(1) Reasons for Proposal

As a follow-up action for the amendment to the Special Act on Support for Areas, etc. Adjacent to Districts Granted to the United States Armed Forces in Korea (December 20, 2020), this Amendment aims to define the minimum financial soundness standards delegated in Article 11, paragraph 1 of the Act to the Enforcement Decree, which private business entities must meet when applying for approval of project implementation (Article 11-2).

The terms are updated in line with amended laws (Article 28).

(2) Major Provisions

A. Define financial soundness standards for private business entities (Article 11-2)

1) Those registered in a type of business that performs comprehensive construction whose appraised construction capacity value and capital are more than the annual average project expense (except for compensation).

2) Those who own at least 50/100 of the project land area.

3) Real estate trust companies entrusted at least 1/3 of the project land area.

4) Those whose corporate bond or corporate credit rating is at least BB- and meet at least two of the following requirements, including the first one.

- Equity capital in the previous business year is at least 10/100 of the total project expenses, or the total revenue is 30/100 of the total project expenses.

- The debt ratio in the previous business year is less than 1.5 times the average in the same business.

- Net profit occurs in at least two of the previous three business years.

B. Update terms in line with amended laws (Article 28)

Change “appraisal business entity” to “appraisal corporation, etc.” with the amendment to the Act on Appraisal and Certified Appraisers.