Full Text of the Guiding Case
Main Points of the Adjudication
Where a construction entity should construct an air defense basement, but, in violation of the Civil Air Defense Law and related provisions, does not do so, this illegal act is a type of nonperformance of a legal obligation. Where a construction entity should, in accordance with law, pay a fee for the ex situ construction of an air defense basement, the provisions concerning “the exemption of the urban infrastructure ancillary fee and various other administrative service fees” for construction projects of indemnificatory housing,  such as low-rent housing and affordable housing, are not applicable.
Related Legal Rule(s)
Articles 22 and 48 of the Civil Air Defense Law of the People’s Republic of China
Basic Facts of the Case
On September 10, 2008, defendant The Civil Air Defense Office of Hohhot Municipality (呼和浩特市人民防空办公室) (hereinafter referred to as the “Hohhot Civil Defense Office”), delivered to plaintiff Inner Mongolia Qiushi Real Estate Development Limited Liability Company (内蒙古秋实房地产开发有限责任公司) (hereinafter referred to as “Qiushi Real Estate Company”), the Notice of the Deadline to Undergo the Examination and Approval Process for “Combined Construction”.  [In the Notice, the defendant] informed Qiushi Real Estate Company that [in] its newly-constructed “Qiushi First City”, an affordable housing residential community project, [the company] had not followed [the requirements of] Article 22 of the Civil Air Defense Law of the People’s Republic of China and Articles 45 and 47 of the Regulation on the Administration of the Construction of Civil Air Defense Projects to also build a basement that could be used for air defense during wartime. [The defendant] demanded that Qiushi Real Estate Company go to the Hohhot Civil Defense Office by September 14 to handle the “Combined Construction” procedures and submit relevant materials. On June 18, 2009, with respect to Qiushi Real Estate Company, the Hohhot Civil Defense Office rendered the Written Decision of the Civil Air Defense Office of Hohhot Municipality to Levy an Air Defense Basement Ex Situ Construction Fee (Hu Ren Fang Zheng Fei Zi No. 001), deciding to levy an “air defense basement ex situ construction fee” of RMB 1,724,600 on Qiushi Real Estate Company’s “Qiushi First City” project. Qiushi Real Estate Company did not raise any objection to [the conclusion that] a 5,518-square-meter air defense basement should have been constructed for the “Qiushi First City” project and that [this basement] had not been [constructed]; [the Company also] did not raise any objection to the legality of the procedures the Hohhot Civil Defense Office followed when it made decision on the levy.
Results of the Adjudication
On January 19, 2010, the Xincheng District People’s Court of Hohhot Municipality, Inner Mongolia Autonomous Region, rendered the (2009) Xin Xing Chu Zi No. 26 Administrative Judgment: [the court] upholds the Written Decision of the Civil Air Defense Office of Hohhot Municipality to Levy an Air Defense Basement Ex Situ Construction Fee (Hu Ren Fang Zheng Fei Zi No. 001) issued by the Hohhot Civil Defense Office. After the judgment was pronounced, Qiushi Real Estate Company appealed. On April 20, 2010, the Intermediate People’s Court of Hohhot Municipality rendered the (2010) Hu Xing Zhong Zi No. 16 Administrative Judgment: [the court] rejects the appeal and upholds the original judgment.
Reasons for the Adjudication
In its effective judgment, the court opined:  Article 16 of the State Council’s Several Opinions Concerning Resolving the Housing Difficulties of Low Income Urban Families provides:
The construction of low-rent housing and affordable housing, reconstruction of shantytowns, and renovation of old residential areas are all exempt from the urban infrastructure ancillary fee and other various administrative service fees and government-managed funds.
Article 8 of the Measure on the Management of Affordable Housing, [promulgated by] seven ministries and commissions, including the Ministry of Construction,  provides:
Affordable housing construction projects are exempt from the urban infrastructure ancillary fee and other various administrative service fees and government-managed funds.
Although the aforementioned provisions concerning the exemption of construction projects of affordable housing or other indemnificatory housing from various administrative service fees do not specify their regulation targets, judging from the original legislative intent, [these provisions] should target legal acts of construction.
Article 22 of the Civil Air Defense Law provides:
In newly constructed civilian buildings in a city, basements that can be used for air defense during wartime [should be] constructed in accordance with relevant State provisions.
Article 48 of the Regulation on the Administration of the Construction of Civil Air Defense Projects states:
Where an air defense basement should be built for a civilian building in accordance with provisions, but due to geology, topography, or other factors, such construction is unsuitable, or where the prescribed construction area [of the basement] is smaller than the constructed area of the first floor of the civilian building, [an air defense basement] need not be built if it is so approved by the departments in charge of civil air defense. However, an ex situ construction fee, [the amount of which is] based on the construction cost needed for the area of the air defense basement that should be built, must be paid, and the departments in charge of civil air defense must carry out the ex situ construction [of the air defense basement] nearby.
This means that only under circumstances prescribed by laws and regulations where the construction of an air defense basement is unsuitable may [a company in charge of the] construction of affordable housing or other indemnificatory housing not build an air defense basement and [only under these circumstances] may relevant provisions exempting [it] from the payment of the air defense basement ex situ construction fee be applicable.
The applicable targets of the relevant provisions exempting payment of the air defense basement ex situ construction fee should not include illegal acts of construction. Otherwise, this would lead to a situation where the cost of violating the law is less than the cost of obeying the law. This violates the legislative intent [of these provisions], and is not beneficial to safeguarding national defense and security or the fundamental interests of the people. Qiushi Real Estate Company should have constructed an air defense basement in accordance with law but did not do so. This illegal act was a type of nonperformance of legal obligations. The relevant preferential provisions on exemption from payment of the air defense basement ex situ construction fee could not be applied.
* The citation of this translation of the Guiding Case is:《内蒙古秋实房地产开发有限责任公司诉呼和浩特市人民防空办公室人防行政征收案》(Inner Mongolia Qiushi Real Estate Development Limited Liability Company v. The Civil Air Defense Office of Hohhot Municipality, A Civil Defense Administrative Levy Case), China Guiding Cases Project, English Guiding Case (EGC21), Feb. 4, 2014 Edition, available at https://cgc.law.stanford.edu/guiding-cases/guiding-case-21.
This document was primarily prepared by Oma Lee, Liyan Tay, Jonathan Wills, XIA Shengying, and Minmin Zhang, and was reviewed by Joelle Tjahjadi. The document was finalized by Isabella Fu, Jordan Corrente Beck, Dimitri Phillips, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings to correspond with those boldfaced in the original Chinese version, was done to make the piece more comprehensible to readers. The following text, otherwise, is a direct translation of the original text and reflects formatting of the Chinese document released by the Supreme People’s Court.
The following Guiding Case was discussed and passed by the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China and was released on November 8, 2013, available at http://www.chinacourt.org/article/detail/2013/11/id/1150429.shtml. See also最高人民法院关于发布第五批指导性案例的通知 (The Supreme People’s Court’s Notice Concerning the Release of the Fifth Batch of Guiding Cases), Nov. 8, 2013, available at http://www.chinacourt.org/law/detail/2013/11/id/147238.shtml.
 Translators’ note: the Chinese term “人防” is used here. In our opinion, it would be clearer if the full term “人民防空” (“civil air defense”) were used. The term “civil defense” was chosen to reflect the abbreviated term.
 Translators’ note: the term “保障性住房” (“indemnificatory housing”) refers to housing with a certain set of standards and a set price or rent that the government provides for low-income families with housing difficulties. See e.g., 中国日报网英语点津 (China Daily Website Language Tips), available at http://www.chinadaily.com.cn/language_tips/news/2010-07/21/content_11028913.htm.
 Translators’ note: the term “结建” is used, which should mean “结合修建” (“combined to construct”), as used in legal provisions that require underground structures of civilian buildings to be combined to construct a basement that can be used for air defense during wartime. See e.g., 上海市民防工程建设和使用管理办法 (Shanghai Municipality’s Administrative Measure on the Construction and Use of Civil Defense Projects), available at http://www.shanghai.gov.cn/shanghai/node17256/node17413/node17418/userobject6ai1285.html. Article 9 of this administrative measure provides that “in newly constructed civilian buildings in the city, [their underground structures] should, in accordance with relevant State provisions, be combined to construct a basement that can be used for air defense during wartime.” (“城市新建民用建筑，应当按照国家有关规定，结合修建战时可以用于防空的地下室。”)
 Translators’ note: the Chinese text does not specify which court opined. Given the context, this should be the Intermediate People’s Court of Hohhot Municipality.
 Translators’ note: the term “政府性基金” is translated here as “government-managed funds” in accordance with the translation used in China’s official sources. See e.g., Report on China’s Central, Local Budgets, available at http://www.china.org.cn/chinese/2013-03/21/content_28317797_2.htm.
 Translators’ note: this ministry has been reorganized into the Ministry of Housing and Urban-Rural Development (住房和城乡建设部).
 Translators’ note: the term “调整对象” translated here as “regulation targets” refers to the objects or acts that a provision aims to regulate.