New Law Changes Legal Regime of the Land Used for Energy Facilities
On 17 August 2010 the Law of Ukraine on Land for Energy Facilities and Legal Regime of Special Zones of Energy Objects (the "Law") was officially published and came into effect.
Lands covered by the Law: new expansive definition of land for energy facilities
The Law defines the legal basis for the allocation and use of land for energy facilities. It also defines the legal regime of the land which is used for the special energy facilities zones.
Compared to the Land Code of Ukraine (the "Code"), the Law contains a more expansive definition of the land for energy facilities. Particularly, under the Law, the land for energy facilities includes the land for placement, construction and operation of facilities producing and transmitting electric power and heat, alternative energy facilities, technological infrastructure facilities, including administrative and industrial buildings of the companies engaged in such operations.
New Law makes it easier to obtain land for energy facilities
According to the Code, the state-owned and municipal land can be transferred to new owners or users only through a tender except for the cases specified by law. The new Law, however, provides that the state-owned and municipal land can be granted to new owners or tenants for energy needs based only on the resolution of the executive bodies or local authorities.The local authorities can rely on the new law to simplify the procedure of getting the land for energy needs.
Also, the Law provides that land can be used for deployment of electricity transmission installation on the terms of land easement and, unlike previously existing law, specifies the procedure for granting such easements.
In addition, the Law provides that construction of power transmission facilities is possible not only on the land zoned for deployment of energy facilities, but also on land zoned for other purposes.
Special zones for energy facilities
The Law settles certain matters of land allocation and use for energy facilities unregulated by Ukrainian law before.
First, the Law regulates the legal regime of special zones for deployment of energy objects. In particular, the Law defines five categories of special zones for energy objects. The zones differ depending on the type of an energy facility they contain. The Law states that the land within the boundaries of the special zones shall not be seized or repurchased from owners and users. Rather, such owners and users can continue to use their land subject to some restrictions. Special zones for energy objects can be designated on land zoned for nearly any purpose. Sizes of certain zones are specified in the Law, others shall be defined by the Cabinet of Ministers of Ukraine (the "Cabinet").
Second, the Law provides for reimbursement to landowners and land users for losses resulting from land use restrictions imposed by the special energy zones. Also, the Law regulates the general terms of such reimbursement and states that the reimbursement procedure must be established by the Cabinet.
Reduced land tax rate for alternative energy facilities
The law grants another important incentive for the development of alternative energy in Ukraine. According to the Law, the land tax on the land under the facilities generating power from alternative sources shall be 30% of the land tax rate for energy facilities.
For further information please contact