Government Regulation Number 54 In 2005

Original Language Title: Peraturan Pemerintah Nomor 54 Tahun 2005

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! KC FINANCIAL. THE LOCAL GOVERNMENT. LENDING AREA. PP 54-2005 Text copy _?.
Back COUNTRY SHEET Republic of INDONESIA No. 136, 2005 (explanation in an additional Sheet of the Republic of Indonesia Number 4574) GOVERNMENT REGULATION of the REPUBLIC of INDONESIA NUMBER 54 in 2005 ABOUT the LENDING AREAS with the GRACE of GOD ALMIGHTY the PRESIDENT of the REPUBLIC of INDONESIA, Considering: that, to implement the provisions of article 171 Law Number 32 of 2004 concerning Regional Government and section 65 of the Act Number 33 year 2004 of Financial Equalization Between the Central Government and the regional Government needs to establish government regulation about the Loans Area;
.,, Considering: 1. Article 5 paragraph (2) of the Constitution of the Republic of Indonesia in 1945;
., ,2. Law Number 32 of 2004 concerning Regional Government (State Gazette of the Republic of Indonesia Number 125 of 2004, an additional State Gazette Number 4437);
., ,3. Act No. 33 of 2004 concerning the Financial Equalization between the Central Government and the regional Government (the State Gazette of the Republic of Indonesia in 2004, an additional 126 Sheet Number country number 4438);
Decide: define: GOVERNMENT REGULATION of LENDING areas.

CHAPTER I GENERAL PROVISIONS article 1 In this Government Regulation is:.,, 1. The Central Government, which is hereinafter referred to as the Government, is the President of the Republic of Indonesia that holds the powers of the Government of the Republic of Indonesia as stipulated in the Constitution of the Republic of Indonesia in 1945;
., ,2. The local government is the Governor, Governor, or mayor, and other Areas as the organizer of local governance;
., ,3. The autonomous region, hereinafter referred to as the area, is the unity of Community law which has territorial boundaries are authorized to organize and administer the Affairs of Government and the interests of the local community according to its own initiative on the basis of the aspirations of the community in the system of unitary State of the Republic of Indonesia;
., ,4. The head of the regional Governor for the provinces or Regent for district or City Mayor for the area;
., ,5. The Regional House of representatives hereafter referred to PARLIAMENT is the institution of the regional House of representatives as an organizer of local governance;
., ,6. Budget revenue and Expenditure of the State, hereinafter referred to as the annual STATE BUDGET is a financial plan approved by the State House of representatives;
., ,7. Budget revenue and Expenditure areas, hereinafter referred to as the annual financial plan is to GRANT local governance was discussed and approved by the local authorities and Representatives of the area, and established with local regulations;
., ,8. Equalization Fund is a fund sourced from the STATE BUDGET revenue is allocated to regions to fund the needs of the region in the framework of the implementation of Decentralization;
., ,9. Lending Area is all transactions which resulted in the region received a sum of money or receive benefits worth the money from other parties so that the region bears the obligation to repay;
., .10. Bond Lending area is the area that is offered to the public through an initial public offering on the stock market;
.,, 11. General Allocation Fund, hereinafter referred to as DAU, is a fund sourced from STATE BUDGET revenues are allocated with the goal of equitable distribution between Regional financial capability to fund the needs of the region in the framework of the implementation of Decentralization;
., 12. Funds for the results are funds sourced from the STATE BUDGET revenue is allocated to Regions based on numeric percentage to fund the needs of the region in the framework of the implementation of Decentralization;
., 13. The project is an activity that is part of a program that consists of a set of actions the deployment resources either in the form of personal (human resources), the capital goods including appliances and technology, funds, or a combination of some or all of the resource type as input (input) to disappear asilkan output (output) in the form of goods/services.
CHAPTER II GENERAL PRINCIPLES article 2 REGIONAL LOANS.,, (1) Lending Area is an alternative source of financing of a GRANT and/or to close the cash shortage.
.,, (2) loan used to finance the activities of the Area which is an initiative of the regional authorities and on the basis of legislation.
Section 3.,, (1) local governments are prohibited from engaging in direct loans to foreign parties.
.,, (2) the provisions referred to in subsection (1) does not apply in respect of the loan directly to the overseas transaction activity that occurs because Bonds of appropriate Areas of legislation in the field of capital market.
Article 4 (1) local governments are prohibited from giving collateral for the loan to the other party.
.,, (2) the income of the area and/or goods belonging to the area should not be used as loan guarantees.
.,, (3) Projects that are financed from the bond Area and their possession of areas inherent in the project any warranty Obligation.
Article 5 (1) loan type Area consists of:.,, a. short term loans;

b. medium-term Loans; and c. the long-term loan.

.,, (2) short term loan referred to in subsection (1) letter a is Lending the area within a period of less or equal to one year's budget and a loan repayment obligations include loan principal, interest, and other fees must be entirely repaid within the fiscal year in question.
.,, (3) medium-term Loan referred to in subsection (1) letter b is Lending the area for a period of more than one financial year and the obligation of repayment of loans include loan principal, interest, and other fees must be paid within a period not exceeding the remainder of the term of Office of the head of the concerned Area.
.,, (4) long-term loan referred to in subsection (1) Letter c is Lending the area for a period of more than one financial year and the obligation of repayment of loans include loan principal, interest, and other fees must be paid off in the next fiscal year in accordance with the terms of the loan agreement are concerned.
Article 6 in the case of the regional Head and Deputy Head of the region that have committed medium-term loan agreement to stop before his term ends, then the medium term loan agreements continue to apply.

Chapter 7.,, (1) only a short term loan used to cover the shortage of cash flow in the fiscal year concerned.
.,, (2) medium-term loans used to finance the provision of public services which do not produce acceptance.
.,, (3) long-term loan used to finance investment projects that result in acceptance.
Article 8.,, (1) the local authorities can do short term loans sourced from:.,, a. local government;

.,, b. financial institutions the bank Indonesia law incorporated and had a seat in the territory of the Republic of Indonesia; and/or, c.., financial institutions not incorporated bank Indonesia law and had a seat in the territory of the Republic of Indonesia.
.,, (2) the local Government can do Loans, medium-term and long-term proceeds from:.,,.,, a. Government funds come from STATE BUDGET income and/or procurement of Government loan from within the country or abroad; b. local government;., c. financial institutions the bank Indonesia law incorporated and had a seat in the territory of the Republic of Indonesia;
.,, d. financial institutions not incorporated bank Indonesia law and had a seat in the territory of the Republic of Indonesia; and/or e. community.

.,, (3) Lending Area sourced from the community as referred to in paragraph (2) letter e in the form of Regional Bonds issued through public bidding to the public in the capital market in the country.
Article 9 the Minister of finance to manage the Loans Area sourced from Government.

REGIONAL LOAN LIMIT CHAPTER III article 10.,, (1) Limits the maximum cumulative lending of the Government and the local government do not exceed 60% (sixty percent) of gross domestic product of the year in question.
.,, (2) the Minister of Finance set the maximum limit of cumulative Lending Area overall at least the month of August for the next budget year having regard to the circumstances and forecasts of development of the national economy.
.,, (3) the Minister of finance sets out guidelines for the implementation and monitoring mechanisms as well as the cumulative maximum Loan limit control of the region.
CHAPTER IV GENERAL CONDITIONS article 11 REGIONAL LENDING requirements that must be met in doing short term loans is as follows:.,, a. activities that will be financed from short-term loans have been budgeted in the GRANT BUDGET years concerned.
.,, b. activities as stated on the letter a is an activity that is both urgent and cannot be delayed. c. other requirements required by the prospective lenders.

Article 12 in the event that the regional government will do loans, medium-term or long-term, local government is obliged to meet the requirements of the following:.,, a. the amount of the remaining loan Area plus the loan amount will be withdrawn does not exceed 75% (seventy five percent) of the total number of General admission BUDGETS in previous years.
.,, b. financial capability projection Area ratio to restore lending at least 2.5 (two comma five).
.,, c. has no arrears over the loan repayment comes from the Government. d. approval of PARLIAMENT.

Chapter V PROCEDURE REGIONAL LOANS SOURCED FROM GOVERNMENT Loan procedure is the first part of the area of the Government Funds sourced from Foreign Loan Article 13.,, (1) the proposed activities that will be financed with loans from the Government's Regional funds sourced from foreign loans should be listed in the list of the priority Plan Loans and/or Grants Abroad issued by State Minister of national development planning/national development Planning Agency Head.
.,, (2) Loan plan deliver local government Area to finance the proposed activities referred to in paragraph (1) to the Minister of finance with at least attach:.,, a. realization BUDGETS during the last 3 years in a row;

b. GRANT BUDGET year concerned;., c. calculation about the ability of the region in meeting the obligations of repayment (DSCR projection); d. financial plan (financing plan) loan that will be proposed; and e. a letter of approval of the PARLIAMENT.

.,, (3) the Minister of finance after getting the consideration of the Minister of the Interior sets Lending Areas as referred to in paragraph (2).
.,, (4) a determination of the Minister of finance referred to in subsection (3) is conducted before the implementation of negotiations with prospective lenders overseas, based on:.,, a. list of Priority Plan Loans and/or Grants abroad;

b. allocation of government loans, according to the source and its requirements;

c. ability to repay; and d. the fiscal capacity of the region.

.,, (5) the Government of the region of Loan funds coming from abroad is carried out through the forwarding agreement loans.
.,, (6) the agreement made between loans n penerusa the Minister of finance and the head of the region.
Article 14 (1) the Minister of Finance set the forwarding terms loans.
.,, (2) the currency used in the forwarding agreement loans can be denominated in Rupiah or foreign currency.
The second part of the loan Procedure areas of the Government that Funds Sourced from Foreign Loans in addition Article 15.,, (1) the area proposed loans to Finance Minister by attaching documents at the lack of the following:.,, a. LEGISLATIVE approval;

b. feasibility study of the project; and c. other necessary documents.

.,, (2) the Minister of finance did a top rating of the loan proposal referred to in subsection (1).
.,, (3) the Minister of finance can give approval or disapproval over the proposed loan.
.,, (4) Regional Loan from the Government that the Fund comes apart from the foreign loans made through the loan agreement was signed by Minister of finance and the head of the region.
Article 16 further Provisions regarding the procedures for the granting of Loans from the Government's Regional Funds sourced from Foreign Loans as stipulated in article 14, and lending area of the Government that the Fund is sourced apart from Foreign Loans referred to in article 16 are set in the regulation of the Minister of finance.

CHAPTER VI PROCEDURE for LOANS were SOURCED FROM AREAS OTHER THAN GOVERNMENT article 17 local Government can conduct Lending Area is sourced apart from Government and other local governments along the bounds of the cumulative Loans not Government and local governments.

The first part of the procedure of short-term loan Article 18.,, (1) local governments proposed loans to prospective lenders.
.,, (2) Prospective lenders do judgment upon the proposal of the regional loan referred to in subsection (1).
.,, (3) short-term loans the region is done by the loan agreement signed by Regional Heads/officials who authorized and lenders, having regard to the requirements of the most advantageous loan recipients of local government.
The second part of the loan procedure in the medium term or long term, article 19, (1) local government is obliged to report the loan plan is sourced apart from the Government to the Ministry of the Interior to get consideration, by passing at least the following documents:.,, a. terms of reference project;

b. GRANT BUDGET year concerned;

.,, c. calculation about the ability of the region in meeting the obligations of repayment (DSCR projection); d. financial plan (financing plan) loan that will be proposed;

e. LEGISLATIVE approval letter.

.,, (2) the Minister of the Interior gave the consideration referred to in subsection (1) in the framework of monitoring the BUDGETS deficits and cumulative loan limits local governments.
.,, (3) in case the Home Secretary has given consideration, the regional Government proposed Lending the region to prospective lenders comply with the consideration of the Minister of the Interior.
.,, (4) Regional Government proposed lending the region to prospective lenders in accordance with legislation.
.,, (5) candidate Area lenders do judgment upon the proposal of the regional Loan referred to in subsection (1).
.,, (6) Lending Area is sourced apart from the Government poured in the loan agreement was signed by the head of the region and the lender.
.,, (7) the loan agreement as referred to in paragraph (6) the obligatory reported to the Minister of finance and Minister of the Interior.
Article 20 the Minister of finance may specify further the implementation of the medium-term loans and long term is sourced apart from the Government in order to control and fiscal prudence by observing the State of the national economy and its cumulative Lending Government and local governments.

CHAPTER VII REGIONAL BONDS first part General Article 9 issuance of bonds of compulsory Areas meet the provisions of this Regulation and its implementation rules and follow the laws and regulations in the capital market.

Section 22 Regional issuance of bonds can only be made in the domestic market and in Rupiah.

Article 23 Obligation is an area effect published by the local government and are not guaranteed by the Government.

Article 24 the value of Regional Bonds at maturity equal to the face value of the bond Area at the time of publication.

Article 25 issuance of bonds the area can only be made to finance the public sector investments that generate revenue and provide benefits to the community.

Article 26 admission of public sector investment as stipulated in article 25, its use is prioritized to pay principal, interest, fines and Bonds related Areas.

Article 27 Payments of principal, interest, and fines over the bond Area budgeted in a GRANT up to the bond Area was declared full.

Article 28 any agreement loan Bond Area at the lack of lists: a. nominal value;

b. the due date;

c. the date of interest payment;

d. interest rate (coupon);

e. the frequency of interest payments;

f. method of calculating interest payments;, g.., provisions regarding the right to buy back the Bonds before maturity Areas; and h. the provisions regarding the transfer of ownership.

The second part of the procedure of Issuing the bond Area Article 29.,, (1) the plan is submitted to the Regional Bond issuance the Minister of finance by first getting the approval of the PARLIAMENT having regard to the provisions of article 20.
.,, (2) the consent of the PARLIAMENT regarding plans for issuance of bonds the area referred to in subsection (1) include payment of principal and interest incurred as a result of the issuance of bonds, the area in question. (3) issuance of bonds specified Areas with local regulations.
.,, (4) the consent referred to in subsection (2) are given the maximum net worth of bonds over the area that will be published at the time of the assignment GRANT.
.,, (5) in addition to providing approval of ha l things referred to in subsection (2) and paragraph (4), PARLIAMENT gave approval for any costs arising from the issuance of bonds.
.,, (6) the provisions concerning the procedures of publishing, implementation/monitoring, and administering Regional Bonds is carried out on the basis of laws-the invitation in the capital market.
Article 30.,, (1) the local authorities can buy back the Bonds issue areas.
.,, (2) the area of Bonds repurchased may be treated as a repayment of the bonds over the area, or kept for resale (treasury bonds).
.,, (3) in the case of bonds repurchased areas accounted as treasury bonds, then the rights attached to the Bond Area annulled by law.
The third part Liability, article 31, (1) local government is obligated to pay principal and interest each Bond Area at maturity as well as fined the bond area.
.,, (2) the payment referred to subsection (1) the funds budgeted in the BUDGETS of the regional income that derives from the acceptance of the project funded by the bond Area or other areas of revenue.
.,, (3) the funds to pay the principal and interest as referred to in paragraph (1) budgeted in a GRANT every year until the expiration of such obligations.
.,, (4) in terms of interest payments as referred to in subsection (1) exceeds the estimated, the head of the regional payment and deliver the payment to the realization of the DPRD in the discussion of changes to BUDGETS.
.,, (5) in the event that the project is not yet generating enough funds to pay the principal, interest and fines Bonds related Areas, then such payment should be paid from a GRANT.
The fourth part of the management of the bond Area of article 32 (1) of the management of the bond Area was held by the head of the region.
.,, (2) the head of a Region can form a working unit to manage the bond area.
Article 33 management of Bonds the area referred to in Article 32 paragraph (1) at least includes:.,, a. determination of Bond management strategy and policy areas include policy control risk; b. planning and determination of the structure of the loan portfolio Area;

c. issuance of bonds region;

d. Regional Bond sales through auctions;

e. repurchase Bonds before maturity Areas;

f. repayment at maturity; and g. accountability.

The fifth part of the accountability and transparency Article 34.,, (1) the head of the Region convene and create accountability for top management as well as Regional Bond Fund results of issuance of bonds.
.,, (2) the Liability referred to in subsection (1) is submitted to PARLIAMENT as part of the accountability for the implementation of the BUDGETS.
Article 35 the head Area is obliged to periodically publish information on:.,, a. Regional Loan management policies and plans that include the areas of Bond issuance the estimated number and schedule the time of publishing;
.,, b. the amount of Bonds outstanding Areas along with the composition, structure and maturity interest rate; c. financial report of the Government of the region;.,, d. report of the use of funds obtained through the issuance of bonds, the allocation of Regional Reserve Fund, as well as reports of other material; and

.,, e. obligation of publication data and/or other information required on the basis of laws and regulations on capital market.
Section 36 of the Ordinance of accountability, as well as publishing, publication of information referred to in article 30, article 35 and article 36 further regulated in the regulation of the Minister of finance and implemented based on regulations in the capital market.

CHAPTER VIII REGIONAL LOAN REPAYMENT Article 37 in terms of repayment short-term loan raises costs, among others, interest and fines, then the fees charged at shopping BUDGETS.

Article 38, (1) the obligation of repayment of loans maturing areas mandatory budgeted in BUDGETS and realized/paid in the financial year in question.
.,, (2) Loan repayment from the Government Area, done in the appropriate currency set out in the loan agreement between the Finance Minister and the head of the region.
CHAPTER IX REGIONAL REPORTING and LOAN SANCTIONS Article 39.,, (1) All receipts and obligations in the framework of Lending Areas noted in BUDGETS and accounted for in accordance with Government accounting standards.
.,, (2) information which contains all loans, medium-term and long-term compulsory poured in the attachment of documents BUDGETS.
.,, (3) any loan agreement undertaken by a public document and is Areas was announced in the Gazette the area.
Article 40.,, (1) local government is obliged to report the cumulative position loans and liabilities loans to Finance Minister and Interior Minister each semester in fiscal year running.
.,, (2) in the event that the area did not submit a report as referred to in paragraph (1), the Minister of finance may delay channeling Funds Balances.
.,, (3) further Provisions regarding the procedures for reporting cumulative position loans and loan obligations as referred to in paragraph (1) are governed by regulation of the Minister of finance.
Article 41.,, (1) in terms of the area did not meet the obligation to pay his loan to the Government as stipulated in article 38, the obligation to pay the loans taken into account with the DAU and/or funds for the result of the acceptance of a State that became the right of the area.
.,, (2) in case the area did direct loans from foreign sources as referred to in article 3, the Minister of finance will do the cutting DAU and/or funds for the result of the acceptance of a State that became the right of the area.
.,, (3) further Provisions regarding the procedures for withholding DAU and/or And a Result set with a regulation of the Minister of finance.
Article 42 in case local governments do not deliver the loan agreement has been done as mentioned in article 19 paragraph (7) and/or local governments make the loan agreement which is not in accordance with the consideration of the Minister of internal affairs as stipulated in article 19 paragraph (2), then the corresponding local government prohibited conduct Lending area for three (3) consecutive years consecutive.

CHAPTER X PROVISIONS of TRANSITIONAL Article 43.,, (1) the loan agreement areas that have been done before the entry into force of this Regulation, can continue to be subject to the provisions of the legislation until the expiration of the old payment of loans.
.,, (2) Loan Agreement areas that have been done before the entry into force of this Regulation, upon mutual agreement between the lender and the loan recipients can adjust its settings and on government regulations.
CHAPTER XI CLOSING PROVISIONS Article 44 by the time this Regulation comes into force, then the Government Regulation Number 107 in 2000 about Lending the area declared does not apply.

Article 45 of this Regulation comes into force on the date of promulgation.

In order to make everyone aware of it, ordered the enactment of this Regulation with its placement in the State Gazette of the Republic of Indonesia.

.,, Set in Jakarta on 9 December 2005 the PRESIDENT of the REPUBLIC of INDONESIA Dr. h. SUSILO BAMBANG YUDHOYONO Enacted in Jakarta on December 9, 2005 MINISTER OF JUSTICE and HUMAN RIGHTS of REPUBLIC of INDONESIA AD INTERIM, YUSRIL IHZA MAHENDRA RI STATE GAZETTE SUPPLEMENTARY No. 4574 (explanation of the 2005 State Gazette Number 136) EXPLANATION for the REGULATION of the GOVERNMENT of the REPUBLIC of INDONESIA NUMBER 54 in 2005 ABOUT the LOAN AREA i. General. ,, Act No. 33 of 2004 concerning the Financial Equalization between the Central Government and the regional Government stipulates that Lending is one of the areas of acceptance Regions in the framework of the implementation of Decentralization, which is recorded and maintained in the budget revenue and Shopping area.
.,, The loan is an alternative source of financing of the regional Budget of income and Expenditure Area and/or to cover the shortage of cash is used to finance the activities of the regional authority and is an initiative based on legislation.
.,, Loan fund is a complementary of the regional acceptance of sources that exist and are intended to finance the procurement of the infrastructure of the area or the treasure still others relating to activities that are increasing acceptance that can be used to return the loan, as well as provide benefits to community service. In addition, the area is possible also do loans with other goals, such as addressing issues related to short-term cash flow areas.
.,, In its execution, the quantity of lending Areas need to be tailored to the capabilities of the region because it may cause the burden of Budget income and Expenditure the area next year, so it needs to be supported by the device's skills in managing Regional Lending areas.
.,, To improve the objectivity and discipline local governments in implementing the loan repayment, then the necessary accuracy and prudence in the management of the loans area.
., Government regulation, it aims to set up more stuff that concerns the Loan Area, by anticipating future needs and taking into account the need to maintain the health and sustainability of national economy.

II. For the SAKE of ARTICLE ARTICLE article 1.,, is quite clear.

Article 2, paragraph (1),, is a "lack of cash" is the form of payment operations budgeted income and Expenditure in the budget area. Paragraph (2).,, is quite clear.

Article 3, paragraph (1).,, is quite clear. Subsection (2),, is a "transaction" is a transaction activities include activities in the framework of public bidding, transactions in securities, transactions outside the stock exchange, grants, gifts and other transactions arising from the transfer of ownership of regional bonds.

Section 4.,, is quite clear.

Article 5, paragraph (1).,, is quite clear. Paragraph (2)

., Short term Loans, not including short-term credit which is common in the trade, for example, liability for the payment of procurement/purchasing goods and/or services are not performed at the time the goods or services in question and accepted.

That includes other costs such as administrative expenses, commitment, the provision, insurance, and a fine. Paragraph (3).,, is quite clear. Subsection (4),, is quite clear.

Section 6.,, is quite clear.

Article 7, paragraph (1), the definition of "financial year concerned" is the financial year at a time when local governments do a short-term loan.

The provisions of this paragraph also contains the sense that short term loans may not be done to finance the cash deficit at the end of the fiscal year. Subsection (2),, is a "public service that doesn't generate receipt" is a service to the community are the responsibility of the local governments that do not generate income for the GRANT. Paragraph (3), the definition of "investment projects that generate receipt" was a project infrastructure and income-generating facility or for a GRANT obtained from charges for the use of infrastructure and the means or.

Article 8, paragraph (1).,, is quite clear. Subsection (2), the definition of "community" is a private person and/or entity that invested in the capital market in the country. Paragraph (3).,, is quite clear.

Article 9,, lending the area sourced from Government loans can come from abroad as well as in addition to foreign loans.

Article 10, paragraph (1).,, is quite clear. Subsection (2), the cumulative maximum limit, setting local government loan in its entirety no later than the month of August so that the area can set the loan amount in the GRANT BUDGET.

The definition of "cumulative number of loans to the Central Government and local governments" is the total Central Government loan after deducting the loans granted to local governments, plus the total loans of the entire local government after deducting loan granted to the Central Government and/or other local government.

The cumulative number of Loans the Government and local governments is calculated with the following formula = Net Loans Central Government plus local government Net Borrowing Net Lending of Government = Total loan Receivables reduced the Central Government to local governments.

NET Area = Total government loan Loan Receivables reduced local governments to the Central Government and/or the Receivables to the Government. Paragraph (3).,, is quite clear.

Article 11, Subparagraph a.,, this provision is intended to restrict the use of short-term loan just to cover the financing of the activities budgeted within BUDGETS that are experiencing a shortage of cash flow. The letter b., of the nonprofit Activities, urgent and cannot be delayed, among others, salaries of employees. The letters c, a, is quite clear.

Article 12, letter a., of, the definition of "amount of the remaining loan area" is the number of old unpaid loans.

The definition of "the loan amount will be withdrawn" is a loan disbursement plan year is concerned.

The definition of "public reception of BUDGETS of the previous year" is the entire acceptance of a GRANT does not include the Special Allocation Fund, emergency fund, loan fund, and other limited its acceptance to finance specific expenditure. The letter b., Regional financial capability, the ratio is calculated based on a comparison between the amount of the original Revenue annual projection areas, funds for the results does not include funds for Reforestation Fund Results, General Allocation Funds and after the obligatory expenditures divided by the reduced projection of sum in installments of principal, interest, and other fees are due annually during the period of the loan will be drawn.

What is meant by "compulsory expenditure" is shopping employees and members of LOCAL shopping.

What is meant by "other fees" that include administration costs, the cost of the provision, the cost of commitment, insurance and fines.

DSCR = {+ PAD (– DBHDR DBH) + DAU} – Mandatory Shopping = 2.5 Installment loan principal + Interest + other fees;

DSCR = Debt Service Coverage Ratio or ratio of the ability to repay loans;

PAD = Original Income Areas;

Allocation Of Public Funds = DAU;

DBH = Funding For Results; and DBHDR = funds for Reforestation Fund Results. The letters c, a, is quite clear. Letter d of LEGISLATIVE Approval, is meant in terms of the loan include diteruspinjamkan and/or forwarded as capital investment to LOCAL GOVERNMENT.

Article 13.,, is quite clear.

Article 14, paragraph (1), forwarding a loan Requirement, that question is the interest rate, grace period, due date and other requirements. Paragraph (2).,, is quite clear.

15. Article,, is quite clear.

Article 16,, is quite clear.

Article 17,, is quite clear.

18. Article,, is quite clear.

Article 19,, is quite clear.

Article 20.,, is quite clear.

Clause 21.

Is quite clear.

Section 22.,, is quite clear.

Article 23.,, this provision confirms that all risks arising as a result of the issuance of the bonds are not secured the area and/or paid by the Government.

Considering the Bond Area was the Effect, published by local governments and are not guaranteed by the Government, then the bond is not a Region belongs to the State.

The definition of "effect" is the effect referred to in regulations in the capital market.

Pasal 24.,, this provision regulates that local governments are prohibited from issuing Bonds County that uses a particular index so that the value of the bond Area at maturity is not equal to face value at the time it is published (index bonds).

Article 25,, this provision regulates that the bond published Area just kind of bonds income (revenue bonds).

26. Article,, is quite clear.

Article 27,, is quite clear.

Article 28, the loan agreement, the bond Area poured in the Treaty of perwaliamanatan was signed by the head of the region and the trustee as the representative of the holder of the bonds/lender.

The letter a, the definition of "nominal value" is the value of Bond Principal Areas, namely, the value of which can be charged by the holder of the bond Area to the issuer of bonds at maturity, or liabilities of principal Regional Bonds that must be paid by the local Government to the holder of the bond area. The letter b.,, is a "due date" is the period of time specified in the agreement the issuance of the bond area (usually listed in the perwaliamanatan agreement) where the holder of the bonds has the right to demand the payment of the rights related to the bond area. The due date due date may include payment of principal or interest payments. The letters c, a, is quite clear. The letter d

.,, Is a "rate of interest (the coupon)" are the benefits promised to the holder of the bond Area of a certain percentage of the nominal value. The determination of the interest rate can be set for certain (fixed rate) or floating (floating rate). The letter e.,, is quite clear. The letter f,, is quite clear. The letter g.,, in the issuance of bonds can be exchanged that the Publisher Area (area) can buy back Bonds the Area sometime before maturity. The letter h.,, is quite clear.

Article 29, paragraph (1), the definition of "LEGISLATIVE approval" is the principle of consent given by Commission REPRESENTATIVES who deal with finance. The approval of the LEGISLATIVE Commission is meant to be used in the submission of a plan of issuance of bonds to Finance Minister.

LEGISLATIVE approval over all Regional Bonds issued automatically is the approval of the payment and repayment of any future financial obligations arising from the issuance of bonds. Subsection (2), in the interest of regional Bonds set refers to floating interest rates, then the consent of the REPRESENTATIVES in question is setting the interest rate formula. Paragraph (3), this Provision was intended to, there is a clear openness and accountability to the community about any liability of such bonds.

Local regulations in question are set with the approval of the plenary PARLIAMENT. The approval of the Plenary PARLIAMENT is meant to be used as terms of the signing of the loan agreement. Subsection (4), the definition of "net worth" is a total nominal value of Bonds outstanding Area (outstanding), published by the Area beyond the face value of the bond area which was withdrawn as the repayment before maturity and or areas that have been Bond being repaid at maturity for one year's budget. Subsection (5),, the costs arising from the issuance of bonds, among other Areas, the emissions charge fines, rating services, and services for the profession and capital market supporting institutions. Paragraph (6).,, is quite clear.

Article 30, paragraph (1).,, is quite clear. Subsection (2),, in terms of Regional Bonds bought back as repayment, then the bond Area in question cannot be resold. Paragraph (3).,, voting rights in the general meeting of the holders of the bonds (the BONDHOLDERS), entitlement to interest payments, as well as other rights attached to Bonds repurchased areas cannot be used or accepted by the region.

Article 31, paragraph (1).,, is quite clear. Subsection (2), the top Regional Bonds, fines budgeted in the change of fiscal year BUDGETS concerned. In the event that the fines do not allow budgeted fiscal year BUDGETS in the change in question, then it is budgeted in the BUDGETS for the next year. Paragraph (3), all liabilities incurred due to the issuance of bonds the area allocated in a GRANT each year as Reserve Fund (sinking fund) that cannot be used for other purposes, up to the termination of the obligation. Estimated funding needs to be allocated for the payment obligations for one year budget presented to PARLIAMENT to GRANT a year taken into account in question. Subsection (4), the realization of the interest payment may exceed projected interest payments in one fiscal year, if the prevailing interest rate of the bond area with floating interest rate is greater than the interest rate assumptions are set out in the GRANT BUDGET. Subsection (5),, is quite clear.

Article 32, paragraph (1), management, and accountability of regional Bonds carried out by units designated by the head of the region. Paragraph (2).,, is quite clear.

Article 33, Subparagraph a.,, in order to achieve cost Bonds the lowest Area on the level of risk that can be accepted and controlled, the local government is obligated to carry out and report on activities that are at least as mentioned in this article. The letter b.,, is quite clear. The letters c, a, is quite clear. D., area, selling Bonds in the primary market through the public offering referred to in the regulations in the capital market.

Furthermore, in terms of the area it intends to repurchase (buy back) the publication of Regional Bonds or sell Bonds back over areas that are repurchased referred to, then the area can make a purchase or resale of Bonds the area through an auction. The letter e.,, is quite clear. The letter f,, is quite clear. The letter g.,, is quite clear.

34. Article,, is quite clear.

Article 35, of the regional bond market, activities can be enhanced when the information about the plan and the realization of the publication which covers, among other things, information about the schedules of issuance, expiration, and the volume of the bond area, widely announced with a regular schedule. The program is especially done in the framework of the regional Bond issuance intended for the establishment of a benchmark price of financial assets. The existence of these will give a chance to the financier to strategy of bidding (bidding), determine the amount of the bond portfolio in the area of supplies, and plan sales/disposals of bonds, the area that is currently in their portfolio. When market participants already know the schedule of the publication in question, the potential interference that occurs in the market can be avoided.

36. Article,, is quite clear.

37. Article,, is quite clear.

Article 38, paragraph (1), liability for loans overdue loan principal installment covers the entire coupled with borrowing costs such as loan interest, bank charges, and cost commitment.

By placing a duty on loans Region as a priority Area and budgeted in spending BUDGETS, then the fulfillment of obligations were meant to have a position that is parallel to the other expenses that must be prioritized areas, such as expenditures when not done can give rise to social insecurity.

Thus the fulfillment of obligations for the loan Area cannot be ruled out if the target not achieved NATIONAL acceptance. Subsection (2), the definition of "the loan agreement" means the agreement between the Government of the area by the Government for loans from foreign loans and in addition to foreign loans.

Article 39, paragraph (1),, in terms of Government Accounting Standards do not yet exist, then local governments doing bookkeeping in order to Loan the area in accordance with legislation. Subsection (2), the Appendix, are part of a GRANT document so that the document can be retrieved in society. Paragraph (3), this Provision was intended to, there is openness and accountability are clear about the obligation of such loans.

What is meant by "public document" is a document that can be known by the entire community.

Article 40, paragraph (1), reports the cumulative position specified Effluent submitted to PARLIAMENT as a notification. Paragraph (2)

.,, Is quite clear. Paragraph (3).,, is quite clear.

Article 41, paragraph (1), the definition of "does not meet the obligation to pay his loan" is not the fulfillment of payment obligations in installments of principal and/or interest like n pinjama fee loan, bank fees, and the cost of the commitment in accordance with the time schedule and the amount set out in the loan agreement.

In accordance with the provisions in paragraph (1), all liabilities repayment Loan Area become the responsibility of the regions. The Central Government does not bear the repayment of loans that become liabilities and responsibility areas. Paragraph (2).,, is quite clear. Paragraph (3), the provisions on the procedures of cutting DAU and/or funds for the results including the provisions on the calculation of quantity pieces as well as the cutting mechanism.

Article 42.,, this provision does not include the bond area.

43. Article,, is quite clear.

44. Article,, is quite clear.

45. Article,, is quite clear.

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