REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

House Bill No. 7688

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

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 DOT?'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 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 (NLTA) shall absorb the
functions of a merged LTO and LTFRB as the primary policy, planning, programming,
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 the 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.
We can only attain this if this bill is passed into law.

In view of the foregoing, the immediate approval of this bill is earnestly sought.

;ARVC. ALEJANO
Representative
‘Magdalo Para sa Pilipino Party-List


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

7688

House Bill No.

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
CREATING THE NATIONAL LAND TRANSPORTATION AUTHORITY,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

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

ARTICLE
TITLE, POLICIES, OBJECTIVES AND SCOPE OF THE ACT

SECTION 1. Title. This act shall be known as the "National Land Transportation
Authority (NLTA) Act of 2018".

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 the
establishment of a motor vehicle statistical office as the principal source of information, the
conversion from the adversarial quasi-judicial procedures in the grant of franchises to operate
public utility motor vehicles into administrative proceedings using socioeconomic indicators in
the grant of permits, and the establishment of an office charged with long term forward planning
in order to improve the administration of the land transportation industry. The Authority shall
absorb the functions of the merged LTO and LTFRB as the primary policy, planning,
programming, coordinating, implementing, regulating and administrative entity of the
government in the promotion, development and regulation of a dependable network of land
transportation systems.

SEC. 3. Scope of the Act. - The provisions of the Act shall control, as far as they apply,
to 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; franchising and operation of public utility motor vehicles; regulation of activities of
motor vehicle manufacturers, assemblers, importers, and dealers, and other related matters
pertaining to road safety and environment protection.

ARTICLE I
DEFINITIONS

SEC. 4. Definition of Terms. - As used in this Act, the following terms shall mean:

a. "Motor Vehicles” shall mean any vehicle propelled by any power other than muscular
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 run only on rails and tracks, and tractors,
trailers and engines of all kinds used exclusively for agricultural purposes.


"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.

"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.

"Component" shall mean any part of a motor vehicle such as engine, chassis and body or

"parts thereof.

"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.

"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.

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

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

"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.

"Driver" shall mean any person who is in actual physical control of a motor vehicle in
‘operation.

. "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.

"Non-Professional Driver" shall mean any person operating any vehicle, except a public
utility vehicle, without compensation.

. "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.

. "Certificate of Public Convenience" shall mean the authorization issued by the Authority

for the operation of land transportation services for public use as required by law.
"Authorized Route" shall mean the approved origin and destination points linked by a
chain of highways and streets open for public use over which the service is authorized.

"Public Utility Operator" shall mean the registered owner of the motor vehicles
authorized for public utility operation by the Authority.

"Abandonment of Service" shall mean the suspension or cessation of service by a public

"utility operator in its authorized route or portions thereof. A partial abandonment of


service is presumed when a public utility operator fails to field the authorized number of
units on a route after due notice from the Authority.

ARTICLE I
CREATION, POWERS AND FUNCTION

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 and Communications for purposes of policy coordination.

SEC. 6. Powers and Functions. - To accomplish its mandate and objectives, the

Authority is authorized to:

a. Prepare the 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 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;

¢. 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;

f. Aceredit 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 for
safety standards of motor vehicles and accessories; issuance of motor vehicle
identification plates and validating stickers;

h. 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;

i. Make arrest for violations of the land transportation laws;


j. Issue subpoena and subpoena duces fecum 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;

1. 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;

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:

1. Secretary of Department of Transportation (DOT?);

2. Director General of the National Land Transportation Authority (NLTA), appointed
by the President as Chief Executive Officer;

3. Secretary of Department of Interior and Local Government (DILG);

4. Secretary of Department of Budget and Management (DBM);

5. Secretary of the Department of Finance (DOF);

6. Secretary of the National Economic Development Authority (NEDA); and
7. Arepresentative from the transport sector to be appointed by the President.

The Board shall meet at least once a month and hold special meetings upon the call of the
Chairman or any four members of the Board. A simple majority shall constitute a quorum to
transact business and vote of at least a simple majority of the members present at which there is a
quorum shall be valid.

ARTICLE IV
ADMINISTRATION

SEC. 8. Executive Officers. - The Authority shall be managed by a Director-General
with the rank, salary and qualifications equivalent to that of a Department Undersecretary, who
must have sufficient knowledge and background in land transportation management. He shall
serve at the pleasure of the President.

‘The Director-General shall be assisted by four (4) Deputy Director-Generals for
‘Administration and Finance, Plans and Operations, Franchising, and Law Enforcement and
‘Adjudication - with rank, salary and qualifications equivalent to that of an Assistant Secretary,
preferably a Career Executive Service Officer (CESO) possessing at least 10 years of experience
and practice in land transportation management and administration.

‘The regional 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 ten years of experience in land transportation management, assisted by
two (2) Technical Regional Directors - one for Operations and another for Administration and


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Finance - with rank, salary and qualifications equivalent to that of a Director III and with at least
ten years of experience in land transportation management.

‘The above-named executive officers of the Authority shall be appointed by the President
upon recommendation of the Board. Within one year, all such officers shall apply and qualify for
appointment as Career Executive Service officers.

For purposes of a more rigid and effective implementation of this Act, the Director-
General shall create the Land Transportation District Offices (LTDO) to be headed by a Land
Transportation District Director appointed by the Director-General. The LTDO shall have the
rank, salary and privileges of a Director Il. The qualifications herein required for LTDO shall
apply to officials appointed pursuant to this law without prejudice to incumbent heads of LTO
district offices regardless of their status.

SEC. 9. Powers of the Director-General. - As Chief Executive Officer of the Authority,
the functions and powers of the heads of the LTO, LTFRB, and DOTr as provided under R.A.
4136 and CA 146 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:

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

(2) Manage the affairs of the Authority and ensure the smooth operational efficiency of
the national land transportation system;

(3) Sign contracts, approve expenditures and appoint and discipline employees below the
level of Presidential appointees;

(4) 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;

(5) 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 of the Board;

(6) Designate as deputies government entities with traffic-related functions, civic action
groups, Non-Government Organization (NGO) and Public Officers (PO) of good
standing;

(7) Do any act or thing for the proper operation and administration of the Authority; and
(8) Perform such other functions and duties as the Board may assign from time to time.

SEC. 10. Staffing Pattern. - The Director-General, subject to the approval of the Board
shall determine the staffing pattern, the number of personnel and field offices of the Authority,
the functions of the central office staff, the regional and district offices; define their duties and
responsibilities and fix their qualifications, salaries and other emoluments.

‘The Board shall act on the recommendation within thirty (30) days from its submission
otherwise the recommendation shall be deemed approved and the same shall be implemented
within ninety (90) days from approval thereof.


SEC. 11. Appointment and Discipline of Personnel. - All officials of the Authority,
except those appointed by the President, shall be selected and appointed on the basis of merit and
fitness as established in a merit system program of the Authority consistent with Civil Service
laws and regulations.

‘The appointment of regional and district officials except those to be appointed by the
President may be delegated by the Director-General to the Regional Executive Director. Except
for the Director-General, all officials to be appointed by the President shall be recommended by
the Board.

‘The power to discipline employees resides with the Director General. Appeals on the
decision of the Director General may be submitted to the Board for reconsideration. Decisions of
the Regional Directors may be appealed with the Director General.

ARTICLE V
FINANCE

SEC. 12. Sources of Funds. - Subject to the rules on government auditing, the equivalent
of fifty percent (50%) of its total annual revenue collections arising from registration of motor
vehicle, licensing of drivers, franchising and other miscellaneous transactions shall be retained
by the Authority to pay for its annual operations and capital expenditures. Under this section, the
Authority is also hereby allowed to undertake the following:

(a) Funds generated from its own special projects not arising from its regular functions
shall be retained by the authority for employees’ welfare, subject to the approval of
the Board.

(b) The Authority is authorized to contract loans, credits and other indebtedness as it may
deem 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.

(©) 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.

(c) 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.

SEC. 13. Exemption from Taxes and Duties. - The importation of equipment,
machineries, software accessories and materials used directly in the operation of the Authority
and which are otherwise not available locally on favorable terms, are exempted from all direct
and indirect taxes, duties, fees, imposts and other charges and restrictions, the provisions of
existing laws to the contrary notwithstanding: Provided, That when the Authority disposes of
such equipment, machineries, software, accessories and materials, the buyer of the same shall
pay to the government the corresponding taxes and duties as assessed by the Bureau of Internal
Revenue and Bureau of Customs.

ARTICLE VI
REGULATION OF PUBLIC UTILITY VEHICLES

SEC. 14. Administrative Permits. - Notwithstanding the provision of any law to the
contrary, the issuance of permits to operate public utility vehicles shall be administratively
processed based on rules and regulations/guidelines that the Authority shall promulgate within

6


sixty (60) days subject to the approval of the Board. Without prejudice to the provisions of R.A.
7160, otherwise known as the Local Government Code of 1991, the permit to operate public
utility vehicles shall be issued by the Authority.

SEC. 15. Operation of Public Utility Vehicles. - No motor vehicle shall be operated as a
public conveyance or for hire without possessing a valid and subsisting franchise and/or permits
issued by the Authority.

All existing franchises and permits issued prior to the affectivity of this Act shall remain
valid up to the date of its expiry as indicated in the certificate or permit. Any subsequent
transaction related thereto shall now be processed and issued pursuant to the rules and
regulations of the Authority.

SEC. 16. Rate Fixing. - For purposes of fixing of rates of public utility vehicles, the
Director General shall undertake the necessary studies, after due consultation with the involved
sectors, and recommend the same to the Board for approval.

SEC. 17. Appeals. - Any decision related to the issuance of permits and orders in
whatever form by the Director-General may be appealed to the Board within fifteen (15) days
from the date of receipt. Decisions and orders issued by officials properly delegated to issue
permits may be appealed to the Director-General within fifteen (15) days from date of receipt.

In all cases where the aggrieved parties are not satisfied with the resolution of the
authority, such decisions may be appealed to the President of the Philippines for final
administrative disposition.

‘Any decisions related to the issuance of permits or any other orders in whatever form by
the appropriate officials of the LTA may be appealed in the following manner:

1. Decisions of orders of the Director-General appealable to the Board within a period of 15
days computed from the date of receipt of said decision appealed from the decision of the
Board shall be final and executory.

2. 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 fifteen (15) days from receipt of the decision being appealed from.

SEC. 18. Penalties. - In order to ensure strict adherence and compliance to the conditions
of the permit issued, the Director-General, subject to the approval of the Board, shall promulgate
the necessary procedures for the imposition of sanctions and appropriate schedule of penalties
for any violation of the conditions of the permit and impose the same.

SEC. 19. Authority to Impose Penalties. - The Director-General is hereby empowered to
impose penalties and sanctions in the form of cancellation, revocation, suspension, fines and
other forms of penalties allowable by law or any combination thereof for violations of the terms
and conditions of the permit. Subject to approval of the Board, the Director-General shall
promulgate a set of guidelines containing the administrative procedures in the imposition of
sanctions including the schedule of penalties

ARTICLE VIL
DISPOSITION OF SEIZED VEHICLE COMPONENTS AND ACCESSORIES

SEC. 20. Disposition of Impounded Vehicles. - All motor vehicles impounded, including
the confiscated accessories and which are abandoned by their owners 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. 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 publication 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. 21. Abolition. - The Land Transportation Office, the Land Transportation
Franchising and Regulatory Board and the Office of Transport Cooperatives in the Department
of Transportation and Communications and the TMG of the PNP and Traffic Enforcement Group
of MMDA are hereby abolished. Properties, assets and liabilities, all powers and duties, rights
and choices of actions, vested by law or exercised by said abolished offices and its predecessors
are hereby transferred to the Authority.

SEC. 22. Holdover Functions. - To ensure smooth transition into the structure of the
Authority, all officers and employees of the defunct LTO, LTFRB, DOTr, TMG of the PNP and
the TEG of MMDA shall continue to exercise their usual functions, duties and responsibilities
unless otherwise directed.

‘The Authority shall ensure that all present employees of the abolished agencies shall be
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 the existing retirement law, 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. 23. 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, LTFRB, DOTr, TMG of PNP and TEG of MMDA or its predecessors, shall continue to be
in effect according to their terms until modified, terminated, superseded, set aside or repealed.

ARTICLE IX
PENAL AND OTHER PROVISIONS

SEC. 24. Penalty for Violations. - The Authority, subject to the approval of the Board,
shall issue guidelines and schedule of fines and penalties for violations committed under this
Act.

SEC. 25. Punishment for Other Offenses. - The conviction of any person for any
offense under this Act shall not bar his prosecution for any other offenses which may have been
‘committed by such person concurrently with the commission of the offense of which he was
convicted or in doing the act or series of acts which constituted the offense of which he was
convicted.

SEC. 26. Duty of Clerks of Court. - It is hereby made the duty of clerks of the regional
trial courts, municipal trial courts trying traffic violation cases to certify to the Authority the
result of any case, whether criminal or civil, involving violations of any provisions of this Act, or
other laws and ordinances relating to motor vehicles. Said certificates shall be specifically


contained the name of the driver or owner of the vehicle involved, his address, the number of his
license and/or the certificate of registration of his vehicle, the date thereof and the offense for
which he was convicted or acquitted.

ARTICLE X
COLLECTION OF FEES, TAXES AND FINES, LIENS, ALLOTMENT OF FUNDS

SEC. 27. Collection of Fees, National and Local Taxes, Toll Fees. - The collection of
all fees, taxes and fines, under the provisions of this Act shall be made in accordance with the
regulations to be prescribed by the Authority subject to the approval of the Board:

(a) No taxes or fees other than those prescribed in this Act shall be imposed for the
registration or operation or on the ownership of any motor vehicle, or for the exercise
of the profession of driver, by any local government, the provisions of any charter to
the contrary notwithstanding; provided however that any provincial board, city or
municipal councilor board or other competent authority may enact or collect such
reasonable and equitable toll fees for the use of such bridges and ferries within their
respective jurisdiction as may be authorized and approved by the proper authorities,
and also for the use of such public roads as may be authorized by the President of the
Philippines upon the recommendation of the proper authority.

(b) Lien Upon Motor Vehicles. Any balance of fees for registration, renewal registration
or delinquent registration of a motor vehicle remaining unpaid and all fines imposed
upon any vehicle owner shall constitute a first lien upon the motor vehicle concerned.
The Director-General is hereby vested with the authority to issue a warrant of
constructive or actual distraint or levy to any owner of motor vehicle who has any
balance of fees for registration, renewal or delinquent registration of a motor vehicle
remaining unpaid which upon demand by the Director- General or his deputies
executing such warrant, the owner of the vehicle shall surrender the same at the time
demanded, except when the attachment or execution is under any judicial process.
‘Any owner who fails or refuses to surrender any of such property or vehicle not
surrendered shall be punished by a fine not exceeding the amount of the fees,
including penalties and interest, if any, for the collection of which such warrant has
been issued, together with the cost and interest if any until surrendered.

ARTICLE X
FINAL PROVISION

SEC. 28. No local government shall enact or enforce any ordinance or resolution in
conflict with the provisions of this Act, or prohibiting any deputy or agent of the authority to
enforce this Act, within their respective territorial jurisdiction and the provisions of any charter
the contrary notwithstanding.

SEC. 29. Appropriations. - To carry out effectively the provisions of this Act during the
transition period, the amount equivalent to thirty five percent (35%) of the collection for the year
is hereby appropriated in addition to the appropriations provided in the General Appropriations
Act of the LTO, LTFRB, DOTr, TMG and TEG.

SEC. 30. 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. 31. Repealing Clause. - All acts, decrees, orders, and instructions ot parts thereof
inconsistent with the provisions of this Act are repealed and modified accordingly.

SEC. 32. Effectivity. - This act shall take effect thirty (30) days after approval and
publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,