REVISED RULES AND PROCEDURES GOVERNING CONVERSION OF PRIVATE AGRICULTURAL LANDS TO NON-AGRICULTURAL USES

I
Prefatory Statement

The guiding principle for the policies on conversion shall be the
prevention of indiscriminate conversion of agricultural lands to
non-agricultural uses which may lead to the diminution of CARP coverage
and the undue displacement of tenant and farmworker beneficiaries. 
However, applications for conversion shall be processed in a speedy and
judicious manner in order to achieve the objectives of promoting the
optimum use of land based on natural endowments, and as a national
resource for public welfare and encouraging industrialization.

II
Policies

It is the policy of the government:

A.      To promote Social Justice, Sound Rural Development, Industrialization and Full Employment.

B.      To promote the optimum use of land as a national resource
for public welfare rather than as a commodity of trade subject to
speculation, hoarding and indiscriminate use.

C.      To ensure timely, just and adequate compensation to landowners, tenant-farmers and farmworkers affected by conversion.

III
Legal Mandate

A. The Department of Agrarian Reform (DAR) is authorized to approve
or disapprove the conversion, reclassification, restructuring or
readjustment of agricultural lands into non-agricultural uses.

B. The authority to approve or disapprove conversion of any
agricultural land for residential, commercial, industrial and other land
uses as may be provided for by law is exclusively vested in DAR.

C. Except where allowed and provided for in this Order, the following acts are prohibited:

1.    The conversion by any landowner of his agricultural land
into any non-agricultural use with intent to evade the application of
R.A. 6657 to his landholdings;

2.    The sale transfer, conveyance or change of the nature of
the lands outside of urban centers and city limits either in whole or in
part after the effectivity of R.A. 6657.

IV
Coverage

These rules shall cover all private agricultural lands whether
tenanted or not, and regardless of crops or commodity produced, except
those covered by Administrative Order No. 15, Series of 1989, and
General Orders issued pursuant thereto.

V
Governing Principles

A. Prime agricultural land needed for food production shall not be converted into non-agricultural use.

Prime agricultural land shall be understood to include all
irrigated lands and such other lands as may fall within the criteria
that shall be determined jointly by the DAR and the DA.

With the primary objective of preserving prime agricultural lands
for agricultural use, the MARO shall participate in the preparation and
updating of town plans and in the work of the review committee organized
in every city/municipality, under the auspices of the Regional
Development Council (RDC). The PARO and the Regional Agrarian Reform
Officer (RARO) shall also actively participate in the preparation and
updating of the land use plans at the provincial or regional levels, as
the case may be, to promote the same objective.

B. Conversion of lands from agricultural into non-agricultural uses
may be allowed when the proposed use conforms with the land use plan or
town development plan of the city or municipality and said land use
plan or town development plan has been approved by the Housing and Land
Use Regulatory Board (HLURB) and validated by DAR.

C. In case the proposed use does not conform with the existing
HLURB-approved land use plan of the city/municipality concerned, the
conversion may be allowed under the following conditions:

1.    When the land is intended to be used as (a) a government
low-cost housing project, as certified by the National Housing Authority
(NHA) or (b) a government joint venture private-government industrial
project, as certified by the Department of Trade and Industry (DTI) and
for which a locational clearance has been issued by the HLURB;

2.    When the land has ceased to be economically feasible and
sound for agricultural purposes, as certified by the Provincial
Agricultural Officer of the Department of Agriculture (DA) assigned to
the province where the land is located;

3.    When the locality has become urbanized and the land will
have a greater economic value for residential, commercial, industrial or
memorial park purposes, as certified by the HLURB deputized Zoning
Administrator.

D. In case the city/municipality does not have a land use plan or
integrated zoning ordinance, duly approved by the HLURB, the dominant
use of the area surrounding the land subject of the application for
conversion shall control. If the proposed use is similar to, or
compatible with, the dominant use of the surrounding area, the petition
for conversion may be given due course.

In the cases referred to in Section V, C, (1), (2) and (3) and D above, the following requirements shall be complied with:

1.    The endorsement of the conversion, through an ordinance passed by the city or municipal council concerned;

2.    The concurrence by the HLURB with the local ordinance; and

3.    The consent, manifested through a referendum, conducted among the inhabitants/communities directly affected.

The favorable endorsement of an application for conversion by an
agency of the national government exercising supervisory or regulatory
functions over the proposed project, such as the DTI and the DOT, shall
be accorded weighty consideration.

E. Land awarded to a farmer-beneficiary under the Comprehensive
Agrarian Reform Program may be the subject of conversion on the same
grounds stated in Section V, (B), (C) and (D) subject, however, to the
following additional conditions:

1)      If the ground relied upon is that the land has ceased to
be economically feasible and agriculturally productive that at least
five (5) years has elapsed since the award of the land to the
beneficiary;

2)      In all cases the beneficiary has fully paid his obligation.

F. In all cases of conversion that will result in the displacement
of tenant-lessees such lessees shall be entitled to a disturbance
compensation equivalent to five (5) times the average of the gross
harvests on their landholding during the last five (5) preceding
calendar years, pursuant to Section 36 of R.A. 3844 as amended by
Section 7 of R.A. 6389. In case of farmworkers under labor-management
relations, they shall be entitled to the rights, benefits, and
privileges provided under a collective bargaining agreement or any labor
law.

The disturbance compensation may be paid in cash or in kind, or in
combinations of both, at the option of the tenants/farmworkers. Payment
in kind may be in the form of the construction of houses on awarded
homelots, priority in employment in the proposed project and other
similar benefits.  The DAR shall approve and closely monitor compliance
with the terms of any agreement for the payment of disturbance
compensation.

G. After the DAR has issued a Notice of Acquisition of an
agricultural land, under the program, no application for conversion of
said land from the landowner or any person acting on his behalf shall be
given due course.  The Notice of Acquisition is the notice sent by the
DAR to the landowner which states the area that is subject to
acquisition and the amount of just compensation offered by DAR.

H. To prevent recourse to conversion as a means of circumventing
coverage under the DAR, conversion shall be granted only if the
petitioner shows clear and convincing proof of financial and
organizational capability to undertake and complete the development of
the area within (1) year from the date of the issuance of a development
permit by the HULURB, if the area is five (5) hectares or less. If the
area is in excess of five (5) hectares, the period of development shall
not extend beyond five (5) years from the date of the issuance of the
conversion order.

VI
Who May Apply For Conversion

A. Owners of private agricultural lands or persons authorized by
them, including land developers duly licensed by the HLURB or the
government agency concerned.

B. Farmer-beneficiaries of the agrarian reform program who have
fully paid for the lands awarded to them and are qualified under these
rules, or persons authorized by them.

C. Government agencies, including government-owned or controlled corporations.

VII
Documentary Requirements

A. Lands Falling Under Section V, B. —

1.       Four (4) copies of Application for Conversion (DAR-LUC Form No. 1);

2.       Special Power-of-Attorney if the petitioner is other than the owner of the land;

3.       Certified xerox copy of OCT/TCT, and/or other documents establishing ownership;

4.       Location Plan/Vicinity Map of the land;

5.       Certification of the HLURB deputized Zoning
Administrator of the city/municipality concerned that the land is within
the proper zone for which the change in land use is being requested and
that said land use plan/zoning ordinance has been approved by HLURB;

6.       Locational clearance from the HLURB when the intended use is for industrial/memorial park purposes;

7.       Proof of Financial and Organizational capability to Develop such as, but not limited to the following:

a.            Contract for development of land;

b.            Profile of developer, including details of past or concurrent development projects;

c.            Licenses, permits, authorities granted by other government agencies;

d.            Certified financial statements;

e.            Income tax returns;

f.             Articles of Incorporation or Partnership, if developer is a corporation or partnership;

g.            Other documents showing financial and
organizational capability such as printed brochures, annual reports,
newspaper advertisements, etc.

8.       Study showing viability as well as economic and social benefits of the project;

9.       Certification of Non-Tenancy, if applicable (DAR-LUC Form No. 5); and

10.     If land has tenants/farmworkers, proof of payment of
disturbance compensation, (Acknowledgment receipt by tenant/farmworker
attested by BARC or Barangay Chairman and MARO), or undertaking to pay
disturbance compensation (Agreement signed by tenant/farmworker and
applicant embodying undertaking of applicant to pay disturbance
compensation in kind, e.g., award of homelots or grant of priority in
employment, etc.)

B. Lands Falling Under Section V, C —

1.       Documents listed in Section VII, A, (1) to (4), (6) to (9);

2.       Certification of compliance with the particular
conditions involved, issued by the proper government agency/official
(NHA, DTI, DA, HLURB deputized Zoning Administrator), as the case may
be;

3.       City or municipal council ordinance endorsing conversion;

4.       Concurrence by the HLURB with the local ordinance; and

5.       MARO report on result of referendum, as concurred in by the BARC or Barangay council concerned.

C. Lands Falling under Section V, D —

1.       Documents listed in Section VII, A, (1) to (4); (6) to (9); and

2.       Documents listed in Section VII, B, (3) to (5)

D. Lands Falling Under Section V, E —

1.       Documents listed in Section VII, A, (1) to (9);

2.       Certification of compliance with the particular
condition involved, issued by the proper government agency/official
(NHA, DTI, DOT, DA, HLURB deputized Zoning Administrator), as the case
may be.

3.       Certification from DAR that the applicant is the actual
farmer-awardee, and that at least five (5) years have elapsed since the
award of the land to him, if the ground relied upon is that the land has
ceased to be economically feasible and agriculturally productive.

4)      Certification from the Land Bank of the Philippines (LBP)
branch in the area that the farmer-awardee has fully paid his
obligations.

 

VIII
Procedure

A. Applicant submits application on prescribed form and required
supporting documents to the Municipal Agrarian Reform Office concerned
where the property is located.

B. Municipal Agrarian Reform Officer (MARO) — The MARO shall perform the following duties and functions:

1.       Review documents for completeness and compliance with requirements under these rules (DAR-LUC Form No. 2)

2.       Conduct field investigation, including ocular inspection to verify the following:

a.            Veracity of information contained in the application;

b.            Whether or not subject land is a prime agricultural land;

c.            Whether or not subject land falls within the appropriate zone of the land use plan or town plan;

d.            If the city/municipality does not have a land use
plan, information on the land subject of conversion and its
compatibility with the proposed use.

e.            Existence of tenancy/farmworker relationship. If
tenanted, or cultivated by a farmworker, the MARO shall interview the
occupants therein; (DAR-LUC Form 4-A)

f.             Whether or not the tenants/farmworkers have been
paid, or have agreed to the terms of an undertaking of the applicant to
pay the disturbance compensation and the terms thereof; and

g.            Other information relevant and useful to the decision-making process

3.       Post Notices for at least two (2) weeks (DAR-LUC Form No. 3a) in the local dialect of intention to convert land in:

a.            the premises of the land sought to be converted;

b.            barangay hall; and

c.            municipal hall

The MARO shall submit a Certification of Posting (DAR-LUC Form No. 3) after the prescribed period of posting.

4.       In case of protest/opposition against the conversion,
the MARO shall advise the party(ies) concerned to file his/their protest
in writing and attach a copy of the same in his investigation report.

5.       Prepare report and recommendation based on field
investigation and verification (DAR-LUC Form No. 4) together with the
Land-Use Conversion Folder (LUCF) and submit to the Provincial Agrarian
Reform Officer (PARO).

6.       The MARO shall perform the duties and functions
enumerated above within twenty (20) working days from the filing of an
application with complete supporting documents.

C. Provincial Agrarian Reform Office (PARO) — The PARO shall perform the following duties and functions:

1.       Evaluate MARO report and supporting documents for
completeness and compliance with requirements under these rules. If
found in order, accomplish pertinent portions of DAR-LUC Form No. 4 and
forward it together with his recommendation, to the RARO.

2.       If MARO report indicates need for further verification,
conduct further field investigation and submit supplemental report
together with recommendation.

3.       Endorse to the Provincial Agrarian Reform Adjudicator
(PARAD), or Provincial Hearing Officer any protest/opposition against
the conversion for investigation and resolution. Thereafter, the PARAD
or Hearing Officer shall furnish the PARO a copy of the action/decision
on the protest/opposition.

4.       The PARO shall perform the duties and functions
enumerated above within ten (10) working days from receipt of the LUCF
from the MARO.

D. Regional Agrarian Reform Office (RARO) —

1.       With respect to an application for land use conversion
involving areas five (5) hectares and below, the RARO shall perform the
following duties and functions:

a.       The Assistant Regional Director for operations, with
the assistance of the Chief, Legal Division, shall evaluate the reports
and recommendations of the MARO and PARO. If found in order, they shall
prepare a draft Order of Approval (DAR-LUC Form No. 6), or if evaluation
is not favorable, a draft Order of Denial/Disapproval (DAR-LUC Form No.
7). Nothing herein stated shall prevent the RARO from conducting
further field investigation or requiring the submission of additional
documents to verify facts not adequately established in the MARO and
PARO reports.

b.       The Regional Director signs the Order of Approval/Disapproval.

c.       The signed Order shall be released by the Records Unit to the applicant, copy furnished the PARO and MARO.

d)      The RARO shall promptly furnish the Office of the
Secretary and the BLD Director with copies of the following documents:

i)             Order of Approval/Disapproval;

ii)            Application of Petitioner (DAR-LUC Form No. 1);

iii)           Evaluation/Verification Sheet (DAR-LUC Form No. 2);

The Order of Disapproval may be reviewed by the Secretary, upon request of the applicant.

e)      The RARO shall perform the duties and functions
enumerated above within ten (10) working days from receipt of the LUCF
from the PARO.

2)      With respect to an application for land use conversion
involving areas above five (5) hectares, the RARO shall perform the
following duties and functions:

a)           The Regional Director shall evaluate the report
and recommendation of the PARO and forward the LUCF together with his
own recommendation to the Undersecretary for field Operations,
Attention: Director of Bureau of Land Development.

E. Bureau of Land Development (BLD) — The BLD shall perform the following duties and functions;

1.       Review and evaluate ail LUCF, involving lands in excess
of five 15) hectares. If found in order, prepare draft Order of Approval
(DAR-LUC Form No. 6) or if evaluation is not favorable, prepare draft
Order of Denial/Disapproval (DAR-LUC Form No. 7)

2.       Where the circumstances clearly so require, and
specially with respect to applications involving large areas of land,
the BLD Director may direct that further field investigation be
conducted or additional documents be submitted to counter check or
refute the findings of the MARO, PARO, RARO.

3.       Forward LUCF together with draft Order to the Undersecretary for Operations.

F. Office of the Undersecretary for Operations — The
Undersecretary for Operations shall review all LUCFs forwarded by the
BLD and indicate his recommendation, either for approval or disapproval
of draft Order. If he approves of the Order, he shall affix his initials
thereon. After his review, he shall forward the LUCF and the draft
Order to the Office of the Undersecretary for Legal Affairs.

G. Office of the Undersecretary for Legal Affairs — The Undersecretary for Legal Affairs shall approve applications for conversion of lands not exceeding fifty (50) hectares.

The Office of the Undersecretary for Legal Affairs shall submit to
the Office of the Secretary a monthly report of all the applications for
conversion that have been acted upon, describing the relevant features
of each application.

The Undersecretary for Legal Affairs shall review all LUCFs
involving lands in excess of fifty (50) hectares and indicate his
recommendation, either for approval or disapproval of the draft Order.
If he approves of the Order, he shall affix his initials thereon.  After
his review, he shall forward the LUCF and the draft Order to the Office
of the Secretary.

H. Office of the Secretary — The Secretary shall approve applications for conversion of lands exceeding fifty (50) hectares.

I.   Releasing and Transmittal of Signed Order — The
Office of the Secretary or the Office of the Undersecretary for Legal
Affairs as the case may be, shall forward the signed Order for release
by the Records Division to the applicant, copy furnished the BLD
Director, the RARO, PARO and MARO.

J.  Monitoring Compliance — Compliance with the terms and conditions of the Order shall be monitored as follows:

1)      The MARO shall monitor compliance by the developer with
the terms and conditions stipulated in the Order and submit periodic
reports to the Regional Director.

2)      The RARO shall submit a quarterly report to the
Secretary, Attention: BLD Director of all transactions involving
land-use conversion.

3)      The BLD Director shall monitor and evaluate the
implementation of this Order and submit a quarterly report to the
Secretary relative thereto.

IX
Protests or Oppositions

Protests or oppositions against the application for conversion shall
be investigated and resolved by the Provincial Agrarian Reform
Adjudicator (PARAD) or the designated Hearing Officer and, in case of
appeal, by the Department of Agrarian Reform Adjudication Board
(DARAB).  The mere filing of a protest shall not constitute an absolute
bar to the processing and approval of an application for conversion, if
the application otherwise clearly falls within these rules.

Serious protests or oppositions may, however, be a ground for
disapproval in borderline cases, and where the adverse effects of
displacement of tenants/farmworkers far outweigh the social and economic
benefits to be enjoyed by the community/locality.

X
Cancellation or Withdrawal of Approval

The authorization for land use conversion already issued by the
Secretary, the Undersecretary, or the Regional Director, pursuant to
this Administrative Order may be cancelled or withdrawn for any of the
following causes/reasons:

a)      Serious violations of conditions governing the issuance;

b)      Misrepresentation or concealment of material facts in the application;

c)      Existence of proof/evidence that the conversion was
resorted to as a means to evade or circumvent coverage of R.A. 6657; and

d)      Failure to complete the development of the area within the time frame specified in Section V, H.

XI
Disapproved or Disauthorized Conversion

Lands disapproved for conversion or subsequently disauthorized under
these rules, shall be placed under CARP compulsory, coverage, in
accordance with the schedule of implementation prescribed in R.A. 6657,
Section 7.  All bonafide beneficiaries therein shall be reinstated.
Compensation previously given to said beneficiaries shall not be
refunded.

XII
Excusable Default

Applicants who have been previously authorized to convert their
landholdings but failed to pursue complete development for valid
reasons, which shall not include causes provided under Section X (A),
(B) and (C) of A.O. 15-88, may be given an extension period of one (1)
year to comply with the terms and conditions of the DAR Land Use
Conversion Order.  However, persons who have knowingly and willfully
converted agricultural lands to non-agricultural uses, whether fully or
partially, in violation of RA. 6657 shall be prosecuted at the instance
of the DAR.

XIII
Repealing Clause

This Order repeals Administrative Order No. 15, series of 1988.

This Order does not supersede Administrative Order No. 15, series of
1989 and all General Orders Issued pursuant to said Order.  All
applications for conversion that meet the criteria prescribed therein
shall continue to be governed by said Orders and not by these rules.

XIV
Transitory Provisions

All LUCFs pending with the DAR at the time of effectivity of this
Order shall be governed by the provisions of this Order, provided,
however, that applicants need not be required to submit the additional
documents required under this Order if the LUCF already submitted
adequately establishes eligibility or non-eligibility for conversion
under the criteria provided herein.

All field offices with which LUCFs have been pending for a period of
time longer than that within which they are required to act under this
Order, shall promptly prepare their recommendations and immediately
forward the LUCFs to the next reviewing office, unless there are
determinations of fact that remain to be made by said office.

XV
Effectivity

This Order takes effect ten (10) days after its publication in two
(2) newspapers of general circulation pursuant to Section 49 of R.A.
6657.

Adopted: 14 Dec. 1989

(SGD.) MIRIAM DEFENSOR SANTIAGO
Secretary

Effective: 7 January 1990