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འག་ོམ་ེའི་བཅའ་ིམས།
༡༩༩༩
THE BHUTAN MUNICIPAL ACT OF 1999
MINISTRY OF COMMUNICATIONS
THE BHUTAN MUNICIPAL ACT OF 1999
TABLE OF CONTENTS PART SUBPART SECTIONS PAGE NO.
PART I Preliminary Title Effective Date Purpose Definitions Interpretation – Meaning of Expressions
PART II Constitution and Structure of the Munici pal Corporation
Subpart 1 Creation of the municipal Corporation Pre-requisites Charter Dissolution of a Municipal Corporation
Subpart 2 The Municipal Committee (Throm Gi Tsogpa) General Functions Composition of the Committee
Subpart 3 Elections of the Committee Members (Thueme)
Election of Committee Members Eligibility Criteria for voters Election Procedures Appointment of Committee Members Eligibility Criteria for Committee Members Duration of Office
Termination of Office Obligations of Committee Members Remuneration of Committee Members Disclosure of Interest Extraordinary Vacancies Subpart 4 Proceedings of the Committee Minutes of a Meeting Notice of Meeting Quorum Voting
Subpart 5 The Thrompen and Employees of the Municpal Corporation Duration of Appointment Duties Termination of Appointment
Employees of the Municipal Corporation Transfer of Officers of the Royal Government to the
Municipal Corporation Conditions of Transfer
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PART III Functions, Authority and Obligations of the Municipal Corporation
Subpart 1 Functions of the Municipal Corporation
General Functions Specific Functions
Subpart 2 Authority of the Municipal Corporati on General Authority Specific Authority Common Seal of the Municipal Corporation Resolution of Disputes National Laws and policies
Subpart 3 Obligations of the Municipal Corporation Community Obligations Financial Obligations Obligations to the Royal Government Linkage with the Competent Authority Obligations to employees
PART IV Municipal Boundaries Municipal Boundaries Procedure for changing the Municipal boundaries PART V Regulative authority of the Municipal Corporation
Subpart I Authority to adopt Local Rules
Local Rules – General Policy and Procedure for the Existing Rules Land Administration Procedures Compliance with the Urban Development Plan
Subpart 2 Enforcement of Rules Subpart 3 Compensation for Acquisition of land
PART VI Operations of services by the Municipal Corporation General Contracting of Services Discontinuation of Services PART VII Finances of the Municipal Corporation
Subpart 1 Policy Financial Authority Grants from the Royal Government Tax Exemptions Shares and dividends Subpart 2 Financial Transaction General Definition of assets and liabilities
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Registration of Vehicles Contracts and arrangement Provident Fund Subpart 3 Budget Subpart 4 Revenues of the Municipal Corporation General Tax Revenue Non-Tax Revenue Borrowings Funds for Capital Projects Subpart 5 Expenditure of the Municipal Corporation General Authority to Spend Expenditure for Meeting Emergency Situations Audit Subpart 6 Miscellaneous Financial Management Practices Gratuity Fund Investment of excess Funds Annual Report PART VIII Duties and Functions of the Competent authority PART IX Amendment and Validity of the Act Schedule 1 Articles of Incorporation (Charter) of the Thimphu Municipal Corporation
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THEW BHUTAN MUNICIPAL ACT, 1999 PART I PRELIMINARY
Title 1. This Act shall be called the Bhutan municipal act, 1999.
Effective Date
2. The Act shall come into force with effect from 28 July 1999, corresponding
to the Bhutanese 15th day of the 6th month of Earth female Hare year.
Purpose 3. The purpose of this act is to enable the establishment of Municipal
corporations as legal entities with perpetual succession, and to confer on them such powers as required to forge partnerships between the Municipal Corporation, the residents, business and industry of the Municipality foe effective development and governance of the Kingdom’s urban communities.
Definitions
4. In this act, unless the context otherwise requires:
“Building or structure” means any physical erection on, above or below the land, including display signs and advertising boards.
“Committee” means a body that may be constituted in accordance with the provisions laid down in subpart 2, Part II of this Act.
“Competent Authority” means the authority that shall be specifically designed by the Royal Government for purpose of this Act.
“Development” means any change to the use of land, the construction of any building or structure, or the alteration to any building or structure.
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“Geographical Area” means an area within the Municipality demarcated either by natural or man-made boundaries, designated for the purpose of administration.
“Government Purpose” means a purpose as may be define rom time to time, by the Royal Government. Regarding this Act, Government purpose will include setting up of projects such as, hospitals, industries and any other similar public utilities.
“Incorporation” means, formal approval to the charter of the Municipal Corporation by the Royal Government.
“Land Acquisition” means acquisition of any land or property within the municipal boundaries in accordance with the procedur s established by the Royal government.
“Land” means the soil including building or other st uctures erected on the land, and all vegetation, but in accordance with THRIMSHUNG- CHHENPO does not include any minerals.
“Municipal Corporation” means a corporation incorporated under this act to implement the provisions of the act for the benefit o the residents of a community classified as a Municipality by the Royal government.
“Municipality” means area over which a Municipal Corp ration has jurisdiction.
“Person” means any individual, partnership, company, government agency or other association of persons, which is recognized as a separate legal entity.
“Regulation” means subordinate by-laws adopted or enacted by the competent authority in accordance with the provision of an Act.
“Residents” mean Bhutanese citizens residing in the Municipality.
“Royal Government” means the Royal government of Bhutan as a whole or, depending on the context, a particular ministry, division, or any other agency of the government.
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“Rules” means subordinate by-laws adopted by the Municipal Corporation in accordance with the provision of this Act.
“Thrompen” means the executive head of the Municipal Corporation.
“Urban Development Plan” means a strategic document outlining the existing and future development within a Municipality.
“Vesting date” means the date on which property, rights and liabilities of the Competent authority are transferred to and vested in a Municipal corporation.
Interpretation – Meaning of Expressions
5. Importing of masculine gender shall include the feminine gender; in the
singular shall include plural and vice versa.
PART II
CONSTITUTION AND STRUCTURE OF THE MUNICIPAL CORPORATION
SUBPART I : CREATION OF THE MUNICIPAL CORPORATION
Purpose of Creation 6. The Royal government shall, under this act, create Municipal
Corporation, in accordance with an urban classificat on as determined from time to time provided the corporation will be able to effectively and equitably provide services, and promote the general wel -being of the residents of the Municipality. Charter
7. In pursuance of Section 6 of this Act, the competent Authority may recommend to the Cabinet to grant a charter stating the name, purpose, organization and other particulars of the Corporatin. Granting of the charter as provided for in Schedule I of the Act shall constitute incorporation of the Municipality as the body corporate.
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Dissolution of the Municipal Corporation
8. The Municipal Corporation may be dissolved by the Royal Government. Upon such dissolution, a competent Authority shall appointed to directly manage the affairs of the Municipal corporation.
SUB PART 2 : THE MUNICIPAL COMMITTEE (THRO GI TSOGP A).
General
9. The committee shall be the highest decision making body of the Municipal
Corporation.
Functions 10. A committee, constituted under this act, shall have the following functions:
i. to formulate policies and development priorities in respect of the functions of the Municipal Corporation.
ii. to adopt rules to enable the Municipal Corporation carry out its function;
iii. to establish procedures and guide lines for the Municipal Corporation that are consistent with the laws and policies of the Royal government to operate efficiently and equitably;
iv. to review and approve the annual budget, related proposals of the Municipal Corporation;
v. any other functions that the Competent Authority or the Royal government may assign to the committee;
vi. to promote traditional architecture.
Composition of the Committee 11. The committee shall consist of:
i. the chairperson who is appointed by the government; ii. the Thrompen; and iii. not more than nine other Committee members who are elected or
appointed in accordance with this Act. This shall be decided in the Corporation charter.
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SUBPART 3: ELECTION AND APPOINTMENT OF THE COMMITT EE MEMBERS (THUEME) 12. The Municipality may be divided into geographical areas depending on the
size of the Municipality, for election or appointment purposes.
Election of Committee Members 13. Where the Regulations established by the Competent authority allow for all
or some of the Committee Members to be elected, the following shall apply:
i. The Thrompen shall be responsible to conduct the election. ii. The Thrompen shall set the date of the election not less than six
weeks prior to the date chosen. iii. The Thrompen shall immediately after the setting of the election
date notify the residents of the Municipality of the forthcoming election and call for nominations of candidates.
iv. The Thrompen shall advise the residents on the number of Members
to be elected to represent each geographical area.
Eligibility Criteria for voters 14. Person entitled to vote shall be Bhutanese citizen:
a. who are registered in the census records of the Municipal and; b. who have been residents of the Municipality for not less than 5
consecutive years at the date of the election.
Election Procedures 15. Election shall be held for each geographical area. 16. Election shall be by consensus.
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17. In the event that a consensus is not reached a secret ballot is to be held.
a The candidate with the largest number of votes in his favour shall be the first Committee Member elected; the candidate wi h the second number of votes in his favour shall be the second Committee Member elected; and so on until the required number of Committee Members is elected.
b. In the event two or more candidate receives the same number of
votes, the committee Member shall be determined by drawing of lots.
c. At the conclusion of the voting process, the Thrompen shall declare
the results of the voting and the names of the Committee Members elected.
Appointment of Committee Members
18 Where the regulations to this Act require all or some of the Committee Members to be appointed, they shall be appointed by the competent Authority.
Eligibility Criteria for Committee Members 19 Persons eligible to be elected as Committee Members shall be:
i. Citizens of the Kingdom of Bhutan; ii. At least 25 years of age; iii. Persons of sound mind; iv. Residents of the Municipality for not less than 5 consecutive years; v. Person with established business house in the Municipality; vi. Literate and able to articulate adequately the views of the residents
that he represents and the Municipality’s proposal and actions to them;
vii. Persons who have not been convicted of a criminal offenses; viii. Person who are willing and able to devote sufficient time to the
office of the Committee; ix. Persons who have not been bankrupt within the past five years; x. Person having respect for the nation’s law and the Pelden Dukpa’s
Driglam Choesum.
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Duration of Office 20 Except as provided for in Section 30, all Committee M mbers shall be
elected or appointed for a period of three years, and shall be eligible for re- appointment.
Declaration of Office
21 A person elected or appointed to be a Committee Members is not entitled to
act as a Committee Member unless he or she has madethe following declaration: “I,……….declare that I will undertake the duties of the office of Committee Member in the best interests of the people in the Municipality of ….. and faithfully and impartially carry out the functions, powers, authorities and discretion vested in me under this or other Act to the best of my skill and judgement”.
22 The declaration must be:
i. made before the Chairman; and ii. recorded in the minutes of the Corporation meeting; a d iii. dated and signed before the chairman.
Termination of Office
23 Committee Member may have his office as a Member terminated by the
competent authority at the request of the committee on the following grounds: i. The Committee member is absent from meetings of the Corporation
on more than three consecutive occasions without acceptable reason; ii. The Member engages in behaviour likely to bring the Corporation in
to disrepute; iii. The Member is incapable of discharging his duties; iv. The Member contravenes any of the terms of his appointment or the
provision of this Act; v. The Member submits a resignation letter to the Chairm n.
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Obligations of Committee Members 24. The Member shall:
i. act honestly with due skills and care in the interest of the Corporarion at all times;
ii Not make improper use of their position or the information acquired in their capacities.
Remuneration of committee Members
25. The Members shall be paid a sitting fee for each meeting attended, as
determined by the Competent Authority but shall not receive any additional remuneration or salary for carrying out their duties as Members.
Disclosure of interest
26. In a Member has a direct personal interest in a matter to be considered by
the corporation, the member shall disclose the nature of the interest prior to the meetings of the Committee.
27. A disclosure under Section 26 shall be recorded in the minutes of the
meeting and unless the Corporation determines otherwis , the members shall not: i. be present during any deliberation of the Committee in relation to
the matter; or ii. take part in any decision of the Committee in relation to the matter.
28. Section 26 does not apply to matters relating to the supply of goods or
services by the Member if the same goods or services ar available at the same terms and conditions to the members of public. Extraordinary Vacancies
29. If the office of a Member becomes vacant because of the provision of
section 23, or because of the death of a member an xtraordinary vacancy is created.
30. The Competent authority shall appoint a member to fill the existing
vacancy.
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31. A Member so appointed to fill an extraordinary vacancy shall hold office only until the next election.
SUBPART 4: PROCEEDINGS OF THE COMMITTEE 32. All meetings of the Committee shall be chaired by the chairperson. In the
absence of the Chairperson, an acting Chairperson shall be appointed by the Chairperson, and if that is not possible, the committee shall elect an Acting Chairperson for the meetings.
33. The committee shall hold at least two meetings in three months. 34. The initial meeting of the Committee shall be convened by the Chairperson,
as son as practicable after the election of the members. 35. Subsequent meetings shall be on a schedule agreed by the Committee at its
first meeting subject to the rights of the chairperson to convene extraordinary meetings if sufficient reasons exist.
36. If deemed beneficial for the development and governance of the
Municipality the Committee may invite any Municipal corporation staff member or official of the Royal Government to participate in its meetings in an advisory capacity.
Minutes of a Meeting 37. The following procedures shall apply for each meeting:
i. Minutes of each meeting shall be recorded; ii. Minutes shall be submitted to the next meetings for confirmation; iii. If the minutes are confirmed the Chairperson at the meeting shall
sign the minutes and certify that have been confirmed.
Notice of Meeting 38. The Members should be notified one week in advance of the meeting with
an agenda.
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Quorum 39. At least 2/3 of the members shall comprise a quorum.
Voting 40. Each Member present at the meeting shall have one vte and decisions shall
be taken on a simple majority of votes. In the event of an equality of votes the chairperson shall exercise a casting vote.
SUBPART 5: THE THROMPEN AND THE EMPLOYEES OF THE
MUNICIPAL CORPORATION
Duration of appointment. 41. The duration of the appointment of the Thrompen shall be at the discretion
of the Royal government.
Duties
42. The Thrompen shall be the executive head of the Municipal Corporation.
The duties of the Thormpen shall include, but not be limited to, the following: i. Manage the affairs of the corporation under the direct on of the
Committee; ii. Supervise the day-to-day operations and administration of the
Municipal Corporation; iii. Ensure the proper and adequate implementation of Corporation’s
rules and regulations; iv. Prepare annual budget, and ensure compliance of the approved
budgets; v. Appoint, in accordance with the policies and procedures of the
corporation, staff members for the Municipal corporation, and be responsible for their dismissal or severance as the cas may be;
vi. Serve as the member-secretary of the Committee;
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vii. Interact with the Competent Authority and other organs of the Royal government on matters concerning the development and overall governance of the Municipal corporation; and
viii. Perform such other duties as the Royal Governme t may determine from time to time;
ix. Act on behalf of the Corporation and in its name.
Termination of Appointment 43. The Competent Authority or the Committee may recommend to the
Government, the termination/transfer of the Thrompen from the Corporation if, any of the circumstances of section 23 apply to him or her.
Employees of the Municipal Corporation
44. A Municipal Corporation may lay down such persons as considered
necessary for the performance of its functions. 45. The Municipal Corporation may lay down rules and guidelines related to
the conditions of employment, privileges, rights and responsibilities of the employees, training and opportunities for promotion, retirement benefits and other matters.
Transfer of civil servants by the Royal government to the Municipal Corporation
46. The royal government may transfer or depute civil servants to serve in a
Municipal Corporation in accordance with the existing guidelines of the Royal Government.
Conditions of transfer
47. Unless civil servants who are transferred as employees of the Corporation
are required to remain in the civil Service, they shall have the following rights and obligations:
i. They shall resign from the civil Service on the day of the transfer; ii. They shall be paid by the Government their separation gratuity and
other entitlements;
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iii. They shall be eligible to receive their Provident fund account balance provident that they choose to receive the full balance not later than the date determined by the Chairman for this purpose;
iv. Civil Servants who decide not to receive the Provident fund Balance by the determined date shall retain their balance i the fund.
v. Employees of the Municipal Corporation including civil servants on transfer to the corporation shall be entitled to remain or become members of the RICB Provident fund on the same terms and conditions as Civil Servants.
PART III FUNCTIONS, AUTHORITIES, AND OBLIGATIONS OF THE MUNICIPAL CORPORATION
SUBPART I: FUNCTIONS OF THE MUNICIPAL CORPORATION
General Functions 48. A Municipal Corporation constituted under this shall have the following
functions:
i. to provide such civil and other services as are essential for the general well-being of the residents of a Municipality;
ii. to ensure that the development occur in a planned ad h rmonious manner;
iii. to undertake any activity, consistent with the other relevant laws and policies of the Royal Government, which may preserve and promote the environment within the limits of a Municipal Corp ration; and
iv. to perform any other function that the Royal governme t may assign.
Specific Functions
49. The Municipal Corporation carry out the following specific functions in consultation with the relevant government Authorities:
i. General Public services • fire prevention and protection; • local emergency and safety services; • animal control; • waste impounding;
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• litter control; • operation of open markets; • public safety
ii. Social and Other Community Services
• Health awareness campaign; • Public conveniences; • Prevention and abatement of nuisance; • Crematoriums; • Sanitary inspection;
iii. Planning and Land Use
• Development control; • Housing and other accommodation; • Land budgeting.
iv. Property Services
• Drinking water supply, drainage and sewerage; • Land development schemes; • Registration/transfer of land ownership; • Land subdivision and consolidation; • Cadastral surveys.
v. Recreation and cultural services
 Halls and public buildings  Sports, recreation and leisure;  Parks, gardens and services;  Public entertainment;  Culture.
vi. Roads including-
• Bridges; • Footpath, landscaping; • Traffic control and signs; • Street maintenance and cleaning; • Lighting and drainage of roads.
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vii. Any other functions relating to orderly and sustainable development of the Municipality including  Parking;  Transport;  Information;  Encouragement of commerce and industry;  Environment control, protection and conservation;  Weights and measures;  Municipal administration;  River Training;  Urban Census.
SUBPART 2: AUTHORITY OF THE MUNICIPAL CORPORATION General Authority
50. Subject to the laws and policies of the Royal government and the conditions
specified in this Act, the Municipal Corporation may exercise any authority that it may consider essential for discharging its functions laid down in Parts III of this Act.
Specific Authority 51. Specifically the Municipal Corporation shall have th authority;
i. to enter into contracts and agreements; ii. to purchase, lease, or otherwise acquire land and property, and sell,
lease, or otherwise dispose off it in the interest of the residents; iii. sue in the Bhutanese courts and be sued; iv. to raise, borrow, spend, and invest moneys for the support of its
functions; v. to establish rules for governing its affairs, including the affairs of the
Committee; vi. to define the functions and duties of its employees; vii. to employee staff to the municipal Corporation, and terminate the
employment in accordance with the Corporation’s procedures; and viii. to adopt and enforce rules for protecting the healt, safety, and well
being of the residents, and for preserving and promoting the quality of municipal environment.
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52. The specific regulative and contracting powers of the Municipal Corporation are elaborated in Parts V and VI of this Act.
Common Seal of the municipal corporation
53. The Municipal corporation shall have a common seal, which must:
i. bear the title of the Municipal Corporation and any other words, letters, or design determined by the committee;
ii. be kept at the Municipal Corporation office; iii. be used in accordance with the rules of the Corporation; iv. be used with signature of the appropriate authority.
54. All courts and persons shall take legal notice of the imprint of the seal of a
Municipal Corporation on any document and shall presume that the document was properly sealed and signed until the contrary is provided.
Resolution of Disputes
55. Any disagreements or disputes arising between the Municipal Corporation and another public body shall be referred to the Competent Authority for resolution. Only if a party is not satisfied with te settlement the normal legal course shall be pursued.
National Laws and Policies
56. All laws and regulations of the Royal Government shall apply to all Municipal Corporation in Bhutan.
SUBPART 3: OBLIGATIONS OF THE MUNICIPAL CORPORATION
Community Obligations 57. The Municipal Corporation shall manage its affairs in an efficient and
equitable manner, benefiting all residents of the Municipality.
Financial Obligations
58. The Municipal Corporation shall manage its finances prudently, and in a manner, which is consistent with sound financial practices. The Municipal Corporation shall exercise, in an appropriate manner, th powers that may be granted to it, by the Royal Government.
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Obligations to the Royal government
59. The Municipal Corporation shall support, to the extent practicable and with its means and capacity, the development and other activities of the Royal Government as far as they relate to the municipality.
60. The Municipal Corporation shall maintain appropriate relations with Ministries of the Royal Government and other organiz tions which may be affected by its affairs.
Linkage with the competent Authority
61. The municipal corporation shall, in respect of matters relating to urban planning and development policies carry out its activities in a manner, which is consistent with the overall directions of the competent Authority.
Obligations to Employees
62. A Municipal Corporation shall seeks to enhance the well being of its employees. It shall provide, to the extent permitted by its means and capacity, safe working conditions, and opportunities for training and promotion, and other service benefits.
PART IV
MUNICIPAL BOUNDARIES
Municipal Boundaries
63. The boundaries of the Municipality shall be those as defined by the Competent Authority on the day that its Charter is granted.
Procedure for Changing the Municipal boundaries
64. The competent Authority or municipal Corporation may propose inclusion of any land which lies outside of, but contiguous to the boundaries of the Municipality in the boundaries of the Municipal corp ation, if it is in the best interests of the residents of the Municipality and the contiguous area. Likewise, it may propose the exclusion of any land which lies within, but contiguous to, the municipal boundaries of the Municipality from the Municipality, it is in the best interest of the residents of the Municipality and the area to be excluded.
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65. i. Upon approval by the Government of the inclusion of any land in the boundaries of the Municipality provisions of this Act and related rules and regulations shall apply to the area included in the Municipality.
ii. upon exclusion of any land from the boundaries of the Municipality, all
provisions of this Act and related rules and regulations shall cease to apply to the excluded area.
66. The Royal government shall reserve the right to reject the proposal in
which case the status quo in respect of municipal boundaries will be maintained.
PART V
REGULATIVE AUTHORITY OF THE MUNICIPAL CORPORATION
SUBPART 1: AUTHORITY TO ADOPT RULES
Local Rules-General 67. The Municipal Corporation may adopt rules to carry out its functions
Specified in sections 48 and 49. These rules may relate but need not be restricted to: i. provision of services such AS water supply, sewerag services, solid
waste management, drains, animal control, plantation, and other including the disposal of unclaimed bodies;
ii. promotion of planned development, pertaining to land use; building
activity; subdivision, sale, purchase and transfer of land; control of squatter and illegal settlement; and commercial activities regulating in particular business timings, location, cleanliness, and waste disposal, shop signs and billboards, sale of alcohol, street vending, weekly market and other matters;
iii. protection and improvement of the city’s environment, i particular,
control of noise, reduction of pollution, regulation of parking, protection of parks and plantations, and other related matters.
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Policy and Procedure for Existing Rules 68. Upon the incorporation of the Municipal Corporation, the Royal
government’s existing regulations, rules and codes of practice relating to building practice, water and sanitation, plumbing and electrification shall continue.
Land Administration Procedures
69. The registration of the ownership of land, subdivision, consolidation,
transfer of land and all matters pertaining to the administration of land shall be in accordance with procedures adopted by the Municipal Corporation and any Act or Regulations, which cover urban land dministration.
Compliance with the urban development plan
70. The municipal corporation shall prepare an Urban Development Plan or
amendments to an approved urban development Plan to regulate and enforce land use and building activity in the municipality and shall submit such plans to the competent Authority for approval.
71. Upon the approval of the urban development plan or any approved
amendments to the Plan, all development activities within the jurisdiction of the municipal corporation.
SUBPART 2: ENFORCEMENT OF RULES 72. The Municipal Corporation shall have the authority to enforce the existing
or new rules. The enforcement methods indicated in the rules may include but need not be limited to, public education and awareness, fines, disconnection of utilities, and stop-work orders.
73. The municipal Corporation shall have under this Act, the authority to
remove, after the issuance of appropriate notices as established under the relevant rules, any construction or activity that is not approved or unauthorized.
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74. the Municipal Corporation shall have the authority to protect its own property such as the water supply sources, and may take such actions it consider necessary for this purpose. Where such properties are shared with other bodies, such actions shall be taken jointly.
75. Any none-compliance to the enforcement of rules may be brought before the Dzongkhag Thrimkhang under which jurisdiction the Municipality is located.
SUBPART 3: COMPENSATION FOR ACQUISITION OF LAND
76. A Municipal Corporation may acquire, in accordance with the procedures laid down by the Royal Government, any land or prope ty within its jurisdiction for the planned development of the Municipality. Compensation for such acquisition shall be payable as per the rates determined by the Royal government from time to time.
PART VI
OPERATIONS OF SERVICES BY THE MUNICIPAL CORPORATION
General 77. The Municipal Corporation shall operate and maintain those services it is
required to provide under this Act.
Contracting of Services 78. The municipal Corporation may contract the operation and maintenance of
any or all the services to private parties, if it is in the best interests of the Municipal Corporation and its residents. Such contract and the conditions of the contract shall be approved by the Competent Authority.
79. Upon the contracting of a service or services, the Municipal Corporation
shall ensure that the services are provided as per the provisions of the contract and are in the best interest of the residents. In the event of any breach of the contract by the contractor the Corporati n shall have the right to terminate the contract with a penalty or compensation as specified under the terms of the contract.
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Discontinuation of Services
80. The Municipal Corporation, after seeking approval of, or being directed by the Royal government, may discontinue providing some or all of the services.
PART VII
FINANCES OF THE MUNICIPAL CORPORATION
SUBPART 1: POLICY Financial Authority
81. The Municipal Corporation shall have the authority to the extent stated in
this Act, to raise, spend, borrow and invest moneys and otherwise manage its finances prudently, and in a manner, which is consistent with sound financial practices.
Grants from the Royal Government 82. Grants from the Royal Government may be given to the Municipal
Corporation when: i. the Municipal Corporation is required to undertake special
responsibilities or provide additional services on behalf of the Royal Government;
ii. the Municipal Corporation is disadvantageously located or has an inadequate financial resource base; and
iii. the Municipal Corporation faces emergency situations. 83. Grants from the Royal Government may also be given to the Municipal
Corporation for undertaking capital-intensive works. Tax Exemptions 84. The Municipal Corporation shall be exempted from payment of taxes on its
revenue incomes.
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Shares and dividends
85. The municipal corporation shall not issue any shares o pay dividends.
SUBPART 2: FINANCIAL TRANSACTION
General
86. Upon the granting of a charter to the Municipal corporation, the Ministry of finance shall transfer all of the assets and liabilities that are associated with the municipal Corporation on the vesting date. The Ministry of finance shall certify in writing the assets and liabilities that have been transferred.
Definition of Assets and liabilities
87. For the purpose of Section 86, the assets and liabilities to be transferred to a Municipal Corporation may include, but not be limited to the following:
i immovable property: office building(s), vacant government lands, staff quarters, garage(s), water treatment and distribution system, landfill(s), sewerage and drainage system, cremation grounds, nurseries and all other property and infrastructure hat is expected to be managed by the Municipal corporation;
ii movable property: vehicles that are attached to the functions that a
Municipal corporation is expected to perform; iii equipment, tools, materials, and supplies as related to the services
and infrastructure, expected to be managed by the Municipal Corporation; and
iv all debts and financial obligations, financial assets and work under
progress associated with I, ii and iii on the vesting date except for debts related to capital works.
Registration of Vehicles
88. All vehicles that are transferred to or purchased by the Municipal Corporation shall be registered and insured by the Municipal Corporation according to the Road Safety and transport Act of Bhutan.
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Contracts and Arrangements
89. Except as otherwise stated in this Act, or directed by the Royal Government, all contracts and arrangements between the Royal government and private parties in respect of the affairs of the Municipal corporation agreed upon prior to the coming into effect of this Act shall continue to be operative.
Provident fund
90. The Municipal Corporation shall assume all obligations, financial and
others, in respect of Provident Fund that may exist on he vesting date for employees who may be transferred to the Municipal Corporation and for other employees not coming from the government.
SUBPART 3: BUDGET 91. The Thrompen shall, at least two months prior to the beginning of a fiscal
year, prepare a draft budget for its regular operations of the corporation and submit the same to the Committee for approval.
92. The Thrompen shall, in addition, following the same procedure, prepare a
draft budget for capital expenditure and submit the same to the Committee for approval.
SUBPART 4: REVENUES OF THE MUNICIPAL CORPORATION General 93. The revenues of the municipal corporation may consist of such taxes, fees,
charges, fines and penalties as assigned to it by the Royal government.
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Tax Revenue 94. The Municipal Corporation may levy and collect the following taxes in a
manner, and at such rates, as may be determined by the Royal Government:
i. land tax, ii. urban house tax, iii. under development land tax, iv. property transfer tax, v. entertainment tax. Non – Tax revenue
95. The Municipal Corporation may impose the following fees, charges, fines
and penalties in a manner, and at rates approved by the Committee: i. land development and subdivision fee ii. land demarcation fee iii. building plan processing fee iv. land registration fee v. site plan fee vi. vehicle parking fee vii. market vendor fee viii. advertisement fees ix. water and sewerage charges (including pipe realignment and
connection fees) x. other service charges xi. fines and penalties xii. environment surcharge Borrowings
96. A Municipal corporation may, with the prior approval of the royal
government, borrow funds to finance capital works. 97. Borrowed funds shall be spent only for the purpose for which they were
raised.
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Funds for Capital projects 98. The municipal corporation may fund capital works and projects through
grants or loans from the Royal Government, the international and bilateral donor agencies, and other sources approved by the Royal government. In case of emergency, the Royal Government may make special provision foe capital works to be undertaken by a Municipal Corporati n.
99. Where projects of the municipal Corporation are financed by a loan, the
municipal Corporation may levy a special tax or a special service charge on the residents of the Municipality for purpose of repaying the loan funds.
100. Funds received for capital works and projects shall be spent only for the
purpose for which they were received.
SUBPART 5: EXPENDITURE OF THE MUNICIPAL CORPORATION
General 101. The Municipal Corporation may spend funds only on carrying out the
functions specified in this Act, and in a manner, which is consistent with sound financial management practices.
Authority to Spend
102. The Authority of the Municipal Corporation to spend shall extend to the
following:
i. the total operating funds that a Municipal corporati n may raise in any fiscal year, by the levying of taxes provided for in Section 94 of this Act, and imposition of fees, charges, fines, and penalties as provided for in Section 95 of this Act, and any grant on revenue account that it may receive from the royal Governmet, and for which budget proposals have been approved by the Committee;
ii. any unspent amount from the previous fiscal year(s);
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iii. the capital budget of the Municipal Corporation for which appropriations have been approved by the Royal Governm nt;
iv. the funds that it may receive for capital works and projects from the
international donor agencies and countries; v. the funds that it may receive for emergency relief works (Section
103).
Expenditure for Meeting Emergency Situations 103. The Municipal Corporation when facing extraordinary and emergency
situations, shall seek, through the Competent Authority assistance from the royal Government. Such funds shall be spent only in accordance with the conditions specified with the granting of such funds.
Audit
104. The Royal government shall in accordance with its procedures, audit the
accounts of the Municipal corporation once a year. The Municipal Corporation shall provide the auditors with full access to all accounts and records.
SUBPART 6: MISCELLANEOUS
Financial Management Practices 105. The Municipal Corporation shall manage its finances r lating to the
operating budget in accordance with financial management practices, as laid down in the Financial Manual of the corporation.
106. The Municipal Corporation shall manage it finances r lating to funds
received from the Royal Government, and the internatio l, bilateral and other sources in accordance with the procedures laid down by the Ministry of Finance.
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Gratuity Fund 107. The Municipal Corporation must, in addition to the fund, establish a
gratuity fund for its employees, or to contribute, with the approval of the Competent Authority, to a similar fund established by other agencies.
Investment of Excess Funds
108. The Municipal corporation may, with the approval of the Competent
Authority invest any excess or inactive funds in a recognized Bhutanese financial institution.
Annual Report
109. Not later than four months after the closing of each financial year the
Municipal Corporation shall submit to the Competent Au hority an annual report of its operations including:
i. the annual financial statements; ii. a statement of corporate objectives and policies; iii. an assessment of the extent to which corporate objectives and
policies have been achieved during the year; iv. an evaluation of the achievement of performance against standards
during the year; v. an inventory of assets.
PART VIII
DUTIES AND FUNCTIONS OF THE COMPETENT AUTHORITY 110. The Competent Authority may draft and recommend for adoption by the
Cabinet, regulations and amendments to regulations in accordance with this Act: i. Those matters set out in Sections 11, 12 & 13 pertaining to the
number and election of Committee Members. ii. Determining the conditions under which the Thrompen shall be
employed and the circumstances whereby he/she may be dismissed. iii. Planning matters referred to in Sections 70 & 71.
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111. The competent Authority shall recommend to the governm nt the incorporation of a Municipal Corporation.
112. The Competent authority shall guide and assist the T rompen in carrying
out those functions referred to in Sections 13, 14, 15, 16 and 17 when an election for Committee Members is held for the first time for a Municipal Corporation.
113. If required by the regulations for a Municipal Corpation, the Competent
Authority shall appoint Committee Members to the Municipal Corporation. 114. In accordance with the provisions of Section 64:
i. Where the Competent Authority after consultations with the Municipal Corporations consider the boundary of a Municipal should be altered, it shall make recommendations to the government.
ii. When a Municipal seeks to alter its boundary, it shall submit its request to the Competent Authority, which in turn shall forward it to the Cabinet with its recommendations relating to the proposal.
115. The Competent Authority shall consider all rules passed by the
Municipality. If it deems the rules to be ill founde or against the interest of the Municipality, it shall revoke the rule.
116. The Competent Authority shall examine every Urban Development Plan, or
modification to such plan submitted to it in accordance with Section 70. In its examination, the Competent Authority may seek guidance from any authority or person it considers appropriate.
117. The competent Authority shall for any plan submitted in accordance with
Section 116; i. approve the plan, or ii. direct that certain changes be made to the plan before it is approved,
or iii. refuse approval of the plan.
118. The Competent Authority any carry out a planning Audit in any
Municipality at any time to determine whether or not any violation to the Urban Development plan has happened.
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119. Upon creation of a Municipal corporation, the Royal Government shall determine the assets and liabilities referred to Section 87 to be transferred to the Municipality.
120. In accordance with Section 82 & 83, the competent Authority shall
recommend to the Royal Government any grants that should be given to the Municipal Corporation for inclusion in the National Budget.
121. Upon receipt of Annual Reports submitted by the Municipal Corporation in
accordance with Section 109, the competent Authority shall submit a compiled municipal Corporations report to the Royal Government.
122. Prior to a Municipality levying and collecting any of the taxes set out in
Section 94, the Competent should seek the Royal government’s approval on the rates of the taxes to be imposed and the manner i which they may be collected.
123. Before a Municipal Corporation obtains a loan to carry out capital works, it
must, as required by Section 96, obtain approval from the Competent Authority.
124. In respect of Section 98, the Competent Authority shall recommendations
for grants or loans on behalf of the Municipal Corporation to the Royal Government.
125. the Competent Authority shall assist any Municipal Corporation facing extraordinary or emergency situations under section 82 in obtaining assistance from the Royal Government.
PART IX
AMENDMENT AND VALIDITY OF THE ACT 126. This Act or any part or sub-part or section of the Act, may, as and when
considered necessary, be amended by the National Assembly. Such an amendment shall not affect the parts, subparts or sections that are not amended.
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127. In the event of any part, sub-part or section being rendered invalid, the reminder of Act and its application shall remain unaffected.
N.B. If under any provision of this Act, there arises any differences in the
interpretation of different terminology, the interp retation as expressed and understood in the Dzongkha text shall prevail.
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Schedule 1. ARTICLES OF INCORPORATIN (CHARTER) OF THE THIMPHU MUNICIPAL CORPORATION. I. NAME The name of the Corporation is the Thimphu Municipal Corporation. II. REGISTERED OFFICE AND AGENT The registered agent and the office of the Corporation is: Thrompen Thimphu Municipal Corporation PO Box 215 Thimphu. III. CONSTITUTION
The Committee is responsible for representing the Municipal residents and the Royal Government in the governance and development of the municipality and for enforcing regulations, resolutions and decisions. The regulations shall be consistent with the Bhutan Municipal Act, 1999 and with all other laws and policies of the Royal Government.
VI. FUNCTIONS AND RESPONSIBILITIES OF THE CORPORATION
Thimphu Municipal Corporation is organized as a non-profit, municipal governance Corporation. The principal functions andresponsibilities of the Corporation are to: i. provide such civic services as are essential for the general well-being
of the residents of Thimphu Municipality; ii. ensure that development and other activities within t e boundaries of
Thimphu Municipal Corporation occur in a planned an harmonious manner;
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iii. support the Royal Government in the general maintenance of the municipality;
iv. carry on any activity consistent with the laws and policies of the Kingdom which may preserve and promote the environment within the limits of the Municipal corporation; and
v. perform any other functions that the Royal governmet may assign from time to time.
V ASSETS AND LIABILITIES The capital assets of the Thimphu Municipal Corporati n consists of:
i. Immovable: Office buildings, garage, water treatment and distribution system, landfill sites for solid waste disposal, staff quarters, nurseries, sewerage system, drainage systm, parks and play grounds and all other properties and municipal nfrastructure including vacant and unregistered government land attached to or managed by the Corporation;
ii. Moveable: All vehicles that are attached to the Corporation; iii. All equipment, tools, materials, and supplies in the possession of the
Corporation; and iv. All debts and financial obligations, and financial assets except for
debts related to capital works. The Corporation shall have the authority to raise, spend and invest money and to otherwise manage its financial affairs to the extent stated in the Bhutan Municipal Act, 1999. The Corporation shall not issue shares, shall not pay dividends, shall be exempted from commercial taxes and shall be exempted from the other corporate commercial requirements stated in the Companies Act of the kingdom of Bhutan, 1989. Disposal of any properties including land shall be strictly in line with the land and other related policies of the Royal Government. VI. DISSOLUTION The Corporation may be dissolved by the Royal Governm nt.
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VII. DECLARATION It is hereby declared to form the Thimphu Municipal Corporation with these Articles and with the provisions of the Bhutan Municipal Act, 1999, and all other requirements of the Royal Government of Bhutan, with effect from-------------- 1999. Dated------------------- Signature Competent Authority Royal Government of Bhutan.
