Yuliya Ekimova |
Speciality "Land Surveying and Cadastre" |
Improving the structure of mining rent, involving elements of 3D-Cadastre |
Scientific adviser: Andolenko Svetlana |
2 Purpose and tasks of the study
3 Definition of the mining rent
4 Economic assessment of underground space
4.1 The purpose and tasks of the economic assessment of underground space
4.2 Factors affecting the value of underground space
5 Legal regulation of use of underground space
5.1 Legal regulation of use of underground space in Ukraine
5.2 Legal regulation of use of underground space in foreign countries
Land has traditionally been described and registered in two dimensions. Accordingly all cadastral systems of the world are in fact two-dimensional. Due to the increasing demand for space in the worlds built up areas and both space above and below the surface are being used, so the modern cadastral systems should record the use of underground space, not just the surface parcel.
The development of underground space and its multipurpose use for purposes not related to mining, over the past decade has been widespread in Ukraine.
There are four main trends in underground building in our country [11]:
— building of underground transportation arteries;
— organization of underground parking;
— building of underground shopping and entertainment centers;
— building of underground facilities for gas storage, oil and other substances.
Intensive development of underground space has led to problems of accounting and recording of underground structures, their connection with the ground.
Directly the establishment of 3D cadastre will solve a number of problems:
1. delineation of rights of the users (owners) of adjacent plots of subsoil and surface;
2. accounting and cadastre of space resources of the subsoil;
3. charging for the use of underground space, which is currently being carried out almost in the form of mining rent, which is associated with mining;
4. economic assessment of underground space to determine the value of areas of underground space.
One of the tasks of the cadastre is a fiscal function. There are currently topical for Ukraine is to find funds to replenish the state budget. This is evidenced by the existence of regulations in the new tax code, which provides payment for subsoil use for purposes not related to mining. In line with this the theme for master's work and the purpose and tasks of the study were selected.
Purpose. Improving the structure of mining rent.
The idea of work: Improvement of the mechanism of charging for the use of subsoil for purposes not related to mining.
Research tasks:
1. justify the principles and methods of payment for the subsoil based on a study of the theory of rent in the system of social reproduction and the theory of mining rent;
2. identify gaps and shortcomings in Ukrainian legislation regulating the use of subsoil for purposes not related to mining;
3. learning foreign experience of charging for the use of subsoil for purposes not related to mining to use in Ukraine;
4. improve the methodology of calculating mining rent charged for the use of subsoil for purposes not related to mining.
Underground space should be regarded as a kind of subsoil resources, which use brings the rental income, in particular the mining rent.
Nowadays the following definition of mining rent has developed. Mining rent — an income of household, commercial and other use of subsoil, mining [20]. The structure of the mining rent is shown in Fig. 3.1.
It is said in literature that the payments for the use of underground space should be rental, i.e., mining rent must reasonably be confiscated for the needs of state and society. Currently, all the mechanisms for determining the value of mining rent developed for the case of the use of subsoil for mining and do not consider such kind of use of subsoil resources as underground space.
Accordingly, it becomes an important question: how to determine the value of mining rent from the use of subsoil for purposes not related to mining?
4.1 The purpose and tasks of the economic assessment of underground space
Value of rental income from the use of underground space can be determined by its economic assessment. It is necessary in economic assessment to proceed from the fact that underground space is a real estate.
The purpose of the economic assessment of underground space [21]: the calculation of value (usefulness, relevance) of its use for society as a whole or its individual members, taking into account the costs of use and the resulting negative consequences.
Tasks of economic assessment [21]:
1. determination the expediency and the priority of using each plot of underground space;
2. choice of trends for its use;
3. choice of how to use the underground space in specific areas;
4. calculation of the size of rents and rent payments for its use;
5. definition of basic indicators of economic mechanism of rational use of underground space.
4.2 Factors affecting the value of underground space
Determining the rent for the use of underground space based on the fact that its plots are located in different natural conditions.
Therefore, the following factors that affect the amount of rent, and accordingly the amount of rent payments should be considered in economic assessment of underground space:
1. technical;
2. economic;
3. environmental;
4. social;
5. legal;
6. timing, affect all the other factors;
7. risk factors.
Methodology for determining the value of underground space in more detail will be addressed in master's degree work.
5.1 Legal regulation of use of underground space in Ukraine
Code of Ukraine "On Subsoil" is a basic document that governs the subsoil in the country.
In Ukraine Art. 262 of the Tax Code establishes the types of payments — national payment — for the use of subsoil [13]:
1. fee for use of subsoil for mining;
2. fee for use of subsoil for purposes not related to mining.
Charges for use of subsoil for purposes not related to mining do not include previously listed factors. This follows from an analysis of the provisions of the Tax Code. The payment rates for the use of subsoil for purposes not related to mining, that are set in art. 264 of the Tax Code of Ukraine, are presented in Table. 5.1.
According to Art. 264 of the Tax Code the payment rates for use of subsoil for purposes not related to mining are set separately for each type of subsoil in UAH per unit of measurement depending on the useful properties of subsoil and ecological safety of their use.
Table 5.1 — The payment rates for the use of subsoil for purposes not related to mining
| Pattern of the use of subsoil | Type of the subsoil use | Unit | The payment rates for the use of subsoil for purposes not related to mining per unit volume of subsoil, UAH per year |
| The use of underground space of the subsoil — porous and fractured geological formations (reservoirs) | storage of natural gas and gas-like products | thousand cubic meters of the active volume | 0,23 |
| The use of underground space — a specially created and existing mining (waste and adapted), as well as natural cavities (caves) | storage of oil and other liquid petroleum products | cubic meters | 0,23 |
| extract of wine, production and storage of wine | square meters | 0,64 | |
| mushroom, vegetables, flowers and other plants cultivation | square meters | 0,64 | |
| food, industrial and other goods, substances and materials storage | square meters | 0,27 | |
| conducting other business activities | square meters | 0,91 |
We can conclude the rate of payment specified in tax legislation does not take into account the following:
1. the factors of economic evaluation, namely the technical, economic, environmental, social, legal, temporary (term), risk factors, that were listed in Section 4;
2. such activities as the use of mineral resources for construction of underground parking, retail and shopping centers, ground transportation arteries, for which it is necessary to charge;
3. Ukrainian legislation lacks a clear definition of the vertical boundaries of the land that would differentiate between the rights of land owners and users of underground space;
4. Ukraine is not conducted state registration of objects of underground space.
To make proposals for improving the mechanism of the economic assessment of underground space the analysis of foreign experience is done.
5.2 Analysis of the legislation of foreign countries
The main document, which contains the legal and economic framework for integrated management and protection of subsoil, protects the interests of the state and citizens of the Russian Federation (RF), as well as the rights of users of mineral resources is the Federal Law "On Subsoil" from 21.02.1992g. № 2395-1.
1. It is said in Art. 130 of the Civil Code of the Russian Federation (RF) from 30.11.1994 N 51 that the subsoil belongs to the real estate [2];
2. In Art. 45, Clause 1 of the Law of Russian Federation "On Subsoil" from 21.02.1992 N 2395-1, the depth of 5 meters of underground space development, that is free from payment for the use of subsoil for purposes not related to mining is specified [3];
3. Specific rates of regular royalty are established by the federal agency managing the state fund of subsoil or its territorial units separately for each plot of the subsoil, for each type of subsoil minimum and maximum rate is set;
4. Only 2 types of use: storage of oil and condensate, storage of natural gas and helium, are subject to payment.
The main document that regulates relations arising in connection with the geological survey of subsoil, mining, use and protection of other resources of subsoil, and aims at the creation and expansion of mineral resources, protection of state interests, rights and lawful interests of subsoil users and other persons is the Code of the Republic of Belarus "On Subsoil", which passed the House of Representatives 10.06.2008.
According to the code [7]:
1. it is stated in art. 17 that the owners, users and occupiers of land have the right to carry out construction and (or) the operation of underground objects that are not related to mining, to a depth of five meters without granting the mining lease;
2. underground space in the Republic of Belarus is considered a separate species of subsoil resources (Article 27);
3. there is the state cadastre of mineral resources in deposits of minerals and geothermal resources of the subsoil, as well as underground spaces that are or may be used for purposes not related to mining (Article 77).
Principles, procedures of the use of mineral resources at the territory of the Republic of Armenia, as well as the relations connected with subsoil, are established by the Code of the Republic of Armenia "On Subsoil", which was adopted 06.11.2002.
In accordance with the code [6]:
1. in art. 2 it is defined the plot of the subsoil, which is the real estate as an area of subsoil with fixed boundaries on all sides, occupied by an artificially created structures, as well as natural cavities (caves), which can be used for different purposes;
2. in accordance with Part 2 of Art. 30 the types of subsoil that are used for purposes not related to mining are:
— building of underground structures;
— building of transport communications;
—waste disposal.
In the Republic of Armenia there is no state cadastre of underground space.
The work has revealed that payments for the use of underground space should be charged depending on the size of mining rent that users of underground space get. To determine the size of mining rent from the use of underground space for purposes not related to mining allows the economic assessment of underground space, that takes into consideration all the features of this type of subsoil resources.
For the rational use of underground space and informed determination of payment rates for the use of subsoil for purposes not related to mining the author proposes in the legislation of Ukraine to consider the following suggestions, that are based on an analysis of laws of foreign countries:
1. to classify areas of mineral resources that are used for purposes not related to mining as the real estate;
2. to provide underground space as a separate type of soil resources;
3. to identify an exhaustive list of possible uses of underground space, which should take into account current trends in underground construction in Ukraine;
4. to establish the size of payments for each type of use of underground space, depending on its economic assessment, which allows to determine more objectively the rental value of an object underground space;
5. to set a maximum depth of the underground space, that is free of charge;
6. to state records of underground spaces that are or may be used for purposes not related to mining.
At the time of writing the abstract master thesis is not completed yet. Completion of work is planned to 01.12.2011. The final text of the paper and related materials may be obtained from the author after the deadline.