Van der Laan-subsidies

As the subsidies are provided from one governmental authority to another, they in principle do not constitute state aid. This is different when a local authority acts in the capacity of a property developer and receives Van der Laan-subsidies in that capacity. However, since the subsidies in principle cannot be considered state aid, the Dutch government did not consider it necessary to notify the measure to the Commission.

Need for alertness
Nonetheless, the Dutch government should have been more alert to the fact that local authorities use the subsidies for construction projects, in which third-party private undertakings (e.g. property developers and contractors) are involved. In the first part of the measure the national government shifted the problem to the local authorities, stating: "In using subsidies provided under this regulation for construction projects, local governments are required to ensure that the European regulations concerning state aid and public procurement are not violated". However, the problem is that many local authorities are unaware of the fact that this measure has not been notified to the Commission, and the Commission in turn has not been able to approve it or to adopt a negative decision that the aid in question is not compatible with the common market.

Solutions?
The Dutch government has now recognised local authorities' need for added advisory support in this area. The second part of the Van der Laan measure, which was published in the Government Gazette on 12 October 2009, contains more specific information regarding aspects of state aid.
The government has provided the following potential solutions for local authorities:
 

• Verify whether the subsidy can be granted under the national temporary framework for crisis aid. Based on this framework, a maximum of EUR 500,000 in government aid may be provided per undertaking ( i.e. the whole concern) up to 1 January 2011.
• Use the subsidies to provide financial support to private individuals, e.g. loans to first-time homebuyers.
• Verify whether it is possible to revalue the land based on the changed conditions (i.e. the financial and economic crisis), as it has decreased in value.
• Does the aid provided constitute state aid? If so, the aid should be notified to the European Commission.

We would like to point out that other solutions for avoiding state aid problems are conceivable. For more information regarding these possibilities please contact Maria van der Velden.

Make sure you comply with the rules for state aid
If you are involved in a project receiving Van der Laan-subsidies, you must verify whether the subsidy is used in accordance with state aid rules and regulations. Otherwise, there is a risk that  you may have to repay (or recover) the aid including interest, thereby delaying the project.