In connection with the application of Article 2 of the Central Government Development Bonds Issuance Act, the Legislative Yuan and Executive Yuan have adopted different views ex officio and have petitioned the Judicial Yuan for a uniform interpretation, which they hence will accept in accordance with Article 7, Paragraph 1, Subparagraph 1, of the Constitutional Interpretation Procedure Act. Furthermore, pursuant to Article 13, Paragraph 1, of the Constitutional Interpretation Procedure Act, the Judicial Yuan has informed the applicant, the Legislative Yuan, and the relative party, the Executive Yuan, to appoint designated representatives to attend hearings and argue before the Constitution Court on December 23, 1993, and has invited financial economics scholars to appear at the said Court to express their opinions on this matter. The allegations of the applicant are briefly summarized as follows:
Article 2 of the Central Government Development Bonds Issuance Act sets forth the total residual amount of the issuance of debts, which nature is the upper limit of indebtedness, a burden undertaken by the government, which has promised such ceiling to the people. The said purpose is to prevent any heavy tax burden upon citizens and to avoid a fiscal crisis. If the more-than-one-year borrowing of the government is not included in the abovementioned non-payable total residual amount, the upper limit restriction as stated in such Act will be pointless, the governmental expenditures will be without limitation and consequently the government may evade the supervision of the Legislative Yuan. As far as Article 34 of the Act Governing the Allocation of Government Revenues and Expenditures is concerned, it is to emphasize the authority of every level of council and shall not be the source of law for more-than-one-year borrowings; thus, such more-than-one-year bank loans shall be governed by the limitation under Article 2 of the Central Government Development Bonds Issuance Act.
The response of the relative party is in the following:The term “bond” under the Central Government Development Bonds Issuance Act, pursuant to the legislative purpose and construction of its literal meaning, shall refer to the bonds issued in accordance with such Act. The upper limit so set forth therein only applies toward these development bonds, exclusive of those from borrowings. Bonds and more-than-one-year borrowings are separately listed under Article 34, Paragraph 1, of the Act Governing the Allocation of Government Revenues and Expenditures, which clearly indicates that they shall not be commingled. Accordingly, more-than-one-year borrowings of the Central Government shall be compiled under the item of budget and separate from revenue arising from bonds, and as such shall be submitted to the Legislative Yuan for review. Every situation will be supervised by the Legislative Yuan and there will not be any attempt to evade the aforesaid supervision.
After considering the points asserted by the applicant and the relative party as well as opinions rendered by the scholars, this Court has found the following:
If deficit and imbalance of the budget should occur, for the fiscal needs and the term promise to pay the principal and premium, the broad definition of the term “bond” shall include any borrowings from individuals, commercial entities, financial institutions, foreign governments or international organizations, while the narrow definition of the same term shall mean the raising of funds from the issuance of bonds and bills. Different countries have various systems for governing of fund-raising methods as well as those rules and regulations public debts should be subject thereto. With respect to the issuance of bonds here, there are the Central Government Development Bonds Issuance Act and other statutes of issuing bonds for special constructions (for instance, the Act for Issuing Second Freeway Development Bonds in the Northern Taiwan Region by the Central Government); the issuance of treasury bills can be found not only in the Treasury Act, but in the Statute for the Issuance of Treasury Bills as well; and in regard to foreign borrowings, there is the Statute for Arranging Foreign Loans and the Guarantee for Developing the Economy and Society by the Government; as to borrowings for more than one year, they are regulated by the Act Governing the Allocation of Government Revenues and Expenditures. Among the above, the Central Government Development Bonds Issuance Act is set forth to issue, pursuant to law, bonds or bills, bearer or registered, or other receipts for the purposes of raising development capitals for the Central Government (as per Article 6 of such Act). According to said Article 2, the so-called “non-payable total amount” shall mean the residual unpaid total sum of such development bonds which are issued in accordance with the above mentioned method, but shall exclude those short-term bonds or bills issued pursuant to other laws by the Central Government, or the debts, greater than one year, loaned by the banks to the government as indicated by the applicant herein. However, either loan or issuance of bonds will fall under the public debts of the government, which in substance makes no difference as and for governmental fiscal instruments. There are specific laws or regulations that prescribe the issuance of development bonds, short-term bonds or bills, or foreign borrowings, wherein the maximum amount or upper limit pursuant to the annual total budget is set forth. As for those more-than-one-year loans arranged by the Central Government, Article 34, Paragraph 1, of the Act Governing the Allocation of Government Revenues and Expenditures stipulates the preparation of the budget for scrutiny by the Legislative Yuan, and once the legal procedures have been concluded, then loans from the banks and other institutions can be arranged. Provided that the lending limit is not applicable in accordance with the ceiling set forth in the Central Government Development Bonds Issuance Act and there is no other law so regulated, the upper limit restriction as stated in said Act will be pointless, which is unbalanced in comparison to the other governmental borrowings mentioned above that have to be limited by several other laws. The above more-than-one-year borrowings only need to be included in annual budgeting and be subject to the review of the Legislative Yuan, which process to avoid the issuance of bonds will be hard to say without evasion of law. Therefore, in order to maintain fiscal healthiness, it is suggested that the upper limit of all permissible debts for the State be prescribed in accordance with the laws after taking all circumstances into consideration.
*Translated by Spenser Y. Hor, Esq. and Chien Yeh Law Offices.