Local Government (Financing and Financial Management) Act of 2016 - Jamaica

The funds of, or payable to and collected by a Local Authority under this Act or any other enactment shall, after due provision is made with the approval of the Minister for interest on, and amortization of, any loans or debts for which the Local Authority is liable or responsible under this Act or any other enactment, be applicable toward the payment of the sums or expenses for which the Local Authority is authorized or liable to make payment under this Act or any other law.

(1) On or before the thirty-first day of October in each year, a Local Authority shall submit to the Minister for approval – 

(a) an operational budget, showing in detail the estimated income receivable and expenditure to be incurred during the financial year beginning on the first day of April next ensuing; (b) a capital budget, showing in detail the projected receipts and 

projected expenditure applicable thereto during the financial year beginning on the first day of April next ensuing; 

I the Local Authority’s budgeted Statement of Financial Position and budgeted Cash Flow Statement, for the financial year beginning on the first day of April next ensuing; 

(d) the Local Authority’s strategic plan and budget, for the period of the three financial years beginning on the first day of April next ensuing, including – 

(i) a statement of the objectives of the Local Authority; 

(ii) the nature and scope of the activities to be undertaken by the Local Authority, differentiating between commercial, social and regulatory activities; 

(iii) justification in respect of capital budgets; and (iv) the performance targets and other measures by which the performance of the Local Authority may be judged in relation to its objectives,

in keeping with all relevant national policies and priorities and consistent with the accounting standards referred to in section 7(1)(a). 

(2) In formulating the budgets submitted under subsection (1), a Local Authority shall adopt a full cost recovery approach which facilitates the ready matching of the costs associated with providing the services and functions for which the Local Authority is responsible, to the revenues generated from those services and functions. 

(3) If the conditions set out in subsection (5) are met, the Minister shall approve any budgets, statements and plans submitted for approval under this section, and such approval shall – 

(a) be granted provisionally by the 31st day of March next ensuing; 

and 

(b) be granted finally within thirty days after the passage by Parliament of the Appropriation Act for the relevant financial year.

 

(1) Prior to submitting any strategic plan and budget to the Minister for approval under section 3(1)(d), the relevant Local Authority shall ensure that the public is given an opportunity to consider and give feedback on a draft of the strategic plan and budget proposed to be submitted.

(1) Except with the prior approval of the Minister, a Local Authority shall not incur during a financial year any expenditure not provided for in the budgets approved under section 3 for that financial year

(2) Notwithstanding subsection (1) – (a) a Local Authority may at any time during a financial year  uthorize a saving under any recurrent subhead of expenditure in such budget to be applied to meet an excess under another subhead, subject to such conditions and restrictions as the Minister may specify in writing; 

(b) expenditure incurred without the approval required therefor by subsection (1), or in contravention of any conditions or restrictions specified under paragraph (a), may be subsequently approved within the financial year by the Minister upon the application of the Local Authority, if such expenditure appears to the Minister to have been necessarily incurred; and

I upon approval given under paragraph (b), but without prejudice to any right or liability enforced prior to the approval, the requirements of paragraph (a), or of subsection (1) (as the case may be), shall be deemed to have been complied with in relation to that expenditure. 

(3) The Minister shall not grant approval under this section unless the Minister is satisfied that the conditions specified in section 3(5) are met.

(1) For the purposes of this Act, there shall be established, under the control and management of a public officer designated for that purpose 

by the Minister 

a)        a fund to be called the Parochial Revenue Fund; and 

b)        a fund to be called the Equalization Fund.

(2) There shall be paid into the Parochial Revenue Fund – 

(a) an amount equivalent to the total amount of property tax paid pursuant to the Property Tax Act, including penalty and interest payable thereon, less any costs lawfully incurred in the collection thereof with the approval of the Minister; 

(b) the amount specified under the Road Traffic Act as payable into the Parochial Revenue Fund, in respect of licence duties on motor vehicles, less any costs lawfully incurred in the collection thereof with the approval of the Minister; 

(c) investment or other income, profits or gains, derived from the assets of the Fund; 

(d) such other amount, or source of revenue, as the Minister may specify by order subject to affirmative resolution of the House of Representatives.

(3) Any moneys and investments forming part of the Parochial Revenue Fund or Equalization Fund may from time to time be invested or realized, as the case may be, in accordance with the directions of the Minister after consultation with the Minister responsible for finance. 

(4) The accounts of the Parochial Revenue Fund and the Equalization Fund shall be prepared within four months after the end of each financial year, in such form and in such manner as the Minister may direct, and the Auditor-General shall examine and certify such amounts and report thereon to the House of Representatives.

(5) The public officer referred to in subsection (1) shall – (a) provide the Permanent Secretary in the Ministry with responsibility for Local Government, with such reports and other information as the Permanent Secretary may require from time to time with respect to the control and management of the Parochial Revenue Fund and the Equalization Fund; and (b) comply with such provisions as may be prescribed for the prudent oversight and governance of the control and management of those Funds.

(1) Subject to subsection (3), there shall be paid out of the Parochial Revenue Fund to each Municipal Corporation, not later than the last day in each month in respect of amounts received by the Fund as property tax and licence duties in the preceding month, an amount equivalent to – 

1. (a)  ninety percent of the amount paid into the Fund, in respect of property tax paid in respect of property in the relevant parish; 

2. (b)  twenty-five percent of the amount paid into the Fund, in respect of the amount paid in the relevant parish as licence duties on motor vehicles

 

(1) Subject to subsection (3), there shall be paid out of the Parochial Revenue Fund to each Municipal Corporation, not later than the last day in each month in respect of amounts received by the Fund as property tax and licence duties in the preceding month, an amount equivalent to – 

(c)  the remaining – 

(i)  ten percent paid into the Fund in respect of property tax 

shall be distributed to each Municipal Corporation, on the basis of the needs of the relevant parish, upon an application made to the Minister by the Municipal Corporation and after consultation by the Minister with the Municipal Corporation; 

(2) The amounts to be paid out under subsection (1) (c)(i) shall first be paid into the Equalization Fund for distribution in accordance with subsection (1)(c)(i). 

(3) Where a Municipality is established pursuant to an order under section 8 of the Local Governance Act or continued pursuant to section 5 of that Act, the geographical area for which the Municipality is responsible shall be deemed to be a relevant parish for the purposes of this section, but in any case where the Minister is satisfied that the method of allocation set out in subsection (1) would result in an inequitable or disproportionate distribution of revenue between the Municipality and the Municipal Corporation for the parish in which the Municipality is located, the Minister shall, by order subject to affirmative resolution, specify a different method of allocation to be used in apportioning the revenue between the Municipality and the Municipal Corporation concerned.

(1) In this Act, “rateable project” means any work , falling within a prescribed category, for the benefit of the inhabitants of a Local Authority or any geographical subset of a Local Authority. 

(2) In order to pay for or provide for the costs, charges and expenses incurred or to be incurred in relation to any rateable project, subject to subsections (5) and (8) and after complying with the procedure set out in section 20, the relevant Local Authority may impose a rate or rates of such amount and for such period as may be necessary for all or any such purposes. 

(3) Any rate allowed under subsection (2) may – 

(a) be imposed upon properties situated in or throughout the geographical area of the Local Authority, or upon the properties situated in any geographical subset thereof as the Council of the relevant Local Authority may from time to time determine and define; 

(b) be a uniform rate, a graduated rate varying with the unimproved value of the property in respect of which the rate is to be paid, or a combination thereof; and 

(c) vary in amount, having regard to the purpose for which such rate is imposed and the advantages to be derived or conferred on any area relative to any other area. 

(4) Subject to subsection (5), the Council of a Local Authority may from time to time increase, decrease or otherwise alter any such rate if found to be excessive or insufficient. 

(5) The Council of a Local Authority shall submit for the approval of the Minister every – 

(a) rate proposed to be imposed; and 

(b) every increase, decrease or other alteration proposed to be made to any rate imposed, under this section, and the Minister may act in accordance with subsection (6). 

(6) The Minister may, after consultation with the Minister responsible for finance, and upon being satisfied that the provisions of section 20 have been complied with (a) approve, increase, decrease or otherwise alter the rate proposed under subsection (5) (a) or (b); and 

(b) fix the date on which it shall take effect and the date or dates on which it shall become due and payable. 

(7) No rate shall be imposed under this section unless a resolution of the House of Representatives has been passed authorising the imposition of the rate. 

(8) The rate imposed under this section shall – 

(a) be payable by the person who, on such date, is in possession of the property in respect of which the rate is due; 

(b) be assessed, raised, levied, collected, and shall be paid to the Collector of Taxes for the parish in which the property is situated, in accordance with the provisions of the Tax Collection Act or any other enactment for the time being in force in relation to the assessment, raising, levying and collection of rates and taxes; 

(c) after collection, be paid over to the Local Authority, for credit to the General Fund established under section 15 for the purposes of the Local Authority; and 

(d) subject to any claim for property tax imposed under the Property Tax Act, be a first charge and lien upon the real property in respect of which the rate is due. 

(9) The Minister shall determine what reimbursement, to be computed at a rate not exceeding three percent of the total amount of the revenue collected under this section, shall be made by a Local Authority towards the cost of collecting, accounting for, disbursing and auditing the revenue collected, and the sum so determined shall be paid to the Accountant-General by that Local Authority and carried to the credit of the Consolidated Fund. (10) The rate as approved by the Minister under subsection (5) shall be published in the Gazette. 

 

(1) There shall be paid over to a Local Authority, for the purposes of that Local Authority, all moneys which the Local Authority is entitled to collect, arising or accruing from the issue of licences within the geographical area of the Local Authority, under the provisions of any enactment, unless the enactment otherwise provides. 

(2) All moneys to be paid over a Local Authority under the provisions of this section shall be paid over subject to the provisions of any enactment for the time being in force regulating any re-imbursement to be made to the Consolidated Fund for collection of the same.

(1) A Local Authority may impose fees –

(a) in relation to any works or services which it is required or empowered to provide under the Local Governance Act or any other enactment; or

(b) for works or services performed by it on behalf of any department or agency of government or any other entity.

(2) All moneys received on behalf of a Local Authority –

(a) for fees, rents, and income from investments or otherwise; or

(b) by way of fines or penalties imposed for the breach of –

(i) any regulations made by the Local Authority; or (ii) any other regulations which the Minister may, after consultation with the Minister responsible for finance, prescribe as being a source of revenue for Local Authorities,

shall be paid over to the Local Authority and placed to the credit of the Local Authority.

 

(1) Subject to the provisions of this section, a Local Authority may, with the approval of the Minister responsible for finance, borrow any sums required by it for meeting any of its obligations or discharging any of its functions. 

(2) Any borrowing by a Local Authority under this section shall not –

(a) be guaranteed by the Minister with responsibility for finance, or otherwise involve any assumption of financial obligation by the Government of Jamaica, other than in accordance with the Public Debt Management Act, 2012; or

(b) constitute a liability, whether direct, contingent or otherwise, on the Consolidated Fund.

(3) Approval shall be given by the Minister under subsection (1) only if the Local Authority satisfies the Minister as to its creditworthiness, including its capacity to manage and service its loan obligations.

(4) All borrowing powers under this section shall be exercised in accordance with Jamaica’s fiscal policy framework and, without prejudice to the generality of the foregoing, shall comply with such provisions of the following enactments as may be prescribed, in all respects as if the Local Authority concerned were a department in the public service of Jamaica –

(a) the Financial Administration and Audit Act;

(b) the Public Bodies Management and Accountability Act;

(c) the Public Debt Management Act; and

(d) the Financial Administration and Audit (Fiscal Responsibility Framework) Regulations, 2012.

 

(1) Subject to subsection (3), there shall be paid out of the Parochial Revenue Fund to each Municipal Corporation, not later than the last day in each month in respect of amounts received by the Fund as property tax and licence duties in the preceding month, an amount equivalent to – 

1. (a)  ninety percent of the amount paid into the Fund, in respect of property tax paid in respect of property in the relevant parish; 

(1) Subject to subsection (3), there shall be paid out of the Parochial Revenue Fund to each Municipal Corporation, not later than the last day in each month in respect of amounts received by the Fund as property tax and licence duties in the preceding month, an amount equivalent to – 

...2. (b)  twenty-five percent of the amount paid into the Fund, in respect of the amount paid in the relevant parish as licence duties on motor vehicles

The recurrent expenses of a Local Authority shall be met out of

its funds derived from –

(a) rates, user fees, licence fees, service charges and administrative

fees;

(b) taxes and other transfers from central government;

 

...That the funds of the Parochial Revenue comes from 

Property Taxes,Licenses duty on motor vehicles, investment or other income, profits or gains and such other amount, or source of revenue

 

14. – (1) Subject to subsection (3), there shall be paid out of the Parochial Revenue Fund to each Municipal Corporation, not later than the last day in each month in respect of amounts received by the Fund as property tax and licence duties in the preceding month, an amount equivalent to – 

(a) ninety percent of the amount paid into the Fund, in respect of property tax paid in respect of property in the relevant parish; 

(b) twenty-five percent of the amount paid into the Fund, in respect of the amount paid in the relevant parish as licence duties on motor vehicles; 

and (c) the remaining – (i) ten percent paid into the Fund in respect of property tax shall be distributed to each Municipal Corporation, on the basis of the needs of the relevant parish, upon an application made to the Minister by the Municipal Corporation and after consultation by the Minister with the Municipal Corporation; (ii) seventy-five percent of the amount paid into the Fund in respect of licence duties shall be distributed to each Municipal Corporation on the basis of the number of miles of parochial roads in the relevant parish expressed as a percentage of the total number of miles of parochial roads in Jamaica.