Tan Venturanza Valdez 2704 Eat Tower Philippine Sock Exchange Cane Exchange Rad, Ortigas Center 1605 Pasig Cy Mero Moni Philipines PO. Box 12167 Ortigas Came Pst Ooo 1003 Pasig Cy, Mero Manila Philipines B on s2005 fa Vas inert sven EGUS 2 September 2015 SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION, INC. (“SADA”) avatar ot S* Floor Kalayaan Building DEVELOPERS ASSOCIATION 4 SOCIATION ING Dela Rose comer Salcedo Streets J o Legaspi Village, Makati City i Asem oe Sept 2 owe J ey ‘Attention; Ms. Armenia Ballesteros ‘National President Re: Request for Opinion Gentlemen: This refers to your query on whether lands which have been reclassified into non-agricultural uses by the local government unit (LGU) concerned are still required to go through the process of conversion or exemption by the Department of Agrarian Reform (DAR). Specifically, you ask: 1. Whether or not lands which have been reclassified into non- { agricultural uses by the LGU, not subject of a Notice of Coverage (NOC), should still go through the process of conversion or exemption by the DAR. 2. Whether or not the DAR still has authority to issue conversion and exemption orders after June 30, 2014. J. _LANDS RECLASSIFIED PRIOR TO JUNE 30, 2014, NT SUBJECT OF A NorIce OF COVERAGE, NEED NoT Go THROUGH THE PROCESS OF CONVERSION OR EXEMPTION BY THE DAR, At the outset, it would be helpful to clearly define what conversion and ‘exemption are, A. Conversion In Alarcon v, Court of Appeals’, the Supreme Court quoted and agreed with the definitions of conversion and reclassification, as contained in DAR ‘Administrative Order No. 01-99, to wit Conversion is different from reclassification. Conversion is the act of changing the current use of'a piece of agricultural land into some other use as approved by the Department of Agrarian "GR. No. 152085. July 8, 2003Reform. Reclassification, on the other hand, is the act of specifying how agricultural lands shall be utilized for non agricultural uses such as residential, industrial, commercial, as embodied in the land use plan, subject to the requirements and procedure for land use conversion, Accordingly, a mere reclassification of agricultural land does not automatically allow a landowner to change its use and thus cause the ejectment of the tenants. He has to undergo the process of conversion before he is permitted to use the agricultural land for other purposes. Conversion, then, is the act of changing the use of agricultural land into some other use, as approved by the DAR. The requirement of going through the conversion process was clarified by the Supreme Colrt in Ros v. Department of Agrarian Reform’, to wit: ‘After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian Reform Program, agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR However, agricultural lands already reclassified before the effectivity of Rep. Act No, 6657 are exempted from conversion, Thus, it is clear that lands reclassified before the effectivity of R.A. 6657 do not need to go through conversion, while lands reclassified after R.A. 6657 took effect have to go through said process. The question now with the expiration of the CARP on June 30, 2014 is, are lands reclassified by local government units prior to June 30, 2014 still required to go through the process of conversion by the DAR? To answer this question, the source of the DAR’s power to approve conversions of agricultural lands should be examined closely. In Department of Justice (DOL) Opinion No. 44 series of 1990, cited and. upheld by the Supreme Court in several cases, it was clarified by the DOJ that the authority of the DAR to approve conversion of agricultural lands only applied to conversions made after the effectivity of R.A. 6657. The DOJ also opined that even though the DAR’s power to approve or disapprove conversion of agricultural lands was mentioned only in Section 65 of R.A. 6657, which pertained to conversion effected after five years from the date of award to a farmer beneficiary, the intent of the law was to require conversion clearance from the DAR before any conversion of private agricultural lands to non- agricultural uses may be made, Thus: 2 GAR, No. 132477. August 31, 2005. » Section 65. Comversion of Lands. — After the lapse of five (5) years from its award, ‘when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its isposition: provided, thatthe beneficiary shall have fully paid his-obligation,While there is no specific and express authority given to DAR in the CARP law to approve or disapprove conversion of agricultural lands to non-agricultural uses, because Section 65 only refers to conversions effected after five years from date of the award, we opined that the authority of the DAR to approve or disapprove conversions of agricultural lands to non-agricultural uses applies only to conversions made on or after June 15, 1988, the date of effectivity of R.A. No. 6657, solely on the basis of our interpretation of DAR's mandate and the comprehensive coverage of the land reform program, Thus, we said: "Being vested with exclusive original jurisdiction over all matters involving the implementation of agrarian reform, it is believed to be the agrarian reform law's intention that any conversion of a private agricultural land to non- agricultural uses should be cleared beforehand by the DAR. ‘True, the DAR's ‘express power over fand use conversion is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will hhave a greater economic value for residential, commercial or industrial purposes. But to suggest that these are the only instances when the DAR can require conversion clearances ‘would open a loophole in the R.A. No. 6657, which every landowner may use to evade compliance with the agrarian reform program. Hence, it should logically follow from the said department's express duty and function to execute and enforce ‘the said statute that any reclassification of a private land as a residential, commercial or industrial property should first be cleared by the DAR.” Xxx, Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural lands covered by R.A, No. 6657 to non-agricultural uses, the authority of DAR to approve such conversions may be exercised from the date of the laws effectivity on June 15, 1988. This conclusion is based on iberal interpretation of RA. No. 6657 in the light of DAR’s mandate and the extensive coverage of the agrarian reform program, It appears clear then that the DAR’s authority to approve conversions of agricultural lands sprang solely from R.A. 6657 and is one that the DOJ opined ‘was merely an implied power of said agency in light of the DAR’s mandate to implement the CARP. The Supreme Court, in CREBA v, Secretary of Agrarian Reform’, agreed with DOS Opinion No. 44, series of 1990, on the * GR. No, 183409. June 18, 2010.characterization of said power of the DAR to approve conversion of agricultural lands, ‘What could be gleaned from the discussion above is the fact that the DAR’s power to approve conversion of agricultural lands is inextricably linked to the implementation of the CARP. The DAR, in essence, was impliedly given the authority to approve or disapprove conversion of agricultural lands because it is the agency tasked with implementing the CARP. Unless such authority was read into the law, the CARP could not have been fully implemented as landowners would in effect be indiscriminately given the license to convert the use of their land from agricultural to other uses, thus defeating the intent of the law. back to the question posed carlier, did the lapse of the period provided for in R.A. 9700 or the CARPER render ineffective the power of DAR to approve conversions of agricultural lands? RA 9700 clearly states that land acquisition and distribution by the DAR shall be completed by June 30, 2014, to wit: SEC. 7. Priorities. - ‘The DAR, in coordination with the Presidential Agrarian Reform Council (PARC) shall plan and program the final acquisition and distribution of all remaining unacquired and undistributed agricultural lands from the effectivity of this Act until June 30, 2014 xXx Land acquisition and distribution shall be completed by June 30, 2014 on a province-by- province basis. (emphasis ours) The provision quoted above is clear that the power of DAR to acquire and distribute lands ceased after June 30, 2014. It is essentially the same agricultural land acquisition and distribution scheme to qualified farmer beneficiaries that constitutes the whole program under the CARP ot R.A. 6657. Such function of the DAR having basically ceased (with a few exceptions), it could be said.then that the CARP itself expired on June 30, 2014. If we accept this view that the CARP has expired, then DAR’s authority to approve or disapprove conversions of agricultural lands has lost its legal basis. It should be remembered that DO! Opinion No. 44 series of 1990 which the Supreme Court quoted with approval, recognized that the authority of the DAR to approve or disapprove conversions of agricultural lands only became effective when the CARP took effect on June 15, 1988. Prior to such date, no DAR conversion clearance or order was required after a local government unit had reclassified an agricultural land. Thus, in CREBA y. Secretary of Agrarian Reform’, the Supreme Court again clarified the requirement of going to the DAR for approval of conversion, to wit: xxx this Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to 20 through the process of conversion, jurisdiction over which is * G.R. No. 183409. June 18, 2010.vested in the DAR. However, agricultural lands, which are already reclassified before the effectivity of Republic Act No {6657 which is 15 June 1988, are exempted from conversion. It bears stressing that the said date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority. (emphasis ours) Clearly then, DAR approval of land conversion is no longer required, after the CARP expired on June 30, 2014. This is true regardless of whether or not the land was reclassified by the LGU prior to June 30,:2014 provided that said land was not issued a Notice of Coverage prior td this date. The absence of a Notice of Coverage issued prior to June 30, 2014 is quite significant because this, ‘would mean that the land in question was never brought under the CARP’s ‘operation since proceedings pertaining to said landholding was never initiated while the law was in effect. If a Notice of Coverage was issued prior to June 30, 2014, the landholding would still be subject to the DAR’s authority pursuant to the latter’s mandate to continue implementation of the CARP with respect t0 pending cases or proceedings. This is provided for in Section 30 of the CARPER or R.A. 9700 which states: Section 30. Resolution of Case.- Any case and/or proceeding involving the implementation of the provisions of Republic Act ‘No. 6657, as amended, which may remain pending on June 30, 2014 shall be allowed to proceed to its finality and be executed even beyond such date. ‘Thus, with the expiration of its statutory power to acquire and distribute lands (save in certain instances), the DAR’s authority to approve conversions of agricultural lands has no more leg to stand on, B. Exemption Section 10 of R.A. 6657 specifies what types of land are exempt from the coverage of CARP. DAR Administrative Order (A.O.) 13 series of 1990 divides these exempt lands into two categories: I Legal Mandate ‘The general policy under CARP is to cover as much lands suitable for agriculture as possible. However, Section 10, R.A. 6657 excludes and exempts certain types of lands from the coverage of CARP, to wit: A. Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds andmangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, ‘government and private research and quarantine centers; and B. All lands with eighteen percent (18%) slope and over, ‘except those already developed. It is submitted that since the CARP is no* longer in effect, with the expiration of the period provided for in the CARPER (June 30, 2014), an exemption order is no longer necessary for lands reclassified by the LGU, whether or not said reclassification was done prior to the lapse of said period, provided that said land was not issued a Notice of Coverage prior to June 30, 2014, As earlier mentioned, the DAR’s authority to issue Notices of Coverage lapsed with the expiration of the CARP or the land acquisition and distribution mandate of DAR. An exemption clearance is, in essence, a confirmatory certification by the DAR that the land subject thereof is not covered by the CARP. With the expiration of the CARP and the concomitant lack of authority of the DAR to issue Notices of Coverage, the DAR’s power to issue an exemption clearance has been rendered superfluous. For what purpose should one seek ‘exemption when coverage is not even possible? Evidently, the only logical conclusion is that an exemption clearance from the DAR is no longer necessary for lands reclassified by the LGU, whether ‘or not done prior to June 30, 2014, as long as no Notice of Coverage was issued IL DAR.NO LONGER HAS THE POWER TO ISSUE CONVERSION ORDERS, AND OBTAINING AN EXEMPTION CLEARANCE FROM THE DAR Is SUPERFLUOUS In light of the above discussion, we answer your query pertaining 10 DAR’s authority to issue Conversion Orders after June 30, 2014 in the negative. Since the DAR’s power to approve or disapprove conversions of agricultural lands emanated solely from R.A. 6657 or the CARP, the expiration of the CARP necessarily brought with it the end of DAR’s authority to approve or disapprove conversions. Similarly for exemption clearances, there is simply no logical reason to seek confirmation of exemption from CARP coverage when the CARP itself has expired. Thus, going to the DAR to seek an exemption clearance will be a superfluityI CONCLUSION With the expiration of the CARP, the DAR’s power to issue conversion orders and exemption clearances, which is inextricably linked to its mandate to implement the CARP, may be said to have been seriously impaired, if not completely extinguished. We trust that the foregoing has been helpful. Should you have any questions thereon, please let us know. Very truly yours, RIO SI 0. E. VENTURANZA. ANN MARGARET K. LORENZO For therm