SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )

Time: é'
First Regular Session ) mie: _le/
By:
o RESISTR c |
1 0 ie, 5 TRATION UNTT

HOUSE BILL NO: BILLS AND INDEX

MICE

Introduced by ANGKLA Party-list Representative JESULITO A. MANALO

AN ACT MODERNIZING THE PUBLIC LAND TRANSPORTATION
INDUSTRY AND CREATING FOR THIS PURPOSE THE LAND
TRANSPORTATION FRANCHISING COMMISSION, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES.

EXPLANATORY NOTE

Public transportation service is relevant in all aspects of society. It plays a
vital role in social development by transporting people, goods and services.
Public transportation service affects land use and development blueprints,
creates jobs and triggers economic growth. All of these are important when
considering the benefits of public transportation to Philippine society.

Considering the far-reaching impact of an efficient public transportation
system, it is imperative that the needs of the riding public, as well as goods and
services, are sufficiently met. The transportation of goods, services and the
Filipino riding public, whether by taxicab, jeepney, truck, bus or train, must be of
such quality that it can serve as the backbone of economic progress.

In 1987, President Corazon C. Aquino, through Executive Order No. 202,
created the Land Transportation Franchising and Regulatory Board (LTFRB) with
the primary objective of providing world-class land transportation services
contributing to the over-all development of the country, improvement of the
socio-economic status of its stakeholders, and promotion of the welfare of the
general public.

Today, more than a quarter of a century has passed and our public land
transportation industry is still lagging behind compared to our Asian
neighbours. In the meantime, public transportation continues to require much
needed changes to serve the general public. Currently, it is the riding public that

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continues to carry the burden of an inefficient transportation system, making it
difficult for them to go to school, go to work and move around to achieve
maximum potential. Thus, there is a need to revisit Executive Order No. 202, as
well as the pertinent provisions of Executive Order No. 292, to achieve the goal
that brought the law to its existence.

An efficient, modern and reliable public transportation system should be
the primary mode of movement for each and every Filipino. It should be the
transport of choice.

The bill seeks to modernize and strengthen the public land transport
system and the administrative body that manages the same, and ultimately to
help the latter accomplish its mission of ensuring that the commuting public has
adequate, safe, convenient, environment-friendly and dependable public land
transportation services charging reasonable rates, through the implementation of
land-based transportation policies, programs, and projects responsive to an
investment-led and demand-driven industry. Transportation policies, programs,
and projects that are responsive to an investment-led and demand-driven
industry can be best achieved by increasing the representation of the private
sector and technical experts in public services. Finally, there is a notable absence
from the private sector and technical experts, yet they represent a substantial
portion of the population that are affected by the actions of the LTFRB.

Accordingly, there is a pressing need to review the current administrative
body, the Land Transportation and Franchising Regulatory Board and amend its
composition. The expansion of the agency is necessary to include several
departments of the government that have an impact on the public land
transportation system, which is of national importance. This bill aims to enhance
the public land transport industry as a whole so that the industry can properly
contribute to the upliftment of the lives of the riding public.

Moreover, the Philippine Congress, the branch of the Government allowed
to grant franchises, shall now exercise its oversight functions in the issuance and
revocation of franchises to ensure that the administrative body adheres to its
mandate.

As the country gears to more economic success, it is imperative that both
the public and private sector work hand in hand in improving public
transportation. Diverse representation can help better understand the needs of
the all sectors involved, especially the riding public. There is an obligation to
ensure that there is strong and effective corporate governance. Diversity
provides check and balance and avoids the possibility of having a board
comprised of individuals who share the same experiences and biases. The vision


of the Government is to efficiently cater to the needs of the public, without
forfeiting a fair and business-friendly atmosphere that fosters premium service.



SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )

First Regular Session )

HOUSE OF REPRESENTATIVES,
HOUSE BILL NO. 1025

Introduced by ANGKLA Party-list Representative JESULITO A. MANALO
—— SE TOO — EEE ee eee

AN ACT MODERNIZING THE PUBLIC LAND TRANSPORTATION
INDUSTRY AND CREATING FOR THIS PURPOSE THE LAND.
TRANSPORTATION FRANCHISING COMMISSION, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES.

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

SECTION 1. Short Title. This Act shall be known as the “Public Land
Transportation Industry Modernization Act’.

SECTION 2. Declaration of Policy. - The State recognizes the importance of public
land transportation as mover and carrier not just of people, but goods and
commodities, and the vital role it plays in the nation’s development. It is thus
hereby declared the policy of the State to improve, foster and develop an efficient
public land transport and consequently increase the productivity of the country,
to improve the quality of public land transport conditions and to make it the
transport of choice. In so declaring, the State recognizes the essential part of the
private sector and the latter’s expertise in addressing the ever changing needs of
the riding public and in coping with the evolving demands of modern living.

SECTION 3. Definition of Terms. - As used in this Act, the following terms shall
mean:

(a) Commission - shall mean the Land Transportation Franchising
Commission.

(b) Certificate of Public Convenience or CPC - shall mean the license or
authority granted for the operation of public and land transportation utilities and


services such as trucks, taxicabs, buses, jeepneys, trimobiles and other motor
vehicles.

(©) Decision - shall mean the final adjudication issued by the
Commission en banc, through a written Resolution, bearing the concurrence and
signature of at least four of its members, relative to the issuance, amendment,
revision, extension, suspension, revocation or cancelation of any CPC.

(4) DOTC or Department - shall mean the Department of
Transportation and Communications.

(2) _ E.O. No. 202 - shall mean Executive Order No. 202 promulgated by
President Corazon C. Aquino creating the Land Transportation Franchising and
Regulatory Board.

() EO. No, 292 - shall mean Executive Order No. 292, known as the
“Administrative Code of 1987” promulgated by President Corazon C. Aquino
subsequent to E.O. No. 202.

(g) Public Utility Operator or Operator ~ shall mean a person or entity
that is granted a CPC as defined under this Act.

SECTION 4. Creation of the Land Transportation Franchising Commission. -
There is hereby created the Land Transportation Franchising Commission,
hereinafter referred to as the “Commission”, which is a government owned and
controlled corporation (GOCC), wholly owned by the Republic of the
Philippines, The Commission shall be under the supervision and control of the
Department of Transportation and Communication (DOTC).

SECTION 5. Composition of the Board of Commissioners. - The Commission
shall be composed of a Chairman and eight (8) other members, constituted as
follows:

(a) Secretary of the DOTC shall serve as ex-officio Chairman of the
Commission.

(b) The other eight (8) members shall be:

(i) Director General of the National Economic Development
Authority (NEDA) who shall sit as ex-officio member;

(ii) Secretary of the Department of Public Works and Highways
(DPWH) who shall likewise sit as ex-officio member;


(iii) Secretary of the Department of Interior and Local
Government (DILG) who shall likewise sit as ex-officio member;

(iv) Chairman of the Metropolitan Manila Development
Authority (MMDA) who shall likewise sit as ex-officio member; and

(v) the remaining four (4) members shall be appointed for a term
of one (1) year each by the President of the Philippines upon the
recommendation of the Governance Commission for Government-
Owned Corporations (Governance Commission), pursuant to the
provisions of Republic Act (R.A.) No. 10149; Provided, That one (1)
member shall serve as the Executive Director and Chief Executive
Officer of the Commission who shall be elected by the Board of
Commissioners from among its ranks pursuant to R.A. No. 10149,
and must be a member of the Philippine Bar and shall have engaged
in the practice of law in the Philippines for at least five (5) years, and
is knowledgeable in the field of transportation law, transport policy
or other related fields,; the remaining three (3) members shall come
from nominees to be made by organizations or associations of Public
Utility Operators which have been in existence and active for the last
five (5) years prior to this Act;

The rank, salary, and privileges of the Executive Director and Chief
Executive Officer of the Commission shall be determined likewise by the
Governance Commission, pursuant to the compensation and position
classification system and the provisions of R. A. No. 10149.

The ex-officio members of the Commission may, in their discretion,
designate their duly authorized nominees to sit in the Commission on their
behalf as ex-officio members and in representation of their respective agencies.

Section 6. Executive Director and Chief Executive Officer. - Except as
otherwise provided in this Act, the Executive Director and Chief Executive
Officer of the Commission shall be prohibited from holding any other position
with the Commission, other government agencies and private institutions that
may give rise to conflicts of interest.

The Executive Director shall have the following powers and functions:

(@) To sit as Chairman of the Land Transportation Franchising Division
created under Section 10 hereof;


(b) To assist the Commission in the implementation of the National
Public Land Transport Master Plan as described under Section 8 (a) of this Act
and the public land transportation development plans and programs prepared by
the Commission and duly approved by the DOTC; and

(0) To implement and enforce of all other policies of the Commission.

SECTION 7. Support Staff. - The Commission and the Executive Director shall be
supported by the Support Divisions created under E.O. No. 202 namely (i) the
Technical Evaluation Division, (ii) the Legal Division, (iii) the Management
Information Division, (iv) the Administrative Division and (v) the Finance
Division, all under the direct control and supervision of the Executive Director.
Any recommendation from these Support Divisions must be submitted to the
Executive Director who shall indorse the same to the Commission for final
approval

The heads of the Support Division are prohibited from holding any other
position with the Commission, other government agencies and private
institutions that may give rise to conflicts of interest

SECTION 8. Powers and Functions of the Commission. - The Commission shall
have the following powers and functions:

(a) To prepare and develop for the approval of the DOTC, within six (6)
months from the effectivity of this Act, a National Public Land Transport Master
Plan, in consultation with the Philippine National Railways and operators of the
Manila Light Rail Transit System, wherein all existing CPCs and routes shall be
accounted for and inventoried, and thereafter forecast the transportation
requirements to properly cater to the needs of the riding public for each
succeeding year, which forecast shall be used as basis for issuance of new CPCs
taking into consideration the existing railroad lines and services;

(b) To formulate, promulgate, administer, implement and enforce rules
and regulations on land transportation public utilities, standards of
measurements and/or design, and rules and regulations requiring operators of
any public land transportation service 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 charges as well as the safety of
persons and property within their areas of operations; Provided, That all these
shall be in conformity with the National Public Land Transport Master Plan
issued by the Commission developed, approved and enforced in accordance with
Section 8 (a) of this Act;


() To prescribe the appropriate terms and conditions with respect to
the issuance, amendment, revision, extension, suspension, revocation, or
cancelation of CPCs authorizing the operation of public land transportation
services provided by motorized vehicles in accordance with the National Public
Land Transport Master Plan and the public land transportation development
plans and programs prepared by the Commission and duly approved by the
DOTC, including therein provisions to ensure the performance of obligations
under the CPCs such as but not limited to the requirement of surety or cash
bonds;

(4) To coordinate and cooperate with other government agencies and
entities concerned with any aspect involving public land transportation services
with the end in view of effecting continuing improvement of such services;

(c) To require operators to furnish audited annual reports of finances
and operations as certified by an independent Certified Public Accountant, with
a complete statement of the annual financial operations, and all other
information, which the Commission may require that may be useful and
necessary for its exercise of its regulatory powers. Said reports shall be sworn to
by the officer or functionary of the operator authorized therefor;

() To prescribe and regulate routes of service, economically viable
capacities and zones or areas of operation of public land transportation services
provided by motorized vehicles which shall be in accordance with the National
Public Land Transport Master Plan and the public land transportation
development plans and programs prepared by the Commission and duly
approved by the DOTC; Provided, That development plans and programs shall be
based on internationally acceptable technical research and data;

(g) To decide in an en banc Decision, after due notice and hearing, and
taking into consideration the recommendations of the Land Transportation
Franchising Division created under Section 10 of this Act, all cases pending
before the Commission relative to the issuance, amendment, revision, extension,
suspension, revocation, or cancelation of CPCs authorizing the operation of
public land transportation services provided by motorized vehicles;

(h) To suspend prior to hearing, through a majority vote of its members
present, any CPC authorizing the operation of public land transportation services
whenever such step shall, in the judgment of the Commission, be necessary to
avoid serious and irreparable damage or inconvenience to the public or to private
interests in accordance with the following procedure:

(i) Upon the recommendation of the Land Transportation
Franchising Division created under Section 10 hereof or motu proprio,


@

the Commission shall initially issue the preventive suspension only
against the specific unit under a particular CPC, which may have
caused serious and irreparable damage or inconvenience to the
public or to private interests, for a period not to exceed five (5)
calendar days. Such preventive suspension may be extended by the
Commission to another ten (10) calendar days only upon the
recommendation of the Land Transportation Franchising Division
which recommendation shall be based on an official report from the
relevant government agency stating that there is reasonable ground
to extend the period of the aforesaid preventive suspension;
otherwise, the five (5) day preventive suspension shall automatically
be lifted. During the additional ten (10) day period, the operator of
the affected unit shall be allowed to show proof of compliance with
any requirement of the Commission as stated in the order of
preventive suspension. Should there be sufficient proof of
compliance, the ten (10) day preventive suspension shall
automatically be lifted.

(i) — Should there be additional official report from the relevant
government agency that there is continuing palpable violation and
blatant disregard of the terms and conditions of the CPC, and the
operator of the affected unit fails to show proof of compliance with
said terms and conditions and with the requirements of the
Commission, the preventive suspension in the immediately
preceding paragraph may be extended to a new period of fifteen (15)
calendar days.

(iii) In no case however shall any preventive suspension, which
has been issued without prior hearing pursuant to this Section 8 (h)
exceed thirty (30) calendar days. Upon the lapse of thirty (30)
calendar days, the preventive suspension shall be automatically
lifted. Subsequent suspensions, if warranted, shall only be made
after due notice and hearing.

To extend the period of preventive suspension pursuant to a fixed

system designed by the Commission in consultation with the private sector,
which system shall (i) provide for the reasonable grounds to extend the period of
preventive suspension, and the palpable violations and blatant disregard of the
terms and conditions of a CPC; (ii) define all other just and reasonable standards,
guidelines, classification, regulations, practices, in implementing preventive
suspensions; and (iii) define all just and reasonable standards, guidelines,
classification, regulations, practices, in the cancelation or revocation of a CPC;


() To determine, prescribe and approve and periodically review and
adjust, reasonable fares, rates and other related charges, relative to the operation
of public land transportation services provided by motorized vehicles;

(k) To fix, impose and collect, and periodically review and adjust,
reasonable fees and other related charges for services rendered;

() To issue preliminary or permanent injunction, whether prohibitory
or mandatory, in all cases in which it has jurisdiction, and in which cases the
pertinent provisions of the Rules of Court shall apply;

(m) To punish for contempt of the Commission, both direct and indirect,
in accordance with the pertinent provisions of, and the penalties prescribed by,
the Rules of Court;

(n) To issue subpoena and subpoena duces tecum and summon
witnesses to appear in any proceedings of the Commission, to administer oaths
and affirmations;

(0) To motu proprio conduct investigations and hearings of complaints
for violation of the public service laws on land transportation and of the
Commission’s rules and regulations, orders, decisions and/or rulings and to
impose fines and/or penalties for such violations;

(p) To review motu proprio the decisions/actions of the Regional
Franchising and Regulatory Office as defined in this Act;

(q) To delegate such functions or duties necessary or incidental to the
administrative management and operations to the Franchising, Division headed
by the Executive Director which shall be subject to its final review and/or
approval, as it may deem proper;

(1) To promulgate rules and regulations governing proceedings before
the Commission, the Land Transportation Franchising Division and the Regional
Franchising and Regulatory Office; Provided, That in the absence of any
applicable provision in the rules and regulations promulgated pursuant to this
paragraph, the pertinent provisions in the Revised Rules of Court of the
Philippines may, in the interest of expeditious justice and whenever practicable
and convenient, be applied in a suppletory character and effect;

(s) To perform such other functions and duties as may be provided by

law, or to enter into contracts, as may be necessary, or proper or incidental to the
purposes and objectives of this Act; and

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() To have and assume all corporate powers as enumerated under the
Batas Pambansa Bilang 68 and all subsequent amendments thereto, necessary to
allow the Commission to carry out its mandate including all the provisions of
this Act; Provided all the provisions of R.A. No. 10149 shall be made applicable to
the Commission; Provided further, all the Rules and Regulations issued by the
Governance Commission shall likewise be made applicable to the Commission,
its governing board, officers, and employees.

SECTION 9. Decision of the Commission; Appeals and/or Review. - The
Commission, in the exercise of its powers and functions in relation to the
issuance, amendment, revision, extension, suspension, revocation, or cancelation,
shall sit and render its Decisions en banc, which Decision shall bear the
concurrence and signature of the majority thereof.

The Decisions, or any other order or resolution of the Commission shalll be
appealable to the President of the Philippines within thirty (30) days from receipt
of the decision; Provided, That the President may motu proprio review any
Decision, order or resolution or any other action of the Commission before the
same becomes final.

SECTION 10. _Land Transportation Franchising Division. - There is hereby
created a Land Transportation Franchising Division under the Commission. The
Franchising Division shall be composed of the Executive Director appointed in
accordance with Section 6 hereof to sit as Chairman, and two (2) members with
the same rank, salary and privileges of a Regional Director. The two (2) members
shall be appointed by the President of the Philippines upon recommendation of
the Secretary of the DOTC; Provided, That one (1) member shall be a holder of a
degree in engineering and the other a holder of degree in economics, finance,
management or law and both of them with at least five (5) years of experience
and practice. The two (2) members of the Franchising Division, unless sooner
removed for cause, shall have a maximum term of five (5) years.

The duties and functions of the Franchising Division are provided
hereunder:

(a) Relative to the issuance, amendment, revision, extension,
suspension, revocation, or cancelation of CPCs:

() — Toexamine, investigate, ascertain facts;

(ii) To receive documentary or testimonial evidence;

(ii) To preside in the investigatory proceedings; and

(iv) To issue recommendatory reports to the Commission as to
resolution of the dispute.

n


(b) __ Relative to the extension of the preventive suspension in accordance
with Section 8 (h) of this Act:

(i) To receive and evaluate the information provided by any
relevant government agency claiming that there is reasonable
ground to extend the period of the aforesaid preventive suspension
or that there is continuing palpable violation and blatant disregard
of the terms and conditions of the CPC; and

(ii) To issue recommendatory reports thereon to the Commission.

(©) To conduct public hearings relative to the determination,
prescription, fixing, imposition, approval, collection and the periodical review
and adjustment of fares, fees, rates and other charges as provided under Section
8;

(4) To study the recommendatory reports submitted by the Regional
Franchising and Regulatory Offices defined under Section 11 hereof and
thereafter to make its final recommendatory report for the Commission; and

(e) _ To conduct investigations and hearings of complaints for violation
of the public service laws on land transportation and of the Commission's rules
and regulations, orders, decisions and/or rulings and to issue recommendatory
reports thereon to the Commission for the imposition of fines and/or penalties
and other measures for such violations.

SECTION 11. Regional Franchising and Regulatory Offices. - The Regional
Franchising and Regulatory Offices (RFRO) created in each of the adminstrative
regions of the country pursuant to E.O. No. 202 and E.O. No. 292 shall be
preserved. The President of the Philippines shall appoint, based on the
recommendation of the Commission, the heads of the RFRO who shall have the
rank, salary and privileges of a Department Assistant Regional Director. The
RFRO shall hear and evaluate any application/petition for routes, within their
respective administrative regions and thereafter to prepare recommendatory
reports to be submitted to the Franchising Division.

SECTION 12. Congressional Oversight Committee. - So as to ensure that the
mandate of the Commission and the objectives of this Act are properly carried
out, there is hereby created a Congressional Oversight Committee to oversee and
monitor, in such manner as it may deem necessary, the actual implementation of
this Act, including the progress of the National Public Land Transport Master
Plan and the public land transportation development plans and programs
prepared by the Commission and duly approved by the DOTC. The
Congressional Oversight Committee shall be composed of five (5) members from

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the Senate and five (5) members from the House of Representatives. The
Committee shall be co-chaired by the chairpersons of the Committee on
Transportation and Committee on Public Services of the House and Senate,
respectively. Such congressional review and oversight shall be undertaken
monthly beginning fifteen (15) days after the effectivity of this Act and thereafter
as may be determined by the oversight Committee.

SECTION 13. Implementing Rules and Regulations. - Within thirty (30) days
from the effectivity of this Act, the Commission shall be required to promulgate
the implementing rules and regulations of this Act.

SECTION 14. Appropriations.—The Secretary of DOTC, through the Land
Transportation Franchising Commission, shall immediately include in its
programs the operational requirements provided in this Act, the initial funding
of which shall be charged against the savings or current year’s appropriations of
the previous and herein re-organized Land Transportation and Franchising
Regulatory Board. Thereafter, such sums as may be necessary for the continued
implementation of this Act shall be included in the annual General
Appropriations Act.

SECTION 15. Transitory Provisions.

(a) All existing and valid CPCs as of the time of the promulgation of
this law shall remain effective. However, all pending applications shall be heard
and all subsequent CPCs shall be issued in accordance with the provisions of this
Act, which issuance shall take into account the National Public Land Transport
Master Plan, as developed, approved and enforced in accordance with Section 8
(a) of this Act, and the public land transportation development plans and
programs prepared by the Commission and duly approved by the DOTC.

(b) All existing circulars, rules and regulations and other issuances by
the Land Transportation and Franchising Regulatory Board shall remain effective
until the same are amended or modified, revoked or superseded by the
Commission in compliance with the latter’s mandate as provided in this Act.

(©) Upon effectivity of this Act and until the appointment by the
President of the Philippines of the necessary members and/or officers in
accordance with the Act, the following rules shall apply in the interim

() To complete the seven (7) members of the Commission, the
NEDA Director General, the DPWH Secretary and the DILG
Secretary shall immediately recommend to the DOTC Secretary one
(1) person each who will serve as acting regular member of the
Commission, and the DOTC Secretary, upon concurrence, shall in

2B


tur endorse the same to the President of the Philippines; Provided,
That such individual to be recommended shall be knowledgeable in
the field of transportation law, transport policy or other related
fields;

(ii) the incumbent Executive Director shall serve as Acting
Executive Director until the appointment of his successor; Provided,
That except as otherwise provided in this Act, he shall be prohibited
from holding any other position with the Commission, other
government agencies and private institutions that may give rise to
conflicts of interest;

(iii) the current members of the Land Transportation and
Franchising Regulatory Board shall hold office as Acting Members
of the Land Transportation Franchising Division, and shall continue
to hear and evaluate all pending cases, applications, investigations
and matters brought before the Land Transportation and
Franchising Regulatory Board and thereafter submit
recommendatory reports to the Commission in accordance with the
provisions of this Act; and

(iv) _ the incumbent Regional Directors of the Regional Franchising
and Regulatory Offices shall serve as Acting Regional Directors of
their respective offices until the appointment of their successors.

(d) The heads of the Support Staff shall be required to divest their
interests in entities which may be in conflict with the provisions of this Act
pursuant to Section 7 hereof.

SECTION 16. Separability Clause. ~ If, for any reason, any part or provision of
this Act is declared invalid, such declaration shall not affect the other provisions
of this Act

SECTION 17. Repealing Clause. - Except as otherwise provided herein, all
provisions of Executive Order No. 202 and the pertinent provisions of Book IV,
Title XV, Chapter 5 of Executive Order No. 292, and all other laws, decrees,
executive orders or rules and regulations inconsistent with this Act are hereby
repealed, amended or modified accordingly.

SECTION 18. Effectivity. - This Act shall take effect after fifteen (15) days
following its publication in at least two (2) newspapers of general circulation.

Approved,