rules and regulations shall not be impaired: Provided, Further, That regional directors who are career
executive service officers and other officers of similar rank in the said regional offices who cannot be
absorbed by the local government unit shall be retained by the national government, without any diminution
of rank, salary or tenure.
(j) To ensure the active participation of the private sector in local governance, local government units
may, by ordinance, sell, lease, encumber, or otherwise dispose of public economic enterprises owned by them
in their proprietary capacity.
Costs may also be charged for the delivery of basic services or facilities enumerated in this Section.
SECTION 18. Power to Generate and Apply Resources. − Local government units shall have the power
and authority to establish an organization that shall be responsible for the efficient and effective
implementation of their development plans, program objectives and priorities; to create their own sources of
revenue and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and
which shall be retained by them; to have a just share in national taxes which shall be automatically and
directly released to them without need of any further action; to have an equitable share in the proceeds from
the utilization and development of the national wealth and resources within their respective territorial
jurisdictions including sharing the same with the inhabitants by way of direct benefits; to acquire, develop,
lease, encumber, alienate, or otherwise dispose of real or personal property held by them in their proprietary
capacity and to apply their resources and assets for productive, developmental, or welfare purposes, in the
exercise or furtherance of their governmental or proprietary powers and functions and thereby ensure their
development into self−reliant communities and active participants in the attainment of national goals.
SECTION 19. Eminent Domain. − A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the
benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised
unless a valid and definite offer has been previously made to the owner, and such offer was not accepted:
Provided, further, That the local government unit may immediately take possession of the property upon the
filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen
percent (15%) of the fair market value of the property based on the current tax declaration of the property to
be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be
determined by the proper court, based on the fair market value at the time of the taking of the property.
SECTION 20. Reclassification of Lands.
(a) A city or municipality may, through an ordinance passed by the Sanggunian after conducting public
hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of
their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and
sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall
have substantially greater economic value for residential, commercial, or industrial purposes, as determined