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At the same time, on accordance with the RF Budget Code, the State duty, as well as the fees for the execution of notarial actions by notaries working at state no tarys offices and appropriately empowered by legislative acts of the Russian Fed eration and subjects of the Russian Federation, by government officials of bodies of executive authority, and by bodies of local self government, are to be trans ferred to the budget of a municipal raion. Thus, there emerges a discrepancy be tween the execution of notarial actions at the level of settlements and the transfer of the corresponding revenues to the budgets of municipal raions As for any changes to issues of local importance, the lawmakers have revived the trend of excluding social issues from the sphere of competence of bodies of local self government71. From the list of issues of local importance of settlements such issues have been excluded as aid in establishing trusteeship and guardian ship, as well as the computation of subsidies for the housing and utilities fees and the organization of the procedure for granting subsidies to those citizens who are entitled to them. This last issue was placed on the list of issues of local importance only a year ago. This inconsistence in the lawmakers behavior does not make any easier the organization of the work of bodies of local self government. As for mu nicipal raions, the issue of trusteeship and guardianship has been withdrawn from the sphere of their competence. Accordingly, the whole bulk of these issues has also been withdrawn from the sphere of activity of city okrugs and placed within the sphere of competence of the Federations subjects. In this connection, the partici pation in the activity relating to trusteeship and guardianship had been placed on the list of issues that are not classified as those issues of local importance that can be settled by the bodies of local self government of all types of municipal forma tions72.

The provisions of Law No. 131 FZ concerning this right are to enter into force from 15 January 2008.

The corresponding items of Articles 14, 15, 16 of Law No. 131 FZ will become null and void from January 2008.

The corresponding provisions of Law No. 131 Fz concerning this right will enter into force from January 2008.

Section Monetary and budgetary spheres Such changes can hardly be regarded as positive. It is highly doubtful that the distancing, from the grassroots, of certain social issues, especially issues like as trusteeship and guardianship, which are so delicate and require an in depth knowl edge of the situation (including the specific family situations), could indeed result in improved performance. As for the issue of the computation and granting of subsi dies, its successful settlement also depends on the knowledge of local specificities and the opportunities provided by the resources of local budgets, which has also become impossible in the situation of the new division of powers.

To the list of issues of local importance assigned to settlements and city ok rugs, that of creating appropriate conditions for the activity of voluntary population units for the protection of public order was added73, while to the list of issues of lo cal importance assigned to all types of municipal formations not only that of the replenishment of library holdings, but also of the ensuring of their adequate protec tion.

It should be noted that this legislative is not free of the imprecision that was characteristic of the previously adopted documents of a similar type. The new pow ers of the bodies of local self government, assigned by the amendments to branch legislation, have not been fully reflected in the amendments introduced to Law FZ and are poorly compatible with the issues of local importance consolidated by this Law to municipal formations. The most vivid example of this incompatibility are the amendments made to the Fundamental Principles of Legislation of the Russian Federation on the Protection of Citizens Health.

2.6.2. The Implementation of Reform in Certain Regions: General Trends and Local Features The amendments to Law No. 131 FZ adopted in 2005 enabled the regions to determine on their own the volume of powers to be executed and the sources of revenue applicable to the newly created settlements. In this connection, different subjects of the Federation provided different solutions to that issue: some of them declared that they were going to implement municipal reform full scale in 2006, while others took advantage of the right granted to them by the newly adopted amendments to legislation and resorted to the evolutional variant of reform imple mentation. Thus, the first question to be answered by the monitoring of reform in 2006 is as follows: how great is the actual difference between the situation in those regions where municipal reform has been fully implemented and in those where the transformations planned at the municipal level were not in their entirety carried out in 2006.

The analysis of the situation as it exists in some regions74 has demonstrated that nowhere do the newly created municipal formations of the settlement level deal with all the issues of local importance envisaged in Law No. 131 FZ. From this This amendment to Articles 14 and 16 of Law No. 131 FZ will enter into force from 1 January 2008.

In 2006, a detailed analysis of the situation with the implementation of municipal reform was con ducted in Vologda Oblast, Cheliabinsk Oblast, Orenburg Oblast, Kaluga Oblast, Tver Oblast and the Republic of Chuvashia, while information on the other regions was sketchier.

RUSSIAN ECONOMY IN trends and outlooks point of view, those regions that have declared full scale implementation of mu nicipal reform do not in any significant way differ from those where the evolutional variant has been chosen. In this connection, in those regions where full scale im plementation of reform has been declared, the instrument of agreements as to the transfer of powers between the bodies of local self government of settlements and municipal raions is applied, in order to limit the competence of the bodies of local self government of settlements. As for those regions where reform has not yet been fully implemented, there the powers of settlements are limited both by re gional legislation and by agreements on the transfer of powers. Nevertheless, we may point out certain differences between the regions where reform has been im plemented full scale from the rest of the subjects of the Federation. Thus, the share of the budgets of settlements in the consolidated budgets of municipal raions, as can be derived from the information relating to the first half year 2006, in the former category of regions amounts to 16.6%, while in the other regions it is only 6.2%.

Of some interest also the question as to the ratios of competence of the bod ies of local self government of newly created and previously existing settlements.

In all propability, the situation varies greatly between regions. For example, in Orenburg Oblast, where prior to the onset of reform there existed only 4 municipal formations of the settlement type, the differences between the powers granted to newly created and previously existing settlements are rather substantial. Thus, the competence of the bodies of local self government of newly created settlements in 2006 was restricted by both regional legislation and by agreements on the transfer of powers, while the previously existing municipal formation Chernorechenskii selsovet was not only dealing with all the issues of local importance envisaged in Law No. 131 FZ, but was also continuing to finance from the local budget the ob jects of public education and public healthy care located in its territory. Quite a dif ferent situation developed in Cheliabinsk Oblast, where prior to the onset of reform the two tier model of territorial organization had already been implemented. Here, in order to restrict the competence not only of the newly created, but also of the previously existing settlements the mechanism of transfer of powers is applied. Si multaneously, there is an obvious intention to bring the powers granted to the bod ies of local self government of settlements to that level which emerged in the pre reform period.

It is evident that the main instrument for restricting the competence of the bodies of local self government of settlements, applied in the regions where mu nicipal reform has been implemented full scale, as well as in the regions where the process of transformation has not been completed yet, is the agreement on the transfer of powers. And this instrument may be widely applied not only within the framework of the transition period, but also after 1 January 2009. Therefore, the character and peculiarities of the application of this instrument need to be analyzed in more detail.

The possibility of and the conditions for the conclusion of an agreement on the transfer of powers are envisaged in Law No. 131 FZ, and not in its transitory provisions, but in its text body (Article 15). By legislation it is thus envisaged that:

Section Monetary and budgetary spheres - the transfer of powers may be effectuated both from the bodies of local self government of settlements to the raion level, and from the bodies of local self government of municipal raions to settlements;

- the agreements must provide for the financial backing of the powers being thus transferred from the subventions granted from the local budgets of those mu nicipal formations that have transferred their powers; the procedure for deter mining the annual volume of subventions must be determined by the agree ment;

- the agreements must envisage the transfer not of an issue of local importance as such, but a part of the powers assigned to the bodies of local self government for the decision making in respect to a certain issue of local impor tance;

- the agreements must be concluded for a certain period of time;

- the agreements must contain provisions establishing the grounds and proce dure for their termination, including early termination;

- the agreements must envisage financial sanctions for the non execution of the agreements.

In actual practice, in a vast majority of cases, the agreements are concluded with violations of existing legislation. The most typical violations are as follows.

1. The agreements are not voluntary in their essence (being an obligation in stead of a right). A model agreement is adopted at the level of either a whole re gion, or one municipal raion. Thus, for example, the Administration of the President of the Republic of Chuvashia developed a model agreement containing a list of powers assigned to settlements, which the Republics bodies of state authority recommend to be transferred from settlements to the level of raions. The corre sponding agreement in most cases is signed, without any changes, by the bodies of local self government of municipal raions with all the settlements on a uniform basis. In this connection, no regard is given to the specific potential of each settle ment for dealing with issues of local importance, and from the instrument designed to adjust to the shortage of material resources and personnel in certain settlements the agreement is turned into a universal instrument for restricting their powers.

In some cases the individualization of agreements is allowed to previously ex isting settlements. Thus, in Maloyaroslavets raion of Kaluga Oblast, individual agreements were signed by only two previously existing settlements with the status of municipal formations: Posiolok Detchino and the town of Maloyaroslavets (in this latter case the volume of powers actually being transferred was minimal). At the same time, all the newly created settlements signed agreements in a single format determined by the administration of the municipal raion, despite their organiza tional potentials being entirely different. An attempt made by the largest of the newly created settlements with the population of approximately 4,000 to limit the volume of powers being transferred to the raion level resulted in a serious person nel reshuffle at the settlement level.

However, in some other regions the situation is less oppressive: there are some rebel municipal formations who are defending their right to execute a wide RUSSIAN ECONOMY IN trends and outlooks range of powers than that envisaged by the standard approached. Nevertheless, in none of the surveyed regions the number of such settlements, according to repre sentatives of local administrations, is more than 10%. And in only some regions the oblast administration does not impose the unification of the mechanism of transfer of powers and truly wants to take into account the local peculiarities. One such ex ample is Tver Oblast.

2. Not the powers but the whole issues of local importance are transferred. As a result, the bodies of local self government of settlements actually lose control over a certain issue of local importance. The transfer of issues of local importance generally, without any specification of the powers being transferred, results in a situation when the actual activity of the bodies of local self government of the mu nicipal raion in their dealing with a given issue may substantially differ from the set tlements expectations. Thus, in one of the rural settlements in Nizhnii Novgorod Oblast the bodies of local self government, as admitted by their representatives, when transferring to the raion level the issue of providing appropriate conditions for the development of mass scale physical culture and sport in the settlements terri tory, believed that rural children would thus obtain the opportunity to regularly visit the raion center in order to train at a local sports school, while the hockey field in the village would be repaired, and the sports organizer would be receiving meth odological assistance from the raion. At the same time, the bodies of local self government of the municipal raion were planning to receive additional funding for the upkeep of the administrative apparatus, for the participation of athletes in inter raion and regional competitions, as well as for the upkeep of the sports school, al though it was not planned that rural children would be brought to train at that school.

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