Important Draft Laws. Issue 41: State Oversight of Local Authorities, Strengthening Combat Immunity, and Abolishing Utility Payments for Destroyed Housing

During this period, 23 draft laws were registered in Parliament: three by the government and 20 by MPs. Among them are proposals to create a national register of decisions made by local authorities and to strengthen oversight of their legality; to clarify under what circumstances service members may be exempt from liability; to cancel utility payments for destroyed homes; and to simplify reporting for specific categories of sole proprietors (FOPs) regarding the Unified Social Contribution (USC). Read more about these and other legislative initiatives in this overview. 

Creating a register of local government decisions and oversight of their legality

Bill No. 13150 was developed within the framework of Ukraine’s European integration commitments, specifically to implement the Ukraine Facility Plan 2024–2027, which includes “establishing a proportional system of administrative supervision over the legality of acts of local self-government bodies, in line with the Council of Europe standards.” The proposal would allow state administrations to check decisions made by local authorities (i.e., village, city, and regional councils). However, such checks must not infringe on the independence of local self-government. That is, state administrations will not be able to interfere in all decisions of local authorities but will exercise control when necessary to protect legality, citizens’ rights, or the public interest.

According to the European Charter of Local Self-Government and Council of Europe Recommendation CM/Rec(2019)3, oversight over local authorities must be clearly defined by law, limited to legality checks, proportionate, and not violate local autonomy. Oversight powers must not overlap, and local authorities should have the right to appeal excessive or unfounded state intervention in court.

Bill No. 13150, which would come into effect one year after martial law ends, addresses part of the legal gaps in this area. It establishes new rules for controlling the legality of decisions adopted by local councils. Acts of regional councils would be reviewed by the Cabinet of Ministers or a designated body. In contrast, acts of city, town, village, and district councils would fall under the supervision of regional state administrations. Currently, the Law on Local Self-Government states that acts by local governments that contradict the Constitution or laws of Ukraine must be invalidated through court proceedings. However, there is no clearly defined procedure for declaring such acts illegal.

Until 2015, prosecutors were authorized to suspend decisions made by local authorities and challenge their legality in court. Today, only individuals or businesses whose rights have been violated by such decisions may file claims, but there are no institutions that systematically review the legality of local government acts or their compliance with the Constitution.

According to the draft law, such oversight bodies would be introduced. The oversight body would formally request a correction if a local government decision violates Ukrainian law or was adopted with procedural violations. If the local authority fails to address the issue within 20 days, the oversight body can go to court to declare the decision illegal.

To simplify the work of oversight bodies, Bill No. 13150 creates a special state register that would store all decisions adopted by local councils and officials, such as village or city mayors. The register would have two parts: an open-access section and one with restricted access (for classified or official documents). Each new decision of a local authority would need to be entered into the register within three working days following its adoption. The register automatically assigns a code to each decision, logs user actions, and ensures document search, storage, and protection. Local self-government bodies must publish their normative legal acts on their official websites (if available), in their own official printed publications, or the media based on contracts for coverage of their activities.

The draft law also aims to expand the powers of heads of local state administrations. They could coordinate the regional local offices of ministries and state bodies, request the cancellation of illegal orders issued by their heads, and appeal to the government if the ministry leadership fails to respond to such proposals within a month.

However, the bill does not define the distribution of powers among different oversight bodies or provide clear rules to avoid duplication of functions in the oversight system. It is necessary to clearly define who is responsible for what and introduce mechanisms to protect local authorities, for instance, by allowing them to appeal oversight decisions in court.

Clarifying combat immunity and military liability during wartime

Bill No. 13146 clarifies the situations in which the actions of military personnel during wartime are not subject to criminal prosecution. Current legislation already includes the concept of combat immunity — exemption from liability for military members, police officers, volunteers, and others involved in national defense for actions aimed at protecting the country, provided they did not involve torture, prohibited warfare methods, or other grave violations of international humanitarian law. The draft proposes to clarify and expand these provisions in the Criminal Code, recognizing as permissible actions those that harmed the enemy and those that may have caused losses to Ukrainian forces, damaged equipment or property, or harmed the interests of the state or individuals.

The draft law also clarifies when military personnel may be liable for negligence. The proposal suggests that liability would apply only if the service member had a “real opportunity to act appropriately” but failed to do so. The penalties would remain unchanged — a fine or up to three years of imprisonment.

No utility charges for war-damaged or destroyed housing

Bill No. 13155 proposes exempting residents from paying for utilities if their housing was damaged or destroyed due to hostilities. This would prevent situations where people whose homes were hit by missiles continue receiving utility bills, as is currently happening in some places, like Kherson. The provision would apply to apartments in multi-story buildings and other property types, such as garages or structures on adjoining land. If a home or part of a house is no longer suitable for living or poses a threat to life, utility payments would be temporarily suspended.

Local governments or military administrations would decide to suspend utility charges after inspecting the damaged property. They must notify utility providers, building managers, and tax authorities of the inspection results. The notice would include the date the property became uninhabitable and the date it is considered restored. Utility charges would be suspended or resumed accordingly. If the property can be repaired, utility charges would not be collected during the repair period.

During martial law and for one year after its end, the accrual of real estate tax on destroyed property would be suspended until relevant decisions are made by the government (at the national level), regional administrations (at the regional level), and local self-government bodies (at the local level) regarding the establishment (restoration) of real estate tax or the absence of such tax if the property is destroyed.

The draft law also proposes allowing homeowners’ associations or housing cooperatives to vote to fully or partially exempt residents whose homes were destroyed from mandatory payments, such as building management fees, security services, reserve fund contributions, repairs, and other charges.

Simplified tax reporting for certain FOPs and small businesses

Bill No. 13108-1 proposes changes to tax reporting rules. Currently, businesses and sole proprietors (FOPs) employing workers under labor contracts must submit monthly reports on the Unified Social Contribution (USC) payment. The bill proposes allowing quarterly reporting for entrepreneurs with fewer than 10 employees receiving government social benefits. Others — those with more than 10 employees, employees receiving pensions or other state assistance, or those who voluntarily choose monthly reporting — would still be required to report monthly. If entrepreneurs switch to quarterly reporting mid-year, they must continue reporting monthly until year-end.

Additionally, the draft law proposes exempting FOPs and members of farming households from reporting altogether if they pay at least the minimum USC amount (₴1,760) monthly. In this case, payment information would be automatically entered into the state register of insured persons. If the paid amount exceeds the maximum contribution (₴26,400), the “excess” would be credited toward future months. The Cabinet of Ministers would define detailed rules for recording and verifying such automatic reporting.

Changing the rules for dividing marital property

Bill No. 13158 proposes amending the rules for dividing marital property between spouses. Currently, spouses may divide shared property by mutual agreement or through the court, even before a divorce. The division agreement must be notarized if real estate is involved (e.g., a house or apartment). The bill introduces a provision that if one spouse sells or uses property without the other’s consent, and the transaction was not made in the family’s interest, this property would still be included in the division process. In such a case, the spouse who sold the property must pay the other half its value. If it is impossible to determine the actual value, the court would rely on the market price of similar property at the hearing.

Prohibiting Russian citizens from owning businesses, land, or natural resources in Ukraine

Bill No. 13151 proposes banning Russian citizens and companies they own or control from acting as founders, participants, or beneficiaries of Ukrainian business entities. Currently, a Cabinet of Ministers resolution prohibits the activities of Russian-owned companies in Ukraine.

Bill No. 13152 states that citizens and legal entities of Russia would not be able to own land or use water resources and subsoil in Ukraine. Currently, under the Land Code, foreigners and stateless persons may acquire ownership of non-agricultural land plots where their real estate is located through purchase, gift, exchange, or inheritance. They must sell any inherited agricultural land within one year. According to the Water Code, foreign individuals and companies can use water resources. However, the Law on Subsoil already prohibits Russian citizens and their companies from using subsoil resources.

Bill No. 13153 introduces amendments to the law on the forced seizure of Russian assets in Ukraine. It expands the definition of a “resident of the Russian Federation” to include the use of asset seizure. Currently, residents of Russia are understood to be legal entities, but if the bill is adopted, citizens of Russia would also be considered residents. This means the forced seizure of assets could be applied to companies connected to Russia and individuals, including Russian citizens. Furthermore, it would become possible to confiscate not only assets directly owned by such individuals or entities but also assets held indirectly through third parties.