Officers, Qualifications, and Compensation
- No person may be appointed Chairman or member unless he is a natural born citizen, at least thirty-five years of age, and not related by affinity or consanguinity within the fourth civil degree to any landowner affected by the Act.
- The Chairman receives PHP 15,000 annual compensation.
- Each member receives PHP 12,000 annual compensation.
Administration’s Functions and Powers
- The Administration is responsible to:
- Conduct studies on land tenure problems nationwide, prepare over-all long range plans, and keep the President and Congress fully informed of program progress.
- Initiate immediate investigations in areas reporting land tenure difficulties and recommend appropriate action without delay.
- Inform the President and Congress of deficiencies of other government departments or agencies affecting land tenure reform implementation.
- Prepare a plan for systematic opening of virgin lands of the public domain for distribution to tenants, giving preference to tenants ejected by virtue of mechanization and to other landless citizens.
- Implement and carry out the expropriation and resale or lease of urban lands already authorized by existing laws.
- The Administration is authorized to:
- Purchase private agricultural lands for resale at cost to bona fide tenants or occupants; or, for abandoned estates where owners have been absent for the last five years, to private individuals who work the lands themselves and are qualified to acquire or own lands but do not own more than six hectares in the Philippines.
- Initiate and prosecute expropriation proceedings for acquisition of private agricultural lands for resale at cost, limited to private agricultural lands beyond:
- three hundred hectares of contiguous area if owned by natural persons, or
- six hundred hectares of contiguous area if owned by corporations.
- Expropriate land regardless of area where there is justified agrarian unrest.
- Prepare schedules of family-size farm units (not exceeding six hectares each) for different crops in different localities.
- Promulgate rules and regulations necessary for successful implementation of the Act.
Organizational Support and Government Assistance
- The Administration must have a Legal Staff, Technical Staff, and Financial Staff, appointed by the Administration, with compensation fixed by the Administration.
- The Administration appoints officials and employees subject to Civil Service rules and regulations, and fixes their compensation, duties, and employment-related rules, including standards and records.
- The Administration may call upon any department or agency of the Government for assistance and cooperation connected with its functions and powers.
Negotiable Land Certificates
- The President, upon recommendation of the Secretary of Finance and concurrence of the Monetary Board, may issue negotiable land certificates upon request of the Administration.
- The annual issuance is limited as follows: sixty million per year during the first two years, and thirty million per year during the succeeding years.
- Negotiable land certificates must be issued in denominations of PHP 1,000 or multiples of PHP 1,000.
- Certificates are payable to bearer on demand and presentation at the Central Bank.
- Certificates earn interest when presented for payment after specified periods from date of issue:
- After five years: 4% per annum
- After ten years: 4.5% per annum
- After fifteen years: 5% per annum
- Negotiable land certificates may be used to:
- Pay for agricultural lands or other properties purchased from the Government, provided the purchaser is not otherwise prohibited to own or hold agricultural lands under the Constitution.
- Pay for purchase of shares of stock or assets of industrial or commercial corporations owned or controlled by the Government.
- Pay all tax obligations of the holder, and any debt or monetary obligation of the holder to the Government or its instrumentalities/agencies, including the Rehabilitation Finance Corporation and the Philippine National Bank, provided payment of indebtedness is not less than 20% of the total indebtedness of the debtor.
- Serve as surety or performance bonds in cases where the Government may require or accept real property as bonds.
Negotiated Purchase of Private Agricultural Lands
- The Administration, acting for and on behalf of the Government, may negotiate to purchase any privately owned agricultural land when the majority of the tenants petition for such purchase.
- Upon receipt of the petition, the Administration must:
- Within 30 days, determine suitability for purchase based on petition information, notify petitioners and the landowner, and fix the date for preliminary negotiation.
- Within 60 days from preliminary negotiation, conduct investigations and technical surveys to determine title and real value, considering:
- prevailing prices of similar lands in the immediate area,
- soil conditions, topography and climate hazards,
- actual production,
- accessibility, and
- improvements.
- Within 90 days from preliminary negotiation, fix the date for final negotiation.
- Before fixing the date for final negotiation, the Administration must require tenants to form a cooperative affiliated with a government financing cooperative agency.
- The cooperative agency must deposit with the Administration an amount not exceeding 25% of the annual gross produce of the principal crop or crops based on the average of harvest of the three years immediately preceding the year the petition was filed.
- The deposit must be credited to the selling price to the tenants according to each tenant’s individual contribution.
- In negotiating purchase, the Administration must offer to pay the purchase price wholly in land certificates or partly in legal tender and partly in land certificates:
- Legal tender portion must not exceed 50% of the purchase price.
- The landowner may be paid by barter or exchange with residential, commercial, or industrial land owned by the Government, if the landowner desires and the Administration agrees.
- If the landowner is willing to accept payment wholly in land certificates, the Administration may include in the price the landowner all outstanding debts, evidenced in writing, of the tenants to said landowner.
- The resulting increase in price due to inclusion of those debts must be not more than 10% of the total cost of the land agreed upon in the negotiated sale.
Expropriation of Private Agricultural Lands
- The Administration may initiate and prosecute expropriation proceedings for acquisition of private agricultural land subject to the land limits in Section 6, paragraph (2) upon petition of a major of the tenants and only when the Administration is convinced:
- the land is suitable for subdivision into family-size farm units, and
- public interest will be served by acquisition.
- Expropriation is proper when either of these conditions exists:
- The landowner continues to refuse to sell after all efforts to negotiate have been exhausted.
- The landowner is willing to sell under Sections 11 and 12 but cannot agree with the Administration as to price and/or the manner of payment.
- The petition where the landowner refuses to sell must be filed in the manner and form prescribed by the Administration.
- Before initiating expropriation proceedings, the Administration must make one last effort to purchase by negotiated sale.
- After commencing the expropriation suit, the Administration may take immediate possession upon deposit of money (or certificate of deposit of a Republic of the Philippines depository) equal to the land value provisionally and promptly determined by the court, taking into account the factors in Section 12, paragraph (2), and such deposit is made with the court that has acquired jurisdiction under Section 3 of Rule 69 of the Rules of Court.
- After taking possession, the procedure on eminent domain in the Rules of Court must be followed.
- Pending judicial expropriation proceedings, the landowner must be given annually an allowance equal to net income from the land as shown by the landowner’s latest income tax return prior to institution of proceedings.
- The annual allowance must be approved by the court and must be deducted from the final compensation award.
- Final payment of just compensation must be wholly in cash unless the owner chooses to be paid wholly or partly in land certificates, in which case Section 15 applies.
- Upon filing of the petition under Sections 12 and 16, the landowner may not alienate any portion of the land covered by the petition except in pursuance of the Act, nor enter into any contract that defeats the purposes of the Act.
- No ejectment proceedings against any tenant or occupant of the land covered by the petition may be instituted or prosecuted until it becomes certain the land will not be acquired by the Administration.
Resale Conditions, Taxes, and Key Terms
- Resale contracts must include a condition, and Torrens titles of lands acquired and subdivided under the Act must be annotated, that the lands shall not be subdivided, sold, or transferred or encumbered without prior consent of the Administration and only to qualified farmers or tenants, or to government banking institutions or agencies.
- All land certificates issued under the Act are exempt from all forms of taxes.
- Amounts paid by the Government as purchase price for agricultural land acquired for resale to tenants under the Act are not considered income of the landowner concerned for purposes of income tax.
- Definitions established by the Act include:
- Agricultural lands: lands devoted to agricultural production, including farm home lots.
- Family-size farm units: farm land area not exceeding six hectares that permits efficient use of farm-family labor resources, considering supplemental labor needed for seasonal peak loads or during developmental and transitional stages of the family itself.
- “At cost”: purchase price plus 6% interest per annum for twenty-five years, comprising 1% per annum for administration expenses plus actual expenses for survey, subdivision and registration; the total divided into twenty-five equal installments is the annual cost to the tenant for twenty-five years.
Use by Veterans and Trust Funds
- Veterans of the Armed Forces of the Philippines and other government employees with backpay certificates from the Government are authorized to use those backpay certificates in payment of family-size farms acquired by authority of the Act.
- All collections from redistribution of lands acquired by the Administration, after deducting 1% for administration expenses and actual expenses for survey, subdivision and registration, must be kept in the National Treasury as a special trust fund exclusively for redemption of the land certificates and bonds issued under the Act.
- A sinking fund must be established so that total annual contributions, accrued at an interest rate determined by the Secretary of Finance in consultation with the Monetary Board, will be sufficient to redeem at maturity the land certificates and bonds issued under the Act.
- The sinking fund must be under the custody of the Central Bank, which must invest it in a manner approved by the Monetary Board, charge investment expenses to the sinking fund, and credit it with interest on investments and other income.
- A standing annual appropriation not exceeding PHP 20,000,000 is made from the general fund in the National Treasury to provide for the sinking fund and carry out the Act.
- An additional appropriation of PHP 100,000,000 is made out of the bond issue authorized under Republic Act Numbered One thousand to carry out the Act.
Appropriations, Organizational Transfer, Repeal
- For the fiscal year 1955–1956, PHP 300,000 is appropriated out of National Treasury funds not otherwise appropriated for salaries, per diems, traveling expenses, furniture, office supplies, and other Administration expenses; subsequent years’ Administration expenses are provided through corresponding annual general appropriation acts.
- Upon organization of the Administration, the Division of Landed Estates in the Bureau of Lands is abolished, and its functions, powers, duties, personnel, records, equipment, and balances of appropriation are transferred to the Administration.
- All acts or parts of acts inconsistent with the Act are repealed.
Effectivity
- Republic Act No. 1400 takes effect upon approval, which was September 9, 1955.