Circular No. 69/2006/TT-BTC amending and supplementing Circular No. 116/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation of Government Decree No. 197/2004/NĐ-CP dated December 3, 2004 on compensation, support, and resettlement when the State expropriates land.

CIRCULAR

Amending and supplementing Circular No. 116/2004/TT-BTC dated December 7, 2004

of the Ministry of Finance guiding the implementation of Decree No. 197/2004/NĐ-CP

dated December 3, 2004 of the Government on compensation, support, and resettlement

when the State recovers land

Based on the Land Law dated November 26, 2003;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the enforcement of the Land Law;

Pursuant to Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State recovers land;

Pursuant to Decree No. 17/2006/NĐ-CP dated January 27, 2006 of the Government amending and supplementing certain articles of decrees guiding the enforcement of the Land Law and Decree No. 187/2004/NĐ-CP on converting state-owned enterprises into joint-stock companies;

The Ministry of Finance guides the amendment and supplementation of Circular No. 116/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation of Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State recovers land (hereinafter referred to collectively as Circular No. 116/2004/TT-BTC) as follows:

1. Amend and supplement Point 3.2 Section 3 Part I as follows:

“3.2. Organizations and individuals that are granted land by the State for use for purposes specified in Clause 1 Article 1 of Decree No. 197/2004/NĐ-CP have the obligation to pay compensation, support, and resettlement expenses. Foreign organizations and individuals, and overseas Vietnamese investing in Vietnam who are granted land with payment of land use fees or leased land shall not be required to bear costs for compensation, support, and resettlement.

Organizations and individuals that are granted land with payment of land use fees or leased land who have paid compensation, support, and resettlement expenses, and foreign organizations and individuals, and overseas Vietnamese investing in Vietnam who have prepaid funds for compensation, support, and resettlement expenses according to the provisions of Decree No. 197/2004/NĐ-CP shall be allowed to deduct the amount paid for land compensation and support from the land use fee and lease fee payable to the State. The deduction amount shall not exceed the land use fee and lease fee payable according to the regulations.”

 2. Amend and supplement Point 3.1 Section 3 Part II as follows:

“3.1. Clause 1 specifies the land price for calculating compensation as the land price for the current use purpose of the land being recovered recognized according to the law at the time of the decision to recover the land, which has been announced annually on January 1 by the People's Committee of the province or centrally-administered city (hereinafter collectively referred to as the provincial-level People's Committee) according to the Government's regulations. Compensation will not be calculated based on the land price for changing the land use purpose after recovery, nor will it be calculated based on the land price due to actual land use not conforming to the prescribed land use purpose under the law.

The Department of Finance and local functional agencies shall apply the land price issued by the provincial-level People's Committee to calculate compensation at the time of the decision to recover the land. In cases where the land price announced by the provincial-level People's Committee does not accurately reflect the actual market transfer price of land use rights under normal conditions, they shall report to the provincial-level People's Committee to determine a specific land price for compensation. The determination of the land price shall be carried out according to the method of determining land prices stipulated in Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods of determining land prices and price ranges for various types of land and Circular No. 114/2004/TT-BTC dated November 26, 2004 of the Ministry of Finance guiding the implementation of Decree No. 188/2004/NĐ-CP of the Government.”

3. Amend and supplement Section 2 Part IV as follows:

“2.1. When implementing support for occupational conversion and job creation for households by allocating land at locations suitable for production or non-agricultural service business operations. If the allocated land has an agricultural origin, the land price for payment of land use fees shall be calculated based on the corresponding agricultural land price according to the type and grade of the agricultural land plot allocated (if the allocated land plot includes different types and grades of agricultural land, then the weighted average price of these types and grades of agricultural land shall be taken); if the allocated land has a non-agricultural origin, the land price for payment of land use fees shall be calculated based on the corresponding agricultural land price according to the type and grade of agricultural land in adjacent areas plus the actual infrastructure investment cost per square meter (if applicable). However, the maximum land price for payment of land use fees shall not exceed the production and non-agricultural business land price specified and announced by the provincial-level People's Committee according to the Government's regulations.

2.2. In cases where projects do not have land to implement support for occupational conversion and job creation for households through land allocation, support for occupational conversion for members of households whose agricultural production land is recovered shall be implemented through vocational training support at local vocational training institutions. The specific level of vocational training support cost shall be decided by the Chairman of the provincial-level People's Committee to suit local conditions.”

If localities have not organized vocational training and the land-using project cannot organize such training, or if the person receiving vocational training support wishes to self-study for occupational conversion, financial support shall be provided; the specific level of financial support shall be decided by the Chairman of the provincial-level People's Committee to match the actual vocational training cost in the locality.”

4. Amend and supplement Section 3 and Section 4 Part VII as follows:

"3. On the basis of the funds guaranteed for compensation, support, and resettlement not exceeding 2% of the total compensation and support funds of the project; based on the actual conditions of the locality, the People's Committee of the province shall decide on specific funding levels to serve the compensation, support, and resettlement in accordance with the scale, nature, and characteristics of each type of project to be uniformly applied within the local area. In cases where a Review Board for Compensation Schemes or a Provincial Steering Committee has been established at the provincial level to direct land clearance work when the State reclaims land, then based on the tasks of the Review Board and the Provincial Steering Committee, the People's Committee of the province shall specifically determine the ratio of allocation of the funding level for organizing compensation, support, and resettlement of the project to be used for the Compensation Board, the Review Board, and the Provincial Steering Committee for Land Clearance Work in accordance with the situation.

When organizing land development funds or the Compensation, Support, and Resettlement Board at the district level implements compensation, support, and resettlement work for multiple projects within the area, they are permitted to adjust the extracted funding levels between projects to be used for organizing compensation, support, and resettlement work in accordance with the actual workload that must be carried out for each project; but it must ensure that the total funding level for organizing compensation, support, and resettlement of the assigned projects does not exceed the total extracted funding according to the regulations of those projects.

4. The funds serving the work of compensation, support, and resettlement are used to cover the costs of organizing the implementation of the compensation, support, and resettlement work of the project according to the content and expenditure levels already guided in Points 1 and 2 of Part VII of Circular No. 116/2004/TT-BTC. Strictly prohibit fictitious expenditures and duplicate expenditures across projects.

Organizations or Boards entrusted with the implementation of compensation, support, and resettlement have the responsibility to report the final accounts regarding the funding level for organizing compensation, support, and resettlement to the Department of Finance for approval in accordance with current regulations. When reviewing the final accounts for this funding amount, the Department of Finance may allow the transfer of unused funds to subsequent projects; in cases where organizations or Compensation Boards are not entrusted with implementing compensation, support, and resettlement for subsequent projects, the funds should be submitted to the State Budget."

1. This Circular takes effect from May 15, 2013.

This Circular takes effect 15 days from the date of publication in the Official Gazette. Provisions in Circular No. 116/2004/TT-BTC that are not amended or supplemented in this Circular remain effective.

During the implementation of this Circular, if any difficulties arise, the People's Committees of provinces and centrally-administered cities are requested to promptly reflect them to the Ministry of Finance for study and resolution.