REPUBLICACTNo.1400

ANACTDEFININGALANDTENUREPOLICY,PROVIDINGFORANINSTRUMENTALITYTOCARRYOUTTHEPOLICY,ANDAPPROPRIATINGFUNDSFORITSIMPLEMENTATION.

Section1.Shorttitle.ThisActshallbeknownasthe"LandReformActof1955."

Section2.Declarationofpolicy.It is thedeclaredpolicyof theState tocreateandmaintainanagrariansystem which is peaceful, prosperous and stable, and to this end the Government shall establish anddistributeasmany familysize farms toasmany landlesscitizensaspossible through theopeningupofpublic agricultural lands and the division and distribution of private agricultural lands where agrarianconflictsexist,eitherbyprivatearrangementwiththeownersorthroughexpropriationproceedings.

THELANDTENUREADMINISTRATION

Section2.Creation and composition. For the purpose of carrying out the policy enunciated in thisAct,thereisherebycreatedaLandTenureAdministration,hereinaftercalledtheAdministration,whichshallbedirectly under the control and supervision of and responsible to the President of the Philippines. TheAdministrationshallconsistofaChairmanandtwomemberswhoshallbeappointedbythePresidentwiththeconsentoftheCommissiononAppointmentsandshallholdofficeforaperiodoffiveyears.Theymayberemovedforcauseorforincapacitytodischargethedutiesoftheiroffice.

Section 4.Qualifications and compensation of members. No person shall be appointed Chairman ormemberoftheAdministrationunlessheisnaturalborncitizenofthePhilippines,atleastthirtyfiveyearsofage,andnotrelatedbyaffinityorconsanguinitywithinthefourthcivildegreetoanylandownerwhomaybeaffectedbythisAct.

TheChairman shall receive an annual compensation of fifteen thousand pesos and themembers shalleachreceiveanannualcompensationoftwelvethousandpesos.

Section5.Functions.ItshallbetheresponsibilityoftheAdministrationto:

(1) Make studies on the land tenure problems throughout the Philippines, prepare overall longrangeplans to solve suchproblems, and keep thePresident and theCongressof thePhilippinesfullyinformedoftheprogressofthelandtenurereformprogram

(2) Initiate immediate investigation in areas reporting land tenure difficulties and recommendappropriateactionwithoutdelay

(3) Inform the President and the Congress of the Philippines of any deficiency of the otherdepartments or agencies of the Government in the implementation of legislation bearing on oraffectingthelandtenurereform

(4)Prepareaplanforthesystematicopeningofvirginlandsofthepublicdomainfordistributiontotenants,preferencetobegiventothosetenantswhoareejectedbyvirtueofmechanizationandtootherlandlesscitizensand

(5) To implement and carry out the expropriation and the resale or lease of urban lands alreadyauthorizedbyexistinglaws.

Section 6.Powers. In pursuance of the policy enunciated in section two hereof, the Administration isauthorizedto:

(1)Purchaseprivateagriculturallandsforresaleatcosttobonafidetenantsoroccupants,orinthecaseofestatesabandonedbytheownersforthelastfiveyears,toprivateindividualswhowillworkthelandsthemselvesandwhoarequalifiedtoacquireorownlandsbutwhodonotownmorethansixhectaresoflandsinthePhilippines

(2)Initiateandprosecuteexpropriationproceedingsfortheacquisitionofprivateagriculturallandsinpropercases,forthesamepurposeofresaleatcost:Provided,Thatthepowerhereingrantedshallapply only to private agricultural lands as to the area in excess of three hundred hectares ofcontiguousareaifownedbynaturalpersonsandastotheareainexcessofsixhundredhectaresifownedbycorporations:Provided, further, That landwhere justified agrarian unrest existsmay beexpropriatedregardlessofitsarea.

(3) Prepare a schedule of areas of familysize farm units, not exceeding six hectares each, fordifferentcropsindifferentlocalitiesand

(4)PromulgatesuchrulesandregulationsasmaybenecessaryforthesuccessfulimplementationoftheprovisionsofthisAct.

Section7.Appointmentofsubordinateofficialsandemployees.ToenabletheAdministrationtoimplementtheprovisionsofthisActmoreeffectively,itshallhaveaLegalStaff,aTechnicalStaffandaFinancialStaff,thepersonnelofwhichshallbeappointedbytheAdministrationwhichshallalsofixtheircompensation.

TheAdministrationshallappoint,subject toCivilService rulesandregulations, fix thecompensationanddetermine thedutiesof suchofficials andemployeesas theexigenciesof the servicemay require.TheAdministration shall establish and prescribe its own rules, regulations, standards and records for theemployment, promotion, transfer, welfare and compensation of employees and officers of theAdministrationandprovideasystemoforganizationtoforresponsibilityandpromoteefficiency.

Section 8. Assistance of other departments and agencies. The Administration may call upon anydepartmentoragencyoftheGovernmentforassistanceandcooperationonanymatterconnectedwiththefunctionsandpowersoftheAdministration.

NEGOTIABLELANDCERTIFICATES

Section9.Issuance.ThePresident,forthepurposesprovidedforinthisActanduponrecommendationoftheSecretaryofFinanceandconcurredinbytheMonetaryBoard,isherebyauthorizedtoissuenegotiableland certificates upon the request of the Administration:Provided, That only sixty million a year will beissuedduringthefirsttwoyears,andthirtymillioneachyearduringthesucceedingyears.

Negotiable land certificates shall be issued in denomination of one thousand pesos ormultiples of onethousandpesosandshallbepayabletobearerondemandandpresentationattheCentralBank.Thesecertificatesifpresentedforpaymentafterfiveyearsfromthedateofissueshallearninterestattherateoffour per centumper annum if presented for payment after ten years from the date of issue shall earninterestattherateoffourandonehalfpercentumperannumandifpresentedforpaymentafterfifteenyearsfromthedateofissueshallearninterestattherateoffivepercentumperannum.

Section10.Usesofcertificates.Negotiablelandcertificatesmaybeusedbytheholderthereofforanyofthefollowingpurposes:

(1) Payment for agricultural lands or other properties purchased from theGovernment: Provided,however,Thatinthecaseofpurchaseofagriculturallands,thepurchaserisnototherwiseprohibitedtoownorholdagriculturallandsundertheConstitution

(2) Payment for the purchase of shares of stock or of the assets of any industrial or commercialcorporationsownedorcontrolledbytheGovernment

(3)Paymentofalltaxobligationsoftheholderthereof,orofanydebtormonetaryobligationoftheholder to the Government or any of its instrumentalities or agencies, including the RehabilitationFinance Corporation and the Philippine National Bank: Provided, however, That payment ofindebtednessshallnotbelessthattwentypercentumofthetotalindebtednessofthedebtorand

(4)Assuretyorperformancebonds,inallcaseswheretheGovernmentmayrequireoracceptrealpropertyasbonds.

NEGOTIATEDPURCHASEOFPRIVATEAGRICULTURALLANDS

Section 11. Lands subject to the purchase. The Administration, acting for and on behalf of theGovernment,may negotiate to purchase any privately owned agricultural landwhen themajority of thetenantsthereinpetitionforsuchpurchase.

Section12.Actiononthepetition.Uponreceiptofthepetition,theAdministrationshall

(1) Within thirty days, determine on the basis of the information contained in the petition, thesuitabilityofthelandforpurchase,notifythepetitionersandthelandowneraccordingly,andfixthedateforpreliminarynegotiation

(2)Withinsixtydaysfromthepreliminarynegotiation,conductinvestigationsandtechnicalsurveystodetermine title to the landand its realvalue, taking intoaccount (a) theprevailingpricesofsimilarlands in the immediate area, (b) the soil conditions topography and climate hazards, (c) actualproduction,(d)accessibility,and(e)improvementsand

(3)Fix,withinninetydaysfromthepreliminarynegotiation,thedateforfinalnegotiation.

Section13.Depositbytenants.Beforefixingthedateforfinalnegotiationundersectiontwelve,paragraph(3),andintheinterestofpublicwelfare,theAdministrationshallrequirethetenantstoformacooperativeto be affiliatedwith a government financing cooperative agency. Such cooperative agency shall depositwith theAdministrationanamountnotexceeding twentyfivepercentumof theannualgrossproduceofthe principal crop or crops of such land on the basis of the average of harvest of the three yearsimmediatelyprecedingtheyearthepetitionwasfiled.Thisdepositshallbecreditedtothesellingpricetothetenantsinaccordancewiththeindividualcontributionofeachtosaiddeposit.

Section14.Payment.Innegotiatingforthepurchaseofagriculturalland,theAdministrationshalloffertopay the purchase price wholly in land certificates or partly in legal tender and partly in landcertificates:Provided,Thattheamounttobepaidinlegaltendershallinnocaseexceedfiftypercentumofthepurchaseprice:Provided,further,Thatthelandowner,ifhedesiresandtheAdministrationsoagrees,maybepaid,bywayofbarterorexchange,withsuchresidential,commercialorindustriallandownedbytheGovernmentasmaybeagreeduponbytheparties.

Section 15.Outstanding debts of tenants. In cases where the landowner is willing to accept paymentwhollyinlandcertificates,theAdministrationisauthorizedtoincludeinthepricetobepaidthelandownerall theoutstandingdebts,evidenced inwriting,of thetenants tosaid landowner, theAdministrationtobethereafterreimbursedinaccordancewithsuchrulesandregulationsasitmaypromulgate:Provided,Thattheresultingincreaseinpricebyvirtueofsuchinclusionwillnotbemorethantenpercentumofthetotalcostofthelandagreeduponinthenegotiatedsale.

EXPROPRIATIONOFPRIVATEAGRICULTURALLANDS

Section16.Whenproper.TheAdministrationmayinitiateandprosecuteexpropriationproceedingsfortheacquisitionofprivateagriculturallandsubjecttotheprovisionsofsectionsix,paragraph(2),uponpetitionofamajorityofthetenantsandafteritisconvincedofthesuitabilityofsuchlandforsubdivisionintofamilysize farm units, and that public interest will be served by its immediate acquisition, when any of thefollowingconditionsexists:

(1)That the landowner fallingwithin thetermsofsectionsix,paragraph(2),continuestorefusetosellafteralleffortshavebeenexhaustedbytheAdministrationtonegotiateforitspurchaseor

(2)ThatthelandowneriswillingtosellundersectionselevenandtwelvebutcannotagreewiththeAdministrationastothepriceand/orthemannerofitspayment.

Section17.Petition.Thepetition, incasethe landownerrefusestosell,shallbefiled inthemannerandform to be prescribed by the Administration. However, before initiating expropriation proceedings, theAdministrationshallmakeonelastefforttopurchasethelandbynegotiatedsale.

Section 18.Possession of the land procedure. The Administration after commencing the expropriationsuit may take immediate possession of the land upon deposit, with the Court which has acquiredjurisdictionovertheexpropriation,ofmoneyoracertificateofdepositofadepositoryoftheRepublicofthePhilippinesasprovidedinsectionthreeofRule69oftheRulesofCourtequaltothevalueofthelandasprovisionally and promptly determined by the Court taking into consideration the factors mentioned insectiontwelve,paragraph(2).

Thereafter the procedure in the Rules of Court with respect to eminent domain proceedings shall befollowed.Pendingjudicialexpropriationproceedingstheownerofthelandsoughttobeexpropriatedshallbegivenannuallysuchallowanceashislatestincometaxreturn,priortotheinstitutionoftheproceedings,shows to be his net income from the land. Such allowance shall be approved by the court havingjurisdictionandshallbedeductedfromthefinalamountawardedascompensationtotheowner.

Section19.Payment.Afterthecourthasmadeafinaldeterminationofthejustcompensationforthelandexpropriated, it shallbepaidwholly incashunless the landownerchooses tobepaidwhollyorpartly inlandcertificates,inwhichcasesectionfifteenshallapply.

Section20.Prohibitionagainstalienation.Uponthefilingofthepetitionreferredtoinsectionstwelveandsixteen, the landowner cannot alienate any portion of the land covered by such petition except inpursuanceoftheprovisionsofthisAct,orenterintoanyformofcontracttodefeatthepurposesofthisAct,andnoejectmentproceedingsagainstanytenantoroccupantofthelandcoveredbythepetitionshallbeinstitutedorprosecuteduntilitbecomescertainthatthelandshallnotbeacquiredbytheAdministration.

GENERALPROVISIONS

Section21.Resaleof landspurchasedorexpropriatedsubject tocondition.It shall bea condition in allresalecontractsandannotatedontheTorrenstitlesoflandsacquiredandsubdividedbyauthorityofthisActthatsaidlandsshallnotbesubdivided,soldorinanymannertransferredorencumberedwithoutpriorconsentoftheAdministrationandonlytoqualifiedfarmersortenantsortogovernmentbankinginstitutionsoragencies.

Section22.Exemptionfromtax.AlllandcertificatesissuedbyauthorityofthisActshallbeexemptfromallformsoftaxes.ThepurchasepricepaidbytheGovernmentforanyagriculturallandacquiredforresaletotenants under the authority of this Act, whether through negotiation or expropriation, shall not beconsideredasincomeofthelandownerconcernedforpurposesoftheincometax.

Section23.Definitionofterms.ForthepurposesofthisAct,thefollowingtermsaredefinedasfollows:

(1)Agriculturallandsshallmeanlandsdevotedtoagriculturalproductionandshallincludethefarmhomelots.

(2) Familysize farm units shall mean such area of farm land not exceeding six hectares as willpermittheefficientuseofthelaborresourcesofthefarmfamily,takingintoaccounttheadditionofsuch supplementary labor as may be necessary either for seasonal peak loads or during thedevelopmentalandtransitionalstagesofthefamilyitself.

(3)Atcostshallmeanthepurchasepriceplussixpercentinterestperannumfortwentyfiveyearswhich includes theonepercentperannum foradministrationexpenses,plusactualexpenses forsurvey, subdivision and registration. The total, divided into twentyfive equal installments, shall betheannualcosttothetenantfortwentyfiveyears.

Section24.Paymentoffamilysizefarmssoldtoveteransandothergovernmentemployees.VeteransoftheArmedForcesof thePhilippinesandothergovernmentemployeeswithbackpaycertificates fromtheGovernmentareherebyauthorized touse theirbackpaycertificates inpaymentof familysize farms thatmaybeacquiredbythembyauthorityofthisAct.

Section25.Trustfund.Allcollectionsfromtheredistributionof the landsacquiredbytheAdministration,after deducting the one per cent for administration expenses and the actual expenses for survey,

subdivision and registration, shall be kept in the National Treasury as a special trust fund to be usedexclusivelyfortheredemptionofthelandcertificatesandbondsissuedbyauthorityofthisAct.

Section26.Sinkingfundappropriation.Asinkingfundshallbeestablishedinsuchmannerthatthetotalannual contribution thereto, accrued at such rate of interest asmay be determined by theSecretary ofFinance in consultation with the Monetary Board, shall be sufficient to redeem at maturity the landcertificatesandbondsissuedunderthisAct.SaidfundshallbeunderthecustodyoftheCentralBankforwhich shall invest the same in such manner as the Monetary Board may approve shall charge allexpenses of such investment to said sinking fund and shall credit the same with the interest oninvestmentsandotherincomebelongingtoit.

AstandingannualappropriationnotexceedingtwentymillionpesosisherebymadeoutofthegeneralfundintheNationalTreasurytoprovideforthesinkingfundcreatedinthissectionandtocarryintoeffectthepurposesofthisAct.

Inaddition, there isherebyappropriatedoutof thebond issueauthorizedunderRepublicActNumberedOnethousand,thesumofonehundredmillionpesostocarryouttheprovisionsofthisAct.

Section 27.Appropriation for the Administration. There is hereby appropriated out of any funds in theNationalTreasurynototherwiseappropriated,thesumofthreehundredthousandpesosforsalaries,perdiems, traveling expenses, furniture, office supplies and other expenses that may be incurred by theAdministrationforthefiscalyear19551956.TheexpensesoftheAdministrationforthesucceedingyearsshallbeprovidedforinthecorrespondingannualgeneralappropriationacts.

Section 28. Transfer of functions of the Division of Landed Estates, Bureau of Lands. Upon theorganization of the Administration, the Division of Landed Estates in the Bureau of Lands shall standabolished and its functions, powers and duties, personnel, records, equipment and balances ofappropriationshallthereuponbetransferredtothesaidAdministration.

Section29.Repealoflaws.AllactsorpartsofactswhichareinconsistentwiththeprovisionsofthisActareherebyrepealed.

Section30.Effectivity.ThisActshalltakeeffectuponitsapproval.

Approved:September9,1955