| Republic of the Philippines

HOUSE OF REPRESENTATIVES

Quezon City
NINETEENTH CONGRESS
First Regular Session
1 1973 3

HOUSE BILL Ne

INTRODUCED BY REPRESENTATIVE ROMEO S. MOMO, SR.

AN
FACILIT.
Ft

The current

ACT AMENDING REPUBLIC ACT NO. 10752, ENTITLED AN ACT

‘ATING THE ACQUISITION OF RIGHT-OF-WAY, SITE, OR LOCATION

)R NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS
EXPLANATORY NOTE

right-of-way (ROW) Law, Republic Act (RA) No. 10752, has significantly

facilitated the acquisition of ROW for infrastructure projects. There are, however, the following

issues whi
acquisition:

a. Section
by the
recogni
and fun
in tum hi

need to be resolved, through an amendment of RA 10752, to further improve ROW

of RA 10752 requires that Independent Property Appraisers (IPAs) be accredited

angko Sentral ng Pilipinas (BSP) or by a professional association of appraisers
.d by the BSP. Such accreditation, however, is not part of the BSP’s core mandate
ions. This has hampered the engagement of IPAs by Implementing Agencies, which
as delayed property appraisal and ROW acquisition.

To address this issue, this Bill proposes to do away with the accreditation by the BSP of

IPAs. Int
Commiss

stead, the bill simply requires that IPAs be licensed by the Professional Regulation
jion and registered with the Professional Regulatory Board of Real Estate Service,

since these are the relevant Agencies that regulate professional property appraisal services.

This will

encourage the participation of more IPAs in property appraisal.



b. Section 5 of RA 10752 also provides that owners of structures and improvements who do not
have legally recognized rights to the land ~ i.e., informal settlers ~ may be compensated for
the replacement cost of such structures and improvements if they meet three criteria — viz.,
must be Filipino citizens, must not own any real property or housing facility, and must not be
professional squatters or members of squatting syndicates. The Implementing Rules and
Regulations of RA 10752, however, added a fourth criterion which is not provided in RA
10754 - ie., that the owners must not occupy an existing government ROW — a well-

i rs criterion to discourage illegal ROW encroachment which restricts the public use

icture.

To clarify this matter, this Bill proposes to explicitly add in the ROW law the fourth criterion
mentioned above.

©. Section 5 of RA 10752 further provides that, in negotiated sale, the implementing agency
shall pay, for account of the seller, the capital gains tax, but does not provide how this tax
shall be computed.

The Bill proposes that, for negotiated sale, the current market value of the land to be used in
computing the capital gains tax is the highest value among the following: (i) the market
value of the land indicated in the Deed of Absolute Sale, or (ii) the fair market value of the
land as determined by the BIR Commissioner based on the applicable zonal value, pursuant
to Section 6(e) of the National Internal Revenue Code, or (iii) the fair market value of the
land as shown in the schedule of values of the Provincial and City Assessors. This is
pursuant to the provisions of the National Internal Revenue Code, as clarified by the BIR
Commissioner in his letter, dated June 07, 2018, to the DPWH.

d. There is no provision in RA 10752 which defines the market value to be adopted for
properties to be acquired as ROW, in case there is a difference in the market values
determined by the Bureau of Internal Revenue (BIR) and the GFI/IPA.

To resolye this issue, this Bill proposes that, in such cases, the implementing agency shall
adopt the market value determined by the GFI/IPA, provided that both the values determined
by the BIR and the GFI/IPA refer to the same time frame. Should the market value
determined by the BIR increase after the issuance of the GFI/IPA appraisal report, the
implementing agency shall check with the GFI/IPA to determine if the rise in market value
determined by the BIR, which is an appraisal criterion in the ROW Act, warrants a change in
the appraised value set by the GFI/IPA.

e. There is no provision in RA 10752 on how to deal with foreign-assisted projects under
Official Development Assistance (ODA), where the loan or grant agreement entered into by
the Government provides ROW rules and procedures that differ from those under RA 10752.

Hence, this Bill proposes that, for foreign-assisted projects with ODA, the relevant guidelines
and procedures concerning ROW acquisition under the loan or grant agreement signed and
executed by the Government of the Philippines and the ODA institution shall be observed.


£, Section 4 of RA 10752 provides that the Government shall not be prevented from entry into
and use of subsurface or subterranean lands which are more than 50 meters from the surface.
This 50-meter threshold is unnecessarily excessive and would make ROW costs prohibitive
for most underground projects, such as subways. This is because, in the Philippines, given
the prevailing soil conditions, buildings, including their basements and foundations

In view of these issues, this Bill proposes:

(i) to reduce the 50-meter depth threshold to 40 meters,

i) to provide in the law for the mode of ROW acquisition for subterranean works within a
depth of 40 meters from the surface, in the following order (which is defined in the
Implementing Rules and Regulations, but not in RA 10752 itself):

a) negotiate with the property owner a perpetual easement of the ROW for the
subterranean portions of his property, at a one-time easement price of 20% of the
market price of the land as determined by an IPA/GFI to be engaged by the
implementing agency; and

) offer to acquire from the property owner the affected portion of the land, including
affected structures, improvements, crops and trees therein in accordance with the
visions of the Act.

to provide that no compensation shall be paid by the Government for the use of portions
of the lands deeper than 40 meters from the surface for infrastructure projects.

g. There is|no specific provision in RA 10752 concerning ROW for areas within ancestral
domain accupied by indigenous peoples.

Therefore, this Bill proposes that, in the case of acquisition of lands within ancestral domains
covered by certificates of ancestral domain title (CADT) or lands with pending issuance of
the CADT which the National Commission on Indigenous Peoples (NCIP) confirms as
ancestral|domain, an infrastructure ROW easement agreement shall be executed between the
implementing agency and the NCIP-certified indigenous political structure as provided for in
RA 8371 (Indigenous People’s Act of 1997). Under this mode, the indigenous cultural
communities/indigenous peoples shall grant the implementing agency the absolute right to
use the affected portion of their ancestral domain as infrastructure right-of-way for as long as
the public purpose requirement subsists, but the indigenous cultural communities/indigenous
peoples shall retain ownership of that portion of the land.



b. There are still instances when the Commission on Audit questions funds allotted for
necessary ROW expense since these are not spelled out in the appropriations section of RA
10752.

The Bill will redefine and expand the eligible expenses where ROW appropriations may be
used. |

Early approval of this measure is earnestly soughy
PPI ‘i y
}



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
House BiLNo.__1973

INTRODUCED BY REPRESENTATIVE ROMEO S. MOMO, SR.

AN/ACT AMENDING REPUBLIC ACT NO. 10752, ENTITLED AN ACT
FACILITATING THE ACQUISITION OF RIGHT-OF-WAY, SITE, OR LOCATION
FOR NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS

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

SECTION 1. Section 4 of Republic Act No. 10752 is hereby amended to read as follows:

“sec. 4. Modes of Acquiring Real Property. — The govemment may acquire real
property as right-of-way, site or location for any national government infrastructure
project through donation, negotiated sale, expropriation or any other mode of acquisition as
provided by law.

“In cases of lands granted through Commonwealth Act 141 and its amendments, the
implementing agency shall:
“(a) Follow the other modes of acquisition enumerated in this Act, if the landowner is not
original patent holder and any previous acquisition of said land is not through a
itous title; or



yy on patent lands, if the landowner is the original patent holder or the acquisition of
land from the original patent holder is through a gratuitous title.

“) me the provisions under Commonwealth Act 141 regarding acquisition of right-of-

implementing agency may utilize donation or similar mode of acquisition if the
is a government-owned or government-controlled corporation.

“When it is necessary to build, construct, or install on the subsurface or subterranean

“Tf the
meters from.

ivate and government owned lands owned, occupied or leased by other persons,
as subways, tunnels, underpasses, waterways, floodways, or utility facilities
government's infrastructure and development project, the government or any of its
rresentatives shall not be prevented from entry into and use of such private and
by surface owners or occupants, if such entry and use are made more than
from the surface.

Government project involves subterranean works within a depth of Forty (40)
the surface, the Government may undertake the mode of right-of-way acquisition in

the following order:

“ay

“By

legotiate with the property owner a perpetual casement of the right-of-way for the
sterranean portions of his property required by the project, at a one-time easement
ice of twenty percent (20%) of the market price of the land as determined by an

t property appraiser or government financing institution to be engaged by
.¢ implementing agency in accordance with the provisions of section 5 of this act;
id

\ffer to acquire from the property owner the affected portion of the land, including
\¢ affected structures, improvements, crops and trees therein in accordance with the
rovisions of this act.

“No compensation shall be paid by the government for the use of such portions of the lands
deeper than forty (40) meters from the surface for infrastructure projects.

“In the

case of acquisition of lands within ancestral domains covered by Certificates of

ancestral domain title (CADT) or lands with pending issuance of the CADT which the National

commission
agency shall
of-way
NCIP-certifi
people’s act
shall grant

of their ancestral

on indigenous peoples (NCIP) confirms as ancestral domain, the implementing
secure the necessary certification precondition, after which an infrastructure right-
it agreement shall be executed by and between the implementing agency and the
indigenous political structure as provided for in republic act no. 8371 (indigenous
f 1997). Under this mode, the indigenous cultural communities/indigenous peoples
implementing agency the absolute and unimpeded right to use the affected portion
domain as infrastructure right-of-way for as long as the public purpose

requirement ‘subsists, but the indigenous cultural communities/ indigenous peoples shall retain

ownership o}

that portion of the land.



“For foreign-assisted projects with official development assistance, notwithstanding the
provisions of this act, the guidelines and procedures concerning right-of-way acquisition under
the approved loan or grant agreement signed and executed by the Government of the Philippines
and the official development assistance institution shall be observed.”

SEC. 2, Section 5 of Republic Act No. 10752 is hereby amended to read as follows:

“Sec. 5. Rules on Negotiated Sale. — The implementing agency may offer to acquire,
through ated sale, the right-of-way, site or location for a national government
infrastructure project, under the following rules:

“(a) The implementing agency shall offer to the property owner, as compensation price, the
sum of:

(1) The current market value of the land;
“2)\The replacement cost of structures and improvements therein; and
(3) The current market value of crops and trees therein;

“To determine the appropriate price offer, the implementing agency may engage the
services of a government financial institution with adequate experience in property
appraisal, or an independent property appraiser accredited by the Bangko Sentral ng
Pilipinas (BSP) or a professional association of appraisers recognized by BSP, the
ir it property appraiser must possess the license required for a real estate appraiser
by the Professional Regulation Commission and must be registered with the Professional
Regulatory Board of real estate service, pursuant to republic act no. 9646 (real estate
service act of the Philippines, 2009). the independent property appraiser shall be procured,
cither by itself or as part of a consulting group, by the implementing agency under the
provisions of Republic Act No. 9184, otherwise known as the “Government Procurement
Reform Act” and its implementing rules and regulations pertaining to consulting services.

“If the, property owner does not accept the price offer, the implementing agency shall
initiate expropriation proceedings pursuant to Section 6 hereof.

“The owner is given thirty (30) days to decide whether or not to accept the offer

ent for his property. Upon refusal or failure of the property owner to accept such
offer of fails or refuses to submit the documents necessary for payments, the implementing
agency shall immediately initiate expropriation proceedings as provided in Section 6

“() Se bparagraph a(2) of Section 5 shall also apply to all owners of structures and
improvements, who do not have legally recognized rights to the land, and who meet all of
the following criteria:

(1) Must be a Filipino citizen;



(2) Must not own any real property or any other housing facility, whether in an
or rural area;

3) Must not be a professional squatter or a member of a squatting syndicate, as
defined in Republic Act No. 7279, otherwise known as the “Urban Development and
jousing Act of 1992:; and

(4) Must not occupy any existing right-of way of the Government.

“(c) With regard to the taxes and fees relative to the transfer of title of the property to the
Republic of the Philippine through negotiated sale, the implementing agency shall pay, for
of the seller, the capital gains tax, as well as the documentary stamp tax, transfer
tax and registration fees, while the owner shall any unpaid real property tax. The current
value of the land to be used in computing the capital gains tax is the highest value
among the following options: (i) The market value of the land indicated in the deed of
absolute sale, or (ii) The fair market value of the land as determined by the Bureau of
Revenue Commissioner based on the applicable zonal value, pursuant to section

ed the amount corresponding any unpaid real property tax, subject to deduction of
jount from the total negotiated price: Provided, however, That the said amount is not
the negotiated price.

le property owner and the implementing agency shall execute a Deed of Absolute
ided, That the property owner has submitted to the implementing agency the

Transfer Certificate of Title.

“() Upon the execution of a deed of sale, the implementing agency shall pay the property
owner:

“(1) Fifty percent (50%) of the negotiated price, exclusive of taxes remitted to the BIR
under subparagraph (4) herein; and

“(2) Seventy percent (70%) of the negotiated price of the affected structures,
improvements, crops and trees, exclusive of unpaid taxes remitted to the BIR under
subparagraph (d) herein.

“(g) The implementing agency shall, at the times stated below, pay the property owner the
esi fifty percent (50%) of the negotiated price of the affected land, and thirty
percent (30%) of the affected structures, improvements, crops and trees, exclusive of



unpaid taxes remitted to the LGU concerned under subparagraph (d) herein; Provided, That
the land is already completely cleared of structures, improvements, crops and trees:

“(1) At the time of the transfer of title in the name of the Republic of the Philippines, in
where the land is wholly affected; or

“(2) At the time of the annotation of a deed of sale on the title, in cases where the land
is partially affected.

“The provisions of subparagraph (a) herein shall also apply to outstanding claims for right-
of-way payments, except that the amount to be offered shall be the price at the time of taking of
the property, including legal interest until fully paid.

there is a difference in the market value of a property as determined by the BIR, on
the market value for the same property as determined by the concerned

| adopt the market value as determined by the Government financing
dependent property appraiser, provided that both the property value set by the
Bureau of Internal Revenue and the property value set by the Government financing
institution/independent property appraiser refer to the same time frame. Should the value set
by the Bureau of Internal Revenue increase after the issuance of the appraisal report, the
implementing agency shall check with the concerned Government financing
institution/independent property appraiser to determine if the rise in value set by the Bureau of
Internal Revenue, which is an appraisal criterion in section 7 of Republic Act no. 10752, will
e in the appraisal value set by the Government financing institution/independent
iser.”

The first paragraph of Section 6 of Republic Act No. 10752 is hereby amended to

lows:

“SEC. 6. Guidelines for Expropriation Proceedings. ~ Whenever it is necessary to acquire
real property for the right-of-way, site or location for any national government infrastructure
through expropriation, the appropriate implementing agency, through the Office of the Solicitor
General, the Office of the Government Corporate Counsel, or their deputized government or
private legal counsel, shall initiate the expropriation proceedings before the proper court under
the following guidelines:

defendant, the implementing agency shall immediately deposit to the court in favor of the

“enti the filing of the complaint or at any time thereafter, and after due notice to the
07

the amount equivalent to the sum of:

“(1) One hundred per cent (100%) of the value of the land based on the current
relevant zonal valuation of the Bureau of Internal Revenue (BIR), issued not more
than three (3) years prior to the filing of the expropriation complaint subject to
subparagraph (c) of this Section;



“@) The replacement cost at current market value of the improvements and/or
Structures as determined by:

“(The implementing agency;

| “Gi) A government financial institution with adequate experience in property
| appraisal; and

“ii) An independent property appraiser that must possess the license required
for a real estate appraiser by the Professional Regulation Commission and be
registered with the Professional Regulatory Board of Real Estate Service
(PRBRES) pursuant to Republic Act no. 9646 (real estate service act of the
Philippines, 2009).

“(3) The current market value of crops and trees located within the property as
determined by the government financial institution or an independent property
appraiser to be selected as indicated in subparagraph (a) of Section 5 hereof.

Sec. 4, The first paragraph of Section 10 of Republic Act No. 10752 is hereby amended to
read as follows:

“SEC. 10. Appropriations for Acquisition of Right-of-Way, Site or Location for National
Government Infrastructure Projects in Advance of Project Implementation. — The government
shall provide adequate appropriations that will allow the concerned implementing agencies to
acquire the required right-of-way, site or location for national government infrastructure projects
in advance of project implementation. These appropriations shall cover the funds needed to
cover the following expenses for activities directly related to right-of-way acquisition for the

of parcellary surveys and appraisal of properties affected by the projects;

tion for the project-affected land, structures and improvements, crops and

“(©) Cost of preparation, validation of a Resettlement Action Plan (RAP), including

livelihood restoration and improvement;

“(@ Cost of preparation of appropriate Environmental Impact Assessment (EIA) report
and other activities in securing Environmental Compliance Certificate (ECC),
including processing fees, review, monitoring, and guarantee funds; and

“(©)Related expenses of the implementing agency, including capital gains tax in the case of
gotiated sale under Section 5 hereof, documentary stamp tax, transfer tax and
gistration fees for the transfer of titles, expropriation-related expenses, and other
‘levant administrative expenses for right-of-way management.

Sec. 5. Section 13 of Republic Act No. 10752 is hereby amended to read as follows:


“Sec. bpm et i 80 ee shall prepare, in
consultation |with key stakeholders, the IRR for the proper implementation of this Act within
sixty (60) days from its approval.

“The committee shall be composed of the following officials or their duly designated
representatives:

“(a) The Secretary of the Department of Public Works and Highways as Chairperson;

“(b)The Secretary of the Department of Transportation and Communications as member;
“©) The Secretary of the Department of Energy as member;

“(d) The Secretary of the Department of Justice as member;

“(e) The Secretary of the Department of Budget and Management as member;

“(® The Director General of the National Economic and Development Authority as

member;

“(g) The Secretary of the Department of Human Settlements and Urban Development as
member; and

“(hy Othe representatives of concemed entities as determined by the committee as

Sec. 6, Repealing Clause. — All laws, decrees, orders, rules and regulations or parts
thereof inconsistent with this Act are hereby repealed or amended accordingly.

Sec. 7, Separability Clause. — If any provision of this Act is held invalid, the other
provisions not affected thereby shall continue in operation.

SEC. 8. Effectivity. This Act shall take effect fifteen (15) days following its publication in
at least two (2) newspapers of general circulation.

Approved.

1