How does the Land Development Fund work effectively?

Ensuring the progress and quality of the draft Decree

Implementing Law on Land No. 31/2024/QH15, the Prime Minister has issued the Plan to implement the Law of Land in 2024; In particular, the key task is to develop 16 documents detailing implementation.

In particular, the Ministry of Finance was assigned to chair the development of two Decrees including the Decree regulating land use fees and land rent and the Decree regulating the Land Development Fund.

The Deputy Minister said that the development of the Government's Decree regulating the Land Development Fund aims to complete the legal basis for the Land Development Fund following the provisions of the land law in 2024, resolving difficulties and obstacles arising during the organization and operation of the Fund, at the same time strengthening management and improving operational efficiency of the Land Development Fund.

Therefore, at the Conference, the Deputy Minister asked delegates to give their opinions on the operating model, organizational structure, tasks and powers of the Land Development Fund; operating capital; Is the capital arrangement and method of repaying advanced capital given in the draft reasonable? The consistency of the draft Decree with relevant regulations of the draft Decree detailing the Law on Land, Law on Housing...

To ensure the deadline for submitting to the Government before May 10, 2024 as required, and to ensure the quality and general comprehensiveness of the Draft, the Deputy Minister also requested delegates to participate in the necessary content to help the drafting agency complete the draft soon.

"Only with opinions derived from practice can the draft be best prepared to help resolve pressing issues and demands posed by reality when localities implement it," the Deputy Minister emphasized.

Propose two options for the Fund's operating capital

Scene of the conference.

According to the draft, the Land Development Fund is an off-budget state financial fund, directly under the Provincial People's Committee, established by the decision of the Provincial People's Committee, has charter capital, operates independently of the state budget, not for profit purposes, ensuring preservation and development of capital. The Fund has legal status, seal, and independent accounting.

Currently, most provinces and cities have established the Fund, therefore, when this Decree takes effect, it is only necessary to review and consolidate the organizational structure, and amend and supplement the organization's Charter and Fund's activities.

However, to cover the realities that may arise, the draft regulations, based on local realities, the Provincial People's Committee assigned the Department of Finance or other specialized agencies under the Provincial People's Committee to chair and coordinate with other agencies. Local authorities prepare a dossier requesting the establishment of the Fund and submit it to the Provincial People's Committee.

After approving the Project to establish the Fund, the Provincial People's Committee promulgates the Decision on the establishment and Charter of organization and operation of the Land Development Fund based on the Project to establish the Fund approved by the Provincial People's Council.

Regarding the Fund's operating capital, Mr. Nguyen Tan Thinh, Director of the Department of Public Asset Management (Ministry of Finance) said that the draft proposes two options. The first one is that, the Fund's charter capital is provided from sources of investment in the development of local budgets; the second one is that every year, based on the actual situation and ability to balance the local budget, the Provincial People's Committee submits to the People's Council to decide on the level of additional charter capital from the local budget's development investment expenditure.

For charter capital management, the Draft also develops two forms. Firstly, the Fund's charter capital is deposited in the State Treasury of provinces and centrally run cities. Second, the Fund's charter capital is deposited in the State Treasury of provinces and centrally run cities or commercial banks with dominant State capital in the area.

At the Conference, Ms. Chu Nguyen Thanh, General Director of the City Development Investment Fund of Hanoi City said that Hanoi established the Land Development Fund in 2011, and in 2017, it entrusted the management to the Investment Fund. To date, the Fund has advanced more than VND 20 trillion to carry out tasks very effectively.

Regarding the Fund's operating model, a representative of the City Development Investment Fund of Hanoi city agreed with the draft to only have two models: independent fund and trust fund. With the trust model, it is possible to entrust local state financial funds.