Decree No. 144/2016/ND-CP dated November 01, 2016 of the Government on providing for a number of peculiar mechanism relating to investment, finance, budget and management of Da Nang city

DECREE

Providing a number of special investment, finance, budget and management decentralization mechanisms applicable to Da Nang city[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the June 17, 2009 Law on Public Debt Management;

Pursuant to the June 18, 2014 Law on Construction;

Pursuant to the November 25, 2014 Housing Law;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the June 29, 2009 Law on Urban Planning;

Pursuant to the June 18, 2014 Law on Public Investment;

At the proposal of the Minister of Finance;

The Government promulgates the Decree to provide a number of special investment, finance, budget and management decentralization mechanisms applicable to Da Nang city.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides a number of special investment, finance, budget and management decentralization mechanisms applicable to Da Nang city (the city for short).

Article 2. Principles for formulation of special mechanisms

1. These special mechanisms are formulated to promote the city’s rapid and sustainable socio-economic development; create conditions for the city to bring into full play its advantages to become one of the major urban centers of the country and a major socio-economic center, which will play a role as an industrial, commercial and service center of the Central Vietnam by 2020; and create an important driving force for the development of the provinces in the Central Vietnam and Central Highlands.

2. The decentralization of powers for management must be associated with the enhancement of responsibilities of the municipal People’s Council and People’s Committee; and concurrently bring into full play the initiative, creativity, potential and advantages of the city for achieving its social-economic development targets.

Chapter II

MECHANISMS FOR MOBILIZATION OF CAPITAL FOR DEVELOPMENT INVESTMENT

Article 3. Mobilization of investment capital and supports from the central budget

1. The city may borrow domestic investment loans through the issuance of municipal bonds and other forms of capital mobilization prescribed by law and on-lent loans provided by the Government to local budgets. The loan limit (including domestic loans borrowed through the issuance of municipal bonds, on-lent loans provided by the Government and other domestic loans prescribed by law) of the municipal budget must not exceed 40% of its collected budget revenues which it may retain as decentralized and be under the annual state budget deficit approved by the National Assembly.

2. The Government shall provide a support from the central budget for the municipal budget for the city to participate in implementing inter-regional public-private partnership (PPP) projects in its locality.

3. The Government shall prioritize allocating sufficient capital amounts to the municipal budget as additional targeted investments to implement the city’s socio-economic development projects and regional projects of the Central Vietnam and Central Highlands.

Article 4. Mobilization of the official development assistance (ODA) and foreign donors’ preferential loans

1. The Government shall prioritize mobilizing and allocating ODA capital to the city to implement important infrastructure investment projects falling within the municipal budget’s spending tasks. Committed domestic funds for these projects shall be allocated by the municipal budget.

2. The Government shall prioritize allocating preferential on-lent loans to the city to implement PPP projects in the locality.

3. The municipal People’s Committee may approve the list of projects and decide to receive non-refundable aid amounts (ODA or non-governmental aids) for projects and programs which have no aid level requirements, except technical assistance related to institutions, religions, policies and laws, administrative reforms, national defense and security subject to decision by the Prime Minister.

The chairperson of the municipal People’s Committee shall receive, manage and efficiently use these aid amounts, observe the accounting and finalizing regime in accordance with law; and make annual reports to the Ministry of Finance and the Ministry of Planning and Investment for monitoring, supervision, summarization, and reporting to the Prime Minister.

Chapter II

FINANCE AND BUDGET MECHANISMS

Article 5. Special budget mechanisms

1. An additional targeted allocation, which is equal to 70% of an increase in collected budget revenues as compared to the budget revenue estimates assigned by the Prime Minister regarding revenues to be shared between the central budget and the local budget (after granting a bonus for surplus revenues in accordance with Law No. 83/2015/QH13 on the State Budget) and revenues to be wholly remitted into the central budget (exclusive of value-added tax on imports, revenues not collected in the city but only accounted into the municipal budget; revenues subject to mutual ceasing and revenues permitted to be retained for the city for spending and management through the state budget in accordance with law) shall be made by the central budget to Da Nang city but must not exceed the increased central budget revenues collected in the locality compared to those of the previous year.

Based on the total increased central budget revenues and general balance, the Government shall report to the National Assembly Standing Committee for consideration and decision the additional targeted allocation for Da Nang city in accordance with Law No. 83/2015/QH13 on the State Budget and the special mechanisms applicable to Da Nang city provided in this Article.

2. Additional targeted allocation from the increased revenues mentioned in Clause 1 of this Article shall be used by the city to: pay outstanding debts in capital construction; invest in infrastructure facilities; invest in the hi-tech park of Da Nang city; allocate committed domestic funds for ODA projects; repay loans; perform important tasks for socio-economic development; ensure national defense and security, and social order and safety of the city; and give bonuses to lower-level budgets. The municipal People’s Committee shall report to the municipal People’s Council for decision specific capital amount for each target or task and bonus for lower-level budgets.

3. In the first year of the new budget stabilization period, the Government shall assign the Ministry of Finance to assume the prime responsibility for, and coordinate with related ministries and sectors in, proposing to competent authorities for consideration and decision stable revenue retention rate of the municipal budget to ensure resources for realizing the city’s socio-economic development targets and implementing regional projects of the Central Vietnam and Central Highlands.

Article 6. The city may implement the mechanism of partially subsidizing interest rates for organizations and individuals that borrow capital for investment in important socio-economic development projects which are capable of retrieving investment capital within the capacity of the municipal budget.

Article 7. Social houses funded with the state budget shall be sold by the city with one-off payment method to earn revenues for investing in construction of other social houses in the locality. The municipal People’s Committee shall formulate the specific schemes and report in writing to the Ministry of Construction for reaching agreement before organizing the implementation.

Chapter IV

MECHANISM OF MANAGEMENT DECENTRALIZATION

Article 8. Adjustment of socio-economic development master plans

Upon reaching agreement with line ministries, the municipal People’s Committee shall organize the formulation and appraisal of, consult the People’s Council’s opinions on, and approve sectional adjustments of, socio-economic development master plans approved by the Prime Minister to suit the actual development of the city in each period, and report implementation results to the Prime Minister.

Article 9. Urban planning and management of construction investment

1. The city shall assume the prime responsibility for appraising technical designs and cost estimates for construction works with three-step designs, construction drawing designs and cost estimates for construction works with two-step designs, and examining the pre-acceptance testing of civil works and technical infrastructure facilities before being commissioned as prescribed in Appendices I and II to this Decree, which are invested for construction in the city (except construction works assigned by the Prime Minister to specialized agencies in charge of construction under the Ministry of Construction and ministries managing special construction works; construction works under projects in which investment is decided by the Ministry of Construction and ministries managing special construction works; and construction works in which investment is decided by state economic groups or corporations).

2. Based on approved master plans and plans on urban development sub-zones and zones, the municipal People’s Committee shall decide to transfer the land use rights to local people for building their own houses under approved projects’ detailed plans in areas where infrastructure facilities have been built, ensuring their houses’ connection to these areas’ infrastructure systems; and annually, it shall summarize and report the implementation to the Ministry of Construction. For other cases, the municipal People’s Committee shall ask for the Ministry of Construction’s written opinions before making decisions.

3. The municipal People’s Committee may approve an increase or a decrease by up to 10% of the area of an industrial park or a hi-tech park which must not exceed 30 hectares compared to the planned area initially approved. The municipal People’s Committee shall approve sectional adjustments of master plans and urban plans after reaching agreement with the Ministry of Construction, and summarize and report plan implementation results to the Prime Minister.

Chapter V

IMPLEMENTATION PROVISIONS

Article 10. Effect

This Decree takes effect on January 1, 2017. To annul the Prime Minister’s Decision No. 13/2006/QD-TTg of January 16, 2006, on a number of preferential finance and budget mechanisms applicable to Da Nang city.

Article 11. Organization of implementation

1. The Minister of Finance shall coordinate with related ministries in guiding the special finance and budget mechanisms applicable to Da Nang city as provided in this Decree.

2. Other investment, finance, budget and management decentralization issues which are not mentioned in this Decree must comply with current regulations.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of the People’s Council and People’s Committee of Da Nang city shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC