Decree No. 89/2017/ND-CP on certain mechanisms and financial-budgetary policies with special characteristics for the city of Hai Phong

DECREE

Regulations on Certain Mechanisms and Financial Policies with Special Characteristics for the City of Hai Phong

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Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to the Law on Public Investment dated June 18, 2014;

Pursuant to the Law on Public Debt Management dated June 17, 2009;

At the proposal of the Minister of Finance;

The Government issues this Decree this Decree stipulates certain mechanisms and financial policies with special characteristics for the City of Hai Phong.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Decree provides detailed implementation of the State Budget Law regarding certain mechanisms and financial policies with special characteristics for the City of Hai Phong (hereinafter referred to as the city).

Article 2. Other financial and budgetary mechanisms and policies not specified in this Decree shall be implemented in accordance with the State Budget Law and other Decrees of the Government providing detailed guidance for the implementation of the State Budget Law.

Article 2. Applicability

Article 3. State agencies, political organizations, political-social organizations, social-professional organizations, social organizations, public service units using the Hai Phong City budget.

Article 4. Other organizations and individuals related to the finances and budget of Hai Phong City.

Article 5. Objectives and Requirements for Building Special Mechanisms

These special mechanisms aim to promote rapid and sustainable economic and social development of the city; create conditions for the city to fully leverage its resources and advantages to build Hai Phong into a green, civilized, modern port city, a major service and industrial center with high competitiveness; a key point of marine economic development nationwide; an educational, healthcare, and scientific-technological center in the Northern coastal region; an important transportation hub of the country, the main gateway to the sea of the northern region, and part of the China-Vietnam economic corridor. Through these efforts, it will serve as a driving force for the economic and social development of localities within the region, the area, and the country as a whole.

Chapter II

RAISING FUNDS FOR INVESTMENT AND DEVELOPMENT

Article 6. Raising Funds for Investment and Development

Clause 1. The city is permitted to borrow funds for domestic investment through various forms of local government bond issuance and other fundraising methods as prescribed by law; borrowing from the central government's loans allocated for local governments to re-lend. The level of debt (including domestic borrowing from local government bond issuance, re-lending from central government loans, and other domestic borrowing as prescribed by law) of the city’s budget shall not exceed 40% of the local budget revenue under the fiscal decentralization and must remain within the annual budget deficit limit decided by the National Assembly.

Clause 2. The Government prioritizes partial funding from the central budget to support the city's participation in implementing projects under the public-private partnership (PPP) model serving regional needs within the city and large, important projects for the city's economic and social development.

Article 7. Raising Official Development Assistance (ODA) and Preferential Loans from Foreign Donors

Clause 1. The Government prioritizes raising ODA funds for the city to implement critical infrastructure projects under the city’s budget expenditure responsibilities. The allocation of counterpart funds domestically for these projects shall be guaranteed by the city’s budget.

2. The Government prioritizes allocating concessional loan capital through the mechanism of lending to localities to implement PPP projects within the city's territory.

Clause 3. For the need to borrow foreign loans to implement important projects, the principle is that based on projects approved by the People's Council of the city, the People's Committee of the city proposes programs and projects to use foreign loans for submission to the competent authority for examination and decision-making according to the mechanism of the Government lending to the city for re-lending. The city is responsible for allocating from the city’s budget to repay according to regulations.

Clause 4. The People's Committee of the city is authorized to approve project lists and decide to accept non-repayable grants (ODA, non-governmental foreign aid) for programs and projects regardless of grant size, except for technical assistance grants related to institutional, religious, policy, administrative reform, defense, and security matters decided by the Prime Minister. The People's Committee of the city is responsible for implementing, receiving, managing, and effectively utilizing these grants, adhering to accounting and bookkeeping regulations; periodically reporting to the Ministry of Finance and the Ministry of Planning and Investment for monitoring, supervision, and compiling reports to the Prime Minister.

Chapter III

MANAGEMENT OF FINANCES AND BUDGET OF HAI PHONG CITY

Article 6. Special Features Regarding the Budget

1. Based on the total approved budget estimate, the progress of implementing projects, the capacity to allocate funds from the city's budget, and the balance of the central budget, the Ministry of Planning and Investment and the Ministry of Finance shall report to the Government to submit to the National Assembly for a decision to supplement targeted funds from the central budget to the city's budget to implement economic and social development projects of the city and regional service-oriented projects within the city's territory, in accordance with the provisions of the Law on Public Investment.

2. Annually, the central budget supplements targeted funds for the city of Hai Phong not exceeding 70% of the increase in revenue collected by the central budget from shared revenue sources between the central budget and the city's budget compared to the Prime Minister's approved estimate (the remaining amount after applying the excess revenue bonus according to the Law on State Budget No. 83/2015/QH13), and revenues specified at points b, c, d, g, h, i, q of Clause 1, Article 35 of the Law on State Budget that exceed the Prime Minister's approved estimate (excluding: revenues not managed by the city, not generated within the Hai Phong city territory but only recorded and paid in Hai Phong; revenues already approved by competent authorities for use; revenues recorded as income, expenses, and retained by units under state budget management according to the law); the amount of targeted supplementation shall not be higher than the increase in central budget revenue on the territory compared to the previous year's actual revenue.

The determination of the amount of targeted supplement is based on the total of all revenues, without calculating each revenue item separately.

Based on the total excess revenue of the central budget and overall balance, the Government shall report to the Standing Committee of the National Assembly for consideration and decision on the level of targeted supplementation for the city of Hai Phong in accordance with the provisions of the Law on State Budget No. 83/2015/QH13 and the special mechanism for the city of Hai Phong stipulated in this Article.

3. The city shall use the targeted supplementation funds from the increased revenue as provided for in Clause 2 of this Article: Prioritize payment of arrears in basic construction; invest in infrastructure projects; allocate matching funds for ODA projects; repay loans; implement important tasks to develop the economy and society, ensure national defense, security, public order, and social safety of the city, and reward lower-level budgets. The People's Committee of the city shall report to the People's Council of the city for a decision on specific funding amounts for each target and task and rewards for lower-level budgets.

4. Mechanism for advance allocation of the next year's budget from targeted central support funds and government bonds: Based on current regulations and the ability to balance funds, the city may consider advancing the next year's budget allocation to implement special, important, urgent projects eligible for capital support from the central budget according to the Law on State Budget.

Article 7. The city may implement a mechanism to partially subsidize interest rates for organizations and individuals when borrowing to invest in important economic and social development projects capable of recovering capital within the scope and capacity of the city's budget and in accordance with the law.

Chapter IV

IMPLEMENTING PROVISIONS

Article 8. Effective Date

1. This Decree takes effect from September 15, 2017, and applies from the 2017 fiscal year.

2. Repeal Decision No. 54/2004/QĐ-TTg dated April 5, 2004, of the Prime Minister on certain preferential financial and budget mechanisms for the city of Hai Phong.

Article 9. Implementation Organization

1. The Minister of Finance and the People's Committee of the city of Hai Phong shall organize the implementation of this Decree.

2. Ministers, Heads of ministerial-level agencies, agencies under the Government, other central agencies, and the Chairman of the People's Committee of the city of Hai Phong are responsible for enforcing this Decree./.