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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
22/2003/QD-BTC
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Hanoi,
February 18, 2003
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DECISION
ON FINANCIAL MECHANISMS IN THE USE OF LAND FUNDS FOR
CREATION OF INFRASTRUCTURE CONSTRUCTION CAPITAL
THE MINISTER OF FINANCE
Pursuant to the Land Law and the 1998 and
2001 Laws Amending and Supplementing a Number of Articles of the Land Law;
Pursuant to the Government’s Decree No. 04/2000/ND-CP of February 11, 2000 on
the implementation of the Law Amending and Supplementing a Number of Articles
of the Land Law; Decree No. 66/2001/ND-CP of September 28, 2001 amending and
supplementing a number of articles of Decree No. 04/2000/ND-CP of February 11,
2000 on the implementation of the Law Amending and Supplementing a Number of
Articles of the Land Law;
Pursuant to the Government’s Decree No. 178/CP of October 28, 1994 on the
tasks, powers and organizational apparatus of the Ministry of Finance;
After obtaining the opinions of the ministries, branches and People’s
Committees of the provinces and centrally-run cities; at the proposal of the
director of the Public Property Management Department,
DECIDES:
Article 1.- Scope of
application
1. This Decision shall apply to the cases of
using land funds for creation of infrastructure construction capital prescribed
in Section 2, Chapter IV of the Government’s Decree No. 04/2000/ND-CP of
February 11, 2000 on the implementation of the Law Amending and Supplementing a
Number of Articles of the Land Law, Clause 10, Article 1 of the Government’s
Decree No. 66/2001/ND-CP of September 28, 2001 amending and supplementing a
number of articles of Decree No. 04/2000/ND-CP of February 11, 2000 on the
implementation of the Law Amending and Supplementing a Number of Articles of
the Land Law.
2. The list of infrastructure construction
projects allowed to use land funds for creation of capital, which has been
approved by the Prime Minister, such as:
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- Projects to construct urban infrastructures;
- Projects to construct infrastructures in
population quarters;
- Projects to construct other infrastructure
works.
3. Land funds for creation of infrastructure
construction capital are those included in the land use plannings already
approved by the Prime Minister, including:
- Land assigned with the collection of land use
levy;
- Land leased and land assigned in other forms
now shifted to assigned land subject to land use levy (change of use purposes).
4. Forms of using land funds for creation of
capital.
a/ Assigning land located right at the places
where the projects’ infrastructures are to be constructed;
b/ Assigning land located outside the areas
where the projects’ infrastructures are to be constructed;
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d/ Using land funds with many advantages for
production, business, daily life and services for creation of investment
capital to build public infrastructures in the localities.
Article 2.- Subjects of
application
For domestic economic organizations (hereinafter
also referred to as investors or organizations for short) which have made
registration for real-estate dealing activities, meet all law-prescribed
capital and technical conditions for executing investment projects, if they win
construction bids or land use right auction (hereinafter referred to as land
auctions), they shall be assigned by the State land under the projects using
land funds for creation of infrastructure construction capital. Particularly
for cases of using land funds for creation of capital under the provisions at
Point d, Clause 4, Article 1 of this Decision, the subjects of application
shall also include Vietnamese individuals (hereinafter referred to as
individuals for short) who satisfy all capital and technical conditions.
Article 3.- Financial
mechanisms applicable to projects using land funds for creation of
infrastructure construction capital
Investment projects allowed to use land funds
for creation of infrastructure construction capital must be opened to bidding
for infrastructure construction or land auctions for such land funds as
follows:
- In an investment project to construct
infrastructures, if the bidding for infrastructure construction has been
organized, land auctions shall not necessarily be organized, the bid-winning
investors shall be assigned by the State land with the collection of land use
levy. If land auctions are organized, the bid-winning investors shall be
assigned to construct infrastructures.
- Where only one investor applies for executing
the project, if he/she/it satisfies the conditions specified in Article 7 of
this Decision, the bidder designation shall be applied.
The investors winning the project bidding or
land auctions shall not be allowed to sell bids in any form.
Article 4.- Listing and
publicization of projects using land funds for creation of infrastructure
construction capital
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1/ The list of infrastructure construction works
allowed to use land funds for capital creation, already approved by competent
authorities, divided into two parts:
a/ The list of infrastructure construction works
to be opened to bidding, corresponding to the assigned land funds;
b/ The list of land funds to be auctioned,
corresponding to infrastructure construction works;
2. The list of land funds used for creation of
capital for each infrastructure-construction work: location, acreage, category
of land being in use, category of land permitted for changing use purpose in
line with the planning on the use of the land plots, and other information
related to the projects using land funds for creation of infrastructure
construction capital.
3. The list of land funds used for creation of
capital to construct public infrastructures in the localities, as prescribed at
Point d, Clause 1, Article 1 of this Decision.
Article 5.- Bidding for
works, land auctions for creation of infrastructure construction capital
Under the provisions of Articles 49, 50, 51, 52
and 53 of the Government’s Decree No. 88/1999/ND-CP of September 1, 1999
promulgating the Bidding Regulation, the agencies (persons) competent to
approve investment projects shall have to direct and organize project bidding.
1. In case of bidding for construction of the
projects’ infrastructures:
a/ To organize bidding to select investors to
execute the projects under the current law provisions on bidding.
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On the above-said principle, the land price used
for calculating the land use levy on the land plot used for creation of
infrastructure construction capital shall be determined as being equal to the
actual price for transferring the right to use adjacent (nearest) land areas
with the same use purposes according to the new use purpose of such land plot;
and concurrently the following must be taken into account:
- The land price used for calculating
compensations when the land funds for creation of infrastructure construction
capital are recovered;
- The land price according to the new use
purpose of the land plot used for creation of infrastructure construction
capital, promulgated by the provincial-level People’s Committees in compliance
with the Government’s regulations;
- The location and infrastructure conditions of
the land plot used for creation of infrastructure construction capital;
- Other factors related to the land price.
c/ The successful bidders for infrastructure
construction shall be assigned land. The payment value shall be determined as
follows:
- The winning bid for infrastructure construction;
- The land price determined under Point b,
Clause 1 of this Article.
2. In case of land auctions:
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b/ The land price for payment of infrastructural
construction works is the winning bid at the land auction.
3. The successful bidders for infrastructure
construction or successful bidders at land auctions are investors who offer the
lowest bid for infrastructural construction works or the highest land prices in
auctions.
4. Where the land funds are used for creation of
capital to build public infrastructures under Point d, Clause 4, Article 1 of
this Decision, land auctions shall be organized. All collected land use levy
amounts must be managed under the law provisions on the State budget. Before
holding land auctions, if it is necessary to invest in the revamp of the land
or invest in the building of infrastructural works and other related works, the
current law provisions on management of capital construction investment must be
complied with.
Article 6.- Conditions
for auctioning land for creation of infrastructure construction capital
1. Land used for creation of infrastructure
construction capital is land included in the land use plannings or detailed
construction plannings already approved by competent authorities;
2. Land used for residence or as grounds for
production, business, services and other purposes according to law provisions.
Article 7.- Selection of
investors to participate in the bidding for infrastructure construction or in
land auctions
1. The subjects eligible for participating in
bidding for infrastructure construction or in land auctions are organizations
and individuals (as specified in Article 2 of this Decision) wishing to use and
deal in real estates, meeting all capital and technical conditions and having experiences
in executing investment projects.
2. Investors wishing to participate in the
bidding for infrastructure construction or in land auctions must send to the
project owners or agencies competent to approve investment projects or decide
on land auctions (in case of using land funds for creation of capital to
construct public infrastructures) the dossiers of application for participation
in the bidding for works or in land auctions. Such a dossier consists of:
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- Financial statements of the latest three years;
- The plan on the implementation of the
infrastructure investment project and the project on using the assigned land
fund;
- The written request for participating in the
bidding or auction.
Where an individual applies for participation in
the land auction as prescribed at Point d, Clause 4, Article 1 of this
Decision, only the written request for participation in the auction and the
plan on the use of the assigned land fund are required.
3. Conditions for selecting economic
organizations and/or individuals to participate in the bidding for
infrastructure construction or in land auctions:
- Having business registration certificates
compatible with the execution of the investment projects;
- Having all capital and technical conditions as
prescribed by law;
- Having the plan on the execution of the
infrastructure investment project and the project on using efficiently the
assigned land fund;
- One organization shall only be allowed to
participate in one bidding unit in a bid package. Where a corporation (company)
participates in a bidding under its name, its members and subsidiaries shall
not be allowed to participate therein in the capacity of independent
contractors.
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Article 8.- Organization
of land auctions
Land auctions shall be organized as follows:
- 30 days before conducting land auctions, the
Auction Councils (organizing agencies) shall publicly announce the land lots
put up for auction at least twice in two weeks on the mass media such as local
radio and television stations, newspapers and other mass media and post up
notices at the venues of the auctions, the offices of the People’s Committees
of the rural and urban districts, towns or provincially-run cities where land
auctions are held.
The contents of such public notices include: The
location, acreage, dimensions, current use purposes, land use planning,
registration time, auction time and other relevant information.
- Completing procedures for participation in the
auction.
- Introducing the land lots, land use planning,
and construction plannings of the land lots put up for auction.
- Organizing the auctions on the principle of
direct auction according to the auction regulations approved by the
provincial-level People’s Committee presidents in accordance with the current
law provisions on auctions.
Article 9.- Registration
of participation in auctions
1. The subjects selected under Article 7 of this
Decision may register and complete registration procedures at least two days
before the date when the auction is held.
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a/ Deposit money (guaranty money - advance
money) as decided by the provincial-level People’s Committees for each auction,
which must not exceed 5% of the land value calculated according to the price of
adjacent (nearest) land with similar infrastructural conditions, promulgated by
the provincial-level People’s Committees. The successful bidders shall have
their deposit money deducted from the payable land use levies (for payment),
and the unsuccessful bidders shall be refunded the deposit money right after
the auctions close. Where organizations and individuals have registered for
participation in the land auctions and paid deposit money but fail to
participate in the auctions or have won the auctions but refuse to execute the
projects or withdraw the offered bids, they shall not be refunded the deposit
money, which shall be remitted into the State budget.
b/ Auction participation fee, which must be paid
upon registration of auction participation and shall not be refunded to the
participation-registering organizations and individuals. The specific fee rates
shall be decided by the provincial-level People’s Committees, suited to the
realities of their localities in accordance with the current law provisions on
auctions.
Article 10.-
Determination of the land auction reserve prices
The reserve prices shall be decided by the
Auction Councils, which are determined under Point b, Clause 1, Article 5 of
this Decision and must not be lower than the prices of adjacent (nearest) land
with similar infrastructure conditions, promulgated by the provincial-level
People’s Committees in compliance with the Government’s regulations.
Article 11.- Conduct of
land auctions
1. Procedures for opening an auction
- Introducing the Council’s members, the
administer and assistants (if any).
- Making a roll-call of the people having
registered for participation in the auction, people qualified for participation
in the auction.
- Introducing all information related to the
land lots put up for auction, answering questions of the auction participants;
distributing bid cards to every organization and individual participating in
the auction; completing other necessary procedures.
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- After the end of the first auction round (first
round), the Auction Council shall announce the reserve price.
- Conducting the auction round by round
continuously with the last round being the round when no more bid is offered
after the Auction Council announces the highest bid. The highest bidder in this
round shall be the auction winner, who shall be permitted to receive the land
use right.
If auctions of the land funds for creation of
capital to build public infrastructures in the localities under Point d, Clause
4, Article 1 of this Decision involve many land lots, the provincial-level
People’s Committees shall prescribe its form and order in accordance with the
law provisions.
Article 12.-
Consideration and approval of the results of the bidding for works or land
auctions
Basing themselves on the results of the project
bidding or land auctions, the project owners shall submit to the People’s
Committee presidents competent to approve investment projects for approval the
results of the project bidding or land auctions. In case of land auctions for
creation of capital to build public infrastructures in the localities under
Point d, Clause 4, Article 1 of this Decision, the Auction Councils shall
submit to the provincial-level People’s Committee presidents for approval the
auction results.
Article 13.- In case of
only one investor applying for project execution
If only one investor applies for project
execution, then:
- The value of the infrastructure work used for
payment of the land fund shall be the cost estimate of the investment project
to construct the infrastructural work, which has been approved by competent
authorities according to the current regulations on management of capital
construction investment;
- The land price used for determining the value
of the land fund assigned to the investor for payment of the value of
construction of infrastructural work is the land price determined according to
the provisions at Point b, Clause 1, Article 5 of this Decision.
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Basing themselves on the bidding (auction) results
approved by competent State bodies, the project owners and successful bidders
for infrastructure construction or at the land use right value auctions shall
sign contracts. Such contracts must fully comply with the law provisions on
economic contracts and the regulations on management of capital construction
investment.
Article 15.- Payment,
accounting and management of money amounts collected from land funds for
creation of investment capital for infrastructure construction
1. After assigning land to the bid- or
auction-winning investors, the provincial-level Finance and Pricing Services
shall record as revenues the land use levy equal to the value of the land funds
assigned to the investors for executing infrastructure construction projects
and, at the same time, record the payment of the investment capital for
building infrastructure construction of the projects.
2. If the value of the land funds assigned to
the investors is larger than the value of the projects’ works, the investors
must remit the differences in cash into the local budgets. If the value of the
land funds assigned to the investors is smaller than the value of the projects’
works, the investors shall be paid the differences from the local budgets; such
payment shall comply with the law provisions on the order of allocation of
investment capital for capital construction.
3. The land use levy amounts collected from the
land funds for creation of capital to build public infrastructures in the
localities prescribed at Point d, Clause 4, Article 1 and Clause 4, Article 5
of this Decision, the cash differences (if any) between the value of the
capital-creating land funds and the value of built infrastructural works of
each project shall be remitted into the State budget according to the law provisions
on the State budget. These amounts shall be used only for investment in
building local infrastructures according to the approved projects.
Article 16.- Land use
right registration
The documents on the winning of auctions or
winning of bidding for the construction of works under the projects using land
funds for creation of infrastructure construction capital together with other
related dossiers as prescribed by law shall serve as a basis for assigning land
to the successful bidders at land auctions or bidding for the construction of
works to be paid with the capital-creating land funds. The documents on the
winning of auctions or winning of bids of construction works, land-assigning
decisions of competent State bodies and other related papers shall serve as a
basis for the land assignees to register their land use right.
Article 17.- Rights and
obligations of investors winning the bidding for works and land assignees
The auction winners that are assigned land must
use such land for the right purposes stated in the project documents already
approved by competent State bodies. If committing violations, their land shall
be recovered under the law provisions on land.
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The investors winning the bidding for
infrastructure construction shall have to strictly perform the contracts signed
with the project owners, ensuring the committed construction progress and
volume. If committing violations, they shall be handled according to the law
provisions on economic contracts.
Article 18.- Responsibilities
of State bodies
1. The provincial-level People’s Committees
shall have to:
- Promulgate regulations on and direct the
organization of, land auctions, direct the bidding for infrastructure
construction;
- Decide to organize bidding for infrastructure
construction or land auctions on a case-by-case basis;
- Decide the land prices for payment to the
investors in case of project bidding;
- Approve the results of the land auctions and
the bidding for infrastructure construction;
- Inspect and supervise the implementation of
financial mechanisms in the use of land funds for creation of infrastructure
construction capital under this Decision.
2. The provincial Finance and Pricing Services shall
assuming the responsibility for and coordinate with concerned branches in:
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- Submitting to the provincial-level People’s
Committees for approval the land prices in case of determining land prices and
bidding for infrastructure construction works. In this case, when submitting
the land prices to the provincial-level People’s Committees for approval, the
provincial Finance and Pricing Services must consult the agencies in charge of
expertise land and real estate prices (if any);
- Submitting to the provincial-level People’s
Committees for approval the land prices for determining the land funds for
payment to the investors;
- Participating in the Land Auction or Bidding
Councils, selecting investors to build infrastructure works;
- Making the budget estimates and the budget
settlement of the use of land funds for creation of infrastructure construction
capital according to the law provisions on the State budget;
- Recording as State budget revenues the land
use levy of the land funds for creation of infrastructure construction capital,
recording as State budget expenditures the capital construction investments;
- Assisting the provincial-level People’s
Committees in guiding, inspecting and supervising the implementation of this
Decision.
Article 19.-
Implementation provision
1. The provision on land auctions in this
Decision shall also apply to the following cases:
- Assigning land subject to land use levy by the
mode of auction;
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- Assigning land to economic organizations to
build dwelling houses for sale or lease (except cases of equitization of State
enterprises and shifting from land lease to land assignment with the collection
of land use levy);
- Other cases as prescribed by law.
2. This Decision takes effect 15 days after its
signing. All regulations on the financial mechanisms in the use of land funds
for creation of infrastructure construction capital, which are contrary to this
Decision, shall be annulled.
Incomplete projects shall comply with decisions
of State bodies competent to approve them.
Projects which are not yet executed shall comply
with this Decision.
Article 20.- The
ministers, the heads of the ministerial-level agencies, the heads of the
agencies attached to the Government, the presidents of the People’s Committees
of the provinces and centrally-run cities shall, depending on their respective
functions, tasks and powers, have to direct concerned units to implement this
Decision.
If facing any problems in the course of
implementation, the ministries, branches and localities should report them to
the Ministry of Finance for timely consideration and settlement.
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