Title: Ministry of Justice Weakens Power of Exemption Committee, Raises Concerns of Favoritism
Subtitle: Controversial decision could impact land transactions and benefit certain groups
Date: [Date]
The Ministry of Justice in Israel has recently issued a document that significantly weakens the power of the Tender Exemption Committee, raising concerns of favoritism and potential misuse of authority. The committee, operated by the Resources and Mineral Industries Administration (RMI) and the Ministry of Finance, determines which land transactions should be exempted from tendering state lands. The move has prompted questions about expanding the Ministry’s own powers while undermining the Exemption Committee.
In practical terms, this decision could result in substantial benefits for the allocation of land worth hundreds of millions of shekels annually. The Exemption Committee receives numerous requests every year from potential land buyers seeking exemptions from land tenders. This avenue not only avoids competition in the tender process but also often leads to significant price discounts for the buyers. In 2021 alone, the committee granted exemptions for land valued at NIS 429 million, spanning an area of nearly one million square meters.
The recent dispute between the RMI, the Ministry of Finance, and the members of the acquisitions committee led to this decision. A document drafted by the deputy legal advisor to the government, attorney Carmit Ulis, suggested significantly weakening the Exemption Committee’s power and leaving the final decision on disputed land assessments to the Exemptions Committee.
One triggering incident for this decision was an appraisal of land in Tel Aviv, where the land’s value fluctuated significantly during the acquisition committee’s assessment process, causing a decrease from 723 million shekels to approximately 330 million shekels. This incident not only attracted attention but also resulted in the Ministry of Finance reprimanding the appraiser involved. Such instances have periodically led the Exemption Committee to retract its decision to approve exemptions, citing discrepancies between the assessments and the real market value.
The Ministry of Justice’s document aims to prevent such cases from recurring as they result in prolonged and costly processes for the applicants. It suggests weakening the Exemption Committee’s power relative to the Accomplishment Committee and emphasizes that the assessment amount should not be a decisive factor when granting exemptions. The document states that the relevant court overseeing the exemption will have limited discretion and cannot reject an exemption solely due to disagreement with the acquisition committee’s land value determination.
Traditionally, farmers seeking to change land zoning, property owners wishing to change land use, and local authorities seeking designated areas for specific purposes have been the main beneficiaries of exemptions from tenders. Notably, the number of exemption requests has been substantial. According to the State Comptroller’s report, between 2017 and 2021, 767 requests were submitted for exemptions from tenders for industrial and tourism land. Additionally, 53% of successful apartment transactions on state land in 2021 were exempted from tendering.
Critics argue that the Ministry of Justice’s decision is not just a power move but also sends a clear signal to the Israel Land Authority. The authority has long awaited a reform to streamline its processes, and the document reaffirms that the reform remains on the agenda despite delays in recent years.
Responding to the Ministry of Justice’s decision, the Israel Land Authority emphasized the need to distinguish between initial land allocation and allocation to existing landowners.
This decision by the Ministry of Justice has sparked a debate about government intervention and potential favoritism in land transactions, raising concerns about transparency and fairness in the allocation of state lands. It remains to be seen how this decision will impact future land deals and whether further reforms will be implemented to address these concerns.