Act for Establishment of State-owned Taiwan Railway Co., Ltd

Article 1
The Ministry of Transportation and Communications (MOTC) establishes the State-owned Taiwan Railways Corporation Ltd. (hereinafter referred to as “the TRC”) to operate the nation’s railways. The provisions of this Act govern the establishment of the TRC.
Article 2
The TRC’s operating principles are to develop a sound state-owned railway business, enrich national capital, promote economic development, and improve the life quality of the populace.
TRC shall strictly implement its core business related to operating safety equipment, in accordance with relevant laws and regulations.
Article 3
The TRC’s scope of operations includes:
1.Operating railway passenger transport and freight transport.
2.Conducting the affiliated business pertaining to Article 21, Paragraph 1 of the Railway Act.
3.The investment, reinvestment, and management of railway-related businesses.
4.Other businesses as approved or commissioned by the MOTC.
All the business originally handled by Taiwan Railway Administration and its affiliates (hereinafter referred to as “the original agency”) will be handled by the TRC after the completion of the company registration by the TRC.
Article 4
The TRC may establish domestic and international subsidiaries and branches, to support normal business operations.
The type and location of any branch of the TRC shall be determined by the MOTC.
Article 5
The TRC shall maintain a Board of Directors consisting with 11 to 15 members, and a Board of Supervisors consisting of 3 to 5 members.
One-third of the Board of Directors from the preceding paragraph shall be experts or scholars in railways, transportation, industry management, law or finance, etc. The Board of Supervisors shall consist of at least one expert representative from the Directorate-General of Budget, Accounting, and Statistics of the Executive Yuan, the MOTC, or the Ministry of Justice.
At least one-fifth of the number of directors in Paragraph 1 shall be appointed from representatives nominated by the trade union.
The gender ratio of any of the Board of Directors and Board of Supervisors in Paragraph 1 shall not be less than one-third of the total number of directors and supervisors.
A safety management committee shall be established under the Board of Directors, and its composition shall be determined by the Board of Directors.
Article 6
The scope of authority of the Board of Directors of the TRC includes:
1.Reviewing and approving all rules, policies, bylaws and regulations governing the TRC and its Board of Directors.
2.Establishing the TRC organizational charter.
3.Review and approval of the TRC’s capitalization.
4.Review and approval of the TRC’s annual business policies, business plans, budgets, financial statements, and operational safety plans.
5.Review and approval of land and building usage.
6.Review and approval of investment or reinvestment plans and other major contracts.
7.Review and approval of property assets for financial collateral or loan purposes.
8.Approval of the establishment, modification, or cancellation of branches or subsidiaries.
9.Appointment and dismissal of the President and Vice President of the TRC
10.Review and approval (or establishment) of human-resource rules and regulations.
11.Approval of business regulations.
12.Approval of an internal control system.
13.Review of matters mandated or approved by the MOTC according to regulations.
14.Review or approval of other matters mandated by laws and regulations, and the articles within the company policy.
Article 7
The implementation matters by the Board of Supervisor of TRC include:
1.Investigation of the TRC’s business and financial affairs.
2.Review and approval of company financial accounts and documents.
3.Other matters mandated by laws and regulations, and the articles within the TRC charter.
Article 8
The TRC shall request approval from the MOTC for the following matters:
1.Annual business plans and operational safety plans.
2.TRC organizational charter and rules and regulations governing the Board of Directors.
3.Adjustments to TRC’s capitalization.
4.TRC annual budget and financial statements.
5.Disposition of land or buildings owned by the TRC.
6.TRC investment or reinvestment matters.
7.The use of TRC assets for financial collateral or loan purposes.
8.Other matters, as described by law, requiring the approval of the MOTC.
Article 9
The TRC is wholly owned by the government.
The government shall provide assets required for the operation of the TRC in the following ways, and shall not be subject to the restrictions of Article 14, Paragraph 1 of the Land Act and Articles 28 and 60 of the National Property Act:
1.Vehicles required for operating passenger and cargo transportation shall be valued as investments.
2.Those belonging to the public domain or are necessary to support government policies are provided without payment and shall be provided for use.
3.The rest is handled by way of investments, gifts, subsidies, leases, or the establishment of the right of superficies.
The methods, conditions, terms, withdrawal, rights, and obligations of the assets mentioned in the preceding paragraph, the basis for the calculation and collection of fees related to renting, and the right of superficies, preferential policies, and other related matters shall be determined by the MOTC.
Article 10
The government shall transfer adequate assets managed by the Taiwan Railway Administration and the original agency, and the MOTC shall establish a fund to handle the existing short-term debts of the original institution.
The funds specified in the preceding paragraph shall be prepared by the MOTC for the budget of the subsidiary units. Subsequent annual fund sources include asset development income, appropriation of government budgetary allocations, fund yields, donations from the public or groups, and other income.
Article 11
The TRC shall have one President, who shall have a professional background with practical experience in transportation or operation and management.
Article 12
Except for the provisions of Articles 13 and 15, TRC employees from the level of Vice President and below shall be managed in accordance with the personnel regulations and hiring contracts of the TRC. Laws and regulations for government employees do not apply to the TRC employees.
Matters concerning salary, retirement, pension, severance, and other matters concerning the TRC personnel regulations, mentioned in the preceding Paragraph, shall be approved by the Board of Directors, reported to the MOTC, and submitted to the Executive Yuan for approval.
Article 13
Except for those who are qualified for the appointment of transportation business personnel or civil servants, for current personnel from the original organization, prior to the implementation of this Act, the MOTC may assist in the resettlement and transfer to other agencies (or institutions), according to his/her wishes; the rest of the staff shall be transferred to the TRC. No layoffs shall be made due to the establishment of the company.
For those who voluntarily retire, sever, or resign within six months from the date of establishment of the TRC, a maximum of seven months’ salary will be paid as severance, inclusive of, if applicable, the 1 months’ salary guaranteed under the Labor Standards Act.
With regard to the aforementioned additional compensation, employees that had applied for early retirement who reach compulsory retirement age shall be eligible to receive an additional compensation amount calculated to the month at which they submit their early retirement request, as stipulated in Article 19, Paragraph 6 of the Civil Servant Retirement Severance Pension Act. Compensation equal to one additional month shall be provided for each month of early retirement taken. For those whose employment contract will expire, severance will be issued according to the number of months of early resignation.
Employees described in Paragraph 2 are re-employed in a public agency within six months of retirement, severance, or resignation, the re-appointment agency shall have their additional compensations (exclusive of the one months’ salary guaranteed by the Labor Standards Act) deducted by an appropriate ratio that shall be returned to the TRC.
The calculation standard for the severance payment (excluding advance salary) referred to in Paragraph 2 for civil servants with labor status refers to the total amount of base salary, professional bonus, and supervisory bonus paid in the month of retirement, severance, or resignation; for employees with solely labor status, the said calculation standard refers to the total amount of the base salary (wages) plus pay raise (professional bonus) total or monthly payment in the month of retirement, severance, or resignation. For those employed in accordance with the Employment Regulations, the said calculation standard refers to monthly payments. Severance payments do not include additions, allowances, fees, bonuses, and overtime pay.
Positions dealing with partnerships with outside agencies / organizations or schools that are reduced, merged, changed, or eliminated shall be eligible for retirement, severance or resignation benefits in accordance with relevant regulations. Those who receive additional compensation are not subject to rules regarding additional compensation in Paragraph 2.
Measures and responsibilities during implementation of the terms of Paragraphs 2 through 4 shall be formulated by the MOTC and submitted to the Executive Yuan for approval.
Apart from those who voluntarily resign from their positions, employees noted in Paragraph 1 that transfer to the TRC shall retain their accumulated years-in-service, current salary level, and retirement, severance, pension and other labor benefits and conditions.
Current public employees of the TRC’s predecessor organizations who have passed government examinations before the implementation of this Act, who are assigned or have applied to retain their training qualifications of the original agency or by the original examination agency / organizations, may proceed their training at the TRC. Those who have passed the training with obtained qualifications, in accordance with the law for the appointment of personnel working under either transportation staff or public servant rules and regulations will be assigned by the TRC from the date of qualifications; their status will be regarded as being current employees transferred to the TRC as stated in Paragraph 1.
Article 14
Current public employees of the original institution, who have passed government examinations shall not be limited by regulations governing transference stated in the Civil Service Examinations Act, Civil Service Employment Act, or other regulations related to official civil servant examinations upon assisted transference into the original appointing agency or a sub-agency, school, original examination organization, or a sub-organization, non-school organization, or school service.
With regard to later position transfers made during the allowed position transfer period, employees shall be limited to: agencies / organizations specified in their original examination qualifications, schools, original examination organization or organizations assisting with transfer, school administrative organizations or sub-organizations, and school-related responsibilities.
Employees in Paragraph 1 with professional or technical civil servant qualifications are not subject to limitations set forth in transference regulations during the permitted transfer period. However, these employees must serve in the transferring organization or the organization (or its sub-organizations) assisting with the transfer for a period of at least 3 years before transferring to another organization.
Article 15
Employees that transfer into TRC shall, from the date of TRC incorporation, abide by their original terms of transportation / public servant employment. Those that remain as government employees (continuing employees) shall have matters related to certifications, employment conditions, salary, promotion, guarantees, official level, service, awards / recognitions, training qualifications, insurance, retirement, pension, welfare rights, rights of assembly, labor rights, and other rights handled according to applicable laws unless otherwise specified. With the exception of the TRC President, promotions and qualifications considerations for all TRC staff shall be handled in accordance with the rules and methods practiced by the predecessor agencies. However, the Executive Yuan in cooperation with the Examination Yuan shall handle issues not addressed by prior public servant-related regulations.
The TRC employees in the preceding paragraph who continue under transportation staff regulations shall be compensated in accordance with the TRC transportation staff salary schedule (in accordance with Regulations for Appointment of Transportation Enterprise Personnel for Taiwan Railway Administration). The Board of Directors shall set appropriate new position names and hierarchy designations for these employees in the new transportation staff title and salary schedule. Revisions to this schedule shall be handled in the same manner.
With regard to the preceding paragraph, the RC shall establish review and evaluation criteria in accordance with the relevant regulations for senior officials and executive staff that transfer over from the predecessor institution.
Contracted staff hired under normal original institution contract hiring rules shall be dismissed upon the TRC incorporation. Contribution benefits originally due based on relevant agency / school contract staff policies shall be replaced with the terms stated in Article 12, Paragraph 1.
Upon TRC incorporation, original institution employees not covered under either transportation staff or public servant rules and regulations, including officials / employees hired under limited- term agreements or contractual agreements, such as contract workers or employees, operators, service staff, mechanics, maintenance, support staff, contractual hires, drivers, etc., shall be transferred to parallel responsibilities in TRC and remain subject to original rules and regulations until their departure or retirement.
Continuing employees from Paragraph 1 and contracted employees and unlicensed personnel may, within 5 years of TRC incorporation, opt to come under TRC regulations stipulated in Article 12, Paragraph 1, at which time they will no longer be subject to relevant public servant or transferred staff regulations. Status change decisions are final.
Retirement and severance terms for continuing employees in addition to the provisions of Article 17, shall continue to follow regulations for public servants. TRC shall continue to allocate an adequate budget to cover obligations under relevant regulations.
Continuing employees who obtained labor insurance from the original institution will continue to participate in labor insurance until they resign or retire.
Article 16
Original institution employees that transfer to the TRC upon incorporation who are on approved leave, suspension (including those whose reinstatement has yet to be determined), and leave without salary shall be transferred under the jurisdiction of the TRC. Employees approved for legally sanctioned leave without salary shall be permitted to return to their position. Those employees able but unwilling to transfer to a position at the TRC may request that the MOTC arrange a transfer to another agency or may arrange their retirement, severance, or resignation.
Article 17
Original institution employees who have been retired or receive pensions shall continue to receive full benefits due under the Retirement Regulations for Taiwan Railway Worker / Civil Servant Retirement Act.
Retirement payments, pension payments, and relief payments (dependent’s pensions) as well as retirement care matters shall be handled by the TRC. Necessary funding shall be arranged in accordance with the preceding paragraph and funds related to retirement and care shall be compensated by the MOTC through relevant annual budgetary allocations.
Article 18
The TRC shall fund an employees’ welfare fund in accordance with the Employee Welfare Fund Act and other relevant regulations.
Article 19
The construction and replacement of railway infrastructure, vehicle purchase and maintenance required for the operation of the TRC, shall be financed by the MOTC through relevant budgetary allocations.
The expenses in the preceding paragraph are self-liquidating and can be attributed to the TRC, and shall be borne by the TRC.
To maintain railway infrastructure and vehicles, increase asset lifespan, and ensure the safety of railway traffic for the TRC, the maintenance costs shall be financed by the MOTC through relevant budgetary allocations, to improve efficiency and extend serviceability.
Regulations for matters relating to the implementation of operations in Paragraph 1 and the preceding paragraph shall be determined by the MOTC.
The railway infrastructure referred to in Paragraphs 1 and 3 refers to the necessary facilities for railway operations, such as railway routes, stations, electricity, traffic security, telecommunications, information, and maintenance.
Article 20
The land and buildings of the TRC are used for railway transportation and dormitory use, and are exempt from land value tax and house tax; the remaining land, buildings (including subsidiary businesses) invested and operated by the company are subject to a land value, tax rate at 1 percent, and a house tax rate at 3 percent.
For the public land and housing provided by the government to the TRC for railway transportation and dormitory use in accordance with Article 9, Paragraph 2, the provisions of the preceding paragraph concerning the exemption of a land value tax and housing tax shall apply.
In accordance with the provisions of Article 9, Paragraph 2, when transferring assets to the TRC and its investment and operations of affiliated businesses, all taxes shall be exempted.
Article 21
The operating loss of the TRC due to cooperation with government policy tasks shall be subsidized by the government.
Regulations for subsidy-related matters in the preceding paragraph shall be formulated by the MOTC and submitted to the Executive Yuan for approval.
Article 22
To manage railway passenger and freight transportation and ancillary businesses, where urban planning changes are involved, TRC must report to the MOTC to coordinate with city planning authorities to make rapid changes in accordance with the provisions of Article 27 of the Urban Planning Law; non-urban land-use changes shall be handled in accordance with the relevant provisions of the Regional Plan Act or the Spatial Planning Act.
For urban plan changes mentioned in the preceding paragraph, reasonable land-use zoning categories shall be established, and appropriate land development intensity and permission events/items shall be determined; the burden of development obligations of the TRC shall be moderately reduced.
Article 23
The date of enforcement of this Statute shall be determined by the Executive Yuan.