Sources of Financing the Fund
- Fund sourced from two main revenues:
- Portion of taxes on Virginia-type cigarettes and duties on imported leaf tobacco.
- Additional real property tax.
Allocation of Taxes on Virginia-type Cigarettes and Duties on Imported Leaf Tobacco
- Entire collection from these taxes distributed as follows:
- Local governments receive their share in the inter-local revenue allotment.
- 1% retained by the Bureau of Internal Revenue for enforcement and collection expenses.
- Remaining balance divided: 10% to national Special Education Fund share, 40% to Philippine Virginia Tobacco Administration Tobacco Fund, 50% to National Government general fund.
Additional Real Property Tax Imposition and Proceeds Disposition
- Imposes an additional annual 1% tax on assessed real property value, with exemptions and maximum limits.
- Tax payable quarterly; basis for assessment per existing laws.
- Collections distributed:
- Municipal collections: 50% retained, 20% remitted to province, 30% to National Treasury for fund stabilization.
- City collections: 60% retained, 40% remitted for fund stabilization.
Creation and Composition of Local School Boards
- Establishes Provincial, City, and Municipal School Boards.
- Each board includes educational superintendent (chairman), local government representatives, treasurer, council members, and Parents-Teachers Association presidents or representatives.
- Duties of these officials in boards are non-delegable.
Functions of Local School Boards
- Determine annual budgetary needs following criteria and Secretary of Education approval.
- Apply for and receive shares of national fund allocations.
- Authorize disbursement of funds per approved budgets.
- Perform additional functions assigned by education bureaus.
- Serve without compensation; reimbursement for travel expenses allowed.
- Boards to meet regularly with quorum and specific vote requirements for budget approval.
Expenditure Rules and Prioritization of Special Education Fund
- Annual budget for expenditures must be prepared by August 15.
- Budgets approved by school boards are final unless appealed within 15 days.
- Uncovered needs forwarded to Department of Education for information.
- National Government fund share expenditures subject to appropriations law.
- Priority for fund allocation given to lowest classified municipalities, cities, and provinces, conditional on increased real property tax collections.
- Specific appropriations detailed for salaries, school repair, scholarships, printing plant, athletic meets, and education research.
Administrative Provisions
- Existing laws on real property tax assessment and collection apply to the additional tax.
Turnover and Release of Fund Collections
- Municipal or city treasurers retain local shares and remit portions due to provinces and National Government monthly.
- No diversion of funds permitted; strict adherence to allocation rules.
- Officials are ministerially duty-bound to release funds within fifteen days upon authorization.
Rulemaking Authority
- Secretary of Education and Secretary of Finance, with recommendations from relevant bureaus, shall promulgate implementing rules and regulations.
- Rules published in three newspapers and take effect fifteen days after publication.
Penal Provisions
- Failure or refusal to remit or release funds, or diversion of collections, punishable by fines up to 10,000 pesos, imprisonment up to six years, or both.
- Government officials involved subject to dismissal, disqualification from public office.
Separability Clause
- Invalidity of any part of the Act does not invalidate the remaining provisions.
Repealing Clause
- Repeals or modifies inconsistent laws, orders, or regulations.
Effectivity
- Act takes effect on January 1, 1969, except tax allocation provisions effective upon approval of the Act.