Effective as of 1 January 2007 Promulgated, SG, No 83 of 16 October 2007, amended, SG, No 53 of 10 June Section I. General Provisions

Transcription

1 DECREE No 245 OF 9 OCTOBER 2007 FOR ADOPTING DETAILED RULES FOR ELIGIBILITY OF EXPENDITURE UNDER OPERATIONAL PROGRAMME REGIONAL DEVELOPMENT, CO-FINANCED BY THE EUROPEAN REGIONAL DEVELOPMENT FUND WITHIN THE FINANCIAL FRAMEWORK Effective as of 1 January 2007 Promulgated, SG, No 83 of 16 October 2007, amended, SG, No 53 of 10 June Section I. General Provisions THE COUNCIL OF MINISTERS DECREED: Article 1. (1) The detailed rules, determining the categories of eligible expenditure under projects, co-financed by the Operational Programme Regional Development, hereinafter referred to as Operational Programme, co-financed by the European Regional Development Fund within the financial framework, shall hereby be adopted. (2) Eligible categories of expenditure under the Operational Programme shall be those, which fall within the scope of financing by the European Regional Development Fund, in accordance with Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJ L 210, , p. p. 1-11). (3) Without conflict with the exceptions, envisaged in the special regulations concerning the funds, also eligible shall be the categories of expenditure for activities, falling within the scope of financing by the European Social Fund, in accordance with Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 concerning the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJ L 210, , p. p ), provided they would make up not more than 10 percent of the total amount of financing under each Priority Axis of the Operational Programme. This expenditure should be in compliance with the detailed rules for eligibility of expenditure under any of the Operational Programmes, co-financed by the European Social Fund. Article 2. (1) Eligibility of expenditure shall be determined in accordance with Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework (SG, No 27 of 2007) and based on the provisions of this Decree. (2) The Application Guidelines of any procedure for selection of projects for

2 providing grant aid or the instructions, approved by the contracting body for direct provision of grant aid within the meaning of Decree No 121 of the Council of Ministers of 2007 for determining the procedure for providing grant financial aid under the Operational Programmes, co-financed by the European Union Structural Funds and the Cohesion Fund and from the PHARE Programme of the European Union (SG, No 45 of 2007), an exhaustive list of expenditures, specifically eligible under the respective scheme or project procedure shall be included and such list may envisage restrictions and/or additional specifications in regard to the specific type, amount, period and conditions for eligibility of the expenditure, based on and within the framework of the national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework, adopted by Decree No 62 of the Council of Ministers of 2007 and this Decree. Section II. Eligibility Period of Expenditure Article 3. The total eligibility period of the expenditure under the Operational Programme shall be determined in accordance with Article 3 (1) of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework from 1 January 2007 to 31 December Section III. Conditions and Rules for Eligibility of Expenditure Article 4. In conformity with the rules of the Ordinance eligible under the Operational Programme shall be the expenditure for activities, determined and carried out under the responsibility of the Managing Authority in accordance with the criteria for selection of operations, approved by the Operational Programme Monitoring Committee. Article 5. (1) In order to qualify as eligible, the expenditure shall simultaneously conform to the following conditions: 1. it shall be required for the project implementation, included into the agreement, respectively in the order within the meaning of Article 3 of Decree No 121 of the Council of Ministers of 2007 for determining the procedure for providing grant financial aid under the Operational Programmes, co-financed by the European Union Structural Funds and the Cohesion Fund and from the PHARE Programme of the European Union and it shall conform to the principles of sound financial management - cost-effectiveness, efficiency and effectiveness of resources invested; 2. it shall be actually incurred and accounted for by basic accounting documents or other documents of equivalent strength as evidence in accordance with

3 national legislation; 3. it shall be actually paid and accounted during the period of eligibility of expenditure under Article 3; 4. it shall be reflected in the book-keeping and tax documentation of the beneficiary and be capable of tracing based on an effectively functioning audit trail; 5. it shall be capable of being established and verified and be evidenced by original cost-supporting documents; 6. it shall not have been funded under another project, programme or other financing scheme, funded by public resources from the national or European budget; 7. it shall be incurred in regard to activities under the Operational Programme in compliance with the provisions of applicable legislation. (2) (amended - SG, No 53 of 2008) Expenditure, paid in the implementation of activities under a project, must be in monetary form, taking into account the exceptions under Article 7, p. p. 7 and 8. (3) (amended - SG, No 53 of 2008) Expenditure, related to fulfilment of contracts for supply of goods, providing services and construction shall be eligible, if the contracts would have been executed in compliance with the requirements of national legislation for awarding public contracts or the provisions of Decree No 55 of the Council of Ministers of 2007 on the terms and procedure for selection of contractor on the part of beneficiaries under contracts for grant financial aid from the European Union Structural Funds and the PHARE Programme of the European Union (SG, No 24 of 2007). Article 6. (amended - SG, No 53 of 2008) (1) The eligible expenditure, required for achievement of the project goals, shall be sub-divided into direct and indirect expenditure. (2) The indirect expenditure, declared on the basis of a flat rate, may not exceed the total value of similar indirect expenditure of the beneficiary based on book-keeping data, which shall be declared by the beneficiary and subject to subsequent verification. Section IV. Eligible Expenditure Article 7. The eligible expenditure under the Operational Programme shall be: 1. purchase of land subject to fulfilment of the following conditions: a) existence of direct connection between the purchased land and the goals of the project co-financed, approved by the Managing Authority and reflected in the contract; b) the value of land purchased must not exceed 10 percent of the total eligible expenditure for the project co-financed; c) submission of evaluation from an independent licensed appraiser or other competent authority, certifying that the acquisition price of the real property would not be in excess of its market value; d) on the date of purchase of the land no real or contractual burdens would exist in regard to it, as would prevent its free usage for the purposes of the project; this circumstance shall be proven by official documents, issued by the competent state bodies;

4 e) seller shall not have purchased the land using public grant financial aid, even in part, during the period of the preceding 10 years prior to submission of the project proposal; 2. expenditure for purchase of a developed real property shall be eligible for cofinancing by the Operational Programme, if directly related to the project goal and the following conditions in regard to the real property would be fulfilled: a) an evaluation shall be issued by an independent licensed appraiser or other competent authority, certifying that its price would not be in excess of the market value and that the building is in compliance with the national legislation; by way of exception, in case the building would contain irregularities from the process of construction, which are capable of being remedied, measures for their correction must be envisaged in the project, except for cases of illegal construction; b) seller shall not have purchased the property (building and/or land) using public grant financial aid, even in part, during the period of the preceding 10 years prior to submission of the project proposal; c) the real property would be used for purpose and term, approved by the Managing Authority; d) on the date of purchase of the property no real or contractual burdens would exist in regard to it, as would prevent its free usage for the purposes of the project; 3. expenditure for construction and construction activities: a) costs, related to surveying, conceptual, technical and detailed designs and with evaluation of conformity of designs under Article 142 (4) of the Spatial Development Act; b) costs, related to securing the necessary permitting documents, required under national law, including any related charges, payable to the respective competent bodies; c) costs, related to preparing documentation for participation in procedures for award of public contracts and for conducting procedures for selection of contractors in compliance with national legislation in this area; d) cost of preparation of construction sites (demolition of existing structures of parts thereof, clearing of the construction site, vertical planning); e) costs for construction and erection works for: aa) (amended - SG, No 53 of 2008) renovation, re-engineering, reconstruction and all types of repairs of buildings earth works, fortifications, repair and rehabilitation of structures, replacement or repair of water mains, waste water, power, heating, climate control, fire alarm, telecommunication installations in buildings, mounting of installations, using renewable energy sources, implementation of energy efficiency measures, including audits of power consumption, energy examination and certification of buildings, finishing works, creating of an architectural environment for disabled individuals and other specific activities, depending on the purpose of the construction project; bb) reconstruction and rehabilitation of roads lay-out, earth works, laying of new road pavement, repair of existing road pavement, building of drainage and fortification facilities, road signalization and marking, protective fences, lighting and other measures, related to road safety; cc) building, reconstruction, repair and rehabilitation of telecommunications infrastructure; dd) (supplemented - SG, No 53 of 2008) building of gas transmission and gas distribution networks; ee) (supplemented - SG, No 53 of 2008) construction, reconstruction and rehabilitation of technical infrastructure up to and within areas of concentrations of business

5 activities/industrial zones; ff) (supplemented - SG, No 53 of 2008) rebuilding, conservation, protection and restoration of monuments of heritage, nature, cultural and historic landmarks; gg) (amended - SG, No 53 of 2008) construction, reconstruction and rehabilitation of technical infrastructure up to and within areas of tourist attractions, placing of tourist signage; hh) building, reconstruction and repair of infrastructure projects for prevention of floods, landslips, etc.; ii) (new - SG, No 53 of 2008) construction, reorganization, reconstruction, rehabilitation and building of public recreation areas (parks, green spaces, playgrounds, etc.), pedestrian walkways and sidewalks, bicycle alleys, subways, street networks, transportation infrastructure, public parking spaces, mounting of energy efficient street lighting, creating of an architectural environment for disabled individuals, security and safety installations and systems, urban environment elements, positioning of advertising, information and monumental and ornamental elements. f) costs for author s and construction supervision; g) costs, related to commissioning of projects into operation (interconnection to exterior power, water supply, waste water, heating power, telecommunication systems and gas distribution network); 4. (supplemented - SG, No 53 of 2008) costs or purchase of new machinery, installations, equipment, furnishings (working inventories), special-purpose transportation means (ambulances, fire fighting vehicles, snow-removal trucks, trash-collection and trashremoval trucks), metropolitan transportation means (tramways, trolleys and buses) and intangible assets; 5. (new - SG, No 53 of 2008) costs for services for: a) development of integrated urban development plans, introduction of automated traffic management and control systems, development of traffic management plans; b) inventorying and evaluation of tourism resources, organization of and/or participation in events (international, national or regional tourist exchanges, expositions, fairs, festivals, seminars, conferences, trainings, working meetings, fora, etc.), preparation and registration of trade marks and geographical designations, development and introduction of quality certification standards and systems, monitoring of effectiveness of marketing activities; c) elaboration of studies and analyses, strategies, action plans and programmes, correspondence learning materials; d) provision of consultations, costs for production and circulation of information and advertisement materials, data bases, advertisement in media; e) elaboration of documentation for procedures of selection of contractor; 6. (previous p. 5, amended - SG, No 53 of 2008) in compliance with the provisions of p. p. 7 and 8 depreciation and in-kind contributions may also be treated as eligible expenditure, if accounted based on book-keeping documents; 7. (previous p. 6 - SG, No 53 of 2008) expenditure for depreciation of depreciating assets, which are directly related to the goals of the project co-financed, shall be eligible subject to the conditions of Article 4 (6) of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework; 8. (previous p. 7 - SG, No 53 of 2008) in-kind contributions shall be deemed eligible in compliance with the conditions of Article 4 (7) of Decree No 62 of the Council of Ministers

6 of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework; 9. (previous p. 8, supplemented - SG, No 53 of 2008) costs for services, directly related to the project, co-financed by the Operational Programme and required for its preparation and implementation, such as transportation, rents, designer, architectural, engineering, IT, consultancy, legal and Notarial, surveys and expert, marketing, sociological and statistical surveys, geodetic surveys, costs for feasibility studies, costs for environmental impact assessments, distribution of information, costs for activities for awareness and publicity of projects, co-financed by the Operational Programme, placing of information panels, financial and book-keeping verification, insurance and other services; 10. (previous p. 9 - SG, No 53 of 2008) expenditure for remunerations of individuals, directly engaged in activities of project management and/or implementation, including the social insurance contributions payable; 11. (previous p. 10, supplemented - SG, No 53 of 2008) costs for business trips (travel, daily subsistence), fees for participation in expositions, seminars, conferences, working meetings, etc. of individuals, directly engaged in activities of project management and/or implementation in-country and abroad, provided the same would have been paid and accounted for in compliance with the applicable regulatory framework in this area; 12. (previous p SG, No 53 of 2008) costs for bank charges for opening and service of accounts only in the cases, where the Managing Authority of the Operational Programme require opening of separate account(s) for the project implementation and this had been expressly indicated in the Application Guidelines; 13. (previous p SG, No 53 of 2008) organization and management costs, determined in Article 4 (8) of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework; 14. (previous p SG, No 53 of 2008) costs related to payments in regard to financial engineering instruments under Article 4 (10) of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework and under the terms of Article 9. Section V. Ineligible Expenditure Article 8. The following types of expenditure shall be ineligible under the Operational Programme: 1. expenditure, defined as ineligible according to Article 4 (13) and Article 9 (1) of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework; 2. expenditure for purchase of used machinery, installations and equipment except for

7 the cases, if the project goals would not be fulfilled without purchase of such equipment and subject to the following conditions being satisfied simultaneously: a) seller would not have purchased them using public grant financial aid, even in part, during the period of the preceding 7 years prior to submission of the project proposal; b) their price would not exceed the market value, established by an independent certified appraiser or duly authorized body by the date of purchase and would be less than the expenditure for acquiring similar new assets; c) they would have the technical characteristics, required for the project implementation and be compatible with the applicable norms and standards and fit for operation for the entire period of the project implementation and for a term not less than the period, determined in Article 57 of Council Regulation (EC) No 1083/2006 of 11 July 2006, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; (OJ L 210, , p. p ); d) approval by the Managing Authority for their purchase shall be in place; 3. expenditure under contracts for supply of goods, providing services and construction, related to the following agreements with sub-contractors: a) agreements with sub-contractors, which increase the expenditure for conducting the activity, without adding value; b) contracts with brokers and consultants, where the price is specified as a percentage of the total expenditure for the activity, unless the beneficiary would be able to prove that payment would relate to work or service actually performed; 4. interest costs, except for cases of subsidization of interest under approved state aid schemes, costs for financial transactions, commissions and losses from foreign currency exchange as well as other costs for purely financial nature; 5. (amended - SG, No 53 of 2008) other taxes and charges with the exception of the cases, envisaged in Article 7, p. 3, letter b) and p. 12; 6. carry-forward costs and debts. Section VI. Specific Cases of Eligibility of Expenditure for Financial Engineering Instruments Article 9. Payments in regard to financial engineering instruments: venture capital funds, guarantee funds and loan funds, as well as in regard to the financial products, provided through them to enterprises, such as loans, guarantees and equity, in accordance with of Council Regulation (EC) No 1083/2006 of 11 July 2006, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, shall be treated as expenditure actually paid in accordance with Article 78 (6) of the same Regulation, provided that the expenditure would be in accordance with the provisions of the Decree. Article 10. (1) The following expenditure shall be eligible in connection with the sustainable urban development investment funds:

8 1. investments into public-private partnership schemes or other sustainable urban development projects, included into integrated sustainable urban development plans; 2. management costs, as determined in the agreements between the Managing Authority and the Sustainable Urban Development Fund, conforming to the conditions and amounts under Article 43, p. 4 of Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund (OJ L 371, , p. 1). (2) Payments for the setting up and/or providing of financial contribution by the financial engineering instruments, indicated in paragraph (1) shall be deemed eligible, if performed based on and in compliance with the provisions of the agreements, signed between the Managing Authority and the sustainable urban development investment fund. Section VII. Specific Cases of Eligibility of Expenditure in Instances of Lease Article 11. (1) Expenditure, paid in connection with lease operations, shall be eligible for co-financing under the Operational Programme and grant aid shall be disbursed to the lessee under the following conditions: 1. the lessee would be direct recipient of the co-financing from the Operational Programme; 2. the lease instalment shall be accompanied by invoice or a book-keeping document of equivalent strength as evidence; 3. in cases of lease contracts, which include a purchase option or a clause for minimum lease period, equal to the useful life of the asset, the maximum amount eligible for co-financing from the Operational Programme, may not exceed the average market value of the asset, established by an independent appraiser or another competent authority as at the moment of execution of the lease contracts; 4. aid from the Operational Programme in regard to the lease contracts shall be paid to the lessee in one or more tranches, in accordance with the lease instalments actually paid, with the exception of the cases of payment in advance; if the term of the lease contract would expire after the end date for receiving financial support from the Operational Programme, only lease-related costs, due and paid by the lessee up to that date shall be eligible; 5. in cases of lease contracts, which do not include a purchase option and the terms of which are shorter than the useful life of the asset leased, only lease payments within the framework of the period of project implementation shall be eligible for co-financing, provided the lessee would be able to prove, that leasing was the most efficient method of acquiring the right of use of the asset; if in applying an alternative method (such as renting of the equipment) expenditure would have been lower, the difference shall be subtracted from the eligible expenditure.

9 (2) other costs, related to the lease contract (taxes, lessor s margin, interest refinancing costs; organization and management expenditure; insurance costs, etc.), shall be ineligible. (3) Lease payments, paid by the lessee in cases of lease with a purchase option and immediate renting of the asset back, may be an eligible expenditure in compliance with the specific provisions of this Article. In such a case expenditure for acquisition of the asset shall be ineligible for co-financing by the Operational Programme. Section VIII. Specific Cases of Eligibility of Expenditure in the Area of Housing Policy Article 12. (1) The expenditure for interventions in the area of housing policy shall be eligible, if paid in accordance with the conditions, set out in the Operational Programme and in accordance with Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 and with Commission Regulation (EC) No 1828/2006 of 8 December 2006 setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund. (2) Eligible expenditure in the area of housing policy under the terms of paragraph (1) shall be the following: 1. costs for repair and rebuilding of the existing structure of residential buildings; 2. costs, related to replacement or repair of all existing building installations (water supply, sewerage, power, heating, ventilation); 3. (new - SG, No 53 of 2008) costs for mounting of installations, using renewable energy sources; 4. (previous p. 3 - SG, No 53 of 2008) costs for repair of roofing of buildings, incl. replacement of the roof water insulation and of elements of the drainage system; 5. (previous p. 4 - SG, No 53 of 2008) costs for applying energy efficiency measures (replacement of joinery, exterior thermal insulation), including of energy consumption audits; 6. (previous p. 5, amended - SG, No 53 of 2008) costs, related to finishing works, forming integral part of the activities under p. p Section IX. Specific Cases of Eligibility of Expenditure for Technical Assistance Under the Operational Programme Article 13. Eligible for co-financing as technical assistance under the Operational Programme shall be expenditure, related to activities of preparation, coordination, management, monitoring, payment, accounting, evaluation, information and control of the Operational Programme, including costs, related to activities of strengthening the administrative capacity for management of the Operational Programme.

10 Article 14. (1) Expenditure for remunerations and supplements to remunerations of civil servants and/or other individuals for performance of activities in connection with preparation, coordination, management, monitoring, payment, accounting, evaluation, information and control of the Operational Programme, shall be eligible for financing, where the duties and responsibilities of these employees would have been specified in: 1. their job descriptions, the tasks assigned in addition to the job description and/or in the contracts for assignment of the activity; 2. the service contracts for performance of any of the activities under Article 13, where the activities carried out remain outside the scope of the job description of the individuals. (2) Costs for social and health insurance contributions, payable by employer in regard to the remunerations paid within the meaning of paragraph (1), shall also be eligible expenditure. Article 15. Other expenditure, eligible for co-financing as technical assistance under the Operational Programme, shall be: 1. (amended - SG, No 53 of 2008) costs for studies, statistical and comparative data and analyses, evaluations and consultancy services, provided by local and international experts, relevant to all aspects of the Operational Programme management and control system; 2. costs, related to the activity of evaluation panels, including Administrative costs and costs for organizing meetings, costs for professional services, provide by outside experts and independent outside appraisers, as necessary; 3. costs for travel and daily subsistence of employees in connection with the activities of management and implementation of the Operational Programme; 4. costs, related to employee training, incl. participation in working visits and meetings with the view of sharing experience and improvement of the organization and methodology of work of employees of the Managing Authority and the regional departments; 5. costs for organizing and conducting of seminars, conferences, working meetings, related to the activities under Article 13; 6. costs, related to dissemination of information and raising the public profile of the Operational Programme, incl. preparation, printing and distribution of promotional materials, audio-visual products, media publications, broadcasting of radio- and TV clips and advertisements, organization of conferences, seminars, working meetings for the media, of campaigns for improving public awareness of the Programme, analysis of opinions and the like; 7. costs for designing and maintaining a website of the Operational Programme; 8. costs for evaluation of the Operational Programme in conformity with the requirements of Article 47 of Council Regulation (EC) No 1083/2006 of 11 July 2006, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; 9. costs, related to organizing and conducting the meetings of the Operational Programme Monitoring Committee and their sub-committees and working groups; also eligible shall be the expenditure for costs for travel and daily subsistence of Monitoring

11 Committee members, provided the costs would not be covered by the organization, which the Committee members represent and would be accounted in conformity with applicable domestic law in this area; 10. costs for preparation of documents for the following programming period; 11. (amended - SG, No 53 of 2008) costs for renting, leasing, purchase and insurance of facilities, equipment, transportation means and other tangible assets, leasing of buildings, required for performance of the activities under Article 13; 12. (new - SG, No 53 of 2008) costs for acquisition, installation, maintenance and updating of intra-agency computerized management systems, including hardware, software, programming products and applications, etc; 13. (new - SG, No 53 of 2008) costs for consumables, materials, fuels and outside services, related to performance of the activities under Article 13; 14. (previous p SG, No 53 of 2008) costs for subscriptions and purchase of printed publications and materials, related to the activities under Article 13; 15. (previous p SG, No 53 of 2008) costs for translation and interpretation, including renting of the required equipment; 16. (new - SG, No 53 of 2008) costs for elaboration of documentation for conducting public procurement procedures. Article 16. As part of technical assistance, expenditure, paid by the Managing Authority, related to strengthening the administrative capacity of beneficiaries for implementation of projects under the Operational Programme, shall also be eligible, including: 1. expenditure for evaluation of needs of specialized training and consultations in regard to the Operational Programme, development and implementation of plans and programs for strengthening capacity; 2. costs, related to identification of project proposals, compiling and maintenance of a data base of ready project proposals; 3. costs, related to activities of building partnerships and networks, including exchange of innovations, experience and best practices. Section X. Accounting of Revenue-Generating Projects Article 17. (1) For the purposes of this Decree revenue shall denote all incomes from the project for the period of its implementation, received from sales, rent, service, receivables, charges, interest on advances provided under contracts executed or other equivalent revenue, with the exception of: 1. revenue, generated during the useful life of co-financed investments and subject to the special provisions in accordance with Article 55 of Council Regulation (EC) No 1083/2006 of 11 July 2006, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; 2. revenue, generated within the framework of the financial engineering operations.

12 (2) The amount of co-financing from the Operational Programme, required for the respective project, shall be reduced by the revenue under paragraph (1). The revenue shall be subtracted from the amount of the eligible expenditure under the project entirely or pro-rated, depending on whether it had been generated in full or in part by the project co-financed. Supplementary Provisions 1. Within the meaning of this Decree: 1. Direct expenditure shall denote the expenditure, which are directly relevant to the activities under the respective project and had been performed entirely for the implementation of the project or form part of the total value of the expenditure, determined on a proportional basis, if determination of the proportion in terms of quantity would be feasible. 2. Indirect expenditure shall denote the expenditure, which is indirectly relevant to the activities under the respective project and which form part of the total amount of the expenditure, determined as a flat rate in the cases, where a precise determination of the portion of the expenditure, relevant to the respective activities under the project would not be feasible. 3. Financial engineering instruments shall denote the holding fund, the urban development fund, the venture capital funds, the guarantee funds and the loan funds. 4. Sustainable urban development fund shall denote a fund, investing into urban development projects via public-private partnerships and into other projects, included into an integrated sustainable urban development plan. 5. Market value shall denote the price within the meaning of 1, p. 8 of the Supplementary Provisions of the Tax - Insurance Procedure Code, determined by the methods of ascertainment of market prices within the meaning of 1, p. 10 of the Supplementary Provisions of the Tax - Insurance Procedure Code. 6. Administrative expenditure shall denote the expenditure, paid by the beneficiary, directly related to usage of office premises/other premises for project purposes and provided they would not include costs, covered under other budget lines, such as office rent, office materials, heating. Lighting and other energy costs, telephone, fax, internet, copying, etc. Transitional and Final Provisions 2. This Decree shall be adopted on the legal basis of the Treaty of Accession of the Republic of Bulgaria to the European Union and Article 56 (4) of Council Regulation (EC) No 1083/2006 of 11 July 2006, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, in relation to of the Transitional and Concluding Provisions of Decree No 62 of the Council of Ministers of 2007 for adoption of national rules for eligibility of expenditure under the Operational Programmes, co-financed from the European Union Structural Funds and the Cohesion Fund, within the financial framework

13 3. Implementation of the Decree shall be assigned to the Minister of Regional Development and Public Works. 4. This Decree shall enter into force as of 1 January 2007.