Decision No. 74/2005/QD-TTg On the use of land transfer fees, factory sale proceeds, and other construction project proceeds when economic organizations must relocate their headquarters, production facilities, and business operations according to planning.

DECISION

Regarding the use of land transfer fees, house sale proceeds, and factory construction project proceeds when economic organizations must relocate their headquarters, production facilities, and business premises according to planning schemes.

Economic organizations whose headquarters, production facilities, and business premises are currently using state-granted or leased land and must be relocated to new locations according to authorized decisions shall utilize land transfer fees, house sale proceeds, and factory construction project proceeds in accordance with this Decision.

Financial handling regarding land

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Land Law dated November 26, 2003;

WHEREAS, Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the implementation 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 reclaims land;

At the proposal of the Minister of Finance,

DECISION:

Article 1. Scope of Application

All economic organizations whose headquarters, production facilities, and business premises are currently using state-granted or leased land and must be relocated to new locations according to authorized decisions shall utilize land transfer fees, house sale proceeds, and factory construction project proceeds in accordance with this Decision.

Article 2. Financial handling concerning land

1. Land currently being used within the planning for national defense and security projects, projects serving national interests, public interests, industrial zones, industrial clusters, high-tech zones, economic zones, and large investment projects as prescribed by the Government, when reclaimed by the State, shall be compensated and supported as follows:

a) For land granted by the State with land use fees that do not come from state budget funds or land currently being used with legitimate origins (eligible for land use rights certificates without paying land use fees) shall be compensated and supported in accordance with Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State reclaims land.

b) For land leased by the State, land granted with land use fees, land transferred with land use fees already paid from state budget funds, or land granted without land use fees, shall be supported financially according to approved investment projects; the maximum level of support shall not exceed the compensation amount for the land reclaimed by the organization or individual to whom the State has granted or leased the land (if the organization or individual does not have to pay compensation, the entity responsible for land clearance and management of reclaimed land will bear the responsibility for payment) as follows:

- In the case of state-owned companies, they shall be supported up to the compensation amount for the reclaimed land; this amount, after deducting the company's actual relocation costs and the unrecovered investment costs in the land from state-provided capital (if applicable), shall be considered state budget investment capital for the company.

- In cases other than state-owned companies, they shall be supported with 20 to 30 percent of the compensation amount for the reclaimed land for relocation and construction of new facilities, but not exceeding five billion dong. The specific level of support shall be decided by the Chairman of the Provincial People's Committee.

2. For land currently being used which does not fall under the provisions of Clause 1 of this Article and must be relocated while transferring land use rights, the proceeds from the transfer of land use rights shall be handled as follows:

a) For land granted by the State with land use fees that do not come from state budget funds or land currently being used with legitimate origins (eligible for land use rights certificates without paying land use fees), the economic organization shall use the proceeds in accordance with Article 7 of this Decision.

b) For land leased by the State, land granted with land use fees, or land granted without land use fees but requiring compensation for the land user upon grant or lease, if the land use fees and compensation payments were made from state budget funds (allocated for payment or recorded as increased state budget capital through the value of land use rights, land rent, or joint venture land contributions), the proceeds from the transfer of land use rights shall be handled as follows:

- For state-owned companies, the proceeds from the transfer of land use rights shall be used for constructing new facilities and modernizing technology in accordance with Clause 1 of Article 7 of this Decision; after deducting the unrecovered investment costs in the land from state-provided capital (if applicable) and actual relocation costs not exceeding the approved standard, the remaining amount shall be considered state budget investment capital for the company.

- In cases other than state-owned companies, the proceeds from the transfer of land use rights, after deducting unrecovered investment costs in the land (if applicable), shall support the economic organization with 20 to 30 percent of the relocation and construction costs for new facilities and modernization of technology, but not exceeding five billion dong; the specific level of support shall be decided by the Chairman of the Provincial People's Committee. The remaining amount (after deducting the aforementioned support) shall be deposited into the state budget in accordance with the current budget allocation system.

3. Economic organizations currently using land with approved projects to construct civilian facilities using part or all of the managed land for production and business purposes, including joint ventures and cooperatives, consistent with planning and business functions, shall handle the proceeds from changing land use purposes in accordance with Clause 2 of this Article. 4. The 20 to 30 percent of land transfer fees and compensation provided to economic organizations other than state-owned companies as stipulated in Point b of Clause 1 and Point b of Clause 2 of this Article shall be disbursed in three installments according to the progress of the new production facility investment project.

Financial handling concerning factories, buildings, and other constructions on land

Article 3. 1. When factories, buildings, and other constructions, which are state assets managed by economic organizations, are sold or compensated for demolition, the proceeds shall be:

a) Capital of state-owned companies if the value of the factories and constructions was provided as capital by the State to the company;

b) State budget investment capital for state-owned companies if the value of the factories and constructions was not provided as capital by the State to the company;

c) Deposited into the state budget if it is not a state-owned company, in accordance with the current budget management system.

c) Deposit into the State budget if it is not a state-owned enterprise under the current budget management regime.

2. Factory buildings and other construction works established by economic organizations with their own funds not from state budget sources, when sold together with the transfer of land use rights or compensated for demolition, the proceeds obtained shall be the capital of the economic organization.

For factory buildings and other construction works that economic organizations are leasing which are state assets, the proceeds from sale or compensation shall be the state budget capital invested in the economic organization (if it is a state-owned company) to build new facilities or modernize technology; such proceeds must be remitted to the state budget according to the current budget management system (if it is not a state-owned company).

3. For factory buildings and other construction works that economic organizations lease from organizations or individuals, immediately after the decision to sell or reclaim by the competent state agency, both parties terminate the contract and hand over the leased property to the lessor for sale or compensation (when the State reclaims the land) in accordance with the provisions of the law.

4. For factory buildings and other construction works that are common assets of multiple parties, the proceeds from sale or compensation shall be divided among the parties according to their capital contributions. The portion of the state capital (if any) shall be handled in accordance with the provisions of Clause 1 of this Article.

5. For unclaimed factory buildings and other construction works, the proceeds from sale or compensation shall be deposited into a separate account at the State Treasury managed by the Department of Finance.

Article 4. Procedures and formalities for implementation

The Minister of Finance shall guide the procedures and formalities for implementing the transfer of land use rights, sale of factory buildings and other construction works when economic organizations must relocate their headquarters, production and business bases according to planning.

Article 5. Authority to decide on the sale of factory buildings and other construction works attached to land and the transfer of land use rights

1. The sale of factory buildings and other construction works attached to land and the transfer of land use rights of state-owned companies shall be decided by the representative of the owner in accordance with the laws on state-owned enterprises.

2. The sale of factory buildings and other construction works attached to land and the transfer of land use rights of economic organizations not covered by Clause 1 of this Article shall be implemented in accordance with relevant laws.

3. The Ministry of Finance shall accept and manage the premises and land of centrally-managed state-owned companies with relocation decisions, but have not yet been sold (transferred land use rights) or handed over to organizations or individuals for use.

4. The People's Committee of the province shall accept and manage the premises and land of state-owned companies not covered by Clause 3 of this Article with relocation decisions, but have not yet been sold (transferred land use rights) or handed over to organizations or individuals for use.

5. Economic organizations that are not state-owned companies using land granted by the State with payment for land use rights, where the payment is not state budget funds, or land legally owned by households or individuals, shall decide on the transfer of land use rights, sale of factory buildings and other construction works in accordance with current laws.

Article 6. Methods of selling factory buildings and other construction works attached to land

1. Auction:

a) For state-owned companies relocating to another location, they must conduct auctions in accordance with the laws on auction.

b) For economic organizations that are not state-owned companies:

- Factory buildings and other construction works attached to land leased or granted by the State without payment for land use rights shall be conducted in accordance with point a, Clause 1 of this Article.

- Factory buildings and other construction works attached to land where the land was granted with payment for land use rights, transferred through assignment of land use rights by the organization, or legally owned by households or individuals, the economic organization shall independently decide on the method and price of sale.

2. Sale by decision of the competent state agency (designated sale):

a) In special cases, the Prime Minister decides on the sale of factory buildings and other construction works attached to land and the transfer of land use rights upon the proposal of the Minister of Finance or the Chairman of the People's Committees of provinces and centrally-administered cities.

b) The designated sale price of factory buildings and other construction works attached to land and the transfer price of land use rights shall be approved by the Chairman of the People's Committees of provinces and centrally-administered cities based on market prices at the time of sale.

Article 7. Management and use of proceeds from the sale of factory buildings and other construction works attached to land, land use right transfer fees, and land support payments

1. For state-owned companies:

a) Proceeds from the sale of factory buildings and other construction works attached to land, land use right transfer fees, and land support payments, after deducting the company's investment in premises and land as stipulated in Articles 2 and 3 of this Decision, actual relocation costs not exceeding the approved limit, and other related costs, shall be deposited into a temporary holding account at the provincial State Treasury by the representative of the owner of the relocating company for centrally-managed state-owned companies; The Department of Finance shall be the account holder for state-owned companies managed locally. These funds shall be used for: investment in production and business facilities at the new location; expansion or deepening investment in technology modernization to increase production and business capacity according to projects approved by competent authorities. Any remaining funds shall be remitted to the state budget in accordance with the State Budget Law.

b) Land compensation within the scope specified in point a, Clause 1 of Article 2 and land use right transfer fees for land within the scope specified in point a, Clause 2 of Article 2 of this Decision; proceeds from the sale of factory buildings and other construction works previously funded by the State shall be decided by the company on their use in accordance with the law.

2. For economic organizations that are not state-owned companies:

a) Proceeds that are the capital of the economic organization shall be decided by the organization on their use.

b) The amount of State support for economic organizations must be deposited into a temporary holding account at the provincial Treasury managed by the Department of Finance and may only be used for the purposes specified in Article 2 and Article 3 of this Decision.

Article 8. Responsibilities of Ministries, Levels

1. The Ministry of Finance shall take the lead and coordinate with relevant Ministries, sectors, and provincial People's Committees to organize guidance and inspection of the implementation of this Decision.

2. The Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, and the Ministry of Construction shall cooperate with the Ministry of Finance to implement this Decision.

3. Ministries, sectors, and state-owned corporations shall direct and guide organizations under their management:

a) To carry out relocation in accordance with regulations.

b) To use the proceeds obtained for the intended purpose as stipulated in this Decision.

4. Provincial People's Committees directly under the Central Government shall be responsible for organizing and directing subordinate functional agencies to provide guidance and assistance to economic organizations in carrying out relocation, investment in construction, and stabilizing production and business operations at new locations.

Article 9. This Decision takes effect fifteen days from the date of publication in the Official Gazette and replaces previous provisions that conflict with this Decision.

Article 10. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the Central Government, and Heads of related organizations and agencies are responsible for implementing this Decision./.