12 August 2011 LAW ON PUBLIC CORPORATIONS LECTURE ATTY.

AGRA
Parts 7-8

Power to legislate is the power to enact amend ordinances or resolutions

Is this power constitutional or statutory? If you examine 1987 constitution, there will be sectoral reps in
local legislative bodies, therefore it can be implied that power to legislate is a constitutional power. But this
can also be an express power because of the term local legislative bodies.
The local councils perform quasi-judicial powers when they hear and impose penalty on erring official of
supervised local government units
Extent of congressional control congress would have the power over the process over local legislative
process.
Can a local government unit conduct sessions once a week? Can congress say than rather meet on MondayTue every week? No, violative of local government code the code is specific on how many times regular
sessions should be conducted in a given week
Is the power to legislate exclusive to local councils? No, the people themselves have the power to amend,
enact and repeal in the exercise of power of initiative and referendum
How do we characterize this power? Delegated by the constitution. Characterized by subordinate
legislation.
Another form of characterization denominated legislation proper procedure must be followed and
derivative legislation ultimately power derived from people

Two presumptions on local legislation

1. substantive all ordinances are presumed valid and constitutional
2. procedural Sanggunian presumed to have acted regularly in enactment ordinances and issuance or adopt
resolutions
Substantive tests for Valid ordinances
1. ordinance must not contravene constitution
2. must not be inconsistent with statutes
3. must not discriminate
4. must not be unreasonable
5. not contrary to public policy
6. must not prohibit trade

What is the effect of a void act? Zoomzat case void legislative act does not confer any right nor vest any
privilege. There is one instance wherein void legislative act can produce legal effects after an ordinance is
approved by mayor and after it has been published it will take effect after last day of publication could be
reviewed by higher councils and void such ordinance during that time from effectivity of ordinance until
voided that particular ordinance operates - operative fact rule
Zoomzat case case pertains to franchise given by council

Ordinances and resolutions distinction

1. ordinances equivalent to law
2. resolutions expression of sentiments or opinions
3. ordinances public in character
4. resolutions private in character
5. ordinance permanent in character
6. resolutions are temporary
7. GR: ordinances must undergo three readings. Save in instances wherein the council by unanimous vote
dispenses
8. Resolutions undergo two readings
9. Ordinances subject to veto however there are only 2 resolutions subject to veto and review: LOCAL
DEVELOPMENT PLANS AND PUBLIC INVESTMENT PROGRAM

Budget is ordinance because of public character

Tax ordinance not resolution
Development plan either resolution or ordinance form
Honoring dragon boat team depends pure expression of recognition resolution, if accompanied by
monetary reward special appropriations it must be in ordinance form
Persona non-grata - resolution
Eminent domain ordinance form because governmental in character and LGC says that it must come in
ordinance form

Why is it important to distinbguish between ordinance and resolution

1. For legality purposes if not ordinance form and if law requires ordinance to be in ordinance form measure
would be illegal. Example: eminent domain must be in ordinance form
2. In terms of process whether to subject to veto and review

all ordinances are subject to veto of local chief executive and subject to review authority by higher
reviewing body

Contracts
What are the requirements for contracts
1. signed by local chief executive
2. signed on behalf of local government unit if not signed then party to contract not local government unit
but chief executive so if theres breach, it will be the officer not LGU who will be liable
3. there must be prior authorization by sanggunian concerned
4. contract must be posted at a conspicuous place

Must authorization be definite insofar as terms? It need not be definite. It may confer broad authority to the
local chief executive
Is the requirement for prior authorization applicable to filing of suits? No, local chief executive can file a
case without securing prior authorization from the council
A contract with no prior authorization is considered unenforceable contract since unenforceable it may be
ratified

How would it be ratified?

1. non-repudiation by council
2. if local government would enjoy benefits of contract
Procedure on legislation

1.
2.
3.
4.
5.
6.
7.

No section in 1991 LGC which outlines process. We can only find process in the implementing rules
and regulations:
theres a sponsor who will file bill, it will be referred for first reading referred to committee will
deliberate and file report
2nd reading interpellation and amendments
3rd reading final form
transmittal to local chief executive who may in turn approve or veto ordinance
publication and posting
takes effect
reviewed by higher LGU
provincial ordinances are not subject to review
veto is not available in barangay level because punong barangay is member of sangguniang barangay
Local councils They can only act and deliberate business in session. Cannot conduct any business outside
a session.
Verbal concurrence is a flawed concurrence because council can act only through ordinances and
resolutions

Regular session v. special session

Regular sessions once a week for provinces, cities, municipalities, twice a month for barangays
Special session as needs arise
Regular session pre-scheduling and frequency taken in internal rules of council
Special session called by chief executive or council
Both sessions open to public
Regular session no need for notice before session
Special session not prescheduled, there must written notice given 24 hours and personally served of
notice
Regular session agenda set in internal rules
Special sessions agenda set in written notice
Vice local chief executive
Barangay -0 presided by punong barangay
Regular councilors for provinces and cities divided into districts

Ex officio members for cities and municpalites from barangay and from sangguniang kabataan
For provincial councils additional ex officio member coming from councilirrs coming from component cities and
mun
All require sectoral reprsenatives have yet to elect
Quorum basis all those elected and qualified including those absent
Voting
Voting majority vote
Voting either 1/3 or 2/3
Can a local government unit provide for 2/3 vote for all ordinances? No, because violative of subordinate
legislation of ordinances however LGU can provide for higher voting requirement for specific ordinance
Casino case the local government unit said that for it to amend a zoning ordinance there must be a 2/3
vote: SC said local government units are in best position to address concerns. The higher voting
requirement is set only for particular ordinance not for all ordinances
Effectivity of ordinances
When does an ordinance take effect? Does it take effect upon approval of council or chief executive, upon
posting or upon review? Takes effect upon last day of posting of publication requirement hence between
effectivity and time declared illegal that ordinance will take effect based on operative fact rule
All ordinances and resolutions must be posted in full
Huc and icc only the main feature is published in local newspaper or in newspaper of general circulation
Other lgus publication not required unless penal sanction
Number of readings
3 day rule only in irr not in law and therefore can sangguunian conduct three readings in one day? Yes.
Under lgu on first day of session the internal rules of procedure must be conducted. In caloocan case, aside
from irr, also passed internal budget. Sc said can do so, they have residual powers for as long as theres
no prohibition, in furtherance of autonomy, lgus have freedom to exercise particular power

Can local council cite person in contempt or compel mayor to produce documents? No, because unlike
congress, local governments do not possess coercive powers, there must be law which delegates power to
summon officials or compel submission of documents

Tax ordinances
Another requirement there must be notice and public hearing failure to give notice and hearing would
render tax ordinance invalid
Role of local chief executive, higher concil,
Role of mayor executive in character
Vice chief legislative and executive presides over council sessions and executive - when mayor or
governor is absent he/she becomes acting mayor
Local chief executive has power to veto or approve ordinance
Vice local presides over sessions
Local chief executive appoints employees of executive branch
Vice local chief executive appoints employees of sangguninan
Local chief executive approves vouches for executive. Vice local chief for legislative branch

Difference between veto and review

Veto - approve or disapprove
Veto intra-lgu power power exercised by mayor/governor of that unit
Review inter lgu power involves two lgus supervising and supervised lgu
Power to veto is executive
Review legislative power
Veto local executive reviews
Veto on ultra vires or prejudicial to public welfare question of law and fact
Review ultra vires and question of law
No veto in case of barangay puong barangay presides over sanggunian

Review no review of provincial ordinances

Can a veto be reversed? Be override by same council? No override for review. Recourse only in court.

Two types of veto

1. general veto - whole ordinance
2. item veto you only veto item which corresponds an appropriation
4 instances can be item veto
1. Appropriations ordinance
2. Ordinance directing payment of money
3. Ordinance creating liability
4. Ordinance/resolution adopting a local development plan/public investment program
Once approved by mayor or governor, an ordinance must be implemented because one of obligations of chief
executive is to implement laws

Role of higher local government unit and role of national government agencies only to review meaning
only questions of law
can national government agency review ordinance only if given authority by law cannot be unilaterally
imposed by the national government agency itself

Only two national government agencies which have power to review

1. DBM appropriations ordinances

2. DOJ tax ordinances

DILG, DENR, OP no power to review

Can a taxpayer go to court direct at first instance to question tax ordinance? No, LGC provides for admin
remedy
Taxpayer must file a case before DOJ, file appeal before DOJ and thereafter file case before courts rule on
exhaustion of administrative remedies must be followed
One exception: wherein property will be subjected to an auction sale can go to court directly to stop
auction sale

RELIEFS

If one wants to question ordinance not certiorari because lgus do not perform quasi-judicial powers
appropriate remedy is declaratory relief

Burden of proof person assailing legality

Can parole evidence be used? GR no, oral testimony cannot be used.

Corporate powers
What are corporate powers of lgus?
Sec. 22 of LGC
1. continuous succession new governor cannot unilaterally rescind contract by previous governor because
real party to contract is not governor but local government unit corporate nature of lgu does not change
with change of officials in lgu
2. can local government unit be sued and sue? Yes. Are local government units immune from suits? No whats
the rule? Either give consent or there is a waiver of consent provided by law. Under LGC, theres statutory
waiver found in sec. 22. Suability different from liability depending on case, LGUs can be held liable
3. third power: corporate seal
4. 4th power acquire and convey property. Provision which requires pre-approval of lgu acquisition in
executive order to impose requirement not imposed by law amounts to control
5. 5th power power to enter into contracts
Who is real party to contract LGU concerned not chief executive. If theres no prior authorization
and no ratification who will be liable for breach? Local chief executive
Two types of liabilities
1. personal
2. corporate
sec. 22 staes lgu shall have full autonomy in exercise of proprietary powers. Can this mean congress can not have
authority to impose limiataions? No.

LGU can secure grants in effect donation grants may be sourced from local or foreign sources no need to
secure clearance from national government agency EXCEPTION: if purpose of grant would involve national
security concerns lgu must secure clearance from national govt agency
Proprietary function : inter-agency cooperation found in constitution. LGUs may enter into collaborative or
cooperative arrangements The use of may this authority is permissive. Lgus cannot be compelled to
cooperate and collaborate with other lgus consensual in character
proprietary function: secure a loan from another lgu or inter-agency loan EXCEPTION: barangay cannot be
a lender Congress disqualified baranggays from contracting lgu loans

Commercial loan
LGUs can secure loans from domestic banks. If it wants to contract a foreign loan the president may
contract a loan on behalf of lgu and relends to lgu.
General purpose of bond need not be income producing and self-liquidation
two limitations on bonds
1. self-liquidating ability to pay own debts
2. income producing
3. nature of project development or livelihood project

proprietary function: may enter into BOT schemes private sector will build and operate for a period and at
end of BOT contract, the asset will be reverted to government
LGUs may also partner with private sector under joint venture arrangement
DILG cannot impose other limitations otherwise control
Cordillera Admin Region juridical status is only admin region not an autonomous region
MMDA not a local government unit, it is not a sub-state, it is not similar to metropolitan manila
commission, not central government contemplated under consti, not a special metropolitan subdivision
because there was no plebiscite. MMDA is a special development authority and admin agency
MMDA is not LGU does not possess police power or power to legislate but because it is an admin agency
it has power to issue rules and it has the power to deliver 7 basic services provided under its charter and in
one case it may implement ordinances enacted by component cities in Metro Manila such as jail walking
ordinance of mandaluyong
Which is more supreme? LGU or MMDA? LGU
Can MMDA dismantle billboards? No doesnt have police power this power is given to DPWH
Can MMDA be compelled by mandamus? Yes
MMDA does not have power to review zoning ordinances
MMDA can enforce anti-jail walking ordinance of component LGUs
MMDA has no authority to construct mass transport terminals because this authority is given to DOTC not
MMDA
MMDA has no power to compel subdivision to open gates and to allow vehicles to enter villages
MMDA has no police power and no power to legislate
MMDA has no power to confiscate licenses of drivers or to remove license plates
Befreo MMDA can put up dumpsite must secure approval from host LGU

-- Lesley Claudio 4A