State Assets Act

Link to law: https://www.riigiteataja.ee/en/eli/ee/Riigikogu/act/503082015007/consolide
Published: 2015-09-01

State Assets Act

Passed 11.11.2009
RT I 2009, 57, 381
Entry into force 01.01.2010
Amended by the following legal instruments (show)

Passed
Published
Entry into force

20.04.2010
RT I 2010, 17, 94
01.05.2010

05.05.2010
RT I 2010, 24, 115
01.09.2010

17.06.2010
RT I 2010, 38, 233
01.07.2010

16.12.2010
RT I, 05.01.2011, 11
15.01.2011

06.06.2012
RT I, 28.06.2012, 1
08.07.2012, partially 01.03.2013

27.02.2013
RT I, 15.03.2013, 26
20.03.2013

20.03.2013
RT I, 05.04.2013, 2
15.04.2013

19.02.2014
RT I, 13.03.2014, 2
23.03.2014, partially 01.01.2015, 01.01.2017 and 01.01.2019

19.02.2014
RT I, 13.03.2014, 3
01.01.2018, 23.03.2014 and partially 01.01.2016

27.02.2014
RT I, 21.03.2014, 3
31.03.2014

11.06.2014
RT I, 21.06.2014, 8
01.01.2015, partially 01.07.2014

19.06.2014
RT I, 29.06.2014, 109
01.07.2014

19.06.2014
RT I, 29.06.2014, 109
01.07.2014, official titles of ministers replaced in accordance with s. 107³(4) of the Government of the Republic Act

18.02.2015
RT I, 23.03.2015, 3
01.07.2015

11.06.2015
RT I, 30.06.2015, 4
01.09.2015, partially 01.07.2015

Chapter 1 GENERAL PROVISIONS 

§ 1.  Scope of application

(1) This Act governs the administration of state assets.
(2) The administration of state assets means the procedure of acquiring assets for the Republic of Estonia (hereinafter, the ‘state’), of possessing, using and disposing of state assets, and of the participation of the state as a shareholder, founder or member in a private or public limited company, foundation, non-profit association, building association, community of apartment owners or a community of co-successors entered in a register in Estonia and, in the cases provided in this Act, in foreign legal persons in private law.
(3) State assets constitute a set of monetarily appraisable rights and obligations belonging to the state.

§ 2.  Exceptions to the application of this Act

(1) Section 77(2) of this Act and the provisions of this Act regarding the acquisition and transfer of shares do not apply to the management, in accordance with the State Budget Act, of liquid financial assets and stabilisation reserve of the state, or to any shares acquired for the purposes of such management.
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]
(2) The provisions set out in ss. 17(1)(1–2), 19(2–3), 30(1)(1–2), 30(3), 37(2–5), 43(2), 50, 57–62, 66–74, 90(7) and 95–100 of this Act do not apply to the state assets administered by security authorities.
(3) State assets in whose respect special rules are provided in another Act is subject to the rules set out in this Act without prejudice to those special rules.
(4) The administration of state assets in the possession of a profit-making state agency is subject to the provisions of this Act without prejudice to the special rules set out in the Act governing that profit-making state agency.
(5) The provisions of this Act do not apply to the transfer of state assets into the use or ownership of a foreign state provided government delegations or other competent institutions have decided so in writing.
(6) The provisions of this Act which concern decision-making in, or the granting of consent by, the Government of the Republic, do not apply to constitutional institutions.
(7) The provisions of this Act do not apply to the transfer of publications and informative materials concerning or promoting the principal activity of an administrator of state assets, as well as to the transfer of souvenirs. The procedure for the transfer of such assets is established by the administrator of state assets.

§ 3.  Definitions

(1) The terms in this Act are defined as follows:
1) state-owned company – a public or private limited company in which the state owns all the shares;
2) partially state-owned company – a public or private company in which the state owns at least one share;
3) majority interest – an interest in a company conferred by the share which represents or shares which represent the majority of votes required for passing decisions at the general meeting of the company to amend the company’s articles of association, increase or decrease the share capital, wind up, merge, divide or transform the company;
4) required interest – an interest in a company conferred by the share which represents or shares which represent the number of votes required for passing decisions at the general meeting of the company which are not listed in point 3 of this subsection;
5) precluding interest – an interest in a company conferred by the share which represents or shares which represent the number of votes required for stopping decisions listed in point 3 of this subsection at the general meeting of the company;
6) minority holding – a holding in a company that does not amount to a precluding interest;
7) foundation established by the state – a state foundation or a foundation whose founders include the state;
8) state foundation – a foundation whose sole founder is the state;
9) foundation whose founders include the state – a foundation whose several founders include the state;
10) constitutional institutions – the Riigikogu, President of the Republic, the National Audit Office, the Chancellor of Justice and the Supreme Court;
11) authorised agency – a state institution into whose possession the administrator of state assets has entrusted the assets it administers.
(2) The provisions governing immovable property apply to any cadastral unit which is owned by the state and which has not been registered as an immovable property in accordance with section 8(3) of the Land Register Act, and to any construction work or any legal or physical share in a construction work, until the land supporting the construction work and the land required to service the construction work is registered in the Land Register, as well as to any ship which belongs to the state and which has not been registered as an immovable property in accordance with section 35 of the Ensign Law and Registers of Ships Act.
(3) The provisions concerning movables in this Act also apply to monetarily appraisable rights.
(4) Unless otherwise provided by law, the provisions concerning securities in this Act also apply to shares in private limited companies.

§ 4.  Administrator of state assets

(1) An administrator of state assets arranges, on behalf of the state, acquisition of assets for the state, possession, use and disposition of state assets, use of immovable property in accordance with an agreement concerning the use of the assets or an agreement on encumbering an immovable property with a limited real right, and the participation of the state as a shareholder, founder or member in a private or public limited company, foundation or non-profit association registered in Estonia and in foreign legal persons in private law, and exercises any rights and performs any obligations which arise in relation to aforementioned activities following the procedure established in this Act.
(2) Administrators of state assets are:
1) the Chancellery of the Riigikogu;
2) the Office of the President of the Republic;
3) the National Audit Office;
4) the Office of the Chancellor of Justice;
5) the Supreme Court;
6) the Government Office;
7) the ministries.
(3) In the cases provided by law or a regulation of the Government of the Republic, the functions of administrator of state assets may be performed by a county administration or a profit-making state agency.
(4) An administrator of state assets enjoys the rights and is subject to the obligations which the law vests and imposes on an owner, shareholder, founder of a company, member of a building association, apartment owner participating in the community of apartment owners, co-successor, founder of a foundation or member of a non-profit association.
(5) Unless otherwise provided by law or regulation, the person or persons to perform the functions of administrator of state assets in the name of the administrator of state assets are appointed internally in the agency.

§ 5.  Administration of securities and of founder’s rights in a company

(1) Shares owned by the state are administered and the founder’s rights in a company are exercised by the ministry or profit-making state agency (hereinafter, ‘holding administrator’) designated by the Government of the Republic who, in making the designation, must consider the competence and fitness of the ministry or profit-making state agency with respect to the best performance of the rights and obligations relating to the administration of the shares and the objective to avoid conflicts of interest between different functions of state.
(2) The Ministry of Finance is designated as the administrator of the securities which are owned by the state and which are not named in subsection 1 of this section.
(3) The administrator of a minority holding of the state in a company is the Ministry of Finance. Where the state’s holding in a company is reduced to a minority holding, the holding administrator submits a draft order to the Government of the Republic for the transfer of the holding into the administration the Ministry of Finance. The draft is submitted within one month from the registration of the increase or decrease in the share capital or the share transfer transaction or any other transaction which resulted in the decrease in the state’s holding.
(4) The administrator of the state’s holding in one and the same company may only be one ministry or profit-making state agency.
(5) At the founding of a company or at a general meeting of the shareholders, the state is represented by the minister of the ministry which administers the state’s holding in the company. Where the shares are administered by a profit-making state agency, for the purposes of this Act, the minister’s function is performed by the supervisory board of the profit-making state agency, represented by the chair of the board in accordance with the corresponding power of attorney.
(6) Where the state’s holding in a company does not amount to a precluding interest, the minister of the ministry administering the holding may authorise a ministry official to participate in a general meeting of shareholders.
(7) The provisions set out in subsections 1, 2 and 5 of this section apply when exercising the rights and performing the obligations arising from membership in a building association.

§ 6.  Agency exercising founder’s and membership rights in a foundation or non-profit association

(1) Membership rights in a land improvement association or any other non-profit association whose membership is mandatory are exercised by the administration of the county in which the non-profit association is situated. If the immovable properties owned by the state within the territory of the land improvement association are administered by one ministry, the membership rights of the state are exercised by that ministry.
(2) Membership rights in an apartment association or any other non-profit association whose membership is related to the administration of state assets are exercised by the administrator of state assets or an agency authorised by the administrator of state assets. The same applies to arrangements in which legal relationships in respect of an apartment which is the subject matter of apartment ownership are dealt with by means of the community of apartment owners, as well as by means of the community of co-successors. If the state assets which the membership relates to is administered by several administrators:
1) any decisions concerning the exercise of membership rights require the endorsement of other administrators of state assets;
2) in designating the agency to exercise the membership rights or resolving any disagreements between the administrators of state assets, the provisions set out in subsection 6 or 7 of section 7 of this Act apply.
(3) The state’s founder’s rights in a foundation and membership rights in a non-profit association not named in sections 1 and 2 of this section are exercised by the ministry designated by the Government of the Republic or the Government Office (hereinafter, the ‘agency exercising founder’s or membership rights’) whose competence and fitness in relation to this task must be taken into consideration.
(4) Only one administrator of state assets may exercise the founder’s rights in one and the same foundation. The same applies to the exercise of membership rights in a non-profit association.
(5) The agency exercising founder’s rights enjoys all rights and is subject to all obligations which follow from the law in respect of the founder of a foundation. In performing the tasks related to such rights and obligations, the state is represented by the minister or State Secretary.
(6) The agency exercising membership rights enjoys all rights and is subject to all obligations which follow from the law in respect of a member of a non-profit association. In performing the tasks related to such rights and obligations, the state is represented by the minister, State Secretary, county governor, or an agency authorised to exercise the membership rights.
(7) The Ministry of Finance may authorise the county administration to exercise founder’s or member’s rights. In that case, in performing the tasks related to the rights and obligations of the founder of a foundation, the state is represented by the county governor.
[RT I, 30.06.2015, 4 - entry into force 01.09.2015]
(8) The minister, State Secretary or county governor representing the exerciser of membership rights, or the head of the agency authorised to exercise membership rights, may authorise a subordinate official to participate in a general meeting (meeting of representatives).

§ 7.  Designation of the administrator of state assets in other cases

(1) The assets that are being acquired by the state is regarded to be under the administration of that administrator of state assets who is to receive that assets pursuant to law or in accordance to the transaction, or who is entitled or obligated to receive that assets.
(2) The administrator of an immovable acquired by the state in accordance with section 126 of the Law of Property Act is designated by the Government of the Republic. Until such designation is made, the state assets concerned are administered by the Ministry of Finance.
[RT I, 30.06.2015, 4 - entry into force 01.09.2015]
(3) The occupation of a movable by the state is organised by the administrator of state assets who is entitled to occupy the movable.
(4) The agency organising the succession to the estate of a deceased person is the administration of the county where the succession is opened, or the Ministry of Foreign Affairs if the succession is opened abroad. The administrator of the assets inherited by the state is designated by the Government of the Republic.
(5) Property confiscated (hereinafter, ‘confiscated property’) in a criminal case by court judgment or ruling or in a misdemeanour case by court judgment or ruling or by decision or ruling of a body conducting extra-judicial proceedings is administered by the administration of the county where the confiscated property is situated, unless otherwise provided by legislation.
(6) Where the administrator of the state assets or the property that is being acquired or the authorised agency cannot be directly determined on the basis of the law or transaction or where there is a dispute, the administrator of state assets is determined by the Government of the Republic.
(7) If one party to the dispute is a constitutional institution, the dispute is to be resolved by the agreement between the administrators of state assets.
(71) The Director-General of the Estonian Road Administration represents the Republic of Estonia with the right of sub-delegation in negotiations conducted with owners of land with a view to acquiring plots of land required for the construction of national roads, and in order to effect the necessary tra[ML1] nsactions, with all rights and responsibilities that the law imposes. The administrator of the plots of land acquired by the government in order to construct national roads is the Ministry of Economic Affairs and Communications.
[RT I, 23.03.2015, 3 - entry into force 01.07.2015]

§ 8.  Principles of administration of state assets

(1) An administrator of state assets must administer state assets in accordance with the aims of its administration, expediently, sustainably and prudently.
(2) A right or physical object which is part of the state assets which constitutes a single whole has a single administrator of state assets.
(3) An administrator of state assets must assess whether the state assets is administrated expediently and in accordance with the intended use of the assets and arrange the ceding, transfer or destruction of the assets that has no use for the state or make a proposal to effect the corresponding ceding, transfer or destruction.
(4) In carrying out any acts or transactions with state assets, the administrator of state assets must, as a principle, strive to increase any gains and avoid any losses that the state stands to make from these acts and transactions.
(5) An administrator of state assets must carry out any transactions with state assets in conformity with legislation and in a transparent and verifiable manner.
(6) An administrator of state assets establishes the requirements for possession and use of state assets for public servants within their area of government.
(7) An authorised agency must, in respect of the state assets entrusted into its possession, observe the principles and perform the obligations imposed by this Act on administrators of state assets.
(8) The state may not be a partner in a general partnership or a limited partnership or a member in a commercial association, except in a building association, and may not be a member of a non-profit-seeking association of persons which has not been entered into a register, except for a community of apartment owners and a community of co-successors. The state may not participate in a foreign legal person in private law if this entails the state’s unlimited liability.

§ 9.  Obligations of administrators of state assets in relation to participation in a legal person in private law

A holding administrator and an agency exercising founder’s or membership rights must ensure the exercise of rights vested in and performance of obligations imposed on shareholders of a company, founders of a foundation or members of a non-profit association by virtue of the Commercial Code, the Foundations Act, the Non-Profit Associations Act and other legislation, define the strategic objectives of the company, foundation or non-profit association on the basis of national development plans and other documents and assess the progress made towards achieving these objectives.

§ 10.  Purpose of the administration of state assets

(1) State assets are administered:
1) for the purpose of exercising state authority;
2) for any other public purpose determined by the administrator of state assets;
3) for the purpose of earning revenue;
4) for the purpose of preservation of the assets as a reserve.
(2) Where the primary purpose of the administration of a holding in a company is the performance of a function which is based on public interest and which is set out in legislation or stipulated in the company’s articles of association or in a regulatory contract, such as the pursuit of a specific business activity, its purpose is also the earning of revenue by way of the sale of goods or provision of services for a fee that ensures a reasonable profit.
(3) The state acquires assets in accordance with legislation and by means of a transaction, provided the acquisition is required for a purpose listed under subsection 1 of this section or if the obligation to acquire the assets arises from Acts of the Riigikogu.
(4) [Repealed – RT I, 13.03.2014, 3 – entry into force 23.03.2014]
(5) In cases not named under subsection 3 of this section, the state may acquire the assets only with the consent of the Government of the Republic.
[RT I, 13.03.2014, 3 - entry into force 23.03.2014]
(6) An administrator of state assets must, by decision and having regard to subsections 1 and 2 of this section, determine the purpose of administering the assets that it administers.

Chapter 2 CEDING THE ADMINISTRATION OF STATE ASSETS TO ANOTHER ADMINISTRATOR OF STATE ASSETS 

§ 11.  Justifiability of ceding the administration of state assets

(1) The administration of state assets may be ceded by one administrator of state assets to another if this results in a more expedient administration of state assets or for other reasons, considering public interest.
(2) An administrator of state assets may request that another administrator of state assets cede to it the administration of a state assets if the state assets concerned is required for the performance of functions which are imposed by legislation and if the other administrator of state assets does not require that state assets for the performance of the functions imposed on itself by legislation.

§ 12.  Deciding on the ceding of the administration of state assets

(1) If the ceding administrator is an administrator of state assets falling under points 6 and 7 of subsection 2 of section 4 of this Act, the ceding of the administration of an immovable or a limited real right by one administrator of state assets to another is decided by the Government of the Republic.
(2) Where an administrator of state assets falling under points 6 and 7 of subsection 2 of section 4 of this Act, who has requested the ceding of the administration of an immovable property or limited real right, fails to reach agreement with the administrator of the immovable property or limited real right, the requesting administrator may bring the matter of the ceding before the Government of the Republic.
(3) If the agency to cede the administration of state assets is a constitutional institution and the receiving agency is an administrator of state assets named in subsection 1 of this section, the ceding takes place in accordance with their mutual agreement. To accept the immovable or limited real right, the administrator of state assets named in subsection 1 of this section must, before executing the agreement concerning the ceding, obtain the consent of the Government of the Republic.
(4) Constitutional institutions decide matters concerning the ceding of the administration of state assets by mutual agreement.
(5) The administration of movables, except for securities, may be ceded by one administrator of state assets to another by mutual agreement.
(6) Within the government area of a single administrator of state assets, the assets may be ceded pursuant to the procedure established by that administrator.

§ 13.  Formalisation and effective date of the ceding of state assets

(1) An instrument of delivery and receipt must be drawn up concerning the ceding of state assets. The instrument sets out at least the particulars of the party ceding and the party receiving the assets, the time of the ceding and a description of the assets, the acquisition cost and residual value of the assets.
(2) The instrument of delivery and receipt drawn up when ceding an immovable property which includes a construction work as an essential part of the property must set out, in addition to the information listed in subsection 1 of this section, information regarding the accessories, condition, designated purpose and defects of the property.
(3) The effective date of the ceding of state assets is the date determined in the instrument of delivery and receipt. Within 30 days from the execution of the instrument, the receiver of the state assets submits an application to amend the information concerning the administrator of the state assets in the relevant database.

Chapter 3 AUTHORISING THE USE OF STATE ASSETS 

§ 14.  Purpose of authorising the use of state assets

(1) The use of state assets is to be authorised primarily when:
1) the use of the state assets for the purpose of exercising state authority or for any other public purpose is temporarily not required;
2) the purpose of authorising the use of state assets is to earn revenue;
3) authorising the use of a movable is necessary in order to provide a public service.
(2) Encumbering state assets with a limited real right is subject to the provisions governing authorisations to use state assets without prejudice to special rules established in this Act in respect of limited real rights.
(3) Granting a loan is not regarded as authorising the use of state assets within the meaning of this Act.

§ 15.  Restrictions on authorising the use of state assets

(1) Authorisation to use state assets may not be granted where the assets are required for the purpose of exercising state authority or for any other public purpose or where authorising the use of the assets by another significantly impairs the intended use of the assets or renders it impossible.
(2) State assets may not be encumbered with a movable property security interest within the meaning of Chapter 2 of Part 8 of the Law of Property Act or with a mortgage within the meaning of Division 1 of Chapter 3 of Part 8 of the Law of Property Act.
(3) An administrator of state assets must stipulate in the agreement concerning the use of the assets that the assets may be subleased or sublet to another person only with the written consent of the administrator of the assets and that the sublease or subletting agreement must be public and be recorded in the State Real Estate Register.
(4) The state must not suffer harm as a result of authorising the use of state assets by another. The state is presumed to suffer harm if the administrator of state assets has not stipulated in the agreement concerning the use of the state assets that the user of the assets must bear the ancillary expenses related to the assets.

§ 16.  Use of state assets by different administrators of state assets

(1) As a rule, an administrator of state assets does not authorise the use, by another administrator of state assets, of the state assets as a whole. In such a case, the decision is made to cede the administration of the assets to the other administrator.
(2) If another administrator of state assets needs to use a part of an immovable property or temporarily an entire immovable property, an agreement concerning the use of the property is concluded between the administrators of state assets.
(3) The agreement concerning the use of an immovable property stipulates the procedure for reimbursement of the expenses related to the use of the property and other important circumstances.
(4) The provisions of this section are also applied by authorised agencies when they use state assets.

§ 17.  Types of procedure employed in authorising the use of state assets

(1) The following types of procedure are employed when authorising the use of state assets:
1) public auction;
2) selective tender;
3) procedure without a public auction or selective tender, including authorisations of use without charge or of use for a fee that falls below the usual value of the use (hereinafter, ‘discretionary procedure’).
(2) A constitutional institution may authorise the use of an immovable property only by way of public auction or selective tender.

§ 18.  Fee for the use of state assets

(1) The use of state assets by another is authorised subject to the payment of a market-based use fee that corresponds to at least the usual value of the use.
(2) The use of state assets for a fee that falls below the usual value of the use but ensures the economic preservation of the assets may be granted:
1) to a local authority for the performance of its functions or when an immovable property is encumbered with a superficies interest for the purpose of developing the business environment;
2) to a legal person in public law for the performance of the functions imposed on it by law;
3) to a legal person in private law for the performance of an administrative function imposed on it in accordance with a law or for the performance of a function stipulated in a regulatory contract;
4) as living premises provided by the employer;
5) in other cases provided in a law.
(3) A fee that ensures the economic preservation of state assets as a rule includes the fees for renovation and technical maintenance services.
(4) If the usual value of the use fee falls below that of the fee which ensures the economic preservation of state assets, the use of the assets may be authorised for a fee that corresponds to the usual value of the assets.
(5) Authorisation to use state assets for no charge may be granted:
1) in accordance with an international agreement or a departmental international agreement or other international arrangement to the armed forces or civilian personnel of a foreign country, to an international organisation or an institution created by international arrangement;
2) in regard to the state assets which are directly related to international communication.
(6) An administrator of state assets must, when authorising the use of the state assets, stipulate in the agreement concerning the use of the assets that any ancillary expenses, taxes or encumbrances in relation to the assets are borne by the user of the assets.
(7) The fee for encumbering an immovable with a restricted real right is determined on the basis of the usual use fee for the restricted real right and the substance of the real right.
(8) If the usual value of the fee is not previously known, the administrator of state assets commissions an expert assessment by a generally recognised expert in order to determine the usual value of the fee. The expert’s assessment may not predate the decision authorising the use of the state assets by more than six months.
(9) The commissioning of an expert assessment is not required where the Ministry of Finance has agreed to waive this in writing. When deciding the grant of the waiver, the Ministry of Finance considers whether the cost of the expert assessment is proportionate to the revenue to be received from authorising the use of the immovable property or limited real right.
(10) In any agreement concerning the use of state assets which is concluded for a term exceeding one year, the administrator of the state assets must make provision for adjusting the use fee.

§ 19.  Deciding to authorise the use of state assets

(1) Granting the authorisation to use state assets is decided by the administrator of the property.
(2) Granting the authorisation to use an immovable property or to encumber such property with a limited real right may be decided by a minister or the State Secretary only with the consent of the Government of the Republic in the following cases:
1) when the decision is made following a discretionary procedure, unless otherwise provided by law;
2) when the decision stipulates a term exceeding 10 years;
3) where the Ministry of Finance refuses to grant its endorsement following the procedure set out in section 101 of this Act or deems it necessary to consult the Government of the Republic due to the importance of the transaction.
(3) Where the usual value of a movable property amounts to 1,000,000 euros or more and the use of the property is to be authorised for a term exceeding one year, a minister or the State Secretary may decide to grant the authorisation to use the property only with the consent of the Government of the Republic.
(4) Where the usual value of a movable property is less than 10,000 euros, the decision to authorise its use may be made following the procedure established by the administrator of the property, having regard to the principles set out in section 8 of this Act.
(5) The consent of the Government of the Republic referred to in points 1 and 2 of subsection 2 of this section is not required when encumbering an immovable property or superficies interest with an easement, with a right of pre-emption or with a real encumbrance, as well as with a personal right of use related to a utility network or engineering structure.
(6) The Government of the Republic, when granting its consent to encumbering an immovable property which includes land zoned for business, industrial production, transportation or public use for the purpose of developing the business environment following a discretionary procedure, and the administrator of the property, when making the corresponding decision, must follow the procedure established by the relevant regulation of the Government of the Republic.

§ 20.  Terms for which the use of state assets is authorised

(1) An authorisation to use state assets may stipulate an unspecified or a specified term of the use.
(2) The use of state assets is authorised without specifying a term for the use where, in future, the state is likely to require the assets for the purpose of exercising state authority or for any other public purpose or where the administrator of the state assets must for another reason reserve to itself the right to terminate the agreement at any time.
(3) Where the use of a movable property is authorised for a specified term, that term may not exceed 10 years.
(4) Unless a rule which is provided by the Law of Obligations Act or by an international agreement and which is mandatory for the parties provides otherwise, the administrator of state assets must stipulate in the agreement concerning the use of the state assets that the term of the agreement will not be extended.

§ 21.  Decision to authorise the use of state assets

(1) A decision to authorise the use of state assets must set out at least:
1) a description of the state assets whose use is authorised;
2) in the case of a public auction or selective tender, the body arranging the authorisation to use the state assets;
3) the term for which the use of the state assets is authorised or a section to the effect that the use of the state assets is authorised for an unspecified term;
4) the type of procedure employed when authorising the use of state assets;
5) the conditions and reasons for setting the use fee;
6) rules for adjusting the fee;
7) in the case of a selective tender, additional conditions for authorising the use of the state assets.
(2) In the cases specified in subsections 2 and 3 of section 19 of this Act, the draft order that is to be submitted to the Government of the Republic must include at least the information specified in points 1, 3 and 6 of subsection 1 of this section.
(3) The explanatory memorandum for the draft order referred to in subsections 2 and 3 of section 19 of this Act is to set out:
1) the reasons for the facts listed in the draft order;
2) the reason for authorising the use of the state assets by discretionary procedure;
3) the reason for authorising the use of the state assets for a term exceeding 10 years;
4) information regarding the area of usable enclosed premises located on the immovable property and regarding the amount of the use fee;
5) when encumbering an immovable property with a superficies interest, information regarding the expenses incurred by the state in relation to the use of any enclosed premises on the property;
6) when encumbering an immovable property with a superficies interest by discretionary procedure, information regarding the superficiary;
7) other important terms, conditions and facts pertaining to the authorisation to use the state assets.
(4) The explanatory memorandum referred to in subsection 3 of this section must enclose, as an annex, a draft agreement concerning the use of the state assets and documents to prove at least the information listed in the same subsection.
(5) A draft decision of an administrator of state assets which is submitted for approval to the Ministry of Finance in accordance with section 101 of this Act is subject to the requirements specified in subsections 3 and 4 of this section.

§ 22.  Modifying the terms and conditions of the authorisation to use state assets

(1) Modifications to the terms and conditions of the authorisation to use state assets may not contradict the terms and conditions of the public auction or selective tender.
(2) Modifications to the terms and conditions of an agreement concerning the use of state assets or of an agreement on encumbering an immovable property with a limited real right are decided by the administrator of the state assets.
(3) Where the decision to authorise the use of state assets requires the consent of the Government of the Republic, the conditions stipulated in such consent may be modified only with the consent of the Government of the Republic.

§ 23.  Arranging the authorisation to use state assets

(1) Authorisation to use state assets is arranged by the administrator of the state assets or by another agency authorised by the administrator.
(2) The body to decide the authorisation to use state assets or an agency that such a body has authorised to arrange the authorisation may authorise third parties to perform operations which are preparatory to authorising the use of the state assets or which represent steps in the process of authorising the use of the state assets, having regard to requirements arising from legislation. For the purposes of this Act, such third parties are conductors of the procedure of authorising the use of the state assets.

§ 24.  Agreement concerning the use of the state assets

(1) An agreement concerning the use of state assets must be in writing and, in the cases provided by law, authenticated by a notary.
(2) State assets is ceded to the user and returned to the administrator of the state assets in accordance with the agreement and the parties sign a written instrument of delivery and receipt which sets out essential parameters characterising the nature and condition of the state assets.

§ 25.  Performance of the agreement concerning the use of state assets and the liability of the parties

(1) If, upon expiration of the term of the agreement, the user fails to return the state assets voluntarily, the administrator of the state assets is obligated to take steps to reassert its direct possession of the assets.
(2) The agency authorising the use of the state assets is obligated to order the user to pay compensation for any harm it has caused to the state as a result of its failure to perform the agreement or failure to perform it in the required manner, or as a result of cancelling the agreement.

§ 26.  Decision to encumber state assets with a limited real right

(1) The decision to encumber state assets with a limited real right must, in addition to the information specified in section 21, set out the substance of the limited real right.
(2) The decision to encumber state assets with a superficies interest must, in addition to the information specified in section 21 and subsection 1 of this section, set out the existing information regarding lease and rental agreements which the state is to enter into with respect to the construction work and, in the case of a decision made following a discretionary procedure, regarding the superficiary.
(3) An authorisation to encumber state assets with a personal right of use or usufruct must, in addition to the information specified in section 21 and subsection 1 of this section, set out the following information regarding the person in whose favour the immovable property is to be encumbered:
1) in the case of a natural person – name, personal identification code or date of birth and residence;
2) in the case of a legal person – name, registry code and registered office.
(4) The decision to encumber state assets with an easement or personal right of use encloses, as an annex, a drawing or sketch which shows the area to be encumbered and, where necessary, the access route to the area.

§ 27.  Agreement on encumbering state assets with a limited real right

(1) In the agreement on encumbering state assets with a limited real right the administrator of the state assets may agree only to such terms and conditions as do not contradict the legislation in force and the decision to encumber the state assets with a limited real right.
(2) In the agreement on the superficies interest to be created, the administrator of the state assets stipulates that in order to transfer the superficies interest to a third party or to encumber it with a mortgage, easement, real encumbrance or the right of pre-emption, or to enter into agreements with third parties concerning the use of the building, the superficiary must seek the consent of the administrator of the state assets. These obligations are recorded in the land register when the superficies interest is created.
(3) In the case specified in subsection 2 of section 18 of this Act, the administrator of the state assets stipulates a clause in the agreement on the superficies interest to be created under which the superficies interest may be terminated if the superficiary uses the subject matter of the superficies interest for a purpose other than that which was previously agreed upon.
(4) Having regard to sections 252 and 253 of the Law of Property Act, the administrator of the state assets stipulates a clause in the agreement on the superficies interest to be created in which the grantor of the superficies interest and the superficiary agree a course of action concerning the construction works on the assets after the expiration of the term of the superficies interest.

§ 28.  Fee for encumbering state assets with a real right

In the agreement on encumbering state assets with a limited real right, the administrator of the state assets stipulates a clause with respect to the fee for encumbering the state assets with a limited real right by which the parties agree that:
1) the fee for encumbering the state assets with a limited real right is paid by way of periodic payments or as a one-off payment;
2) periodic payments are to paid as advance payments for the following period twice a year, as a rule by 1 July and 1 January;
3) the obligation to pay the fee arises when the limited real right is recorded in the land register and is extinguished when the corresponding entry is removed from the register;
4) the obligation to pay a periodic fee for encumbering the state assets with a limited real right is recorded as a real encumbrance in favour of the state in part 3 of the entry concerning the dominant immovable in the main register of the land register;
5) an adjustment of the fee for encumbering state assets with a limited real right may be demanded after three years have passed since the limited real right was created and again when three years have passed since the last adjustment of the fee. In order to secure the right to request an adjustment of the fee, a corresponding observation must be entered in the land register with the same rank as that of the real encumbrance.

Chapter 4 TRANSFER OF STATE ASSETS 

Division 1 General provisions 

§ 29.  Purpose of the transfer

State assets may be transferred to another when:
1) the administrator of the state assets or the authorised agency does not require the assets for the purpose of exercising state authority or for any other public purpose;
2) the assets are required by persons referred to in points 1–4 of subsection 1 of section 33 of this Act for the performance of public functions or in the cases listed in points 5–7.

§ 30.  Types of procedure employed in transferring state assets

(1) The following types of procedure are employed in transferring state assets;
1) public auction;
2) selective tender;
3) discretionary procedure.
(2) A constitutional institution may transfer an immovable or superficies interest only for a fee and by way of public auction or selective tender.
(3) Except for a security or claim or work of artistic value or another movable property whose value cannot be appraised, the administrator of state assets may transfer a movable property whose usual value amounts to 10,000 euros or more only by way of public auction or selective tender. This requirement does not apply in the cases specified in sections 33 and 35.

§ 31.  Special rules regarding the types of transfer of securities

(1) In addition to the types of procedure listed in subsection 1 of section 30 of this Act, state-owned securities may be transferred:
1) by way of a public sale, including by way of a public tender or sale in a regulated securities market following the procedure specified in section 74 of this Act;
2) when making a takeover bid for shares in accordance with section 165 of the Securities Market Act;
3) when effecting a takeover of shares within the meaning of Chapter 291 of the Commercial Code;
4) when redeeming or repurchasing units in an investment fund;
5) when exchanging shares, convertible debentures or other securities for different securities;
6) in the acquisition of own shares by a company;
7) in an offer of shares to the other shareholders of the company;
8) by means of a sale of the right of pre-emption to subscribe for shares in a public limited company;
9) under other conditions provided by legislation or in the emission of the securities.
(2) The provisions governing public sales which are set out under point 1 of subsection 1 of this section do not apply to transfers of shares in a private limited company.

§ 32.  Sale of state assets

Unless otherwise provided by law, state assets are transferred by way of sale for a fee.

§ 33.  Transfer of state assets without charge or below the usual value

(1) State assets, except for securities, may be transferred without charge or for a fee that falls below the usual value of the assets where:
1) a local authority requires the assets for the performance of functions imposed on it in accordance with a law or for the purpose of developing the business environment;
2) a legal person in public law, a non-profit association or foundation established or to be established by the state requires the assets for the performance of functions imposed on it in accordance with a law or its articles of association;
3) a non-profit association or foundation requires the assets for the performance of functions which are stipulated in its articles of association and which relate to rescue, education, research, language or youth work or the provision of healthcare or social services;
[RT I 2010, 24, 115 - entry into force 01.09.2010]
4) an immovable property is required by a foreign state for a diplomatic, consular or trade mission;
5) a movable property is required in order to participate in international cooperation or to implement a development cooperation project;
6) a movable property is required in order to provide humanitarian aid;
7) it is directly required by law.
(2) The persons mentioned under points 1–3 of subsection 1 of this section may transfer the immovable property which was acquired without charge or for a fee that falls below the usual value of the property only if the property is no longer required or it can no longer be used for the performance of the functions listed under points 1, 2 and 3. This subsection does not apply where a local authority has acquired an immovable in accordance with point 1 of subsection 1 of this section for the purpose of developing the business environment and where the immovable is transferred to a legal person in private law which is subject to the dominant influence of the local authority.
(3) Where an immovable is transferred, including where it is ceded to or where a superficies interest is created in favour of a legal person in private law within 10 years after the immovable was acquired under points 1–3 of subsection 1 of this section, the person falling under points 1–3 of subsection 1 of this section must compensate to the state 65 per cent of the usual value which the assets had at the time of its acquisition by that person. The compensation must be paid within three months from the transaction to the bank account of the administrator of state assets from whom the assets was acquired.
(4) Where a local authority cedes an immovable property acquired from the state to a legal person in private law which is subject to the dominant influence of the local authority or creates a superficies interest in the favour of that person, the provision in subsection 3 of this section applies if that legal person in private law transfers the acquired immovable or superficies interest.
(5) The state reserves the right to require any persons falling under points 1–3 of subsection 1 of this section to use the immovable property ceded to them according to its designated purpose. If the person who has acquired the immovable from the state fails to use it according to its designated purpose, the state is entitled to demand from that person the payment of a contractual penalty at the rate of at least 25 per cent of the value of the assets at the time of its ceding.
(6) The administrator of state assets monitors the observance of the requirements listed in subsections 2–5 of this section.
(7) The administrator of state assets stipulates in an agreement on the transfer of state assets the obligation of the person falling under points 1–3 of subsection 1 of this section to give notice of the transfer of the immovable property or superficies interest referred to in subsections 3 and 4.

§ 34.  Transfer to a local authority of residential land for a price below the usual value of the assets

(1) In addition to cases specified in subsection 1 of section 33 of this Act, an immovable property which is zoned for residential use and which has not been built up may be transferred to the local authority in whose area of administration the property is situated.
(2) In the case described in subsection 1 of this section, the selling price of the immovable is 65 per cent of its usual value.
(3) The selling price referred to in subsection 2 of this section must be paid within two years of the execution of the agreement on the transfer of the immovable property.

§ 35.  Barter

(1) State assets may be transferred by way of barter by discretionary procedure:
1) when expropriating an immovable property in accordance with the Immovables Expropriation Act;
2) where the barter is required for a public purpose and is advantageous for the state;
3) in other cases provided by law.
(2) If at least one of the physical objects to be bartered is an immovable property, the usual value of the objects to be bartered may not differ by more than 10 per cent. The usual value of any movable property to be bartered may not differ by more than 30 per cent. The difference in the value is compensated in money.
(3) The requirement established in subsection 2 of this section in respect of the difference in the usual value of the movables is not applied with respect to the state assets transferred for the use of a foreign mission and the public servants working there.

§ 36.  Persons acquiring state assets

State assets may be acquired by anybody, provided no restrictions to acquisition of the assets are established by law.

§ 37.  Deciding the transfer of state assets

(1) The transfer of state assets is decided by the administrator of the state assets.
(2) The transfer of an immovable property or a limited real right may be decided by a minister or the State Secretary only with the consent of the Government of the Republic in the following cases:
1) when the decision is made following a discretionary procedure or selective tender;
2) by ceding the assets as a non-monetary contribution to a legal person in private law;
3) where the Ministry of Finance refuses to grant its endorsement following the procedure set out in section 101 of this Act or deems it necessary to consult the Government of the Republic due to the importance of the transaction.
(3) A minister or the State Secretary may decide the transfer of a movable only with the consent of the Government of the Republic in the following cases:
1) the transfer concerns securities;
2) the transfer, by discretionary procedure, of claims in the amount of 10,000 euros or more;
3) when ceding the assets as a non-monetary contribution to a legal person in private law;
4) if the Ministry of Finance refuses to grant its endorsement following the procedure set out in section 101 of this Act or deems it necessary to consult the Government of the Republic due to the importance of the transaction.
(4) It is not necessary to seek the consent of the Government of the Republic if:
1) the state’s holding in a company to be transferred is less than 10 percent of the company’s share capital and the nominal value of that holding is less than 1,000,000 euros;
2) the state assets is ceded to a state-owned company within the calendar year as a non-monetary contribution whose usual value does not exceed 10 per cent of the nominal value of the total share capital or falls below 10,000 euros;
3) the transfer concerns an easement, a right of pre-emption or a real encumbrance;
4) a mortgage created in favour of the state is ceded when the obligation secured by the mortgage has been performed;
5) an immovable property encumbered with a superficies interest in the course of the land reform is being transferred pursuant to subsection 1 of section 1051 of this Act.
[RT I, 15.03.2013, 26 - entry into force 20.03.2013]
(5) With regard to the state assets which are administered by state agencies, the Government of the Republic is entitled to specify, by type or value, classes of assets whose transfer is to be decided by the Government of the Republic in each particular case.
(6) Where the usual value of a movable is less than 10,000 euros, the decision to transfer the assets may, in cases not listed in subsections 3–5 of this section, be made following the procedure established by the administrator of the state assets, having regard to the principles set out in section 8 of this Act.
(7) The Government of the Republic, when granting its consent to the transfer, to a local authority or undertaking and by discretionary procedure of an immovable property which includes land zoned for business, industrial production, transportation or public use, and which constitutes a territorial whole and is required for the purpose of developing the business environment at the national and local level, and the administrator of the property, when making the corresponding decision, must follow the procedure established by the relevant regulation of the Government of the Republic.

§ 38.  Decision to transfer state assets

(1) A decision to transfer state assets must set out at least:
1) a description of the state assets to be transferred;
2) the legal basis for the transfer of the state assets, including a reference to the relevant provisions in this Act;
3) the type of procedure employed when transferring state assets;
4) in the case of a public auction or selective tender, the body arranging the transfer of the state assets;
5) the starting price of the sale if this has been set;
6) in the case of a selective tender, additional conditions of the sale;
7) in the case of a discretionary procedure, information regarding the entitled person and the type of procedure used to determine the price.
(2) In the cases specified in subsections 2, 3 and 5 of section 37 of this Act, the order of the Government of the Republic must include at least the information listed in points 1–3, 6 and 7 of subsection 1 of this section.
(3) A transfer of state assets may take place in several stages, during each of which important circumstances are determined in relation to the transfer.
(4) Any decision to transfer securities is subject to the provisions set out in this section together with the special rules set out in section 39.

§ 39.  Special rules regarding the decision to transfer securities

(1) With respect to the subject matter of the transfer, the decision to transfer securities sets out at least the name of the issuer and the type, number and, where it exists, the nominal value of the securities to be transferred. In the case of the transfer types listed in points 5 and 9 of subsection 1 of section 31 of this Act, the decision to sell must also set out the amount or the minimum amount of the compensation to be paid for a share.
(2) In the case of a public sale of securities, the decision to transfer the securities must set out:
1) the procedure of public sale (a public offering or sale in a regulated market);
2) the sale conditions listed in subsections of 3–5 of this section;
3) where necessary, the conditions for postponing or stopping the public sale and for changing the time-limits and conditions related to the sale;
4) other important circumstances related to the public sale or important circumstances concerning the preparation of the sale.
(3) In the case of a public offering of securities, the decision to transfer securities must set out:
1) in the case of a public offering at a predetermined price, the offering price;
2) in the case of a public offering at an equilibrium price to be determined in the course of the offering, the principles based on which the offering price is determined;
3) the principles of establishing the results of the offering;
4) the rules governing the distribution of the securities between the investors;
5) the procedure for submitting and considering offers.
(4) The body deciding the transfer may stipulate, as a condition of the public offering, an obligation to register the securities for trading in a regulated market, in this case also determining the regulated markets in which registration for trading must be sought.
(5) Where securities are to be transferred in a regulated market, the decision to transfer securities must also set out the minimum selling price of the securities and, if necessary, the schedule of the sale.
(6) Where shares are transferred as part of a takeover bid, the decision to transfer securities must, in addition to the information specified in subsection 1 of this section, set out:
1) a reference to the takeover bid and the essential conditions of the bid;
2) the takeover price of the shares and the manner of payment for the shares;
3) reference to acts (acceptance or offer) performed in the course of the takeover bid.
(7) Where securities are exchanged for other securities, the decision to transfer securities must, in addition to the information specified in subsection 1 of this section, set out information regarding the securities received and the number of securities received per each security given in the exchange.
(8) Where shares in a public limited company are transferred by way of a targeted offer to another shareholder of the company or other shareholders of the company, the decision to transfer shares must, in addition to the information specified in subsection 1 of this section, set out:
1) the price or starting price (minimum price) of the offer, where it is practical to determine such a price;
2) the name of the shareholder or the names of the shareholders whom the offer targets or the criteria for targeting the shareholders;
3) the procedure and time-limit for submitting offers.
(9) Where shares in a public limited company are transferred subject to preferential rights to subscribe for the shares, the decision to transfer the securities must, in addition, set out:
1) the subscription price of shares or the starting price, where it is practical to determine such a price;
2) if necessary, the requirements which the subscribers need to meet.

§ 40.  Transfer of shares in a public limited company in response to a takeover bid

(1) Shares in a public limited company may be transferred as part of a takeover bid described in section 165 of the Securities Market Act if the person attempting the takeover has made a takeover bid to acquire the shares. The administrator of the shares submits the takeover bid to the body deciding the transfer together with a recommendation to accept or refuse the takeover bid.
(2) Where the consent of the Government of the Republic is required for the transfer of the shares, if the maker of the takeover bid has amended the proposed price such that the new price is more advantageous than the original one, or if the maker of the bid has agreed to waive the suspensive conditions contained in the original bid, or if a competing takeover bid has been made, the body deciding the transfer makes a decision, with the consent of the Government of the Republic, concerning revocation of the offer or acceptance made previously.
(3) In order to transfer shares in a public limited company as part of a takeover bid, the relevant operations required by legislation and the takeover prospectus must be performed.

§ 41.  Exchange of securities for other securities

(1) State-owned securities may be exchanged for other securities in accordance with the decision to transfer securities if:
1) in the case of a transfer referred to in point 2 of subsection 1 of section 30 and in points 1, 2, 7 and 9 of subsection 1 of section 31, the securities are partially or wholly paid for with other securities whose usual value is at least equal to the amount of money to be paid or to the usual value of the securities that are being transferred;
2) this is in accord with the conditions of emission of the securities to be exchanged.
(2) In order to exchange securities, the operations described in the conditions of emission of the securities and in the legislation applicable to such conditions must be performed.

§ 42.  Transfer of shares to other shareholders of the company

(1) By decision of the body deciding the transfer, shares belonging to the state in a public limited company may be transferred to another shareholder or other shareholders of the company, provided this type of transfer of the shares is expedient in the light of the conditions emanating from the articles of association of the company, the structure of the company’s shareholders, the agreements concluded between the shareholders, the conditions of emission of the shares or on the basis of other facts which warrant the presumption that resorting to another type of transfer would not be expedient from the point of view of the protection of the state’s interests, or that resorting to those other types of transfer would entail additional risks.
(2) The provision made in this section in regard to shares and shareholders in a public limited company, and to public limited companies, also applies to shares and shareholders in a private limited company, and to such companies.

Division 2 Arranging the transfer 

§ 43.  Initiating the transfer

(1) When initiating the transfer of state assets, the administrator of the state assets must ascertain that the assets are not required for the purpose of exercising state authority or for any other public purpose.
(2) Where the administrator of state assets has ascertained that it has no need for an immovable property which it administers, and that the state institutions within its government area have no such need either, the administrator of the state assets disseminates, through the State Real Estate Register to all administrators of state assets, the information characterising the assets.
(3) If the immovable property is not required for the purpose of exercising state authority or for any other public purpose by any other administrator of state assets, its ceding is decided in accordance with the procedure described in section 12 of this Act.
(4) When initiating the transfer of an immovable property, the administrator of the property decides the conditions of the transfer in accordance with its discretionary authority, having regard to, among other things, the economical use of real property, the continuing use of the land for the same purpose, the possibilities of implementing spatial plans and any other circumstances of importance to the future use of the land or of any construction works on the land, and, where necessary, makes provision for the joint transfer of several immovable properties.
(5) Within the meaning of this Act, the joint transfer of several immovable properties means the transfer of several such properties for a single price. In selecting the properties to be transferred, the administrator of state assets has regard to the territorial location of the immovable properties, the tied relationship of the properties when used for their designated purpose, the expected higher value of the properties when transferred jointly, in comparison to their value when transferred separately, and to any other circumstances which, when present, make it expedient to transfer several items of state assets jointly.

§ 44.  Draft order, explanatory memorandum and documents of the Government of the Republic

(1) In the cases described in subsections 2, 3 and 5 of section 37 of this Act, the administrator of state assets prepares a draft order of the Government of the Republic and its explanatory memorandum. The explanatory memorandum must set out at least the following:
1) information regarding the state assets, including any encumbrances on the assets;
2) a justification of the expediency of the transfer and the impact of the transfer on the national budget;
3) the reasons related to selecting the particular transfer procedure and to other important circumstances pertaining to the transfer;
4) the reasons for deciding to transfer for no charge or for a fee that falls below the usual value of the assets;
5) an assessment concerning the usual value of the assets;
6) information regarding the detailed spatial plan concerning the assets;
7) other reasons in relation to the circumstances described in sections 38 and 39 of this Act.
(2) The explanatory memorandum must enclose, as an annex, documents which prove the information presented in the memorandum.

§ 45.  Special rules regarding the explanatory memorandum and documents in the case of transfers of securities

(1) When transferring securities, the explanatory memorandum of the draft order of the Government of the Republic sets out at least the following particulars:
1) information regarding the securities, their issuer and, in the case of a takeover, information regarding the person who made the takeover bid;
2) a justification of the expediency of the transfer, which separately sets out factors related to economic policy and factors related to financial economy;
3) the reasons behind the choice of the transfer procedure and other important circumstances pertaining to the transfer;
4) the opinion of the administrator of the securities regarding the usual value of the securities as indicated in the expert’s assessment.
(2) The following documents must be enclosed, as an annex, to the explanatory memorandum:
1) documents which prove the information specified in subsection 1 of this section;
2) in respect of a foreign issuer, where they exist, documents regarding its registration in the country in which it is located;
3) when exercising a takeover bid for shares in a public limited company, the notice and prospectus of the takeover bid;
4) in the case of a takeover bid for shares under Chapter 291 of the Commercial Code, the takeover report and the auditors’ report, and the draft resolution of the general meeting of the shareholders by which the takeover of the shares of minority shareholders is decided;
5) in the case of the transfer of units in an investment fund, the fund rules;
6) the resolution of the general meeting of the shareholders of the public limited company by which the convertible debentures were issued;
7) the resolution of the supervisory board or the general meeting of the shareholders of the public limited company by which the acquisition of the company’s own shares was decided;
8) the resolution of the shareholders of the private limited company whereby the acquisition of the company’s own shares was decided;
9) the document determining the price of the securities or the compensation to be paid for each share in the public limited company.
(3) If they cannot be accessed using the information in the central database of the registry department of Tartu County Court, the explanatory memorandum must also enclose following documents:
[RT I, 21.06.2014, 8 – entry into force 01.01.2015]
1) the articles of association of the issuer and its memorandum of association;
2) the latest audited annual accounts of the issuer or, in the case of a takeover bid, the audited annual accounts for the last two financial years;
3) in the case for paying for securities with other securities or exchanging securities for other securities, the reports referred to in point 2 of this subsection in respect of the issuers of the securities to be taken as payment or exchange.
(4) If, due to the requirements established in legislation or in the terms and conditions of the emission of the securities, it is not possible or not expedient to transfer the securities using the procedures described in sections 30(1) and 31(1), the explanatory memorandum must refer to the relevant legislation or documents showing the special rules in the terms and conditions of the emission.
(5) Where the transfer takes place in several stages, the administrator of state assets submits at first to the Government of the Republic a draft of the order to be recorded in the minutes of the meeting of the Government of the Republic, the explanatory memorandum and the endorsement letter of the Ministry of Finance.

§ 46.  Fee for transfer

(1) State assets may only be transferred for a fee that corresponds to the usual value of the assets and is paid in money, unless otherwise provided by law.
(2) To determine the usual value of an immovable property to be transferred, the body deciding the transfer or organising the sale of the property arranges an expert assessment of the usual value of the property by a generally recognised expert. The expert’s assessment must conform to established good practice.
(3) The commissioning of an expert assessment is not required where the Ministry of Finance has agreed to waive this in writing. When deciding the grant of the waiver, the Ministry of Finance considers whether the cost of the expert assessment is proportionate to the revenue to be received from the transfer of the immovable or limited real right.
(4) The procedure for determining the usual value of movable to be transferred is decided by the administrator of the assets.
(5) The expert’s assessment may not predate the decision to transfer the assets by more than six months.

§ 47.  Determining the usual value of securities

(1) To determine the usual value of the securities to be transferred, including the securities received in the course of an exchange of securities, the administrator of the securities commissions an expert assessment of the usual value of the securities from a generally recognised expert.
(2) The commissioning of an expert assessment is not required where:
1) the Government of the Republic has agreed to waive this;
2) the cost of the expert assessment is not proportionate to the revenue to be received from the transfer of the securities;
3) the transfer procedure referred to in points 3, 4 or 6 of subsection 1 of section 31 is used;
4) the securities transferred or received in the course of an exchange of securities are the securities referred to in subsection1 of section 2491 of the Commercial Code.
(3) Where an expert assessment is not commissioned, it is substituted by an assessment of the usual value of the securities drawn up by the administrator of the securities, who takes into consideration the trading price of the securities, in the case of securities which are traded in the market, the amount of compensation paid for each share in the public limited company, the net asset value of the share or unit, the book value of the securities and other relevant information.

§ 48.  Transfer arrangements

(1) The transfer of state assets is arranged by the administrator of the state assets or by an agency authorised by the administrator.
(2) The body to decide the transfer of state assets or the agency that such a body has authorised to arrange such transfer may authorise third parties to perform operations which are preparatory to the transfer of the state assets or which represent steps in the process of transferring the state assets, having regard to requirements arising from legislation. For the purposes of this Act, such third parties are conductors of the procedure of authorising the use of the property.

§ 49.  Terms and conditions of the transfer agreement

(1) Before executing the transfer agreement, the agency arranging the transfer of state assets must require the person acquiring the assets to provide each security required by the decision to transfer the state assets, in other documents relating to the transfer, and by legislation, in regard to the performance of the agreement.
(2) The administrator of state assets must set out in the transfer agreement at least the following particulars:
1) the names of the parties, their registration information and, in the case of a natural person, the personal identification code or date of birth;
2) the subject matter of the transfer agreement;
3) the price of the transfer and the terms of payment;;
4) the time and procedure for the passing of ownership of the assets;
5) the securities in regard to the performance of the agreement;
6) additional terms and conditions of the agreement;
7) the terms of covering the expenses;
8) if the assets are transferred without charge or for a fee which is below the usual value of the assets, the terms and conditions of specific-purpose use of the assets, the time-limit for performing the tasks undertaken as obligations and the terms and conditions listed in sections 33 and 34 of this Act.
(3) The transfer agreement may be modified if the following requirements are observed:
1) the terms and conditions of the agreement may be modified, provided this does not harm the interests of the state as a party to the agreement;
2) the modification of the terms and conditions of the agreement does not contradict the terms and conditions of the public auction or selective tender;
3) the consent of the administrator of the state assets is required to modify the terms and conditions of the agreement and to terminate an agreement containing an additional condition of the selective tender;
4) Where the decision to transfer state assets requires the consent of the Government of the Republic, the conditions stipulated in such consent may be modified only with the consent of the Government of the Republic.

§ 50.  Notice of the transfer agreement

(1) The person arranging the transfer of state assets is under an obligation, within 10 days of the day on which the transfer of an immovable, superficies interest or securities becomes conclusive, to publish a notice of the transfer in the publication Ametlikud Teadaanded. The notice must set out the name of the person who acquired the assets, the price and the additional conditions. In the case of a public sale of securities to several buyers, the notice includes the names of those persons who acquired 10 percent or more of the securities sold.
(2) The requirement in subsection 1 of this section does not apply to a public sale of securities accepted for trading in a regulated market.

Division 3 Special rules regarding transfers of state assets by way of ceding the assets as non-monetary contribution to a legal person in private law 

§ 51.  Ceding of state assets as non-monetary contribution to a legal person in private law

State assets which is administered by a ministry or the Government Office may be ceded to a legal person in private law as a non-monetary contribution in the following cases:
1) into the share capital of a company in which the state participates or in which the state wishes to acquire a holding, when founding the company or increasing its share capital;
2) into the ownership of a foundation or non-profit association to be established by the state;
3) into the ownership of a foundation established by the state;
4) when paying the membership fee to a non-profit association.

§ 52.  Proposal to cede state assets to a legal person in private law

(1) Where the ceding of state assets is subject to the consent of the Government of the Republic, the holder of the shares of the company or the person exercising the founder’s or membership rights, or the person who seeks founder’s or membership rights, submits the proposal to cede the assets, which are drawn up as a draft order of the Government of the Republic and which encloses the explanatory memorandum described in section 53 of this Act and, in accordance with subsection 2 of this section, the following documents, unless those documents are accessible by using the information in the central database of the registry department of Tartu County Court:
[RT I, 21.06.2014, 8 – entry into force 01.01.2015]
1) draft articles of association and draft memorandum of association;
2) other agreements related to the founding, including the shareholders’ agreement, provided these have been concluded, or their drafts;
3) a list of the state assets to be ceded together with information concerning the residual book value of the assets and the acquisition cost of the same;
4) the expert’s assessment of the usual value of the assets to be ceded, which, in the case of an immovable property, sets out the price of the land as a separate item;
5) in the case of the existence of a second founder who is a legal person in private law, the audited annual accounts of that second founder;
6) the auditors’ report regarding whether the usual value of the non-monetary contribution corresponds to that stated in the expert’s assessment and the explanatory memorandum, except where the non-monetary contribution consists in the securities referred to in subsection 1 of section 2491 of the Commercial Code;
7) an extract from the land register of from the register in which the movable is registered, if the non-monetary contribution consists in an immovable property or a movable property subject to a registration obligation, unless the information concerning the registration is accessible by using the information in the central database of the registry department of Tartu County Court;
[RT I, 21.06.2014, 8 – entry into force 01.01.2015]
8) the articles of association of the foundation or non-profit association and the memorandum of association;
9) the articles of association of the company and the the memorandum of association, as well as the draft resolution to increase the company’s share capital.
(2) The following documents listed in subsection 1 of this section must be annexed to the proposal to cede state assets:
1) in the case of a company, foundation or non-profit association which is being founded, the documents listed in points 1–7 of subsection 1 of this section;
2) in the case of a foundation established by the state, or when paying the state’s membership fee in a non-profit association, the documents listed in points 3,4,7 and 8;
3) in the case of increasing the share capital of a company, the documents listed in points 2–4, 6, 7 and 9.

§ 53.  Explanatory memorandum concerning the ceding of state assets to a legal person in private law

The explanatory memorandum sets out at least the following particulars:
1) the purpose of the state’s participation in a legal person in private law or of founding such a person, and the relationship to the strategic plan for the relevant policy area, together with a reference to the particular strategic aim or measure;
2) the opinion of the ministry in charge of the area of government which includes the matters that the legal person in private law to whom the assets are to be ceded deals with, or will deal with;
3) in the case of founding a company, a four-year business plan;
4) in the case of founding a foundation or a non-profit association, the action plan for achieving the aims set to the foundation or non-profit association, together with a four-year financial plan;
5) in the case of increasing the share capital of a company, the reason for the increase and the relevant financial and cost-benefit calculations;
6) in the case of seeking an authorisation to waive the preferential right of acquiring new shares when the share capital of a partially state-owned company is being increased, or to exercise such a right to an extent which falls below that which is possible, a justification for such course of action, and the relevant financial and cost-benefit calculations;
7) an explanation of how the ceding of the assets to a foundation established by the state or to a non-profit association contributes to the attainment of the objectives set to those persons, including a cost-benefit analysis;
8) when the ceding of the assets is accompanied by transactions involving other state assets, information concerning the subject matter of such transactions and the terms and conditions of the corresponding agreements.

§ 54.  Formalising the ceding of state assets to a legal person in private law

(1) The agreement on ceding state assets to a legal person in private law is executed by the minister who administers the assets, or the State Secretary.
(2) The minister may authorise the Secretary-General or Deputy Secretary-General of the ministry to execute the agreement.
[RT I, 29.06.2014, 109 – entry into force 01.07.2014]

Division 4 Certification of state assets as unserviceable 

§ 55.  Conditions for certifying state assets as unserviceable

(1) State assets is certified as unserviceable and written off, provided:
1) the assets are not needed by administrators of state assets or authorised agencies for the exercise of state authority or for another public purpose, the corresponding need is not foreseeable in the future and, in the assessment of the administrator of the state assets, the expenses related to authorising the use of or transferring the assets would exceed the revenue from such authorisation of use or transfer, for which reason it is not economically expedient to authorise the use of the assets or transfer it;
2) the state assets have been partially or completely destroyed, damaged, stolen, lost or otherwise rendered unusable or untransferable.
(2) The administrator of state assets establishes a procedure for certifying state assets as unserviceable, and for writing off and destroying such assets.
(3) State assets whose acquisition cost was 10,000 euros or more may be certified as unserviceable only by decision of the administrator of the state assets.
(4) The decision to certify the assets as unserviceable must list the essential conditions related to the state assets which is certified as unserviceable and, in the case of the destruction of the assets, the conditions of destroying the assets.

§ 56.  Writing off and destroying state assets

(1) Any state assets which are certified as unserviceable are written off from the balance sheet and, where this is necessary, destroyed or, in the case of a construction work, demolished.
(2) A physical object which has been certified as unserviceable is destroyed in a manner which involves the lowest possible cost and is environmentally the most sound.

Chapter 5 PROCEDURE IN AUTHORISING THE USE OF AND TRANSFERRING PUBLIC PORPERTY 

Division 1 Conduct of procedures 

§ 57.  Basic principles of procedure

(1) This Chapter provides the basic requirements for procedures f authorising the use of and transferring state assets. Detailed procedures of authorising the use of and transferring state assets are established by the administrators of state assets.
(2) This Chapter does not apply to transfers of state assets to legal persons in private law in accordance with Division 3 of Chapter 4 of this Act.

§ 58.  Publication of the notice of auction

(1) In accordance with the decision concerning authorisation of the use or sale of state assets and the terms established in respect of the public auction or selective tender by the body arranging the authorisation of the use or the transfer of the state assets (subsequently in this Chapter, ‘the arranging body’), a notice in respect of the public auction or selective tender is published in the publication Ametlikud Teadaanded not less than two weeks before the time-limit for submission of written bids for the auction or the selective tender and, in other cases, before the holding of the auction.
(2) The notice sets out essential information concerning the assets whose use is to be authorised or which is to be transferred, including information concerning the draft of the corresponding agreement and the accessibility of the terms of the auction.
(3) The time-limit within which bids in a public auction or selective tender may be submitted, and the place at which they are to be submitted, must be such as to ensure for the state the optimum result of the bidding process.
(4) Notices and advertisements of a public auction or selective tender may also be disseminated in another manner. In the cases referred to in sections 66(6) and 66(7) the notice of the public auction is published in at least one newspaper of nation-wide circulation and a notice is transmitted to the entitled person by regular post to the address of the residence or registered office which appears in the Population Register or Commercial Register in respect of that person.

§ 59.  Inspection of the assets

After publication of the notice of a public auction or selective tender, any interested person may, at the time and place previously determined by the arranging body, inspect the assets whose use is to be authorised or which is to be transferred, and peruse the essential terms and conditions of the offer and of the corresponding agreement.

§ 60.  Starting price

(1) In authorising the use of or transferring state assets by way of public auction the body deciding the transfer or authorisation of use (hereinafter in this Chapter, the ‘deciding body’) sets a starting price. In setting the starting price, the deciding body takes guidance from sections 18 and 46 of this Act. The starting price may be higher than the usual value.
(2) In the second public auction, the deciding body may set a starting price which is by up to 20 percent lower than the starting price of the first auction.
(3) The setting of a starting price is not required in selective tenders and in the third or subsequent public auction.

§ 61.  Participation fee

(1) In a public auction or selective tender, the deciding body may set a fee in the amount of up to two percent of the starting price of the auction or tender for participating with an offer in that auction or tender.
(2) When setting the amount of the participation fee, the deciding body bases its decision on the estimated expenses related to the holding of the public auction or selective tender and on the expected number of tenderers.
(3) When no starting price has been set, the setting of the participation fee is based on the usual value of the assets whose use is to be authorised or which is to be transferred, unless the arranging body decides otherwise.
(4) The participation fee is paid by the time and at the place established by the arranging body.

§ 62.  Security

(1) The security to be given for complying with the rules of the procedure or for performing the agreement may take the form of:
1) a mortgage or a movable property security interest, preferably a first-ranked mortgage or registered security interest in movable property;
2) a guarantee issued by a credit or financial institution or an insurance undertaking;
3) a cash deposit;
4) a deposit with a notary;
5) when living premises are being transferred, the loan agreement concluded between the person who acquires the premises and the bank.
(2) The deciding body determines the security to be given in relation to authorisation to use or the sale of an immovable property or a superficies interest by means of a public auction or selective tender.
(3) The deciding body may set the amount of the security referred to in points 2 and 3 of subsection 1 of this section at up to 10 percent of the starting price of the public auction or selective tender. When authorisation is granted to use state assets, the amount of the security may be set as the equivalent of the use fee payable for one to three months’ use.
(4) When no starting price has been set, the setting of the amount of the security is based on the usual value of the assets whose use is to be authorised or which is to be transferred, unless the arranging body decides otherwise.

§ 63.  Expenses of the person acquiring state assets

(1) Unless otherwise provided in an international agreement, the administrator of state assets stipulates a clause in the agreement concerning the use of the state assets or in the agreement on the transfer of the assets under which the notary’s fee and state fee related to authorising the use of or transferring the assets is paid by the person who acquires the use or ownership of the assets.
(2) The administrator of state assets stipulates a clause in the agreement on the transfer of the assets under which the expenses related to transferring the assets for no charge or for an amount which falls below the usual value of the assets are borne by the person acquiring the assets.

§ 64.  Expenses related to transferring state assets

(1) Documented expenses which are directly related to arranging the transfer of an immovable property or limited real right and which exceed the sums paid by way of the corresponding participation fees, may be covered out of the funds received as the result of the sale.
(2) Subject to the approval of the minister responsible for the area, the debts related to an immovable property or superficies interest to be transferred may be paid out of the funds received as the result of the sale.
(3) By decision of the administrator of state assets, documented expenses which are directly related to arranging the transfer of a movable and any debts related to the movable transferred may be covered out of the funds received as the result of the sale.
(4) When living premises which are in the ownership of the state are transferred to the lessee, the administrator of the state assets is entitled to reimburse the lessee for any justified and documented improvements to those premises out of the means obtained from the sale.

§ 65.  Expenses related to authorising the use of state assets

(1) By decision of the administrator of state assets, documented expenses which are directly related to authorising the use of an immovable property or superficies interest and which exceed the sums paid by way of the corresponding participation fees may be covered out of the funds received for the use.
(2) Subject to the approval of the minister responsible for the area, the debts related to an immovable property or superficies interest whose use was authorised may be paid by the administrator of the property out of the funds received for the use.
(3) By decision of the administrator of state assets documented expenses which are directly related to arranging the authorisation to use a movable and any debts related to the movable whose use has been authorised may be covered out of the funds received for the use.
(4) Where state assets are commercially leased or leased, by decision of the administrator of the assets, set-offs may be made to reimburse the expenses incurred by the commercial lessee or lessee in order to improve the buildings or civil engineering works, provided this is stipulated in the lease or commercial lease agreement and provided the improvements have been made with the consent of the lessor or commercial lessor. To make the set-offs, the agreement stipulates the time and extent of the set-off and other essential terms and conditions.

Division 2 Public auction 

§ 66.  Public auction: definition and special cases

(1) Public auction means a manner of authorising the use of or transferring state assets in which the contract is awarded to the person who agrees to the conditions of the auction, including any additional conditions stipulated as final, and bids the highest price.
(2) The use of state assets may be authorised or state assets may be sold by means of a public auction conducted orally, by electronic means or in writing.
(3) An oral auction takes place at a set time and place at which participants have the possibility of registering themselves as participants of the auction in accordance with the conditions of the auction, having previously paid the participation fee and, if this is required, a security deposit, and make their bids on the spot.
(4) In an auction conducted in writing, the participants submit, in accordance with the conditions of the auction and by a set date, a written bid in a sealed envelope.
(5) In an auction conducted by electronic means, participants of the auction make their bids and communicate with the holder of the sale by means of a public data communication network and the usernames of and the bids made by the participants are accessible in real time to all participants of the auction by means of a data communication network.
(6) In a transfer, at an auction, of an immovable property retained in state ownership which is designated as profit yielding land and contains a parcel of forest land, the owner of an adjacent immovable property which is designated as profit yielding land and contains a parcel of forest land, who participated in the auction but was not awarded the contract, is entitled to acquire the immovable property which is the subject of the transfer at the price which was established in the auction, provided that owner, within five business days following communication of the results of the auction, submits a written notification of using that entitlement. If there are several persons who are entitled under this subsection, preference is given to the owner who made the highest bid.
[RT I, 05.04.2013, 2 - entry into force 15.04.2013]
(7) When an immovable property which is designated as profit yielding land and contains a crop area or a natural grassland area is being transferred, the person whose use of that property has a due legal basis and who participated in the auction but was not awarded the contract is entitled to acquire the property which is the subject of the transfer at the price which was established in the auction, provided that person, within five business days following communication of the results of the auction, submits a written notification of using that entitlement. If there are several persons who are entitled under this subsection, preference is given to the person who enjoys a right of use which extends to the largest part of the immovable property that is being transferred. If a person entitled under subsection 6 of this section and a person entitled under this subsection wish to exercise their respective entitlements in regard to the same property at the same time, preference is given to the latter.
(8) If, for reasons to do with the person entitled under subsection 6 or 7 of this section, the transfer of the immovable property fails to be effected within the time-limit established by the seller, the person who was awarded the contract in the auction is entitled to acquire the property within the time-limit established by the seller.
(9) [Repealed – RT I, 05.04.2013, 2 – entry into force 15.04.2013]

§ 67.  Notification of the results of a public auction

(1) The registration number of and the amount bid by the person who won an oral auction and the person who made the second best bid is announced by the person conducting the auction in the room in which the auction was held after the winner has been established.
(2) The name and the result of the bid or tender of the person who won an auction conducted in writing and the person who made the second best bid are communicated by the arranging body in writing within five business days after the holding of the auction to all persons who submitted a bid in the auction.
(3) The results of an auction conducted by electronic means are notified to all participants of the auction in a public data communication network at the address at which the auction was held immediately after the winner of the auction has been established.

§ 68.  Approval of the results of a public auction

(1) The deciding body decides to approve or refuse to approve, including to declare the auction a failure, the results of a public auction within 20 business days following communication of the results of the auction.
(2) When authorising the use of or transferring state assets the deciding body is entitled to declare a public auction a failure and to refuse to approve the results of the auction if:
1) no one registers as a participant of the auction or none of the registered participants attended the oral auction;
2) no bids, or no bids which met the requirements were submitted;
3) the participants of the auction did not abide by the instructions of the person who conducted the auction or infringed the rules of procedure of the auction;
4) it was revealed in the auction that the participants had colluded or engaged in concerted action, and this affected or may have significantly affected the results of the auction;
5) the winning bid in an auction in which no starting price was set is economically unacceptable to the state.
(3) In addition to the grounds provided in subsection 2 of this section, the deciding body refuses to approve the results of a public auction if:
1) in conducting the auction, the arranging body or the person who conducted the auction infringed the rules of procedure of the auction;
2) an infringement of the procedure provided by legislation took place at the auction and was characterised by an extent which affected the results of the auction;
3) the winner of an auction conducted in writing was not entitled to participate in the auction;
4) at least one of the participants who submitted a bid in an oral auction or an auction conducted by electronic means was not entitled to participate in the auction and the participation of that person or those persons significantly affected the results of the auction.
(4) When approval of the results of a public auction is refused, the reasons for the refusal are to be set out in writing.
(5) The decision approving the results of a public auction sets out the name of the winner of the auction and the amount bid by the winner. If the amount of the cash deposit in the auction was set at least at five percent of the starting price for the bids, the decision also sets out the name of the person who made the second best bid, and the amount bid by that person.
(6) On the grounds provided in subsections 6 and 7 of section 66 of this Act, the deciding body approves the results of the auction in favour of the persons entitled under those sections.
(7) In the case described in subsection 8 of section 66 of this Act, the deciding body is entitled to repeal the decision approving the results in favour of the entitled person and to approve the results in favour of the person who made the highest bid in the auction.
(8) The decision is communicated without delay to the participants of the public auction.

§ 69.  Decision following refusal to approve the results of a public auction

(1) Within one month following refusal to approve the results of a public auction, the deciding body decides whether to hold a new auction, or to postpone or forgo the auction.
(2) In the case described in subsection 3 of section 30 of this Act, when refusing to approve the results of a public auction, the deciding body is entitled to decide the transfer of a movable by discretionary procedure, provided the price of the transfer may fall below 10,000 euros.

§ 70.  Procedure concerning securities

(1) The cash deposit paid by the winner of a public auction is deemed to be a partial payment toward the purchase price. If the security for the bid was provided in the form of a guarantee, a valid letter of guarantee is returned to the winner of the auction after payment of the sale price but not before the conclusion of the real right contract.
(2) Within five business days following the approval or refusal to approve the results of the auction, the arranging body returns the cash deposits of the other participants of the public auction to those participants, and of the winner of the auction to the winner, provided the reason for the refusal to approve the results of the auction was an infringement by the arranging body. A valid letter of guarantee is returned to a participant of the auction within the same time-limit. If the arranging body fails to return the cash deposit within the time-limit, the participant may demand payment of late interest at the rate of 0.1 percent per day of the deposited cash which has not been returned.
(3) The cash deposit is not returned to a participant of a public auction whose actions resulted in the failure of the auction or a refusal to approve the results of the auction, and any guarantee submitted by the participant is called in.
(4) When state assets are transferred to a person entitled under subsection 6 or 7 of section 66 of this Act, the arranging body returns the cash deposit paid by the person who made the highest bid in the auction within five business days following approval of the results of the auction in favour of the entitled person.
(5) [Repealed – RT I, 05.04.2013, 2 – entry into force 15.04.2013]

§ 71.  Evading the conclusion of the agreement

(1) The deciding body sets a time-limit for the conclusion of the agreement concerning the use or transfer of state assets. The time-limit may be up to two months following approval of the results of the public auction. In cases where this is justified, the deciding body may extend that time-limit.
(2) When the conclusion of the agreement is being evaded, the deciding body may annul the results of the public auction.
(3) If the winner of a public auction fails to conclude the agreement within the relevant time-limit, or submitted a guarantee to performing the agreement, the agreement may be concluded with the person who made the second best bid, provided the cash deposit was set at least at five percent of the starting price for the bids. The arranging body sets a time-limit for concluding the agreement, which may be up to one month.
(4) If the results of a public auction are annulled, the cash deposit paid by the winner of the auction is not returned and any guarantee submitted by such winner is called in. The provision in subsection 1 of section 69 of this Act applies to the decision made following the annulment.

Division 3 Selective tender 

§ 72.  Authority to hold a selective tender

(1) When authorising the use of or transferring state assets, a selective tender is used where, in addition to the price, the fulfilment of additional conditions is important.
(2) Securities may be sold by selective tender only if the sale concerns shares in a state-owned company or shares which are freely transferable under the articles of association of the company.
(3) The agreement is concluded with the person whose tender has been declared the best by the deciding body upon considering the price which was bid as well as the fulfilment of the additional conditions. Additional conditions and price may be subject to negotiation with the tenderers.
(4) Any additional conditions must be amenable to objective assessment.
(5) The provisions in sections 68–71 of this Act apply to the procedure for selective tenders.

§ 73.  Additional conditions of a selective tender

(1) Additional conditions in the sale or authorisation of use of state assets may include the following:
1) the making of investments, including by way of increasing the share capital;
2) the obligation to use the assets for a specific purpose;
3) the maintenance of employment;
4) the creation of new jobs;
5) the submission and implementation of a technical or financial plan meeting the requirements presented;
6) compliance with environmental protection requirements;
7) other additional conditions whose fulfilment the deciding body considers important.
(2) In addition to the list in subsection 1 of this section, additional conditions to authorising the use of state assets may take the form of:
1) an obligation imposed on the user regarding the assets whose use have been authorised;
2) an obligation imposed on the user to perform work for or provide services to the body which authorised the use, provided the performance of the work or the provision of the services require special skills on the part of the user or are of a special nature.
(3) When authorising the use of state assets, participants of a selective tender may be allowed to make proposals concerning specific technical or other details of the work or service, provided the participants are required to include in their tenders specific information concerning the technical and other specifications and projects that they propose.

Division 4 Public sale of securities 

§ 74.  Public sale of securities

(1) The types of public sale of securities are as follows:
1) public offering at a predetermined price or at an equilibrium price established in the course of the offering (hereinafter, ‘public offering’);
2) the sale of securities in a regulated market.
(2) Public sale may be applied only in the case of securities which, under the terms of their emission, are freely transferable.
(3) A non-market transaction which is performed in the trading system of a regulated market and which concerns securities listed in the regulated market is also deemed a sale in the regulated market.
(4) When preparing a public sale, the holder of the sale:
1) in the case of a public offering with an equilibrium price, arranges the discovery of the minimum price;
2) in the case of a public offering at a predetermined price, arranges for the determination of the selling price;
3) arranges the preparation and registration of the prospectus;
4) where this is needful, enters into an agreement with a third party on preparing and conducting the public sale.
(5) Provided the Government of the Republic consents to this, the holder of the sale may postpone or stop the sale if the conditions in the regulated market in which the securities have been accepted for trading or are intended to be so accepted have become significantly less advantageous compared to the conditions which prevailed at the time when the sale was decided, and going forward with the sale would cause the state more harm than postponing or stopping the sale.
(6) Within 15 business days following the expiration of the time-limit for submission of offers, the holder of the sale decides, by directive, to approve or refuse to approve the results of the public offering.
(7) The holder of the sale refuses to approve the results of the public offering if, in conducting the sale, the procedure established in legislation has been infringed, or the conditions of the sale have been derogated from.
(8) In the case described in subsection 7 of this section, the sums transferred by the offerors as payment for the purchase of the securities are returned to those offerors within 20 business days following the date on which the decision to refuse to approve the results of the public offering was made. If the holder of the sale does not return the said sums within the time-limit, it is liable to pay late interest on those sums to the offerors at the rate of 0.1 percent per day.
(9) Within 30 days following approval of the results of the public offering, the holder of the sale submits to the Government of the Republic an information report concerning the results of the sale and the expenses related to the sale.

Chapter 6 PARTICIPATION OF THE GOVERNMENT IN LEGAL PERSONS IN PRIVATE LAW 

Division 1 Exercising the rights of the shareholder 

§ 75.  Acquisition of shares and requirements in respect of the articles of association

(1) When the state participates in founding a company, or acquires a holding in a company in which the state holds no shares, the holding of the state may not be less than a minority interest.
(2) The provision of subsection 1 of this section does not apply:
1) to the acquisition of shares as a gift or as a result of succession;
2) when the holding is acquired for the purpose provided in point 4 of subsection 1 of section 71 of the State Budget Act;
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]
3) to the acquisition of a holding as a result of a barter transaction;
4) when the holding is acquired in accordance with a law or resolution of the Riigikogu;
5) when a holding in a legal person in private law which is registered in a foreign state is acquired in order to confer on an Estonian foreign mission the right to use enclosed premises.
(3) When the state has at least the required interest in a company, the holding administrator, in exercising its founder’s or shareholder’s rights, must take steps to ensure that the articles of association of the company state the company’s area of activity and aim.
(31) The administrator of a partially state-owned company which for the purposes of the State Budget Act is part of central government must, when exercising its founder’s or shareholder’s rights, take steps to ensure that the following specific requirements are reflected in the articles of association of the company:
1) all of the company’s receipts and expenditures are reflected in a balanced budget which is drawn up in conformity with the company’s financial plan, with the rules concerning budget position set out in section 6 of the State Budget Act, with the rule concerning net debt set out in section 10 of the same Act, and with any limitations established in accordance with section 11 of the same Act;
2) each year, the company draws up and presents, in accordance with the rules set out in section 12 of the State Budget Act, a financial plan to serve as the basis for the preparation of the company’s budget.
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]
(4) Where this is justified, the holding administrator, when founding a partially state-owned company, or acquiring a holding in a company in which the state held no shares, must take steps to ensure that the following specific requirements are reflected in the articles of association of the company:
1) a representation requirement that is greater than the one specified in subsection 2 of section 170 and in subsection 1 of section 297 of the Commercial Code;
2) a majority requirement that is greater than the one specified in subsection 1 and 2 of section 174 and in subsection 1 of section 299 of the Commercial Code.
(5) When it is necessary to increase the share capital of the company, the holding administrator must consider whether it may be expedient to seek an emission of preferential shares.
(6) In observing the obligations provided in subsection 4 and 5 of this section, the holding administrator must, having regard to the size of the state’s holding, avoid the creation of disproportionate entitlements.

§ 76.  Competence of the Government of the Republic

(1) A minister as the person exercising the founder’s rights may, within his or her competence and following the procedure provided by law, decide the founding of a partially state-owned company or become a shareholder of a company in which the state acquires a holding which confers at least a minority interest, or a holding whose nominal value is at least 1,000,000 euros, only in accordance with an authorisation from the Government of the Republic.
(2) The decision to found a partially state-owned company or acquire a holding in a company must, among other things and following the provision in subsection 2 of section 10 of this Act, define the purpose of the state’s participation in the company.
(3) The administrator of the holding in a company referred to in subsection 1 of this section may make decisions or vote in a general meeting of the shareholders only in accordance with the authorisation from Government of the Republic in the following matters:
1) winding up the company;
2) merging the company with a company which is not part of the same consolidation group, or dividing the company;
3) transforming the company;
4) the company’s issuing of convertible debentures, increasing or decreasing the share capital;
5) acquiring new shares or increasing the nominal value of the share in a private limited company, among other things by way of capitalisation of reserves; waiving the right of pre-emption in respect of subscribing for shares in a public limited company or in respect of increasing the nominal value of the share in a private limited company, or using such a right of pre-emption to an extent that falls below that which is possible;
6) amending the articles of association, when this entails changes in the rights related to the holding;
7) entry into, modification or termination of an agreement between the shareholders.
(4) Where the holding administrator requests this, the Government of the Republic may issue instructions and guidelines to the administrator also in regard to matters not referred to in subsection 3 of this section.
(5) The Government of the Republic makes the decisions referred to in subsections 1, 3 and 4 of this section at the proposal of the holding administrator or the minister representing the ministry which seeks the administration of the holding. The matter may also be raised for discussion by another member of the Government of the Republic.

§ 77.  Dividend

(1) If the state holds at least a required interest in a company, the Government of the Republic, at the proposal of the m
(2) inister responsible for the area, approves the amount or rate of the dividend which serves as the instruction to the holding administrator in voting in the general meeting of the shareholders.
(2) The holding administrator submits to the minister responsible for the area a proposal regarding the amount of rate of the dividend referred to in subsection 1 of this section together with the report which is mentioned in subsection 2 of section 98 of this Act.
(3) When extraordinary circumstances arise, the holding administrator may submit to the minister responsible for the area a reasoned request to propose to the Government of the Republic to adjust the amount of rate mentioned in subsection 1 of this section. The said request may also be made by the minister responsible for the area.
(4) In the case of a company which does not fall under subsection 1 of this section, when the holding administrator receives the notice convening a general meeting of the shareholders, he or she must consult the Ministry of Finance without delay concerning the rate or amount of the dividend.

Division 2 Exercising founder’s and membership rights in a foundation or non-profit association 

§ 78.  Competence of the Government of the Republic

(1) The person who exercises founder’s rights may, within his or her competence and following the procedure provided by law decide, only in accordance with an authorisation from the Government of the Republic:
1) the founding of a state foundation or foundation whose founders include the state;
2) the division, winding up or merger with another foundation of a foundation established by the state;
3) the acquisition or transfer by a state foundation of a qualifying holding in a company, or the participation of a state foundation in the founding of another foundation.
(2) The person who exercises membership rights may vote, only in accordance with an authorisation from the Government of the Republic:
1) at the founding or winding up of a non-profit association;
2) in becoming a member of or terminating the membership in a non-profit association;
3) in merging or dividing a non-profit association.
(3) The decision to found a foundation whose several founders include the state or a non-profit association, or to become a member of a non-profit association must, among other things and following the provision of subsection 2 of section 10 of this Act, determine the purpose of the state’s participation in the foundation or non-profit association.
(4) At the proposal of the person exercising founder’s or member’s rights, the Government of the Republic may also issue instructions and guidelines in matters not mentioned in subsections 1 and 2 of this section.
(5) The Government of the Republic makes the decisions mentioned in subsections 1, 2 and 4 of this section at the proposal of the person who exercises founder’s or member’s rights or who seeks such rights. The matter may also be raised for discussion by another member of the Government of the Republic.
(6) The provisions of subsections 2–4 of this section do not apply to participation in the non-profit associations referred to in subsections 1 and 2 of section 6 of this Act.

§ 79.  Requirements in regard to the articles of association of a foundation

(1) When the person to exercise founder’s rights engages in the exercise of those rights, he or she must take steps to ensure that the following specific requirements are reflected in the articles of association of a foundation established by the state:
1) the settlement transactions of a state foundation are made through the State Treasury;
2) a foundation whose several founders include the state participates in and acquires and transfers holdings in companies, founds other foundations, is merged with another foundation or divided only in accordance with a prior unanimous decision of all the founders;
3) a foundation established by the state may borrow money and enter into financial lease agreements only in accordance with a unanimous decision of all the members of its supervisory board;
[RT I 2010, 38, 233 - entry into force 01.07.2010]
4) a foundation whose several founders include the state only participates in a company whose activities are directly related to attaining the aim of the foundation;
5) in the agreement on the acquisition of an immovable or superficies interest for no charge, a foundation established by the state assumes the obligation to use the assets for a specific purpose, and to pay the contractual penalty, in accordance with the provisions in section 33 of this Act;
6) a foundation whose several founders include the state is wound up or merged with another foundation when this is demanded by the state;
7) a foundation whose founders include the state may not be wound up or merged with another foundation without the consent of the state.
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]
(2) The person exercising the founder’s rights in a foundation established by the state which for the purposes of the State Budget Act is part of central government must, when exercising those rights, take steps to ensure that the following specific requirements are reflected in the articles of association of the foundation:
1) all of the foundation’s receipts and expenditures are reflected in a balanced budget which is drawn up in conformity with the foundation’s financial plan, with the rules concerning budget position set out in section 6 of the State Budget Act, with the rule concerning net debt set out in section 10 of the same Act, and with any limitations established in accordance with section 11 of the same Act;
2) each year, the foundation draws up and presents, in accordance with the rules set out in section 12 of the State Budget Act, a financial plan to serve as the basis for the preparation of the foundation’s budget.
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]

Division 3 Management and supervision 

§ 80.  Requirements to candidates for membership of a governing body

(1) The holding administrator and the minister responsible for the area as well as the person exercising the founder’s or membership rights may not elect to the governing body of a legal person in private law, or propose to be elected member of such a body, or vote in support of the election of, any person who falls under subsections 2–4 of this section or who does not fulfil the following requirements:
1) possession of the knowledge and experience required to perform the duties of the office, taking into account the area of activity of the legal person and the area of finance;
2) capability of acting with the degree of care expected of him or her and in accordance with the requirements of the office, taking into account the aims and interests of the legal person, and the need to ensure effective protection of the interests of the state as the shareholder, founder or member.
(2) When exercising its founder’s or shareholder’s rights, the holding administrator must take steps to ensure that the articles of association of the company disqualify from membership in the supervisory board:
1) any self-employed person who is active in the same area of activity as the company and who is not a shareholder of the company;
2) any partner of a general partnership which is active in the same area of activity as the company, or any general partner of a limited partnership, if such partner is not a shareholder of the company;
3) any person whose share or shares represent at least 1/10 of the share capital of a company which operates in the same area of activity as the company, and which is not a shareholder of the company;
4) any member of the governing body of another company which operates in the same area of activity as the company except where such other company is a partially state-owned company, or a company which belongs to the same group as the company, or a company which is a shareholder of the company.
(3) When exercising his or her founder’s rights, the person exercising the founder’s rights must take steps to ensure that the following are disqualified from membership in the supervisory board of the foundation:
1) any self-employed person who is active in the same area of economic activity as the foundation and who is not the co-founder of the foundation;
2) any partner of a general partnership or any general partner of a limited partnership who is active in the same area of economic activity as the foundation, provided neither the partner nor a general or limited partnership of which he or she is a partner is the co-founder of the foundation;
3) any person whose share or shares represent at least 1/10 of the share capital of a company which operates in the same area of economic activity as the foundation, provided neither the person nor a company of which he or she is a shareholder is the co-founder of the foundation;
4) any member of the governing body of a company which operates in the same area of activity as the foundation except where such company is a partially state-owned company, or a company which is the co-founder of the foundation.
(4) When exercising its founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s rights must take steps to ensure that the articles of association of the company or foundation disqualify from membership in the governing body of the company or foundation any person:
1) whose culpable acts or omissions have resulted in the bankruptcy of any person;
2) whose culpable acts or omissions have resulted in the withdrawal of an activity licence issued to a legal person;
3) who is subject to a disqualification from holding director’s, liquidator’s or registered representative’s positions and from pursuing a business as a self-employed person;
4) whose culpable acts or omissions have caused harm to a legal person;
5) who has been convicted of an economic criminal offence or of a criminal offence related to the office held, or of a criminal offence against property;
6) who has important business interests in relation to the company or foundation which, among other things, take the form of holding a qualifying interest in the legal person in private law within the meaning of section 9 of the Securities Market Act (hereinafter, the ‘qualifying interest’) or the form of being a member of a governing body of a company which is an important seller or buyer of the goods offered by that legal person in private law, or who provides services to or commissions services from the legal person in private law.
(5) When exercising its founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s rights must take steps to ensure that the articles of association of the company or the foundation established by the state stipulate that:
1) the restrictions listed in points 1–4 of subsection 4 of this section continue to apply for five years after the declaration of bankruptcy, the withdrawal of the activity licence, the expiration of the disqualification from holding director’s, liquidator’s or registered representative’s positions and from pursuing a business as a self-employed person, or after the payment of compensation for the harm caused;
2) the disqualification provided in point 5 of subsection 4 of this section does not apply to a person whose conviction has been spent.

§ 81.  Electing and recalling members of the supervisory board

(1) When exercising its founder’s, membership or shareholder’s rights, the holding administrator and the person exercising the founder’s or membership rights must take steps to ensure that:
1) the articles of association of a foundation established by the state stipulate that members of the supervisory board are appointed and recalled by decisions of the founders in accordance with the provisions in the articles of association concerning the allocation of supervisory board appointments to each founder;
2) the articles of association of a non-profit association of which the state is a member stipulate that in a meeting of the members, the proposal to elect to the governing body of the association, or to recall from such a body, is made by the members of the association;
3) the articles of association of a partially state-owned company in which the state is not the sole shareholder stipulate that the holding administrator is entitled to make the proposal to elect to or recall from the supervisory board at least in regard to the number of members of the supervisory board that is proportional to the state’s holding;
4) the articles of association of a partially state-owned company in which the state does not hold a required interest stipulate, in accordance with subsection 2 of section 319, that where this is expedient, some of the members of the supervisory board are selected and recalled by the holding administrator.
(2) If the holding administrator is entitled to select or propose to elect more than one member of the supervisory board, he or she selects, or proposes to elect, the number of members corresponding to one-half of the relevant quota at the proposal of the minister responsible for the area, and selects or proposes to elect the other half at his or her discretion. This does not apply in regard to the transmission network operator described in the Electricity Market Act, the members of whose supervisory board are selected or proposed for election by the holding administrator. Also, the administrator of the holding in the transmission network operator may not select or propose to elect any member of the supervisory board of an undertaking active in producing or selling electricity.
[RT I, 28.06.2012, 1 - entry into force 01.03.2013]
(3) If, in the case described in subsection 2 of this section, the holding administrator is entitled to select or propose to elect an odd number of members of the supervisory board, he or she selects or proposes to elect one more member at his or her discretion.
(4) If the person exercising the founder’s rights in a foundation established by the state is entitled to appoint more than one member of the supervisory board of the foundation, he or she appoints at least one of these members at the proposal of the minister responsible for the area.

§ 82.  Exchange of information

(1) The administrator of the state’s holding transmits to the minister responsible for the area for information a copy of any decisions of the shareholders and of the minutes of the general meetings of the shareholders, which show the activities of the holding administrator in exercising shareholder’s or founder’s rights in the partially state-owned company.
(2) The person exercising the founder’s rights in a foundation established by the state transmits to the minister responsible for the area for information a copy of any decision concerning the selection, election or recalling of any members of the supervisory board of the foundation, and of any other decision made by the founders of the foundation established by the state.
(3) The copies of the decisions and other documents listed in subsections 1 and 2 of this section are transmitted within five business days following the making of the decision, the approval of the minutes or the execution of the document.

§ 83.  Submission of information by candidates for membership in the supervisory board

(1) The holding administrator, the person exercising the founder’s or membership rights and the minister responsible for the area may, in accordance with section 80 of this Act, elect or, in the cases listed in section 81, propose to elect, as a member of the supervisory board only a candidate who:
1) submits a written declaration to the holding administrator to the effect that he or she has perused the requirements provided in legislation in regard to members of governing bodies of legal persons in private law, including the notification obligations listed in section 84, and that he or she meets those requirements and undertakes to observe them;
2) submits the particulars listed in subsection 2 of this section.
(2) The candidate referred to in subsection 1 of this section submits the following particulars:
1) first name and surname, personal identification code or, in the absence of such code, the date of birth, the residential address and education;
2) a full overview of the employment positions and offices held during the last five years together with the corresponding time periods, including particulars concerning membership in a governing body of a legal person in private law;
3) information concerning legal persons which were declared bankrupt or wound up by a court during the last five years and in which his or her participation at the time of the declaration of bankruptcy or of being wound up by the court amounted to more than 10 percent of the share capital or of whose supervisory or management board he or she was a member at that time;
4) information concerning any convictions recorded with the Criminal Records Office;
5) information concerning the companies in which his or her participation at the time of the submission of the particulars exceeds 10 percent of the share capital or of whose governing body he or she is a member, showing at least the total amount of the share capital and the size of the holding belonging to him or her, and the revenue and the list of the areas of activity for the last completed financial year.
(3) The minister responsible for the area may, by regulation, establish a detailed list of the particulars which are required under subsection 2 of this section, the format for the submission of the particulars and the format for the submission of the declaration mentioned in point 1 of subsection 1.

§ 84.  Obligations to be observed by members of the supervisory board

(1) When a candidate described in subsection 1 of section 83 of this Act has been elected member of the supervisory board of a legal person in private law, he or she is obligated to notify the person who is referred to in subsection 1 of section 83 and who has elected him or her to the supervisory board, or who has made the corresponding proposal, of the following facts:
1) of any plans in the company, foundation or non-profit association to undertake transactions which are beyond the ordinary course of its business or which may be of significant importance to the legal person in private law and may entail consequences;
2) of his or her work as a member of the supervisory board or other governing body, including to submit, in the format and within the time-limit requested by the person who elected him or her, information concerning the work of the supervisory board of other governing body;
3) of any change in the particulars he or she has submitted in respect of himself or herself, or of himself or herself not meeting the requirements provided in respect of members of governing bodies of legal persons in private law.
(2) If the candidate described in subsection 1 of section 83 is elected chair of the supervisory board of a partially state-owned company in which the state holds at least a required interest, or of a foundation established by the state, he or she is obligated to submit to the holding administrator or the person exercising the founder’s rights and the minister responsible for the area:
1) the agenda of a meeting of the supervisory board at least three business days before the meeting is held and, within one month following the holding of the meeting, a copy of the minutes of the meeting together with the materials for the meeting;
2) in the case that a resolution of the supervisory board is adopted without calling a meeting of the board, the draft resolution of the board at the same time that it is transmitted to the members of the board, and the record of the vote or the results of the vote within five business days following the vote.
(3) If the candidate described in subsection 1 of section 83 is elected member of the supervisory board of a company in which the state does not hold a required interest, he or she is obligated to submit to the holding administrator and the minister responsible for the area the agenda of a meeting of the supervisory board three business days before the meeting is held and, within three months following the holding of the meeting, the minutes of the meeting. If the supervisory board includes more than one such member, the holding administrator designates one member who was elected to the supervisory board at his or her proposal to perform this obligation.

§ 85.  Remuneration of members or the supervisory board

(1) When exercising founder’s, membership or shareholder’s rights, the holding administrator or the person exercising the founder’s rights must take steps to ensure that the articles of association of a partially state-owned company or of a foundation established by the state reflect the following principles:
1) the amount of the remuneration payable to members of the supervisory board of a state-owned company and the procedure for the payment of such remuneration is decided by the holding administrator by means of a resolution of the sole shareholder;
2) the amount of the remuneration payable to members of the supervisory board of a company in which the state holds at least a required interest, but in which the state is not the sole shareholder, and the procedure for the payment of such remuneration is decided by the general meeting of the company;
3) the remuneration of members of the supervisory board of a state foundation is set by the person exercising the founder’s rights;
4) the remuneration of members of the supervisory board of a foundation whose several founders include the state is set jointly by the founders;
5) unless this Act or the Government of the Republic Act provide otherwise, equal remuneration is set to the members of the supervisory boards of the companies and foundations mentioned in points 1–4 of this subsection. A higher remuneration may be set for the chair of the supervisory board. Additional remuneration may be set for a member of the supervisory board in relation to the participation of that member in the audit committee mentioned in the Authorised Public Accountants Act, or other body of the supervisory board;
6) when paying remuneration to a member of the supervisory board of the company or foundation mentioned in points 1–4, the member’s participation in the board’s meetings and in the work of bodies of the board is taken into account;
7) when recalling a member of the supervisory board of a company or foundation falling under points 1–4 from the supervisory board, no compensation is paid to the member;
8) when, in the case of a company or foundation falling under points 1–4, the obligation described in point 1 or 2 of subsection 2 of section 84 of this Act is not complied with, the person or body which set the remuneration may, following the procedure established in subsection 2 of this section, decide to suspend the payment of remuneration to the chair of the council, or decide to reduce such remuneration proportionately to the period during which the said obligation was not complied with;
9) in accordance with subsection 3 of section 4, subsection 6 of section 521, subsection 4 of section 79 and subsection 6 of section 83 of the Government of the Republic Act the remuneration of a member of the supervisory board is not paid to a minister, the State Secretary or a county governor.
[RT I, 29.06.2014, 109 – entry into force 01.07.2014]
(2) Specific procedure concerning remuneration of members of the supervisory board and the limit rates of the remuneration, which the holding administrator or the person exercising the founder’s rights must have regard to when deciding to approve, or voting on, the articles of association, are established by a regulation of the minister responsible for the area.

§ 86.  Remuneration of a member of the management board

When exercising founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s rights must take steps to ensure that the articles of association of any company in which the state holds at least a required interest, and the articles of association of any foundation established by the state stipulate the following principles:
1) remuneration may be paid to a member of the management board only in accordance with the director’s agreement concluded with that member. Where the member of the management board, in addition to the duties of the member of the management board of the company or foundation, carries out other tasks required by the company or foundation, such tasks may only be remunerated if this is stipulated in the director’s agreement;
2) additional remuneration may be paid to a member of the management board as a function of his or her performance. Reasons must be given for setting a specific amount of additional remuneration, having regard to the attainment of the objectives set to the company or foundation and any added value created, and the market share attained, by the company. The total amount of additional remuneration paid during the financial year may not exceed the amount equivalent to four times the average monthly remuneration paid to the member of the board in the previous financial year;
3) A member of the management board may be granted termination pay only where he or she is recalled from the board on the initiative of the supervisory board before the expiration of his or her mandate. Termination pay may be granted in the amount equivalent to up to three months’ remuneration of the member of the management board as effective at the time of the recall.

§ 87.  Internal control and internal audit

When exercising his or her founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s rights must take steps to ensure that the articles of association of a partially state-owned company or a foundation established by the state reflect the following principles:
1) a foundation established by the state and a company in which the state has at least a required interest, is under an obligation to ensure an operational system of internal control;
2) a company falling under point 1 of this section is under an obligation to create a position of internal auditor or to commission internal auditing services from a firm of auditors, provided that, on the balance sheet date, at least two of the following three consolidated indicators exceed the thresholds provided in this point: sales revenue: six million euros, balance sheet total: three million euros and the number of employees: 75;
3) a foundation referred to in point 1 is under an obligation to create a position of internal auditor or to commission internal auditing services from a firm of auditors, provided that, on the balance sheet date of the reporting year, the balance sheet total exceeds two million euros or the revenue of the reporting year exceeds two million euros;
4) a company or foundation falling under point 1 may forgo creating a position of internal auditor or commissioning internal auditing services from a firm of auditors, if in the view of the supervisory board, this may prove economically expedient. The board’s corresponding decision must be previously endorsed by the general meeting of the shareholders, the person exercising the rights of the founder of the foundation or all the founders;
5) the holding administrator or the person exercising the founder’s rights is entitled to demand the carrying out of a special audit, and to use a unit of the agency which he or she presides over to carry out the audit.

§ 88.  Special rules regarding the management of partially state-owned companies

(1) When exercising founder’s or shareholder’s rights, the holding administrator must take steps to ensure that the articles of association of a partially state-owned company stipulate the following requirements:
1) the articles of association of a company in which the state holds at least a required interest may not circumscribe the powers of the supervisory board provided in subsection 1 of section 317 of the Commercial Code;
2) a private limited company in which the state holds at least a required interest must have a supervisory board;
3) any company falling under point 1 of this section must, when setting the number of members on the supervisory board, take into account the size and financial situation of the company and the need to ensure effective performance of the tasks provided in section 316 of the Commercial Code in regard to the supervisory board;
4) in any company falling under point 1 of this section, the acquisition and transfer of a qualifying holding is to be decided by the general meeting of shareholders. A decision by the general meeting of the parent company is also required in order for its subsidiary to acquire or transfer a qualifying holding in another company;
5) in any company falling under point 1, the general meeting of the shareholders must adopt management and reporting principles in respect of the company’s subsidiaries;
6) the subsidiary of a company falling under point 1 must, for certain decisions, obtain the consent of the general meeting of the shareholders or the supervisory board of the parent company, provided the general meeting of the shareholders has made the corresponding decision;
7) in any company falling under point 1, the general meeting must adopt the rules of procedure of the supervisory board;
8) the supervisory board of a company falling under point 1 must observe the requirements, established by the minister responsible for the area in accordance with subsection 3 of this section, concerning the drawing up of the minutes and the information to be recorded in the minutes of the supervisory board of any state-owned company or any foundation established by the state, and concerning the submission of the information listed in points 1 and 2 of subsection 2 of section 84 of this Act, provided such requirements have been established;
9) the right of another shareholder of a company falling under point 1 to receive information concerning the agenda of the supervisory board and to peruse the minutes of the meetings of the supervisory board;
10) any company falling under point 1 is under an obligation to implement, in its management practices, the good practice of company management and to describe the observance of such practice in a management report which is included in the annual report;
11) any company falling under point 1 may pay out subsidies and make gifts only if this is conducive to the attainment of the company’s activity and financial goals and provided the company’s articles of association provide a procedure for the payment of subsidies, including the principles for the payment of subsidies and the making of gifts, the conditions of making the payments, limit amounts or rates of payments in the financial year and the procedure of making the corresponding decisions.
(2) When exercising founder’s or shareholder’s rights, the holding administrator must take steps to ensure that the procedure mentioned in point 11 of subsection 1 of this section provides that:
1) during any calendar year, the state-owned company and a company in which the state holds at least a required interest, together with the subsidiaries of the aforementioned company which are part of the consolidation group of that company may give out grants and make gifts in the amount of up to 1.5 percent of the average consolidated net profit of the company across the preceding three financial years;
2) information concerning the grants given out and the gifts made is disseminated through the website of the company within three business days following the making of the corresponding decision, and the information remains publicly available on the website at least during four years following the end of the subsidisation or of the making if the gift;
3) the name or designation of the recipient of the grant, the sum of the grant and the reason for giving out the grant are stated on the company’s website.
(3) The minister responsible for the area may establish requirements regarding the information to be recorded in, and the format of, the minutes of the meeting of the supervisory board of any state-owned company or any foundation established by the state, as well as regarding the submission of the information listed in points 1 and 2 of subsection 2 of section 84 of this Act.

§ 89.  Special rules regarding the management of foundations established by the state

(1) The person exercising the founder’s rights must take steps to ensure that the provisions in the articles of association of the foundation established by the state comply with the following:
1) in determining the number of members of the supervisory board, the aims, assets and financial situation of the foundation must be taken into account, as well as the need to ensure efficient performance of the tasks of the supervisory board in planning and organising the work of the foundation and in supervising the work of the management board;
2) unless otherwise provided by law, members of the supervisory board are appointed exclusively by the founders. The articles may also stipulate that up to one-half of the representatives of the state may be selected by the person exercising the founder’s rights on the basis of nominations made by parties named in the articles of association of the foundation;
3) at least by the beginning of the financial year, the supervisory board approves the foundation’s annual activity goals;
4) meetings of the supervisory board take place at least four times per year;
5) the supervisory board must adopt its rules of procedure;
6) the supervisory board must observe the requirements established by the minister responsible for the area in accordance with subsection 3 of section 88 of this Act in regard to drawing up minutes, and the information to be recorded in the minutes, of the meetings of the supervisory boards of state-owned companies and foundations established by the state, as well as the requirements regarding submission of the information listed in points 1 and 2 of subsection 2 of section 84 of this Act, provided that such requirements have been enacted;
7) The minutes of the meeting of the supervisory board must be signed by all members of the board who attended the meeting;
8) any co-founder is entitled to receive information concerning the agenda of the supervisory board and to peruse the minutes of the meetings of the board.
(2) [Repealed – RT I 2010, 38, 233 – entry into force 01.07.2010]

Chapter 7 ADMINISTRATION OF REAL PROPERTY 

Division 1 Special rules regarding administration of built-up real property 

§ 90.  Obligations of the administrator of state assets in administering a built-up immovable property

(1) A built-up real property within the meaning of this Act is an immovable property which includes a building which is registered, or subject to registration, in the Register of Construction Works.
(2) Any built-up immovable property which belongs to the state and which is not needed for the exercise of state authority or for any other public purpose is to be transferred, unless the Government of the Republic decides otherwise.
(3) For using built-up real property in accordance with the aims of the use and expediently, the Government of the Republic, by means of a regulation, establishes the quality standard, floor area use standard and expense standard to be applied in real estate environments.
(4) In administering a built-up immovable property, the administrator of the state assets acts in accordance with the standards mentioned in subsection 3 of this section and with other standards established in laws.
(5) The administrator of state assets arranges the maintenance of built-up immovable property in accordance with generally recognised principles of real property maintenance.
(6) The administrator of state assets must keep a maintenance log and an account of expenses in respect of built-up real property.
(7) In order to assess the observance of the standards and principles mentioned in subsections 3–6 of this section, once every five years the administrator of state assets commissions an audit concerning the expedience of use of the built-up real property which the administrator administers or which the administrator has been authorised to use.
(8) Subsection 2 of this section does not apply in the case of built-up immovable properties located abroad.

§ 91.  Built-up real property provided for the state’s use

(1) The built-up real property which is provided for the state’s use is classed into general-purposes and specific-purposes. The Government of the Republic approves the principles for discovering the rate of the rent by each class of real property and the general terms and conditions of the agreements on provision of property for the state’s use.
(2) For the purposes of this Act, specific-purpose real property means built-up immovable property which is developed with a view to the specific needs of the user and which the market cannot supply within a reasonable time horizon.
(3) A state institution may enter into lease or commercial lease agreements of immovable property for a term exceeding 10 years only with the consent of the Government of the Republic.

Division 2 State-owned company providing real estate services to the state 

§ 92.  Purpose of activities of a state-owned company providing real estate services to the state

(1) The Government of the Republic is entitled to designate a state-owned company to provide real estate services to the state and advise the state in matters concerning real estate (hereinafter, ‘the provider of real estate services’).
(2) The real estate services referred to in subsection 1 of this section are the provision of real property for the state’s use and the management, development, leasing, transferring and acquisition of the state’s real property.

§ 93.  Special rules regarding the articles of association of a company providing real estate services to the state

(1) In addition to observing other provisions which, under this Act, are considered necessary in the articles of association of companies, the holding administrator, when exercising his or her founder’s or shareholder’s rights, must take steps to ensure that the articles of association of the provider of real estate services stipulate the following principles:
1) the aim of the provider of services is to supply the service of providing real property for the state’s use and the service of managing, developing, transferring and acquiring state assets, and of encumbering such assets with limited real rights, and to advise the state in matters related to real estate;
2) the provider of services establishes the procedure for using and disposing of real property, having regard to the principles set out in this Act;
3) the supplying of the service of providing real property for the state’s use must seek the best offer for the state and, where necessary, also broker offers of real properties belonging to other parties;
4) regular publication, on its website, of information concerning its work and submission of information to the State Real Estate Register in accordance with this Act and with the constitutive regulations of the State Real Estate Register, enacted under subsection 3 of section 95 of this Act;
5) in addition to the provision of subsection 1 of section 298 of the Commercial Code, it is in the competence of the general meeting of the shareholders to borrow money and give a security in the amount exceeding 65,000,000 euros, to encumber any immovable property provided for the state’s use with a mortgage, to transfer any immovable property provided for the state’s use, to acquire or transfer a qualifying holding in a company, as well as to authorise a subsidiary to resolve to undertake any of the aforementioned acts;
6) the general meeting of the shareholders may resolve to borrow money and give the security mentioned in point 5, or to transfer an immovable property provided for the state’s use only in accordance with the authorisation of the Government of the Republic;
7) the amount of equity capital of the provider of the services must be at least 30 percent of the annual weighted balance sheet total. The general meeting may resolve that the amount of the equity capital may, for a period specified in the resolution, fall below this value.
(2) The provision in point 1 of subsection 1 of section 88 of this Act does not apply in regard to the articles of association of the provider of real estate services.

Chapter 8 DISSEMINATION OF INFORMATION, REPORTING AND OVERSIGHT 

Division 1 State Real Estate Register and the dissemination of information 

§ 94.  Registration of state assets

The administrator of state assets makes the arrangements to cause the assets that it administers to be recorded in state databases in accordance with the type of the assets and the legislation governing the operation of the relevant database.

§ 95.  State Real Estate Register

(1) A state real estate register is established in order to perform the tasks provided in this Act (hereinafter, ‘the register’). The objective of the register is to give a uniform overview of the real estate which belongs to the state, the real estate which is entrusted into the state’s use, and of limited real rights, and making the state’s transactions in real estate accessible to the public.
(2) The register assembles information from other databases concerning the state’s real estate and limited real rights and creates an environment for the exchange of information between administrators of state assets and for the performance of operations concerning the assets.
(3) The register is founded and its constitutive regulations are established by the Government of the Republic.
(4) The controller of the data in the register is the Ministry of Finance.
(5) The register records:
1) the purpose of use of any immovable property which belongs to the state and information concerning the use of such immovable property;
2) information concerning notices, agreements and decisions on transferring, authorising the use of and writing off any immovable property belonging to the state;
3) information concerning agreements which confer on the state the right to use immovable property;
4) information concerning designations of administrators of state assets and of authorised agencies.
(6) Providers of the data are administrators of state assets or the persons whom such administrators have authorised to act in their stead, and the provider of real estate services referred to in subsection 1 of section 92 of this Act.
(7) A provider of data records in the database of the register information concerning any agreement concerning an immovable property within 10 business days following the conclusion or modification of the agreement.
(8) The provider of the data is responsible for the accuracy and updating of the data recorded in the register.
(9) Data concerning the designation of administrators of state assets and of authorised agencies have legal significance. Other data in the register are for information and statistical purposes only.
(10) Information related to a state secret is not recorded in the register.

§ 96.  Giving notice to administrators of state assets in order to clarify whether real estate belonging to the state is needed

(1) In order to establish whether and to what extent an immovable property of the state is needed by another administrator of state assets or an authorised agency, the administrator of the assets uses the State Real Estate Register to announce its intention to authorise the use of or transfer the property, publishing a notice on the dedicated website.
(2) Administrators of state assets state their position regarding the needfulness of the property and the reasons for that position on the same website within 10 days following the publication of the notice.
(3) If an administrator of state assets fails to state its position within the time-limit, it is deemed to have no need of the immovable property, and no objections to authorising the use or transferring the property.

§ 97.  Dissemination of the data

(1) The data in the register are public and are disseminated through the website of the register.
(2) Unless otherwise provided by law, any agreements on the transfer or use of immovable property whose parties include the state, as well as any amendments and integral parts of such agreements, such as annexes and instruments of delivery and receipt, are disseminated through the public website of the State Real Estate Register. The same applies to any security given in relation to such agreements and to other ancillary obligations, and to assignments of any claims or assumption of any obligations deriving from such agreements.
(3) The composition of the supervisory board and management board of a company in which the state holds at least a required interest, and of the supervisory board and management board of a foundation established by the state, as well as any changes to the composition of those boards and the amount of the remuneration set for members of the supervisory board are disseminated through the website of the holding administrator or the person who exercises the founder’s rights within five business days following the making of the decision and the Ministry of Finance disseminates the data concerning such legal persons in an aggregated form through its website.
(4) Unless otherwise provided by law, the resolutions of a general meeting of any company and those of the founders of any foundation which fall under subsection 3 of this section are disseminated in accordance with the procedure provided in subsection 3.
(5) The reports mentioned in section 98 of this Act are disseminated through the website of the holding administrator at the same time that they are submitted to the Ministry of Finance.
(6) Once per calendar quarter and at the latest by the end of the month following the calendar quarter, any company in which the state holds at least a required interest, and any foundation established by the state, publishes on its website its income statement, its balance sheet and its cash flow statement.

Division 2 Reporting and oversight 

§ 98.  Reporting in respect of state holdings and the exercise of founder’s rights

(1) In exercising their founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s rights must take steps to ensure that the articles of association of a company in which the state holds at least a required interest, and the articles of association of a foundation established by the state stipulate the obligation to submit to the Ministry of Finance and to the National Audit Office, within four months following the end of the financial year, a copy of the audited and approved annual report. An overview of the work of the supervisory board in arranging, presiding over and supervising the activities of the company or foundation, together with the total of remuneration payments made to members of the supervisory and management board during the financial year, is enclosed with the report. The other shareholders of the company and the other founders of the foundation are entitled to demand to be given the report and the overview for perusal within the same time-limit.
(2) Each year, the holding administrator submits to the Ministry of Finance a report concerning the purpose of the state’s holdings and the administration of those holdings. The same applies to the administration of participations in building associations.
(3) Each year, the person exercising the founder’s rights in a foundation established by the state submits to the Ministry of Finance a report concerning attainment of the aims set to the foundation and the exercise of the founder’s rights.
(4) By 1 August of every year, the person exercising the state’s membership rights submits to the Ministry of Finance a report concerning the non-profit associations in which he or she exercises the membership rights. The same applies to participations in apartment associations and communities of co-successors.
(5) The reports mentioned in subsections 2 and 3 of this section are submitted within 30 days following the expiration of the time-limit set out in subsection 1. The reports drawn up by the Ministry of Finance are disseminated through the website of the ministry.
(6) Requirements regarding the content of the reports mentioned in subsections 2–4 of this section, the procedure for submission of the reports and the forms for the reports are established by the Government of the Republic by means of a regulation.
(7) Where securities of partially state-owned company are listed in a regulated market, the holding administrator must observe and, where necessary, take steps to ensure, that the articles of association of the company stipulate that the reports mentioned in subsections 1 and 2 of this section must comply with the requirements regarding dissemination of information effective in the regulated market.

§ 99.  Aggregated reports

(1) Once a year the Ministry of Finance submits to the Government of the Republican aggregated report which concerns the administration of the real estate belonging to the state and which is drawn up on the basis of the information in the State Real Estate Register and, where this is necessary, includes proposals to achieve a better administration of state assets and opinions regarding the expediency of transferring any real estate.
(2) Once a year the Ministry of Finance submits to the Government of the Republic an aggregated report which is drawn up on the basis of the reports mentioned in subsections 1–4 of section 98 of this Act and, where this is necessary, includes proposals to pursue the interests of the state in legal persons in private law, and opinions concerning the expediency of effecting any transfers of state holdings and of continuing the work of foundations and non-profit associations in accordance with the aims pursued by the state’s participation in those foundations and associations.
(3) The Government of the Republic approves the aggregate reports and transmits these without delay as information to the Riigikogu and the State Audit Office. The aggregated reports are disseminated through the website of the Ministry of Finance.

§ 100.  Oversight of administration of state assets

(1) In order to oversee the performance of the tasks provided in this Act, the Ministry of Finance is entitled:
1) to require administrators of state assets and authorised agencies to submit information and documents concerning acquisition of assets and acceptance of assets for state use, and concerning administration of state assets;
2) to conduct on-site inspections in order to check the accuracy of the information entered in the register by the administrator of state assets and the authorised agency;
3) when infringements are discovered, to make recommendations concerning elimination of those infringements or the performance of other necessary operations.
(2) The Ministry of Finance disseminates information concerning infringements of the requirements provided in this Act in the aggregated report mentioned in subsection 1 of section 99 of this Act.

§ 101.  Obtaining an endorsement from the Ministry of Finance

(1) Before making the decision concerning an immovable property or limited real right, or before approaching the Government of the Republic to obtain its consent in accordance with this Act, the administrators of state assets referred to in points 6 and 7 of subsection 2 of section 4 of this Act submit a draft order of the Government of the Republic or a draft directive of the administrator of the assets for endorsement to the Ministry of Finance in the case of the following decisions:
1) acquisition of assets for the state for the purpose provided in subsection 1 of section 10, or with the consent of the Government of the Republic, provided such acquisition does not fall under the Public Procurement Act;
2) acceptance of the use of a assets for the purpose provided in subsection 1 of section 10, or with the consent of the Government of the Republic, provided such acceptance does not fall under the Public Procurement Act;
3) authorisation of the use of state assets, except when encumbering such assets with an easement, real encumbrance or the right of pre-emption, or with a personal right of use related to a utility network or engineering structure;
4) transfer of state assets, except when transferring an easement, real encumbrance or the right of pre-emption;
5) ceding state assets to another administrator of state assets;
6) ceding, in accordance with section 51, state assets to a legal person in private law in which the state participates;
7) the decisions referred to in sections 76 and 78;
8) the commissioning of the audit referred to in subsection 7 of section 90;
9) other decisions of the Government of the Republic which emanate from this Act.
(2) An explanatory memorandum and supporting documents are annexed to the drafts referred to in subsection 1 of this section, having regard to the provisions of subsections 2 and 3 of section 21 and sections 44 and 45.
(3) The Ministry of Finance decides the endorsement of the draft referred to in subsection 1 within 30 days after receiving the documents listed in subsection 2. In complex cases, the Ministry of Finance may extend this time-limit to 60 days, notifying this to the administrator of state assets who submitted the draft.
(4) If, within the time-limit established in subsection 3 of this section, the Ministry of Finance has not notified the administrator of state assets of granting or refusing to grant the endorsement, the draft is deemed to have been endorsed.
(5) Any refusal to endorse a draft referred to in subsection 1 of this section must be based on valid reasons based on the purpose and principles of administration of state assets provided in this Act.
(6) If the Ministry of Finance refuses to endorse a draft for valid reasons, the administrator of state assets may only perform the transaction with the consent of the Government of the Republic.
(7) In the cases not listed in subsections 2 and 3 of section 19 and in subsections 2 and 3 of section 37 of this Act, the Ministry of Finance may demand that the administrator of state assets approach the Government of the Republic to be granted the consent.
(8) Point 2 of subsection 1 of this section does not apply to the lease of enclosed premises abroad.

Chapter 9 Implementing provisions 

Division 1 Implementation of the Act 

§ 102.  Procedures and agreements

(1) The provision in subsection 2 of section 97 of this Act does not apply to agreements concerning authorisation of use or transfer of state assets concluded before the entry into force of this Act, except if such agreements are subsequently modified.
(2) Where this is possible and within one year following the entry into force of this Act, administrators of state assets are to bring into conformity with the provisions of this Act concerning authorisation of the use of state assets any agreements concerning authorisation of use of state assets concluded before the entry into force of this Act.
(21) If an agreement concerning an authorisation to use state assets concluded before the entry into force of this Act in respect of the specific use and care of land which is located within a protected natural object or which contains such an object stipulates the possibility of extending its operation, the administrator of state assets may, when the term of the agreement expires, on a single occasion extend the operation of the agreement by up to five years, while it brings that agreement into conformity with the provisions in the law which govern authorisations of use of state assets.
[RT I 2010, 17, 94 - entry into force 01.05.2010]
(3) Any procedure initiated before the entry into force of this Act concerning the ceding, authorisation to use, transfer or certification as unserviceable of state assets, may be carried through in accordance with the requirements in force before the entry into force of this Act at the latest six months after the entry into force of this Act.
(4) The obligation provided in subsection 4 of section 58 of this Act to transmit to an entitled person a notice concerning the auction is applied starting 1 April 2010.

§ 103.  Defining the purpose of administration of state assets

(1) Within one year following the entry into force of this Act the administrators of state assets must bring the assets that they administer into conformity with the provision of subsection 2 of section 8.
(2) Within one year following the founding of the State Real Estate Register and in accordance with subsection 1 of section 10 of this Act, the administrators of state assets are to define the purpose of administration in respect of each immovable property which they administer.
(3) In accordance with the provision of subsection 2 of section 10 of this Act, the administrator of state assets must, at the latest in the first report to be submitted under subsections 2–4 of section 98, define the purpose of administration of each security, and of participation in each foundation or non-profit association.

§ 104.  Re-registration of state assets, ceding of founder’s and membership rights

(1) Within one year following the entry into force of this Act, the Ministry of the Interior is to make the arrangements to re-register any state assets which was in the administration of county administrations as administrators of state assets as assets which are in the administration of the Ministry of the Interior, or register the county administration as an authorised agency.
(2) Subsection 1 of this section does not apply in the case referred to in subsection 3 of section 4 of this Act.
(3) Within one year following the entry into force of this Act, administrators of state assets, except the ministry referred to in subsection 1 of section 6 of this Act, are to cede the entitlement to exercise membership rights in land improvement associations to the county administration in whose territory those associations are located.
(4) The entitlement to exercise membership rights in land improvement associations in respect of which bankruptcy or liquidation proceedings have been initiated is not ceded to the county administration.
(5) The entitlement to exercise the founder’s rights in a foundation is to be ceded by the county administration to the Ministry of the Interior within three months following the entry into force of this Act.
(6) A constitutional institution retains the entitlement to exercise membership rights in a non-profit association, unless different provision is made in accordance with subsection 2 of section 6 of this Act in the agreement between administrators of state assets. The agreement is to be concluded within three months following the entry into force of this Act.

§ 105.  Ownership reform

(1) If, in respect of a state assets, ownership reform and land reform procedures have not been finalised, the provisions of the Principles of Ownership Reform Act and the Land Reform Act, and the legislation enacted in accordance with those Acts, continue to apply until the relevant proceedings have been concluded.
(2) In transferring an immovable property which is designated as profit yielding land and contains a crop area or a parcel of natural grassland and the use of which was not authorised under the State assets Act, the person entitled under subsection 7 of section 66 of this Act is the person who, until it was decided to retain the land in state ownership, was using more than one-half of the immovable property which is being transferred under an agreement on the temporary use of the land.
[RT I, 05.01.2011, 11 - entry into force 15.01.2011]
(3) In authorising the use of an immovable property which is designated as profit yielding land and contains a crop area or a parcel of natural grassland, and the use of which was not authorised under the State assets Act, the person who participated in the auction and who, until it was decided to retain the land in state ownership, used more than one-half of the immovable property whose use is to be authorised, in accordance with an agreement on the temporary use of land, is entitled to be authorised to use the immovable property for the use fee established in the auction, provided that, if he or she did not win the auction, within five business days following communication of the results of the auction he or she submits a written notification of using that entitlement.
[RT I, 05.01.2011, 11 - entry into force 15.01.2011]
(4) If, by the time that this subsection enters into force, the time-limit for submitting tenders in a public auction procedure has not expired, the provision in subsection 2 of this section applies to any transfer and the provision in subsection 3 of this section applies to any authorisation of the use of an immovable property.
[RT I, 05.01.2011, 11 - entry into force 15.01.2011]

§ 1051.  Transferring an immovable property encumbered with a superficies interest in the course of the land reform

(1) A person in whose favour a superficies interest was created on state land in accordance with the Land Reform Act prior to 20 March 2013 and any successor to that superficies interest is entitled, up to 31 December 2013, to submit an application to acquire the land encumbered with the superficies interest, in accordance with the conditions provided in section 351 of the Land Reform Act, except where this concerns land which is required by the state for the performance of its functions. The application is submitted to the administrator of the state assets and the transfer is arranged by the administrator of the state assets or a person authorised by the administrator. If, at the time when the superficies interest was created, the construction work was in common ownership, the person mentioned in the first sentence of this subsection is entitled to acquire, on the same conditions, the entire land which corresponds to his or her share in the construction work at the time of the transfer of the land.
(2) If the superficies interest on land which is in the ownership of the state has been created in accordance with the Land Reform Act and the person in whose favour the interest was created has not used the option, provided in subsection 1 of this section, to acquire the land at advantageous conditions, each successive superficiary enjoys the right of pre-emption in the event of the transfer of the immovable property. The corresponding observation is recorded in the land register on the basis of an application of the administrator of the state assets.
[RT I, 21.03.2014, 3 - entry into force 31.03.2014]

§ 106.  Legal persons in public law

The provisions of Chapters 3 and 4 of this Act also apply to legal persons in public law, except to local authorities, in relation to possessing, using and disposing of their assets, unless otherwise provided by the law governing the activities of the legal person in public law.

§ 107.  Registration of state land in the Land Register and in the Land Cadastre

(1) Administrators of state assets are under an obligation to cause any built-up properties which belong to the state and which they administer to be registered in the Land Register and to perform the necessary operations by 31 December 2012.
(2) Administrators of state assets are under an obligation to cause any parcels of land which belong to the state and which they administer and which do not fall under subsection 1 of this section, to be registered in the Land Cadastre, and to perform the necessary operations by 31 December 2017.
[RT I, 15.03.2013, 26 - entry into force 20.03.2013]

§ 108.  Bringing legislation and articles of association into conformity with this Act

(1) Administrators of state assets are to establish the procedures mentioned in this Act within six months following the entry into force of this Act. Until such procedures have been established, the procedures established under the State assets Act are followed until the entry into force of this Act insofar as they do not contradict the provisions of this Act.
(2) Within one year following the entry into force of this Act, the Ministry of Finance is to submit for approval to the Government of the Republic the quality standard, floor area use standard and expense standard listed in subsection 3 of section 90 of this Act, as well as the principles for establishing the price of leases mentioned in subsection 1 of section 91 of this Act and the general terms and conditions for lease agreements in which the state is the lessee.
(3) The constitutive regulations of the ministries are to be brought into compliance with this Act within four months following the entry into force of this Act.
(4) Within the areas of government of the ministries, the constitutive regulations of state agencies and of state institutions affiliated to state agencies are to be brought into compliance with this Act within six months following the entry into force of this Act.
(5) When exercising his or her founder’s or shareholder’s rights, the holding administrator and the person exercising the founder’s or membership rights must take steps to ensure that the articles of association of legal persons in private law in which the state participates are brought into compliance with the provision of this Act within six months following entry into force of this Act. In accordance with point 1 of section 79 of this Act, state foundations are to start making settlement transactions through the State Treasury starting 1 January 2011.
(6) Within two months following the entry into force of this Act, the Ministry of Finance is to submit for approval to the Government of the Republic the requirements listed in subsection 6 of section 98 of this Act, the procedure for submitting the reports and the forms of the reports.
(7) Within two months following the entry into force of this Act, the minister responsible for the area is to approve the procedure for remuneration and the limit rates of the remuneration of members of the supervisory boards which is referred to in subsection 2 of section 85 of this Act. Until the entry into force of the corresponding regulation of the minister responsible for the area, the procedure for remuneration and the limit rates of the remuneration of members of the supervisory board continue to apply as effective before the entry into force of this Act.
(8) The administrator of a partially state-owned company which for the purposes of the State Budget Act is part of central government, or the person exercising founder’s rights in a foundation established by the state which for the purposes of the State Budget Act is part of central government, must take steps to ensure that the the articles of association of the company or foundation are brought into conformity with section 75(31) or 79(2) of this Act by 1 May 2014.
[RT I, 13.03.2014, 2 - entry into force 23.03.2014]

Division 2 Termination of the activities of the State Assets Register 

§ 109.  Time-limit for termination of the activities of the State Assets Register

(1) The activities of the State Assets Register are terminated within one year following the entry into force of this Act.
(2) Until commencement of the work of the State Real Estate Register, the operation of the State Assets Register continues in accordance with the procedure in force prior to the entry into force of this Act.

§ 110.  Archiving the data in the State Assets Register

(1) Within six months following termination of the activities of the State Aassets Register, the Ministry of Finance arranges the archiving of the data contained in the register.
(2) The State Real Estate Register uses the data of the State Assets Register in accordance with the procedure established in its constitutive regulations.

§ 111.  Registration of state assets in state databases

Administrators of state assets undertake to register in the relevant registers, by 31 December 2013, any state assets which they administer and which have not been registered in such databases, except in the case provided in section 107 of this Act.

Division 3 Amendments to and repeals of laws 

§ 112. – § 130. [Omitted from this text.]

§ 131.  Entry into force of the Act

This Act enters into force on 1 January 2010.
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