Purposes of Local Government Bonds
In principle, Local Governments may issue bonds to finance purposes stipulated in Article 5 of the Local Finance Law.
Such purposes include:
- Operating public enterprises such as transport, gas, water supply and sewerage services:
- Investments and loans;
- Renewal relief works;
- Constructing public facilities such as schools, nurseries, other educational or welfare facilities, and firefighters' facilities; and
- Developing road, river, port and other public infrastructures
- Hospital
(Miyagi Prefecture)
- Stadium
(Saitama Prefecture)
- Investment & Infrastructure
(Aichi Prefecture ＆ Nagoya City)
- Hospital
(Osaka City)
- Sewerage
(Kure City)
- Museum
(Kita Kyusyu City)
In addition, other statutory provisions authorize Local Governments to issue bonds for specific purposes. These include:
- Depopulated Areas Special Measure Bonds, based on the Law on Special Measures to Stimulate Depopulated Areas;
- Municipal Merger Special Measure Bonds, based on the Law on Special Measures to Promote Municipal Mergers;
- Evacuation Facility Development Bonds, based on the Law on Special Measures for Active Volcanoes;
- Mining Pollution Relief Bonds, based on the Local Finance Law
Further, special Local Government Bonds can be issued to ensure sufficient revenue sources for Local Governments. These include:
- Tax-Reduction Supplementary Bonds, based on the Local Finance Special Measures Law;
- Retirement Allowance Bonds, based on the Law on Special Measures to Promote Local Finance Rehabilitation;
- Revenue Shortfall Bonds, based on the Basic Law on Disaster Relief Measures; and
- Temporary Financial Measures Bonds, based on the Local Finance Law