Conf. Cttee. Report

7/28/2019 Conf. Cttee. Report

1/54

~~./:" "''''''"c's;:~(.~l ~ ,1;-. ','". ~. ~ . . .

F - " '. ~.\

CONGRESS OF THE REPUBLIC OF THE PHILlPPINm:> .. >; ".,.:.FOURTEENTH CONGRESS ' . i . c'.' .~. Q A F E B 2008~",~

I ' . f' rl tu I~First Regular Session \\.~'~'/_ ='-f:-, - '.' , - j

\\," " . .~ *;, " r- /~.~~.,)..

. - ._/~.

JOINT EXPLANATORYSTATEMENTOF THECONFE~i~~VCOMMITTEE

TheConference Committee on the disagreeing provisions of H. B.No. 3156and its counterpart version approved by the Senate submits the following JointStatement to both Houses of Congress in explanation of the amendments andrecommendations agreed upon by the conferees inthe accompanying ConferenceCommitteeReport:

1. Asreference for this Report, the Conferees agreed touse the Houseversionastheworking draft;

3. Section4of the Houseversion was adopted in toto including the amendmentsintroduced by theSenate, toread asfollows:

"NOTWITHSTANDING THE FOREGOING,NOTHING IN THIS ACT SHALL DIMINISH THE.

POWERS AND FUNCTIONS OF THE CIVIL;AERONAUTICS BOARD (CAB) AS PROVIDED FOR!UNDER REPUBLIC ACT NO. 776, ALSO KNOWN AS!"THE CIVIL AERONAUTICSBOARD, ASAMENDED" i

!

4. TheConference Committee agreed to adopt Section 5 of th Houseversionand further agreed to remove from the membership in the Board of arepresentative fromthe private sector. In lieu thereof, the $ecretary of theDepartment ofLabor and Employmentshall be designated astheseventh (7th)member oftheBoard. i

5. Sections6, 7,8, and 9oftheHouseversion were adopted by tJe Committee.I

6. Theentire Section 10of the Houseversion was deleted and!the succeedingsectionswere re-numbered accordingly. I

7. OnSection 11of the working draft, the conferees agreed toadopt the HouseI

version andtheamendments foundintheSenateversion. !

9. The Conferees agreed to retain Section 16 of the House version with amodificationtoread asfollows:

"THE UTILIZATION OF ANY FUNDS COMINGFROM THE COLLECTION AND/OR LEVY OF THEAUTHORITY SHALL BE SUBJECT TO THEEXAMINATION OF THE CONGRESSIONALOVERSIGHT COMMITTEE."


2/54

10.Theentire Section 17of theHouseversion was adopted including the insertionof thephrase "SOLELYANDEXCLUSIVELY "asintroduced by theSenate.

11.Section 18 of the House version was adopted in toto by the ConferenceCommittee.

12.Section 19ofthe Houseversion was adopted including the amendments oftheSenatewhich shall read asfollows:

"SEC. 18. COMPENSATION AND OTHEREMOLUMENTS OF AUTHORITY PERSONNEL-WITHIN

SIX (6) MONTHS FROM THE EFFECTIVITY OF THISACT, THE BOARD SHALL DETERMINE THE NEWSCHEDULE OF SALARIESOF THE EMPLOYEES OF

THE AUTHORITY SUBJECTTO COMPLIANCE WITH

THE EXISTING COMPENSATION LAWS;PROVIDED,THAT THE BOARD SHALL DETERMINE AND FIXTHE COMPENSATION AND FRINGE BENEnTS OFEMPLOYEES HOLDING TECHNICAL POSITIONS

THAT ARE NOT COMMON TO THE OTHERAGENCIES OF THE GOVERNMENT WHICH SHALLBE SPECIFIED IN THE IMPLEMENTING RULESANDREGULATIONS.

13. Section 20 of the House version and the modification introduced by theSenate were adopted;

14. On Section 21 of the House version on "Annual Report", the Confereesagreed to adopt the House version and the amendment/modificationintroduced by theSenate;

16.InSection 25, subsection (0) of the Houseversion, the word "fqr" was deletedand replaced withthe conjunction "and";

I

17.Section 26oftheHouseversion was adopted in toto; iI

I

18.TheConferees agreed toadopt Section 27of the House versi~n including theamendments introduced by theSenate; I

19. TheConferees agreed toadopt theentire Section 28of the Hohseversion;I

i20.Theconferees agreed to adopt the amendments of the Senate py deleting the

entire Section 29referring tothe "Original Powers" of theAut~ority and tore-number thesucceeding sections accordingly. \

I

iI

21.Sections 30,31,32,33,34,35,36,37,38,39,40,41,42,43,44,46,46, 47,48,49,

50,51,52,53,54,55,5657,58,59,60,61,62,63,64,65,66, 61,68,69,70,71,72, 73, 74, 75, 76, 77, 78,79, 80, 81, 82, 83, 84,85 and 86were adopted in totoby theconferees. ;

22.Section 87 on the "Abolition of the Air Transportation Office" found in theHouse version was adopted including the amendments introduced by theSenatetoread as followsj


3/54

"ANY REAL PROPERTY OWNED BY THE NATIONALGOVERNMENT OR GOVERNMENT-oWNEDCORPORATION OR AUTHORITY WHICH IS BEINGUSEDAND UTILIZED ASOFnCE OR FACILITY BY THEAIR TRANSPORT OFnCE SHALL BE TRANSFERBEDAND TITLED IN FAVOROF THEAUTHORITY".

23.TheConferees agreed toadopt Sections88, 89, 90, 91, 92and 93of theHouseversionin toto.

24. Section 93 on the creation of an Congressional Oversight Committee, theConferees agreed toadopt theSenateversion and toadd theparagraph;

"THE CONGRESSIONAL OVERSIGHT COMMITTEESHALL BE IN EXISTENCE FOR A PERIOD OF nVE (5)

YEARS, AND THEREAFTER, ITS OVERSIGHTFUNCTIONS SHALL BE EXERCISED BY THE SENATE

COMMITTEE ON PUBLIC SERVICESAND THE HOUSECOMMITTEE ON TRANSPORTATION ACTINGSEPARATELY ".

25. TheConferees agreed to adopt Section93on the "Repealing Clause" of theSenateversion and to add another paragraph toread asfollows:

"NOTWITHSTANDING THE FOREGOING, NOTHINGIN THIS ACT SHALL DIMINISH THE POWERS ANDFUNCTIONS OF THE MANILA INTERNATIONALAIRPORT AUTHORITY CREATED BY VIRTUE OF

EXECUTIVE ORDER NO. 903, SERIES OF 1983; SUBICBAY METROPOLITAN AUTHORITY AS REGARDS THESUBIC BAY INTERNATIONAL AIRPORT CREATED BYVIRTUE OF REPUBLIC ACT 7227; CLA.BK

INTERNATIONAL AIRPORT COBPORATION ASREGARDS THE DIOSDADO MACAPAGAL

INTERNATIONAL AIRPORT AUTHORITY , CREATED.BYVIRTUE OF EXECUTIVE ORDER NO. 193, SERIES OF2003; AND THE MACTAN-CEBU INTERNATIONALAIRPORT AUTHORITY CREATED BY VIRTUE OFREPUBLIC ACT NO. 6958".

26. TheConferees agreed toanomnibus amendment adding thelord "General"totheword "Director".

27.Tobe consistent withthe agreement toutilizetheHouseversiop, thetitleshallr e~as: !

i

iI

"ANACT I!

CREATING THE CIVIL AVIATION AUTHORITY O r THEPHILIPPINES, AUTHORIZING THE APPROPRIATION OFI FUNDS

THEREFOR, AND FOR OTHER PUBPOSES" III


4/54

Incase of a conflict between the statements/amendments stated in thisJointExplanation and that of the provisions of the consolidated bill inthe accompanyingConference Committee Report, theprovisions of thelatter shall prevail.

N. MON 0 O. PUENTEVELLA

ChairmanHouseofRepresentatives Panel


5/54

REPUBLI C OF THE PHILIPPINES

CONGRESS

FOURTEENTHCONGRESSFirst Regular Session

The Conference Committee on the disagreeing provisions of the amendments

agreed upon by the Senate and the provisions of the third reading copy of House Bill

No. 3156, entitled:

"AN ACT

CREATING THE CIVIL AVIATION AUTHORITY OF THE

PHILI PPINES, AUTHORIZING THE APPROPRIATION OF FUNDS

THE REFOR, AND FOR OTHER PURPOSES"

after having met and discussed the subject matter in full and free conference,

has agreed and does hereby recommend to their respective Houses that the

amendments agreed upon by the Senate in consolidation with the third

reading copy of House Bill No. 3156, be approved in accordance with the

attached copy of the bill as reconciled and approved by the conferees.

CONFEREES ON THE PART OF THE

HOUSE OF REPRESENTATIVES:

CONFEREES ON THE PART OF THE

SENATE:

ASILIO A. FABIAN

/'


6/54

(h~vHON. ~jFI;ro M .L ll.CSON


7/54

CONGRESS OF THE PHILIPPINES }

FOURTEENTH CONGRESS

First Regular Session

AN ACT CREATING THE CIVIL AVIATION AUTHORITY OF THE

PHILIPPINES, AUTHORIZING THE APPROPRIATION OF FUNDS

THEREFORE, AND FOR OTHER PURPOSES

1 SECTION1. Short Title. - ThisActshall be knownas theCivil Aviation2 AuthorityActof2008.

3 SEC.2. Declaration ofPolicy. - Itishereby declared thepolicy of

4 theStatetoprovide safeand efficientair transport and regulatory services in

5 thePhilippines by providing for thecreation of acivil aviationauthoritywith

6 jurisdiction over therestructuring of thecivil aviationsystem, thepromotion,

7 development andregulation of thetechnical, operational, safety, and aviation

8 securityfunctionsunder thecivil aviationauthority.

(1) "Aerial work" refers to anaircraft operation inwhichanaircraft is

used for specialized services suchas agriculture, construction, photography,

surveying, observation and patrol, search and rescue, aerial advertisement,

etc.

(2) "Aerodrome" refers toanairport, adefined area onland or water

(including any buildings, installations and equipment) intended to be used

16 either wholly or in part for the arrival, departure and surface movement of

17 aircraft.

(4)"Aeronautical telecommunication" refers to and includes any

telegraph or telephone communication signs, signals, writings, images and

sounds of any nature, by wire, radio or other systems or processes of

signaling, used intheaeronautical service.

(5)"Aeronautical telecommunication station" refers to any station

operated toprovide telecommunicationsforaeronautical purposes.

(6)"Air carrier or operator" refers to a person who undertakes,

whether directly or indirectly, or by a lease or any other arrangements, to


8/54

engage inair transportation services or air commerce. Thetermmaylikewise

2 refer toeither a"Philippineair carrier" or a"foreignair carrier" asindicated

3 by thecontext.

4 (7)"Aircommerceor commercial air transport operation" refers toand5 includes scheduled or non-scheduled air transport services for payor hire,

6 thenavigationof aircraftinfurtheranceof abusiness, thenavigationofaircraft

7 fromone place to another for operation in the conduct of abusiness, or an

8 aircraft operation involvingthe transport of passengers, cargo or mail for

9 remunerationorhire.

10 (8)"Aircraft" refers to any machine that can derive support in the

I I atmosphere fromthe reactions of the air other than the reactions of the air12 against the earth's surface. Theterm"aircraft", when used in thisAct or in

13 regulations issued under thisAct,shall refer tocivil aircraft only, andwill not

14 includeStateorpublic aircraft.

15 (9)"Aircraft accident" refers to an occurrence associated with the

16 operation of an aircraft which takes place between the time any person

boards the aircraft with the intention of flight until such time as all such

persons havedisembarked, inwhich:

(a) Anyperson suffersdeath or serious injuryasaresult ofbeing inor

upon the aircraft or by direct contact withthe aircraft of anything attached

thereto; or

23 (l0) "Aircraft radio station" refers to a radio station on board any

aircraft.

(11) "Aircraftengine" refers toanyengineuse, or intended tobeused,

propulsion of aircraft and includes all parts, appurtenances, and

accessories thereof other thanpropellers.

(12) "Aircraft incident" refers to the occurrence, other than an

accident, whichisassociated withtheoperation of anaircraftwhenthesafety

oftheaircrafthasbeen endangered, or isasituationwhichcould~ndanger an

aircraftandifitoccurred againinother circumstances.

(l3)"Aircraft piracy" refers to any actual or attempted seizure or

exercise of control, by forceor violence, or by anyother formofintimidation,

withwrongful intent,ofanaircraftwithinthejurisdictionofthePhilippines.


9/54

(14) "Airman" refers toany individual whoengages, as theperson in

2 command or as pilot, mechanic, aeronautical engineer, flightradio operator

3 or member of thecrew, inthenavigationof aircraftwhileunder wayand any

4 individual whoisdirectly incharge of inspection, maintenance, overhauling,

5 or repair of aircraft, aircraftengine, propellers, or appliances; andindividual

6 whoserves inthecapacity ofaircraftdispatcher or airtrafficcontrol operator.

7 (15) "Airmanlicense" refers to a written authorizationor permission

8 issued toanyperson for theexercise of theprivileges of flying,maintaining,

9 controlling, directing, dispatching, instructing or any other civil aviation

10 activitywhichisregulated andsupervised bytheAuthority.

11

(16) "Airnavigation" refers tothepractice of controlling, guiding and12 operating aircraft fromairport of departure to pre-determined airport of

13 destination, including alternate airports. To ensure safety, regularity and

14 efficiency of civil aviation operations, standardization and common

15 understanding amongall parties involvedareessential inall matters affecting

16 theoperation of aircraft and thenumerous facilitiesand services required in

17 their support, such as airports, telecommunications, navigation aids,

18 meteorology, air trafficservices, search andrescue, aeronautical information

19 services and aeronautical charts, in accordance withthe procedures, rules

20 and regulations contained in the appropriate Annexes to the Chicago

Convention.

(17) "Airnavigationfacility"refers toanyfacilityused in, availablefor

usein, or designed foruseinaidofair navigation,includingairports, landing

areas, lights, any apparatus or equipment for disseminating weather

information,for signaling, for radio directional finding, or for radio or other

electromagnetic communication, and any other structure or mechanismhaving a similar purpose for guiding or controlling flight in the air or the

landingandtake-offofaircraft.

(18) "Air navigation services" refers to and includes information,

directions andother facilitiesfurnished, issuedorprovided inconnectionwith

the navigation or movement of aircraft, and the control of mQvement of

vehiclesinanypart ofanairport usedforthemovementofaircraft.

(19) "Air operator" refers to any organization which undertakes to

engage indomestic commercial air transport or international commercial air

transport, whether directly or indirectly, or by a lease or any other

arrangement.


10/54

(20) "AirOperator Certificate(AOC)"refers toacertificateauthorizing

2 anoperator tocarry outspecifiedcommercial airtransport operations.

3 (2l)"Air route" refers to the navigable airspace between two points

4 and theterrain beneath suchairspace identified, totheextent necessary, for5 applicationofflightrules.

6 (22)"Air route and airway facilities" refers to facilities provided to

7 permit safenavigationof aircraftwithintheairspaceof airroutes andairways,

8 including:

15 (23) "Airport" refers toany area of land or water designed, equipped,

set apart or commonly used for affording facilities for the landing and

departure of aircraft and includes any area or space, whether ontheground,

on the roof of a building or elsewhere, whichis designed, equipped or set

apart for affordingfacilitiesforthelanding and departure of aircraft capable

ofdescending or climbingvertically.

(24) "Air transport" refers to the transportation of persons, property,

mail or cargo by aircraft.

(25) "Air transport service" refers to the act of transporting persons,

property, mail cargo, inwholeor inpart, by aircrafttopointswithinoroutside

ofthePhilippines.

(26) "Airworthiness"meansthatanaircraft,itsengines, propellers, and

other components and accessories, are of proper design and construction,

and are safefor air navigationpurposes, suchdesign and constructionbeing

consistent with accepted engineering practice and in accordance with

aerodynamic lawsandaircraftscience.


11/54

(27) "Annexes to the Chicago Convention" refers to the documents

2 issued by the International Civil Aviation Organization (ICAO) containing the

3 standards and recommended practices applicable tocivil aviation.

4 (28) "Appliances" refers to instruments, equipment, apparatus, parts,5 appurtenances, or accessories, of whatever description, which are used, or

6 are capable of being or intended tobe used, in the navigation, operation, or

7 control of aircraft inflight (including parachutes and including communication

8 equipment and any other mechanism or mechanisms installed in or attached

9 to aircraft during flight), and which are not part or parts of aircraft, aircraft

10 engines, or propellers.

II (29) "Authority" refers to the Philippine Civil Aviation Authority

12 created pursuant to the provisions of this Act and shall, as indicated by the

13 context, include the Board of Directors and!or Director General created

14 pursuant thereto.

15 (30) "Aviation certificate" means any airworthiness certificate, airman

16 certificate, air operator certificate, certificate authorizing the operation of an

17 aviation school or approved maintenance organization or other document

issued by virtue of the provisions of this Act in respect of any person, aircraft,

airport or aviation-related service.

(31) "Board of Directors" means the board of the civil aviation authority

created under thisAct.

(32) "Chicago Convention" refers to the international basis for civil

aviation agreements.

(iii)A corporation or association created or organized and authorized

under thelaws of thePhilippines.

(34)"Civil aircraft" refers to any aircraft other than a state or public


12/54

(35)"Civil aviation" refers to the operation of any civil aircraft for the

2 purpose of general aviation operations, aerial work or commercial air

3 transport operations.

4 (36) "Crewmember" refers toaperson assigned toperformduties on5 anaircraftinflight.

6 (37) "Dangerous goods" refers to articles or substances that are

7 capable of posing significant risks to health or safety of property when

8 transported by air.

10 (39) "Domestic air commerce" means and includes air commerceII withinthelimitsofthePhilippineterritory.

12 (40) "Domesticair transport" means air transportationwithinthelimits

13 ofthePhilippineterritory.

14 (41)"Foreign air carrier or foreign air operator" means any operator,

not being a Philippine air operator, which undertakes, whether directly or

indirectly or by lease or anyother arrangement, toengage incommercial air

transport operations withinborders or airspaceofthePhilippines, whether on

ascheduled orchartered basis.

(42) "Foreign air transport" refers to air transportation between the

PhilippinesandanyplaceoutsideitorwhollyoutsidethePhilippines.

(43) "General aviationoperation" refers to an aircraft operation of a

civil aircraftforother thanacommercial air transport operationor aerial work

peration.

(44) "ICAO"Where used inthisAct, refers to theabbreviation for the

International CivilAviationOrganization.

(45) "International commercial air transport" refers tothecarriage by

aircraftofpersons or property forremunerationor hireor thecarriage ofmail

between anytwo(2)ormorecountries.

(46) "Navigable airspace" refers to the airspace above the minimumaltitudes of flight prescribed by regulations under this Act and includes

airspaceneeded toinsuresafetyinthetake-offandlandingofaircraft.


13/54

(47) "Navigation of aircraft" refers to a function that includes the

2 piloting of aircraft.

3 (48) "Person" refers to any individual, firm, partnership, corporation,

4 company, association, joint-stock association, or body politic, and includes5 any trustee, receiver, assignee, or other similar representative of these

6 entities.

7 (49)"Philippine air carrier" means an air carrier who is a citizen of the

8 Philippines.

9 (50) "Philippine aircraft" means an aircraft registered in the

10 Philippines inaccordance withtherequirements of thisAct.

II (51)"Propeller" refers to an inclusive term for all parts, appurtenances,

12 and accessories of apropeller.

13 (52)"Public aircraft" refers toan aircraft used exclusively inthe service

14 of any government or of any political jurisdiction thereof, including the

15 Government of the Philippines, but not including any government-owned

aircraft engaged in operations which meet the definition of commercial air

transport operations.

(53)"Rules of the air" means those provisions for securing the safety of

aircraft inflight and inmovement on the surface and the safety of persons and

property onthe surface. These provisions include:

(54) "Spare parts" refers toany parts, appurtenances, and accessories

of aircraft (other than aircraft engines and propellers), aircraft engines (other

than propellers), propellers, and appliances, maintained for installation or use

inan aircraft, aircraft engine, propeller, or appliance, but which at the time

are not installed therein or attached thereto.


14/54

(ii)Any other aircraft within the jurisdiction of the Philippines, while the

2 aircraft is in flight, which is from the moment when all external doors are

3 closed following embarkation until the moment when one such door isopened

4 for disembarkation or, in case of a forced landing, until the competent

5 authorities take over the responsibility of the aircraft and the persons and

6 property aboard.

7 (56) "Validation" refers aboard to the written acceptance of an action

8 of the civil aviation authority of another country inlieu of an action that this Act

9 assigns tothe Director General.

10 (57) "Landing fees" refers to all charges for the use of any landing strip

II or runway by any aircraft landing or taking off at anaerodrome.

12 (58) "Terminal fees" refers to charges for parking at or near the ramp,

13 terminal area, or building, for purposes of loading or unloading passengers

14 and/or cargo.

(59) "Royalties" refers toall charges based on gross business or sales,

or gross or net profit.

(60) "Supplies" includes any and all items of whatever nature ordescription which may be necessary for, or incidental to, the operation of an

aircraft.

SEC. 4. Creation of the Authority. - There is hereby created an

independent regulatory body withquasi-judicial and quasi-legislative powersand possessing corporate attributes to be known as the Civil Aviation

Authority of the Philippines (CAAP),hereinafter referred toas the "Authority",

attached tothe Department ofTransportation and Communications (DOTC) for

the purpose of policy coordination. For this purpose, the existing Air

Transportation Officecreated under the provisions of the Republic Act 776, as

amended, ishereby abolished.

Notwithstanding the foregoing, nothing in this Act shall diminish theowers and functions of the Civil Aeronautics Board (CAB) as provided for

32 under Republic Act. No. 776, also known as "The Civil Aeronautics Act of the

33 Philippines", as amended.


15/54

(a) Establishment of Authority Headed by a Director General - The

2 Authority shall be headed by aDirector General of Civil Aviation, referred to

3 in this Act as the "Director," who shall be appointed by the President of the

4 Philippines and shall be responsible for all civil aviation in the Philippines and

5 the administration of this Act. The Director shall be appointed based on the

6 qualifications herein provided and shall have atenure of officefor aperiod of

7 four (4) years. His appointment may be extended for another non-extendible

8 term of four (4) years and shall only be removed for cause inaccordance with

9 the rules and regulations prescribed by the Civil Service Commission.

10 (b) Responsibility of Director General - The Director General shall be

I\ responsible for the exercise of all powers and the discharge of all duties of the

12 Authority and shall have control over all personnel and activities of the

13 Authority.

14 SEC. 5. Composition of the Board Members. - The corporate

15 powers of the Authority shall be vested in a board, which is composed of

16 seven (7) members:

(a) The Secretary of the Department of Transportation and

Communications shall act as chairman ex officio;

(b) The Director General of Civil Aviation (DGCA) shall automatically

be theViceChairman of the Board;

The Directors listed under Subsections (a) to (g) shall be ex officio

members of the Board of Directors: Provided, that, in the absence of the

Director appointed in Subsections (c) to (g), the Director concerned shall

designate the officer next in rank to him in his department or officeto act on

his behalf as aDirector.

3\ SEC. 6. Prohibited Interests. - All members of the Board or any of

32 their relatives within the fourth civil degree of consanguinity or affinity,

33 legitimate or common law, shall be prohibited from holding any interest


16/54

whatsoever, either as investor, stockholder, officer or director, in any

2 company or entity engaged in air commerce, whether scheduled or

3 unscheduled, passenger or cargo, domestic or international, or in any

4 business providing support services topersons engaged inair commerce (i.e.

5 general sales agencies, travel agencies, cargo forwarders, ground handling,

6 catering, fuel servicing, aircraft maintenance, etc.) and must therefore divest,

7 through sale or legal disposition, of any and all interests insuch undertakings

8 upon the member's assumption of office. Any violation of this section shall

9 subject the member concerned toremoval fromAuthority for cause as well as

10 administrative, civil or criminal prosecution under applicable laws.

II SEC. 7. Limitation of Subsequent Employment. - Nomember of the

12 Board or any employee of theAuthority shall accept employment or enter into

13 acontract of service with an entity regulated by the Authority until the expiry

14 of one (1) year from the termination of his appointment, whether by

15 resignation or revocation or otherwise.

16 SEC. 8. Quorum. - Thepresence of at least four (4) members of the

Board shall constitute aquorum and the majority vote of three (3) members in

a meeting where a quorum is present shall be necessary for the adoption of

any rule, ruling, order, resolution, decision or other act of the Board in the

exercise of itsfunctions.

SEC. 9.Qualifications of Director General. - No person shall be

appointed or designated as theDirector General unless he isaFilipino citizen,

at least thirty-five (35) years of age, of good moral character, unquestionable

integrity, recognized competence and a degree holder with at least five (5)

years supervisory or management experience inthefield of aviation.

SEC. 10. Board Meetings. - The Board shall meet regularly once a

month and may hold special meetings toconsider urgent matters upon call of

the Chairman or upon the initiative of four (4) members. Internal rules of

procedure in the conduct of Board meetings shall be as prescribed by the

Board.

31 SEC. 11. Per Diems. - Themembers of theBoard shall receive aper

32 "emfor each meeting actually attended. Theper diems of the members of the

33 B d shall be determined pursuant to a resolution adopted by the Board

34 "ect to compliance of the guidelines duly existing and applic~le by the

35 Commission onAudit.


17/54

SEC. 12. Personnel. - Qualified existing personnel of Air

2 Transportation Office (ATO) shall be given preference in the filling up of

3 plantilla positions created in the Authority, subject to existing civil service

4 rules and regulations.

5 SEC. 13. Principal Office. - The Authority shall have its principal

6 officeinMetro Manila and may hold hearings on any proceedings at such time

7 and places within the Philippines, as itmay provide by order inwriting.

8 SEC. 14. Capitalization. - The Authority shall have an authorized

9 capital stock of FiftyBillionPesos (PhP50,OOO,OOO,OOO.OO)which shall be fully

10 subscribed by theRepublic of the Philippines. Thesubscription of theNational

I 1 Government shall be paid as follows:

12 (a) The unexpended balances of appropriations inthe current General

13 Appropriations Act and other acts in force upon approval hereof, pertaining

14 to, held or used by, theATO;

(b) Thevalue of existing assets of the ATO, which shall be determined

by anindependent and qualified appraiser or appraisers within six (6) months

from the effectivity of this Act, and after deducting the loans and other

liabilities of the ATOat the time of the takeover of the assets and properties;

and

(c)Such amounts as may be appropriated from time to time fromthe

funds of the National Treasury, including any outlay from the infrastructure

program of theNational Government.

SEC. 15. Fiscal Autonomy - The Authority shall enjoy fiscal

autonomy. All moneys earned by the Authority fromthe collection/levy of anyand 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 utilization of any funds coming fromthe collection and! or levy of

Authority shall be subject to the examination of the Congressional

30 versight Committee.

31 SEC. 16. Exemption from Taxes, Customs and Tariff Duties. (a)The

32 importation of equipment, machineries, spare parts, accessories and other

33 materials including supplies and services used solely and exclusively in the

34 operations of the Authority not obtainable locally shall be exempt from all


18/54

direct and indirect taxes, wharfage fees and other charges and restrictions,

2 the existence of pertinent laws tothe cont rary notwithstanding.

3 (b) All obligations entered into by the Authority and any income

4 derived therefrom, including those contracted with private international5 banking and financial institutions, shall be exempt from all taxes, both

6 principal and interest. The Authority is also exempt from the payment of

7 capital gains tax, documentary stamp tax, real property estate tax and all

8 other local government-imposed taxes and fees.

9 SEC. 17. Schedule of Feesand Charges. - TheAuthority shall adopt

10 and publish its schedule of fees and charges. The Authority shall hold such

1 1 public hearings or consultative meetings with stakeholders in the industry

12 before adopting its schedule of fees and charges. The Authority shall not

13 revise its schedule of fees and fines more often than once every three (3)

14 years.

15 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 oftheAuthority

subject tothe compliance withthe existing compensation laws; Provided that,

the Board shall determine and fix the compensation and fringe benefits of

employees holding technical positions that are not common to the other

agencies of the government which shall be specified in the Implementing

Rules and Regulations.

SEC. 19. Transfer of Properties. - The funds and appropriations,

records, equipment and property of the ATO is hereby transferred to the

SEC. 20. Annual Report. - TheAuthority shall prepare and submit an

annual report tothe President of thePhilippines tothe Senate and totheHouse

ofRepresentatives onitsaccomplishments at the close of each calendar year.

SEC. 21. Policies. - In the exercise and performance of its powers

32 nd duties under this Act, the Authority shall consider the following, among

33 0 her things, as being inthe public interest and in accordance withthe public

34 convenience and necessity:


19/54

(a) The development and utilization of the air potential of the

2 Philippines;

3 (b) The encouragement and development of an air transportation

4 system properly adapted to the present and future of foreign and domestic5 commerce of thePhilippines;

6 (c) The regulation of air transportation in such manner as to support

7 sound economic condition in such transportation and toimprove the relations

8 between air carriers;

9 (d) Ensuring the safety , quality, reliability, and affordability of aIr

10 transport services for theriding public; and

I I (e) The encouragement and development of a viable and globally

12 competitive Philippine aviation industry.

15 SEC.22. Powers and Functions. - The Authority shall have such

powers as are granted to the Board and the Director General under the

provisions of thisAct.

SEC.23. Corporate Powers. - The Authority, acting through the

Board, shall have thefollowing corporate powers:

(a) To succeed in its corporate name, to sue and be sued in such

corporate name, and toadopt, use and alter itscorporate seal, which shall be

judicially noticed;

(c) Toenter into, make, perform and carry out contracts of every class,

kind and description, which are necessary or incidental totherealization of its

purposes, with any person, domestic or foreign private firm, or corporation,

local or national government office, agency and withinternational institutions

or foreign government;

29 (d) To raise money, contract loans, indebtedness, credit and issue

30 commercial papers and bonds, in any local or convertible foreign currency

3 I fromany other international financial institutions under terms and conditions

32 prescribed by law, rules and regulations;


20/54

(e) To execute any deed of guarantee, mortgage, pledge, trust or

2 assignment of any property for the purpose of financing the programs and

3 projects deemed vital for the attainment of itsgoals and objectives;

4 (f) Toconstruct, acquire, own, hold, operate, maintain, administer and5 lease personal and real properties, including buildings, machinery,

6 equipment, other infrastructure, agricultural land, and its improvements,

7 property rights, and interests therein, and to encumber, mortgage, dispose,

s sell, or alienate or otherwise dispose the same at the fair market value it may

9 deem appropriate; to lease its plant, machinery, equipment or goods not

10 immediately required by it: Provided That, no real property thus acquired

II and any other real property shall be sold without the approval of thePresident

12 of thePhilippines;

13 (g) To receive gifts, donations, grants, bequests, services, properties,

14 whether personal or real, and assistance of all kinds, fromprivate and public

15 sources, firms, institutions, domestic and foreign governments, and

16 international institutions, and utilizethe same for the purposes set forthinthis

Act;

(h) To invest its funds and other assets in such areas, ventures, and

projects as itmay deem wise;

(i) Tosettle, under such terms and conditions most advantageous toit,

any claimby or against it;

G ) To determine and keep its own system of accounts following

generally accepted principles of accounting, aswell as the forms and contents

of itscontracts and other business documents;

(k) To perform such other acts, as are necessary or convenient in

connection with the performance of its functions, to carry out the purposes of

thisAct.

32 (a) Provide comprehensive policy guidance for the pro;motion and

33 development of thePhilippine aviation industry, asprovided for inthisAct;


21/54

(b)EnsurethattheAuthorityperforms itsfunctionsinaproper, efficient

2 andeffectivemanner;

3 (c) Decide the objectives, strategies and policies of the Authorityin

4 accordancewiththeprovisionsofthisAct;

5 (d) Determine the organizational structure of the Authority in

6 accordance with the provisions of this Act, establish a human resources

7 management system based on merit and fitness, and adopt a rational

8 compensationandbenefits scheme;

9 (e) Exerciseappellatepowers onanydecisions, findingsandrulings of

10 the Director General, to issue subpoena ad testificandum or subpoena duces

I I tecum requiring the attendance and testimony of witnesses inany matter or

12 inquiry pending before the Board and require the production of books,

13 papers, contracts, agreements and all other documents submitted for

purposes of this section to be under oath and verified by the person in

custody thereof as to the truth and correctness of data appearing in such

books, papers, tariffs,contracts, agreements andall other documents,

(f)Exerciseappellatepowers toorder thetakingof depositions inany

proceeding, or investigation, pending before theBoardat any stage of such

proceeding orinvestigation;

(g)Useavailableservices, equipment, personnel andfacilitiesofother

agencies of the Philippine Government, on a reimbursable basis when

appropriate and, onasimilar basis, toco-operate withthose agencies inthe

establishment anduseofservices, equipment andfacilitiesoftheAuthority;

(h)Usetheproperty of theAuthorityinsuchamanner asmay appeartotheAuthoritytobe requisite, advantageous or convenient withaview to

26 aking the best use of any of theproperty of theAuthorityin relation to its

27 ctionsunder thisAct;

28 (i) Invest such of the Authority's funds that are not immediately

29 required for operating expenses, or other immediate obligations in any

30 business venture theBoardmay deemappropriate, or insuchsecured note,

31 government securities, and other negotiable instruments that satisfy the

32 guidelines prescribed by theBoard.FundsoftheAuthorityshall bedeposited

33 insuchcommercial anduniversal banks astheBoardmaydetermine, subject

34 tothe requirements of existing laws. TheBoardshall designate the officials

35 authorizedtodeposit inorwithdrawfundsfromsuchdepository banks;


22/54

(j) Promulgate rules and regulations as may be necessary in the

2 interest of safety in air commerce pertaining to the issuance of the airman's

3 certificate including the licensing of operating and mechanical personnel,

4 type certificate for aircraft, aircraft engines, propellers and appliances,

5 airworthiness certificates, air carrier operating certificates, air agency

6 certificates, navigation facility and aerodrome certificates; air traffic routes;

7 radio and aeronautical telecommunications and air navigation aids; aircraft

8 accident inquiries; aerodromes, both public and private-owned; construction

9 of obstructions to aerodromes; height of buildings; antennae and other

10 edifices; registration of aircrafts; search and rescue; facilitation of air

1 I transports; operations of aircrafts, both for domestic and international,

12 including scheduled and non-scheduled; meteorology in relation to civil

13 aviation; rules of the air; air traffic services; rules for prevention of collision of

14 aircrafts; identification of aircraft; rules for safe altitudes of flight; and such

other rules and regulations, standards, governing other practices, methods

and/ or procedures as the Director General may find necessary and

appropriate to provide adequately for safety regularity and efficiency in air

commerce and air navigation;

(k) Impose and fix reasonable charges and fees for the use of

government aerodromes or air navigation facilities; for services rendered by

the Authority in the rating of any aerodrome or air navigation facilities, civil

aviation schools and instructors, aircraft repair stations, and aircraft radio and

aeronautical telecommunications stations;

(1)Fix the reasonable charges to be imposed in the use of privately-

owned air navigation facilities and aerodromes;

(m) Adopt a system for the registration of aircraft as hereinafter

provided;

(n) Determine and fix, landing fees, parking space fees, royalties on

29 ales or deliveries, direct or indirect, to any aircraft for its use of aviation

30 oline, oil and lubricants, spare parts, accessories and supplies, tools, other

31 alties, fees or rentals for the use of any of the property under its

32 management and control;

33 (0) Approve the annual and supplementary budget plan and utilization

34 of retained revenue;


23/54

(q) Upon itsowninitiative or therecommendation of theDirector

2 General or an application of aprivate person, grant exemption fromthe

3 requirements of observing rules or regulations issued inaccordance withthis

4 Act: ProvidedThat said grant of exemption isnot prejudicial toflight safety;

5 (r) Formulate rules and regulations concerning compliance of the

6 carrier and the public for the safe transport of goods and materials by air

7 pursuant to international standards or Annexes to the Chicago Convention;

8 and

9 (s) Incoordination withthe appropriate government agency tasked to

10 provide airport security, shall:

I 1 (1) Prescribe reasonable regulation requiring that all passengers and

12 all property intended to be carried in the aircraft cabin in commercial air

13 transport be screened by weapon-detecting procedure or facilities employed

or operated by employees or agents of the air operator or foreign air operator

prior toboarding the aircraft for such transportation;

(2) Prescribe such other reasonable rules and regulations requiring

such parties, methods and procedures as the Director General may find

necessary to protect persons and property aboard aircraft operating in

commercial air transport against acts of criminal violence and aircraft piracy;

and

(3) To the extent practicable, require uniform procedures for the

inspection, detention, and search of persons and property in domestic

commercial air transport and international commercial air transport to assure

their safety and to assure that they will receive courteous and efficient

treatment by air operators and their agents and employees.

SEC. 25. Issuance of Rules and Regulations. - The Board, in

consultation with the Director General, shall issue and provide for the

enforcement of such orders, rules and regulations as may be necessary to

29 give effect to the provisions of this Act. All rules and regulations issued in

30 cordance with the provisions of this Act shall be formally promulgated and

31 P riodically reviewed and updated in accordance with the requirements of

32 the Administrative Code of the Philippines or any amendment or successor

33 thereto and the International Civil Aviation Organization Standards and

34 Recommended Practices. Pending the promulgation of such new rules and

35 regulations, the current rules and regulations of the ATO shall continue to

36 apply.


24/54

SEC.26. Setting of Charges and Fees. - TheBoard,afterconsultation

2 with the Director General, and after public hearing, shall determine, fix,

3 impose, collector receive reasonable charges, fees, dues or assessments in

4 respect of aviation certificates, licenses and all other authorizations or

5 permissions authorizedtobeissuedunder thisActandall servicesperformed

6 by the Authority. All charges and fees shall be formally promulgated in

7 accordance with the requirements of the Administrative Code of the

8 Philippines or any amendment or successor thereto. Pending the

9 promulgationof suchnewschedule ofcharges andfees, thecurrent charges

10 andfeesofATOshall continuetoapply.

11 SEC.27. Issuance of Rules of Procedure and Practice. - TheBoard

12 may authorizetheDirector General toissue or amend rules of practice and

13 procedures asmayberequired tobe issuedpursuant totheprovisionsof this

14 Actor issueandadopt rules andregulations andother issuancesof theICAO.

15 Pending the promulgation of such new rules of procedures and practice,

16 current rules ofprocedures andpractices oftheATOshall continuetoapply

SEC.28. Appellate Powers. - The Board, on an appeal properly

taken by an interested party from a decision, judgment or order of a

Director General, shall havethepower to:

(a)Review, confirm, modify, revise, amend or reverse, as the case

maybe, decisions, judgments and/or orders oftheDireetorGeneral;

(b) Confirm, remit, mitigate, increase or compromise, as the case

maybe, finesimposed by theDirector General pursuant withtheprovisions

ofthisAct.;and

(c) Review, confirm, modify, revise, amend or reverse, as the case

may be, impositions by the Director General of liens onpersonal and real

properties of entities, persons, corporations or partnerships in default, or

those who have failed to perform their obligations pursuant to rules and

29 egulations promulgated under this Act, or those who shall have failed to

30 ythefinesor other pecuniary penalties forviolationthereof.

3 I Inno case that the Director General shall participate in the hearing

32 djudication of anappealed case before theBoardwhere thesubject of

33 appeal is ajudgment or decision rendered by his office. In such case, it

34 requires four (4)concurring votes of themembers of theBoardwhoactively

35 participated inthe deliberation of the appealed case before thejudgment

36 or decisionoftheDirector General canbemodifiedor reversed.


25/54

SEC.29. Power toAdminister Oaths. - Themembers of theBoard,

2 theDirector General andsuchother dulydesignated officersoftheAuthority

3 shall have the authority to administer oaths in the transaction and

4 performance oftheir officialduties.

5 SEC.30. Annual Budget. - TheBoardshall adopt anannual Budget

6 tofundtheoperations oftheAuthority.

7 SEC.31. Delegation of Functions. - (a) Delegation to Officers,

8 Employees and AdministrativeUnitsof Authority. - TheDirector General

9 may, subject to such regulations, supervision and review as may be

10 prescribed, authorize the performance by any officer, employee, or

II administrative unit under the Director General's jurisdiction of any function

12 under thisAct.

13 (b) Delegation to Private Persons. - The Director General, in

14 accordance withthepolicyguidelines prescribed by theBoard, isauthorized

15 todelegate anyassigned powers andduties toanyproperly qualifiedprivate

person subject tohis continuingsupervision, regulation, and review as may

beprescribed. However, theDirector General shall ensure thatsuchfunctions

are not delegated in such away that air operators, aerial work or general

aviationoperators andmaintenancefacilities,ineffect,regulate themselves.

SEC.32. Limitation ofPowers. - TheBoard shall not exercise any

21 power or function not otherwise expressly granted to it under this Act,

22 neither shall theBoardexercise, inthefirstinstance, any power or function

that properly fallswithin the authority, jurisdiction, powers or functions of

theDirector General.

SEC.33. Organizational Structure ofthe Authority. - Withinfifteen

(15) days fromthe appointment of and acceptance by all members of the

Board and theDirector General of their respective appointment, theBoard,

in consultation with the Director General, shall meet to draw-up the

31 Authority's organizational structure. The Board shall agree on the

32 uthority's final organizational structure not later than six (6) months from

33 thedateoftheeffectivityofthisAct.

34 Inaddition totheofficescreated under Sections36and 40of thisAct,

35 theBoardshall establish thefollowingpermanent offices:


26/54

5 TheBoard may agree for the viability for the creation of additional

6 officesand the finalizationof the organizational structure not later than six

7 (6)monthsfromthedateoftheeffectivityofthisAct.

8 Notwithstandingthequalificationstandards asmay be prescribed by

9 theBoardand theCivil ServiceCommission, theselection and appointment

10 of theheads of theforegoing officesshall be limitedfromtherank and file

1 1 employees oftheconcerned services.

13 (a) AuthoritytoOperate- TheDirector General mayconductaschool

14 or schools for the purpose of training employees of the Authorityin those

subjects necessary for theproper performance of all authorizedfunctionsof

theAuthority.TheDirector General mayalsoauthorizeattendanceofcourses

given in such schools by other governmental personnel and personnel of

foreigngovernments, orpersonnel oftheaeronautical industry.

(b) Offset of Training Costs - The Director General is hereby

authorized, where appropriate, to require payment of appropriate

consideration to offset the costs of training provided by such school or

schools.

SEC.35. Powers and Functions of the Director General. - The

Director General shall be the chief executive and operating officer of the

Authority.Heshall havethefollowingpowers, dutiesandresponsibilities:

(I) Tocarry out the purposes and policies established inthisAct; toenforcetheprovisionsoftherules andregulationsissuedinpursu~ce tosaid

30 Act; and he shall primarily be vested with authority to take charge of the

31 technical andoperational phaseofcivilaviationmatters;


27/54

(2) To designate and establish civil airways, to acquire, control,

2 operate and maintain along such airways, navigation facilities and to chart

3 such airways and arrange for their publication including the aeronautical

4 charts or maps required by the international aeronautical agencies, by

5 utilizing the equipment, supplies or assistance of existing agencies of the

6 government asfar aspracticable;

7 (3) To issue airman's certificate specifying the capacity in which the

8 holder thereof is authorized toserve as airman inconnection with aircraft and

9 shall be issued only upon the finding that the applicant is properly qualified

10 and physically able to perform the duties of the position. The certificate shall

I I contain such terms, conditions and limitations as the Director General may

12 determine to be necessary to assure safety in air commerce: Provided,

13 however, that the airman's license shall be issued only to qualified persons

14 who are citizens of the Philippines or qualified citizens of countries granting

15 similar rights and privileges tocitizens of thePhilippines;

16 (4) To issue airworthiness certificate for aircraft which shall prescribe

the duration of such certificate, the type of service for which the aircraft may

be used, and such other terms and conditions and limitations as are required;

(5) To issue air carrier operating certificate in accordance with the

minimum safety standards for the operation of the air carrier to whom such

certificate is issued. The air carrier operating certificate shall be issued only

toaircrafts registered under theprovisions of thisAct;

(6) Toissue type certificate for aircraft, aircraft engine, propellers and

appliances;

(7) To inspect, classify and rate any air navigation facilities and

aerodromes available for the use of aircraft as toitssuitability forsuch use and

to issue a certificate for such air navigation facility and aerodrome; and to

determine the suitability of foreign aerodromes, air navigation facilities as

well as air routes to be used prior to the operation of Philippine-registered

30 aircraft inforeign air transportation and fromtimetotime thereafter asmay be

3 I quired intheinterest of safety inair commerce;

32 (8) To issue certificates of persons or civil aviation schools gIVIng

33 instruction inflying, repair stations, and other air agencies and provide for the

34 examination and rating thereof;


28/54

(9) Toprovide fortheenforcement of therules andregulations issued

2 under the provisions of this Act and to conduct investigation for violations

3 thereto. In undertaking such investigation, to require by subpoena ad

4 testificandum or subpoena duces tecum, the attendance and testimony of

5 witness, the production of books, papers, documents, exhibits matter,

6 evidence, or the taking of depositions before any person authorized to

7 administer oath. Refusal to submit the reasonable requirements of the

8 investigationcommitteeshall bepunishableinaccordancewiththeprovisions

9 ofthisAct;

10 (l 0) Tocollectanddisseminateinformationrelativetocivil aeronautics

I I and the development of air commerce and the aeronautical industry; to

12 exchange with foreign governments, information pertaining to civil

13 aeronautics; andtoprovidefordirect communicationonall mattersrelatingto

14 the technical or operational phase of aeronautics with international

15 aeronautical agencies;

16 (11) To acquire and operate such aircraft as may be necessary to

executethedutiesandfunctionsoftheAuthorityprescribed inthisAct;

(12) To plan, design, acquire, establish, construct, operate, improve,

maintain,andrepair necessary aerodromes andother airnavigationfacilities;

(13) To collect and receive charges and fees for the registration of

aircraft and for the issuance and!or renewal of licenses or certificates for

aircraft, aircraftengines, propellers and appliances, and airmenasprovided

inthisAct;

(15) To participate actively with the largest possible degree in the

development of international standardization of practices inaviationmatters

importanttosafe, expeditious, andeasy navigation,andtoimplementasfaras

practicable theinternational standards, recommended practices andpolicies

adopted by appropriate international aeronautical agencies;

(16) To exercise and perform its powers and duties under this Act

31 onsistent withany obligationassumed by theRepublicof thePhilippinesin

32 a ytreaty, conventionoragreement oncivilaviationmatters;

33 (17) To cooperate, assist and coordinate with any research and

34 technical agency of the government on matters relating to research and

35 technical studies on design, materials, workmanship, cqnstruction,


29/54

performance, maintenance and operation of aircraft, aircraft engines,

2 propellers, appliances, and air navigationfacilitiesincludingaircraftfuel and

3 oil: Provided, That nothing in this Act shall be construed to authorize the

4 duplication of the laboratory research, activities or technical studies of any

5 existinggovernmental agency;

6 (18) To designate such prohibited and danger areas, in consonance

7 withtherequirements of theinternational aeronautical agencies and national

8 security;

9 (19) Toissue, deny, suspend, cancel or revoke any certificate, license

10 pertaining to aircraft, airmen and air agencies: Provided, that any order

I]

denying, suspending, cancelling, revoking thecertificateor license may be]2 appealed totheBoard, whosedecisions shall be final withinfifteen(15)days

13 fromdateofnotificationofsuchdenial, cancellationorrevocation;

14 (20) To grant authorization to civil aircraft or persons to carry

] 5 instruments or photographic devices to be used for aerial photography or

16 taking of pictures by photograph or sketching of anypart of thePhilippines;

and

(21) Pursuant to a board resolution, to enter into, make and execute

contractsofanykindwithanyperson, firm,orpublic orprivatecorporation.

SEC.36. The Office of Enforcement and Legal Service. - To

21 effectively implement the civil aviation regulatory, supervisory and

administrativemandates of theDirector General under thisAct, apermanent

officewithintheAuthoritytobe knownastheEnforcementandLegal Service,

o be composed of in-house counsels of the Authority and its necessary

support staffshall beestablished by theBoard.

ThisOfficeshall provide adequate legal assistance and support to the

Director General and to theAuthority, as awhole, in the exercise of quasi-

legislativeandquasi-judicial power asprovided forunder thisAct.

Theexercise of thefunctionby theDirector General toissuesubpoena

testificandum, subpoena duces tecum and the imposition of any

lministrative sanction shall be within the exclusive determination and

rermmendatiOn ofthe Enforcement and Legal Service.

SEC.37. Orders.- (a) Effectiveness of Orders Except in

emergency situations,all orders, rulesandregulationsoftheDirector General

shall take effectwithinsuchreasonable times as the Director General may


30/54

prescribe, and shall continue in force until afurther order, rule or regulation,

2 or for a specified period of time, as shall be prescribed in the order rule, or

3 regulation.

4 (b) Emergencies - Whenever the Director General is of the opinion5 that an emergency requiring immediate action exists withrespect tosafety in

6 civil aviation, the Director General shall have the power, either upon

7 complaint or the Director General's initiative without complaint, at once, if the

8 Director General so orders, without answer or other formof pleading by the

9 interested person or persons, and with or without notice, hearing, or the

10 making or filingof areport, to make such just and reasonable orders, rules or

1 1 regulations as may be essential intheinterest of safety incivil aviation tomeet

12 such emergency: Provided That the Director General shall immediately

13 thereafter initiate proceedings relating to the matter giving rise to any such

14 order, rule or regulation.

15 (c) Suspension and Modification of Orders. - The Director General

16 shall have the power to suspend or modify orders upon such notice and in

such manner asthe Director General shall findproper.

(d) Public Compliance. - It shall be the duty of every person (along

with any agents and employees thereof in the case of entities other than

individuals), subject to this Act, to observe and comply with any order, rule,

regulation, or certificate issued by the Director General under this Act,

affecting such person solong as the same shall remain ineffect.

SEC.38. Right of Access for Inspection. - (a) The Director General

or his authorized representative shall be authorized access to civil aircraft,

including aerodromes, without restriction wherever they are operated within

the Philippines for purposes of ensuring that those aircraft are airworthy and

being operated inaccordance withthisAct, regulations issued under thisAct,

and applicable ICAo Annexes.

(b)The Director General or his authorized representative shall be

thorized access to civil aircraft registered in the Philippines without

they are operated in the world for the purposes of

ensuring that these aircraft are airworthy and are being operated m

accordance withthisAct and applicable regulations and directives.

(c)The Director General or his authorized representative shall be

authorized access by the Philippine air operators at any place and any time to

conduct any tests or inspections in their facility or offices in order to


31/54

determine that those operations are conducted in accordance with this Act

2 and applicable regulations and directives.

3 (d)The Director General or his authorized representative shall be

4 authorized access to any aerodromes, whether privately or government-s owned, toconduct inspections or evaluation of the facilities therein inorder to

6 determine that itsoperations are conducted.

7 SEC. 39. Authority to Prevent Flight. - (a) The Director General is

8 authorized to direct the operator or airman of acivil aircraft that the aircraft is

9 not tobe operated insituations where:

II (2) The airman may not be qualified or physically or mentally capable

12 for the flight; or

13 (3) The operation would cause imminent danger topersons or property

onthe ground.

(b)TheDirector General may take such steps as are necessary todetain

such aircraft or airmen.

SEC. 40. Creation of Flight Standards Inspectorate Service. - (a) The

Board, other than the offices it shall create in furtherance of this Act, shall

establish a permanent office known as the Flight Standards Inspectorate

Service (FSIS) that will assist the Director General in carrying out the

responsibilities of his office for certification and ongoing inspections of

aircraft, airmen and air operators.

27 Furthermore, the Board shall create, but not limited to, the following

28 offices which will provide support to the functions of the Fligh,t Standard

29 Inspectorate Service, namely: Aircraft Registration. Aircraft Engineering and

30 Standards, Airmen Examination Board and Officeof theFlight Surgeon.


32/54

SEC.41. Validation. - TheDirector General is authorized, in the

2 discharge of his certificationand inspectionresponsibilities, tovalidate the

3 actions of the civil authority of another Statein lieu of taking the specific

4 action,withthefollowingrestrictions:

5 (1)For actions on airman or airworthinesscertificates, the other State

6 mustbe asignatorytotheChicagoConventionandbefulfillingitsobligations

7 under the Chicago Conventionwithrespect totheissuanceand currency of

8 thesecertificates;and

9 (4) For actionsapplicable toair operators, theDirector General must

10 exercise discretionandrequire supporting documents. TheDirector General

I I should ensure that, when validationis based onthe actions of another civil

12 aviationauthority, there is no informationtoindicatethat the Statedoes not

13 meet its obligations under the Chicago Conventionregarding certification

14 andongoingvalidationofitsairoperators.

15 SEC.42. AircraftAccident Investigation and Inquiry Board. - Pending

the establishment of an independent and separate government agency

created to conduct investigation of accidents on land, air and water, the

Director General shall organizeanAircraftAccidentInvestigationandInquiry

Board(AAIIB),tobecomposed ofpersonnel oftheAuthorityspecializedinthe

various disciplines of civil aviation.TheBoardshall appoint thehead of the

(a) Reporting of Accidents - TheBoard shall promulgate rules and

regulations governing the notification and the reporting of accidents and

incidents involving aircraft.

(b) General Authority to Investigate - Except as provided inSubsection Cof thissection, theDirector General shall have:

(1) Thepower to investigate, or arrange by contract or otherwise

for the investigation of, accidents involving aircraft occurring in the

Philippines and civil aircraft registered in the Philippines occurring

utside the territory of any foreign country for the purpose of

d termining the facts, conditions and circumstances relating to each

accident and theprobable cause thereof; and

(2) The authority to participate in the investigation of accidents

involving aircraft registered in the Philippines occurring outside the

territory of a foreign country, consistent with any treaty, convention,


33/54

agreement, or other arrangement between the Philippines and the

2 country inwhose territory the accident occurred;

3 (c) Accident Prevention - The Director General shall take any

4 corrective actions which, on the basis of the findings of the accident5 investigations authorized under this Section, that, in the judgment of the

6 Director General, will tend toprevent similar accidents in the future.

7 (d) Investigation of Accidents Within Military Sites

8 Notwithstanding any other provision of this section, and, the investigation

9 of an accident involving aircraft occurring within military sites in the

10 Philippines, or an accident involving solely an aircraft of the armed

II forces of any foreign country occurring in the Philippines, shall be the

12 responsibility of the military. For the purpose of this subsection, the term

13 'military sites' means those areas within the Philippines which are under

14 the control of the military of the Philippines or the military of another

15 country.

(e) Use as Evidence - No part of any report or reports of the

Director General relating to any accident, or the investigation thereof,

shall be admitted as evidence or used in any suit or action for damages

arising out of any matter mentioned in such report or reports except

when the criminal liabilities/aspects of the accident is put into issue.

(a) Establish and maintain a system for the national registration of

aircraft inthe Philippines;

(b) Establish and maintain a system for the registration of liens,

mortgages or other interests inaircraft or aircraft engines; and

28 (c) Have sole authority to register aircraft and liens, mortgages or

29 er interests inaircraft or aircraft engines.

30 SEC.44. Eligibility for Registration. - Except as otherwise provided

31 inthe Constitution and existing treaty or treaties, no aircraft shall be eligible

32 for registration unless it is owned by or leased to acitizen or citi~ens of the

33 Philippines or corporations or associations organized under the laws of the


34/54

Philippines at least sixty per centum (60%) of whose capital is owned by

2 Filipino citizens. That, under such rules and regulations to be promulgated

3 by the Board foreign-owned or registered aircraft may be registered if

4 utilized by members of aero clubs organized for recreation, sport or the

5 development of flying skills as apre-requisite to any aeronautical activities

6 of such clubs within the Philippine airspace. (R.A. 776, P.D. 1278, E.O. 546,

7 and B.P.504)

8 Such certificate shall be conclusive evidence of nationality for

9 international purposes, but not in any proceeding under the laws of the

10 Republic of the Philippines.

II The certificate of registration is conclusive evidence of ownership,

12 except inaproceeding where such ownership is, or may be, at issue.

13 SEC. 45. Application for Aircraft Registration. - Applications for

14 certificate of registration shall be made in writing, signed and sworn to by

15 the owner or lessee of any aircraft or aircraft engine eligible for registration.

16 The application shall also state: (1) the date and place of filing; (2) the

specification, construction and technical description of the aircraft or aircraft

engine; and (3) such other information as may be required by the Authority

insuch manner and formas theAuthority may prescribe by regulation.

SEC.46. Issuance of Certificate of Registration. - Should the

Director General, upon considering the application for registration, find the

aircraft or aircraft engine eligible for registration, such aircraft shall be

registered under the provisions of this Act and the owner thereof shall be

issued acertificate ofregistration.

SEC.47. Nationality. - An aircraft shall acquire Philippine

nationality when registered pursuant tothisAct.

SEC. 48. Revocation. - Any certificate of registration may be

revoked by the Authority for any cause which renders the aircraft ineligible

forregistration.

30 SEC.49. Conveyance to be Recorded. - No conveyance made or

31 e ecuted, which affects the title to, or interest in, any aircraft of Philippine

32 registry, or any portion thereof shall be valid in respect to such aircraft or

33 portion thereof against any person other than the person by whom the

34 conveyance is made or executed, his heirs, assignees, executors,

35 administrators, devisees, or successors in interest, and any person having


35/54

actual notice thereof, until such conveyance is recorded in the Authority.

2 Every such conveyance so recorded shall be valid as against all persons.

3 Any instrument, recording of which is required by the provisions of this Act,

4 shall take effect fromthe date of its record in the books of the Authority, and

5 not fromthe date of itsexecution.

6 SEC.50. Form of Conveyance.- No conveyance may be recorded

7 under the provisions of this Act unless it complies with the requirements for

8 the registration of documents similar to the land registration process. The

9 conveyance to be recorded shall also state: (1) the interest in the aircraft of

10 the person by whom such conveyance is made or executed or, inthe case of

I] a contract of conditional sale, the interest of the vendor; and (2) the interest

12 transferred by the conveyance.

13 SEC. 51. Establishment of Systemof Recording. - The Authority

14 shall establish anational system for recording documents that affect the title

15 to or any interest in any aircraft registered in accordance with this Act and in

16 any aircraft engine, propeller, appliance or spare parts intended for use on

any such aircraft.

SEC.52. Method of Recording. - The Authority shall record

conveyances delivered to it in the order of their receipt, in files kept for that

purpose, indexed toshow:

(e) If such conveyance ismade as security for indebtedness, the

amount and date of maturity of such indebtedness; and

(f) All particular estates, mortgages, liens, leases, orders and other

28 encumbrances and all decrees, instruments, attachments or entries affecting

29 rcraft and other matters properly determined under thisAct.

30 SEC.53. Validity Before Filing. - Upon the establishment of a

3 1 recording system in accordance with the provisions of this Act, nq document

32 affecting the titletoor any interest insuchregistered aircraft, aircr~t engines,


36/54

propellers, appliances, or spare parts shall be valid except as between the

2 parties thereto, unless the document isregistered insuchrecording system.

3 SEC. 54. Previously Unrecorded Ownership. - Applications for the

4 issuance or renewal of an airworthiness certificate for aircraft whose5 ownership has not been recorded as provided in this Act shall contain such

6 information with respect to the ownership of the aircraft as the Director

7 General shall deem necessary to show who have property interests in such

8 aircraft and thenature and extent of such interest.

II SEC.55. General Powers and Functions. - (a) Promoting Safety-The

12 Director General shall have the power and duty topromote safety of flight of

13 civil aircraft in civil aviation by prescribing and revising fromtime to time as

14 necessary:

15 (1) Reasonable rules and regulations implementing, at minimum, all

standards oftheAnnexes tothe Chicago Convention; and

(2) Such other reasonable rules, regulations, or minimum standards

governing other practices, methods, and procedures as the Director General

may findnecessary toprovide adequately for safety incivil aviation.

(b) Considerations inthe Regulation of Air Operators. - Inprescribing

standards, rules and regulations, and inissuing certificates under thisAct, the

Director General shall take into consideration the obligation of air operators

to perform their services with the highest possible degree of safety pursuant

topublic interest.

SEC. 56. Form of Applications. - Applications for certificates issued

by virtue of this chapter shall be in such form, contain such information, and

be filed and served in such manner as the Authority may prescribe and shall

be under oath or affirmationwhenever theAuthority sorequires.

30 SEC. 51. Authority to Certificate Airmen. - The Director General is

31 authorized to issue airmen certificates specifying the capacity i~which the

32 holders thereof are authorized to serve as airman in connection with an

33 aircraft.


37/54

SEC.58. Application and Issuance. - Any individual may file with

2 the Director General an application for an airman certificate. If the Director

3 General finds, after due investigation, that such individual possesses the

4 proper qualifications for, and is physically able to, perform the duties

5 pertaining to the position for which the airman certificate is sought, the

6 Director General shall issue such certificate.

7 SEC. 59. Terms and Conditions. - The airman certificate shall

8 contain such terms, conditions and tests of physical fitness, and other matters

9 as may be necessary toassure safety incivil aviation.

12 (b) State the name and address of, and contain a description of the

13 individual towhomthe airman certificate isissued; and

(c) Betitled withthe designation of the airman and itsauthorized

privileges.

SEC. 61. Authority toIssueAirworthiness Certificates. - The owner of

any aircraft registered in accordance with this Act may filewith the Director

General an application for an airworthiness certificate for such aircraft.

SEC.62. Issuance. - If it is found that the aircraft conforms to the

appropriate type certificate and, after inspection, finds that the aircraft is in a

condition allowing for safe operation, an airworthiness certificate shall be

issued by theDirector General.

SEC.63.Terms and Conditions. - TheDirector General shall prescribe in

the airworthiness certificate the duration of such certificate, the types of

service for which the aircraft may be used, and such other terms, conditions,

limitations and information as are required in the interest of safety. Each

28 airworthiness certificate issued by the Director General shall be recorded by

29

SEC.64. Airworthiness Approvals. - The Director General may

prescribe the terms under which additional airworthiness approvals, for

purposes ofmodification, may be made.


38/54

SEC.65. Authority to Certificate Carriers and Establish Safety

2 Standards. - The Director General is authorized to issue air operator

3 certificates and toestablish minimumsafety standards for the operation of the

4 air carrier towhich any such certificate isissued.

5 SEC. 66. Application and Issuance. - Any air carrier who is acitizen

6 of the Philippines may filewith the Director General an application for an air

7 operator certificate. If the Director General finds, after thorough investigation,

8 that such air carrier is properly and adequately equipped and has

9 demonstrated the ability to conduct a safe operation in accordance with the

10 requirements of this Act and the rules, regulations and standards issued

1 1 pursuant thereto, theDirector General shall issue an air operator certificate to

12 such air carrier. Provided, however, That inno event shall theDirector General

13 issue an air operator certificate to an air carrier that does not possess avalid

14 Certificate of Public Convenience and Necessity (CPCN) issued pursuant to

thisActand itsimplementing rules.

SEC. 67. Examination and Rating. - TheDirector General isauthorized to

provide for the examination and rating of:

(a) The adequacy of the course of instruction, the suitability and

20 airworthiness of the equipment and the competency of the instructors of

civilian schools providing instruction in flying or in the repair, alteration,

maintenance, and overhaul of aircraft, aircraft engines, propellers and

appliances; and

(b) The adequacy and suitability of the equipment, facilities and

materials for, and methods of, repair and overhaul, and the competency of

those engaged inthework or giving any instruction inaccredited maintenance

organizations or shops engaged in the repair, alteration, maintenance and

overhaul of aircraft engines, propellers and appliances.

30 a) MinimumSafety Standards - TheDirector General shall have the power to

31 escribe and revise, from time to time as necessary, minimum safety

32 for the operation of air navigation facilities located in the

33 "lippines.


39/54

(l) TheDirector General is empowered toissue airport certificates

2 to, and toestablish minimumsafety standards for the operation of, airports

3 that serve any scheduled or unscheduled passenger operations of air

4 operator or foreign air operator aircraft.

5 (2) Any person desiring to operate an airport that is described in

6 this section and that is required by the Director General, by rule, to be

7 certified may file with the Director General an application for an airport

8 operating certificate. If the Director General finds, after investigation, that

9 such person is properly and adequately equipped and able to conduct a

\0 safe operation in accordance with the requirements of this Act and the

II rules and regulations, and standards prescribed thereunder, the Director

12 General shall issue an airport operating certificate to such person. Each

13 airport operating certificate shall prescribe such terms, conditions and

14 limitations as are reasonably necessary to assure safety in commercial air

I S transport. Unless the Director General determines that it would be

16 contrary to public interest, such terms, conditions and limitations shall

17 include, but not limited to, terms and conditions, relating to:

(i) The operation and maintenance of adequate safety equipment,

including fire fighting and rescue equipment capable of rapid access to

any portion of the airport used for landing, takeoff, or surface

maneuvering of aircraft; and

(ii) The condition and maintenance of primary and secondary

runways as theDirector General determines tobe necessary.

(a) Each air carrier to make or cause to be made, such inspection,

maintenance, overhaul and repair of all equipment used in air transport and to

ensure that theoperations conducted are inaccordance withtheprovisions of this

Actandtherules, regulations, directives andorders issued byvirtueofthisAct;

(b) Each air carrier holding an air operator certificate to ensure that the

maintenance of aircraft and operations thereof are conducted inthepublic interest

3\ d in accordance with the requirements of this Act and the rules, regulations,

32 ctivesandorders issued byvirtueofthisAct;

33 (c) Each holder of an airman certificate to observe and comply with the

34 authority and limitations of that certificate, the requirements of this Act and the

35 rules, regulations, directives andorders issued by virtueofthisAct;


40/54

(d)Everyperson perfonning duties inair transportation toobserve and

2 comply withtherequirements ofthisActandtherules, regulations, directives and

3 orders issued by virtueofthisAct;and

4 (e) Every person who offersor accepts shipments, cargo or baggage inair

5 commerce toofferor accept suchshipments, cargo orbaggage inaccordance with

6 the provisions of Annex 18of the Chicago Convention and the ICAOTechnical

7 InstructionsfortheSafeTransport ofDangerous GoodsbyAir.

8 SEC. 70.. Authority to Inspect. - (a) Authority toInspect Equipment -

9 TheDirector General shall have thepower and duty to:

10 (1)Make such inspections of aircraft, aircraft engines, propellers and

II appliances used by an operator of civil aircraft as may be necessary to

12 determine that the operators are maintaining the I safe condition for the

13 operation inwhich they are used; and

14 (2)Advise each operator in the inspection and maintenance of these

15 items.

(b) Unsafe Aircraft, Engines, Propellers and Appliances - When the

Director General finds that any aircraft, aircraft engine, propeller orappliance, used or intended tobe used by any operator incivil aviation, isnot

in a condition for safe operation, the Director General shall notify the

operator. Such aircraft, aircraft engine, propeller or appliance then shall not

21 be used in civil aviation or in such manner also to endanger civil aviation,

unless found by the Director General tobe in acondition for safe operation.

SEC. 71. Amendment, Modification, Suspension and Revocation of

(a) Re-inspection and Reexamination - The DirectorGeneral may, from time to time, for any reason, re-inspect or reexamine

any civil aircraft, aircraft engine, propeller, appliance, air operator,

school, with approved maintenance organization, or any civil airman

holding a certificate issued under this Act.

(b) Actions of the Director General - If, as a result of any such re-

inspection or reexamination, or if, as a result of any other investigation

made by the Director General, the Director General determines that

32 fety in civil aviation or commercial air transport and the public interest

33 re uires, the Director General may issue an order amending, modifying,

34 sus ending or revoking, in whole or in part, any airworthiness certificate,


41/54

airman certificate, air operator certificate or certificate for any airport.

2 school, or approved maintenance organization issued under this Act.

3 (c) Notice to Certificate Holders and Opportunity to Answer - Prior

4 to amending, modifying, suspending or revoking any of the foregoing5 certificates, the Director General shall advise the holder thereof as to any

6 charge or reason relied upon by the Director General for the proposed

7 action and, except in cases of emergency, shall provide the holder of

8 such certificate an opportunity to answer any charges and be heard as to

9 why such certificate should not be amended, modified, suspended or

10 revoked.

J J (d) Appeals - Any person whose certificate is affected by such an12 order of the Director General under this section may file his motion for

13 reconsideration within five (5) days from receipt thereof and in case of

14 denial shall, within ten (10) days, filehis appeal to the Board.

(e) Effectiveness of Orders Pending Appeal - The filing of motion

for reconsideration or appeal as provided for under this Act shall not stay

the effectiveness of the Director General's order except through an

injunctive relief duly issued by acourt of competent jurisdiction.

(1) Operate in civil aviation any civil aircraft which there is not

urrently in effect a certificate of airworthiness and registration, or in

violation of the terms of any such certificate and operation of the aircraft

in a careless and reckless manner and operation of aircraft In

contravention of its approved operating limitations and manual;

(2) Serve in any capacity as an airman in connection with any civil

aircraft, aircraft engine, propeller or appliance used or intended for use

in civil aviation without an airman certificate authorizing that person to

serve in such capacity, or in violation of any term, condition or limitation

30 of his certificate, or in violation of any order, rule or regulation issued

32 (3) Employ for service in connection with any civil aircraft used in

33 aviation an airman who does not have an airman certificate

34 authorizing that person to serve in the capacity for which the person is

35 employed;


42/54

(4) Operate as an air operator without an air operator certificate,

:2 or in violation of the terms of any such certificate;

3 (5) Operate aircraft in civil aviation in violation of any rule,

4 regulation, or certificate issued by the Director General under this Act;

5 and

6 (6) While holding a certificate issued to a school or approved

7 maintenance organization as provided in this Act, to violate any term,

8 condition or limitation thereof, to violate any order, rule or regulation

9 made under this Act relating to the holder of such certificate.

)0 (b) Considering that the aircraft operation is impressed with public

)) interest, the Director General may prescribe exemptions of the foregoing

)2 provisions for foreign aircraft and airmen.

SEC. 73. Statutory Lien. - TheDirector General, after complying withthe

required legal formalities provided by law, shall have the power to impose

lien onaircraft and machinery:

(a) If the charges and other fees are not paid in full on due date or any

art of the charges or the latepayment penalty thereto remains unpaid; and

(b) Failure topay administrative fines arising fromviolation of any rules

and regulations promulgated by theAuthority.

SEC. 74. Lien on Personal and Real Properties. - The Director

General shall have the power toimpose lien onpersonal and real properties,

and other assets of persons, corporations, partnerships, and such other

entities

Conf. Cttee. Report

Documents

Transcript of Conf. Cttee. Report