Updating Preliminary Review Rules for Land Use in Construction Projects

Preliminary review of construction project land use plans was first introduced under the Implementing Rules of the PRC Land Administration Law (中华人民共和国土地管理法)(which was promulgated by the State Council with effect from January 1 1999), then briefly mentioned in the Administration of Examination and Approval of Land Used for Construction Procedures (issued by the MLR effective March 2 1999), and put into operation in detail by the original Procedures of 2001. Under these rules, there is a two-step approval for land used in construction projects: preliminary review and construction land use approval. The purpose of the preliminary review is obviously to ensure compliance with laws, regulations, planning and zoning early on in construction projects. It thus is of vital importance for any construction project developer in China to be aware of the requirements of the preliminary review.

The revised Procedures reflect recent regulatory changes in the PRC investment system and adapt to the requirements of the PRC Administrative Licensing Law, and clarify the authority in charge, the procedures and the validity of the preliminary review. Here we can highlight the major points in the revised Procedures.

Effects of the Preliminary Review

The revised Procedures assert the role of the preliminary land use review in any construction project, whether it is one subject to approval, verification or filing. The recent State Council Decision on the Reform of Investment System abolished China's traditional investment approval system and classified construction projects into those subject to approval, those subject to verification and those subject to filing. Following this Decision, the relevant ministries and commissions have issued their own rules to implement the requirements in the Decision. The revised Procedures make clear the necessity of the preliminary review amid these changes, and the state land and resources authority shall conduct review of the land use issues involved in construction projects during the project approval, verification or filing stage.

The original Procedures were ambiguous on the validity of the preliminary review. Under the revised Procedures, the preliminary review is valid for two years from issuance. In the absence of a preliminary review, a subsequent conversion of arable land to construction land and land requisition shall not be allowed, and land supply procedures shall not be effected. At the end of the preliminary review, the authority in charge shall issue a preliminary review opinion, the project owner shall need to implement such opinion, and such opinion is a necessary supporting document for project approval or verification. The revised Procedures are silent on the legal effect of the preliminary review on the project subject to filing only, but as the preliminary review is required in such a project under the Revised Procedures, it is reasonable to say that without the preliminary review the final construction land use plan will not be granted by the state land and resources authority.

The revised Procedures also require a repeated preliminary review in case of material adjustment after the preliminary review, such as change of the land use purpose or selection of the project site.

Authority in Charge

The preliminary review shall be conducted by the state land and resources authority at the same level of the approval, verification or filing authority for the construction project concerned. In a case where the MLR is the preliminary review authority in a construction project, then the provincial bureau of state land and resources or the municipal bureau of state land and resources (in a case where the project site is the urban area of a city) shall conduct an initial preliminary review and then report it to the MLR.

Application Timeframe

For a project subject to approval, the project owner shall apply for preliminary review during the feasibility study stage. For a project subject to verification or filing, the application shall be filed before application for verification or filing.

Summary of the Procedures

The project owner shall need to fill out an application form, submit a report (setting out the project information, selected sites, total land use scale and type of land to be used, and arable land reclamation preliminary plan), and for a project subject to approval, the project proposal approval and feasibility study.

The authority in charge shall conduct the initial preliminary review (if any) within 20 days from its acceptance of the application and the preliminary review within 20 days with an extension in time up to additional 10 days.

The preliminary review focuses on compliance regarding the site selection, land use scale, land use purpose, and feasibility and funding of the planned arable land reclamation. In a case where the overall land use planning and zoning in the region concerned is to be revised due to a construction project, the revision shall be subject to expert appraisal and hearing. Finally, the authority in charge shall issue its conclusive opinions on these issues and set out the specific requirements on the project owner with respect to its land use, which implementation will be reviewed in the final land use approval stage.