Legal Regulation of Tools Supporting Brownfield Redevelopment in the Czech Republic

1. Legal Regulation of Tools Supporting Brownfield Redevelopmentin the Czech Republic January 24, 2006

2. The Czech Ministry for Regional development project “Brownfields for public administration” • Project duration 9/2004 – 12/2006 • We are specialized to Central Bohemian Region • Consortium of the partners – EC HARRIS s.r.o. - DHV ČR, spol. s.r.o. - IURS - Město Brno - ČVUT fakulta stavební • The project includes 16 coherent parts

3. Main important parts of the project for 2006 • Two database solutions database of case studies database of brownfields inventory • Methodology and analytic utilities, control and decisions making process • Help with deep local analyse for municipalities • Assistance for the region with data analyse and proceeding plan • Development plan for 3 selected municipalities • Preparing international project in participation with municipalities and region • Marketing, publication and advertising • Legal Regulation of Tools Supporting Brownfield Redevelopmentin the Czech Republic

4. How to move forward with brownfield redevelopment: • More effective use of existing tools to support brownfield redevelopment • Implementation of new tools to existing legislation to support brownfield redevelopment and their use

5. Key amendments on brownfields to existing legislation • Identification of brownfield • Public administration΄s authority over brownfield • Classification of brownfield according to a defined criteria • Establishment and maintenance of a brownfield database • Toolssupporting brownfield redevelopment

6. Identification of brownfield Definition: • formerly developed land and buildings • currently not efficiently used or abandoned • might be contaminated (existing or imminent risk of environmental damage, historical damage) Formal designation of real estate as a “brownfield“ and legal consequences of such designation: • designation in the form of an administrative decision • right to appeal

7. Public administration΄s authority over brownfield • central authority – basic policy and conception of brownfield redevelopment, coordination of other public administration authorities, allocating and distributing public resources from the state budget or from European programs on co-financing of redevelopment of particular brownfield, etc. • regional authorities – search for new brownfield, their entry in a database, arranging brownfield audits, prioritizing of brownfield redevelopment on the local level according to the policy of the central authority, etc.

8. Classification of brownfield according to a defined criteria • brownfield is/is not contaminated; • brownfield is/is not well situated (from the viewpoint of its connection to land and railway communication, situated in a town or outside a town, etc.); • brownfield is/is not developed with real estate; • total area of the brownfield; • number of owners of the brownfield, etc.

9. Brownfield database • Registration of brownfield and description; • Administration of the database by the central state authority responsible forredevelopment of brownfield

10. Tools supporting brownfield redevelopment • Economic tools • Administrative and legal tools

11. Economic tools supporting brownfield redevelopment • Increase real estate tax for (some) brownfield • Higher carrying costs (fees) for new occupation of greenfield • Direct interventions from public resources (grants) – municipal, regional, state and EU funds and programs • Costs depreciation preferences as to activities related to the creation of conditions for further use of brownfield • Reduction of grants from public sources projects which do not concern disturbed areas

12. Increased real estate tax for (some) brownfield The goal is to persuade the owner to redevelop particular real estate or to create economic incentives for the owner to transfer the real estate to an active individual/entity. • if the real estate tax on brownfield to be applied, requirement for designation of a real estate as “brownfield” in the form of an administrative decision, including the possibility to appeal against it • according to the estimated number of brownfields in the CR (6,000-12,000) a substantial burdening of the state costs and paperwork • to be evaluated whether the eventual increase of real estate tax shall be applied on all or only on some (qualified) brownfield

13. Higher fees for occupation of areas from the agricultural fund The goal is to decrease reduction of arable land to the bare minimum and to situate investments in places where the environmental impacts are less harmful. • Economic disadvantages as a consequence of occupation of areas from the agricultural fund which might persuade investors in connection with the direct support of brownfield use to use browfield and to raise money for the protection of environment

14. Administrative and legal tools supporting brownfield redevelopment • Consistent enforcement of liability for environmental damages • Increased protection of the land within the land planning procedures • Expropriation in the case of the most problematic brownfield • Establishment of companies specialized in brownfield

15. Consistent enforcement of liability for environmental damages • liability of the polluter: • set forth in the Environmental Act; • moreover, a uniform mode of assessment of environmental damages is missing as well as a mode of reformation enforcement • liability of the owner of the real estate (de lege ferenda): • secondary liability based on the principle “ownership creates liability”; • necessity of participation of public funds on the reformation • state liability (warranty): • general warranty of the state for the state of environment

16. Increased protection of the land within the land planning procedures • obligation of the land planning authorities while deciding on use of plots of land to set forth an obligation to restore the plots to a non-risk state when abandoning them after use for authorized purposes • obligation of the applicant when applying for greenfield to warrant that a brownfield cannot be used for the purposes of his investment • designation of state authorities or state organizations which would be responsible for brownfield redevelopment for the purposes of land planning proceedings

17. Expropriation in the case of most problematic brownfield • expropriation or a compulsory restriction of ownership rights is allowed only in the public interest and by virtue of a state act and with compensation; • the “grounds for expropriation“: • events in which expropriation is allowed; • may be indicated generally in law; • public interest: • obligation to justify specificpublic interest in every expropriation proceeding

18. Thank you for your attention Tereza Titěrová Project coordinator EC HARRIS s.r.o. Bredovský dvůr, Olivova 6 / 948 110 00 Praha 1 Tel.: +420 224 505200 Fax: +420 224 505222 tereza.titerova@echarris.com www.echarris.com Martin Fučík Attorney-at-law HAVEL & HOLÁSEK v.o.s. Law Firm Týn 1049/3 110 00 Prague 1 Tel.: +420 224 895 950 Fax: +420 224 895 980 office@havelholasek.cz www.havelholasek.cz