The Diet on Wednesday enacted a law aimed at reforming public corporations and government-authorized nonprofit bodies.

In a plenary session, the House of Councilors approved the bill to reorganize and consolidate 77 public corporations and 86 state-authorized nonprofit bodies, with the ruling coalition and the main opposition Democratic Party of Japan lending their support.

The government plans to set up a headquarters to promote reform of public corporations and other public entities on Friday, when the law goes into force, government officials said.

Prime Minister Junichiro Koizumi will be appointed chief of the headquarters, they said. Its members will meet for the first time on Friday evening to receive an interim draft plan on reform currently being drawn up by a government secretariat.

Administrative reform minister Nobuteru Ishihara, Chief Cabinet Secretary Yasuo Fukuda, Finance Minister Masajuro Shiokawa and Toranosuke Katayama, minister of public management, home affairs, posts and telecommunications, are expected to be named deputy heads of the headquarters.

The new law stipulates that the government will compile a plan to reorganize and consolidate public corporations and other public entities within a year after the law comes into force.

Based on the plan, the government will review the functions of public corporations to decide whether they should be abolished, privatized or made into independent administrative agencies.

Stimulus bills enacted

The House of Councilors enacted on Wednesday four bills related to an economic stimulus package adopted in early April.

The bills include one that exempts stock sales of up to 1 million yen annually from capital gains tax.

This is designed to boost the stock market, and in turn help stimulate the struggling economy, by encouraging individuals to invest in stocks.

Another bill is aimed at revitalizing the securities market by shortening the settlement period for commercial paper.

The bills include a revision to the Financial Revitalization Law to let the state-run Resolution and Collection Corp. continue buying bad loans from banks until the end of March 2004.

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