F1F'1 EENTIf CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First negular Session 
) 
) 
) 
SENATE 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
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 shall absorb the functions of 
a merged L TO and L TFRB as the primary policy, planning, progranlming, 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 tlle 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. 
Hence, passage of this bill is earnestly requested. 
~~~w 
Senator 


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FlF'IEENTII CONGRESS OF TIlE 
) 
REPUBLIC OF THE PlHLIPPINES ) 
FIRST REGULAR SESSION 
) 
SENATE 
403 
s. No. __ 
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Introduced by Seuator Antonio "Sonny" F. Trillanes IV 
AN ACT 
ESTABLISHING THE NATIONAL LAND TRANSPORTATION AUTHORITY, 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES 
Be in enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
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ARTICLE I 
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TITLE, POLICIES, OBJECl1VES AND SCOPE OF TIlE ACT 
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SECTION 1. Title. - This act shall be known as the "National Land Transportation 
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Authority (NLTA) Act of201O." 
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SEC. 2. Policy and Objectives. The state shall pursue the development, maintenance and 
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expansion of a viable, efficient, safe and dependable land transportation system as an effective 
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instrument for national development and economic progress, specifically through the 
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establishment of a motor vehicle statistical office as the principal source of information, the 
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conversion from the adversarial quasi judicial procedures in the grant of franchises to operate 
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public utility motor vehicles into administrative proceedings using socioeconomic indicators in 
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the grant of permits, and the establishment of an office charged with long term forward planning 
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in order to improve the administration of the land transportation industry. The Authority shall 
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absorb the functions of the merged LTO and LTFRB as the primary policy, planning, 
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programming, coordinating, implementing, regulating and administrative entity of the 
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government in the promotion, development and regulation of a dependable network of land 
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transportation systems. 
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SECfION 3. Scope of the Act. The provisions of the Act shall control, as far as they 
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apply, to the registration and operation of motor vehicles; licensing of drivers and conductors; 
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enforcement of traffic rules, laws and regulations; adjudication of traffic and non-traffic 
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violations; franchising and operation of public utility motor vehicles; regulation of activities of 
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motor vehicle manufacturers, assemblers, importers, and dealers, and other related matters 
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pertaining to road safety and environment protection. 
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mean: 
ARTICLED 
DEFINITIONS 
SEC. 4. Wortls and Phrases Defined. - As used in this Act, the following terms shall 
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(a) 
"Motor Vehicles" shall mean any vehicle propelled by any power other than 
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muscular power 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 lUll only on rails 
and tracks, and tractors, trailers and engines of all kinds used exclusively for 
agricultural purposes. 
(b) 
"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. 
(c) 
"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. 
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(d) 
"Component" shall mean ffi1Y part of a motor vehicle such as engine, chassis and 
body or parts thereof. 
(e) 
"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. 
(f) 
"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. 
(g) 
"Deputies" shall mean the organic and duly authorized representatives of the 
Director General to carry out the provisions of this Act. 
(h) 
"Agents" shall mean the duly designated representatives of the Director General 
authorized to assist in enforcing the provisions of this Act. 
(i) 
"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. 
(j) 
"Driver" shall mean any person who is in actual physical control of a motor vehicle 
in operation. 
(k) 
"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. 
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(I) 
"Non Projessional Driver" shall mean any person operating any vehicle except a 
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public utility vehicle, without compensation. 
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(m) "Conductor" shall mean a person assisting the driver of a public utility vehicle to 
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ensure the safety of cargoes and/or passengers while said vehicle is in operation. 
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(n) 
"Certificate of Public Convenience H shall mean the authOlization issued by the 
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Authority for the operation of land transportation services for public use as required 
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bylaw. 
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(0) 
"Authorized Route" shall mean the approved origin and destination points linked by 
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a chain of highways and streets open for public use over which the service is 
\0 
authorized. 
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(p) 
"Public Utility Operator" shall mean the registered owner of the motor vehicles 
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authorized for public utility operation by the Authority. 
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(q) 
"Abandonment of Service" shall mean the suspension or cessation of service by a 
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public utility operator in its authorized route or portions thereof. A partial 
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abandonment of service is presumed when a public utility operator fails to field the 
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authorized number of units on a route after due notice from the Authority. 
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ARTICLEll 
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CREATION, POWERS AND FUNCTION 
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SEC. 5. Creation of ti,e NLTA. The National Land Transportation Authority (NLT A), 
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hereinafter referred to as the Authority, is hereby created, which shall be attached to the 
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Department of Transportation and Communications for purposes of policy coordination. 
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SEC. 6. Powers and Functions. To accomplish its mandate and objectives, the Authority 
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is authorized to: 
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(a) 
Prepare the National Land Transportation Development Program for approval by 
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the NEDA Board; evaluate and package projects and investment programs; and for 
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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 
paliicipate 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; 
(e) 
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; 
(t) 
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. 
(g) 
Establish rules and regulations for the inspection and registration of motor vehicle; 
issuance, suspension and revocation of driver's licenses and permits, type approval 
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for safety standards of motor vehicles and accessories; issuance of motor vehicle 
identification plates and validating stickers; 
(h) 
Promulgate mles 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; 
(i) 
Make arrest for violations of the land transportation laws; 
0) 
Issue subpoena and subpoena duces tecum to compel the appearance of motor 
vehicle owners, drivers and other persons; 
(k) 
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; 
(I) 
Compile, maintain and manage an integrated data center with appropriate 
communications linkages for records and statistics in land transportation including a 
unifornl traffic violation accident and stolen motor vehicles reporting system 
(m) Generate non-tax revenues out of its assets, properties and services; and 
(n) 
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: 
(a) 
Secretary of Department of Transportation and Communications (DOTC); 
(b) 
Director General of the National Land Transportation Authority (NLTA), appointed 
by the President as Chief Executive Officer; 
(c) 
Secretary of Department ofInterior and Local Government (DILG); 
(d) 
Secretary of Department of Budget and Management (DBM); 
(e) 
Secretary of the Department of Finance (DOF); 
(f) 
Secretary of the National Economic Development Authority (NEDA); and 
(g) 
A representative from the transpOlt sector to be appointed by the President. 
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Transportation District Director appointed by the Director-General. The LTDO shall have the 
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rank, salary and privileges of a Director II. The qualifications herein required for L TDO shall 
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apply to officials appointed pursuant to this law without prejudice to incumbent heads of LTO 
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district offices regardless of their status. 
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SEC. 9. Powers of tlte Director-GeneraL As Chief Executive Officer of the Authority, 
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the functions and powers of the heads of the L TO, L TFRB, and OTC as provided under R.A. 
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4136 and CA 146 as amended as well as other laws otherwise not expressly defined in this Act 
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are now deemed transferred, vested and exercised by the Director-General of the Authority, 
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including the following: 
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(a) 
Implement, enforce and apply the policies, programs, guidelines, procedures, rules 
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and regulations promulgated, prescribed, issued and adopted by the Authority; 
(b) 
Manage the affairs of the Authority and ensure the smooth operational efficiency of 
the national land transportation system; 
(c) 
Sign contracts, approve expenditures and appoint and discipline employees below 
the level of Presidential appointees; 
(d) 
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; 
(e) 
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 ofthe Board; 
(f) 
Designate as deputies govtlrnment entities with traffic-related functions, civic action 
groups, Non-Government Organization (NGO) and Public Officers (PO) of good 
standing; 
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(g) 
Do any act or thing for the proper operation and administration of the Authority; 
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and 
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Perform such other functions and duties as the Board may assign from time to time. 
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SECfION 10. Staffing Pattern. The Director-General, subject to the approval of the 
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Board shall determine the staffing pattern, the number of personnel and field offices of the 
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Authority, the functions of the central office staff, the regional and district offices; define their 
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duties and responsibilities and fix their qualifications, salaries and other emoluments. 
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The Board shall act on the recommendation within (30) days from its submission 
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otherwise the recommendation shall be deemed approved and the same shall be implemented 
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within 90 days from approval thereof. 
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SEC. 11. Appointment and Discipline of Personnel. All officials of the Authority, except 
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those appointed by the President, shall be selected and appointed on the basis of merit and fitness 
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as established in a merit system program of the Authority consistent with Civil Service laws and 
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regulations. 
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The appointment of regional and district officials except those to be appointed by the 
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President may be delegated by the Director General to the Regional Executive Director. Except 
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for the Director General, all officials to be appointed by the President shall be recommended by 
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the Board. 
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The power to discipline employees resides with the Director General. Appeals on the 
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decision of the Director General may be submitted to the Board for reconsideration. Decisions of 
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the Regional Directors may be appealed with the Director General. 
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ARTICLE V 
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FINANCE 
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SEC. 12. Sources of Funds. Subject to the rules on government auditing, the equivalent 
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of fifty percent (50%) of its total annual revenue collections arising from registration of motor 
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vehicle, licensing of drivers, franchising and other miscellaneous transactions shall be retained 
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by the Authority to pay for its annual operations and capital expenditures. Under this section, the 
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Authority is also hereby allowed to undertake the following: 
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(a) 
Funds generated from its own special projects not arising from its regular functions 
shall be retained by the authority for employees' welfure, subject to the approval by 
the Board. 
(b) 
The Authority is authorized to contract loans, credits and other indebtedness as it 
may deem seem 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. 
(c) 
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. 
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SEC. 13. Exemption from Taxes and Duties. The importation of equipment, 
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machineries, software accessories and materials used directly in the operation of the Authority 
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and which are otherwise not available locally on favorable terms, are exempted from all direct 
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and indirect taxes, duties, fees, imposts and other charges and restrictions, the provisions of 
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existing laws to the contnU'y notwithstanding. Provided, that, when the Authority disposes of 
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such equipment, machineries, software, accessories and materials, the buyer of the same shall 
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pay to the government the corresponding taxes and duties as assessed by the Bureau of Internal 
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Revenue and Bureau of Customs. 
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ARTICLE VI 
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REGULATION OF PUBtlC UTILITY VEIHCLES 
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SEC. 14. Administrative Permits. Notwithstanding the provision of any law to the 
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contrary, the issuance of permits to operate public utility vehicles shall be administratively 
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processed based on rules and regulations/guidelines that the Authority shall promulgate within 
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60 days subject to the approval of the Board. 
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Without prejudice to the proyisions of R.A. 7160, otherwise known as the Local 
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Government Code of 1991, the permit to operate public utility vehicles shall be issued by the 
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Authority. 
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SEC. 15. Operation of Public Utility Vehicles. No motor vehicle shall be operated as a 
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public conveyance or for hire without possessing a valid and subsisting franchise andlorr permits 
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issued by the Authority. 
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All existing franchises and permits issued prior to the affectivity of this Act shall remain 
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valid up to the date of its expiry as indicated in the certificate or permit. Any subsequent 
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transaction related thereto shall now be processed and issued pursuant to the rules and 
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regulations of the Authority. 
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SEC. 16. Rate P'ixing. For purposes of fixing of rates of public utility vehicles, the 
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Director General shall undertake the necessary studies, after due consultation with the involved 
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sectors, and recommend the same to the Board for approval. 
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SEC. 17. Appeals. Any decision related to the issuance of permits and orders in whatever 
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form by the Director General may be appealed to the Board within fifteen (15) days from the 
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date of receipt. Decisions and orders issued by officials properly delegated to issue permits may 
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be appealed to the Director General within fifteen (15) days from date of receipt. 
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In all cases where the aggrieved parties are not satisfied with the resolution of the 
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authority, such decisions may be appealed to the President of the Philippines for final 
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administrative disposition. 
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Any decisions related to the issuance of permits or any other orders in whatever form by 
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the appropriate officials of the LTA may be appealed in the following manner: 
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(a) 
Decisions of orders of the Director-General ,appealable to the Board within a period 
of IS days computed from the date of receipt of said decision appealed from the 
decision of the Board shall be final and executory. 
(b) 
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 15 days from receipt of the decision being appealed from. 
IS 
SEC. 18. Penalties. In order to ensure strict adherence and compliance to the conditions 
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of the permit issued, the Director-General, subject to the approval of the Board, shall promulgate 
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the necessary procedures for the imposition of sanctions and appropriate schedule of penalties 
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for any violation of the conditions of the permit and impose the same. 
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SEC. 19. Autllority to Impose Penalties. The Director-General is hereby empowered to 
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impose penalties and sanctions in the fonn of cancellation, revocation, suspension, fines and 
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other forms of penalties allowable by law or any combination thereof for violations of the terms 
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and conditions of the permit. Subject to approval of the Board, the Director-General shall 
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promulgate a set of guidelines containing he administrative procedures in the imposition of 
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sanctions including the schedule of penalties. 
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ARTICLEVD 
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DISPOSmQN OF SEIZED VEIllCLE COMPQNENTS AND ACCESSORIES 
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SEC. 20. Disposition of Impounded Vehicles. All motor vehicles impounded, including 
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the confiscated accessories and which are abandoned by their owners for failure to pay the fines 
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andlor serve the penalties imposed thereon within six (6) months, shall be sold and disposed of 
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by the Authority in public auction under the following conditions: 
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(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 
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publication of the notice of public sale. The proceeds thereof shall be applied to the 
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lien of the government with the remaining amount credited to the Authority for use 
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in its law enforcement activities. 
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ARTICLE VD 
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TRANSITORY PROVISIONS 
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SEC. 21. Abolition. The Land Transportation Office, the Land Transportation 
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Franchising and Regulatory Board and the Office of Transport Cooperatives in the Department 
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of Transportation and Communications and the TMG of the PNP and Traffic Enforcement Group 
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of MMDA are hereby abolished. Properties, assets and liabilities, all powers and duties, rights 
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and chooses of actions, vested by law or exercised by said abolished offices and its predecessors 
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are hereby transferred to the Authority. 
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SEC. 22. Holdover Functions. To ensure smooth transition into the structure of the 
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Authority, all officers and employees of the defunct LTO, LTFRB, OTC, TMG of the PNP and 
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the TEG of MMDA shall continue to exercise their usual functions, duties and responsibilities 
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unless otherwise directed. 
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The Authority shall ensure that all present employees of the abolished agencies shall be 
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accommodated without diminution of their salaries as a result of the reorganization. Officials and 
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employees who opt to retire during the reorganization shall receive, in addition to retirement 
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benefits and pensions granted under the existing retirement law, an additional two (2) months 
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salary for every year of service. An amount corresponding to the retirement benefits of all 
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employees opting to retire shall be held in reserve by the National Treasury to pay for this 
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purpose. PrOVided, That employees who have opted to retire and who have received retirement 
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benefits will no longer be eligible for employment in the Authority. 
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SEC. 23. Saving Clause. All orders, rules, regulations, permit, licenses, decisions and 
IS 
privileges which have been issued, made, granted or allowed to become effective by the former 
, 
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LTO, LTFRB, OTC, TMG ofPNP and TEG ofMMDA or its predecessors, shall continue to be 
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in effect according to their terms until modified, terminated, superseded, set aside or repealed. 
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ARTICLE IX 
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PENAL AND OTHER PROVISIONS 
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SEC. 24. Penalty jor Violations. The Authority, subject to the approval of the Board, 
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shall issue guidelines and schedule of fines and penalties for violations committed under this 
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Act. 
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SEC. 25. Plmisllmentjor OilIer Offenses. The conviction of any person for any offense 
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under this Act shall not bar his prosecution for any other offenses which may have been 
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committed by such person concurrently with the commission of the offense of which he was 
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convicted or in doing the act or series of acts which constituted the offense of which he was 
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convicted. 
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SEC. 26. Duty of Clerks of Court. It is hereby made the duty of clerks of the regional 
, 
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trial courts, municipal trial courts trying traffic violation cases to certifY to the Authority the 
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result of any case, whether criminal or civil, involving violations of any provisions of this Act, or 
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other laws and ordinances relating to motor vehicles. Said certificates shall be specifically 
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contained the name of the driver or owner of the vehicle involved, his address, the number of his 
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license and/or the certificate of registration of his vehicle, the date thereof and the offense for 
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which he was convicted or acquitted. 
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ARTICLE X 
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COLLECTION OF FEES, TAXES AND FINES, LIENS, ALLOTMENT OF FUNDS 
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SEC. 27. Collection of Fees; National a"d Local Taxes; Toll Fees. The collection of all 
IS 
fees, taxes and fines, under the provisions of this Act shall be made in accordance with the 
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re!,'Illations to be prescribed by the Authority subject to the approval of the Board. 
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( a) 
No taxes or fees other than those prescribed in this Act shall be imposed for the 
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registration or operation or on the ownership of any motor vehicle, or for the 
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exercise of the profession of driver, by any local government, the provisions of any 
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charter to the contrary notwithstanding; provided however that any provincial 
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board, city or municipal councilor board or other competent authority may enact or 
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collect such reasonable and equitable toll fees for the use of such bridges and ferries 
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within their respective jurisdiction as may be authorized and approved by the proper 
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authorities, and also for the use of such public roads as may be authorized by the 
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President of the Philippines upon the recommendation of the proper authority. 
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(b) 
Lien Upon Motor Vehicles. Any balance of fees for registration, renewal 
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registration or delinquent registration of a motor vehicle remaining unpaid and all 
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fines imposed upon any vehicle owner shall constitute a first lien upon the motor 
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vehicle concerned. The Director-General is hereby vested with the authority to issue 
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a warrant of constructive or actual distraint or levy to any owner of motor vehicle 
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who has any balance of fees for registration, renewal or delinquent registration of a 
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motor vehicle remaining unpaid which upon demand by the Director-General or his 
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deputies executing such warrant, the owner of the vehicle shall surrender the same 
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at the time demanded, except when the attachment or execution is under any 
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judicial process. Any owner who fails or refuses to surrender any of such property 
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or vehicle not surrendered shall be punished by a fine not exceeding the amount of 
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the fees, including penalties and interest, if any, for the collection of which such 
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warrant has been issued, together with the cost and interest if any until surrendered. 
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' ARTICLE X 
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FINAL PROVISION 
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SEC. 28. No local government shall enact or enforce any ordinance or resolution in 
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conflict with the provisions of this Act, or prohibiting any deputy or agent of the authority to 
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enforce this Act, within their respective territorial jurisdiction and the provisions of any charter 
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itO the contrary notwithstanding. 
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SEC. 29. Appropriations. To carry out effectively the provisions of this Act during the 
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transition period, the amount equivalent to thirty five percent (35%) of the collection for the year 
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is hereby appropriated in addition to the appropriations provided in the General Appropriation 
23 
Act of the LTD, LTFRB, DTe, TMG and TEG. 
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SEC. 30. Separability Clause. If for any reason, any section or provision of this Act is 
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declared to be unconstitutional or invalid, the other sections or provisions hereof which are not 
27 
affected shall continue to be in full force and effect. 
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SEC. 30. Repealing Clause. All acts, decrees, orders, and instructions or parts thereof 
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inconsistent with the provisions of this Act are repealed and modified accordingly. 
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SEC. 32. Effectivity. This act shall take effect thirty (30) days after approval and 
5 
publication in the Official Gazette. 
Approved, 
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