Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

nie, 12406 2013
Te: OTe |

Sixteenth Congress
First Regular Session

2368 \

HOUSE BILL NO.

Introduced by : Cong, George P. Amalz

EXPLANATORY NOTE

This is a refilled bill, which was previously approved in the lower house on third and
final reading. It was transmitted to the Senate but was not approved until adjournment of the
session.

The Philippine government is relentless in its quest towards tapping all possible
revenue resources to address the challenges in attaining good and responsive 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purposes, thus, resulting to multiple, confusing, unrealistic, or outdated values for the same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 litigations 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, i.e., 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 goverment agencies and instrumentalities, as well as private entities

Govemed 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
appraisal/valuation 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. This 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 bome
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 local government. By enhancing the valuation
systems and procedures in the local governments, the bill will allow us to move toward a
more rational land administration and management system that fully taps the potential of the
real property sector. In turn, 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 yood and transparent
governance, and increased public confidence.

In view of the foregoing, immediate passage of this

stly requested,


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

2368

HOUSE BILLNO.___“*

Introduced by : Cong. George P. Amaiz

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 shalt

(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; ant

(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.

(4) 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.

(@) 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.

(f) 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 (5)
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 Il
‘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
concemed 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;

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

(a) 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;

() 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)Perform such other functions as are necessary, proper and incidental to implement

the provisions 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 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
inthis 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;

(5) 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.

(0) 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 goverment 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,
ules 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;

(d) Coordination and consultation with regional offices of other government
departments, bureaus and agencies within the region dealing with real property valuation
and appraisal;

(@) Provision for leadership and policy direction in the area of real property valuation
and appraisal fo 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 goverment appraisers;

(6) 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,

(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 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; concems 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 concerned 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 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 after determination of the prevailing market value of these properties in
accordance with internationally 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, rules, 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 to the concemed sanggunian and the
provincial govemor 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 concemed 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 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 conduct public hearings and proper consultation, within sixty (60) days
from receipt thereof, after which it may enact the proposed ordinance; 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 concemed local chief executive to act on the ordinance within the
prescribed period shall render the same approved,

The approved ordinance, together with the SMY, shall be published by the concemed
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.

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 SMVs 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 (6) 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 concemed BLGF Regional Office and
recommendation by the BLGF Executive Director for approval by the Secretary of Finance
within ninety (80) 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
concerned 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
tegistry 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 province, 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

(©) 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.

‘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, 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 or temporary 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. However, in the
case of those holding temporary appointments, the local chief executive of the municipality,


Ue

city or province may issue a permanent appointment to the’Tneumbent, provided he meets
the minimum qualifications as provided for under RA 1Z60, otherwise known as the Local
Government Gode of, 1991, within a period of one year from the approval of this law;
Otherwise, eae shall be removed and can be replaced by the local chief executive
provided the applicant meets the minimum qualifications as provided for in this law.

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 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 conceals any de\ ion 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 goverment 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 (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. 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 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 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 Vil
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 concemed 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 Goverment Code of 1991", and other laws 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(g)(h)(), 201, 202,
209(a), 212, 214, 218 paragraph 1(b), 219, 220, 224(a), 443(d), 444(b)()(v), 454(d),
455(b)(1)(v), 483(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)(6), 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.

(0) All laws, presidential decrees, executive orders, presidential proclamations, rules
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,