Republic of the Philippines
House of Representatives
Quezon City

FLFTEENTH CONGRESS

First Regular Session

House Bill No. 4794

Introduced by Representative Hermilando I. Mandanas

EXPLANATORY NOTE

The problem of climate change, considering its adverse
repercussions, is, without doubt, one of the most pressing concerns that
confront many countries, the Philippines included, in the world today.
Considering our country’s location, high population and low adaptive
capacity, it is considered a climate change hot spot vulnerable to sea level
rise, flash floods, extreme and longer hot and rainy seasons, cyclones,
storm surges, droughts and a host of other serious consequences. It is, thus,
imperative for the Philippines, in line with the solutions to global warming
being undertaken by the rest of the world, to step up its own efforts in
dealing with this global concern. This it can very well do by legislating
measures that could lessen, if not eradicate, the emission to the atmosphere
of the so-called “harmful gases”, which cause the Earth to warm up way
beyond normal levels.


This bill seeks to address the climate change problem by Providing
fiscal and non-fiscal incentives for the manufacture, assembly, conversion
and importation of electric, hybrid and other alternative fuel vehicles. As
proposed, manufacturers, assemblers, converters and importers concerned
shall be exempt to pay duties, excise taxes and the Value-Added Tax
(VAT) for the period of nine (9) years, in appropriate cases. Likewise, said
electric, hybrid and other alternative vehicles shall be exempt from the
payment of the Motor Vehicle User’s Charge (MVUC). These fiscal
incentives, together with the non-fiscal ones, will promote the market for
“cleaner” vehicles, paving the way for the realization of having a healthier
environment.

In addition to this expected boon, the country will also provide an
answer to its fuel-saving woes. With the advent of these environment-
friendly cars, there will be less demand for the importation of
traditional/conventional fossil fuels (gasoline and petroleum) and more for
the production of alternative fuels like electric, solar, wind, hydrogen fuel
cell, compressed natural gas (CNG), liquefied natural gas (LNG) and
liquefied petroleum gas (LPG).

Accordingly, passage of the bill is eamestly sought.

|. HERMILANDO I. MANDANAS
Second District, Batangas


Pen anaunn

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4794

Introduced by the Honorable Hermilando I. Mandanas

AN ACT
PROVIDING INCENTIVES FOR THE MANUFACTURE, ASSEMBLY,
CONVERSION AND IMPORTATION OF ELECTRIC, HYBRID AND OTHER
ALTERNATIVE FUEL, VEHICLES, AND FOR OTHER PURPOSES

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

SECTION 1, Title. — This Act shalt be known as the “Electric, Hybrid and Other
Altemative Fuel Vehicles Incentives Act of 2011."

SEC. 2. Declaration of Policy. ~ tts the policy of the State to safeguard life and
environment by encouraging the use of alemative sources of energy for vehicles
intended for public and private use. To protect the well-being and promote the

A) It is the policy of the State to protect and advance the right of the
People to a balanced and healthful ecology in accord with the rhythm
and harmony in nature. The State shall Tecognize and address the
detrimental effects on the environment, safeguard the welfare, and
Protect the health of the people by improving air quality and by
reducing the impact of greenhouse gas effects emitted from man-made
Sources such as vehicles operating on fossil fuels.

B} The State supports the need to Promote the development of new
technology to accelerate social Progress and promote human
development. The use of altemative sources of energy on vehicles
intended for public and Private use is encouraged to Promote


innovation, energy efficiency, security and conservation, and to speed
up the deployment of cleaner technology.

©) The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investments. To accelerate economic growth and generate
employment, the State shall provide incentives to private enterprises
and individuals engaged in the manufacture, assembly, conversion,
and importation of electric, hybrid and other alternative fuel vehicles.

SEC. 3. Definition of Terms, ~ As used herein, the following shall mean:

(a) “Electric Vehicle” (EV) shall refer to any vehicle that uses electric
motors solely for propulsion.

(b) “Hybrid Vehicle (HV) shall refer to any vehicle that combines the
technologies of using intemal combustion engine (ICE) with a battery-
powered electric motor to gain advantages of both propulsion systems.

{c) Other “Alternative Fuel Vehicle” (AFV) shall refer to any vehicle using
alte mative sources of energy such as but not limited to: solar, wind,
hydrogen fuel cell, compressed natural gas (CNG) or liquefied natural
gas (LNG) and liquefied petroleum gas (LPG), other than conventional
sources of energy like petroleum and gasoline for propulsion.

(d) “Manufacturer” or “Assembler” shall mean any individual, partnership,
corporation or other entity engaged in the manufacture, assembly and
conversion of electric, hybrid and other alternative fuel vehicles
incorporated, organized and existing under Philippine laws.

(e) “Importer” shall mean any individual, partnership, corporation or other
entity engaged in the importation of completely built units (CBUs) of
electric, hybrid and other altemative fuel vehicles incorporated,
organized and existing under Philippine laws.

SEC. 4. Coverage. - This Act shall cover electric, hybrid and other alternative
fuel vehicles but shall not include vehicles powered by gasoline, petroleum, bio-
diesel and bio-ethanol.

SEC. 5. Incentives to Manufacturers or Assemblers. — The provision of any
special or general law to the contrary notwithstanding, the manufacture or
assembly of completely knocked-down (CKD) parts of electric, hybrid and other
altemative fuel vehicles, including the conversion of vehicles into electric, hybrid
and other alternative fuel vehicles, shall be exempt from the payment of excise
taxes and duties for nine (9) years from the effectivity of this Act.


The imposition of the Value-Added Tax (VAT) for the purchase and
importation of raw materials, spare Parts, components and capital equipment
used in the manufacture or assembly of electric, hybrid and other alternative fuel
vehicles shall be suspended for the next nine {9) years from the effectivity of this
Act.

SEC. 6. Incentives to Importers. - The provision of any special or general law
to the contrary notwithstanding, the importation of completely built units (CBUs)
of electric, hybrid and other altemative fuel vehicles shall be exempt from the
Payment of excise taxes and duties for nine (9) years from the effectivity of this
Act.

SEC. 7. Exemption from the Payment of Motor Vehicle User's Charge
(MVUC), - Electric, hybrid and other alternative fue! vehicles shall be exempt
from the payment of the Motor Vehicle User's Charge (MVUC) imposed by the
Land Transportation Office (LTO) under Republic Act (RA) No. 8794, otherwise
known as “Motor Vehicle User's Charge (MVUC) Act.”

SEC. 8. Non-Fiscal Incentives. ~

1. Priority in Registration and Issuance of Plate Number. — Registration and
Fenewal of registration of electric, hybrid and other alternative fuel vehicles shall
be prioritized by the Land Transportation Office. A special type of vehicle plate to
be determined by the Land Transportation Office shall be exclusively issued to all
electric, hybrid and other alternative fuel vehicles upon registration.

2. Priority in Franchise Application. — Public Utility Vehicle (PUV) operators
exclusively utilizing electric, hybrid and other alternative fuel vehicles shall be
Land Transportation Franchising and Regulatory Board
(LTFRB) in the approval of applications for franchise to operate, including their
fenewal, for nine (8) years from the effectivity of this Act,

3. Exemption from Unified Vehicular Volume Reduction Program (UVVRP) or
Number-Coding Scheme. — All electric, hybrid and other alternative fuel vehicles
shall be exempted from the mandatory Unified Vehicular Votume Reduction
Program (UVVRP) or Number-Coding Scheme being implemented by the Metro
Manila Development Authority (MMDA) and other local government units (LGUs)
concemed.

4. Mandatory Provision for Parking Spaces in New Establishments. — Business
and commercial establishments to be constructed after the effectivity of this Act
are mandated to provide exclusive pa ing spaces for all electric, hybrid and
other altemative fuel vehicles. No building permit shall be issued for the
construction of business and commercial establishments that include parking
Spaces unless the owner submits an affidavit that there shall be parking spaces


to be exclusively designated for electric, hybrid and other alternative fuel
vehicles.

SEC. 9, Registration, Implementation and Monitoring. - The Department of
Finance (DOF) and Department of Trade and industry (DT!) shall be responsible
for the administration and implementation of the incentives granted under this
Act.

Manufacturers, assemblers, converters and importers of electric, hybrid
and other alternative fuel vehicles shall fegister with the Department of Finance
in order to avail of the incentives provided under this Act. For proper monitoring,
the Department of Finance and the Department of Trade and Industry shall meet
regularly to monitor and review the implementation of the incentives Provided
herein.

SEC. 10. Implementing Rules and Regulations. - The Department of Finance,
in coordination with the Department of Trade and Industry, shall promulgate the
necessary rules and regulations for the effective implementation of this Act.

SEC. 11. Separability Clause. - If any provision of this Act is subsequently
declared invalid or unconstitutional, other provisions hereof which are not
affected thereby shall remain in full force and effect.

SEC. 12. Repealing Clause. - All laws, acts, presidential decrees, executive
orders, issuances, presidential proclamations, rules and regulations or Parts.
thereof which are contrary to and inconsistent with any provision of this Act are
hereby repealed, amended or modified accordingly.

SEC. 13. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

Publication either in the Official Gazette, or in at least two (2) newspapers of
general circulation, whichever comes eartier.

Approved,