I hereby give My sanction with the advice of the Privy Council to the Finance Law, for which the concurrence of the Imperial Diet has been obtained, and cause the same to be promulgated.
Signed:HIROHITO, Seal of the Emperor
This thirty-first day of the third month of the twenty-second year of Showa (March 31, 1947)
Countersigned: Prime Minister and concurrently Minister for Foreign Affairs YOSHIDA Shigeru
Minister of State Baron SHIDEHARA Kijuro
Minister of Justice KIMURA Tokutaro
Minister of State SAITO Takao
Minister of Communications HITOTSUMATSU Sadayoshi
Minister of State HOSHIJIMA Niro
Minister of Welfare KAWAI Yoshinari
Minister for Home Affairs UEHARA Etsujiro
Minister of Finance ISHIBASHI Tanzan
Minister of State KANAMORI Tokujiro
Minister of Transportation MASUDA Kaneshichi
Minister of Commerce and Iudustry ISHII Mitsujiro
Minister of Education TAKAHASHI Seiichiro
Minister of Agriculture and Forestry KIMURA Kozaemon
Minister of State TANAKA Man-itsu
Minister of State TAKASE Sotaro
Contents of the Finance Law
Chapter I. General Provisions concerning Finance
Chapter II. Divisions of Accounts
Chapter III. Budget
Part I. General Provisions
Part II. Formulation of the Budget
Part III. Execution of the Budget
Chapter IV. Settlement of the Accounts
Chapter V. Miscellaneous Provisions
THE FINANCE LAW
Chapter I. General Provisions of Finance
Article 1. The budgetary estimates of the State and other fundamental matters relating to finance shall all be executed in accordance with the provisions of this Law.
Article 2. By the term "Annual Revenue" are understood the cash receipts, which are to constitute the financial source for the payments that are to satisfy and cover the various demands of the State during the tiscal year, whereas the term "Annual Disbursement" means the defrayments in cash which are to satisfy and cover the various demands of the State.
The cash receipts as mentioned in the preceding paragraph comprise also the proceeds from the disposal of other properties or what are created as the result of the assumption of a new liability, whereas in the defrayments in cash also mentioned in the same paragraph are included likewise what produce the acquisition of other properties or the decrease of the liabilities.
It is to be understood further that in the Annual Revenue and the Annual Disbursement as mentioned in paragraph 1 are included likewise the transferred amounts moving between the different accounts, besides what is caused by the tranafer within the State Treasury, on the basis of the provisions of the Law.
The term "Annual Revenue" shall mean all kinds of income in one fiscal year, and the term "Annual Disbursement" shall mean all kinds of expenditure in one fiscal year.
Article 3. With the exception of the taxes, as regards the imports which are collected and received in consequence of the sovereign right of the State and the prices of monopoly and fees and charges connected with the enterprises which are exclusively operated by the State as the result of the provisions of the Laws or as a matter of fact, all must be provided for by means of the Laws or by the decision reached at the Diet.
Article 4. The Annual Expenditure of the State shall have its financial source in the Annual Revenue other than the public loans or borrowings. It is provided however that as concerns the financial source of the public work expenditure, the investments and the advances, it is authorized to issue public loans or to make borrowings, within the limits of the amounts sanctioned as the result of decision at the Diet.
In the case of the issue of a public loan or of making borrowings, in accordance with the proviso of the preceding paragraph, the plan for their redemption shall be submitted to the Diet.
The limits of the public work expenditure as provided for by paragraph 1, shall be subjected to the decision at the Diet every fiscal year.
Article 5. As regards the issue of public loans in general, it shall not be permitted to make the Bank of Japan undertake it, and as regards the making borrowings, it also not be permitted to make borrowings from the Bank of Japan. It is provided, however, that in case there exists some special reason therefor, an exception shall be made, only within the limits of the amount sanctioned as the result of the decision reached at the National Diet.
Article 6. In case there is produced a surplus at the settlement of revenues and expenditures in the annual account in each fiscal year, a sum not less than a half of the surplus concerned shall be devoted to the purpose of redemption of public loans or borrowings, by the year after next of the year in which the said surplus was produced unless othe measures are taken by the provisions of some other Laws.
In respect of the computation of the surplus refered to in the preceding paragraph, necessary matters therefore shall be stipulated by Cabinet Order.
Article 7. The State is authorized to issue a Treasury bill or to make a temporary borrowing from the Bank of Japan when there is a necessity thereof, by reason of the movements of the National Treasury money.
The Treasury Bill or the temporary borrowing mentioned in the preceding paragraph shall be redeemed with the Annual Revenue of the fiscal year concerned.
As regards the highest amount of the Treasury Bill or the temporary borrowing, it shall be subjected to the decision reached at the Diet each fiscal year.
Article 8. Remittal of the whole or part of State claims or alteration of the validity of the same must be made in accordance with law.
Article 9. No State property shall, except in accordance with law, be exchanged, used as means of payment, or transferred or leased without proper countervalue.
State Property shall always be managed in good condition and operated most efficiently in accordance with the object of its ownership.
Article 10. The charging of the whole or part of expenses required for specific State affairs to persons other than the State shall be done in accordance with law.
Chapter II. Division of Accounts
Article 11. The fiscal year of the State begins on April 1 every calendar year and ends on March 31 in the following calendar year.
Article 12, The expenses for each fiscal year shall be defrayed with the revenue for the same fiscal year.
Article 13. The accounts of the State are divided into the general account and special accounts.
A special account is established by law in case the State carries on a specific undertaking, or holds a specific fund and conducts its operation, or only in case it is necessary to effect management separately from the general revenue and expenditure, by appropriating specific revenue for specific expenditure.
Chapter III. The Budget
Part I. General Provisions
Article 14. Revenue and expenditure shall all be included in the Budget.
Article 15. In case the State performs an act of bearing liability, excepting those provided for by law or those within the extent of amount of expenditure budget, such act shall be subjected to the decision of the Diet beforehand.
Besides those provided for in the preceding paragraph, in case of urgent necessity such as restoration from calamity or damages, the State may perform the act of bearing liability within the amount decided by the Diet each fiscal year.
The term of the years of the Treasury Liability Bearing act in the preceding two paragraphs shall be within three years of the present fiscal year, except the extraordinary cases such as, when the Diet approves the extension of the term, or the salaries and pensions to be paid to foreigners, guarantee of the liabilities or replenishment of the principal, and interest or the interest, of the liabilities of public bodies, rent of land or building, shares of money under international treaty, and other or cases under the authorization of the law.
The act of bearing liability according to the provision of the preceding two paragraphs must be reported to the Diet at its next ordinary session.
The act of bearing liability performed by the State in accordance with the provision of paragraph 1 or 2 shall be called the National Liability.
Part II. Formulation of the Budget
Article 16. The Budget shall consist of general budget provisions, revenue and expenditure estimates, and national liability.
Article 17. The President of the House of Representatives, the President of the House of Councillors, the Director of the Supreme Court, and Director of Board of Audit, shall be obligaed to make the report of the estimrate of revenues, expenditures and national liability under their jurisdiction each fiscal year, and send it to the Cabinet for respective convenience of budget control and adjustment.
The Prime Minister and the Ministers of the respective Ministries shall be obliged to make the report of the estimates of revenues, expenditures and national liability under their respective jurisdiction each fiscal year, and send it to the Minister of Finance.
Article 18. The Minister of Finance shall examine the estimation of the preceding paragraph, and, after adding necessary adjustments, to it, he shall make the provisional estimate of revenues, expenditures, and national liability in order to get the decision of the Cabinet.
Before the Cabinet males the final, decision of the preceding paragraph, it must ask for the opinions of the President of the House of Representatives, the. President of the House of Councillors, the Director of the Supreme Court, and the Director of the Board of Audit with regard to the rough estimates of the expenditure of the Diet, the Court, and the Board of Audit.
Article 19. In case the estimated expenditures of the Diet, the Court and the Board of Audit are out down by the Cabinet, the estimates sent in from the Diet, the Court and the Board of Audit shall also be given in the budget of revenue and expenditure in detail, together with the sources of revenue which may become necessary in case the expenditure of the Diet, the Court and the Board of Audit is to be amended by the Diet.
Article 20. The Minister of Finance shall prepare a detailed statement of estimated revenue for each fiscal year in accordance with the decision of the Cabinet referred to in Article 18.
The President of the House of Representatives, the President of the House of Councillors, Director of the Supreme Court, and the Director of the Board of Audit, the Prime Minister, and the Ministers of the respective Ministries (hereinafter called heads of the respective Ministries and other Government Agencies) shall, prepare in pursuance of what is determined by the Minister of Finance respectively within the range of the rough estimate decided upon by the Cabinet as referred to in Article 18, and send to the Minister of Finance a requisition each fiscal year for the estimated expenses and the national liability.
Article 21. The Minister of Finance shall prepare the budget in accordance with the detailed statement of estimated revenue and the requisition from the House of Representatives, House of Councillors, the Court, the Board of Audit, the Cabinet and respecjtive Ministries (hereinafter called the respective Ministries and Other Government Agencies each for the estimated expenses and the national liability, and ask for the decision of the Cabinet.
Article 22. In the general provisions for the budget estimates, in addition to summary regulations pertaining to revenue and expenditure estimates and national liability, the following matters shall be provided:
1. The limit to the amount of public loans or borrowings as provided for in the proviso of paragraph 1, Article 4;
2. The limit to the amount of public work expenditure as provided for in paragraph 3, Article 4;
3. The limit to the amount of public loans to be undertaken by, or of the borrowings to be borrowed from, the Bank of Japan as provided for in the proviso of Article 5;
4. The maximum amount of the Treasury bill to be issued by the Ministry of Finance or of the temporary borrowing to be borrowed from the Bank of Japan as provided for in paragraph 3, Article 7;
5. The limit to the amount resulting from the national liability as provided for in paragraph 2, Article 15;
6. Matters necessary for the execution of the budget in addition to those mentioned in the preceding, items.
Article 23. As regards the budget estimates of revenue and expenditure, they. shall be divided mainly into Parts, accorping to their nature in the case of revenue, and according to their purposes in the case of expenditure, and each Part shall be divided into Titles and Items. Again a clear statement shall be made therein of departments, bureaus, etc, concerned with the receipts or disbursements.
Article 24. In order to meet an unforeseen deficit in the estimates, the Cabinet shall include in the budget of revenue and expenditure an amount deemed proper as a reserve.
Article 25. Of the estimated expenditure, those expenses, whose defrayal is not expected to be completed within a given fiscal year on account of their nature, shall be shown expressly in the budget so that they may be asked for the approval of the Diet for carrying them over to, and used in the ensuing fiscal year.
Article 26. As regards the national liability, the reason of its necessity for each, item, the fiscal year in which the acts of liability are performed, and the limit to the amount of national liability shall be made clear, and the fiscal year, the term or the annual defrayal of the disbursement resulting from the national liability shall be shown in case of necessity.
Article 27. It is usual that the Cabinet shall present to the Diet the budget estimates for each fiscal year during the month of December of the previous fiscal year.
Article 28. The budget estimates to be submitted to the Diet shall accompany the following documents for reference:
1. Detailed statement of estimated revenue;
2. Requisitions for the estimated expenses, requisitions for the national liability, from the respective Ministries and other Government Agencies;
3. Summary showing and net totals of the settlement of the account of revenues and expenditures for the preceding fiscal year before last, the same of the provisional settlement of the account of the same of revenues and expenditure for the last fiscal year, and the budget of revenues and expenditures of the present fiscal year;
4. Actual figures showing the conditions of treasury as of the end of the fiscal year before last and the estimated figures showing the conditions as of the end of last fiscal year and as of the end of the current fiscal year;
5. Lists of Government Bonds and borrowings outstanding at the end of the fiscal year before last and lists of estimated amounts of Government bonds and borrowings outstanding at the same as of the end of last fiscal year and the end of the current fiscal year, and a list showing the amounts, of annual redemption;
6. Lists showing the amounts of state properties outstanding at the end of the fiscal year before the last and lists showing estimated amounts of state properties and at the end of last fiscal year and the same as of the end of the current fiscal year;
7. Documents showing the assets, liabilities, profits, losses and other conditions of principal corporations in which the Government has interested as of the end of the preceding fiscal year before last, last fiscal year and the present fiscal year;
8. Documents showing the disbursement and estimates of the disbursement and estimated amount of expenditures after the present fiscal year, of the national liability which will be carried forward to the following fiscal year, and the same showing the total plan the progress and others of the business extending over several fiscal years;
9. Documents showing financial conditions and other data that are of help in clarifying the details of he budget;
Article 29. The Cabinet may formulate the Additional Budget in accorpance with the necessary budgetary procedures and present it to the Diet only when the deficiency arises in the expenditure which is absolutely necessary on account of the reason arising after the formation of the Budget or in the expenditure of the national liability or the expenpiture belonging to the liability of the State legally or through contract.
Excepting the forgoing case, when it is necessary to make significant changes in the existing budget on account of the reason arising after the formation of the budget, the Cabinet may present a revised budget to the Diet.
Aritcle 30. The Cabinet may present to the Diet a provisional budget for a certain period of a fiscal year, in case it is necessary.
The provisional budget shall become extinct upon the formation of the regular budget for the current fiscal year and the payments made or liabilities, originated according to the provisional budget shall be regarded as having been made or originated in accordance with the regular budget.
Part III. Execption of the Budget
Article 31. Upon formation of the budget, the Cabinet shall allocated the amounts of revenues and expenditures, and national liabilitiy to the heads of the respective Ministries and other Government Agencies who the responsible for the execution of the budget according to the resolutious adopted, by the Diet.
The amount of revenues and expenditures allocated to each Ministry or board according to the provision of the foregoing paragraph shall be classified into divisions and items in case of the revenues and divisions, items and sub-items in case of the expenditures.
When the allocation referred to in the first paragraph is made the Minister of Finance shall notify the Board of Audit accordingly.
Article 32. The Heads of the respective Ministries and other Government Agencies shall not use the appropriation of the expenditure budget fosr other objects provided for in the respective items.
Article 33. The Heads of the respective Ministries, and other Government Agencies shall not make the transfer among the divisions of the expenditure budget or among the amounts apportioned to respective Sections and Bureaus, but in case it is necessary in executing the budget to make the transfer among the Bureaus and Sections of the sane Ministries and Boards, they may make the transfer Ministry or Government Agencies Only within such amount of money under the item of the same name as designated by Cabinet Order.
The Heads as is the respective Ministries and other Government Agencies shall be authorized to make the transfer among the appropriation of the items and sub-items under the provision of the Cabinet Order.
The provision of the proviso paragraph 1 and the preceding paragraph shall not be applied in case a special regulation has been in the budget.
The Minister of Finance shall report of the transfer under the proviso to paragraph 1 and paragraph 2 to the Board of Audit.
The amount of transfer under the proviso to paragrabh 1 and paragraph 2 be manifestly recorded with the reason there for in the settlement of the acount of revenues and expenditures.
Article 34. The heads of the respective Ministries and other Government Agencies, on the basis of the budget approtioned to them in accordance with the provisionl of paragraph 1, Article 31, and according to the terms as fixed by the Minister of Finance, shall prepare a plan concerning the payment or contracts, by determining the amounts needed for the payment, or the amounts needed for the contract and other acts (hereinafter to be referred to as contracts, etc.) which cause the payment by the State separately for each of the personnels engaged in the business of defrayment and of contract, and forward the same plan to the Ministry of Finance, in order to obtain his regular recognition.
The Minister of Finance, by taking into due consideration the actual circumstances of the monetary market, the state of the Treasury money, and the Annual Revenue, and further, of the condition of the outlay of the expenditure concerned, shall prepare for each period as mentioned in the preceding paragraph, the policy regarding the recognition of the plan as to the payment or contracts, etc., and submit the same to the Cabinet Conference in order to obtain its final decision.
When the Minister of Finance, on the basis of the policy as mentioned in the preceding paragraph, has given his recognition to the plan of payment or contracts, etc., he shall notify the heads of the respective Ministries and Boards thereof, as well as to the Board of Audit. and at the same time he shall also notify the Bank of Japan of the plan of payment.
Article 35. The reserve fund shall be controlled by the Minister of Finance.
The Head of each Ministry or Government Agency shall make the report on the reason amount and bases of the computation in case of necessity to disburse from the reserve fund, and send it to the Minister of Finance.
The Minister of Finance must investigate the request of the preceding paragraph, and make the summary report of the reserve fund with necessary adjustment in order to get the approval of the Cabinet. But with regard to the expenses appointed by the Minister of Finance with the approval of the Cabinet, the Minister of Finance shall be able to decide specifically without asking the permission of the Cabinet.
When the summary report of the reserve fund is decided, the expenses included in the report shall be regarded as appropriated under the provision of the paragraph 1st of Article 31.
The provisions of paragraph 2, the main clause of paragraph 3 and the preceding paragraph 4 shall be apply to the national liability under the provision of the paragraph 2 of Article 15.
Article 36. For disbursements made out of the reserve fund the Heads of the respective Ministries and other Government Agencies shall prepare a statement thereof and submit it to the Minister of Finance immediately after the opening of the following ordinary session of the Diet.
The Minister of Finance shall prepare a suumarized statement of such disbursements based upon each statement of the preceding paragraph.
The Cabinet shall introduce the summarized statement of disbursements made out of the reserve fund and also the statements of the respective Ministries and other Government Agencies into the following ordinary session of the Diet for its approval.
The Minister of Finance shall submit the summarized statement and the statements of the preceding paragraph to the Board of Audit.
Chapter IV. Settlement of Accounts
Article 37. The Heads of the respective Ministries and other Government Agencies shall, according to the decision made by the Minister of Finance, prepare a report on the settlement of revenues and expenditures under their jurisdiction and statement of Government debts for each fiscal year and submit them to the Minister of Finance.
The Minister of Finance shall prepare a detailed statement of settled revenue based on the report on the settlement of revenues of the preceding paragraph, using the same classification as that in the detailed statement of revenue budget.
Article 38. A settlement of revenues and expenditures shall be made out by the Minister of Finance based on the detailed statement of settled revenue and report on the settlement of expenditures.
The settlement of revenues and expenditures shall be prepared according to the same classification as that in the revenue and expenditure budget, clasifying therein the items given below.
(1) Revenue
2. Revenue decided to collect(As regards revenue undecided to collect, the amount which was adjusted as "decided to collect" after it had been received)
4. Deficiencies due to default
5. Revenue not yet received
(2) Expenditure
2. Expenditure to be brought forward from the preceding fiscal year
3. Reserve fund disbursed
4. Amount of increase on decrease in accommodation
6. Expenditure to be carried forward to the succeeding fiscal year
Article 39. The Cabinet shall submit the settlement of revenue and expenditure to the Board of Audit together with the detailed statement of settled revenue, the reports on the settlement of expenditures presented by the respective Ministries and other Government Agencies and the statement of Government debts, by the time November 30th of the subsequent year.
Article 40. The cabinet shall customarily present the settlement of revenue and expenditure examined by the Board of Audit to the ordinary session of the Diet to be convened in the following year.
The settlement of revenue and expenditure of the preceding paragraph shall be accompanied with the report of audit by the Board of Audit and the detailed statement of settled revenue, settlement and the reports on the settlement expenditures submitted by the respective Ministries and other Government Agencies and the statement of Government debts.
Article 41. Any surplus arising in the annual budget for each fiscal year shall be transferred to the revenue for the following fiscal year.
Chapter V. Miscellaneous Provisions
Article 42. The appropriation of the respective fiscal year shall not be carried over to the subsequent fiscal year. However, appropriations approved by the Diet for carrying over in accordance with the provisions of Article 25 and expenditures, the payment of which was contracted for and has not been completed within a fiscal year on account of unavoidable circumstances, may be carried forward and used in the following fiscal year.
Article 43. In case where the carrying forward of an account is necessary in accordance with the provisions of the preceding Article of each the heads the respective Ministry and other Government Agencies shall prepare a statement of carring forward explaining reasons and amount there of par item and should ask the approval the Ministry of Finance thereof.
In case where The approval mentioned in the preceding paragraph is given the budget shall be deemed to have been allotted to the expenditure concerned in accordance with the provisions of the first paragraph of Article 31.
Article 44. The State may posses special funds as far as it is stipulated by law.
Article 45. In case Where it is necessary for special accounts, any other stipulation contrary to this law may be made.
Article 46. In case where a budget is approved, the Cabinet shall give, without delay, an account to the nation about the budget, the settlement of revenue and expenditure of the preceding fiscal year before last and the general items concerning finance such as the amount on band of public loan, borrowings, state property, etc by means of printed matter, conferences, etc.
Except those stipulated in the preceding paragraph, the Cabinet shall give at least every trimester an account to the Diet and nation about the situation of appropriation that of national treasury and others concerning finance.
Article 47. Matters necessary for the application of the present Law shall be stipulated by Cabinet Order.
Supplementary Provisions:
Article 1. The present Law shall come into force as from April 1, 1947, however, the provisions of Article 17, Article 18, paragraph 2, Article 19, Article 30, Article 31, Article 35 and Article 36 shall be put in force as from the day of the enforcement of the Constitution of Japan, and the date of enforcement of the provisions of Article 3, Article 10 and Article 34 shall be fixed by Cabinet Order.
The provisions of Articles 4 and 5 shall apply to public loans or receipts through borrowing to be included in the budget for the fiscal year 1948-49 onward, and the provisions of Article 7 and Chapter 3 (exclusive of paragraph 1 of Article 17, paragraph 2 of Article 18, Article 19, Article 28, Article 30, Artjcle 31, Article 34 and Article 36 inclusive) and the provisions of Chapter IV to the budget estimates and final accounts for the fiscal year 1947-48 onward.
Article 2, In this Law, "the Diet." "the Cabinet" , "the Ministries and other Government Agencies," and "Cabinet Order" shall, until the enforcement of the Constitution of Japan, read respectively "the Imperial Diet" , "the Government" , "the Ministries" and "Imperial Ordnance" .
Until the enforcement of the Constitution of Japan, in the second paragraph of Article 20, "The President of the House of Representatives, the President of the House of Councillors, the Director of the Supreme Court, the Director of the Board of Audit and the Prime Minister and the Ministers of the respective Ministries (hereinafter callep the head of respective Ministries and other Government Agencies)" shall read as "Minister of respective Ministries" and in Article 21, "the House of Representatives, the House of Councillors, the Court, the Board of Audit, Cabinet and respective Ministries (hereinafter called respective Ministries and other Government Agencies)" shall read in "Respective Ministries" .
Article 3. With regard to disbursements from the reserve fund made prior to the enforcement of the present Law and the final accounts for the fiscal year 1945-46 and 1946-47, former provisions shall still prevail.
Article 4. Matters for which approval of the Diet has hitherto been obtained as relating to contracts to the charge of the National Treasury unprovided for in the Budget shall, after the enforcement of the Constitution of Japan, be the national liability. But in that case the provision of paragraph 3 of Article 15 after the revision shall not be applicable.
Article 5. The following laws shall be abrogated.
Law No.2 in the year of 1911, pertaining to the Use by Carry-over of Subsidies for Construction Work if public Corporations.
Dajokan Decree No.17 in the year of 1872, pertaining to Contributions to the Government.