Sunset Law Fails to Pass National Assembly... Bipartisan Agreement on 'Ant National Bond Investment Law' Also Falls Through

National Assembly Holds Plenary Session This Afternoon
Only Non-Controversial Bills Including KEPCO Act Processed
Vote on No Woong-rae Arrest Consent Proposal

[Asia Economy Reporters Hyunju Lee and Youngwon Kim] Sunset laws such as the Safe Freight Rate System and the Additional Overtime Work System, which are set to expire at the end of this year, are expected to ultimately fail to pass the National Assembly. Sunset laws are regulations that automatically abolish government projects or organizations after a predetermined period unless the legislative body takes separate action. If the National Assembly does not extend them by the end of this year, these systems will disappear.

According to the National Assembly Legislative Information System on the 27th, 26 bills, including the amendment to the Korea Electric Power Corporation Act (KEPCO Act), will be submitted and processed at the plenary session held at 4 p.m. that day. Also, the arrest consent motion for Representative Noh Woong-rae, reported to the plenary session on the 23rd, will be put to a vote.

Originally, the ruling and opposition parties had agreed to process laws with sunset clauses expiring in December this year, such as the National Health Insurance Act and the National Health Promotion Act (regarding national treasury financial support for health insurance), the Freight Motor Vehicle Transport Business Act (Safe Freight Rate System), and the Labor Standards Act (8-hour additional overtime work system), as well as the Korea Electric Power Corporation Act and the Korea Gas Corporation Act, while passing the next year’s budget in the early hours of the 24th.

[Image source=Yonhap News]

However, the opposition party, which insists on a three-year extension of the Safe Freight Rate System for freight trucks, and the ruling party, which argues that it should be discarded and then renegotiated, have been at a stalemate, and the bill was not even submitted to the Legislation and Judiciary Committee, the last hurdle before the plenary session. Regarding the law on national treasury financial support for health insurance, the ruling party insists on a five-year extension, while the Democratic Party demands permanent enactment. Joo Ho-young, floor leader of the People Power Party, said, "Even if the law expires, it does not mean support cannot be provided, and since there is time, if an agreement is reached later, a law can be made to provide support." On the other hand, Park Hong-geun, floor leader of the Democratic Party, urged the prompt passage of the Safe Freight Rate System, saying, "The Yoon Seok-yeol government and the People Power Party are even obstructing the 'sunset laws' that the ruling and opposition parties agreed to process within a set period."

Accordingly, only bills without disagreements between the ruling and opposition parties were passed at the National Assembly Legislation and Judiciary Committee held the previous day. The amendment to the Korea Electric Power Corporation Act includes provisions to temporarily expand KEPCO’s bond issuance limit to five times the sum of its capital and reserves until December 31, 2027, and in crisis situations, with the approval of the Minister of Trade, Industry and Energy, to issue bonds up to six times the limit. This bill was submitted to the plenary session held on the 2nd after bipartisan agreement but was rejected and faced severe criticism. Subsequently, the Planning and Finance Committee prepared a bill with the same content and plans to approve it at the plenary session that day. The amendment to the Korea Gas Corporation Act, which expands the company bond issuance limit from the existing four times to five times, and the amendment to the External Audit Act, which exempts listed companies with total assets under 100 billion won from internal accounting management system audits, will also pass the plenary session that day.

However, the amendment to the National Bond Act, which would allow individual investment-type national bond purchases scheduled to be implemented next year, failed to pass the relevant standing committee and thus was not processed at the plenary session that day. The National Assembly Planning and Finance Committee held an economic and fiscal subcommittee meeting on the 26th to discuss the National Bond Act amendment but postponed processing due to disagreements between the ruling and opposition parties. Shin Dong-geun, Democratic Party member and economic and fiscal subcommittee chairman of the Planning and Finance Committee, said, "(The National Bond Act amendment) is difficult due to many schedules in January next year and can only be discussed in February."

The amendment introduces a national bond product limited to individual purchasers. Previously, the amendment to the Restriction of Special Taxation Act, which introduces a 14% separate taxation on interest income from individual investment national bonds, must be processed together to issue national bonds exclusively for individual investors. However, with the National Bond Act amendment stalled in the standing committee, the implementation of the Restriction of Special Taxation Act amendment passed by the plenary session has also become difficult. Ryu Seong-geol, People Power Party member and ruling party floor leader in the Planning and Finance Committee, said at the party’s floor strategy meeting the previous day, "Although the ruling and opposition party floor leaders had already agreed, the Democratic Party floor leader is suddenly using personal reasons for absence from the subcommittee as an excuse to evade the National Bond Act processing, claiming additional discussion is needed," and strongly urged, "We strongly urge the Democratic Party, as the majority party in the National Assembly, to keep that promise even now." A National Assembly Planning and Finance Committee official said, "If it is discussed and passed early next year, implementation of the Restriction of Special Taxation Act is possible," but added, "Even if discussed, it is doubtful whether it will properly pass."

This content was produced with the assistance of AI translation services.