No tax ordinances without prior public hearing

SECOND DIVISION [ G.R. No. 217077, January 27, 2016 ] VICENTE O. TORNO, FOR HIMSELF AND IN BEHALF OF THE EMPLOYEES OF EASTERN BICOL MEDICAL CENTER, IN HIS CAPACITY AS PRESIDENT OF EBMC-EA, NANETTE G MOLINA, VERONICA M. ANGELES, JOCELYN T. MADERA, JUAN T. SICIO, NAIDAH SHAHEED S. RENDON, GILDA M. TANIEGRA, YOLANDA PALINO, AND DR. ELMER T. TATAD V. HONORABLE ARACELI B. WONG, IN HER CAPACITY AS GOVERNOR OF THE PROVINCE OF CATANDUANES, HONORABLE JOSE "BONG" TEVES, IN HIS CAPACITY AS VICE-GOVERNOR OF THE PROVINCE OF CATANDUANES, AND HONORABLE JORGE C. REYES, HONORABLE JOSE ROMEO R. FRANCISCO, HONORABLE GIOVANNI A. BALMADRID, HONORABLE NEL B. ASANZA, HONORABLE EDWIN T. TANAEL, HONORABLE LORENZO T. TEMPLONUEVO, JR., HONORABLE ARNEL B. TURADO, HONORABLE MARILYN T. TATEL, HONORABLE SHIRLEY A. ABUNDO, AND HONORABLE GREGORIO E. ANGELES, IN THEIR OFFICIAL CAPACITY AS MEMBERS OF THE SANGGUNIANG PANLALAWIGAN.

This Petition[1] seeks the reversal of the Regional Trial Court's October 13, 2014 Decision[2] dismissing the Petition for Declaratory Relief and/or Prohibition "for not being the proper remedies under the circumstances[,]"[3] and the February 27, 2015 Order[4] denying reconsideration.[5]

On January 17, 2014, petitioner employees of Eastern Bicol Medical Center filed before the Regional Trial Court a special civil action for declaratory relief and prohibition[6] questioning the validity of Provincial Ordinance No. 001-2010[7] entitled "An Ordinance Converting EBMC [Eastern Bicol Medical Center] Into A Provincial Economic Enterprise."[8] Petitioners filed the action after more than three (3) years into the Ordinance's implementation,[9] raising, among other things, public respondents' alleged lack of compliance with posting and publication requirements in passing the Ordinance.[10]

Before this court, petitioners reiterate their arguments on the Ordinance's invalidity, the Ordinance having been "enacted in the absence of publication, written notices [,] and compliance with [the] 10-day mandatory period and with [the] 3-Reading Rule."[11] They submit that "no committee report was submitted to show that the obligatory public hearings had been held."[12] They submit that the January 25, 2010 public hearing violated the 10-day rule, and respondents did not comply with the three-reading rule.[13]Petitioners pray that this court "annul Provincial Ordinance No. 001-2010 and prohibit the Honorable Governor from further enforcing the Ordinance for being patently illegal"[14] and "order the reversion of EBMC into its original state and reintegrating it into the fold of the provincial government."[15]

In their Comment[16] dated September 30, 2015, respondents counter that petitioners filed the improper mode of appeal in seeking a factual review from this court and raising questions such as whether publication and public hearing were conducted.[17] Respondents discuss the antecedent proceedings and mention, among other things, that the Sangguniang Panlalawigan's regular sessions held on January 20, 2010 and February 3, 2010 thoroughly discussed the matter of conversion, that public hearing took place on January 25, 2010, and that the Catanduanes Tribune published the Ordinance for three (3) consecutive weeks on August 18, 25, and September 2, 2010, as certified by the publisher.[18]

Respondents quote Section 2[19] of the Local Government Code on the thrust of decentralization, and this led to the creation of economic enterprises.[20] Section 18[21] of the Local Government Code specifically provides for the power to generate and apply resources.[22] Respondents also quote Article 47(b) of Administrative Order No. 270, or the Implementing Rules and Regulations of the Local Government Code, in that "[local government units] shall enjoy full autonomy in the exercise of their proprietary functions and in the management of their economic enterprises, subject to the limitations provided in the Code and other applicable laws."[23]

This court resolves to deny the Petition.

Petitions filed under Rule 45 of the Rules of Court can only raise questions of law.[24] The issue on whether respondents complied with the procedure for the approval of a revenue measure as provided under Sections 186[25] and 187[26] of the Local Government Code and its implementing rules and regulations involve a factual question.

In any event, the Local Government Code mandates local government units to be self-reliant.[27] Section 22 enumerates the local government unit's corporate powers, and this includes "full autonomy in the exercise of their proprietary functions and in the management of their economic enterprises, subject to the limitations provided in this Code and other applicable laws."[28]

Section 186 provides for its power to levy other taxes, fees, or charges, provided "[t]hat the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose."[29]

Petitioners admitted during pre-trial the nature and conduct of the January 25, 2010 public hearing.[30] Their Petition before the Regional Trial Court anchored on the alleged delay in their salary payments as a result of the enactment of the Ordinance converting the Medical Center into an economic enterprise.[31] The effects of this conversion on the efficiency of salary releases, the success or failure of its implementation, are policy questions outside of this court's jurisdiction.

The parties also admitted during trial that "the provisions of the ordinance in question are clear, hence, not vague and ambiguous[.]"[32] Assuming that grounds exist to question the validity of the Ordinance, pursuant to Section 187 of the Local Government Code, "any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice[.]" Petitioners only filed their action after more than three (3) years of the Ordinance's implementation.

WHEREFORE, this court resolves to NOTE the Comment and to DENY the Petition for failure to sufficiently show any reversible error in the assailed judgment to warrant the exercise of this court's discretionary appellate jurisdiction.

SO ORDERED. 

[1] Rollo, pp. 3-43. This Petition was filed pursuant to Rule 45 of the Rules of Court.

[2] Id. at 49-59. The Decision was penned by Presiding Judge Lelu P. Contreras of Branch 43, Regional Trial Court of Virac, Catanduanes.

[3] Id. at 59.

[4] Id. at 46-47.

[5] Id. at 47.

[6] Id. at 79, Petition for Declaratory Relief and/or for Prohibition.

[7] Id. at 125-140.

[8] Id. at 82, Petition for Declaratory Relief and/or for Prohibition, and 125, Provincial Ordinance No. 001-2010.

[9] Id. at 9, Petition, and 88, Petition for Declaratory Relief and/or for Prohibition.

[10] Id. at 101, Petition for Declaratory Relief and/or for Prohibition.

[11] Id. at 24, Petition.

[12] Id. at 30.

[13] Id. at 32.

[14] Id. at 40.

[15] Id.

[16] Id. at 672-692.

[17] Id. at 689.

[18] Id. at 682-683.

[19] LOCAL GOVT. CODE, sec. 2 provides:

SECTION 2. Declaration of Policy. - (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the national government to the local government units.

[20] Rollo, p. 676, Comment.

[21] LOCAL Govt. Code, sec. 18 provides:

SECTION 18. Power to Generate and Apply Resources. - Local government units shall have the power and authority to establish an organization that shall be responsible for the efficient and effective implementation of their development plans, program objectives and priorities; to create their own sources of revenue and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and which shall be retained by them; to have a just share in national taxes which shall be automatically and directly released to them without need of any further action; to have an equitable share in the proceeds from the utilization and development of the national wealth and resources within their respective territorial jurisdictions including sharing the same with the inhabitants by way of direct benefits; to acquire, develop, lease, encumber, alienate, or otherwise dispose of real or personal property held by them in their proprietary capacity and to apply their resources and assets for productive, developmental, or welfare purposes, in the exercise or furtherance of their governmental or proprietary powers and functions and thereby ensure their development into self-reliant communities and active participants in the attainment of national goals.

[22] Rollo, p. 677, Comment.

[23] Id.

[24] RULES OF COURT, Rule 45, sec. 1.

[25] LOCALGOVT. CODE, sec. 186 provides:

SECTION 186. Power To Levy Other Taxes, Fees or Charges. - Local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose.

[26] LOCALGOVT. CODE, sec. 187 provides:

SECTION 187. Procedure for Approval and Effectivity of Tax ordinances and Revenue Measures; Mandatory Public Hearings. - The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.

[27] LOCALGOVT. CODE, sec. 17(a).

[28] LOCALGOVT. CODE, sec. 22(d).

[29] LOCAL GOVT. CODE, sec. 186.

[30] Rollo, pp. 52 Regional Trial Court's Decision' and 445, Pre-trial Order.

[31] Id. at 52, Regional Trial Court's Decision, and 444-445, Pre-trial Order.

[32] Id. at 52, Regional Trial Court's Decision, and 445, Pre-trial Order.