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ABAKADA GURO PARTY LIST v. HON.CESAR PURISIMA (Sec. of Finance)

G.R. No. 166715August 14, 2008

Topic: Legislative Investigations

Background of the Law:

RA 9335 or the Attrition Act of 2005 was enactedto improve the revenue collection performanceof the BIR and the Bureau of Customs (BOC).The law provides a system of rewards andsanctions through the creation of aRewards andIncentives Fund (Fund) and a RevenuePerformance Evaluation Board (Board) toencourage BIR and BOC officials to exceed theirrevenue targets. The collection of the BIR andthe BOC in excess of their revenue targets for theyear, as determined by DBCC, sources the Fund.Any incentive or reward is taken from the fundand allocated to the BIR and BOC in proportionto their contribution in the excess collection ofthe targeted amount of tax revenue. The lawcovers all officials and employees of the BIR andBOC with at least six months of service,regardless of employment status.

FACTS:

Petitioners as taxpayers challenge theconstitutionality of RA 9335, a tax reformlegislation. They contend that:

o the system of rewards andincentives invites corruption andundermines the constitutionallymandated duty of the officials andemployees to serve the people withutmost utmost responsibility,integrity, loyalty and efficiency

o the law is violative of theconstitutional guarantee of equalprotection as it limits the scope ofthe system of the rewards andincentives only to the employees of

BIR and BOC.o The law unduly delegates the power

to fix revenue targets to be achievedto the President without sufficientstandards

o The creation of a congressionaloversight committee violates thedoctrine of separation of powers.While the legislative function is

deemed accomplished andcompleted upon the enactment andapproval of the law, the creation ofthe congressional oversightcommittee permits legislativeparticipation in the implementation

and enforcement of the law

Respondents, on the other hand contendthat:

o The petition is premature as there isno actual case or controversy yet,hence there is no necessity of theexercise of the Courts jurisdiction

o the allegation that the rewardsystem will breed mercenaries ismere speculation and does notsuffice to invalidate the law

othe law validly classifies the BIRand BOC because the functions theyperform are distinct from those ofthe other government agencies andinstrumentalities

o the law provides a sufficientstandard that will guide theexecutive in implementing itsprovisions

o the creation of the congressionaloversight committee enhances,rather than violates separation ofpowers as it ensures the fulfillmentof the legislative policy and servesas a check to any over-accumulationof power on the part of theexecutive and implementingagencies

ISSUES + RULING:1. Whether there is an actual case/ controversy

No. The petitioners failed to assert anyspecific and concrete legal claim or todemonstrate any direct adverse effect of thelaw on them. They are unable to show a

personal stake in the outcome of the case oran injury to themselves. Hence, the petitionis procedurally unsound.

However, by reason of public interest andbecause of the grave nature of thepetitioners allegations, the Courtnevertheless proceeded to the resolution ofthe case.

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2. Whether the implementation of RA 9335 willturn BIR and BOC officials and employees intobounty hunters and mercenaries

This claim is purely speculative and withoutfactual and legal basis. Public officers enjoythe presumption of regularity in the

performance of their duties, whichnecessarily favors BIR and BOC employees.

Further, a system of incentives for exceedingthe set expectations of a public office is notanathema to the concept of publicaccountability. It recognizes and reinforcesdedication to duty, industry, efficiency andloyalty to public service of deservinggovernment personnel.

By providing for liabilities under Section 8,RA 9335 also establishes safeguards toensure that the reward will not be claimed if

such will be the product of irregularperformance of official duties.

3. Whether the law violates the equalprotection clause.

No. Since the subject of the law is therevenue-generation capability and collectionof the BIR and BOC, the incentives and/orsanctions provided in the law shouldlogically pertain to said agencies.

Both BIR and BOC are bureaus under theDepartment of Finance. They principallyperform the special function of being theinstrumentalities through which the Stateexercises its power of taxation. Thisclassification rests on substantial distinction.Hence, the classification and treatmentaccorded to the BIR and the BOC under RA9335 fully satisfy the demands of equalprotection.

4. Whether there is an undue delegation ofpower to the president

No. RA 9335 passed the completeness testand the sufficient standard test. It states the

policy and standards to guide the Presidentin fixing revenue targets and theimplementing agencies in carrying out theprovisions of the law, as embodied in Sec.2s Declaration of Policy.

The determination of revenue targets doesnot rest solely on the President as it alsoundergoes the scrutiny of the DBCC.

Section 7 specifies the limits of the Boardsauthority and identifies the conditionsunder which officials, who fall short of thetarget by 7% may be removed from theservice. It lays down a reasonable yardstickfor removal with due considerations of all

relevant factors affecting the level ofcollection. It is also subject to civil servicelaws, rules and regulations and compliancewith substantive and procedural dueprocess.

At any rate, the court has recognized thefollowing as sufficient standards: publicinterest, justice and equity, publicconvenience and welfare and simplicity,economy and welfare.

5.Whether the RA 9335, thru the creation of the

joint congressional oversight committee,violates the principle of separation of powers.

The issue of the alleged encroachment of theJCOC on the executive is rendered moot andacademic as it ceased to exist afterapproving the IRR. Nevertheless, the Courtproceeded to discuss the issue of itsconstitutionality.

Section 23 of RA 9335 was struck down asunconstitutional for violating the principleof separation of powers

o There are three categories by whichCongress acts in the exercise of itsoversight powers: a) scrutiny, b)Congressional investigation and c)legislative supervision.

o In the exercise of legislativescrutiny, Congress may requestinformation and report from otherbranches of the government, giverecommendations or passresolutions for consideration of theagency involved.

o Congressional investigation, on theother hand, involves a more intensedigging of facts and is recognizedby the 1987 Constitution underSection 21, Article VI.

o While the first two involve inquiryinto past executive branch actions,the third form, legislativesupervision, allows Congress toscrutinize the exercise of delegated

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law-making authority and permitsCongress to retain part of thatdelegated authority.

Any post-enactment congressionalmeasure such as this should be limited to

scrutiny and investigation, in particular:

1) scrutiny based primarily on Congresspower of appropriation and budgethearings, the power to ask heads ofdepartments to appear before and be heardby either of its Houses on any matterpertaining to their departments and itspower of confirmation; and

2) investigation and monitoring of theimplementation of laws pursuant to the

power of Congress to conduct inquiries inaid of legislation.

Any action or step beyond that willundermine the separation of powersguaranteed by the Constitution.

Legislative vetoes in the form of acongressional oversight committee, as inthis case, fall in this class. Legislative veto isa statutory provision requiring the Presidentor an administrative agency to present theproposed implementing rules andregulations of a law to Congress, which hasthe power to approve or disapprove theregulations before they take effect.

As such, it is in the form of an inward-turning delegation.

According to the Opinion of Justice Tinga,the requirement that the implementingrules of a law be subjected to approval byCongress as a condition for their effectivityviolates the cardinal constitutionalprinciples of bicameralism and the rule onpresentment since:

o a valid exercise of legislative powerrequires the act of both chambers. Itcan be exercised neither solely byone of the two chambers nor by acommittee of either o bothchambers. Assuming the validity ofa legislative veto, both a single-chamber legislative veto and acongressional committeelegislative veto are invalid

o lawmaking is a joint act of thelegislature and the executive.Assuming that legislative veto is avalid legislative act with the force oflaw, it cannot take effect withoutsuch presentment even if approved

by both chambers of Congress.o Subsequently, from the moment

the law becomes effective, anyprovision of law that empowersCongress or any of its members toplay any role in theimplementation or enforcement ofthe law violates the principle ofseparation of powers and is thusunconstitutional.

ADJUDICATION: The petition was partiallygranted. Section 12 of RA 9335 creating a JointCongressional Oversight Committee to approvethe IRR of the law is unconstitutional. Theconstitutionality of the remaining provision isupheld.