Republic Act No. 5447

It is hereby declared to be the policy of the government to contribute to the financial support of the goals of education as provided by the Constitution. For this purpose, there is hereby created a Special Education Fund, hereinafter referred to as the Fund, to be derived from the additional tax on real property and from a certain portion of the taxes on Virginia-type cigarettes and duties on imported leaf tobacco, hereinafter provided for, which shall be expended exclusively for the following activities of the Department of Education:

This Fund shall consist of the proceeds of the following taxes:

Allocation of the taxes on Virginia-type cigarettes and the duties on imported leaf tobacco. The entire collection from specific taxes on locally-manufactured Virginia-type cigarettes and tariff duties on imported leaf tobacco shall be allocated as follows:

The share of the local governments in the regular internal revenue allotment as provided for in Commonwealth Act Numbered Four hundred eighty-six, as amended by Republic Act Numbered Seven hundred eighty-one, as further amended by Republic Act Numbered Five thousand one hundred eighty-five, shall be computed and set aside for distribution to local governments in accordance with existing laws.

One per centum of the entire collection shall be retained by the Bureau of Internal Revenue for the purchase of strip stamps, apparatus, equipment, as well as improvement and adoption of modern methods for the effective enforcement and collection of the specific taxes mentioned in this section.

The balance shall be distributed as follows: ten per centum to the national share of the Fund; forty per centum to the Philippine Virginia Tobacco Administration Tobacco Fund created under Republic Act Numbered Four thousand one hundred fifty-five; and fifty per centum to the general fund of the National Government.

There is hereby imposed an annual additional tax of one per centum on the assessed value of real property in addition to the real property tax regularly levied thereon under existing laws: Provided, That when the entire total assessed valuation of real property assessable to any one person is not in excess of three thousand pesos, the additional tax thereon shall not be collected: Provided, further, That the total real property tax shall not exceed a maximum of three per centum.

Article three of Commonwealth Act Numbered Four hundred seventy and the pertinent provisions of the corresponding charters of chartered cities to the contrary notwithstanding, the basic and the additional real property tax shall be due and payable in four equal installments; the first installment shall be due and payable on or before March 31; the second installment, on or before June 30; the third installment, on or before September 30; and the last installment, on or before December 31.

The assessment already made or to be made under Commonwealth Act Numbered Four hundred seventy and under other applicable laws shall constitute the basis for assessment and collection of the additional levy under this Act. It shall be collected by the municipal or city treasurer where the real property is situated and distributed as follows:

A. Collections in the municipalities:

In every province, city or municipality, there shall be established a Provincial School Board, City School Board, or Municipal School Board, respectively, which shall be composed of the following:

A. Provincial School Board:

Provincial, city and municipal school boards shall have the following functions:

Each school board shall prepare not later than August 15 each year the budget of receipts and expenditures for the ensuing fiscal year to carry out the purpose of this Act. Budgets prepared and approved in accordance with Republic Act Numbered Five thousand one hundred sixty-eight and other existing laws, administrative rules and regulations by provincial, city or municipal school boards shall be final and executory upon approval of the budget by the boards unless an appropriate appeal is taken within fifteen days from the date of the approval of the budget with the Director of Public Schools or the Director of the Bureau of Vocational Education, as the case may be, for final decision within thirty days upon receipt of the appeal under rules and regulations to be promulgated by the Secretary of Education. Any school need which cannot be covered by the budget of receipts and expenditures shall be forwarded to the Department of Education, through the Bureau of Public Schools or the Bureau of Vocational Education, as the case may be, together with the approved special budget for the ensuing fiscal year for its information.

Expenditure of the share of the National Government out of the Special Education Fund shall be in pursuance of appropriations made by the law which shall be included in the budgets of the Bureau of Public Schools and the Bureau of Vocational Education in the annual General Appropriations Acts: Provided, However, That in allocating the Fund corresponding to the National Government, the Department of Education shall follow a schedule of priorities starting with the municipalities, cities or provinces belonging to the lowest classification made by the Department of Finance under Section two thousand one hundred seventy-one of the Revised Administrative Code, as amended by Section one of Republic Act Numbered Two thousand three hundred sixty-eight: Provided, finally, That starting with the fourth year from the approval of this Act, municipalities, cities and provinces enjoying priority shall continue to be entitled thereto provided their total collection from real estate taxes during the preceding three fiscal years shall have increased by an average of at least fifteen per cent.

The collections accruing to the said Fund during the fiscal year ending June 30, 1969, are hereby appropriated to fund the appropriations from the general and bond funds for the Bureau of Public Schools and the Bureau of Vocational Education which cannot be programmed for expenditure for lack of funds: Provided, That the following sums are hereby appropriated strictly in accordance with the following schedule of priorities:

All administrative, special and general provisions of law, including those pertaining to the assessment, remission, collection, and refund of real property taxes not inconsistent with the provisions of this Act are made applicable in respect to the additional tax on real property:

The municipal or city treasurers concerned shall retain the shares of the municipal or city government and turn over the portions of their collections of the taxes and penalties mentioned in Section four hereof appertaining, as the case may be, to the provincial government and/or to the National Government to the respective treasurers thereof monthly within fifteen days of every succeeding month. No portion of the collections may be transferred or diverted to the general or any of other fund of the National Government, provinces, cities or municipalities, or used or expended for any purpose other than those specified in this Act. It shall be the ministerial duty of the Budget Commissioner, the Treasurer of the Philippines, all municipal, provincial and city treasurers, as well as of the officials and employees under their supervision and control to effect releases from the Fund within fifteen days from receipt of the order and/or authorization by the Secretary of Education, in respect to the share of the National Government from the Fund, and by the municipal, city or provincial school boards, in respect to their respective shares from the Fund.

The Secretary of Education and the Secretary of Finance, upon the recommendation of the Director of Public Schools, the Director of Vocational Education and the Treasurer of the Philippines, as the case may be, shall promulgate all rules and regulations for the effective enforcement of the provisions of this Act pertaining to their respective jurisdictions, and shall cause the same to be published within fifteen days from promulgation, in three newspapers of general circulation in the Philippines and shall take effect as such, fifteen days after their publication.

Any person who fails or refuses to turn over collections of the taxes and penalties mentioned in this Act within the period fixed in Section nine hereof, or who delays, obstructs, or prevents the same; or who fails or refuses to effect releases from the Fund within the period fixed in Section nine hereof, or who delays, obstructs or prevents the same; or who orders, causes, or effects the transfer or diversion of the collections of this Fund or any portion thereof, shall be punished with a fine not exceeding ten thousand pesos or imprisonment not exceeding six years, or both, in the discretion of the court. If the offender is a government official or employee, he shall, in addition, be dismissed from the service with prejudice to reinstatement and with disqualification for election or appointment to any public office.

The provisions of this Act are hereby declared to be separable, and in the event any part, section or provision of this Act is held invalid or unconstitutional, no other part, section or provision thereof shall be affected thereby.

All Acts, parts of Acts, executive orders, ordinances, rules and regulations which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

This Act shall take effect on January first, nineteen hundred and sixty-nine except the allocation under Section three which shall take effect upon approval of this Act.