NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                           )
?.-   RECEIVED   '£
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HOUSE OF REPRESENTATIVES
EXPLANATORY NOTE
This bill seeks to exempt from real property tax the trees and improvements on lands
covered   by  Certificates  of  Stewardship  Contracts  under  the   Integrated  Social   Forestry
Program of the Department of Environment and Natural Resources.
The last two decades saw the alarming degradation and loss of the country's natural
resources.  The escalation of ka/.ng/.n farming  and  illegal  logging  activities  has  prompted the
government to come  up with  innovative  programs to arrest the deforestation  problem.  One
such   program   is  the   Integrated   Social   Forestry  Program  (lsFP)  of  the   Department  of
Environment  and   Natural   Resources   (DENR).   The   ISFP   is  a   people-oriented   program
designed to improve the socio-economic conditions of upland farmers and communities who
depend on forestlands for their livelihood, enhance ecological stability, and maximize upland
productivity,   Since   its   inception,   the   farmer-grantees   have   already   developed   several
hectares of forestlands.  Assisted  by the  national  and  local governments as well as  lending
institutions, the income levels of the grantees have increased, their dwellings improved,  and
literacy  rates  enhanced.  It  has  been  noted,  however,  that  based  on  the  provisions  of the
Local Government Code of 1991  and prior legislative issuances,  real property owned by the
Republic of the Philippines or any of its political subdivisions, the beneficial use of which has
been granted, for consideration or otherwise, to a taxable person,  is subject to real property
tax.  Hence,  lands covered  by Certification of Stewardship Contracts (CSC) under the lsFP,
including the trees and improvements thereon, are subject to real property tax.
It is emphasized however, that the lsFP was implemented to democratize the use of
public lands,  promote a  more equitable  distribution  of forest bounty under the stewardship
principle,  reduce poverty,  promote social justice and  protect the environment.  In this regard,
it is proposed that trees and other improvements on lands covered by the lsFP be exempted
from  the  real  property tax  imposed  under the  Local  Government Code of  1991.   While the
proposal could reduce the revenue of local government units from this source,  it is believed
that the same may not have an adverse impact on local government finance since the lands
would still be subject to the basic and additional real property tax under the Code.
In view of the foregoing, approval of the bill is earnestly requested.
GUEZ


NINETEENTH CONGRESS                  )
REPUBLIC OF THE PHILIPPINES    )
First Regular session                            )
HOUSE OF REPRESENTATIVES  -
Introduced by Representative Rufus a. Rodriguez
House Bill No.  E3±O
AN ACT
EXEMPTING  FROM  REAL  PROPERTY TAI THE TREES AND OTHER IMPROVEMENTS
ON  LANDS  COVERED  BY  CERTIFICATES  OF  STEWARDSHIP  CONTRACTS  UNDER
THE INTERGRATED SOCIAL FORESTRY PROGRAM
Be it en.?ctpd by the Senate and House of Representatives of the Philippines in Congress
assembled:
SEC770W  7.  -  Trees  and  other  improvements  on  lands  covered  by  Certificates  of
Stewardship  Contracts  under the  Integrated  Social  Forestry Program  of the  Department of
Environment  and  Natural  Resources  (DENR)  shall  be  exempt  from  the  real  property  tax
under Section 232 of the Local Government Code of 1991.
SEC.  2. Ru/es and Regu/ati.ons. - The Department of Finance,  in consultation with
the  Department  of  Environment  and  Natural  Resources,  shall  promulgate  the  rules  and
regulations as may be necessary to implement the provisions of this Act.
SEC.  3.  Repea//-ng  C/ause.  - All  laws,  decrees,  orders,  rules  and  regulations  and
other issuances  or parts  thereof which  are  inconsistent with  this Act are  hereby  repealed,
modified or amended accordingly.
SEC. 4. Effecfi.vi.fy. -This Act shall take effect fifteen (15) days after the completion
of  its  publication   in  the  Official   Gazette  or  in  at  least  two  (2)  newspapers  of  general
circulation.
Approved,