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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO._ 4400

Introduced by: REP. MEL SENEN S. SARMIENTO

EXPLANATORY NOTE

Real property is considered the most important natural resource and the biggest financial
asset. The World Bank noted that 50% to 75% of the country’s wealth is ‘contained in land
resources. In the Philippines, however, the land market is contributing only 6.6% to the Giross
National Product, This is due to the many problems in land management and administration,
including real property valuation, which is chaotic, ineffective, and inequitable. This resulted
to inefficiencies in the land market, lack of confidence of the public and investors on the real
property sector, and, above all, unreelized revenues from real property and loss of income for
the Philippine Government,

At least 23 national government agencies (NGAs) and more than 1,700 local government
units (LGUs) use different systems and methodologies for different purposes, thus, resulting
to the same property having muttiple, confusing, unrealistic, or outdated values.

For almost two decades of the effectivity of the Local Government Code (I.GC), real
Property valuations in the LGUs have remained stagnant, outdated and persisted to be
susceptible to political dictation and maneuvering. The requirement of the LGC to regularly
conduct the general revision of the Schedule of Market Values (SMV) and property
assessments every three years has been hardly realized and fully implemented by the LGUs,
‘The SMVs aro, thus, generally undervalued, and contributed to ftuge foregone revenues of the
LGUs. On the other hand, the Bureau of Internal Revenue (BIR), in determining values for
zonal valuation as basis for national land-related taxes, does not have the statutory mandate to
regularly revise the zonal values, as welt as the technical expertise in doing feal property
valuations—often relying inputs from the private appraisal sector and tocal government
assessors. Thus, valuations by the government do not truly capture and reflect the current,
market-based property developments and economic conditions—overvaluation occurs when
the government is acquiring real property, while undervaluation proliferates if the
government is collecting taxes.

With the effectivity of the Real Estate Service Act or Republic Act No. 9646, which
professionalizes the real estate service in the country, including local government assessors
and national government appraisers, this bill adopts a bottom-up approach in
institutionalizing reforms in the valuation sector of the country to adopt a market-based SMV,

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by maximizing the technical expertise of LGU assessors in using and adapting uniform and
intemationally-accepted valuation standards. This bill seeks to improve the valuations of
LGUs to become the basis for real property taxation of the national and local governments,
and as benchmark for other purposes, as required by other government agencies and
instrumentalities.

Concurrently, reorganizing and strengthening the Bureau of Local Govenment Finance
(BLGF) is being proposed as a fundamental element to achieve the envisioned reforms. By
starting at the locat governments, the BLGF shall be the lead agency to review and approve
the SMVs of all LGUs, thus, separating the technical function of valuation from the political
function of taxation exercised by local elective officials. The BLGF shall oversee all real
property vatuation matters in the country, being in the best position to assume the
responsibility within the existing bureaucracy.

Building an equitable, transparent, and impartial valuation system will stimulate a vibrant real
estate sector, and foster private investors’ confidence and the general public. The potential of
real property to strengthen the fiscal affairs of the LGUs should be fully tapped to achieve
more meaningful local fiscal autonomy and to improve the government’s capacity to generate
revenues and provide adequate public service delivery.

In view of the foregoing, the immediate approval of this bill is earnestly sought.

MEL OX sanamenero

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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4400

Introduced by: REP. MEL SENEN S. SARMIENTO

AN ACT INSTITUTING REFORMS IN REAL PROPERTY VALUATION 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:

SEC. 1. Short Title. - This Act shall be known as the "THE REAL PROPERTY
VALUATION REFORM ACT OF 2011."

ARTICLE I
DECLARATION OF 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:
(@) Promote the fiscal autonomy of local govermments 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; i

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

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(g) 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 cach
acted knowledgeably, prudently, and without compulsion;

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

(@ Real Estate — refers to the land and all those items which 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 alt the rights, interests, and benefits related to the
ownership of reat estate, plant, machinery, and equipment;

(k) Schedule of Market Values or SMV — refers to a table of market values of real
properties within a local government unit prepared by assessors pursuant to
existing laws, rules and regulations.

(1) Special Purpose Property ~ refers to a property which is designed, constracted 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. .

(m)Valuation/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 H
STRENGTHENING THE BUREAU OF LOCAL GOVERNMENT FINANCE

Chapter 1
‘BLGF Ceatral Operations

SEC. 4. Role of the Bureau of Local Government Finance. — The Bureau of Local
Government Finance 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 concemed parties;

(b) Review for compliance with the real property valuation policies and standards and
approve the Schedule of Market Values (SMVs) prepared by the provincial

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

{c) Support the development and professionalization of the valustion/appraisal
practice in the country pursuant to Republic Act No. 9646;

{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 apprisers and assessors.

SEC. 3. Definition of Termes, — As used in this Act, the following jepms mean:
(a) Appraiser ~ also known as valuer; refers to a person who conducts
valuation/appraisal; specifically, one who possesses the necessary qualifications,
ability, and experience to execute or direct the valuation/appraisal of real property.

(b) Assessor — refers to an official in the locat government unit, 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 tand for
residential, commercial, industrial, recreational or other purposes.

(d) Improvements — is a valuable addition made to a property or an ametioration in its
condition, amounting to more than a mere repair of replacement of parts involving
capital expenditures and labor, which is intended to enhance its value, beauty or
utility or (0 adapt it for new or further purposes.

{¢) 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; 90 also are sources of energy, outside of man himself, such
as water, coat deposits, and the natural fertility of the soil.

(f) Machinery — embraces machines, equipment, mechanical contrivances,
instruments, appliances ot apparatus which may or may not be attached,
permanently or temporarily, to the real property. I( 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 of activity and which by their very nature and
purpose are designed for, or necessary to its manufacturing, mining, logging,
‘commercial, industrial or agricultural purposes.

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assessors together with smunicipal assessors, and city assessors, including the
municipal assessor of Metro Manila, for tax and other purposes;

(©) Provide technical assistance on real property appraisal matters 10 government
agencies and intstrumentalities, and coordinate or conduct the valuation/appraisal
of special purpose properties, when requested;

+ (@) Provide leadership and policy directions to local government units on real
property valuation/appraisal for taxation and other purposes, including the
development and maintenance of valuation standards, the regulation of
valuation/appraisal activities and other related matters, and the promotion of
valuation/appraisal training and seminars;

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

(Q 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/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

@ Perform such other functions as are necessary, proper, and incidental to
implement the provisioas 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, which shall perform the functions pertaining to Sec. 4 hereof.

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

(a) Develop and ithplement 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/appraisat and
their implementation in the regional offices;

(©) Approve, upon review by the RPVS, the Schedule of Market Values (SMVs)
prepared by the provincial assessors together with municipal assessors, and city
assessors, including the municipal assessor of Metro Manila, for tax and other
purposes

(@) Advise and assist other government agencies on matters pertaining to real
property vaiuation/appraisal; and

* (©) Perform such other fictions 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 Revenuc (BIR),

Department of Environment and Natural Resources (DENR);

Bangko Sentral ng Pilipinas (BSP);

National organization of government assessors;

Private appraisal sector; and

Union of Local Authorities of the Philippines (ULAP);

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

(©) The Chairperson and members of the Committee shall aot receive additional
salary for the performance of their functions, but they shall be entitled to
honoraria, pursuant (o 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.

ae een

SEC. 8. Functions of the Central Consultative Committee. - The Central
Consultative Committee shall serve as the consultation 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 Reglonal Offices. — The BLGF Regional Offices, through
the Regional Director, shall have the responsibility on all matters relating to
valuation/appraisal and the SMVs in the region, such as:

(a) Implement 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;

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

(c) Provide economical, efficient, and effective service relating to the implementation
of the provisions of this Act in the region;

(@) Coordinate and consult with regional offices of other govemment departments,
bureaus, and agencies within the region dealing with real property
valuation/appraisat;

(©) Provide leadership and policy direction in the area of real property
valuation/appraisal to local government units in the region;

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

{g) Perform other fictions as may be assigned by the BLGF 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 from:

1) Bureau of Internal Revenue - Regional Office;

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

4) Private appraisal sector within the region; and

5) Bankers association within the region,

(b) The members of the Regional Consultative Committee must be performing
valuation/appraisal relsted functions, Representatives from the regional
organization of goverment assessors, private appraisal sector, and banking
association within the region shall be represented by the head of their respective
organization. *

(c) 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 Regionat
Director may deem necessary for the performance of its functions.

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SEC. 11. Functions of the Regional Consultative Committee. — The Regionat
Consultative Committee shall serve as a consultation forum in the region for discussion on
developments in the focal 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; appraiser and assessor concems in
general; and other matters as may be determined by the Committee.

ARTICLE 11
VALUATION/APPRAISAL OF REAL PROPERTIES

Chapter 1
Vatuation 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 local
government units and other concerned parties in appraising or valuing Iands, buildings,
machinery and other real properties for taxation and other purposes. The valuation standards
shall conform with the generally accepted valuation principles and intemationally accepted
standards.

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SEC. 13. Valuation/Approisal of Real Property. — Fot 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 rutes and regulations for
the valuation/appraisal of real property pursuant to the provisions of this Act. It shall provide
Ieadership 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 poticy objectives, the provisions of existing pertinent
laws shall be applied after determination of the prevailing market value of these properties in
sccordance 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, shall prepare the SMVs for the different classes of real 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 concerned, copy furnished the provincial governor or the city mayor, as the case may
be, and the concerned Sanggunian, to the BLGF Regional Office for review and compliance
with other requirements not later than the thirty-first (31%) day of October of the inumediately
preceding calendar year the general revision of real property assessments shall be undertaken.
‘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. The
BLGF Executive Director, after review by the RPVS, shall approve the SMV within sixty
(60) days upon receipt of the same; otherwise, said schedule shall be deemed approved.

The approved SMV shall be transmitted to the concemed assessor who shall confer
with the local chief executive regarding the said approved SMV. Likewise, the concemed
assessor shal] 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 Sanggumian,
through the Chairman 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 Sangeunian
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 Sangeunian of an Ordinanice 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, of within fifteen (15) days, in the case of provinces, to approve
the same. Failure of the concerned focal chief executive (0 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
local government unit in a newspaper of local circulation once a week for two consecutive
weeks: Provided, however, That in provinces, cities and municipalities where there are 00

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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 pasted in the BLGF official website.

SEC. 15. Use of Schedule of Market Values. ~The SMV as approved by the BLGF .
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 national government
agencies, and as benchmark for real property appraisal for other purposts. For purposes of
‘computing any internal revenue tax, the BIR Commissioner shall adopt the SMV or the actual
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 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 shall formulate the
program for the regutar revision of SMVs. All 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 earlier 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 inequalitics in any SMV is deemed necessary, the provincial assessors together with the
municipal assessors, and city assessors, including the municipal assessor in Metro Manila,
may recommend to the BLGF Executive Director revisions to their fing SMV. Such
revision/s shall be subject to review and approval by the BLGF Executive Director within
ninety days (90) from the date of receipt thereof.

SEC. 17. Conduct of Capacity Bullding 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 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 neckssary documents

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from the concemed officials or employees of national goverment offices or
insirumentalities, local government units, and the private sector. The updated database shall
be made available to the local government units, national government agencies, and the
private sector as well,

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 Manita, an abstract of his/her
registry every three (3) months and copies of all contracts selling, transferring or otherwise
converting, fcasing, or mortgaging real property registered by him/her 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 of regulation ¢ 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 of 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 province, city or municipality where the property is situated,

SEC, 21. Duty of Geodetic Engineers to Furnish Copy of Plans to Assestor. — (t
shall be the duty of all geodetic engineers, public or private, to furnish free of change, 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. - 1t shail be the
duty of the assessors to transmit to the concerned BLGF Regional Office all real property
transactions data from the Register of Deeds, official issuing building permit and geodetic
engineers within one (1) month after the receipt of such data. The BLGF’s 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

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SEC. 23. Appointment of Assestors. — Notwithstanding the provisions of existing
laws to the contrary, appointments of provincial, city, afid municipal assessors and assistant
assessors shall be in accordance with the following guidelines:

(a) in the case of provincial and assistant provincial assessors and city and assistant
city assessors, appointee shall be chosen from the list of at least three (3) ranking
eligible recommendecs suitable and qualified for appointment within the region;

(b) In the case of municipal and assistant municipal assessors, appointee shalt be
chosen from the list of at least three (3) ranking eligible recommendees suitable
and qualified for appointment within the province; and

(©) In the case of city and assistant city assessors and municipal and assistant
municipal assessors for Metro Manila, appointee shalt be chosen from the fist of at
feast three (3) ranking eligible recommendees suitable and qualified for
appointment within the Metro Manila,

‘The assessors shail be under the technical supervision of the BLGF, primarily through

a system of compliance reporting and provision for education and training for capacity
building.

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 an 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
throe (3) years in the case of the municipal assessor.

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 18, 19, 20, 21, and 22 of this Act shall be
punished by a maximum fine equivalent to the officiat’s or employee's six (6) months basic
salary or suspension from service for a period not exceeding one (1) year, or both, at the
discretion of the competent authority.

SEC. 26. Failure to 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 concealed any deviations or departures from such
standards in the valuation/appraisal of real property, shall be punished by a maximum fine
equivalent to the official’s or employee's six (6) months basic salary, and suspension from
the government service,

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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 shall be meted the maximum fine equivalent to the official’s or
eanployee’s six (6) months basic salary, 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,
whe violates any provision of this Act other than those panishable 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 (Locat 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 atl cases of appeals as remedies
foc the taxpayers in the assessment of their propertics,

ARTICLE V
‘TRANSITORY PROVISIONS

SEC. 30. TransitoryGuidelines. — (a) Local government units 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 real 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 internal revenue tax purposes and the SMVs prepared by the
provincial assessors together with the municipal assessors, and city assessors, including the
municipal assessors of Metro Manila, that have been approved by their respective
Sanggunians for real property taxation purposes shall continue to be in force and effect untit
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 shat! 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 shalt approprinte the necessary funds either from locally generated

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revenues, the Internal Revenue Allotment (IRA), or other possible sources every fiscal year.
‘The accumulated amount so appropriated shall be known as the Real Property Tax
Administration Fund (RPTAF) which shall be used to ensure the proper implementation of
the regular revisions of the SMVs and general revision of property assessments, and the
administration of real propetty taxes in all local government units.

SEC. 33. Appropriations. — The amount necessary for the initial implementation of
this Act shail be charged against the current appropriations of the BLGF. Thereafter, such
‘sum for the continuing operations and the proper 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 sik (6) months after
the effectivity of this Act, the DOF, upon conducting consultations with concemed parties,
shall issuethe 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 laws
consistent with this Act shall have suppletory effect.

SEC. 36, Repealing Clause. — (8) Section 6(B) of Republic Act No. 8424, otherwise
known as the National Intemal Revenue Code (NIRC), as amended, and Sections 199(1), 201,
20Ha), 212, 214, 219, 224(a), 472(a) par 1, 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 19, 135(a), 138, 198(@\eXhX(D, 202, 218part(b), 220, 443d),
4AAOXINY), 454d), 455M LXV), 463d), and 465(bX1X¥), 472(b\(8) of the LGC, and
Section 88(B) of the NIRC are hereby modified accordingly;

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

SEC. 37. Separability Clause. — Any portion of provision of this Act that may be
declared unconstitutional or invalid shail not have the effect of aullifying other portions or
provisions hereof, as long as such remaining portions or provisions can still subsist and be
given effect in their entirety.

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,

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