Bureau of Local Government Finance Opinion

August 13, 2014 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 3rd Indorsement Respectfully returned to the Regional Director, Bureau of Local Government Finance, Region IV-B (MIMAROPA), Batangas City, the herein 2nd Indorsement dated July 7, 2014, requesting clarification and/or further instructions on the 1st Indorsement dated May 23, 2014 of the OIC-Regional Director, Department of the Interior and Local Government (DILG), Region IV-B, relative to the letter dated May 15, 2014 of Honorable Jose Ildefonso M. Maliwanag, Municipal Mayor, Municipality of Mansalay, Province of Oriental Mindoro. The said letter of Mayor Maliwanag, requested, among others, opinion on the following subject matters: 1. . . .; 2. Whether the Municipality has the power/authority to amend the Revised Revenue Code of 2011 to enable it to charge cargo ship companies with Environmental User's Fee (EUF) or any other similar fees; HTcADC 3. What kind of fees can the Municipality impose upon contractors of nationally-funded infrastructure projects? That Office opined and held that said LGU can rightfully adjust the Environmental User's Fee provided that such adjustment, being a regulatory concern of the LGU, should commensurate only to the cost of such regulation. However, on the possibility of basing such FEE or CHARGE on the "volume of their respective loads", the same may already constitute a violation of Sections 130 (b) (4) and 133 (e) of the Local Government Code of 1991. As regards to Item No. 3, that Office recommends that before said LGU can issue (or collect) Development Permit Fee on Contractor, details on the same should first be required in order to establish the liabilities the Contractors should settle with the said Municipality before it starts any development. In view of the foregoing, this Bureau confirms with your opinion and recommendation on the adjustment of EUF and collection of Development Permit Fee of the Municipality of Mansalay, Oriental Mindoro. However, it is suggested that before any fee or charge can be collected, it should be levied by an Ordinance duly enacted for the purpose. Therefore, the Municipality of Mansalay thru the Sangguniang Bayan thereat may enact the necessary ordinances for the collection of the said fees, provided, however, requirements under Sections 187 and 188 of the LGC shall have to be complied with. It bears emphasis that the conduct of public hearing is mandatory and without such will nullify ab initio any amendatory ordinance enacted by the Sangguniang Bayan of Mansalay, Oriental Mindoro. aScITE It is hoped that this will help clarify matters. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director