APPLICANTS HANDBOOK

for

PROJECT GENERATION AND DEVELOPMENT

5th Call for proposals HURO/1101

Applicants Handbook

Table of contents
I. ELIGIBILITY RULES ..................................................................................................................................... 5 I.1 General eligibility requirements for projects ............................................................................................... 5 I.1.1 Cross-border character and impact .................................................................................................... 5 I.1.2 Criteria for joint projects ...................................................................................................................... 6 I.1.3 The Lead Partner Principle (LPP) ....................................................................................................... 7 1.2 Territorial eligibility..................................................................................................................................... 7 1.3 Eligibility of applicants ............................................................................................................................... 8 I.3.1 Exclusion criteria ................................................................................................................................. 9 I.3.2 Special eligibility criteria for infrastructural investment projects ....................................................... 10 I. 4 Eligibility of partnerships ......................................................................................................................... 10 1.4.1 Roles within the partnership ............................................................................................................. 11 I.4.2 Balanced partnerships ...................................................................................................................... 11 1.5 Eligibility of activities ............................................................................................................................... 12 I.5.1 Compliance with the scope of the programme ................................................................................. 12 1.5.2 Non-eligible activities ....................................................................................................................... 13 1.5.3 Information and publicity measures ................................................................................................. 13 I.6 Eligibility of costs and budgets ................................................................................................................. 14 I.6.1 General rules on the eligibility of costs ............................................................................................. 14 I.6.2 Eligibility period ................................................................................................................................. 15 I.6.3 Geographical eligibility ...................................................................................................................... 15 I.6.4 Eligibility by category of costs ........................................................................................................... 15 I.6.5 Non-eligible costs .............................................................................................................................. 21 II. RATE OF FINANCING AND FINANCIAL ELIGIBILITY ............................................................................. 23 II.1 Form of support ....................................................................................................................................... 23 II.2 Rate of funding ........................................................................................................................................ 23 II.3 State aid .................................................................................................................................................. 24 III. PROJECT APPLICATION AND ASSESSMENT ...................................................................................... 25 III.1 Project assessment and evaluation process .......................................................................................... 25 III.1.1 Evaluation phases: .......................................................................................................................... 26 III.2 Handling of complaints ........................................................................................................................... 29 IV. SUPPORT FOR APPLICANTS................................................................................................................. 30 V. RELEVANT EUROPEAN AND NATIONAL LEGISLATION ...................................................................... 32 VI. GLOSSARY OF TERMS ........................................................................................................................... 38 VII. LIST OF ANNEXES ................................................................................................................................. 40 ANNEX NO. 1. TABLES OF INDICATIVE ELIGIBLE ACTIVITIES BROKEN DOWN BY ACTIONS ........... 40 ANNEX NO. 2 - LIST OF INDICATORS ....................................................................................................... 48

Applicants Handbook

Dear Applicant!

This handbook is a document intended to offer you support in preparing successful projects within the Hungary Romania Cross-Border Co-operation Programme 2007-2013.

As its title suggests, it provides information and guidance regarding the rules and procedures to be observed by applicants when planning their projects and stresses out the main elements the applicants shall be aware of when dealing with a cross-border project. However, it does not replace other documents. Applicants are invited to carefully read the documents listed in the application package, as well as the Programme Document (Operative Programme) in order to be able to prepare their applications in compliance with the rules governing this Programme, including relevant national and community legislation. The handbook cannot cover and predict all situations, so it is intended to tackle general issues. Based on the guidance and contacts provided, the applicants shall be able to identify the source of information they need in order to get the right answer to their questions and be able to prepare their projects and applications. Please keep in mind that information regarding the rules and procedures regarding the implementation of projects can be found in the Project Implementation Handbook, downloadable from our programme website.

Hoping that this handbook will give you the required support,

The Managing Authority and the Joint Technical Secretariat wish you success in your project application process!

Applicants Handbook

INTRODUCTION THE HURO CBP 2007-2013

Hungary-Romania Cross-Border Co-operation Programme 2007-2013 continues the former cross-border programmes implemented in the region, extending and building upon the results and experiences of the past programmes: Interreg IIIA in Hungary and Phare CBC in Romania. Its main goal is to bring the people, communities and economic actors of the border area closer to each other in order to facilitate the joint development of the co-operation area, building upon the key strengths of the border region. In pursuing this objective, the programme provides for two Priority Axes, which reflect the main streams of cooperation: Improvement of the key conditions of joint, sustainable development in the co-operation area Strengthen social and economic cohesion of the border area

The indicative financial allocation for each the priority axis mentioned above is listed in the following table. These amounts are composed of the Funds coming from the European Regional Development Fund, as well as from the national public contribution of the two member States. The financial allocations will be granted to projects during the programme period on competitive basis in the frame of open calls for proposals:

Community funding (a) 114 482 217

National public 1 funding (b)

National private funding (c) 0

Total funding Cofinancing (d) = (a)+(b)+ rate% (c) (e)=(a)/(d) 134 684 961 85

Priority Axis 1: Improvement of the key conditions of joint, sustainable development in the cooperation area Priority Axis 2: Strengthen economic social and

20 202 744

96 524 222

17 033 686

113 557 908

85

Cohesion of the border area Total 211 006 439 37 236 430 0 248 242 869

The amount is incorporating the state co-financing and the applicants own public contribution that shall be assigned to the total community contribution (ERDF) in the frame of the call for proposals through the whole programme period.

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I. ELIGIBILITY RULES
The programme imposes a set of eligibility criteria for projects, namely: General eligibility requirements for projects; Territorial eligibility; Eligibility of applicants; Eligibility of partnerships; Eligibility of activities; Eligibility of costs.

I.1 General eligibility requirements for projects

Projects will be considered eligible in case: They are in line with the objectives and the Priority axes of the Programme as described in the Programme Document; They are in line with one of the Key areas of intervention and Actions of the present Call for Proposals (please see Annex 1 of the Handbook, Tables of indicative eligible activities broken down by actions); The duration of the project is in line with the minimum and maximum number of months indicated for the respective action in the Call for Proposals; The grant amount requested must respect the minimum and maximum grant amounts indicated for the respective action in the Call for Proposals; Have a provable cross border character and impact; Fulfil at least two of the following joint criteria: joint development, joint implementation, joint staffing, joint financing; Are in accordance with the Lead Partner principle; Respect the requirements and limitations presented in this Call, the Applicants Handbook and the Programme;

I.1.1 Cross-border character and impact

The overall objective of the programme is to tackle problems and needs that are not limited by boundaries and their elimination or decrease requires common solutions. In order to be eligible, projects shall prove the existence of the cross border character right from the project generation and project development phase. This is meant to be achieved through interventions and measures that, although seemly similar to those contained in the national, sectoral and regional operational programmes, differentiate themselves through their explicit crossborder dimension. The actions envisaged for this programme have to have a strong cross-border character, must be relevant for and represent the interest of both countries. The projects have to reflect common needs of the border area, and to tackle problems from a clear cross-border perspective. The cross border character shall lay the ground for the cross border impact, therefore in the absence of a CBC character there will be no CBC impact either. The cross border feature shall accompany the project through its whole lifecycle as follows: cross border character in project generation and development phase; cross border character in project implementation phase and visible at the level of project concrete results and objectives; cross border impact following project closure.

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DEFINITION! Cross border character

o o o o

DEFINITION! Cross border impact

the need for the implementation is manifesting on both sides of the border; target groups can be identified on both sides of the border; the project is focused on a problem having a real cross border dimension; the project tackles issues which are of common interest to all the partners involved and proposes solutions to a problem that can be easily transferable to other areas presenting similar characteristics; The results of the project provide added value in the eligible programme area and have a long lasting effect even after the closure of the project on both sides of the border, which effect is directly linked to the project activities and/or defined target groups.

The cross-border character and impact of the projects will be closely checked during the project assessment and will result in rejection of the projects, if not proven.

I.1.2 Criteria for joint projects

One of the special features of the new programming period is the obligation to respect at least two of the four 3 joint criteria listed in the Regulation , i.e. joint development, joint staffing, financing and implementation. The aim of these criteria is to develop sustainable cross border partnerships with effective and sustainable cooperation and long lasting positive effect on the programme area. The requirement of meeting two of the four criteria is a minimum requirement, applicants being encouraged to address all of them, since these shall reflect the basis of their cooperation. The joint criteria give an overall image on the quality of the partnership. In most of the cases, joint development of a project (designing activities and responsibilities in common) implies joint implementation; furthermore, in order to implement a project jointly, it is inevitable to finance or staff the activities together. Also, when deciding to implement a project together, it is quite plausible that the partners were involved in its development, and that they participate in its financing and staffing. Therefore, the fulfilment of the joint criteria requirement should not be a problem for the applicants and it will only increase the quality of the cross-border project. NOTE! Based on the criteria of joint financing, projects will be evaluated from the point of view of the proportionate sharing of tasks and responsibilities and relative budgets among partners, as well. The table below defines the meaning of the joint special criteria. DEFINITION! Project development should be a process where the partners present and refine the project idea, establish objectives, name a Lead Partner, plan activities with clearly defined inputs and responsibilities from each partner and allocate the necessary budget for them. Therefore: The partnership shall be established before the submission of the full application. The joint project design shall be demonstrated as such in the application Joint work packages shall be designed with clearly defined inputs from the partners. Joint development
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Projects financed within the Hungary Romania Neighbourhood Programme 2004-2006 were financed on the one hand from preaccession on the other from Structural Funds, having separate rules and management structures. Therefore, the cross-border projects were either individual or mirror projects, that reflected their impact in the cross-border area. The new programming period is providing a unified European financial source (the ERDF) for both sides of the border, with joint rules and management structures. Thus, joint projects can now be developed with a stronger effect in both countries. Regulation 1080/2006 Article 19.

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Joint implementation means that the Lead Partner and at least a Project Partner from the other side of the border (Cross-Border Partner) work together on the project with a clear, content based inter-connection among the activities on both sides of the border. Furthermore: activities should be complementary to each other, not performed in parallel; though the Lead Partner bears the overall responsibility for the project, all partners participate and take responsibilities for the realization of the core activities; The joint implementation and sharing of responsibilities of the partners should be clearly reflected in the Partnership Agreement, in the Activity Plan and in the detailed budget; Joint implementation can be strengthened by setting up a Project Steering Committee. Joint staffing is reflected by a balanced and qualified joint project team, proportionate in size with the necessities of the project, where each partner shall represent itself with internal or external staff (administrative and professional) in order to implement the activities envisioned. Each staff member must have the necessary experience for implementing the activities envisioned. The management staff should carry out their project related duties on both sides of the border. Within the staff, a balanced distribution of activities and responsibilities shall be made, avoiding function duplication and parallel project management activities, for example, one project manager and one financial manager should be sufficient for the entire project in case of small scale projects; Tasks shall be distributed among the project management staff in proportion with the resources allocated for it in the partner level budget; In the application it shall be demonstrated that staff members will work in close connection and exchange information regularly in order to ensure an efficient project management; Joint project staffing includes regular cross border meetings among Project Partners, clear responsibilities of the partners involved and a transparent internal communication system. For each project there will be a single Subsidy Contract, therefore a single joint budget. However, the joint budget shall be divided among partners in a balanced way, depending also on the responsibilities assumed and own contribution ensured. The project shall finance the participation in at least one core activity (not only administrative and management costs) for at least one Hungarian and one Romanian partner, in the programme territory; Each applicant shall contribute with co-financing proportionately with the requested funding, confirmed by bank statements; Staff costs shall be paid on both sides of the border (external services are not included).

DEFINITION! DEFINITION!

I.1.3 The Lead Partner Principle (LPP)

The Council Regulation 1080/2006 (ERDF) establishes for the 2007-2013 programming period as compulsory the implementation of the Lead Partner Principle in cross border programmes. In accordance with that, all partnerships have to designate one partner among themselves to act as Lead Partner, who will submit the project proposal on behalf of the entire partnership and will hold the responsibility for the implementation of the whole project, including all actions carried out by either partner. For more information on division of tasks among partners please see Chapter 1.4 Eligibility of Partnerships.
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1.2 Territorial eligibility

According to the approved programme document, the eligible activities shall be implemented in the target area of the programme, comprising the territory of eight cross border counties being part of North Great Plain and South Great Plain Regions in Hungary and of the North West and Western Region from Romania.
4 Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJ L 210 31. 07. 2006);

Joint financing

Joint staffing

Joint implementation

DEFINITION!

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Eligible counties in Hungary: Szabolcs-Szatmr-Bereg, Hajd-Bihar, Bks and Csongrd. Eligible counties in Romania: Satu-Mare. Bihor, Arad and Timis. The special conditions regulated by Art. 21 of the ERDF Regulation governing the location of an operation and the eligibility of expenditures incurred outside the programme area - adjacent NUTS III level areas or outside the European Union are not applicable within this cross border programme. Thus no expenditures incurred from activities and operations implemented on the territory of counties outside the programme area and the European Union will be financed from the existent funds. Exemption from this rule can constitute, in certain well justified cases, those expenditures that are closely related to operations implemented outside the programme area, being directly related to project objectives and indispensable in what regards the success of the project. These activities and expenditures shall be clearly defined in the application phase and will be approved by the Joint Steering Committee on a case by case basis, and even if approved, cannot exceed 20% of the total eligible costs.
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1.3 Eligibility of applicants

In the framework of the present programme only those non-profit legal persons can apply for financing and become Lead Partners or Partners that are established based on the relevant national public or private law and act in the purpose of public benefit. All applicants directly involved in the project have to prove their professional, operational/administrative and financial capacity to manage their share of activities in the field of action they are applying for and must have direct responsibility for the preparation and management of the proposed actions both from a professional and from a financial point of view, not acting as intermediaries.

Lead Partners and Project Partners (for precise definitions see Chapter I.4 Eligibility of partnership) have to comply with the following conditions: 1. Have to be organizations falling into one of the following categories: public bodies and public equivalent bodies. Based on Directive 18/2004 EC, a body governed by public law means any body: i. Established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character; ii. Having legal personality, and iii. Financed, for the most part, by the State, regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies 6 governed by public law . non-profit private bodies: any non-profit legal body established under the private law, acting in the general public interest. Please note that based on this only non-governmental organizations and Chambers of Commerce can apply! European Groupings for Territorial Cooperation (EGTCs) introduced by Regulation (EC) 1082/2006, and established according to the national legislation of Hungary (Regulation (HU) 99/2007) and Romania (Gov. Decree (RO) 127/2007) are considered eligible in case they satisfy the eligibility criteria applicable for each applicant, excluding the necessity to have a cross border partner.

Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJ L 210 31. 07. 2006); 6 For HU applicants: according to Annex 1 and 2 of the Bulletin 9001/2002 (SK 3.) of the Central Statistical Office

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EGTCs have to meet the following criteria: a) To be established by legal persons governed by public or private law having their seat on the territory of Hungary and Romania; b) To have their seat in the eligible programme area; c) To have incorporated in its statute as objective and field of activity the contribution to the development of the eligible cross border programme area; As described in the two national legislations and the Regulation, other legal bodies similar in construction to EGTCs, can equally act as sole beneficiaries, according to the interpretation of the Lead Partner principle by the Coordination of the Committee of Funds. 2. Have their seats or a regional/local branch registered in the eligible programme area, i.e.: Szabolcs- Szatmr Bereg, Hajd-Bihar, Bks and Csongrd counties in Hungary and, Satu Mare, Bihor, Arad and Timi counties in Romania; In case the organisations headquarter is registered outside the eligible programme area, but there is a regional/local branch office with a legal entity in the eligible programme area, then the regional/local branch shall apply for financing and in case of contracting, it shall be the beneficiary. In case the organisations headquarter is registered outside the eligible programme area and its branch office is not a legal entity, the main organisation shall apply and, in case of contracting, it shall be the beneficiary. In this special case, the organisation shall meet the following criteria: a) The regional/local branch office needs to be registered at least one year before the launch of the present Call for proposals, which shall be proved by at least one of the following documents: Copy of the Register and/or Deed of Foundation and/or Statutes and/Articles of Association b) The legal representative of the main organisation shall nominate the person responsible for acting in the scope of the project implementation (Annex 9 to the Application Form);

Individuals, bodies with an industrial or commercial character and political parties may not apply! In addition to the Lead Partner and Partners, Associated Partners can also be involved to support the implementation of the project if their experience or field of competence constitutes an important input of added value for the project. Associated Partners shall not receive financing and will not bear direct responsibility for the preparation and management of the project activities. Associated Partners must be established based on the relevant national public or private law and have their seats on the territory of one of the following countries: EU/EEC Member State or EU candidate country or preaccession country. Political parties and individuals may not be Associated Partners!

I.3.1 Exclusion criteria

All applicants (Lead Partners, Project Partners) shall prove their professional and financial liability by not falling under any of the cases presented below. In order to ensure the fulfilment of the financial commitments, applicants to whom the following cases apply, cannot receive funding: a) they are bankrupt or being wound up, are having their affairs administered by the courts, have entered into an arrangement with creditors, have suspended business activities, are the subject of proceedings concerning those matters, or are in any analogous situation arising from a similar procedure provided for in national or EU legislation or regulations; b) they have been convicted of an offence concerning professional conduct by a judgement which has the force of res judicata (i.e., against which no appeal is possible); c) they are guilty of grave professional misconduct proven by any means;

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d) they have not fulfilled obligations relating to the payment of debts to the consolidated state budget, like for example social security contributions or the payment of taxes in accordance with the legal provisions of the country in which they are established; e) they have been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organisation or any other illegal activity detrimental to the Communities' financial interests; f) they have been declared to be in serious breach of contract for failure to comply with their contractual obligations in connection with a procurement procedure or other grant award procedure financed by the Community or national budgets; g) are subject to a conflict of interests; h) are guilty of misrepresentation in supplying the information required by the Managing Authority as a condition of participation in the Call for Proposals or fail to supply this information; i) have attempted to obtain confidential information or influence the Joint Steering and/or Joint Monitoring Committees or the Managing Authority or the Joint Technical Secretariat during the evaluation process of current or previous calls for proposals; In the cases referred to in points (1), (3), (4), (5), (8) and (9) above, the time of exclusion shall be decided by the JSC on case by case basis.

I.3.2 Special eligibility criteria for infrastructural investment projects

In addition to the conditions mentioned above, in case of infrastructural development projects, the applicant must prove the ownership or user rights of the land and/or building. The ownership has to be proven by a land or building registration act from the relevant public registers, according to the national legislation. In case the land is in concession, it must be proved that the duration of the concession of the land is in line with the provisions of article 57, paragraph 1 from Regulation 1083/2006 and that the landowner has given his written agreement to the applicant to perform the investment. In case the land or building is not in the ownership of the Lead Partner/Project Partners, then a long term rental contract or the adequate document proving the right of long-term use shall be presented guaranteeing the utilization of the building for the purpose of the operation for the Lead Partner and/or the Project Partner(s) for at least ten years following completion of the operation. The same consent of the owner has to be attached as in case of concession. In all cases, the building and/or the land must be free of any encumbrances, must not be the object of a pending litigation neither the object of a claim according to the relevant national legislation.

I. 4 Eligibility of partnerships
All partnerships, as a minimum, must comprise a Lead Partner organisation/institution and a Cross-Border Partner organisation/institution. Each Project Partner has to individually meet the eligibility criteria for applicant organisations listed in Chapter I.3. Based on the Lead Partner Principle (LPP), the organizations, institutions involved in a project according to their financial, professional commitment, undertakings and responsibilities may be classified according to the following categories: Lead Partner (or Lead Applicant, hereinafter LP); Project Partner (hereinafter PP): Cross-Border Partners (CBP) Domestic Partners (DP)

Associated Partners (AP).

European Groupings of Territorial Co-operation (EGTC) are exempted from the compulsory criteria to act in partnership with at least one CBP, nevertheless it not forbidden for them to act in partnership or have AP (s).

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1.4.1 Roles within the partnership

The partnership shall aggregate partners with common needs and objectives who are ready to establish good cooperation and collaboration relations. Partners must commit themselves by signing a Partnership Agreement that regulates the division of tasks and responsibilities within the partnership (to be submitted along with the application, for the model please see the Application Package) to collaborate for the implementation of the project they are applying for financing. The number of partners should be limited to the professional and/or financial needs of the project; partners without effective and tangible contribution shall not be included in the partnership. The Lead Partner (LP): As described above, for each project one particular organisation from the partnership needs to be nominated as Lead Partner (LP) in order to represent and to mediate the whole project towards the programme bodies. The LP will ensure the smooth cooperation and communication within the partnership and shall oversee the fulfilment of the activity packages under various partners responsibilities. In all cases the Lead Partner has to have the necessary financial and human resources in order to coordinate the management of the project, as well as the required financial liquidity in order to smoothly implement the project financially The Project Partner(s): As mentioned above, partnerships must have at least one Cross-Border Partner (CBP) to the Lead Partner organisation while further partners, either Cross-Border and/or Domestic Partners (DP) can be involved in the implementation should the content of the project justify it. The role of the PP(s) is as much important in the implementation of joint projects as that of the LP. PPs are required have the necessary human resources and the financial liquidity in order to be able to carry out their own tasks. They shall be accountable for their activities and assume responsibilities in the event of any irregularity during the implementation of the project. Therefore the partnership shall define the roles in such a way to ensure the implementation of the project and minimise the risk possibilities that might occur because of lack of administrative, management and financial capacities, as well as internal and external communication. The Associated Partners (AP): In specific cases, in addition to the LP and PP, Associated Partners can be involved to support the implementation of the project if their experience or field of competence constitutes an important input of added value for the project. However, an AP cannot take the role of Lead Partner or cannot be designated as the compulsory Cross-Border Partner. In accordance with it, the APs will not bear direct responsibility for the preparation and management of the project activities. NOTE! Partners (Lead Partner, Project Partners or Associated Partners) cannot be each others SUBCONTRACTORS! All external contracts concluded in order to provide services, goods or works shall be concluded with third parties independent from the partnership!

I.4.2 Balanced partnerships

Partnerships established for the implementation of projects must be balanced in terms of: Professional expertise: all partners must be able to contribute with their specific expertise to the realisation of the objectives of the project Activities: the division of roles and responsibilities for the implementation of the project activities must be proportional to the professional, administrative and financial capacity of the partners. However, each partner must participate in at least one core activity (other than compulsory preparation, management and communication activities) within the project activity structure Budget: the project budget shall be divided among partners in a balanced way, depending also on the responsibilities assumed and own contribution ensured. Each applicant shall contribute with own cofinancing proportionate with the requested funding on partner level.

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NOTE! Applications proposed to be implemented in a one-sided partnership shall be rejected as they will not accomplish the requested minimum criteria of involving at least one CBP with an active, provable contribution to the project.

SUMMARY The minimum size eligible partnership comprises one Lead Partner and one Cross-Border Partner; The Partners have to nominate a Lead Partner that will be the link between the project and management structures and bear responsibility for the project; The difference between a PP and AP is that APs do not bear direct responsibility for implementation of the project and do not receive financing within the project, but may contribute to its professional implementation; One-sided partnerships cannot be supported. NOTE! Partners (Lead Partner, Project Partners or Associated Partners) cannot be each others SUBCONTRACTORS!

1.5 Eligibility of activities I.5.1 Compliance with the scope of the programme
All project activities proposed in the framework of the present programme have to fall within the scopes of the Priority Axes, Key Areas of intervention and Actions of the programme, as well as to comply with the territorial eligibility criteria. The programme provides financial support for operations fitting in the Priority axes and Key areas of intervention as defined in the Programme. Operations have to bring a clear contribution to the objectives of the programme, having a real cross-border character and impact and are targeted towards public benefit. ANNEX 1 of this Handbook presents an exhaustive list of the actions launched in the frame of the present Call for Proposal! The list of operations listed under each Action is indicative, offering a framework and guidance for applicants. Applicants are invited to develop freely their project ideas and propose their own activities. Nevertheless these activities have to fall in the framework of the listed indicative operations. Furthermore projects and proposed activities have to respect all the relevant eligibility criteria and demonstrate a clear contribution to the Programme and to the Lisbon, Gothenburg and Danube Region Strategies of the EU. Therefore projects should clearly consider the following aims: contribution to sustainable territorial development; leverage effect on investment, development perspectives and policy development; facilitation of innovation, entrepreneurship, knowledge economy and information society by concrete cooperation actions and visible results (creation of new products, services, development of new markets and the improvement of human resources based on the principles of sustainability); contribution to integration by supporting balanced capacities for cross border territorial cooperation at all levels.

Applicants are requested to apply for one Key area of intervention and one Action listed. Activities that have synergy with other key areas of intervention of the programme, or other Actions than that the applicants are applying to will be mostly welcomed. Furthermore, activities that introduce innovative elements or best practices will be highly appreciated. Nevertheless, there are some fixed operations that are not eligible (in any case) within this programme (ineligible activities) as being inconsistent with the programmes objectives.

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1.5.2 Non-eligible activities

The following activities are ineligible: Activities with untreated negative impact on the environment; Activities outside the programme area; Acquisition of equipment as main objective, activity; 7 Profit making activities, business investments ; Onesided activities with no cross border effect; Double financed activities, i.e. activities already funded from other community or national public or private sources.

As a general rule, projects financed under the present Programme should not generate any kind of revenues, since their results have to be of public benefit, and have to be made available for the general public free of charge. Revenues that may be generated by projects have to be forecasted and presented as such in the projects budget table and the Cost-Benefit Analysis. According to Article 55 of Regulation (EC) 1083/2006 Eligible expenditure on revenue-generating projects shall not exceed the current value of the investment cost less the current value of the net revenue from the investment over a specific reference period meaning, that net revenues (incomes less operating costs) produced as result of implemented project activities must be deducted from the total eligible reimbursable costs. The net revenues that will be obtained in the next five years following project closure will be deducted from the total eligible project expenditures, thus also from the public funds granted. When deciding on the project activities, please consider that the rules regarding revenue-generating projects, as well as those regarding state aid shall be applicable through the whole project life cycle, respectively during the sustainability period (5 years after project closure). In case activities fall under state aid rules, these will result in a reduced subsidy rate for the particular activity falling under such rules or in some cases for the whole project. In case activities are revenue-generating, the amount of the subsidy will be lowered in alignment with the net revenue generated. In order to avoid such situations, the outcome and results of the projects shall be made available for the general public free of charge and on equal terms, not generating profit and net revenues For more information on state aid rules, please see chapter II.3 State aid and Annex 1 of this Handbook, respectively Annex D Guidelines on State Aid of the Call for proposals

1.5.3 Information and publicity measures

Projects are required to use various forms and methods of communication at the appropriate territorial level in 8 order to reach the widest possible results and achieve the widest dissemination . All projects financed under this programme will be obliged to meet the minimum visibility requirements; therefore applicants are invited to consider these activities and related costs when planning their project proposals. The mandatory I&P instruments to be included in the Application form and to be used during project implementation are detailed below. Besides the enumerated mandatory tools beneficiaries are encouraged to employ, plan, create and use alternative forms and means of communication depending on the size and needs of the project. Compulsory I&P tools Organising at least one public event (opening/closing ceremony) or any other public event (ex. reception, open day, community programmes (organising street festivities, festival in a given settlement, educational events), entertaining programme, concert, exhibition, conference, professional presentation, workshop, etc.); Placing a direct reference (banner and description with all the obligatory elements from the Visibility guide for projects) to the project on the websites of all project partners (if available);

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i.e. activities with a commercial character COMMISSION REGULATION (EC) No 1828/2006 (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

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Preparing regular photo documentation on the progress of the project and sending it to the JTS and the MA upon request; Sending out and/or organising at least one press release and/or press conference related to the project.

In case the total public contribution (ERDF and state co-financing) to the operation exceeds EUR 500 000 and the operation consists in the purchase of a physical object or in the financing of infrastructure or of construction operations, in addition to those listed above, the applicants shall have the following obligations: Sending out and/or organising at least two press releases and/or press conferences when launching and closing the project; Organising at least two public project events (opening/closing ceremony) or any other public event to which the media is invited; Putting up temporary billboards on the sites of the operation during project implementation (not mandatory in cases when the project does not contain infrastructure or construction elements, but the purchase of physical objects); Putting up a permanent explanatory plaque no later than six months after completion of the operation. More information on the topic can be found in the Visibility guide for projects (Annex 4 of the Project Implementation Handbook).

SUMMARY Proposed activities have to be implemented in the eligible programme area bringing a contribution to the programme objectives and falling into one of the key areas of intervention and actions proposed; Projects are expected to generate new, innovative knowledge, products and services with cross-border relevance and applicability. Potential beneficiaries will have to clearly demonstrate the advantages of achieving their goals in the frame of a cross-border co-operation instead of a national initiative. During project development, emphasis shall be put on demonstrating how the operations and activities of the project affect the local society, what partnerships and co-operations may be developed and what a provable spin-off effect it could have in the programme area. Also, the impact on the defined target groups shall be precisely presented.

I.6 Eligibility of costs and budgets I.6.1 General rules on the eligibility of costs
In general, costs are eligible if they fulfil cumulatively the following criteria: a) were incurred and paid out by the LP or PP(s) during the project implementation period (the period between the project start date and end date), and they can be verified on the basis of original invoices, and/or other accounting documents of equivalent nature (receipts, vouchers etc.); b) were incurred in the eligible area of the programme; c) are in line with the provisions for cost categories specified in sub-chapter I.6.4.Eligibility by category of costs d) are directly related to the project, and necessary for the development, starting and/or implementation of the project and are included in the budget approved by the JSC e) comply with the principles of sound financial management (efficiency, economy and expediency) and relevant national and community rules and legislation and the Applicants Handbook. In order to be reimbursable, all expenditures must be certified by the bodies designated to perform the first level control.

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More information on the rules of reimbursement of costs can be found in Chapter IV, Validation of expenditures by the control bodies of the Project Implementation Handbook!

I.6.2 Eligibility period

Generally, the eligibility period of expenditures of a project financed within the present Call has to fall between st st the 1 of January 2007 and 31 of December 2014. The exact beginning and the end of the eligibility period (i.e. project implementation period) of each project is laid down in the respective Subsidy Contract. This means that expenditures will be eligible in case they incurred and were paid out within this eligibility period indicated in the Subsidy Contract. Costs that are subject to reimbursement but not incurred in the eligible timeframe set in a Subsidy Contract shall not be accountable and cannot be reimbursed. Exception from the abovementioned rule: Preparation costs are eligible if they are incurred after 1 January 2007, but before the submission of the application; (for Hungarian partners) costs budgeted under BL 2, Staff costs, 3. Travel and accommodation and BL 8, Administrative costs, in case of the final reporting period, can be paid out within maximum 30 days after the end date of the project. Projects can be started after the submission of the application on the risk of the applicants. Costs will be eligible only in case the project is selected for financing. NOTE! Projects with their implementation already started before the submission of the application are not eligible for financing!
st

I.6.3 Geographical eligibility

As a general rule, the eligible expenditures shall be incurred in the eligible programme area, i.e. on the territory of the 8 counties as listed in Chapter 1.2 Territorial eligibility. Costs incurred outside the eligible programme area 9 will generally not be reimbursed, since the programme does not use the flexibility rule . Exceptions from this rule are made for expenditures with a major importance and impact, closely linked to the programme area. The eligibility of this type of cost shall be decided by the JSC on case by case basis, but in any case these costs shall be limited to maximum 20% of the total eligible costs of the budget. The incurred expenditures shall serve the programmes objectives, shall have a positive impact on the eligible area and/or shall be explicitly necessary for the implementation of activities needed for the fulfilment of the project objectives.

I.6.4 Eligibility by category of costs

The following cost categories, presented in the budget tables as main budgetary lines, are considered eligible: A. B. C. D. E. F. G. H. Preparation cost; Staff cost; Travel and accommodation cost; External service costs; Equipment costs; Investment costs Financial charges; Administrative cost

Costs not included in the list of eligible expenditures, or not in accordance with the rules on the eligibility of expenditures, respectively costs arisen during project implementation, that although eligible expenditures, would be beyond the scope of the approved project, must be paid from the own financial resources of the partners.

9 Article 21 of 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

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A. Preparation cost
The preparation cost is a special eligible expenditure that may be incurred in the preparation/development phase of the project, and shall be closely related to the elaboration of the project. The expenditure will be an eligible cost according to the following conditions: Preparation costs are eligible if they were incurred on or after the 1 of January 2007 and before the submission of the applications. Preparation costs shall be paid by end date of the first reporting period. Meet the provisions b)-e) of subchapter I.6.1.General rules on the eligibility of costs
st

Invoices related to the preparation activities need to be issued before the submission of applications in the given Call for proposals in line with the national legislations. This means: - in case of the Romanian Partners the date of issuance must be before the submission of applications; - in case of Hungarian Partners the date of performance must be before the submission of applications and the invoice must be issued within 15 days (except for the special cases listed in relevant legislation). NOTE! The rate of the preparation costs shall not exceed 10% of the total eligible project budget, but shall be not more than 150 000,- EUR and must be proportionate with the complexity of the project. The following costs can be reimbursed as project preparation cost: Preliminary studies and planning documentations preparation of feasibility studies, environmental impact assessments, cost benefit analysis, costs of authorization and plans, costs of conditional public procurement, preliminary assessment of demands, target group analysis, market research, need assessment, position paper, other relevant studies; Procurement of compulsory permits according to the national legislation; Translations from / to English, Hungarian and Romanian languages; Meetings costs connected to the organization of meetings between Project Partners and/or stakeholder, Associated Partners; Travel costs of employees of applicants, including per diems and accommodation connected to the project preparation, for ex. organization of partnership meetings. Project elaboration maximum 1% of the total eligible costs, but no more than 5.000 EUR, and proportionate with the complexity of the project.

Activities such as elaboration of preliminary studies and planning documentations, translations and project elaboration can be carried out by the employees of the Project Partners as well. These costs can be budgeted as preparation costs, while for the reimbursement the same rules shall apply as for the reimbursement of Staff costs. For more information please consult section 4.5.2 Staff costs of the Project Implementation Handbook.

B. Staff costs
The costs of staff are expenditures incurred connected to the personnel involved in the implementation of the project on behalf of the LP or PPs institution. These costs shall be clearly connected with the project and its activities. Staff members shall be employed by the LP or PPs institution with a valid work contract executing the project related tasks in a full-time or a part-time job.. In case of Romanian partners, staff members shall be contracted based on individual employment contracts, as regulated by the valid labour legislation (Law 53/2003); civil contracts not being acceptable. Remuneration for public and civil servants may only be eligible for funding if their tasks directly relate to the project activities. Costs for regular, daily tasks that are obligatory by legislation are not eligible. Personnel cost as a main budgetary line is divided in two sub cost categories. Their planning shall be in accordance with the following:

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a) Management cost: project management costs are expenditures incurred by the project staff directly involved in the administrative and daily implementation of the project activities. These costs include for example the wages of the project manager/project coordinator, financial manager, project assistant, accountant, etc.; b) Internal expertise cost: are costs related to personnel in charge with the professional implementation of the project. Internal experts carry out typically content-related activities, such as preparation of a study, holding lectures or trainings, research work or other expertise necessary for the implementation of the project. The difference between the above categories lies in the type of activity that incurred these costs: administrative support or professional expertise. Accountancy costs are considered costs related to the administration of the project activities therefore shall be budgeted as project management costs. Furthermore, applicants shall not budget audit costs, as the audit activities shall be carried out by the first level controllers during the procedure for validation of expenditures. NOTE! The total management costs shall not exceed 5% of the total eligible budget. Total management costs include the costs budgeted under 2.1. Management costs budgetary line (Staff costs) and 4.1. External management services main budgetary line (External services), as well. Expenditures accountable as staff cost are gross salaries including taxes and social contributions (the total work cost), in line with national legislation. In case of employees working only part time on project activities, having other parts of their working time devoted to other operations, the proportional part of gross salaries shall be accounted, in proportion with the work-time spent on the project as supported by time sheets. Bonus or other payments are not eligible. Personnel costs shall be proportional with the qualification of the human resources involved, the amount of work dedicated and the salaries for similar category of work in the respective Member State and those practiced by the beneficiary.

C. Travel and accommodation cost

Travel and accommodation costs are eligible if they are incurred by the project staff members, ie. personnel directly employed by the LP or PPs institution and involved in the implementation of the project who perform tasks directly related to the project activities away from their headquarters. To be reimbursable, costs must meet the general eligibility criteria, and particularly, must be in line with the relevant national legislation of Hungary and Romania, respectively. As a general rule for travelling, the most economic way of transportation has to be used. Travelling costs outside the programme area are not eligible unless they are proved to be linked to the project implementation activities and are traceable from the application form. These shall be approved by the JSC on case by case basis simultaneously with the approval of the application. In general, the following travel costs are eligible, if clearly connected to project implementation: Travelling by own car it is allowed to use a private or company car only if it is the most economic way of transportation and is proven to be a time saving solution; Travelling by rail the amount accepted equals the price of a second class train ticket (including compulsory travel supplements) for the journey; Travelling by other form of transportation - the amount accepted should not exceed the economy class train fare. Travels can be extended if cheaper flight conditions can be obtained, unless this leads to the increase of total costs. Airfare is eligible only for a distance of min. 400km, at economy class. Per diems/diurn per diems are eligible only for project staff members (personnel directly employed by the PPs whose salaries are budgeted on budget line 2) who travel in the scope of the project and spend more than 1 day far from their headquarters. Rates fixed by the European Commission for per diems abroad cannot be exceeded: http://ec.europa.eu/europeaid/work/procedures/implementation/per_diems/index_en.htm

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Methods that may be used for calculation of per diems abroad are the following: a) In case of using the rate defined by the European Commission for per diems abroad, per diems have to cover expenses for accommodation, food and beverages, and local transportation costs, i.e. more travel, accommodation, food and local transport costs are not eligible. Please consider that this method is not applicable for the Romanian partners! b) In case of using the rate defined in the internal procedures of the partner organisation for per diems, costs for accommodation, inland travel and local transport costs are eligible above the costs of per diems.. Other costs for subsistence are not eligible. This method, including the internal procedures of the partners for per diems, has to be in line with the national legislation of the partners and the sum of eligible costs (per diems, accommodation and travel costs altogether) cannot exceed the maximum rate defined by the European Commission for per diems. Romanian partners should use this method for calculation of the per diem costs, where per diem means the diurn as regulated by Romanian legislation! c) In case no costs for per diem abroad will be paid, costs for accommodation, meals and local transportation are eligible to be reimbursed. Exceptionally, Romanian partners shall be able to have meal costs reimbursed according to the national provisions for the reimbursement of diurn. For the rules applicable in case of Romanian beneficiaries, please consult the Ministerial Decree no. 568/2009 regarding the rules of reimbursement of costs sustained by Romanian beneficiaries within the Hungary-Romania Cross-Border Co-Operation Programme and its modifying Decree no. 1168/2010 issued by the Ministry of Regional Development and Tourism (downloadable from the programme web site). Currently the maximum rate of diurn applicable for travels abroad is 35 euro/person/day, while for travels inland, the applicable legislation regulating the minimum and maximum rates of diurn is Government Decree no. 1860/2006, modified by the Government Decree no. 1677/2008. Accommodation and meal costs can be accepted if they are in the middle price range and do not exceed those listed by the EC and only in the case these costs are not covered by the per diem. Local fares bus, taxi, underground tickets, etc. can be accepted only in the case these costs are not covered by the per diem.

NOTE! Travelling and meal costs of the external experts shall be included in their service contracts as part of their expert fee! These costs cannot be budgeted separately, above the expert fees! Travelling and meal costs of project beneficiaries (e.g. target groups, students, trainees, etc.) shall be included under External services, Transport of goods and people, respectively Organisation of events.

D. External services
External services are services provided for the implementation of a project activity part by a third party, contracted by the LP or PP(s). External services are eligible under the following conditions: The services are directly related to the project; The work of external experts is essential to the implementation of the project; Services are not duplicated (both internal and external experts budgeted for the same job); Rates applied are reasonable, reflect the actual market prices and are proportionate to the level of experience and expertise, as well as the quality of service offered; The selection of the experts shall be in compliance with the national Public Procurement Law in force; The external expertise is not done by a Lead Partner, Project Partner or Associated Partner.

NOTE! External service contracts/mandatory contracts can not be concluded with employees directly employed by the Partners! In case of Romanian Partners, only service contracts can be concluded, civil contracts are not acceptable.

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The following cost categories can be taken into account: External management services: in case the LP or PP(s) do not have qualified personnel/staff for the management of the project, they have the possibility to outsource management activities partly or entirely. Consequently, the external management staff can be complementary to the internal management staff, as well. However, applicants must pay attention not to duplicate tasks within the management body, i.e. to have both internal and external staff for the same tasks. Duplication shall be closely controlled during evaluation and relative costs shall be proportionately reduced. NOTE! The total management costs shall not exceed 5% of the eligible costs. Total management costs include the costs budgeted under 2.1. Management costs budgetary line (Staff costs) and the 4.1. External management services main budgetary line (External services), as well. Professional expertise: includes services related to the professional implementation of the project, e.g. preparation of studies, researches, design documentation, cost of translation, public procurement or other expertise necessary for the implementation of the project. Organization of events (e.g. conferences, seminars, meetings, workshops, trainings etc.): includes costs like translation of documents, rental costs, trainers fee etc. Activities closely related to the event organization can be contracted separately based on the activity type, as well (ex. transportation, translation, rental activities etc.) .Catering expenses for internal project management meetings are not eligible! Transport of goods and people: costs related to the travel of the target groups or transportation of goods necessary for project implementation shall be budgeted here. Costs linked to the travel of the internal project management staff shall be included under the travel cost budget line; Information and publicity activities (e.g. handouts, brochures, leaflets, advertisements, publicity materials, web page, newsletters, other publication costs) including costs related to all aspects of promotion, visibility and publicity specific to the project based on the rules included in the Visibility guide for projects ; Other services costs to be included here are those types of costs that cannot be directly linked one of the budget lines specified above, but are directly related and necessary for the implementation of the project, e.g. public procurement costs, costs incurred in relation with permits required by national legislation, etc. The exact type of the expenditure to be included here must be defined in the project application

In case the planned external services for a budget line exceed the amount of 2.500,- EUR net, Terms of reference (Annex 5d to the Application Form) shall be submitted by the applicant defining the content of the service and the requirements towards the Contractor. Please note that if an internal expert is already included in the budget at Staff costs, the same activity shall not be included at the external expertise costs and vice versa.

E. Equipment costs
Purchase of equipments, devices and other goods is eligible only if it is necessary and directly related to the implementation of the project. The equipments shall be used exclusively for project implementation and they should have a clear contribution to the achievement of the projects objectives. If applicable, supplies should be selected with regard to the relevant public procurement law. Equipments shall be listed in the approved project budget. The following costs can be eligible: Content related equipment, comprising equipments such as laboratory equipment, special measurement equipment, raw materials, consumables, and other goods necessary for the implementation of the project; Office equipment (computers, office furniture, etc.) shall be eligible in duly justified cases if related to the project management and necessary for the implementation of the project. they were not reimbursed/financed from other community or national projects, they are new (acquisition of the second-hand equipment is ineligible),

The cost of the equipments can be reimbursed, if

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are not included under another (e.g. administrative) budget line.

In case the planned purchase of equipments (5.1-5.2 budget lines) exceed the amount of 5.000,- EUR net, Technical specification (Annex 5e to the Application Form) shall be submitted by the applicant.

F. Investment costs
Investment costs are amounts invested in purchase of land or building, construction / reconstruction / extension / modernisation of buildings, or the construction / reconstruction / extension / modernisation of other facilities. In case of procurement the ownership must be transferred to the final beneficiaries and/or local partners, at the latest by the end of the action. a) Purchase of land will be an eligible expenditure under the following conditions: - The purchase of the land is indispensable for project implementation; - The cost of the purchased land shall not exceed 10% of the total eligible project cost; - The land shall be evaluated by an independent expert (the Land Evaluation must not be older than 6 months); - The purchase price must not exceed the price recorded in the Land Evaluation document; - If the current or any of the previous owners did not get in the past 5 years any financial support for purchasing this particular land from community or other public funds; b) Purchase of buildings is eligible expenditure under the following conditions: - The building shall be evaluated by an expert (the Building Evaluation must not be older than 6 month); - Eligible cost is the Purchase price and it must not exceed the price recorded in the Building Evaluation document; - The building shall have a settled property situation - The current or any of the previous owners did not get in the past 5 years any financial support for purchasing this particular building from the community funds; c) Construction/reconstruction/modernisation/extension of buildings, and other facilities: Construction costs mean expenditure related to works needed for alteration, reconstruction, expansion of a used building or construction of a new one. These costs will be reimbursable if they are directly linked to the project implementation. The construction shall be in accordance with all legal measures/codes construction, hygienic and safety - and shall have all documentation, certifications that is needed for utilization. The contractors shall be selected according to the applicable national regulations related to public procurement. Please note that in case of investments that affect buildings or land, and if the applicant is not the owner of the respective real estate, it should provide a rental / concession contract or a right for long term use for that building/land for at least ten years after the end of the project.

G. Financial charges/fees, guarantee costs and legal consultancy fees

The following costs are eligible expenditures: Charges for financial transactions; Bank service charges - account fee, bank statement in case of projects where a separate account has to be used for the project implementation; Insurance costs, as costs occurred for insuring the immobile and mobile investments realized or acquisitioned during the implementation of the project. In case of immobile investments this shall be done in case their price is above 25 000, - EUR net, and in case of mobile ones if above 5 000, - EUR net. Guarantee costs provided by banks or other financial institutions, if such guarantees are exclusively required by national or Community legislation;

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Legal consultancy fees, notary fees, if they are directly related and necessary for the project implementation;

H. Administrative costs
Administrative costs are those costs for which there are no properly identified invoices relating to the project financed by ERDF, but instead a large number of general invoices like rent, telephone bills, postage costs etc. from which it is difficult to identify precisely the part that concerns the project. To avoid difficulties and contentious interpretations, less complicated rules will apply. Applicants shall provide a method for calculation based on real costs, i.e. the basis for the calculation will be the total administrative costs of the respective organization. Overheads will have to be proportionate with the number of staff employed by the partners who work directly in the implementation of the project. NOTE! The overhead costs shall not exceed 5% of each partners total eligible budget,! Administrative costs comprise the following three cost types: group 1: telephone, fax, postage costs, etc; group 2: heating, electricity, lighting, office rent, etc; group 3: office supplies like: paper, toner, pencil etc.

I.6.5 Non-eligible costs

Ineligible expenditures are especially the direct taxes, real estate taxes, real estate acquisition tax, gifts tax, inheritance tax, road tax and duty. Exceptions are the non - recoverable value added taxes. If the applicants organization is not legally entitled to recover the taxes (VAT) from official authorities and this can be demonstrated as such, the tax may be included in the frame of the eligible total cost. Value Added Taxes that are recoverable cannot be considered eligible, and should not be included in the total eligible cost claimed of the project. The following expenditures shall not be eligible for a contribution from ERDF: Any costs incurred and paid out before or after the eligible period of the project defined in the Subsidy Contract, except for approved preparation costs, that shall incur during the preparation phase of the project proposal; Interest on debt (Article 7 of Regulation (EC) No. 1080/2006); Recoverable Value Added Tax (Article 7 of Regulation (EC) No. 1080/2006); Expenditure on housing (Article 7 of Regulation (EC) No. 1080/2006); Fines, financial penalties and expenditure on legal disputes (Article 49 of Regulation (EC) No. 1828/2006); 2118 Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999; 19 Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999; 20 Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999; Other items, services or building investments already financed by a community or other international or national grant, subsidy; Unpaid partial amounts of invoices (e.g. compensation for damages, guarantee payments, cash discounts, rebates, etc.); Debts and provisions for losses and bad debts; Leasing;

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Acquisition of second-hand equipment; Costs of payable interest, credit overdrawing; Currency exchange losses and commissions; Provision for future losses or other possible future liabilities; Commissions and dividends, profit payment; Purchase of business share and stock exchange share; In kind contributions (e.g. free usage of room, equipment or other facilities, unpaid voluntary work, generally any contribution without cash flow), Lump sum payments, Subcontracted activities increasing the cost of the operation without proportionate value added, Subcontracts in which the payment is defined as a percentage of the total cost of the operation (e.g. success fee) unless such payment is justified by the LP or its Project Partners with reference to the actual value of the work or services provided (e.g. success fee), Expenditures invoiced further to the third parties and not borne by the LP or its Project Partners, Any cost of services, procurement or investment not directly related to the project and not approved in the Application Form; Expenditures not directly associated with the LB or its Project Partners; Representational items for entertainment, entertainment allowance (e.g. flowers, gifts, alcohol, greeting cards, entrance fees, decoration materials etc.) and similar expenditures, if not related to the project; The cost of the purchased land exceeding 10% of the total eligible project cost. Preparation costs exceeding 10% of the total eligible project cost, and more or equal to the sum of EUR 150 000,-.

Please, take into consideration that the list of the non-eligible expenditures detailed above is not an exhaustive list!

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II. RATE OF FINANCING AND FINANCIAL ELIGIBILITY

II.1 Form of support
Support given to projects in the framework of the Programme is non-refundable support consisting of community sources (ERDF) and state co-financing. The aim of the state co-financing is to decrease the financial burden of the applicants by contributing to their financial support in order to properly and successfully implement the projects. These sources shall be complemented with the applicants own contribution, if relevant. Community and state co-financing are allocated together to projects with the decision of the Joint Steering Committee, but contracted separately by the programme bodies, i.e. ERDF by the Managing and state cofinancing by National Authorities. The state contribution will be granted automatically to any successful project based on a contract for state co-financing concluded between the Project Partner and the competent NA of its country of origin. In the frame of the programme ERDF financing will be offered based on reimbursement. Costs will be reimbursed after they had been actually paid out by the Partners and after they had been validated by the national first level control (for more information please see Project Implementation Handbook). There is no possibility for requesting ERDF-advance payments. However, advance payments shall be made from the state co-financing after the conclusion of state co-financing contracts. The rate of advance payment is 100% of the Hungarian state contribution for Hungarian Project partners and maximum 80% of the Romanian state co-financing to the Romanian Project Partners. The detailed rules for granting the state co-financing shall be stipulated within the state co-financing contracts.

II.2 Rate of funding

The grant accorded in the framework of the present Call can make up to 95% of the total eligible project budget in case of Hungarian, and 98% in case of Romanian applicants. This grant rate totals both ERDF and state cofinancing. The rate of ERDF financing within a project is maximum 85% of the total eligible public project budget. Each applicant has to bring an own contribution to the project, that shall be minimum 5% in case of Hungarian and minimum 2% in case of Romanian applicants of the total eligible budget of the project. The own contribution rate has to be met on the budget level of each partner depending on the country where the partner is situated. Each Project Partner has to ensure the financial resources necessary for the implementation of the project until the reimbursement of ERDF funds. The only Applicants exempted from bringing own contribution, are those Hungarian Project Partners that are financed out of the Hungarian state budget falling in one of the categories below: Budgetary organ and/or their institutions established centrally according to Annex 1 and 2 of the Bulletin 9001/2002 (SK 3.) of the Central Statistical Office (i.e. having 311 or 312 as 13-15th digit of the uniform statistical code) Other beneficiaries financed from state budget falling under the categories listed in ESA95 . Partners falling into one of the above categories are not obliged to bring own contribution, therefore the rate of Community funding shall be 85% while the rate of state contribution shall be 15% of the total eligible project budget. Romanian beneficiaries have to comply with the provisions of the Law 105/2011 regarding the distribution of external non-refundable funds and of national contribution in the budget of the institutions involved in their management for the European Territorial Cooperation Objective. The rate of national co-financing in case of beneficiaries falling under public law is maximum 13% of the total eligible budget for Romanian PPs and maximum 10% for Hungarian PPs, while the rate of ERDF is maximum
10

10

www.nfu.hu/download/.../Allami_koltsegvetesi_szervek_lista.xls

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85% of the total eligible budget. In case of beneficiaries governed by private law, the rate of ERDF co-financing is calculated in a different way, as it is maximum 85% of the total eligible public source available for the project (i.e. total eligible budget minus own contribution). Therefore the rate of national co-financing is higher, reaching maximum 14,7% of the total eligible budget for Romanian partners and maximum 14,25% for Hungarian partners. An example for the calculation of the sources of financing: Hungarian partner Public Private Sources of Rate Sources of Rate financing financing
ERDF National cofinancing Public own contribution Total eligible public source Private own contribution Total eligible budget 85 000,00 10 000,00 5 000,00 100 000,00 85,00 10,00 5,00 100,00 95 000,00 5 000,00 100 000,00 100,00 95,00 5,00 100 000,00 100,00 80 750,00 14 250,00 80,75 14,25

Romanian Partner Public Private Sources of Rate Sources of Rate financing financing
85 000,00 13 000,00 2 000,00 85,00 13,00 2,00 98 000,00 2 000,00 100 000,00 98,00 2,00 100,00 83 300,00 14 700,00 83,30 14,70

100 000,00 100,00

100 000,00 100,00

II.3 State aid

In order to ensure undistorted competition on the internal common market, the European Commission laid down a set of rules, called state aid rules. Its basic is laid down in Art 107 (1) of the Treaty of Functioning the European Union and it says that any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. Projects with activities falling under these rules might receive a lower funding rate, therefore Project Partners, in order to be able to conclude the Subsidy Contract, have to engage themselves to finance those activities with a higher own contribution rate. Further guidelines regarding these rules are offered in Annex 1 of the present Handbook, connected to the framework activities, as well as in the attached guidelines (ANNEX D - Guidelines on state aid).

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III. PROJECT APPLICATION AND ASSESSMENT

This chapter will give you an overview on the procedures used for the selection of operations financed in the frame of the programme. The present Call for proposals is launched in the frame of the one-step application procedure. In case of this application model, the call for proposals is launched and opened for a given period of time. Applicants are invited to submit their detailed Application Form (AF) with all listed annexes and supporting documents attached. The full applications will be evaluated against the selection criteria published as an annex of the Call for Proposals and presented to the Joint Steering Committee to take its decision about the co-financing. Rejected applications can be submitted only in the framework of a new Call for Proposals.

III.1 Project assessment and evaluation process

The aim of the assessment procedure will ensure that only viable projects, possible to be implemented and in line with the objectives and priorities of the programme shall be financed. The assessment and evaluation of the applications will be performed and coordinated by the JTS, assisted by the IP and external experts, if necessary. The project selection process shall be done according to the model presented in the diagram and shall comprise the following three phases.

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1 STEP PERIODIC MODEL

JSC

Approval of CfP

MA/NA/JTS

Launch of CfP

Development of the Application

Applicants with support of JTS, IP

Submission

Return formal defect

Receiving of applications

JTS, IP

Registration

1) Administrative compliance assessment

External evaluators / JTS, IP 2) Quality assessment

JSC 3) Ranking of projects

JSC decision

III.1.1 Evaluation phases:

1 Administrative compliance assessment is carried out according to the defined administrative and eligibility criteria, which shall allow the project to enter into the quality assessment phase; The administrative compliance means the check of the submission and formal criteria, as well as the eligibility check. The eligibility check is meant to ensure that projects fulfil the requirements clearly identified by the programme in the frame of the Call for Proposals and OP. These criteria are not subject of interpretation instead will be a subject of a short answer yes / no. Applications not fulfilling these criteria will not be further evaluated and proposed for rejection. Applicants are requested to check the Call for Proposals and its annexes in order to see which kind of document can be completed and which are those documents that result in automatic rejection if missing.

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Projects will have one possibility for completing the missing documents/data in case these are listed among the materials possible to be complemented. Projects that are not developed in accordance with the predefined administrative and eligibility criteria will be rejected at this stage of evaluation and shall not participate in the content and quality assessment. 2 Content and quality assessment: the evaluation of the cross-border character and relevance of the project, the economic and organisational capacity of project partners and accordance with national policies will be checked, as well as, the cost efficiency of the projects and their sustainability, etc. based on the quality assessment grid. Content and quality assessment shall measure the quality of the projects against some previously defined goals. Evaluation grids are always part of the Application package of the specific Calls for Proposals. 3 Final phase of the assessment and decision-making: synthesis of the assessment is prepared and forwarded to the JSC by the JTS, in agreement with the MA, for decision regarding the adjudication of subsidy. The decision on approving the project proposals will be made by the JSC. Following the decision making, the Managing Authority informs the applicants on the outcome of the evaluation procedure, the results being published on the programmes website, as well. The Lead Partner of the projects selected for financing will be invited to sign the Subsidy Contract (SC) for ERDF funds, as well as, the Project Partners on their turn, shall conclude the Contract for State Co-financing (CSF) with National Authorities. The following chart indicates the time schedule of project assessment that may vary depending of the number of project proposals submitted.

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One step application model Project assessment time line

Closing of the call for proposal / Submission o applications 2 days

Registration of the applications

40 days
Opening session and administrative compliance assessment (including formal completion)

30-40 days
Qualitative assessment, including JTS quality assurance

27 days

Closing of the assessment process and preparing summaries, quality assurance of the MA, finalizing ranking lists

12 days
JSC decision (including the preliminary consultation of materials before JSC meeting)

25 days
Drafting and approving JSC minutes

Period of time for the assessment is 136 - 146 working days Closing the assessment process by informing the applicants on decision

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III.2 Handling of complaints

Decisions regarding the rejection of a project in any phase of the evaluation process administrative compliance assessment or qualitative assessment are taken by the JSC. The LP can have an insight in the evaluation grids within 7 calendar days after the receipt of the notification letter. In case the Lead Partner or the partnership does not agree with the decision of the JSC, the Lead Partner is entitled to file a complaint. The complaint can be filed in case the decision: infringes the rights or any provisions stipulated in the Regulations of the European Union; presents an encroachment to the Call for proposals or application package published. written in English; addressed to the Head of Managing Authority (MA) and sent to the Joint Technical Secretariat by regular mail to the following address: HU-RO JTS - VTI Nonprofit Kft. H-1016, Budapest, Gellrthegy utca 30-32. filed by the legal representative of the Lead Partner; sent in 7 calendar days following the notification regarding the rejection of the project or in 7 calendar days after the date of becoming familiar with the content of the quality evaluation, in case a personal insight in the evaluation documentation was requested.; contain clear and articulate reference to the nature of the encroachment based on EU Regulations or the application package published.

The complaint has to be:

All complaints shall be forwarded to the MA by the JTS ex officio and shall be considered and answered by the MA, as the responsible complaint handling body, in 20 calendar days following receipt of the complaint. This can be extended once with an extra 45 calendar days in case further investigations are needed. The Lead Partner is informed about the extension of the deadline. Complaints shall be automatically rejected, without any examination in case: they were not filed by the organisation entitled to submit a complaint; they were filed after deadline, i. e. more than 7 calendar days after the receipt of the official rejection letter or more than 7 calendar days after the date of becoming familiar with the content of the quality evaluation; they do not contain clear reference to the nature of the encroachment based on EU Regulations, or the documentation of the Call for proposals; in case the subject and content of a complaint correspond with a complaint already filed and rejected; was not sent by regular mail or courier service (e.g. per fax or e-mail).

29

IV. SUPPORT FOR APPLICANTS

The potential applicants and interested stakeholders may address the JTS and IP for guidance and information on the conformity of their project idea with the programmes objective, key areas of intervention, as well as, may receive general input on the financing possibilities within the programme. The information released by the JTS and the IP shall not distort under any condition the rules of open competition, as well as, shall comply with the principle of equal opportunity towards each applicant. According to the approved OP, the JTS and IP will provide: information related to the programme, assistance in identifying and establishing partnerships, assistance in the assessment of the partnership; support in the project generation and development process; support in the understanding and usage of the Lead Partner principle; support in the understanding and usage of the joint special criteria; assistance in the development and usage of proper project communication tools; support in project implementation and reporting, etc. The support provided by the JTS and IP will be ensured through the entire project development process in the form of

Specially organized events: As stipulated in the OP, the JTS in co-operation with the IP will organize a set of events designed for helping the potential applicants to better understand the programme and work efficiently for developing their projects. These events are: Info-days Workshops Partner search and Lead Partner/Lead Applicant forums

Details about the time and location of the events will be published and advertised on programs website www.huro-cbc.eu or www.hungary-romania-cbc.eu - and in the mass media connected to the call for proposals. These events will offer the opportunity to the applicants to get the necessary information on the application process and shall contribute to networking among them. This last will also be a service offered through the programmes web page. By direct contact: telephone, e-mail, as well as personally on an appointment basis. Interested applicants will have the possibility to contact the offices of JTS in Budapest or Bkscsaba, Hungary and IP in Oradea or Timisoara, Romania personally, or by phone/fax/e-mail in all program languages (Hungarian/ Romanian/English). The questions raised by the applicants and the answers to these will be accessible on the programmes webpage in the Frequently Asked Questions column.

Please consult regularly the programmes website for information and updates related to the programme!

30

Contact details of the programme management and control bodies

31

V. RELEVANT EUROPEAN AND NATIONAL LEGISLATION

a) Indicative legislation on European level
Treaty on the Functioning of the European Union (TFEU) (OJ C 83/47 30.03.2010) on the European Regional Development Fund and Regulation (EC) No 1080/2006 of the European Parliament and of the Council repealing Regulation (EC) No 1783/1999 (OJ L 210 31. 07.2006)11; Regulation (EC) No 1081/2006 of the European Parliament and of the Council Regulation (EC) No 1082/2006 of the European Parliament and of the Council on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJ L 210 31. 07. 2006); on the European Grouping of territorial cooperation (OJ L210 31. 07. 2006); on 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 210/25 11. 07. 2006)12 on establishing a Cohesion Fund and repealing Regulation(EC) No 1164/94 (OJ L 210 31. 07. 2006); on 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 27. 12. 2006)13 on the application of Articles 87 and 88 of the Treaty to de minimis aid (OJ L 379/5 15. 12. 2006); on declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General block exemption Regulation) (OJ L 214/3. 2008. 9.8.)14 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ L 134 31. 03. 2004); on the application of Article 86 (2) of the EC Treaty to State aid in the form of public service compensation

Council Regulation (EC) No 1083/2006

Commission Regulation (EC) No 1084/2006

Commission Regulation (EC) No 1828/2006

Commission Regulation (EC) No 1998/2006

Commission Regulation (EC) No 800/2008

Directive 2004/18/EC of the European Parliament and of the Council Commission Decision 2005/842/EC

11 12

(OJ L 210 31. 07. 2006) (OJ L 210/25 11. 07. 2006) 13 (OJ L 371 27. 12. 2006) 14 (OJ L 214/3. 9.8. 2008.)

32

granted to certain undertakings entrusted with the operation of services of general economic interest (OJ L 312/67 29. 11. 2005.)

b) Indicative Hungarian legislation Acts: CXXIX of 2003 Act C of 2000 Act CLXIX of 2010 Act XCII of 2003 Act CXXVII of 2007 Act IV of 1959 Act XXII of 1992 Act LXV of 1990 Act CXXXV of 1997 Act CVII of 2004 Act XXI of 1996 Act LXXVIII of 1997 Act LXIV of 2001 Act CXXXIX of 2005 Act CI of 2001 Act LXXIX of 1993 Act LXXVI of 1993 Act LIII of 1995 Act XLIII of 2000 Act LVII of 1995 Act XCIX of 2007 Act LXIII. Of 1992 Act. on Public Procurements on Accountancy on Finances of Republic of Hungary in 2011 on Taxes on Value Added Tax on the Civil Code on Labour Code on local governments on the partnership and co-operation of local governments on multipurpose partnership of local governments on regional development and regional settlement on setup and protection of built environment on protection of cultural heritage on higher education on adult training on education on vocational training on the general rules of environment protection on waste management on water management on the European Grouping of territorial cooperation on protection of personal data and transparency of public data

Governmental Decrees: Government Decree 85/2004 (IV.19) on the Procedure regarding State Aid defined by Article 87 (1) of the EC Treaty and on the Regional Aid Map;

33

Government Decree No. 160/2009. (VIII. 3.) Government Decree No 217/2006 Government Decree No 49/2007

setting out rules for the implementation of the programmes related to the ERDF and IPA; on the operation of state finance; on the institutions of the national use of certain aid from the territorial cooperation in the program period 2007-2013 of the ERDF, IPA and ENPI; on the protection of quality of surface water; on the protection of underground water; on the protection and prevention of environment impairment;

Government Decree 220/2004 Government Decree 219/2004 Government Decree 90/2007

Ministerial Decrees: Decree of the Ministry for National Development and Economy 5/2009. (III. 18.) on the rules of usage of state aid and types of aids granted from certain programmes related to European territorial cooperation, funded by the European Regional Development Fund and the Instrument for Pre-Accession on the detailed rules of granting aid for maintenance and renovations of public road remounting ports and ferries, and their attendant establishments, roads; on the detailed rules of the usage of the tourist estimates; on the general procedure rules of usage of aids granted from ERDF, European Social Found and Cohesion Fund in the period 2007-2013;

Decree of the Ministry of Transport, Telecommunication and Energy 22/2009 (V.11)

Decree of the Head Minister of Prime Ministers Office 14/2002 Common Decree of the Head Minister of Prime Ministers Office and the Ministry of Finance 16/2006

c) Indicative Romanian legislation Government Decision No. 1631/2009 Governmental Decision 9501/2007 Governmental Emergency Ordinance 127/2007 Governmental Decision no. 457/2008 Law No. 315/2004 regarding the organization and the functioning of the Ministry of Regional Development and Tourism on approving the transmission of OP to the EC; on the European Grouping for Territorial Cooperation; regarding the institutional framework for coordinating and managing the structural instruments; concerning the regional development in Romania, with subsequent completions and modifications; regarding the distribution of external nonrefundable funds and of national contribution in the budget of the institutions involved in their management for the European Territorial Cooperation Objective;

Law 105/2011

34

Government Decision No. 1485/2007

regarding the establishing of the joint technical secretariat and of the info points, on the implementation of the European territorial cooperation operational programmes crossborder component; on public finance, with subsequent completions and modifications; regarding local public finance, with subsequent completions and modifications; on local public administration with subsequent completions and modifications; regarding the chambers of commerce; regarding associations and foundations; for the prevention, disclosure and sanctioning of corruption, with subsequent completions and modifications; regarding public procurement, with subsequent completions and modifications; on the prevention, ascertain and recovery of the European funds, and of the related co-financing funds which were not properly used; on the national procedures regarding state aid; regarding the environmental protection; regarding equal opportunities for men and women; on the prevention and sanctioning of all forms of discrimination; of cadastre and real estate advertising, with subsequent completions and modifications; regarding the quality of constructions; regarding the regime of roads, with subsequent completions and modifications; regarding the authorization for the execution of construction works, with subsequent completions and modifications; regarding the territory arrangement and urban planning, with subsequent completions and modifications; regarding the authorization by the Construction State Inspectorate of the technical-economical documentation for the investment objectives financed through public funds;

Law No. 500/2002 Law No. 273/2006 Law No. 215/2001 Law No. 335/2007 Government Ordinance No. 26/2000 Law No. 78/2000

Government Ordinance No. 34 /2006 Government Ordinance No 66/2011

Government Ordinance 117/2006 Government Emergency Ordinance No. 195/2005 Law No. 202/2002 Government Ordinance No. 137/2000 Law No. 7/1996 Law No. 10/1995 Ordinance No. 43/1997

Law No. 50/1991

Law No. 350/2001

Government Decision No. 1072/2003

35

Government Decision No. 28/2008

regarding the approval of the framework content of the technical-economic documentation concerning public investments, and of the structure and methodology for elaborating the general estimate for investment objectives and intervention operations; for the modification of the thresholds regarding the competencies for approving the technical-economic documentation for new investment objectives; concerning the public property and its juridical regime; for establishing the evaluation frameworkprocedure of the impact on the environment for certain public and private projects; for approving the Emergency Government Ordinance No. 34/2002 concerning the prevention, reduction and integrated control of pollution, with subsequent completions and modifications; for the ratification of the Convention on the impact assessment on environment in cross-border context, adopted at Espoo on 25 February 1991; on the framework of public participation to the elaboration of certain pans and programmes concerning the environment; establishing the procedure for the elaboration of the impact assessment for plans and programmes; on the public access to information regarding the environment; for the ratification of the Aarhus Convention, signed on 25.06.1998, concerning the access to information, the participation of the public to the decision making process and the access to justice regarding the environment issues; on environmental liability with regard to the prevention and remedying of environmental damage; for the completion and modification of several legal acts that are transposing the acquis communautaire in the field of environmental protection; regarding the management of national territory section III - protected areas; for approving the Emergency Government Ordinance No. 236/2000 on the regime of protected natural areas, conservation of natural habitats, of wild fauna and flora;

Government Decision No. 1865/2006

Law No. 213/1998

Government Decision No. 1213/2006

Law No. 645/2002

Law No. 22/2001

Government Decision No. 564/2006

Government Decision No. 1076/2004 Government Decision No. 878/2005

Law No. 86/2000

Government Emergency Ordinance No. 68/2007

Government Emergency Ordinance No. 12/2007 and Government Decision No. 210/2007

Law No. 5/2000

Law No. 462/2001

36

Government Ordinance No. 129/2000

regarding professional training, with subsequent completions and modifications; concerning the scientific research and technological development, with subsequent completions and modifications; for the approval of the national Strategy in the field of research, development and innovation for the period 2007-2013; for the approval of the national Plan of research, development and innovation II for the period 2007 2013; for approving the methodological Norms for the contracting, financing monitoring and evaluation of programmes and projects of research, development and innovation, and the actions foreseen in the national Plan of research, development and innovation; for the stimulation of investments; regarding certain rights and duties of the Romanian personnel sent abroad for undertaking temporary missions, with subsequent completions and modifications; concerning the rights and duties of the personnel of public authorities and institutions during the delegation and posting in other locality, as well as for moving in the locality, in the work interest; approving the list of eligible expenditures for the operations financed under the HU-RO CBP modifying and completing the Decree of the Ministry of Regional Development and Housing nr. 568/2009 regarding the approval of cost standards for investments financed out of public funds

Government Ordinance No. 57/2002

Government Decision No. 217/2007

Government Decision No. 475/2007

Government Decision No. 1265/2004

Government Emergency Ordinance No. 85/2008

Government Decision No. 518/1995

Government Decision No. 1860/2006

Decree of the Ministry of Regional Development and Housing nr. 568/29.07.2009 Decree of the Ministry of Regional Development and Tourism nr. 1168/19.03.2010

Government Decision no. 363/2010

37

VI. GLOSSARY OF TERMS

Applicant Beneficiary Eligible expenditure Eligible area/region European Regional Development Fund (ERDF) Lead Partner/ Lead Beneficiary Project Partner Any legal entity which submits an application to be financed by the programme; Any applicant whose application has been approved for financing; Expenditures made by a Beneficiary, related to the operations financed through the programme, which comply with the rules set and spent accordingly and thus can be reimbursed from ERDF and state co-financing; The Hungarian and Romanian counties located in the border area, as mentioned in the programming document approved by the European Commission; One of the financing instruments of the European Union, through which the present programme is financed. Beneficiaries will get support for their projects besides the state co-financing from ERDF. An applicant designated by the partners involved in a project responsible for coordinating the process of development, submission and implementation of that specific project; An organization involved in the project preparation and implementation, which receives ERDF and state support in order to realize the proposed activities. Project Partners are involved in a contractual relationship with National Authorities for the state co-financing, and will conclude a Partnership Agreement with the Lead Partner for governing the rights and responsibilities brought by the implementation of their common project; Compulsory Project Partner from the other side of the border where the Lead Partner is situated; Project Partner located in the same country as the Lead Partner; An organization involved in the project at different stages that may contribute to the professional implementation of the planned project activities without receiving any ERDF or state co-financing in return. The Associated Partner will not be involved in contractual relationship with Managing or National Authorities and will not be fully involved in the implementation of the activities of the project nor financially; The legislation of the state on whose territory the beneficiary is located; Amount with which all beneficiaries have to contribute to the total eligible amount of their own project budget. A strategic priority within the operational programme, including a group of interconnected key areas of intervention and actions with measurable specific objectives; Any legal entity meeting the eligible criteria for submitting an application to be financed by the programme; Any applicant or potential applicant is a potential beneficiary until the decision for financing its project has been issued; The activity for which funding is being sought under the Programme, expressed as the application form and its annexes; Contract concluded between the MA/JTS and the Lead Partner containing the rights and obligations of the two parties related to the ERDF funds awarded for project implementation; Amount made available from the central budgets of the two Member States participating in the programme and will be automatically accorded to beneficiaries to a certain extent complementing the available ERDF Funds. Contract between the Project Partners and National Authorities related to the rights and obligations referred to the state co-financing; Agreement signed by all Project Partners which states the rights and obligations of the partners related to the activities to be implemented within the project, the designation of the Lead Partner, and other issues to be settled in order the project to be implemented properly;

Cross-Border Partner Domestic Partner Associated Partner

National Legislation Own contribution Priority Axis Potential applicant Potential beneficiary Project Subsidy Contract

State cofinancing Contract for state co-financing Partnership Agreement

38

List of Abbreviations - Certifying Authority - Contract for State Co-financing - Domestic Partner - European Grouping for Territorial Cooperation - European Regional Development Fund - European Social Fund - Group of Auditors - Info Point - Joint Monitoring Committee - Joint Steering Committee - Joint Technical Secretariat - Lead Partner - Managing Authority - HungaryRomania Cross Border Co-operation Programme 2007-2013 - Partnership Agreement - Project Partner - Final Progress Report - Project Progress Report - Subsidy Contract

CA CSF DP EGTC ERDF ESF GoA IP JMC JSC JTS LP MA OP PA PP FPR PPR SC

39

VII. LIST OF ANNEXES

ANNEX NO. 1. TABLES OF INDICATIVE ELIGIBLE ACTIVITIES BROKEN DOWN BY ACTIONS PLEASE NOTE!
For the present Call, in accordance with Hungarian Decree of the Ministry for National Development and Economy no. 5/2009. (III. 18.) also temporary aid can be granted. In each case when there is an X in the state aid or de minimis column it means that certain activities might fall under state aid if all the conditions that lead to it are met. It does not mean that all projects submitted under that particular action will fall under state aid rules. In all cases please, also consult the relevant chapter of the present Handbook and ANNEX D - Guidelines on state aid, as well as the relevant Community and national legislation listed in the Handbook.

PRIORITY AXES KEY AREA OF INTERVENTION ACTION FRAMEWORK ACTIVITY Construction, rehabilitation and widening of the surface and substructure of roads across the border (leading to it and crossing it), that connects settlements Construction, rehabilitation and widening the surface and substructure of roads connecting small villages with the main road/highway, which lead to the border Construction, rehabilitation of bicycle paths leading to and crossing the border Construction, rehabilitation of bicycle routes connecting settlements along roads that lead to the border SPECIAL PROVISIONS

1. Improvement of the key conditions of joint sustainable development in the co-operation area 1.1. Improvement of cross-border transport facilities 1.1.1. Road development STATE AID PROVISIONS NOT FALLING UNDER REGIONAL AID DE MINIMIS/ STATE AID TEMPORARY AID X

X X In all cases environmental friendly solutions have to be sought and will have an advantage.

PRIORITY AXES KEY AREA OF INTERVENTION ACTION

1. Improvement of the key conditions of joint sustainable development in the co-operation area 1.2. Improvement of cross-border communication 1.2.1 Development of the cross-border broadband internet infrastructure STATE AID PROVISIONS REGIONAL AID DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

FRAMEWORK ACTIVITY

Establishment and development of distribution point and networks that connect settlements to country main networks Ensure connection between distribution points and networks within the territory of two or more neighbouring settlements across the border Development of special IT networks and secure IT communication systems between cross border public institutions that cooperate (police, water management, firemen) as well as other special intervention units (maybe also local governments and public transportation institutions) SPECIAL PROVISIONS

Regarding the first two activities, they do not fall under state aid rules only in the case when they concern public institutions, i.e. public institutions apply and are the beneficiaries of available funds.

PRIORITY AXES KEY AREA OF INTERVENTION ACTION

1. Improvement of the key conditions of joint sustainable development in the co-operation area 1.3. Protection of the environment 1.3.1 Protection of nature and natural values infrastructure STATE AID PROVISIONS REGIONAL AID DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

FRAMEWORK ACTIVITY

Improvement/setting up of infrastructure for nature protection and sustainable use of natural resources in protected areas (places to receive visitors, resting places, waste management systems, etc.) Establishment of information centres/houses, open air schools related to the protection of nature and natural values

Recovery or development of natural habitats, establishment, improvement of protection functions of the land and natural values Rehabilitation, prevention of protected historical gardens, natural collections SPECIAL PROVISIONS ----

PRIORITY AXES KEY AREA OF INTERVENTION ACTION FRAMEWORK ACTIVITY

1. Improvement of the key conditions of joint sustainable development in the co-operation area 1.3 Protection of the environment 1.3.2. Water management STATE AID PROVISIONS REGIONAL AID DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

Rehabilitation of the river basin in order to ensure the good quality of surface waters; rehabilitation of floodplains in accordance with the national legislation and EU water framework directive Works in order to improve the quality of water flows in the border area Rehabilitation of cross-border polluted areas that threaten rivers or groundwater; prevention of further contamination in accordance with the rules in effect Establishment or improvement of rainwater pipeline systems within the territories of settlements, in areas where the excess rainwater threatens land or settlements on the other side of the border; restoration of wetland fields in a sustainable way Co-operation between existing institutions and relevant stakeholders in order to harmonize activities in the filed of flood prevention and contamination issues in a sustainable way, as well as to install joint pollution and water level monitoring systems SPECIAL PROVISIONS ----

X X

PRIORITY AXES KEY AREA OF INTERVENTION ACTION

1. Improvement of the key conditions of joint sustainable development in the co-operation area 1.3 Protection of the environment 1.3.3. Reducing pollution waste management STATE AID PROVISIONS REGIONAL AID or SERVICE IN GENERAL ECONOMIC INTEREST X Activity is falling under the Altmark Trans case or might be a service in general economic interest, but this does not mean a lower intensity rate. In case it is regional aid the intensity rate might be lower. DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

FRAMEWORK ACTIVITY

Establishment of cross-border plants for processing/burning waste (able to be commonly used)

Complete and modernize regional waste management technologies with new elements; selective waste collection

X Activity is falling under the Altmark Trans case or might be a service in general economic interest, but this does not mean a lower intensity rate. In case it is regional aid the intensity rate might be lower.

Elimination of illegal dumps, rehabilitation of sites, creation of waste collection systems, allowing also selective collection

X Activity is falling under the Altmark Trans case or might be a service in general economic interest, but this does not mean a lower intensity rate. In case it is regional aid the intensity rate might be lower.

Construction, reconstruction, expansion of sewage systems only in case of justified cross-border impact; application of special, environmental friendly sewage treatment systems

X Activity is falling under the Altmark Trans case or might be a service in general economic interest, but this does not mean a lower intensity rate. In case it is regional aid the intensity rate might be lower.

Exchange of good practices between local authorities only when connected to one of the activities above SPECIAL PROVISIONS

The above mentioned activities in certain cases might not fall under state aid rules, like for example development of waste plant or construction of sewage systems.

PRIORITY AXES KEY AREA OF INTERVENTION ACTION FRAMEWORK ACTIVITY

2. Strengthen social and economic cohesion of the border area 2.1. Support for cross-border business cooperation 2.1.1. Development of business infrastructure STATE AID PROVISIONS REGIONAL AID DE MINIMIS/ TEMPORARY AID X NOT FALLING UNDER STATE AID

Construction of new business infrastructure facilities, extension of existing ones with new facilities and services directly serving the development of cross-border business and trade Reconstruction or enlargement of (multifunctional) buildings that can be used for conferences, fairs and trades, business events. (Property development for investment and purchase of necessary equipment is also eligible) Elaboration of feasibility studies, engineering design documents, architectural plans, environmental impact assessments

The first two activities might fall under the state aid rules, depending on the case. In case the investment concerns the establishment of a new business infrastructure or the extension, reconstruction or enlargement of existing facilities that will lead to the offering of new services the activity might be regional aid, thus the intensity rate might be lowered to 50%. Regarding the third activity in case the costs can be activated on the investment then it will fall under regional aid rules. In all other cases de minimis/temporary aid rules might be applicable, or the activity could be considered as not falling under the state aid rules.

SPECIAL PROVISIONS

PRIORITY AXES KEY AREA OF INTERVENTION ACTION

2. Strengthen social and economic cohesion of the border area 2.1. Support for cross-border business cooperation 2.1.3. Development of tourism STATE AID PROVISIONS NOT FALLING UNDER STATE AID

FRAMEWORK ACTIVITY

REGIONAL AID

DE MINIMIS/ TEMPORARY AID

Planning, realizing (delineating) and marking forest pathways, horse-riding paths, hiking and bicycle routes, etc. (for active tourism); developing resting places, etc. Establishment of visitor-friendly, interactive exhibition centers/houses X Only for marketing activities

Development of thematic tourist packages, preparation of joint marketing tools and information systems Purchase of equipment, environmental friendly vehicles serving tourism purposes (bicycles, canoes, water bicycles, etc.) in cases when tourist places, tourist services are already developed Preparation of joint marketing tools and information systems in connection with the first three activities Supporting the rehabilitation/reconstruction of historical monuments, buildings, sights that have an effect on tourism and cultural development and around which tourist packages of cross-border importance can be built, like for example: religious, historic routes, or concentrating around cultural heritage (literature, artistic heritage, etc.) SPECIAL PROVISIONS X Only for marketing activities

In case of framework activity 3 and 4, 6 only the activity concerning marketing will fall under state aid rules. Regarding the support given to these activities the de minimis/temporary aid rule shall apply. In case of activity 4 the general rule that project aiming only to the purchase of equipment shall not be supportable shall apply. Thus the purchase of equipment should be complemented with other activities from one or more of the framework activities proposed. Please note that projects without infrastructural investment are not eligible in Call for proposal 1101, framework activities 1,3,4,5 cannot be implemented without infrastructural investment activities (framework activities 2,6).

PRIORITY AXES KEY AREA OF INTERVENTION ACTION FRAMEWORK ACTIVITY Joint and complementary development of R&D and innovation infrastructure related to a cooperation project: development of existing R&D and innovation infrastructure serving CBC, harmonization of the purchasing of specific equipments, establishment of new R&D centres and infrastructure facilities, creation of research and technical development centers for joint research in areas relevant for CBC cooperation and matters of common interest

2. Strengthen social and economic cohesion of the border area area 2.2. Promotion of cooperation in the field of R&D and innovation 2.2.1. Joint research infrastructure development STATE AID PROVISIONS R+D AID DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

SPECIAL PROVISIONS

In case the facility will serve fundamental research the grant rate intensity will remain the same as stipulated in the call. In case industrial research or experimental development will be conducted in the facility the intensity will be 50%, respectively 25%.

PRIORITY AXES KEY AREA OF INTERVENTION ACTION FRAMEWORK ACTIVITY

2. Strengthen social and economic cohesion of the border area 2.4.Healthcare and prevention of common threats 2.4.1. Development of infrastructure for common health and risk prevention STATE AID PROVISIONS REGIONAL AID DE MINIMIS/ TEMPORARY AID NOT FALLING UNDER STATE AID

Construction, reconstruction in health care: risk prevention Cooperation between health-care service providers: joint purchase of medical equipment and joint use of them, establishment of on-line diagnostic systems and patient coordination systems, purchase of the necessary IT tools Activities fostering the mobility of patients and health professionals Creation of joint mechanisms for intervening in urgent, unexpected

X X

situations, that require rapid response and interventions (eg. transport accidents, fire, natural and industrial disasters, criminal cases); development of CB emergency plans, development of communication links, joint monitoring and preventive interventions Should include other relevant stakeholders like fire department, rapid response teams in case of disasters, etc. Organisation of cross border simulation trainings, conferences, workshops in the field of risk prevention Purchase of equipments necessary for common interventions (eg. ambulance cars, resuscitating instruments, etc.) Increasing awareness, fostering knowledge exchange and contributing to the preparation of guidance materials Identify the causes of health inequalities within the programme area and develop strategies in order to bridge the gap

X The purchase of equipments, as well as soft actions, like organizing conferences, workshops, increasing awareness, etc - cannot be the bases of one project, it has to be combined with other activities that match the frameworks listed. Thus, investment types of activities have to be combined with soft ones in order to be eligible.

SPECIAL PROVISIONS

ANNEX NO. 2 - LIST OF INDICATORS 2.1. MANDATORY INDICATORS

Indicator values Indicator type Description Measurement Unit Base value Planned values

PRIORITY Axis 1: Improvement of the key conditions of joint, sustainable development in the cooperation area Key area of intervention 1.1: Improvement of cross-border transport facilities
1.1.1 Road development Result Output Output Output Output Number of people with improved cross border accessibility (road, bycicle paths) Lenght of new roads built Lenght of roads re-constructed Length of new bycicle paths built Length of bycicle paths re-constructed person km km km km

Key area of intervention 1.2: Improvement of cross-border communication

1.2.1 Development of cross border broad band infrastructure Output Output Number of people with improved IT accessibility in the programme area Number of people with reduced isolation through improved access to ICT networks Number of people using joint infrastructure person person

Output

person

48

Result

People reached by joint communication initiatives

person

Key area of intervention 1.3: Protection of the environment

1.3.1 Protection of nature and natural values (soft and infrastructure) Output Result Number of joint nature protection actions The size of land with improved environmental situation 1.3.2 Water management Output Result Number of joint water management actions Size of territory with improved flood protection 1.3.3 Waste management Output Output Result Number of joint waste management actions Number of people using joint infrastructure Ha of land with improved environmental situation pc person ha pc ha pc ha

PRIORITY Axis 2: Strengthen social and economic cohesion of the border area Key area of intervention 2.1: Support for cross-border business cooperation
2.1.1 Development of business infrastructure Output Output Number of businesses involved in cross border cooperation Number of businesses using joint infrastructure 2.1.3 Development of tourism Output Number of improved tourism attractions pc pc pc

49

Output Result

Number of people using joint infrastructure Increase in the number of visitors of jointly developed / marketed destinations

person person

Key area of intervention 2. 2: Promotion of co-operation in the filed of R&D and innovation
2.2.1 Joint research infrastructure development Output Output Result Number of new research and/or technical centers established Number of people using joint infrastructure Joint research results used in practice pc person pc

Key area of intervention 2. 4: Healthcare and prevention of common threats

2.4.1 Development of infrastructure for common health and risk prevention Output Number of people served by the joint infrastructure person

50

2.2. OTHER INDICATORS

Indicator values Indicator type Description Measurement Unit Base value Planned values

PRIORITY Axis 1: Improvement of the key conditions of joint, sustainable development in the cooperation area
Key area of intervention 1.1: Improvement of cross-border transport facilities
1.1.1 Road development Output Output Output Result Result Result Result Result New road connections established between settlements or through the border Number of people with reduced isolation through improved access to transport Number of people using joint infrastructure Decrease in travelling time (road, bycicle) Decrease in the distance between the settlements connected by the new road Increase of road safety (road) Increase in the average speed (road) Decrease in the segregation of settlements (road) pc person person % km % % %

Key area of intervention 1.2: Improvement of cross-border communication

1.2.1 Development of cross border broad band infrastructure Output Number of distribution points established pc

51

Output Output Output Result Result Result Result

Number of IT networks developed (new) Number of special IT networks/systems developed between institutions Number of institutions involved in the IT network Increase in the number of end points connected to the distribution point Number of cross border public institutions connected Increased IT accessability of the disabled/disadvantaged people Increased number of internet users

pc pc pc % nr person %

Key area of intervention 1.3: Protection of the environment

1.3.1 Protection of nature and natural values Output Output Output Output Output Output Output Number of projects ensuring connectivitiy of Natura 2000 sites Size of newly defined joint protected areas Number of joint/correlated management plans prepared The size of land affected by the sustainable use of natural resources Built-up area of resting places, places developed for visitors Number of information centers, open-air schools established Number of institutions/organizations involved in the network established for protection of environment Natural habitats recovered 1.3.2 Water management Output Number of rivers and catchments rehabilitated pc pc ha pc ha ha pc pc

Output

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Output Output Output Output Output Output Output Output Output Output

Number of joint actions improving the quality of water flows Number of common ground water bases rehabilitated Size of the remediated area Number of joint monitoring systems established Number of rainwater pipeline systems established/improved Number of specific water management instruments / equipments bought (supply) Number of common hydrogeological models developed Number of databases prepared Number of surveys performed Number of surface water pollution sources eliminated or significantly reduced within the project Number of ground water pollution sources eliminated or significantly reduced within the project Floodplains rehabilitated Wetland fields restored 1.3.3 Waste management

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Output

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Result Result

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Output Output Output Output Result

Number of sewage system established/developed Number of joint waste collection and processing systems established Number of best practices exchanged Number of specific waste management instruments / equipments bought (supply) Size of contaminated territory rehabilitated

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Result

Waste collected or processed with new technology

m3/year

PRIORITY Axis 2: Strengthen social and economic cohesion of the border area
Key area of intervention 2.1: Support for cross-border business cooperation
2.1.1 Development of business infrastructure Output Output Output Output Output Output Output Output Output Output Output Output Result Number of newly built business infrastructures Number of business infrastructures reconstructed Built-up area of newly constructed building Area of reconstructed surface Number of newly introduced functions and services Number of organizations utilizing new business functions/services Number of joint marketing tools developed Number of newly established work places Number of work places preserved Number of studies elaborated Number of databases developed Number of surveys performed Cross-border business cooperations settled 2.1.3 Development of tourism Output Output Lenght of forest roads, cycling, horse-riding pathways, educational paths built Activities contributing to the environment and sustainable development m pc pc pc M2 M2 pc pc pc pc pc pc pc pc pc

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Output Output Output Output Output Output Output Output Output Output Output Result Result

Number of tourist products developed Number of people affected by tourist products developed Number of thematic tourist packages developed Number of visitorfriendly, interactive exhibition centres established Number of people affected by tourist packages developed Built-up area of reconstructed/rehabilitated tourism infrastructure Number of reconstructed/rehabilitated tourism infrastructure Number of joint information activites elaborated Number of joint marketing tools developed Number of newly established work places Number of work places preserved Number of people using jointly developed facilities Number of people participating in joint events

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Key area of intervention 2. 2: Promotion of co-operation in the filed of R&D and innovation
2.2.1 Joint research infrastructure development Output Output Result Number of specififc equipments purchased Number of existing research centers with new infrasturcture facilities Increase in the effectiveness of cross border research activities pc pc %

Key area of intervention 2. 4: Healthcare and prevention of common threats

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2.4.1 Development of infrastructure for common health and risk prevention Output Output Output Number of buildings constructed/reconstructed/acquired Built-up area of the built / reconstructed buildings Number of professional organisations involved in the risk prevention cooperations established Number of professional organisations involved in the health care cooperations established Number of joint mechanisms created for emergency situations Number of joint strategies/protocols developed Number of activities aiming to foster the mobility of patients
Number of activities aiming to foster the mobility of health care/emergency rescue professionals Number of activities aiming at the creation of a joint portfolio of health services

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Output

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Output Output Output

Output

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Output Output Output Output Output Output Result

Number of integrated dispatcher services established Number of joint trainings (including language courses) Number of joint workshops and conferences Number of awareness raising events Number of people reached by the awareness raising events Population covered by the joint mechanisms developed

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