Bureau of Local Government Finance Opinion

December 27, 2006 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully referred, thru the Regional Director for Local Government Finance, Department of Finance, Region VI, 2nd Floor, Philippine Veterans Bank Building, Corner Valeria-Delgado Streets, Iloilo City, to the Provincial Assessor, Kalibo, Aklan, the within preceding Indorsement dated February 21, 2006, requesting opinion on whether or not a parcel of land can be reclassified from agricultural (irrigated riceland) to commercial/residential land merely upon a mere written request from the declared owner. The attached documents reveal the following: 1. The subject parcel of land with an area of 4,659 square meters located in Estancia, Kalibo, Aklan, was formerly declared as irrigated riceland in the name of Amado M. Fernandez under the attached Tax Declaration No. 04254, effective 1998; 2. On October 17, 2005, a Deed of Adjudication with Sale was executed by and between the Heirs of Amado M. Fernandez, which ceded, transferred and conveyed to Mary Avelyn S. Kelzenberg, the whole portions of the subject property together with all the improvements found thereon; 3. Resolution No. 97-106, series of 1997, of the Sangguniang Bayan of Estancia, approving the request of Virginia Cezar (Heir of Amado M. Fernandez) to reclassify the subject land covered by Lot No. 1462-F under TCT No. EP-88 from residential to commercial use; 4. Tax Declaration No. 05753 declaring the said land as commercial (2,000 sq.m.) and residential (2,659 sq.m.) in the name of Mary Avelyn S. Ketzenberg, effective 2006; and 5. Letter dated November 2, 2005 of Mr. Vicente I. Fernandez, representing the Heirs of Amado M. Fernandez, to that Office requesting reclassification of the said parcel of land from irrigated Riceland to commercial lot. Atty. Martelino further argued that even though the subject property was already reclassified as commercial/residential under Municipal Ordinance No. 2000-34 on July 20, 2000 based on the Municipality's Comprehensive Land Use Plan (CLUP), Section 65 of R.A. No. 6657 (Comprehensive Agrarian Reform Program), provides that "if an agricultural land is reclassified after June 15, 1988, the provisions on land conversion, will apply", hence a conversion clearance from DAR must be secured. Further, Atty. Martelino informed that the required Department of Agrarian Reform (DAR) conversion clearance was not secured by that office, in direct violation of BLGF Memorandum Circular No. 03-90 dated January 22, 1990, which is quoted below: "xxx xxx xxx. "The Department of Agrarian Reform (DAR) has issued the revised rules and procedures governing conversion of private agricultural lands to non-agricultural uses. Under said issuance, the authority to approve or disapprove conversion of any agricultural land for residential, commercial, industrial and other land uses as may be provided by law is exclusively vested upon the Department of Agrarian Reform (DAR). "In this connection, all Provincial, City and Municipal Assessors are hereby instructed that no change in actual use and corresponding reclassification of agricultural lands shall be effected in the records without proof or evidence of the approval by DAR of such conversion of the property. . . . . "xxx xxx xxx." Relatedly, paragraph D, Section 3, Chapter VIII of the newly revised Manual on Real Property Appraisal and Assessment Operations provides as follows, to wit: "SEC. 3. Land Use Planning. "xxx xxx xxx. "D. Conversion of Agricultural Lands to Non-Agricultural Uses "The Department of Agrarian Reform (DAR) is mandated to approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses pursuant to Section 4 (j) of E.O. No. 129-A, series of 1987. It is vested with the exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and other land uses. Action on applications for land use conversion on individual landholding shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units concerned, together with the National Land Use Policy pursuant to R.A. No. 6657 and E.O. No. 129-A. "1. The following may apply for conversion: "a. Owners of private agricultural lands or other persons duly authorized by the landowners. "b. Farmer-beneficiaries of the Agrarian Reform Program after the lapse of five (5) years from award, reckoned from the date of registration of their landholdings, and who have fully paid their obligations and are qualified under A.O. No. 07, Series of 1997 issued by DAR, or persons duly authorized by it. "c. Government agencies, including government-owned or controlled corporations. "This shall cover all private agricultural lands as defined herein regardless of tenurial arrangement and commodity produced. It shall also include all untitled agricultural lands and agricultural lands reclassified by LGUs into non-agricultural uses after June 15, 1988, pursuant to M.C. No. 54, Series of 1993 of the Office of the President and those proposed to be used for livestock, poultry and swine-raising. "2. The following criteria were adopted as bases for the approval of applications for conversion: "a. Agricultural lands classified or zonified for non-agricultural uses by LGUs and approved by the HLURB before June 15, 1988 shall be governed by DAR Administrative Order No. 6, Series of 1994. "b. Conversion may be allowed if at the time of the application, the lands are reclassified as commercial, industrial, residential or other non-agricultural uses in the new or revised town plans promulgated by the local government unit and approved by the HLURB or by the Sangguniang Panlalawigan (SP) after June 15, 1988 in accordance with Section 20 of R.A. 7160, as implemented by M.C. No. 54, and E.O. No. 72, Series of 1993 of the Office of the President. "c. If the city/municipality does not have a comprehensive development/land use plan and zoning ordinance duly approved by the HLURB/SP but the dominant use of the area surrounding the land subject of the application for conversion is no longer agricultural or if the proposed use is similar to, or compatible with the dominant use of the surrounding areas as determined by the DAR, conversion may be granted. "xxx xxx xxx." Clearly, reclassification by Assessors of agricultural land to non-agricultural uses shall be made based on the Comprehensive Land Use Plan (CLUP) and Zoning Ordinance duly approved by the Local Sanggunian concerned. If the LGU, however does not have the CLUP and Zoning Ordinance, conversion may still be granted provided the dominant use of the area is no longer agricultural. Stated differently, reclassification should be made only upon actual development/conversion of the area into either commercial, residential, industrial and other uses. It is worthwhile to note that this Bureau is in conformity with the intent of the LGUs in preparing their respective Comprehensive Land Use Plans (CLUPs) pursuant to Section 20 (c) of the Local Government Code of 1991 (R.A. 7160); and Article 41 of its Implementing Rules and Regulations (IRR) enacted through their respective Zoning Ordinances, which shall also be the basis for reclassification of agricultural lands, to non-agricultural uses. However, the subsequent reclassification arising from the conversion of agricultural lands to non-agricultural uses shall not be effected without the approval of DAR, as clearly stated under BLGF Memo Circular No. 03-90. On the issue that an administrative charge will be filed against those involved in the reclassification of the subject EP-covered land without the prior approval of the DAR, this Bureau emphasizes that the action by, among others, the Provincial Assessor of Aklan was in accordance with the Resolution passed by the Sangguniang Bayan of Estancia. Further, Section 472 (b) (1) of the Local Government Code of 1991 provides the following: "Section 472. Qualification, Powers and Duties. "xxx xxx xxx. "(b) The assessor shall take charge of the assessor's office, perform the duties provided for under Book II of this code and shall: "(1) Ensure that all laws and policies governing the appraisal and assessment of real properties for taxation purposes are properly executed; "xxx xxx xxx." Be guided accordingly. (SGD.) MA. PRESENTACION R. MONTESA Executive Director