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ENFORCEMENT DECREE OF THE LOCAL PUBLIC ENTERPRISES ACT — 법갈피

영문법령 / ENFORCEMENT DECREE OF THE LOCAL PUBLIC ENTERPRISES ACT

ENFORCEMENT DECREE OF THE LOCAL PUBLIC ENTERPRISES ACT

대통령령일부개정시행 2025-09-02행정안전부,행정안전부 · 제35729호 · 공포 2025-09-02

CHAPTER I GENERAL PROVISIONS

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters mandated by the Local Public Enterprises Act and those necessary for the enforcement thereof. <Amended on Mar. 31, 2005>

Article 2(Scope of local government-directly operated enterprises) #

(1) "Businesses which are higher than standards prescribed by Presidential Decree" in Article 2 (1) of the Local Public Enterprises Act (hereinafter referred to as the "Act") means the businesses satisfying the following standards: <Amended on Mar. 31, 2005; Jan. 28, 2015>

1. In cases of the water supply business: At least 10,000 tons of daily production capacity;

2. In cases of the industrial water supply business: At least 10,000 tons of daily production capacity;

3. In cases of the tramway business: At least 50 operating cars;

4. In cases of the automobile transportation business: At least 30 operating cars;

5. In cases of the local road business: At least 50 km of roadway under its management or at least three toll-tunnels and bridges under its management;

6. In cases of the sewerage business: At least 10,000 tons of daily disposal capacity;

7. In cases of the housing business: At least 100,000 square meters of floor area under its management or at least 100,000 square meters of total area under its construction;

8. In cases of the land development business: At least 100,000 square meters of land under its development;

9. Deleted. <Mar. 9, 2007>

(2) "Public welfare facilities prescribed by Presidential Decree" in Article 2 (1) 9 of the Act means the following incidental and convenience facilities that are necessary for entrusted houses to perform the intended functions and to be used: <Added on Jun. 2, 2020>

1. Parks, green areas, parking lots, children's playgrounds, senior citizens' centers, management facilities, social welfare facilities and facilities incidental thereto;

2. Facilities necessary for the living welfare of residents, such as cultural, sports and business facilities.

Article 26(Designation of financial companies handling receipts and disbursements of cash) #

(1) A financial company, etc. that may be designated as a financial company allowed to engage in part of cash receipts and disbursements pursuant to the proviso of Article 33 (1) of the Act (hereinafter referred to as "designated financial company") shall be any of the following institutions: <Amended on Jun. 19, 2002; Mar. 31, 2005; Jan. 06, 2012, Dec. 4, 2013; Oct. 25, 2016; Jan. 5, 2021; Dec. 12, 2023>

1. Banks authorized pursuant to Article 8 of the Banking Act;

1-2. Nonghyup Bank under the Agricultural Cooperatives Act;

1-3. The Korea Development Bank under the Korea Development Bank Act;

1-4. The Industrial Bank of Korea under the Industrial Bank of Korea Act;

1-5. Suhyup Bank under the Fisheries Cooperatives Act;

2. Post offices under the Postal Savings and Insurance Act;

3. Community credit cooperatives under the Community Credit Cooperatives Act;

4. Credit unions under the Credit Unions Act;

4-2. Cooperatives under the Agricultural Cooperatives Act (limited to cooperatives engaging in credit business);

4-3. Cooperatives under the Fisheries Cooperatives Act (limited to cooperatives engaging in credit business);

4-4. Cooperatives under the Forestry Cooperatives Act (limited to cooperatives engaging in credit business);

5. Mutual savings banks under the Mutual Savings Banks Act.

(2) Where a manager designates a designated financial company pursuant to the proviso of Article 33 (1) of the Act, he or she shall take into consideration profitability and safety; provided, where an institution referred to in paragraph (1) 3, 4, and 4-2 through 4-4 is designated, such institution shall be designated from among institutions meeting all of the following safety standards based on an audit report under Article 18 (1) of the Act on External Audit of Stock Companies: <Added on Dec. 12, 2023>

1. The gross amount of assets shall exceed 250 billion won;

2. The gross amount of capital shall exceed 25 billion won;

3. The proportion of the gross amount of capital to the gross amount of assets shall exceed 10/100;

4. The net profit before deducting costs of corporate taxes shall be in surplus for three consecutive years.

(3) Designated financial companies shall be classified into financial companies in charge of receipts and disbursements which take care of a portion of receipts and disbursements and financial companies in charge of receipts which take care of a portion of receipts, and the financial companies in charge of receipts and disbursements shall have overall control over it, but if there are at least two financial companies in charge of receipt and disbursements, the financial company in charge of receipts and disbursements, which is designated by the manager of the local government-directly operated enterprise, shall have overall control over it. <Amended on Dec. 4, 2013; Dec. 12, 2023>

(4) The cash receipt and disbursement services under paragraph (1) shall include the receipt and disbursement services in the method of payment by securities and by account transfer. <Amended on Dec. 12, 2023>

[Title Amended on Dec. 4, 2013]

Article 31(Payment of ordinary expenses) #

(1) Where the following expenses are apprehended to possibly interfere with the fulfillment of business tasks if they are not paid off with cash, the enterprise cashiers of a local government-directly operated enterprise may transfer necessary funds to ordinary-expenses cashiers: <Amended on Jun. 19, 2002; Jul. 17, 2008>

1. Traveling expenses;

2. General operational expenses;

3. Expenses of departments which have no cashier;

4. Expenses of offices which have no fixed place of business;

5. Expenses needed for the construction work, manufacture, or afforestation which is implemented by each department;

6. Expenses needed for direct payment of small sums of money to a multiple number of people;

7. Expenses to be paid off in foreign countries;

8. Expenses for sailing vessels;

9. Expenses for repayment of the principal and interest of local bonds or loans;

10. Expenses to be paid off in regions outside the jurisdiction of the local government concerned; provided, in case of provinces, transportation expenses incurred outside the jurisdiction of the government of the city where the provincial government is located, shall be included;

11. Salaries and bonuses to be paid to public servants, and the remunerations, fixed-amount allowances, and fixed-amount welfare payments to be paid to people in miscellaneous positions;

12. Allowances, recompenses, and business promotion expenses;

13. Expenses needed for the purchase of subsidiary foods required by each department, or expenses for the purchase of materials for construction works, tests, or inspections.

(2) Expenses under subparagraph of paragraph (1) shall not be provided in excess of the following amounts: the expenses under paragraph (1) 2, 3, 7, 9, 11 and 12 shall not be subjected to any limitation on the amount provided: <Amended on Jun. 19, 2002; Jul. 17, 2008>

1. Expenses under paragraph (1) 1, 4, 6, 8 and 10: Ten million won;

2. Deleted; <Jul. 17, 2008>

3. Expenses under paragraph (1) 5: 20 million won.

(3) The funds under paragraph (2) shall be provided in accordance with the following standards:

1. Ordinary expenses of departments: They shall be provided once a month within the limit under paragraph (2);

2. Expenses to be provided occasionally: The amount of the necessary expenses shall be estimated in advance and shall be provided, if possible, in a piecemeal manner extended over a certain period to the extent that it does not interfere with the regular fulfillment of tasks.

(4) The manager shall appoint public officials who will perform activities that constitute the causes for the payment of the ordinary expenses under paragraph (1): this shall not apply to cases where ordinary expenses are temporarily paid off.

Article 47(Examination of feasibility of establishment) #

(1) The examination of feasibility prescribed in Article 49 (3) of the Act shall include the following matters, and the detailed procedures and examination standards therefor shall be determined by the Minister of the Interior and Safety: <Amended on Jul. 26, 2017>

1. The adequacy of the business;

2. Analysis of the earnings by business;

3. Determination of demand for organization and human resources;

4. Influences on the improvement of welfare of residents;

5. Influences on the local economy and local finance.

(2) The head of a local government shall organize a deliberative committee consisting of the council members, related experts, related public officials of the relevant local government, etc. and deliberate on whether to establish a local government-invested public corporation (hereinafter referred to as "local government-invested public corporation") based on the outcomes of an examination of feasibility conducted by a specialized institution under Article 49 (3) of the Act and the results of a public hearing of the opinions of residents held under Article 76-2 (1) of this Decree.

(3) Matters necessary for the organization and operation of the deliberative committee referred to in paragraph (2) shall be determined by the head of the relevant local government, and at least one half of the members thereof shall be commissioned as civilian members.

(4) "Specialized institution satisfying the requirements prescribed by Presidential Decree, such as professional human resources and examination and research capability" prescribed in Article 49 (4) of the Act means an institution that meets all of the following requirements:

1. It shall have at least five persons having experience of at least three years and at least two persons having experience of at least five years in the affairs related to the examination of feasibility of business;

2. It shall have a record of research services on the examination of feasibility of business concerning a local public enterprise referred to in Article 3 of the Act or a public institution referred to in Article 4 of the Act on the Management of Public Institutions (hereinafter referred to as "public enterprise"), or concerning local finance.

[This Article Wholly Amended on Mar. 30, 2016]

Article 47-2(Examination of feasibility of investment in other corporations) #

(1) Where a local government-invested corporation invests in other corporations pursuant to Article 54 (2) of the Act, it shall undergo a preliminary examination by a specialized institution designated and publicly notified by the Minister of the Interior and Safety from among specialized institutions meeting the requirements under Article 47 (4) with regard to the necessity and feasibility of investment; provided, where the amount of investment is less than 500 million won, it may undergo a preliminary examination by a local government-invested research institute under the Act on the Establishment and Operation of Local Government-Invested Research Institutes (limited to where all the requirements under the subparagraphs of Article 47 (4) are met). <Amended on Mar. 30, 2016; Dec. 12, 2023>

(2) If necessary for the efficient implementation of a preliminary examination under paragraph (1), the Minister of the Interior and Safety may determine and publicly notify the details under the subparagraphs of paragraph (3) and the standards for such examination. <Added on Dec. 12, 2023>

(3) A specialized institution that conducts a preliminary examination pursuant to paragraph (1) shall do so in consideration of the following matters:<Amended on Dec. 12, 2023>

1. The adequacy of the business performed by the corporation to invest in;

2. Analysis of the earnings by business performed by the corporation to invest in;

3. Methods of securing financial resources;

4. Influences of the business performed by the corporation to invest in on the regional economy.

(4) “The amount prescribed by Presidential Decree” under the former part except the subparagraphs of Article 54 (3) of the Act means 100 million won.

(5) Where the president of the Corporation intends, pursuant to Article 54 (3) of the Act, to exclude equity contributions for carrying out a project falling under any subparagraph of Article 54 (3) of the Act and equity contributions not exceeding the amount under paragraph (4) from the review of the necessity and validity of equity contributions, the procedures therefor shall mutatis mutandis be governed by Article 58-2 (3) through (6). In such cases, “for new investment projects” shall be construed as “ for equity contributions,” “Article 65-3 (2) of the Act” shall be construed as “Article 54 (3) of the Act,” “review of the validity of new investment projects” shall be construed as “review of the necessity and validity of equity contributions,” and “the name of the project” shall be construed as “the name of the equity contribution.” <Added on Sep. 2, 2025>

(6) The limit of investment by a local government-invested public corporation in another corporation pursuant to Article 54 (4) of the Act shall be as follows: <Amended on May 28, 2024; Sep. 2, 2025>

1. Where the debt ratio of a local government-invested public corporation as at the end of the immediately preceding business year is less than 100/100: Up to 50/100 of the capital of the local government-invested public corporation as at the end of the immediately preceding business year;

2. Where the debt ratio of a local government-invested public corporation as at the end of the immediately preceding business year is not less than 100/100 but less than 200/100: Up to 25/100 of the capital of the local government-invested public corporation as at the end of the immediately preceding business year;

3. Where the debt ratio of a local government-invested public corporation as at the end of the immediately preceding business year is not less than 200/100: Up to 10/100 of the capital of the local government-invested public corporation as at the end of the immediately preceding business year.

(7) “Where any significant managerial change prescribed by Presidential Decree occurs, such as a change of the largest shareholder” under Article 54 (5) of the Act means the following cases: <Added on Sep. 2, 2025>

1. A change of the largest shareholder;

2. A change in the business purpose of the corporation in which equity has been contributed;

3. Where any rapid change in the financial structure falling under any of the following items occurs:

(a) Where net loss occurs for at least three consecutive fiscal years;

(b) Where the debt ratio is not less than 200/100 as of the last day of the immediately preceding fiscal year;

(c) Where the capital impairment ratio (meaning the amount obtained by subtracting total equity from capital stock divided by capital stock) exceeds 50/100 as of the last day of the immediately preceding fiscal year.

[This Article Wholly Amended on Dec. 4, 2013]

[Enforcement Date: Apr. 2, 2026]

Article 56-2(Standards for reappointing or dismissing president) #

(1) Where the head of a local government intends to reappoint or dismiss the president of the relevant local government-invested public corporation pursuant to Article 58 (4) of the Act, he or she shall comply with the following standards: <Amended on Jun. 2, 2020>

1. Reappointment standards:

(a) Where the president scores high in the assessment of his or her execution of a performance-based contract prescribed in Article 58-2 of the Act, the assessment of his or her management prescribed in Article 78 (1) of the Act, and the assessment of his or her work performance prescribed in Article 78 (4) of the Act during his or her term of office;

(b) Where the outcomes of the assessment of the president in terms of the execution of a performance-based contract prescribed in Article 58-2 of the Act, management prescribed in Article 78 (1) of the Act, and work performance prescribed in Article 78 (4) of the Act are significantly better than those for the immediately preceding year, during his or her term of office;

2. Dismissal standards:

(a) Where the president scores low in the assessment of his or her execution of a performance-based contract prescribed in Article 58-2 of the Act, the assessment of his or her management prescribed in Article 78 (1) of the Act, and the assessment of his or her work performance prescribed in Article 78 (4) of the Act during his or her term of office;

(b) Where the outcomes of the assessment of the president in terms of the execution of a performance-based contract prescribed in Article 58-2 of the Act, management prescribed in Article 78 (1) of the Act, and work performance prescribed in Article 78 (4) of the Act are significantly worse than those for the immediately preceding year, during his or her term of office;

(2) The standards for reappointing or dismissing the president under paragraph (1) shall be applied in the order of the assessment of his or her work performance prescribed in Article 78 (4) of the Act, the assessment of his or her management prescribed in Article 78 (1) of the Act, and the assessment of his or her execution of a performance-based contract prescribed in Article 58-2 of the Act. <Amended on Jun. 2, 2020>

(3) The scope of the high scores and low scores referred to in paragraph (1) and standards for determining whether the score is high or low shall be determined by the Minister of the Interior and Safety after undergoing the deliberations thereon of the policy committee for local public enterprises under Article 78-5 of the Act. <Amended on Feb. 29, 2008; Sep. 21, 2009; Mar. 23, 2013; Nov. 19, 2014; Mar. 30, 2016; Jul. 26, 2017>

[This Article Added on Mar. 9, 2007]

[Previous Article 56-2 moved to Article 56-3 <Mar. 9, 2007>]

Article 56-3(Formation and operation of executive officer recommendation committee) #

(1) The committee for recommending executive officers pursuant to Article 58 (3) and (7) of the Act (hereinafter referred to as the "recommendation committee") shall be established under a local government-invested public corporation and shall consist of the following persons; provided, where a local government-invested public corporation is established, the committee shall consist of four persons recommended by the head of the relevant local government and three persons recommended by the relevant council: <Amended on Sep. 21, 2009; Dec. 4, 2013; Mar. 30, 2016>

1. Two persons recommended by the head of the relevant local government;

2. Three persons recommended by the relevant council;

3. Two persons recommended by the board of directors of the relevant local government-invested public corporation.

(2) No ex officio director who is a public official of the relevant local government or executive officer who intends to apply for the open recruitment of candidates for executive officers shall participate in the resolution of the board of directors for the recommendation of members of the recommendation committee pursuant to paragraph (1) 3. <Added on Mar. 31, 2005; Jul. 9, 2019>

(3) Members of the recommendation committee shall be the following persons: <Amended on Jun. 12, 2006>

1. Professionals of business management;

2. Executive officers of economy-related organizations;

3. Persons who have retired as public officials of Grade IV or higher in their ranks or public officials in general service who belong to the Senior Executive Service;

4. Certified public accountants;

5. Persons deemed to have knowledge and experience in the management of public enterprises.

(4) Executive officers and employees of a local government-invested public corporation (excluding non-standing directors) and public officials of the said local government (including council members) shall not become members of the recommendation committee. <Amended on Dec. 4, 2013>

(5) The recommendation committee shall make a decision by concurrent votes of a majority of incumbent members.

(6) The chairperson of the recommendation committee shall be elected from among its members, and the chairperson shall represent the recommendation committee and preside over its meeting.

(7) When a local government-invested public corporation intends to newly appoint an executive officer due to the expiration of term of office or for other grounds, it shall organize the recommendation committee without delay, and request the head of the local government and the council to recommend a member. <Amended on Sep. 21, 2009; Dec. 4, 2013>

(8) The recommendation committee shall continue to exist until the recommended person is appointed as an executive officer. <Amended on Sep. 21, 2009>

(9) The recommendation committee shall prepare and keep minutes in which the details of deliberation and discussion of the meetings of recommendation committee are recorded, and disclose the minutes to the public; provided, where any of the subparagraphs of Article 9 (1) of the Official Information Disclosure Act is applicable, the recommendation committee shall be allowed not to disclose the minutes to the public. <Added on Jul. 31, 2012>

(10) Matters necessary for the formation, operation, etc. of the recommendation committee, other than those prescribed by this Decree, shall be prescribed by the articles of incorporation of a local government-invested public corporation. <Added on Sep. 21, 2009>

[This Article Added on Jun. 19, 2002]

[Title Amended on Sep. 21, 2009]

[Moved from Article 56-2; previous Article 56-3 moved to Article 56-4 <Mar. 9, 2007>]

Article 56-4(Procedures for recommending candidates for executive officers) #

(1) The recommendation committee shall, where it is to publicly recruit the candidates for executive officers pursuant to Article 58 (8) of the Act, make public announcement of recruiting executive officers on the website of the relevant local government and local government-invested public corporation, the website prescribed by the Minister of the Interior and Safety pursuant to Article 44-2 (4), and at least one daily newspapers distributed nationwide or daily newspapers mainly distributed in the area of the relevant local government, and the recruiting period shall be at least 15 days; provided, where it is inevitable for the swift employment, the recruiting period may be shortened after obtaining approval from the head of the local government. <Amended on Mar. 23, 2013; Nov. 19, 2014; Mar. 30, 2016; Jul. 26, 2017>

(2) The recommendation committee shall recommend persons who have abundant knowledge and experiences and capability required for the performance of duties as executive officers of the local government-invested public corporation as candidates for executive officers from among those who apply for the public recruiting under paragraph (1).

(3) Where the recommendation committee intends to recommend candidates for executives, it shall recommend at least two persons, except in extenuating circumstances.

(4) Where the recommended candidates for executive officers have any ground for disqualification under Article 60 of the Act or are deemed significantly inappropriate for the management of the local government-invested public corporation, the head of the local government or the president of the local government-invested public corporation, who has appointing authority, may request the recommendation committee to re-recommend candidates for executives. In such cases, the recommendation committee shall re-recommend candidates for executive officers.

(5) The recommendation committee may have a specialized agency perform the affairs including recruiting, investigating, etc. of candidates for executive officers, on behalf of the committee.

[This Article Wholly Amended on Sep. 21, 2009]

Article 57-4(Request for investigation against persons committing misconduct) #

(1) "Misconduct prescribed by Presidential Decree, such as the misconduct of providing or receiving money or valuables, a sex offense, or hiring misconduct" in the former part of Article 63-7 (2) of the Act means any of the following acts (hereinafter referred to as "misconduct"):

1. Illegally giving or receiving, or promising to give or receive money, goods, real property, entertainment or other economic interests in connection with the official duties;

2. Embezzlement, misappropriation, theft, fraud or appropriation of public funds, property or goods of the relevant local government-invested public corporation;

3. Sexual crimes under Article 2 of the Act on Special Cases concerning the Punishment of Sexual Crimes;

4. Prohibited acts under Article 4 of the Act on the Punishment of Arrangement of Commercial Sex Acts;

5. Causing significant harm to the fairness of personnel affairs by intervening in or affecting hiring, promotion, and other personnel affairs, in violation of any statutes or regulations, articles of incorporation, bylaws, etc.;

6. Hiring misconduct, tax evasion, accounting fraud, unfair trade practices and other related serious illegal acts committed in violation of the Act, the Commercial Act, the Criminal Act, the Punishment of Tax Evaders Act, the Framework Act on Local Taxes, the Monopoly Regulation and Fair Trade Act, or other statutes or regulations related to the business of the relevant local government-invested public corporation.

(2) When requesting an investigation, audit or inspection under the former part of Article 63-7 (2) of the Act, the head of a local government shall do so in accordance with the following classifications. In such cases, he or she shall hold prior consultations with the Board of Audit and Inspection to request an audit or inspection therefrom pursuant to subparagraph 2:

1. Where an investigation into the fact or suspicion of a crime is deemed necessary: Making a request to a criminal investigation agency;

2. Where it is deemed that there exist unavoidable circumstances, making it impractical for the head of a local government to directly engage in an audit or inspection, and that an audit and inspection under the Board of Audit and Inspection Act is necessary: Making a request to the Board of Audit and Inspection.

(3) Where the head of a local government requests an investigation, audit or inspection pursuant to the former part of Article 63-7 (2) of the Act, he or she shall also submit materials evidencing the fact or suspicion of misconduct.

[This Article Added on Jun. 2, 2020]

[Previous Article 57-4 moved to Article 57-8 <Jun. 2, 2020>]

Article 57-6(Measures against persons involved in hiring misconduct) #

(1) Where the head of a local government discloses personal information, misconduct, etc. pursuant to Article 63-7 (4) of the Act, he or she shall publish the following matters in the Official Gazette or post them on the website designated by the Minister of the Interior and Safety as prescribed in Article 44-2 (4) or on the website of the relevant local government for one year: <Amended on Jun. 8, 2021>

1. Names, ages, occupations and addresses of executive officers convicted in connection with hiring misconduct; in such cases, detailed addresses under subparagraph 6 of Article 2 of the Road Name Address Act may be omitted;

2. Names and addresses of local government-invested public corporations to which persons involved in hiring misconduct belong, and their duties and positions;

3. Details and means of hiring misconduct;

4. Details of the final and conclusive judgment of guilty in connection with hiring misconduct.

(2) Where the head of a local government requests that the president of a local government-invested public corporation cancel the offer of employment, promotion, appointment or take other unfavorable personnel measures (hereafter in this Article referred to as "cancellation of employment offer, etc.") pursuant to the former part of Article 63-7 (5) of the Act, he or she shall comply with the standards as classified in the following subparagraphs and shall also notify the grounds therefor:

1. Where any person passes a recruitment examination or is hired as a result of any hiring misconduct: Request to cancel the decision on the examination or hiring;

2. Where any person is promoted, reassigned, transferred, or dispatched for being involved in or aiding hiring misconduct: Request to cancel such promotion, reassignment, transfer, or dispatch. In such cases, unfavorable personnel measures against such person may also be requested, if deemed necessary.

(3) The president of a local government-invested public corporation shall notify parties to the cancellation of employment offer, etc. of the following matters at least 10 days before he or she determines the cancellation of employment offer, etc.:

1. Details of and grounds for requests made by the heads of local governments for the cancellation of employment offer, etc.;

2. Deadline for providing explanations;

3. Methods of providing explanations;

4. Methods of handling in the absence of explanations;

5. Other matters necessary for providing explanations.

(4) Where the parties to the cancellation of employment offer, etc. in receipt of a notice under paragraph (3) fail to provide explanations without good reason, the president of a local government-invested public corporation may make the cancellation of employment offer, etc. without giving them additional opportunities to explain.

(5) If deemed necessary for determining the cancellation of employment offer, etc., the president of a local government-invested public corporation may request that the relevant person submit opinions or evidence.

(6) Where the president of a local government-invested public corporation determines the cancellation of employment offer, etc., he or she shall notify such determination to the parties to the cancellation of employment offer, etc., and to the head of the relevant local government without delay.

[This Article Added on Jun. 2, 2020]

[Previous Article 57-6 moved to Article 57-10 <Jun. 2, 2020>]

Article 57-8(Accounting) #

(1) Articles 31 and 31-5 of the Act on Contracts to Which a Local Government Is a Party and Articles 2, 6, 6-2, 7 through 32, 32-2, 33 through 42, 42-3, 42-4, 43, 44, 44-2, 45 through 49, 51, 52, 54 through 56, 64, 64-2, 66 through 71, 71-2, 71-3, 72 through 75, 75-2, 76 through 78, 78-2, 79, 81 through 86, 87 through 89, 89-2, 90 through 92, 93, 94 through 97, 97-2, 98, 98-2, 99, 100, 100-2, 101, and 103 of the Enforcement Decree of that Act shall apply mutatis mutandis to accounting, standards and procedures for concluding a contract, restrictions on the eligibility for bidding, etc. prescribed in Article 64-2 (6) of the Act. In such cases, "local government" shall be construed as "public corporation," "accounting official" as "accounting clerk," "public official under its control" as "employee under its control," "head of a local government" as "president of a local government-invested public corporation," "public official" as "employee," and "relevant public official" as "relevant employee". <Amended on Jan. 28, 2015; Jun. 2, 2020>

(2) Notwithstanding Article 25 (1) of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party which applies mutatis mutandis under paragraph (1), the president of a local government-invested public corporation or an employee who takes charge of the affairs related to contracting upon delegation or entrustment of all or part thereof by the president of a corporation (hereinafter referred to as "contracting officer") may conclude a contract by free contract in any of the following cases: <Amended on Jan. 28, 2015; Jan. 16, 2018; Jul. 9, 2019>

1. Where he or she intends to conclude a contract with a subsidiary of the local government-invested public corporation (referring to a juristic person in which the relevant corporation holds 100/100 of the total number of issued stocks or total shares of investment; hereafter the same shall apply in subparagraph 2) or a company in which it has invested (referring to a juristic person, the total of the number of stocks or shares of investment of which held by the relevant local government-invested public corporation and other local government-invested public corporations is 100/100 of the total number of issued stocks or total shares of investment; hereafter the same shall apply in subparagraph 2) to entrust or delegate the affairs of the corporation;

2. Where he or she intends to conclude a contract inevitably with a subsidy of the corporation or a company in which it has invested, for the maintenance, etc. of facilities and equipment owned by the relevant local government-invested public corporation or the first-class public structures defined in subparagraph 1 of Article 7 of the Special Act on the Safety Control and Maintenance of Establishment;

3. Where a local government-invested public corporation implements the win-win model under Article 8 (1) of the Act on the Promotion of Mutually Beneficial Cooperation between Large Enterprises and Small and Medium Enterprises, and enters into a contract with the relevant commissioned enterprise within two years after its performance results are confirmed by the promotion headquarters for the distribution of the win-win model under paragraph (2) of that Article.

[This Article Added on Dec. 4, 2013]

[Moved from Article 57-4 <Jun. 2, 2020>]

Article 57-9(Scope of procurement contracts of urban railway corporation subject to international tender) #

(1) Notwithstanding Article 57-8, where a procurement contract is to be concluded in an amount which is at least the one determined and publicly notified by the Minister of the Interior and Safety in accordance with a government procurement agreement joined or concluded by the Government or international standards based thereon (hereinafter referred to as "government procurement agreement, etc."), a local government-invested public prescribed in Appendix 1 (hereinafter referred to as "urban railway corporation") shall conclude such contract by means of international tender; provided, any of the following cases shall be excluded from the objects of the procurement contract with an urban railway corporation subject to an international tender: <Amended on Jul. 26, 2017; Jun. 2, 2020>

1. Where goods or services necessary for the production for resale or sale are procured;

2. Where goods or services are procured for resale or sale or for use in the supply of goods and services for resale or sale;

3. Where products of small and medium enterprises are manufactured and purchased according to the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets;

4. Where agricultural products, fishery products or livestock products are purchased in accordance with the Grain Management Act, the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, or the Livestock Industry Act;

5. Where necessary to maintain the public order and stability or to protect lives and health of humans or animals or intellectual property right;

6. Where goods produced by or services, etc. of philanthropic institutions, the disabled, or prisoners are procured;

7. Where procurement is conducted for the promotion of feeding programs;

8. Other details specified in government procurement agreements, etc. and prescribed by Decree of the Ministry of the Interior and Safety.

(2) Where a contract is concluded by an international tender prescribed in paragraph (1), the methods, procedures, etc. for contracting other than those prescribed in this Decree shall be subject to the application mutatis mutandis of Articles 1, 2, 4 through 25, and 39 through 46 of the Regulations on Special Cases concerning the Enforcement Decree of the Act on Contracts to Which the State Is a Party in Specific Procurement and Articles 1 through 11, 13, 14 and 17 of the Regulations on Special Cases concerning the Enforcement Decree of the Act on Contracts to Which the State Is a Party in the Procurement of Specific Goods, Etc.. In such cases, "the head of a central agency" shall be regarded as "the president of an urban railway corporation", "the Minister of Strategy and Finance" as "the Minister of the Interior and Safety", "Ministerial Decree of Strategy and Finance" as "Decree of the Ministry of the Interior and Safety", "public official in charge of contracting" as "contracting officer", and "the State" and "the Government" as "an urban railway corporation," respectively. <Amended on Jul. 26, 2017>

(3) Matters to be informed in conducting an international tender shall be publicly announced in a publication specified in a government procurement agreement, etc.

(4) Where deemed necessary, taking into consideration the purposes, character, etc. of a contract, the president of an urban railway corporation or a contracting officer may conclude a contract by an international tender even when it is not subject to an international tender prescribed in paragraph (1).

[This Article Added on Jan. 28, 2015]

[Moved from Article 57-5 <Jun. 2, 2020>]

Article 58-2(Examination of feasibility of new investment project) #

(1) "New investment project of a size not less than that prescribed by Presidential Decree" in Article 65-3 (1) of the Act means the following: <Amended on Mar. 30, 2016; Jun. 2, 2020>

1. A local government-invested public corporation established by a City/Do: A new investment project, the total project cost of which is at least 50 billion won;

2. A local government-invested public corporation established by a Si/Gun/Gu: A new investment project, the total project cost of which is at least 30 billion won.

(2) The examination of the feasibility of a new investment project under Article 65-3 (1) of the Act (hereinafter referred to as "examination of the feasibility of a new investment project") shall include the following: <Amended on Mar. 30, 2016; Jun. 2, 2020>

1. The adequacy of the new investment business;

2. Analysis of the earnings by new investment business;

3. Methods of securing financial resources;

4. Influences of the new investment business on the local economy.

(3) Where the president of a local government-invested public corporation intends to have a new investment project under any subparagraph of paragraph (1) excluded from the examination of the feasibility of a new investment project under Article 65-3 (2) of the Act, he or she shall submit a written request for confirming exclusion from the examination of the feasibility of a new investment project, specifying the name, overview and necessity of the relevant project, and grounds for exclusion, etc. <Added on Jun. 2, 2020>

(4) Upon receipt of a written request for confirming exclusion from the examination of the feasibility of a new investment project under paragraph (3), the head of a local government shall confirm whether the project is eligible for the exclusion from the examination of the feasibility of a new investment project under Article 65-3 (2) of the Act and shall notify the president of the relevant local government-invested public corporation of the result. <Added on Jun. 2, 2020>

(5) Matters necessary for the procedures and methods for confirming whether a project is subject to exclusion from the examination of the feasibility of a new investment project and other matters necessary for confirming exclusion from the examination of the feasibility of a new investment project under paragraphs (3) and (4) shall be determined by the Minister of the Interior and Safety. <Added on Jun. 2, 2020>

(6) Where the Minister of the Interior and Safety determines matters under paragraph (5), the Minister shall hear the opinions of the heads of local governments. <Added on Jun. 2, 2020>

(7) "Specialized institution satisfying the requirements prescribed by Presidential Decree, such as professional human resources, and examination and research capability" in Article 65-3 (3) of the Act means an institution that meets all the requirements prescribed in each subparagraph of Article 47 (4). <Added on Mar. 30, 2016; Jun. 2, 2020>

[This Article Added on Dec. 4, 2013]

Article 62(Issuance of bonds) #

(1) If a local government-invested public corporation intends to issue bonds prescribed in Article 68 (1) of the Act, it shall submit an application, stating the following matters, to the head of the relevant local government. This shall also apply where the head of a local government applies for approval to the Minister of the Interior and Safety pursuant to Article 68 (3) of the Act: <Amended on Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>

1. Purpose of issuing bonds;

2. Timing for issuing bonds;

3. Gross amount of the bonds to be issued (where bonds are to be issued in several face values, gross amount of the bonds to be issued by face value);

4. Interest rate;

5. Method and deadline for redemption of the principals;

6. Method and deadline for paying the interests;

7. Method of subscription and underwriting.

(2) Limit of issuance of bonds which a local government-invested public corporation may issue under Article 68 (1) of the Act shall be as follows: <Amended on Mar. 29, 2011; Dec. 4, 2013>

1. Not more than four times the amount of the net assets determined under Article 14 for a local government-invested public corporation operating a business falling under Article 2 (1) 7 and 8 of the Act;

2. Not more than two times the amount of the net assets determined under Article 14 for a local government-invested public corporation operating a business, other than the business falling under subparagraph 1.

(3) When a local government-invested public corporation intends to issue bonds for the purpose of Article 19 (1) 1 of the Act, it shall formulate and execute plans for improving its management.

(4) "Where bonds to be issued pursuant to paragraph (1) are in excess of the limit prescribed by Presidential Decree" in the former part of Article 68 (3) of the Act means any of the following cases: <Amended on Sep. 21, 2009; Jul. 31, 2012>

1. Where debt ratio after adding the estimated amount of bonds to be issued is at least 200/100 as at the time an application for approval for issuance of bonds is submitted;

2. Where a net loss has been reported in the last three or more consecutive years;

3. Where the estimated amount of bonds to be issued is at least 30 billion won.

(5) The bonds prescribed in Article 68 (1) of the Act shall state the following matters, and the president of the local government-invested public corporation shall put his or her name and seal, or sign thereon:

1. Bond number;

2. Title of the corporation;

3. Matters stipulated in paragraph (1) 3 through 6.

[This Article Wholly Amended on Mar. 31, 2005]

Article 63(Bearing expenses for vicarious execution) #

(1) Where the local government-invested public corporation intends to execute a project of the State or the local government vicariously pursuant to Article 71 (1) of the Act, it shall execute the project under contract on a commission basis.

(2) Where the local government-invested public corporation performs a project of the State or local government vicariously pursuant to Article 71 (1) of the Act, the scope of any expenses which the State or the local government has to bear shall be as follows:

1. Expenses incurred in formulating a project plan, conducting a prior investigation, providing services, etc. necessary for the practical execution of the project;

2. Facility expenses, personnel expenses, and ancillary expenses required for the projects execution;

3. Expenses for management of facilities during the period from the termination of the project to the settlement of accounts or to the handing over of the facility;

4. Commissions for vicarious execution of the project;

5. Other expenses inevitably incurred for the execution of the project.

(3) Where the State or the local government bears expenses pursuant to Article 71 (1) of the Act, the local government-invested public corporation shall in advance draft a plan for execution of a fund and present it to the State or local government; the State or local government shall make disbursements to the fund in preference to any other funds; where the State or local government is required to adjust the time of its disbursement, it shall first consult the local government-invested public corporation.

(4) Where the local government-invested public corporation has completed its vicarious execution, it shall without delay calculate expenses which the State or local government has been required to bear.

(5) Where it is particularly necessary to execute a project of the State or local government vicariously, the local government-invested public corporation may allow a third person to execute part of the project with prior approval of the head of the local government.

Article 72-3(Exclusion, challenge, and refrainment of members of policy committee) #

(1) Where a member of the policy committee falls under any of the following, he or she shall be excluded from deliberation and vote of the relevant item on the agenda:

1. Where the member or a person who is or was his or her spouse becomes the person concerned with the relevant item on the agenda (where the person concerned is a corporation or organization, including its executive officer or employee; hereafter the same shall apply in this Article) or is a person who holds the right jointly or assumes liabilities jointly with the person concerned with the relevant item on the agenda;

2. Where the member is or was a relative of the person concerned with the relevant item on the agenda;

3. Where the member or an institution to which he or she belongs has given testimony, made a statement, provided advice and suggestions, conducted research, provided service or made appraisal on the relevant item on the agenda;

4. Where the member is or was involved in the inspection, investigation or examination of the relevant item on the agenda;

5. Where the member or an institution to which he or she belongs is or was an agent of the person concerned with the relevant item on the agenda.

(2) Where a member has a reason for exclusion under paragraph (1) or it is difficult for the person concerned with the item on the agenda that is deliberated and decided by the policy committee to expect fair deliberation or resolution from the member, he or she may file an application for the use of a challenge with the policy committee, specifying the reason for the challenge. In such cases, the chairperson shall decide whether to accept the challenge without a vote of the policy committee.

(3) Where a member has a reason for exclusion under the subparagraphs of paragraph (1), he or she shall refrain himself or herself from deliberation and vote of the relevant item on the agenda.

[This Article Added on Jul. 9, 2019]

Article 76(Contributions to evaluation institute of regional public corporation) #

(1) The chairperson of the Evaluation Institute of Regional Public Corporation established under Article 78-4 (1) of the Act (hereafter referred to as the "Evaluation Institute") shall, in accordance with the following standards, draw up a proposal for request for contributions classifying them into all and each of local governments and local public enterprises, and shall determine the size of contributions by no later than July 31 each year following consultation with the Minister of the Interior and Safety: <Amended on Jul. 26, 2017>

1. Compilation standards of local government contributions: Fiscal capacity, number of public enterprises, etc.;

2. Compilation standards of local public enterprises: Sales amount, number of employees, assets, etc.

(2) Before holding a consultation prescribed in paragraph (1), the chairperson of the Evaluation Institute shall submit records of collection of contributions and business execution, business plan for the following year, etc. to the Minister of the Interior and Safety. <Amended on Jul. 26, 2017>

(3) In order for the amount of contributions which has been consulted with the Minister of the Interior and Safety under paragraph (1) to be compiled in the budgets of the local government and local public enterprises, the chairperson of the Evaluation Institute shall submit a request for contributions to the relevant local government and local public enterprises by no later than August 31 each year together with the following documents: <Amended on Jul. 26, 2017>

1. A business plan for the following fiscal year;

2. An estimated statement of financial position and an estimated profit and loss statement for the following fiscal year.

(4) Upon finalization of a budget for contributions, the head of the relevant institution, in receipt of a request for contribution paragraph (3), shall notify the Evaluation Institute thereof.

(5) Where the Evaluation Institute intends to receive contributions finalized and notified under paragraph (4), it shall submit an application for payment of contributions together with a fund implementation plan to the relevant institution.

(6) The Evaluation Institute shall use the contributions for its original business and operation expenses.

(7) The Evaluation Institute shall appropriate the surplus which has occurred after settlement of accounts to its fundamental property or operation fund.

(8) The chairperson of the Evaluation Institute shall file a report on the matters concerning the payment and use of contributions with the Minister of the Interior and Safety within two months from the end of each fiscal year. <Amended on Jul. 26, 2017>

[This Article Wholly Amended on Mar. 30, 2016]

Article 78(Notification) #

(1) Where the business operated by a local government becomes to be governed, or not governed by laws, as a local government-directly operated enterprise pursuant to Article 2 of the Act, the head of the local government shall notify such fact to the Minister of the Interior and Safety. <Amended on Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Nov. 16, 2023>

(2) The head of the local government shall notify the Minister of the Interior and Safety on any of the following matters within 10 days from the date the relevant reasons occurred: <Amended on Jun. 19, 2002; Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Nov. 16; 2023>

1. Matters concerning the establishment of a local government-invested public corporation and a local government public corporation prescribed in Articles 49 (1) and 76 (1) of the Act;

2. Matters concerning the joint establishment of a local government-invested public corporation and a local government public corporation prescribed in Articles 50 (1) and 76 (2) of the Act;

3. Matters concerning the alteration of the articles of association of a local government-invested public corporation and a local government public corporation prescribed in Articles 56 (3) and 76 (2) of the Act;

4. Matters concerning the appointment and dismissal of the president (chief director) and auditors of a local government-invested public corporation and a local government public corporation prescribed in Articles 58 (2) and 76 (2) of the Act;

4-2. Deleted; <Sep. 24, 2014>

5. Outcomes of management improvement measures taken pursuant to Article 78-2 (3) of the Act;

6. Deleted; <Jun. 19, 2002>

7. Other matters concerning such important changes as liquidation or privatization of a local government-invested public corporation or a local government public corporation.

(3) When the head of a Si/Gun/autonomous Gu intends to notify the Minister of the Interior and Safety pursuant to paragraphs (1) and (2), he or she shall do so via a Mayor/Do Governor who has jurisdiction over such Si/Gun/Gu. <Amended on Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Nov. 16; 2023>

(4) For the purpose of local public enterprises' management pursuant to the basic principle prescribed in Article 3 of the Act, the Minister of the Interior and Safety may give advice, recommendation, or guidance thereto, and request such enterprises to submit the necessary data. <Amended on Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>

[Title Amended on Nov. 16, 2023]

ENFORCEMENT DECREE OF THE LOCAL PUBLIC ENTERPRISES ACT

Article 1(Purpose) #

Article 2(Scope of local government-directly operated enterprises) #

Article 2-2(Application mutatis mutandis of provisions governing fees) #

Article 3(Manager's term of office) #

Article 3-2(Formulation of medium- to long-term business management plans of local water supply business) #

Article 4(Adjustment of incomes or expenses related to more than two or more businesses) #

Article 5(Expenses to be borne by general accounts) #

Article 6(Methods of accounting) #

Article 7(Determination of year to which profits should be attributed) #

Article 8(Determination of year to which expenses should be attributed) #

Article 9(Determination of year to which increase or decrease, or transfer of assets should be attributed) #

Article 10(Classification of account receivable and account payable) #

Article 11(Classification of accounts) #

Article 12(Assets) #

Article 13(Liabilities) #

Article 14(Capital) #

Article 14-2(Scope of transfer of profits into general accounting) #

Article 15(Procedures for issuing municipal development bonds) #

Article 16(Advances) #

Article 17(Calculation of costs) #

Article 18(Methods of calculating fees) #

Article 19(Matters to be entered in budget) #

Article 20(Presentation of budget bill) #

Article 21(Execution of budget) #

Article 22(Arrangement of expenses in relation to revenue expenditures and capital expenditures) #

Article 23(Budget control account and funds operation plans) #

Article 24(Application for approval for carrying budget forward to next term) #

Article 25(Scope of expenses not paid in cash) #

Article 26(Designation of financial companies handling receipts and disbursements of cash) #

Article 27(Proper care of receipt and disbursement services of designated financial institutions) #

Article 28(Contracts on cash receipt and disbursement services) #

Article 29(Disbursement by check) #

Article 30(Disbursement by account Transfer) #

Article 31(Payment of ordinary expenses) #

Article 32(Inspection of designated financial institutions) #

Article 33(Payment with securities) #

Article 34(Payment by account transfer) #

Article 35(Public officials in charge of accounts) #

Article 36(Presentation of reports on settlement of accounts) #

Article 37(Appropriation of profits) #

Article 38(Appropriation of capital surplus) #

Article 39(Disposition of loss) #

Article 40(Transfer of reserve funds into capital) #

Article 41(Acquisition and disposal of important assets) #

Article 42(Appraisal of assets) #

Article 43 #

Article 44(Disclosure of business management) #

Article 44-2(Combined disclosure) #

Article 45(Handing over and taking over business) #

Article 46(Regulations regarding account management) #

Article 47(Examination of feasibility of establishment) #

Article 47-2(Examination of feasibility of investment in other corporations) #

Article 48(Matters to be included in articles of association) #

Article 49(Registration of incorporation) #

Article 50(Registration of installation of public corporation's branch) #

Article 51(Registration of transfer) #

Article 52(Alteration registration of alteration) #

Article 53(Application for registration) #

Article 54(Calculation of registration period) #

Article 55(Directors) #

Article 56 #

Article 56-2(Standards for reappointing or dismissing president) #

Article 56-3(Formation and operation of executive officer recommendation committee) #

Article 56-4(Procedures for recommending candidates for executive officers) #

Article 57(Vicarious execution by executive whose term of office has expired) #

Article 57-2(Profit-Making Business of Executive Officers and Employees Prohibited from Concurrent Offices) #

Article 57-3(Registration of appointment of agents) #

Article 57-4(Request for investigation against persons committing misconduct) #

Article 57-5(Deliberative committee on disclosure of persons involved in local public enterprises' hiring misconduct) #

Article 57-6(Measures against persons involved in hiring misconduct) #

Article 57-7(Personnel audit) #

Article 57-8(Accounting) #

Article 57-9(Scope of procurement contracts of urban railway corporation subject to international tender) #

Article 57-10(Objects and Grounds for Filing Objections) #

Article 57-11(Formulation of medium- to long-term financial management plans) #

Article 57-12(Details of written integrity pledge) #

Article 58(Business plans and budget) #

Article 58-2(Examination of feasibility of new investment project) #

Article 58-3(Business management in real names and disclosure thereof) #