Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. 62°74

Introduced by: Representative Amnulfo P. Fuentebella,

EXPLANATORY NOTE

This bill seeks to reorganize the Land Transportation Office, which was
created pursuant to Republic Act 4136 and Executive Order No. 125-A in order
to consolidate and rationalize its functions and processes uninhibited by
unnecessary control and fiscal constraints that deter its expeditious
modernization and carrying out of its mandates.

As envisioned by the bill, a National Land Transportation Authority shall
be a self-reliant and globally competitive government agency that provides
excellent and vibrant public service through innovative technology, and will
have the primary function of planning, policy formulation, coordinating,
implementing, regulating as an administrative entity of the government in the
promotion, development and regulation of motor vehicle registration, driver's
licensing, and enforcement of land based transportation and traffic laws.

This bill seeks to authorize the NLTA to use 80% of the income that it
collects from its operation to allow the agency to perform its broad functions
and enable it to modernize to be updated with present needs to ensure public
safety and welfare.

The proposal will also address the public's requirement for bureaucratic
efficiency, professionalization, and eradication of perceived corruption through
the reorganization of the LTO which will virtually eliminate the inept and corrupt
that are otherwise protected by the Civil Service rules and regulations as to
security of tenure

The growing complexity of the transportation sector brought about by
modernization and progress has necessitated for an Agency that is modernized
both functionally and organizationally to facilitate the regulation and promotion
of the sector as a whole.


In view of the foregoing reasons, the approval of this bill is earnestly

ji

‘sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. 6274

Introduced by: Representative Amulfo P. Fuentebella,

AN ACT
ESTABLISHING THE NATIONAL LAND TRANSPORTATION AUTHORITY,
APPROPRIATNG FUNDS THEREFOR AND FOR OTHER PURPOSES

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

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

SEC. 1. Title. - This act shall be known as the "National Land Transportation
Authority (NLTA) Act of 2017".

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 a globally competitive government agency
‘that provides excellent and vibrant public service through innovative technology; the
establishment of a motor vehicle statistical office as the principal source of
information for long term planning in order to improve and sustain the administration
of motor vehicle manufacture, ownership, use, licensing of drivers, enforcement of
transportation and traffic laws, through its quasi legislative and quasi-judicial
functions.

The Authority shall have a distinct, independent and different organizational
set-up and functions from the Land Transportation Franchising & Regulatory Board
for check and balance. The Authority shall however continue to be the law enforcing
arm of the LTFRB, except for regulatory rules that are within its exclusive mandate.


In order to improve the administration of the land transportation industry, The
Authority shall absorb the functions of the Land Transportation Office created
pursuant to Executive Order 125 as amended and it is hereby reorganized structurally
and functionally in accordance with the provisions of this Act, and shall have the
functions of developing, formulating and implementing plans, programs, policies,
standards, specifications and guidelines pertaining to land transportation.

SEC. 3. Scope of the Act. - The provisions of the Act shall control, as far as
they apply, 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; regulation of activities of motor vehicle manufacturers,
assemblers, importers, and dealers, and the regulation of land based motor vehicles
pursuant to Republic Act 8749 or the Clean Air Act of 1999 for environmental
protection, and such other related laws.

ARTICLE II
DEFINITIONS

SEC. 4. Words and phrases defined. - As used in this Act, the following terms
shall mean:

(a) "Motor Vehicle” shall mean any vehicle propelled by any power other than
muscular power using the public highways, but excepting road rollers, trolley cars,
‘street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian
trucks, and cranes if not used on public highways, vehicles which run only on rails
or tracks, and tractors, trailers and traction engines of all kinds used exclusively for
agricultural purposes

Trailers having any number of wheels, when propelled or intended to be
Propelled by attachment to a motor vehicle, shall be classified as separate motor
vehicle with no power rating.

The definition of motor vehicles include Light Electric Vehicles (LEVs) which
are defined as two wheeled or three-wheeled vehicle that is powered by a battery
powered motor with no more than 36 voltage output and with amps per hour ranging
from 10 to maximum of 60 capable of propelling the device at a speed of not more
than 55 kph on flat surface; and e-trikes which are motor vehicles powered by
electrical energy from rechargeable batteries symmetrically arranges mounted with
cabin which is designed to travel on three wheels for six (6) or less passengers
excluding the driver depending on the number of seats provision

(b) "Passenger automobiles” shall mean all pneumatic-tire vehicles of types similar
to those usually known under the following terms: touring car, command car,
speedster, sports car, roadster, jeep, cycle, car (except motor wheel and similar


small outfits which are classified with motorcycles), coupe, landaulet, closed car,
limousine, cabriolet, and sedan.

Motor vehicles with changed or rebuilt bodies, such as jeepneys, jitneys, or
‘station wagons, using a chassis of the usual pneumatic-tire passenger automobile
type, shall also be classified as passenger automobile, if their net allowable carrying
capacity, as determined by the Director General of National Land Transportation
Authority, does not exceed nine passengers and if they are not used primarily for
carrying freight or merchandise.

The distinction between "passenger truck" and "passenger automobile" shall be
that of common usage: Provided, That a motor vehicle registered for more than nine
passengers shall be classified as “truck”: And Provided, further, That a “truck with
‘seating compartments at the back not used for hire shall be registered under special
"S" classifications. In case of dispute, the Director General of National Land
Transportation Authority shall determine the classification to which any special type
of motor vehicle belongs.

(c) “Articulated vehicle” shall mean any motor vehicle with a trailer having no front
axle and so attached that part of the trailer rests upon motor vehicle and a
substantial part of the weight of the trailer and of its load is borne by the motor
vehicle. Such a trailer shall be called as "semi-trailer."

(d) "Component " shall mean any part of a motor vehicle such as engine, chassis
and body or parts thereof.

(e) “Rebuilt Motor Vehicle” means a locally assembled vehicle using new or used
engine, major parts or components;

(e) "Driver" shall mean every and any licensed operator of a motor vehicle.

(f) "Professional driver" shall mean every and any driver hired or paid for driving or
operating a motor vehicle, whether for private use or for hire to the public.

Any person driving his own motor vehicle for hire is a professional driver.

(g) "Non Professional Driver" shall mean any person operating any vehicle except
public utility vehicle, without compensation.

(h) "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.

(i) “Owner” shall mean the person or entity identified as the motor vehicle owner
in the motor vehicle registration or by a valid deed of sale;


The "owner" of a government-owned motor vehicle is the head of the office or the
chief of the Bureau to which the said motor vehicle belongs.

(j) "Dealer" shall mean every person, association, partnership, or corporation
making, manufacturing, constructing, assembling, remodeling, rebuilding, or setting
up motor vehicles; and every such entity acting as agent for the sale of one or more
makes, styles, or kinds of motor vehicles, dealing in motor vehicles, keeping the
same in stock or selling same or handling with a view to trading same.

(k) “Manufacturer or Assembler” means any entity or person who manufactures or
assembles motor vehicles, for eventual use in the Philippines;

(I) "Garage" shall mean any building in which two or more motor vehicles, either
with or without drivers, are kept ready for hire to the public, but shall not include
street stands, public service stations, or other public places designated by proper
authority as parking spaces for motor vehicles for hire while awaiting or soliciting
business.

(m) "Gross weight" shall mean the measured weight of a motor vehicle plus the
maximum allowable carrying capacity in merchandise, freight and/or passenger, as
determined by the Director General of the National Land Transportation Authority.

(n) "Highways" shall mean every public thoroughfare, public boulevard, driveway,
avenue, park, alley and callejon, but shalll not include roadway upon grounds owned
by private persons, colleges, universities, or other similar institutions.

(0) "The Director General of National Land Transportation Authority" shall mean the
incumbent chief of the National Land Transportation Authority duly appointed under
this Act by the President for a fixed term.

(p) "Deputies " shall mean the organic and duly authorized representatives of the
Director General to carry out the provisions of this Act.

(q) "Agents " shall mean the duly designated representatives of the Director General
authorized to assist in enforcing the provisions of this Act.

(f) "Tourist" shall mean a foreigner who travels from place to place for pleasure or
culture.

(s) "Public Utility Operator" shall mean the registered owner of the motor vehicles
authorized for public utility operation by the Land Transportation Franchising and
Regulatory Board, or a person or entity that manages a transport business but not
necessarily a vehicle owner;

(t) "Deputies " shall mean the organic and duly authorized representatives of the
Director General to carry out the provisions of this Act.


(u) “Modification” means any physical change or alteration in the part, components
of a motor vehicle, to which a standard applies, which compromises its road
worthiness, and/or its use is unsafe or endanger the driver, passengers, pedestrians
or other motorists.

(v) All other terms not specifically defined herein shall have the same meaning and
purpose as used in Section 3, Article Il of Republic Act 4136.

ARTICLE III
CREATION, POWERS AND FUNCTIONS

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 for purposes of policy coordination.

Notwithstanding the foregoing, nothing in this Act shall diminish the powers and
functions of the National Land Transportation Authority (NLTA) as provided for under
Republic Act No. 4136, also known as “An Act to Compile the Laws Relative to Land
Transportation and Traffic Rules, to Create a Land Transportation Commission and
for Other Purposes”, as amended.

SEC. 6. Powers and Functions - To accomplish its mandate and objectives,
the Authority is authorized to:

(a) Prepare the periodic 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 to equip, install and provide in their
motor vehicles such devices, equipment, facilities and vehicle maintenance
Procedures and techniques as may promote safety, protection, comfort and
convenience to persons and property;

(d) Notwithstanding an act of Congress, prescribe a uniform and rationalized fees
and charges for the registration of motor vehicles and licensing of drivers;


(e) Establish and prescribe the corresponding rules and regulation for the
enforcement of laws governing land transportation, including the penalties and
penalties for the violations thereof, and for the deputation of appropriate law
enforcement agencies in pursuance thereof;

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

(g) Establish and prescribe the rules, regulations, procedures and standards for
the accreditation of driving schools;

(h) 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;

(i) 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;

(j) Make arrests for violations of the land transportation laws;

(k) Issue subpoena and subpoena duces tecum to compel the appearance of
motor vehicle owners, drivers and other persons;

(I) 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;
(m) 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;
(n) Generate non-tax revenues out of its assets, properties and services; and
(0) Perform such other powers and functions as maybe provided by law.
ARTICLE IV
ADMINISTRATION

SEC. 5. Executive Officers. - The Authority shall be headed by a Director
General of Land Transportation, referred to in this Act as the “Director General”, who


shall be appointed by the President of the Philippines and shall be responsible for all
land transportation in the Philippines and the administration of this Act.

The Director General shall have the rank, salary and qualifications equivalent to that
of a Department Undersecretary, who must have sufficient knowledge and background
in land transportation management, and shall have a tenure of office for a period of
four (4) years. His appointment may be extended for another non-extendible term of
four (4) years and shall only be removed for cause in accordance with the rules and
regulations prescribed by the Civil Service Commission.

SEC. 6. Responsibility of the Director General — The Director General shall
be responsible for the exercise of all powers and the discharge of all duties of the
Authority and shall have control over all personnel and activities of the Authority.

The Director-General shall be assisted by three (3) Deputy Director-Generals — for
Administration and Finance, Plans and Operations, and Law Enforcement and
Adjudication - with rank, salary and qualifications equivalent to that of an Assistant
Secretary, preferably a Career Executive Service Officer (CESO) or third level eligible
possessing at least ten (10) years experience and practice in land transportation
management and administration.

SEC. 7. Powers of the Director General - As Chief Executive Officer of the
Authority, the functions and powers of the heads of the Land Transportation Office,
as provided under R.A. 4136 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:

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

(b) Manage the affairs of the Authority to ensure the smooth, safe, and 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 for recurrent income and expenditures for adoption
not later than one month before the commencement of the ensuing year for review
of the DOTr and Congressional Oversight Committee;

(e) Undertake research, studies, investigations, projects, engage the services of
experts/consultants either in full time or part time basis, and other related activities
as may be required relative to the administration of this Act.

(f) Designate as law enforcement deputies government entities with traffic-related
functions, civic action groups, Non-Government Organizations (NGOs) and Public
Officers (POs) of good standing, or any person or entity which to the discretion of


the Director General can assist in the effective implementation of traffic,
transportation and other regulatory rules implemented by the NLTA ;

(g) Accident Prevention — The Director General shall take any corrective actions
which, on the basis of the findings of the accident investigations conducted pursuant
to the administration of the Act, in the judgment of the Director General, will tend to
prevent similar accidents in the future; and

(h) To promulgate rules and issuances for the furtherance of this Act.

SEC. 8. Regional and District 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 at least five
(5) years experience in land transportation management, assisted by two Technical
Regional Directors - one for Operations and another for Administration and Finance
- with rank, salary and qualifications equivalent to that of a Director Ill and with at
least five (5) years experience in land transportation management.

For purposes of public service efficiency and for a more strict and effective
implementation of this Act, the Director- General may propose for the approval of
Congress the creation of additional National Land Transportation District Offices
(NLTDO) to be headed by a National Land Transportation District Director appointed
by the Director-General. The NLTDO shall have the rank, salary and privileges of a
Director Il. The qualifications herein required for NLTDO shall apply to officials
appointed pursuant to this law without prejudice to incumbent heads of LTO District
Offices regardless of their status.

SEC. 9. Staffing pattern - The new position structures and staffing
pattern shall be formulated by the existing Land Transportation Office for approval
by the Department of Transportation.

SEC. 10. Law enforcement -— In order to make more effective the enforcement
of traffic laws, rules and regulations, there shall be created in the National Land
Transportation Authority two service units in the Office of the Director General, namely:

1. Law Enforcement Service, and
2. Traffic Adjudication Service - which shall have the following powers and functions:

@) To hear and decide cases involving violations of laws, rules and regulations
governing land transportation and to impose fines and/or penalties therefor;
provided that violations resulting in damage to property and/or physical injuries
or violations constituting offenses punishable under the Revised Penal Code or
other penal laws shall be under the jurisdiction of the regular courts;

b) To order the impounding of motor vehicles and confiscation of plates or the
arrest of violators of laws, rules and regulations governing land transportation;


¢) To issue subpoena an subpoena duces tecum and to summon witnesses to
appear in any proceeding thereof, and to administer oaths and affirmations;

d)

To promulgate rules and regulations governing the proceedings before it;
provided that except with respect to paragraph c, the rules of procedures and
evidence prevailing in the courts of law shall not be controlling and all
reasonable means to ascertain the facts in each case shall be used without
regard to technicalities of law and procedures but all in the interest of due
process; and

) To perform such other functions and duties as may be provided by law, or as
may be necessary, or proper or incidental to its powers and functions.

The Traffic Adjudication Service and the Law Enforcement Service may require the
cooperation and assistance of the Philippine National Police, particularly the Highway
Patrol Group, or any government agency or office.

Each of the aforesaid service units shall be headed by a Service Chief to be
appointed by the Director-General and shall have the qualifications, rank, and salary
grade of a Division Chief.

The Law Enforcement Service and Traffic Adjudication Service shall be replicated
in the Regional Offices to be known as Law Enforcement Unit Traffic Adjudication Unit
with the same powers and functions. The Law Enforcement Unit shall be headed by
the Technical Regional Director for Operations, and the Traffic Adjudication Unit shall
be headed by the Technical Regional Director for Administration and Finance.

Funds needed to carry out the provisions of the foregoing shall be taken from funds
available in the Authority and/or from subsequent appropriations.

ARTICLE V
FINANCE

SEC.11. Fiscal Autonomy. — The Authority shall enjoy fiscal autonomy to
allow the agency to perform its broad functions to ensure public safety and welfare

It shall retain 70% of all its Non-Tax Revenues and income from collection/levy of any
and all such fees, charges, dues, assessments and fines it is empowered to
collect/ievy under this Act, but excludes fees and charges classified as Tax
Revenues, or those consequent to a contractual obligation and other laws, such as
but not limited to Motor Vehicle Users Charge, Science Tax, Trust Receipts, Legal
Research Fund, and fees collected for service providers.


30% of such non-tax revenues, and all of the Authority's Tax Revenues shall be
deposited to the National Treasury as part of the general fund of the national
government.

The Authority shall however continue to be entitled to its share of the Motor
Vehicle Users Charge pursuant to Republic Act 8794 to finance its road safety and
revenue enhancement projects.

Five percent (5%) of non-tax revenue retained should be allocated for
equipment modernization, and one percent (1%) shall be reserved for employees’
benefits (health care, food allowances, etc.) as part of non-wage benefits or incentives

The utilization of any funds coming from the collection and/or levy of the
Authority shall be subject to the examination of the Congressional Oversight
Committee.

SEC. 12. Exemption from Taxes, Customs and Tariff Duties. —

(a) The importation of equipment, machineries, spare parts, accessories and other
materials including supplies, license cards and motor vehicle plates used solely and
exclusively in the operations of the Authority not obtainable locally shall be exempt
from all direct and indirect taxes, wharfage fees and other charges and restrictions,
the existence of pertinent laws to the contrary notwithstanding.

(b) All obligations entered into by the Authority and any income derived therefrom,
including those contracted with private international banking and financial
institutions, shall be exempt from all taxes, both principal and interest. The Authority
is also exempt from the payment of capital gains tax, documentary stamp tax, real
property estate tax and all other local government-imposed taxes and fees, subject
to existing revenue regulations.

ARTICLE VI

DISPOSITION OF SEIZED VEHICLE COMPONENTS AND ACCESSORIES

SEC. 13. Disposition of Impounded Vehicles. - All motor vehicles
impounded for violation of transportation and traffic laws, rules and regulation, or
abandoned by their owners, including the confiscated accessories, 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.

(b) The proceeds of the public auction shall be applied to all liens, fines, fees and
penalties 24 accruing in favor of the Authority provided that the remainder shall be
returned to the registered owner.

(c) Anabandoned or impounded vehicle without a known owner or lawful claimant
after three notices in newspapers of national circulation shall be sold at public
auction after such 3 publications 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. 14, Abolition. - The Land Transportation Office is hereby abolished.
Properties, assets and liabilities, all powers and duties, rights and courses of actions,
vested by law or exercised by said abolished office and its predecessors are hereby
transferred to the Authority.

SEC. 15. Holdover Functions. - To ensure smooth transition into the structure
of the Authority, unless otherwise directed, all officers and employees of the defunct
LTO shall continue to exercise their usual functions, duties and responsibilities under
the reclassified positions.

The Authority, as far as practicable, shall ensure that all present employees of
the abolished agency or abolished positions, subject to Civil Service laws, rules and
regulations on meritocracy, shall be eligible for reappointment) 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 existing
retirement laws, 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.16. 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 or its predecessors, shall continue to be in
effect according to their terms until modified, terminated, superseded, set aside or
repealed.


ARTICLE Vill
FINAL PROVISIONS

SEC. 17. No local government shall enact or enforce any ordinance or
resolution in conflict with the provisions of this Act, or prohibit any deputy or agent of
the Authority to enforce this Act within their respective territorial jurisdiction, the
provisions of any charter to the contrary notwithstanding.

SEC. 18. No court in the Philippines shall have jurisdiction to issue any
restraining order, preliminary injunction, or preliminary mandatory injunction in any
case, dispute, or controversy involving the acquisition, purchase, manufacture of
motor vehicle license plates, driver's license, Information Technology projects, or
other contracts, activities equally critical to the carrying out the mandates of the
Authority in order not to disrupt or hamper the pursuit of essential government
projects.

ARTICLE IX
EFFECTIVITY

SEC. 19. 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. 20. Repealing Clause. - All acts, decrees, orders, and instructions, or
parts thereof, inconsistent with the provisions of this Act are repealed and modified
accordingly.

SEC. 21. Effectivity - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

APPROVED