Republic of the Philippines
HOUSE OF REPRESENTATIVES
EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 9572

INTRODUCED BY REPRESENTATIVE ANN K. HOFER

EXPLANATORY NOTE

This bill seeks to exempt from the income requirement set forth in Section 450 of
Republic Act No. 7160, as amended, otherwise known as the Local Government Code of 1991,
the capital towns of provinces without an existing city.

The Local Government Code requires the following prior to a municipality or a cluster

of barangays” conversion into a component city:

()_allocally generated average annual income of at least one hundred million pesos
(P100,000,000.00) for the last two (2) consecutive years based on 2000 constant
prices; and, either

(ii) a contiguous territory of at least one hundred (100) square kilometers, as
certified by the Land Management Bureau; or

(iii) a population of not less than one hundred fifty thousand (150,000) inhabitants.

Of the 81 provinces of the country, 27—or more than one third—do not have a city. Of
these 27 provinces, 18 satisfy either of the two other requisites. These provinces are: (1) Abra;
(2) Ifugao; (3) Mountain Province; (4) Apayao; (5) Nueva Vizcaya; (6) Quirino; (7)
Marinduque; (8) Occidental Mindoro; (9) Catanduanes; (10) Guimaras; (11) Northern Samar;
(12) Biliran; (13) Zamboanga Sibugay; (14) Compostela Valley; (15) Davao Occidental; (16)
Sarangani; (17) Sulu; and (18) Tawi-Tawi. At least 1.14 million inhabitants of these 18
municipalities may benefit from this income requirement exemption, should their
municipalities’ conversion to cities push through.

Converting municipalities or a cluster of barangays into a component city increases
their share from the revenues generated by the national government or the Internal Revenue
Allotment (IRA). This increased share from the government coffers allows the local
government to better finance basic services and fund projects. It serves as an impetus of
development and a financial equalizing mechanism. An increased share in the IRA helps the
local government engage in development activities, which ultimately translates to socio-
economic development for the people.

In view of the foregoing reasons, immediate approval of this m is earnestly
sought. Z,

y

K.\HOFER
Representative
2™ District, Zamboanga Sibugay


Republic of the Philippines
HOUSE OF REPRESENTATIVES
EIGHTEENTH CONGRESS,
First Regular Session

HOUSE BILL NO. 5572

Introduced by: REP. ANN K. HOFER

AN ACT
EXEMPTING FROM THE INCOME REQUIREMENT THE CAPITAL TOWN
OF A PROVINCE WITHOUT A CITY, AMENDING FOR THE PURPOSE
SECTION 450 OF REPUBLIC ACT NO. 7160, AS AMENDED, 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 450 of Republic Act No. 7160, as amended, otherwise known as
the Local Government Code of 1991, is hereby further amended to read as follows:

“Section 450. Requisites for Creation. — (a) A municipality or a cluster
of barangays may be converted into a component city if it has a locally generated
average annual income, as certified by the Department of Finance, of at least
One hundred million pesos (P100,000,000.00), for the last two (2) consecutive
years based on 2000 constant prices, and if it has either of the following
requisites:

() a contiguous territory of at least one hundred (100) square
kilometers, as certified by the Land Management Bureau; or

(ii) a population of not less than one hundred fifty thousand (150,000)
inhabitants, as certified by the [National Statistics Office]
Philippine Statistics Authority (PSA).”

Provided, That, {T}the creation thereof shall not reduce the land area,
population and income of the original unit or units at the time of said creation to
less than the minimum requirements prescribed herein.

Provided further, That the capital town of provinces where there are
no existing city shall be exempt from the prescribed income requirement.

(b) The territorial jurisdiction of a newly-created city shall be properly
identified by metes and bounds. The requirement on land area shall not apply
where the city proposed to be created is composed of one (1) or more islands.
The territory need not be contiguous if it comprises two (2) or more islands.


(c) The average annual income shall include the income accruing to the
general fund, exclusive of special funds, transfers, and non-recurring income.”

SEC. 2. All laws, decrees, orders, rules and regulations and other issuances or parts
thereof, inconsistent with the provisions of this Act, are hereby repealed or modified
accordingly.

SEC. 3. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in a newspaper of general circulation.

Approved,