Local Government Units to Receive State-Owned Property

Total Croatia News

The new Law on State Property Management brings important changes.

On Wednesday, the government sent the draft Law on State Property Management to the Parliament. According to the Minister of State Property Goran Marić, the law is primarily aimed at protecting and activating state property to stimulate economic activity and increasing employment, reports Lider on December 14, 2017.

“The existing legal framework and institutional forms related to the management of state property have led to long-term abandonment, destruction and usurpation of state property, but also to a large number of unused properties,” said Minister Marić. He added that the properties in question included 330 former military facilities covering 50 million square metres of land, 3,470 plots in construction zones covering a total of ​​429 million square metres, 3,860 commercial office premises, of which 930 are empty, and 210 are used illegally, 80 campsites, thousands of apartments, garages, etc.

According to Marić, the proposal focuses primarily on the protection and activation of state assets managed by his Ministry in order to stimulate economic activity and increase employment. He emphasised that the primary basis of the application of this law would be the assessment of the property value ​​and public tenders.

The proposal of the new Law on State Property Management stipulates that the Minister will make decisions on the disposal of shares of businesses of particular interest and properties of estimated value up to 7.5 million kunas, instead of the current one million kunas. In other cases, the government will be the one making decisions.

If no valid offer is received in the first round of sale of shares or properties, the initial price can be reduced by a maximum of 30 percent in the second round and by a maximum of 50 percent of the estimated market value in the third round. The state property management strategy will be adopted for a period of seven years instead of the current four years.

When it comes to properties, the new law provides for the prohibition of sub-rentals. The state will directly lease properties to interested parties, with subcontracts being automatically terminated. Also, properties will have to be paid by one-time payments and not in instalments.

When it comes to state-owned companies, the responsible ministries will directly nominate members of the management and supervisory boards of these companies to the government.

Perhaps the most significant provision of the law is that all state-owned properties which were used as schools, health centres, hospitals and other institutions founded by the local and regional self-government units as of 1 January 2017 , and which are used for educational and medical purposes, and as cemeteries, morgues, monuments, parks, playgrounds, sports recreational facilities, social homes, fire brigade centres, memorial homes and marketplaces, will be registered as owned by the units of local or regional self-government units.

Also, the local self-government will no longer be able to change spatial plans without the approval of the Ministry of State Property. According to the new law, the Ministry of State Property will become responsible for tourist camps, regardless of whether they are located in construction zones or on agricultural land plots.

It is also provided that the Board of Directors of the Centre for Restructuring and Sales (CERP) will have seven members, with the State Property Minister as chairman and representatives of six other ministries as members – finance, economy, tourism, agriculture, the sea, transport and infrastructure, as well as environmental and energy protection. The proposal also stipulates that representatives of trade unions and employers will participate in the work of the CERP Management Board, but without the right to vote.


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