QuestionsQuestions (Republic Act No. 1400)
Its short title is the “Land Reform Act of 1955.” The State policy is to create and maintain an agrarian system that is peaceful, prosperous, and stable by establishing and distributing as many family-size farms to as many landless citizens as possible through opening public agricultural lands and dividing/distributing private agricultural lands where agrarian conflicts exist, either by private arrangement or through expropriation.
The Land Tenure Administration (the “Administration”) is created to carry out the policy. It is directly under the control and supervision of, and responsible to, the President of the Philippines.
They are appointed by the President with the consent of the Commission on Appointments, and hold office for five years. They may be removed for cause or incapacity to discharge their duties.
He must be a natural-born citizen, at least 35 years old, and not related by affinity or consanguinity within the fourth civil degree to any landowner who may be affected by the Act.
Among others: conduct nationwide studies on land tenure problems; prepare long-range plans and report progress to the President and Congress; initiate immediate investigations in areas with land tenure difficulties; inform the President/Congress of deficiencies of other agencies; prepare a plan for opening virgin public agricultural lands (preferring ejected tenants by mechanization and other landless citizens); and implement expropriation and resale/lease of urban lands authorized by existing laws.
It may: (1) purchase private agricultural lands for resale at cost to bona fide tenants/occupants, or in abandoned-estates cases to qualified individuals not owning more than six hectares; (2) initiate and prosecute expropriation to acquire private agricultural lands for resale at cost—limited by area thresholds (excess of 300 hectares for natural persons; excess of 600 hectares for corporations), except that land with justified agrarian unrest may be expropriated regardless of area; (3) schedule family-size farm units not exceeding six hectares; and (4) promulgate rules and regulations for implementation.
Limits: up to 60 million per year for the first two years, and 30 million per year for succeeding years. Interest: none on presentation within five years; 4% per annum if presented after five years; 4.5% per annum after ten years; and 5% per annum after fifteen years.
They may be used to: (1) pay for agricultural lands or other properties purchased from the Government (with constitutional ownership limitations respected for agricultural lands); (2) pay for purchase of shares/assets of government-owned or controlled industrial/commercial corporations; (3) pay the holder’s tax obligations and certain government debts/monetary obligations, with a rule that payment of indebtedness shall not be less than 20% of total indebtedness; and (4) serve as surety/performance bonds when required/accepted by the Government, with real property as bonds.
When acting for and on behalf of the Government, it may negotiate to purchase any privately owned agricultural land if the majority of the tenants therein petition for the purchase.
Within 30 days, the Administration determines suitability for purchase, notifies petitioners and landowner, and sets the date for preliminary negotiation. Within 60 days from preliminary negotiation, it conducts investigations and technical surveys to determine title and real value using listed factors (prevailing prices, soil conditions/topography/hazards, actual production, accessibility, and improvements). Within 90 days from preliminary negotiation, it sets the date for final negotiation. Before final negotiation, tenants must form a cooperative affiliated with a government financing cooperative agency that deposits up to 25% of annual gross produce of principal crop(s) based on the average of harvest of the prior three years.
Payment may be wholly in land certificates or partly in legal tender and partly in land certificates. The amount paid in legal tender cannot exceed 50% of the purchase price. The Act also allows barter/exchange of certain government-owned lands if agreed.
If the landowner is willing to accept payment wholly in land certificates, the Administration may include the tenants’ outstanding debts evidenced in writing to the landowner. The resulting increase in price due to such inclusion must not exceed 10% of the total agreed cost of the land.
The Administration may expropriate upon petition of a majority of tenants and after it is convinced the land is suitable for subdivision into family-size farm units and that public interest will be served, where: (1) the landowner (within Section 6(2) terms) continues to refuse to sell after all efforts to negotiate have been exhausted; or (2) the landowner is willing to sell under negotiated purchase provisions but cannot agree with the Administration on price and/or manner of payment.
After commencing the expropriation suit, the Administration may take immediate possession upon deposit with the court a money/certificate deposit equal to the value of the land as provisionally determined by the court. Pending judicial expropriation, the landowner receives annually an allowance based on his latest income tax return showing net income from the land, approved by the court, and this allowance is deducted from the final compensation.
The landowner cannot alienate any portion of the covered land except pursuant to the Act, nor enter into contracts to defeat the Act’s purposes. No ejectment proceedings against any tenant/occupant covered by the petition may be instituted or prosecuted until it becomes certain the land will not be acquired by the Administration.
Resale contracts must include a condition, and the Torrens titles must be annotated, that the lands may not be subdivided, sold, transferred, or encumbered without prior consent of the Administration and only to qualified farmers/tenants or to government banking institutions/agencies.
Section 22 exempts all land certificates from taxes and provides that purchase price paid by the Government for agricultural land acquired for resale to tenants is not considered income of the landowner for income tax purposes. Section 23 defines “agricultural lands,” “family-size farm units” (max six hectares), and “at cost” (purchase price plus 6% per annum for 25 years including 1% per annum for administration expenses plus survey/subdivision/registration expenses, payable via 25 annual installments). Section 25 creates a special trust fund in the National Treasury from collections after deducting admin expenses and survey/subdivision/registration expenses, used exclusively for redemption of land certificates and bonds issued under the Act.