Busan Metropolitan City Ordinance on Financial Support to the Passenger Transport Service : City Government

Article 1 (Purpose)
The purpose of this Ordinance is to prescribe the matters necessary for the subjects and methods to be subsidized or financed or the redemption of subsidies or loans to support a passenger transport operator financially under Article 51 (2) of the Passenger Transport Service Act (hereinafter referred to as the "Act").

Article 2 (Subject of Financial Support)
A person who may receive financial support (hereinafter referred to as "person eligible for financial support") shall be any person who operates passenger transport business falling under any of the following subparagraphs:
- 1. Business falling under any of the subparagraphs in Article 51 (2) of the Act;
- 2. Transfer discount system between public transportation means
- 3. Creation of public parking space; or
- 4. Other businesses necessary for promoting passenger transport service.

Article 3 (Route Bidding, etc. According to Operating the Non-Profit Route) (1) The Mayor may call for bids for financial support (hereinafter referred to as the "Route Bidding") concerning the non-profit route falling under any of the following subparagraphs:
- 1. In a case where no passenger transport wishes to operate the route which was run by business entity who lost its license since the route was unprofitable or
- 2. In other cases where the Mayor deemed it necessary to open a new non-profit route for the local resident's transportation convenience and the vitalization of local economy.
(2) The Mayor shall analyze operation earning and expenses based on the operation results, the current earnings, local traffic condition, and the demand for bus use, etc.
(3) The Mayor shall first appoint the person who demand the least subsidy if he/she intends to appoint a passenger transport operator through bidding the route.

Article 5 (Methods To Be Financed and the Procedure of Financial Support)
(1) The Mayor shall decide whether to finance or not considering the following matters comprehensively after hearing from relevant institutions or traffic experts, etc. where applications are submitted under Article 4:
- 1. Validity of financial support;
- 2. Adequacy of submitted fund and
- 3. The scale of available fund for each business, and etc.
(2) Susan Metropolitan City Ordinance on Subsidy Management shall apply mutatis mutandis to those matters concerning the procedure of financial support, the methods to be financed, and the supervision.

Article 6 (Redemption of the Loans, etc.) (1) The standards for redemption period of loans, the methods to be financed, and the interest rate forloans shall be as follow:
- 1. The loan period and principal redemption: the quarterly redemption in 3years with a 3-year grace period
- 2. The interest rate for loans: the market interest rates within the limit of annual 7 percent; and
- 3. Calculation of interest and collection: quarterly collection of annual interest from the loan date.
(2) The Mayor may take necessary measures such as the extension of redemption period of the loans for the change of demand for transportation, and etc.

Article 7 (Entrustment of Business) (1) The Mayor may entrust financial institutions, andetc. with the parts of businesses concerning financial support to a passenger transport operator. In this case, he/she must make an agreement with the entrusted institution.
(2) If the mayor intends to make an agreement with the entrusted institution, the contents of the contract shall include the purpose of entrustment, the entrustment fees, the period of entrustment, the obligation of the entrusted institutions, the responsibility in a case where the entrusted institution commits a breach of the said agreement on entrustment, and other necessary matters.

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