December 13, 1996

DAR OPINION NO. 123-96

Mr. Luis G. De Castro, Jr.

#925 Zone 8

Bulan, Sorsogon

Dear Mr. De Castro:

This has reference to your letter seeking opinion on the queries posed therein, to wit:

1)        An untenanted 132-hectare land has been covered by CARP since 1994 and presently negotiations for VLT (70 has.) and VOS (28 has.) are underway. If the abovementioned properties are subsequently reclassified into industrial use (in 1996) by the Local Government Unit (LGU) through zoning ordinance, what will happen to DAR's CARP coverage?

2)        If a LGU reclassifies 300 hectares into industrial, can the DAR have the right to reduce it to 56 hectares only? Which will prevail LGU or DAR?

3)        What are the steps that an owner must take if his property formerly declared covered by CARP but is later on reclassified by the LGU into industrial?

4)        What effect will the subsequent reclassification of a piece of property have with regard to its valuation under CARP?

Anent your first query, coverage of landholdings under the Comprehensive Agrarian Reform Program are not affected by the subsequent reclassification of the subject property into industrial. Briefly, it does not place the landholding outside the purview of the CARP since it merely specify how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan. In other words, it merely allocates lands to different activities or classes of land uses, involved and enacted through the town planning and zoning process. It is not synonymous with conversion under Section 65 of R.A. 6657 for while the authority to reclassify is lodged with the local government units, the authority to convert remains with the DAR.

Moreover, Section 20 of R.A. 7160 (Local Government Code of 1991) expressly provides that agricultural lands distributed to agrarian reform beneficiaries pursuant R.A. 6657 (Comprehensive Agrarian Reform Law) shall not be affected by the said reclassification and the conversion of such lands into other purposes shall still be governed by Section 65 of said Act. Likewise paragraph (e) of the said section declares in an unequivocal terms that "nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. 6657.

Anent your second query, the DAR as the lead agency tasked to implement the Comprehensive Agrarian Reform Program of the government is vested with the authority to reduce the landholding reclassified by city or municipality if it exceeds the limits prescribed by law. Memorandum Circular No. 54 of the Office of the President dated July 8, 1993 prescribed the guidelines governing Section 20 of R.A. 7160 and limits the reclassification to certain percentage of the total agricultural land area at the time of the passage of the ordinance, to wit:

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

2)        For component cities and first to 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 R.A. 6657 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. However, 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 provided by law.

Obviously, the limitation is designed to prevent indiscriminate reclassification of the agricultural lands into non-agricultural uses to the detriment of the Comprehensive Agrarian Reform Program.

Anent your third query, landowners whose property has been formally declared covered by CARP but is later on reclassifies by the LGU into industrial can file an application for land use conversion with the DAR. Specifically, DAR A.O. 12, Series of 1994 paragraph VIII (copy attached) laid down the procedures in applying for land use conversion. Moreover, paragraph VI (e) of the said Administrative Order explicitly provides that no application for conversion shall be given due course if 1) the DAR has issued a Notice of Acquisition under the compulsory acquisition (CA) process: 2) Voluntary offer to sell (VOS), or an application for stock distribution covering the subject property has been received by DAR; or 3) there is already a perfected agreement between the landowner and the beneficiaries under Voluntary Land Transfer (VLT).

Anent your fourth query, the subsequent reclassification of the agricultural land into other uses produces no effect whatsoever on the valuation previously determined under CARP. As already discussed, reclassification per se is not enough to place the subject property outside the coverage of CARP because it does not change the current use of a piece of agricultural land into some other use. Such being the case, the valuation previously determined continues to have a binding force and effect unless the land has been declared as no longer suitable for agricultural purposes.

We hope to have clarified matters with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA