Municipal Budgets Act by QoA2W6h7

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									           Municipal Budgets Act
         Promulgated State Gazette No. 33/24.03.1998, amended, SG No. 69/3.08.1999,
effective 3.08.1999, SG No. 9/2001, Judgment No. 2/18.01.2001 of the Constitutional Court of
the Republic of Bulgaria, SG No. 9/30.01.2001, amended, SG No. 56/7.06.2002, effective
1.10.2002, amended and supplemented, SG No. 93/1.10.2002, SG No. 107/9.12.2003, amended,
SG No. 34/19.04.2005, effective 1.06.2005, SG No. 105/29.12.2005, effective 1.01.2006,
amended and supplemented, SG No. 98/5.12.2006, effective 1.01.2007, SG No. 108/19.12.2007,
amended, SG No. 98/14.12.2010, amended and supplemented, SG No. 16/22.02.2011

        Text in Bulgarian: Çàêîí çà îáùèíñêèòå áþäæåòè

      Chapter One
    GENERAL PROVISIONS
        Article 1

     (Amended, SG No. 107/2003)

      This act shall regulate the preparation, adoption, execution, closing and reporting of
municipal budgets, the budget relationships between the municipalities and the central budget,
and the treatment of extra budgetary resources of municipalities.

        Article 2

     Municipal budgets and extra-budgetary resources shall be managed by the bodies of local
government and the local administration in compliance with the provisions of the law.

      Chapter Two
    MUNICIPAL BUDGET
        Article 3

     (1) Each municipality shall have a separate budget.

     (2) The municipal budget shall be a separate financial account of the municipality's
revenues and expenditures for a single budget year.

     (3) The budget year shall be concurrent with the calendar year.

        Article 4

     (Amended, SG No. 107/2003)
      (1) The municipal budget shall be the means of authorization and appropriation of money
resources to finance local activities and activities delegated by the State.

     (2) Financing of local activities and activities delegated by the State shall be done by any
municipality in the interest of the local community and applying the principles of legality,
appropriateness of purpose, efficiency, effectiveness and public openness.

         Article 5

     (Amended, SG No. 107/2003)

      The municipal budget shall be open to public scrutiny and shall be controlled by the local
community in a manner determined by the Municipal Council and by competent authorities as
designated by law.

         Article 6

     (Amended, SG No. 107/2003)

     (1) Municipal budget revenues shall consist of:

     1. own revenues from:

      (a) (amended, SG No. 108/2007) local taxes under conditions, according to procedures and
within limits provided for by law;

     (b) (amended, SG No. 108/2007) local fees according to procedures provided for by law;

     (c) services and rights provided by the municipality;

     (d) municipal property;

     (e) fines and property sanctions;

     (g) other proceeds;

     2. state transfers concerning:

     (a) (repealed, SG No. 108/2007);

    (b) grants;

     (c) subventions;

     (d) (amended, SG No. 108/2007) Interest-free loans from the central budget for financing
expenditures, including on value added tax, until their reimbursement under approved projects
and programmes financed by the European Union;

      3. transfers between spenders of budget appropriations.

     (2) The state shall provide full compensation of any reduction in the revenues referred to in
Paragraph (1), Subparagraph (1) that has resulted from the implementation of a state policy.

         Article 7

      (Amended, SG No. 107/2003)

      In formulating the revenue side of the municipal budget, the Municipal Council shall
specify revenues from:

      1. local taxes;

      2. local fees;

      3. services and rights provided by the municipality;

      4. management and disposition of municipal property;

      5. fines, penalty charges and other non-tax revenues;

      6. interest, penalty charges and other non-tax revenue.

         Article 8

      (Amended, SG No. 107/2003)

      (1) The expenditure side of the municipal budget shall set up budget appropriations for
financing local activities and activities delegated by the State.

      (2) Activities delegated by the State and standards of their costing, quantitative and
qualitative assessment shall be set jointly by the respective minister, the National Association of
Municipalities in the Republic of Bulgaria, and the Minister of Finance and shall be adopted by
the Council of Ministers.

       (3) Standards referred to under Para 2 shall serve to determine the total amount of funding
activities delegated by the State and to allocate them by municipality. The amount of resources
per municipality shall be determined in the National budget Act for the respective year.

      (4) Under a decision of the Municipal Council, activities delegated by the State may be
financed additionally also with funds from the own revenues of municipalities and from the
equalisation grant.
         Article 9

      (Amended, SG No. 107/2003)

      (1) (Amended, SG No. 108/2007) In the expenditure side of the municipal budget, the
Municipal Council shall determine the budget appropriations for financing current and capital
expenditures incurred in local activities, apportion the funds for activities delegated by the State
by type of activity and by paragraph in accordance with the standards referred to in Article 8, and
the expenditure for interest, fees and commission payments associated with servicing municipal
debt. Payments towards the principals of municipal debt shall be budgeted in the section on
financing the deficit.

      (2) Budget appropriation for current expenditure shall provide funding to ensure the
normal course of operations in the performance of activities related to the provision of public
services by the municipality.

      (3) Budget appropriation for capital expenditure shall provide funding for the acquisition,
rehabilitation and repairs to longterm assets.

      (4) (New, SG No. 108/2007) Paragraphs (1) - (3) shall apply unless otherwise provided for
by the State Budget of the Republic of Bulgaria Act for the relevant year.

         Article 9a

      (New, SG No. 107/2003)

      The Municipal Council shall adopt a regulation on the terms and procedure for the
preparation, execution of and reporting on the municipal budget.

         Article 10

      (Repealed, SG No. 107/2003)

    Chapter Three
  MUNICIPAL     BUDGET                                  PREPARATION                        AND
ADOPTION
         Article 11

      (Amended, SG No. 107/2003)

      (1) The draft budget of any municipality shall be prepared proceeding from:

      1. the municipality's strategy, projections and the municipal development plan, as adopted
by the Municipal Council;

     2. the budget projections, in conformity with general economic requirements, outlining the
parameters of the municipal revenues for the following three years;

      3. suggestions submitted by the local community through consultations, meetings and
public hearings;

      4.(amended, SG No. 69/1999, supplemented, SG No. 107/2003, amended, SG No.
16/2011) proposals by the municipal mayor, the mayors of wards and mayoralties, the mayorsÒ
envoys and the heads of budget-funded units, by the chairperson of the Municipal Council
concerning the activities of the Municipal Council, and by other organisations receiving grants
from the municipal budget;

      5. financing obligations in terms of financing municipal debt;

     6. the division of activities into local and delegated by the State that are financed through
municipal budgets;

      7. standards for activities delegated by the State;

      8. proposals of the competent ministries regarding structural changes in activities delegated
by the State, while retaining the autonomy of the municipal budget;

      9. information from the Ministry of Finance concerning expected proceeds from state
transfers from the central budget;

      10. obligations under national and regional programs and projects.

     (2) (Amended, 107/2003, 105/2005) Municipal draft budgeting shall be organized by the
municipality mayor, in cooperation with the mayoralty mayors and the ward mayors. The
revenue administration shall cooperate with the municipality in the estimation of the annual
amount and monthly proceeds from the revenues referred to in Article 7.

      (3) (Amended, SG No. 107/2003) The municipality mayor shall submit to the Ministry of
Finance an estimate for the own revenues and local expenditures, and a proposal for the amount
of the ad hoc grant from the central budget for capital expenditure purposes for the respective
year within a time limit as established by the Minister of Finance;

      (4) (New, SG No. 93/2002, amended, SG No. 107/2003) Together with the estimate
referred to in Paragraph (3), the municipality mayor shall present to the Ministry of Finance the
municipality's intentions to assume municipal debt.

      (5) (Amended, SG No. 107/2003, SG No. 108/2007) The municipality mayor shall prepare
the draft budget based on the aggregate indicators for proceeds from subsidies from the central
budget, the physical indicators and monetary amount indicators for any activities delegated by
the State as set in the National budget of the Republic of Bulgaria Act for the relevant year and
in observance with the uniform budget classification.

      (6) (Amended, SG No. 107/2003) The mayor of the municipality shall make the draft
budget available for public discussions by the local community, and shall announce the date for
the hearing with an advance notice of no less than 7 days in the local mass media. The public
hearing shall be held following a procedure as established by the Municipal Council. Any
proposals made shall be recorded in minutes that shall be attached as an integral part of the draft
budget when the latter is introduced by the mayor to the Municipal Council for discussions.

      (7) (Amended and supplemented, SG No. 16/2011) The mayor of the municipality shall
introduce the draft municipal budget within 30 working days after the National Budget of the
Republic of Bulgaria Act for the respective year has been promulgated.

      (8) (New, SG No. 16/2011) In case the time limit referred to in Paragraph (7) is not
observed, the municipal mayor shall not be paid remuneration for the period after the expiry of
the time limit until the draft budget is tabled before the Municipal Council. The municipal
mayorÒs remuneration due for that period shall be paid to him/her after he/she tables the draft
budget before the Municipal Council.

       (9) (Renumbered from Paragraph 8, SG No. 16/2011) The Municipal Council committees
shall review the draft budget and shall prepare an opinion thereon in compliance with the Rules
of Procedure of the Municipal Council and the Municipal Administration.

         Article 12

      (Amended, 107/2003, SG No. 16/2011)

     (1) Where the municipal mayor has tabled the draft budget within the time limit referred to
in Article 11, Paragraph (7), the Municipal Council shall adopt the municipality's budget within
45 working days of the promulgation of the National Budget of the Republic of Bulgaria Act for
the relevant year and in accordance with the uniform budget classification.

      (2) Where the municipal mayor has tabled the draft budget after the expiry of the time limit
referred to in Article 11, Paragraph (7), the Municipal Council shall adopt the municipality's
budget within 15 working days after it is tabled by the municipal mayor.

      (3) In case the time limit referred to in Paragraph (1) or Paragraph (2) respectively is not
observed, the chairperson of the Municipal Council and the municipal councillors shall not be
paid remuneration for the period after the expiry of the relevant time limit until the municipality's
budget is adopted. The remuneration of the chairperson of the Municipal Council and of the
municipal councillors due for that period shall be paid to them after the Municipal Council
adopts the municipality's budget.

         Article 13
      (Amended, SG No. 107/2003)

     The municipality budget shall be apportioned on a monthly basis and shall be approved by
the municipality mayor.

         Article 14

      (Amended, SG No. 107/2003)

     The municipal budget may include a provision for a reserve for immediate and unexpected
expenditure as follows:

     1. for activities delegated by the State, to an amount of up to 10 per cent of the resources
approved under the National Budget of the Republic of Bulgaria Act for the respective year;

      2. for local activities, to an amount as determined by the Municipal Council.

         Article 15

     (1) (Amended, SG No. 107/2003) The municipal budget shall be submitted to the
competent regional office of the National Audit Office and to the Ministry of Finance within one
month following its adoption by the Municipal Council.

      (2) (Declared unconstitutional by Judgement No. 2/2001 of the Constitutional Court - SG
No. 9/2001; New, SG No. 107/2003) Where the National Budget of the Republic of Bulgaria Act
for the respective year has not been adopted, expenditures for activities delegated by the State
and expenditures for local activities shall be incurred on a monthly basis in an amount up to
1/12th portion of the account of budgetary appropriations for the respective period of the
preceding year.

      (3) (Amended, 107/2003, SG No. 16/2011) Where the National Budget of the Republic of
Bulgaria Act for the respective year has been adopted, for any period of time prior to the tabling
of the draft municipal budget, expenditures for financing activities delegated by the State shall be
incurred on a monthly basis to an amount equal to the state transfers approved under the National
Budget of the Republic of Bulgaria Act for the respective year, and expenditures for financing
local activities shall be incurred on a monthly basis in an amount up to 1/12th portion of the
account of budgetary appropriations for the respective period of the preceding year.

      (4) (New, 107/2003, amended, SG No. 16/2011) After the municipal mayor tables the draft
municipal budget before the Municipal Council, expenditures for financing local activities shall
be incurred, until the budget is adopted, as per the submitted draft, AND expenditures for
financing activities delegated by the State shall be incurred under the terms specified in
Paragraph (3).

      (5) (New, 107/2003, repealed, SG No. 16/2011) that of Municipal Council members.
         Article 16

      (Repealed, SG No. 107/2003)

         Article 17

       (1) (Amended, SG No. 107/2003) Where new municipalities have been formed, or where
the administrative boundaries and territories of existing municipalities have been revised, any
alterations in the budgets of the affected municipalities and the relationships thereof with the
central budget shall follow a procedure established by the Council of Ministers.

      (2) The Municipal Council of any newly established municipality shall adopt a municipal
budget for the remaining part of the current budget year no later than 60 days following the
separation of the new municipality.

      (3) The Municipal Council of any existing municipality shall adopt any amendment to the
annual municipal budget no later than 60 days following the date of elections held ahead of the
regular term of local elections.

      (4) In the case of a merger of two or more municipalities, an aggregate budget of the newly
established municipality shall be prepared, and the said budget shall be adopted by the newly
elected Municipal Council no later than 60 days following the date of the elections held.

         Article 18

      (Amended, SG No. 16/2011)

     (1) The municipal budget may be altered in the course of the budget year subject to the
requirements referred to in Article 11, Paragraph (9). The time limits applicable to the tabling
and adoption of the alterations in the municipal budget shall be set in the regulation referred to in
Article 9€.

      (2) Any alterations of the amount of budgetary relationships between municipal budgets
and the central budget in the course of the budget year shall be performed subject to conditions
and in accordance with a procedure set by the National Budget of the Republic of Bulgaria Act
for the relevant year.

       Chapter Four
     MUNICIPAL BUDGET EXECUTION
         Article 19

     (1) Execution of the municipal budget shall commence on the 1st day of January and shall
be completed on the 31st day of December.
      (2) (Amended, SG No. 107/2003) The execution of the municipal budget shall be
organized by the municipality mayor through the mayoralty mayors and the ward mayors and
through the heads of public-financed organizations financed from and through the municipal
budget.

         Article 20

      Collection of municipal budget own revenue shall be done by the municipal administration
unless otherwise provided for by law.

         Article 21

      (1) (Amended, SG No. 107/2003, SG No. 98/2006) The cash execution of the municipal
budget shall be handled by the Bulgarian National Bank through Bulgarian commercial banks.
Bank servicing of the budget and budgetary accounts of the municipality, as well as reporting of
operations in, and assets on, such accounts, shall follow the procedure set by the State Budget
Procedures Act and the State Budget of the Republic of Bulgaria Act for the respective year.

      (2) Any operations related to the cash execution of the municipal budget, including the
safekeeping of cash and valuables, shall be effected gratuitously.

         Article 22

     (Amended, SG No. 107/2003)

      Municipal budget expenses may be incurred up to the amount of receipts covered under
Articles 6.

         Article 23

     (Repealed, SG No. 107/2003)

         Article 24

     (Amended, SG No. 107/2003)

     Any deficiency of resources as may temporarily occur in financing local activities in the
process of municipal budget execution shall be covered, by resolution of the Municipal Council,
by borrowing from:

     1. extra-budgetary resources and funds of the municipalities;

     2. banks and other financial institutions;

     3. other sources.
         Article 25

      (Amended, SG No. 107/2003)

      (1) The municipality mayor shall report to the Municipal Council on the current execution
of the budget for the first six months of the year.

     (2) Periodically, mayors shall provide information to the local community as to the
execution of the budget following a procedure as established by the Municipal Council.

         Article 26

      (1) (Amended, SG No. 107/2003) In connection with the optimization of budgetary
spending and in view of the actual needs of the local community, the Municipal Council may, in
the course of the budget year, open, close down, or restructure budgetary units within the
municipality financed with own revenues, acting within the scope of its jurisdiction, and it may
propose that the relevant decisions be taken by the competent central government authorities in
the area of activities and responsibilities delegated by the State.

       (2) The financial consequences of any Municipal Council resolution under Paragraph (1)
shall be for the account of the municipal budget.

         Article 27

       (1) (Amended, SG No. 107/2003, supplemented, SG No. 108/2007) When adopting the
budget of the municipality or in the course of its execution, the Municipal Council may, insofar
as not otherwise provided for by law, resolve to vest the municipality mayor with the following
powers in connection with any newly occurred and proven pressing needs, while staying within
the total amount of the budget:

       1. to alter the size of budget appropriations as set for the different types of expenditure
within the limits of the total outlay for any single public-financed activity, except for outlays for
salaries, social security and health insurance contributions and scholarships, in the part relating
to activities delegated by the State;

      2. to transfer budget appropriations as set for different types of expenditure within one and
the same activity or from one activity to another, within the limits of a single budget group,
without altering the total extent for the said group in its part relating to local activities;

      3. to dispose with the reserve budget appropriation referred to in Article 14.

      (2) In exercise of the powers covered under Paragraph (1), the mayor shall issue orders.

         Article 28

      (1) (New, SG No. 16/2011) The Municipal Council shall determine the secondary spenders
of budget appropriations and adopt their budgetary accounts together with the municipal budget
after a proposal by the municipal mayor.

     (2) (Renumbered from Paragraph 1, SG No. 16/2011) In his or her capacirst spender of
budgetary appropriations, the municipality mayor shalsue an order establishing the rights and
responsibilities of the secoy and tertiary spenders of budgetary appropriations.

       (3) (Amended, 1012.2003, renumbered from Paragraph 2, SG No. 16/2011) mayor of
thnicipality shall limit or suspend financing of any public-nced orzation, unit and subsidized
activity which is proven to have vtedgetary discipline until the said violation is rectified, giving
nothe competent authorities.

       Chapter Five
     MUNICIPAL BUDGET REPORTING
         Article 29

     Closing and reporting of the municipal budget shall be done according to the procedure
and within the time limits established for closing and reporting the state budget.

         Article 30

       (1) (Amended, SG No. 107/2003) The Municipal Council shall consider and approve the
annual report on the execution of the municipal budget according to the uniform budget
classification.

      (2) (Amended, SG No. 107/2003) Municipalities shall submit periodic and annual reports
on the budget execution according to the uniform budget classification, as well as any additional
information in formats, content and within time limits as set by the competent authorities.

      (3) (Repealed, SG No. 98/2011).

      (4) (Amended, SG No. 107/2003) The mayor of the municipality shall prepare and present
the annual report on the execution and closure of the municipal budget for public discussions by
the local community, and shall announce the date for the hearing with an advance notice of no
less than 7 days in the local mass media. The public hearing shall be held following a procedure
as established by the Municipal Council.

    Chapter Six
  MANAGEMENT     OF   BUDGETARY                                                            AND
EXTRABUDGETARY RESOURCES
         Article 31
      (Amended, SG No. 107/2003)

      The management of budgetary and extrabudgetary resources shall be regulated in a
regulation as provided for in Article 9a.

         Article 32

      (Amended, SG No. 107/2003)

      The mayor shall be responsible for ensuring that the financial management and control
systems in the municipality are set up and functioning in compliance with the principles set out
in Article 4, paragraph (2)

         Article 33

      (Repealed, SG No. 107/2003)

      Chapter Seven
  RELATIONSHIPS OF THE MUNICIPAL BUDGET
WITH THE CENTRAL BUDGET
  (Title amended, SG No. 107/2003)
         Article 34

      (Amended, SG No. 107/2003)

      (1) The relationships of the municipal budget with the national budget shall be carried out
through transfers from the central budget, which shall include:

      1. (repealed, SG No. 108/2007);

     2. (amended, SG No. 108/2007) a block subsidy to fund activities delegated by the State;

      3. a block equalization grant for local activities;

      4. an ad hoc grant allocated for capital expenditure, including those in activities delegated
by the State;

      5. an ad hoc grant allocated for implementation of the state policy to promote the
development of municipalities, and for implementation of national, regional programs and
international programmes and projects, and for co-financing under European Union programmes
and projects;

      6. financial compensation from the State;
      7. subventions;

      8. (amended, SG No. 108/2007) temporary interest-free loans from the central budget in
case of temporary deficiency of resources in the municipal budget.

      9. (new, SG No. 108/2007) interest-free loans from the central budget for financing
expenditures, including on value added tax, until their reimbursement under approved projects
and programmes financed by the European Union

      (2) (Amended, SG No. 108/2007) The State shall finance activities delegated to the
municipalities by the State through a block subsidy allocated for funding activities delegated by
the State.

      (3) (Amended, SG No. 108/2007) The block subsidy allocated for funding activities
delegated by the State shall amount to the budget appropriations for those activities as
determined under the procedure set out in Article 8, Paragraph (3).

      (4) The block equalization grant for local activities shall be designed to ensure a minimal
level of local service provision in municipalities. Criteria for the distribution of the block
equalization grant among municipalities shall be determined jointly by the Minister of Finance
and the National Association of Municipalities in the Republic of Bulgaria.

      (5) The amount of the block equalization grant may not be less than 10 per cent of the
reported own revenues as set out in Article 6, paragraph (1), subparagraph (1) for all
municipalities for the preceding year.

       (6) The amount of ad hoc grants for capital expenditure and the criteria for their
distribution shall be determined jointly by the Minister of Finance and the National Association
of Municipalities in the Republic of Bulgaria.

      (7) The type and amount of budgetary relationships between the central budget and
municipal budgets shall be determined under the National Budget of the Republic of Bulgaria
Act for the respective year.

         Article 35

      (Amended, SG No. 107/2003)

       (1) Transfers to municipalities allocated to support the activities delegated by the State
shall be made on a monthly basis by the 5th of the current month in an amount equal to 1/3 of the
quarterly allocation of the respective outlays. The quarterly allocation of the annual transfer shall
be specified by the National Budget of the Republic of Bulgaria Act for the relevant year.

      (2) (Repealed, SG No. 108/2007).
     (3) (Repealed, SG No. 108/2007).

     (4) Where in the course of execution of a municipal budget a temporary shortage has arisen
in resources needed to finance activities delegated by the State, the Minister of Finance shall
remit an advance amount from the grant approved under the National Budget of the Republic of
Bulgaria Act for the respective year.

      (5) Ad hoc grants may not be transformed into block grants.

      (6) No grants from the central budget allocated for activities delegated by the State may be
used as a source of funds for refunding any taxes overpaid in the municipality for any previous
time periods.

       (7) The National Audit Office shall exercise control for the implementation of financial
relationships between the central budget and municipal budgets for the provisions in the
preceding paragraphs.

         Article 36

    (1) (Amended, SG No. 107/2003) The municipality shall receive full financial
compensation from the State upon:

       1. attachment of additional financial obligations to the municipality by statutory
instruments after the adoption of the national budget for the relevant year and the budget
relationships with the municipality as thereby established;

      2. an adjustment to labour remuneration of employees in the activities delegated by the
State financed through the municipalities, effected through an act of the Council of Ministers;

      3. in other cases prescribed by law.

       (2) (Amended, SG No. 107/2003) Should the resources covered under Paragraph (1),
Subparagraphs (1) and (3) be not provided, the statutory instruments shall enter into force and
shall be provided with resources during the succeeding budget year.

         Article 37

      (Amended, SG No. 107/2003)

      (1) During the budgeting process for preparing the draft national budget of act for the
relevant year, the National Association of Municipalities in the Republic of Bulgaria shall make
a proposal, stating supporting arguments, as to the total amount of relationships of municipal
budgets with the central budget and shall present these to the Ministry of Finance.

      (2) The National Association of Municipalities in the Republic of Bulgaria shall express an
opinion and make proposals on the draft bill developed by the Ministry of Finance, in its part
pertaining to municipalities.

      (3) The Minister of Finance shall hold consultations with the National Association of
Municipalities in the Republic of Bulgaria on the proposals made by them on the issues specified
in Paragraphs (1) and (2).

      (4) The consultations referred to in Paragraph (3) shall be held on the basis of rules based
on the principles of mutual respect and trust, equality, transparency and public openness,
assumption of responsibilities that are adequate to the scope of authority and the real capacity of
central and local authorities.

      (5) Any differences of opinion emerging from the consultations referred to in Paragraph
(3) shall be reflected in a protocol signed by both parties, which shall be annexed to the draft of
the National Budget of the Republic of Bulgaria Act for the respective year, and shall be
reviewed by the Council of Ministers.

         Article 38

      (Repealed, SG No. 107/2003)

         Article 39

      (Repealed, SG No. 107/2003)

         Chapter Eight
     MUNICIPAL DEBT
     (Title amended, SG No. 107/2003, No. 34/2005)
         Article 40

      (Amended, SG No. 107/2003, No. 34/2005)

     The Municipal Council may resolve to assume municipal debt under terms and procedure,
established by law.

         Article 41

      (Amended and supplemented, SG No. 107/2003, repealed, SG No. 34/2005)

    Chapter Nine
  EXTRA-BUDGETARY                                 RESOURCES                    OF         THE
MUNICIPALITY
         Article 42

     (1) Extra-budgetary resources shall be raised and disbursed through extra budgetary
accounts and funds which are:

      1. subject of an express statutory provision;

      2. subject of a specified expression of will such as donation, testament, local referendum
and other resources, provided by natural persons and legal entities and organizations.

      (2) (Amended, SG No. 107/2003) Income and expense accounts for extrabudgetary
resources shall be prepared, which shall be adopted together with the municipal budget by the
Municipal Council.

      (3) Should the municipal budget be not adopted, the extra-budgetary accounts shall be
approved by the Municipal Council within one month after the commencement of the budget
year.

      (4) The report on disbursement of extra budgetary resources shall be adopted together with
the report on the execution of the municipal budget.

     (5) (Supplemented, SG No. 98/2006) Bank servicing of extra-budgetary accounts of the
municipality, as well as reporting of operations in, and assets on, such accounts, shall follow the
procedure set by the State Budget Procedures Act and the State Budget of the Republic of
Bulgaria Act for the respective year.

         Article 43

     (1) The approved estimates of extra budgetary resources and the reports thereon shall be
submitted to the regional offices of the National Audit Office and of the Ministry of Finance.

      (2) Municipalities shall present periodic and annual reports on operations in any
extra-budgetary accounts, as well as additional information in a format, contents and within time
limits as prescribed by the Ministry of Finance upon consultation by the National Audit Office.

           ADDITIONAL PROVISION
         § 1. For the purposes of this Act:

      1. (Amended, SG No. 107/2003) "Local activities" are the activities which municipalities
perform and finance on the basis of a law and/or a decision of the Municipal Council while
determining independently their type, quantity and quality.

      2. (Amended, SG No. 107/2003) "Activities delegated by the State" are the activities
involved in the provision of state public services to which the population should have equal
access ensured according to the effective laws.
      3. (Amended, SG No. 107/2003) "Local community" refers to the citizens and legal entities
that have been registered, operate or use services on the territory of the municipality.

      4. (Amended, SG No. 107/2003, repealed, SG No. 108/2007).

     5. "Budget appropriation" are the resources voted within the limits of the budget,
determining the size of a specified outlay.

      6. "Extra-budgetary account" is a financial legal vehicle regulating the off-budget revenues
and expenditures placed at the disposal of the municipalities.

      7. "Budgetary discipline" is the behaviour due by virtue of the law from the mayor and the
specialized finance services of the municipality, and from the spenders of budget appropriations
in respect of compliance with the authorized sizes of budget appropriations during the separate
accounting periods and compliance with the share of expenditures as approved by the Municipal
Council by budget section, and in compliance with the priorities as approved by the National
Budget of the Republic of Bulgaria Act for the relevant year.

     8. (New, SG No. 107/2003) "Municipal development plan" is the plan as adopted by the
Municipal Council following the procedure provided for in the Regional Development Act.

      9. (Repealed, SG No. 107/2003).

     TRANSITIONAL                                   AND                 CONCLUDING
PROVISIONS
         § 2. The provisions of this Act may be amended, supplemented or repealed solely by
express statute to amend and supplement this Act or the State Budget Procedures Act.

         § 3. Any extra-budgetary resources borrowed prior to the date of entry of this Act into
force shall be repaid within time limits as established by the Municipal Council.

         § 4. This Act repeals:

      1. Article 51, Paragraph 2, Article 52, Paragraphs 2 and 3, Articles 53, 55, 56, 57 and 58 of
the Local Self-Government and Local Administration Act (promulgated in the State Gazette No.
77/1991; amended in Nos. 24, 49 and 65/1995, No. 90/1996, and No. 122/1997).

     2. Article 6, Paragraph 1, Subparagraph 1 of the Act to Settle the Housing Problems of
Long-Standing Home Purchase Savings Depositors (promulgated in the State Gazette No. 82 of
1991; amended in Nos. 62 and 94/1992; corrected in No. 9/1993, amended in No. 90/1993, No.
16/1996 and No. 123/1997);

      3. § 5 of the Additional Provisions to the Territorial Administration of the Republic of
Bulgaria Act (promulgated in the State Gazette No. 63/1995; amended in No. 51/1996 by
Constitutional Court Ruling No. 8 dated 6 June 1996; amended in No. 27/1998);

      4. Article 5, Paragraph 3, Article 9, Paragraph 2, and Article 17, Paragraph 2 of the Roads
Act (promulgated in the State Gazette No. 93/1969; amended in No. 37/1978, No. 35/1996 and
No. 87/1997).

          § 5. In Article 22, Paragraph 2 of the Local Self Government and Local Administration
Act, the figure "50,000" shall be replaced by "500,000".

         § 6. (Amended, 107/2003) The implementation of this Act shall be entrusted to the
Council of Ministers to the municipal councils, and to the mayors. This Act was passed by the
38th National Assembly on 11 March 1998, and the State Seal has been affixed thereto.

     TRANSITIONAL              AND     CONCLUDING         PROVISIONS        ACT      ON     THE
AMENDMENT AND

        SUPPLEMENT TO MUNICIPAL BUDGETS ACT

        Promulgated State Gazette No. 107/2003

      § 42. Any borrowing of extra budgetary funds used loanwise prior to the effective date of
this Act shall be repaid within time limits as determined by the Municipal Council.

      § 43. within six months of the entry into force of this Act, municipal councils shall adopt
the regulation referred to in Article 9a.

        § 44. The provision of Article 34, Paragraph 5 of § 31 shall take force as of 1 January
2005.

								
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