(1) Reasons for Proposal

The Act on the Promotion of Smart City Development and Industry was amended (Act no. 16631; promulgated on November 26, 2019; to be enforced on February 27, 2020) to prescribe grounds on which to designate smart regulatory innovation districts and conduct smart innovation projects and smart test bed projects to enable the private sector to test and commercialize innovative technologies and services without regulatory constraints during the process of developing and operating smart cities. Accordingly, this Amendment prescribes procedures and standards for the designation, modification, and cancellation of smart regulatory innovation districts, procedures and standards for the implementation of smart innovation projects and smart test bed projects, management/operation and follow-up after project implementation, and other matters delegated by the Act and matters necessary for the enforcement thereof.

(2) Major Provisions

A. Introduce smart regulatory innovation districts, smart innovation projects, and smart test bed projects (Chapter 8, Articles 46 through 54)

1) Allow the heads of local governments to apply to the Minister of Land, Infrastructure and Transport for smart regulatory innovation district designation by formulating a smart regulatory innovation district plan that has undergone public inspection. Require the Minister of Land, Infrastructure and Transport to grant the designation via National Smart City Committee deliberation after considering such factors as relevance to smart city-related projects carried out in the area concerned, effects of designation, etc.

2) Allow private enterprises, etc., to prepare a smart innovation project plan or smart test bed project plan that has been reviewed by the local government concerned and apply to the Minister of Land, Infrastructure and Transport for approval. Require the Minister of Land, Infrastructure and Transport to grant approval via National Smart City Committee deliberation after having the plan reviewed by the relevant central administrative agencies, and considering such factors as the effects of regulatory improvement, innovative quality of the project, and project execution capacity of the project implementer.

3) Require a smart innovation project implementer or smart test bed project implementer that has obtained approval to purchase liability insurance to cover indemnity costs in the event of damage arising from project implementation. Allow the Minister of Land, Infrastructure and Transport to cancel projects and take other necessary measures in the event that the project implementation process poses a risk to public safety, etc.

4) Allow the Minister of Land, Infrastructure and Transport to report to the National Smart City Committee on the outcomes of smart regulatory innovation districts. Require the heads of the relevant central administrative agencies to report on the commencement and completion of modifications to laws and regulations, and require project implementers to submit a results report to the relevant government departments and the local government concerned after their project has been completed.

5) Allow the Minister of Land, Infrastructure and Transport to outsource project management affairs to a designated agency to ensure the systematic management of smart innovation projects and smart test bed projects.

B. Add to the scope of projects that may be proposed by the private sector (Article 14)

Add the testing and provision of smart innovative technologies and services as a project that may be proposed by private enterprises, etc.

C. Add ex officio members to the National Smart City Committee and reorganize the specialized committee (Article 25 and Article 27)

Add the Vice Minister of SMEs and Startups as a government member of the National Smart City Committee, and modify the subject matters of the specialized committee that supports Committee deliberation to ensure that they are aligned with current smart city policies.