Decision No. 22/2003/QÐ-BTC of the Minister of Finance on the financial mechanism for using land funds to build infrastructure

MINISTRY OF FINANCE ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
NUMBER: 22/2003/QD-BTC	Hanoi, February 18, 2003

 

Pursuant to …;

OF THE MINISTER OF FINANCE NUMBER 22/2003/QD-BTC ON FEBRUARY 18, 2003 REGARDING THE FINANCIAL MECHANISM IN THE USE OF LAND FUNDS FOR CAPITAL FORMATION TO BUILD INFRASTRUCTURE

THE MINISTER OF FINANCE

WHEREAS, the Land Law and the Law Amending and Supplementing Certain Articles of the Land Law in 1998 and 2001;
WHEREAS, Decree No. 04/2000/NĐ-CP dated February 11, 2000 of the Government on the Implementation of the Law Amending and Supplementing Certain Articles of the Land Law; Decree No. 66/2001/NĐ-CP dated September 28, 2001 of the Government amending and supplementing certain articles of Decree No. 04/2000/NĐ-CP dated February 11, 2000 on the Implementation of the Law Amending and Supplementing Certain Articles of the Land Law;
BASED ON DECREE NO. 178/CP DATED OCTOBER 28, 1994 OF THE GOVERNMENT ON THE TASKS, POWERS AND ORGANIZATIONAL STRUCTURE OF THE MINISTRY OF FINANCE;
After receiving opinions from relevant ministries, sectors, and provincial people's committees; In accordance with the proposal of the Director of the State Asset Management Department;

DECISION:

Article 1.

Scope of Application.

1. This Decision shall apply to cases of using land funds for capital formation to build infrastructure as stipulated in Section 2 Chapter IV of Decree No. 04/2000/NĐ-CP dated February 11, 2000 of the Government on the Implementation of the Law Amending and Supplementing Certain Articles of the Land Law, Clause 10 Article 1 of Decree No. 66/2001/NĐ-CP dated September 28, 2001 of the Government amending and supplementing certain articles of Decree No. 04/2000/NĐ-CP dated February 11, 2000 on the Implementation of the Law Amending and Supplementing Certain Articles of the Land Law.

2. The list of infrastructure construction projects that use land funds for capital formation has been approved by the Prime Minister includes:

- Infrastructure construction projects outside urban areas and rural residential areas: transportation, irrigation, electricity, water supply and drainage, schools, hospitals (health stations), squares, sports fields, and other infrastructure construction projects;

- Urban infrastructure construction projects;

- Residential area infrastructure construction projects;

- Other infrastructure construction projects.

3. Land funds for infrastructure construction are land included in the land use plan already approved by the Prime Minister, including:

- Land allocated with payment of land use fee;

- Leased land, land allocated under other forms now converted to land allocation with payment of land use fee (change of land use purpose).

4. Forms of using land funds for capital formation.

a. Allocate land at the location of the infrastructure project;

b. Allocate land outside the construction area of the infrastructure project;

c. Allocate land due to expansion of land acquisition scope for infrastructure transportation projects. The expanded land area will be used to form capital for infrastructure construction;

d. Use land with many advantages for production, business, living, and services to allocate land for capital investment in local common infrastructure construction.

Article 2.

Scope of Application.

Domestic economic organizations (hereinafter referred to as investors or organizations) registered for real estate business activities, meeting the conditions regarding capital and technology as prescribed by law to implement investment projects; if winning the tender for construction works or winning the auction for land use rights (hereinafter referred to as land auction), the State will allocate land within the project using land funds for infrastructure construction to such investors. In the case of using land funds for capital formation as stipulated in Point d Clause 4 Article 1 of this Decision, the applicable subjects also include domestic individuals (hereinafter referred to as individuals) who meet the conditions regarding capital and technology.

Article 3.

Financial mechanism applied to projects using land funds for infrastructure construction.

Investment projects using land funds for capital formation must conduct construction work tenders for infrastructure or land auctions for land used to form capital for infrastructure investment projects as follows:

- Within an infrastructure construction investment project, if construction work tenders for infrastructure have been conducted, there will be no land auctions; the winning bidder will be allocated land with payment of land use fee by the State; If land auctions are conducted, the winning bidder of the land auction will be responsible for implementing the construction of infrastructure works.

- In the case where only one (01) investor requests to implement the project and meets the conditions stipulated in Article 7 of this Decision, direct assignment tendering shall be implemented.

The winning bidder of construction work or land auction cannot resell the bid under any form.

Article 4.

Establish and publicize projects using land funds for infrastructure construction.

Based on the List of Projects Using Land Funds for Infrastructure Construction and the annual plan for using land funds for infrastructure construction approved by the Prime Minister according to Article 22 of Decree No. 04/2000/NĐ-CP dated February 11, 2000 of the Government on the Implementation of the Law Amending and Supplementing Certain Articles of the Land Law, the People's Committee of provinces and centrally-administered cities (hereinafter referred to as Provincial People's Committee) shall direct the establishment and approval of projects using land funds for infrastructure construction; Publicize and disclose for a period of 20 days through local mass media (radio, television, newspapers) and post at communes, wards, towns, districts, counties, and cities within the province where the land for infrastructure construction capital formation is located about: 1. The list of infrastructure construction works using land funds that have been approved by competent authorities, divided into two parts:

a. The list of infrastructure construction works subject to bidding corresponding to the allocated land;

b. The list of land subject to auction corresponding to infrastructure construction works

2. The list of land used to form capital for each infrastructure construction work: location, area, current land use type, permitted land use change type according to the land use plan, and other information related to the project using land funds for infrastructure construction.

3. The list of land used to form capital for local common infrastructure construction as stipulated in Point d Clause 4 Article 1 of this Decision.

Article 5.

Tendering for construction works and land auctions for infrastructure construction capital formation.

According to Articles 49, 50, 51, 52, and 53 of Decree No. 88/1999/NĐ-CP dated September 1, 1999 of the Government on the Issuance of the Tendering Regulations, the authority (person) approving the investment project shall be responsible for directing and organizing the tendering of the project.

1. In the case of tendering for infrastructure construction works of the project:

a- Organize bidding to select investors to implement the project in accordance with the current laws on bidding.

b- Determine the land price transferred to the winning bidder for the construction project to settle the value of the construction project. In this case, the land transfer price that requires payment for land use is the land price calculated based on the new intended use. This price must be the land transfer price for the right to use the land according to its new intended use to create capital for infrastructure construction.

Based on the above principle, the land price for calculating the land use fee of the land used to create capital for infrastructure construction shall be determined in accordance with the actual land transfer price of adjacent land (nearest) having the same intended use as the new intended use of the land used to create capital for infrastructure construction; at the same time taking into account:

- The land price for compensation when reclaiming the land fund used to create capital for infrastructure construction;

- The land price according to the new intended use of the land used to create capital for infrastructure construction issued by the Provincial People's Committee in accordance with the Government's regulations;

- The location of the land used to create capital for infrastructure construction and conditions regarding infrastructure;

- Other factors related to the land price.

c- The winning bidder for the construction of infrastructure projects shall be allocated land. The settlement value shall be determined as follows:

- The bid price for constructing the infrastructure project;

- The land price determined in accordance with point b Clause 1 of this Article.

2- In the case of auctioning land:

a- The value of the infrastructure construction project used to settle the land fund is the budget estimate of the investment project for constructing the infrastructure project approved by the competent authority in accordance with the current regulations on basic construction management.

b- The land price used to settle the construction of the infrastructure project is the auction-winning land price.

3- The investor who wins the bidding for the construction of the infrastructure project or the auction of land is the investor with the lowest bid price for constructing the infrastructure project or the highest auction price for land.

4- In the case of using the land fund to create capital for common infrastructure construction as stipulated in point d Clause 4 Article 1 of this Decision, the land shall be auctioned. All proceeds from the land use must be managed in accordance with the State Budget Law. Before auctioning the land, if it needs to be improved or constructed with infrastructure projects and related works, it must comply with the current regulations on basic construction management.

Article 6.

Conditions for auctioning land to create capital for infrastructure construction.

1- The land used to create capital for infrastructure construction is land that has been planned for land use or detailed construction planning approved by the competent authority.

2- Land used for residential purposes or as production, business, service premises and other purposes as prescribed by law.

Article 7.

Selecting investors to participate in bidding for infrastructure construction projects or land auctions.

1- The subjects participating in bidding for infrastructure construction projects or land auctions are organizations and individuals (as stipulated in Article 2 of this Decision) who have a need to use and trade real estate, meet the financial and technical requirements, and have experience implementing investment projects.

2- Investors participating in bidding for infrastructure construction projects or land auctions must submit to the project owner or the competent authority approving the investment project, the decision on land auction (in cases where the land fund is used for common infrastructure construction) an application to participate in the bidding or auction, including:

- Business registration certificate with appropriate business activities for the investment project, accompanied by documentation proving professional capacity, financial status, technical qualifications, and experience in implementing the project;

- Financial reports of the last three years;

- Implementation plan for the infrastructure investment project, the project using the allocated land fund;

- A request to participate in the bidding or auction.

In the case of individuals applying to participate in land auctions as stipulated in point d Clause 4 Article 1 of this Decision, they only need to provide a request to participate in the auction and a proposed use of the allocated land fund.

3- Conditions for selecting economic organizations and individuals to participate in bidding for infrastructure construction projects or land auctions:

- Having a business registration certificate suitable for implementing the investment project;

- Meeting the financial and technical requirements as prescribed by law;

- Having an implementation plan for the infrastructure investment project, effectively utilizing the allocated land fund;

- An organization may only participate in one tender unit in one tender package. If a Holding Company (Company) participates in the tender, its affiliated units and subordinate units are not allowed to participate as independent contractors.

In the case of land auctions as stipulated in point d Clause 4 Article 1 of this Decision, where the land fund for auction has been divided into plots (lots) for individual household or personal housing construction, individuals participating in the auction only need to provide proof of their financial capability.

Article 8.

Organizing land auctions.

Land auctions shall be organized as follows:

- At least 30 days before the auction, the Auction Board (the main organizing body) shall publicly announce the auction lots (plots) at least twice within two weeks through mass media such as local radio, television, newspapers, and other means of communication, and shall also post the announcement at the auction venue, the district, county, town, city under provincial administration offices where the land auction takes place.

The public announcement shall include: location, area, dimensions, current intended use, land use planning, registration deadline, auction date, and other relevant information.

- Conduct procedures for registering to participate in the auction.

- Introduce the lot, land use planning, and construction planning of the auctioned land area.

- Organize the auction in accordance with the direct auction principle, following the auction rules approved by the Chairman of the Provincial People's Committee in compliance with the current laws on auctions.

Article 9.

Registering to participate in land auctions.

1- The selected entities as stipulated in Article 7 of this Decision must complete the registration and registration procedures no later than two days before the auction date.

2- After the file is approved by the Council, the organization or individual registering for the land auction must pay:

a- A deposit (guarantee money - advance payment) determined by the Provincial People's Committee for each auction but not exceeding 5% of the value of the land calculated based on the price of land with similar infrastructure conditions nearby (closest) issued by the Provincial People's Committee. The successful bidder will have the deposit deducted from the land use fee to be paid (for settlement purposes). Those who do not win the auction will be refunded immediately after the auction ends. In cases where organizations or individuals have registered to participate in the auction, have paid the deposit, but do not participate in the auction or win the auction but refuse to implement the project or withdraw the bid price, they will not be refunded the deposit, which will be submitted to the State Budget.

b- Auction participation fees; this fee is paid when registering to participate in the auction and will not be refunded to organizations or individuals who have registered to participate in the auction.. The specific amount of the fee is decided by the Provincial People's Council in accordance with current laws on auctions, suitable to local realities.

Article 10.

Determine the starting price for the land auction.

The starting price is determined by the Auction Council. The starting price is set according to point b, Clause 1, Article 5 of this Decision and must not be lower than the price of land with similar infrastructure conditions nearby (closest) issued by the Provincial People's Committee as stipulated by the Government.

Article 11.

Conduct the land auction.

1- Auction opening procedures:

- Introduce members of the Council, the auctioneer, and assistants (if any).

- Roll call of those who have registered to participate in the auction and those who meet the conditions to participate in the auction.

- Provide all relevant information about the land being auctioned, answer questions from participants; Distribute bidding forms to each participating organization or individual; Complete other necessary procedures.

2- Auction format and procedure: Following the principle of direct sealed-bid auction, the ballots are issued by the Council.

- After the first round of bidding (round one) ends, the Auction Council announces the starting price.

- Bidding proceeds in rounds continuously until the final round, which is the round after the Auction Council announces the highest bid but no one requests further bidding. The person with the highest bid in this round is the successful bidder - the person receiving the right to use the land.

In cases where the land fund for constructing common infrastructure facilities for the locality is auctioned as stipulated in point d, Clause 4, Article 1 of this Decision and includes multiple plots (lots) of land, the Provincial People's Committee shall specify the format and procedure in accordance with the provisions of the law.

Article 12.

Examine and approve the tender results or land auction results.

Based on the tender results for construction projects or land auction results, the project sponsor submits to the Chairman of the competent Provincial People's Committee for approval of the investment project, approval of the tender results for construction projects, or approval of the land auction results for the project. In cases where the land is auctioned to create capital for constructing common infrastructure facilities for the locality as stipulated in point d, Clause 4, Article 1 of this Decision, the Auction Council submits to the Chairman of the Provincial People's Committee for approval of the auction results.

Article 13.

In the case where there is only one investor requesting to implement the project.

In the case where there is only one investor requesting to implement the project, then:

- The value of the infrastructure construction works to settle the land fund is the budget estimate of the investment project for constructing infrastructure works approved by the competent authority in accordance with current regulations on investment management.

- The land price used to determine the value of the land fund transferred to the investor to settle the value of infrastructure construction works is the land price determined according to point b, Clause 1, Article 5 of this Decision.

Article 14.

Sign the contract.

Based on the approval of the tender (auction) results by the competent state agency, the project sponsor and the successful bidder for the construction of infrastructure works or the successful bidder for the land auction rights shall sign the contract. The contract must comply fully with the provisions of the law on economic contracts and the regulations on investment management of basic construction.

Article 15.

Settlement, accounting, and management of funds obtained from the land fund for investment in infrastructure construction.

1- After transferring land to the successful bidder of the tender or the land auction, the Department of Finance and Prices shall record the land use fee equal to the value of the land fund transferred to the investor to implement the infrastructure construction project, while recording the settlement of the construction investment capital for the infrastructure works of the project.

2- If the value of the land fund transferred to the investor exceeds the value of the project, the investor must pay the difference in cash to the local budget. If the value of the land fund transferred to the investor is less than the value of the project, the local budget shall pay the difference to the investor; The payment shall be carried out in accordance with the legal provisions on the procedures for allocating construction investment capital.

3- The land use fee obtained from the land fund for investment in common infrastructure construction facilities for the locality specified in point d, Clause 4, Article 1 and Clause 4, Article 5 of this Decision, and the difference in value between the land fund for investment and the value of infrastructure construction works of each project (if any) shall be submitted to the State Budget in accordance with the legal provisions on the State Budget. This amount can only be used to invest in constructing infrastructure works of the locality according to the approved project.

Article 16.

Register land use rights.

The successful auction document, the successful tender document for construction works under the project using the land fund for investment in infrastructure construction, together with other related documents as prescribed by law, serve as the basis for transferring land to the successful bidder of the land auction or the successful tenderer of construction works settled by the land fund. The successful land auction document or successful tender document for construction works, the land transfer decision of the competent state agency, and other related documents are the basis for the land recipient to register land use rights.

Article 17.

Rights and obligations of the successful bidder for construction works and the land recipient.

The successful auction participant must use the land for the purpose stated in the project approved by the competent state agency. If violated, it will be reclaimed according to the provisions of the Land Law.

The successful auction participant who is allocated land or the successful bidder for infrastructure construction projects has the rights of a person allocated land with payment of land use fees as stipulated by current laws.

The investor who wins the bid for infrastructure construction projects shall strictly implement the contracts signed with the project owner, ensuring progress, volume, and the construction of committed works. If violated, they will be dealt with according to the law on economic contracts.

Article 18.

Responsibilities of state agencies.

1- The People's Committee of the province shall be responsible for:

- Issuing regulations and directing the organization of land auctions, directing bidding for infrastructure construction projects;

- Deciding on bidding for infrastructure construction projects or land auctions in specific cases;

- Determining the land price for payment to investors in the case of bidding for construction projects;

- Approving the results of land auctions and bidding for infrastructure construction projects;

- Inspecting and supervising the implementation of financial mechanisms in the use of land funds for infrastructure construction as provided in this Decision.

2- The Department of Finance - Price Control shall take the lead in coordinating with relevant sectors:

- Timely monitoring the formation and fluctuation of actual land transfer prices in the locality as a basis for determining the land price for collecting land use fees in the case of bidding for infrastructure construction projects or determining the starting price for land auctions;

- Submitting to the People's Committee of the province for approval of the land price in the case of land valuation and bidding for infrastructure construction projects. In this case, before submitting to the People's Committee of the province for approval of the land price, the Department of Finance - Price Control must seek the opinion of the land and real estate valuation agency (if any);

- Submitting to the People's Committee of the province for approval of the land price to determine the value of the land fund paid to investors;

- Participating in the Land Auction Council, bidding, selecting investors for infrastructure construction projects;

- Preparing the budget estimate and finalizing the budget regarding the use of land funds for infrastructure construction as prescribed by the State Budget Law;

- Recording state budget revenue from land use fees of the land fund for infrastructure construction, recording state budget expenditure for basic construction investment;

- Assisting the People's Committee of the province in guiding, inspecting, and supervising the implementation of this Decision.

Article 19.

Implementation clause.

1- The provisions on land auctions in this Decision also apply to the following cases:

- Allocation of land with payment of land use fees through auction;

- Agencies, public service units, people's armed forces units, political organizations, political-social organizations, social organizations, social-professional organizations, economic organizations permitted by competent state agencies to transfer land use rights or sell buildings together with the transfer of land use rights;

- Allocation of land to economic organizations to build houses for sale or lease (except in the case of converting state-owned enterprises to joint-stock companies and transferring from lease land to allocation of land with payment of land use fees);

- Other cases as prescribed by law.

2- This Decision takes effect fifteen days after its signing. All financial mechanisms for using land funds for infrastructure construction that contradict this Decision are abolished.

For ongoing projects, they shall be implemented according to the decision of the competent state agency that approves them.

For projects not yet commenced, they must be implemented according to this Decision.

Article 20.

Ministers of Ministries, Heads of ministerial-level agencies, agencies under the Government, Chairmen of Provincial People's Committees, and Municipal People's Committees directly under the Central Government shall, based on their functions, tasks, and authorities, be responsible for directing related units to implement this Decision.

During the implementation process, if there are difficulties, ministries, sectors, and localities are requested to report to the Ministry of Finance for timely consideration and resolution.

 

Nguyen Sinh Hung (Signed)