DILG Legal Opinion No. 151-03

October 28, 2003 DILG LEGAL OPINION NO. 151-03 Ms. Evangeline L. Esperas Sangguniang Panlalawigan Member Provincial Capitol Building Tacloban City Dear Madam : This refers to your letter informing us of the controversial condonation ordinance enacted by the Sangguniang Panlungsod of Tacloban City, approved by the Vice-Mayor in his capacity as Acting Mayor, but which was later on vetoed by the City Mayor upon his reassumption to office after his leave of absence and within the 10-day period provided for by the Local Government Code for a local chief executive to approve or disapprove an ordinance. In addition, you alleged that the Acting Provincial Legal Officer of Leyte and the Department of Finance Secretary (actually, the Bureau of Local Government Finance Executive Director Presentacion Montesa, per document attached), opined that the condonation ordinance is ultra vires for reason that its basis for enactment does not fall under the grounds cited in Section 276 of the Code. Thus, you are requesting our opinion on the following queries, to wit: DTaSIc 1. Whether or not the condonation ordinance (City Ordinance No. 2002-8-120) of the Sangguniang Panlungsod of Tacloban City is an approved ordinance, considering that the de jure mayor vetoed it, but after the same was approved by the acting mayor; and 2. Whether or not the condonation ordinance is ultra vires . In reply to your first query, we are of the view that the condonation ordinance is already considered approved despite the veto made by the de jure mayor upon his reassumption. Section 456 of the Local Government Code provides for the powers of the City Vice-Mayor, thus: "SEC. 456. Powers, Duties and Compensation . (a) The City Vice-Mayor shall: 1. be the presiding officer of the sangguniang panlungsod and sign all warrants drawn on the city treasury for all expenditures appropriated for the operation of the sangguniang panlungsod; 2. subject to Civil Service law, rules and regulations, appoint all officials and employees of the sangguniang panlungsod, except those whose manner of appointment is specifically provided in this Code; 3. assume the office of the city mayor for the unexpired term of the latter in the event of permanent vacancy as provided for in Section 44, Book I of this Code; 4. exercise the powers and perform the duties and functions of the city mayor in cases of temporary vacancy as provided for in Section 46, Book I of this Code; and 5. exercise such other powers and perform such other duties and functions as may be prescribed by law or ordinance. . . ." Corollarily, Section 46 (a) of the Local Government Code provides that: "When the governor, city or municipal mayor, or punong barangay is temporarily incapacitated to perform his duties for physical or legal reasons such as, but not limited to, leave of absence, travel abroad, and suspension from office, the vice-governor, city or municipal vice-mayor, or the highest ranking sangguniang barangay member, shall automatically exercise the powers and perform the duties and functions of the local chief executive concerned, except the power to appoint, suspend or dismiss employees which can only be exercised if the period of temporary incapacity exceeds thirty (30) working days." Clearly, from the foregoing provisions of law, since the Acting Mayor can exercise all the powers appurtenant to the Office of the Mayor, except the power to appoint, suspend or dismiss employees which can only be exercised when the absence of the Mayor is more than thirty (30) working days, the Acting Mayor was well within his power and authority when he approved the condonation ordinance. The veto made by the de jure mayor may also be considered as fait accompli since the operative act of approval has already been exercised by the Acting Mayor. HTCDcS In the case of Gamboa vs. Aguirre (310 SCRA 867), the Supreme Court had already the occasion to recognize that when the Vice-Governor is now performing as Acting Governor, the latter is performing quasi-executive functions in such capacity, and he is not anymore allowed to continue presiding over the session in deference to the principle of separation of powers. On whether or not the condonation ordinance is ultra vires , please note that local ordinances, like national laws, enjoy the presumption of validity. As to whether or not an ordinance passed by the lower sanggunian is ultra vires , this is a question that should be threshed out in the higher sanggunian in the exercise of its power to review lower ordinances. In your case, the Sangguniang Panlalawigan's determination as to whether or not the ordinance is ultra vires , is binding. Be that as it may, it is with much regret to inform you that we refrain from answering the question on whether or not such ordinance is ultra vires because the attendant circumstances in passing an ordinance, including the wisdom of the legislative body, are matters that only the court can inquire into, especially that in this case, subject ordinance has already been approved. Wee hope we have enlightened you on the matter. CTHaSD Very truly yours, (SGD.) JOSE D. LINA, JR. Secretary Department of Interior and Local Government March 10, 2003 Jose D. Lina, Jr. Secretary DILG, Quezon City S I R : We have an interesting and important situation which could be another precedent case, the resolution of which shall enrich jurisprudence. Hence, once again, I seek your legal opinion on the following issues: First issue : Whether or not the condonation ordinance of the Sangguniang Panlungsod of Tacloban City is an approved ordinance, considering that the de jure mayor vetoed it, but after the same was approved by the acting city mayor. The facts of the case show that on Dec. 18, 2002 the Sangguniang Panlungsod of the city of Tacloban enacted Ordinance No. 2002-8-120, entitled "AN ORDINANCE CONDONING THE PENALTIES ON UNPAID REAL PROPERTY TAXES FOR 2002 AND PRIOR YEARS IN THE CITY OF TACLOBAN" ( please see Annex "A"). It was submitted to the office of the city mayor on Jan. 7, 2003 when the presiding officer/vice-mayor was the acting mayor of the city, and the city mayor was still out on leave (Christmas vacation and medical check-up). On Jan. 8, 2003 the said ordinance was approved by the vice-mayor in his capacity as the acting city mayor on said date. On Jan. 10, 2003, said ordinance was submitted to the Sangguniang Panlalawigan of Leyte for review. The incumbent city mayor arrived and resumed office and released his veto message to Ordinance No. 2002-8-120 ( please see Annex "B") on Jan. 13, 2003, well within the 10-day period provided by law for a mayor to approve or disapprove an ordinance. This mayor was known publicly to be not in favor of the city tax condonation ordinance even when said ordinance was still being hatched in the Sangguniang Panlungsod. The media and the public also were very explicit in their dislike/disapproval of the same. However, when the mayor's veto message was sent to the Sangguniang Panglunsod, the same was no longer considered by the legislative body simply because the ordinance was already approved by the Acting City Mayor and in fact, already submitted to the Sangguniang Panlalawigan of Leyte. The facts clearly point out that the subject ordinance was acted upon with dispatch because the Sangguniang Panglunsod knew the stand of the City Mayor regarding the ordinance. Second Issue : Whether or not City Ordinance No. 2002-8-120 entitled "AN ORDINANCE CONDONING THE PENALTIES ON UNPAID REAL PROPERTY TAXES FOR 2002 AND PRIOR YEAR IN THE CITY OF TACLOBAN" is ultra vires . The undersigned board member, in the review of the above ordinance, agrees with the opinion of the Acting Provincial Legal Officer, (please see Annex "C) especially that long before said ordinance was conceived by the city legislators, she already had the opportunity to consult the Dept. of Finance regarding the subject when resolutions coming from the six (6) pilot municipalities covered by the Land Management Program (LAMP) of the President of the Republic of the Philippines, were referred to the Committee on Rules, Laws & Privileges of which she is the chairperson. TcCSIa Despite the opinion of the Acting Legal Officer and the Finance Secretary, (please see Annex "D") the majority of the board members agreed with the Sangguniang Panlungsod. For them, the Sangguniang Panlungsod has absolute authority to grant tax exemption, incentives or reliefs under Sec. 192 of R.A. 7160. On the other hand, this representation sincerely believes that condonation of payment of surcharges, penalties on real property taxes is proper and valid only when the conditions provided under Sec. 276 in relation to Sec. 277 R.A. 7160 are met and complied with. A very important issue here is whether or not the Sangguniang Panlungsod of Tacloban City or the Sangguniang Panlalawigan of Leyte may condone surcharges, and penalties on real property taxes of previous years without the declaration by the local disaster coordinating council of a calamity or substantive failure of crops or decrease of agri-based products, pursuant to Sec. 276 of R.A. 7160. Your opinion on the matters above cited will greatly help the provincial board, especially the undersigned chairperson of the Committee on Rules in the resolution of the referred subjects on the condonation of surcharges, penalties on real properties of the 6 pilot municipalities covered by LAMP. At this juncture, perhaps it might be noteworthy to add, that this representation advised the LAMP to instead ask the Pres. of the Republic to issue executive order to condone previous real property taxes. May I express my gratitude and appreciation for your usual prompt response to this request. Sincerely yours, (SGD.) HON. EVANGELINE L. ESPERAS Board Member, 1st District of Leyte ANNEX-A ORDINANCE NO. 2002-8-120 AN ORDINANCE CONDONING THE PENALTIES ON UNPAID REAL PROPERTY TAXES FOR 2002 AND PRIOR YEARS IN THE CITY OF TACLOBAN Be it enacted by the Sanggunian Panglungsod, City of Tacloban, Philippines that: Section 1. This Ordinance shall be known as the 2002 TACLOBAN CITY TAX CONDONATION ON REAL PROPERTIES, which shall only cover the condonation of penalties, interests and surcharges for delinquent real property taxes for the year 2002 and prior years on residential, commercial, industrial and other classes of real property to include improvements thereon. Section 2. The tax condonation shall likewise apply the following: 1. Those real properties which are undeclared and subject to back taxes; 2. Those real properties which were declared delinquent and real estate taxes have not been paid as of December 31, 2002. Section 3. This condonation of penalties, interests and surcharges on unpaid real property taxes shall not apply to any of the following: 1. Real properties which have been disposed of at public auction to satisfy the real property tax delinquencies; AcISTE 2. Real properties which are the subject of pending cases in court for real property tax delinquencies; 3. Real properties with tax delinquencies, which are being paid pursuant to a compromise agreement Section 4. The condonation granted herein may be availed of only until March 31, 2003. Section 5. No public auction of delinquent real properties shall be held from January 1, 2003 to March 31, 2003, the period of effectivity of this ordinance. Section 6. In order to avail of the Tax Condonation Program: 100% condonation of all penalties and interest if all delinquent real property taxes are paid in full: 50% condonation if payment is only or 50% and 25% condonation if payment is only or 25%. Section 7. The Office of the City Treasurer is mandated to conduct a massive information for the enforcement of this ordinance. Section 8. All ordinances, resolutions, orders, issuances, rules and regulations or parts thereof which are inconsistent with the provisions of this ordinance are hereby repealed and/or modified accordingly. Section 9. This ordinance shall take effect on January 1, 2003. Section 10. For purposes of complying with the provisions of Section 511 of Republic Act 7160, otherwise known as the Local Government Code of 1991, a copy of this ordinance shall be posted at prominent places in the city for a minimum period of three (3) consecutive weeks and published once in a newspaper of general circulation in Tacloban City. ENACTED, December 18, 2002, with one (1) objection, Honorable Rufino Pacanan. I HEREBY CERTIFY to the correctness of the aforementioned ordinance. (SGD.) GUALBERTO V. MARTINEZ, JR. Secretary ATTESTED: (SGD.) EDWIN Y. CUA City Vice-Mayor & Presiding Officer APPROVED, JAN. 08, 2003 (SGD.) ROLANDO C. HIDALGO PEDRO B. PANIS Floor Leader Assistant Floor Leader (SGD.) NOFREDO C. LAGONOY (SGD.)WILSON S. UY Member Member (SGD.) MA. LOURDES A. GO-SOCO (SGD.) LITO * Member Member (SGD.) WILSON L. CHAN (SGD.) ARVIN V. ANTONIO Member Member (Objected) RUFINO A. PACANAN (SGD.) CRISTETA R. PEDROSA Member Member (SGD.) EDEN C. PINEDA (SGD.) EDWARD FREDERICK L. CHUA Member Member ANNEX-B 10 January 2003 THE HONORABLE MEMBERS Sangguniang Panlungsod Tacloban City Your Honors: In accordance with the provisions of the LGC are the powers and authority of the Office of the City Mayor, there are two functions that the Vice Mayor acting as Mayor cannot do or perform: (a) the authority to appoint, suspend, or dismiss employees which can only be exercised if the period of the temporary incapacity exceed thirty (30) working days, (Sec. 46 LGC); and, (b) the authority to approve an ordinance which should be presumed as prohibited by law because of its patent in consistency, and the obvious conflict of interest as well as that of delicadeza . Otherwise, it would be worse than a situation described in common parlance as " lutong macao ", so to speak, since it would give rise to a ridiculous and anomalous, situation, where the Vice Mayor presiding over the Sangguniang Panlungsod (SP) to enact an Ordinance, having ultimately the influential power and authority to break a tie in the voting thereof; and then, as in the instant situation , where the City Mayor is absent/on leave for more than 3 (but definitely less than 30) days, and the Vice Mayor automatically acts as City Mayor starting on the 4th day thereof; then, he causes the already enacted ordinance to be received by the Office of the Mayor while he is Acting Mayor, and he then signs the same as such Acting Mayor at the time. HScAEC This situation is seriously aggravated by the fact that the instant Tax Condonation Ordinance which is obviously ULTRA VIRES and outside the authority of the SP to enact, unless there is the presence of certain conditions and requirements provided for in the law, particularly Sec. 276, LGC, which condition of calamity and/or the requirement of a general failure of crops or a substantial decrease in the price of agricultural products which are stated therein, do not presently prevail nor are currently present in the City of Tacloban nor anywhere in the Province of Leyte. The undersigned was on leave not only because of the Holiday Season but also because of his periodic medical therapy re his multiple heart by-pass operation. And, for the Vice Mayor to obviously and wantonly take advantage of the situation by approving a patently ultra vires ordinance which he so indubitably helped to enact, is not only unethical but also illegal, since that power/authority is reserved to the actual City Mayor only, by virtue of Secs. 55 and 56 and carries with it the power of VETO. The Vice Mayor acting as Mayor cannot be expected to exercise the power of VETO for very obvious reason; thus, depriving the City Mayor to exercise the legitimate and, by its nature, a power germane only to his Office as City Mayor. It should also be noted that Secs. 55 and 56 (LGC) uses the term " Local Chief Executive " and not just "Mayor", and much less the term "Acting Mayor"; otherwise, if it was the intention of Congress or particularly of the principal author of the LGC, then the same could have been so specified considering the significance/implication of the same; especially so, since the principal author of said law, Sen. Aquilino Pimentel, has written a book on said LGC but never mentioned the above situation. Because of the above, THE UNDERSIGNED HEREBY FORMALLY DECLARE THAT HE VETOES THE CONDONATION ORDINANCE #2000-8-120 ON THE GROUND THAT IT IS ULTRA VIRES AND CONTRARY TO SEC. 276 OF THE LGC; and, to support this contention, but avoiding being repetitive, the undersigned is attaching herewith and is calling the unprejudiced and unbiased attention of the Members of the SP, to the legal opinion of the City Legal Office which was immediately requested by this Office upon receipt of the original copy of said Ordinance on 7 January 2002; and said opinion was actually read by the Vice Mayor when acting as Mayor on that very day, but who, in spite of the controversial situation that said ordinance has created, he (Vice Mayor) signed the same. Attached to the legal opinion of the City Legal Office are the official stance of the government offices herein concerned, as follows: 1. Reg. Director Bureau of Local Government Finance dated 3 December 2002 (Annex "A") 2. Exec. Director of the Bureau of Local Government Finance dated 18 September 2002 (Annex "B") 3. Former Exec. Sec. of Finance Edgardo Espiritu dated 17 November 1999 (Annex "C") 4. Presidential Memorandum Circular No. 153 dated 4 June 1992 (Annex "D") Furthermore, a perusal of the book of Atty. Floresita Flores on "Real Property Taxation," cited as an authority by the proponent of said controversial condonation ordinance, does not show her alleged statement that LGUs has absolute authority in their power to grant tax exemptions, incentives or reliefs ; on the contrary, as an alleged authority on taxation, she is precisely and constantly quoting circulars, memoranda and decisions of the DOF, which are all contrary to the substance of said Condonation Ordinance #2002-8-120. Finally, in view of the exercise of this VETO power, the undersigned hereby orders the City Treasurer to receive payments of real estate taxes, as a result of this alleged condonation, but to have a written annotation on the official receipts thereof, to the effect, that said payment is being received as under protest only and subject to the computed penalties thereon; and for the Office of the City Treasurer to start issuing warrants on levy against those who are delinquent in the payment of real estate taxes . Meanwhile, if the SP insists in recognizing the illegal and unethical approval by the Vice Mayor of the said ordinance, and will have the same be published within ten (10) days therefrom in accordance with Sec. 188, being a tax ordinance; or, if the SP validly gives cognizance of the herein VETO, but would STILL WANTONLY OVERRIDE THE SAME and, within ten (10) days thereafter, have the same published in accordance with the aforecited Sec. 188; then, in view of either of those expected acts of the SP, THE UNDERSIGNED IS HEREBY FORMALLY ANNOUNCING THAT HE AND CITY TREASURER ARE GOING TO APPEAL SAID ORDINANCE TO THE DEPARTMENT OF JUSTICE (DOJ) ON THE GROUND THAT IT IS ULTRA VIRES, BEING CONTRARY TO SEC. 276, LGC, AND NOT WITHIN THE AMBIT OF SEC. 192 WHICH IS ONLY FOR BUSINESS TAXES; since, in so far as real estate taxes are concerned it is specifically subject to the requirements/conditions provided for in Sec. 276 (which is being repeated herein for emphasis); and, for that matter, for the Office of the City Legal Officer to prepare and draft said Appeal for the joint signatures of the undersigned and the City Treasurer. cDaEAS Hoping for your reasonable reaction hereto, I remain. Very sincerely, (SGD.) ALFREDO J. ROMUALDEZ City Mayor ANNEX-C 2nd INDORSEMENT January 20, 2003 Respectfully returned to the Secretary, Sangguniang Panlalawigan of Leyte, the attached Ordinance No. 2002-8-120 of the Sangguniang Panlungsod of Tacloban, with the following comments and recommendation: 1. That subject Ordinance does not contain any provision of law, upon which its enactment was based; 2. That there being no specific legal basis, the Provincial Legal Office is of the opinion that its enactment was based on the general powers of the Sanggunian concerned, provided under Section 458, (2), (ii) of R.A. 7160, quoted hereunder for ready reference: "Section 458 (2), (ii) subject to the provisions of Book II of this code and applicable laws, and upon the majority vote of all the members of the Sangguniang Panglunsod, enact Ordinances levying taxes, fees and charges, . . . , and granting tax exemption, incentives or reliefs " 3. That worthy of note however, is the fact that subject power of the SP is SUBJECT TO THE PROVISIONS OF BOOK II of the code; 4. That under Book II of the code (R.A. 7160), are two (2) provisions regarding condonation of taxes and interests, on real properties namely Sections 276 and 277, Chapter 8; 5. That Sections 276 and 277 respectively are quoted hereunder for ready reference; "Section 276, Condonation or Reduction of Real Property Tax and Interest. In case of a general failure of crops or substantial decrease in the price of agricultural or agribased products, or calamity in any province, city, or municipality, the sanggunian concerned by Ordinance passed prior to the first (1st) day of January of any year and upon recommendation of the Local Disaster Coordinating Council, may condone or reduce, wholly or partially, The TAXES and INTEREST thereon for the SUCCEEDING year or years in the City or Municipality affected by the calamity." "Section 277 condonation or reduction of tax by the President of the Philippines. The President of the Philippines may, when public interest so requires, condone or reduce the real property tax and interest FOR ANY YEAR in any province or city or a municipality within the Metropolitan Manila area." 6. That from the provisions of Section 276, it is quite clear that condonation of Tax or Interest can only be done in case of general failure of crops, substantial decrease in the price of agricultural or agribased products, or calamity, upon recommendation of the Local Disaster Coordinating Council, for the SUCCEEDING YEAR; acHITE 7. That pursuant to the provisions of Section 277, property tax and interests may be condoned only by the President, when public interest so requires, FOR ANY YEAR, in any province, etc. . . ; 8. That since Ordinance No. 2002-8-120 speaks of condonation of Penalties, Interests and Surcharges on unpaid real property taxes for 2002 and PRIOR years, the legal office opines that the same may find legal basis on Section 277 in so far as the year of application is concerned. That the problem however, is that, under said section, it is only the President of the Republic that can make such condonation; 9. That in view thereof therefore, Ordinance No. 2002-8-120 of the SP of Tacloban is hereby recommended for the declaration of its INVALIDITY pursuant to Section 56 of R.A. 7160, FOR WANT OF LEGAL BASIS and therefore, ULTRA VIRES. (SGD.) ATTY. IMELDA G. NARTEA Acting Provincial Legal Officer 2nd Indorsement September 18, 2002 Respectfully returned to the ICO-Regional Director for Local Government Finance, Region VIII, 3rd Floor Tri-Star Building, 170 Avenida Veteranos St., Tacloban City his preceding 1st indorsement of August 7, 2002 concerning the attached letter dated July 18, 2002 of Hon. Evangeline L. Esperas, Board Member, 1st District of Leyte, requesting information on the grant of amnesty/condonation on payment of interest, penalties, and surcharges due on real properties relative to the launching of the Land Administration and Management Program (LAMP) in some pilot municipalities in the province. In this connection, it is informed that specifically Section 276 of the Local Government Code of 1991 provides the grounds upon which a local sanggunian through the enactment of an ordinance passed prior to the 1st day of January of any year, may condone or reduce, wholly or partially, the taxes and interest thereon for the succeeding year or years in a province, city or municipality affected by a calamity, general failure of crops or agribased products and upon the recommendation of the Local Disaster Coordinating Council. It will be noted that the real property tax is an imposition of the province, city, and municipalities within Metropolitan Manila Area 1 and the Fundamental Principles on Local Government Taxation dictates that "Taxation shall be uniform in each LGU. 2 Hence, the condonation being contemplated by the Local Advisory Group to real properties in the six (6) municipalities covered by the LAMP "in order to help the poor land owners obtain titles to their land in the quickest way possible" does not fall within the ambit of the aforecited grounds and does not adhere to general application, hence, the grant has no legal basis and should not be pursued. This Bureau concurs with the view expressed by that Office regarding the negative effect of the grant of condonation in the overall revenue generation program of the local government. ETHIDa (SGD.) PRESENTACION R. MONTESA Executive Director Footnotes 1. SECTION 232 (RA 7160). POWER TO LEVY REAL PROPERTY TAX. Province, city, or municipality within Metropolitan Manila Area may levy the annual ad valorem tax on real property such as land, buildings, machinery, and other improvements not hereinafter specifically exempted. 2. ARTICLE 219 (IRR). Fundamental Principles . The following fundamental principles shall govern the exercise of the taxing and other revenue-raising powers of LGUs; (a) Taxation shall be uniform in each LGU. The uniformity required is only within the territorial jurisdiction of a province, a city, a municipality, or a barangay. . . ."