Can Barangays Collect Fees for Quarrying? A Legal Analysis in the Philippine Context
Introduction
In the Philippines, quarrying activities—primarily involving the extraction of sand, gravel, earth, and other quarry resources—play a significant role in construction, infrastructure development, and local economies. These operations are often conducted in rural or semi-urban areas, falling within the territorial jurisdiction of barangays, the smallest unit of local government. A common question arises: Can barangays directly collect fees for quarrying activities within their boundaries? This article provides a comprehensive legal analysis based on Philippine laws, focusing on the Local Government Code of 1991 (Republic Act No. 7160 or RA 7160), the Philippine Mining Act of 1995 (Republic Act No. 7942 or RA 7942), and related regulations. It explores the scope of barangay powers, the regulatory framework for quarrying, revenue-sharing mechanisms, limitations, and ancillary roles barangays may play. The analysis concludes that while barangays cannot directly impose or collect fees specifically for quarrying, they benefit from revenue sharing and may charge for related services.
Legal Framework Governing Quarrying and Local Government Powers
The Local Government Code of 1991 (RA 7160)
The Local Government Code (LGC) devolves significant powers to local government units (LGUs), including provinces, cities, municipalities, and barangays, to promote decentralization and local autonomy. However, the powers are hierarchical and delimited by law to prevent overlap and ensure efficient governance.
General Powers of LGUs: Under Section 17 of the LGC, LGUs are granted basic services and facilities, including regulation of natural resource utilization. Barangays, as the grassroots level, have powers related to maintaining peace and order, delivering basic services, and enacting ordinances for general welfare (Section 391). However, their fiscal powers are more restricted compared to higher LGUs.
Taxation and Fee-Collection Authority: The LGC delineates taxing powers across LGU levels in Book II, Title One. Provinces, cities, and municipalities have broader authority to impose taxes, fees, and charges on businesses and resource extraction. Barangays, per Sections 152 and 153, are limited to:
- Taxes on small retailers with gross receipts below certain thresholds (e.g., P50,000 in cities or P30,000 in municipalities, at up to 1%).
- Service fees for the use of barangay-owned properties or facilities (e.g., dryers for agricultural products).
- Fees for barangay clearances required for permits issued by higher LGUs.
- Other specific fees, such as those for cockfighting, places of recreation with admission fees, or outdoor advertisements.
Notably, quarrying does not fall under these enumerated categories for barangays. Quarrying is classified as a business activity involving resource extraction, which aligns more with provincial or municipal taxing powers.
The Philippine Mining Act of 1995 (RA 7942)
RA 7942 regulates mineral resources, including quarry operations for non-metallic minerals like sand and gravel. It vests primary regulatory authority in the national government through the Department of Environment and Natural Resources (DENR) and its Mines and Geosciences Bureau (MGB).
Quarrying Permits: Quarry permits for sand, gravel, and similar resources are typically issued under DENR Administrative Order No. 2010-21 (Consolidated DENR Administrative Order for the Implementing Rules and Regulations of RA 7942) or local ordinances. For commercial quarrying, permits are granted by provincial governors (pursuant to Section 138 of the LGC) or the MGB for larger-scale operations. Barangays have no direct permitting authority.
Integration with LGC: RA 7942 recognizes LGU roles in environmental protection and revenue generation but defers to the LGC for specific fiscal mechanisms related to quarry resources.
Other Relevant Laws and Regulations
- National Internal Revenue Code (NIRC, RA 8424 as amended): Defines quarry resources and imposes national taxes, but local taxes are governed by the LGC.
- Environmental Laws: The Philippine Environmental Impact Statement System (Presidential Decree No. 1586) and the Ecological Solid Waste Management Act (RA 9003) require LGUs, including barangays, to participate in environmental compliance. Barangays may be involved in monitoring but not in direct fee collection for extraction.
- Small-Scale Mining: Under the People's Small-Scale Mining Act (RA 7076), small-scale quarrying may involve community cooperatives, but permits are still issued by provincial or city mining regulatory boards, not barangays.
Authority to Regulate and Tax Quarrying
Provincial and Municipal Authority
The LGC explicitly grants provinces the power to regulate and tax quarrying:
- Section 138 (Tax on Sand, Gravel, and Other Quarry Resources): Provinces may levy a tax not exceeding 10% of the fair market value per cubic meter of quarry resources extracted from public lands or waters within their jurisdiction. The permit to extract is issued exclusively by the provincial governor, based on an ordinance from the Sangguniang Panlalawigan (provincial board).
This provision centralizes quarrying regulation at the provincial level to ensure uniform standards and prevent fragmented governance. Municipalities and cities may impose additional business taxes under Section 143 if the quarry operates as a business within their territory, but the primary extraction tax remains provincial.
Barangay's Lack of Direct Authority
Barangays lack explicit authority under the LGC or RA 7942 to impose taxes or fees directly on quarrying activities. Quarrying is not a "service" rendered by the barangay nor a small retail operation. Any attempt by a barangay to enact an ordinance imposing such fees could be deemed ultra vires (beyond legal authority) and subject to nullification by higher courts or the Department of the Interior and Local Government (DILG).
- Rationale for Limitation: The hierarchical structure of LGUs prevents double taxation and jurisdictional conflicts. Allowing barangays to collect quarrying fees could lead to overlapping impositions, discouraging investment and complicating compliance.
Revenue-Sharing Mechanism: Barangays' Indirect Benefit
While barangays cannot collect fees directly, they receive a substantial share of revenues from quarrying taxes collected by the province:
- Distribution under Section 138: The proceeds from the provincial tax on quarry resources are distributed as follows:
LGU Level Share Percentage Province 30% Component City or Municipality (where resources are extracted) 30% Barangay (where resources are extracted) 40%
This 40% share ensures barangays benefit financially from quarrying without needing to collect fees themselves. The share is remitted directly to the barangay treasury and can be used for local projects, infrastructure, or environmental rehabilitation. In practice, this mechanism incentivizes barangays to monitor operations and report violations, as their revenue depends on proper collection at the provincial level.
Additionally, under Section 289-294 of the LGC, barangays receive shares from national wealth utilization (e.g., 1% of gross revenues from mining/quarrying projects), further supplementing their income.
Ancillary Roles and Fees Barangays May Charge
Barangays are not entirely excluded from the process. They play supportive roles and may collect fees for related services:
Barangay Clearances and Endorsements: Quarry permit applicants often require a barangay clearance or resolution endorsing the operation (e.g., for environmental or community impact assessments). Under Section 152(c) of the LGC, barangays may charge "reasonable fees" for issuing such clearances. These fees are nominal (typically P100-P500, depending on local ordinances) and cover administrative costs, not the quarrying activity itself.
Fees for Use of Barangay Properties: If quarrying involves using barangay roads, facilities, or properties (e.g., for hauling), fees may be charged under Section 152(b). For instance, overload fees or road maintenance charges could apply.
Community Taxes and Other Levies: Barangays can impose community taxes on residents (Section 156-158), but this is not specific to quarrying. Operators or workers residing in the barangay may be subject to these.
Environmental and Regulatory Monitoring: Barangays can enact ordinances requiring operators to comply with local environmental standards (e.g., dust control, rehabilitation). Non-compliance could lead to fines, but these are enforcement tools, not direct quarrying fees.
In some localities, barangay ordinances mandate "community development funds" from operators, but these must align with LGC limits to avoid being challenged as unauthorized taxes.
Limitations and Potential Legal Challenges
Prohibition on Double Taxation: Article III, Section 5 of the LGC prohibits LGUs from imposing taxes that duplicate national or higher LGU levies. A barangay fee mimicking the provincial quarry tax could be invalidated.
Judicial Oversight: The Supreme Court has ruled in cases involving LGU taxation (e.g., on business permits) that powers must be expressly granted. Hypothetically, if a barangay imposes unauthorized quarrying fees, affected parties can seek remedies via the DILG, Sangguniang Panlalawigan, or courts.
Practical Issues: Unauthorized collections could lead to corruption allegations or disputes with operators, undermining local governance.
Conclusion
In summary, barangays in the Philippines cannot directly collect fees for quarrying activities, as this authority is vested in provinces under Section 138 of the LGC and supported by RA 7942. Instead, barangays receive a generous 40% share of provincial collections, ensuring they benefit economically without regulatory overlap. They may, however, charge reasonable fees for ancillary services like clearances or property use, provided these are within their limited fiscal powers. This framework balances local autonomy with national uniformity, promoting sustainable resource management. For specific applications, barangay officials should consult the DILG or legal experts to ensure compliance, and operators must secure proper permits to avoid penalties. This structure underscores the collaborative nature of Philippine federalism in natural resource governance.