situated, in conformity with the valuation
standards adopted under this Act. The BLGF shall promulgate the rules and regulations for
the vahuation and appraisal of real property pursuant to the provisions of this Act. It shall
provide leadership in ensuring rationalized valuation of real properties transcending political
boundaries.

For real properties 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 apptied after determination of the prevailing market value of these properties in
accordance with intemationally accepted valuation standards adopted under this Act.
SEC. 14. Preparation of Schedule of Market Values. .- Provincial assessors together
with municipal assessors, and city assessors, including the municipal assessor in Metro
Manila, shali prepare the SMVs for the different classes of rea} property situated within their
respective local government units, pursuant to the valuation standards, rules, regulations and
other specifications set by the DOF and the BLGF. The said SMVs shall be submitted by the
assessor concemed to the BLGF Regional Office fos review and compliance with other
requirements not later than the thirty-first (31°) day of October of the immediately preceding
calendar year that the general revision of real property assessments was undertaken. A copy
thereof shall be furnished the concerned Sanggunian and the provineial governor or the city

mayor, as the case may be.


ao eu

oo

‘The said SMVs shall be reviewed by the BLGF Regional Office within thirty (30) days
upon receipt thereof, and shall then be submitted by the same to the BLGF Central Office.
Upon the recommendation of the BLGF Executive Director, the Secretary of Finance shall
approve the SMV within sixty (60) days from receipt of the same; otherwise, said schedule
shall be deemed approved.

The approved SMV shail be transmitted to the concerned assessor who shall confer with
the local chief executive regarding the said approved SMV. Likewise, the concemed assessor
shall submit to the local chief executive # tax inapact report of the new SMV as against the
existing assessment levels and tax rates, and shall provide the Sanggunian, through the
Chairperson of the Committee on Ways and Means, a copy of such report. 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 Sanyeunian for the enactment of an Ordinance
setting the appropriate assessment levels and tax cates. The concemed Sanggunian shall enact
such Ordinance, upon conduct of public bearings and proper consultation, within sixty (60)
days from seveipt thereof otherwise, the existing Ordinance on assessment levels and tax
rates shall remain in force and eftect.

‘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 Metro Manila, or within fifteen (15) days, in the case of provinces, to approve
the samme. Failure of the concerned loca! chief executive to act on the Ordinance within the
prescribed period shall reader the same approved.

The approved Ordinance together with the SMV shall be published by the concerned
local government unit in « newspaper of loca} circulation once a week for two (2) consecutive
weeks: Provided. however, That in provinces, cities and municipalities where there are no
“aewspapers ‘of locai circulation, the same shall be posted in the provincial capitol, city or
municipal hall and in two (2) other conspicuous public places therein. A list of LGUs whose
SMVs have been approved shall be posted in the BLGF official website.

SEC. 15. Use of Schedule of Market Values. - The SMV, as approved by the Secretary
of Finance, shall be used for the general revision of real property assessments in local
government units, as basis for the determination of real property related taxes imposed by
ational goverrmnent agencies, and as beuchmark for real property appraisal for other
purposes. For purposes of computing any internal revenue tax, the BIR Commissioner shall
adopt the SMV, or the actual gross selling price in consideration, as stated in real property

transaction documents, whichever is higher


‘Notwithstanding the provisions of existing laws to the contrary, the SMV shall cease as
besis for the determination of national and focal real property related taxes after five (5) years
from the effectivity of its enacting Ordinance.

SEC, 16, Revision of Schedule of Market Values. - The BLGF shail formulate the
program for the regular revision of SMVs. Al) provincial assessors together with the
municipal assessors, and city assessors, including the municipal assessor in Metro Manila,
shall undertake a revision of their respective SMVs within two (2) years from the effectivity
of this Act. Thereafter, they shall undertake a general revision of SMVs and property
assessments not cerlier than three (3) years from the date of last revision, but not later than
five (5) years.

In case of any significant change in the market where the property is located after the said
SMVs have been approved and prior to its next revision, or where correction of errors and
inequalities in any SMV is deemed necessary, the provincial assessors together with the
municipal ussessors, and city assessors, including the municipal assessor in Metro Manila,
may recommend to the BLGF Executive Director revisions to their existing SMV. Such
revision/s shall be subject to review by the concemed BLGF Regional Office and
recommendation by the BLGF Executive Director for approval by the Secretary of Finance
within ninety days (90) from the date of receipt thereof.

SEC. 17, Conduct of Capacity Building Interventions. ~ For the effective
implementation of this Act, the BLGF shall develop and conduct the necessary trainings for
all local assessors and other local officials/staff on the preparation of SMV in sccordance
with internationally accepted valuation standards, concepts, principles and practives; conduct
of SMV impact studies; preparation of compliance reports, and other subject areas to ensure

the effective impicmentation of this Act.

Chapter 2
Development and Maintenance of Real Property Database

SEC. 18. Development of Real Property Database. — The BLGF shall develop and
maintain an up-to-date electronic database of the sale, exchange, lease, mortgage, donation
und all other real property transactions in the country and on the cost of construction or
renovation of buildings and other structures, and on prices of machinery. For this purpose, the
BLGF is hereby authorized 0 requis the mandatory submission of necessary documents
from the concerned officials or employees of national government offices or
instrumentalities, local governmem units, and the private sector. The updated database shalt


war nn ewne

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SYSsRBRiIRRRVEnsesoeaenanaeen-s

he made available to the local governmert units, national government agencies, and the
private sector.

SEC. 19. Duty of Register of Deeds to Supply Assessors of Real Property Transactions
Data. — The Register of Deeds shall prepare and submit to the provincial and eity assessors,
including the municipal assessor in Metro Manila, ap abstract of the entire registry every
three (3) months and copies of ail contracts selling, tvansferring or otherwise converting,
easing, 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 os alienation accompanied by copies of
corresponding deeds of sale, donstion, or partition or other forms of alienation.

SEC. 20, Duty of Official Issuing Building Permits or Certificates of Registration of
Machinery to Transmit Copy to the Assessor. ~ Any public official or employee who may
pow or hereafter be required by law or regulation to issue to any person # permit for the
construction, addition, repair, or renovation of # building, or permanext improvement on
land, or a certificate of registration for any machinery, including machines, mechanical
contrivances, and apparamis attached or aifixed on land or to another real property. shall
transmit a copy of such permit or certification within thirty (30) days of its issuance. to the
assessor of the provinee, city or municipality where the property is situated.

SEC. 21. Duty of Geodetic Engineers to Furnish Copy of Plans to Assessor. — \t 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 cf the month from receipt of such approved
plans from the Land Management Bureau (LMB), the Land Registration Authority (LRA), o-
the Housing and Land Use Regulatory Board (HLURB), as the case may be

SEC. 22, Duty of Assessors to Transmit Documents to the BLGF. — It shall be the duty
of the assessors to transmit to the concemed BLGF Regional Office al! real property
transactions data ftom 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 suck data.
‘The BLGF"s Regional Offive 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. 23. Appointment of Assessors. - Tbe 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) rthe case of provincial and-assistant pooxincial.assgsonus and.city.and assistant ty
assessors, appointee shall be chosen from the list of at feast three (3) ranking eligible
recommendees within the region, as endorsed by the DOF Secretary as suitable and
qualified for appointment;

(0) In the case of municipal and assistant municipal assessors, appointee shali be chosen
from the list of at least three (3) ranking eligible recommendees within the province,
as endorsed by the DOF Secretary as suitable and qualified for appointinent; and

{c} Im the case of city and assistant city assessors and municipal and assistant mumicipal
assessors for Metro Manila, appointee shall be chosen from the list of at least three (3)
ranking eligible recommendees within the Metro Manila, as endorsed by the DOF
Secretary as suitable and qualified for appointment.

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

SEC. 24. Qualifications of Local Government Assessors. “N86 pétson ‘shall be appointed ~

assessor or assistant assessor unless such person 3s a citizen of the Philippines, a resident of

the region for a provincial or city assessor/assistant assessor and of the provinee for a
mnunicipal assessor/assistant assessor, a registered and licensed appraiser, of good moral
character, and must have an experience in real property valuation or assessment work or in
any siitable field 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.

‘All incumbem assessors holding permanent appointments shall enjoy security of
tenure and shall continue to perforrn their functions without the need for reappointment and
without diminution of ststus, rank and salary grade. Those with temporary appointments are
given the opportunity to qualify for permanent appointments as assessors for @ period to be
determined by the DOF upon the effectivity of this Act.


ARTICLE IV
PENAL PROVISIONS.

SEC. 25. Failure to Comply with the Requised Submission of Bocuments. — Any
government official or employee who fails without justifiable reason to provide or furnish
data or information required pursuant to Sections 19, 20, 21, and 22 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 authoriry.

SEC. 26, Failure to Comply with the Valuation Standards, ~ An assessor who, for
unjustifiable reasons, fuils to comply with the valuation standards developed und adopted
pursuant io this Act, or deliberately conceals any deviations or departures from such
standards in the valuation and appraisal of real property, shall be punished by a fine
equivalent to the official’s or employee's basic salary for a period of one (£) month to six (6)
months, or by suspension from the government service for aot more than one (1) year, or
both, at the discretion of the competent authority.

SEC. 27, 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 shail be meted 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
government service for not more than one (1) year, or both, at the discretion of the competent
authority,

SEC. 28, Violations af Other Provisions, — Any person, whether natural or jusidical, who
violates any provision of this Act other than those punishable under Sections 25, 26, and 27
hereof shall, when warranted, be dealt woth under applicable existing laws.

SEC. 29. Taxpayers’ Remedies in Case of Erroneous Assessments of Real Properties. —
The provisions of Sections 226 (Local Board of Assessment Appeals) and 229 (Action by
the Local Board of Assessment Appeais) of Republic Act No. 7160, otherwise known as The
Local Government Code of 1991 shal! apply in alt cases of appeals as remedies for the
taxpayers in the assessment of their properties.

ARTICLE V
TRANSITORY PROVISIONS.
SEC. 30. Transitory Guidelines, — (4) Local government units which are in the process

of revising their SMVs, upon the effectivity of this Act, shall continue with such revisions in


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accordance with Section 16 of this Act: Provided That proper notification and coordination
with tie BLGF shall be undertaken.

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

SEC. 31. Saving Clause. - The zonal values as determined by the BIR and approved by
the Sccretary uf Finance for internal revenue tax purposes and the SMVs prepared by the
provincial assessors together with the municipal assessors, and city assessors, including the
mumicipal assessors in Metro Manila, that have been approved by their respective
Sangsunians for real property taxation purposes shall continue to be in force and effect until
repealed, superseded, modified, revised, set uside, or replaced by the values provided under
the new SMV% as approved in accordance with Section 16 of this Act, which shall be within
two (2) years upon the effectivity of this Act.

ARTICLE VI
FUNDING REQUIREMENTS

SEC. 32. Budgetary Requirements for Revision of Schedule of Market Values. - Each
local Sanggunian shall appropriate the necessary funds from locally generated revenues, the
Imema) Revenue Allotment (RA), or such other sources every fiscal year. The accumulated
amount so appropriated shell be known as the Real Properly Tax Administration Fund
(RPTAF) which shall be used for the proper implementation of the regular revision of the
SMVs and general revision of real property assessments, and the administration of real
property taxcs in all local government units.

SEC. 33. Appropriations. ~ The amount necessary for the implementation of this Act
shall be included in the unpual General Appropriations Act.

ARTICLE VIE
MISCELLANEOUS PROVISIONS
SEC. 34. Implementing Rules and Regulations (IRR). ~ Within six (6) months after the
effectivity of this Act, the DOF, in consultation with concerned parties, shal! issue the IRR
for the effective implementation of this Act.


SEC. 35. Suppletory Application of Existing Laws. - The provisions of Republic Act
No. 7166, otherwise known as the Local Government Code of 1991, and other laws
vonsistent with this Act shall have suppletory effect.

SEC. 36. Separability Clause. — Any portion or provision of this Act that may be
dectared unconstitutional or invalid shall not have the effect of sullifying other portions or
provisions hereof, as long as such remaining portions or provisions can still subsist and be
given effect in their entirety.

SEC. 37. Repealing Clause. — (a) Sections 19, 135(a), 138, 198(a), 19%(Xh)Q). 201,
202, 20%a), 212, 214, 218 par. 1 (b), 219, 220, 224(a), 443(4), 444(bNIX¥), 454(4),
455(bX1X¥), 463(d), 465(bK1X¥), 472a) par i, 472(bX8), and 473(a) par 1 of Republic Act
No. 7160, otherwise known as the Local Government Code (LGC) of the Philippines, are
hereby repealed;

(b) Sections 6(e}, 24(D), 27(D\(5), Sections 88(b) and 102 of Republic Act No. 8424,
otherwise known as the Tax Keform Act of 1997, are hereby amended or modified
accordingly;

(©) Ail laws, presidential decrees, executive orders, presidential proclamations, rules and
regulations or parts thereof contrary to or inconsistent with this Act are hereby repealed,
superseded or modified accordingly.

SEC. 38. Effectivity. - This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,


House of Representatives
Committee Affairs Department

FACT SHEET
House Bill Nos. 212, 1164, 4440, 4618 and 4687

REAL PROPERTY VALUATION AND ASSESSMENT REFORM ACT OF
2011

Introduced by: HON, NEPTALI M. GONZALES Ii, RODOLFO G. BIAZON, MEL SENEN S.
SARMIENTO, DISODADO MACAPAGAL ARROYO, GLORIA
MACAPAGAL-ARROYO, RUFUS B. RODRIGUEZ and MAXIMO B.
RODRIGUEZ, JR.

Committee Referral: Committee on Government Reorganization (Primary)
Committee Chairperson: Rep. Cesar G. Jalosjos

Commitiee Referrat: Committee an Appropriations (Secendary)
Committee Chairperson: Rep. Joseph Emilio A, Abaya

OBJECTIVES:

* To promote fiscal autonomy of local governments by enhancng their capacity to
generate local revenues from real property.

+ To ensure a uniform set of standards for valuation of fand in the country.

* To remove the existence of multiple, unrealistic and corrupticn-prone system of !and
valuation

* To correct inefficiencies in the allocation and utilization of the land market

KEY PROVISIONS:

* Establishes the Real Property Valuation Service within the Bureau of Local
Government Finance (BLGF) that shait develop and implement policies. plans,
Programs, and operating standards in all aspects of valuation and appraisal of real
properties

* Provides that the Service shall be heaced by an Executive Director wro shall
recommend to the Secretary of Finance the approval of the Schedule of Market
Values (SMVs) prepared by the provincial assessors together with muricipai and city
assessors, including the municipal assessor in Metro Manila, for tax and other
purposes. Lee lage ta

* Creates a Central Consultative Committee that shall serve as the cofiiitiaton forum
on matters pertaining to the setting. adoption, and maintenance of valuation
standards.

* Provides that the BLGF shall develop and maintain an up-to-date electronic
database of the sale, exchange. lease, and alt other real property transactions in zhe
country.


les that the basis

ation shall be the current market value prevailing in the
y where the property i

‘ocated

RELATED LAWS:

¢ R.A. No. 8424, Nationa! Internal Revenue Code (NIRC)
* R.A. No. 7160, Local Government Code
» R.A. No. 9546, Real Estate Service Act