REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

House Bill'No._ 8496_

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

EXPLANATORY NOTE

The economic benefits of airports are well recognized for primary, commercial service,
reliever and urban general aviation airports, however less well known are the benefits and
importance of rural ones.

In a research conducted in the United States, the benefits of airports to rural communities are
the following:

a. Enhanced quality of life;

b. Access to needed professional services;

c. Improved quality of healthcare;

d. Effective and timely response to disasters, emergencies, and fires;

. Support for local businesses including agriculture and timber businesses;
4d. Improved ability to petition the government;

f. Enriched community life; and

4d. Improved sense of well-being

Rural airports are integrated into the life of rural communities. While not numerous, flights
or activities associated with rural airports occur regularly that are key to health care, disaster and
‘emergency response, business, public safety, economic development, and other factors that improve
the quality of life. In this sense, rural airports are essential public facilities.

All rural communities, especially here in the country, must maintain access to the centers
where medical and non-medical specialists, parts inventories, and treatment technologies are
available. Rural airports provide an access point to these centers of medical excellence situated in
far-flung areas, particularly those situated here in Luzon.

Rural economies can also benefit from rural airports, which can provide an alternative
means of transporting goods. This is most beneficial to landlocked provinces where transfer of
goods by sea would require time and greater costs. As such, these airports are vital in spurring
economic development of rural economies that are lagging behind its urban counter parts

In sum, the lack of rural airports would have a negative impact on the quality of health care,

economic development, and the ability of local and national governments in responding to disasters
and emergencies.

. Gary CfAlejano


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

House Bitt No, °496

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

AN ACT
GRANTING THE RIGHT TO FRANCHISEES TO DEVELOP THE RURAL AIRPORT
INFRASTRUCTURE NETWORK IN THE PHILIPPINES FOR COMMERCIAL AND
OTHER PURPOSES

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

SECTION 1. Short Title —This Act shall be known as the “Rural Airport Development
Act.”

SEC. 2. Franchisee—The provisions of this Act shall be available to any congressional
franchise holder engaged in rural air transport operating any type or fixed or rotary wing, land, or
sea type of aircraft.

SEC. 3. Rural Airport—As used in this Act, a rural airport shall mean any runway, take-off
and landing area or seaway, not exceeding one thousand two hundred (1,200) meters in length, with
a total land area not exceeding twenty (20) hectares, which may be accessed by any type of aircraft
rated by its manufacturers to utilize the facilities.

Such airports are those which, due to the remoteness, lack the presence and continuous
operations of any government regulatory body.

Such an airport shall be so certified as a regular rural destination by any franchise

SEC. 4. Construction, Management, Operation, and Maintenance of Rural Airports.—
Any franchisee may construct, manage, operate and/or maintain any rural airport in any part of the
Philippines in order to eventually make each municipality regularly accessible within easy reach of
the principal and proximate urban areas with a population of at least one hundred thousand
(100,000).


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SEC. 5. Use of Provincial or Municipal Road.—Any provincial or municipal road may be
used for take-off and landing purposes, provided these are delineated and previously approved by
the municipal or provincial government for such use, provided further, that the features of the said
airport are within the specifications and operating limits according to the manufacturers of the
aircraft employed and provided finally, that adequate safety standards are followed by the
franchisee

SEC. 6. Development of the Surrounding Area of the Airport—In order to encourage
industries to be developed within the immediately surrounding area of the airport, the franchisee
may establish, manage, lease, and operate the following activities: aircraft hangarage, educational
facilities for aircraft mechanics, pilot and personnel; warehouses, light industry, commercial and
financial facilities; hotel guest house and tourism facilities, and telecommunications facilities to
support activities, provided these facilities are within five hundred-meter (500m) radius of the
runway of said airports.

SEC. 7. Government Use—The franchisee, with the use of its own aircraft and airport
facilities may provide said services to any branch of the Armed Forces of the Philippines (AFP) pr
any government agency to be compensated either in cash or in the equivalent amount of aviation
fuel to be drawn from any government branch or agency in areas where these are available within
terms mutually acceptable to both parties.

SEC. 8. Right to Operate —To relieve the government of the expenses in maintaining rural
airports and other missionary destinations, and as a variation of the Build-Operate-Transfer Law,
the franchisee may takeover the management, maintenance, and operation of any existing
government agency-operated rural airport, provided that the franchisee’s own annual operating
costs of operating and maintaining said airport, adjusted for an annual increment not to exceed ten
percent (10%) per annum. All subsequent operating expenses of the airport and the air terminal
shall be for the account of the franchisee. The savings to the government agency due to the relief
from operating the airport and terminal may be employed for other airport projects elsewhere.

SEC. 9. Right to Purchase or Lease.—The franchisee shall have the right to purchase
and/or lease, whichever is applicable and available, adequate space at any govemment or
government agency-owned airport, aerodome, or air terminal for purposes of linking the rural air
transport system with national and international flight and providing necessary support services.

SEC. 10. Insurance Coverage —The franchisee shall be required to cover all passengers
and cargo with insurance as specified by the Air Transport Office (ATO) or the Civil Aeronautics


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Board (CAB). Any third party liability of the franchisee shall be limited to the amount of the
insurance cover so specified

SEC. 11, Franchisee as Deputy of ATO.—Whenever the Air Transport Office (ATO) is not
present in any airport point of origin or destination within the Philippines, the franchisee shall
automatically assume the status as the deputy of the ATO for air safety purposes. The franchisee, as
well as the airports operated by the franchisee shall not be subject to any restrictive operations by
any government agency except those that pertain to the national interest. Regular reports on all
airports operated by the franchisee shall be made by the franchisee to the ATO.

SEC. 12. Full Authority to Administer—The franchisee shall exercise authority as may be
necessary within its premises or airports of operation and carry out its functions, provided that the
Franchisee may request the assistance of law enforcement agencies, including deputization may be
required. Such authority shall be exercised in connection with the following:

a. Maintenance of safety and security to passengers, cargos, aircraft, airport
equipment, structures, facilities, personnel, funds and documents;

b. Regulating entry to, exit from and movement within the airports;
¢. Maintenance of peace and order within the premises;
4. Contracting of private security agencies;

e, Removal of natural obstructions that affect safety of takeoff and landing such as
trees without need for government clearances; and

f. Enforcement of the rules and regulations promulgated by the franchisee pursuant
to the law.

In case of emergencies or imminent danger involving national security within the airport
premises, the Philippine Air Force Security Command shall take charge.

SEC. 13. Tax Incentives.—The franchisee as operator of rural airport, shall be exempt from
any and all taxes, including income, capital gains, lease, rental, gross, value-added, ad valorem,
compensating, import and export duties on its aircraft parts and maintenance and overhauling
equipment, interest on loans and dividends on investment contracted or granted, fuel, oil and real-
estate taxes. In lieu of said taxes, the franchisee shall pay the government, through the Nationla


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Treasury, ten (10%) percent of the gross revenue charged for all landing and take-off fees being
charged on certified rural airports.

SEC. 14. Authority to Offset—The provisions of the existing laws to the contrary
notwithstanding, the Secretary of Budget and Management and/or the National Treasurer are hereby
authorized to offset any outstanding obligation of the franchisee as the operator of rural airport to
any agency or instrumentality of the government, including those incurred in the construction and
maintenance of certified rural airports.

SEC. 15. Proceeds of the Offset—tThe franchisee shall be authorized to purchase, lease,
construct, rehabilitate, modernize, improve rural airports as defined in this Act and apply the to
offset in accordance with Section 13 its expenses, provided that the amounts do not exceed fifty
percent (50%) of the equivalent costs of the government airport nearest to the certified rural airport.
‘The franchisee shall also be authorized to manage, maintain, and administer said rural airports and
apply its costs of management, administration, and maintenance to its right to offset under Section
14, provided that such costs do not exceed fifty percent (50%) of the current management,
administration, and maintenance costs of the government airport nearest to the certified rural
airports.

SEC. 16. Leniency Clause.—The franchisee shall be required to comply with the provisions
of Presidential Decree No.442 as amended, subject however to periodic review by the Department
of Labor and Employment.

SEC.17. No Disruption Policy.—As the rural airport is vital to the air transport system in
particular and the economy in general, its operations may not be disrupted by any agency unless
specifically approved by the President of the Philippines and such disruptions shall not exceed
thirty (30) days for any one occasion

SEC. 18. Duration of Privilege. —These powers and privileges herein presented to an
eligible franchisee shall be valid for fifty (50) years and renewable for another fifty (50) years,
unless invalidated by Congress.

SEC. 19. Penalty,—Violators of this Act shall be subjected to a fine of not more than five-
hundred thousand pesos (P500,000) or imprisonment for six months, or both, for any offense
against the provisions of this Act.


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SEC. 19. Repealing Clause—All laws, decrees, executive orders or parts thereof
inconsistent with the provisions of this Act is hereby repealed or modified accordingly.

SEC. 20. Separability Clause —If any part or provision of this Act is declared invalid or
unconstitutional, the other parts not otherwise affected shall remain in full effect and force.

SEC. 21. Effectivity.—This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or at least two newspapers of general circulation.

Approved,