(adopted at the 8th meeting of the Standing Committee of the first Chongqing Municipal People's Congress on March 28, 1998)

Chapter I General Provisions

Article 1 These Regulations are formulated in accordance with the law of the people's Republic of China on the progress of science and technology, relevant laws and regulations and in the light of the actual situation of this Municipality for the purpose of ensuring the investment in science and Technology (hereinafter referred to as the investment in science and Technology), standardizing the management of funds for science and technology, making rational use of funds for science and technology, and promoting scientific and technological progress, economic construction and social development.

Article 2 the term "investment in science and technology" as mentioned in these Regulations refers to the capital investment of the government and its relevant departments, enterprises, institutions, social organizations and individuals in scientific and technological research and development, popularization and application of scientific and technological achievements, scientific and technological services and popularization of science and technology.

Article 3 all units and individuals engaged in scientific and technological input and management activities within the administrative areas of this Municipality shall abide by these regulations.

Article 4 the overall level of investment in science and technology shall be increased year by year, and a multi-level and multi-channel science and technology investment system shall be established and improved, with financial investment as the guide, enterprises and institutions as the main body, bank loans as the support, and social fund-raising and foreign capital introduction as the supplement.

Article 5 investment in science and technology shall adhere to the principle of focusing on economic, scientific and social development, optimizing investment orientation and improving efficiency.

The use of science and technology funds shall be based on the principle of combining compensation with free payment and using the funds for specific purposes.

Article 6 the people's governments of cities, districts and counties (autonomous counties) shall strengthen their leadership over the input of science and technology, and incorporate the input of science and technology into the national economic and social development plans of their respective regions.

Article 7 the municipal and district / county (Autonomous County) administrative departments for science and technology shall be the functional departments in charge of science and technology work of the people's governments at the same level and shall be responsible for the guidance, coordination and comprehensive management of science and technology input in their respective regions.

Article 8 the financial departments of cities, districts and counties (autonomous counties) shall be responsible for the compilation of the financial budget for science and technology funds at the corresponding levels, and shall supervise and inspect the use and management of financial appropriations.

Article 9 branches and sub branches of the people's Bank of China shall supervise and manage the scientific and technological credit and investment activities of professional banks and other non bank financial institutions according to law.

Chapter II investment in science and technology

Article 10 investment in science and technology mainly includes:

（1） Science and technology expenses, three items of science and technology expenses, scientific research capital construction expenses, special funds for science and technology and other funds for science and technology arranged in the financial budget;

（2） The funds left by the state policy support to enterprises and institutions for the development of science and technology;

（3） Science and technology credit funds and science and technology funds invested by banks and non bank financial institutions;

（4） Science and technology funds invested, subsidized and donated by enterprises, institutions and individuals;

（5） Science and technology funds arranged by relevant government departments with production, construction and development funds;

（6） Science and technology funds invested, subsidized and donated by domestic and foreign organizations and individuals;

（7） Other funds for science and technology.

Article 11 the people's governments of cities, districts and counties (autonomous counties) shall include in the budget at the same level the expenses for science and technology, the expenses for the three items of science and technology, the expenses for the basic construction of scientific research and the special funds for science and technology.

The growth rate of financial funds for science and technology should be higher than the growth rate of the current fiscal revenue.

The expenses for science and technology at the municipal level shall account for more than 2% of the budgetary expenditure at the municipal level (excluding the funds allocated by the higher authorities), and the expenses for science and technology at the district and county level (Autonomous County) shall account for more than 1% of the budgetary expenditure at the same level.

Article 12 the funds needed by independent scientific research institutions for capital construction, such as the preparation of key laboratories, intermediate test bases, the purchase and renewal of important instruments and equipment, shall be separately listed in the key plans for capital construction investment.

Article 13 the government shall, in accordance with the provisions of the state, give preferential policy support to scientific research institutions, colleges, universities and enterprises for the following acts as well as high-tech enterprises:

（1） Technology transfer, technology training, technology consultation, technology service, technology contract and technology share;

（2） New product development, intermediate test, basic construction of trial room and facilities in scientific research, imported scientific research instruments and equipment and experimental spare parts;

（3） Export of high and new technology and its products.

All the taxes and fees that enterprises and institutions enjoy the exemption or exemption from the state policies for scientific and technological activities must be used for scientific and Technological Development and achievements transformation.

Article 14 the relevant government departments shall allocate a certain proportion of the annual funds for production, construction and development to scientific and Technological Development and achievements transformation.

Article 15 banks shall support the transformation of scientific and technological achievements and provide loans to scientific research institutions and scientific and technological enterprises.

The government should give financial support to the major science and technology projects invested in the city by the national policy banks.

Article 16 a science and technology development bank shall be established in accordance with the provisions of the state.

Article 17 the government encourages units and individuals to carry out science and technology venture investment, science and technology credit, science and technology insurance and financial leasing services for science and technology.

Non bank financial institutions serving science and technology should focus on investing in science and technology projects. Other financial institutions are encouraged to increase investment in science and technology.

Article 18 enterprises and institutions shall increase investment in research and development and technological innovation.

The annual funds for technological development of an enterprise shall account for more than one percent of the sales revenue of the enterprise, and more than three percent shall be spent by enterprises with advanced technology, scientific and technological enterprises or high-tech enterprises. The technological development fee of an enterprise is included in the cost according to the actual amount.

Scientific research institutions should draw a certain proportion of funds from their net income to establish science and technology development funds.

Article 19 the science and technology development, science and technology popularization, science and Technology Award and science and technology development risk fund of Chongqing Municipality shall be established. The fund should be raised through multiple channels to increase in value. The specific measures shall be formulated by the Municipal People's government.

All industries, districts and counties (autonomous counties) shall establish science and technology development funds according to the needs of their own industries and local science and technology development.

Article 20 scientific research institutions, colleges and universities, and high-tech enterprises may, in accordance with the relevant provisions of the state, raise funds for scientific and technological research and development in the form of joint-stock system, joint venture, cooperation, and the establishment of funds.

Units undertaking major scientific and technological projects may raise funds from the society after they are reported to the relevant departments for approval.

Article 21 organizations or individuals at home and abroad shall be encouraged to support scientific research, technology development and reward scientific and technological talents. If the amount of scientific and technological donation is large, the special fund for science and technology may be established in the name of an individual according to the wishes of the donor and approved by the relevant departments.

Article 22 foreign organizations and individuals may establish research and development organizations in this Municipality in accordance with law, or may also hold Sino foreign joint ventures and Sino foreign cooperative research and development institutions with research and development organizations or other organizations of the city.

Chapter III use and management of science and technology funds

Article 23 governments at all levels shall optimize the investment direction of funds, use the regulatory role of market mechanism, adapt to the development requirements of science and technology, allocate scientific and technological funds reasonably, guarantee the major scientific and technological investment in economic construction, scientific and technological progress and social development, and improve the fund efficiency.

Article 24 the scientific and technological funds invested in the financial sector shall be mainly used in the following aspects:

（1） Agricultural research and major public welfare research;

（2） Major scientific and technological research, high-tech research, application basic research, soft science research and science and technology expert training;

（3） The transformation of scientific and technological achievements, the integration of emerging industries and science and technology economy.

The scientific and technological funds invested in the financial sector may be used by means of appropriations, paid use, discount interest and so on.

Article 25 the arrangement of scientific and technological development plan projects shall be applied to the competent department of the project by units and individuals. After being appraised by experts, the project shall be selected as a priority.

The competition mechanism shall be introduced into the project initiation of science and technology projects. If the conditions are met, public bidding shall be carried out.

Article 26 units and individuals applying for scientific and technological projects shall abide by relevant regulations, and shall not take fraudulent acts to defraud scientific and technological funds.

The project competent department shall not establish a project for those that do not conform to the national industrial policies or are elimination of backward technologies.

Article 27 for the scientific and technological projects that have been approved or won the bid, the management system of technical contract system, project management responsibility system and project owner responsibility system must be implemented.

Article 28 the state-owned scientific research institutions and scientific institutions shall be subject to classified management.

Encourage the technological development research units with the budget difference to carry out the integrated operation of technology, industry, trade or technology, agriculture and trade, or develop into modern science and technology enterprises, and gradually realize self-reliance and self-reliance and self-reliance on profit and loss.

The social public welfare type and agricultural scientific research units that guide the use of funds in a lump sum manner shall provide paid technical services to the society and gradually implement enterprise operation.

The administrative department of science and technology shall mainly use the scientific and technological projects' early development and intermediate test of scientific research institutions, and also be used as the working capital for commercialization and industrialization of scientific and technological achievements.

Article 29 the relevant departments of the government shall, in accordance with the plan for the development of science and technology, combine with the actual situation, highlight the key points, use the funds of science and technology they have in their respective hands, and strengthen their management. 

The science and technology funds raised by enterprises and institutions themselves shall be used for science and technology development or for supporting science and technology projects assigned by the relevant departments of the state and the municipality, and shall be accounted separately.

Article 30 the departments in charge of science, technology and economy shall closely cooperate with banks in the research and evaluation of science and technology investment information and science and technology development projects, and the banks shall provide science and technology loans on a selective basis.

Article 31 science and technology credit cooperatives, science and technology venture capital companies, science and technology foundations, science and technology insurance companies and other organizations shall establish and improve rules and regulations to guarantee science and technology investment, so as to improve efficiency and service quality.

Article 32 funds for science and technology must be used exclusively. No unit or individual is allowed to misappropriate, embezzle or intercept them, and they shall be subject to auditing and financial supervision according to law.

Article 33 establish and improve the financial management system of science and technology funds and the statistical system of science and technology investment. The relevant departments and units shall regularly submit the statistical data and materials of scientific and technological input to the statistical department.

Chapter IV rewards and penalties

Article 34 the government and the competent departments concerned shall reward the units and individuals that have achieved remarkable economic and social benefits by implementing these regulations, broadening the channels of technological funds, increasing investment, and scientifically managing and using the funds.

The government shall issue honorary certificates and honorary titles to the units and individuals with large amount of scientific and technological donations.

Article 35 Whoever misappropriates, withholds or intercepts government funds for science and technology shall be ordered by the relevant administrative department to return them within a time limit; And depending on the seriousness of the case, the unit to which they belong or the administrative department at a higher level shall give administrative sanctions to the person who is directly responsible.

Article 36 If a person fraudulently obtains funds for science and technology, the Department directly in charge of the science and technology project shall recover the funds in full and confiscate the illegal gains. Depending on the seriousness of the case, the administrative department of science and technology, together with the Department in charge of the science and technology project, shall impose a fine of not more than 20% of the amount defrauded; The person who is directly responsible shall be given administrative punishment by his unit or superior administrative department, and the economic responsibility of the person who is directly responsible can be investigated.

Article 37 If the relevant government departments and their staff abuse their power, abuse their power for personal gain, neglect their duties or dereliction of duty, resulting in heavy losses in science and technology investment, which does not constitute a crime, they shall be investigated for administrative responsibility by the units they work for, or by the administrative department or supervisory department at a higher level.

Article 38 those who violate these regulations and constitute a crime shall be investigated for criminal responsibility according to law.

Article 39 If a party refuses to accept the administrative penalty, he may apply for administrative reconsideration or bring a suit in the local people's court. If the party fails to apply for reconsideration, bring a suit or implement the decision on punishment within the time limit, the organ that made the decision on punishment shall apply to the people's court for compulsory execution.

Chapter V supplementary provisions

Article 40 the investment and management of science and technology by the relevant departments of the State shall be carried out in accordance with their provisions. In the absence of such provisions, these Regulations shall apply.

Article 41 for the purposes of these regulations, the term "three expenses for science and technology" refers to the expenses for trial production of new products, intermediate tests and subsidies for important scientific research.

Article 42 these Regulations shall come into force as of July 1, 1998.

Source: Chongqing Bureau of science and technology