November 9, 2016 FB [2016] No.154
The finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning:
According to the Budget Law of the People’s Republic of China and the State Council’s Opinions on Strengthening the Management of Local Government Debt (Guo Fa [2014] No.43), our department has formulated the Measures for the Management of General Debt Budget of Local Governments. It is hereby issued, please implement it carefully.
Annex: Measures for the Administration of General Debt Budget of Local Governments
Cc: General Office of the State Council, Budget Working Committee of the NPC Standing Committee, Financial Ombudsman Offices of the Ministry of Finance in all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate plans.
Attachment:
Measures for the Administration of General Debt Budget of Local Governments
Chapter I General Provisions
Article 1 In order to regulate the general debt budget management of local governments, these Measures are formulated in accordance with the Budget Law of the People’s Republic of China, the State Council’s Opinions on Strengthening the Management of Local Government Debt (Guo Fa [2014] No.43) and other relevant provisions.
Article 2 General debts of local governments (hereinafter referred to as general debts) as mentioned in these Measures include general bonds of local governments (hereinafter referred to as general bonds), loans from international financial organizations and foreign governments with repayment responsibilities (hereinafter referred to as foreign loans), and general debts in the form of non-local government bonds as of December 31, 2014 (hereinafter referred to as general debts in the form of non-bonds).
Article 3 General debt revenue, arranged expenditure, debt service and issuance expenses shall be included in the general public budget management.
Article 4 General debt income shall be raised by issuing general bonds, except for foreign debt lending.
The governments of provinces, autonomous regions and municipalities directly under the Central Government are the main issuers of general bonds, and the provincial financial departments are responsible for the specific issuance. If it is really necessary for the governments of cities, autonomous prefectures, counties, autonomous counties, cities not divided into districts and municipal districts (hereinafter referred to as municipal and county governments) to issue general bonds, they should be included in the general debt budget management of the provinces, autonomous regions and municipalities directly under the Central Government, which will issue them uniformly and lend them to the municipal and county governments. With the approval of the provincial government, the municipal government under separate state planning can issue general bonds by itself.
Article 5 General debt income shall be used for public welfare capital expenditure and shall not be used for recurrent expenditure.
Article 6 A general debt shall have a repayment plan and a stable source of repayment funds.
The principal of general debt is repaid through general public budget revenue (including transfer to budget stabilization fund and other budget funds) and issuance of general bonds.
Interest on general debt shall be repaid through general public budget revenue (including transferred budget stabilization fund and other budget funds), and shall not be repaid through issuing general bonds.
Article 7 Non-bond general debts shall be replaced by general bonds within the time limit stipulated by the State Council.
Eighth to strengthen the local government debt management information construction, general debt budget revenue and expenditure into the financial budget management information system at the same level, general debt management into a unified national management information system.
Article 9 Measures for the budget management of foreign debt lending shall be formulated separately by the Ministry of Finance.
Chapter II General Debt Limits and Balances
Article 10 Within the general debt limit approved by the National People’s Congress or its Standing Committee, the Ministry of Finance and Administration, based on factors such as debt risk, financial situation, and overall consideration of national regulatory policies and the needs of public welfare projects in various regions, puts forward plans for general debt limits in different regions and new general debt limits in the current year, and issues them to provincial financial departments after being approved by the State Council.
The provincial financial department shall, before the end of October each year, put forward suggestions on increasing borrowing general debts and arranging public welfare capital expenditure projects in the next year in the region, and report them to the Ministry of Finance after being approved by the governments of provinces, autonomous regions and municipalities directly under the Central Government.
Article 11 The provincial finance department shall, within the local general debt limit issued by the Ministry of Finance, put forward a general debt limit plan for the current year for the provincial level and cities and counties under its jurisdiction based on factors such as debt risk, financial situation and overall consideration of the construction needs of public welfare projects in the local area, and submit it to the municipal and county finance departments after being approved by the provincial, autonomous regional and municipal governments.
The municipal and county financial departments shall put forward suggestions on issuing general bonds at the provincial level and arranging public welfare capital expenditure projects in advance, and report them to the provincial financial departments according to procedures after approval by the government at the corresponding level.
Twelfth provinces, autonomous regions and municipalities directly under the central government shall borrow general debts within the general debt limit, and the balance of general debts shall not exceed the local general debt limit.
The plan of issuing general bonds by provinces, autonomous regions and municipalities directly under the Central Government to repay the due principal of general debts shall be put forward by the provincial financial department in consideration of the actual needs of the corresponding level and cities and counties, and shall be submitted to the provincial, autonomous region and municipality directly under the Central Government for approval and then organized and implemented according to the regulations.
Chapter III Budget Preparation and Reply
Thirteenth to increase the income from borrowing general debt, the following contents should be included in the budget adjustment plan:
(1) General bond income raised by provinces, autonomous regions and municipalities directly under the Central Government within the newly-increased general debt limit;
(two) the general debt income of the city and county governments from the higher level government.
General debt income should be reflected under the total line of general public budget income, and the provincial level should be included in the corresponding budget account under "general debt income", and the city and county level should be included in the corresponding budget account under "local government general debt lending income".
Article 14 The expenditure for increasing the arrangement of borrowing general debts shall be included in the budget adjustment plan, including the expenditure at the same level and the expenditure at the lower level of lending. General debt expenditure should be clearly defined to specific projects, included in the management of financial expenditure budget project library, and linked with medium-term financial planning.
The expenditure of the general debt arrangement at this level shall be reflected in the total expenditure line of the general public budget and included in the relevant budget subjects according to the purpose of expenditure; Sub-lending expenditure should be reflected under the total line of general public budget expenditure and included in the corresponding budget subject under "debt lending expenditure".
Fifteenth general debt repayment expenditure should be based on the scale of general debt due in the current year, general public budget financial resources and other factors, and properly arranged, and included in the annual budget draft.
The general debt repayment expenditure should be reflected under the total line of general public budget expenditure and included in the corresponding budget subject under "local government general debt repayment expenditure".
Sixteenth general debt interest and issuance costs should be reasonably estimated according to the scale, interest rate and rate of general debt, and included in the overall arrangement of general public budget expenditure.
General debt interest and issuance expenses shall be reflected on the total line of general public budget expenditures. The general debt interest expense is included in the corresponding budget item under "local government general debt interest expense", and the issuance expense is included in the corresponding budget item under "local government general debt issuance expense".
Article 17 To increase the expenditure on borrowing general debts and corresponding arrangements, the financial department shall be responsible for the specific preparation of the general public budget adjustment plan, which shall be submitted by the government at the corresponding level to the Standing Committee of the people’s congress at the corresponding level for approval.
Article 18 Where a general debt is lent to a lower-level government, the financial department shall, after the approval of the people’s congress at the corresponding level or its standing committee, timely issue the budget for general debt lending to the relevant municipal and county-level financial departments.
After the approval of the people’s congress at the corresponding level or its standing Committee, the municipal and county governments that accept the general debt lending shall sign a lending agreement with the financial department at a higher level in time.
Chapter IV Budget Implementation and Final Accounts
Article 19 The provincial financial department shall make overall consideration of the situation at the corresponding level, cities and counties, formulate the general bond issuance plan of the whole province according to the budget adjustment plan, the demand for repayment of general debt principal and the bond market conditions, and reasonably determine the term structure and issuance time.
Article 20 The funds raised by the provincial finance department in issuing general bonds shall be turned over to the provincial treasury and allocated according to the budget arrangement and repayment plan.
The funds raised by issuing general bonds on behalf of the municipal and county governments shall be promptly allocated to the municipal and county financial departments by the provincial financial departments in accordance with the lending agreement.
Twenty-first provincial financial departments should do a good job in the information disclosure and credit rating of general bond issuance in accordance with the regulations. The information disclosed shall include the financial situation of the general public budget, the plan for issuing general bonds and the plan for arranging expenditure items, the debt repayment plan and the source of funds, and other information that should be disclosed in accordance with the provisions.
Article 22 The financial department at the provincial level shall, within 3 working days after the issuance of general bonds, report the issuance of general bonds to the Ministry of Finance for the record, and send a copy to the local Office of the Financial Ombudsman of the Ministry of Finance (hereinafter referred to as the Office of the Commissioner).
Twenty-third local financial departments at all levels should use general bond funds according to the budget adjustment plan and the budget subjects and purposes stipulated in the general bond issuance. If it is really necessary to adjust the purpose of expenditure, it shall be handled in accordance with the prescribed procedures.
Twenty-fourth provincial financial departments shall, in accordance with the contract, timely repay the maturity principal, interest and payment of issuance fees of general bonds of the whole province, autonomous region and municipality directly under the central government. The municipal and county financial departments shall, in accordance with the provisions of the lending agreement, timely pay the funds such as debt service and issuance expenses that should be borne by the local area or the corresponding level to the provincial financial department.
Article 25 If the municipal and county financial departments fail to pay the general bond debt service, issuance fees and other funds to the provincial financial departments in full and on time, the provincial financial departments can take appropriate measures to deduct them and disclose the default to the market.
Twenty-sixth at the end of the budget year, the local financial departments at all levels shall comprehensively and accurately reflect the general debt income, arranged expenditure, debt service and issuance expenses when preparing the draft final accounts of the general public budget.
Chapter V General Debt in Non-bond FormIncorporate into budget management
Twenty-seventh local financial departments at or above the county level shall incorporate non-bond general debt into the local general debt limit and implement budget management.
For non-bond general debts, the government, creditors and debtors shall, by way of contract, agree on the time limit for replacing them with general bonds within the time limit stipulated by the State Council and transfer their repayment obligations. After the repayment obligation is transferred to the local government, the local financial department shall register the general budget accounting account according to the relevant materials.
Twenty-eighth general debt in the form of non bonds, where the debtor is a local government and its departments, shall be replaced by general bonds within the time limit prescribed by the State Council; If the debtor is an enterprise, institution or individual, and the creditor agrees to replace it with ordinary bonds within the time limit stipulated by the State Council, the local government shall replace it; if the creditor does not agree to replace it with ordinary bonds within the time limit stipulated by the State Council, it will no longer be included in the local government debt, and the debtor will repay it by himself, and the corresponding general debt limit will be reduced by the Ministry of Finance according to procedures.
Chapter VI Supervision and Administration
Twenty-ninth local financial departments at or above the county level shall, in accordance with laws, regulations and the provisions of the Ministry of Finance, disclose the general debt limit, balance, term structure, use and repayment to the public and take the initiative to accept supervision.
Thirtieth local financial departments at or above the county level shall establish and improve relevant systems and strengthen the management and supervision of general debts in the region.
Article 31 The Commissioner’s Office shall strengthen the supervision of local general debts, urge local governments to regulate the borrowing, use and repayment of general debts, and report to the Ministry of Finance in a timely manner if violations of laws, regulations and financial management regulations are found.
Article 32 If the violation of these Measures is serious, the Ministry of Finance may suspend the qualification for issuing general bonds in relevant areas. In violation of laws and administrative regulations, the relevant personnel shall be investigated for responsibility according to law; Suspected of a crime, transferred to judicial organs for handling according to law.
Chapter VII Supplementary Provisions
Thirty-third provinces, autonomous regions and municipalities directly under the central government may formulate detailed rules for implementation according to these measures.
Article 34 The Ministry of Finance shall be responsible for the interpretation of these Measures.
Article 35 These Measures shall come into force as of the date of issuance.
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