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3. Introduction of the norm on the chief superintendents secondary liability for the monetary liabilities of the recipients of the budget funds in his charge. The liability of the chief superintendent of the budget funds to have secondary liability for the monetary liabilities of the budget institutions in his charge is one of his main budget responsibilities. This is the very fact that was decided to reflect in clause 1 article 158 of the Budget Code of the Russian Federation, in which the budget responsibilities of the chief superintendent of the budget funds are established.

4. The change in the procedure for taking into account the operations with oil and gas earning of the federal budget. According to the new version of clause 2 article 9612 of the Budget Code of the Russian Federation, in case the volume of oil and gas transfer established by the Federal Law On the federal budget for 2009 and for the planning period of 2010 and 2011 is not achieved all the means of of the oil and gas earnings are to be directed first to the oil and gas transfer until its volume is reached and only the are directed to the Reserve Fund of the Russian Federation and the National Welfare Fund.

5. The simplification of the procedure for the provision of the state insurance arrangements of the Russian Federation. In order to make the government support of the organizations more operational the law project lifts the limitation of the Budget Code of the Russian Federation concerning the maximum volume (sum) of the state insurance arrangements of the Russian federation, the right to adopt the decisions on which the Government of the Russian Federation is allowed to transfer to the Ministry of Finance of the Russian Federation.

According to the Federal Law of the Russian Federation from 30.12.2008 No 324-FZ On making changes to the Federal Law On the federal budget for 2009 and for the planning period of 2010 and 2011 a number of amendments was made to the federal budget for 2009 and for the planning period of 2010 and 2011 aimed at supporting of the financial market and some branches of the economy.

The changes made did not concern the main indices of the federal budget. The realization of the additional measures on supporting the Russian economy is envisaged to fulfill at the expense of specification of the internal financing sources for the budget deficit. According to the amendments, for instance, the forecast upper limit of the state internal debt of the Russian Federation was raised (including the state insurance arrangements of the Russian Federation in the RF currency up to RUR 463 bln on January, 1 2010, up to RUR 492 bln on January 1, 2011 and up to RUR 477 bln on January, 2012).

The amendments envisage the possibility for the Ministry of Finance of the Russian Federation to submit the government insurance arrangements concerning the credits of some organizations (including organization of strategic significance of the defense industry complex) at the amount that does not exceed RUR 10 bln for each insurance arrangement, and increase the maximum amount of the state insurance arrangements provisioned by the Ministry of Finance of the Russian Federation in the form of the foreign currency aimed at supporting the export of the industrial production from USD 50 mln to USD 150 mln for each insurance arrangement of the Russian Federation. Besides, the volume of federal budget funds within which the Government of the Russian Federation as a result of federal budget execution in 2008 has a right to direct resources for the fulfillment of the measures aimed at supporting the financial market, labor market, branches of the economy, as well interbudgetary transfer provision was increased from RUR 175 mln to RUR 325 mln.

Municipal reform: recent changes in legislation I. Starodubrovskaya, N. Mironova In late 2008, two federal laws were adopted whereby changes were introduced which cover a rather broad spectrum of different aspects of local self-government regulation. As a result, by the end of the year 2008 the overall number of legislative acts designed to introduce changes in the Federal Law On the general principles of the organization of local self-government in the Russian Federation had become 41 since the moment of the laws adoption in 2003.

The year 2008 saw the continuation of the rather unfortunate tradition of amending federal legislation in order to introduce yet another changes concerning the division of powers between bodies of authority of different levels, as well as some other important aspects of the activity of bodies of local self-government, towards a years end. On the most recent occasion these newly adopted normative acts were Federal Law of 25 November 2008, No 222-FZ On the introduction of changes into some legislative acts of the Russian Federation in connection with further improvement of the organization of local self-government and Federal Law of 25 December 2008, No 281-FZ, On the introduction of changes into some legislative acts of the Russian Federation. As a result, by the end of 2008 the number of legislative acts designed to make amendments to the Federal law On the general principles of the organization of local self-government in the Russian Federation had become as high as since the moment of its adoption in 2003.

The aforesaid two laws introduce the following changes that have some bearing upon a sufficiently broad spectrum of different aspects of local self-government regulation:

the regulation of the territorial organization of local self-government has become more clearly defined, first of all in the part relating to the creation of new municipal formations;

with regard to intra-city municipal formations belonging to cities of federal importance it has now become possible, for a head of a municipal formation, to combine the posts of a head of a representative body and a head of administration;

changes have been introduced in the lists of the issues of local importance assigned to municipal formations; in particular, the execution of municipal control and supervision over forests was consolidated to urban districts;

some clarification has been introduced into the issue concerning the powers relating to the upkeep and exploitation of biothermal pits which, in absence of precisely defined regulation, had often been consolidated to municipal formations without any reasonable justification thereto; now this sphere has been placed under the jurisdiction of the Federations subjects;

some changes have been introduced into the lists of the rights of municipal formations: all municipal formations now enjoy the right to create appropriate conditions for the development of tourism; besides, the right to perform the functions of founding municipal educational establishments for higher professional training belonging to the sphere of their jurisdiction as of 31 December 2008 has been consolidated to municipal raions, whereas previously it had been consolidated only to urban districts and determined in more general terms the creation of municipal educational establishments for higher professional training; etc.;

branch legislation now offers more detailed definitions of certain rights and powers of municipal formations those relating to notarial acts, certain powers in the sphere of physical culture and sports, etc.

the timelines for the implementation of some provisions of municipal reform have been extended:

thus, the deadline for the completion of the description of the borders of municipal formations in accordance with the requirements of urban development and land legislation, as well as for the privatization, alienation and reorientation of unrelated property of municipal formations has been extended until 1 January 2012;

the timelines for the implementation of municipal reform in the Republic of Chechnya and the Republic of Ingushetia have been determined.

Notwithstanding the fact that many issues from this list are indeed of paramount importance, it should also be noted that they are mostly only of technical character and narrow application, and so have no impact on the fundamental principles of municipal reform.

However, some other areas where changes have been introduced into federal regulation by these two legislative acts are of higher significance.

Firstly, legislation now envisages the sub-delegation to the municipal level of the powers transferred to the regions from the federal level, which has thus become possible in the spheres of vaccination against infectious diseases; compulsory insurance of the civil responsibilities of owners of means of transportations; and a certain number of social support measures. This is yet another demonstration of the limitations imposed by a rigid pattern of the division of powers, which necessitates the creation of complex mechanisms for their delegating between the levels of authority. Besides, this provision is also fraught with the danger of further increase of the scope of activity associated with the execution of delegated powers by the bodies local self-government, which by now has reached a nearly critical level as it is.

Secondly, one instrument of regulation, which in the past was regarded as negative by both the municipalities and the experts community, has been reestablished namely, the setting at the federal level of the upper threshold for the tariffs on electric and heating power. Initially, this mechanism, which imposes significant restrictions on the independence of subjects of the Federation and municipal formations in the sphere of tariff regulation, was introduced in order to control the rate of inflation, but even then it was by no means considered to be a perfect solution to this problem. However, in any event it was envisaged that from the year 2009 onwards it was to be abolished. Instead, the new amendments to prevailing legislation have consolidated the application of this set of instruments on a permanent basis. Evidently, such a decision on the part of the lawmakers will further complicate the execution of municipal powers in the sphere of housing and utilities; make more difficult the development of an appropriate market infrastructure for the providers of utilities; prevent the switchover to complete coverage of the housing and utilities costs by the population in all the regions; and impose additional obligations on subjects of the Federation and municipal formations to provide budget funding to the utilities sector. The necessity to extent such measures on a temporary basis, for the period of the current economic crisis, can indeed be reasonably discussed; however, there is no reasonable substantiation for consolidating such measures on a permanent basis.

Thirdly, certain modifications have been introduced into the regulation of the financing powers transferred by mutual agreements between settlements and municipal raions. Previously, it was clearly stated in legislation that the powers thus transferred should be financed by transfers from the budget of that municipal formation from which the powers were delegated. Now it is established that, in order to execute the transferred powers, the bodies of local self-government have the right to additionally draw on their own material resources and financial means. This decision cannot be estimated in unequivocal terms. On the one hand, it is conducive to unification of the regulation of financing powers delegated from national and municipal levels, thus approximating it to the actual practice of transferring powers.

On the other, under these new conditions it becomes even easier than before to centralize the powers and finances at the raion level, thus impinging on the rights of settlements. By making use of their prerogatives to distribute financial aid between settlements, the bodies of local self-government of a municipal raion may first resort to an extreme centralization of their financial resources, and then force the settlements to transfer to them the bulk of their powers, on the lawful grounds that the former are providing the necessary funding from their own budget.

However, of still more importance, by comparison with what is present in newly adopted legislation, is what is conspicuously absent from it. In this connection, it is noteworthy that the new amendments offer no cardinal solutions to those fundamental problems that the sphere of local selfgovernment is currently faced with. These are, first of all, the problems of financial character. The recently adopted legislative acts, while failing to define more clearly the mechanisms designed to improve the system of financing of municipal formations in the future, also fall far short of outlining any prospects for those temporary changes that were introduced into federal legislation for the duration of the transition period, until 1 January 2009. Consequently, in the year 2009 these measures some of them being of fundamental character were automatically to be discontinued41. All this, besides, occurs spontaneously, without any serious analysis or discussion of the potential consequences which could have provided a basis for well-substantiated decision-making.

First of all, the right of regional authorities to set for municipal formations additional norms, in connection with financial aid, for deductions to be made not only from the income tax, but also from any of the taxes transferred to the regional budget by agreements with bodies of local self-government, as well as a regions right to replace by these additional norms not only the per capita dotations, but also the dotations designed to equalize the levels of budget sufficiency.

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