Article 1(Purpose) #
The purpose of this Act is to develop the public administration of local governments in a sound manner with the adjustment of their finances by subsidizing financial resources necessary for the public administration of local governments.
[This Article Wholly Amended on Feb. 6, 2009]
Article 2(Definitions) #
The definitions of the terms used in this Act are as follows: <Amended on Dec. 23, 2014; Dec. 31, 2014; Jan. 12, 2021>
1. The term "local subsidy" means an amount of money calculated under Article 4 as a subsidy granted by the State to local governments faced with financial deficiencies, in accordance with Articles 6, 9, 9-3, and 9-4;
2. The term "local governments" means the Special Metropolitan City, Metropolitan Cities, Special Self-Governing Cities, Dos, Special Self-Governing Provinces, Sis, Guns, and autonomous Gus referred to in Article 2 (1) and (2) of the Local Autonomy Act, and a local government association established under Article 176 (1) of that Act;
3. The term "standard amount of financial demand" means an amount of money calculated under Article 7 in order to fairly estimate the financial demand of each local government;
4. The term "standard amount of financial revenue" means an amount of money calculated under Article 8 in order to fairly estimate financial revenue of each local government;
5. The term "items for estimate" means types of standard expenses established as classified by function or by nature, in order to fairly estimate the standard amount of financial demand of each local government;
6. The term "estimation unit" means a unit of each item for estimate, in order to fairly estimate the standard amount of financial demand;
7. The term "expense per unit" means an amount of money for each estimation unit in order to calculate the standard amount of financial demand.
[This Article Wholly Amended on Feb. 6, 2009]
Article 3(Categories of subsidies) #
Local subsidies (hereinafter referred to as "subsidies") shall be classified into general subsidies, special subsidies, real estate subsidies, and firefighting safety subsidies. <Amended on Dec. 23, 2014; Dec. 31, 2014>
[This Article Wholly Amended on Feb. 6, 2009]
Article 4(Financial resources of subsidies) #
(1) The financial resources of subsidies are as follows: <Amended on Dec. 23, 2014; Dec. 10, 2019>
1. An amount equivalent to 1,924/10,000 of the total amount of internal taxes for the pertinent year (which shall exclude object taxes, comprehensive real estate holding tax, 45/100 of the total amount of individual consumption tax levied on tobacco, and the relevant amounts of items of taxation used as financial resources for special accounts pursuant to other Acts; hereinafter the same shall apply);
2. The total amount of comprehensive real estate holding tax levied under the Comprehensive Real Estate Holding Tax Act;
3. An amount equivalent to 45/100 of the total amount of individual consumption tax levied on tobacco under the Individual Consumption Tax Act;
4. An amount after adjusting the difference under subparagraph 1 of Article 5 (3) pursuant to Article 5 (3);
5. An amount after adjusting the difference under subparagraph 2 of Article 5 (3) pursuant to Article 5 (3);
6. An amount after adjusting the difference under subparagraph 3 of Article 5 (3) pursuant to Article 5 (3).
(2) The financial resources of subsidies by category are as follows: <Amended on Jan. 1, 2014; Dec. 23, 2014; Dec. 31, 2014>
1. General subsidies: (The amount referred to in paragraph (1) 1 + the amount adjusted under paragraph (1) 4) × 97/100;
2. Special subsidies: (The amount referred to in paragraph (1) 1 + the amount adjusted under paragraph (1) 4) × 3/100;
3. Deleted; <Dec. 31, 2014>
4. Real estate subsidies: The amount referred to in paragraph (1) 2 + the amount adjusted under paragraph (1) 5;
5. Firefighting safety subsidies: The amount referred to in paragraph (1) 3 + the amount adjusted under paragraph (1) 6.
[This Article Wholly Amended on Feb. 6, 2009]
Article 5(Appropriation in budget) #
(1) The State shall appropriate subsidies under this Act in the national budget each year. <Amended on Jan. 1, 2014>
(2) Whenever national taxes that are sources of subsidies increase or decrease due to a revised supplementary budget, subsidies shall also be adjusted accordingly; provided, subsidies may be adjusted up until the year after the following year, considering regional financial conditions, etc. <Added on Jan. 1, 2014>
(3) The following differences in subsidies shall be adjusted by appropriating them in the national budget for the year after the following year, at the latest: <Amended on Jan. 1, 2014; Dec. 23, 2014; Dec. 10, 2019>
1. The difference of the subsidies owing to the difference between the estimated internal taxes and the settled amount thereof;
2. The difference of the subsidies owing to the difference between the estimated comprehensive real estate holding tax and the settled amount thereof;
3. The difference of the subsidies owing to the difference between the estimated amount equivalent to 45/100 of the total amount of individual consumption tax levied on tobacco under the Individual Consumption Tax Act and the settled amount thereof.
[This Article Wholly Amended on Feb. 6, 2009]
Article 6(Grant of general subsidies) #
(1) General subsidies shall be granted to a local government on the basis of the amount of a shortage when, for such government, the standard amount of financial revenue is less than the standard amount of financial demand each year; provided, in cases of an autonomous Gu, its general subsidies shall be calculated by adding its standard amounts of financial demand and financial revenue to the standard amounts of financial demand and financial revenue respectively of each relevant Special Metropolitan City or each relevant Metropolitan City, and shall thereby be granted to such Special Metropolitan City or such Metropolitan City.
(2) If the Minister of the Interior and Safety intends to grant general subsidies under paragraph (1), he or she shall notify the head of the relevant local government of such decision along with the following materials: <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
1. Basic data for calculation of the general subsidies;
2. Details thereof for each local government;
3. Other related materials.
[This Article Wholly Amended on Feb. 6, 2009]
Article 7(Standard amount of financial demand) #
(1) The standard amount of financial demand shall be the sum of the amounts computed by, for each item for estimate, multiplying the relevant expenses per unit by the numerical value of estimation units.
(2) Items for estimate and estimation units shall be prescribed by Presidential Decree, and expenses per unit shall be prescribed by Decree of the Ministry of the Interior and Safety, taking into account the price fluctuations, etc., within the standards prescribed by Presidential Decree. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
(3) When the standard amount of financial demand is calculated under paragraphs (1) and (2), if it falls under any of the following cases, expenses per unit shall be adjusted or the standard amount of financial demand shall be supplemented and corrected:
1. Where it is necessary to consider the extraordinary nature of islands and remote places prescribed by Presidential Decree;
2. Where it is necessary for promoting balanced development among regions, such as the development of underdeveloped regions prescribed by Presidential Decree;
3. Where, for each local government, the standard amount of financial demand has been set very unreasonably due to the uniform application of expenses per unit or due to other reasons.
[This Article Wholly Amended on Feb. 6, 2009]
Article 8(Standard amount of financial revenue) #
(1) The standard amount of financial revenue shall be the amount of revenue from general taxes of the local government concerned, calculated by the basic tax rate.
(2) The basic tax rate under paragraph (1) shall be the rate equal to the 80/100 of the standard tax rate prescribed in the Local Tax Act.
(3) If the standard amount of financial revenue of each local government calculated by the basic tax rate under paragraphs (1) and (2) is very unreasonable, it shall be supplemented and corrected.
[This Article Wholly Amended on Feb. 6, 2009]
Article 8-2(Measures in relation to errors in data for calculation) #
Where general subsidies are granted as a result of the miscalculation of the standard amount of financial demand or the standard amount of financial revenue due to errors, etc. in data for calculation of subsidies, the miscalculated amount may be added to or subtracted from the standard amount of financial demand or the standard amount of financial revenue of the relevant local government at the time its general subsidies are calculated in the next year of the year when the facts, such as errors, have been confirmed.
[This Article Wholly Amended on Feb. 6, 2009]
Article 8-3(Reflection of self-directed endeavor for sound fiscal management) #
(1) In order to encourage and promote the sound fiscal management of local governments, self-directed endeavor of each local government for the sound fiscal management may be reflected in the calculation of the standard amount of financial demand under Article 7 and the standard amount of financial revenue under Article 8.
(2) When the endeavor of each local government is reflected pursuant to paragraph (1), the criteria for items and calculation of such endeavor shall be prescribed by Decree of the Ministry of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
[This Article Added on Mar. 7, 2011]
Article 9(Grant of special subsidies) #
(1) Special subsidies shall be granted as follows: <Amended on Jan. 1, 2014>
1. Where special financial demand arises for current regional issues that cannot be assessed based on the calculation method of the standard amount of financial demand: An amount equivalent to 40/100 of the financial resources of special subsidies;
2. Where special financial demand arises for recovery from a disaster occurring after the deadline for the determination of general subsidies or for the management of disasters or safety control or where financial revenue decreases after such deadline: An amount equivalent to 50/100 of the financial resources for special subsidies;
3. Where special financial demand arises for national projects, projects requiring urgent cooperation between the State and local governments, key regional policies, financial assistance to exemplary local governments that have made achievements in local administration or financial management, or other relevant matters: An amount equivalent to 10/100 of the financial resources of special subsidies.
(2) Where the head of a local government files a request for grant of special subsidies under each subparagraph of paragraph (1), the Minister of the Interior and Safety shall grant special subsidies after examining such request; provided, where the Minister of the Interior and Safety deems it necessary, he or she may grant special subsidies, based on certain criteria that he or she determines, without receipt of any request. <Added on Mar. 7, 2011; Mar. 23, 2013; Jan. 1, 2014; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
(3) Deleted. <Jul. 26, 2017>
(4) The Minister of the Interior and Safety may impose conditions for the use of special subsidies under paragraph (1) or limit the purposes for which special subsidies under paragraph (1) are usable. <Added on Mar. 7, 2011; Mar. 23, 2013; Jan. 1, 2014; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
(5) Where the head of a local government intends to modify any of the conditions imposed under paragraph (4) or intends to use special subsidies for an altered purpose, he or she shall obtain prior approval from the Minister of the Interior and Safety. <Added on Mar. 7, 2011; Mar. 23, 2013; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
(6) The Minister of the Interior and Safety shall not grant a special subsidy under paragraph (1) for any project subsidized for private sectors. <Added on Jan. 1, 2014; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
Article 9-2 #
Deleted. <Dec. 31, 2014>
Article 9-3(Grant of real estate subsidies) #
(1) The real estate subsidies shall be granted to local governments in full amounts.
(2) The standards for granting real estate subsidies pursuant to paragraph (1) shall be prescribed by Presidential Decree, taking into account the financial conditions, conditions of administration of local taxes, etc., of local governments. <Amended on Jan. 1, 2010>
[This Article Wholly Amended on Feb. 6, 2009]
Article 9-4(Grant of firefighting safety subsidies) #
(1) The Minister of the Interior and Safety shall grant the full amount of firefighting safety subsidies to local governments according to the following classifications; in such cases, the Minister shall seek advice from the Fire Commissioner of the National Fire Agency on the firefighting area before granting the firefighting safety subsidies: <Amended on Jul. 26, 2017; Dec. 10, 2019; Dec. 31, 2024>
1. Purposes of operating firefighting personnel of local governments, expanding firefighting facilities (including firefighting equipment; hereinafter the same shall apply), and strengthening firefighting safety control: An amount equivalent to at least 40/100 of the total amount of individual consumption tax imposed on tobacco pursuant to the Individual Consumption Tax Act;
2. Objectives of expanding safety facilities and safety management of local governments: An amount not exceeding 5/100 of the total amount of individual consumption tax imposed on tobacco pursuant to the Individual Consumption Tax Act.
(2) The standards for granting firefighting safety subsidies under paragraph (1) shall be prescribed by Presidential Decree in consideration of firefighting personnel of local governments, the current status of firefighting facilities and safety facilities, the status of investment in firefighting facilities and safety facilities, requirements for investment in firefighting facilities and safety facilities, efforts to prevent disasters and strengthen safety, financial conditions, etc.; provided, the portion equivalent to 25/100 of the total amount of individual consumption tax imposed on tobacco pursuant to the Individual Consumption Tax Act out of the amount under paragraph (1) 1 shall be preferentially appropriated for the personnel expenses of firefighting personnel. <Amended on Dec. 10, 2019; Dec. 31, 2024>
[This Article Added on Dec. 23, 2014]
[Previous Article 9-4 moved to Article 9-5 <Dec. 23, 2014>]
Article 9-5(Application mutatis mutandis of related provisions) #
Articles 8-2, 13, and 15 shall apply mutatis mutandis to measures to be taken regarding errors, etc. in data for calculation of real estate subsidies and firefighting safety subsidies, to filing objections and reporting, and Article 15 shall apply mutatis mutandis to reporting of special subsidies. <Amended on Dec. 23, 2014; Dec. 31, 2014>
[This Article Wholly Amended on Feb. 6, 2009]
[Moved from Article 9-4 <Dec. 23, 2014>]
Article 10(Timing of grant) #
Subsidies shall be granted quarterly; provided, special subsidies may be granted exceptionally.
[This Article Wholly Amended on Feb. 6, 2009]
Article 11(Correction of unfair subsidies) #
(1) Where a local government receives or intends to unfairly receive subsidies by exaggerating or falsely stating data necessary for calculation of subsidies, the Minister of the Interior and Safety may order such local government to return any surplus of the amount that such local government shall normally receive, or may reduce the amount which such local government intends to unfairly receive. <Amended on Mar. 23, 2013; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
(2) Where a local government has made any excessive expenditure in violation of the relevant statutes or regulations or has neglected the collection for securing revenues, the Minister of the Interior and Safety may reduce the amount of subsidies that shall be granted to such local government or may order such local government to return some of the subsidies already granted. In such cases, the amount of subsidies to be reduced or ordered to be returned shall not exceed the amount which has been spent in violation of the relevant statutes or the amount which has not been secured due to negligence in collection. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
(3) When the head of a local government has used special subsidies in violation of any of the conditions imposed under Article 9 (4) or other purposes, the Minister of the Interior and Safety may order such head to return the amount used in violation of such conditions or purpose, or may deduct such amount from special subsidies to be granted in the following year. <Added on Mar. 7, 2011; Mar. 23, 2013; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
(4) The return of subsidies under paragraphs (1) through (3) may be done in installments, as prescribed by Presidential Decree. <Added on Dec. 31, 2014>
[This Article Wholly Amended on Feb. 6, 2009]
Article 12(Adjustment of subsidies due to change in districts) #
Where the district of a local government is changed or a local government is abolished, established, divided or merged, the Minister of the Interior and Safety shall adjust subsidies to be granted to the relevant local government, as prescribed by Presidential Decree. <Amended on Mar. 23, 2013; Nov. 19, 2014; Dec. 31, 2014; Jul. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]
Article 13(Filing objections to amount of subsidies) #
(1) If the head of a local government who has been notified of a decision of general subsidies under Article 6 (2) is dissatisfied with the basic data, etc. for calculation of the amount of subsidies for such local government, he or she may file an objection with the Minister of the Interior and Safety within 30 days from the date on which he or she has received the notification. In such cases, where the head of a local government is the head of a Si/Gun, such objection shall be filed through the competent Metropolitan City Mayor or Do Governor. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
(2) Upon receiving an objection filed under paragraph (1), the Minister of the Interior and Safety shall examine such objection within 30 days from the date on which he or she has received such objection, and shall notify the head of the relevant local government of the result thereof. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]
Article 14 #
Deleted. <Dec. 28, 1999>
Article 15(Reporting on general subsidies) #
The Minister of the Interior and Safety shall report on the criteria for distribution, the details of distribution, and the outcomes of execution of general subsidies, and other important matters necessary for administration of general subsidies, to the competent standing committee of the National Assembly within three months after the closing of each fiscal year. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]