RECEIVED
27 JUL 2016

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

SEVENTEENTH CONGRESS
First Regular Session

aINo 2U aL
House Bill No. a

TATIVES

Introduced by Rep. CESAR V. SARMIENTO.

EXPLANATORY NOTE

Republic Act 9497, otherwise known as the Civil Aviation Act of 2008 was signed into
law on March 4, 2008, The law abolished the Air Transportation Office (ATO) and in its stead
created the Civil Aviation Authority of the Philippines (CAAP), which is mandated to set
comprehensive, clear, and impartial rules for the aviation industry. Under RA 9497, the
CAAP shall be an independent regulatory body with quasi-judicial and quasi-legislative
powers with corporate attributes,

Prior to the passage of RA 9497, the US Federal Aviation Authority (FAA)
downgraded the Philippines to Category 2 status in 2007 after finding 88 critical elements.
The "downgrade" meant the FAA had concerns over the ability of its counterpart (formerly
ATO) to implement global aviation standards, which include security and safety, among
others. In 2010, the EU placed Philippine air carriers on its blacklist, banning any airline from
the Philippines from flying to Europe. These restrictions were obstacles in the expansion
plans of both Philippine Airlines and Cebu Pacific. The restrictions prevent airlines from the
Philippines from mounting new flights from the Philippines to the US or Europe.

These are perceived as having a negative impact on tourism and the growth of the
Philippines’ air transport sector in general. Recently, the technical review report of the FAA
cited 23 ‘critical elements” that still have to be addressed for the improvement of the
country's aviation status. The remaining “critical elements" include fine-tuning of the
Philippine Civil Air Regulations, changing the CAAP's safety and oversight structure,
updating its database storing system, standardizing their certification of safety inspectors,
and revalidating airline carriers, among others.

The recent efforts of CAAP have led to the resolution of many of the regulatory
concerns raised, as indicated by the restoration of the Philippines to Category 1 status in
April 2014 and the lifting of the ban in July 2013 by the EU on Philippine carriers to mount
flights into Europe, This proposed measure seeks to fully address the still perceived
deficiencies in the supervision and management of the Philippine civil aviation industry and
to strengthen CAAP as the country's designated civil aviation authority. There is a need to
pass these amendments in order to sustain and not to derail CAAP's efforts which once
again allowed carriers to offer direct flights from the Philippines to Europe and to more
destinations in the United States as it continues to work with international aviation bodies to
improve and upgrade the status of Philippine aviation.

In view of the foregoing, passage of this bill is earnestly sought. ae

7”

CESAR V. SARMIENTO


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

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2041

Introduced by Rep. CESAR V. SARMIENTO

AN ACT
STRENGTHENING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES,
AMENDING FOR THE PURPOSE REPUBLIC ACT 9497, OTHERWISE KNOWN.
AS THE CIVIL AVIATION AUTHORITY ACT OF 2008

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

SECTION 1. Section 2 of Republic Act No. 9497, otherwise known as the
Civil Aviation Authority Act of 2008 is hereby amended to read as follows:

“SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
provide safe and efficient air transport and regulatory services in the Philippines by
providing for the creation of a civil aviation authority with jurisdiction over the
restructuring of the civil aviation system, the promotion, development and regulation
of the technical, operational, safety, and aviation security functions under the civil
aviation authority IN FURTHERANCE OF THE OBLIGATIONS OF THE
PHILIPPINES TO THE INTERNATIONAL COMMUNITY AS A CONTRACTING
STATE TO THE CHICAGO CONVENTION. THE AUTHORITY SHALL
COORDINATE WITH OTHER GOVERNMENT AGENCIES IN ADVANCING
AVIATION SECURITY IN THE PHILIPPINES.”

TOWARDS THIS END, THE GOVERNMENT SHALL EXTEND ALL MEANS AND
MECHANISMS NECESSARY FOR THE AUTHORITY TO FULFILL ITS VITAL TASK
OF PROMOTING AND ENSURING SAFE AND EFFICIENT AIR TRANSPORT.

IN VIEW OF THE CRUCIAL ROLE, AND THE NATURE, POWERS AND
FUNCTIONS OF THE AUTHORITY, AS A GOVERNMENT INSTRUMENTALITY
WITH CORPORATE POWERS, IT SHALL ENJOY FISCAL AND ADMINISTRATIVE
AUTONOMY.”

SECTION 2. Section 4 of the same Act is hereby amended to read as
follows:

“SEC. 4. Creation of the Authority. - There is hereby created an independent
regulatory body with quasi-judicial and quasi-legislative powers and possessing
corporate attributes to be known as the Civil Aviation Authority of the Philippines


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

SEVENTEENTH CONGRESS
First Regular Session

2041

House Bill No.

"Introduced by Rep. CESAR V. SARMIENTO

AN ACT
STRENGTHENING THE CIVIL AVIATION AUTHORITY OF THE PHILIPPINES,
AMENDING FOR THE PURPOSE REPUBLIC ACT 9497, OTHERWISE KNOWN
CIVIL AVIATION AUTHORITY ACT OF 2008

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

SECTION 1. Section 2 of Republic Act No. 9497, otherwise known as the
Civil Aviation Authority Act of 2008 is hereby amended to read as follows:

“SEC. 2, Declaration of Policy. - It is hereby declared the policy of the State to
provide safe and efficient air transport and regulatory services in the Philippines by
providing for the creation of a civil aviation authority with jurisdiction over the
restructuring of the civil aviation system, the promotion, development and regulation
of the technical, operational, safety, and aviation security functions under the civil
aviation authority IN FURTHERANCE OF THE OBLIGATIONS OF THE
PHILIPPINES TO THE INTERNATIONAL COMMUNITY AS A CONTRACTING
STATE TO THE CHICAGO CONVENTION. THE AUTHORITY SHALL
COORDINATE WITH OTHER GOVERNMENT AGENCIES IN ADVANCING
AVIATION SECURITY IN THE PHILIPPINES.”

TOWARDS THIS END, THE GOVERNMENT SHALL EXTEND ALL MEANS AND
MECHANISMS NECESSARY FOR THE AUTHORITY TO FULFILL ITS VITAL TASK
OF PROMOTING AND ENSURING SAFE AND EFFICIENT AIR TRANSPORT.

IN VIEW OF THE CRUCIAL ROLE, AND THE NATURE, POWERS AND
FUNCTIONS OF THE AUTHORITY, AS A GOVERNMENT INSTRUMENTALITY
WITH CORPORATE POWERS, IT SHALL ENJOY FISCAL AND ADMINISTRATIVE
AUTONOMY.”

SECTION 2. Section 4 of the same Act is hereby amended to read as
follows:

“SEC. 4. Creation of the Authority. - There is hereby created an independent
regulatory body with quasi-judicial and quasi-egislative powers and possessing
corporate attributes to be known as the Civil Aviation Authority of the Philippines


(CAAP),hereinafter referred to as the "Authority" attached to the Department of
Transportation and Communications (DOTC) for the purpose of policy coordination,
For this purpose, the existing Air Transportation Office created under the provisions
of Republic Act No. 776, as amended, is hereby abolished.

THE AUTHORITY SHALL BE EXEMPTED FROM THE PROVISIONS OF
REPUBLIC ACT NO. 10149, OTHERWISE KNOWN AS THE GOCC
GOVERNANCE ACT OF 2011 AND FROM THE JURISDICTION OF THE
GOVERNANCE COMMISSION FOR GOVERNMENT-OWNED OR CONTROLLED
CORPORATION

THE AUTHORITY SHALL HOWEVER BE REQUIRED TO COMPLY WITH
THE DISCLOSURE REQUIREMENTS IN SECTION 25 CHAPTER V OF RA 10149
AND MAY BE SUBJECT TO THE SPECIAL AUDIT ANY TIME UPON THE
DIRECTIVE OF THE COMMISSION ON AUDIT AND/OR THE CONGRESSIONAL
OVERSIGHT COMMITTEE ON CAAP (COCCAAP) AS HEREIN PROVIDED;
PROVIDED THAT NO PERFORMANCE INCENTIVE, BONUS, ANY KIND OF
ADDITIONAL BENEFIT NOT PRESCRIBED UNDER THE LAW SHALL BE
GRANTED UNLESS THE AUTHORITY HAS FULLY PAID ALL TAXES FOR WHICH
IT 1S LIABLE.

XXX

(a] APPOINTMENT AND TERM OF OFFICE OF THE Director General - The
Authority shall be headed by a Director General of Civil Aviation, referred to in this
Act as the "Director General,” who UNLESS OTHERWISE PROVIDED BY LAW,
SHALL BE RESPONSIBLE FOR ALL NON-ECONOMIC ASPECTS OF civil aviation
in the Philippines and the administration of this Act. NOTWITHSTANDING THE
PROVISIONS OF REPUBLIC ACT 10149, OTHERWISE KNOWN AS THE GOCC
GOVERNANCE ACT OF 2011, [T]he Director General shall be appointed based on
the qualifications herein provided and shall have a tenure of office for a period of five
(6) years. His appointment may be extended for another non-extendible term of five
(5) years and shall only be removed for cause in accordance with the rules and
regulations prescribed by the Civil Service Commission. IN CASE THE DIRECTOR
GENERAL FAILS TO COMPLETE HIS TERM, HIS SUCCESSOR SHALL ONLY
SERVE FOR THE UNEXPIRED PORTION OF THE TERM OF HIS
PREDECESSOR. NO DIRECTOR GENERAL CAN SERVE IN OFFICE FOR MORE
THAN TEN (10) YEARS.

THE PRESIDENT OF THE PHILIPPINES SHALL APPOINT THE DIRECTOR
GENERAL FROM A SHORTLIST OF FOUR (4) NOMINEES PREPARED BY THE
BOARD OF DIRECTORS CONSTITUTED AS A SEARCH COMMITTEE WHO
SHALL RECEIVE AND EVALUATE NOMINATIONS. NO INCUMBENT DIRECTOR
GENERAL SHALL BE A MEMBER OF THE SEARCH COMMITTEE.

UPON EXPIRATION OF THE INCUMBENT DIRECTOR GENERAL'S TERM OR IN
CASE OF VACANCY, ALL OF THE MEMBERS OF THE BOARD OF DIRECTORS,
SHALL BE CONSTITUTED AS A SEARCH COMMITTEE WHO SHALL RECEIVE
AND EVALUATE NOMINATIONS, AND SHALL PREPARE A SHORTLIST OF
THREE (3) NOMINEES THEREOF. THE PRESIDENT OF THE PHILIPPINES MAY


OR MAY NOT CHOOSE TO APPOINT THE DIRECTOR GENERAL FROM THE
AFOREMENTIONED SHORTLIST. NO INCUMBENT DIRECTOR GENERAL
SHALL BE A MEMBER OF THE SEARCH COMMITTEE,

Xxx’
SECTION 3. Section 5 of the same Act is hereby amended as follows:

Sec. 5. Composition of the Board Members. — The corporate powers of the
Authority shall be vested in a board, which is composed of eleven (11) members:

(a) The Secretary of the Department of Transportation and shall act as chairman
ex officio;

(b) The Director General of Civil Aviation (DGCA) shall automatically be the vice
chairman of the Board;

(©) The Secretary of Finance;

(4) The Secretary of Foreign Affairs;

(e) The Secretary of Justice;

(f) The Secretary of the Interior and Local Government;

(g) The Secretary of the Department of Labor and Employment;

(H) THE SECRETARY OF THE DEPARTMENT OF TOURISM (PER SECTION
96 OF REPUBLIC ACT NO. 9593);

(l) THE SECRETARY OF THE DEPARTMENT OF NATIONAL DEFENSE;

() REPRESENTATIVE FROM THE PRIVATE SECTOR WHO WILL
REPRESENT THE AIRLINE INDUSTRY IN THE PHILIPPINES; AND

(Kk) REPRESENTATIVE FROM THE PRIVATE SECTOR WHO WILL
REPRESENT THE CONSUMERS IN THE PHILIPPINES.

THE DIRECTORS LISTED UNDER SUBSECTION (A) TO (I) SHALL BE EX OFFICIO
MEMBERS OF THE BOARD OF DIRECTORS: PROVIDED THAT, IN THE ABSENCE
OF THE CHAIRMAN, HE SHALL DESIGNATE AN UNDERSECRETARY OF THE
DEPARTMENT OF TRANSPORTATION TO ACT IN HIS BEHALF AS CHAIRMAN;
PROVIDED FURTHER, THAT THE DIRECTOR GENERAL, IN HIS ABSENCE, SHALL
DESIGNATE HIS REPRESENTATIVE FROM THE AUTHORITY TO ACT AS VICE
CHAIRMAN, PROVIDED, THAT, IN THE ABSENCE OF THE DIRECTOR APPOINTED
IN SUBSECTIONS (C) TO (I), THE DIRECTOR CONCERNED SHALL DESIGNATE
WITH FULL POWER AND AUTHORITY, IN WRITING, AN OFFICER IN HIS.
DEPARTMENT OR OFFICE TO ACT ON HIS OR HER BEHALF AS A DIRECTOR.
THE DIRECTORS APPOINTED IN SUBSECTIONS (J) AND (K) CANNOT DESIGNATE
A REPRESENTATIVE TO ACT ON HIS OR HER BEHALF DURING ANY FUNCTION
OF THE AUTHORITY.

THE MEMBERS FROM THE PRIVATE SECTOR SHALL BE CITIZENS OF THE
PHILIPPINES, AT LEAST THIRTY-FIVE YEARS OLD, OF GOOD MORAL
CHARACTER, UNQUESTIONABLE INTEGRITY, OF KNOWN PROBITY AND WITH
RECOGNIZED COMPETENCE IN THE FIELD OF MANAGEMENT, CIVIL AVIATION,
AND RELATED FIELDS.


SECTION 4. Section 9 of the same Act is hereby amended to read as follows

"SEC. 9. Qualifications of Director General. - No person shall be appointed as the
Director General unless he is a Filipino citizen, at least thirty-five (35) years of age,
of good moral character, unquestionable integrity, recognized competence and a
degree holder with at least FOUR (4) years supervisory or management experience
in the field of aviation.”

SECTION §. Section 12 of the same Act is hereby amended to read as
follows:

“SEC. 12. Personnel. -THE DIRECTOR GENERAL SHALL EXERCISE
APPOINTING AND DISCIPLINING POWERS OVER ALL PERSONNEL OF THE
AUTHORITY,

APPOINTMENTS IN THE CAAP, EXCEPT AS TO THOSE WHICH ARE POLICY-
DETERMINING, PRIMARILY CONFIDENTIAL OR HIGHLY TECHNICAL IN
NATURE, SHALL BE MADE ONLY ACCORDING TO THE CIVIL SERVICE LAW
AND REGULATIONS: PROVIDED, THAT NO QUALIFICATION REQUIREMENTS.
FOR POSITIONS IN THE CAAP SHALL BE IMPOSED OTHER THAN THOSE SET
BY THE CAAP BOARD OF DIRECTORS: PROVIDED, FURTHER, THAT,
MAJORITY OF THE CAAP BOARD OF DIRECTORS, MAY, WITHOUT NEED OF
OBTAINING PRIOR APPROVAL FROM ANY OTHER GOVERNMENT AGENCY,
APPOINT PERSONNEL IN THE CAAP WHOSE SERVICES ARE DEEMED
NECESSARY IN ORDER NOT TO UNDULY DISRUPT THE OPERATIONS OF
CAAP. OFFICERS AND EMPLOYEES OF THE CAAP, INCLUDING ALL MEMBERS.
OF THE CAAP BOARD, SHALL NOT ENGAGE DIRECTLY OR INDIRECTLY IN
PARTISAN ACTIVITIES OR TAKE PART IN ANY ELECTION EXCEPT TO VOTE.

THOSE OFFICIALS, OFFICERS AND PERSONNEL OF CAAP WHOSE
FUNCTIONS ARE POLICY-DETERMINING, PRIMARILY CONFIDENTIAL OR
HIGHLY TECHNICAL IN NATURE, SHALL BE EXEMPTED FROM THE
REQUIREMENTS PRESCRIBED UNDER THE RULES ON __ THE
CLASSIFICATIONS AND QUALIFICATION STANDARDS INCLUDING, BUT NOT
LIMITED TO, PRESIDENTIAL DECREEE NO. 985, REPUBLIC ACT NO. 6758 AS
AMENDED, JOINT RESOLUTION NO. 4 S. 2009 OF THE PHILIPPINE CONGRESS,
AND REPUBLIC ACT 10149. HOWEVER, ALL OFFICIALS, OFFICERS AND
EMPLOYEES OF CAAP SHALL BE SUBJECT TO THE PROVISIONS OF
REPUBLIC ACT NO. 6713"

SECTION 6. Section 15 of the same Act is hereby amended to read as
follows:

“SECTION 15. Fiscal Autonomy. — The Authority shall enjoy fiscal autonomy. All
moneys earned by the Authority from the collection/levy of any and all such fees,
charges, dues, assessments and fines it is empowered to collect/levy under this Act
shall be used solely to fund the operations of the Authority.


THE AUTHORITY SHALL LIKEWISE BE EXEMPTED FROM THE
PROVISIONS OF REPUBLIC ACT NO. 7656 OR THE DIVIDEND LAW. THE
INCOME GENERATED BY THE AUTHORITY FROM AIR NAVIGATIONAL
CHARGES SHALL BE UTILIZED FOR COMPLIANCE WITH INTERNATIONAL,
STANDARDS OF SAFETY.

The utilization of any funds coming from the collection and/or levy of the
Authority shall be subject to the examination of the COCCAAP. THE COCCAAP
MAY REQUIRE THE AUTHORITY TO SUBMIT, FURNISH OR PROVIDE ANY AND
ALL DOCUMENTS IN RELATION TO THE UTILIZATION OF FUNDS OF THE
AUTHORITY AND ANY OTHER NON-FINANCIAL DOCUMENTS RELATIVE TO
THE DUTIES, FUNCTIONS, OPERATIONS OF THE AUTHORITY. SHOULD CAAP.
FAIL TO TIMELY SUBMIT THE REQUIRED DOCUMENTS TO THE COCCAAP
WITHIN FIFTEEN (15) CALENDAR DAYS, THE COCCAAP MAY HOLD THE
OFFICIALS OF CAAP ADMINISTRATIVELY LIABLE IN A PROPER
ADMINISTRATIVE PROCEEDING AND SHALL BE SUFFICIENT CAUSE FOR
REMOVAL OR DISMISSAL OF A PUBLIC OFFICIAL OR EMPLOYEE, EVEN IF NO
CRIMINAL PROSECUTION IS INSTITUTED AGAINST HIM.

SECTION 7. Section 18 of the same Act is hereby amended to read as
follows:

“SEC. 18. Compensation and Other Emoluments of Authority Personnel. - Within six
(6) months from the effectivity of this Act, the Board shall determine the new
schedule of salaries of the employees of the Authority subject to the compliance with
the existing compensation laws AND REVISE THE SAME FROM TIME TO TIME AS
IT MAY DEEM NECESSARY: Provided, That the Board shall determine and fix the
compensation, EMOLUMENTS and fringe benefits of employees holding technical,
REGULATORY and LEGAL positions, IT SHALL PROVIDE ANNUAL REVIEWS OR
INCREASES BASED ON PERFORMANCE AND PRODUCTIVITY BASED ON PRE-
DETERMINED GOALS SET BY THE BOARD OF THE AUTHORITY.

SECTION 9. A new section 18-A is hereby inserted in Republic Act 9497, to
read as follows:

“SEC. 18-A. MANAGEMENT OFFICIALS AND EMPLOYEES; MERIT SYSTEM —
THE BOARD SHALL ESTABLISH A HUMAN RESOURCES MANAGEMENT
SYSTEM, WHICH SHALL PROMOTE PROFESSIONALISM AT ALL LEVELS OF
THE AUTHORITY IN ACCORDANCE WITH SOUND PRINCIPLES OF
MANAGEMENT.

A PROGRESSIVE COMPENSATION STRUCTURE, AS MAY BE DETERMINED BY
THE MAJORITY OF THE MEMBERS OF THE CAAP BOARD OF DIRECTORS,
BASED ON, AND EQUIVALENT TO THE STANDARDS OF THE AVIATION
INDUSTRY, AS PRACTICED AND OBSERVED IN THE INTERNATIONAL

AVIATION INDUSTRIES, INCLUDING THE STANDARDS SET BY THE
INTERNATIONAL CIVIL AVIATION ORGANIZATION, SHALL BE ADOPTED AS AN
INTEGRAL COMPONENT OF THE AUTHORITY'S HUMAN RESOURCES
PROGRAM.”


SECTION 10. Anew section 18-B is hereby inserted in Republic Act 9497, to
tead as follows:

“SEC. 18-B. COMPENSATION. — ALL RATED AND/OR LICENSED AIRMEN AND
SUCH OTHER PERSONS OF THE AUTHORITY WHO MAY BE AUTHORIZED TO
UNDERTAKE OR PERFORM REGULAR AND FREQUENT FLIGHTS IN THE
PERFORMANCE OF THEIR DUTIES, SHALL RECEIVE, UPON APPROVAL OF
CAAP, IN ADDITION TO THEIR BASE PAY, AN INCREASE IN COMPENSATION
OF AT LEAST FIFTY PERCENTUM (50%) OF THEIR RESPECTIVE BASE PAY,
PROVIDED, HOWEVER, THAT THE NUMBER OF HOURS ACTUALLY FLOWN BY
SUCH AIRMEN AND AUTHORIZED PERSONNEL SHALL NOT BE LESS THAN
FOUR (4) PER MONTH; PROVIDED FURTHER, THAT THE AFOREMENTIONED
INCREASE IN COMPENSATION SHALL BE MANDATORY ONLY IN THE FIRST
INSTANCE FROM THE EFFECTIVITY OF THE AMENDMENT TO THIS LAW;
PROVIDED, FINALLY, THAT FUTURE MANDATORY INCREASES IN THE
COMPENSATION OF THE RATED AND/OR LICENSED AIRMEN AND SUCH
OTHER PERSONS OF THE AUTHORITY WHO MAY BE AUTHORIZED TO
UNDERTAKE OR PERFORM REGULAR AND FREQUENT FLIGHTS IN THE
PERFORMANCE OF THEIR DUTIES, MAY BE INCREASED BY THE AUTHORITY
ONLY IF THE AUTHORITY HAS ITS OWN SUFFICIENT BUDGET FOR THE SAME
AND IF IT WILL SERVE THE INTEREST OF THE AVIATION INDUSTRY AS A
WHOLE."

SECTION 11. A new section 18-C is hereby inserted in Republic Act 9497, to
read as follows:

"SEC. 18-C. EMPLOYMENT OF PERSONS FOR CONFIDENTIAL,HIGHLY
TECHNICAL AND POLICY DETERMINING POSITIONS — UPON APPROVAL OF
THE MAJORITY OF THE MEMBERS OF THE CAAP BOARD, THE DIRECTOR
GENERAL MAY, MAKE APPOINTMENTS TO CONFIDENTIAL, HIGHLY
TECHNICAL, AND POLICY DETERMINING POSITIONS AS MAY BE REQUIRED
BY THE FUNCTIONS AND RESPONSIBILITIES OF HIS OR HER OFFICE."

SECTION 12. Section 24 of the same Act is hereby amended to read as
follows:

“Sec, 24-A. Powers of the Board. The Board shall have the following general
powers:

XXX

(d) ANY LAW TO THE CONTRARY NOTWITHSTANDING, ORGANIZE, RE-
ORGANIZE, AND determine the organizational structure of the Authority in
accordance with the provisions of this Act, establish a human_resources
management system based on merit and fitness, CREATE, TRANSFER, RE-
ALIGN AND ABOLISH OFFICES AND POSITIONS, and adopt a__ rational
compensation and benefits scheme EQUIVALENT TO THE STANDARDS SET BY


THE INTERNATIONAL CIVIL AVIATION ORGANIZATION (ICAO);

Xxx

(T) APPROVE POLICY ON LOCAL AND FOREIGN TRAVEL, AS LONG AS THE
SAME WILL SERVE TO ADVANCE THE INTEREST OF THE STATE OF CIVIL
AVIATION IN THE PHILIPPINES, AND THE CORRESPONDING EXPENSES,
ALLOWANCES, PER DIEMS OF OFFICERS, EMPLOYEES, AGENTS OF THE
AUTHORITY, AS LONG AS THE SAME ARE REASONABLE, NOTWITHSTANDING
THE PROVISIONS OF PRESIDENTIAL DECREE NO, 1177, EXECUTIVE ORDER
292, EXECUTIVE ORDER 248, AS AMENDED, EXECUTIVE ORDER 298, AND
SIMILAR LAWS;

(U) EXERCISE THE POWER OF EMINENT DOMAIN FOR THE PURPOSE OF
THIS ACT IN THE MANNER PROVIDED BY LAW, PARTICULARLY, THE PRE-
REQUISITES OF TAKING OF POSSESSION AND THE DETERMINATION AND
PAYMENT OF JUST COMPENSATION; AND.

(V) THE BOARD MAY PERFORM SUCH ACTS, THROUGH THE DIRECTOR
GENERAL OR APPROPRIATE OFFICE, CONDUCT SUCH INVESTIGATION IN
THE PERFORMANCE OF ITS QUASI JUDICIAL FUNCTIONS, AS IT SHALL DEEM
NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ACT.

IN EXERCISING THE POWERS GRANTED UNDER THIS ACT, THE BOARD
SHALL GIVE FULL CONSIDERATION TO THE REQUIREMENTS OF NATIONAL
DEFENSE, COMMERCIAL AND GENERAL AVIATION, AND TO THE PUBLIC
RIGHT OF TRANSIT THROUGH NAVIGABLE AIRSPACE."

SECTION 13. A new section 24-B is hereby inserted in Republic Act 9497, to
read as follows:

“SEC. 24-B. DELEGATION OF POWER — THE BOARD MAY, BY RESOLUTION
APPROVED BY A THREE-FOURTHS (3/4) VOTE OF THE BOARD OF
DIRECTORS AT A BOARD MEETING, DELEGATE ALL OR ANY OF ITS POWERS
TO THE DIRECTOR GENERAL, A MEMBER OF THE BOARD OR A COMMITTEE.
THE DELEGATE IS, IN THE EXERCISE OF A DELEGATED POWER, REMAINS.
SUBJECT TO THE CONTROL AND SUPERVISION OF THE BOARD THE
DELEGATION MAY BE REVOKED BY RESOLUTION OF MAJORITY VOTE OF
THE BOARD OF DIRECTORS. A DELEGATION CONTINUES IN FORCE IN SPITE
OF CHANGES IN THE COMPOSITION OF THE BOARD.

THIS PROVISION SHALL HAVE RETROACTIVE EFFECT INSOFAR AS IT DOES.

NOT PREJUDICE OR IMPAIR VESTED OR ACQUIRED RIGHTS IN
ACCORDANCE WITH EXISTING LAWS.”

SECTION 14. Section 25 is hereby amended to read as follows:


SEC. 25, ISSUANCE OF RULES AND REGULATIONS.- THE BOARD, UPON
CONSULTATION WITH THE DIRECTOR GENERAL, SHALL ISSUE AND PROVIDE
FOR THE ENFORCEMENT OF SUCH ORDERS, RULES AND REGULATIONS AS
MAY BE NECESSARY TO GIVE EFFECT TO THE PROVISIONS OF THIS ACT. ALL
RULES AND REGULATIONS ISSUED IN ACCORDANCE WITH THE PROVISIONS OF
THIS ACT SHALL BE FORMALLY PROMULGATED AND PERIODICALLY REVIEWED
AND UPDATED IN ACCORDANCE WITH THE REQUIREMENTS OF THE
ADMINISTRATIVE CODE OF THE PHILIPPINES OR ANY AMENDMENT OR
SUCCESSOR THERETO AND THE INTERNATIONAL CIVIL AVIATION
ORGANIZATION STANDARDS AND RECOMMENDED PRACTICES.

SECTION 15, Section 26 of the same Act is hereby amended to read as
follows:

“SEC. 26. Setting of Charges and Fees. - The Board, after consultation with the
Director General, and after public hearing, shall determine, fix, impose, collect or
receive reasonable charges, fees, dues or assessments in respect of aviation
certificates, licenses and all other authorizations or permissions authorized to be
issued under this Act and all services performed by the Authority BASED ON THE
PRINCIPLE OF COST RECOVERY WHILE AT THE SAME TIME ENSURING THAT
THE SAID PRINCIPLE IS APPLIED EQUITABLY IN THAT AERONAUTIC USER
SHOULD NOT BE BURDENED WITH COSTS NOT PROPERLY ALLOCABLE TO
SAID USER, THE PRINCIPLE OF COST RECOVERY IS A SYSTEM OF FEES,
DUES AND OTHER SIMILAR CHARGES ESTABLISHED TO RECOUP SOME OR
ALL OF THE COSTS OF THE AUTHORITY IN ITS FUNCTION AS AN OPERATOR
AND/OR REGULATOR IN THE CIVIL AVIATION INDUSTRY. All charges and fees
shall be formally promulgated in accordance with the requirements of the
Administrative Code of the Philippines or any amendment or successor thereto.
Pending the promulgation of such new schedule of charges and fees, the current
charges and fees of the AUTHORITY shall continue to apply.”

SECTION 16. Section 27 of the same act is hereby amended as follows:

SEC, 27. ISSUANCE OF RULES OF PROCEDURE AND PRACTICE. - THE
DIRECTOR GENERAL SHALL ISSUE OR AMEND RULES OF PROCEDURES
AND PRACTICE BEFORE THE CAAP IN RELATION TO ITS REGULATORY
FUNCTION AS MAY BE REQUIRED BY THE PROVISIONS OF THIS ACT OR
ISSUE AND ADOPT RULES AND REGULATIONS TO IMPLEMENT THE
REGULATORY ISSUANCES OF THE ICAO; PROVIDED THAT SUCH SHALL
FIRST BE APPROVED BY MAJORITY VOTE OF THE BOARD BEFORE SUCH
RULES, REGULATIONS, AND OTHER REGULATORY ISSUANCES BEFORE THE
SAME TAKES EFFECT.

SECTION 17. Section 30 of the same Act is hereby amended to read as
follows:

"SEC. 30. Annual Budget. THE AUTHORITY SHALL ADOPT AN ANNUAL BUDGET


TO FUND THE OPERATIONS OF THE AUTHORITY. WHEN DEEMED TO BE
NECESSARY FOR THE FURTHERANCE OF PERFORMING ITS FUNCTIONS,
WITH PRIOR NOTICE TO THE DEPARTMENT OF TRANSPORTATION AND TO
THE PUBLIC, AND UPON THREE-FOURTH (3/4) MAJORITY VOTE OF THE
MEMBERS OF THE BOARD OF DIRECTORS PRESENT AT A MEETING CALLED
FOR THAT PURPOSE, THE AUTHORITY MAY PREPARE AND ADOPT A
SUPPLEMENTARY BUDGET.

SECTION 18. Section 35 of the same Act is hereby amended to read as
follows:

“SEC. 35. Powers and Functions of the Director General. - The Director General
shall be the chief executive and operating officer of the Authority. He shall have the
following powers, duties and responsibilities:

XXX

(e) To issue air OPERATOR certificate in accordance with the minimum safety
standards for the operation of the air carrier to whom such certificate is issued. The
air OPERATOR certificate shall be issued only to aircrafts registered under the
provisions of this Act.

AN AIR OPERATOR CERTIFICATE HOLDER MAY OPERATE AND USE FOREIGN
REGISTERED AIRCRAFT PROVIDED THAT ITS STATE OF REGISTRATION
DELEGATES TO THE DIRECTOR GENERAL THE TECHNICAL AND SAFETY
OVERSIGHT FUNCTIONS OVER THE AIRCRAFT AND/OR ITS CREW, AS
APPLICABLE.

XXX
(V) SUBMIT FOR THE APPROVAL BY MAJORITY VOTE OF THE BOARD, THE
ORGANIZATIONAL STRUCTURE OF THE AUTHORITY IN ACCORDANCE WITH THE
PROVISIONS OF THIS ACT, ESTABLISH A HUMAN RESOURCES MANAGEMENT
SYSTEM BASED ON MERIT AND FITNESS, AND ADOPT A RATIONAL
COMPENSATION AND BENEFITS SCHEME,”

SECTION 19. Section 40 of the Same Act is hereby amended as follows:
“SEC. 40. Creation of Flight Standards Inspectorate Service. - (a) A permanent office
known as the Flight Standards Inspectorate Service (FSIS) shall be established to assist
the Director General in carrying out the responsibilities of his office for certification and
ongoing inspections of aircraft, airmen and air operators.

The FSIS shall perform the following functions:

(1) Airworthiness inspection;

(2) Flight operations inspection and evaluation; and


(3) Personnel licensing.”

SECTION 20, Section 73 of the same Act is hereby amended to read as
follows:

“SEC. 73. Statutory Lien AND POWER TO DETAIN. - The Director General shall
have the power to impose lien on AND DETAIN aircraft and machinery:

(a) If the charges and other fees are not paid in full on due date or any part of the
charges or the late payment penalty thereto remains unpaid; and

(b) Failure to pay administrative fines arising from violation of any rules and
regulations promulgated by the Authority.”

SECTION 21. A new section 84-A is hereby inserted in Republic Act 9497, to
read as follows:

“SEC. 84-A. EXECUTION OF MONETARY JUDGMENT. - THE DIRECTOR
GENERAL IS AUTHORIZED TO ENFORCE MONETARY JUDGMENTS THROUGH
THE SHERIFF WHO SHALL DEMAND THE IMMEDIATE PAYMENT OF THE FULL
AMOUNT STATED IN THE WRIT OF EXECUTION TO BE IMPOSED FOR EACH
VIOLATION OF THIS ACT,

FOR THIS PURPOSE, THE DIRECTOR GENERAL MAY ISSUE AN ORDER
DIRECTING THE SHERIFF TO REQUEST THE ASSISTANCE OF LAW
ENFORCEMENT AGENCIES TO ENSURE COMPLIANCE WITH THE WRIT OF
EXECUTION, ORDERS OR PROCESSES.”

SECTION 22. Section 91 of the same Act is hereby amended to read as
follows:

SECTION 91. Congressional Oversight Committee. — A Congressional Oversight
Committee, hereinafter referred to as the “Committee", is hereby constituted in
accordance with the provisions of this Act. The Committee shall be composed of the
Chairman of the Senate Committee on Public Services and Chairman of the House
Committee on Transportation and four (4) additional members from each House to
be designated by the Senate President and the Speaker of the House of
Representatives, respectively. The Committee shall, among others, in aid of
legislation:

(a) Monitor and ensure the proper implementation of this Act;

(b) Review the collection performance of the Authority; and

(c) Review the proper implementation of the programs of the Authority
and the use of its collected fund and budget

In furtherance of the hereinabove cited objectives, the Committee Is empowered to
require the Authority to submit all pertinent information including, but not limited to,
its collection performance data and its annual audited financial statements certified


by the Commission on Audit. ANY MEMBER OF THE COMMITTEE OR HIS OR
HER REPRESENTATIVE IS AUTHORIZED TO SIT AS AN OBSERVER IN ANY OF
THE MEETING OR FUNCTION OF THE BOARD. The Congressional Oversight
Committee shall be in existence for a period of TWELVE (12) YEARS, and
thereafter, its oversight functions shall be exercised by the Senate Committee on
Public Services and the House Committee on Transportation acting separately

SECTION 23 Repealing Clause -REPUBLIC ACT 10149 AND REPUBLIC
ACT 7656 AND OTHER LAWS, decrees, executive orders, rules and regulations and
other issuances or part thereof, which are inconsistent with this Act, are hereby
repealed, amended, or modified accordingly.

SECTION 24. Effectivity - This Act shall take fifteen (15) days after its
publication in two (2) newspapers of general circulation

Approved.