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Section 20. Reclassification of Lands.

(a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to the third class municipalities, ten percent (10%); and

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657). otherwise known as "The Comprehensive Agrarian Reform Law", shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act.

(b) The President may, when public interest so requires and upon recommendation of the National Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue to prepare their respective comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided. That the requirements for food production, human settlements,

and industrial expansion shall be taken into consideration in the preparation of such plans.

(d) Where approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657. Fortich vs Corona Facts:

This pertains to the two (2) separate motions for reconsideration filed by herein respondent and the applicants for intervention, seeking a reversal of our April 24, 1998 Decision nullifying the so-called "win-win" Resolution dated November 7, 1997, issued by the Office of the President in O.P. Case No. 96-C-6424, and denying the applicants Motion For Leave To Intervene. The issue in this case stems from a proposed agroeconomic development of the disputed land which the province of Bukidnon and the municipality of Sumilao, Bukidnon intend to undertake. Expressing full support for the proposed project, the Sangguniang Bayan of Sumilao, Bukidnon on March 4, 1193 enacted Ordinance No. 24 converting or reclassifying the subject 144-hectare land from agricultural to industrial/institutional use. It was intended to provide an opportunity to attract investors, who can inject new economic vitality, provide more jobs and raise the income of its people. Bukidnon Provincial Board also supported the said project.

Issue: Whether or not the power of the local government units to reclassify lands is subject to the approval of the Department of Agrarian Reform (DAR)

Held: Local Government Units need not obtain the approval of the DAR to convert or reclassify lands from agricultural to non-agricultural use. It should be stressed that when the March 29, 1996 OP Decision was declared final and executory, vested rights were acquired by the herein petitioners, namely, the province of Bukidnon, the municipality of

Sumilao, Bukidnon, and the NQSR Management and Development Corporations, and all others who should be benefited by the said decision. The issue here is not a question of technicality but that of substance and merit. Whether the Sangguniang Bayan of Sumilao has the legal authority to reclassify the land into industrial/institutional use, the March 29, 1996 OP Decision has thoroughly and properly disposed the issue. Converting the land in question from agricultural to agro-industrial would open great opportunities for employment and bring about real development in the area towards a sustained economic growth of the municipality. Procedural lapses in the manner of identifying/reclassifying the subject property for agro-industrial purposes cannot be allowed to defeat the very purpose of the law granting autonomy to local government units in the management of their local affairs. Stated more simply, the language of Section 20 of R.A. No. 7160 is clear and affords no room for any other interpretation. By unequivocal legal mandate, it grants local governments units autonomy in their local affairs including the power to convert portions of their agricultural lands and provide for the manner of their utilization and disposition to enable them to attain their fullest development as self-reliant communities.

ROXAS & co. vs CA321 scra 106 FACTS: This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. T h i s C o n g r e s s p a s s e d R e p u b l i c A c t N o . 6 6 5 7 , t h e Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.Before the law's affectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL., petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL. On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion of the two haciendas.

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. On August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS (voluntary offer to sell) of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to nonagricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses. In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped. Despite the denial of the Voluntary Offer to sell withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico and Banilad. , through its President, Eduardo Roxas, reiterated its request to withdraw the VO Sover Hacienda Caylaway in light of the following:1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg.,Diliman, Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound for further agricultural development.2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the Department of Agrarian Reform], and the requisite public hearings.3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enactedby the Municipality of Nasugbu.4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator andDeputized Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has noobjection to the conversion of the lands subject of referenced titles to non-agricultural. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to nonagricultural. Petitioner urges the Court to take cognizance of the conversion proceedings and rule accordingly

ISSUE: WON the courts are in a better position to resolve petitioner's application for conversion of land. HELD : NO. Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily the agency possessing the necessary expertise on the matter he DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion is provided as follows: A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into nonagricultural uses," pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987.B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial and other land uses, pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987. "B. Section 5 (1) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial and other land uses. "C Section 65 of R. A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise empowers the DAR to authorize under certain conditions, the conversion of agricultural lands. "D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that action on applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units concerned, together with the National Land Use Policy, pursuant to R. A. No. 6657 and E. O. No. 129-A.

Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are nonagricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.

The failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the present, these farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land. The petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion.

DAR vs Sarangani G.R. No. 165547, January 24, 2007 Petitioner: DAR Respondents : Sarangani Agricultural Co Inc, ACIL Corporation, Nicasio Alcantara and Tomas Alcantara Ponente: Azcuna Facts: The Sangguniang Bayan of Alabel, Sarangani passed Resolution No. 97-08 adopting a 10 yearcomprehensive development plan of the municipality and its land use. On January 30, 1998, pursuant toMunicipal Zoning Ordinance No. 08, Series of 1997, and to accelerate the development and urbanization of Alabel, the Sangguniang Bayan of Alabel passed Resolution No. 98-03 reclassifying lots that were located withinthe builtup areas, based on the 1995-2005 Land Use Plan of the municipality, from agricultural to non-agricultural uses.Later, the Sangguniang Panlalawigan of Sarangani approved Resolution No. 98-018 or the the Ten-Year Municipal Comprehensive Development Plan (MCDP 1995-2205) and the Land UseDevelopment Plan and Zoning Ordinance of the Municipality of Alabel, Sarangani Per Resolution No. 97-08 andMunicipal Ordinance No. 97-08, S. of 1997 of the Sangguniang Bayan of A portion of the area involving376.5424 hectares, however, was covered by the CARP commercial farms deferment scheme.The Zoning Certification issued by the office of the Municipal Planning and Development Council (MPDC)showed that properties located at Barangay Maribulan, Alabel were among those reclassified fromagricultural and pasture land to residential, commercial institutional, light industrial and open space in the1995-2005 land use plan of Alabel.The respondent then field an application for land use conversion of certain parcels of land.Meanwhile, members of the Sarangani Agrarian Reform Beneficiaries Association, Inc. (SARBAI) sent a letter-petition to the DAR Secretary oppposing the application for land use conversion filed by SACI. SARBAI allegedthat its members were merely forced to sign

the waiver of rights, considering that the commercial farmdeferment period ended on June 15, 1998. Later, the PLUTC agreed to recommend the disapproval of a portionof a property which was still viable for agriculture. The conversion was deferred subject to the submission of certain requirements.Later, the DAR Secretary denied application for land use conversion.On November 9, 2000, DAR Secretary Horacio R. Morales, Jr. denied application for land useconversion. SACI appealed to the Office of the President. The Office of the President dismissed the appeal andaffirmed in toto the challenged DAR Orders. motion for reconsideration was denied, so they filedwith the Court of Appeals a petition for review raising substantially the same issues.The CA granted the petition and ordred DAR to issue a conversion order. As to the deferred portion, DARwas directed to expedite the processing and evaluation of application. I ssue: WON a notice of coverage is an indispensable requirement for the acquisition of land Held: No, Under the circumstances, a notice of coverage is not an indispensable requirement before DAR canacquire the subject lots or commercial farms, which are covered by a deferment period under theComprehensive Agrarian Reform Law (CARL) or R.A. No 6657 upon its effectivity on June 15, 1998 I ssue: WON the DAR should use the comprehensive land use plans and ordinance of the local sanggunian asprimary reference Held: Yes, Section 20 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991,empowers the local government units to reclassify agricultural lands. Memorandum Circular No. 54 Guidelines Governing Section 20 of R.A. No. 7160 Otherwise Known as the Local Government Code of 1991Authorizing Cities and Municipalities to Reclassify Agricultural Lands Into NonAgricultural issued byPresident Ramos on June 8, 1993 specified the scope and limitations on the power of the cities an