SEVENTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES. )
Second Regular Session ) .
o 18 §PR-3 P2200
SENATE enon &
S.B.No._ 1774

Introduced by Senator SONNY ANGARA

AN ACT
TO REDUCE THE COST OF DOING BUSINESS IN LOCAL GOVERNMENT UNITS
BY AMENDING CERTAIN PROVISIONS IN BOOK II OF REPUBLIC ACT 7160,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991

EXPLANATORY NOTE

One of the key objectives of the Local Government Code (Republic Act 7160)
was to provide LGUs greater means to create their own revenue sources. Over the
years and in a number of local governments, the pursuit of this objective has been in
conflict with attracting and maintaining private investment. Many private businesses
complain that the fees imposed by LGUs have raised the cost of doing business,
thereby reducing their profitability and their viability

LGUs unlikely impose high fees and charges with the intent of taxing businesses
out of existence. But in many cases, LGUs lack the guidance on how to fairly and
efficiently determine what should be imposed (fee or charge).

With this in mind, this bill mandates several national agencies—the Department
of the Interior and Local Governments (DILG), the Department of Budget and
Management (DBM), the Department of Finance (DOF) and the National Economic
and Development Authority (NEDA)—to outline clear guidelines in the setting of local
fees and charges, which LGUs should then incorporate in their impositions. Such
reform will raise LGU competitiveness and strike a healthy balance between revenue
generation and private business promotion.

In view of the foregoing, approval of this Bill is earnestly requested.

SONNY ANGARA



SEVENTEENTH CONGRESS OF THE ) ~
REPUBLIC OF THE PHILIPPINES. )
Second Regular Session ) 18 APR-3 P2200

ce

SENATE RECEIyi

$.B.No. 1774

Introduced by Senator SONNY ANGARA

AN ACT
TO REDUCE THE COST OF DOING BUSINESS IN LOCAL GOVERNMENT UNITS
BY AMENDING CERTAIN PROVISIONS IN BOOK II OF REPUBLIC ACT 7160,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 1310f Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, hereinafter referred to as the “Code”, is hereby amended

to read as follows:

“SEC. 131. Definition of Terms. - When used in this Title, the term:
(a) xxx
XxX

(9) [Charges F 3
property] “CHARGE” REFERS TO LIABILITY FOR SERVICES RENDERED
OR CONVENIENCES PROVIDED BY THE LGU, THE AMOUNT OF WHICH
SHOULD BE COMMENSURATE TO SUCH SERVICES AND CAPITAL
RECOVERY WHICH ENSURES CONTINUED DELIVERY;

(h) xxx

XxX

(|) “Fee” fj Ss i fixed—by a for the regulat *
inspection-of a—business—or-activity] REFERS TO A LIABILITY IMPOSED
FOR THE REGULATION OR INSPECTION OF A BUSINESS OR ACTIVITY



THE AMOUNT OF WHICH SHOULD BE COMMENSURATE TO THE
ADMINISTRATIVE COST OF REGULATION AND SURVEILLANCE:
(m) xxx

XxX"

SEC. 2. Section 147 of the Code is hereby amended to read as follows

“SEC. 147. MUNICIPAL Fees [and-Charges]. - The municipality may impose
and collect such reasonable fees [and-charges] on business and occupation
and, except as reserved to the province in Section 139 of this Code, on the
practice of any profession or calling, commensurate with the cost of
regulation, inspection and licensing before any person may engage in such
business or occupation, or practice such profession or calling AND SUBJECT
TO GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE ON THE
SETTING OF LOCAL FEES TAKING INTO CONSIDERATION THE
RECOVERY OF ADMINISTRATIVE COSTS.”

SEC. 3. Section 149 of the Code is hereby amended to read as follows:

“SEC. 149. Fishery (Rentals,) LICENSE Fees and RENTAL Charges. ~ (a)
Muricipalities shall have the exclusive authority to grant fishery privileges in
the municipal waters and impose rentals, fees or charges therefore in
accordance with the provisions of this Section.

(b) The sangguniang bayan may:

(1) Grant fishery privileges to erect fish corrals, oyster, mussel, or other
aquatic beds or bangus fry areas, within a definite zone of the municipal
waters, as determined by it AND LEVY RENTAL CHARGES FOR SAID
PRIVILEGE SUBJECT TO GUIDELINES TO BE PROVIDED BY THE
BUREAU OF LOCAL GOVERNMENT FINANCE OF THE DEPARTMENT
OF FINANCE, THE DEPARTMENT OF THE ENVIRONMENT AND
NATURAL RESOURCES, AND THE BUREAU OF FISHERIES AND
AQUATIC RESOURCES OF THE DEPARTMENT OF AGRICULTURE


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ON THE SETTING OF LOCAL CHARGES TAKING INTO
CONSIDERATION THE COSTS OF SERVICES FOR THE
ENVIRONMENTAL MAINTENANCE AND SUSTAINABILITY OF THE
MUNICIPAL WATERS COVERED BY THE PRIVILEGE: Provided,
however, That duly registered organizations and cooperatives of marginal
fishermen shall have the preferential right to such fishery privileges:
Provided, further, That the sangguniang bayan may require a public
bidding in conformity with and pursuant to an ordinance for the grant of
such privileges: Provided, finally, That in the absence of such
organizations and cooperatives or their failure to exercise their preferential
right, other parties may participate in the public bidding in conformity with
the above cited procedure.

(2) Grant the privilege to gather, take or catch bangus fry, prawn fry or
kawag-kawag or fry or other species and fish from the municipal waters by
nets, traps or other fishing gears to marginal fishermen free of any rental,
fee, charge, or any other imposition whatsoever.

(3) Issue licenses for the operation of fishing vessels of three (3) tons or
less for which purpose the sangguniang bayan shall promulgate rules and
regulations regarding the issuances of such licenses to qualified applicants
under existing laws AND LEVY FEES SUBJECT TO GUIDELINES TO BE
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE OF
THE DEPARTMENT OF FINANCE ON THE SETTING OF LOCAL FEES
TAKING INTO CONSIDERATION THE RECOVERY OF
ADMINISTRATIVE COSTS: Provided, however, That the sangguniang
concerned shall, by appropriate ordinance, penalize the use of explosives,
noxious or poisonous substances, electricity, muro-ami, and other
deleterious methods of fishing and prescribe a criminal penalty therefor in
accordance with the provisions of this Code: Provided, finally, That the
sanggunian concemed shall have the authority to prosecute any violation
of the provisions of applicable fishery laws.



oun

SEC. 4. Section 152 of the Code is hereby amended to read as follows:

“SEC. 152. Scope of Taxing Powers. - The barangays may levy taxes, fees
and charges, as provided in this Article, which shall exclusively accrue to
them:
(a) Taxes — On stores or retailers with fixed business establishments with
gross sales or receipts of the preceding calendar year of Fifty thousand pesos
(P50,000.00) or less, in the case of cities and Thirty thousand pesos
(P30,000.00) or less, in the case of municipalities, at a rate not exceeding one
percent (1%) on such gross sales or receipts.
(b) — [Service-Fees-of] Charges - Barangays may collect reasonable [fees
oF] charges for [services rendered in- connection with the regulation-of] the use
of barangay-owned properties or service facilities such as palay, copra or
tobacco dryers SUBJECT TO GUIDELINES TO BE PROVIDED BY THE
BUREAU OF LOCAL GOVERNMENT FINANCE OF THE DEPARTMENT
OF FINANCE ON THE SETTING OF LOCAL CHARGES TAKING INTO
CONSIDERATION THE RECOVERY OF, MAINTENANCE AND CAPITAL
REPLACEMENT COSTS.
(c) _ Barangay Clearance — No city or municipality may issue any license or
permit for any business or activity unless a clearance is first obtained from the
barangay where such business or activity is located or conducted. For such
clearance, the sanggunian barangay may impose a reasonable fee SUBJECT
TO GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE ON THE
SETTING OF LOCAL FEES TAKING INTO CONSIDERATION THE
RECOVERY OF ADMINISTRATIVE COSTS. The application for clearance
shall be acted upon within seven (7) working days from the filing thereof. In
the event that the clearance is not issued within the said period, the city or
municipality may issue the said license or permit.
(a) Other fees [and—Gharges] - SUBJECT TO GUIDELINES TO BE
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE OF
THE DEPARTMENT OF FINANCE ON THE SETTING OF LOCAL FEES
TAKING INTO CONSIDERATION THE RECOVERY OF ADMINISTRATIVE
COSTS, [F] The barangay may levy reasonable fees [and-charges]

4



(1) On commercial breeding of fighting cocks, cockfights and cockpits;
(2) On places of recreation which charge admission fees; and
(3) On billboards, signboards, neon signs, and outdoor advertisements.”

SEC. 5. Section 153 of the Code is hereby amended to read as follows:

“SEC. 153 [Service] OTHER Fees [or] AND Charges. - Local government
units may impose and collect such reasonable fees and charges rendered
SUBJECT TO GUIDELINES TO BE PROVIDED BY THE BUREAU OF
LOCAL GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE
ON THE SETTING OF LOCAL FEES AND CHARGES TAKING INTO
CONSIDERATION THE RECOVERY OF ADMINISTRATIVE, CAPITAL,
MAINTENANCE AND OTHER SERVICE DELIVERY COSTS.”

SEC. 6. Section 154 of the Code is hereby amended to read as follows:

“SEC. 154. Public Utility Charges. — Local government units may fix the
rates for the operation of public utilities owned, operated and maintained by
them within their jurisdiction SUBJECT TO GUIDELINES TO BE PROVIDED
BY THE BUREAU OF LOCAL GOVERNMENT FINANCE OF THE
DEPARTMENT OF FINANCE ON THE SETTING OF LOCAL CHARGES
TAKING INTO CONSIDERATION THE RECOVERY OF CAPITAL,
MAINTENANCE AND OTHER SERVICE DELIVERY COSTS.”

SEC. 7. Section 155 of the Code is hereby amended to read as follows:

“SEC. 155 Toll [Fees—or] Charges. - The sanggunian concerned may
prescribe the terms and conditions and [fix] SET the rates [for the imposition
of toll fees-of] ON charges IMPOSED for the use of any public road, pier, or
wharf, waterway, bridge, ferry or telecommunication system funded and
constructed by the local government unit concerned SUBJECT TO
GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE ON THE
SETTING OF LOCAL CHARGES TAKING INTO CONSIDERATION THE

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Cord saH ew

15
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17

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RECOVERY OF CAPITAL, MAINTENANCE AND OTHER SERVICE
DELIVERY COSTS: Provided, That no such toll [fees-of] charges shall be
collected from officers and enlisted men of the Armed Forces of the
Philippines and members of the Philippine National Police on mission, post
office personnel delivering mail, physically-handicapped, and disabled
citizens who are sixty-five (65) years or older.

When public safety and welfare so requires, the sanggunian concerned
may discontinue the collection of the tolls, and thereafter the said facility shall
be free and open for public use.”

SEC. 8. Repealing Clause. - Section 139 of Republic Act 7160 is hereby
repealed. All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 9. Separability Clause. — If, for any reason or reasons, any part of
provision of this Act shall be held unconstitutional or invalid, other parts or provisions

hereof which not affected thereby shall continue to be in full force and effect.

SEC. 10. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,