Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS

‘SECOND REGULAR SESSION

COMMITTEE REPORT NO 1635

Submitted by the Committee on Legisiative Franchises on

5684

Re: House Bill No. . prepared by the Committee

Recommending ils approval. in substitution with House Bills 5336

Sponsors Representatives Marcelino “Marcy” Ri Teodoro, Arturo B. Robes
and Giorgidi B_ Aggabao

MR. SPEAKER.

The Committee on Legislative Franchises to which was referred and
House Bill No. 5336, introduced by Reps. Marcelino R. Teodoro, Arturo B. Robes
and Giorgidi B. Aggabao entitied

“AN ACT AMENDING SECTIONS 10, 11 22 AND 24 OF REPUBLIC ACT
776, OTHERWISE KNOWN AS THE CIVIL AERONAUTICS ACT OF THE
PHILIPPINES, AS AMENDED”

has considered the same and recommends that the attached House Bill No.

5681 onited:

“AN ACT AMENDING SECTIONS 10, 11 22 AND 24 OF REPUBLIC ACT
776, OTHERWISE KNOWN AS THE CIVIL AERONAUTICS ACT OF THE
PHILIPPINES, AS AMENDED”


be approved in substitution of House Bill No. 5336 with Reps. Marcelino R.
‘Teodoro, Giorgidi B. Aggabao, Arturo B. Robes, Jeci A Lapus, Rodolfo W.
Antonino, George P. Armaiz, Carmelo F. LAzatin, Eleandro Jesus F Madrona,
Maria Lilagros “Mitos” Magsaysay, Romero Federico S Quimbo, Maximo B.
Rodriguez and Andres B- Saivacion, Jr. as authors thereof.

wae ‘submitied:_

9 EN Oe ae
MARCELINO “MARCY” R. TEODORO
Chairman
Committee on Legislative Franchises

THE HONORABLE THE SPEAKER
HOUSE OF REPRESENTATIVES
QUEZON CITY

Page 2012
Cometiee

Re House Bl No 338, Amendments to the Cnarter of Cul Aeronautcs Board



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

SECOND REGULAR SESSION

S61

HOUSE BiLL NO.

Introduced by Reps. MARCELINO R. TEODORO. GIORGIDI B. AGGABAO,
ARTURG B. ROBES, JEC!A LAPUS, RODOLFO W. ANTONINO. GEORGE P.
ARNAIZ_ CARMELO F. LAZATIN, ELEANDRO JESUS F. MADRONA, MARIA
MILAGROS “MITOS” MAGSAYSAY, ROMERO FEDERICO S. QUIMBO,
MAXIMO B_ RODRIGUEZ AND ANDRES D. SALVACION, JR_

AN ACT
AMENDING SECTIONS 10. 71, 22 and 24 OF REPUBLIC ACT 776.
OTHERWISE KNOWN AS THE CiViL AERONAUTICS ACT OF THE
PHILIPPINES, AS AMENDED

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

SECTION 1. Section 10 Republic Act No. 776, otherwise know as of the
Civil Aeronautics Act of the Philippines is hereby amended to read as follows:

“SECTION 10: Powers and duties of the Board — (A) Except as otherwise
provided herein, the Board shall have the power to regulate the economic
aspect of air transportation, and exercise general supervision and
reguiation of, jurisdiction and contro! over, air carriers. general sales
agents, cargo sales agents and airfreight forwarders as well as their
properly, property rights. squipment, AND facilities. [and franchise] in so


i far as may be necessary for the purpose of carrying out the provisions of
2: this Act,

3 XK

4

s (C) The Board shall have the following specific powers and duties:

7 (1) tn aecordance with the provisions of Chapter 4 of this Act, to issue.
8 deny, amend, revise, alter, modify, cancel, suspend, or revoke. in whole or
9 in part, upon petition or complaint, or upon its own initiative, any temporary
10 operating permit or Cerificate of Public Convenience and Necessity
u (CPCN); Provided, however, THAT NO CPCN SHALL BE ISSUED
12 PRIOR TO A GRANT OF VALID LEGISLATIVE FRANCHISE TO THE
B AIRLINE COMPANY AND that in the case of foreign air carriers, the
rey permit shall be issued with the approval of the President of the Republic of
is the Philippines.

16 xx

7

is (4) To approve or disapprove increase and/or decrease of capital,
19 lease, purchase, sales of aircraft of air carrier engaged in air commerce;
20 consolidation, merger, lease’ and acquisition and control of operating
a contracts between domestic foreign air carriers, or between domestic air

carriers or any person engaged in any phase of aeronautics AND
INFORM CONGRESS OF THE SAME WITHIN THIRTY (30) DAYS.

x
27. SECTION 2. Section 11 of the same Act is hereby amended to read as
28 follows:
29
wD “SECTION 11. Nature, terms and conditions — Certificate of Public

31 Convenience and Necessity { CPCN ) is a permit issued by the Board



3

authorizing a person to engage in air commerce and/or transportation,
foreign and/or domestic. No person shall engage in air commerce
WITHOUT THE PRIOR GRANT OF A LEGISLATIVE FRANCHISE BY
CONGRESS AND unless there is in force a permit issued by the Board

No general sales agent, cargo sales agent or airfreight forwarder shall
‘engage in any of the activities mentioned in Section 3 paragraphs (jj), (kk)
and (il) respectively, unless there is in force a permit or any other form of
authorization issued by the Board.

There shall be attached to the exercise of the privileges granted by the
LEGISLATIVE FRANCHISE AND THE permit, or amendment thereto,
such reasonable terms. conditions; or limitations as, in the judgment of the
Board, the public interest may require.

SECTION 3 THERE SHALL BE INCORPORATED AFTER SECTION 11
OF REPUBLIC ACT NO. 776, AS AMENDED. A NEW SECTION TO
READ AS FOLLOWS:

SECTION. 11-A. Legislative Franchise. - All domestic airline
carriers, airfreight forwarders and air taxis operating without a legislative
franchise which have been issued 2 CPCN or other permits to operate by
the Civil Aeronautics Board prior to the approval of this Act may continue
to operate until the end of the term of the operational permits’ Provided,
‘That the CPCN or other permits issued by the CAB granting the domestic
qifne carriers, airfreight forwarders and air taxis shail not be extended or
renewed without a legisiative franchise: Provided, further, That these


i camiets shall be required to apply for legislative franchise within one year
2 from the effectivity of this Act

4 Existing franchises that are not operated or are without pending

application for certificates of public convenience and necessity at the time
6 of the effectivity of this Act are deemed revoked,

SECTION 4. Section 22 of the same ACT is hereby amended to read as

9 follows:

it “SECTION 22. Modification, suspension or revocation ~ The Board upon

12 petition or complaint or upon its own initiative, may, by order entered after
B notice and opportunity for hearing, alter, amend, modify or suspend any
4 permit, in whole or in part, if public convenience and necessity so require,
15 or may revoke any permit in whole or in part, for intentional failure to

16 comply with any provision of this Act or any order, rule or regulation issued

7 thereunder, or any term condition of limitation of such permit: PROVIDED,
1s THAT THE BOARD SHALL NOTIFY CONGRESS PRIOR TO ANY
19 ACTION IT SHALL MAKE

21 Provided Further, That the Board, for good cause, may by order, without
22 notice and hearings suspend. for a period not to exceed thirty (30) days
B any permit of the exercise of any privilege or authority issued or granted
4 under this Act whenever such step shall, in the judgment of the Board, be

necessary to avoid serious or irreparable damage or inconvenience to the
public, Any interested person may file with the Board a protest or

memorandum in support of or opposition to the alteration. amendment,

28 modification, suspension, or revocation of any permit.”

29

30 SECTION 5. Section 24 of the’same Act is hereby amended to read as
31 follows:



ES “SECTION 24. Effective Date and Duration of Permit - Each permit shail

3 be effective from the date specified therein and shall continue in effect
4 until suspended or revoked or until the Board shall certify that operation
s thereunder has ceased: Provided, That if any service authorized by 2
6 permit is not inaugurated within 4 period of ninety (90) days after the date
7 of authorization as shail be fixed by the Board or after such other period
3 2s may be designated by the Board, ihe Board may by order direct that
? such permit shail thereupon cease to be effective to the extent of such
10 service: PROVIDED FURTHER, THAT THE BOARD SHALL NOTIFY
n CONGRESS WITHIN THIRTY (30) DAYS OF ANY CHANGE IN THE
8B STATUS OF THE FRANCHISE GRANTED TO THE AIRLINE
3 COMPANY: Provided, FINALLY [ further], That no permit shail be issued
" for 2 period of more than twenty five (25) years OR THAT WOULD
15 EXCEED THE TENURE OF THE FRANCHISE”

te

iW SEC. 6 Separability Ciause — if any provision of this Act is deciared

18 invalid of unconstitutional, the other provisions not affected thereby shall
19 _ continue to be in full force and effect

21 SEC. 7. Repealing Ciause — Ail laws, decrees, executive orders,
22 prociamations, rules and regulations and other issuances, or parts thereof which
23 are inconsistent with the provisions of this Act, are hereby repealed, amended or
24 modified.

26 SEC. 8. Effectivity Clause. — This Act shall take effect fifteen (15) days
27 after its publication in at least two (2) newspapers of general circulation in the
28 Philippines

30 Approved


FACT SHEET

Substitute House Bill No. 5684
In Substitution to House Bill No. 5336

AN ACT AMENDING SECTIONS 10, 11, 22 & 24 OF REPUBLIC ACT 776,
OTHERWISE KNOWN AS THE CIVIL AERONAUTICS ACT OF THE
PHILIPPINES, AS AMENDED

introduced hy: HON. MARCELINO R. TEODORO, GIORGIDI B. AGGABAQ,
ARTURO B. ROBES, JEC! A. LAPUS, RODOLFO W. ANTONINO,
GOERGE P. ARNAIZ, CARMELO F. LAZATIN, ELANDRO JESUS F.
MADRONA, MARIA MILAGROS “NMITOS” MAGSAYSAY, ROMERO
FEDERICO S. QUIMBO, MAXIMO B. RODRIGUEZ and ANDRES
SALVACION, JR.

Committee Referral: LEGISLATIVE FRANCHISES
Committee Chairperson: HON. MARCELINO R. TEODORO

OBJECTIVE:
. To strengthen the right of Congress to regulate public utilities including public
transportation

KEY PROVISIONS:

. Reverts to Congress the authority of granting legislative franchise to operators of
airlines

. Grants Civil Aeronautics Board the authority to regulate the operation of airline
companies

. Provides that the grantee shail secure from Congress the legislative franchise to

operate air transportation prior to issuance of a Certificate of Public Convenience
and Necessity to airline companies by the Civil Aeronautics Board

. Requires the Civil Aeronautics Board to inform Congress prior to any action to
modify, suspend or revoke any permit it has issued to franchise grantees. Honors
licenses granted by Civil Aeronautics Board within the expressed terms in their
licenses. These carriers shall be required to apply for legislative franchise within
three (3) years from the effectivity of this Act.

. Prohibits the Civil Aeronautics Board from issuing Certificate of Public
Convenience and Necessity without legislative franchises.

RELATED LAW:

° Republic Act No. 776 -- “CIVIL AERONAUTICS ACT OF THE PHILIPPINES”