AN ACT AMENDING THE LAWS GOVERNING LOCAL GOVERNMENTS BY INCREASING THEIR AUTONOMY AND REORGANIZING PROVINCIAL GOVERNMENTS.

Case Overview and Summary

Summary of Republic Act No. 2264

Provisions on Local Government Budgets (Section 1):
- Provincial, city, municipal, and municipal district budgets shall be in full force and effect on the date fixed by the respective governing bodies, subject to certain conditions.
- Conditions include: (1) appropriated amount not exceeding estimated tax receipts/income, (2) provisions for statutory and contractual obligations, and (3) no salary higher than the maximum allowed by law.
- The Secretary of Finance has the power to review provincial and city budgets to ensure compliance with the conditions.
- The Provincial Treasurer has the power to review municipal and municipal district budgets to ensure compliance with the conditions.

Provisions on Taxation (Section 2):
- Chartered cities, municipalities, and municipal districts can impose municipal license taxes or fees on occupations, businesses, or privileges within their jurisdiction.
- They can collect fees and charges for services rendered.
- They can regulate and impose reasonable fees for services related to businesses, professions, or occupations within their jurisdiction.
- They can levy just and uniform taxes, licenses, or fees for public purposes.
- Municipalities and municipal districts cannot impose percentage tax on sales or taxes on articles subject to specific tax under the National Internal Revenue Code, except gasoline.
- Exclusions from local taxation are listed, such as residence tax, documentary stamp tax, taxes on certain businesses (e.g., printing and publishing), taxes on public utilities (except electric), taxes on forest products, taxes on estates and inheritances, taxes on income, taxes or fees for motor vehicle registration and driving licenses, customs duties, and taxes on banks, insurance companies, and franchise tax payers.
- The Secretary of Finance has the authority to suspend the effectivity of any tax ordinance deemed unjust, excessive, oppressive, or confiscatory within 120 days of its passage.

Additional Powers of Local Government Units (Section 3):
- Provincial Boards can: (1) appropriate money for the general welfare of the province and its inhabitants, (2) appropriate money for loans or aids to municipalities or municipal districts, (3) exercise the power of eminent domain for certain purposes (e.g., construction of roads, buildings, parks, water systems) upon favorable recommendation, (4) permit construction and maintenance of railways, conduits, and telephone lines across public property upon favorable recommendation and conditions, (5) create and define boundaries of barrios and sitios upon petition, and (6) change names of barrios, sitios, and public buildings upon recommendation and petition.
- Municipal Boards or City Councils can: (1) appropriate money for the general welfare of the city and its inhabitants, (2) authorize payment of uniforms for police forces, and (3) create, define boundaries, and change names of barrios, sitios, public buildings, and public streets within the city upon petition.
- Municipal Councils can: (1) create a legal division or office headed by an attorney-at-law as the municipal attorney, (2) appropriate money for the general welfare of the municipality or municipal district and its inhabitants, and (3) change names of public buildings and public streets within the municipality or municipal district.
- City Mayors and Municipal Mayors can grant permits to hold benefits for public and charitable purposes, except cockfighting and prohibited games of chance.
- Municipal Boards or City Councils and Municipal Councils can adopt zoning and subdivision ordinances or regulations for their respective cities and municipalities, subject to the approval of the Mayor.
- Provinces, cities, and municipalities can make purchases of materials, equipment, and supplies locally or elsewhere without going through the Bureau of Supply, subject to certain conditions (e.g., not exceeding maximum prices set by the Bureau of Supply, public bidding, certification of conformity with specifications).
- Provinces, cities, and municipalities can undertake and carry out public works projects financed by their funds or borrowed funds, under the supervision of the District Engineer (for provinces and municipalities) or City Engineer (for cities), without the intervention of the Department of Public Works and Communications.

Provisions on Provincial Vice-Governor and Succession (Sections 4-6):
- Every province shall have a provincial vice-governor elected in the same manner as the provincial governor and with the same qualifications.
- The vice-governor shall assume the office of provincial governor for the unexpired term in the event of a permanent vacancy.
- If the governor-elect dies before assumption of office or fails to qualify, the vice-governor-elect shall assume the office of provincial governor.
- In case of temporary incapacity of the governor, the vice-governor shall perform the duties and exercise the powers delegated by the governor in writing and receive the same salary as the governor.
- The vice-governor shall be entitled to per diems, allowances, and other privileges granted to members of the provincial board.
- The first provincial vice-governor shall be elected in the next general elections for provincial and municipal officers following the approval of this Act.

Provisions on City, Municipal, and Municipal District Vice-Mayor and Succession (Section 7):
- The vice-mayor shall assume the office of mayor for the unexpired term in the event of a permanent vacancy.
- If the vice-mayor is incapacitated or refuses to assume the office of mayor, the councilor who obtained the largest number of votes in the preceding local elections shall assume the office of mayor, and so on until the vacancy is filled.
- If the mayor-elect dies before assumption of office or fails to qualify, the vice-mayor-elect shall assume the office of mayor.
- In case of temporary incapacity of the mayor, the vice-mayor shall perform the duties and exercise the powers of the mayor, except the power to appoint, suspend, or dismiss employees.
- If the vice-mayor is temporarily incapacitated, the councilor who obtained the largest number of votes among the incumbent councilors in the preceding local elections shall perform the duties and exercise the powers of the mayor, except the power to appoint, suspend, or dismiss employees.
- These provisions do not apply to cities without elective mayors and/or vice-mayors.

Provisions on Effectivity of Appointments (Section 8):
- Appointments by provincial governors, city mayors, and municipal mayors shall become effective upon issuance and attestation by the provincial treasurer (for appointments by provincial governors and municipal mayors) or city treasurer (for appointments by city mayors).
- Provincial and city treasurers are deputized as deputies of the Commissioner of Civil Service for attesting appointments.
- Appointees shall be entitled to collect the fixed compensation once the appointment is attested.
- Temporary appointments to unclassified or emergency positions take effect immediately without attestation.
- Attested appointments shall be forwarded to the Commissioner of Civil Service for review within 10 days.
- If the Commissioner of Civil Service does not make any corrections or revisions within 180 days, the appointments are deemed properly made.
- Provincial and city treasurers shall be responsible for compensation received by appointees if appointments are attested contrary to civil service law, rules, and regulations.
- Provincial and city treasurers shall be under the supervision and control of the Commissioner of Civil Service for the attestation of appointments.

Other Provisions:
- All inconsistent laws, executive orders, administrative orders, and proclamations are repealed or modified accordingly, but existing rights shall not be abridged, modified, or affected (Section 9).
- Nothing in this Act shall deprive any province, city, municipality, or municipal district of any power currently enjoyed or exercised or diminish its autonomy (Section 10).
- If any part or section of this Act is declared unconstitutional, it shall not invalidate the other provisions (Section 11).
- Rules for the interpretation of the Local Autonomy Act are provided, including liberal construction of implied powers in favor of local governments, liberal interpretation of the general welfare clause, and governing of existing vested rights by the original terms and provisions of contracts (Section 12).
- This Act shall take effect upon its approval (Section 13).