The Compilation and Management of Education Expenditure Act was passed by the Legislature in November 28, 2000, and will be put into execution within 12 months. This act is the first act regulates and constructs the operations of public education finance system in Taiwan. At the time when the act has just been passed, this paper narrates the background of legislation, discusses the characteristics of the regulations, and explores the potential problems we might encounter when this education finance system is set to operate. Suggestions are also made for future policymaking.