Respondent maintains that the imposition of goodwill fees upon stall holders at the municipal public market is not a revenue measure that requires a prior public hearing. Rentals and other consideration for occupancy of the stalls at the municipal public market are not matters of taxation.
Respondent’s argument is specious.
Article 219 of the Local Government Code provides that a local government unit exercising its power to impose taxes, fees and charges should comply with the requirements set in Rule XXX, entitled “Local Government Taxation”:
Article 219. Power to Create Sources of Revenue.—Consistent with the basic policy of local autonomy, each LGU shall exercise its power to create its own sources of revenue and to levy taxes, fees, or charges, subject to the provisions of this Rule. Such taxes, fees, or charges shall accrue exclusively to the LGU. (Emphasis ours.)
Article 221(g) of the Local Government Code of 1991 defines “charges” as:
Article 221. Definition of Terms.
x x x x
(g) Charges refer to pecuniary liability, as rents or fees against persons or property. (Emphasis ours.)
Evidently, the revenues of a local government unit do not consist of taxes alone, but also other fees and charges. And rentals and goodwill fees, imposed by Municipal Ordinance No. 98-01 for the occupancy of the stalls at the municipal public market, fall under the definition of charges.
For the valid enactment of ordinances imposing charges, certain legal requisites must be met. Section 186 of the Local Government Code identifies such requisites as follows:
Section 186. Power to Levy Other Taxes, Fees or Charges.—Local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose. (Emphasis ours.)
Section 277 of the Implementing Rules and Regulations of the Local Government Code establishes in detail the procedure for the enactment of such an ordinance, relevant provisions of which are reproduced below:
Section 277. Publication of Tax Ordinance and Revenue Measures.—x x x.
x x x x
(b) The conduct of public hearings shall be governed by the following procedure:
x x x x
(2) In addition to the requirement for publication or posting, the sanggunian concerned shall cause the sending of written notices of the proposed ordinance, enclosing a copy thereof, to the interested or affected parties operating or doing business within the territorial jurisdiction of the LGU concerned.
(3) The notice or notices shall specify the date or dates and venue of the public hearing or hearings. The initial public hearing shall be held not earlier than ten (10) days from the sending out of the notice or notices, or the last day of publication, or date of posting thereof, whichever is later;
x x x x
(c) No tax ordinance or revenue measure shall be enacted or approved in the absence of a public hearing duly conducted in the manner provided under this Article. (Emphases ours.)
It is categorical, therefore, that a public hearing be held prior to the enactment of an ordinance levying taxes, fees, or charges; and that such public hearing be conducted as provided under Section 277 of the Implementing Rules and Regulations of the Local Government Code.
There is no dispute herein that the notices sent to petitioners and other stall holders at the municipal public market were sent out on 6 August 1998, informing them of the supposed “public hearing” to be held on 11 August 1998. Even assuming that petitioners received their notice also on 6 August 1998, the “public hearing” was already scheduled, and actually conducted, only five days later, on 11 August 1998. This contravenes Article 277(b)(3) of the Implementing Rules and Regulations of the Local Government Code which requires that the public hearing be held no less than ten days from the time the notices were sent out, posted, or published.
When the Sangguniang Bayan of Maasin sought to correct this procedural defect through Resolution No. 68, series of 1998, dated 18 September 1998, respondent vetoed the said resolution. Although the Sangguniang Bayan may have had the power to override respondent’s veto, it no longer did so.
The defect in the enactment of Municipal Ordinance No. 98 was not cured when another public hearing was held on 22 January 1999, after the questioned ordinance was passed by the Sangguniang Bayan and approved by respondent on 17 August 1998. Section 186 of the Local Government Code prescribes that the public hearing be held priorto the enactment by a local government unit of an ordinance levying taxes, fees, and charges.
Since no public hearing had been duly conducted prior to the enactment of Municipal Ordinance No. 98-01, said ordinance is void and cannot be given any effect. Consequently, a void and ineffective ordinance could not have conferred upon respondent the jurisdiction to order petitioners’ stalls at the municipal public market vacant.