“= REPRESS
Zoe REPRESEN.

le AY
REPUBLIC OF THE PHILIPPINES iy RECEIVED 2)
HOUSE OF REPRESENTATIVES oa w
Quezon City
EIGHTEENTH CONGRESS
First Regular Session

House Bill No. _ 3845

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN III

EXPLANATORY NOTE

‘There is a need to create a central agency that will consolidate the functions currently being
undertaken by the Land Transportation Office, the Land Transportation Franchising and
Regulatory Board, the DOTC's Office of Transport Cooperatives, the PNP's Traffic
Management Group and the MMDA's Traffic Enforcement Group. This is to avoid the
confusion as to which agency is tasked to maintain land transportation law and order on the
streets of the Philippines, as well as to provide direction and administration to the nation's
land transportation industry.

‘As envisioned by the bill, a National Land Transportation Authority (NLTA) shall absorb the
functions of a merged LTO and LTFRB as the primary policy, planning, programming,
coordinating, implementing, regulating and administrative entity of the government in the
promotion, development and regulation of a dependable network of land transportation
systems.

In so doing, a more efficient agency capable of addressing the various needs of the land
transportation industry is created, which, through regulations, will ensure public safety and
welfare. To allow the agency to do its broad function, the bill authorizes the NLTA to use
50% of the income that it collects from its operation. This will enable the agency to
modernize in order to be better equipped to do the tasks at hand.

‘As we move towards progress, we need a land transportation agency that is up to the
challenge. We can only attain this if this bill is passed into law.

In view of the foregoing, the immediate approval of this bill is earnestly sought.

MANUE) "ABOCHAN IIL
Represental
Magdalo Para sa Pilipino Party-List


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session
3845
House Bill No.

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN III

AN ACT
CREATING THE NATIONAL LAND TRANSPORTATION AUTHORITY,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

ARTICLE I
TITLE, POLICIES, OBJECTIVES AND SCOPE OF THE ACT

SECTION 1. Title. This act shall be known as the "National Land Transportation
Authority (NLTA) Act”.

SEC. 2. Policy and Objectives. The state shall pursue the development, maintenance
and expansion of a viable, efficient, safe and dependable land transportation system as an
effective instrument for national development and economic progress, specifically through
the establishment of a motor vehicle statistical office as the principal source of information,
the conversion from the adversarial quasi-judicial procedures in the grant of franchises to
operate public utility motor vehicles into administrative proceedings using socioeconomic
indicators in the grant of permits, and the establishment of an office charged with long term
forward planning in order to improve the administration of the land transportation industry.
The Authority shall absorb the functions of the merged LTO and LTFRB as the primary
policy, planning, programming, coordinating, implementing, regulating and administrative
entity of the government in the promotion, development and regulation of a dependable
network of land transportation systems.

SEC. 3. Scope of the Act.- The provisions of the Act shall control, as far as they
apply, to the registration and operation of motor vehicles; licensing of drivers and conductors;
enforcement of traffic rules, laws and regulations; adjudication of traffic and non-traffic
violations; franchising and operation of public utility motor vehicles; regulation of activities
of motor vehicle manufacturers, assemblers, importers, and dealers, and other related matters
pertaining to road safety and environment protection.

ARTICLE I
DEFINITIONS

SEC. 4. Definition of Terms. - As used in this Act, the following terms shall mean:


"Motor Vehicles” shall mean any vehicle propelled by any power other than muscular
using the public highway but excepting road rollers, trolley cars, street-sweepers,
sprinklers, lawn mowers, bulldozers, graders, forklifts, amphibians, trucks, and cranes
if not used on public highways, vehicles which run only on rails and tracks, and
tractors, trailers and engines of all kinds used exclusively for agricultural purposes.

"Highway" shall mean the entire width between the boundary lines of every way

"publicly maintained when any part thereof is open to the use of the public for the

purpose of vehicular travel.

"Owner" shall mean any person or entity in whose name the motor vehicle is

registered with the Authority. The owner of a motor vehicle owned by the government

or government: controlled corporation shall be the office, agency or bureau to which
the motor vehicle belongs.

"Component" shall mean any part of a motor vehicle such as engine, chassis and body

” or parts thereof.

"Dealer" shall mean any duly accredited person, association, partnership, firm or

corporation engaged in the assembly, manufacture, importation, buying and selling, or

rebuilding of motor vehicles or its components evidenced by a commercial invoice.
"Director-General" shall mean the actual or acting chief of the National Land
Transportation Authority duly appointed or designated by the President of the
Republic of the Philippines.

"Deputies" shall mean the organic and duly authorized representatives of the Director

"General to carry out the provisions of this Act.

"Agents" shall mean the duly designated representatives of the Director General

authorized to assist in enforcing the provisions of this Act.

"Parking or parked” means that the motor vehicle has been brought to a stop on the
shoulder or proper edge of a highway, and remains inactive in that place or closed
thereto for an appreciable period of time. A motor vehicle which properly stops,
merely to discharge a passenger or to take in a waiting passenger, or to load and
unload a small quantity of freight with reasonable dispatch shall not be considered as
"parked" if the motor vehicle again moves away without delay.

"Driver" shall mean any person who is in actual physical control of a motor vehicle in
operation.

"Professional Driver" shall mean any person hired or paid to operate a motor vehicle
whether in private use or for hire to the public. Any person driving his own motor
vehicle for business or for hire is a professional driver. Nothing in this definition shall
prevent a professional driver from operating a private vehicle without compensation.

"Non-Professional Driver" shall mean any person operating any vehicle, except a
public utility vehicle, without compensation.


. "Conductor" shall mean a person assisting the driver of a public utility vehicle to

ensure the safety of cargoes and/or passengers while said vehicle is in operation.

"Certificate of Public Convenience” shall mean the authorization issued by the
Authority for the operation of land transportation services for public use as required
by law.

"Authorized Route" shall mean the approved origin and destination points linked by a
chain of highways and streets open for public use over which the service is
authorized.

"Public Utility Operator" shall mean the registered owner of the motor vehicles
authorized for public utility operation by the Authority.

"Abandonment of Service" shall mean the suspension or cessation of service by a
public utility operator in its authorized route or portions thereof. A partial
abandonment of service is presumed when a public utility operator fails to field the
authorized number of units on a route after due notice from the Authority.

ARTICLE Ii
CREATION, POWERS AND FUNCTION

SEC. 5. Creation of the NLTA. - The National Land Transportation Authority

(NLTA), hereinafter referred to as the Authority, is hereby created, which shall be attached to
the Department of Transportation and Communications for purposes of policy coordination.

SEC. 6. Powers and Functions, - To accomplish its mandate and objectives, the

Authority is authorized to:

a. Prepare the National Land Transportation Development Program for approval by
the NEDA Board; evaluate and package projects and investment programs; and
for this purpose, may call on any agency or organization whether public or private
whose development plans include land transportation as an integral part thereof, to
participate in the preparation and implementation of such programs;

'b. Enter into contract with domestic and foreign companies for services and products
duly approved in the National Land Transportation Development Program;

c. Promulgate, administer and enforce standards of measurements, designs, and rules
and regulations requiring owners of motor vehicles and operator of public land
transportation services to equip, install and provide in their utilities and in their
stations such devices, equipment, facilities and operating procedures and
techniques as may promote safety, protection, comfort and convenience to persons
and property in their charge, as well as the safety of persons and property within
their areas of operation;

d. Issue, amend, revise, suspend or cancel certificates of public convenience or
permits authorizing the operation of public utility land transportation services, and
to prescribe the appropriate terms and conditions therefor and regulate the
operation of public land transportation;


m.

n.

Identify, establish, prescribe and regulate routes or service, economically viable
capacities, zones or areas of operation of public land transportation services,
adjust fares, freight rates and related charges;

Accredit and regulate the activities of motor vehicle and component
manufacturers, assemblers, importers and dealers; the operation of driving
schools; inspection stations for safety and smoke emission; clinics and
laboratories to conduct medical examination and psychological tests including
alcohol and drug testing; and insurance companies and other activities related to
the function of the Authority;

Establish rules and regulations for the inspection and registration of motor
vehicle; issuance, suspension and revocation of driver's licenses and permits, type
approval for safety standards of motor vehicles and accessories; issuance of motor
vehicle identification plates and validating stickers;

. Promulgate rules and regulations for the effective enforcement of all land

transportation and traffic laws, rules and regulations and impose and collect fines
and penalties for violations thereof,

Make arrest for violations of the land transportation laws;

Issue subpoena and subpoena duces fecum to compel the appearance of motor
vehicle owners, drivers and other persons;

. Fix, impose and collect, and periodically review and adjust reasonable fees and

other related charges for services rendered, as well as administrative fines for
violation of pertinent laws, orders, rules and regulations, decisions and rulings;

Compile, maintain and manage an integrated data center with appropriate
communications linkages for records and statistics in land transportation including
a uniform traffic violation accident and stolen motor vehicles reporting system;
Generate non-tax revenues out of its assets, properties and services; and

Perform such other powers and functions as maybe provided by law.

SEC. 7. Governing Body. - The governing board and policy making body of the
Authority shall be vested in the Board of Directors composed of the following:

v
2

Secretary of Department of Transportation and Communications (DOTC);

Director General of the National Land Transportation Authority (NLTA),
appointed by the President as Chief Executive Officer;

. Secretary of Department of Interior and Local Government (DILG);
|. Secretary of Department of Budget and Management (DBM);
.. Secretary of the Department of Finance (DOF);


6. Secretary of the National Economic Development Authority (NEDA); and
7. A representative from the transport sector to be appointed by the President.

The Board shall meet at least once a month and hold special meetings upon the call of
the Chairman or any four members of the Board. A simple majority shall constitute a quorum
to transact business and vote of at least a simple majority of the members present at which
there is a quorum shall be valid.

ARTICLE IV
ADMINISTRATION

SEC. 8. Executive Officers. - The Authority shall be managed by a Director-General
with the rank, salary and qualifications equivalent to that of a Department Undersecretary,
who must have sufficient knowledge and background in land transportation management. He
shall serve at the pleasure of the President.

The Director-General shall be assisted by four (4) Deputy Director-Generals for
Administration and Finance, Plans and Operations, Franchising, and Law Enforcement and
‘Adjudication - with rank, salary and qualifications equivalent to that of an Assistant
Secretary, preferably a Career Executive Service Officer (CESO) possessing at least 10 years
of experience and practice in land transportation management and administration.

The regional offices shall be headed by a Regional Executive Director under the
direct supervision of the Director-General with rank, salary and qualifications equivalent to
that of a Director IV, possessing ten years of experience in land transportation management,
assisted by two (2) Technical Regional Directors - one for Operations and another for
‘Administration and Finance - with rank, salary and qualifications equivalent to that of a
Director III and with at least ten years of experience in land transportation management.

The above-named executive officers of the Authority shall be appointed by the
President upon recommendation of the Board. Within one year, all such officers shall apply
and qualify for appointment as Career Executive Service officers.

For purposes of a more rigid and effective implementation of this Act, the Director-
General shall create the Land Transportation District Offices (LTDO) to be headed by a Land
Transportation District Director appointed by the Director-General. The LTDO shall have the
rank, salary and privileges of a Director II. The qualifications herein required for LTDO shall
apply to officials appointed pursuant to this law without prejudice to incumbent heads of
LTO district offices regardless of their status.

SEC. 9. Powers of the Director-General. - As Chief Executive Officer of the
Authority, the functions and powers of the heads of the LTO, LTFRB, and DOTC as
provided under R.A. 4136 and CA 146 as amended, as well as other laws otherwise not
expressly defined in this Act are now deemed transferred, vested and exercised by the
Director-General of the Authority, including the following:

(1) Implement, enforce and apply the policies, programs, guidelines, procedures, rules
and regulations promulgated, prescribed, issued and adopted by the Authority;


(2) Manage the affairs of the Authority and ensure the smooth operational efficiency
of the national land transportation system;

(3) Sign contracts, approve expenditures and appoint and discipline employees below
the level of Presidential appointees;

(4) Submit an annual budget to the Board for recurrent income and expenditures for
adoption not later than one month before the commencement of the ensuing year;

(5) Undertake research, studies, investigations, projects and other related activities,
and submit reports and recommendations to the Board for its information and or
approval; engage the services of experts/consultants either in full time or part time
basis as may be required in the performance of his functions and duties as maybe
determined by him subject to the approval of the Board;

(6) Designate as deputies government entities with traffic-related functions, civic
action groups, Non-Government Organization (NGO) and Public Officers (PO) of
good standing;

(7) Do any act or thing for the proper operation and administration of the Authority;
and

(8) Perform such other functions and duties as the Board may assign from time to
time.

SEC. 10. Staffing Pattern. - The Director-General, subject to the approval of the
Board shall determine the staffing pattern, the number of personnel and field offices of the
Authority, the functions of the central office staff, the regional and district offices; define
their duties and responsibilities and fix their qualifications, salaries and other emoluments.

The Board shall act on the recommendation within thirty (30) days from its
submission otherwise the recommendation shall be deemed approved and the same shall be
implemented within ninety (90) days from approval thereof.

SEC. 11. Appointment and Discipline of Personnel. - All officials of the Authority,
except those appointed by the President, shall be selected and appointed on the basis of merit
and fitness as established in a merit system program of the Authority consistent with Civil
Service laws and regulations.

The appointment of regional and district officials except those to be appointed by the
President may be delegated by the Director-General to the Regional Executive Director.
Except for the Director-General, all officials to be appointed by the President shall be
recommended by the Board.

The power to discipline employees resides with the Director General. Appeals on the
decision of the Director General may be submitted to the Board for reconsideration.
Decisions of the Regional Directors may be appealed with the Director General.


ARTICLE V
FINANCE

SEC. 12. Sources of Funds. - Subject to the rules on government auditing, the
equivalent of fifty percent (50%) of its total annual revenue collections arising from
registration of motor vehicle, licensing of drivers, franchising and other miscellaneous
transactions shall be retained by the Authority to pay for its annual operations and capital
expenditures. Under this section, the Authority is also hereby allowed to undertake the
following:

(a) Funds generated from its own special projects not arising from its regular
functions shall be retained by the authority for employees’ welfare, subject to the
approval of the Board.

(b) The Authority is authorized to contract loans, credits and other indebtedness as it
may deem necessary to carry out the purposes of this Act. The obligations shall be
the sole liability of the Authority unless guaranteed by the Republic of the
Philippines.

(©) Revenue generated from fines and penalties including proceeds from public sale
arising from law enforcement activities shall be retained by the Authority for its
operational and maintenance requirements.

(d) The collection of motor vehicle registration fees shall be reinstated to defray
operational costs and maintenance of national regional facilities.

(e) The Director-General shall, every year, prepare and adopt estimates of income and
expenditures and capital budget for the ensuing year. Its annual budget shall be
submitted to the Board for approval.

SEC. 13. Exemption from Taxes and Duties. - The importation of equipment,
machineries, software accessories and materials used directly in the operation of the
Authority and which are otherwise not available locally on favorable terms, are exempted
from all direct and indirect taxes, duties, fees, imposts and other charges and restrictions, the
provisions of existing laws to the contrary notwithstanding: Provided, That when the
‘Authority disposes of such equipment, machineries, software, accessories and materials, the
buyer of the same shall pay to the government the corresponding taxes and duties as assessed
by the Bureau of Internal Revenue and Bureau of Customs.

ARTICLE VI
REGULATION OF PUBLIC UTILITY VEHICLES

SEC. 14. Administrative Permits. - Notwithstanding the provision of any law to the
contrary, the issuance of permits to operate public utility vehicles shall be administratively
processed based on rules and regulations/guidelines that the Authority shall promulgate
within sixty (60) days subject to the approval of the Board. Without prejudice to the
provisions of R.A. 7160, otherwise known as the Local Government Code of 1991, the permit
to operate public utility vehicles shall be issued by the Authority.


SEC. 15. Operation of Public Utility Vehicles. - No motor vehicle shall be operated
as a public conveyance or for hire without possessing a valid and subsisting franchise and/or
permits issued by the Authority.

All existing franchises and permits issued prior to the affectivity of this Act shall
remain valid up to the date of its expiry as indicated in the certificate or permit. Any
subsequent transaction related thereto shall now be processed and issued pursuant to the rules
and regulations of the Authority.

SEC. 16. Rate Fixing. - For purposes of fixing of rates of public utility vehicles, the
Director General shall undertake the necessary studies, after due consultation with the
involved sectors, and recommend the same to the Board for approval.

SEC. 17. Appeals. - Any decision related to the issuance of permits and orders in
whatever form by the Director-General may be appealed to the Board within fifteen (15) days
from the date of receipt. Decisions and orders issued by officials properly delegated to issue
permits may be appealed to the Director-General within fifteen (15) days from date of
receipt.

In all cases where the aggrieved parties are not satisfied with the resolution of the
authority, such decisions may be appealed to the President of the Philippines for final
administrative disposition.

Any decisions related to the issuance of permits or any other orders in whatever form
by the appropriate officials of the LTA may be appealed in the following manner:

1. Decisions of orders of the Director-General appealable to the Board within a period of
15 days computed from the date of receipt of said decision appealed from the decision
of the Board shall be final and executory.

2. Decisions of Regional Executive Director to issue permits for PUV pursuant to the
immediately preceding paragraph may be appealed to the Director-General within a
period of fifteen (15) days from receipt of the decision being appealed from.

SEC. 18. Penalties. - In order to ensure strict adherence and compliance to the
conditions of the permit issued, the Director-General, subject to the approval of the Board,
shall promulgate the necessary procedures for the imposition of sanctions and appropriate
schedule of penalties for any violation of the conditions of the permit and impose the same.

SEC. 19. Authority to Impose Penalties. - The Director-General is hereby
empowered to impose penalties and sanctions in the form of cancellation, revocation,
suspension, fines and other forms of penalties allowable by law or any combination thereof
for violations of the terms and conditions of the permit. Subject to approval of the Board, the
Director-General shall promulgate a set of guidelines containing the administrative
procedures in the imposition of sanctions including the schedule of penalties


ARTICLE VII
DISPOSITION OF SEIZED VEHICLE COMPONENTS AND ACCESSORIES

SEC. 20. Disposition of Impounded Vehicles. - All motor vehicles impounded,
including the confiscated accessories and which are abandoned by their owners for failure to
pay the fines and/or serve the penalties imposed thereon within six (6) months, shall be sold
and disposed of by the Authority in public auction under the following conditions:

(a) The owners of said impounded vehicles shall be given appropriate written notice on
the auction sale with the option to redeem said property after paying all charges
within fifteen (15) days from receipt of such notice, or to participate in the public
auction. The proceeds of the public auction shall be applied to all liens, fines, fees and
penalties accruing in favor of the Authority provided that the remainder shall be
returned to the registered owner.

(b) An impounded vehicle without a known owner or lawful claimant, or after three
notices in newspapers of national circulation, shall be sold at public auction after
publication of the notice of public sale. The proceeds thereof shall be applied to the
lien of the government with the remaining amount credited to the Authority for use in
its law enforcement activities.

ARTICLE VII
TRANSITORY PROVISIONS

SEC. 21. Abolition. -The Land Transportation Office, the Land Transportation
Franchising and Regulatory Board and the Office of Transport Cooperatives in the
Department of Transportation and Communications and the TMG of the PNP and Traffic
Enforcement Group of MMDA are hereby abolished. Properties, assets and liabilities, all
powers and duties, rights and choices of actions, vested by law or exercised by said abolished
offices and its predecessors are hereby transferred to the Authority.

SEC. 22. Holdover Functions.- To ensure smooth transition into the structure of the
Authority, all officers and employees of the defunct LTO, LTFRB, DOTC, TMG of the PNP
and the TEG of MMDA shall continue to exercise their usual functions, duties and
responsibilities unless otherwise directed.

The Authority shall ensure that all present employees of the abolished agencies shall
be accommodated without diminution of their salaries as a result of the reorganization.
Officials and employees who opt to retire during the reorganization shall receive, in addition
to retirement benefits and pensions granted under the existing retirement law, an additional
two (2) months salary for every year of service. An amount corresponding to the retirement
benefits of all employees opting to retire shall be held in reserve by the National Treasury to
pay for this purpose:Provided, That employees who have opted to retire and who have
received retirement benefits will no longer be eligible for employment in the Authority.

SEC. 23. Saving Clause. - All orders, rules, regulations, permit, licenses, decisions
and privileges which have been issued, made, granted or allowed to become effective by the
former LTO, LTFRB, DOTC, TMG of PNP and TEG ofMMDA or its predecessors, shall
continue to be in effect according to their terms until modified, terminated, superseded, set
aside or repealed.


ARTICLE IX
PENAL AND OTHER PROVISIONS

SEC. 24. Penalty for Violations. - The Authority, subject to the approval of the
Board, shall issue guidelines and schedule of fines and penalties for violations committed
under this Act.

SEC. 25. Punishment for Other Offenses. - The conviction of any person for any
offense under this Act shall not bar his prosecution for any other offenses which may have
been committed by such person concurrently with the commission of the offense of which he
was convicted or in doing the act or series of acts which constituted the offense of which he
was convicted.

SEC. 26. Duty of Clerks of Court. - It is hereby made the duty of clerks of the
regional trial courts, municipal trial courts trying traffic violation cases to certify to the
Authority the result of any case, whether criminal or civil, involving violations of any
provisions of this Act, or other laws and ordinances relating to motor vehicles. Said
certificates shall be specifically contained the name of the driver or owner of the vehicle
involved, his address, the number of his license and/or the certificate of registration of his
vehicle, the date thereof and the offense for which he was convicted or acquitted.

ARTICLE X
COLLECTION OF FEES, TAXES AND FINES, LIENS, ALLOTMENT OF FUNDS

SEC. 27. Collection of Fees, National and Local Taxes, Toll Fees. - The collection
of all fees, taxes and fines, under the provisions of this Act shall be made in accordance with
the regulations to be prescribed by the Authority subject to the approval of the Board:

(a) No taxes or fees other than those prescribed in this Act shall be imposed for the
registration or operation or on the ownership of any motor vehicle, or for the
exercise of the profession of driver, by any local government, the provisions of
any charter to the contrary notwithstanding; provided however that any provincial
board, city or municipal councilor board or other competent authority may enact
or collect such reasonable and equitable toll fees for the use of such bridges and
ferries within their respective jurisdiction as may be authorized and approved by
the proper authorities, and also for the use of such public roads as may be
authorized by the President of the Philippines upon the recommendation of the
proper authority.

(b) Lien Upon Motor Vehicles. Any balance of fees for registration, renewal
registration or delinquent registration of a motor vehicle remaining unpaid and all
fines imposed upon any vehicle owner shall constitute a first lien upon the motor
vehicle concerned. The Director-General is hereby vested with the authority to
issue a warrant of constructive or actual distraint or levy to any owner of motor
vehicle who has any balance of fees for registration, renewal or delinquent
registration of a motor vehicle remaining unpaid which upon demand by the
Director- General or his deputies executing such warrant, the owner of the vehicle
shall surrender the same at the time demanded, except when the attachment or
execution is under any judicial process. Any owner who fails or refuses to

10


surrender any of such property or vehicle not surrendered shall be punished by a
fine not exceeding the amount of the fees, including penalties and interest, if any,
for the collection of which such warrant has been issued, together with the cost
and interest if any until surrendered.

ARTICLE X
FINAL PROVISION

SEC. 28. No local government shall enact or enforce any ordinance or resolution in
conflict with the provisions of this Act, or prohibiting any deputy or agent of the authority to
enforce this Act, within their respective territorial jurisdiction and the provisions of any
charter the contrary notwithstanding.

SEC. 29. Appropriations. - To carry out effectively the provisions of this Act during
the transition period, the amount equivalent to thirty five percent (35%) of the collection for
the year is hereby appropriated in addition to the appropriations provided in the General
Appropriations Act of the LTO, LTFRB, DOTC, TMG and TEG.

SEC. 30, Separability Clause. - If for any reason, any section or provision of this Act
is declared to be unconstitutional or invalid, the other sections or provisions hereof which are
not affected shall continue to be in full force and effect.

SEC. 31. Repealing Clause. - All acts, decrees, orders, and instructions or parts
thereof inconsistent with the provisions of this Act are repealed and modified accordingly.

SEC. 32. Effectivity. - This act shall take effect thirty (30) days after approval and
publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,

at