Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

House Bill No. 1623

Introduced by Representative KAREN HOPE F. GARCIA

EXPLANATORY NOTE

Taxation without representation, it is said, is tyranny. But no less inequitable is
representation without taxation.

Under the Local Goveriment Code of 1991, however, this situation obtains in the
case of component cities of provinces, which, while retaining the right to vote for
elective provincial positions, are not required to share in the burden of government by
way of taxation. Under the Section 271 of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, component cities — unlike municipalities — are not
required to share the proceeds of real property taxes with the province.

This is onerous for a number of reasons. First, a local govemment unit's being, or
conversion into, a component city does not relieve the province of its obligation to
maintain provincial infrastructure such as roads and bridges within that component city,
and its mandatory assistance to its barangays.

Second, a province is, under Section 16 of the same Code, mandated to protect
and uphold the general welfare of all its inhabitants, including those residing in
component cities, which do not, under present laws, share in the burden of government.

Third, it is onerous to municipalities, which, more often than not, are smaller and
less financially capable than component cities, and are ironically mandated to
exclusively share the burden of government within the province.

Clearly, Section 271 of the Local Government Code should be amended to
correct this onerous situation, by making component cities share, as they must, the

proceeds of real property taxes with the province.

Rep. KAREN HOPE F. GARCIA
3rd District, Province of Cebu

Thus, early passage of this bill is eamestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

‘TWENTIETH CONGRESS
First Regular Session

House Bill No. 162 3

Introduced by Representative KAREN HOPE F. GARCIA

AN ACT
GRANTING PROVINCES A SHARE IN THE PROCEEDS OF REAL PROPERTY
TAXES IMPOSED BY COMPONENT CITIES, AMENDING SECTION 271 OF
REPUBLIC ACT NUMBER 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 271 of the Local Government Code is hereby amended to
read as follows:

Sec. 271. Distribution of Proceeds. The proceeds of basic real property tax,
including interest thereon, and proceeds from the use, lease or disposition, sale or
redemption of property acquired at a public auction in accordance with the provision of
this Title by the province or city or a municipality within the Metropolitan Manila Area
shall be distributed as follows:

(a) In the case of provinces:
(1) Province — thirty-five (35%) shall accrue to the general fund;

(2) Municipality — forty percent (40%) to the general fund of the municipality where
the property is located; and

(3) Barangay — twenty-five (25%) shall accrue to the barangay where the property is
located.

{(b) In the case of cities:
(1) City — seventy percent (70%) shall accrue to the general fund of the city; and

(2) Barangay — thirty percent (30%) shall be distributed among the component
barangays of the cities where the property is located in the following manner:

(i) Fifty percent (50%) shall accrue to the barangay where the property is
located;

(ii) Fifty percent (50%) shall accrue equally to all component barangays of the
city; and]

(b) IN THE CASE OF COMPONENT CITIES AND CITIES WHOSE INHABITANTS
RETAIN THE RIGHT TO VOTE FOR ELECTIVE PROVINCIAL OFFICIALS:

(1) PROVINCE - THIRTY PERCENT (30%)SHALL ACCRUE TO THE PROVINCE;


(2) CITY — FORTY PERCENT (40%) TO The GENERAL FUND OF THE CITY;
AND

(3) BARANGAY — THIRTY PERCENT (30%) SHALL BE DISTRIBUTED AMONG
THE COMPONENT BARANGAY WHERE THE PROPERTY IS LOCATED IN
THE FOLLOWING MANNER:

(i) FIFTY PERCENT (50%) SHALL ACCRUE TO THE BARANGAY WHERE
THE PROPERTY IS LOCATED;

(ii) FIFTY PERCENT (50%) SHALL ACCRUE EQUALLY TO ALL COMPONENT
BARANGAYS OF THE CITY;

{(c)] (d) In the case of a municipality within the Metropolitan Manila Area:

(1) Metropolitan Manila Authority — thirty-five percent (35%) shall accrue to the
general fund of the authority;

(2) Municipality ~ thirty-five percent (35%) shall accrue to the general fund of the
municipality where the property is located;

(3) Barangays — thirty percent (30%) shall be distributed among the component
barangays of the municipality where the property is located in the following
manner:

(i) Fifty percent (50%) shall accrue to the barangay where the property is
located;

(ii) Fifty percent (50%) shall accrue equally to all component barangays of the
municipality

(c)IN_ THE CASE OF HIGHLY-URBANIZED CITIES AND INDEPENDENT
COMPONENT CITIES WHOSE INHABITANTS DO NOT RETAIN THE RIGHT TO
VOTE FOR ELECTIVE PROVINCIAL OFFICIALS:

(1) CITY - SEVENTY PERCENT (70%) SHALL ACCRUE TO THE GENERAL
FUND OF THE CITY;

(2) BARANGAY — THIRTY PERCENT (30%) SHALL BE DISTRIBUTED AMONG
THE COMPONENT BARANGAY WHERE The PROPERTY IS LOCATED IN
THE FOLLOWNG MANNER:

(i) FIFTY PERCENT (50%) SHALL ACCRUE TO THE BARANGAY WHERE
THE PROPERTY IS LOCATED;

(ii) FIFTY PERCENT (50%) SHALL ACCRUE EQUALLY TO ALL COMPONENT
BARANGAYS OF THE CITY;

[(@)] (e) The share of each barangay shall be released, without need of any further
action, directly to the barangay treasurer on a quarterly basis within five (5) days
afier the end of each quarter and shall not be subject to any lien or holdback for
whatever purpose.

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


Sec, 3. Separability Clause. If any provision of this Act is declared invalid, the
remainder of this Act or any provision not affected thereby shall remain in full force and
effect.

Sec. 4. Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general
circulation

Approved,