‘SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No.__ 1968

EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 4687 by the undersigned
Rufus B. Rodriguez during the 15” Congress where it was approved by the
Committee on Government Reorganization and substituted with House Bill No. 6044,
It was subsequently approved on 2” reading, approved on 3% reading and was
transmitted to the Senate where it was not acted upon.

The Philippine government is relentless in its quest towards tapping all
possible revenue resources to address the challenges in attaining good and
Tesponsive governance and effective public service delivery every Filipino deserves.

One of the most vaunted sources of revenues is real property, which is
considered as the most important natural resource and the biggest financial asset.
The World Bank reported that 50% to 75% of the country's wealth is contained in
land. Ironically, the land market is contributing only 6% to the Gross National
Product. Characterized by inconsistencies and inefficiencies in the land
‘administration and management sector, specifically in real property valuation, our
country has failed to capture and maximize the huge potential that the land sector
offers.

The real property valuation system in the Philippines depicts a depressing
state of chaotic, inefficient, and inequitable layers of bureaucracy. At least 23 national
government agencies (NGAs) and more than 1,700 local government units (LGUs)
Perform or require valuation functions and services using varied systems and
methodologies for different purposes, thus, resulting to multiple, confusing,
unrealistic, or outdated values for the same property. The discrepancies in real
property values have had considerable cost to the government. Conflicting land
values resulted to right-of-way compensation problems, lengthy court
arising from valuation disputes, project delays, and unrealized revenues and socio-
economic benefits. The system has also caused huge disparities of taxable base for
local and national taxation, and revenue leakages due to the absence of single
market-based valuation for taxation purposes, ie., the Bureau of Internal Revenue
imposes zonal valuation for capital gains tax and other national land-related taxes,
while the local government units (LGUs) use the Schedule of Market Values (SMV)
as basis for real property tax

The existing challenges in the land and real property valuation sector have
also meant the public's lack of confidence in real property values. Instances of
overvaluation and undervaluation, depending on the purpose of transaction, have
proliferated, thus, derailing the potential of the real property sector in taking a leap
towards contributing to the country's economic development.

The problems in real property valuation may be traced on the failure of LGUs
to correctly update the SMVs. While the Local Government Code (LGC) requires the
regular conduct of the general revision of SMVs and property assessments every
three years, LGUs have failed to comply with the requirements of the law for lack of
penal sanctions in the law and for fear of political backlash arising from it.



Expectedly, the resulting condition is a stagnant, outdated, and highly politicized real
property valuation that is inconsistent with the realities of the market economy. SMVs
have become generally undervalued, and failed to reflect the real market conditions
of the real property sector—causing huge foregone revenues of the LGUs. The BIR,
on the other hand, has no statutory mandate for the regular revision and updating of
the zonal values. Thus, this bill seeks to improve real property valuation for the
government by adopting a market-based SMV to be used as basis of local and
national real property taxation, and as benchmark for other purposes as required by
other government agencies and instrumentalities, as well as private entities.

Governed by internationally accepted valuation standards and best practices,
the LGU SMVs shall represent the real market conditions of their respective
localities, with the aid of an effective national valuation database system. In light of
Republic Act No. 9646 or the Real Estate Service Act, which now professionalizes
and regulates the appraisalivaluation practice, this bill also seeks to harness the
professional competence of local government assessors and national government
appraisers towards developing and establishing and efficient and responsive
valuation system in the country. The VRA, as a complementary bill, becomes
essential in ensuring that professional appraisal/valuation operates in an environment
that is equitable, transparent, and objective.

In order to implement the reforms, the Bureau of Local Government Finance
(BLGF), under the Department of Finance, is proposed to be reorganized and
strengthened to provide the institutional support and accountability to operationalize
the reform agenda. The BLGF is envisioned to oversee all matters relating to real
property valuation in the country, while taking the lead in reviewing the SMV of all
LGUs for approval by the Secretary of Finance, and compliance monitoring for the
regular SMV revision by LGUs. By doing so, the highly technical function of real
property valuation is separated from the political function of taxation. Thus, local
officials are insulated from the pressures and political backlash borne out of initiatives
to correct and update their respective SMVs.

The passage of this bill is earnestly sought as a timely and complementary
measure to support the long-term revenue efforts of the government. By enhancing
the valuation systems and procedures in the local governments, the bill will allow us
to move toward @ more rational land administration and management system that
fully taps the potential of the real property sector. In tum, the capacity of the
government to generate more revenues is enhanced, without necessarily imposing
New tax measures or increasing existing tax rates. Intended to be an instrument in
enhancing local autonomy, the bill will enable LGUs to achieving a more stable fiscal
wherewithal and a strengthened local real property tax base to fund service delivery
requirements of the LGUs, thereby achieving good and transparent governance, and
increased public confidence.

In view of the foregoing, immediate passage of this bill is earnestly requested.

RupUS'B. RODKIG}

MAXIMO 'B. RODRIGUEZ, JR.


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No.. 1968

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 Real Property
Valuation and Assessment Reform Act of 2013"

ARTICLE!
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 internationally accepted
valuation standards, concepts, principles and practices. Towards this end, the State
shall

(a) Promote the fiscal autonomy of local governments to provide basic services
to their constituency by enhancing their capacity to generate local revenues from real
property;

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

(c) 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 government agencies;

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

(e) Support the development and professionalization of the valuation and
appraisal practice in the country pursuant to Republic Act No. 9646, otherwise known
as the "Real Estate Service Act of the Philippines”;

(f) 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 research 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 terms 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 real property; also
known as valuer.

(b) Assessor refers to an official in the local government unit (LGU) who is a
licensed appraiser, who 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.

(d) Improvements refer 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 or to adapt it for new or further purposes.

(e) 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 natural fertility of the soil

() 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, self 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 necessary to its manufacturing, mining, logging, commercial,
industrial or agricultural purposes.

(9) Market value refers 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 length transaction (a transaction between independent, unrelated parties
involving no irregularity) after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion.

(h) Private appraisal sector refers to licensed nongovernmental real estate
service practitioners who have been active in the practice of real estate appraisal for
the last five (6) years.

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

@ _ Real property refers to all the rights, interests and benefits related to the
‘ownership of real estate, plant, machinery and equipment.

(kK) 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,

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

(m) Valuation and appraisal refers to 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 II
STRENGTHENING THE BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF)

Chapter 1
BLGF Central Operations
SEC. 4, Role of the Bureau of Local Government Finance. - The 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 compliance therewith by the
LGUs and other concerned parties;

(b) Review for compliance with the real property valuation policies and
standards and recommend for approval of the Secretary of Finance 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 local and national, and for other purposes;

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

(d) Provide leadership and policy directions to LGUs on real property valuation
‘and appraisal 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;

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

(f) 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 study 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 penalties relative to the implementation of this Act; and

(i) Perform such other functions as are necessary, proper and incidental to
implement the provisions of this Act.

‘SEC. §. 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 BLGF.

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:

(a) 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 regional offices;


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

(d) Advise and assist other government agencies on matters pertaining to real
property valuation and appraisal; and

(e) Perform such other functions as may be provided by law or required in
pursuance of this Act

SEC. 7. Consultations with Concemed 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 government assessors;

(6) National organization of appraisers in national government agencies;

(6) Private appraisal sector, and

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

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

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

(d) The Committee shall meet at the initiation of the Chairperson at least once
every semester and shall have as many meetings as the Chairperson may deem
necessary for the adoption of valuation standards.

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

Chapter 2
BLGF Regional Operations
SEC. 9. Role of the BLGF Regional Offices. — The BLGF Regional Offices, through
the Regional Director, shall be responsible for all matters relating to valuation and
appraisal and the SMVs in the region, such as the:

(a) Implementation of the provisions of this Act and related policies, plans,
programs, rules and regulations on real property valuation or appraisal of LGUs in
the region;

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

(4) Coordination and consultation 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 LGUs in the region;


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

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

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

(1) BIR — Regional Office;

(2) DENR — 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 and appraisal-related functions. Representatives from the regional
‘organization of government assessors, private appraisal sector and banking
associations 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
least once every quarter and shall have as many meetings as the BLGF Regional
Director may deem necessary for the performance of its functions.

SEC. 11. 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; concerns of taxpayers,
civil society and other stakeholders; outcome of compliance reporting in the region;
level of complaints and appeals; LGU training in the region; appraisal and
assessment concerns in general; and other matters as may be determined by the
Committee.

ARTICLE Ill
VALUATION AND APPRAISAL OF REAL PROPERTIES

Chapter 1
Valuation Standards and Market Values

SEC. 12. Development of Valuation Standards. — Notwithstanding the provisions of
existing laws 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 LGUs and other concemed 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. 13. 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 valuation and appraisal of real property pursuant to the
provisions of this Act. It shall provide leadership in ensuring rationalized valuation of
Teal 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 applied 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 the Schedule of Market Values. - Provincial assessors,
together with the municipal assessors and the city assessors, including the municipal
assessor in Metro Manila, shall prepare the SMVs for the different classes of real
property situated within their respective LGUs, pursuant to the valuation standards,
tules, regulations and other specifications set by the Department of Finance (DOF)
and the BLGF. The said SMVs shall be submitted by the assessor concerned to the
BLGF Regional Office for 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 provincial governor or
the city mayor, as the case may be.

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 shall be transmitted to the concerned assessor who shall
confer with the local chief executive regarding the said approved SMV. Likewise, the
concerned assessor shall submit to the local chief executive a tax impact 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 sanggunian for the enactment of an ordinance setting the appropriate
assessment levels and tax rates. The concerned sanggunian shall enact such
ordinance, upon conduct of
Public hearings and proper consultation, within sixty (60) days from receipt thereof;
otherwise, the existing ordinance on assessment levels and tax rates shall remain in
force and effect.

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 same. Failure of the concerned local chief
executive to act on the ordinance within the prescribed period shall render the same
approved.

The approved ordinance, together with the SMV, shall be published by the
concerned LGU in a newspaper of local circulation once a week for two (2)
consecutive weeks: Provided, however, That in provinces, cities and municipalities
where there are no newspapers of local 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 the 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 LGUs as basis for the determination of real property-related taxes
imposed by national government agencies, and as benchmark 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 basis for the determination of national and local real property-related taxes
after five (5) years from the effectivity of its enacting ordinance.

SEC. 16. Revision of the Schedule of Market Values. - The BLGF shall formulate
the program for the regular revision of the SMVs. All provincial assessors, together
with the municipal assessors and the city assessors, including the municipal
assessor in Metro Manila, shall undertake a revision of their respective SMV within
two (2) years from the effectivity of this Act. Thereafter, they shall undertake a
general revision of the SMVs and property assessments not earlier than three (3)
years from the date of the 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 assessors and the 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 concerned BLGF Regional Office and recommendation by the BLGF Executive
Director for approval by the Secretary of Finance within ninety (90) days 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 the
‘SMV in accordance with internationally accepted valuation standards, concepts,
principles and practices; conduct of SMV impact studies; preparation of compliance
reports, and other subject areas to ensure the effective implementation 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 and 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 to require the
mandatory submission of necessary documents from the concemed officials or
employees of national government offices or instrumentalities, LGUs and the private
sector. The updated database shall be made available to the LGUs, 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 city assessors, including the municipal assessor in Metro Manila, an
abstract of the entire registry every three (3) months and copies of all contracts
selling, transferring or otherwise converting, leasing 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 or alienation accompanied by copies of corresponding
deeds of sale, donation 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 now or hereafter be required by law or regulation to issue to any person a permit
for the construction, addition, repair or renovation of a building, or permanent
improvement on land, or a certificate of registration for any machinery, including


machines, mechanical contrivances and apparatus attached or affixed on land or to
another real property, shall transmit a copy of such permit or certification within thirty
(80) days of its issuance to the assessor of the province, city or municipality where
the property is situated

SEC. 21. Duty of Geodetic Engineers to Furnish Copy of Plans to the Assessor. ~ It
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 of
the month from receipt of such approved plans from the Land Management Bureau
(LMB), the Land Registration Authority (LRA) or 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 all real
property transactions data from 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 such data. The BLGF Regional Office 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.

Chapter 3
Appointment and Qualifications of Assessors

SEC. 23. Appointment of Assessors. — The 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) In the case of provincial and assistant provincial assessors and city and
assistant city assessors, the appointee shall be chosen from the list of at least three
(3) ranking eligible recommendees within the region, as endorsed by the DOF
Secretary as suitable and qualified for appointment;

(b) In the case of municipal and assistant municipal assessors, the appointee
shall 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
appointment; and

(0) In the case of city and assistant city assessors and municipal and assistant
municipal assessors for Metro Manila, the appointee shall be chosen from the list of
at least three (3) ranking eligible recommendees within 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. — No person shall be
appointed assessor or assistant assessor unless such person is a citizen of the
Philippines, a resident of the region for a provincial or city assessor/assistant
assessor and of the province for a municipal assessor/assistant assessor, a
registered and licensed appraiser, of good moral character and must have
experience in real property valuation or assessment work or in any suitable 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 incumbent assessors holding permanent appointments shall enjoy security
of tenure and shall continue to perform their functions without the need for
reappointment and without diminution of status, rank and salary grade. Those with



temporary appointments are given the opportunity to qualify for permanent
appointments as assessors for a period to be determined by the DOF upon the
effectivity of this Act.

ARTICLE IV
PENAL PROVISIONS

SEC. 25. Failure to Comply with the Required Submission of Documents. — 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 authority.

SEC. 26. Failure fo Comply with the Valuation Standards. — An assessor who, for
unjustifiable reasons, fails to comply with the valuation standards developed and
adopted pursuant to this Act, or deliberately conceals any deviation or departure 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 (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. 27. Failure to Prepare the 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 shall be meted a fine equivalent to the official's
or employee's basic salary for a period of one (1) month to six (8) 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 of Other Provisions. — Any person, whether natural or juridical,
who violates any provision of this Act other than those punishable under Sections 25,
26 and 27 hereof shall, when warranted, be dealt with 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 Appeals) of Republic Act No.
7160, otherwise known as the “Local Government Code of 1991”, shall apply in all
cases of appeals as remedies for the taxpayers in the assessment of their properties.

ARTICLE V
TRANSITORY PROVISIONS
SEC. 30. Transitory Guidelines. — (a) LGUs which are in the process of revising
their SMVs, upon the effectivity of this Act, shall continue with such revisions in
accordance with Section 16 of this Act: Provided, That proper notification and
coordination with the 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 actual price in consideration as stated in
Teal property transaction documents, 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 Secretary of Finance for intemal revenue tax purposes, and the
‘SMVs prepared by the provincial assessors, together with the municipal assessors
and the city assessors, including the municipal assessor in Metro Manila, that have
been approved by their respective sanggunians for real property taxation purposes
shall continue to be in force and effect until repealed, superseded, modified, revised,
set aside or replaced by the values provided under the new SMVs 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 the Revision of the Schedule of Market
Values. — Each local sanggunian shall appropriate the necessary funds from locally
generated revenues, the Internal Revenue Allotment (IRA) or such other sources
every fiscal year. The accumulated amount so appropriated shall be known as the
Real Property Tax Administration Fund (RPTAF) which shall be used for the proper
implementation of the regular revision of the SMVs and the general revision of real
property assessments, and the administration of real property taxes in all LGUs.

SEC. 33. Appropriations, - The amount necessary for the implementation of this Act
‘shall be included in the annual General Appropriations Act.

ARTICLE VII

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

SEC. 35. Suppletory Application of Existing Laws. — The provisions of Republic Act
No. 7160, otherwise known as the “Local Government Code of 1991", and other jaws
consistent with this Act shall have suppletory effect.

SEC. 36. Separability Clause. — Any portion or provision of this Act that may be
declared unconstitutional or invalid shall not have the effect of nullifying 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), 199(9)(h)(\),
201, 202, 209(a), 212, 214, 218 paragraph 1(b), 219, 220, 224(a), 443(d),
444(b)(I\(v), 454(d), 455(b)(1)(v), 463(d), 465(b)(1)(v), 472(a) paragraph 1, 472(b)(8)
and 473(a) paragraph 1 of Republic Act No. 7160, otherwise known as the “Local
Government Code of 1991, are hereby repealed.

(b) Sections 6(E), 24(D), 27(0)(5), Sections 88(B) and 102 of Republic Act No.
8424, otherwise known as the “Tax Reform Act of 1997", are hereby amended or
modified accordingly.

(c) All laws, presidential decrees, executive orders, presidential proclamations,
ules 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,