PROVINCIAL ORDINANCE No. 003-2012

ordinance incorporating therein the proposed Updated Schedule of Fair Market

Provincial Assessor and to appropriate funds for the conduct of the General Revision of Real Property Assessments;

WHEREAS, the said Schedule of Fair Market Values of all classes of real properties was referred to the Committee on Ways and Means of the Sangguniang Panlalawigan for study, review and recommendations;

WHEREAS, the Committee on Ways and Means recommended the conduct of simultaneous public hearing on October 11, 2012 in four separate venues of the 1st and 2nd Districts of Lanao del Norte. The first venue is in the Municipality of Baloi covering the Municipalities of Tagoloan, Pantar, Pantao-Ragat, Matungao and Poona Piagapo. Second, is in the Municipality of Bacolod covering the Municipalities of Linamon, Kauswagan, Maigo, Tangcal and Munai. Third, is in the Municipality of Tubod covering the Municipalities of Baroy, Kolambugan, Magsaysay, Munai and Tangcal. Fourth, is in the Municipality of Kapatagan covering the Municipalities of Nunungan, Lala, Sultan Naga Dimaporo, Salvador and Sapad, Lanao del Norte;

WHEREAS, the Committee on Ways and Means after the conduct of public hearing, careful review and analysis, recommended the passage of an ordinance adopting the Schedule of Fair Market Values prepared by the Office of the Provincial Assessor in coordination of the Offices of the Municipal Assessors of the twenty two municipalities of this province informing among others that there was no revision of real property since 2003 considering that there was no proposal for the adoption of the Schedule of Fair Market Values after the 2001 Schedule of Fair Market Values and once in every three years thereafter.

NOW THEREFORE, after due deliberation on motion of Hon. Baldomero N. Zamora, duly seconded by Hon. Acmad G. Cotongan, be it resolved the by Sangguniang Panlalawigan of Lanao del Norte in session assembled, to pass and enact

THE UPDATED AND/OR REVISED SCHEDULE OF FAIR MARKET VALUES FOR DIFFERENT CLASSES AND KINDS OF REAL PROPERTIES AND IMPROVEMENTS OF THIS PROVINCE FOR 2012"

Basis of Value-a statement of the fundamental measurement principles of a valuation on a specified date.

Benchmark-is a reference point from which the value of other similar properties is measured or tested. To be consistent in determining the quality level of construction, quality class benchmarks for class, age and type of structure should be established.

Buildings-are permanent structures adhered to the land, usually used for habitation, commercial and industrial purposes and for other various uses and not mere superimpositions on the land like a 'barong-barong' or temporary fixtures.

Bundle of Rights-is the combination of rights associated with the ownership of real property, e.g., the right to use, to sell, to lease, to give away, or to choose to exercise all or none of these rights.

Capitalization-at a given date, the conversion into the equivalent capital value of net income or a series of net receipts, actual or estimated, over a period. In business valuation, this term also refers to the capital structure of a business entity. In business valuation, this term also refers to the recognition of expenditure as a capital asset rather than a periodic expense. Method of arriving at the value of a property by reference to net returns and an expected percentage yield of return. In some countries, capitalization refers to the conversion of a stream of income into capital value using a single conversion factor.

Capitalization Factor/Capitalization Rate any multiple or divisor used to convert income into capital value. It is the actual mathematical relationship between the annual financial return a property generates, and the capital value of that property. Generally, expressed as a percentage. May be calculated on the gross or net return, but should be specified as to which.

Cost Approach-one of the approaches to value commonly applied in Market Value estimates and many other valuation situations. Cost Approach is also known as 'Replacement Cost' or 'Reproduction Cost' less depreciation, and sometimes the 'Contractors Method'. Under this approach to value, the land is appraised as vacant. To the land value is then added the depreciated cost of the improvements to arrive at an indication of value. It is based on the "Principle of Substitution".

It is a comparative approach to the value of property or another asset, that considers as a substitute for the purchase of a given property, the possibility of constructing another property that is an equivalent to the original or one that could furnish equal utility with no undue cost resulting from delay. The Valuer's estimate is based on the replacement cost of the subject property or asset, less total (accrued) depreciation.

The cost approach establishes the value of a real property by estimating the cost of acquiring land and building a new property with equal utility or adapting an old property to the same use with no undue cost due to delay. An estimate of entrepreneurial incentive or developer's profit/loss is commonly added to land and construction costs. For older properties, the cost approach develops an estimate of depreciation including items of physical deterioration and functional obsolescene. Crop(ping) Farms-agricultural properties used for growing commodities that are typically planted and harvested within a twelve-month cycle. Properties used for annual crop production may grow more than one type of annual crop over the same period and may or may not make use of irrigation to produce the crops. Some commodities are annual crops that may be left in the ground beyond a twelve-month cycle, per contract provisions or in circumstances where market conditions are unfavorable. These crops will last for more than one year after harvest but are considered less than permanent.