Republic of the Philippines RECEIVED
HOUSE OF REPRESENTATIVES pare 7 JUL 2016
Quezon City —

SEVENTEENTH CONG!

REGISTRATION UNIT

First Regular Session [BWLS AND INDEX SERVICE

House Bill No.

Introduced by HON. ROZZANO RUFINO B. BIAZON

EXPLANATORY NOTE

‘The absence of a uniform set of standards for valuation of land in the country has
caused the existence of multiple, unrealistic, and corruption-prone system of land valuation,
‘This in turn has generated inefficiencies in the allocation and utilization of the land market,
lack of confidence of the public and investors on the real property sector, and, above all, loss
of income and unrealized revenues from real property for the Philippine Government,
Estimated to contribute 50 percent to the national wealth, the land market contributes only 6,6
percent and national revenues from real estate transactions have been consistently going
down over the years.

‘There are at least twenty-three (23) national government agencies undertaking real
property valuation, each using its own system, and methodology for its own purpose, (i.e. the
Bureau of Intemal Revenue (BIR) with its zonal values for various national land tax
transactions like capital gains tax, estate tax, and documentary stamp tax, the DPWH for
expropriation of real property, etc.). The Local Government Units (LGUs) likewise prepare,
legislate, and implement their own schedules of market values (SMVs) on which the
assessment of real property tax is based. Thus, the same property is given different values
depending on the nature and purpose for valuation, confounding the property owners and the
public, and making valuation susceptible to political influence and corruption. The zonal
values of the BIR are generally 25 percent higher than the SMVs of the LGUs. But even this
higher level was found out to be 25 to 70 percent lower than the prevailing market prices. The
national and local governments are thus deprived of much needed revenues from a most
stable and convenient source due to these rampant undervaluations.

Valuations used by both BIR and LGUs for taxation purposes are also outdated.
While the Local Government Code requires the LGUs to revise their SMVs every three years,
this is hardly observed. The same is true for the BIR which has no statutory requirement to
revise its zonal values. The situation does not also provide equity and faimess to taxpayers as
well as to property owners, nor is it conducive to encouraging investments and confidence in
the land market,

/OUSE \F REPRESENTATIVES



The Valuation Reform Act (VRA) hopess to address these problems. It seeks to
establish uniform and internationally-accepted standards for the valuation of real property in
the country. It also adopts market value as a single real property valuation base for the
assessment of real property related taxes. The proposed measure also establishes market
value for valuing or appraising real property for various government purposes. Reform is also
introduced by separating the function of appraising and assessment of property from tax
policy and tax administration, For this purpose a National Valuation Authority (NVA) is
being proposed to be created to regulate and have oversight of the valuation and appraisal of
real property in the country. This would also ensure that a nationally consistent, equitable,
and impartial valuation system of real property for taxation and other purposes is put in place.
Hopefully, such will result in broadening the valuation base of real property for taxation and
thus contribute to improving the national income for the country’s social and economic
development,

As a necessary support to improving the valuation system and keeping it abreast with
international standards and practices, assessors are professionalized and insulated from undue
political intervention by setting the qualifications standards for their appointment.

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

by ba ae
ROZZANO RUFINO B,, BTAZON

Representativi
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS

First Regular Session

House Bill No. 1274

Introduced by HON, ROZZANO RUFINO B. BIAZON

AN ACT
TUTING REFORMS IN REAL PROPERTY VALUATION IN THE
HORITY

IN!
PHILIPPINES, ESTABLISHING THE NATIONAL VALUATION AU’
AND APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and House of Rep,resentatives of the Philippines in
Congress assembled:

SECTION ONE. Short Title. ~ This Act shall be known as the "The Real Property
Valuation Reform Act of 2016."

ARTICLE I
DECLARATION OF POLICY AND OBJECTIV!
AND DEFINITION OF TERMS,

See. 2. Declaration of Polic
the development and maintenance o
property valuation based on internationally accepted valuation
principles, and practices. Towards this end, the State shall:

and Objectives, - It is the policy of the State to promote
1. equitable, impartial, and nationally consistent real
standards, concepts,

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

(b) 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;

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

(d) Support the development and professionalization of the valuation/appraisal
practice in the country pursuant to Republie Act No. 9646;


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

(8) 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 making it abreast with global developments;
and

(g) Ensure transparency in real property transactions to protect consumers and develo
confidence in the work of appraisers and assessors.

See. 3. Definition of Terms. — As used in this Act, the following terms 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 local government unit, 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 - is 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 mayor may not be attached, permanently or temporarily, to
the real property. It includes th~ 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 mature and purpose are designed for, or necessary to its
manufacturing mining, logging, commercial, industrial or agricultural purposes.

(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 scller in an arm’s length
transaction (a transaction between independent, unrelated parties involving no

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irregularity) after proper marketing wherein the parties had each 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,

(i) 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 ground,

()) Real Property = refers to all the rights, interests, and benefits related to the ownership of
real 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.

() Special Purpose Property - refers to a property which is deSigned, constructed and
developed for a specific use Qr purpose, By its very nature, this type of property is rarely
offered for sale in the open market except as part of a going concern. 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 I
NATIONAL VALUATION AUTHORITY AND THE REGIONAL OFFIC

Chapter 1
Establishing a National Valuation Authority

Sec. 4. Establishment of a National Valuation Authority, ~ To achieve the policy and
objectives declared in this Act, there shall be established a National Valuation Authority
(NVA), hereinafier referred to as the Authority, which shall be the primary agency of the
government on matters concerning the valuation or appraisal of real properties in the
Philippines. ‘The Property Valuation Staff (PVS) established within the Department of
Finance (DOF) shall serve as the nucleus of the Authority. The Authority shall be attached to
the DOF and shall have its central office in Metro Manila,

. 5. Powers and Functions of the Authority, ~ The Authority shall have the
following powers and functions:


(a) Develop, adopt, and maintain valuation standards consistent with generally
accepted valuation standards, regulations ,!nd specifications for real property
appraisal used for tax and other purposes, and ensure compliance therewith by

ational government agencies, local government units, and other concerned

parties;

(b) Review and approve 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;

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

(d) Provide leadership and policy directions to local government units, national
government agencies, private sector institutions and individuals dealing with 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;

(c) Maintain a roster of government appraisers

(1) 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
based 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

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

See. 6, Head of Authority. ~ The Authority shall be headed by a Director General who
shall be appointed by the President of the Philippines upon the recommendation of the
Secretary of Finance. The Director General must be a Filipino citizen, of good moral
character, a graduate in engineering, accounting or appraisal related degrees, and a licensed
appraiser, or assessor, with at least ten (10) years experience in valuation/appraisal or
assessment of real properties. The Director General shall have the salary grade equivalent to
the rank of an Assistant Secretary under the Salary Standardization Law.

Sec. 7. Responsibilities of the Director General. — The Director General shall be
responsible for the efficient and effective performance of the statutory responsibilities of the
‘Authority set forth in this Act and for the overall internal management and governance of the
Authority. For this purpose, the Director General shall

4


(a) Develop and implement policies, plans, programs, and operating standards for the
attainment of the objectives and mandate of the Authority;

(b) Provide policy direction and leadership in all aspects of valu:
their implementation in the regional offices;

n/appraisal and

(c) Advise and assist the Secretary of Finance and other government agencies on
matters pertaining to real property valuation/appraisal;

(@ Exercise administrative supervision over the central and regional offices, and
provide technical assistance over the local government assessors; and

(¢) Perform such other functions as may be provided by law, or required in pursuance
of the law or the demand of the statutory responsibilities of the Authority.

See. 8. Creation of An Advisory Board. ~ (a) There shall be created an Advisory
Board, hereinafter referred to as the Board, compdsed of a representative each from the

(1) Department of Finance (DO

(2) Bureau of Local Government Finance (BLGF);
(3) Bureau of Internal Revenue (BIR);
(4) Department of Environment and Natural Resources (DENR);

(5) Bangko Sentral ng Pilipinas (BSP);

(6) National organization of government assessors;
(7) Private appraisal sector;

(8) Ui

mn of Local Authorities of the Philippines (ULAP); and

(9) The Director General as an ex officio member.

(b) The member-representatives from the DOF, BLGF, BIR, and DENR shall be
appointed by the President of the Philippines from the nominees of the respective Department
Secretaries from officials performing valuation-related functions whereas the member-
representative from the BSP shall be appOinted by the Bangko Sentral Governor. The
representatives from the national organization of government assessors, the private sector,
and ULAP shall be appointed by the President from the nominees of the national government
assessors, private appraisers’ organizations, and ULAP, respectively.

(c) The President of the Philippines shall appoint the Chairman from among the
government member-representetives of the Board. The Authority shall provide the Secretariat
and other support services to the Board.


(d) The members of the Board shall serve for a maximum of three (3) years. In case of
vacancy in the Board, the person so appointed or designated shall serve only for the
unexpired term. They shall not receive additional'salary for the performance of their functions
but they shall be entitled to honoraria pursuant to existing laws and regulations

(c) The Board shall meet at the initiation of the Chairman or any Board Member at
least once every three (3) months. It shall have as many special meetings as it may deem
necessary for the performance of its functions and may require the presence of
representatives from concerned agencies whenever necessary. The Board shall also formulate
and adopt its internal rules and regulations for the conduct of its meetings.

Sec. 9. Functions of the Advisory Board, ~ The Board shall advise the Director
General on matters pertaining to valuation/appraisal and shall have the recommendatory
power on the adoption of the valuation standards and the setting, maintenance, and
compliance monitoring of the valuation standards prepared and developed pursuant to
Section 14 of this Act.

Chapter 2
Organization of the Authority's Regional Offices

Sec. 10. Establishment of Regional Offices. - There shall be established in every
administrative region of the country a Regional Office of the Authority, headed by a Regional
Director who shall be appOinted by the Secretary of Finance upon the recommendation of the
Director General. The Regional Director must be a Filipino citizen, of good moral character,
a graduate in engineering, accounting or appraisal related degrees, a licensed appraiser, ot
assessor, with at least five (5) years of experience in valuation/appraisal or assessment of real
property. The Regional Director shall have a salary grade equivalent to Director IIT under the
Salary Standardization Law.

The Regional Directors collectively shall serve as a corps of officers that constitute
the next in rank to the Director General and deSignation to the Director General's office may
be made from their ranks. There shall be a phased implementation of the Regional Offices.

See. 11, Functions of the Regional Offices. - The Regional Offices, under the
Regional Director, shall have the responsibility for all issues relating 10 valuation/appraisal
and SMYs in the region, such as:

) Implement laws, policies, plans

programs, rules and regulat
in the Region;

(b) Review and recommend the approval of the proposed SMVs prepared by the
provincial assessors together with the municipal assessors, and city assessors,
including the municipal assessor of Metro Manila, for tax and other purposes;

(©) Provide economical, efficient, and effective service relating to the Authority's
mandate to all government agencies and other concerned parties within the region:


(4) Coordinate with regional offices of other government departments, bureaus, and
agencies within the region dealing with real property valuation/appraisal;

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

(0) Adopt and maintain 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 local government assessors; and

(g) Perform other functions as may be assigned by the Director General,
Sec. 12, The Regional Consultative Committee. ~ (a) There shall be created in every

administrative region a Regional Consultative Committee, hereinafter referred to as the
lee, composed of a representative each from:

(1) Bureau of Local Government Finance = Regional Offic

(2) Bureau of Internal Revenue - Regional Office;

(3) Department of Environment and Natural Resources

-Regional Offi

(4) Regional organization of government assessors;
(5) Private appraisal sector within the region; and

(6) Regional banking association,

(b) The members of the Regional Consultative Committee shall elect the Chairman
from among themselves.

(©) The members of the Regional Consultative Commitice must be performing
valuation/appraisal related functions, and shall be appointed by the Regional Director of the
agency concerned, while the representative from the organization of government assessors,
private appraisal sector, and banking association within the region shall be appointed by the
head of their respective organization.

(d) The members shall serve for a maximum of three (3) years, otherwise shortened or
terminated by the appointing authority. In case of vacancy in the Committee, the person so
appointed or designated shall serve only for the unexpired term. The chairperson and
members of the Committee shall not receive additional salary for the performance of their
functions but they shall be entitled to honoraria pursuant to existing laws and regulations,

(c) The Committee shall mect on t~e initiation of the Regional Director or any of the
Board Members at least once every three (3) months. Tt shall have as many special meetings
as it may deem necessary for the performance of its functions, The Committee shall also
formulate and adopt its internal rules and regulations for the conduct of its meetings.


Sec. 13. Functions of the Committee. ~ The Committee shall serve as a consultation
forum in the region for discussion on property market reports; concerns 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 1/1
VALUATION/APPRAISAL OF REAL PROPERTIES

Chapter 1
Valuation Standards and Market Values

Sec. 14. Development of Valuation Standards, - Notwithstanding the provisions of
existing laws to the contrary, the Authority shall develop, adopt, maintain and implement
uniform valuation standards which shall be used by all appraisers and assessors of national
and local government agencies and its instrumentalities, and other concerned parties in
appraising or valuing lands, buildings, machinery and other real properties for taxation and
other purposes, The valuation standards must conform with the generally accepted valuation
principles and internationally accepted standards.

See. 15. Valuation/Appraisal of Real Property. ~ For valuation purposes, all real
property, 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 Authority shall promulgate the rules and regulations
for the classification and valuation/appraisal of real property pursuant to thé provisions of this
Act. It shall provide leadership in ensuring rationalized valuation of real properties
transcending political boundaries. For real properties intended for low-cost or socialized
housing and other programs of the government imbued with social policy objectives, the
provisions of existing pertinent laws shall be applied,

Sec. 16. 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 and specifications set
by the Authority. The said SMVs shall be submitted by the assessor concemed, upon proper
information to the local chief executive and the Sanggunian, to the Authority's Regional
Office for review and compliance with other requirements. The said SMVs shall then be
submitted to the Authority's Central Office for approval within sixty (60) days from receipt
thereof. ‘The Authority shall review and approve the SMV within thirty (30) days upon
receipt of the same, otherwise, said schedule shall be deemed approved.

‘The Authority shall transmit the approved SMV to the concerned assessor who shall
confer with the local chief executive regarding the said approved SMV. Likewise, the
concemed assessor shall submit to the local chief executive a revenue impact report of the
new SMV as against the existing assessment levels and tax rates, and shall provide the
Sanggunian, 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 revenue
impact report within fifteen (15) days from receipt of the same to the Sangeunian tor the
enactment of an Ordinance setting the 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 ren (10) days, in the case of cities and
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 within the prescribed period to act on
the Ordinance shall render the same approved. The approved Ordinance together with the
SMV shall be published by the concemed 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 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, The Authority shall also publish the approved SMV on its official website.

Sec. 17. Use of Schedule of Market Values. ~ The SMV as approved by the Authority
shall be used for the general revision of real property values and as basis for the
determination of real property related taxes imposed by the national and local governments,
For purposes of computing any internal revenue tax, the BIR Commissioner shali adopt the
SMV or the actual price in consideration as stated in real property transaction documents,
whichever is higher,

Sec. 18. Revision of Schedule of Market Values, ~ The Authority shall formulate the
program for the regular 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
establishment of the Authority. Thereafter, they shall undertake a revision of SMVs 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 SMV has been approved and prior to its next revision, the provincial assessors together
with the municipal assessors, and city assessors, including the tylunicipal assessor in Metro
Manila, may recommend to the Authority revisions to their existing SMV.

See. 19. Conduct of Training and Seminars, — For the effective implementation of this
Act, the Authority shall conduct the necessary trainings and seminars 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, income projections based on
property taxes and other tax administration matters,

Chapter 2
Development and Maintenance of
Real Property Database

___ See, 20. Development of Real Property Database, ~The Authority 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 ot
renovation of buildings and other structures, and on prices of machinery. For this purpose, the

9


‘Authority is hereby authorized to require the mandatory submission of necessary documents
from the concerned officials or employees of national government offices or
instrumentalities, local government units, and the private sector. The updated database shall
be made available to the local government units, national government agencivs, and the
private sector as well.

Sec. 21. Duty of the 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 his registry
every three (3) months and copies of all contracts selling, transferring or otherwise
converting, leasing, 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 alicnation,

Sec, 22. Duy 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 (30) days of its issuance, to the
assessor of the province, city or municipality where the property is situated.

Sec, 23. Duty of Geodetic Engineers to Furnish Copy of Plans to 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 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,

See. 24, Duty of Assessors to Transmit Documents to the Authority. ~ It shall be the
duty of the assessors to transmit all real property transactions data from the Register of
Deeds, official issuing building permit and geodetic engineers to the Regional Office of the
Authority within one (1) month after the receipt of such data. The Authority's Regional
Office shall record, process and make a summary report of the real property data, and submit
the same to the Central office within one (1) month from receipt of such data.

Chapter 3
Appointment and Qualifications of Assessors

¢, 25. Appointment of Assessors, ~ The Secretary of Finance shall appoint
provincial, city, and municipal assessors, upon recommendation of the local chief executive,
subject to 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, appointee shall be chosen from the list of at least three (3) ranking
eligible recommendees suitable and qualified for appointment within the region:

10


(b) In the case of municipal and assistant municipal assessors, appointee shall 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 shall be chosen from the list of at
east three (3) ranking eligible recommendees suitable and qualified for
appointment within the Metro Manila, The assessors shall be under the
administrative supervision of the concerned local government unit and under the
technical assistance of the Authority, primarily through a system of compliance
reporting and provision for education and training for capacity building.

Sec. 26. 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, licensed appraiser, of good moral character, &
graduate in engineering, accounting, commerce or appraisal related degree, 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 three (3) years in the case of
the municipal assessor, pursuant to the provisions of Republic Act No. 9646, otherwise
known as the Real Estate Service Act.

In accordance with Section 30 of Republic Act No. 9646, within three years from the
effectivity of this Act all existing and new positions in the national and local and local
governments, whether career, permanent, temporary or contractual, and primarily requiring
the services of any real estate service practitioner, shall be filled only by registered and
licensed real estate service practitioners. All incumbent assessors/assistant assessors holding
permanent appointments shall continue to perform their functions without need for
reappointment and without diminution of status, rank and salary grade, and shall enjoy
security of tenure. However, they may not be promoted to a higher position until they meet
the qualification requirements of that higher position as herein prescribed. Nothing in this Act
shall be construed to reduce any benefit, interest, or right enjoyed by the incumbents at the
time of the enactment of this Act. The appointing authority shall exercise his power to
appoint the assessor in accordance with the provisions of Republic Act No. 9646 only when a
vacancy occurs.

ARTICLE IV
PENAL PROVISIONS

Sec. 27. Failure to Comply with the Required Submission of Documents, ~ Any
government official or employee who fails without justifiable reason or reasons to provide or
furnish data or information required by the Authority pursuant to Sections 21. 22. 23 and 24
of this Act shall be punished by a maximum fine equivalent to the official'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. 28. Failure to Comply with the Valuation Standards. ~ An assessor or appraiser
who, for unjustifiable reasons, fails to comply with the valuation standards prepared and
adopted pursuant to this Act, or deliberately concealed any deviations or departures from

un


such standards, 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 or from
the practice of profession for a period not exceeding one (1) year, or permanent revocation of
his/her license at the discretion of the competent authority.

Sec. 29. 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 required by the Authority shall be punished, upon conviction, by a maximum fine
equivalent to the official's or employee'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. 30. Vidlations of Other Provisions. — Any person, whether natural or juridical,
who violates any provision of this Act other than those punishable under Sections 27. 28, and
hereof shall, when warranted, be dealt with under applicable existing laws.

Sec. 31. Taxpayers’ Remedies in Case of Wrong Assessment 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. 7661, 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. 32. Transitory Guidelines. ~ Within ninety (90) days upon the effectivity of this
Act, the Authority's Central Office shall be organized. The President of the Philippines shall
appoint the Director General upon the recommendation of the Secretary of the Department of
Finance.

(a) _ The Director General shall organize the Board pursuant to Section 8 of this
Act within thirty (30) days upon the organization of the Authority.

(b) An Ad Hoc Committee is hereby created which shall be responsible for the
formulation of the Authority's Organization, Staffing, and Implementation Plan, including the
selection and placement of personnel, taking into consideration the organizational criteria
such as, but not limited to, availability of qualified personnel, facilities, budgetary support
and others. The Ad Hoc Committee shall also be responsible for drafting the Impiementing
Rules and Regulations (IRR) for this Act. The Ad Hoc Committee shall be composed of the
Director General as ex-officio Chairperson and representatives from the DOF, SLGF, SIR,
National Tax Research Center (NTRC), and Land Administration and Management Project
(LAMP), as members.

(©) ___ After the organization of the Authority's Central Office, the Authority's
Regional Offices shall be organized.

(4) __ All existing staff of the Property Valuation Staff (PVS) in the Department of
Finance, records, equipment and appropriations provided for the PVS, as determined by the

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‘Ad Hoc Committee based on the approved organization and staffing, shall be tran:
the Authority.

red 10

(©) Local government units who are in the process of reVising their SMVss 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 Authority shall be
undertaken: Provided, finally, That the newly approved SMVs shall be in force and effect for
a period of two (2) years.

(Incase the SMY is not yet available or revised, the BIR Commissioner shall
adopt the existing SMV 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. 33. Saving Clause, ~ The zonal: values as determined by the SIR 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 the 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. 34, Budgetary Requirements for Revision of Schedule of Market Values, ~ To
ensure the proper implementation of the regular revisions of the SMVs and the administration
of real property taxes in all local government units, each local Sanggunian shalt appropriate
the necessary funds equivalent to ten percent (10%) of the one percent (1%) from the original
allocation of the Special Education Fund (SEF). The amount so appropriated shall be known
as the Real Property Tax Administration Fund (RPTAF),

‘The proceeds from the share of the local government unit in the SEF shall
automatically accrue to the RPTAF to be maintained in every provincial, city or municipal
treasury offices.

Sec. 35. Appropriations, ~The amount necessary for the initial implementation of this
Act shall be charged against the current appropriations of the Property Valuation Staff within
the Department of Finance. Thereafter, such sum as may be necessary for the Authority's
continuing operations and the proper implementation of this Act shail be included in the
annual General Appropriations Act.

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ARTICLE VIL
MISCELLANEOUS PROVISIONS

SEC. 36. Implementing Rules and Regulations (IRR). — The Secretary of Finance,
taking into account the recommendation of the Ad Hoe Committee oreated under this Act and
in consultation with other concerned parties, shall issue the IRR for the effective
implementation of this Act.

Sec. 37. 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, 38, Repealing Clause. ~ (a) Section 6(E) of Republic Act No. 8424, otherwise
known as the National Internal Revenue Code (NIRC), as amended, and Section 199(1) of
Republic Act No. 7160, otherwise known as the Local Government Code (LGC) of the
Philippines, are hereby repealed;

(b) Sections 199(¢), 199(m), 199 (0), 201,202,203, 209(a), 212, 214, 217, 219, 220,
224, 225, 443(d), 444(b)(1)(v), 454 (A), 455(b)(1)(v), 463 (d), 465(b)(1)(v), 472, and 473 of
the LGC, and Section 88(S) 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 incon~Istent with this Act are hereby repealed,
superseded or modified accordingly.

Sec. 39, 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 stich remaining portions or provisions can still subsist and be
given effect in their entirety,

Sec. 40. 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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