Decree No. 37/2013/ND-CP Amending and supplementing some articles of Decree No. 138/2007/ND-CP dated August 28, 2007 on the organization and operation of local development investment funds.

DECREE

Amending and supplementing some articles of Decree No. 138/2007/ND-CP dated August 28, 2007 on the organization and operation of local development investment funds

 on the organization and operation of local development investment funds

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Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on Organization of People's Councils and People's Committees dated November 26, 2003;

Pursuant to the Law on State Budget dated December 16, 2002;

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to the Law on Credit Organizations dated June 16, 2010;

At the proposal of the Minister of Finance;

The Government promulgates this Decree to amend and supplement some articles of Decree No. 138/2007/ND-CP dated August 28, 2007 on the organization and operation of Local Development Investment Funds (hereinafter referred to as Decree No. 138/2007/ND-CP),

Article 1. Amend and supplement some articles of Decree No. 138/2007/ND-CP as follows:

1. Amend Article 5 as follows:

"Article 5. Responsibilities of State management agencies

1. Responsibilities of the Ministry of Finance

a) Take the lead and coordinate with ministries and sectors to submit to the Government for issuance of mechanisms and policies on the organization and operation of local development investment funds;

b) Issue model bylaws on the organization and operation of local development investment funds;

c) Issue accounting systems, financial management mechanisms, and reporting systems for local development investment funds.

2. Responsibilities of the State Bank of Vietnam

a) Carry out state management functions related to currency and banking activities concerning the lending operations of local development investment funds;

b) Coordinate with the Ministry of Finance to develop policies, monitor, and evaluate the implementation of lending and investment activities of local development investment funds.

3. Responsibilities of the Provincial People's Council

a) Approve the project to establish a local development investment fund;

b) Approve the plan to allocate and supplement the charter capital of the local development investment fund from the provincial budget based on the proposal of the Provincial People's Committee;

c) Examine and give approval to the list of priority economic and social infrastructure investment fields according to the provisions of Clause 2 and Clause 4, Article 1 of this Decree;

d) Perform other tasks as prescribed by law.

4. Responsibilities of the Provincial People's Committee

a) Develop the project to establish a local development investment fund for submission to the Provincial People's Council for approval in accordance with Decree No. 138/2007/ND-CP and this Decree;

b) Decide on the establishment of a local development investment fund after the project to establish the local development investment fund has been approved by the Provincial People's Council;

c) Submit to the Provincial People's Council for approval the plan to allocate and supplement the charter capital of the local development investment fund; allocate resources to provide and supplement the charter capital of the local development investment fund according to the plan approved by the same-level People's Council;

d) Approve the operational bylaws of the local development investment fund or approve amendments and supplements to the bylaws based on the proposal of the Chairman of the Management Board of the local development investment fund;

đ) Approve the organizational structure of the local development investment fund based on the proposal of the Chairman of the Management Board of the local development investment fund;

e) Issue the list of priority economic and social infrastructure investment fields according to the provisions of Clause 2 and Clause 4, Article 1 of this Decree;

g) Decide on the minimum interest rate for loans issued by the local development investment fund during each period as stipulated in Clause 5, Article 1 of this Decree;

h) Approve investment decisions for projects with investment amounts exceeding 10% of the equity capital of the local development investment fund;

i) Approve loan decisions for projects with loan amounts exceeding 15% of the equity capital of the local development investment fund or loan periods exceeding 15 years;

k) Approve capital contributions to enterprises with contribution amounts exceeding 10% of the equity capital of the local development investment fund;

l) Decide on the number of members of the Management Board of the local development investment fund;

m) Manage, inspect, and supervise the overall operation and finance of the local development investment fund;

n) Perform other tasks as prescribed by law.

2. Amending and supplementing Article 6 as follows:

"Article 6. Direct investment targets

1. Direct investment targets are projects within the list of priority economic and social infrastructure investment fields of the locality issued by the Provincial People's Committee in accordance with Clause 2 of this Article.

2. Based on the local socio-economic development strategy and the infrastructure investment fields specified in Appendix I attached to this Decree, the Provincial People's Committee shall issue annually or periodically the list of priority economic and social infrastructure investment fields of the locality after obtaining the approval of the Provincial People's Council.

3. Based on the list of priority economic and social infrastructure investment fields of the locality specified in Clause 2 of this Article, the local development investment fund shall select, review, and decide to directly invest in specific projects if they meet the investment conditions stipulated in Decree No. 138/2007/ND-CP and this Decree."

3. Amend and supplement Point a Clause 1 Article 9 as follows:

"a) Invest through business cooperation contracts (BCC), build-operate-transfer (BOT), build-transfer-operate (BTO), build-transfer (BT) contracts, and other direct investment forms as prescribed by investment laws."

4. Amend and supplement Article 11 as follows:

"Article 11. Loan targets

1. Loan targets are projects within the list of priority economic and social infrastructure investment fields of the locality issued by the Provincial People's Committee in accordance with Clause 2 of this Article.

2. Based on the local socio-economic development strategy and the infrastructure investment fields specified in Appendix I attached to this Decree, the Provincial People's Committee shall issue annually or periodically the list of priority economic and social infrastructure investment fields of the locality after obtaining the approval of the Provincial People's Council.

3. Based on the list of priority economic and social infrastructure investment fields of the locality specified in Clause 2 of this Article, the local development investment fund shall select, review, and decide to lend to specific projects if they meet the loan conditions stipulated in Decree No. 138/2007/ND-CP and this Decree."

5. Amending and supplementing Article 15 as follows:

"Article 15. Interest rates for loans

1. The interest rate for loans from the local development investment fund shall be determined according to the principle of not being lower than the average deposit interest rate of all sources of capital raised, ensuring compensation for management fees, other costs related to the loan activities of the local development investment fund, and the preservation and development of the fund's equity capital.

2. Annually or during each period, based on the principle of determining the interest rate stipulated in Clause 1 of this Article, the General Director or Director of the local development investment fund shall calculate, submit to the Fund Management Board for approval, and report to the provincial People's Committee to issue a decision setting the minimum loan interest rate of the local development investment fund.

3. The local development investment fund decides the loan interest rate for each specific project, but it must not be lower than the minimum loan interest rate decided by the provincial People's Committee pursuant to Clause 2 of this Article.

4. In cases where the provincial People's Committee decides to provide loans for investment projects to develop economic and social infrastructure at interest rates lower than the minimum loan interest rate prescribed in Clause 2 of this Article, the provincial People's Committee shall bear responsibility for subsidizing the difference between the minimum loan interest rate of the local development investment fund and the designated loan interest rate for that project.

5. In cases where the provincial People's Committee decides to support post-investment interest rates for a specific project, the following conditions must be ensured:

a) The recipient of post-investment interest rate support must be the investor in a project included in the list of priority sectors for investment in economic and social infrastructure development in the locality as prescribed in Clauses 2 and 4 of Article 1 of this Decree.

b) The provincial People's Committee shall issue a decision to support post-investment interest rates for each specific project, clearly specifying: the recipient of the support; the method, timing, and level of post-investment interest rate support; the tasks, rights, and responsibilities of the local development investment fund in appraising the project and disbursing post-investment interest rate support; the obligations and responsibilities of the recipient and other related parties.

c) The provincial People's Committee shall be responsible for fully allocating the source of post-investment interest rate support funds to the local development investment fund as prescribed in Point b of Clause 5 of this Article, ensuring that it does not affect the operational capital of the local development investment fund.

6. For projects using support funds from international financial institutions with different loan interest rate provisions than those stipulated in this Decree, they shall be implemented in accordance with the provisions of the agreements signed with the financial institution.”

Organizations and individuals submit directly or send through postal service or via the Online Public Service Portal 01 set of application documents for issuing, extending, amending, and supplementing permits as stipulated in Article 15 of this Decree to the One-stop Service Center of the People's Committee of provinces and centrally-run cities (or the Receipt and Delivery Department of the Department of Natural Resources and Environment).

"Article 17. Provisions on joint lending

1. The local development investment fund may act as the lead lender or jointly lend with other local development investment funds, credit organizations, and other organizations to finance projects.

2. In cases where joint lending is carried out for projects outside the province or city where the local development investment fund operates, the joint lending must satisfy the following conditions:

a) The project must belong to the list of priority sectors for investment in economic and social infrastructure development in the locality as prescribed in Clause 4 of Article 1 of this Decree;

b) The project has characteristics supporting regional economic and social development, including the locality where the local development investment fund operates;

c) It must be approved by the Chairman of the provincial People's Committee where the local development investment fund operates for joint lending outside the province or city.

3. Joint lending must be formalized in a contract with terms and conditions complying with the provisions of Decree No. 138/2007/NĐ-CP and this Decree.

4. The interest rate for joint lending by local development investment funds shall be determined independently and reflected in the contract, ensuring that it is not lower than the minimum loan interest rate of each fund as prescribed in Clause 5 of Article 1 of this Decree.”

7. Amend and supplement Article 21 as follows:

"Article 21. Forms of Capital Contribution

The local development investment fund may contribute capital to establish joint-stock companies or limited liability companies in accordance with the Enterprise Law to directly invest in economic and social infrastructure projects listed in the priority sectors for investment in economic and social infrastructure development issued by the provincial People's Committee as prescribed in Clause 2 of Article 1 of this Decree."

8. Amend Clause 2 of Article 23 as follows:

"2. The local development investment fund may accept entrustment to manage the operations of credit guarantee funds for small and medium-sized enterprises; housing development funds, land development funds, cooperative development support funds, and other local financial funds established by the provincial People's Committee. The entrustment to the local development investment fund shall be carried out in accordance with current laws."

9. Amend and supplement Article 25 as follows:

"Article 25. Investment Limits

1. The limit on direct investment in projects shall not exceed 50% of the equity capital of the local development investment fund at the time of implementation.

2. Loan limits:

a) The loan limit for a single project shall not exceed 20% of the equity capital of the Fund at the time of implementation and shall not exceed 80% of the total investment capital of the project. If the local development investment fund simultaneously implements direct investment and loans for a single project, the total limit on direct investment and loans shall not exceed 30% of the equity capital of the Fund at the time of implementation.

b) The total outstanding loan balance for a single customer of the local development investment fund shall not exceed 25% of the equity capital of the local development investment fund.

3. The limit on capital contribution to establish economic organizations shall not exceed 20% of the equity capital of the local development investment fund at the time of implementation.

4. For projects using support funds from international financial institutions with different investment and loan limits than those stipulated in this Decree, they shall be implemented in accordance with the provisions of the agreements signed with the financial institution.”

10. Amend and supplement Clause 1 of Article 26 as follows:

"1. The equity capital of the local development investment fund includes:"

a) Registered capital: Is the amount of capital contributed by the owner to the local investment development fund for operation as prescribed in Decree No. 138/2007/NĐ-CP and this Decree;

b) Financial reserve fund, Investment Development Fund;

c) Other sources of capital from the owner as prescribed by law.”

11. Amend and supplement Article 32 as follows:

Article 32. Principles of Operation of Local Investment Development Funds

1. The local investment development fund is a state financial organization of the locality, operating under a policy bank model, implementing the principle of financial autonomy, not aiming for profit, preserving and developing capital.

2. The local investment development fund is liable up to the extent of its own capital.

12. Amend and supplement Article 36 as follows:

Article 36. Composition of the Management Board of the Local Investment Development Fund

1. The Management Board has a maximum of five (5) members, the Provincial People's Committee decides on the number of members of the Management Board based on actual conditions, following the principle that the number of Management Board members must be odd.

2. The Chairman, Vice-Chairman, and other members of the Management Board are appointed, dismissed, or removed by the Chairman of the Provincial People's Committee.

3. Members of the Management Board must have knowledge and experience in finance, capital investment, and business management.

4. The composition, structure, standards, number, and term of operation of the Management Board are stipulated in the Model Charter regarding the organization and operation of the Local Investment Development Fund.

13. Amend Clause 2 of Article 38 as follows:

“2. The Supervisory Board has a maximum of three (3) members, who are entitled to allowances and other benefits as prescribed by law.”

14. Supplement Clause 4a of Article 39 as follows:

“4a. Recruitment of employees; planning and appointment of leadership cadres of the Local Investment Development Fund shall be carried out according to the provisions of the Operating Charter of the Local Investment Development Fund.”

15. Amend Clause 3 of Article 40 as follows:

“3. The wage mechanism, bonus, and ranking system of the Local Investment Development Fund shall be implemented according to the regulations applicable to a limited liability company wholly owned by the State. The ranking of the Local Investment Development Fund shall be based on the ranking criteria for the group of financial companies.”

Article 2. Implementation

Within a maximum period of two (2) years from the date this Decree takes effect, all existing local investment development funds must review and reorganize their organizational structures in accordance with this Decree.

For loan and direct investment projects that the local investment development fund has signed loan agreements and direct investment contracts before this Decree takes effect, they may continue to implement according to the agreements already signed within the limits prescribed in Decree No. 138/2007/NĐ-CP until the end of the contract term. In cases where the loan and direct investment contract amounts are amended or supplemented, such amendments or supplements must comply with the loan and direct investment limits prescribed in this Decree.

For loan and direct investment projects after this Decree takes effect, they must comply with the loan and direct investment limits prescribed in Decree No. 138/2007/NĐ-CP and this Decree.

All activities of raising capital, lending, direct investment, and other activities according to the functions of the local investment development fund of the State-owned Investment Finance Company of Ho Chi Minh City shall be carried out in accordance with Decree No. 138/2007/NĐ-CP and this Decree.

Article 3. Effectiveness and Responsibility for Implementation

1. This Decree takes effect from June 10, 2013.

2. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of People's Committees of provinces and centrally-run cities, and related organizations and individuals are responsible for enforcing this Decree.