QUASI-LEGISLATIVE POWER (RULE MAKING POWER)
§ Legislative power
Power to make, alter, 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. Delegation to the local governments (e.g. Sec. 48, Local Government Code)
c. Delegation to the people
d. Delegation to the Supreme Court (e.g. Sec. 5(5), Art. VIII, Constitution)
e. Delegation to Administrative Agencies.
Cases:
1. US v. Barrias, 11 Phil. 327 (1908)
Lesson: Fixing of penalties for violation of laws is a matter purely within the hands of the legislature.
SC’s words: The complaint in this instance was framed with reference, as its authority, to sections 311 and 319 [19 and 311] of Act No. 355, of the Philippine Customs Administrative Act, as amended by Acts Nos. 1235 and 1480. Under Act No. 1235, the Collector is not only empowered to make suitable regulations, but also to "fix penalties for violation thereof," not exceeding a fine of P500. This provision of the statute does, indeed, present a serious question.
In the case of The Board of Harbor Commissioners of the Port of Eureka vs. Excelsior Redwood Company (88 Cal., 491), it was ruled that harbor commissioners can not impose a penalty under statutes authorizing them to do so, the court saying: "Conceding that the legislature could delegate to the plaintiff the authority to make rules and regulations with reference to the navigation of Humboldt Bay, the penalty for the violation of such rules and regulations is a matter purely in the hands of the legislature."
Notes:
"One of the settled maxims in constitutional law is, that the power conferred upon the legislature to make laws can not be delegated by that department to any other body or authority. Where the sovereign power of the State has located the authority, there it must remain; and by the constitutional agency alone the laws must be made until the constitution itself is changed. The power to whose judgment, wisdom, and patriotism this high prerogative has been intrusted can not relieve itself of the responsibility by choosing other agencies upon which the power shall be developed, nor can it substitute the judgment, wisdom, and patriotism of any other body for those to which alone the people have seen fit to confide this sovereign trust." (Cooley's Constitutional Limitations, 6th ed., p. 137.)
This doctrine is based on the ethical principle that such a delegated power constitutes not only a right but a duty to be performed by the delegate by the instrumentality of his own judgment acting immediately upon the matter of legislation and not through the intervening mind of another.
2. People v. Vera, 65 Phil. 56 (1937)
Lesson: Old Probation Law violated the doctrine of non-delegation when it placed the discretion to the local governments the decision to allocate for the salary of the probation officer.
3. Maceda v. Macaraig, 197 SCRA 771 (1991)
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 non-delegation the exception.
SC’s words: The standards of the delegated power are also clearly provided for. The required "standard" need not be expressed. In Edu vs. Ericta and in De la Llana vs. Alba, this Court held: "The standard may be either express or implied. If the former, the non-delegated objection is easily met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole."
In People vs. Rosenthal the broad standard of "public interest" was deemed sufficient. In Calalang vs. Williams, it was "public welfare" and in Cervantes vs. Auditor General, it was the purpose of promotion of "simplicity, economy and efficiency." And, implied from the purpose of the law as a whole, "national security" was considered sufficient standard and so was "protection of fish-fry or fish eggs."
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.
Mr. Justice Isagani A. Cruz commenting on the delegation of legislative power stated
"The latest in our jurisprudence indicates that delegation of legislative power has become the rule and its non-delegation the exception. The reason is the increasing complexity of modern life and many technical fields of governmental functions as in matters pertaining to tax exemptions. This is coupled by the growing inability of the legislature to cope directly with the many problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present day undertakings, the legislature may not have the competence, let alone the interest and the time, to provide the required direct and efficacious, not to say specific solutions."
Thus, in the case of Tablarin vs. Gutierrez, 51 this Court enunciated the rationale in favor of delegation of legislative functions –
"One thing however, is apparent in the development of the principle of separation of powers and that is that the maxim of delegatus non potest delegare or delegati potestas non potest delegare, adopted this practice (Delegibus et Consuetudiniis, Anglia edited by G.E. Woodline, Yale University Press, 1922, Vol. 2, p. 167) but which is also recognized in principle in the Roman Law (d. 17.18.3) has been made to adapt itself to the complexities of modern government, giving rise to the adoption, within certain limits, of the principle of subordinate legislation, not only in the United States and England but in practically all modern governments. (People vs. Rosenthal and Osmeña, 68 Phil. 318, 1939). Accordingly, with the growing complexities of modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a constantly growing tendency toward the delegation of greater power by the legislative, and toward the approval of the practice by the Courts." (Emphasis supplied.)
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.
Moreover, all presumptions are indulged in favor of the constitutionality and validity of the statute. Such presumption can be overturned if its invalidity is proved beyond reasonable doubt. Otherwise, a liberal interpretation in favor of constitutionality of legislation should be adopted.
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.
4. Eastern Shipping Lines, Inc. v. POEA, 166 SCRA 533 (1988)
Lesson: 2 tests explained. Also, the reason for the delegation.
SC’’s words: 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 enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot. 14 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.
The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally pertain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in the particular fields assigned to them.
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 a statute by "filling in" the details which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law.
Memorandum Circular No. 2 is one such 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."
5. Rabor v. CSC, 61 SCAD 569 or 244 SCRA 614 (1995)
Lesson: High degree of detail not necessary in a law that delegates power to administrative agencies to exercise “subordinate legislation.”
SC’s words: Clearly, therefore, Cena when it required a considerably higher degree of detail in the statute to be implemented, went against prevailing doctrine. It seems clear that if the governing or enabling statute is quite detailed and specific to begin with, there would be very little need (or occasion) for implementing administrative regulations. It is, however, precisely the inability of legislative bodies to anticipate all (or many) possible detailed situations in respect of any relatively complex subject matter, that makes subordinate, delegated rule-making by administrative agencies so important and unavoidable. All that may be reasonably demanded is a showing that the delegated legislation consisting of administrative regulations are germane to the general purposes projected by the governing or enabling statute. This is the test that is appropriately applied in respect of Civil Service Memorandum Circular No. 27, Series of 1990, and to this test we now turn.
We consider that the enabling statute that should appropriately be examined in the present Civil Service law - found in Book V, Title I, Subtitle A, of Executive Order No. 292 dated 25 July 1987, otherwise known as the Administrative Code of 1987 - and not alone P.D. No. 1146, otherwise known as the "Revised Government Service Insurance Act of 1977." For the matter of extension of service of retirees who have reached sixty-five (65) years of age is an area that is covered by both statutes and not alone by Section 11 (b) of P.D. No. 1146. This is crystal clear from examination of many provisions of the present civil service law.
§ Delegation of legislative power to Administrative Agencies
a. Quasi-legislative or rule-making powers of administrative agencies
b. Kinds of rule-making power
1. Rule-making by reason of particular delegation of authority (subordinate legislation)
2. Rule-making by the constructuion and interpretation of a statute being administered (interpretative legislation)
3 kinds:
§ Interpretation as incident of the execution of a law
§ Interpretation handed down by the Secretary of Justice upon the request of a government agency or official
§ Intyerpretation in adversary proceedings
3. Determination of facts under a delegated power as to which a statue shall go into effect (contingent legislation)
c. Reasons for delegation of legislative power
Delegation of legislative pwer has become more and more frequent, if not necessary. This has led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception.
The reasons for the delegation of legislative power are the increasing complexity of the tast of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activites and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary.
d. What can and cannot be delegated
What can be delegated – Legislature may properly delegate to administrative agency any legislative power other than the making, altering or repealing of a law, the determination of legislative policies and objectives to be achieved, and the formulation and promulgation of a defined and binding rule of conduct. It can delegate the discretion as to how the law shall be enforced, to issue rules to fill in details, to ascertain facts on which the law will operate, to exercise police power, and to fix rates. To be valid, however, the delegation has to pass the competence and sufficiency of standard tests.
What cannot be delegated – Doctrine of separation of pwers prohibits the delegation of that which is purely legislative in nature. This consists of the power to make the law, or to determine what the law shall be, and to alter or repeal it.
e. Test to determine validity of delegation
1. Completeness 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.
2. Sufficient standard test - There must be adequate guidelines or limitations in the law to map out the boundaries of the delegate’s authority and prevent the delegation from running riot.
Case:
1. 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.
SC’s 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 delegate’s authority and prevent the delegation from running riot. To be sufficient, the standard must specify the limits of the delegate’s 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 Board’s 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:
xxx xxx xxx
(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:
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 of 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.
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 rule-making) 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.
2. Gutierrez v. DBM, G.R. No. 153266, March 18, 2010 (and other allied cases)
Lesson: If the law is clear, no need for IRR to be implemented. In this case, no need for publication of the IRR.
SC’s words: As will be noted from the first sentence above, “all allowances” were deemed integrated into the standardized salary rates except the following:
(1) representation and transportation allowances;
(2) clothing and laundry allowances;
(3) subsistence allowances of marine officers and crew on board government vessels;
(4) subsistence allowances of hospital personnel;
(5) hazard pay;
(6) allowances of foreign service personnel stationed abroad; and
(7) such other additional compensation not otherwise specified in Section 12 as may be determined by the DBM.
But, while the provision enumerated certain exclusions, it also authorized the DBM to identify such other additional compensation that may be granted over and above the standardized salary rates. In Philippine Ports Authority Employees Hired After July 1, 1989 v. Commission on Audit, the Court has ruled that while Section 12 could be considered self-executing in regard to items (1) to (6), it was not so in regard to item (7). The DBM still needed to amplify item (7) since one cannot simply assume what other allowances were excluded from the standardized salary rates. It was only upon the issuance and effectivity of the corresponding implementing rules and regulations that item (7) could be deemed legally completed.
Delegated rule-making is a practical necessity in modern governance because of the increasing complexity and variety of public functions. Congress has endowed administrative agencies like respondent DBM with the power to make rules and regulations to implement a given legislation and effectuate its policies. Such power is, however, necessarily limited to what the law provides. Implementing rules and regulations cannot extend the law or expand its coverage, as the power to amend or repeal a statute belongs to the legislature. Administrative agencies implement the broad policies laid down in a law by “filling in” only its details. The regulations must be germane to the objectives and purposes of the law and must conform to the standards prescribed by law.
On publication: It is a settled rule that publication is required as a condition precedent to the effectivity of a law to inform the public of its contents before their rights and interests are affected by the same. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation.
Nonetheless, as previously discussed, the integration of COLA into the standardized salary rates is not dependent on the publication of CCC 10 and NCC 59. This benefit is deemed included in the standardized salary rates of government employees since it falls under the general rule of integration—“all allowances.”
More importantly, the integration was not by mere legal fiction since it was factually integrated into the employees’ salaries. Records show that the government employees were informed by their respective offices of their new position titles and their corresponding salary grades when they were furnished with the Notices of Position Allocation and Salary Adjustment (NPASA). The NPASA provided the breakdown of the employee’s gross monthly salary as of June 30, 1989 and the composition of his standardized pay under R.A. 6758. Notably, the COLA was considered part of the employee’s monthly income.
In truth, petitioners never really suffered any diminution in pay as a consequence of the consolidation of COLA into their standardized salary rates. There is thus nothing in these cases which can be the subject of a back pay since the amount corresponding to COLA was never withheld from petitioners in the first place.
Consequently, the non-publication of CCC 10 and NCC 59 in the Official Gazette or newspaper of general circulation does not nullify the integration of COLA into the standardized salary rates upon the effectivity of R.A. 6758. As the Court has said in Philippine International Trading Corporation v. Commission on Audit, the validity of R.A. 6758 should not be made to depend on the validity of its implementing rules.
3. 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.
SC’s 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. 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
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.
4. Board of Trustees v. Velasco, G.R. No. 170436, February 2, 2011
Lesson: Internal rules do not need publication.
SC’s 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 Center’s 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.
f. Requisites for validity of administrative rules and regulations
1. Must be germane to the objects and purposes of the law
2. Conform to the standards that the law prescribes
3. Must be reasonable
4. Must be related solely to carrying into effects the general provisions of the law.
Cases:
1. Dagan v. Philippine Racing Commission, G.R. No. 175220, February 12, 2009
Lesson: Requisites, explained.
SC’s words: The validity of an administrative issuance, such as the assailed guidelines, hinges on compliance with the following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the prescribed procedure;
3. It must be within the scope of the authority given by the legislature;
4. It must be reasonable.
All the prescribed requisites are met as regards the questioned issuances. Philracom’s authority is drawn from P.D. No. 420. The delegation made in the presidential decree is valid. Philracom did not exceed its authority. And the issuances are fair and reasonable. Xxx
P.D. No. 420 hurdles the tests of completeness and standards sufficiency.
Philracom was created for the purpose of carrying out the declared policy in Section 1 which is “to promote and direct the accelerated development and continued growth of horse racing not only in pursuance of the sports development program but also in order to insure the full exploitation of the sport as a source of revenue and employment.” Furthermore, Philracom was granted exclusive jurisdiction and control over every aspect of the conduct of horse racing, including the framing and scheduling of races, the construction and safety of race tracks, and the security of racing. P.D. No. 420 is already complete in itself.
Clearly, there is a proper legislative delegation of rule-making power to Philracom. Clearly too, for its part Philracom has exercised its rule-making power in a proper and reasonable manner. More specifically, its discretion to rid the facilities of MJCI and PRCI of horses afflicted with EIA is aimed at preserving the security and integrity of horse races.
Petitioners also question the supposed delegation by Philracom of its rule-making powers to MJCI and PRCI.
There is no delegation of power to speak of between Philracom, as the delegator and MJCI and PRCI as delegates. The Philracom directive is merely instructive in character. Philracom had instructed PRCI and MJCI to “immediately come up with Club’s House Rule to address the problem and rid their facilities of horses infected with EIA.” PRCI and MJCI followed-up when they ordered the racehorse owners to submit blood samples and subject their race horses to blood testing. Compliance with the Philracom’s directive is part of the mandate of PRCI and MJCI under Sections 11 of R.A. No. 7953 and Sections 1 and 2 of 8407.
As correctly proferred by MJCI, its duty is not derived from the delegated authority of Philracom but arises from the franchise granted to them by Congress allowing MJCI “to do and carry out all such acts, deeds and things as may be necessary to give effect to the foregoing.” As justified by PRCI, “obeying the terms of the franchise and abiding by whatever rules enacted by Philracom is its duty.”
As to the second requisite, petitioners raise some infirmities relating to Philracom’s guidelines. They question the supposed belated issuance of the guidelines, that is, only after the collection of blood samples for the Coggins Test was ordered. While it is conceded that the guidelines were issued a month after Philracom’s directive, this circumstance does not render the directive nor the guidelines void. The directive’s validity and effectivity are not dependent on any supplemental guidelines. Philracom has every right to issue directives to MJCI and PRCI with respect to the conduct of horse racing, with or without implementing guidelines.
On publication: Petitioners also argue that Philracom’s guidelines have no force and effect for lack of publication and failure to file copies with the University of the Philippines (UP) Law Center as required by law.
As a rule, the issuance of rules and regulations in the exercise of an administrative agency of its quasi-legislative power does not require notice and hearing, In Abella, Jr. v. Civil Service Commission, this Court had the occasion to rule that prior notice and hearing are not essential to the validity of rules or regulations issued in the exercise of quasi-legislative powers since there is no determination of past events or facts that have to be established or ascertained.
The third requisite for the validity of an administrative issuance is that it must be within the limits of the powers granted to it. The administrative body may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute.
The assailed guidelines prescribe the procedure for monitoring and eradicating EIA. These guidelines are in accord with Philracom’s mandate under the law to regulate the conduct of horse racing in the country.
Anent the fourth requisite, the assailed guidelines do not appear to be unreasonable or discriminatory. In fact, all horses stabled at the MJCI and PRCI’s premises underwent the same procedure. The guidelines implemented were undoubtedly reasonable as they bear a reasonable relation to the purpose sought to be accomplished, i.e., the complete riddance of horses infected with EIA.
It also appears from the records that MJCI properly notified the racehorse owners before the test was conducted. Those who failed to comply were repeatedly warned of certain consequences and sanctions.
Furthermore, extant from the records are circumstances which allow respondents to determine from time to time the eligibility of horses as race entries. The lease contract executed between petitioner and MJC contains a proviso reserving the right of the lessor, MJCI in this case, the right to determine whether a particular horse is a qualified horse. In addition, Philracom’s rules and regulations on horse racing provide that horses must be free from any contagious disease or illness in order to be eligible as race entries.
All told, we find no grave abuse of discretion on the part of Philracom in issuing the contested guidelines and on the part MJCI and PRCI in complying with Philracom’s directive.
2. Smart Communications Inc., v. NTC, G.R. No. 151908, August 12, 2003
Lesson: Rule-making and Adjudication distinguished.
SC’s words: Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.
The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. They must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an administrative order, the former must prevail.
Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority, it was held: The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule- making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine.
3. Conte v. Commission on Audit, 76 SCAD 16 or 264 SCRA 19 (1996)
Lesson: Administrative issuances should adhere to the statutes that they are supposed to implement.
SC’s words: It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail. A rule or regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. Though well-settled is the rule that retirement laws are liberally interpreted in favor of the retiree, nevertheless, there is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of any doubt as to the ultra-vires nature and illegality of the disputed resolution constrains us to rule against petitioners.
As a necessary consequence of the invalidity of Res. 56, we can hardly impute abuse of discretion of any sort to respondent Commission for denying petitioners’ request for reconsideration of the 3rd Indorsement of July 10, 1989. On the contrary, we hold that public respondent in its assailed Decision acted with circumspection in denying petitioners’ claim. It reasoned thus: “After a careful evaluation of the facts herein obtaining, this Commission finds the instant request to be devoid of merit. It bears stress that the financial assistance contemplated under SSS Resolution No. 56 is granted to SSS employees who opt to retire under R.A. No. 660. In fact, by the aggrieved parties’ own admission (page 2 of the request for reconsideration dated January 12, 1993), it is a financial assistance granted by the SSS management to its employees, in addition to the retirement benefits under Republic Act No. 660.” (underscoring supplied for emphasis) There is therefore no question, that the said financial assistance partakes of the nature of a retirement benefit that has the effect of modifying existing retirement laws particularly R.A. No. 660.
g. Penal rules and regulations
Cases:
1. People v. Santos, 63 Phil. 300 (1936)
Lesson: Effect when administrative agency issue orders that are beyond its authority.
SC’s words: The herein accused and appellee Augusto A. Santos is charged with having ordered his fishermen to manage and operate the motor launches Malabon II and Malabon III registered in his name and to fish, loiter and anchor within three kilometers of the shore line of the Island of Corregidor over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Commerce.
These acts constitute a violation of the conditional clause of section 28 above quoted, which reads as follows: "Provided, That boats not subject to license under Act No. 4003 and this order may fish within the areas mentioned above (within 3 kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, particularly Corregidor) only upon receiving written permission therefor, which permission may be granted by the Secretary of Agriculture and Commerce upon recommendation of the military or naval authorities concerned."
Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within three kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Commerce upon recommendation of the military and naval authorities concerned. Inasmuch as the only authority granted to the Secretary of Agriculture and Commerce, by section 4 of Act No. 4003, is to issue from time to time such instructions, orders, rules and regulations consistent with said Act, as may be necessary and proper to carry into effect the provisions thereof and for the conduct of proceedings arising under such provisions; and inasmuch as said Act No. 4003, as stated, contains no provisions similar to those contained in the above quoted conditional clause of section 28 of Administrative Order No. 2, the conditional clause in question supplies a defect of the law, extending it. This is equivalent to legislating on the matter, a power which has not been and cannot be delegated to him, it being exclusively reserved to the then Philippine Legislature by the Jones Law, and now to the National Assembly by the Constitution of the Philippines. Such act constitutes not only an excess of the regulatory power conferred upon the Secretary of Agriculture and Commerce, but also an exercise of a legislative power which he does not have, and therefore said conditional clause is null and void and without effect (12 Corpus Juris, 845; Rubi vs. Provincial Board of Mindoro, 39 Phil., 660; U. S. vs. Ang Tang Ho, 43 Phil., 1; U. S. vs. Barrias, 11 Phil., 327).
For the foregoing considerations, we are of the opinion and so hold that the conditional clause of section 28 of Administrative Order No. 2, issued by the Secretary of Agriculture and Commerce, is null and void and without effect, as constituting an excess of the regulatory power conferred upon him by section 4 of Act No. 4003 and an exercise of a legislative power which has not been and cannot be delegated to him.
2. People v. Que Po Lay, 94 Phil. (1954)
Lesson: Necessity of publication.
SC’s words: But the question of non-publication is fundamental and decisive. If as a matter of fact Circular No. 20 had not been published as required by law before its violation, then in the eyes of the law there was no such circular to be violated and consequently appellant committed no violation of the circular or committed any offense, and the trial court may be said to have had no jurisdiction. This question may be raised at any stage of the proceeding whether or not raised in the court below.
3. People v. Maceren, 79 SCRA 450 (1977)
Lesson: The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted.
SC’s words: The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing.
The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see Collector of Internal Revenue vs. Villaflor, 69 Phil. 319; Wise & Co. vs. Meer, 78 Phil. 655, 676; Del Mar vs. Phil. Veterans Administration, L-27299, June 27, 1973, 51 SCRA 340, 349).
There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Section 4 of the Fisheries Law provides that the Secretary "shall from time to time issue instructions, orders, and regulations consistent" with that law, "as may be necessary and proper to carry into effect the provisions thereof. That power is now vested in the Secretary of Natural Resources by section 7 of the Revised Fisheries Law, Presidential Decree No. 704.
Section 4(h) of Republic Act No. 3512 empower the Commissioner of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources, forms, instructions, rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries."
A penal statute is strictly construed. While an administrative agency has the right to make rules and regulations to carry into effect a law already enacted, that power should not be confused with the power to enact a criminal statute. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58 SE 2d 534; See 2 Am. Jr. 2nd 129-130).
Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority-granting statute, do not represent a valid exercise of the rule-making power but constitute an attempt by an administrative body to legislate (State vs. Miles, 5 Wash. 2nd 322; 105 Pac. 2nd 51).
In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body, and the order will be scrutinized with special care. (State vs. Miles, supra).
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