Notes on Quasi-Legislative Power (Rule-Making Power) QUASI-LEGISLATIVE POWER (RULE MAKING POWER) Legislative power -- Power to make, alter,

r, and repeal laws. Doctrine of Separation of Powers

Non-delegation of legislative power -- Power conferred upon the legislature to make laws cannot be delegated by that department to any other body or authority. Exception to the doctrine of Non-delegation of legislative power a. Delegation to the President (e.g. Sec. 23(2) (war) and 28(2) (tariff rates), Art. IV, Constitution) b. c. d. e. Delegation to the local governments (e.g. Sec. 48, Local Government Code) Delegation to the people Delegation to the Supreme Court (e.g. Sec. 5(5), Art. VIII, Constitution) Delegation to Administrative Agencies.

3. Maceda v. Macaraig, 197 SCRA 771 (1991) -- Commonwealth Act No. 120 created the National Power Corporation as a public corporation to undertake the development of hydraulic power and the production of power and the production of power from other sources R.A. no 358 granted NPC tax and duty exemption RA no 6395 revised the charter of the NPC Congress declared as a natural policy the total electrification of the country PD no 380 amended some provisions of the former act -- the exemption of NPC from taxes, duties, fees, imposts and other charges imposed directly or indirectly on all petroleum products used by NPC PD no. 938 further amended the provision

PD no 1931 withdrew all tax exemption granted in favor of GOCC including their subsidiaries; also empowered the President and /or Finance Minister, upon recommendation of the FIRB (Fiscal Incentives Review Board) to restore, partially or totally, the exemption withdrawn. FIRB issued Resolution No. 10-85 restoring tax and duty exemption privileges of NPC EO no 93 again withdrew once again all tax and duty incentives granted to government and private entities but it gave authority to FIRB to restore, revise the scope and prescribe the date of effectivity of such tax and/or duty exemptions. FIRB issued Resolution No. 17-87 restoring NPCs tax and duty exemptionthe president, through respondent Macaraig confirmed and approved FIRB Resolution no.17-87.

Petitioner, as a member of Phil. Senate introduced a resolution directing the Senate Blue Ribbon

Committee to conduct a formal and extensive Inquiry into reported Massive Tax Manipulations and Evasions by Oil Companies which were made possible by their availing of the non-existing exemption of NPC ISSUE: Whether or not there was valid delegation of quasilegislative power granted to FIRB by EO no 93?

Some Notes on Direct and Indirect Taxes: Direct Taxes those which a taxpayer is directly liable on the transaction or business it engages in. Examples are: custom duties, ad valorem taxes paid by oil companies for importation of crude oil Indirect Taxes paid by persons who can shift the burden upon someone else. Examples are: ad valorem taxes that oil companies pay to BIR upon removal of petroleum products from its refinery can be shifted to its buyer, like the NPC. EASTERN SHIPPPING LINES VS POEA POEA: Cases under the Jurisdiction of POEA Facts: Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but by the Social Security System and should have been filed against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the complainant. The decision is challenged by the petitioner on the principal ground that the POEA had no jurisdiction over the case as the husband was not an overseas worker. Issue: W/N the issuance of Memorandum Circular No. 2 is a violation of non-delegation of powers Held: The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their rights. It replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "original and exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law or contract involving Filipino contract workers, including seamen." The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984. This circular prescribed a standard contract to be

Lesson: Executive Order No. 93 is complete and it also provided sufficient standard. A reading of Section 3 of said law shows that it set the policy to be the greater national interest. Also, delegation of legislative power has become the rule and its nondelegation the exception. SCs words: The standards of the delegated power are also clearly provided for. The required "standard" need not be expressed. The observation of petitioner that the approval of the President was not even required in said Executive Order of the tax exemption privilege approved by the FIRB, unlike in previous similar issuances, is not well-taken. On the contrary, under Section 1 (f) of Executive Order No. 93, aforestated, such tax and duty exemptions extended by the FIRB must be approved by the President. In this case, FIRB Resolution No. 17-87 was approved by the respondent Executive Secretary, by authority of the President, on October 15, 1987. Thus, in the case of Tablarin vs. Gutierrez, 51 this Court enunciated the rationale in favor of delegation of legislative functions The legislative authority could not or is not expected to state all the detailed situations wherein the tax exemption privileges of persons or entities would be restored. The task may be assigned to an administrative body like the FIRB. E.O. No. 93 is complete in itself and constitutes a valid delegation of legislative power to the FIRB. And as above discussed, the tax exemption privilege that was restored to NPC by FIRB Resolution No. 17-87 of June 1987 includes exemption from indirect taxes and duties on petroleum products used in its operation. The tax exemption is intended not only to insure that the NPC shall continue to generate electricity for the country but more importantly, to assure cheaper rates to be paid by consumers. There would be no loss to the government. The said amount shall accrue to the benefit of the NPC, a government corporation, so as to enable it to sustain its tremendous task of providing electricity for the country and at the least cost to the consumers. Denying this tax exemption would mean hampering if not paralyzing the operations of the NPC. The resulting increased revenue in the government will also mean increased power rates to be shouldered by the consumers if the NPC is to survive and continue to provide our power requirements. 59 The greater interest of the people must be paramount.

adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen for overseas employment. But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-delegation of legislative power. It contends that no authority had been given the POEA to promulgate the said regulation; and even with such authorization, the regulation represents an exercise of legislative discretion which, under the principle, is not subject to delegation. GENERAL RULE: Non-delegation of powers; exception It is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the legislature to the delegate. Memorandum Circular No. 2 is an administrative regulation. The model contract prescribed thereby has been applied in a significant number of the cases without challenge by the employer. The power of the POEA (and before it the National Seamen Board) in requiring the model contract is not unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority. That standard is discoverable in the executive order itself which, in creating the Philippine Overseas Employment Administration, mandated it to protect the rights of overseas Filipino workers to "fair and equitable employment practices." Two Tests of Valid Delegation of Legislative Power There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is to enforce it. Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegates authority and prevent the delegation from running riot. Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative. Power of Subordinate Legislation The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the power of subordinate legislation.

With this power, administrative bodies may implement the broad policies laid down in statute by filling in the details which the Congress may not have the opportunity or competence to provide. Memorandum Circular No. 2 is one such administrative regulation

Rabor v. CSC Facts: Dionisio M. Rabor is a Utility Worker in the Office of the Mayor, Davao City. He entered the government service as a Utility Worker on 10 April 1978 at the age of 55 years. Sometime in May 1991, an official in the Office of the Mayor of Davao City, advised Dionisio M. Rabor to apply for retirement, considering that he had already more than 68 years old. Rabor responded by showing a GSIS certificate with a notation to the effect that his service is extended for him to complete the 15-years requirement for retirement. The Davao City Government wrote to the Regional Director of the Civil Service Commission, Region XI, Davao City informing the latter of the foregoing and requesting advice as to what action should be taken on Rabors case. Director Caward replied by saying that Rabors continued employment is contrary to Office of the President M.C. No. 65 hence, it is non-extendible. Mayor Duterte furnished Rabor a copy of Cawads letter and ordered him not to work anymore. Rabor asked Director Cawad for extension of his job until he completed the 15-year requirement but was denied. Rabor then asked OP for an extension. His request was referred by OP to CSC and thereafter CSC denied Rabors request Rabor asked for reconsidered of CSC ruling citing Cena case but was denied. Rabor reiterated his request to Mayor Duterte but was rebuffed. Hence, this petition. Issue: WON Rabor request for extension should be granted in view of Cena case Held: No. Cena doctrine overturned. In Cena v. CSC, the Court reached its conclusion primarily on the basis of the "plain and ordinary meaning" of Section 11(b) of P.D. No. 1146. While Section 11 (b) appeared cast in verbally unqualified terms, there were (and still are) two (2) administrative issuances which prescribe limitations on the extension of service that may be granted to an employee who has reached sixty-five (65) years of age. These are CSC Circular No. 27, s. 1990 and OPM.C. No. 65. The Court resolved the challenges posed by the above two (2)administrative regulations by, firstly, considering as invalid Civil Service Memorandum No. 27 and, secondly, by interpreting the Office of the President's Memorandum Circular No. 65 as inapplicable to the case of Gaudencio T. Cena. Nevertheless, the Court now ruled that the SC in Cena made a narrow interpretation. It is incorrect to decide the issue on the basis only of PD 1146.Reading the pertinent provisions the Admin Code particularly the provisions governing the CSC, it is clear that both

the Admin Code and PD 1146 are the governing laws relating to retirement of government officials and employees. It was on the basis of the above quoted provisions of the 1987 Administrative Code that the Civil Service Commission promulgated its Memorandum Circular No. 27. In doing so, the Commission was acting as "the central personnel agency of the government empowered to promulgate policies, standards and guidelines for efficient, responsive and effective personnel administration in the government." It was also discharging its function of "administering the retirement program for government officials and employees" and of "evaluat[ing] qualifications for retirement." It is also incorrect to say that limitation of permissible extensions of service after an employee has reached sixty-five (65) years of age has no reasonable relationship or is not germane to the foregoing provisions of the present Civil Service Law. The physiological and psychological processes associated with ageing in human beings are in fact related to the efficiency and quality of the service that may be expected from individual persons.CSC Memo No. 27 is not invalid for having gone beyond the parameters set by PD 1146. In fact what the legislature intends is that the CSC should fill in the details in the implementation of PD 1146. Civil Service Commission is charged by the 1987 Administrative Code with providing leadership and assistance in the development and retention of qualified and efficient work force in the Civil Service and with the enforcement of the constitutional and statutory provisions, relative to the retirement and the regulation for the effective implementation of the retirement of government officials and employee. ABAKADA Guro Party List v. Purisima, G.R. No. 166715, August 14, 2008 Lessons: (1) Clarifying the 2 tests. (2) It is unlawful for congress to exercise veto on the IRRs of an administrative agency. SCs words: On the 2 tests: Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the sufficient standard test. A law is complete when it sets forth therein the policy to be executed, carried out or implemented by the delegate. It lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map out the boundaries of the delegates authority and prevent the delegation from running riot. To be sufficient, the standard must specify the limits of the delegates authority, announce the legislative policy and identify the conditions under which it is to be implemented. RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy of the law:

SEC. 2. Declaration of Policy It is the policy of the State to optimize the revenue-generation capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by providing for a system of rewards and sanctions through the creation of a Rewards and Incentives Fund and a Revenue Performance Evaluation Board in the above agencies for the purpose of encouraging their officials and employees to exceed their revenue targets. Section 4 canalized within banks that keep it from overflowing the delegated power to the President to fix revenue targets: SEC. 4. Rewards and Incentives Fund A Rewards and Incentives Fund, hereinafter referred to as the Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in excess of their respective revenue targets of the year, as determined by the Development Budget and Coordinating Committee (DBCC), in the following percentages: Excess of Collection of the Excess the Revenue Targets Percent (%) of the Excess Collection to Accrue to the Fund 30% or below 15% More than 30% 15% of the first 30% plus 20% of the remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the year when the revenue collection target was exceeded and shall be released on the same fiscal year. Revenue targets shall refer to the original estimated revenue collection expected of the BIR and the BOC for a given fiscal year as stated in the Budget of Expenditures and Sources of Financing (BESF) submitted by the President to Congress. The BIR and the BOC shall submit to the DBCC the distribution of the agencies revenue targets as allocated among its revenue districts in the case of the BIR, and the collection districts in the case of the BOC. xxx xxx xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected respectively of the BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by the President to Congress. Thus, the determination of revenue targets does not rest solely on the President as it also undergoes the scrutiny of the DBCC.

On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions under which officials and employees whose revenue collection falls short of the target by at least 7.5% may be removed from the service: SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following powers and functions: (b) To set the criteria and procedures for removing from service officials and employees whose revenue collection falls short of the target by at least seven and a half percent (7.5%), with due consideration of all relevant factors affecting the level of collection as provided in the rules and regulations promulgated under this Act, subject to civil service laws, rules and regulations and compliance with substantive and procedural due process: Provided, That the following exemptions shall apply:

b. Congressional investigation - While congressional scrutiny is regarded as a passive process of looking at the facts that are readily available, congressional investigation involves a more intense digging of facts. The power of Congress to conduct investigation is recognized by the 1987 Constitution under section 21, Article VI, c. Legislative supervision - The third and most encompassing form by which Congress exercises its oversight power is thru legislative supervision. Supervision connotes a continuing and informed awareness on the part of a congressional committee regarding executive operations in a given administrative area. While both congressional scrutiny and investigation involve inquiry into past executive branch actions in order to influence future executive branch performance, congressional supervision allows Congress to scrutinize the exercise of delegated law-making authority, and permits Congress to retain part of that delegated authority. Congress has two options when enacting legislation to define national policy within the broad horizons of its legislative competence. It can itself formulate the details or it can assign to the executive branch the responsibility for making necessary managerial decisions in conformity with those standards. In the latter case, the law must be complete in all its essential terms and conditions when it leaves the hands of the legislature. Thus, what is left for the executive branch or the concerned administrative agency when it formulates rules and regulations implementing the law is to fill up details (supplementary rulemaking) or ascertain facts necessary to bring the law into actual operation (contingent rule-making). Administrative regulations enacted by administrative agencies to implement and interpret the law which they are entrusted to enforce have the force of law and are entitled to respect. Such rules and regulations partake of the nature of a statute and are just as binding as if they have been written in the statute itself. As such, they have the force and effect of law and enjoy the presumption of constitutionality and legality until they are set aside with finality in an appropriate case by a competent court. Congress, in the guise of assuming the role of an overseer, may not pass upon their legality by subjecting them to its stamp of approval without disturbing the calculated balance of powers established by the Constitution. In exercising discretion to approve or disapprove the IRR based on a determination of whether or not they conformed with the provisions of RA 9335, Congress arrogated judicial power unto itself, a power exclusively vested in this Court by the Constitution. YES. R.A. No. 9335 is constitutional, except for Section 12 of the law which creates a Joint Congressional Oversight Committee to review the laws IRR.

On legislative veto: The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of approving the implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From then on, it became functus officio and ceased to exist. Hence,

The issue ; -- its alleged encroachment on the executive

function of implementing and enforcing the law may be considered moot and academic. Concept and bases of congressional oversight Broadly defined, the power of oversight embraces all activities undertaken by Congress to enhance its understanding of and influence over the implementation of legislation it has enacted. Clearly, oversight concerns post-enactment measures undertaken by Congress: (a) to monitor bureaucratic compliance with program objectives, (b) to determine whether agencies are properly administered, (c) to eliminate executive waste and dishonesty, (d) to prevent executive usurpation of legislative authority, and (d) to assess executive conformity with the congressional perception of public interest. Categories of congressional oversight functions The acts done by Congress purportedly in the exercise of its oversight powers may be divided into three categories, namely: scrutiny, investigation and supervision. a. Scrutiny - Congressional scrutiny implies a lesser intensity and continuity of attention to administrative operations. Its primary purpose is to determine economy and efficiency of the operation of government activities. In the exercise of legislative scrutiny, Congress may request information and report from the other branches of government. It can give recommendations or pass resolutions for consideration of the agency involved.

Board of Trustees v. Velasco, G.R. No. 170436, February 2, 2011 Lesson: Internal rules do not need publication. SCs words: Not all rules and regulations adopted by every government agency are to be filed with the UP Law Center. Only those of general or of permanent character are to be filed. According to the UP Law Centers guidelines for receiving and publication of rules and regulations, interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the Administrative agency and not the public, need not be filed with the UP Law Center. Resolution No. 372 was about the new GSIS salary structure, Resolution No. 306 was about the authority to pay the 2002 Christmas Package, and Resolution No. 197 was about the GSIS merit selection and promotion plan. Clearly, the assailed resolutions pertained only to internal rules meant to regulate the personnel of the GSIS. There was no need for the publication or filing of these resolutions with the UP Law Center. ALSO: The trial court was correct in declaring that respondents had the right to be presumed innocent until proven guilty. This means that an employee who has a pending administrative case filed against him is given the benefit of the doubt and is considered innocent until the contrary is proven. In this case, respondents were placed under preventive suspension for 90 days from 23 May 2002 to 21 August 2002 and that they were denied the benefits which GSIS employees were entitled to Resolution No. 306. After serving the period of their preventive suspension and without the administrative case being finally resolved, respondents should have been reinstated and entitled to the grant of step increment. BPI Leasing v. Court of Appeals, G.R. No. 127624, Nov. 18, 2003 Lesson: Subordinate and interpretative legislation distinguished. General rule is prospective application of administrative rules. SCs words: Administrative issuances may be distinguished according to their nature and substance: legislative and interpretative. A legislative rule is in the matter of subordinate legislation, designed to implement a primary legislation by providing the details thereof. An interpretative rule, on the other hand, is designed to provide guidelines to the law which the administrative agency is in charge of enforcing. The Court finds the questioned revenue regulation to be legislative in nature. Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to Section 277 of the NIRC (National Internal Revenue Code) Section 277 (now Section 244) is an express grant of authority to the Secretary of Finance to promulgate all needful rules and regulations for the effective enforcement of the provisions of the NIRC. In Paper Industries Corporation of the Philippines v. Court of Appeals, the

Court recognized that the application of Section 277 calls for none other than the exercise of quasi-legislative or rule-making authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was issued pursuant to the rule-making power of the Secretary of Finance, thus making it legislative and not interpretative as alleged by BLC. BLC further posits that, assuming the revenue regulation is legislative in nature, it is invalid. BLC argues that Revenue Regulation 19-86 should retroact to the date of effectivity of the law it seeks to interpret. After upholding the validity of Revenue Regulation 19-86, the Court now resolves whether its application should be prospective or retroactive. On non-retroactivity: The principle is well entrenched that statutes, including administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary is manifest by express terms or by necessary implication. In the present case, there is no indication that the revenue regulation may operate retroactively. Furthermore, there is an express provision stating that it shall take effect on January 1, 1987, and that it shall be applicable to all leases written on or after the said date. Being clear on its prospective application, it must be given its literal meaning and applied without further interpretation. Thus, BLC is not in a position to invoke the provisions of Revenue Regulation 19-86 for lease rentals it received prior to January 1, 1987. It is also apt to add that tax refunds are in the nature of tax exemptions. As such, these are regarded as in derogation of sovereign authority and are to be strictly construed against the person or entity claiming the exemption. The burden of proof is upon him who claims the exemption and he must be able to justify his claim by the clearest grant under Constitutional or statutory law, and he cannot be permitted to rely upon vague implications. Nothing that BLC has raised justifies a tax refund.