5. Busan Metropolitan City Ordinance on the Local Development Fund
- Article 1 (Purpose)
- The purpose of this Ordinance is to establish the Busan Metropolitan City Local Development Fund (hereinafter referred to as the "Fund") for the securing and supplying funds needed to promote the welfare of citizens and to support local public enterprises and local development, and to prescribe such matters to effectively manage and use it.
- Article 2 (Establishment of Special Account)① The Busan Metropolitan City Local Development Fund Special Account shall be established.
- ② Paragraph 13 of the Local Public Enterprises Act (hereinafter referred to as the "Law") shall apply to the Special Account pursuant to Paragraph 1.
- Article 3 (Designation of Manager)
- The manager pursuant to Article 7 of the Law shall be designated, and the Director General for the Policy and Planning shall be the manager.
- Article 4(Source of Fund)
- The Fund shall be raised through the following sources:
- 1. Support and loan from the government;
- 2. Contribution of the Busan Metropolitan City(hereinafter referred to as the "City")
- 3. Revenue from the issue of Busan Metropolitan Local Development Bond((hereinafter referred to as the "Local Development Bond");
- 4. Profits accrued from the operation of the Fund;
- 5. Money transfered from and into the general account, etc. for using as a separate circulation fund earmarked for a special purpose;
- 6. Other support for the establishment of the Fund.
- Article 5 (Fund Operation Plan)
- The Mayor of Busan Metropolitan City(hereinafter referred to
as the "Mayor") shall establish a Fund operation plan regarding the following matters:
- 1. Matters on the Fund operation scale;
- 2. Matters on the issue and repayment of the Local Development Bond;
- 3. Matters on the loan and repayment of the Fund;
- 4. Matters concerning the revenues and expenses of the Fund;
- 5. Other matters for the efficient management of the Fund.
- Article 7 (Issue and Registration of the Local Development Bond)
- ① The Mayor may issue the Local Development Bond pursuant to Article 19, Paragraph 2 for securing the investment source and for the local development with the approval of Busan Metropolitan Council.
- ② The Local Development Bond shall be issued with the registration to the register authority pursuant to Article 3 of the Registration of Bonds and Debentures Act.
- ③ The necessary matters for the method of issue, registration and other process, etc. shall be prescribed in Municipal Rules.
- Article 8 (Purchase of Local Development Bond, Etc.)① Any person falling under each of the
following subparagraphs shall purchase the Local Development Bond following the standard of
the Attached Table 1, and the persons who are exempted from the purchase shall be the
Attached Table 2. However, the business of the Busan Metropolitan City Superintendent of
Education shall be excluded.
- 1. Anyone who receives license, permission or authorization from the City or boroughs(Gu) and counties(Gun) (hereinafter referred to as the "Borough");
- 2. Anyone applies for report or registration to City or Borough;
- 3. Anyone enters into a contract of undertaking, service, purchase, repair or manufacture;
- ② The City shall not sell the Local Development Bond to persons subject to purchase pursuant to this Ordinance if the City and Borough issue other bonds under other Ordinance. However, this shall not apply when other law allows the issue of other bond,
- ③ When the bonds issued pursuant to Busan Metropolitan City Ordinance on the Urban Railroad is sold out during the fiscal year, the bond pursuant to this Ordinance shall be purchased throughout the rest of the fiscal year.
- ④ Necessary matters such as the applying process for purchasing of the Local Development Bond, the proof of purchase, etc. shall be prescribed in Municipal Rules.
- Article 9 (Repayment and Interest Rate of Local Development Bond) ① The principal and interest of the Local Development Bond shall be redeemed at the same time after 5 years from the issue date, and the interest rate shall be 2.5 percent of compound interest per year.
- ② The issue date of the Local Development Bond shall be the last date of the month which the selling date belongs. However, the interest accrued between the actual selling date and the issue date shall be paid at the time of selling.
- ③ The extinctive prescription of the Local Development Bond shall be 10 years for the principal and 5 years for the interest after the repayment date pursuant to Paragraph 1.
- ④ The Mayor shall make an official notice of the start of repayment on daily newspapers, the Busan Gazette and Internet Website of the City before one month of the starting date of repayment for the incoming repayment of the Local Development Bond, and the interest after the repayment date shall not be paid.
- ⑤ The principal and interest of the Local Development Bond shall not be redeemed before the
repayment date is not reached. However, they may be paid in case of following subpragraphs
and the process of repayment shall be determined by Municipal Rules:
- 1. When the reason of purchasing the Local Development Bond such as license, permission, authorization or contract is revoked, canceled or returned without the responsibility of the buyer;
- 2. When the buyer of the Local Development Bond turns out to be not eligible for the purchase, or the buyer purchased excessively over the legitimate limit.
- Article 10 (Entrustment of Selling and Redemption Business)
- The Mayor may entrust businesses concerning the selling and redemption of Local Development Bond to the main and branch office of the City Safe, or a financial institution designated by the Mayor.
- Article 11 (Loan of the Fund)① The Fund shall be provided with preference to local development activities such as water supply and drainage, expansion of road system, etc., the funding priority shall be decided based on the promotion of citizen's welfare, profits of business, balance of regions, and the necessary matters such as the process of loan, procedures, etc. shall be determined by Municipal Rules.
- ② The interest rate of the loan shall be 3.5 percent per year, the term of the loan shall be repaid equally for 10 years period after two years from the starting date of the loan.
- ③ When the Mayor wants to loan for the special purpose with the separate circulation fund pursuant to Article 4, Subparagraph 5, he/she may give loan with separate favorable interest rate within the limit of Paragraph 2.
- ④ Even before the date of repayment, the Mayor may retrieve the loan in part or whole if anyone who received the loan pursuant to Paragraph 1 uses it for other purpose than the original one.
- ⑤ When anyone received the loan delays the payment of principal and interest, he/she shall pay the arrears for the period from the next date of the original repayment day to the actual repayment date based on the general loan's arrears rate of the financial institution which is entrustd with the repayment business of the Local Development Bond, if the repayment date is a public holiday or a non-business day of a financial institution, the repayment shall be paid on the next business day.
- Article 12 (Management of the Fund)① The Mayor shall give loans from the Fund based on the priority pursuant to Article 11, Paragraph 1 and the year-round money flow.
- ② The Mayor may divert funds from other account within the budget limit of the same fiscal year pursuant to Article 65 of the Local Finance Act if the cash is insufficient for the management of the Fund.
- Article 12 (Management of the Fund)① The Mayor shall give loans from the Fund based on the priority pursuant to Article 11, Paragraph 1 and the year-round money flow.
- ② The Mayor may divert funds from other account within the budget limit of the same fiscal year pursuant to Article 65 of the Local Finance Act if the cash is insufficient for the management of the Fund.
- Article 13 (Designation of Account Managing Public Officials)① There shall be the following
accounting public officials pursuant to Article 34 of the Law:
- 1. The Fund accounting officer: the Director in charge of budget;
- 2. The government official in charge of income: the Deputy Director in charge of the Fund;
- The treasurer: the Deputy Director in charge of the Fund;
- 4. The Asset accounting officer: the Deputy Director in charge of the Fund.
- ② Besides the government officials pursuant to Paragraph 1, the administrator may determine seperately on the designation.
- Article 14 (Deliberation on the Fund Operation)
- The Busan Metropolitan City Financial Plan
Deliberative Committee shall deliberate on following matters for the effective operation and
management:
- 1. Matters on the Fund operation plan pursuant to Article 5;
- 2. Matters on the Fund loan pursuant to Article 11;
- 3. Other matters for the operation of the Fund which the Mayor deems necessary.
