Bureau of Local Government Finance Opinion

June 10, 1999 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned, thru the Regional Director for Local Government Finance, Department of Finance, Region VII, 3rd Floor, Cebu Kang-ha Foundation Building, Corner Juan Luna and Lapu-lapu Streets, Cebu City, to the Municipal Assessor, Sta. Catalina, Negros Oriental, the within Resolution No. 98-53 enacted by the Sangguniang Bayan thereat, in effect, authorizing the Municipal Assessor, that municipality, to categorize, for taxation purposes, all lands within the approved Development Plan of the municipality and to change the tax declarations of the affected properties from agricultural to non-agricultural in accordance with the approved Zoning Ordinance. In a letter dated March 19, 1999, the Regional Director for Local Government Finance, Region VII, submitted that the "municipality of Sta. Catalina may categorize for taxation purposes, all lands within its approved development plan. However, regarding agricultural lands, its reclassification shall be done in accordance with Section 20 of R.A. No. 7160, as implemented by Memo Circular No. 54 and Executive Order No. 72, series of 1993 of the Office of the President with further reference to Administrative Order Nos. 6&7, of the Department of Agrarian Reform." Moreover, guidelines were prescribed by the Department of Finance (DOF) for the reclassification of lands from "agricultural to non-agricultural uses" under Local Finance Circular No. 1-98, copy enclosed, the pertinent portion of which is quoted hereunder: "In view of the foregoing provision of law, the following guidelines for the reclassification of lands are hereby prescribed: "xxx xxx xxx. "(b) In the case of Agricultural Lands : (1) Approval of the land conversion by the Department of Agrarian Reform (DAR) is necessary for the immediate and automatic reclassification even if the Local Government Unit (LGU) has enacted a Zoning Ordinance reclassifying such agricultural lands into other uses. SITCEA "(2) In the case where a local zoning ordinance has been duly enacted and no further DAR approval is required, the reclassification of such agricultural lands shall likewise be effected immediately and automatically by the assessor concerned as soon as appropriate notice of the reclassification of the Sanggunian; and certification from DAR that approval is no longer necessary, are officially presented/received by his Office." "(3) The provincial or municipal assessor may be called upon by the Sangguniang Panlungsod or the Sangguniang Bayan to testify on the present actual use of the land and its potential for substantially greater economic value for other purposes. To this end, the concerned local assessor shall incorporate in the tax mapping and real property identification and accounting system a systematic method by which the following agricultural lands may be readily identified, to wit: "a. all irrigated lands where water is available to support rice and other crop production; "b. all previously irrigated lands which, for whatever reason, is no longer accessed by a viable irrigation system or do not have sufficient source of water for rice and other crop production but are within area programmed for irrigation facility rehabilitation by the Department of Agriculture (DA) and the National Irrigation Administration (NIA); and "c. all irrigable lands already covered by irrigation projects with firm funding commitments at the time of the application for land use conversion." Accordingly, this Bureau concurs in the views expressed by the said Regional Director. In addition, it is important to emphasize hereon that in the reclassification of lands from "agricultural to non-agricultural" uses, the provisions of the abovementioned Local Finance Circular No. 1-98 should be applied. Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge