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ACT ON THE PROMOTION OF DEVELOPMENT AND DISTRIBUTION OF ENVIRONMENT-FRIENDLY AUTOMOBILES

Amended by Act No. 9686, May 21, 2009

Article 1 (Purpose)

The purposes of this Act are to plan for the continuous development of the automobile industry and to improve the living conditions of the people and to contribute to the national economy by establishing and promoting a general plan and policy to accelerate the development and distribution of environmentally friendly automobiles. Article 2 (Definitions)

The definitions of the terms used in this Act are as follows:

1. The term "automobile" means the automobile or construction machinery falling under any of the following items, which is prescribed by Presidential Decree: (a) Automobile prescribed in subparagraph 1 of Article 2 of the Automobile Management Act; or

(b) Construction machine prescribed in subparagraph 1 of Article 2 of the Construction Machinery Management Act;

2. The term "environmentally friendly automobile" means any of the following automobiles: electric car, solar powered car, hybrid car, fuel cell vehicle, natural gas vehicle or clean diesel vehicle under subparagraphs 3 through 8, announced by the Minister of Knowledge Economy after consultation with the Minister of Environment from among the automobiles that meet the qualifications in the following items: (a) The energy efficiency must meet the standards prescribed by the Ordinance of the Ministry of Knowledge Economy;

(b) It must be compatible with the standards of low pollution automobiles prescribed by the Ordinance of the Ministry of Environment in accordance with subparagraph ACT ON THE PROMOTION OF DEVELOPMENT AND

DISTRIBUTION OF ENVIRONMENTALLY FRIENDLY

AUTOMOBILES

230 Ministry of Government Legislation

6 of Article 2 of the Special Act on the Improvement of Air and Environment for Seoul Metropolitan Area; and

(c) It must be compatible with the standards for detailed technical matters, such as automobile performance, etc., prescribed by Ordinance of the Ministry of Knowledge Economy;

3. The term "electric car" means an automobile that uses electric energy charged from an electric power supply as its power source;

4. The term "solar powered car" means an automobile that uses solar energy as its power source;

5. The term "hybrid car" means an automobile that uses the combination of gasoline, diesel fuel oil, liquefied petroleum gas, natural gas or a fuel prescribed by the Ordinance of the Ministry of Knowledge and Economy and electric energy (including electric energy charged from an electric power supply) as its power source;

6. The term "fuel cell vehicle" means an automobile that uses electric energy that has been generated by using hydrogen fuel as its power source;

7. The term "natural gas vehicle" means an automobile that uses natural gas (including compressed natural gas and liquefied natural gas) as its power source;

8. The term "clean diesel vehicle" means an automobile that uses an engine that converts thermal energy into mechanical energy wherein the combustion of diesel fuel oil takes place inside the engine, which emits pollutants under Article 46 (1) of the Clean Air Conservation Act on a level similar to that of a hybrid car or natural gas vehicle; and

9. The term "hydrogen fuel supply facility" means a facility that supplies hydrogen to fuel cell vehicles.

Article 3 (Master Plan for Development of Environmentally Friendly Automobiles) (1) The Minister of Knowledge Economy shall establish a master plan to accelerate the development and distribution of environmentally friendly automobiles (hereinafter referred to as "master plan") every five years. In such cases, the opinions of the heads of central administrative agencies, such as the Minister of Environment and of the Special Metropolitan City Mayor, Metropolitan City Mayor or Do governor (hereinafter referred to as "Mayor/Do governor") shall be heard as prescribed by Presidential Decree.

(2) The master plan shall contain the following matters: Laws on Green Growth, and Economic Investment in Korea 231 04_LawsConcerningGreenGrowth

1. Fundamental direction for the development and distribution of environmentally friendly automobiles;

2. Mid-term and long-term aims of the development and distribution of environmentally friendly automobiles;

3. Matters concerning the research and development of environmentally friendly automobiles and the construction of infrastructure relating to research and development thereof;

4. Matters concerning the construction of infrastructure necessary to distribute the power sources of automobiles, such as hydrogen fuel supply facilities; and

5. Other matters necessary for the development and distribution of environmentally friendly automobiles.

(3) The master plan under paragraph (1) shall be fixed after deliberation of the State Council. Provided, that where insignificant matters prescribed by Presidential Decree are changed, such as a partial change in the direction of project for detailed technology development of environmentally friendly automobiles, this shall not apply. (4) Where it is deemed necessary, the head of central administrative agency concerned may request the Minister of Knowledge Economy to modify the master plan. In such cases, the Minister of Knowledge Economy shall hear the opinions of the heads of other relevant central administrative agencies and of the Mayor/Do governor if he/she intends to modify the master plan. (5) Where the master plan is modified as prescribed in paragraph (4), paragraph (3) shall apply mutatis mutandis.

Article 4 (Implementation Plan for Development of Environmentally Friendly Automobiles)

(1) In order to promote the master plan, the Minister of Knowledge Economy shall establish and promote an implementation plan for the development of environmentally friendly automobiles (hereinafter referred to as "implementation plan for development") every year after hearing the opinions of the heads of central administrative agencies concerned as prescribed by Presidential Decree.

(2) The implementation plan for development shall contain the following matters:

1. Field of priority technology development;

2. Objective of priority promotion by field of technology development; 232 Ministry of Government Legislation

3. Schedule and method of promotion of technology development;

4. Matters concerning the construction of infrastructure necessary for the efficient promotion of technology development projects; and

5. Other matters necessary for technology development. Article 5 (Implementation Plan for Distribution of Environmentally Friendly Automobiles)

(1) In order to promote the master plan, the Minister of Environment shall establish and promote an implementation plan for the distribution of environmentally friendly automobiles (hereinafter referred to as "implementation plan for distribution") every year after hearing the opinions of the heads of central administrative agencies concerned and of the Mayor/Do governor as prescribed by Presidential Decree. In such cases, the Minister of Environment shall consult with the Minister of Knowledge Economy on the distribution of environmentally friendly automobiles.

(2) The implementation plan for distribution shall contain the following matters:

1. Areas subject to the distribution of environmentally friendly automobiles;

2. Models of environmentally friendly automobiles and the quantity to supply by model;

3. Matters concerning the construction of infrastructure, such as the hydrogen fuel supply facility;

4. Matters concerning plans for raising funds and standards for financial assistance; and

5. Matters necessary for the distribution of environmentally friendly automobiles. (3) The Mayor/Do governor shall establish and promote a plan to accelerate the distribution of environmentally friendly automobiles in accordance with the master plan and implementation plan for distribution.

Article 6 (Assistance Policy for Technology Development) (1) In order to accelerate the technology development of environmentally friendly automobiles, the State may establish and promote an assistance policy concerning the following matters in order to promote technology development related to environmentally friendly automobiles:

1. Gathering and dissemination of information on technology development of Laws on Green Growth, and Economic Investment in Korea 233 04_LawsConcerningGreenGrowth

environmentally friendly automobiles within and outside of Korea; and

2. Research and development concerning the core technology of environmentally friendly automobiles and so on.

(2) The Minister of Knowledge Economy may have a person falling under any of the following subparagraphs perform the research and development of environmentally friendly automobiles in order to promote the technology development project under paragraph (1):

1. National and public research institutions;

2. Research institutions established under Article 8 of the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutions;

3. Specific research institutes under Article 2 of the Support of Specific Research Institutes Act;

4. Specialized manufacturing technology institutions under Article 42 of the Industrial Technology Innovation Promotion Act;

5. Industrial technology research cooperatives under the Act on the Support of Industrial Technology Research Cooperatives;

6. Universities, colleges, industrial colleges, junior colleges or technical colleges under Article 2 of the Higher Education Act;

7. Research institutes attached to enterprises as prescribed in Article 7 (1) 2 of the Technology Development Promotion Act; or

8. Agencies, organizations or business operators relating to environmentally friendly automobiles, which are prescribed by Presidential Decree. Article 7 (Promotion of Projects for Formation of Foundation for Technology) In order to efficiently promote the development of technology relating to environmentally friendly automobiles under Article 6 (1), the State may promote projects for the formation of foundation for technology in the following subparagraphs:

1. Projects for the formation of foundation for technology;

2. International projects for the cooperation in technology;

3. Projects for the education of industrial technical manpower; and

4. Other projects prescribed by Presidential Decree. 234 Ministry of Government Legislation

Article 8 (Assistance to Fuel Manufacturers)

(1) The State or local governments may provide necessary funds to those who manufacture, supply or sell hydrogen which is the fuel for fuel cell vehicle, or those who intend to install a hydrogen fuel supply facility.

(2) Matters necessary for the standards and methods of assisting funds under paragraph (1) shall be prescribed by Presidential Decree.

Article 9 Deleted. Article 10 (Assistance to Purchasers and Owners of Environmentally Friendly Automobiles)

The State or local governments may provide the purchasers and owners of environmentally friendly automobiles with necessary assistance.

Article 11 (Assistance to Operation of Environmentally Friendly Automobiles) (1) The Mayor/Do governor may allow owners of environmentally friendly automobiles to apply a mark recognizable from outside the automobile.

(2) The State and local governments shall devise an assistance policy necessary for automobiles that bear the mark under paragraph (1). (3) Matters necessary for the specification of the mark under paragraph (1) shall be prescribed by the Ordinance of the Ministry of Knowledge Economy.

Article 12 (Publicity of Environmentally Friendly Automobiles) The State or local governments may request organizations relating to automobiles, etc. to implement publicity necessary to promote awareness on environmentally friendly automobiles.

Article 13 (Financial Resources for Financial Assistance) The financial resources in the following subparagraphs may be used for funds necessary for the assistance under Articles 6 through 8, 10, and 11 (2):

Laws on Green Growth, and Economic Investment in Korea 235 04_LawsConcerningGreenGrowth

1. Special accounts for energy and resource-related projects under the Act on the Special Accounts for Energy and Resources-Related Projects;

2. Funds for the promotion of small and medium enterprises and for industrial foundation under the Act on the Promotion of Small and Medium Enterprises;

3. Special accounts for environmental improvement under the Act on Special Accounts for Environmental Improvement.

Article 14 (Requests for Supply of Data)

(1) Where it is deemed necessary to establish a master plan and implementation plan for development, the Minister of Knowledge Economy may request the administrative agency concerned and the agency or organization relating to environmentally friendly automobiles for the supply of necessary data, opinions. In such cases, the administrative agency concerned and the agency or organization relating to environmentally friendly automobiles that has been requested shall comply with the requirements unless any extraordinary circumstance which prevents them from doing so.

(2) Where it is deemed necessary to establish an implementation plan for distribution, the Minister of Environment may request the Mayor/Do governor for a data on the outcome of promotion for distribution of environmentally friendly automobile. In such cases, the Mayor/Do governor shall comply therewith unless any extraordinary circumstance exists.

Article 15 (Entrustment of Administrative Affairs) The State or local governments may entrust part of the administrative affairs in the following subparagraphs to the specialized agency concerned:

1. Administrative affairs of assessment, management of projects in promoting the projects in Articles 6 and 7;

2. Administrative affairs necessary for the assistance prescribed in Articles 10 and 11 (2);

3. Part of the administrative affairs prescribed by this Act, which is prescribed by Presidential Decree.

ADDENDUM

This Act shall take effect on the date of its promulgation.