PLC Paper No. LS 2/97-98

Paper for the House Committee Meeting
on 11 July 1997

Legal Service Division Report on
Resolution under section 29 of the
Public Finance Ordinance (Cap. 2)

The Secretary for the Treasury has given notice to move a motion under section 29 of the Public Finance Ordinance (Cap. 2) at the Provisional Legislative Council meeting to be held on 16 July 1997. The purpose of this motion is to seek the Provisional Legislative Council approval to set up a fund called the Land Fund with effect from 1 July 1997 to receive, hold and invest the assets of the Hong Kong Special Administrative Region Government (HKSARG) Land Fund, which have been transferred to the Government of the Hong Kong Special Administrative Region upon its establishment on 1 July 1997.

2. The proposed resolution provides for, inter alia, the administration and management of the Land Fund by the Financial Secretary, the credit to the Land Fund of all sums earned by investment and disposal of the assets after deduction of administration and management expenses, payment of all administration and management expenses by the Land Fund, assumption by the Land Fund of all liabilities of the Trustees of the HKSARG Land Fund Trust and the indemnity obligations of the Financial Secretary to the Trustees in respect of the Trust and the power of the Financial Secretary to authorize and direct investment of the assets.

3. According to the Secretary for the Treasury draft speech, setting up the Land Fund would facilitate the management of the assets of the HKSARG Land Fund, enable the assets to be clearly identified and accounted for, and their investment performance to be properly reflected and evaluated. The Director of Accounting Services will prepare a statement of assets and liabilities and a statement of receipts and payments in respect of the Land Fund each year and transmit such statements to the Director of Audit in accordance with the provisions of the Audit Ordinance (Cap. 122). The accounts of the Land Fund will also be published for public information.

4. The legal and drafting aspects of the draft resolution are in order.

Prepared by

FUNG Sau-kuen, Connie
Assistant Legal Adviser
Provisional Legislative Council Secretariat
8 July 1997