Republic of the Philippines
HOUSE OF REPRESENTATIVES.
‘Quezon City

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RECEIVED %\

‘SIXTEENTH CONGRESS one: 21 JUL 2013 |

FIRST REGULAR SESSION

House BiLLNo.___—«458

Introduced by REP. MARCELINO R. TEODORO.

EXPLANATORY NOTE

This bill seeks to amend the charter of the Civil Aeronautics Board (CAB) and in the
process retum the inherent right of Congress to regulate public utilities including public
transportation.

Due to the rapid ascent of globalization where companies merge with one another,
including public utilities like telecoms, power, transport and broadcast; there is an emerging
threat of a creeping monopoly that could endanger the interest of the public.

There is a clamor from lawmakers and the public alike that the right of the State to
regulate public utilities be restored to its former status since it is a legitimate exercise to assure
the protection of the public from these emerging company mergers.

Sec. 11, Article 12 of the 1987 Constitution is explicit in its provision regarding the power
of Congress to amend, alter, repeal franchises and takes precedence over and above any law
as such a review should be undertaken of Section 8, Article Ill, Chapter |, Part X of the 1972
Integrated Reorganization Plan which gave authority to the CAB to issue, deny, amend, revise
alter, modify, cancel, suspend or revoke, in whole or in part, upon petition or complaint, or upon
its own initiative, any temporary operating permit or Certificate of Public Convenience and
Necessity.

In view of the aforementioned emerging global trends, the State should revoke its
delegation to public service agencies the power to give licenses and permits to operate without
prior approval of Congress

In view of the foregoing, approval of this bill s eamestly requested
(ARCELINO “MARCY” R. TEODORO

Representative
4® District, City of Marikina


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

458

HOUSE BILL NO.

RODUCED BY REP. MARCELINO “MARCY” R. TEODORO

AN ACT AMENDING SECTIONS 10, I1, 22 AND 24 OF REPUBLIC ACT NO. 776,
OTHERWISE KNOWN AS “THE CIVIL AERONAUTICS ACT OF THE
PHILIPPINES”, AS AMENDED

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

SE

ION 1. Section 10 of Republic Act No. 776, otherwise known as “The Civil

Aeronautics Act of the Philippine:

is hereby amended to read as follows

“SEC. 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 [shall have the] EXERCISE general supervision and regulation of,
[the] jurisdiction and control over air carriers, general sales agents, cargo sales agents, and
airfreight forwarders as well as their property, property rights, equipment, AND facilities,

[and franchise,] insofar as may be necessary for the purpose of carrying out the provisionS

of this Act.
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“(C) The Board shall have the following specific powers and duties
“Q) In accordance with the provisions of Chapter IV of this Act, to issue, deny,

amend, revise, alter, modify, cancel, suspend or revoke, in whole or in part, upon petition

or complaint, or upon its own init

ive, any temporary operating permit or Certificate of
Public Convenience and Necessity (CPCN): Provided, however, THAT NO CPCN
SHALL BE ISSUED PRIOR TO A GRANT OF VALID LEGISLATIVE
FRANCHISE TO THE AIRLINE COMPANY AND [T]That in the case of foreign air
carriers, the permit shall be issued with the approval of the President of the Republic of the

Philippines.

“(4) To approve or disapprove increase and/or decrease of capital, lease,
purchase, sales Jor] OF aircraft of air carrier engage[s|D in air commerce; consolidation,
merger, purchase, lease and acquisition and control of operating contracts between
domestic air carriers, between domestic and foreign air carriers, or between domestic air
carriers or any person{s] engaged in any phase of aeronautics AND INFORM
CONGRESS OF THE SAME WITHIN THIRTY (30) DAYS.

“x x


SEC. 2. Section 11 of the same Act is hereby amended to read as follows:

ota Nature, lerms and Conditions. - Certificate of Public Convenience and
Necessity (CPCN) is a permit issued by the Board authorizing a person to engage in air
commerce and/or air 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 (II) respectively, unl
there is in force a permit or any other form of authorization issued by the Board
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“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

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SEC. 3. There shall be incorporated after Section 11 of Republic Act No. 776, as amended, a
new section to read as follows:

“SEC. 11-A. LEGISLATIVE FRANCHISE. — ALL DOMESTIC AIRLINE
CARRIERS, AIRFREIGHT FORWARDERS AND AIR TAXIS OPERATING
WITHOUT A LEGISLATIVE FRANCHISE WHICH HAVE BEEN ISSUED A CPC!
OR OTHER PERMITS TO OPERAT VIL AERONAUTICS BOARD,
PRIOR TO THE APPROVAL OF _ MAY CONTINUE TO OPERAT
UNTIL THE END OF THE TERM OF THE OPERATIONAL PERM
PROVIDED, THAT THE CPCN OR OTHER PERMITS ISSUED BY THE CAB
GRANTING THE DOMESTIC AIRLINE CARRIERS, AIRFREIGHT
FORWARDERS AND AIR TAXIS SHALL NOT BE EXTENDED OR RENEWED
WITHOUT A LEGISLATIVE FRANCHISE: PROVIDED, FURTHER, THAT
THESE CARRIERS SHALL BE REQUIRED TO APPLY FOR LEGISLATIVE
FRANCHISE WITHIN THREE(3) YEARS FROM THE EFFECTIVITY OF THIS
ACT.

“EXISTING FRANCHISES THAT ARE NOT OPERATED OR ARE WITHOUT
PENDING APPLICATION FOR CPCN AT THE TIME OF THE EFFECTIVITY OF
THIS ACT ARE DEEMED REVOKED.”

SEC. 4 Section 22 of the same Act is hereby amended to read as follows.
“SEC. 22. Modification, suspension or revocation. — The Board, upon petition of
complaint or upon its own initiative, may, by order entered after notice and opportunity for

hearing, alter, amend, modify or suspend any permit, in whole or in part, if public


convenience and necessity so require; or may revoke any permit, in whole or in part, for
intentional failure to comply with any provision of this Act or any order, rule or regulation
issued thereunder, or any term, condition or limitation of such permit: PROVIDED, THAT
THE BOARD SHALL NOTIFY CONGRESS PRIOR TO ANY ACTION IT SHALL
MAKE: Provided, FURTHER, That the Board, for good cause, may, by order, without
notice and hearing suspend, for a period not to exceed thirty days, any permit or the exercise
of any privilege or authority issued or granted 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 in opposition to the alteration, amendment, modification,

suspension, or revocation of any permit.”

SEC. 5. Section 24 of the same Act is hereby amended to read as follows.

“SEC. 24. Effective date and duration of permit. ~ Each permit shall be effective
from the date specified therein and shall continue in effect until suspended or revoked or
until the Board shall certify that operation thereunder has ceased: Provided, That, if any
service authorized by a permit is not inaugurated within a period of ninety (90) days after
the date of authorization as shall be fixed by the Board or afler such other period as may be
designated by the Board, the Board may by order direct that such permit shall thereupon
cease to be effective to the extent of such service: PROVIDED, FURTHER, THAT THE
BOARD SHALL NOTIFY CONGRESS WITHIN THIRTY (30) DAYS OF ANY
CHANGE IN THE STATUS OF THE FRANCHISE GRANTED TO T
COMPANY: Provided, (further| FINAL
more than twenty-five (25) years OR THAT WOULD EXCEED THE TENURE OF
THE FRANCHISE”

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¥, That no permit shall be issued for a period of

SEC. 6. Separability Clause If any provision of this Act is declared invalid or

unconstitutional, the other provisions not affected thereby shall continue to be in full force and effect,

regulations and other issuances or parts thereof which are incons

SEC. 7. Repealing Clause. — All laws, decrees, executive orders, proclamations, rules and

are hereby repealed, amended or modified accordingly

ent with the provisions of this Act

SEC. 8. Effectivity Clause. ~ This Act shall take effect fifteen (15) days after its publication in

at least two (2) newspapers of general circulation in the Philippines

Approved,